Dr.

Rafiq Zakaria Campus Maulana Azad Educational Trusts

Millennium Institute of Management

Rauza Baugh, Aurangabad. (Affiliated to Dr. B.A.M.U., Aurangabad) For the academic year 2011-12 A FINAL PROJECT REPORT ON

TO ASCERTAIN THE EFFECTIVENESS OF PERFORMANCE APPRAISAL METHODOLOGY USED BY THE PEPSICO INDIA HOLDINGS PVT. LTD., PAITHAN
Submitted By MEGHA TARACHAND RODE
MBA IInd Year (IVth Sem) Roll No. 29

Guided By Ms. PADMAPANI SAWAI

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(Lecturer)

Dr. Rafiq Zakaria Campus Maulana Azad Educational Trusts

Millennium Institute of Management

Rauza Baugh, Aurangabad. (Affiliated to Dr. B.A.M.U., Aurangabad) For the academic year 2011-12

CERTIFICATE
This is certifying that MEGHA T. RODE student of M.B.A. IInd Yr (IVth sem) has completed her Final project on TO ASCERTAIN
THE EFFECTIVENESS OF PERFORMANCE APPRAISAL METHODOLOGY USED BY THE PEPSICO INDIA HOLDINGS PVT. LTD., PAITHAN and submitted satisfactory report as per the

requirement of Dr. B.A.M.U., Aurangabad in the partial fulfillment of the Master of Business Administration (M.B.A) academic year 2011-12. GUIDED BY DIRECTOR Ms. Padmapani Sawai Sheikh Saleem Dr.

Place: Aurangabad Date: / /

ACKNOWLEDGEMENT
It gives me an immense pleasure to acknowledge all the people who directly or indirectly helped me during the final project. My thanks go to Dr. Shaikh Saleem sir (Honorable Director, MIM, Aurangabad) and Ms. Padmapani Sawai mam who guided me for final project. My special thanks go to PEPSICO INDIA HOLDING PRIVATE LIMITED, PAITHAN and who guided and cooperated me to accomplish my final project effectively.

MEGHA T. RODE
MBA-IInd Yr (IVth sem) Roll No. 29

DECLARATION
I undersigned MEGHA T. RODE here by declare that all the information present in this report is based on my personal observation and any flaw thereby would be attributed solely to me. I also promise that the information collected from the sources would only be used for the completion of my MBA. I here by declare that this report is submitted by me in the partial fulfillment of Master of Business Administration is genuine work of me. It has not been submitted either fully or partially or any other institute prior in other connection.

MEGHA T. RODE
MBA-IInd Yr (IVth sem) Roll No. 29

EXECUTIVE SUMMARY
First of all I went to the company and gathered the information about project topic and then I started analyzing information on the topic.

My project of PEPSICO covers the following WHAT IS PERFORMANCE APPRAISAL? Methods of Performance appraisal
Overview of PEPSICO INDIA HOLDING PRIVATE LIMITED,

PAITHAN Objectives of the study Research Methodology Adopted Findings and analysis of project Suggestions to the company regarding to Performance Appraisal.

INDEX
Sr. No. 1 2 Introduction Company overview 2.1 Plant Overview 2.2 HR Department of PepsiCo 2.2.1 Introduction of HR 2.2.2 Objectives of HR 2.2.3 HR Functions 2.2.3.1 Employee Empowerment 2.2.3.2 Labor Relation 2.2.3.3 Recruitment and Selection 2.2.3.4 Training and Development 2.2.3.5 Performance appraisal 2.2.3.6 Compensation and Benefits 2.3 Plant layout Literature Review 3.1 What is Performance Appraisal? 3.2 Characteristics of Performance Appraisal 3.3 Importance & Purpose of Performance Appraisal 3.4 Process of Performance Appraisal System 3.5 Methods of Performance Appraisal 3.6 Advantages & Disadvantages 3.7 Benefits of Performance Appraisal Objectives of the study Particulars Page No. 8 9

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6 7 8 9 10

Research Methodology 5.1 Aim of the study 5.2 Research design 5.3 Types of Research Design 5.4 Sampling 5.4.1 Methods of sampling 5.5 Data collection methods 5.6 Research methodology adopted 5.6.1 Research Design 5.6.2 Research Instrument 5.6.3 Sampling Plan 5.6.4 Sampling Design 5.6.5 Source of data collection Data analysis, Results & Interpretation 6.1 Data presentation & analysis Limitations of the study Suggestions & Conclusions References Sample Questionnaire

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28 47 48 50 51

INTRODUCTION
My project topic is To ascertain the effectiveness of Performance Appraisal methodology used by the PepsiCo India Holdings Pvt. Ltd., Paithan. My project is all about the examining effectiveness of the performance appraisal methodology on executive level people in Pepsico India Holdings Pvt. Ltd. In this project I am going to take the survey of executive level employees of company with the help of questionnaire. So I can examine in what amount performance appraisal system enhances performance of the employees. It will help in improving previous performance appraisal system. The main objective of this project is to review the current appraisal system in order to enhance the productivity of the company and examining the employee attitude towards the present appraisal system. And after examining current appraisal system, my next objective is to provide suggestions and recommendation to the company regarding previous performance appraisal system. In this company I had tried to study the kind of appraisal system.

COMPANY OVERVIEW

Plant Name: - PEPSICO INDIA HOLDING PRIVATE LIMITED Plant Location: - The exact location of the plant is Plot No. D7, MIDC Paithan, Taluka Paithan, Dist. Aurangabad - 431148. PLANT OVERVIEW Green Field Spread across 52.1 Acre At MIDC Paithan 50 Km from Aurangabad Green belt of 19.4 Acre Central point in country Plant is HACCP certified and preparation of AIB certification.

Indian story of PepsiCo started from in the year 1989 in India.

Today Pepsi is single largest brand in India. PepsiCo industry turn over is 5000 crores and directly employees more than 7500 people.

PepsiCo today is the leader in CSD segment in India and enjoy

leadership in fruit juices and snack category in many parts of country. In Paithan this organization was established in 2003. It is the largest cold drink plant in Maharashtra. This plant is committed to produce & supply safe & quality products to consumer. Operations are controlled by qualified & experienced food scientists & technologists & also well trained operating team. Basically preparations of following products are carried out;

1. Pepsi cola 2. Mountain Dew 3. Slice Mangola 4. Gatorade lemon lime 5. Mirinda Orange

6. Tropicana twister 7. 7up Nimbooz 8. Mango Slice 9. Duke Lemonade 10. 7 Up

Plant Employees Details 1. Associates- 184 2. Executives- 85

3. Contract labor- around 250-300

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 First commercial production on March 4th 2003 with 200 BPM Cold fill PET then Expansion happened as PET 200BPM GRB 660BPM Juice 200BPM Juice 100BPM Juice 160 BPM Juice 600 BPM Cup Line : : : : : : : Commissioned in March 2003 Commissioned in Jan2004 Commissioned in April 2004 Commissioned in April 2004 Expansion in April 2006 Commissioned in May 2007 Commissioned in April 2010 Commissioned in March 2011

HR DEPARTMENT OF PEPSICO
HR Introduction: HR department follows the policies by the HR department of PEPSICO. At PEPSICO, their belief is that "their people are their greatest asset. They take great pride in acknowledging the contribution each one of them makes". they focus on People Development and for that they ensure: Staff PEPSICO with world class Professionals and ensure that the right systems are in place to encourage them to develop to their full potential. Create a collaborative and mutually supportive work environment that encourages people to grow. Build a team of professionals who deliver expertise by participating in business decisions. Develop Performance Management and reward systems underlying our Business strategy. HR Objectives: 1. To look out for the well being of all employees of the company. 2. Provide leadership and direction to employees of the company. 3. Career Development planning for all employees of company. 4. Ensure thorough training of nationwide employees.
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the

5. To provide individual employees with orientation on the company at the time of joining. 6. To provide employees with solutions to their problems. 7. Maintaining data records of all employees of PEPSICO (Human Resources information System). 8. To evaluate and retain those employees who are assets to the company.

HR Functions of PEPSICO:
EMPLOYEE EMPOWERMENT The company is giving more stress on employee empowerment by giving them right to participate in decision making speacially those decision which directly affect the employee themselves. Also the company gives the subordinates the right to work on the behalf of its supervisor in absence of him. LABOUR RELATIONS The company is paying more attention to strengthen the relationship among employees by giving them equal opportunities to take advantage of the firms incentives, because no biasness among employees is practiced in the firm which affects the good relations among employees. RECRUITMENT PEPSICO employs through both formal and informal ways of recruitment. Departments tell their need to HR department. And then recruitment is done on the requirement by the project. All candidates send their CVs by post; they are then short listed and called. So those candidates then report at the PEPSICO from where they are sent to the Human Resource Department for further interviews. But recently PEPSICO has devised a new way of recruitment i.e. Online Applications. They give Ads in leading newspaper and use some other mass media communication channels and then receive applications and CVs online. In this way huge paper work is reduced and recruitment process is improved in terms of efficiency and convenience with the use of technology.

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Strategies for Recruitment The recruitment process is likewise the same but minutely varies in the organization depending upon the ranks. In recruitment PEPSICO keeps certain things in front e.g. What the person was getting (in terms of salary) prior to PEPSICOs Job. Whether the person is polished enough to adjust in their environment. Whether he or she has the required technical skills or the required qualification for that specific job. In PEPSICO they surely see qualifications but they prefer a person with required skills, aptitudes, experience and capabilities. SELECTION In PEPSICO, selection Criteria is based on numerous factors such as education, health, background and previous experience.

Selection process
1. The Application The employment application is candidates first chance to present his qualifications to the Organization. As such, it is extremely critical for his/her continued participation in the examination process. Before beginning, one has to review thoroughly what the Job Announcement specifies as the requirements to qualify for the position. Candidate must meet these criteria to be considered for the position; ensure that, otherwise candidate will be wasting his effort in completing the application. 2. Written Exams Written exams are usually obtained from one of several test construction firms available to them. These tests are designed to determine level of technical and/or analytical abilities associated with the particular position for which candidate had applied. The test which is conducted in PEPSICO selection purpose is TEST OF COGNITIVE ABLITIES. This test is mostly taken from fresh graduates. Whereas, some people are selected on the basis of experience. 3. Performance Exams
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Performance exams test ability to accomplish specific job-related tasks by providing the opportunity to actually perform them. These tests are scheduled through the Human Resources Department office, with notification in writing of the date, time, location and duration of the test. Instructions will be given on the tasks to be completed and then asked to complete them. Individuals with considerable relevant experience will conduct the evaluations. Safety, quality of work, adaptability, performance under stress, etc. are evaluated. 4. Specialized Testing Some positions will require specialized testing, such as technical skills, agility and communication skills etc. These tests are scheduled just as like other tests. 5. The Panel Interview The results of this component of the exam process will be used to determine if candidate should be included on the List of Eligible Candidates forwarded to the hiring authority for consideration for a departmental Selection Interview. This portion of the examination is normally weighted 100% (or as indicated on the Job Announcement). Typically, previous test results are used only to qualify you for participation in the Panel Interview. The Panel is comprised of qualified individuals, which may or may not be employees of the City. Normally, the panel will consist of three evaluators. These individuals will evaluate responses to a variety of job-related questions over the scheduled time period. 6. The Selection Interview Once the List of Eligible Candidates is established it is sent to the Department(s) that is hiring to fill a current vacancy. The Department Head is responsible for setting up Selection Interviews. He/she may interview anyone on the list, since all persons referred to the department are qualified. The Department Head will be looking for the candidate with the best qualifications for their particular position. The candidate selected to fill the vacancy will undergo a medical examination, drug screen, background investigation, and a probationary period before attaining permanent employment status.

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TRAINING & DEVELOPMENT PEPSICO has trained and developed many of its senior and fast track managers and supervisors. For lower and technical staff the organization have a complete training calendar for the year, if organization thinks and feel that an employee requires training to update his knowledge about the field, he just have to report the HR department and he will be listed for the next training program.

PERFORMANCE APPRAISAL The jobs are evaluated on yearly basis under 360o method; the competent employees are rewarded in shape of promotions, bonus, increments and annual holidays and promotion. The results of an appraisal can be used to identify areas for further development of the employee. The organization also uses different questionnaires, which consist of numerous questions about the behavior of the employee, and then on the basis of these answers personality of the employee is judged. When evaluation is made the unsatisfactory performers are given warning. The employee after warning is put under observation, for some period of time and if the employees performance is still unsatisfied then are demoted or fired.

COMPENSATION & BENEFITS Promotion Promotion is direct shift only to the next level from the current grade, the employees performance is evaluated and if his performance is above average he is given promotion. PEPSICO promotes only those candidates who are experienced and eligible for that particular vacancy. Increments The company decides at the end of the financial year, according to its financial condition, whether increments should be given or not. Free transport PEPSICO provide free transport to local employee.

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Medical facility PEPSICO provide free medical facility to workers depending upon the position/rank of the employee. House loans: They give the facility of house loan only to deserving individual. The loan approval depends upon the post of the employee. Overtime payment: Overtime payment is pay for only those workers who are working more than their working hours mostly overtime payment is given to low level staff.

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PLANT LAYOUT

Canteen

Shipping office

Packing & Storage area

Engineering Workshop Engineering Store Chemical Storage Office

Blow Mould Room

NEW HOT FILL

OLD HOT FILL

GRB

PET

Reception Pulp storage Ready Syrup Room

Crown Store

QC Lab. Water Treatment Plant

Raw Syrup Room

Sugar Godown

Boiler Room

Compressor Room

Co2 storage

D G Room

L T Room

Security Cabin

ETP Lab.

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LITERATURE REVIEW What is Performance Appraisal?Performance Appraisal is defined as the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in working organizations and potential of employees. According to Flippo, Performance Appraisal is the systematic, periodic and an important rating of an employees excellence in matters pertaining to his present job and his potential for a better job.

Characteristics1. Performance Appraisal is a process. 2. It is the systematic examination of the strengths and weakness of an employee in terms of his job. 3. It is scientific and objective study. Formal procedures are used in the study. 4. It is an ongoing and continuous process wherein the evaluations are arranged periodically according to a definite plan. 5. The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee.

Importance and PurposePerformance Appraisal has been considered as the most significant an indispensable tool for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increases. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting,

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selection, training and compensation. Accurate information plays a vital role in the organization as a whole. They help in finding out the weaknesses in the primary areas. Formal Performance Appraisal plans are designed to meet three needs, one of the organization and the other two of the individual namely:
They provide systematic judgments to back up salary increases,

transfers, demotions or terminations.

They are the means of telling a subordinate how he is doing and

suggesting needed changes in his behavior, attitudes, skills or job knowledge. They let him know where he stands with the Boss.
Superior uses them as a base for coaching and counseling the

individual. On the basis of merit rating or appraisal procedures, the main objectives of Employee Appraisal are: To enable an organization to maintain an inventory of the number and quality of all managers and to identify and meet their training needs and aspirations. To determine increment rewards and to provide reliable index for promotions and transfers to positions of greater responsibility. To suggest ways of improving the employees performance when he is not found to be up to the mark during the review period. To identify training and development needs and to evaluate effectiveness of training and development programmes. To plan career development, human resource planning based potentials.

ProcessThe process of performance appraisal: 1. Establishing performance standards 2. Communicating the Standards 3. Measuring Performance 4. Comparing the actual with the standards 5. Discussing the appraisal
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6. Taking Corrective Action

Methods of Performance appraisal

The foregoing list of major program pitfalls represents a formidable challenge, even considering the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing away with appraisals themselves is like trying to solve the problems of life by committing suicide. The more logical task is to identify those appraisal practices that are (a) most likely to achieve a particular objective and (b) least vulnerable to the obstacles already discussed. Before relating the specific techniques to the goals of performance appraisal stated at the outset of the article, I shall briefly review each, taking them more or less in an order of increasing complexity. The best-known techniques will be treated most briefly. 1. Essay appraisal In its simplest form, this technique asks the rater to write a paragraph or more covering an individual's strengths, weaknesses, potential, and so on. In most selection situations, particularly those involving professional, sales, or managerial positions, essay appraisals from former employers, teachers, or associates carry significant weight. . 2. Graphic rating scale This technique may not yield the depth of an essay appraisal, but it is more consistent and reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is he outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication. 3. Field review The field review is one of several techniques for doing this. A member of the personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the

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group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. 4. Forced-choice rating Like the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party. 5. Management by objectives To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in some organizations are being asked to set - or help set - their own performance goals. Within the past five or six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell on it here. Advantages Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance. Employees are judged according to real outcomes, and not on their potential for success, or on someone's subjective opinion of their abilities. The guiding principle of the MBO approach is that direct results can be observed easily. The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied elements that go to make up employee performance. MBO advocates claim that the performance of employees cannot be broken up into so many constituent parts, but to put all the parts together and the performance may be directly observed and measured. Disadvantages This approach can lead to unrealistic expectations about what can and cannot be reasonably accomplished. Supervisors and subordinates must have very good "reality checking" skills to use MBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self-monitoring.

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Variable objectives may cause employee confusion. It is also possible that fluid objectives may be distorted to disguise or justify failures in performance. 6. Ranking methods For comparative purposes, particularly when it is necessary to compare people who work for different supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to which a host of additional facts and impressions must somehow be added. There is no single form or way to do this. The best approach appears to be a ranking technique involving pooled judgment. The two most effective methods are alternation ranking and paired comparison ranking. 1. Alternation ranking: Ranking of employees from best to worst on a trait or traits is another method for evaluating employees. Since it is usually easier to distinguish between the worst and the best employees than to rank them, an alternation ranking method is most popular. Here subordinates to be rated are listed and the names of those not well enough to rank are crossed. Then on a form as shown below, the employee who is highest on the characteristic being measured and the one who is the lowest are indicated. Then chose the next highest and the next lowest, alternating between highest and lowest until all the employees to be rated have been ranked. 2. Paired-comparison ranking: This technique is probably just as accurate as alternation ranking and might be more so. But with large numbers of employees it becomes extremely time consuming and cumbersome. Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or more people are asked to make independent rankings of the same work group and their lists are averaged), are among the best available for generating valid order-of-merit rankings for salary administration purposes.

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7. Assessment centers So far, we have been talking about assessing past performance. What about the assessment of future performance or potential? In any placement decision and even more so in promotion decisions, some prediction of future performance is necessary. How can this kind of prediction be made most validly and most fairly? 8. 360 Degree Feedback Many firms have expanded the idea of upward feedback into what the call 360-degree feedback. The feedback is generally used for training and development, rather than for pay increases. Most 360 Degree Feedback system contains several common features. Appropriate parties peers, supervisors, subordinates and customers, for instance complete survey, questionnaires on an individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings are not given just by the next manager up in the organizational hierarchy, but also by peers and subordinates. Appropriates customer ratings are also included, along with the element of self appraisal. Once gathered in, the assessment from the various quarters are compared with one another and the results communicated to the manager concerned. Another technique that is useful for coaching purposes is, of course, MBO. Like the critical incident method, it focuses on actual behavior and actual results, which can be discussed objectively and constructively, with little or no need for a supervisor to "play God."

Benefits of Performance Appraisals

1. Measures an employees performance. 2. Helps in clarifying, defining, redefining priorities and objectives. 3. Motivates the employee through achievement and feedback. 4. Facilitates assessment and agreement of training needs. 5. Helps in identification of personal strengths and weaknesses. 6. Plays an important role in Personal career and succession planning. 7. Clarifies team roles and facilitates team building. 8. Plays major role in organizational training needs assessment and analysis.
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9. Improves understanding and relationship between the employee and the reporting manager and also helps in resolving confusions and misunderstandings. 10. Plays an important tool for communicating the organizations philosophies, values, aims, strategies, priorities, etc among its employees. 11. Helps in counseling and feedback.

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OBJECTIVES OF THE STUDY

To carry out the study of Performance Appraisal System at PEPSICO INDIA HOLDINGS PVT. LTD., AURANGABAD, I framed the following objectives of the project_ 1. Identification of the technique of performance appraisal followed in PEPSICO. 2. Employee attitude towards the present appraisal system. 3. Review of the current appraisal system in order to 1. Enhance productivity 2. Attain global standards 4. To provide suggestions & recommendations from the study conducted. 5. To develop my understanding of the subjectPerformance Appraisal System implemented in various Organizations varies according to the need and suitability. Through my research, I have tried to study the kind of Appraisal used in the Organization and the various pros and cons of this type of system. 6. To enhance the welfare of employeesThe Appraisal system is conceived by the Management but mostly does not take into consideration the opinion of the employees. This can lead to adverse problems in the Organization. Therefore by this study I have attempted to put forth the opinion of the employee with respect to the acceptability of the Performance Appraisal System.

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RESEARCH METHODOLOGY
Aim of the Research To ascertain the effectiveness of Performance Appraisal methodology used by the Organization. Research Design Research Design refers to "framework or plan for a study that guides the collection and analysis of data". A typical research design of a company basically tries to resolve the following issues: a) Determining Data Collection Design b) Determining Data Methods c) Determining Data Sources d) Determining Primary Data Collection Methods e) Developing Questionnaires f) Determining Sampling Plan A research design is a type of blueprint prepared on various types of blueprints available for the collection, measurement and analysis of data. A research design calls for developing the most efficient plan of gathering the needed information. The design of a research study is based on the purpose of the study. A research design is the specification of methods and procedures for acquiring the information needed. It is the overall pattern or framework of the project that stipulates what information is to be collected from which source and by what procedures. Types of Research Design: (1) Explorative Research Design: Explorative studies are undertaken with a view to know more about the problem. These studies help in a proper definition of the problem, and development of specific hypothesis is to be tested later by more conclusive research designs. Its basic purpose is to identify factors underlying a problem and to determine which one of them
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need to be further researched by using rigorous conclusive research designs. (2) Conclusive Research Design: Conclusive Research Studies are more formal in nature and are conducted with a view to eliciting more precise information for purpose of making marketing decisions. These studies can be either: a) Descriptive or b) Experimental Thus, it was mix of both the tools of Research Design that is, Explorative as well as Conclusive. Sampling An integral component of a research design is the sampling plan. Specifically, it addresses three questions 1. Whom to survey (The Sample Unit) 2. How many to Survey (The Sample Size) & 3. How to select them (The Sampling Procedure) Making a census study of the whole universe will be impossible on the account of limitations of time. Hence sampling becomes inevitable. A sample is only a portion of the total employee strength. According to Yule, a famous statistician, the object of sampling is to get maximum information about the parent population with minimum effort. Methods of Sampling 1. Probability Sampling is also known as random sampling or chance sampling. Under this sampling design every individual in the organization has an equal chance, or probability, of being chosen as a sample. This implies that the section of sample items is independent of he persons making the study that is, the sampling operation is controlled objectively so that the items will be chosen strictly at random.
2. Non Probability Sampling is also known as deliberate sampling,

purposeful and judgmental sampling.

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Non-Probability Sampling is that which does not provide every individual in the Organization with a known chance of being included in the sample. Data collection method Collection of data is the first step in statistics. The data collection process follows the formulation for research design including the sample plan. The data can be secondary or primary. 1. Primary DataCollection of Primary Data during the course of the study or research can be through observations or through direct communication with respondents on one form or another or through personal interviews. I have collected primary data by the means of a Questionnaire. The Questionnaire was formulated keeping in mind the objectives of the research study. 2. Secondary dataSecondary data means data that is already available i.e., they refer to data, which has already been collected and analyzed by someone else. When a secondary data is used, the researcher has to look into various sources from where he can obtain data. This includes information from various books, periodicals, magazines etc. Research Methodology Adopted
Research Design: Descriptive research Research Instrument: Structured Questionnaire

Sampling Plan i) Sample Method: Non-Probability Sampling (Convenience Sampling) ii) Sample Size: 30 iii) Sample Unit: Executives (L0-L5) iv) Sample Area: PEPSICO INDIA HOLDINGS PVT. LTD., PAITHAN Sampling Design Convenience Sampling, as the name implies, is based on the convenience of the researcher who is to select a sample. Respondents in the sample are included in it merely on account

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of their being available on the spot where the survey was in progress. Source of Data collection a) Primary Data: Structured Questionnaire b) Secondary Data: Journals, Booklets, Company Data, etc. c) Contact Method d) Personal Interaction

DATA ANALYSIS, RESULTS AND INTERPRETATION

DATA PRESENTATION AND ANALYSIS: 1. Pie Diagrams

Have you worked in any other Company prior to joining this

Organization? Data Options Yes No Analysis Pie chart 1 Table 1 Response 20 10

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10, 33%
Yes No

20, 67%

Result and Interpretation 20 people out of sample size have worked in other company prior to join this company and 10 people are fresher.
Awareness of Performance Appraisal model being used at PEPSICO

among Executives during induction Data Table 2 Options Yes No Analysis Pie chart 2 Response 26 4

30

4, 13%

Yes No

26, 87%
Results and Interpretation When executives joined PepsiCo that time 26 people are aware about the performance appraisal system during induction and 4 people are not aware about the performance appraisal system during induction. Due to the fact that most of the employees have got experience in this sector before, so they ask about the Performance Appraisal model used in the Organization. The respondents that said that they were informed of the model during the interview were told so at the discretion of the interviewer. The company has however made it a point to inform the employee about the model before he signs the acceptance letter. This prevents any ambiguities and misunderstanding about what is expected of the employee before he joins the Organization.
Opinion about type of Performance Appraisal Model used in this

Organization Data Table 3 Options Simple Complicated

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Response 1 1

Objective Subjective Efficient Inefficient Analysis Pie chart 3

0, 0% 1, 3% 3% 1, 6, 20%

6 6 16 0

Simple 6, 20% Complicated Objective Efficient Subjective Inefficient

16, 54%

Result and Interpretation Among total sample size 1 employee think that performance appraisal system is simple in PepsiCo, 1 employee think that system is complicated, 6 employees think that system is objective, 16 employees think that performance appraisal system is efficient, 6 employee think that system is subjective and 0 employee are in the fever of inefficient. It concludes that more than 50% people are in fever of efficient performance appraisal system. From the above pie chart it can be inferred that, a majority of the sample respondents have found the Appraisal Model to be efficient and objective on one hand but also subjective on the other hand. The Appraisal model has been thoroughly dealt with during the training so the employees know exactly what is expected of them. The HR department follows an open door policy which ensures that any queries regarding the policy can be

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clarified to the employees satisfaction. But the employees are of the opinion that the subjective nature of the Appraisal system is one of the main disadvantages. The fact remains that due to the kind of work carried out by PepsiCo India Holdings Pvt. Ltd., it becomes quite irrelevant to appraise on an objective basis.
Opinion about the Performance Appraisal System gives a proper

assessment of executives contribution to the organization Data Table 4 Options Yes No Response 26 4

Analysis Pie chart 4

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4, 13%

Yes No

26, 87%

Result and Interpretation About 87% of the respondents say that the Performance Appraisal System does give a true and fair view of their contribution to the Organization. This does include employees who think that their rating does not always turn up to be correct as per their opinion. The groups of respondents, who have replied in the negative, also include candidates who say that the appraisal does not turn out to be right most of the times but do show a fair view sometimes. Since the appraisal is done a quarterly basis and most of the candidates have not gone through more than 2-3 rounds of appraisals, the data may not be entirely sufficient to reach any conclusions.

How often does Performance assessment of executives match to their

expectations?
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Data Table 5 Options Never Rarely Sometimes Often Every time Analysis Pie chart 5
0, 0% 1, 3% 9, 30% 9, 30% Never Rarely Sometimes Every time Often

Responses 0 1 9 9 11

11, 37%

Result and Interpretation 11 executives think that performance assessment every time matches to their expectations, 9 executives think that performance assessment sometimes matches to their expectation, 9 other executives think that performance assessment often matches to their expectation, and 1 executive think that performance assessment rarely matches to his expectation. This question was purposely put into the questionnaire to validate the answers for the previous question. The breakup of the data clearly shows that 0% of the entire sample state that their appraisal has never shown a fair view of their performance. If this can be combined with those who are of the
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opinion that their appraisal rarely matches up to their expectations, this figure goes up to consist about 3% of the population. That shows that 97% are satisfied with the present system even though this includes satisfaction in varying degrees like the appraisal matches up to the respondents expectations sometimes, often or every time. This does show that the satisfaction level of the employees in this system is quite high and that there is a general feeling of likeability among the respondents.
If continuous appraisal how often should the Performance Review take

place? Data Options Once a week Once a month Every 3 months Every 6 months Once a year Analysis
2, 7% 0, 0%

Table 6 Response 0 2 10 16 2

Pie chart 6
2, 7% Once a week Once a month 10, 33% Every 3 months Every 6 months Once a year

16, 53%

Result and Interpretation

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Performance appraisal review is a constant process and lesser the frequency between the appraisals, the better. The majority want (i.e. 86% which includes 3rd and 4th option only) the frequency of the appraisal to less than 6 months. The employees say that the longer the frequency between appraisals, the more the chances of the appraisal not matching up to their expectations because many performances get overlooked. If the appraisal is done on a more frequent basis, the employee has a chance to find out the gaps in his / her performance on a more regular basis which will help them to improve more on their performance and thereby eliminate waste. The appraisal does not necessarily have to be a formal one. Even informal performance appraisals done between formal appraisals but on a more frequent level will most certainly help and go a long way in improving performance.

Employees satisfaction level with the current appraisal system 37

Data Table 7 Options Very low Low average High Very high Analysis Pie chart 7
0, 0% 1, 3% 7, 23% Very low Low average High Very high 22, 74%

Responses 0 7 22 1

Result and Interpretation 22 executives are highly satisfied with the current performance appraisal system, 7 executives has the low average satisfaction with the current performance appraisal system and 1 executive very highly satisfied with the current performance appraisal system. The satisfaction level of the Appraisal system is high as can be seen from the chart. This is a good sign as increased level of satisfaction is the main emphasis of any appraisal system. The area tops at the rating of high and this includes about 74% of the population. Other area shows that 26% have rated the Appraisal system as low average or very high. The high
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Satisfaction level in the System could also be due to various reasons like monetary or non-monetary incentives or growth parameters. The satisfaction level also brings to light the efficiency of the management in devising an acceptable Appraisal system.
Executives opinion about areas of performance appraisal that should be

improved Data Table 8 Options Objectives being properly set Transparency & fairness of appraiser Frequency of appraisal All the above Analysis Pie chart 8
8, 27% 11, 36% Objectives being properly set Transparency & fairness of appraiser Frequency of appraisal All the above 8, 27% 3, 10%

Response 11 3 8 8

Result and Interpretation

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This question breaks up the different phases of the appraisal system and tries to come to derive a conclusion as to the areas of improvement in the process of evaluation. 36% of the respondents say that there should be a change on the aspect of objectives of the appraisal. The frequency of appraisal is another aspect that needed review. The present system is a quarterly one and the general opinion is that informal appraisals should be held on a more regular basis. Transparency and fairness of appraiser should be improved according to 10% of the respondents. And 27% have stated that there should be change in all the above areas.

How important do you think is Performance Appraisal to your Performance?

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Data Table 9 Options Not important Less important Important Very important Most important Analysis Pie chart 9
0, 0% 1, 3% 5, 17% Not important Less important 17, 57% 7, 23% Important Very important Most important

Response 0 1 5 7 17

Result and Interpretation 7 executives think that performance appraisal is very important to their performance, 5 executives think it is important to their performance and 1 executive think that performance appraisal is less important to their performance. But 57% of executives think that performance appraisal is most important to their performance. This question was put in to find out and analyze the importance of the Appraisal system to the productivity of the employee. The data clearly shows that the recognition of the employees performance does have a direct impact on his / her efficiency.

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A vast majority of the respondents (i.e. 80% which includes ratings of very important or most important) affirm that their performance is directly influenced by recognitions of their performance by the appraisal system. None of the respondents have stated that the appraisal system had no effect on their productivity. This points out to the fact that the Appraisal system goes a long way in determining the productivity of the employees in an Organization. Therefore it is very important for any Organization to devise their Performance Appraisal System carefully.
Do you think the One on One session are effective in ironing out

problems in the work environment? Data Table 10 Options Yes No Analysis Pie chart 10
4, 13%

Response 26 4

Yes No

26, 87%

Result and Interpretation

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One on one session is conducted by PepsiCo India Holdings Pvt. Ltd. during the appraisal system phase to tell the employee on an individual level as to the rating given to him / her. Each session lasts between 10-30 minutes. The team leader tries to justify his reasons on why he had given a particular rating to an employee. 13% of the employees responded by saying that the one on one sessions are not efficient in ironing out problems mainly because since they are done on a formal basis so some employees consider it just as a formality which the appraiser uses to impose the rating he has already given to an employee. The employee therefore does not expect the rating to change after a one on one session with the supervisor. But 87% employees expect the rating to change after one on one session with the supervisor.
Rating given to the transparency of the Appraisal System in PepsiCo

Data Table 11 Options 1 2 3 4 5 6 7 8 9 10 Response 0 0 1 2 8 8 7 2 2 0

Analysis Pie Chart 11

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0, 0% 0, 0% 0, 0% 1, 3% 2, 7% 2, 7% 2, 7%

1 3

2 4 6 8 10

7, 23%

8, 26%

5 7 9

8, 27%

Result and Interpretation This question is an attempt to analyze the perceived transparency of the rating among the employees of the Organization. A majority of the employees have given a transparency rating of 5 and 6. The perception of the employees is since the appraisal is done on a quarterly basis, the employee is not in a position to actually evaluate the basis of the rating he / she has received. This causes a lot of ambiguity in the ratings. This is the primary concern due which almost 63 % have given a rating of 6 and below. The respondents who have given a rating of 7 and above have mostly given this rating because they have got good ratings in the past and feel that there is not much required in terms of transparency as long as they get good ratings themselves. Do you feel comfortable discussing any difference of opinion about your Performance rating with your appraiser? Data Options Yes No Analysis Table 12 Response 30 0

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Pie chart 12
0, 0%

Yes No

30, 100%

Result and Interpretation All the executives feel comfortable during discussing any difference of opinion about their performance rating with their appraiser.

Rating given to the current Performance Appraisal System in PepsiCo

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Data Table 13 Options 1 2 3 4 5 6 7 8 9 10 Analysis Pie chart 13

0, 0% 0, 0% 1, 3% 1, 3% 1, 3% 3, 10% 3, 10% 0, 0%

Response 0 0 1 1 3 11 10 3 1 0

1 3 5 7

2 4 6 8 10

10, 33% 11, 38%

Result and Interpretation

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11 and 10 executives has given rating as 6 and 7 respectively, and particular 3 executives has given rating as 5 and 8, and particular 1 executive has given rating as 3, 4, 9. The respondents were specifically told to rate the Appraisal system by setting aside any kind of human intervention present in it by just evaluating its inherent structure and not efficiency in its execution. This helps to ascertain whether there are any flaws in the Performance Appraisal system. About 84 % of the sample has given a rating of 6 points and above. This shows the system is generally acceptable to the employees and is a good sign for PepsiCo India Holdings Pvt. Ltd. The concern of the Organization should be to find out why the remaining 16 % are not very highly satisfied with the system and find out ways and means to increase their acceptability of the system.
Does personal bias creeps-in while appraising an employee?

Data

Table 14 Options Yes No Response 6 24 Pie chart 14

6, 20%

Analysis

Yes No

24, 80%

Result and Interpretation

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In the process of appraising, both the parties are human being, that is, the one who is being apprised and the other who is appraising. Thus, there bound to be subjectivity involved, be it an objective way of appraising. Thus, when asked from among the sample size of 30 respondents, as less as 6 respond ended that personal bias do creep in while appraising an individual. Hence, it is inevitable to say that personal likings do not come in the process of appraisal. It is the extent to which the appraiser manages it so that it does not become very partial and bias.
Executives

opinion

about

appropriate

method

for

conducting

performance appraisal Data Table 15 Options

a. Rating the employee on number of traits along with the range

Response 5 0 10 11 1 3

of performance for each by the supervisor. b. For every trait, each subordinate is paired with and compared to every other Subordinate.
c. Reviewing employees on the basis of identified specific

examples of good or poor performance. d. Setting specific measurable goals with each employee and periodically reviewing the progress made. e. Reviewing performance through case studies, presentations, role playing, etc. for future performance. f. Receiving feedback from people whose views are considered helpful and relevant including the appraise himself.

Analysis
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Pie chart 15
3, 10% 1, 3% 0, 0% a b 5, 17%

c 11, 37%

10, 33%

Result and Interpretation 70% of the executives think that setting specific measurable goals with each employee and periodically reviewing the progress made and reviewing employees on the basis of identified specific examples of good or poor performance are the appropriate method for conducting performance appraisal.

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SUGGESTIONS AND CONCLUSION

After having analyzed the data, it was observed that practically there was no appraisal in the organization. To be an effective tool, it has to be on the continuous basis. This is the thing that has been mentioned time and again in the report, as, in the absence of continuity, it becomes a redundant exercise. Before actually deciding drafting what should be the kind of appraisal the following things should be taken care of: 1. The very concept of performance appraisal should be marketed throughout the organization. Unless this is done, people would not accept it, be it how important to the organization. 2. To market such a concept, it should not start at bottom; instead it should be started by the initiative of the top management. This would help in percolating down the concept to the advantage of all, which includes the top management as well as those below them. This means that the top management has to take a welcoming and positive approach towards the change that is intended to be brought. 3. Further, at the time of confirmation also, the appraisal form should not lead to duplication of any information. Instead, detailed appraisal of the employees work must be done which must incorporates both the work related as well as the other personal attributes that are important for work performance.

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4.

It should be noted that the appraisal form for each job position should be different as each job has different knowledge and skill requirements. There should not be a common appraisal form for every job position in the organization.

5.

A neutral panel of people should do the appraisal and to avoid subjectivity to a marked extent, objective methods should be employed having quantifiable data.

6.

The time period for conducting the appraisal should be revised, so that the exercise becomes a continuous phenomenon.

7.

Transparency into the system should be ensured through the discussion about the employees performance with the employee concerned and trying to find out the grey areas so that training can be implemented to improve on that. Ideally in the present day scenario, appraisal should be done, taking the views of all the concerned parties who have some bearing on the employee. But, since a change in the system is required, it cannot be a drastic one. It ought to be gradual and a change in the mindset of both the employees and the head is required.

8.

Managerial Efficiency The implementation of a Performance Appraisal System rests on the shoulders of the manager and he must ensure that it is done

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properly. A good manager can make an average appraisal system work and vice-versa. 9. Effective Communication One function of performance appraisals is to help employees develop so they can contribute more effectively. In order for the employees to develop and learn they need to know what they need to change, where (specifically) they have fallen short, and what they need to do. If a manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much information to an employee. It just says the manager is dissatisfied with something. In order to make it meaningful and promote growth, far more information must be added to the appraisal process and the related information should be transparently shared with the employee.

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LIMITATIONS OF THE STUDY

The following are the limitations faced by me during the course of the study
1. The sample consisted only of executives in the day shift. Executives

of the night shift were not considered for the purpose of study.
2. There is no concrete basis to prove the response given is a true

measure of the opinion of all the employees as a whole. 3. Convenient sampling was used as the mode of conducting the research.
4. The

questionnaire contained mostly multiple-choice questions; therefore many respondents may not have given a proper thought before answering the questions.

5. The response of the respondents may not be accurate thinking that the Management might misuse the data. 6. Sensitive company information cannot be displayed in the project report.
7. Due to the fact that most of the respondents were young, the questions

might not have been answered with due sincerity.

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ANNEXURE
1.

List of tables-

Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15

2. List of Figures- Pie chart 1 Pie chart 2 Pie chart 3 Pie chart 4 Pie chart 5 Pie chart 6 Pie chart 7 Pie chart 8 Pie chart 9 Pie chart 10 Pie chart 11 Pie chart 12 Pie chart 13 Pie chart 14 Pie chart 15

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REFERENCES www.pepsico.co.in www.google.com www.wikipedia.com

PEPSICO India Holdings Pvt. Ltd., Paithan Manual

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APPENDIX QUESTIONNAIRE
Dear Respondent, I would be grateful if you could spare some of your time to respond to the following questions. Your response will be treated as confidential and would only be used for the purpose of study.

NameDesignationGender- Male Age- 21-25 Female 25-30 30-35 35+

Yrs of experience in this OrganizationLess than a Year 1 yr 2 yrs 3 yrs 4 yrs+

1) Have you worked in any other Company prior to joining this Organization? Yes No

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2) Were you informed about the Performance Appraisal model, used in the Organization, during your induction? Yes No

3) How do you find the Performance Appraisal Model in this Organization? (Mark all the relevant options) Simple Subjective Complicated Efficient Objective Inefficient

4) In your opinion, does the Performance Appraisal System give a proper assessment of your contribution to the organization? Yes No

5) How often does your Performance assessment match to your expectations? Never Often Rarely Every time Sometimes

6) According to you, how often should the Performance Review take place? Once a week Every 3 months Once a year Once a month Every 6 months

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7) What is your Satisfaction level with the current Appraisal System? Very low High Low Average Very High

8) Which are the areas that should be improved upon? (Mark all the relevant options) Objectives being properly set Transparency and fairness of appraiser Frequency of Appraisal All the above 9) How important do you think is Performance Appraisal to your Performance? Not Important Important Most Important 10) Do you think the One on One session are effective in ironing out problems in the work environment? Yes No Less Important Very Important

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11) If you were given an opportunity to rate the transparency of the Appraisal System, What marks would you give? (On a scale of 1 to 10 with 1 being the lowest and 10 being the highest)

12) Do you feel comfortable discussing any difference of opinion about your Performance Rating with your appraiser? Yes No

13) How do you rate the Performance Appraisal System in your Organization? (On a scale of 1 to 10 with 1 being the lowest and 10 being the highest)

14) Do you think personal bias creeps in while appraising an individual? Yes No

15) What according to you should be the appropriate method for conducting performance appraisal? a) Rating the employee on number of traits along with the range of performance for each by the supervisor. b) For every trait, each subordinate is paired with and compared to every other Subordinate.
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c) Reviewing employees on the basis of identified specific examples of good or poor performance. d) Setting specific measurable goals with each employee and periodically reviewing the progress made. e) Reviewing performance through case studies, presentations, role playing, etc. for future performance. f) Receiving feedback from people whose views are considered helpful and relevant including the appraise himself. 15) If you have any suggestions on improving current performance Management system, write them below.

Thank you, Date/ /

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