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Agriculture Management of Tea Industry

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Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.


This chapter will give the reader with the clear background of research study, research question, research objectives, justification of research, organisation of study, research framework and brief overview of what will present later in the whole dissertation.

1.1. Background of research study:

All organizations evaluate the performance of their employees to find out their relative worth for the job they are doing. Performance is being related to the productivity, it is crucial for the organization to achieve its goals and objectives. Effective performance for the organization means that output can be maintained with fewer numbers of employees. Performing effectively is also of crucial importance to the employee because organizations can no longer tolerate poor performance, they (employees) are more likely to be dismissed. The effective management performance, therefore, is not only vital for the long-term survival of the organizations but is also a moral obligation on the employees.

Performance appraisal is considered as the systematic evaluation of individuals to their performance on the job and their potentials for development (Dale S. Beach, 1980: 290). Wendell French has defined performance appraisal as a systematic and periodic assessment of how employees are doing their jobs in relation to established norms and the communication of that kind of assessment to employees. It is a process of evaluation an employee's job performance with respect to its requirements.

A systematic performance appraisal provides information for making decisions about various issues such as promotions, pay increases, layoffs, training and development and transfers. It is management's powerful tool in controlling human resource and productivity. Managers can improve an employee's job performance through clarifying expectations and evaluating performance. Employees also, in general, prefer having some kind of appraisal to develop an appropriate vision of their own effectiveness and opportunities (Wood, 1988). Formal performance appraisal can meet the three needs, one of the organization and the other two of the individuals within the organization:

  • It provides systematic judgments to back up salary increase, transfer, demotion or termination.
  • It is the means of communicating to subordinates the behavior, attitudes, skills or job knowledge and let him know where he stands.
  • It is used as a base for coaching and counseling the individual by his superior

1.2. Selected organisation of study

Beginning of tea plantation in Nepal dates back to the year 1863, when Mr. Gajraj Singh Thapa, the 'Badahakim' (Chief Administrator) of Ilam, initiated tea plantation for the first time at Ilam. It is said that he was very much impressed by the taste of tea and fascinating beauty of tea gardens of Darjeeling. So he brought tea-technicians from Darjeeling and made local people join hands in tea plantation. His effort was later followed by planting tea in Ilam and Soktim in the year 1865 (both plantations are still under commercial production). It is believed that the tea seedlings were given by the Chinese government as gift to the then prime minister Jung Bahadur Rana. The first tea processing factory was established in the year 1872, in Ilam Tea Estate.

But the further expansion of tea plantation lay virtually stagnant for about a century. No efforts were found to be made by the government or private sector in this direction. It was only in 1959 when Budhkaran Tea Estate was established at Rangiadanga (Maheshpur VDC, Jhapa), the first tea estate in private sector. Soon after this venture, a few other landlords also started tea plantation in Jhapa district, which gave birth to some tea estates such as Satighatta Tea Estate, Himalaya Tea Garden, Nakkalbanda Tea Estate, Mittal Tea Estate, Giribandhu Tea Estate. These tea estates are still among the leading private sector tea companies of Nepal. However, these plantations were done more with the motivation of saving the land from land ceiling being imposed under the Land Ceiling Act in 1963, because all the plantations during that period were started by big land holding families. This can be seen in some of the plantation fields of those days having the tea bushes at the distance of more than two feet. These ventures, however, opened the door for other entrepreneurs in tea sector.

In the history of tea development in Nepal, the establishment of Nepal Tea Development Corporation (NTDC) is considered to be a landmark to augment the tea cultivation. NTDC was established in 1966, with the joint effort of the Government and Overseas Development Administration (ODA), Britain with the objective of making the country self-reliant in tea by producing more tea, thereby, substituting import of tea and earn foreign currency by exporting quality tea. Soon after its establishment, NTDC took over the first two tea plantations, namely, Ilam and Soktim tea estates. NTDC then extended tea plantation in Kanyam (Ilam) in the year 1971, with the aim of producing exportable quality tea. One year later, another tea garden was established in Tokia (Jhapa) in 1972. Keeping in view of the increasing internal demand of tea another tea estate was established in Barne (Shantinagar VDC, Jhapa). Later, two more tea estates, namely, Barradashi (Jhapa) and Chilingkot (Ilam) were established; making altogether seven tea estates under the ownership and management of NTDC. Despite its significant contribution for the development of tea cultivation, the only government owned corporation faced acute financial and managerial problems in the latter years, and eventually NTDC was leased out to the private sector in the year 2000. The management of NTDC was handed over for 50 years to Triveni Group, with the condition of keeping all workers in 'as it was' form and terminating all staff under voluntary retirement scheme with extra two months' salary as a golden handshake.

Besides these plantations by government and private sectors, small growers started tea cultivation in the nearby VDCs of Kanyam, when NTDC established Kanyam Tea Estate. Some 40 small farmers started tea cultivation in some VDCs of Ilam district, such as, SriAntu, Kolbung, Kanyam, Fikkal, Pashupatinagar, Panchakanya, Laxmipur, and Godak. With the encouragement and technical support provided by NTDC, tea cultivation at small farmers' level, expanded gradually in different parts of other districts, namely, Panchthar, Terhathum, Dhankuta, and Jhapa. In view of good prospect of tea cultivation in the Eastern Region, the Government declared these five districts as "Tea Zone" in the year 1982 and accordingly adopted a favorable policy to encourage tea farmers in private sector. The facilities incorporated in the policy included: providing easy loan to tea cultivators from Agriculture Development Bank with 50 percent subsidy in the interest on loan for the first 5 years in Terai and 7 years in hills, exemption from land-ceiling for tea cultivation and 90 percent rebate on land-tax. With the objective of extending technical services, seedlings and transport facilities, small farmers' offices were established under NTDC in Fikkal, Manglabare and Jasbire of Ilam; Chilingden of Panchathar; Solma of Terhathum; and Hile of Dhankuta districts. All these efforts contributed quite positively to the expansion of tea cultivation, which consequently gave birth to the concept of "Bought Leaf Factory". The first processing unit of this kind was established in the year 1989, at Fikkal of Ilam district.

The enactment of Industrial Enterprise Act by the Government encouraged and facilitated more to the extension of tea cultivation. Industrial Enterprise Act, 1992 (amended in 1998) has an objective of encouraging the promotion of manufacturing industries in the country by making the environment of industrial investment more congenial and straight forward. The Act has categorized tea cultivation and processing industry as an agro-based industry which fall under national priority industries like horticulture and fruit processing, vegetable and seed farming, sericulture and silk production, animal husbandry etc.

The Act has proposed some concessions to the agro-industries with an income tax exemption for a period of five years from the date of commercial production. If the tea industry wants to invest in the pollution controlling mechanism or equipment, then a reduction of up to 50 percent is granted in the taxable income. Such remission may be deducted on a lump sum or an installment with a period of three years.

The Ninth Five Year Plan (1997-2002) gave a high priority to agro-based industries such as tea plantation and processing. The plan recognized agro-based industries as the basis of industrialization in the country. This plan emphasized on the plantation of high-valued Orthodox tea for export. Similarly it placed importance on the promotion of CTC tea for domestic consumption. During the plan period, total tea area was projected to be 4564 hectare and total tea production was projected to be 4101 mt. from 3156 ha.

Agriculture Development Bank actively disbursed credit to the tea sector during 1996-1997. As a result, the number of CTC planters under tea estates and out grower's category increased rapidly. The reasons for increase in plantations, as responded by the tea planters, were:

  • Good rate of returns as compared to traditional farming.
  • Availability of bank credit attracted tea plantation.
  • High demand for tea in both domestic and foreign market (esp Orthodox tea).
  • Peer pressures also motivated out growers to start tea plantation.

The other reason was that other food crops could not be grown in the land adjoining tea plantation. By the use of insecticides and pesticides in the tea plantation, insects are flushed out and take refuge in the nearby land which devours the crops.

1.2.1. Types of Tea:

Generally two types of tea are produced in Nepal. One variety that is grown in the hilly region is called Orthodox tea. Orthodox tea has a huge demand in overseas countries and its export is increasing over the years. The major markets of Nepalese Orthodox tea are Western Europe and North America. Similarly, tea grown in Terai (plain area) especially in Jhapa district is called CTC (Crush, tear and Curl) tea, which accounts for more than 95% of the total domestic tea consumption. Orthodox Tea:

Black tea, in the form of traditional leaf tea produced from hill grown tea, particularly Chinese type of tea is known as Orthodox tea. The Orthodox tea, particularly popular for its aroma, is considered as premium tea all over the world (Singh, 2001). This tea is produced from the leaves of tea bushes in the eastern hilly region. Despite its long plantation history, the production and productivity of Orthodox tea have been low due to lack of conducive govt. policy, high cost of production (and therefore expensive) lack of technical know-how, and CTC oriented domestic market. However, the increasing demand of hill-orthodox tea in the overseas market provides good prospect of tea cultivation in the hilly region of Nepal. CTC Tea:

CTC tea, commonly used by majority of tea consumers of the world (produced in Jhapa district) is popular for its color. The manufacturing process of CTC tea consists of withering of leaves, rolling, fermenting, and drying through mechanical devices. Furthermore, sorting is done with the help of machine in different grades such as brokens, fannings, and dust.

1.2.2. Present Status of Tea Industry:

Tea Industry includes all Tea Estates, processing plants, small growers, Packeters and marketers that are directly involved in production and marketing of tea. National Tea Policy-2000 defines 'Tea Industry' as the tea cultivation with the registration of industry in the land availed under the concession of land ceiling facilities and having one's own processing plant. Although tea industry has a long history of more than a century, in real sense it is only after the establishment of Nepal Tea Development Corporation. Ltd. in 1966, that tea cultivation flourished in Nepal.

At present, there are 128 tea estates and 45 tea processing factories as registered in NTCDB. Out of these 24 tea estates have their own processing factories whereas 21 tea processing factories do not have their own tea gardens. In addition to these, there are 20 tea packaging industries and export import agencies related to tea marketing.

Tea industry in Nepal has developed under three different ownership status and management, namely, Public Estates, Private Estates and Small Holders. The only government owned and managed, NTDC was privatized in the year 2000. All these three types of tea producers have contributed significantly for the expansion of tea cultivation. The efforts made by Government and private sector entrepreneurs including small farmers have been the driving force for the extension of tea in the hills and Terai. Some of the important steps taken by the Government over the last 25 years include establishment of NTDC, implementation of outgrows scheme, declaration of tea zone, and policy package including facilities like providing loan and subsidy on bank rate, exemption from land ceiling and land tax etc., establishment of NTCDB, and issuing of National Tea Policy-2000.

The organization structure in all the tea estates under study was not presented clearly in the charts. However, the procedures and processes being practiced in carrying out the everyday tasks in tea industry are more or less similar in most of the cases. On the basis of the management system being adopted in the tea gardens consisting of different levels and statutory requirements, a common type of organization structure could be designed. The common structural pattern of tea estates is presented in Fig. 1.1.

Fig. 1.1 Structural Pattern of a Tea Garden

Owners / Board of Directors

Managing Director


Welfare Officer

Asst. Manager



Finance Officer

Asst. Manager


Factory Babu

Main Mechanic

Garden Babu

Garden Clerk

Head Clerks


Computer Operator

Asst. Health Worker

Staff Nurse Sisters



Fitter Babu

Main Sardar








Main Sardar









Tea Worker

Tea Maker





Asst. L.W.O.

Asst. Clerk

Asst. Accountant


In practice the estates in Nepal were having typically a very simple line organization structure to administer the day to day routine operations. Fig. 1.2 exhibits a typical form of common organization structure found in all tea estates, though it was not formally exhibited in charts. Each tea estate consisted of a manager with whole responsibility to look after the garden and the factory both as routine work. His roles were more of a technician with the knowledge of tea gardening and processing than a manager. Under the manger were appointed an assistant manager or an officer known as factory in-charge whose main roles and duties were related with running the tea processing factory with the help of technical assistants. And in the garden there were a few assistants called 'Sardars' to supervise the field work whereas in the office were an accountant/clerks. Attendance-keepers called 'Hazira-Babus' and a peon. On the basis of field visits and observation in different tea estates the existing common organization structure could be drawn as under.

Fig. 1.2 Organization Structure of Tea Estates

Owners / Board of Directors

Managing Director




Asst. Fitters







Office Accountant

Factory Incharge



Senior Sardars


Computer Operators

Attendance Keeper

Sardars Bahidars

1.3. Research question

Is the performance appraisal practice key to pay rise, training and development, promotion or termination of the employee in the tea industry of Nepal?

1.4. Research objectives

The specific objectives of this study were:

  1. To examine how employee performance is appraised in an organization.
  2. To evaluate the effectiveness of performance appraisal system in the organization.
  3. To analyze the relationship between performance appraisal and the factors like pay rise, training and development, promotion or termination of employee in an organization.

1.5. Justification of research

Tea industry which occupies an important position in the national economy is growing extensively mainly in the eastern region of Nepal. It is, being one of the most labor intensive, agro-based industries; it involves a great deal of workforce, which provides direct employment to about 41000 workforces. After the privatization of Nepal Tea Development Corporation in 2000, the change in ownership is also accompanied by deep changes in organizational procedures and culture that could have a profound effect on enterprise behavior and performance (Manandhar, 2002: 37).

There have been only a few research studies in the field of human resource management in private enterprises of Nepal. And there has not yet been any specific research conducted in performance appraisal in tea industry of Nepal. So, in view of the poor research-based on performance appraisal and the lack of knowledge existing in this field, the research work is virtually called for the streamlining of performance appraisal practices. Research can lead to an increased understanding of and improvement in performance appraisal practices. It can provide insights for managers as they attempt to increase employee productivity and satisfaction while reducing absences and turnover. Research can also identify potential problem areas related to performance appraisal

Lack of specific research in this field has encouraged the researcher to take up the task of conducting a comprehensive research with the purpose of examining and analyzing the actual performance appraisal practices in tea industry of Nepal. This study will reveal a clear picture about the existing state of performance appraisal practices in tea industry. The outcome of the study may serve as a research infrastructure on which further researches can be built. And the information and conclusions derived from this study may be useful and helpful for practicing managers, as well as planners, policy makers and other agencies concerned, through better understanding of performance appraisal practices relating to tea industry. Thus, it is a modest attempt towards examining and understanding performance appraisal practices in tea industry of Nepal.

1.6. Structure of dissertation

Chapter 1: Introduction: In the first chapter of dissertation covers with background information followed by the selected organisation of study, research question, research objectives, justification of study, structure of dissertation and end with research framework.

Chapter 2: Literature review: The second chapter reviews relevant literature of performance appraisal consisting of academic and institutional researches, seminar and survey reports, and articles. Also it includes purpose of performance appraisal and methods of PA. The literature showed that there is positive and strong relationship between performance appraisal and pay rise, promotion or termination, and training and development of employee.

Chapter 3: Methodology: This chapter deals with the general theories of research like phenomenology and positivism and shows the relevance of phenomenology for this research study. Apart from this, it includes the types of research like inductive and deductive research where the researcher applies the inductive research approach. Finally the data collection tools, techniques, analysis and interpretation methods are dealt briefly in this chapter.

Chapter 4.Finding/result: This chapter presents all collected data from primary and secondary sources in tabular form for analysis in order to achieve the goal of the dissertation.

Chapter 5: Analysis and discuss of finding: This chapter deals with the results of the data analysis and discussion on the findings.

Chapter 6: Conclusion and recommendation: This chapter deals with summarizes major findings of the study and forwards some suggestions

1.7. Research framework

Figure 1.3. Research framework:











Primary Data



Secondary Data

PAS Model of Tea Industry

Analysis of Organisation's Operating Systems and Performance


Literature Review

2.1. Performance Appraisal

The essence of the concept of the HRM is that people working in the organization are viewed as a valuable resource. If these people are managed properly, they can boost productivity through commitment and capability. HRM lays emphasis on the importance of integrating personnel functions (recruitment, selection, appraisal, reward, development, industrial relations, grievance and discipline, retirement, redundancy, dismissal) into the overall strategic management of the organization obligation on the employees.

The effective management of performance is not only vital for the survival of the organization but is also in the best interest of the employees. The underlying assumption of performance management is that the individual employees can satisfy their needs and objectives by contributing to the attainment of the organization's objectives. This may result in employee's motivation and greater job-satisfaction which is at the core of HRM (Foot and Hook 2008).The performance appraisal process generally consists of the following six steps as depicted in Figure 1 (Decenzo and Robbins, 1998).

Table 2.1. The Performance Appraisal Process

Establishment of performance standards

Communicate the performance expectations to employees

Measure actual amount of performance

Compare the actual performance with standards

Discuss appraisal with the employee

If necessary, take corrective action

Performance appraisal begins with the establishment of clear and objective standards of performance evolved out of job analysis and job description. These standards need to be communicated to the employees. Subordinates have to receive and understand the information properly. The third step is the measurement of the actual performance. For this, four measures can be utilized by managers, namely, personal observation, satisfied reports, oval reports and written reports. The fourth step is the comparing of the actual performance with standards. If any deviations are found between standards and actual performance, the manager may proceed to the fifth step to discuss the appraisal with the employees. Final step of appraisal is taking corrective action when it requires

The objectives of performance appraisal can be classified by different ways but according to (Harrison, 1995) to the objectives of performance appraisals are i. administrative: which determine orderly way of promotion, transfers and increase of payment. ii. Informative: supplying the relevant data to management team according to performance of subordinates and weakness and strengths of individual. iii. Motivational: create good environment to employee which motivate staff to develop themselves and to improve their performance

According to (Randell, et al. 1972) the main purpose of staff appraisal is to evaluate, auditing, constructing succession plans, motivating staff, developing individuals and

checking. Similarly according to (Lefton, 1997 ) performance appraisal can be defined by mainly four characteristics a. its formal b. it tries to find out why and how a subordinates is doing the job c. it tries to explore how subordinate can do better way in a job d.it always tries to produce benefits for subordinate, the organization and the superior.

Performance evaluation systems in Nepalese organizations are mandatory. The results of performance appraisal are not used in terms of career development, reward management and employee training and development. The results are mostly used to decide whether to promote employees or not (Adhikari, 2006).The main purpose of performance evaluation in government and public enterprises is the promotion of employees. It is not used for performance feedback to employees, reward management and identifying the needs of training and development. In civil service, 40 percent of performance appraisal is confidential and thus non transparent to employee (Agrawal, 2001).

Three different approaches exist for doing appraisals. Employees can be appraised against (i) absolute standards, (ii) relative standards, or (iii) objectives (MBO). However, no one approach is always best. Absolute standards are individual oriented whereas relative standards rank individuals. Management by objectives facilitates continuous improvement of performance results.

Most of the private sector enterprises in Nepal lack systematic performance appraisal system. Personal judgment and subjective assessment of owner-manager serves as the key criteria for performance appraisal (Agrawal, 1982). Formal and systematic performance appraisal system was non-existent in tea industry of Nepal.

Promotion is the vertical movement of an individual in an organization's hierarchy, enhanced status, accompanied by increased responsibilities, and usually with increased income, though it is not always so (Monappa and Engineer, 1999). It is the advancement of an employee to a higher job-rank in the organizational hierarchy accompanied by a pay rise (Pigors and Myers, 1981: 303). Employees consider their ultimate success of their career and performance in terms of the number and frequency of promotion they get during their service. Yoder et al observed that promotion gives incentive to initiative, ambition and enterprise, unrest and minimizes discontent, attracts capable personalities, appropriate logical training of advancement, and forms and effective reward for cooperation and loyalty, long term service, etc. (Yoder,1979). It increases satisfaction in the employees that their talents and capabilities are being recognized. In turn, they trust the organization and devote for the accomplishment of organizational goals and objectives.

In Nepal, the Civil Service Act was promulgated in 1956 which stated that promotion should be given to civil service personnel on the basis of work efficiency (Civil Service rule, 1993). Many changes have been done in the promotion system of the employee in the government organization since that time. The Administrative Reform Commission formed under the chairmanship of Mr. Vedananda Jha suggested that the promotion criteria for civil service personnel should include (a) seniority, (b) experience, (c) academic qualification and training, and (d) departmental performance report including co-operative attitude. Another Administration Reform Commission formed under the chairmanship of Mr. B.B. Thapa noted as promotion occupied special importance in the career development of employees, so capability to hold higher promotion and the capacity to perform the work satisfactory in the present position were the main criteria of promotion (Government of Nepal, 1996, Report of Commission). Amendments were done in the Civil Service Rules in 1978 and 1983. Similarly the Administrative Reform Committee formed under the chairmanship of the then prime-minister Mr. G.P. Koirala in 1991 emphasized performance oriented promotion system. The new Civil Service Act, 1993 laid stress on performance ability with criteria such as past performance, seniority, work experience of remote area, and academic qualification. Similarly, the comparative weight-ages of promotion criteria of civil service employees were changed after 1992.

NASC's study on promotion system of civil services stated that there was lack of clarity in its purpose and no consistency in the average promotion period between level and services. The risk of subjectivity in merit rating was a major apprehension in the minds of civil servants for giving more weight to merit rating. Even the performance evaluators' views were in favor of 'no link of the promotion with the performance'. Basic perquisites for sound performance appraisal practices, such as clear organizational and sectional objectives, individual job descriptions, adequate and reliable information system etc. were not properly provided in the civil service. Majorities were in favor of number allotting 50 percent of seats to the promotion by competitive examination as compared to the exiting 25 percent, in some cases even less.

Williams (1972) ascertained that managers lacked adequate means or determination to control the motivation and productivity of their workforce. Job description, performance appraisal and output indicators were non-existent; rewards and sanctions were irrationally applied; salaries were not genuinely related to knowledge and or effort requirements; offices had inadequate facilities; poor co-operation and limited delegation. The top of the decision making level was congested by trivialities while middle-level staff were in a soporific frenzy over the responsibilities for complex planning and fiscal matter. The review presented above fairly indicates that the limited attempts have been made to study personnel / HR management practices in public and private enterprises of Nepal. Those studies have shed light on some aspects of personnel / HR management, however, the concluding remark indicates that personnel /HR management in the past remained neglected areas of management. This review also indicates that no systematic attempts have been made to study HRM practices in tea industry of Nepal. This knowledge gap has called for a systematic study which could bridge up such a gap. The present study is an attempt in that direction.

2.2. Purpose of performance appraisal

It can be appeared at first glance that performance appraisals are applied for a kind id narrow purpose to assess who is doing a better job (or not). Even so genuinely performance appraisals are one of the most various tools available to managers. They may operate many purposes that profit both the employee whose performance is being appraised and the organisation.

Table 2.2.Purpose of performance appraisal



Decide on lay offs

Describe individuals weaknesses and strengths

Determine retention and termination

Describe individual training needs

Document personal decisions

Provide performance feedback

Find out promotion conditions

Acknowledge individual performance

Determine transfers and assignments

Measure goal achievement

Describe poor performance

Assist in goal identification

Evaluate training progress/program

Determine the organizational training needs

Personal planning

Reinforce authority design

Meet legal requirements

Improve communication

Validate selection criteria

Allow employee to discuss concerns

Make compensation/reward decisions

Provide a forum for leaders to help

2.2.1. Administrative Purposes

From the administrative outlook, appraisal programs supply inputs which can be used for total range of HRM activities. Performance appraisal is directly connected to sum other measure HR function, such as transfer, promotion and layoffs decisions. The performance data may use in HR planning in regulating the relative value of jobs under a job measure programme and as a criteria for supporting selection tests. It also supply a paper trial for documenting HRM action which can be result in lawful action because employers should keep up exact objective records of employee performance, in order to support themselves from possible target of discrimination in touch with such HRM action as salary determination, promotion and termination. Lastly it is most important to acknowledge that the success of total HR programme rely on understanding how the performance of employee weight up with goals set up for them. Appraisal systems have the ability to effect employee manners, by guiding directly to make better organizational performance.

2.2.2. Developmental purposes:

From the individual development outlook, appraisal supplies the feedback which is necessary for discussing weakness and strength as well as making better performance. Irrespective of the employee's level of performance, appraisal process supply a chance to describe issues for discussion, remove any essential problems and arrange new goals for fulfilling high performance. A developmental reach to appraisal acknowledge that the intention of managers is to make better job manners, not only to judge past performance, having a sound basis for making better performance is one of the major merit of an appraisal programs.

2.3. Who must appraise performance?

Nowadays, jobs are getting more and more challengeable so it is often not sensible to presume that one person can fully watch and judge an employee's performance. The rater can include team members, supervisors, peers subordinates, self and customers.

2.3.1. Managers/supervisor appraisal:

Managers/supervisor appraisal become the traditional reach the judging an employee's performance.in most cases, supervisors are in the finest position to carry out this function, although it can't be possible every time to do so for them. Most of the time managers protest that they don't have time to fully watch the performance of employee as such they depends on performance data to judge an employee's performance. Generally, the supervisor's superior examine the evaluation once informed by the managers. Having appraisal examined by a supervisor's superior minimize the possibility of superficial or biased evaluation. Examine by superiors normally are more objective and supply a wider prospective of employee performance than do appraisal by instant supervisors.

2.3.2. Self-appraisal:

When the manager search to extend an employee's participation in the review process, the self-appraisal is advantageous. It requires an employee to finish the appraisal form earlier to appraisal interview. At the lowest level this gets employee view about his or her weakness and strength and may guide to discussion about barriers to successful performance. The performance interview, the employee and the manager discuss the job performance and they agree the last appraisal. When the employee and the manager together set up future performance goals of employee progress plan than this approach also works well.

2.3.3. Subordinate appraisal:

The subordinate are in an excellent position to judge their managers since they are in often touch with their superiors and occupy a special position, from which to watch many performance connected manners. Since, subordinate appraisals present with employee's activity over their managers, the managers themselves can be hesitant to support such a system, especially when it can be used as a basis for amends decisions. Even so, managers intend to be more open to the concept when the information is used for progressive purposes. In addition, available proof suggests that when pay attention to the advice of their subordinates, their personal performance may get better substantially. However, to keep away from potential problems, subordinates appraisal should submit unnamed and mixed across sum individual raters.

2.3.4. Peer appraisal:

Individuals of same positions who works jointly was asked to judge each other. A peer appraisal supplies information that contrasts to some degree from ratings by a superior, since peers frequently see dissimilar dimensions of performance. Peers may readily describe leadership and interpersonal talent along with other weakness and strengths of their co-workers.

The merit of peer appraisal is the trust that they fit out more exact and logical information than appraisals by superiors. The supervisors frequently notice employees, putting their better foot ahead, while a usual basis can be seen a more genuine pictures those who work with their fellow employees. Even so, peer appraisal can't be wise able for administrative decisions such as bonuses and salary. Employers who used peer appraisal should also be confident to safeguard confidentiality in handling the review forms.

2.3.5. Customers appraisal:

A customer appraisal is same to team appraisal, which is post on TQM ideas and seeks judgements from both internal and external customers. In differ to internal customers; external customers include anyone inside the organization who rely on an employees work output eg. Managers who depend upon the HR department for choice and training services could be applicant for coordinating internal customer's judgement of that department. For both administrative and developmental purposes internal customer may supply must useful feedback regarding the value attached from an employee or group of employee.

2.4. Performance appraisal methods:

Performance appraisal methods might be widely described as measuring behaviours, traits or results. Trait approaches carry on be the extra popular system in spite of their inherent subjectivity. Behavioural approaches supply extra action oriented facts to employee and for that reason it might be best for development. The result oriented approach is obtaining popularity because its central point on the Jud gable contributions that employees make to organization.

2.4.1. Trait methods:

Performance appraisal of trait approaches are planned to judge the area to when an employee possesses positive characteristics such as creativity, dependability, initiative and leadership that are observed as significant for the organization and the job in general. The reason that trait methods are extra popular is outstanding in great part to the case with which they are progressed. Even so, on the basis of job examination if not planned carefully trait appraisals can be notoriously subjective and biased.

2.4.2. Easy Method:

In this method, the appraiser should compose a statement which best describes about the employee to appraised. The appraiser should describes the employee's talent and weakness and create a further recommendation for development. This methods point out unique characteristics of employee to be appraised. It is more useful when supervisor/manager need to identify specific point about the employee's skills, special talents, promotion and weakness.

2.4.3. Behavioural method:

This method mainly develops and describes the action which should be exhibited on the job. Behavioural methods are mainly used for providing the developmental feedback to employee. Critical incident method:

Critical incident method is used when the behaviour results of employee are unusual failure or unusual success in some parts of job. The most advantages of critical incident methods are that which covers the required appraisal period. Behavioural incidents are specific, which can facilitate feedback and development of employee. Behavioural checklist method:

It is one of the oldest methods, in which rating form is constructed containing the statement having both effective and ineffective job activities. To construct a behaviour checklist form of salesperson the following points needs to be include:

After any complain from customer, call him/her immediately.

Discuss about the complaint with customer.

Gather facts about complaint.

Transmit right information which can solve the problem and customer fell happy from it. Behavioural anchored rating scale (BARS):

A BARS contains of 5-10 vertical rating scale, where each scale covers important dimension of job performance or behavioural statement containing important job performance abilities as good or bad. Statements are prepared through critical incidents of job. The critical incidents are kept along the scale and assigned value accordingly to export option. A BARS is developed by committee including subordinates and managers. It takes long time and effort to construct.

2.4.4. Result method:

Rather than evaluating the behaviour of employee on job, some organization evaluates the result they achieve through their work. Through result appraisal employee often fell responsible to their outcomes. Productivity Measures:

There are various numbers of results that can be seen to evaluate performance of employee. For example salesperson can be evaluate on the basis of their sales volume, production workers can be evaluate on the basis of number of units production and number of detected defects item. So, it is directly align to employee and goal of the organization. But there are some limitations of this method. Management by objectives (MBO):

This method tries to overcome the limitation of result appraisal method. MBO is the philosophy coined by Peter Drucker in 1954. According to this method, employee constructs objectives by consulting with their supervisor and applies these objectives for their evaluation criteria. MBO is a system which involves a cycle starting with the common goal and objective of organization and finally back to that step which is shown as follows:

Figure 2.2. Management by Objectives:

Step 1

Organization goal and metric

Step 3A

Supervisor lists goal and metric for subordinate

Step 4

Mutual agreement of goals and metrics

Step 2

Department goal and metrics

Step 3B

Subordinate purposed goals and metrics


Review of organizational Performance

Step 6

Final review

Step 5

Interim review

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