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Performance Appraisal System Effect on Employees Apollo Tyres

1. 1 Introduction

According to Mayo, 2000, Human resources management can be an important function of a firm because the machines can be easily aimed, restored and utilised but employees you live beings with thoughts and prejudices and can't be easily directed, serviced and utilised. In 20th hundred years the theoretical as well as functional areas of the Recruiting management acquired a scientific aspect, the consistent initiatives of the management to improve the performance of the organization has resulted in the performance analysis of recruiting or employees. The employees will be the building blocks of a company and the faulty block will deform the entire firm so that it is the duty of the management to form these building blocks according to the needs. The performance appraisal system is not new theory it comes with an age old record to tell but the modern appraisal system has improved in the mid of 20th century.

The performance appraisal system, which combines many departments of the company, is aimed at the development of performance of the employees. The employees who aren't credit scoring in the performance appraisal period are required to undertake training and skill development programme. The performance appraisal was thought to be a motivation factor however in practise many reports have shown that it is not always become a motivational factor but sometimes has de-motivational effects on the appraised. The machine which formulates the rules and rules to encourage the employees to execute better in the next appraisal period can be called as a best suited system for that one firm because there is no perfect method or method to be followed in a performance appraisal system in a firm. (Nishad, 2005)

The drive and de-motivation factors may be present in the same performance appraisal system. The appraisal may be motivational to some employees in the meantime it is de-motivating for others. The merged effect is an over-all thing in all appraisal system but the proportion of determination to de-motivation factors should be high in any other case the entire aim of the Performance appraisal will be failed. (Seong and Lewis, 2009)

There are many factors which impact the result of performance appraisal the main factor is the appraisal treatment and the analysis criteria, the next critical indicators are social, ethnical, economical and politics aspects of the employees. The interpersonal and social aspects are known as long lasting factors which can't be nullified so that it becomes the work of the company to plan a PA system which suits the socio-cultural areas of the employees in addition to the due thought for the political as well as the economics factors. (Nishad, 2005)

1. 2 Track record and justification of the study

1. 2. 1 History of the Study

Apollo Tyres Ltd is a multinational company having many divisions all over the world. It is an exclusive sector company with limited responsibility. The performance tabs on ATL has drawn many foreign businesses to initiate joint venture with the corporation in UK, US and African continent. The performance of the company and the varied product categories it provides to the clients are the key because of its success. (Company profile, 2010)

Apollo Tyres Ltd is rising as a worldwide tyre produces and it finds its power in the option of materials and labour at less price than its rivals. The annual earnings for 2009 financial yr was 1. 2 Billion USD. The main income source is form the domestic production; recently the company has acquired many other international firms including the Dunlop Tyres in 2006 and VBBV of Netherlands as well as the Russia's most significant tyre developing company Amtel-Vredestein NV. ATL has a primary market strategy and has 2500 showroom all over the world; majority of it are in India. You will discover 4000 dealerships India and more than 100 sellers internationally. (Company account, 2010 and Stanley, 2009)

The globalisation has taken many difficulties to ATL as new multinational companies have joined the health attention sector in India. ATL has coped with problems with diversified product plan and then for which it has invested billion of Indian Rupee, because of this the company has major market talk about in India. It really is a subject of credit that around 10% of Tyre Products available around world participate in ATL because of the export activities of the business. The business is so successful because of the work force it received. (Company profile, 2009)

The staff are being provided by good facilities such as good working environment, good salary, versatile time schedule and holiday break and festive allowancesetc. The Management has already providing them a contributory pension account and insurance scheme for the employees. The educational scholar ships and education center up to senior high school for the children of employees are provided by the business itself, apart from the residential service. (Company account, 2010 and Stanley, 2009)

The annual report from financial 12 months 2006 to 2009 has demonstrated that the output has been getting lowered year by yr. In 2006 it was 2. 6% decrease and in '09 2009 it has already reached the alarming 18% decrease. The management has a performance appraisal system since 1971 and counselling programme as well as skill development programs are given for the underperformed employees. Still the output graph documents a downward expansion. And this proposed study indents to learn the efficiency and impact of the appraisal system on the employees and the output. (Stanley, 2009)

1. 2. 2 Justification of the study

Every organisation surrounding the world has eye-sight and mission, regardless of the school of thought behind the eyesight and mission there will be a common factor in the philosophy increased performance. The improved upon performance might bring revenue to the organisation. The overall development of the organisation may be one aspect of the 'advanced performance' of the company. the upgraded performance means the improved performance of the its various departments such as Recruiting management, financial management, development and functions management, sales management, marketing management, customer support managementetc. In all of the departments the individuals factor is a matter of serious concern. The right people for the right job make all the distinctions. (Taylor, 2001)

All the companies involve some or other method to assess and analyse the performance than it. The analysis of this performance and the activities plans to be taken to increase the performance are of great need for every firm. To control the performance appraisal of its employees the businesses have another appraisal team under the human resources office. The functions of appraisal team are included with other division such as financial section to organize the appraisal rewards and punishments, if any. (Qureshi, 2005)

The performance appraisal is a complicated disciple of research because the appraisal consequence is probably not the intended and assumed drive of the employees. The studies have discovered that in many organizations around world the appraisal process and remedial methods have resulted in the declined performance of the employees indicating the de-motivational aftereffect of the appraisal system. (Nishad, 2005)

The appraisal methods and standards should be identified particularly for each and every firm because the appraisal results and the impact of the employees are incredibly much depended on the exterior internal factor of the organization. The exterior factors such as socio-cultural features of the employees, the economic and politics situation of the physical located area of the firmetc. The internal factors mean the nature of the careers, the leisure and pleasure in the job, the working conditions, organisational cultureetc. (Nishad, 2005)

The appraisal theories when put on the Parts of asia the effect may be damaging because the traditional western appraisal ideas have a great limitation in the Parts of asia as a result of social and ethnical difference of the Asian people. So that it is vital to analyse the appraisal system based on local factor which affect the management and the organisational behaviour of the employees. (Taylor, 2001and Nishad, 2005)

In the suggested analysis, ATL- Kalamassery, in the Kerala status, India, is considered because the political and the cost-effective situations of the state of hawaii. The Kerala is world famous for the various politics ideologies such as communism and socialism. The economic backwardness of the state of hawaii is also factor to take this device of ATL for the analysis. Regarding to Taylor (2001) the sociable- cultural features of the employees in India are very much not the same as the european countries. The social behaviour of Indians may also be unacceptable social etiquettes for westerners. The interpersonal bond and relationships are different from that of the western countries. The suggested study would like to analyse the impact of the factors in the appraisal system and how far the appraisal system of ATL can manage its employees in the improvement of performance.

1. 2. 3 Books Review

Performance appraisal has a long history it emerged with the civilisation. Once the people are interacting to each other within an orderly fashion then it may require some laws to govern the carry out of the folks in the group. This initial law formation is called "grundnorm" which means the bottom norm, and these bottom part norms were made to control the carry out and also the distributed obligations. The distribution of duties include various works; later on when these works required efficiency then performance of the individual and the categories were commenced to analyse. So that it can be said that the performance appraisal was there in the primitive societies and eventually the application form and the method of evaluation has been changed a great deal. (Rajeev, 2000)

According to Mayo, (2000), in today's world, where everything is measured with time, the performance evaluation has great importance. The performance of each member of a group is very important to the goal of performance evaluation. After the industrial trend new management ideas came in to being and many of them went in to oblivion, those survived provided emphasis on the analysis of the performance on the basis of scientific standards. The commercial world attempts to inspire its man vitality so that better performance can be obtained from each of the employees.

The motivational aspect of the performance appraisal has been subject matter for profound rooted debates which derive from the countless disciplines of study such as mindset, anthropology, sociology. . . etc. The difficulty of the topic matter signifies the intricacies mixed up in performance appraisal process and its own effect on the employees. (Nishad, 2005)

The motivational theories such as Vroom's expectancy theory and cleanliness theory suggest that the employees are not motivated by giving them better facilities or salary but there's a mental dimensions such as gratitude, recognition, career progress. . . etc. The present day appraisal theory which is dependant on these concepts while the traditional theory of performance appraisal only support the deterrent method, that is, the employees who are undertaking well will be paid better and the ones who aren't will be sacked. This process has many loop openings like the mental strain through the appraisal period the employees have and having less commitment from the area of the employees and it was proved to be ineffective in motivating the employees. (Rajeev, 2000)

The modern strategy, meanwhile, support moreover a lenient procedure on the employees. The basic philosophy is to understand the basic problem in the underperformance of the employees. The primary cause may well not be related to the job or it can be related of some physiological problems, whatever it may the administrator or the supervisor who's responsible for the appraisal process is responsible to understand it. The counselling process is designed to understand the issues and give recommendations to solve the problems of the employees. The training and improvement programmes are also conducted in many modern sectors to boost the performance level of the employees. (Rajeev, 2000)

The performance appraisal is usually starts with the formulation of the standards on which each and every staff will be analysed. The standards formation is highly complex and will be unique according to the nature of employment as well as the school of thought of the management. The criteria then communicated to the employees and a period period will be given to these to opine about the requirements and after the evaluation of the suggestions from the various sources the management may change the requirements or stick on with it. The appraisal process begins and the each employee will be up to date about the appraisal period. The appraisal consequence will be shared publically and remedial steps will be studied thereafter. The remedial measures include the training and improvement programme and even the removal of the underperformance form the career. (North, 2006)

The problem with the performance appraisal commences when the employees are instructed to undergo the remedial methods. Regarding to Nishad (2005), the public and ethnical factors of the employees as well as the political strength are essential factors that dictate the appraisal process. Unlike the western world in Parts of asia the political power of the employee's unions is a lot stronger and the labour regulations are much lenient to support the employees. The appraisal system in the Asian countries shall not follow the strategies of the traditional western firms. The motivational factors and the de-motivational factors are different and contradictory in western and eastern world. The factors which motivate a westerner may a factor for de-motivation in Parts of asia.

According to Taylor (2001), the social-cultural aspects of the employees have significant effect on the appraisal system in the Parts of asia. The trade unionism and the political inclination of the unions are other factors which will impact the appraisal system adversely. The behavioural structure of the employees have to be analysed prior to the formulating the appraisal strategy.

The political philosophy of the politics parties in Kerala varies from leftist ideology to the rightist capitalism. The political parties highly support one or the other politics ideologies; communism and socialism will be the major philosophies that happen to be being followed in the state for more than a century. The trade unions of the state of hawaii are affiliated to anyone of the political functions and the trade unions relishes the safety of labour regulations of the land. (Ashok, 2007)

Situation in the ATL is not different from the politics situation of the state. The political gatherings have a great influence on the trade unions and the lives of the employees. Every staff in the ATL is affiliated to anybody of the political parties. That is basically a survival strategy for the employees as well as the trade unions. (Ashok, 2007)

The collective bargaining of the trade unions and the risk of attacks hampered the development of many sectors in the state. The current situation in the company is also same and the management have to go over and reach in a consensus to put into action any change in work schedule or in reward or in the salary. The strength of the management is in the bargaining electricity which of the trade unions is in the unity and menace to strike. (Uppal, 2009)

The performance appraisal system of any industry is under the scrutiny of the trade unions, the performance criteria should be handed down by the trade union so that it can be properly run. The remedial measures are also supervised by the trade unions and any action which is a potential menace will be highly resisted by the unions. (Uppal, 2009)

1. 2. 4 Aim

The present analysis is designed to analyse the Performance Appraisal System of the Apollo Tyres Ltd and the motivating as well as the de-motivating effects of the appraisal system based on the socio-cultural and politico-economical situations and to suggest the strategies and types of procedures to enhance the performance of the employees.

1. 2. 5 Hypothesis

(A) Null hypothesis H0

"Impact of your performance appraisal system on the employees is depended on the sociable, cultural, politics and economical environment of the firm and the employees"

(B) Solution Hyposthesis

H1: "Impact of any performance appraisal system on the employees is NOT depended on the cultural and Ethnical environment of the company and the employees"

H2: "Impact of your performance appraisal system on the employees isn't depended on the political and economic environment of the organization and the employees"

The null hypothesis is "statistical hypothesis that is examined for possible rejection under the assumption that it's true (usually those observations are the result of chance). The concept was presented by R. A. Fisher" (Gonick and Smith, 2006)

In this suggested review, the null hypothesis considers the impartial variables such as public, cultural, politics and economic factors of the environment where the firm operates. The null hypothesis is assumed to be trued based on the various secondary data. The choice hypothesis is divided in to two part one with the factors such communal and cultural factors and the next one is politics and financial factors.

According to Malhotra (2008), the social and ethnical factors cannot be separated as it is has strong affect on each other. The sociable factor is formed predicated on the ethnical factor and the ethnic is nurtured and propagated through cultural circumstances. According to Cumbler (2003), The political philosophy is actually related with the market of the country, the politics affiliation is moreover has direct effect on the current economic climate of the people. It is noteworthy that the communism and other labourer favoured philosophies are flourishing the third world countries as a result of poor economical conditions. Once these countries become developed nations the leftist philosophies will vanish in span of time.

1. 2. 6 Key Targets of the Study

1. To analyse the performance appraisal system in general and especially in the Apollo Tyres Ltd (ATL)

2. To comprehend analyse the importance of the performance appraisal system in attaining the goals and targets of an firm

3. To study and analyse the move of performance appraisal from classic to modern and the major factors influenced the transition

4. To comprehend the motivating and de-motivating effect of the appraisal system on the employees in general and particularly in the ATL

5. To analyse aftereffect of social and social factors and political and inexpensive factors of the employees on the appraisal system generally speaking and particularly in the ATL.

1. 2. 7 Research Questions

To fulfil the primary objective of the study the next research questions are proposed

Performance Appraisal its meaning and definitions

What will be the need for performance evaluation system in achieving the organisational objective and goals?

What will be the differences in the present day as well as in the traditional appraisal system?

What is the relationship between the motivation of the staff and appraisal system?

How do the socio-cultural and politico-economical factors of the staff have an effect on the Appraisal System in a company?

Does the performance appraisal system in the Apollo Tyres Ltd have a motivational effect on the employees?

What are the strategies that the ATL uses in the appraisal process to enhance the performance of the employees in this socio-cultural and politico-economical qualifications?

2. Research method and Approach

2. 1 Introduction

The research method and approach is devised to review and understand Performance Appraisal System in the Apollo Tyres Ltd (ATL). The study involves the opinion of the employees and the management on the present appraisal system in ATL. The interview method will be used to comprehend the management area of story on the Performance Appraisal system in the ATL. The questionnaire method can be used to comprehend the employee side story. The literature reviews are depended to produce a frame focus on the theoretical concept of the analysis. Various statistical methods will be used to analyse the info and it'll be explained on the basis of relevant books. The course of the study will be six months. Within the month of March, 2010 the study will be commenced and the final article will be published in Sept, 2010.

2. 2 Research Technique of the study

The research methodology of the analysis is designed to understand the Performance Appraisal System in the ATL and the impact of present system on the employees.

According to Kothari, (2002) the study method well suited for a study where in fact the relevant literatures as well as the principal data are being used the two research methods are generally used such as the exploratory methods and the constructive methods. The constructive methods are being used when the topic matter of the research needs some structure of mention of handle the whole research results. For instance, in international marketing research, sometimes, the cultural qualities of customers have to be taken the foundation or structure of guide of the analysis because this trait will have an impact on all the study questions under analysis.

2. 2. 1 Exploratory research methods

Exploratory research methods are wildly used in the extra data accumulation. On this present research the books review will be used to understand and also to formulate the theoretical shape work of the entire study. The annals of the appraisal system, the relevance of the appraisal system, the motivational as well as the de-motivational areas of the PA system, the sociable and cultural factors as well as the politics and financial factors will be thoroughly researched through relevant books. The relevant resources will be explored to comprehend the subject subject of the analysis deeply thus exploratory research methods. (Kothari, 2002)

2. 2. 2 Constructive Research Methods

Constructive research methods are being used when the study result can't be generalised scheduled the influence of prominent factors in the study. (Kothari, 2002)

In today's review the performance appraisal system is analysed predicated on the cultural and cultural facet of the employees. The political and inexpensive aspects are also considered for the study because each one of these factors have a prominent effect on the study. Quite simply, without taking these factors in mind the research will be completed. The geographical located area of the unit under review is in the Kerala status, India, which is an economically backward place and the political philosophies, such communism and socialism have formidable effect on people living there. The cultural and cultural factors are different from the, the burkha and the sociable bonds and family cohesions are extremely important aspects this culture. The communal connection and etiquettes will vary from that of the western world so the theories applicable in the western world no longer stand good in these circumstances. So that it is mandatory for this study to form a frame focus on these factors to analyse the subject matter of the study.

2. 2. 3 Questionnaire and interview method

Interview and questionnaire methods are usually used to accumulate the info first hands (Kothari, 2002). In this particular study these methods are preferred to get the information on the appraisal system of ATL and the impact of such system on the employees. The questionnaires will be utilized to find the views of the employees on the performance appraisal system as well as the appraisal rewards and the methods of the PA system.

According to Saunders et al. , 2003 the open up end interviews are of help to assemble data in a larger perspective. The available end interview questions and the answers to it will supply the interviewer the possibility to ask other relevant questions to the interviewee based on the prior answer and can get additional information from the interviewer.

The interview questions are available end in aspect and the questions will be asked to the officers of ATL. According to the answers of the representatives other related questions will be asked to obtain additional comprehensive view on the subject. This technique is used to interview the officers only because there are incredibly few in number.

The questionnaire will be sent out to the employees and the responses will be collected back within one month of distribution. This method is adopted because in this product there are 2100 employees and interviewing all them will not be possible scheduled to time constrain.

2. 3 Approach to Study

The proposed research requires both main data as well as the secondary data to meet up with the objectives of the study. The method of review thus made to collect the principal as well as the extra data. The primary data will be collected from the management staffs and from the employees. The secondary data will be gathered by referring books, Articles, the e-journals and newspaper publications, web sitesetc.

2. 4 Major data collections methods

Primary data will be gathered from the employees and the managers of the ATL immediately. The employees will be allocated the self-structured close end questionnaire to be responded and 2 weeks time will get to these to load it and go back. Managerial staff will be interview with available end interview questions. Relating to Saunders et al. , 2003, the available end questions are very apt for interviewing a little sample in a report it also very effective because the available end questions will provide enough possibility to ask more questions based on the solution for the previous questions and clarify the concerns on the statements if any.

2. 5 Extra Data collection methods

The supplementary data collection is strongly suggested information gathering process in any research work. The researcher should be diligent enough to select apt resources and updated information. In management subjects the data collection should be done through kept up to date resources and latest editions literature, articles and publications because new concept and theories and its own applications are rising day by day which is the responsibility of the researcher to determine the up dated information for his research work. (Kumar, 2005)

The extra data collection method includes usage of the relevant and modified books, publications and articles. The web site will be thoroughly used if the authenticities of the websites are known. The school catalogue and online facility will be thoroughly used for this research. The info about the company profile will be compiled though company website and referring the ISO manual of ATL and the annual report which comes in the website of ATL.

2. 6 Method of Data analysis

In the suggested study the primary data as well as the extra data will be utilized to attain a bottom line and the recommendations. The principal data will be analysed with various statistical tools such as chi rectangular test, ANOVA etc and the variance evaluation will be done to understand the impact of the declaration with the books review. Both the primary and supplementary data will be concurrently used to interpret the results of the research.

2. 7 Opportunity, Ethics and Restriction of the Study


The proposed research is on the performance appraisal system and the impact of it on the employees. The scope of the study includes the research of the various factors such as the social-cultural aspects and the political-economic factors of the surroundings where the Apollo Tyres Limited is functioning. The cultural and cultural aspect of the employees will be analysed and the suitable technique for the appraisal system will be analyzed. The political and financial situation of the employees will be analysed and the performance appraisal approach of the management will be examined predicated on these factors. The range of the research will be on the formulation appraisal strategy which will be suitable under the various research parameters. The motivational and the de-motivational impact of the appraisal system will be analysed predicated on the four above mentioned aspects of the employees.


According to Kothari (2002), a research study will provide accurate results and can provide a valid bottom line if it has followed a study ethics. In this particular proposed review the permission to do the research is from the management of Apollo Tyres Small, Kalamassery Device, Kerala condition, India. The survey among the list of employees of the ATL will be conducted confidentially. The questionnaire won't contain any whereabouts of the employees only the service, get older, gender and positions. You won't ask for any personal details including the address, name or any name of unique post. The study will seek the written agreement from the management for the interview of the Management staffs therefore the evidence of opinion can be adduced in the Dissertation. Relevant books will be gathered and analysed to gather the knowledge bottom about them matter so the research must have a through theoretical support.


Short span of time is problem in the study as the period of time is limited to 90 days. The info collection and the evaluation of the primary data will be achieved with maximum quickness and there is a chance the reactions of the employees is not 100% true to the actual fact. The literature on the performance appraisal is numerous and reading the relevant one requires excellent time. The limited time may limit the amount of literature that can be analysed by the researcher.

The data will be collected through research aid wing of Indian Management Association (IMA). The consultant of IMA will be hired for the purpose of the info collection; the knowledge limit of the individual on the study objective may prove to be a challenge in translating the questionnaire to the employees.

The cooperation from the part of the employees and other management personnel is essential for the success of the study. The research are affected if there is limited co-operation from the staffs of the Apollo Tyres Small.

2. . 8 Bottom line and Recommendations


The trade unionism and the political inclination of the unions are other factors that may impact the appraisal system adversely. The behavioural style of the employees have to be analysed prior to the formulating the appraisal strategy. The politics school of thought of the politics people in Kerala varies from leftist ideology to the rightist capitalism. The politics parties firmly support one or the other political ideologies; communism and socialism are the major philosophies which are being implemented in the state of hawaii for more than a century. The trade unions of their state are associated to anyone of the political functions and the trade unions relishes the safeguard of labour laws of the land. Situation in the ATL is not different from the politics situation of the state. The political parties have a great effect on the trade unions and the lives of the employees. Every worker in the ATL is associated to anybody of the politics parties. That is basically a success strategy for the employees as well as the trade unions. The collective bargaining of the trade unions and the threat of strikes hampered the development of many business in their state. The current situation in the firm is also same and the management have to discuss and reach in a consensus to put into action any change in working arrangements or in reward or in the salary. The effectiveness of the management is in the bargaining electricity which of the trade unions is in the unity and hazard to punch. The performance appraisal system of any industry is under the scrutiny of the trade unions, the performance standards should be handed down by the trade union such that it can be efficiently run. The remedial methods are also supervised by the trade unions and any action which is a potential menace will be highly resisted by the unions


The recommendation of the proposed study is dependant on the books review. Apollo Tyres Limited is operating in a politically productive environment, the economical situation of the employees also average and the affect of the political get-togethers on the trade unions is strong thus it is strongly recommended that the company should formulate an appraisal strategy with the consent of the trade unions so that it can be executed with amount of resistance from the employees. The public and cultural areas of the employees is contrary to the counselling process and remedial methods such as demotion or salary cut or removal from the service so that it will be best for ATL to concentrate on such remedial methods which ensures better performance such an exercise and development program. The counselling process has not use in today's situation so it can be averted. The appraisal criteria can be modified and enough time schedule can be reorganised to ensure an increased productivity. The monetary rewards can be maintained for the employees for their higher performance.

2. 9 Gantt Chart



























Literature review

Questionnarie preparation


Primary data analysis

Changes in the books review

First draft


Second draft


Final version submission

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