CHAPTER-I

INTRODUCTION
Human resources management is primarily concern with the people management. It is a
crucial subsystem in the process of management. The success or of the organization not
only depends on the material, machines and equipment but also on the personnel who put
in their best efforts for efficient performance of the job. Human resources management is
the management of employees skills, knowledge, talents aptitudes, creative abilities etc.
Human Resource Management (HRM) is a relatively new approach to managing people in
any organization. People are considered the key resource in this approach. it is concerned
with the people dimension in management of an organization. Since an organization is a
body of people, their acquisition, development of skills, motivation for higher levels of
attainments, as well as ensuring maintenance of their level of commitment are all
significant activities. Human Resource Management is a process, which consists of four
main activities, namely, acquisition, development, motivation, as well as maintenance of
human resources.
Human Resource Management is the process of recruitment, selection of employee,
providing proper orientation and induction, providing proper training and the developing
skills, assessment of employee (performance of appraisal), providing proper compensation
and benefits, motivating, maintaining proper relations with labour and with trade unions,
maintaining employees safety, welfare and health by complying with labour laws of
concern state or country.
Altogether, human resource management is the process of proper and maximise utilisation
of available limited skilled workforce. The core purpose of the human resource
management is to make efficient use of existing human resource in the organisation. The
Best example at present situation is, construction industry has been facing serious shortage
of skilled workforce. It is expected to triple in the next decade from the present 30 per
cent, will negatively impact the overall productivity of the sector, warn industry experts.
Every organisations' desire is to have skilled and competent people to make their
organisation more effective than their competitors. humans are very important assets for
the organisation rather than land and buildings, without employees ( humans ) no activity
in the organisation can be done. Machines are meant to produce more goods with good
quality but they should get operated by the human only.
1

PERFORMANCE APPRAISAL:
Performance Appraisals is the assessment of individuals performance in a systematic
way. It is a developmental tool used for all round development of the employee and the
organization. The performance is measured against such factors as job knowledge, quality
and quantity of output, initiative, leadership abilities, supervision, dependability, cooperation, judgment, versatility and health. Assessment should be confined to past as well
as potential performance also. The second definition is more focused on behaviours as a
part of assessment because behaviours do affect job results.
Performance appraisal in any organisation will be done at a specific period, like annually
or half yearly or quarterly or maybe regularly. It all depends upon the nature or size of the
organisation, and sometimes necessity of the managers decide the period of performance
appraisal of their employees. Most of organisations are insisting employee appraisal
should be a continuous process and should not be limited to a formal review once a year.
The frequency of formal appraisals will depend on the nature of the organization and on
the objectives of the system. For example, in a high technology organisation objectives
may be changing quickly so that formal appraisals may need to be carried out more than
once a year. In an environment which is less subject to change, annual appraisals may be
sufficient. Most employees receive a formal appraisal annually, although more frequent
appraisals are often needed for new employees, for longer serving staff who have moved
to new posts or for those who are below acceptable performance standards.

Definitions
Performance appraisal refers to all formal procedures used in working conditions to
evaluate personalities and contributions and potential of group members.
- Dale Yoder
It is the process of evaluating the performance and qualification in terms of the
requirement of job for which he is employed for purposes of administration including
placements selection for precautions providing financial rewards and other actions
which required differential treatment among the members of a group as distinguished
from actions affecting all members equally
-Heyal Observer

Purpose of performance management systems:

Performance Management is the term used to describe the process set by an
organization to ensure all employees are aware of the level of performance expected of
them in that role, as well as any individual objectives they will need to achieve to
achieve overall organizational objectives. It is generally considered good practice to
communicate what form of performance management system your organization uses for
its employees during induction process. By the end of the induction process the
employee should be aware of their goals and objectives they need to achieve within their
role to ensure they are performing satisfactorily.
Performance Appraisal is the systematic evaluation of the performance of
employees and to understand the abilities of a person for further growth and
development. Performance appraisal must be conveying to employees how well they
have performed on established goals. Its also desirable to have those goals and
performances measures mutually set between the employee and supervisor. Without
proper two-way feedback about ones own efforts and its effect on performance, we run
the risk of decreasing an employees motivation. However, equally important feedback is
the issue of development. Development, it is refried to those areas in which an employee
has a deficiency or weakness, or an area that simply could be better if some effort was
expended to enhance performance.

REQUIREMENTS OF A PERFORMANCE APPRAISAL SYSTEM

Easy to understand and simple to operate: A good performance appraisal system
is one which is easy to understand and simple to operate. Such system
normally covers all employees and naturally all of them including those at the
lowest level should be able to understand it easily and quickly. Similarly,
the appraise procedure should not be too complex or time consuming.
Simplicity of appraisal system gives convenience to all.

Support from the employees:

Performance appraisal is for the benefit c

employees. Naturally, they must feel confidence as regards the system. They should
not feel it to be too theoretical, unrealistic and partial. In other words, the system
should not be opposed by the employees. There should be popular support
appraisal system. It is also desirable to discuss the appraisal procedure with the
employees before finalising the same. In addition, good appraisal system should
also have the support of all line people/executives who administer it.
Wide publicity: The performance appraisal scheme should be given wide public
for the information and guidance of employees. This will make them alert about
appraisal procedure and its benefits. The opposition to the scheme will be
limited when it is given wide publicity through notices and posters.
Suitability to the organisation's operations and structure: One uniform system
performance appraisal may not be suitable to all enterprises/organisations.
System introduced should be suitable to the organisation structure and
operation. This will make the appraisal, adaptable. In brief, the appraisal
system adaptability to the organisation structure.
Scientific and Reliable: The performance appraisal system should be scientific
also reliable. There should be no scope for partiality/favouritism while rating
employees. The system should work in a uniform manner at all times even
the raters change. A reliable system gets support from the employees.
Correctly defined standards of performance: In a good performance
appraisal system, the standards of performance must be clearly and correctly
defined, facilitates easy comparison of actual performance with the established
standards. The performance criteria should be clear and divided into objective
and subjective criteria. Proper weight age should be given to various
considerations included.

PROCESS OF PERFORMANCE APPRAISAL

4

 The evaluation process begins with establishment of performance standards.

At the time of designing a job and formatting a job description, performance
standards are usually developed for the position. These standards should be
clear and not vague and objective enough to be understood & measured.
Next step is to communicate these standards to the employees, for the
employees left to themselves would find it difficult to guess what is expected
of them, feedback is necessary from sub-ordinate to the manager for effective
communication.
Third step is the measurement of performance four sources of information are
frequently used to measure actual performance: personal observation,
statistical reports, oral reports and written reports.
Fourth step is comparison of actual performance with standards. The
employee is apprised and judged of his potential for growth and advancement.
Next stage is the results of appraisal are discussed periodically within the
employees, where good points, weak points, difficulties are indicated and
discussed so that performance is improved

Establish performance
standards

Communicate performance expectations to

employees
Measure actual
performance

Compare actual performance with

standards

Discuss the appraisal with the

employee

If necessary, initiate corrective

action

COMPONENTS OF PERFORMANCE EVALUATION:

As we have seen, performance evaluations can be made for a variety of purposes counselling,
promotion, research, salary, administration or a combination of these. The personnel evaluation
system should address the questions who, what, when, where, how? of performance appraisal.

Who of the Appraisal? As Ruder man observes, the appraisal can be accomplished
by one or more individuals involving a combination of the immediate supervisor, other
managers, personnel manager, peers, the assesses himself and subordinates.
What of Appraisal? The what of the performance appraisal consists in appraising
non-supervisory employees for their current performance, and managers for their current
performance, and managers for future potential?
Why of Appraisal? Creating & maintaining a satisfactory level of performance of
employees in their present jobs, aiding in decision making for promotion, transfer, layoffs
& discharges, promoting, understanding between the supervisor and his subordinates.
When of

Appraisal? The when answers the query about the frequency of appraisal.

It has been suggested informal counseling should occur continuously. The manager should
discuss an employees work as soon as possible after he has judged it. The time of rating
should not coincide with the time of salary reviews, for if the two occur together
constructive evaluation and considerations of self-development will probably take second
place to the pressures of pay.
Where of Appreciation

? The where indicates the location where an employee

may be evaluated? It is usually done at the place of work or office of the supervisor.
Informal appraisals may take anywhere and everywhere, both on the job in work situations and off
the job.
How of

Appraisal?

Under how the company must decide what different methods are

available and which of these may be used for performance appraisal. On the basis of the
comparative advantages and disadvantages it is decided which method would suit purpose best.

Performance Appraisal Methods

Traditional methods
Confidential report.
Essay evaluation
Critical incident method.
Checklists and weighted checklists
Ranking
Graphic rating scale
Mixed Standard Scales
Forced Distribution
Grading Method
Modern methods
Assessment center method.
Human resource accounting.
Behaviorally anchored rating scales.
Management by objectives.
360 Degree performance appraisals.

Confidential report
It is mostly used in government organizations. It is a descriptive report prepared, generally
at the end of every year, by the employees immediate superior. The report highlights the
strengths and weaknesses of the subordinate. The report is not data based. The impressions
of the superior about the subordinate are merely recorded there. It does not offer any
feedback to the appraise. The appraise is not very sure about why his ratings have fallen
despite his best efforts, why others are rated high when compared to him, how to rectify
his mistakes, if any; on what basis he is going to be evaluated next year, etc. Since the
report is generally not made public and hence no feedback is available, the subjective
analysis of the superior is likely to be hotly contested. In recent years, due to pressure
from courts and trade unions, the details of a negative confidential report are given to the
appraise.
8

Essay evaluation
Under this method, the ratter is asked to express the strong as well as weak points of the
employees behaviour. This technique is normally used with a combination of the graphic
rating scale because the ratter can elaborately present the scale by substantiating an
explanation for his rating. While preparing the essay on the employee, the ratter considers
the following factors: (i) Job knowledge and potential of the employee; (ii) Employees
understanding of the companys programmes, policies, objectives, etc.; (iii) The
employees relations with co-workers and superiors; (iv) The employees general planning,
organizing and controlling ability; (v) The attitudes and perceptions of the employee, in
general. Essay evaluation is a non-quantitative technique. This method is advantageous in
at least one sense, i.e., the essay provides a good deal of information about the employee
and also reveals more about the evaluator. The essay evaluation method however, suffers
from the following limitations:
It is highly subjective; the supervisor may write a biased essay. The employees
who are sycophants will be evaluated more favourably then other employees.
Some evaluators may be poor in writing essays on employee performance. Others
may be superficial in explanation and use flowery language which may not reflect
the actual performance of the employee. It is very difficult to find effective writers
nowadays.
The appraiser is required to find time to prepare the essay. A busy appraiser may
write the essay hurriedly without properly assessing the actual performance of the
worker. On the other hand, appraiser takes a long time; this becomes uneconomical
from the view point of the firm, because the time of the evaluator (supervisor) is
costly.

Critical incident method

Under this method, the manager prepares lists of statements of very effective and
ineffective behaviour of an employee. These critical incidents or events represent the
outstanding or poor behaviour of employees on the job. The manager maintains logs on
each employee, whereby he periodically records critical incidents of the workers
behaviour. At the end of the rating period, these recorded critical incidents are used in the
evaluation of the workers performance. An example of a good critical incident of a sales
assistant is the following:
July 20 The sales clerk patiently attended to the customers complaint. He is polite,
prompt, and enthusiastic in solving the customers problem.
9

On the other hand the bad critical incident may appear as under:
July 20 The sales assistant stayed 45 minutes over on his break during the busiest part of
the day. He failed to answer the store managers call thrice. He is lazy, negligent, stubborn
and uninterested in work.
This method provides an objective basis for conducting a thorough discussion of an
employees performance. This method avoids regency bias (most recent incidents get too
much emphasis). This method suffers however from the following limitations:
Negative incidents may be more noticeable than positive incidents.
The supervisors have a tendency to unload a series of complaints about incidents
during a review session.
It results in very close supervision which may not be liked by the employee.
The recording of incidents may be a chore for the manager concerned, who may be
too busy or forget to do it.

Checklists and weighted checklists

Another simple type of individual evaluation method is the checklist. A checklist
represents, in its simplest form, a set of objectives or descriptive statements about the
employee and his behaviour. If the ratter believes strongly that the employee possesses a
particular listed trait, he checks the item; otherwise, he leaves the item blank. A more
recent variation of the checklist method is the weighted list. Under this, the value of each
question may be weighted equally or certain questions may be weighted more heavily than
others. The following are some of the sample questions in the checklist.
l
Is the employee really interested in the task assigned? Yes/No
l
Is he respected by his colleagues (co-workers)
Yes/No
l
Does he give respect to his superiors?
Yes/No
l
Does he follow instructions properly?
Yes/No
l
Does he make mistakes frequently?
Yes/No
A rating score from the checklist helps the manager in evaluation of the performance of
the employee. The checklist method has a serious limitation. The ratter may be biased in
distinguishing the positive and negative questions. He may assign biased weights to the
questions. Another limitation could be that this method is expensive and time consuming.
Finally, it becomes difficult for the manager to assemble, analyze and weigh a number of
statements about the employees characteristics, contributions and behaviours. In spite of
these limitations, the checklist method is most frequently used in the employees
performance evaluation.
10

Ranking
Ranking methods compare one employee to another, resulting in an ordering of employees
in relation to one another. Rankings often result in overall assessments of employees,
rather than in specific judgments about a number of job components. Straight ranking
requires an evaluator to order a group of employees from best to worst overall or from
most effective to least effective in terms of a certain criterion. Alternative ranking makes
the same demand, but the ranking process must be done in a specified manner (for
example, by first selecting the best employee in a group, then the worst, then the secondbest, then the second-worst, etc.).
Comparative evaluation systems such as ranking are rarely popular. No matter how
close a group of employees is in the level of their performance, and no matter how well
they perform on the job, some will rank high and some will end up at the bottom.
Evaluators are often reluctant to make such discriminations. Also, rankings are unable to
compare employees across different groups. For example, it is difficult to say whether the
second-ranked employee in unit A is as good as or better than the second-ranked employee
in unit B. Despite the problems of ranking methods, if an organization has a very limited
number of promotions or dollars to allocate, rankings can be very useful in differentiating
among employee.

Graphic Rating Scale

Perhaps the most commonly used method of performance evaluation is the graphic rating
scale. Of course, it is also one of the oldest methods of evaluation in use. Under this
method, a printed form, as shown below, is used to evaluate the performance of an
employee. A variety of traits may be used in these types of rating devices, the most
common being the quantity and quality of work. The rating scales can also be adapted by
including traits that the company considers important for effectiveness on the job. A model
of a graphic rating scale is given below.
Carefully constructed graphic rating scales have a number of advantages:
1. Standardization of content permitting comparison of employees.
2. Ease of development use and relatively low development and usage cost.
3. Reasonably high ratter and rate acceptance.

11

Table: Typical Graphic Rating Scale

Employee Name...................
Department.........................
Data.................................

Job title.................
Rate...............
Table-1.1

Quantity of work:
Volume of work under
normal
working
conditions

Unsatisfactory

Quality of work:
Neatness,
thoroughness
and
accuracy of work
Knowledge of job
A clear understanding
of
the
factors
connected with the job
Attitude:
Exhibits
enthusiasm
and
cooperativeness on the
job
Dependability:
Conscientious,
thorough,
reliable,
accurate, with respect
to attendance, reliefs,
lunch breaks, etc.
Cooperation:
Willingness
and
ability to work with
others to produce
desired goals.

12

Fair

Satisfactory

Good

Outstanding

From the graphic rating scales, excerpts can be obtained about the performance standards
of employees. For instance, if the employee has serious gaps in technical-professional
knowledge (knows only rudimentary phases of job); lacks the knowledge to bring about an
increase in productivity; is reluctant to make decisions on his own (on even when he
makes decisions they are unreliable and substandard); declines to accept responsibility;
fails to plan ahead effectively; wastes and misuses resources; etc., then it can safely be
inferred that the standards of the performance of the employee are dismal and
disappointing.
The rating scale is the most common method of evaluation of an employees
performance today. One positive point in favour of the rating scale is that it is easy to
understand, easy to use and permits a statistical tabulation of scores of employees. When
ratings are objective in nature they can be effectively used as evaluators. The graphic
rating scale may however suffer from a long standing disadvantage, i.e., it may be
arbitrary and the rating may be subjective. Another pitfall is that each characteristic is
equally important in evaluation of the employees performance and so on.

Mixed Standard Scales

Mixed standard scales are a relatively recent innovation in rating scales. They
contain statements representing good, average, and poor performance based on
behavioural examples obtained from knowledgeable persons, usually supervisors. An
evaluator's task is to indicate whether an employee either fits the statement, is better than
the statement, or worse than the statement.
In a mixed standard scale, each performance dimension has three statements
relating to it: one illustrating good performance, one average, and one poor. Thus, this
mixed standard scale has nine statements, three for each of the three dimensions used.
Statements in mixed standard scales are randomly mixed, tending to reduce rater errors by
making it less obvious which statements reflect effective or ineffective performance.

13

Example
Instructions: If the employee fits the statement, put a ?=? in the space opposite the
statement. If the employee is better than the statement, put a ?v?. If the employee is worse
than the statement, put ?x?.
1. Is on good terms with everyone. Can get along with people even in disagreement.
2. Employee's work is spotty, sometimes being all right and sometimes not. Could be more
accurate and careful.
3. Has a tendency to get into unnecessary conflicts with people.
4. is quick and efficient, able to keep work on schedule. Really gets going on a new task.
5. The accuracy of employee's work is satisfactory. It is not often that you find clear
evidence of carelessness.
6. Gets along with most people. Only very occasionally has conflicts with others on the
job, and these are likely to be minor.
7. Is efficient enough, usually getting through assignments and work in reasonable time.
8. Work is striking in its accuracy. Never any evidence of carelessness in it.
9. There is some lack of efficiency on employee's part. Employee may take too much time
to complete assignments, and sometimes does not really finish them.

Forced Distribution
Forced distribution is a form of comparative evaluation in which an evaluator rates
subordinates according to a specified distribution. Unlike ranking methods, forced
distribution is frequently applied to several rather than only one component of job
performance.
Use of the forced distribution method is demonstrated by a manager who is told that he or
she must rate subordinates according to the following distribution: 10 percent low; 20
percent below average; 40 percent average; 20 percent above average; and 10 percent
high. In a group of 20 employees, two would have to be placed in the low category, four in
the below-average category, eight in the average, four above average, and two would be
placed in the highest category. The proportions of forced distribution can vary. For
example, a supervisor could be required to place employees into top, middle, and bottom
thirds of a distribution. Forced distribution is primarily used to eliminate rating errors such
as leniency and central tendency, but the method itself can cause rating errors because it
forces discriminations between employees even where job performance is quite similar.
14

Grading Method
In

the

grading

method,

number

of

grades

or

classes

are

first

established and carefully defined. The rater evaluates the performance of an individual
employee against these standards and places him in one of these grades. The grades are
related to qualities of employees and grades are given to such qualities. The qualities
may be like job knowledge, judgement, leadership, cooperative attitude and so on. The
grades may be like A (for outstanding), B (for very good), C (for good), D (for fair) and E
(for poor). The ratter judges the performance of an employee and puts him under
suitable category. This method is simple and quick but the rating of employees may not be
accurate particularly when the ratter has to complete the rating of large number of
employees within a short period.

Modern Methods
Assessment centre
An assessment centre typically involves the use of methods like social/informal events,
tests and exercises, assignments being given to a group of employees to assess their
competencies to take higher responsibilities in the future. Generally, employees are given
an assignment similar to the job they would be expected to perform if promoted. The
trained evaluators observe and evaluate employees as they perform the assigned jobs and
are evaluated on job related .The major competencies that are judged in assessment centres
are interpersonal skills, intellectual capability, planning and organizing capabilities,
motivation, career orientation etc. assessment centres are also an effective way to
determine the training and development needs of the targeted employees.

Human Resource Accounting Method

Human resource is the most invaluable asset of an organisation. This asset can be
valued
and trained employees leave an organisation, it will cost business in many ways. This
method assesses performance in terms of costs and contributions of employees. Costs of
human resources consist of expenditure on recruitment, selection, training,
remuneration, human resource planning, etc. Contribution of human resource is the
money value of labour productivity. The difference between cost and contribution
represents the performance of employees. This method is at infant stage with limited
usage.
15

Behaviourally Anchored Rating Scales

Also known as the behavioural expectations scale, this method represents the latest
innovation in performance appraisal. The critical incidents serve as anchor statements on
a scale and the rating form usually contains six to eight specifically defined performance
dimensions. The following chart represents an example of a sales trainees competence
and a behaviourally anchored rating scale.

An Example of Behaviourally Anchored Rating Scale (Bars)

Performance

Points

Extremely good

Behaviour
Can expect trainee to make valuable suggestions for
increased sales and to have positive relationships with
customers all over the country.

Good

Can expect to initiate creative ideas for improved sales.

Above average

Can expect to keep in touch with the customers throughout

the year.

Average

Can manage, with difficulty, to deliver the goods in time.

Below average

Can expect to unload the trucks when asked by the

supervisor.

Poor

Can expect to inform only a part of the customers.

Extremely poor

Can expect to take extended coffee breaks and roam around

purposelessly.

How to construct BARS? Developing BARS follows a general format which combines
techniques employed in the critical incident method and weighted checklist ratings scales.
Emphasis is pinpointed on pooling the thinking of people who will use the scales as both
evaluators and evaluees.

16

Step 1: Collect critical incidents: People with knowledge of the job to be probed, such as
job holders and supervisors, describe specific examples of effective and ineffective
behaviour related to job performance.
Step 2: Identify performance dimensions: The people assigned the task of developing the
instrument cluster the incidents into a small set of key performance dimensions. Generally
between five and ten dimensions account for most of the performance. Examples of
performance dimensions include technical competence, relationships with customers,
handling of paper work and meeting day-to-day deadlines. While developing varying
levels of performance for each dimension (anchors), specific examples of behaviour
should be used, which could later be scaled in terms of good, average or below average
performance.
Step 3: Reclassification of incidents: Another group of participants who are
knowledgeable about the job is instructed to retranslate or reclassify the critical incidents
generated (in Step II) previously. They are given the definition of job dimension and told
to assign each critical incident to the dimension that it best describes. At this stage,
incidents for which there is not 75 per cent agreement are discarded as being too
subjective.
Step 4: Assigning scale values to the incidents: Each incident is then rated on a one-toseven or one-to-nine scale with respect of how well it represents performance on the
appropriate dimension. A rating of one represents ineffective performance; the top scale
value indicates very effective performance. The second group of participants usually
assigns the scale values. Means and standard deviations are then calculated for the scale
values assigned to each incident. Typically incidents that have standard deviations of 1.50
or less (on a 7-point scale) are retained.
Step 5: Producing the final instrument: About six or seven incidents for each performance
dimension all having met both the retranslating and standard deviation criteria will be
used as behavioural anchors. The final BARS instrument consists of a series of vertical
scales (one for each dimension) anchored (or measured) by the final incidents. Each
incident is positioned on the scale according to its mean value.Because the above process
typically requires considerable employee participation, its acceptance by both supervisors
and their subordinates may be greater.
17

Figure-1.2

MBO
It is a method of appraisal evolved by Peter Drucker. In this MBO method, (also called
goal setting approach) the subordinate employees are required to set their own
standards of performance with their superiors. Thereafter, the actual performance of
subordinates is evaluated against such standards. This is how appraisal is not
imposed on the employees
Introduced with their cooperation and participation. The actual performance may be
discussed personally in an appraisal interview where the superior will explain to the
subordinate his weaknesses and the manner in which they can be removed or
minimised.
This method is a participative appraisal method and is a new development based on
democratic principles. This technique is now becoming popular. At present, in many
companies along with the appraisal by the superior, the employee himself is given self
appraisal form and is asked to give the details which are reassessed by the superior
along with his own evaluation and the details are discussed in the performance
appraisal interview.

MERITS
18

(1) Use of multiple ratters: It is assumed that appraisal under 360 degree will be more
reliable and free from bias because a number of ratters are involved. Their findings
are likely to be more objective.
(2) Systematic data collection: There is systematic collection of performance data from
the immediate supervisors, peers and the concerned employee. Subordinates or
colleagues can volunteer to give useful information about the ability of the
employee to perform the job.
(3) Potentiality

of

self-development:

360

degree

appraisal

provides

broader

perspective about an employee's performance. When feedback is provided from

different sources it facilitates self-development to the employee. The employee can
compare his/her perception about the self with the perceptions provided by others.
(4) Formal communication: Only formal communication is entertained in 360 degree
appraisal. Hence the employee feels more accountable to the organisation.
(5) Identifying special traits: 360 degree appraisal is found highly effective to identify
and measure team building skills and interpersonal skills.

DEMERITS
(1) Sense of insecurity: Employees often get frightened with the thought that appraisal
will be obtained from multiple sources. Organisations should work out employeefriendly appraisal system.
(2) Time-consuming: 360 degree appraisal is found time consuming. It is because lot of
time is taken to select the right ratter, prepare questionnaire and analyse the data.
(3) Involvement of many ratters: When multiple ratters are involved it is not possible for
every ratter to separate honest observations from personal bias. All ratters may not be
equally close to the employee.

19

USES OF PERFORMANCE APPRAISAL

Performance appraisal is crucial tool in the hands of the management to bring about
greater agility and responsiveness in human resources of an organization. Performance
appraisal is the foundation of much human resource decision. Therefore, it has
multifarious uses as depicted below:
1. PERFORMANCE IMPROVEMENT: Performance feedback allows the employee,
manager and personnel specialists to intervene with appropriate actions to improve
performance.
2. COMPENSATION ADJUSTMENTS: Performance evaluations help decision-makers
determine who should receive pay raises. Many firms grant part or all pay increases and
bonuses based upon merit, which is determined mostly through performance appraisals.
3. PLACEMENT DECISIONS: Promotions, transfers and demotions are usually based
on past or anticipated performance. Often promotions are a reward for past performance.
4. TRAINING AND DEVELOPMENT NEEDS: Poor performance may indicate the
need for retraining. Likewise, good performance may indicate untapped potential that
should be developed.
5. CAREER PLANNING AND DEVELOPMENT: Performance feedback guides career
decisions about specific career paths one should investigate.
6. STAFFING PROCESS DEFICIENCIES: Good or bad performance implies strengths
or weakness in the personnel departments staffing procedures.
7. INFORMATIONAL INACCURACIES: Poor performance may indicate errors in job
analysis information, human resource plans, or other parts of the personnel management
information system. Reliance on inaccurate information may have led to inappropriate
hiring, training, or counselling decisions.
8. EQUAL EMPLOYMENT OPPURTUNITY: Accurate performance appraisals that
actually measure job related performance ensure that internal placement decisions are not
discriminatory.
9. EXTERNAL CHALLENGES: Sometimes performance is influenced by factors
outside the work environment such as family, financial, health or other personal matters. If
uncovered through appraisals, the human resource department may be able to provide
assistance.
10. FEEDBACK TO HUMAN RESOURCES: Good/bad performance throughout the
organization indicates how well the human resource function is performing.
20

RESEARCH DESIGN & METHODOLOGY

The method of study explains the systematic way of finding to predetermine objectives.
More over this provides the clear path to accomplish and achieve clear solution for the
problem stated. The following are the stages which the researcher has passed to obtain the
conclusion.

NEED OF THE STUDY

This study clear that whether job description at K.D.M.P.M.A.C.U LIMITED
company provide an opportunity For understanding the qualities, merits and limitations
of an employee working in the organisation.
For giving annual increment and other monetary benefits to an employee.
For deciding promotions, transfers and demotions of employees working in an
organisation.
For selecting employees for training and management development programmes.
For providing guidance to an employee to develop his qualities, abilities and work
performance.
For conducting research on personnel management.
Performance appraisal is needed for raising the morale of employees.
For raising the efficiency of the whole organisation by giving promotions (higher
positions) to most competent employees and also by giving opportunities to all
employees for their self improvement and development.

SCOPE OF THE STUDY

21

The scope of the study is to prepare the participant of the management to

take the decision while working with any organization.
During this period the students area send to different section to know everything of
that section in detail so that she/he gets overall picture of the working conditions, of
that section or department.
The participant prepares project report and mentions suggestions and gives
recommendation where ever necessary.

OBJECTIVES OF THE STUDY

To review the performance of the employees over a given period of time.

22

 To judge the gap between the actual and the desired performance.
To help the management in exercising organizational control.
Helps to strengthen the relationship and communication between superior
subordinates and management employees.
To diagnose the strengths and weaknesses of the individuals so as to identify the
training and development needs of the future.
To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.

Research Methodology:
Data source

: Primary data
23

Secondary data
Area of research

: K.D.M.P.M.A.C.U Limited

Research approach

: Survey method

Sample plan

: Questionnaire

Sample unit

: personal interview

Sample size

: 50

Data Collection Method:

The information necessary for this survey is collected by trapping primary data and
secondary data.

Primary Data:
Primary data refers to the first hand information that is collected from questionnaire and
personal interview. The questionnaire is the main instrument used to collect primary data.
The questionnaire is designed to collect the information about and its effect on the
programs of the organization.

Secondary Data:
Secondary data may be either published data or unpublished data. Secondary data means
data that is already available or the data that have already been collected and analysed by
some one else. Usually secondary data is available in books, magazines, journals, reports,
internets etc.

Research Design:
In research design of this project the study was conducted using survey method. I took all
the 50 employees as sample and took their response using the research instrument as
questionnaire; the questionnaire was personally given to each other.

Tools of the Study:

The tools used for collecting the data are through the questionnaires. The main reason for
selecting the questionnaire method for the study is:

Respondents have adequate time to give well thought out answers.

24

The time of the study was also a limiting factor.

Five pointer scales were use through the questionnaire.

Statistical Tools used:

Statistical tool like tabulation, graphic representation, are used in the compilation and
computation of data.

Percentage method:
Percentage refers to a special kind of ratio is used in making comparison about two or
more series of data. Percentage is also used to describe relationship. It is also used to
compare the relative terms of two or more series of data.

Formula:
Number of respondents/total number of respondents*100

LIMITATIONS OF THE STUDY:

25

 Any work carries some sort of limitations due to certain available and unavailable
reasons. The following are the limitations of the study.
Limited time period- the project work has been done during the period of 60 days.
This short time may lead to some conclusions, which in long run may not be
valued.
Small sample size- more than 500 people are working in K.D.M.P.M.A.C.U

Limited as executive level officers, so we can not considered the all employees
within given time, because of this reason we taken limited sample 50.
Executive level only- we collected the responses from the executives only.
Some employees are not given the response because of their busy work schedule.
We distributed questioners to 50 members, we get back all 50 from this, so the
collected information also limited
The some members are not given accurate responses.

The limited information we considered for whole executives in the organization.

CHAPTER- II
INDUSTRY PROFILE
26

DAIRY INDUSTRY IN INDIA

Dairy farming is one of the chief sources of income for many people once it can be
treated as a subsidiary Occupation. Now it is treated as one of the most important industry
especially in rural areas.
India is a country of villages where our farmers have small land holdings intensive
cropping therefore has been the way of farming. As a result production enhancement
inputs went on increasing. Thus the input output ratio started getting unbalanced. The need
of cash was more felt to buy inputs even the rate of interest is very high. Money lenders
exploited the farmers who were poor and debt were ridden.
A large number of farmers of Pune and Ahmedabad in Maharashtra are open,
hostility against money lenders in 1879; subsequently land improvement act 1883, and
agriculture act in 1884 were passed to advance loans at reasonable rate of interest of
farmers. The government realized that co-operative credit society act was noticed. The act
following short comes.
1. Classification of the societies into urban and rural was in scientific
2. Only credit societies are resisted
3. It was selected about the distribution of profit, thus another act named The CoOperative societys act of 1912 was enacted. The act took care of following instructions
like central bank superior of non-credit societies
The co-operatives remained central subject in the year 1919 co-operative become a
static subject within the scope of provincial legislative. Each province started formulating
of their own co-operative. Societies act to suit these requirements. After independence the
co-operative movement made rapid stride, government adopted the policy of developing
the co-operative movement for establishing the democratic order in the country.
It becomes necessary that co-operative legislation must keep place with the
progress of movement after independence. The Bombay co-operative societys acts of
1925 were amended nineteen times to suit the changing circumstances. Hence the
government of India appointed the committee in 1967 to review co-operative Acts in

27

different states and prepare a model bill on the basis of this model bill acts passed is as
follows.
1. The Mysore Co-Operative societies act of 1959
2. The Gujarat Co-Operative societies act of 1961.
3. The Madras Co-Operative societies act of 1961
4. The Andhra Pradesh Co-Operative societies act of 1964
5. The Rajasthan Co-Operative societies act of 1965
STEPS OF DAIRY DEVELOPMENT
In India there was progress in the dairy industry before independence.
Government of India realized that necessity of increasing milk production and bi-products
there by producing substantial job. Opportunities to the urban and rural community. The
government also recognized the need for getting additional income and employment
opportunities to the rural and urban people. The government has focused much more
attention on dairy development program by allocating more funds in fourth and five year
plans the government of India during 1970 has launched massive program operation flood.
With the help of the European nations and worlds production program costing Rs.500
Crores.
Government of India has undertaken various schemes through organization and
institution like India dairy corporation India dairy development board, Animal Husbandry,
plans, national dairy research institute. These programs enable for immediate development
in dairy activities. Dairy development with the help of effective marketing systems,
marketing helps to the enhancement of profitability prospects of the enterprise.
OPERATION FLOOD PROGRAMME IN INDIA
In order to build a variable and self-sustaining national dairy industry and cooperative lines the N.D.D.B launched a project christened operation flood mobilize from
the sale of products base on the foreign food donations in the form of the skimmed
powdered and butter oil. Operation flood, the largest development program over
undertaken in the world, was initiated closely on the help of GREEN REVOLUTION in
the country against the back drop of huge surplus at milk production in highly developed
milk producing countries in the west and dwindling per capita milk availability at borne
with its pledge to provide milk to one and all, it was considered the worlds largest dairy
development program it spurred the India Dairy industry to launch a WHITE
REVOLUTION
28

PHASE

OPERATION FLOOD OPERATION

OPERATION FLOOD

DURATION

-I
JULY 1970

FLOOD -II
APRIL 1981-

III
APRIL1985 MAR

MAR 1981

MAR 1980

1990

1,165 (Disbursed)

2,772 ( Disbursed)

6,013 (Disbursed)

FUNDS (Rs. Ps)

The agreement signed by a world food program and government of India. The W.F.P will
arrange to supply 126000 metric tons of butter oil. Which co-operation will handle on behalf of government utilization of commodities would generate funds estimated at rupees
954 million during the project period. These funds are to be invested in four major cities
extended over ten states that are Haryana, Rajasthan, Uttar Pradesh, Bihar, Tamilnadu,
Andhra Pradesh, Maharashtra and Gujarat.
Table-3.1
The importance of dairy development in India was recognized internationally in
the holding of the 58th Annual session of the international dairy federation and 19 th
international dairy congress of a particular significance of India as its main theme was
Dairy as an instrument of social and economic change.
INSTITUTIONAL SUPPORT TO CO-OPERATIVE DAIRY IN INDIAN DAIRY
CORPORATION
The India diary cooperation was setup under companies act on 13 th February 1970
it is Government of India undertaking. The immediate need to setup I.D.C to handle the
popularity known operation flood thus it becomes mainly a financial cum promotional
agency of the central government. The main objectives of Indian Dairy Corporation are of
as follows.

They are
1. To promote Dairy Industry in the country.
2. To assist the state Government and other organization including co-operative societies
interested in promotion of dairy industry to meet the requirements of milk products.
29

3. To provide a package of technical input for the enhancements to milk production.

4. Resettlement of city based cattle in rural areas.
5. To assist expanding the capacity and operations of existing dairies in big cities and rural
areas.
NATIONAL DAIRY DEVELOPMENT BOARD (N.D.D.B)
At the time of industrialization, the cattle feed factory is at kanjari in October
1964, the late Sri Lal Bahudur Sastry, prime Minister of India paid unscheduled visit to
producers, co-operative societies, and stayed there over right. He was impressed by the
socio-economic changes brought by milk co-operatives in Krishna district and desired to
have a national level organization to milk producers co-operative societies replicate
ANANDS in the other part of the country.
Thus national dairy development board was setup under the power of ministry of
agriculture and Irrigation. Government of India in September 1965 under societys
registration act 1860 and Bombay public trust act 1950 the board of directors including the
chairman is nominated by the organization that is supported by the professionals to carry
out boards activities.
ANAND PATTERN DAIRY DEVELOPMENT
The formation of Anand Milk Co-Operative was launched with the organization of
Krishna district co-operative milk producers union limited at an Anand. In this pattern
milk producers themselves control the function of Dairying milk procurement, processing
and marketing.

DAIRY INDUSTRY IN ANDHRA PRADESH

The main occupation of Andhra Pradesh is Cultivation. The village reflects the
Social, Economic, Moral and culture of Human Race. Dairy stands as the Back-bone of
Agriculture at the same time it place important activity for stability of Rural Economic
Conditions and helps to maintain Nations health by supplying sweet milk. It provides not
30

only income but also income to the milk producers. Now the productions of milk become
a subsidiary occupation among marginal farmers, small farmers and Agricultural labor.
The Government of Andhra Pradesh has started Dairy Development corporation to
safe guard he interests of milk producers, and ensuring supply of fresh milk at reasonable
price to urban consumers as an our come A.P.D.D.C provided employment to nearly 20
employees and organize as many as 87 dairy units including 7 milk factories. 13district
dairies, 22 chilling centres, 24mimichilling centered, 18 cooling centers, and 15 mini
cooling centres. In addition to that the private units are contributing their little mite in their
development of he dairy industry. M/s. Hindustan Milk Foods that have started a malted
milk products. Factory at Rajahmundry, Further to enhance working efficiency and to
increase turnover, the Government an autonomous dairy collection development
corporation. As a result of these measure the dairy industry improving towards massive
milk collection .
This will go a long way in improving the supplemental income to them. Further
lucrative market for all the milk at the door steps of milk producers in a village at fair rate
based on the two access policy is assured it could handle all the milk with is network of
chilling and cooling centres. More than 3.5lakhs milk producers get Rs20 Crores per
annum for supplying of the milk, which 69% of total beneficiaries belong to small and
marginal farmers. Agricultural labourers and other weaker sections of the society. All the
efforts by A.P.D.D.C.F and N.D.D.B today Andhra has excellent potential of milk
production with progressive framers who are more receipts to the new technology and
scientific practices, the estimate milk production is 40 lakhs per day.

FINANCIAL ASSISTANCE
The nation co-operative development corporation has been providing financial
assistance to dairy co-operative for organization medium and small sized processing plants
and milk chilling centres. The co-operation has sanctioned total loan assistance.
SELF SUFFICIENCY
31

In Andhra Pradesh pilot milk supply scheme brought revolutionary change in dairy
development and Economic development progress of movement after independence ate.
The program of Operation Flood created milk revolution and laid new hopes for
eradication of poverty and Unemployment. Now the dairy industry is equipped with
modern technical knows how and is in a position to face army challenges of future milk
demands, under co-operative sector several steps are taken to provide milk demands,
under co-operative sector several steps are taken to provide milk connecting centres in the
every nook and corner of the state to increase the production capacity of the milk yielding
animals help of the program model technical methods for achieving self-sufficiency in
milk production.
DAIRY DEVELOPMENT
In 1960 a pilot milk supply scheme was started in the state for dairy development.
Its initial milk capacity was 100 litres per day at the time of starting new its daily
collection increased 11 lakhs per daily. It also acts as a liaison between milk producers of
villages and consumers of the towns by providing reasonable price to the producers to
maintain stable market.
ANDHRA PRADESH DAIRY DEVELOPMENT CO-OPERATIVE FEDERRATION
A.P.D.DC.F was formed in October 1981 to implement OPERATION FLOOD II.
Through the active involvement of produces in organizing milk production, procurements
are easy, processing and marketing in Three Tier cooperative structure as per the
national of Government of India

PLANNING INVESTMENT
1. Rs 33.43 Crores
2. Rs 112.00 Crores
3. Rs 247.50 Crores
4. Rs 349.17 Crores
5. Rs 600.00 Crores
32

6. Rs 1000.00 Crores
OPERATION FLOOD
In our state operation flood was divided into three types Anand Level
1. Village level D.C.S
2. District level M.P.V.C
3. State level A.P.D.D.C.F
BRIEF NOTE OF MARKETING DIVISION A
The Andhra Pradesh dairy development federation has got 6 product
manufacturing units in Andhra Pradesh namely.
a.

Milk products factory, Hyderabad

b.

Milk products factory, Chittor.

c.

Milk products factory, Nandyal.

d.

Milk products factory, proddutoor.

e.

Sangam Dairy products factory, Vadlamudi.

f.

Milk products factory, Vijayawada.

The products manufactured by these units are being sold under brand name of
vijaya the products generally produced foe the national market are
1. Skim Milk powder
2. White milk powder
3. Vijaya spray
4. Table Butter
5. Cheese
6. Ghee and White Butter
SPECIALITIES OF VIJAYA DAIRY
1. Only milk producing company which exports it products to Malaysia
2. Only Dairy offering five varieties of milk for the benefit of the consumers
3. A Wide range of milk products produced under Vijaya Dairy
4. Range of UHT processed milk and milk products with shelf life of 4 months
5. A large distribution of Network.
33

MILK PRODUCTS
After meeting requirement of Liquid milk surplus supplies can be converted into
Bi-products like Baby food milk powder, Butter Milk, Sterilized flavored Milk, Ghee,
Cooking Butter, pannier, Lassie, Basundhi, Milk Cake, Doodh peda etc., All these
products subject to strict quality control before dispatched.
DISTRIBUTION NETWORK
LIQUID MILK DISTRIBUTION
Vijayawada city is divided into 24 zones. A separate milk route operating both
morning and evening to distribute the milk to the commission agents and cold-chain point
connects each zone. In additional milk is distributed through a separate route.
PRODUCT DISTRIBUTION
A) Local distribution within the district, through distributors stockiest and retailer,
products are delivered to these distributors /stockiest /retailers.
B) Distributors to outside districts through stockiest and EX-Factory Direct Sale
throughout the Country.
Export
Krishna Milk union is on the there hold of entering to the international market on
its own. It is all set to export HUT milk and products to countries like UAE, Bahrain etc.,

CHAPTER-III
COMPANY PROFILE
Introduction to Krishna District Milk Producers Mutually Aided Cooperative
Union Limited:
The Krishna District has great potential for milk production with a substantial
marketable surplus to tap. The market oriented milk production is the key
livestock activity to generate stable income for the farmer. About 90 percent of rural
34

households are directly concerned with livestock production. 40 percent are mainly Dairy
oriented. It is livelihood security to the rural poor and buffers the risks due to crop failure
The Original dairying in Krishna District commenced in 1965 by the state
Government with the assistance of UNICEF (United Nations International Children
Emergency Fund). Under a pilot project named INTEGRATED MILK PROJECT
HYDERABAD ANDVIJAYAWADA (1960) a Milk supply scheme was introduced in
1965 to organize milk collection from the Villages, to process at chilling at Vijayawada
and Hyderabad. The milk supply Scheme was a great success with its services to the
producers and quality supplies to the consumers. The initial procurement network was
gradually extended to all over the district within a span of 5 years. The Milk Products
Factory first of its kind in south India was established and commissioned in Vijayawada
by 1969.The company got ISO 22000-2005 and ISO 14000 Trademark for its quality
of milk. The company recently made record sales of 1.64 Lakhs its/day where as its
previous sales record was 1.45 Lakhs its/day.
VISION:
Farmers prosperity through technical innovations and customer orientation with specific
focus on quality and cost.
MISSION:
Dairying in the district to be the major instrument of strengthening rural economy and
making available safe milk and milk products.
QUALITY POLICY:
Aiming to be a technologically advanced dairy with global outlook providing products
and services of highest quality delighting the customers.
Most of the Village Dairy Cooperative societies are viable and managed by the
producer members receiving better technical know-how. The Government has enacted
APMACS Act 1995. (Andhra Pradesh Mutually Aided Cooperative Societies Act, 1995)
which provides autonomy to the cooperatives. As pr the policy and directives from the
state Government/Federation, The Dairy Cooperatives registered under APCS Act, 1964
were converted in to APMACS ACT, 1995. The Krishna Milk Union in July 2001 in
consonance with the wishes of its member producers. Elections are being held as per
byelaws to the Board of Management of Krishna Milk Union under APMACS Act, 1995.
ORGANISATION STRUCTURE:

35

STAFF POSITION as on 01-03-2010.

Managing Director:

Directors (Marketing)

Director (Finance)

Dairy Managers

Asst. Dairy Managers

Quality Control Officer

Assist. Dairy Managers

21

Fodder Development Officer

Junior Engineers

Technical staff

111

Transport

31

Finance

39

Administration

117

Field Staff

88

Others (Non Technical)

375
-------------------

Total

803
-------------------

COMPANY PRIDE
Daily average milk procurement 1,63,794 its.
36

Turnover of business has reached to 200 crores

Daily milk sales average reached to 1,60,000 its
Obtained ISO 9001. 2000, 14000 and HA.A.C.C.P. Certification
Earning profits and distributing bonus to its members.
Paying Rs.68crores per year to farmers as cost of milk procured from them.
Strengthened the rural economy by avoiding middlemen and making available safe
milk products to the customers.
Provided self-employed to the rural women.
First powder plant established in South India.
Largest democratic functionary in the District serving the farming community.
Having more than Rs.1000 crores grass root level production base.
Providing direct and indirect employment to people
First dairy to introduce free varieties of liquid milk
First dairy to introduce liquid ice cream in tetra brick pack
First dairy co-operative to introduce curd in cups in South India
First dairy to introduce butter milk and lassies in tetra brick pack
Annual turnover more than Rs.121 crores with a continuous growth rate
First dairy to introduce Basundi in cups and milk cake
Distribution network with 27 milk distribution routes.

RANKING OF THE DISTRICT IN ANDHRA PRADESH :

37

Milk production
Processing
Marketing

----

IIIrd
IVth
IIIrd

Krishna District has milk procurement ranging from 45,000 Kgs per day from 1969 to
1998District being buffalo concentrated has wide procurement functions. The District CoOperative Milk Union provides the following inputs to the farmers for increasing milk
production.
Premixed cattle feed
Cattle insurance at 2/3 subsidies
Eternity first aid facilities
Fodder seeds at subsidized rates
Animal vacancies and medicines at subsidize prices.
A1 facilities
Breading bulls
Extension Services.
Processing and Production:
One process of producing milk processing is supervised by Dairy managers (I/C
Production) is heading the production division supported by four dairy managers, 11 Asst.
Dairy Managers and other production staff engaged in milk production on his process
involves manufacturing finished goods storage, milk processing, Butter making, Ghee
making, Powder making by-products
Milk Reception:
As soon as milk is arrived at the reception dock either through cans or tankers, the
laboratory authorities conduct all the platform/Bacteriological / chemical test and after its
quality confirmation the milk is received and sent to storage.
Raw Milk :
Milk products factory, Vijayawada is directly connected by around 175 villages a radius
of around 50 KMs around Vijayawada. The milk collected from these villages is collected
directly last Milk products factory, Vijayawada for which it equipped with a can conveyer,
an electrical weighing machine, a dump tank and a straight through can washer with
cleaning capacity of 600 cans per hour.
Chilled Milk:
38

Chilled milk from chilling centers and other stations through milk tankers are received at
the end after receiving quality confirmation from laboratory the milk is sent for storage.
Milk Processing Section:
It has 12 storage tanks each of 15,000 its. Four creams vats each of 500 ltrs capacity. Itis
equipped with 13 milk pasteurizer of 20,000 ltrs capacity/hour, 15,000 ltrs/hour and
10,000ltrs/hour respectively. It also has cream pasteurizers with a capacity of 500
ltrs/hour. Altogether it has milk storage of four lakh liters.

Operations:
Separation of required quantity of whole milk to the extent of demand and with a mixture
of whole milk/cream and skim milk in required proportions, milk is standardized to their
composition and sent them to the packing or products manufacturing divisions.
Butter Sections:
It is equipped with three butter churns with drum capacity of 1500 lts. Each The cream
loaded the drums in churned for about three hours for separation of liquid butter milk from
cream after setting of butter. It was washed with chilled water to remove
solids from it. The butter formed is collected and sent back to processing section while the
solids in liquid form of butter milk is sent back to processing section or further usage. To
the extent of usage the butter is packed in kg packs and 20 Kgs packs and remaining is
utilized for ghee making.
Ghee Section:
There are 7 ghee boilers in ghee section each with 1000 lts. Capacity in which butter is
melted for 3 hours at 120 Deg Centigrade. After attaining satisfactory flavor, color etc.,
and the ghee is pumped to ghee setting tanks where it is allowed for eight hours for setting
of sediment at the bottom of the tank. There are settling tanks each 8000 ltrs. Capacity and
low storage tank each3000 ltrs. Capacity. Then the ghee is clarified and filtered with fine
filters. After obtaining satisfactory report from lab authorities the final filtered ghee is
packed in 5 ltrs, 2 ltrs and 1 ltr and ltr. Etc., the total capacity of ghee packing is 18.0
MT per day.
By-Product Section:
All the fresh milk products like Buttermilk, Sweet Lssie, Khova, Paneer, Yoghurt, Milk
Cakes are manufactured under strict hygienic and aseptic conditions.

Powder Section:
39

It has two powder plants. An Alfa level makes single effects gravity flow milk evaporation
plant with drying capacity of 8.0 MT per day and another Vulcan level double effect
gravity flow milk evaporator plant with drying capacity of 14.0 MTs per day are under
operation. Fine and superior quality ISI grade SMP is packed in 25 Kgs. 1 Kg and Kg.

Milk Packing:
It has the capacity of pack 2,00,000 ltrs. Of various varieties of milk per day. It is equipped
with eight sachet packing machines each capacity of 150 tubs per hour. Five varieties of
milk in it sachets for directs consumers. Cans for institutions are being packed.
Aseptic Packing Station (APS) :
Special officer is heading the APS Unit. The APS was established in 1988 with the
financial assistance of NDDB in the existing campus of milk product factory, Vijayawada
with a total outlay 22 crores. Milk is treated in high temperature plant for 203 seconds
at about 1400Deg. C under low pressure followed by rapid cooling. This enables milk free
of micro organisms
Which are liable to proliferate during storage. Tetra Brick is a compact, sterile, pilfer
proof, unbreakable and long shelf life pack that retains freshness and goodness of milk for
3-4 months

MILK PRODUCTION FLOW CHART

40

Milk from Villages

Raw Milk Reception

Chilled Milk Reception

Milk Chilling

Milk Pasteurization & Separation

Standardization

Crea
m
Butte
r

Evaporatio

Milk
packing

Drying
Sachet
s

Cans

UHT
Packing

Khova,
lassi

Market

Powder
Ghee

Market
Market Sto

Marke
t

Storage for
Reconstitutio
n

Packin
g

Market

In the production section, the milk and milk products are produced. The excess
41

milk is converted into skim milk powder (SMP) to meet demand to learn seasons.
SALES
Indents received from various boots and parlours. Depending on the indents, the
consolidated reports are raised. These reports are sent to various sections. Reconciliation
statements are prepaid according to the indents and the. Details of stock delivery are
maintained for various parlours, boots and institution. Andhra Pradesh has prominent
place in the dairy of India. Dairy and milk supply has been given importance in the five
year plans of the state. Not only with a view has help had the farmer to improve their
income had it enabled.
CHILLING CENTERS
The VIJAYAWADA milk products factory has set up six chilling centers, which
has been producing chilled milk for the composition of the various segments of the
consumers. Chilling centres use very successfully to milk products factory.
RESEARCH AND DEVELOPMENT
The Indian council of agricultural research has started a research scheme during
the period 1970-71 to undertake research on milk products. Under this scheme soft
cheese, butter milk power curd, Doodh peda, ice cream mix butter etc. are manufactured.
NEED FOR EXPANSION
With the introduction of the baby food, the milk handling capacity has been
reduced to about 80-85 thousand litres of milk in view of the sugar content added in
manufacture of the baby food. Therefore its proposed to expand the present plant by
adding additional buildings in the existing vacant area adjacent to the transport section.
This enables the factory to handle 1.5 LL per day.

CAPACITIES
MILK

1,76,000 liters per day

42

Ghee

5 tones per day

Butter

7 tones per day

Milk powder

4 tones per day

Refrigeration capacity

1.5 tones per day

Stream generation

13 tones per 1 part

Milk packing

1,25,000 packets per day

Chilling

1,50,000 litres per day

Processing

1,50,000 litres per day

DETAILS AT A GLANCE
THE KRISHNA DISTRICT MILK PRODUCERS CO-OPERATIVE UNION LIMITED
Table 4.2
1. number of villages covered

815

2. number of cooperative societies

534

3. number of milk routes

35

4. number of chilling centres

5. number of feed mixing plats

6. milk products factory area

27.3acres

7. value of factory buildings

Rs. 120lakhs

8. UNICEF aided equipment value

Rs. 57lakhs

9. value of other buildings and investments

Rs. 270 lakhs

10. date of commissioning of milk products 11.4.1969

factory
11. total staff

1854

12. date of formation of union

6.7.1983

13. date of transfer of management of union

8.2.1985

COMPANY GROWTH :
As an integral part of the above project the milk products factory, Vijayawada
was commenced on 11-04-1969. The Factory ha got an initial handling capacity
43

of 1,25,000 liters in the first stage with provision of handle 2,50,000 liters milk in the
second stage. It has crossed the mark of 1, 00,000 liters in the very first year of its
operation getting admiration from the UNICEF officials. The women has been playing a
greater role in the rural dairying i.e., feeding of animals, washing and milking etc., To
enourage this activity in an organized way the APDCFL of foundation three district viz.,
Nalgonda, Krishna and Chittoor already 8 women co-operative societies are organized and
200 new members have been enrolled a part from 1000women members enrolled in other
societies.
Chilling Centers:
The milk products factory Vijayawada has set up 10 chilling centers which are given
producing chilled milk for the composition of the various segments in the consumers.
Chilling centers are very useful to milk products factory following centers are in Krishna
District under the location of Milk products Factory, Vijayawada.
Pamarru

Hanuman junction

Veerayyalanka

Gudlavalleru

Chillakollu

Thiruvuru

Gannavaram

Vuyyuru

MARKETING OF COMPANY PRODUCTS:

Deputy Director (S & M) is heading the sales and marketing wing supported by a Sales
Manager and three Assistant Sales Managers with a network of 700 booths, 300 round the
cold chain parlors. The sales and marketing wing of the union functions round the clock
for the distribution and marketing of milk and milk production.

Ghee Section :
There are 7 ghee boilers in ghee section each with 1000 ltrs. Capacity in which butter is
melted for 3 hours at 120 Deg. C. After attaining satisfactory flavor, color etc., the ghee
is pumped to ghee setting tanks where it is allowed for eight hours for setting of sediment
at the botto m of the tank. There are settling tanks each 8000 ltrs. Capacity and low storage
tank each3000 ltrs. Capacity. Then the ghee is clarified and filtered with fine
filters. After obtaining satisfactory report from lab authorities the final filtered ghee is
packed in 5 ltr, 2 ltr and 1 ltr and ltr etc., The total capacity of ghee packing is 18.0 MT
per day.

By-Products Sections:
All the fresh milk products like buttermilk, sweet lassie, khova, pannier, yoghurt, milk
cake are manufactured under strict hygienic and aseptic condition.
44

Powder Section:
It has two powder plants. An Alfa level makes single effects gravity flow
mi9lk evaporation plant with drying capacity of 8.0 MT per day and another Vulcan level
double effect
gravity flow milk evaporator plant with drying capacity of 14.0 MTS per day are
under operation. Fine and superior quality ISI Grade SMP is packed in 25 Kg, 1 Kg and
Kg.Deputy Director ( S & M) is heading the sales and marketing wing supported by a
sales manager and three Assistant Sales Managers with a network of 700 booths, 300
round the cold chain parlors. The sales and marketing wing of the union functions round
the clock for the distribution and marketing of milk and milk production.

Distribution Network:
Liquid milk distribution:
Vijayawada City is divided into 24 zones, each zone is connected by a separate milk route
operating booth morning and evening to distribute the milk to the commission agents and
cold chain points.

Product Distribution:
Local distribution within the district. Through distributors, stockiest and retailers.Prod
ucts are delivered to these distributors/stockiest/retailers. b. Distribution to outside
district : Through stockiest and Ex Factory direct sales throughout the country.

Summary:

45

Starting with a tiny procurement of 243 liters of milk on 11-2-1965 under the milk chilling
center, pamarru, the collection in the district has surpassed one lakh installed capacity
of milk Products Factory, Vijayawada within two years i.e. in 1971 necessitating
additional capacities. The Units were under Dairy Development Departments (1971).The
products manufactured at Milk Products Factory, Vijayawada such as Butter, Ghee, Skim
Milk Powder, Whole Milk Powder and Infant Milk Food with the brand name VIJAYA
earned appreciation of consumers all over the country. The VIJAYA becomes synonym
for superior quality competing AMUL. The Milk Project is a buzz word among the public
all over the region. The expansion of Milk Product Factory, to meet the increased handling
needs has been taken up later under OPERATION FLOOD programmed by National
Dairy Development Board (NDDB).Union collects milk from about 1 Lakh milk
producers covering 800 villages organized through 20 routes. District union has 6 milk
chilling centers one each operating at Pamaru, Hanuman
Junction,Veerankilack, Gudlavalleru, Chillakollu and Tiruvuru with total processing
capacity of 1.22 Lakhs/day.
It has milk products factory with the factory with the facilities to manufacture different
milkproducts.Milk processing 2.5 Lakhs its/dayMilk dairying 22 MT/dayButter 22 MT/da
yGhee 18 MT/day.

The milk products factory at Vijayawada handles surplus milk from all coastal districts.
About 1.73 lakh kgs/day with peak touching 3.18 lakh kgs/day. The factor conserves fat in
the shape of white butter usually to the extent of 1000 MT per year. An Aseptic Packing
Station (APS) was set up in the Milk Products Fatory to pack 50,000liters of long the milk
(UHT MILK) per day. Union has also 2 cattle feed mixing plants with a total of 50 Mt/day.

SAILENT FEATURES OF K.D.M.P.M.A.C.U.L

Turnover of business has reached to Rs.119 Crores in the year 2003 2004
46

Daily average milk procurement : 1,63,794 kilograms (2003-2004)

Highest milk procurement : 2,77,487kgs

Daily milk sales average has reached to 1,21,697 litres.(2003-2004)

Obtained ISO 9001:2000 and H.A.C.C.P Certification

Earning profits and distributing bonus to its members.

Paying Rs.68 Crores per year to farmers as cost of milk procured from them.

Strengthened the rural economy by avoiding middlemen and making available safe milk
and milk products to consumers.

Provided self employment to the rural women.

Rural societies are providing funds to Roads, schools, community Buildings, veterinary
Hospitals, Libraries etc.,

ACHIEVEMENTS OF K.D.M.P.M.A.C.U.L

Having more than Rs.1000 Crores grass root level production base

Providing direct and indirect employment to more than 3,00,000 people.

First dairy to introduce sterilized cream in terra brik pack

Annual turnover more than Rs. 121 Crores with a continuous growth rate,

Member producers base of more than 1,50,000 consumers

Distribution network with 27 milk distribution routes

Functioning under MACs Act., with more empowerment to the producers

Democratic set up with least government interference by the people. for the people in all
ways and always

State of art manufacturing facilities with international product quality

47

KDMPMACUL OBJECTIVES

Evolving long-term policies to encourage and develop milk production and productivity in
the district.

Achieving co-ordination among various programs in the district to optimize resource

utilization.

Providing remunerative and assured market for the milk produced by the farmers round
the year.

Improving efficiency in milk collection, transport, processing and marketing with the
emphasis on reducing the cost of operations at very stage from rural farmer to urban
consumer.

Increasing in availability of milk and developing the market of milk and milk products.

Developing the manpower of the organization to reach excellence in their working life and
create a pro-active organizational culture for achieving competitive edge.

Consolidation and expansion of co-operative structure with special attention to small

farmers and weaker sections of milk producing community.

Traders from countries like Singapore and Brunei placing orders with the dairy for milk
powder.

48

KDMPMACUL STRATEGY

Milk procurement activities will be intensified for securing increased share in existing
marketable surplus.

Concentration of milk production enhancement programmers with special emphasis on

animal breeding, fodder development and animal health.

Marketing in the district will be intensified for better remuneration, privatization beyond
departmental level.

Major strength of union being aseptic technology, emphasis on value added aseptic milk
and milk products.

To survive and grow in the emerging; competitive environment there would be more
delegation of work across the organization calling for accountability through well defined
parameters.

Productivity improvement by corporate restructuring with change in managerial system to

make people more system dependent rather then individual dependent.

Intensive training for all levels of staff, which can really help; to; improve the functioning
of organization.

Introduction of reward and punishment system.

Introduction of quality systems under ISO: 9001-2000, ISO: 14001-2004 and HACCP
certification.

Financial restructuring of the organization with the help of the Government of A.P and
NDDB.

Plan to increase procurement to two Lakhs litres per day.

49

ORGANIZATIONAL STRUCTURE:
The dairy Industry in the district had its beginning as a part of animal Husbandry
activates and then it was transformed into various stages such as Integrated Milk project
(1960), Dairy Development Department (1971), Andhra Pradesh Dairy Development
Corporation (1974), A.P. Dairy Development Co-op Federation Ltd (1981), and finally
emerged as The Krishna District Milk Producers Mutually Aided Co-op Union Ltd and
got registered under AP Mutually Aided Co-op Act 1995.Consequent upon its adoption of
1995 Act the union has attained the autonomous status and is governed by its General
Body Through Board of Directors and Chairman.

General
Body
Board of
Management
Managing
Director

Procurement & Input

Personnel

Sales & Marketing

Q&C

Production

Stores

Plant Maintenance

MIS

50

Finance
AP

PRODUCT PROFILE:
Today APDDCF offers the widest spectrum of milk products in India, under the brand
name VIYAYA. These include Ghee, Butter, Processed Cheddar Cheese and Cheese spread, UHT
milk, Flavored Milk (Merry Milk), Slim Milk in Tetra packs, Sterilized cream, skim milk powder,
Dairy whitener, cooking Butter and Ice Cream. Several among these carry the A-Mark, an
attestation of quality by Government of India and the ISI mark of Bureau of Indian Standards.
The brand VIJAYA denotes quality and quality, which makes it a trusted name in millions of
households across the country.
In addition, APDDCF also manufactures products such as Sterilized Flavoured
Milk, Pannier (indigenous unrefined cheese). Doodh Peda (desiccated milk sweet) and
Buttermilk which is marketed through a network of Vijaya Parlours and a chain of retailers
spread across Andhra Pradesh.
MILK:
The Dairy produce two types of milk namely
1.
Low fat Milk
Contain Fat 1.5% and SNF 9%
Rate- Rs 10 per litre.
2.
Economy Milk
Contain Fat - 3% and SNF 8.5%
Rate Rs.12 per litre.
3.

Premium Milk
Contain Fat 4.5% and SNF 8.5%
Rate Rs.13

4.

Special Milk
Contain Fat-6% and SNF-9%
Rate- Rs, 14 per liter
5.
Gold Milk
Contain Fat-7% and SNF-9%
Rate- Rs, 15 per liter
Highly nutritious
Pasteurize, standardized / toned / double toned milk
100% Bacteria free and contained no preservatives and additives
Packed in poly sachets using sophisticated form, fill and seal machines
In case of decayed usage. Boil, cool and refrigerator.
MILK PRODUCTS:

Vijaya Curd, Vijaya Khova

Lussy, Ghee
51

Lip Sip, Milk Cake

Flavored Milk, Basundi.

Pannier

Vijaya Premium

Cooking Butter

Dhood Peda

Skim Milk Powder

POLICY AND REGULATIONS RELATED TO DAIRYING
To start with the Parliament enacted Industries Development and
Regulation Act [IDRA] in 1951 to ensure industrial growth with social justice. By 1991,
many of the earlier laws and Govt. policies underwent drastic changes. New economic
Policy opened the doors to foreign investment and Govt. set about abolishing its monopoly
of any sector or any individual enterprise, except in the areas of strategic importance. The
deli censing of the dairy industry was started during this time. Being a scheduled industry
under IDRA, till 1991, any applicant intending to establish a dairy need to obtain a license
and similarly seek permission before expanding the capacity of Dairy. Post 1991, the
manufacture of milk foods was removed as a scheduled industry under IDRA. This meant
that;

To establish or expand the existing Dairies no longer have to obtain a

license from the Govt. The filing of a simple information memorandum would suffice.
Govt. would no longer demarcate areas for setting up Dairy plants or
specify the area for milk procurement.

Milk and Milk Order [MMPO] 1992:

The deli censing of the dairy industry led to a run on the limited milk available in
the milk sheds. Therefore, MMPO was notified in June 1992. All persons handling milk in
excess of 10,000 liters per day or milk solids in excess of 500 metric tones of products per
annum had to be registered under MMPO. By July 2001, the MMPO had registered 675
units wish an aggregate processing capacity of 68.6 millions liters per day. This included
212 co-operative units with an aggregate processing capacity of 28.4 million liters per day
and 339 private units wish an aggregate processing capacity of 31.5 million liters per day.

Other Important Regulations

-

The prevention of Food Adulteration [PFA] Act 1954

52

The infant milk substitutes, feeding bottles and Infant Foods Act 1992

The standard weights and measures Act 1976

The insecticide Act 1968

The Consumer Protection [COPRA] Act, 1986

The water Act 1974 and the AIR Act 1981

AGMARK [Ag. Produce Grading and Marketing Act] 1937 as amended in 1986

BIS Act 1986 for whole range of dairy products

New Law for milk Producer Organizations

The companies Act 2002 was passed by parliament in Dec 2002 provides for
incorporation of producer companies and related matters as also the option to inter-state
cooperative societies to become producer company.

Export Law
The Act provides for facilitating export trade through the EIC, EIA and APEDA.

Scenario before Economic Reforms-Govt. Policy

Development of Dairying only in cooperative

Of programs- setting up of Dairy plants under cooperative umbrella and replicating

Anand pattern.

Private Dairy plants existing in certain parts of country.

Scenario after Economic Reforms- Govt. Policy

Shelter to cooperative Dairy sector removed

Dairy plants or Dairying can be taken up by any sector

MMPO promulgated in 1992 and amended

The Policy, Rules and Regulations Influence the cooperatives

National policy on cooperatives

Economic Reforms

No specific benefits to co-op. in taxation, subsidies, MMPO and EXIM related issues

PFA Regulations

No income tax benefits

No special benefits or no investment allowance exemption

Dividend on share limited to 15%

Restrictions under co-op. Law

SALES AND MARKETING
53

Dy. Director [S&M] is heading the Sales and Marketing wing supported by a Sales
Managers with a network of 700 booths, 300 round the clock cold chain parlours. The
sales and marketing Wing of the Union functions round the clock for the distribution and
marketing of milk and milk products.
DISTRIBUTION NETWORK
1.

LIQUID MILK DISTRIBUTION:

Vijayawada city is divided into 24 Zones. Each zone is connected by a

separate milk route operating both morning and evening to distribute the milk to the
commission agents and cold chain points. In addition, milk is distributed through a
separate route to the following Towns.
2.

PRODUCT DISTRIBUTION:

a)

Local distribution within the district: Through distributors, stockiest delivered to these
distributors / Stockiest / Retailers.

b)

Distribution to out Side district: Through stockiest and Ex-Factory Direct Sales
throughout the country.

3.

EXPORT:
Krishna Milk Union is on the threshold of entering to the International
Market on its own. It is all set to export UHT Milk and Products to countries like UAE,
Bahrain etc.,

Strategies for Achieving the Marketing Targets

Expansion into markets outside area of operation
a.

Strengthening the border areas of Guntur district.

b.

Expansion into the upcoming rural markets beyond Pamarru, Bantumilli, Pedana,
Challapalli and Avanigadda.

c.

Expansion to boarder areas of Khammam district.

d.

Lateral arrangements to augment milk supply through autos/ rickshaws in the interior
areas of growing towns like Gudivada and Machilipatnam.

e.

Expansion to new markets i.e. Amalapuram and Rajole.

f.

Strengthening of the existing supply network by increasing the number of milk routes
for smooth and timely supply to agents.

Expansion into uncovered smaller markets within area

54

a.

Expansion of sales network in the upcoming new market i.e. Sing nagar and Vambay
colony.

b.

Extension of sales activities in the newly created urban blocks i.e. at New Raja
Rajeswaripet and new Wholesale market complex at Gullpudi.

c.

Extension of sale activities in the growing small markets like G. Kondur and
Mylavaram.

Brand differentiation / promotion

a. Painting of the vehicle fleet of 35 associated with marketing to promote and identify
the VIJAYA brand using innovative concepts.
b. Brand promotion activities using electronic media in displaying or in customer service.
c. Brand differentiation activities using the infrastructure available with supply chain
partners i.e. Visi coolers and Bulk vending machines.
d. Product brand promotion activities through exclusive brochures. (Using digital
technology).
e. Brand promotion at the customer level through Competitions, Health & Nutritional
Brochures and Booklets.

Traditional production
a. Development and introduction of traditional fresh milk products i.e. Kheer.
b. Introduction of traditional fruit based U.H.T. flavoured milk.

55

TERMS & CONDITIONS FOR MILK & MILK PRODUCTS DISTRIBUTION

GENERAL CONDITIONS
1. The distributor must have experience in operating / handling the transportation of
milk / milk products in a reputed firm at least for a period of one year.
2. Defaulted distributors / backed out distributors / having legal disputes with the union
by any reasons are not entitled to participate in the tenders.
3. The distributor should quote / offer the rate per liter in tender for each route and for
each year of contract separately for the routes indicated in the schedule.
4. The period of the contract is for 3 (three) years from the date of actual placement of
the vehicle for distribution of milk as per agreement. The assignment can be extended for
3 (three) months beyond the accepted period at the sole discretion of the union at the
existing conditions and up to one year on mutual consensus of the both the parties.
5. The rates offered should be kept open for acceptance for a period of three moths from
the date of opening of tenders. The successful tender has to execute / start the work within
15 days from the date of order.
6. In case of failure of the vehicle, if the distributor does not inform and make alternate
arrangements for transport and distribution of milk, the union will have the right to
terminate the contract by forfeiting the security deposit and bills payable if any, besides
initiating legal action for breach of contract at his risk and cost.
7. It shall be responsibility of the distributor, in case of any breakdown of the vehicle, to
immediately provide a substitute with another vehicle and in doing so he shall take due
care that the milk and other material carried shall not be spoiled and delivered in time to
booths/points.
8. The union reserves the right to modify the way of the route, increase of decrease the
distance of the route and such enhancement or reduction in the route length per trip as
determined by the union is binding on the distributor and no extra rate will be paid for any
additional coverage with in the specified route.
9. That the agreement can be terminated by the union if :
A. The distributor has violated any of the terms of the agreement.
B. The distributor or any of his servants/representatives/agents misbehave in any way
causing to tarnish the fair name and reputation of the cooperative union or act in any way
detrimental to the interests of the union.
56

C. The distributor or any of his representatives/agents/servants indulge in malpractices.

D. The distributor is found to have obtained the contract through fraud of
misrepresentation or other unfair means.
E. The distributor is adjudicated insolvent.
F. If the distributor is a partnership, firm, when the partnership is dissolved.
G. The distributor is otherwise found to be unfit or incapable of discharge his
responsibility under agreement legitimately.
10. The courts at Vijayawada shall alone have jurisdiction to decide any dispute arising out
of this agreement.
11. The distributor shall not have his own independent agents or vendors and shall not
appoint any agents or vendors.
12. The union officials have the right to inspect the vehicles on the way of distribution and
have the right to undertake quality control checks and also stocks.
13. The distributor shall be liable for the misdeeds, misbehaviour of his staff, for any
excess loading of stocks or any other unlawful act inside the dairy premises or during
distribution operations.
14. Necessary stationery like truck sheets, dispatch, cash acknowledgment books will be
supplied by the union.
15. The distributor should submit the particulars of the crew with photos and identity
cards. No other candidate other than the declare person will be allowed in the dairy along
with the vehicles. The contractor should provide uniform to the authorized employees in
khaki colour.
16. The distributor should allow transport of materials / products and tappals of the union
in the route vehicles if necessary.
17. The contractor shall not subcontract; assign his right or obligations under this
agreement to any other person.
18. The union is not responsible in any way, for any loss damages or injury to the
distributors vehicles inside or out side the dairy premises.
19. The route will be fixed in respective routes by the union shall have the power to
decrease/increase, change alter or modify the prescribed routes and number of outlets and
timings as per requirement.

57

20. The union does not guarantee any quantity of milk as the minimum/maximum of the
supply and no compensation will be payable on this account, the figures given in the
annexure are only approximate basing on past performance.
21. Union can also supply milk to certain institutions on credit. Distributor would be
required to submit acknowledgements to union from such institutions as a proof of
delivery. In case such acknowledgements are not received in time from the distributor, it
would be presumed that milk has not been delivered as per directions as per directions of
union and cost of milk would be recovered from the security deposit of the distribution on
monthly basis.
22. In case distributor repeatedly fails [not more than two times of the similar failure] to
perform duties as per the terms and conditions of agreement, then union will be free to
make alternative arrangements for the entire work or for a part thereon. In such case
additional cost incurred by the union will be recovered from distributor along with suitable
penalty duly forfeiting the security deposit.
23. The distributor or his authorized representative should remain present in union office
between 11.00a.m to 5.00p.m every day so that problem of booth agents in connection
with supplies, cash collections and reconciliation of supply crates/cans account etc., is
done on the spot on daily basis. Distributor or his authorized representatives of
supervisory level should be present on the dock at the time of dispatches of milk from the
factory.
24. Union will not be responsible for any times challans imposed for the vehicle for failure
under motor vehicle act or for any other offence committed under any law for the time
being in force including traffic rules by the driver of the vehicle or any other
person/persons or by the distributor. On no account the union will be liable for any
statutory penalties imposed by any court of law/authority/ state or local body or any other
statutory authority for committing any violation of laws by the staff engaged on the
vehicle or by the distributor while the vehicle in use for the work of union. All the legal
formalities to keep vehicles on the road conditions will be the responsibility of the
distributor.
25. The distributor shall comply with the provisions of PF Act., TDS., Income Tax, ESI
Act and other statutory laws whenever necessary. The distributor will also maintain
prescribed statutory registers and submit necessary information to union every month for
verification. The union will not be responsible in any case for noncompliance of
provisions of PF,ESI and other statutory laws by the distributor, any liability arising out

58

due to noncompliance or default of the distributor will be passed immediately to him/her

for necessary payment, otherwise it will be recovered from the security deposit.
26. During the period of agreement, if necessary, any conditions can be modified
/incorporated with an objective to provide better services to the consumer, booths, and
outlets etc., all the terms and conditions as mentioned in tender document shall be a part of
this agreement.
27. All the personnel whose services shall be taken by distributor directly or indirectly for
the distribution purpose in terms of this agreement of the distribution and shall perform
their duties under the sole control and supervision of the distributor and in turn under the
instructions of the union authorities.
28. The management of Krishna milk union has right to impose a fine up to Rs.5000/every time for the irregularities committed up to two times for the similar offence and
suitable action will be taken later as per the agreement liable to be terminated.
29. As the contract is based on the cost per litre of milk distributed, the distributor must
concentrate and gear up their staff towards increase of sales.
30. The pasteurized milk of various types in sachets/cans and milk products with
containers would be handover to the distributor at the cold store of milk products factory,
Vijayawada. The distributors after shifting the quantity of milk and products shall load
into his vehicle with his manpower.
31. After acknowledgement the milk, milk products with crates/cans at the dairy the
distributor shall leave the premises of the milk products factory, as per the time schedule
given to him and deliver the same to the commission agents [milk vendors] of the milk
booths/points/as per their indent in the truck sheet in time in the route.
32. The distributor shall collect back the empty crates/cans from the respective sales
booths/points including from credit institutions and handover back to the authorized
person at milk products factory, Vijayawada on the same day [trip] as per the time
schedule.
33. The distributor shall place the vehicle for the loading and dispatch as per the timings
fixed by the union or any other time stipulated from time to time regularly. In case of
failure of the vehicles or otherwise, the distributor shall have to make alternative
arrangements otherwise the loss sustained by the union will by recovered from the
Distributor besides imposing penalty for such lapses.
34. The Union will not accept any return of loose milk/or sachets undelivered damaged
/unsold etc., spoiled due to any reasons.
59

35. The distributor will be responsible for counting of packets and sorting out
leakage/defective pouches before loading the creates /cans in vehicles. It shall be the
responsibility of the distributors to ensure that no leak pouch is supplied to booth agents
/agencies or any other outlets.
36. Distributor would be required to submit acknowledgements from the booth
agents/points to union as a proof of delivery of milk and products. In case stocks are
delivered short and complaint is submitted by booth agent in writing, not only the cost of
milk and products will be recovered from the distributor but also suitable penalty may be
imposed.
37. In case distributor dose not bring all the crates/ cans in any trip, a penalty calculated on
the basis of per crate per day may be imposed on distributor or and total cost for crates not
returned may be recovered with penalty. It shall be the responsibility of distributor to bring
all the crates/cans from booth agents etc., Further at the end of every four months, i.e.,
during April, August, December, of every year the Tubs/Cans or other accounts is to be
finalized with authorities concerned and of any found short will be recovered in lump sum
and must be settled during the said month itself.
38. The tender will not apply to the milk supply made after the regular time [AM&PM]
either to CC points or on urgent indents.
39. The distributor is prohibited to store the milk and supply the same on next
trip/subsequent trip.
40. The distributor shall deliver the milk in morning and in the evening in all points as per
the schedule given from time to time.
41. The distributor has to make supply to the Agents/Vendors/delivery points appointed by
the KDMPMACU Limited only.
42. The milk supply shall not be stopped to any booth/ point without the knowledge
/orders of the union.
43. All the loading and unloading work has to be carried out by the distributor at dairy and
at the sale points. In return trip the empties [cans, tubs, etc.,] have to be collected and
returned to the dairy. Sufficient man power /workers shall be provided by the distributor in
each vehicle.

60

TRANSPORT CONDITIONS
1. Only vehicle with the specifications given in the schedule shall be deployed for
distribution of milk for the purpose of this agreement. The distributor shall maintain the
vehicle tidy and fit for transport of milk and strictly observe the hygienic conditions.
2. The distributor on acceptance of the contract shall get the vehicles painted on the sides
as per the designs /art work to be proved by the Union.
3. The vehicles should have insulted with plan outer surface as specified in the schedule.
4. The vehicle model should not earlier than 2000.
5. The bottom of the vehicle shall be provided with a flat iron sheet for smooth
movement of the crates together with angular of 7 feet height from the floor of the vehicle.
6. The vehicle shall be provided with self-starter. The engine should be stopped while the
vehicle is being loaded/unloaded at the dairy dock, penalty will be imposed @ Rs.50/- per
day, and itself starter is not provided.
7. The engine of the vehicles should be in perfect working condition and should not emit
any black smoke. The vehicle should also obtain pollution certificates from time to time.
8. The vehicle should have valid appropriate insurance and permit and other statutory
paper etc.,
9. There shall be good lighting arrangements both in cabin and body of the vehicle. A
penalty of Rs.50/- per day will be imposed, if flooring of the vehicle is not smooth and
lights are not provided in body and cabin of the vehicle.
10. The distributors should provide necessary vehicles as per the increased demand of
milk products in a route, as and when required.
11. In case distributor uses lesser number of vehicles than the actual requirement for
transportation then a suitable penalty would be imposed.
12. The Distributor should have telephone facilities.

FINANCIAL CONDITIONS
61

1) That a sum of Rs.10,000/- [Rupees ten thousand only] paid by the distributor towards
EMD at the time of submitting tender will converted into security deposit and the
distributor undertake to furnish the further deposits as may be required by the Union from
time to time towards security deposits.
2) The Distributor shall pay the complete value of milk delivered before 6.00 PM by way
of cash on the day of delivery failing which action will be proposed as per the condition
No: 61.
3) The total amount of security deposit shall be 3 days sale value of milk to be supplied
from time to time. The distributor shall furnish security deposit immediately to the Union
by way of 50% cash deposit and 50% as Bank Guarantee form a Nationalized /Scheduled
Bank.
4) The distributor is liable to pay the cost of the empty crates/cans shorts returned to the
milk products factory, Vijayawada at the purchase cost of new crate/can for each crate/can.
The union will be lawful to recover the cost of the same from the distributor without any
notice for the same.
5) The indent for the milk for the subsequent day supplies should be given before 6.00
PM every day.
6) In the event of failure on the part of distributor to pay for the consignment of milk as
stated above the distributor shall have to pay the interest at the rate of 18% (Eighteen) per
annum on daily compounding basis till the realization of actual amount but with in 2 days
only. The union shall have the right to all remedies and proceedings available to them
against the distributor as per law including termination of the contract with forfeiture of
security deposit, if the distributor fails to pay the due amount with in 2 days maximum
along with interest.
7) In the event of any booth agent failing to pay the amount with in the stipulated time
supply of milk may be stopped and suitable action will be taken by the Krishna District
Milk Producers Mutually Aided Co-Operative Union Ltd on the request of distributor after
due enquiry, if deemed fit.
8) Amount of security deposit in the form of cash deposit and bank guarantee shall be
increased by the Distributor in the event of revision of prices or increase in sale volumes
whenever demanded by the union.
9) The cash form security deposit of the distributor will be refunded only after the
satisfactory fulfilment of contract and as soon as the accounts are finalized with interest @
6% per annum and the interest will be credit/ paid to the Distributor every year.
10)
a. It would be the responsibility of the distributor to collect the full amount in return for
the milk supplied on cash during that trip from the booth agents/points/ institutions etc.,
without fail by issuing cash acknowledgements.
62

b. In case of defaulters, the distributor must hand over the dues list booth wise with
individuals cash receipts to the sales section by 6.00 P.M every day.
c. The pending dues as informed by the distributor will be collected by the union and the
amount as and when collected will be transferred to distributor.
d. However the distributor has to pay the full cost of milk [for cash sales quantity only]
as per truck sheets in full to the union every time irrespective of the dues amount pending.
e. If the dues list is not submitted properly and in-time [i.e.6.00PM of the same day] it is
not the responsibility of the union to make effort to collect dues.
f. The union will try to collect the dues by all means from the sale points as soon as
possible and actual amount will be passed on to the distributor or adjusted against the
amount payable by him to the union.
g. If the distributor cause any damage to the union property the cost will be recovered
from out of the charges or any sums payable.
h. The vehicle should also carry milk products whenever required for which
transportation and delivery charges would be paid at 1/3 rd of the distribution and cash
collection charges for milk per liter.
11) For proper accountability the distributor will be provided a buffer stocks of
cans/tubs/baskets etc., by the Krishna Milk Union by collecting the necessary deposit at
the time of entering into agreement to facilitate the necessary deposit at the time of
entering in to agreement to facilitate the distributor to hand over/return the exact/same
quantity of cans/tubs/baskets etc., on the same day which he has received at the time of
taking delivery of stocks.
12) In case, distributor does not hand over the cans/tubs/baskets etc., on the same day, the
cost will be recovered from the distributor to bring all the cans/tubs/baskets etc., from the
retailer. The deposit will be refund after completion of distributorship and finalize the
accounts.

TERMS & CONDITIONS FOR BOOTH AGENT

1. I will conduct the business exclusively with Vijaya Milk/ Milk Products, at the
specified sanctioned point only.

63

2. I will conduct the sales at the prevailing price fixed by the union from time to time in
the specified sale point only.
3. I will conduct sale only to direct customers and not to any authorized /un-authorized
agents/points.
4. I will pay the milk amount to the milk amount to the milk distribution vehicle staff in
the return trip regularly and for products against delivery.
5. I am prepared to pay the additional security deposit as per the demand of the union in
future.
6.

I obey to deduct the additional security deposit if required

from my monthly

commission.
7. The glow sign board will be returned back to union in case of cancelling of agency.
8. I under take to abide the rules and regulations framed and to be frame by the Krishna
Union, Vijayawada governing the marketing of milk and milk products.

CHAPTER-IV
THEORITICAL FRAMEWORK OF THE STUDY

Human resources management is primarily concern with the people management. It is a

crucial subsystem in the process of management. The success or of the organization not
64

only depends on the material, machines and equipment but also on the personnel who put
in their best efforts for efficient performance of the job. Human resources management is
the management of employees skills, knowledge, talents aptitudes, creative abilities etc.
Human Resource Management (HRM) is a relatively new approach to managing people in
any organization. People are considered the key resource in this approach. it is concerned
with the people dimension in management of an organization. Since an organization is a
body of people, their acquisition, development of skills, motivation for higher levels of
attainments, as well as ensuring maintenance of their level of commitment are all
significant activities. Human Resource Management is a process, which consists of four
main activities, namely, acquisition, development, motivation, as well as maintenance of
human resources.
Performance Appraisals is the assessment of individuals performance in a
systematic way. It is a developmental tool used for all round development of the employee
and the organization. The performance is measured against such factors as job knowledge,
quality and quantity of output, initiative, leadership abilities, supervision, dependability,
co-operation, judgment, versatility and health. Assessment should be confined to past as
well as potential performance also. The second definition is more focused on behaviours
as a part of assessment because behaviours do affect job results.

Definitions
Performance appraisal refers to all formal procedures used in working conditions to
evaluate personalities and contributions and potential of group members.
- Dale Yoder

PERFORMANCE APPRAISAL AND EEO

Performance appraisal is the integral part of the organizations. Properly
developed and implement, the performance appraisal process can help an organization
achieve its goals by developing productive employee. Although there are many types of
65

performance evaluation systems, each with its own advantages and disadvantages, we
must be aware of the legal implications that arise.
Equal Employment Opportunity (EEO) laws require organization to have HRM
practices that are bias free. For HRM, this means that performance evaluation must be
objective and job related. That is, they must be reliable and valued! Furthermore;
performance appraisals must be able to measure responsible performance success.

Effective Performance Standards

Serve as an objective basis for communicating about performance.
Enables the employee to differentiate between acceptable and unacceptable
results.
Increase job satisfaction because employees know when tasks are performed
well.
Inform new employees of your expectations about job performance.

Trends in Performance Appraisal System

Former Trend
The merit rating terminology is used to determine qualifications for wage increase, transfer,
promotion for hourly paid workers. The rating scale techniques and statistical manipulation of data
used for comparison purposes. The superior communicates his rating to employee & tries to sell
evaluation to him, seeks to have employee conform to his view. To control employee behavior by
using it as an instrument for rewards, Punishments and threats.

To make decisions regarding salary increases and promotions.

To place people to do the right kind of jobs.
To identify the training and developmental needs of the employees.

Emerging Trend
The employee appraisal and performance appraisal are used to development of individual,
improved performance on the job and provide emotional security for technical, professional and
managerial employees. The mutual goal setting, critical incidents, group appraisal techniques are
66

used. Superior stimulates employee to analyze himself and set own objectives in line With job
requirements. Superior is helper and counsellor Help each employee to understand more and more
about his role and become clear about his functions. To identify the developmental needs of each
employee & to increase mutuality between each employee and his supervisor.

PROCESS OF PERFORMANCE APPRAISAL

The evaluation process begins with establishment of performance standards.
At the time of designing a job and formatting a job description, performance
standards are usually developed for the position. These standards should be
clear and not vague and objective enough to be understood & measured.
Next step is to communicate these standards to the employees, for the
employees left to themselves would find it difficult to guess what is expected
of them, feedback is necessary from sub-ordinate to the manager for effective
communication.
Third step is the measurement of performance four sources of information are
frequently used to measure actual performance: personal observation,
statistical reports, oral reports and written reports.
Fourth step is comparison of actual performance with standards. The
employee is apprised and judged of his potential for growth and advancement.
Next stage is the results of appraisal are discussed periodically within the
employees, where good points, weak points, difficulties are indicated and
discussed so that performance is improved.

PERFORMANCE APPRAISAL AND EEO

Performance appraisal is the integral part of the organizations. Properly
developed and implement, the performance appraisal process can help an organization
achieve its goals by developing productive employee. Although there are many types of

67

performance evaluation systems, each with its own advantages and disadvantages, we
must be aware of the legal implications that arise.
Equal Employment Opportunity (EEO) laws require organization to have
HRM practices that are bias free. For HRM, this means that performance evaluation
must be objective and job related. That is, they must be reliable and valued!
Furthermore; performance appraisals must be able to measure responsible
performance success.
To assist there matters, two factors arise:
a. The performance appraisal must be conducted according to some established intervals
b. Appraisers must be trained in the process.
To accomplish these objectives, managers need to identify organizational goals to be
accomplished, communicate individual and organizational goals to employees that support
the overall strategic mission and Government Performance and Results Act (GPRA) goals
of the Department, monitor and evaluate employee performance, and use performance as a
basis for appropriate personnel actions, including rewarding noteworthy performance and
taking action to improve less than successful performance.
The Office of Personnel Management defines performance management as the systematic
process of:

Planning work and setting expectations

Continually monitoring performance
Developing the capacity to perform
Periodically rating performance in a summary fashion; and
Rewarding good performance

Key elements:
There are four key elements in the appraisal system:

68

1. Set objectives - Decide what the Team Leader wants from the employees and agree
these objectives with them.
2. Manage performance - Give employees the tools, resources and training they need to
perform well.
3. Carry out the appraisal - monitor and assess the employees' performance, discuss
those assessments with them and agree on future objectives.
4. Provide rewards/remedies - Consider pay awards and/or promotion based on the
Appraisal and decide how to tackle poor performance.

CHAPTER-V
DATA ANALYSIS AND INTERPRETATION
69

5.1. Are you aware of Performance Appraisal System at KDMPMACUL ?

[Yes/no]. How clear are you with it?
Table 5.1

parameters

Completely
clear

Clear to
Good
extent

Partially
clear

20

20

10

50

40

40

20

100

No of
Respondent
s
% of
Respondent
s
Figure 5.1

Not clear to all Total

Completely clear
Clear to
Partially clear
Not clear to all
Total

INTERPRETATION
From the above table & figure it is clear that the KDMPMACUL is appraising the
performance of the employees, which is aware to the all employees in the company.

5.2. With reference to your organization, what according to you is the appraisal
form?
Table 5.2

70

Parameters

No of
Respondents
%of
Respondents

A report on the
employees
performance by
his immediate
reporting authority
30

A report on the
employers
performance
by the
employee
20

A combined
report on both
employee and
employer by third
party
0

None

Total

50

60

40

100

Figure 5.2

No of Respondents
A report on the
employees
performance by his
immediate reporting
authority

A report on the
employers
performance by the
employee

None

Total

A combined report on
both employee and
employer by third
party

INTERPRETATION:
From the above table & figure it is clear that the KDMPMACUL following the appraisal
form is a report on the employees performance by his immediate reporting authority.

5.3.

Do you feel that regular

appraisals on performance stimulate & guide employees development?
[Yes/no]. How frequently should it be done?
71

Table 5.3

Parameters
No of
Respondent
s
% of
Respondent
s

Monthly

Quarterly

Half
yearly

Annually

Total

10

15

20

50

20

10

30

40

100

Figure 5.3

Monthly
Quarterly
Half yearly
Annually
Total

INTERPRETATION:
From the above table & figure it is clear that the KDMPMACUL Company conducting
appraisal yearly once, and the appraisal system stimulate and guide employees
development.

5.4 In KDMPMACUL, What is the duration for which the performance of

individual employee is assessed?
72

Table5.4
parameters

Accounting year

Calendar year

None

Total

No of Respondents

40

10

50

% of Respondents

80

20

100

Figure 5.4

No of Respondents
Accounting year
Calendar year
None
Total

INTERPRETATION:
From the above table & figure it is clear that the organization considering the accounting
year to appraise the performance of the employees.

5.5. In KDMPMACUL, Performance appraisal is a tool to

73

Table 5.5

Parameters
No of
Respondent
s
% of
Respondent
s
Figure 5.5

To transfer
the
employee

To promote
the
employee

Too release
inconvenient

To punish

Total

50

50

100

100

No of Respondents
To transfer the
employee
To promote the
employee
Too release
inconvenient
To punish
Total

INTERPRETATION:
From the above table & figure it is clear that the KDMPMACUL conducting performance
appraisal to promote the employees, it should be motivates the employees to work better
and perform well.

5.6. Are you satisfied with the feedback given to you about your performance during
appraisals?
Table 5.6
74

Parameters
No of
Respondent
s
% of
Respondent
s

Agree

Neither
agree nor
disagree

Disagree

Strongly
Disagree

Total

20

15

50

10

40

30

10

10

100

Strongl
y agree

Figure 5.6

No of Respondents
Strongly agree

Agree

Neither agree nor

disagree

Disagree

Strongly Disagree

Total

INTERPRETATION:
From the above table & figure it is clear that in the KDMPMACUL the half of the
employees are satisfied with the feedback given by the superior during the appraisal, so
the company perform well to satisfy employees and give accurate feed back in time.

5.7. The current performance appraisal system at KDMPMACUL is satisfactory?

[Yes/no]
75

Table 4.7

Parameters

Yes

No

Total

No of Respondents

35

15

50

% of Respondents

70

30

100

Figure 5.7

No of Respondents

Yes
No
Total

INTERPRETATION:
From the above table & figure it is clear that more than half of the employees are satisfying with
current appraisal system, to get 100% satisfaction from the employees the organization should
improve the present system by using new technology otherwise implement the new technique to
appraise the employees.

5.8. Employees are happy with the assessment of performance followed in the
organization?
76

Table 5.8

Parameters

Agree

Neither
agree nor
Disagree

Disagree

Strongly
Disagree

Total

20

10

10

50

10

40

20

20

10

100

Strongl
y Agree

No of
Respondent
s
% of
Respondent
s

Figure 5.8

Strongly Agree
Agree
Neither agree nor
Disagree
Disagree
Strongly Disagree
Total

INTERPRETATION:
From the above table 5.8 it is found that, 40% of respondents have agreed
That they are happy with the assessment of performance appraisal followed in the
organization. And 20 % of the respondents are in neutral stage and 10% of the
respondents are in a disagreed stage where 10% have strongly agreed for
the above statement but none of them have strongly disagreed for this statement.
We c a n i n t e r p r e t t h a t , m o s t o f t h e e m p l o y e e s w e r e i n d i s a g r e e a n d
n e u t r a l position. Because the assessment system in the organization was not up to the
mark.

77

5.9. The tool employed to appraise employees performance in your company is free
from biases & prejudices?
Table5.9
Parameters
No of
Respondent
s
% of
Respondent
s
Figure 5.9

Strongly
Agree

Agre
e

Neither
agree nor
Disagree

Disagree

Strongly
Disagree

Total

30

10

50

10

60

20

10

100

No of Respondents
Strongly Agree

Agree

Neither agree nor

Disagree

Disagree

Strongly Disagree

Total

INTERPRETATION:
From the above table & figure it is clear that more than half of the employees are agreeing
that the appraisal system in KDMPMACUL is free from biases & prejudices, and some are
not agreeing so the company can follow some other techniques to improve the present
appraisal system.

78

5.10. Advises and suggestions are given to the employees during the appraisal
process?
Table 5.10

Parameters

Strongl
y Agree

Agre
e

Neither
agree nor
disagree

Disagree

Strongly
Disagree

Total

30

10

50

10

60

20

10

100

No of
Respondent
s
% of
Respondent
s

Figure 5.10

Strongly Agree
Agree
Neither agree nor
disagree
Disagree
Strongly Disagree
Total

INTERPRETATION:
From the above table 5.10 it is found that, 10 % of respondents have disagreed
that advises and suggestions are given to the employees during the appraisal process and
60% of them have agreed and 10% of the respondents strongly agree and
majority of the respondents i.e.20% are in a neutral stage and none of them have
disagreed for the above statement.
The above analysis exhibits that, emplo yees are expecting many more
suggestions and advises, during the appraisal process that would be helpful for their career.
79

5.11 Employee needs to be assessed as?

Table 5.11

Parameters

Once in 3
Months

Once in 6
Months

15

30

50

10

30

60

100

No of
Respondent
s
% of
Respondent
s

Once in an year

Total

Figure 5.11

No of Respondents
Once in 3 Months
Once in 6 Months
Once in an year
Total

INTERPRETATION:
From the above table it is found that, 60% of respondents feel that
their appraisal system should be once in a year and 30% of the respondents
feel that it should be twice in a year (6 months) and where as 10% of the respondents
feel that it should be for every 3 months.
Here, the employees felt that, they need to be assessed once in a year, as they
felt it is a right period of time to assess the performance.

80

5.12. According to you, what should be considered most when appraising?

Table 5.12
Parameters
No of
Respondent
s
% of
Respondent
s
Figure 5.12

Merit

Seniority

Quality of Work

All

Total

20

30

50

40

60

100

No of Respondents
Merit
Seniority
Quality of Work
All
Total

INTERPRETATION:
From the above table & figure it is clear that the KDMPMACUL considering merit, seniority,
quality of work when appraising the employees in the organization, the company should follow
this every time it will improve the performance of employees, motivates them and company can
produce more.

81

5.13. How much do you feel that ratings are transparent & true to your expectations?
Table 5.13
Parameters

Totally

To a good Extent

To some
extent

Not at all

Total

20

20

10

50

40

40

20

100

No of
Respondent
s
% of
Respondent
s

Figure
5.13

No of Respondents
Totally
To a good Extent
To some extent
Not at all
Total

INTERPRETATION:
From the above table & figure it is clear that half of the employees agree that ratings are
transparent and true to some extent, half are agree to good extent. So the company should
give the ratings are which are transparent to the employees, also take some suggestions
from the workers when appraising.

5.14. In order to appraisal more clearly,

Table 5.14
82

Parameters

The management
should made
objectives &
appraisal very clear

Emphasis seriousness of
the purpose to both
appraiser & appraise

All

Total

10

35

50

20

10

70

100

No of
Respondent
s
% of
Respondent
s
Figure 5.14

No of Respondents
The management
should made
objectives & appraisal
very clear

Emphasis seriousness
of the purpose to both
appraiser & appraise

All

Total

INTERPRETATION:
From the table & figure 5.14 it is clear that the management should made & give the clear
objectives to the employees to perform well and also emphasis seriousness of the purpose
to both appraiser and appraisee to appraisal should more effective & clear. The company
continues above both things it will be perform well.

5.15. Employees are aware of 360-degree appraisal.

Table 5.15
83

Parameters
No of
Respondents
% of
Respondents

Yes

No

30

20

60

40

Total
50
100

Figure 5.15

No of Respondents

Yes
No
Total

INTERPRETATION:
From the above table 5.15 it is found that, 60% of respondents are aware of
360-degree appraisal and 40% of die respondents are not known of 360-degree appraisal.
So majority of the respondents i.e. 60 % of the respondents have agreed that they were
aware of 360 degree appraisal.
Here from the above study it is known that, the employees are not completely aware of
360-degrees appraisal system.

CHAPTER- VI
84

FINDINGS AND SUGGESTIONS

The chapter Highlights about some of the finding suggestions based on the study which
are helpful to identified and improve the organization

FINDINGS
50% of employees are completely clear towards the appraisal system at
KDMPMACUL, 41% are clear to good extent, 9% are partially clear.
90% of the respondents have answered that the appraisal form is a report on the
employees performance by his immediate reporting authority,10% are answered that a
report on the employers performance by the employee.
6% of respondents have answered that the appraisal should be done monthly, 12% are
quarterly,25% are half yearly and 57% are annually. 100% are answered yes.
94% of the respondents have answered that the KDMPMACUL considering the
accounting year as the duration for assessing the performing, and 6% are answered
neither calendar year nor accounting year.
100% of the respondents answered that in KDMPMACUL the appraisal is a tool to
promote the employee
3% of the respondents have answered that they are strongly agreeing that the appraisal
system in the KDMPMACUL is free from biases & prejudices, 60 % are answered as
agree,21% are neither agree nor disagree, and 16% are disagree.
10% of respondents have answered that strongly agreeing that there is a need to have
counselling sessions, 72 % are agree, 10% are neither agree nor disagree and 8% are
disagree.
25% of the respondents have answered that quality of work considered mostly when
appraising, 75% are answered that merit, seniority, quality of work all are considered.

SUGGESTIONS
85

Feed back: An ideal appraisal system is one, which has a built in procedure for
performance feedback to the employees. The appraisee should be given feedback as to
why he had been assigned a particular grading and also the areas in which he can further
improve should be suggested to him. This helps to establish healthy relationship between
appraisers and appraisees, which develops cooperativeness in the work environment. The
convincing ability and assertive nature of the appraiser plays an important role.

Transparency: The appraisees are not aware of the performance dimensions on

which they are rated. Unless the grade is below average, it is not communicated to them.
This makes appraisees isolated from the system. This motivates them to work better and
also their trust in the existing appraisal system enhances. It also necessary to communicate
ratings and grades to all the employees in such a way that fosters healthy competition
among employees who improve their work performance and in turn contribute to
institutional goals.

Counselling: counseling sessions can be conducted regularly to understand

organizational and personal constraints that restrict the employees from working to their
maximum capacity. Action plans should be initiated and implemented to improve
organizational constraints to the extent possible. However this should be done at the free
will of the employees and employee privacy should not be distributed in any case in such
sessions. Counselling provides moral support and enhances psychological strength of the
employees.

360-degree appraisal system: not only the superiors but also by the subordinates
and colleagues who come in to contact with them rate Employees. The bias that enters in
to the appraisal if a single appraiser does it can be reduced considerably if more than one
appraiser rates the employees. Final grade should be decide only after observing the
validity and rationality of these ratings. This brings more objectivity in to the performance
appraisal system.

Group appraisal method: The rating is not made by a single evaluator, but by a
group of supervisors who sit together and evaluate the performance of the employee. This
also improves the team spirit in the organization.

86

CONCLUSION
It is here by concluded that the appraisal system followed at through the
company need to take into account employees at all the levels of the organization. This
will help the same time the company must adopt itself to newer concepts on the ideas to
improve the performance of the employees. Latest tools such as 360 degree appraisal,
interactive learning the corporation in having a high satisfied workforce which is
ingredient in the success of a company.
At sessions, online computer training programmes etc., must be incorporated for
better results. The appraisal process which they want, is one which would help them to
know actual performance and which would stop them from performing any incorrect
actions. The study thus enables us to conclude that performance appraisal system in
KDMPMACUL is not just a formality. It places a vital role in improving the overall
performance of the employees.

87

QUESTIONNAIRE

1. Are you aware of Performance Appraisal System at KDMPMACUL?

How clear are you with it?
a) Completely clear

b) clear to good extent

c) partially clear

d) not clear to all

2. With reference to your organization, what according to you is the appraisal form?
a) A report on the employees performance by his immediate reporting authority
b) a report on the employers performance by the employee
c) a combined report on both employee and employer by third party
d) None

3. Do you feel that regular appraisals on performance stimulate & guide employees
development? [Yes/no]. How frequently should it be done?
a) Monthly

b) quarterly

c) half yearly d) annually

4. In KDMPMACUL, What is the duration for which the performance of

Individual employee is assessed?
a) Accounting year

b) calendar year

c) none

5. In KDMPMACUL, Performance appraisal is a tool to

a) To transfer the employee

b) To promote the employee

c) To release inconvenient

d) To punish

6. Are you satisfied with the feedback given to you about your performance during
appraisals?
a) Strongly agree

b) agree

c) neither agree nor disagree

d) Disagree

e) strongly disagree

88

7. The current performance appraisal system at KDMPMACUL is satisfactory?

a) Yes

b) No

8. Employees are happy with the assessment of performance followed in the organization?
a) Strongly agree b) agree
d) Disagree

c) neither agree nor disagree

e) strongly disagree

9. The tool employed to appraise employees performance in your company is free

from biases & prejudices?
a) Strongly agree b) agree
d) Disagree

c) neither agree nor disagree

e) strongly disagree

10. Advises and suggestions are given to the employees during the appraisal process?
a) Strongly agree b) agree
d) Disagree

c) neither agree nor disagree

e) strongly disagree

11. Employee needs to be assessed as ?

a) Once in 3 Months

b) Once in 6 Months c) Once in an Year

12. According to you, what should be considered most when appraising?

a) Merit

b) seniority

c) quality of work

d) all

13. How much do you feel that ratings are transparent & true to your expectations?
a) Totally

b) to a good extent c) to some extent

14. In order to appraisal more clearly,

89

d) not at all

a) The management should made objectives & appraisal very clear

b) Emphasis seriousness of the purpose to both appraiser & appraise
C) all

15. Employees are aware of 360-degree appraisal?

a) Yes

b) No

90

BIBILOGRAPHY

Books:
Donald L. Kirkpatrick, 2006, Improving Employee Performance through
Appraisal and Coaching.
Richard Rudman, 2003, Performance Planning and Review.
Roger E. Herman, 1997, The Process of excelling, oak Hill press.
P. S u b b a R a o , 2 0 0 6 , E s s e n t i a l s o f H u m a n R e s o u r c e M a n a g e m e n t a n d I
n d u s t r i a l Relations, Himalaya Publishing House.

Websites:
www. hrcite.com
www.hrlinks.com
www.google.com
www.citeHR.com

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