Summer Training Report

JASODA DEVI COLLAGE& INSTITUTIONS

A Project Report

ON

PERFORMANCE APPRAISAL

AT

SARAS DAIRYRAJASTHAN COOPERATIVE DAIRY FEDERATION

JAIPUR

Submitted in Partial Fulfillment for the

Full time P.G. Degree course

In Master of Business Administration [M.B.A.]

Submitted By:- Submitted To:-

Reena Rani Yadav Dr. SHIKHA ASTHANA

M.B.A-IV Sem.

(2008-2010)

INDEX

S.No. Particulars Page No.

Acknowledgement i

Preface ii

1. CHAPTER – 1. FOOD PROCESSING INDUSTRY IN INDIA 1 – 12

2. CHAPTER – 2. CORPORATE PROFILE 13 – 22

3. CHAPTER – 3. ABOUT SARAS & ITS PRODUCTS 23 – 28

4. CHAPTER – 4. PERFORMANCE APPRAISAL 29 – 40

5. CHAPTER – 5. EMPLOYEE WELFARE 41 – 47

6. CHAPTER – 6. RESEARCH METHODOLOLGY 48 – 49

7. CHAPTER – 7. DATA ANALYSIS & INTERPRETATION 50 – 55

8. CHAPTER – 8. FINDINGS & SUGGESTION 56 – 57

9. CHAPTER – 9. CONCLUSION 58 – 59

10. CHAPTER – 10. BIBLIOGRAPHY 60 – 61

11. CHAPTER – 11. ANNEXURE 62 – 67

CHAPTER 1.

FOOD PROCESSING INDUSTRY IN INDIA

FOOD PROCESSING INDUSTRY IN INDIA

The food processing industry in India is segmented into food grain /

pulse milling, fruit / vegetable processing, milk and milk products,

beverages, fish, poultry products, meat and meat products, aerated

water / soft drinks, beer / alcoholic beverages, breakfast cereals,

bread, biscuits, confectioneries, malt protein and edible oils / fats.

Like many other industries, the food processing industry also

comprises of both the organized and unorganized sector. Certain

branded and packed products such as butter, cheese, ghee, jams,

jellies, fruit / vegetable juices, sauces and ketchup, soups, broths,

fruit pulp and fruit juice based drinks are already exempted from

Excise Duty. This should be extended to all processed products made

from perishable goods such as poultry, meat, milk, fruits and

vegetables.

The industry is estimated to grow at 9-12 percent, on the basis of an

estimated GDP growth rate of 6-8 percent, during the Tenth Five

Year Plan period. Value addition of food products is expected to

increase from the current 8 percent to 35 percent by the end of 2025.

Fruit & vegetable processing, which is currently around 2 percent of

total production will increase to 10 percent by 2010 and to 25

percent by 2025. Given the size of the industry and the nascent

development stage, the food processing sector is a key focus area for

the Government of India. The importance of the sector is further

enhanced by the fact that over 70 percent of the population depends

upon agricultural activity for livelihood.

The Government has therefore been focusing on commercialization

and value addition to agricultural produce, minimizing pre/post

harvest wastage, generating employment and export growth in this

sector, through a number of regulatory and fiscal incentives. The

potential for processed food as per the stated vision (INR billion.) at

2003-04 prices is as follows:

Source: Vision, Strategy and Action Plan for Food Processing Industries in India. Prepared by Rabo India Finance Pvt. Ltd. for Ministry of Food

Processing Industries, Government of India, April 2005.

In order to achieve the market potential, the investment required in

capacity creation and setting up requisite infrastructure in the period

2003-04 was Rs.560 billion. Between 2009-10 it is expected to be

Rs.437 billion. and Rs.997 billion. in 2014-15. The sectoral

breakdown is as follows represented on next page: -

The source for these funds will be a combination of investment by

industry players, debt/equity from financial institutions, foreign

direct investment and Government funding through financial

schemes. The contribution from financial institutions, equity from

industry (including FDI) and Government is estimated to be

approximately 45%, 45% and 10% respectively.

The unorganized sector in food processing requires an investment of

about INR 100 billion. In the next ten years (estimated on the basis

of output ratio as 2:1 and capital intensity ratio as 5:1 of organized

and unorganized sector). The employment intensity is estimated to

be approximately 10 direct employment per INR million of

investment in the unorganized sector (Source: Dr. J.S.Bedi

Analysis). This will lead to direct employment creation of 1 million

in the unorganized sector. The indirect employment generation in the

unorganized sector will be about 1 million (assuming a ratio of direct

to indirect employment as 1:1). The above analysis assumes no

replacement of existing employment.

A nine-point strategy is recommended to achieve the stated vision:

1. Shift from supply driven to demand driven approach

2. Increase affordability of food products by reducing costs through

rationalization of tax regime and increasing supply chain efficiency

3. Enhance financing to the agriculture and food processing sector in

a comprehensive manner given the intrinsic linkages of the two

sectors

4. Improve food standards and safety systems through science based

setting of standards and strengthening of the food testing network

5. Strengthen institutional framework to develop manpower and

R&D capabilities to address global challenges

6. Increase competitiveness of the small and medium enterprises by

facilitating their access to the best practices, technology, capital and

marketing opportunities

7. Effective market development and awareness campaign to

enhance the image of Indian food products, particularly overseas

8. Foster public-private partnerships for infrastructure creation and

technology Upgradation

9. Replicate successful Indian and international business models

including cooperative models in production, processing and

marketing of food products

Food processing has an important role to play in linking Indian

agriculture to consumers in the domestic and international markets.

The agriculture sector in India contributes a fourth of the country’s

GDP and provides employment to approximately two thirds of the

population. However, its potential has not been tapped due to

underdevelopment of the food processing sector in India.

One of the most important challenges facing the country is providing

remunerative prices to farmers for their produce without incurring

the additional burden of subsidies. This challenge could be addressed

if cereals, fruits, vegetables, milk, fish, meat and poultry etc. are

processed for consumption in the domestic and international

markets. The impact of increased economic growth in agribusiness

through food processing can play a significant role in reducing rural

poverty and increasing rural income. Further, food processing leads

to significant employment generation – not only directly but also

across the supply chain in production of raw materials, storage of

produce and finished products and distribution of food products to

consumers.

For example a grant of INR 66.7 million (total investment of

approximately INR 250 to 300 million) to 35 units in UP in 2003-04

has resulted in direct employment of 2,500 and indirect employment

of 20,000. Processing of food enhances shelf life of agricultural

products and thus reduces wastages. The role of food processing

becomes critical since agricultural production is targeted to double in

the next 10 years. With low farmer price realization and wastage in

the food supply chain being significant even with the current level of

production, only processing of agri products can secure farmer

incomes against a slump in prices as well as reduce wastages.

Further, a vibrant food processing industry can be a catalyst for crop

diversification.

The big opportunity for India

As a food supplier, India with the second largest arable land in the

world, and with diverse agro-climatic zones across the country, has

tremendous production advantages in agriculture, with the potential

to cultivate a vast range of agricultural products. For example, India

produces 41% of the world’s mangoes, 30% of cauliflowers, 28% of

tea, 23% of bananas, 24% of cashew nuts, 36% of green peas and

10% of onions. This strong base in agriculture produces a large and

varied raw material base for food processing. These advantages if

leveraged optimally, can translate into India becoming a leading

food supplier to the world. As a consumer, India with a population of

1.08 billion, growing at about 1.6% per annum (Census Estimates) is

a large and growing market for food products.

Food is the single largest component of private consumption

expenditure, accounting for as much as 53% of the total. Further, the

upward mobility of income classes and increasing need for

convenience and hygiene will drive demand for (a) perishables and

non food staples and (b) processed foods.

However, the agri & food sector faces several challenges, which

hamper realization of potential. A long and fragmented supply chain

is the single largest bottleneck facing the sector. This together with

demand related issues as well as regulatory distortions have

cumulatively resulted in several inefficiencies. Comprehensive

supply chain solutions are the key to achieving sustainable

development of the Food Processing sector in India.

Food safety is a growing concern across the world. There is an

increasing need to provide greater assurance about the safety and

quality of food to consumers. With the increase in world food trade,

India’s potential to garner a higher share in world food trade and the

advent of the Sanitary and Phytosanitary (SPS) Agreement under the

World Trade Organization (WTO) have led to increasing recognition

and adoption of food safety measures. The capacity of India to

penetrate world markets depends on its ability to meet increasingly

stringent food safety standards imposed in developed countries. Food

standards are expected to acquire greater importance given

increasing concerns on food safety on the back of breakout of

diseases such as BSE, avian influenza etc. on the one hand and

growing consumer demand for products which are healthy on the

other. Therefore, compliance with international food standards is a

prerequisite to gain a higher share of world trade. At the same time,

there is growing awareness among Indian consumers given recent

controversies on quality standards of many food products. The

players in the Indian food industry need to keep these trends in view

and meet domestic and international consumer demand for safe food.

Future Employment Generation

Food processing has significant potential for employment generation

not only directly but also across the supply chain in production of

raw materials, storage of produce and finished products and

distribution of food products. Employment intensity is significantly

higher in the Small Scale Industries (SSI) sector as compared to the

organized sector for the same level of investment.

The incremental employment in the organized sector in FPI sector by

2015 on the basis of the stated vision is estimated at 8.2 million. The

sectoral break-down is as represented on next page:

The employment intensity in the organized sector is 1.8 direct and

6.4 indirect per million on investment. The ratio of indirect to direct

employment is therefore 3.5. Rabo India has estimated investment

required in the organized sector of FPI as INR 997 billion. in the

next ten years. Hence the employment generation potential in the

organized sector is 8.2 million including 1.8 million direct and 6.4

million indirect for an estimated investment of INR 997 billion.

The unorganized sector in food processing requires an investment of

about INR 100 billion. in the next ten years (estimated on the basis

of output ratio as 2:1 and capital intensity ratio as 5:1 of organized

and unorganized sector).

The employment intensity is estimated to be approximately 10 direct

employments per INR million of investment in the unorganized

sector (Source: Bedi Analysis). This will lead to direct employment

creation of 1 million in the unorganized sector. The indirect

employment generation in the unorganized sector will be about 1

million (assuming ratio of direct to indirect employment as 1:1). The

above analysis assumes no replacement.

SSI in Food Processing

The SSI sector accounts for 95% of industrial units in the country,

40% of value added in the manufacturing sector, 34% of national

exports and 7% of Gross Domestic Product (GDP). The SSI sector is

the largest employment generator next only to agriculture. It has

been estimated that an investment of INR 1 million in fixed assets in

the small-scale sector generates employment for forty persons and

produces more than four million rupees worth of foods or services.

The food sector is a leading employer within SSI, providing

employment to 480,000 persons (13% of SSI).

The SSI sector is less capital intensive with a high potential to

generate employment. However, the efficiency of SSI units is

impacted by the following:

- Lack of capital / credit

- Inadequate training technical / managerial

- Tools and technology (traditional and less efficient)

- Limited market knowledge (demand, food standards)

The organized large-scale sector is focused on processed foods,

where SSI cannot compete due to lack of marketing and distribution

strengths. However, SSIs can play an important role in procuring

from farmers and primary processing of produce to increase shelf life

and make it available to processor / marketers who have access to

the final consumer.

There is a strong need to provide necessary training and R&D

support to SSIs to promote product innovation. Also, SSIs have

limitations in terms of investments on brand development. There is a

need to promote public private participation in supporting collective

investment by SSIs in branding.

CHAPTER – 2.

CORPORATE PROFILE

ABOUT Rajasthan Cooperative Dairy Federation [RCDF] :

Dairy development was initiated by the state government in the early

seventies under the auspices of Rajasthan State Dairy

Development Corporation(RSDDC) registered in 1975. Two years

later RCDF assumed responsibility for many of the functions of

RSDDC. It became the nodal agency for implementation of

operation flood in the state.

(RCDF) set up in 1977 as the implementing agency for dairy

development programmes in Rajasthan is registered as a society

under the Rajasthan cooperative societies act 1965.

THE ORGANISATION:

The Federation is a State level apex co-operative organization owned

by its member unions each of which, in turn, is owned the dairy co-

operative societies in its area of operation which are themselves

owned by farmer members.

The Federation has a board of directors which has overall

responsibility for the planning policies, financial resource

mobilisation and management, member and public relations as well

as liaison with agencies of the state and central government,

financing institutions etc. The Federation has a chief executive

designated as Managing Director.

OBJECTIVES: -

To carry out activities for promoting production, procurement,

processing and marketing of milk & milk products for the

economic development of animal husbandry/ farming community.

Development & expansion of such other allied activities as may

be conducive for the promotion of the dairy industry,

improvement & protection of milch animals and economic

betterment of those engaged in milk production.

Organise and provide technical inputs.

Erection of Dairy, chilling plant, cattle feed plants for unions.

Study of problems of mutual interest of the Federation and milk

unions.

Impart training and orientation to dairy co-operative members.

Advise, assist and guide milk unions

Undertake audit and accounts supervision

Encourage fodder production etc.

ORGANIZATIONAL BOARD: -

Chairman: Shri Om Prakash Punia, Rajasthan Co-operative

Dairy Federation Ltd., JAIPUR.

Member: Shri Samir Singh Chandel, Managing Director

Rajasthan Co-operative Dairy Federation Ltd., JAIPUR.

Member: Secretary to Government, Animal Husbandry

Department, Government of Rajasthan, JAIPUR.

Member: Registrar, Co-operative Societies of Rajasthan,

JAIPUR.

Member: Dy. Secretary to Government, Finance (Gr. IV & PI),

Government of Rajasthan, JAIPUR.

Member: Shri Mahipal Singh, Chairman, Sikar-Jhunjhunu

Distt. Milk Producers Co-operative Union Ltd., SIKAR.

Member: Shri Pratap Singh Bithiya, Chairman, Pali Distt. Milk

Producers Co-operative Union Ltd., PALI.

Member: Shri Raghvendra Singh Deora, Chairman, Jalore-

Sirohi Distt. Milk Producers Co-operative Union Ltd.,

RANIWARA.

Member: Shri Kushalpal Singh, Chairman, Distt. Milk

Producers Co-operative Union Ltd., BHARATPUR

Member: Shri Gopal Lal Chaudhary, Chairman, Distt. Milk

Producers Co-operative Union Ltd., SAWAI-MADHOPUR.

Member: Dr. Smt. Gita Patel, Chairperson, Distt. Milk

Producers Co-operative Union Ltd., UDAIPUR.

Member: Shri Raja Ram Jorad, Chairman, Distt. Milk

Producers Co-operative Union Ltd., BIKANER.

Member: Shri Pema Ram Saharan, Chairman, Distt. Milk

Producers Co-operative Union Ltd., HANUMANGARH.

THREE TIER STRUCTURE:

The dairy co-operative movement operates on three tier system

wherein farmer members own dairy co-operative societies (DCS)

which own district milk producer's union. The unions collectively

own the RCDF. It is a vertically integrated structure that establishes

a direct linkage between those who produce the milk and those who

consume it.

Federation - Provides service & support to unions. Marketing

within & outside state, Liaison with government and NGO agencies,

mobilisation of resources & coordinating & planning programmes /

projects.

Union - Develops village milk cooperative network, procures milk

from DCS, processes & markets. Sale of cattle feed and related

inputs, promotion of cross breeding through AI and NS, promotion

of fodder development and general support & supervision to DCS.

DCS - Provides input services(AH, AI) to its members and

procurement of milk.

The dairy co-operatives depict the following institutional properties

Democratically elected board of DCS, milk unions & Federation

from among their members.

Adoption of such bye laws which ensure democratic process on

the principles of cooperation.

Management & ownership of assets by the cooperatives.

Autonomy in pricing, marketing & appointment of personnel.

Employment of professional.

Total control of the organisation is in the hands of its members.

INFRASTRUCTURE: -

A. INPUT FACILITIES   LOCATIONEXOTIC NUCLEUS FARM   BASSIFROZEN SEMEN BANK   BASSIFODDER SEED FARM   ROJARI / BASSI / PALCATTLE FEED PLANTS   AJMER, BIKANER, JODHPUR, NADBAI

B. MILK PROCESSING , TRAINING & CATTLE FEED FACILITIES

UNIONMILK (TLPD

)

DRYING

(MTPD)

CHILLING CENTRES

HIRED CHILLING CENTRES

TRAINING

CENTRE (NOS.)

CF PLANT

S (MTPD)

     

Capacity

(TKGPD )

No.

Capacity

(TKGPD )

No.

   

AJMER 150 10 -       1 150ALWAR 150 10 -   20 1    BANSWARA 30 - -          BARMER     50 2        BHARATPUR - - - - 50 2   150BHILWARA 150 - - - - 1 1  BIKANER 150 5 160 4 10 1 1 150CHITTORGARH

- - - - 30 - - -

CHURU 30 -     10 1    GANGANAGAR

100 10 60 2 70 3    

JALORE 100 10 10 1 30 2    JAIPUR 300 15 50 1 375 5 1  JHALAWAR 20 - - - 40 3 - -JODHPUR 100 - 50 3 - - 1 150KOTA 50 - - - 20 1 1  NAGAUR     30 2 10 1    PALI 60 - 20 1 20 1    SIKAR 60 - 10 1 10 1    TONK/SWM 40 -     30 1    UDAIPUR 60 - - - 40 2 1  TOTAL 1550 60 440 17 765 26 7 600 

TECHNICAL INPUT:

In addition to provision of regular and remunerative market for milk

to the farmers the dairy cooperative development programme also

provides input and services for promoting animal health and

production enhancement of milch animals

A. Animal Health Programme (AH)

Veterinary services like first aid, medical treatment and vaccinations

are being provided to the members by the milk unions.

· First aid is provided at the village at the DCS.

· Regular scheduled services are provided by mobile units and at

veterinary camps.

· Emergeny services provide veterinary care at the farmer's doorstep.

. B. Breed Improvement

1. Artificial Insemination Programme (AI): Artificial

Insemination Programme has been undertaken by RCDF. To supply

the frozen semen to the AI Centres of Milk Unions as well as to A.H.

Department, an ultramodern Frozen Semen Station is established at

Bassi which supplies the Semen of high pedigree exotic and native

breeds.

2. Natural Services (NS): Bulls of improved breeds are provided at

dairy cooperative societies where AI activities are not much feasible.

C. Cattle Feed

Balanced cattle feed is being manufactured by four cattle feed plants

viz. Ajmer, Bikaner, Jodhpur and Nadbai. The milk unions make

feed available to the farmers via village cooperative societies. The

available range of Cattle Feed are balanced cattle feed, high energy

feed, calf starter & Cattle feed supplements like Urea molasses

bricks (UMB) and Mineral mixture.

D. Fodder Development : Under the recent major input programme

the fodder development activities have been taken by RCDF through

which the major fodder crops and their seed is grown on Rojhri,

Bassi and Pal Farms and seed is supplied to the dairy farmers on no

profit-no loss basis. The major fodder crops are lucerne, oat, bajra,

barseem Sorghum Sudan Grass etc. The federation also procures

quality seeds from other agencies & provides them to the farmers.

TRAINING & EXTENSION: Eight milk unions viz Ajmer,

Bhilwara, Bikaner, Ganganagar, Jaipur, Jodhpur, Kota and Udaipur

are operating centres where training is provided for several area

related to DCS operations viz DCS secretary, Management

Committee member, AI workers, milk tester, first aid worker,

chairman orientation, dairy animal management and various

refresher courses etc. To enhance active participation of the producer

members in the DCS, to create awareness about improved animal

husbandry practices viz feeding, crossbreeding, animal management

and stimulate fodder production, extension activities are carried out

at DCS and at milk unions. Under farmer's induction & orientation

programme, visits to the dairy plants are arranged to demonstrate the

process & disposal of the milk collected from the producers.

Producers also taken to visit the model Indian dairy cooperative-

Anand Milk Cooperative Union (AMUL ) in Gujarat and they in turn

educate other milch animal owners in their area about the practices

and benefits of cooperatives. Audio-visual aids, field

demonstrations, extension camps are used to explain feeding,

breeding , fodder development and clean milk production practices.

AUTOMATION: The milk collection and testing systems at village

DCS have been automated with the installation of electronic milk

testers (EMT) and auto milk collection stations (AMCS). At present

9677 EMT & AMCS are operational at DCS level. Milk reception,

weighment and testing at dairy plants and chilling centres have been

modernized with the installation of Automated raw milk reception

Dock.

MILK PRODUCTION   IN RAJASTHAN (000,MT)

S.NO. YEAR PRODUCTION1 1985-86 41462 1986-87 41683 1987-88 39114 1988-89 40365 1989-90 42176 1990-91 43397 1991-92 44748 1992-93 45869 1993-94 495810 1994-95 510311 1995-96 544912 1996-97 587313 1997-98 648714 1998-99 692315 1999-2000 726016 2000-2001 745517 2001-2002 771818 2002-2003 778919 2003-2004 8054

20 2004-2005 8310

21 2005-2006 8713

Source Integrated Sample Survey Report : Animal Husbandry Department, Rajasthan

CHAPTER – 3.

ABOUT SARAS & PRODUCTS

ABOUT SARAS:

The marketing activities of the Federation include providing support

to the Milk Unions in milk and milk products within and outside the

State. RCDF is presently marketing milk & milk products under

Saras brand :

Fresh milk of different compositions and long shelf life tetra pak

milk is being marketed in rural and urban areas. The Federation is a

major supplier of tetra pak milk (UHT) to the armed forces.

RCDF is also marketing various fresh milk products in Saras brand,

which are, Chhach, Lassi, Shrikhand, Flavoured Milk, Mawa, Paneer

and Dahi. Long life products such as Cow ghee, Ghee, Table Butter,

Dairy Whitener, Skim Milk Powder, WMP and Tetra Pak Milk (Cow

Milk, Taza Milk and Fit and Fine) are also being marketed.

Saras Milk Parlours serving a complete range of milk products are

operational at 442 points in Rajasthan. Presently Saras brand is

being marketed through a network of 17484 outlets

SARAS - PRODUCTS

The "Saras" range:

Fresh Milk

DTM

Toned

Standard

Full Cream

Skimmed

Long Shelf Life Milk- Tetra pak

Cow Milk

Toned Milk (Taaza)

Cow Milk

Fresh Milk Products

Chaach

Lassi

Dahi

Paneer

Shrikhand

Icecream

Rasgulla

Flavored milk

Mawa

Long Shelf Life Milk Products

Ghee

Cow Ghee

Table Butter

SMP

WMP

Cheese

Dairy Whitener

White Butter

Cattle Feed

Balanced feed

High energy

Mineral mixture

Calf starter

Urea Molasses Brick

(UMB)

SARAS - PRODUCTS PRICES

MRP. in Rupees (w.e.f. 10.10.2008 for Ghee)

PackingSize

Ghee Table butter

Ghee (cow)

TetraPackTaaza

Tetra pack Fit-n-

Fine

Tetrapack ExcelBrick

TetraPackExcelFino

Balanced Cattle Feed

High Energy

Mineral Mixture

Urea Mol. Brick

1/2 lt. Mono carton 

109 - - - - - - - - - -

1 lt. Monocarton 

215 - 220 - - - - - - - -

1 lt. Tin  - - - - - - - - - -

15 kg tin  3225 - 3300 - - - - - - - -

100 gm  - 19 - - - - - - - - -

500 gm  - 92 - - - - - - - - -

25 Kg  - - - - - - - - - 550 -

50 Kg  - - - - - - - 392.5 430 - -

nos.  - - - - - - - - - - 31

500 ml.  - - - - - - - - - - -

1000 ml.  - - - 31 29 32 31 - - - -

1000 gm  - - - - - - - - - 26 -

5 lt. Tin  1075 - 1100 - - - - - - - -

15 Litre Tin 

3000 - 3075 - - - - - - - -

Cattle feed rates are ex-factory price

QUALITY ASSURANCE OF SARAS

RCDF possesses a specialized central quality control labaratory

which monitors adherence to quality standards through random

sampling of milk, milk products, cattle feed, packing material etc.

Each dairy plant has its own laboratory to which RCDF staff

provides advise and technical support.

Established in the year 1990 the Central Quality Control Laboratory

in RCDF is engaged in monitoring the quality standards of milk and

milk products, packaging material, cattle feed and effluent treatment

so as to ensure their conformance with laid down respective

standards of P.F.A., B.I.S., Ag-mark and Pollution Control Board.

Ambit of activities cover all aspects right from collection of milk to

finished products by programme such as clean milk production, ISO-

9002 and HACCP-15000 certification. In addition to this all the

major milk plants and cattle feed plants too have their own

laboratories to ensure the QAP and TQM at first place.

Commitment to production of quality products has resulted in the

dairy plants at Ajmer, Alwar, Bhilwara, Bikaner, Ganganagar, Jaipur

& Udaipur being registered under ISO-9002 and HACCP-15000

systems.

GROWTH CHARTS:

CHAPTER – 4.

PERFORMANCE APPRAISAL

PERFORMANCE APPRAISAL

Performance appraisal (PA) is one of the important components in

the rational and systemic process of human resource management.

The information obtained through performance appraisal provides

foundations for recruiting and selecting new hires, training and

development of existing staff, and motivating and maintaining a

quality work force by adequately and properly rewarding their

performance. Without a reliable performance appraisal system, a

human resource management system falls apart, resulting in the total

waste of the valuable human assets a company has.

There are two primary purposes of performance appraisal: evaluative

and developmental. The evaluative purpose is intended to inform

people of their performance standing. The collected performance

data are frequently used to reward high performance and to punish

poor performance. The developmental purpose is intended to identify

problems in employees performing the assigned task.

The collected performance data are used to provide necessary skill

training or professional development. The purpose of performance

appraisal must be clearly communicated both to raters and ratees,

because their reactions to the appraisal process are significantly

different depending on the intended purpose.

Failure to inform about the purpose or misleading information about

the purpose may result in inaccurate and biased appraisal reports.

Critical Criteria of Developing a Pa System

In order for performance appraisal information to be useful, the PA

system must be able to consistently produce reliable and valid

results. Measurement items in the performance appraisal system

must be designed in such a way that the results of rating are

consistent regardless of the raters and the timing of the assessment.

Another critical criterion in developing a PA system is the validity of

the measurements. It is important to make sure that the appraisal

items are really measuring the intended performance or target

behavior. If they are not, the PA system encourages the wrong kind

of work behaviors and produces unintended, frequently negative,

organizational outcomes.

For instance, if the number of traffic violation tickets issued is an

item in performance appraisal of police officers, it encourages them

to sit on a corner of a street and pull over as many violators as

possible during heavy traffic hours. The true purpose of a police

force, which is public safety, may become secondary to issuing a

large number of tickets for many officers.

What to Evaluate

The first important step in developing a PA system is to determine

which aspects of performance to evaluate. The most frequently used

appraisal criteria are traits, behaviors, and task outcomes.

Traits. Many employees are assessed according to their traits, such

as personality, aptitudes, attitudes, skills, and abilities. Traits are

relatively easy to assess once a rater gets to know ratees.

But traits are not always directly related to job per formance. Trait-

based assessment lacks validity and thus frequently raises legal

questions.

Behaviors. For many jobs, performance is so broadly defined or so

conceptual in nature— such as ensuring public safety in the police de

partment—that it is hard to come up with reliable performance

measures. In such cases, desirable behaviors can be identified and

assessed in the belief that such behaviors lead to successful

performance. Such behavior-focused assessment encourages

employees to adopt desirable behavioral patterns in the workplace.

Task outcomes. When information about task outcomes is readily

available, it is the most appropriate factor to use in evaluating

performance. When an organization has a clear and measurable goal

as in the case of a sales force, this approach is recommended.

However, it has its own pitfalls. There is a problem if employee

behaviors are not directly related to the task out-come.

Too narrow a focus on measuring out-come only sometimes results

in unintended negative consequences. When sales staff narrowly

focus on target sales figures to increase their performance measure,

for example, they are encouraged to help a few large-volume

customers and to ignore many smaller buyers. This may result in

poor customer service on the floor.

Who Evaluates?

The most common raters of performance are employees' immediate

supervisors, who are usually in the best position to know and

observe the employees' job performance. They are also responsible

for employees' work.

Their evaluation is a powerful tool in motivating employees to

achieve successful and timely completion of tasks. However, as a

result of working together over a long time with the same

employees, the immediate supervisor may build up a fixed

impression about each employee and use it every time he or she has

to evaluate performance.

Some companies find that subordinates are in an excellent position

to observe and evaluate their managers' performance, especially

when it comes to measuring effective management of their

department. While there is merit in asking subordinates to evaluate

how they are managed, such evaluation may turn into a popularity

contest. Accurate and objective assessment may not be obtained if

employees are fearful of possible retaliation from their supervisors.

Anonymity of the evaluators is key to the successful use of

subordinates for objective evaluation.

Other raters who are frequently used in some companies include

peers, customers, and the employees themselves. Peer evaluation is

particularly useful when teamwork and collegiality are important to

successful task performance. Peer pressure is sometimes a powerful

motivator in encouraging teamwork among members.

Customer satisfaction is vital to a company's success and can be used

in performance appraisal. Many companies systematically collect

performance information from customers, typically through

anonymous surveys and interviews. Self-assessment is also a useful

means, especially when the performance appraisal is intended to

identify the training and development needs of potential employees.

Each of these raters contributes to assessing certain aspects of

performance. Since job performance is multidimensional in nature, it

is important to use different raters or a combination of multiple raters

depending on the goal of a performance appraisal system. This

multirater evaluation, or so-called 360-degree feedback system, is

becoming increasingly popular among many American corporations,

including General Electric, AT&T, Warner Lambert, and Mobil Oil.

Performance Appraisal Methods

To ensure the reliability and validity of a PA system, a company

must design the evaluation process carefully and develop appropriate

measuring scales. Among the many assessment methods developed

by human resource management experts, commonly used ones

include the Graphic Rating Scale, Behaviorally Anchored Rating

Scale, Narrative Technique, Critical-Incident Method, Multiperson

Comparison Method, Forced Choice Method, and Forced

Distribution Method.

The Graphic Rating Scale is the simplest and most popular method

for performance appraisal. As shown on Figure 1, the Graphic Rating

Scale offers a list of areas related to job performance. A manager

rates each employee on the listed areas according to a numerical

score.

Although this method is relatively simple and quick to complete,

some experts question its validity and reliability. Without elaborate

description, appraisal items and scores are subject to various

interpretations of raters.

In order to overcome pitfalls of the Graphic Rating Scale, numerous

other methods have been developed. The Behaviorally Anchored

Rating Scale (BARS), illustrated in Figure 2, offers rating scales for

actual behaviors that exemplify various levels of performance.

Because raters check off specific behavior patterns of a ratee, PA

results of BARS are more reliable and valid than those of the

Graphic Rating Scale. Human resource managers must carefully

analyze each job and develop behavior patterns pertinent to various

levels of performance for the job before they use the BARS.

The Narrative Technique is a written essay about an employee's job

performance prepared by a rater. The essay typically describes the

rate's job-related behaviors and performance. Without standard

performance description, it is a cumbersome task for raters to write

an essay for several employees. For example, a rater can be asked to

describe the activities, achievements, and level of performance of the

employee in a completely open-ended format (unstructured

narration).

Alternatively, the rater can be pro vided with some structure to use in

the evaluation; for example, "Describe briefly the activities,

achievements, and level of performance of the staff member in the

following areas: (1) work habits, (2) planning and organizing the

tasks, (3) management skills, communications, and development of

others."

The performance review form at a college asks an evaluator to

describe the activities, accomplishments, and creative works of the

professors in the areas of (1) teaching and (2) research/creative

activity. A dean of the college writes about the professor's teaching

performance: "Dr. Michael Johnson has been nominated by his

students for the Outstanding Teacher Award several times during his

service.

He introduced many teaching innovations into his classes. His

teaching record is exemplary." In the area of creative activity, the

dean writes: "Dr. Johnson has a strong and productive research

record with a defined focus in organizational leadership. His research

has been recognized with several awards given by professional

organizations. His creative activity is exemplary."

Similar to the Narrative Technique is the Critical-Incident Method,

which involves keeping a running log of effective and ineffective job

performance.

For example, the PA log of an employee, Mr. Campbell, contains

Unsatisfactory Incidents as follows: 1/28/2000: "Refused to try a

new work procedure," and 2/15/2000: "Argued with a customer

about the origin of error in the paperwork."

The log also contains Satisfactory Incidents as follows: 1/20/2000:

"Volunteered to help Charlie complete his assignment in time";

2/19/2000: "Trained new employees in safety regulations."

The Multiperson Comparison Method asks raters to compare one

person's performance with that of one or more others. It is intended

to effectively eliminate the possibility of giving the same rating to all

employees. In order to separate performance scores among multiple

employees, the Forced Choice or Forced Distribution Methods are

adopted. Raters must choose one high performer from the list of

employees or distribute certain scores to employees at different

ranks. For example, only one top person will get 40 percent, two

second-rank persons 20 percent, and the bottom one person 10

percent. The Paired Comparison Method is a special case of the

Multiperson Comparison Method.

Everyone in the evaluation pool is compared against everyone else

as a pair and recorded "plus" or "minus" when the target ratee is

better or worse, respectively, than his/her comparison. The final

performance ranks are determined by the number of positives.

Subjectivity and Objectivity

Accuracy is critical to performance appraisal. In order to obtain

accurate performance information, raters must provide objective and

unbiased ratings of employees. But, because it is almost impossible

to develop a perfectly accurate performance checklist, managers'

subjective opinions are frequently called for. Many companies use

some combination of subjective and objective assessment for actual

performance appraisal. Yet there are numerous problems in the

actual assessment of employee performance, mainly due to rater

bias. Some raters tend to rate all employees at the positive end rather

than to spread them throughout the performance scale; this is called

"leniency." Alternatively, "central tendency", which places most

employees in the middle of the scale, also raises concern about

possible appraisal error. Another common error in performance

appraisal is the halo effect. This occurs when a manager's general

impression of an employee, after observing one aspect of

performance, influences his/her judgment on other aspects of the

employee's performance.

Researchers have found that personal preferences, prejudices,

appearances, first impressions, race, and gender can influence many

performance appraisals. Sometimes raters' personal opinions or

political motives creep into the performance appraisal process.

They intentionally inflate or deflate performance ratings of certain

employees as a way to punish them or promote them out of the

department. Using unreliable and unvalidated performance

appraisals may cause a legal problem. A number of court cases have

ruled that the performance appraisal systems used by many

companies were discriminatory and in violation of Title VII of the

Civil Rights Act.

In order to avoid legal problems, companies must develop an

appraisal system based on careful job analysis and establish its

reliability and validity. They must give clear written instructions to

raters for completing evaluations and provide them adequate training

if necessary. The company must allow employees to review the

results of the appraisals. Human resources departments must play a

key role in the development and implementation of an effective

performance appraisal system.

CHAPTER -5.

EMPLOYEE WELFARE DESIGN

EMPLOYEE WELFARE DESIGN

This information will be helpful to you if:

An employer does not have any employee welfare benefit plans and

wants to know how to approach the task of designing the most

appropriate plan or plans; or The employer has at least one employee

welfare benefit plan and is not sure if it is the right plan.

Who Is To Benefit?

The first step in employee welfare benefit plan design is to determine

who the employer intends to benefit and why. The scope of coverage

and the employees who are to be covered by the plan will be the first

limiting factor in the number of alternatives available because of the

nondiscrimination rules in the Code. For example, if the plan is to

cover a select group of executives, it may not be possible to provide

the benefit on a tax-favored basis. On the other hand, if the plan is to

be a broad-based plan covering executives and rank-and-file

employees, then many alternatives are available on a tax-favored

basis. Determining the scope of coverage in the proposed employee

welfare benefit plans also involves identifying which employees

must be covered.

The nondiscrimination rules applicable to each type of welfare plan

typically require coverage of a sufficient number of non-highly

compensated employees versus highly compensated employees.

If the employer is a member of a controlled group or an affiliated

service group, these rules also require that the employees of all

members of the group be taken into account when testing for

nondiscrimination. Leased employees must also be taken into

account. Therefore, a complete and accurate census must be prepared

when determining who to benefit and will also be key in the

following steps for plan design.

What Benefits Will Be Provided?

The question of what benefits will be provided goes hand in hand

with the question of who is to benefit under the welfare benefit

plans. The most typical employee welfare benefit plans are the

following:

1. Medical

2. Prescription drugs

3. Dental

4. Vision

5. Death

6. Disability

7. Dependent care

8. Educational assistance

9. Severance

How Will The Benefits Be Provided?

Employee welfare benefits can be provided from the employer's

general assets, from a trust, through insurance, or through a

combination. The approach used may cut down on the

nondiscrimination rules and reporting requirements that apply. For

example, medical benefits that are provided through insurance are

not subject to any nondiscrimination rules whereas self-insured

medical benefits are.

Who Will Administer The Benefits?

Each employee welfare benefit that an employer provides requires

some level of administration. The employer must determine what is

required and who is going to handle it. Will it be handled internally?

Through an insurance broker? By a third party administrator?

How Much Will The Benefits Cost?

The employer's cost of the benefits to be provided will be a function

of what level of benefits are going to be provided, who is going to

pay for the benefits (see below), and how they are going to be

provided. For example, an insured medical plan with a $500

deductible is going to be more expensive than the same plan with a

$1,000 deductible. Or, a small employer may find that providing

dental benefits on a self-insured basis is more expensive than

insuring such benefits, while a large employer may find just the

opposite to be true.

Who Will Pay For The Benefits?

Employee welfare benefits can be provided by the employer paying

all of the costs, by the employees paying all of the costs, or through a

combination of employer and employee contributions. For example,

a frequent plan design for medical benefits is for the employer to pay

for the employee's coverage and the employee to pay for coverage

for the employee's spouse and dependents.

If the employees are going to pay for any portion of the cost, are the

employees going to pay their share on a pre-tax basis or an after-tax

basis?

If they are to pay their share on a pre-tax basis, then the employer

will need to have a cafeteria plan so that the employees can reduce

their compensation in order to purchase the desired benefits.

How Many Plans Will There Be?

An employer can design its plans so that each is a separate plan

requiring its own summary plan description with its own reporting

obligations. Alternatively, an employer can combine two or more

plans into a single plan in which case only one summary plan

description is required and only one Form 5500 needs to be filed.

EMPLOYEE EMPOWERMENT

Empowerment is simply gaining the power to make your voice

heard, to contribute to plans and decisions that affect you, to use

your expertise at work to improve your performance and with it the

performance of your whole organization.

1. Food processing in India is a great industry offering potential

employment opportunities to the people at large.

2. Since one got aware with the food industry, the way of food

products availability and the hygiene maintain at the time of

manufacture and distribution.

3. One also been educated there the 24hr clean, healthy atmosphere

and a definition of qualitative service can be best defined there.

4. A Distinctive life style, better than the best services and

improving the momentum to serve the customer as prompt

possible are few pre-requisites.

CHAPTER – 6.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Research Methodology: A research is a process of providing relevant

guidelines for necessary reading of market scenario with respect to the

objective for which survey is requires to be carried out with the help of

Questionnaire. Keeping the objective of PERFORMANCE APPRISAL in

mind it was decided to carry out a survey among the personnel and human

resources appointed in the prestigious SARAS Dairy in Jaipur.

Research Instruments

Questionnaire: Research was done with the help of questionnaire. There

were two types of questions.

1. Closed ended questions

2. Open ended questions

Closed ended questions included answers of objective type only in which

either a choice from the few alternatives was to be chosen.

Sampling techniques: - there are usually two techniques of sampling being

taken – Random sampling and systematic sampling. I have adopted

systematic sampling for the conduct of the survey.

Sample Size: The sample size was 35 individuals consisting of executives

and employees for the purpose of conducting a small general survey

pertaining questionnaire for generating necessary conclusive evidences.

CHAPTER 7.

DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS & INTERPRETATION

Analysis: - It was inferred from the internal survey to the

organization that out of 35 employees: Freshers were 6, Working for

over an year were 20 and Well Experienced were 9

17%26%

57%

Fresher Working for over an year Well Experienced

Q.2 Are you available with necessary training & development?

Analysis: - It was depicted that life insurance advisors are providing with

necessary training & development pertaining to existing products/policies by

11 advisors, Pertaining to customer relationship & selling policies: 12,

pertaining to new product updation: 9 and No by 3 surveyed advisors.

Q.3 What is the basis of performance measurement and appraisal in

your organization?

Analysis: Further it was also analyzed that the performance measurement

and appraisal in the organization being adopted as: Grading system: 5,

Ranking system: 8, BARS system: 4 & Performance – Point allocation: 18

Q.4 Are you satisfied with the way of behaviour and conduct of senior

level management with you?

Analysis: Satisfaction with the way of behaviour and conduct of senior level

management with the advisors analyzed as follows: Yes by 19 majority of

advisors, No by 10 and To some extent by 6 life insurance advisors.

Q.5 What satisfy you most?

Analysis: Most derivable Satisfaction factors for the employees as been

depicted below:

Reputation of the company: 4 Higher Commission: 8

Rewards & Recognitions: 9 Environment and Ambience: 7

Freedom to work: 7

Q.6 What dissatisfy you most?

Analysis: Most derivable dissatisfaction factors for employees as been

depicted below:

Negative attitude of customers: 16 Private – Public myth: 7

Non-supportive colleagues & staff: 3 No permanency:5

No fixed salary: 4

Q.7 Do you agree that cordial nature of management as well as infusion

of new skills and strategies being imparted time to time will lead to

augmentation of efficient performance?

Analysis: - It was agreed by 27 wide majority of employees that that cordial

nature of management as well as infusion of new skills and strategies being

imparted time to time will lead to augmentation of efficient performance

where mere 2 said no and 6 favored to some extent

Q.8 How often the performance is evaluated?

Analysis: - it was analyzed that performance evaluation of employees was

undertaken as Weekly to 2 employees, Monthly to 5, Quarterly to 24 and

remaining 4 employees to Yearly

Q.9 Your performance till date is:

Analysis: - performance till date as achieved by the respective questioned

employees for the purpose of their performance Evaluation were as

respectively Higher: 15, Substantial: 5, Rising: 7 and Improving: 8

Q.10 Do you agree that for augmenting performance and efficiency it is

necessary:

Analysis: - for augmenting performance and efficiency it is necessary to

raise monetary incentives and shower non-monetary incentive for achieved

performance depicted by 13 employees where as Impart necessary skills and

knowledge pertaining to work procedure by 9. Raise the level of confidence

and trust in employees via motivation [5] and To make the corporate

atmosphere more amicable and positive by

CHAPTER 8.

FINDING & SUGGESTION

FINDINGS & SUGGESTIONS

In SARAS, I found:

1. that the industry offering its best services and opportunities in

every sphere,

2. that the employees working in, are satisfied with their jobs as well

as treatment of the superior organizational members,

3. that employees are loyal towards the organization resulting

enriched and considerable working experience.

4. that despite being simply graduated, by maintaining their healthier

working experience many of them have been promoted by their

hard work and creative expertise.

5. that the management control over the lower management and

supervisory section is medium and not high because of the fact

that employees are enough to handle their tasks and

responsibilities fairly and honestly.

6. that the Daily reporting to the Superior by the corresponding

subordinate employee of maintained so as to judge the

comparative performance of the particular day

CHAPTER 9.

CONCLUSION

CONCLUSION

At the end of the report, I would like to put my words with utmost

delight that what I found in SARAS while fulfilling my objective

was that the employees are serving in a very amicable leading o

serving the objectives to their fullest advantages to the organization.

The employees are being provided with proper training and

development and their performance appraisal is being undertaken at

frequent levels leading to judge the value of human personnel

employed therein.

Therefore what I found after evaluated performance of selected 35

employees working in the organization that they must be more

equipped with the working amenities and new technological know

how and must be well trained and developed to strengthen

themselves in dealing each and every query and problems of the

customers and hence must make their sales as desired for the

beneficial to the customers and the company as a whole.

In my study I draw the conclusion that employees are getting

acquainted with work frequently and the behaviour of their bosses

are cooperative and more as advisors. Since food industry is rising

followed by a good competition despite the company is performance

extensively well in all over Rajasthan and some locations like in

Delhi, Haryana etc.

CHAPTER 10.

BIBLIOGRAPHY

BIBLIOGRAPHY

In order to obtain more information regarding the present study and to

substantiate it with theoretical proof, the following references were

made: -

Books: -

1. Human resource & Personnel Management –CK Awasthi

2. Performance Management and Appraisal systems – TV Rao

3. Human resource and Personnel management – Aswathappa

Magazines & Newspapers

The times of India

Business World

The Hindu

Website references :

www.sarasmilkfed.coop

www.ibef.org

CHAPTER 11.

ANNEXURE

ANNEXURE - QUESTIONNAIRE

NAME OF THE EMPLOYEE: ________________________________

DESIGNATION: ___________________________________________

JOB ASSIGNMENT: ________________________________________

AREA/ DEPARTMENT OF WORKING

Q.1 Are you a

Fresher

Working for over an year

Well Experienced

Q.2 Are you available with necessary training & development for

enhancement of your performance?

Pertaining to existing products/policies

Pertaining to customer relationship & selling policies

Pertaining to new product updation

No

Q.3 What is the basis of performance measurement and appraisal in

your organization?

Grading system

Ranking system

BARS system

Performance based Point allocation

Q.4 Are you satisfied with the way of behaviour and conduct of senior

level management with you?

Yes

No

To some extent

Q.5 What satisfy you performance most?

Reputation of the company

Higher Commission

Rewards & Recognitions

Environment and Ambience

Freedom to work

Q.6 What dissatisfy you performance most?

Negative attitude of customers

Private – Public myth

Non-supportive colleagues & staff

No permanency

No fixed salary

Q.7 Do you agree cordial nature of management as well as infusion of

new skills and strategies being imparted time to time will lead to

augmentation of efficient performance?

Yes

To some extent

No

Q.8 How often the performance is evaluated?

Weekly

Monthly

Quarterly

Yearly

Q.9 Your performance till date is:

Higher

Substantial

Rising

Improving

Q.10 Do you agree that for augmenting performance and efficiency it is

necessary:

Impart necessary skills and knowledge pertaining to work procedure.

Raise the level of confidence and trust in employees via motivation

To make the corporate atmosphere more amicable and positive

To raise monetary incentives and shower non-monetary incentive for

achieved performance

Other associated comments:

1. ________________________________________________

2. ________________________________________________

3. ________________________________________________

4. ________________________________________________

DEEPIKA SINGHAL

SARAS