CHAPTER1

INTRODUCTION OF THE STUDY

1.1 INTRODUCTION

Employee performance appraisal is a systematic and structured process used by

organizations to evaluate the efficiency, productivity, and overall contribution of employees
toward achieving organizational goals. It plays a vital role in human resource management by
identifying employee strengths, areas for improvement, and potential for future growth.

In today’s competitive business environment, organizations increasingly rely on

effective performance appraisal systems to enhance employee motivation, improve job
satisfaction, and ensure optimal utilization of human resources. A well-designed appraisal system
not only facilitates fair evaluation but also supports decision-making related to promotions,
rewards, training, and career development.

The Small Industries Development Corporation (SIDCO) in Thiruvananthapuram

(TVM) is a prominent organization committed to the development and promotion of small-scale
industries. As a public sector enterprise, SIDCO places significant emphasis on employee
performance and organizational efficiency. Evaluating employee performance in such an
organization is crucial for maintaining productivity standards and achieving long-term
[Link] study focuses on analyzing the employee performance appraisal system at
SIDCO, TVM. It aims to understand the existing appraisal practices, assess their effectiveness,
and identify areas for improvement. The findings of this study can provide valuable insights into
enhancing appraisal systems and contributing to better organizational performance.

Performance appraisal involves various methods such as self-assessment, supervisor

evaluation, peer review, and performance metrics. These methods help organizations to identify
employee strengths, weaknesses, skills, and areas that require improvement.

Through this process, employees receive constructive feedback, which helps them
enhance their performance and align their work with organizational [Link] addition,
performance appraisal plays a significant role in administrative decisions such as promotions,
salary increments, rewards, and training needs.
It also contributes to improving communication between employees and management, thereby
creating a positive work environment and increasing employee motivation and job satisfaction.

The Small Industries Development Corporation (SIDCO) in Thiruvananthapuram (TVM) is a

key organization focused on promoting and supporting small-scale industries. As a government
enterprise, SIDCO emphasizes efficiency, accountability, and employee development. Therefore,
having an effective performance appraisal system is crucial for maintaining high standards of
performance and ensuring organizational [Link] study aims to examine the employee
performance appraisal system at SIDCO, TVM by analyzing its structure, methods, and
effectiveness. It also seeks to identify challenges faced in the appraisal process and suggest
improvements to make the system more transparent, fair, and result-oriented. The study will help
in understanding how performance appraisal contributes to both employee development and
organizational success.

1.1.1 Employees Performance Appraisal

Employee performance appraisal is a formal and systematic process used by organizations to

evaluate and document an employee’s job performance over a specific period. It is a critical
component of human resource management that ensures employees’ work aligns with the
organization’s goals, objectives, and standards.

The primary purpose of performance appraisal is to assess how effectively employees are
performing their duties, meeting targets, and contributing to the overall success of the
organization. This process typically involves setting performance standards, measuring actual
performance, comparing it with expected outcomes, and providing feedback to employees.

Performance appraisal systems are designed to serve multiple functions within an

organization. Firstly, they act as a tool for performance evaluation, helping management
understand employee productivity, efficiency, and quality of work. Secondly,

they support employee development by identifying skill gaps and training needs, enabling
employees to improve their capabilities and career growth. Thirdly, appraisal systems assist in
administrative decision-making, such as promotions, salary increments, transfers, and rewards.
 A well-structured performance appraisal system incorporates various methods and
techniques. Common approaches include rating scales, management by objectives (MBO), 360-
degree feedback, self-appraisal, and peer evaluation. Each method provides a different
perspective on employee performance, ensuring a more comprehensive and unbiased evaluation.
Moreover, performance appraisal plays a crucial role in enhancing employee motivation and job
satisfaction. When employees receive regular feedback and recognition for their work, they feel
valued and are more likely to be engaged and committed to their roles. Transparent and fair
appraisal systems also build trust between employees and management, fostering a positive
organizational culture.

1.1.2 Definitions of Employees Performance Appraisal

 According to Edwin [Link] “Performance appraisal is the systematic, periodic, and an

impartial rating of an employee’s excellence in matters pertaining to his present job and his
potential for a better job.”

 According to Dale S. Beach:“Performance appraisal is the systematic evaluation of the

individual with respect to his or her performance on the job and his or her potential for
development.”

 According to Gary Dessler:“Performance appraisal means evaluating an employee’s current

and/or past performance relative to his or her performance standards.”

1.1.3 Objectives Employees Performance Appraisal

Employee Performance Appraisal is a systematic process of evaluating an employee’s job

performance and providing feedback to improve future performance.

 To evaluate employee performance

 To identify strengths and weaknesses

 To provide feedback to employees

 To support promotion and salary decisions

 To identify training and development needs

 To improve employee motivation

  To facilitate career planning

 To improve communication between employees and management

 To maintain performance records for future reference

1.1.4 Nature Employees Performance Appraisal

Employee performance appraisal is a systematic and organized process designed to

evaluate the efficiency, productivity, and overall contribution of employees to an organization.
It follows a planned sequence of steps, including setting performance standards, measuring
actual performance, comparing it with established benchmarks, and providing feedback. This
structured approach ensures that the evaluation is consistent, fair, and objective.

Performance appraisal is also a continuous process, carried out at regular intervals

such as monthly, quarterly, or annually. It allows organizations to monitor employees’
progress over time, ensuring that performance is constantly improving and aligned with the
company’s objectives. Unlike a one-time assessment, this ongoing nature helps in identifying
trends, recognizing consistent performers, and addressing areas that need development
promptly While the appraisal system evaluates past performance, it is equally development-
oriented.

It identifies strengths and weaknesses, highlights skill gaps, and determines training
needs. This aspect of appraisal supports employee growth and career development, helping
individuals enhance their competencies and prepare for higher responsibilities. Constructive
feedback, a central feature of the process, guides employees toward improved performance
and greater efficiency in their roles.

Performance appraisal is also goal-oriented, aligning individual employee objectives

with the overall goals of the organization. This ensures that employees’ efforts contribute
directly to organizational success.

Furthermore, it acts as a motivational tool, recognizing achievements and providing

incentives that enhance job satisfaction and engagement. Through interactive discussions
between supervisors and employees, the process strengthens communication, builds trust, and
fosters a positive work culture
1.1.5 Importance Employees Performance Appraisal
Employee performance appraisal plays a crucial role in the effective management of
human resources in any organization. One of its primary importance is that it provides a
systematic evaluation of employee performance, helping management understand how well
individuals are performing in their assigned roles. By identifying strengths and weaknesses,
appraisal enables supervisors to recognize high performers and provide guidance or support to
those who require improvement.

Importance Employees Performance Appraisal:

 Helps in strategic workforce planning by identifying talent and succession needs

 Provides documentation for legal and compliance purposes

 Enhances organizational accountability by linking performance to outcomes

 Encourages a culture of transparency and fairness in the workplace

 Supports organizational decision-making beyond HR, such as project assignments

or departmental planning
 Acts as a benchmark for organizational productivity and efficiency

 Strengthens employee-management relationship through structured discussions

 Facilitates monitoring of organizational policies and procedures effectiveness

 Helps in retention of high-performing employees by recognizing and rewarding talent

1.1.6 Factors Affecting Employees Performance Appraisal

The effectiveness of employee performance appraisal depends on several key factors.
One of the most important is clarity of performance standards. If the expectations and criteria
for evaluation are not clearly defined, it can lead to confusion, inconsistency, and
dissatisfaction among employees.
Similarly, the competence and objectivity of the evaluator plays a critical role. Bias,
favoritism, or lack of proper training for evaluators can significantly affect the accuracy and
fairness of the appraisal.
1)Organizational Factors

These refer to the company’s policies, culture, and overall work environment. A supportive
organization with clear goals helps ensure fair and effective performance appraisal.

1. Employee-Related Factors

These include the employee’s skills, experience, attitude, and motivation. Higher competence and
positive behavior usually lead to better performance evaluation.

2. Manager-Related Factors

These involve the evaluator’s ability, fairness, and objectivity. Bias, lack of training, or poor
communication can negatively affect the appraisal process.

3. Job-Related Factors

These are connected to the nature of the job, workload, and role clarity. Clearly defined roles and
manageable tasks help in accurate performance assessment.

4. External Factors

These include outside influences like economic conditions, competition, and government policies.
Such factors can impact employee performance indirectly.

1.1.7 Need of Employees Performance Appraisal

Employees’ performance appraisal is essential for evaluating the efficiency and

effectiveness of employees in an organization. It helps in identifying strengths and weaknesses,
providing feedback, and improving overall performance.
 Helps to evaluate employee performance systematically
 Identifies strengths and areas for improvement
 Provides feedback for employee development
 Assists in promotion and salary decisions
 Motivates employees to perform better
 Helps in identifying training and development needs
 Ensures alignment with organizational goals
 Encourages Accountability
 Improves Decision Making
 Skill development
1.2 INDUSTRIAL PROFILE
Small scale industries are business that requires few people to run, the number of which will
depend on different jurisdictions. Such industries often thrive on areas that have a high scarcity of
raw materials. They provide immediate large scale employment. They offer a method of ensuring
a more equitable distribution of the national income and they facilitate an effective mobilization of
resources of capital and skill which might otherwise remain underutilized.
Government has recognized the important role of entrepreneurs in the industrial development of the
country, especially through the small scale industries. SSIs are essentials for Indian economy in terms of
employment generation, foreign exchange earnings and share in industrial output and contribution to
national income. The government of India and state government provide a number of special facilities and
incentives. The incentives not only motivate entrepreneurial base in the economy. The new entrepreneurs
face a number of problems on account of inadequate infrastructure facilities and other support services

The government offers a package of service through its specialized institutions and
motivates entrepreneurs to take advantage of the various facilities and establish eateries and
flourish. This package includes assistance in obtaining finance, help in marketing, technical
guidance, training and technology up graduation etc. It is hoped that institutional incentives
would play a key role in the promotion of small enterprises their self-sustainable growth.

Small scale industry has been accorded an imported place in the national economy by
national decision makers. Small units generate employment at relatively small capital cost,
mobilize resources of capital and skill at micro levels and are expected to meet the raising
demand for various goods and services required by the economy. Small scale industry forms an
important sector constituting nearly 40 percent of the total output in the private sectors. Much
more significant is the employment generation capacity of small scale industry.

In most of the developing countries like India Small Scale Industry (SSI) constitute an
important and crucial segment of the industrial sector.

They play an important role in employment creation, resources utilization, and income
generation and helping to promote changes in gradual and phased [Link] have been given
an important place in the framework of Indian planning since beginning both for economic and
ideological reasons. The reasons are obvious.

The scarcity of capital in India severely limits the number of non-farm jobs that can be
created because investment costs per job are high in large and medium industries.
 Small scale enterprises are generally more labor intensive the larger organizations. As a
matter of fact, small scale has now emerged as a dynamic and vibrant sector for the Indian
economy in recent years. It has attracted so much attention not only from industrial planners and
economics but also sociologists, administrators and politicians.

Defining small-scale industry is a difficult task because the definition of small-scale

industry varies from country to country and from one time to another in the same country
depending upon the pattern and stage of development, government policy and administrative set
up of the particular country. Every country has set its own parameters in defining small scale
sector.

Generally small scale sector is defined in terms of investment ceiling on the original
value of the installed plant and machinery In the Indian context, the parameters areas as follows:
The small scale industries board in 1955 defined, "Small scale industry as a unit employing less
than 50 employees if using power and less than 100 employees if not using power and with a
capital asset not exceeding its 5 lakhs. Small scale industries may sound small but actually plays
a very important part in the overall growth of an economy.

Small industries can be characterized by the unique feature of labor intensiveness. The
small scale industry is especially in the production of consumer commodities. Small scale
industries can be characterized with the special feature of adopting the labour intensive approach
for commodity production. As these industries lack capital, so they utilize the labor power for
the production of goods. The main advantage of such a process lies in the absorption of the
surplus amount of the labour in the economy that were not being absorbed by the large and
capital intensive industries. This in turn helps the system in scaling down the extent of
unemployment as well as poverty.

It has been empirically proved all over the world that small scale industries are adept in
distributing national income in more efficient and equitable manner among the various
participants in the process of good production than their medium of larger counterparts. SSI help
the economy in promoting balanced developments of industries across all the regions of the
economy.

SSIs enjoys a lot of help and encouragement from the government through protecting
these industries from the direct competition of the large scale ones provision of subsides in the
form of capital, lenient tax structure for the industry and many more.

The problem of industrial sickness is the outcome of the varying degree of role failure of the
entrepreneurs and the social entities in their environment. Effective role performance of the
social entities in the environment could have potentially prevented the role performance of the
enterprises from worsening. The poor performance and role failure of the "sick units who cannot
repay the borrower funds in the term depletes the resources base of the state agencies and
adversely affairs their capacity to help the needy units more effectively. The sociological nature
of the problem hence emerges as one of a cascading set of role failures among an interrelated
and interacting set of social entities involved in the problem situation

1.2.1 Features of Small Scale Industries

The nature of the SSI is usually beneficial to the small entrepreneurs that have access to
limited funds but have the expertise to provide support not only to the local employment but also
to the major industries and in many cases the export segment as well. Some of these features are
discussed below.

1) Flexibility

SSIs are usually flexible or easily adapt to the ever changing consumer demands or needs
as well as business environment. This feature is usually absent in large or multinational
corporations and businesses as their scale of operations is very huge to suddenly adapt to the
necessary changes.

2) Less capital Intensive

Small Scale Industries requires lesser capital investment. This enables them the ease of set up
and establishment of their business as well as faster access to financing options.

3) Management

Management and ownership of SSIs is usually the same. There are not many buffers that
can be found between management and ownership in small scale industries as compared to the
larger corporationsThis ensures the involvement of the owners in the day to day running of the
business and be well versed with the needs and demands of the business.

4)Ownership

Ownership of these organizations is usually with a single person or limited persons. The
organizations usually that come under the SSIs are either sole proprietary or partnership firms or
private limited companies

5)Technological dependence

ensures that the local skilled labor is assured of employment and is part of socio-economic
development. Their lesser dependence on technology also ensures that the business is not greatly
impacted by the ever changing and growing technological advancements of the world.

6)Ancillary units

Small scale industries as mentioned on many occasions function as ancillary units to large
corporations. This means that they essentially supply basic manufactured products or services that
are further developed into the final products that are consumed by the ultimate consumer. This
inter-dependency of the SSI and the large corporations ensures the wheels of the economy run
smoothly and also ultimately the growth and survival of the small scale industry.

7)Meets local demands

The nature of the many SSI units makes it easier to meet the local demands as well as
utilize the local resources to the optimum level. The requirements of the small scale industries are
in turn fulfilled by similar small scale suppliers which thereby ensure a cohesive and conducive
atmosphere of interdependence and growth of all the SSI units

1.2.2 Objectives of Small Scale Industries

Small Scale Industries (SSI) play a vital role in the economic development of a country. They
contribute significantly to employment generation, utilization of local resources, and balanced
regional development. These industries promote entrepreneurship and support large industries by
supplying essential goods and services. Overall, SSIs help in reducing poverty and improving the
standard of living, especially in rural and semi-urban areas.

 Employment Generation

 Balanced Regional Development

 Utilization of Local Resources

 Promotion of Entrepreneurship

 Increase in Production

 Export Promotion

 Development of Rural Economy

1.2.3 Importance of Small Scale Industries

Indian economy is considered to be a developing economy. Small Scale industries sum

up to be almost half the manufacturing and service organizations as well as our exports. The
Government therefore has time and again announced various schemes and incentives to boost
this sector and make it achieve higher standards of quality and scale of production or operations.

The need or importance of the SSIs in our country has been highlighted by some of the
following points:

 Employment Opportunities

Small scale industries generate a large number of jobs with low investment.
They are especially helpful in reducing unemployment in rural and semi-urban area

 Economic Growth

SSI contribute significantly to the country’s GDP and industrial output.

They support overall economic development.

 Balanced Regional Development

These industries promote growth in backward and rural areas.

They help reduce regional disparities.

 Utilization of Local Resources

SSI make use of locally available raw materials and labor.

This leads to efficient resource utilization.

 Encouragement of Entrepreneurship

They motivate individuals to start their own businesses.

This helps in developing entrepreneurial skills and innovation.
1.3 COMPANY PROFILE

.The Small Industries Development Corporation (SIDCO) in Thiruvananthapuram

(Trivandrum), Kerala, plays a significant role in promoting and supporting small scale industries
in the state. Established by the Government of Kerala, SIDCO aims to encourage
entrepreneurship and generate employment opportunities by providing infrastructure facilities,
financial assistance, and technical support to Micro, Small and Medium Enterprises (MSMEs). It
develops industrial estates, supplies essential raw materials, and offers marketing assistance to
help small industries compete in the market.

SIDCO Trivandrum also conducts training programs and supports new entrepreneurs in
setting up their businesses, especially in rural and backward areas. Overall, it acts as an
important agency for industrial growth and balanced regional development in Kerala.

Kerala SIDCO is the institutional agency providing support facilities to Small Scale
Industry. It was established the prime objectives of rendering and promoting schemes for
Industrial Development and to develop entrepreneurship by providing packaged consultancy
services. The major activities of SIDCO include raw material distribution, marketing assistance
to registered SSI units in the state, execution of civil works for infrastructure development on
the Ne-half of industries. The SIDCO have 17 major industrial estates and 36 mini industrial
estates all over the state. This corporation also has 8 production and service units

Kerala SIDCO, a government owned Public Sector Corporation, was established in

November 1975 for the development and promotion of small scale industries. Currently SIDCO
is expanding its area of works by diversification to give new vision to the small scale industries.
God's own Country, Kerala, is gifted with abundant natural resources essential for establishing
Industrial Units and SIDCO is taking the initiative to set up industrial units. Kerala SIDCO is the
Total Solution Provider for small scale sector as it offers all facilities and help to set up a Small
Scale Unit. This corporation is rendering valuable assistance to Small Scale Units in the state.
including consultancy at the beginning of the project to the identification of Industrial facilities,
distribution of essential raw materials marketing of the Small Scale Industrial Products,
undertaking civil and electrical works, and setting up of small scale unit, Kerala SIDCO
competently handles the necessary requisites of any projects. Kerala SIDCO is now in the path
of profit and is now granting basic facilities and marketing security to the industrialists and new
entrepreneurs through its diversified activities and new working style. In 2012-13, Kerala
SIDCO achieved the highest turnover among state Indian SIDCO's with a turnover of 253 crores.

Kerala SIDCO, a Public Sector Undertaking of the Government of Kerala has four
decades of servicing to its credit as a Promotional Agency for Small Scale Industries. This
corporation is rendering assistance to SSI's in the state, like providing infrastructure facilities,
distribution of essential raw materials, marketing of products, undertaking civil and electronic
works etc, moreover, Kerala SIDCO is supplying Bitumen to local Bodies as Nodal Agencies
and Paraffin Wax to Small Scale Industries.

At present Kerala SIDCO possesses Industrial Lands in 12 sites, best suited for
Industrial purposes. Kerala is gifted with abundant natural resources essential for establishing
Industrial Units and SIDCO is glad to propose some of the plots for allotment for Industrial
purposes. Kerala SIDCO is in the lookout for more suitable areas across Kerala which will be
made available to investors suiting their requirements.
SIDCO offers:

 Factory Sheds & Developed land in all districts of Kerala

 Industrial Raw Materials through District Depots.

 Marketing assistances through District Level Sales Emporia

 Kerala Small Industrial Development Corporation Limited (Kerala SIDCO) is a state
agency of a Kerala, India, established for the promotion of small scale industries in the state of
Kerala. It works in association with the National Small Industries Development Corporation.
Apart from acting as the dispenser of government subsidies for starting a new SSL, the Kerala
SIDCO provide technical assistance, training, and als0 connects up the aspirant industrialists to
suppliers of raw material as well as machinery. Kerala SIDCO operates Industrial Parks,
Industrial Estates, and mini Industrial Estates in all the 14 districts of Kerala.

1.3.1 Objectives of SIDCO

 To prop, council, finance and cover and promote the interest of small diligence in the state.

 To give structure installations like road, drainage. electricity, water force etc. is one of the
primary objects of SIDCO.

 The main ideal of SIDCO is to stimulate the growth of diligence in the small scale sector.

 Marketing and deals of products, revivification of sick units and recuperation of

disfigurement units.

 Conservation, operation and administration of artificial estates and development plots,

vittles for all artificial installations, specialized and directorial backing for the execution of
their work and business.
1.3.2 Vision of SIDCO

“Touching every life and delivering value across the nation”

1.3.3 Mission of SIDCO

“Our Mission is to deliver quality products to the customer with prime quality”

1.3.4 Competitors
There is only one main competitor for the Kerala SIDCO which is KINFRA (Kerala
Infrastructural DevelopmentCorporation). Other competitors include local companies and foreign
Multinational companies.
1.3.5 Policy of SIDCO

 To pole the industrial development and to develop entrepreneurship by providing

package consultancy service.

 To promote employment, and development of rural areas through small scale industries.

 To provide financial assistance to small scale sector

 To provide self-employment.

1.3.6 Product Profile of SIDCO

 Food and Allied industries:- Pickles and chutneys, bread, mustard oil, groundnut oil.

 Wood and Wood products:- Wooden furniture and fixtures

 Paper products:-Exercise books and registers

 Injection molding thermo plastic products:- PVC pipes, including conduits up to 110 mm
for PVC pipes.

 Other chemical products:- wax candles, laundry soap, safety matches fireworks,
agarbathis.

 Glass and ceramics:- Glass bangles

 Mechanical engineering excluding transport equipment:- steel almirah, rolling shutters,

steel chairs - all types, steel tables all types, steel furniture - all other types, padlocks,
stainless steel utensils, domestic utensils.

1.3.7 Departments of SIDCO

 Marketing Department

 Production Department

 Finance Department
 HR Department

 Industrial Infrastructure Department

 Raw Material Department

 Construction Department

 IT & TC Department

[Link] Marketing Department

Kerala SIDCO provides marketing support to Micro Small and Medium

Enterprises performing in the State. Since last 10 times we've been retailed colorful products
successfully to colorful Government Departments and PSU's. SIDCO is also entrusted as the
nodal agency for the fixing of prices for electrical particulars- one among the reticent particulars
for MSME Sector.

Around 250 MSME units expunged with SIDCO for circular marketing backing and
around 400 units registered with SIDCO for direct marketing backing. We've founded our
association to meet your conditions in the parts of sword/ rustic cabinetwork, office innards
furnishing modular seating arrangements etc.

In the present script as the request implicit keeps on changing, we've geared up to serve
you on a state-wide base with 17 sub services in all sections. We can assure excellent client
service Support with the help of acceptable blend of quality product range and technically sound
moxie. Further we've excellent platoon to give after deals.

service to amend the complaints incontinently and on a time bound manner. We've
chalked out a medium in quality control with elaborate network of elderly officers to g1ve
service backing to you in all your conditions.

We're confident that service rendered by us surely satisfied you in your conditions. Still,
any complaint/ suggestions for the betterment of our service may kindly be insinuated to the
following addresses without any vacillation.
[Link] Production Department

SDCO has 9 product units spread each over Kerala. In addition to the other Conditioning,
SIDCO is directly manufacturing some particulars through this product Units e main guests are
Government Departments, Public Sector undertakings and other Government/Quasi Government
agencies and general public. The Government Departments and agencies can buy papers from
our product units without tender formalities. About 300 persons are directly employed and about
500 workers are laterally involved in these units.

[Link] Finance Department

The Finance and Accounts Department plays a crucial role in safeguarding and managing
the financial health of the organization. It is responsible for planning, directing, and overseeing
the efficient allocation and utilization of financial resources to support the company's strategic
objectives, profitability, and long-term sustainability

Beyond day-to-day financial management, the department also engages in budget

preparation, cost control, financial forecasting, and investment planning, enabling the
organization to make informed and forward-looking decisions. It works closely with other
departments to align financial planning with operational priorities, ensuring that resource
allocation supports overall business goals. The Finance and Accounts Department plays a vital
role in risk management by monitoring financial exposure, controlling debt levels, and ensuring
the company maintains a strong credit profile. It also ensures compliance with tax regulations,
corporate laws, and financial reporting standards, thereby upholding the organization's integrity
and reputation.

The department performs five core functions, each essential to maintaining the
company's overall financial performance and stability:

 Financial Planning and Budgeting: Preparing financial forecasts, allocating resources

efficiently, and planning budgets to align with organizational goals.

 Bookkeeping and Record Maintenance: Accurately recording all financial transactions

and maintaining up-to-date ledgers for audit readiness and internal review.

 Cash Flow Management: Monitoring and controlling cash inflows and outflows to
 maintain liquidity and avoid financial shortfalls.

 Compliance and Reporting: Ensuring timely filing of statutory returns, tax documentation,
and preparation of financial reports in compliance with regulatory

 Internal Controls and Audit: Implementing control mechanisms to prevent fraud, ensure
data accuracy, and support internal and external audits.

[Link] HR Department

The Human Resource (HR) Department of Kerala SIDCO stands as a foundational

pillar in the organization, playing a vital role in steering its mission by fostering a skilled,
engaged, and future-ready workforce. As a strategic enabler of Kerala SIDCO's sustainable
growth and development, the HR Department is instrumental in aligning human capital with the
organization's overarching vision and long-term objectives.

Through innovative talent management practices and people-first policies, the

department cultivates a workplace culture that is dynamic, inclusive, performance-driven, and
adaptive to change. By anticipating workforce needs, nurturing leadership capabilities, and
championing employee well-being, the HR team ensures that Kerala SIDCO remains agile,
competitive, and resilient in the face of evolving challenges. In essence, the HR Department not
only manages the organization's most valuable asset its people but also empowers them to be
active contributors to the organization's success and societal impact.

The department also oversees comprehensive performance management systems

designed to promote transparency, fairness, and merit-based growth within the organization.
Through structured performance appraisals, regular feedback loops, and clearly defined goal-
setting practices

The HR Department ensures that individual contributions are consistently evaluated and
aligned with Kerala SIDCO's strategic priorities. These mechanisms not only recognize and
reward high performance but also identify areas for development, enabling personalized growth
pathways for employees

By embedding performance metrics into the organizational culture, the department

fosters a high level of accountability, innovation, and continuous improvement across all levels.
This performance-driven approach not only boosts employee motivation and engagement but
also contributes to the organization's long- term efficiency, adaptability, and success.
[Link] Industrial Infrastructure Department

Industrial Estates are a cradle set up by the government for the growth of small-scale
sector. These are specific areas zoned for artificial conditioning in which structure similar as
Toads, power and other mileage services are handed to grease the growth of diligence and to
minimize impacts on the terrain. An Industrial Estate is an area of land set away for artificial
development. The conception of setting up of Industrial Park is to enable to concentrate devoted
structure in a delimited area to reduce the per- business expenditure of that structure to enable to
attract new business by furnishing an intertwined structure in one position, etc. The conception of
setting up of Industrial Estate in all the Legislative Constituency with the help of the Gram
Panchayats is to be worth considered as the overall artificial growth of the state. By setting up
Industrial premises in all sections, there will be a balanced growth of the artificial sector especially
small and medium sector throughout the state. The product conditioning in the state will be
increased in our state Kerala, which is a consumer state. SIDCO has 17 major Artificial Estates
and 36 Mini Industrial Estates with a total area of 270.30271 acres of land and 923 artificial
shanties. Allotments. of land and shanties are made on reimbursement base.

Whenever land/ shanties fall idle or the unit holder becomes defaulter of pretenses,
similar land/shanties are proceeded evicted and re-allotted to other artificial entrepreneurs. The
entrepreneurs who have remitted the full value of shanties land bought on ORS are given trade
deed. SIDCO has carried out numerous experimental workshop like road lighting, internal road
and furnishing water force to the units in the Industrial Estates and Mini Industrial Estates.

[Link] Raw Material Department

Kerala SIDCO is a promotional agency formed for promoting business openings of

the state to the MSME entrepreneurs and to punctuate the ideal business climate prevailing in
Kerala with the main objects to counsel, finance, cover and promote the interest of the SME
units in the state, by furnishing steady continued force of scarce, indigenous and imported raw
accoutrements and also furnishing marketing backing for their products, Kerala SIDCO works
harmoniously with MSME units in Kerala with the supports offered by the Government of
Kerala. SIDCO provides functional inflexibility and act as support medium for MSME units and
diligence Department of the State Government,For the effective perpetration of the cardinal
object, a separate division videlicet Raw Material division was formed at its original stage with
14 outlets for the time bound force of raw accoutrements at nominal rate by icing quality.
 major particulars handled by the Raw Material division are paraffin wax, line rode, Iron
and sword, cement, Gl. pipes, Aluminium wastes, Titanium dioxide, Petroleum products
especially Bitumen, paints, Lubes, Agricultural tools and tools.

[Link] Construction Department

The Kerala Small diligence Development Corporation is a Public Sector Undertaking

completely possessed by Government of Kerala. The construction Division is one of the major
divisions of SIDCO which is having a panel of educated masterminds.

There's a network of masterminds throughout the state. The Division has completed
colorful systems in the Construction field during once 40 times on the strength of dynamic,
energetic and educated masterminds. As a boon the new Managing Director of SIDCO is an
mastermind whose well educated in civil Construction field. SIDCO has expunged Engineers for
the medication of DPR, Structural Design, Detailed Estimate etc.

[Link] IT & TC Department

SIDCO IT & TC Division is furnishing software and tackle results to Government
Departments, Public Sector Undertakings, Original Self Government Bodies, Autonomous
Institutions and SSI Units. IT & TC Division supplies Hardware( waiters, Laptops, Desktop &
Computer peripherals) Software results, IT Consultancy Services, Telecom Products, office
robotization Products, Periodic conservation contract, Third Party conservation contracts for
form and conservation. Kerala SIDCO Limited has expunged accredited IT & Telecom
enterprises throughout Kerala to execute the systems accepted. We're completely equipped to
execute any IT & Telecom perpetration as per Government Guidelines. Through our business
mates we're able of furnishing any IT results which the guests demand and with be wide
repertories of good service labor force we can handed on call support for all over unborn guests
located through the length and breadth of the State.
 CHAPTER 2

REVIEW OF LITERATURE
 CHAPTER 2

RERVIEW OF LITERATURE

INTRODUCTION

The literature on employees’ performance appraisal emphasizes its role as a systematic and
continuous process aimed at evaluating and improving individual and organizational performance.
Various researchers have highlighted that an effective appraisal system not only measures
employee performance but also identifies training and development needs, enhances motivation,
and supports managerial decision-making. Modern appraisal approaches focus on fairness,
transparency, and employee participation to ensure accuracy and acceptance of the evaluation
process. Additionally, the integration of feedback mechanisms and performance standards has
been recognized as crucial for achieving organizational effectiveness. Therefore, reviewing these
studies provides valuable insights into best practices and emerging trends in performance
appraisal systems, which are relevant to the present study.
This section examines various studies conducted by researchers, highlighting different
methods, techniques, and approaches used in performance appraisal systems. It also focuses on
key factors influencing appraisal outcomes, such as employee behavior, organizational policies,
and feedback mechanisms. By reviewing earlier works, it becomes easier to understand the
strengths and limitations of existing appraisal practices.

2.1 RERVIEW OF LITERATURE

1. Moats (1999) support Shelley's argument and go on to say that performance evaluation is a
procedure used by organizations to assess employee performance in accordance with current
standards. According to Moats, the primary goal of appraisals is to assist managers in
efficiently employing personal and human resources, which will ultimately increase
production

2. McNamara (2000), The most recent behaviour is used to determine rating in this bias
disregarding the behaviours that were frequently displayed during the course of the
assessment period. The tendency for raters to evaluate an employee's performance primarily
on the basis of his most recent behaviour rather than considering long-tern trends is reflected
in the recent impact.
3. Moller and Torronen (2003) Effectiveness is by definition a qualitative metric that 1s
determined by the assessor. The ability of the system to develop and provide solutions that
offer greater value to the institution stakeholders is what they define as effectiveness.

4. Rasch (2004)There is a possibility that fear will oppose valuation. A weak assesment system
won't have a sufficient impact. Issues with raters, such as contrast error, central tendency
mistake, personal bias error, and leniency or harshness error, also have an impact on an
employee's performance review.

5. Kurt (2004) Some managers are inclined to take the easy route and give people go0d ratings,
others are prone to believe in the tyranny of exact assessment, which places an undue
emphasis on an individual's shortcomings and makes the evaluation too harsh

6. Cleveland, Murphy, and Williams (2004) examined the multiple purposes of performance
appraisal systems in organizations. They found that appraisal serves administrative,
developmental, and strategic functions. Their study emphasized that performance appraisal
must be aligned with organizational goals and clearly communicated to employees. They also
highlighted that fairness and accuracy in evaluation are critical for employee acceptance and
trust in the system

7. Smither, London, and Reilly (2005) focused on 360-degree feedback systems. Their study
revealed that feedback from multiple sources provides a comprehensive evaluation of
employee performance. However, they noted that feedback must be constructive and
supported with follow-up actions to ensure improvement in performance.

8. Varma, Pichler, and Srinivas (2006) analyzed the role of cultural differences in
performance appraisal. They found that cultural values influence how employees perceive
appraisal systems, and organizations must consider these factors to ensure fairness and
effectiveness.

9. DeNisi and Pritchard (2007) emphasized that performance appraisal should be a continuous
and dynamic process. Their study highlighted that linking appraisal with employee motivation
and development leads to better performance outcomes and improved organizational
efficiency.

[Link] Dessler (2008) defined performance appraisal as a systematic process of evaluating

employee performance against set standards. He emphasized that appraisal helps identify
performance gaps and supports employee development through proper feedback mechanisms.
.

11. Elaine Pulakos (2009) discussed the shift from traditional appraisal systems to continuous
performance management. She highlighted that ongoing feedback, coaching, and real-time
evaluation are more effective in improving employee performance than annual appraisals

12. Armstrong-Stassen and Schlosser (2010) studied the impact of performance appraisal on
employee commitment. They found that recognizing employee performance through appraisal
systems enhances motivation, job satisfaction, and organizational effectiveness.

13. P. Singh and A. Mohanty (2011) examined the impact of performance appraisal on
employee productivity. Their study found that appraisal systems help align individual goals
with organizational objectives and improve overall efficiency through feedback and
evaluation

14. Leonardo P. Daoanis (2012) focused on employee perceptions of appraisal systems. He

concluded that fairness and transparency are essential for employee satisfaction and
motivation, while biased appraisal systems negatively affect performance.

15. S. Nganga, M. Wanjiku, and M. Sakwa (2013) found that clear performance standards and
proper evaluation methods improve employee performance..

16. Ahmad, Hussain, and Shahzad (2014) found that ineffective appraisal systems lead to bias
and employee dissatisfaction.

17. O. T. Arogundade and Olasunkanmi-Alimi (2015) highlighted the role of performance

appraisal in employee development and career growth.

18. Bhurtel and Adhikari (2016)The study highlighted that performance appraisal helps
employees clearly understand their roles, responsibilities, and expectations within the
organization. It improves job performance by providing proper guidance and feedback. The
researchers also found that effective appraisal systems increase employee satisfaction and
productivity.

19. Ismail and Rishani (2018)The study emphasized the importance of continuous feedback in
performance appraisal systems. It found that regular feedback helps employees identify their
strengths and weaknesses. This leads to improved performance, higher morale, and better
employee engagement.

20. Upadhyay, Ansari, and Bijalwan (2019)This study concluded that performance appraisal
improves employee satisfaction and retention in organizations.
21. Memon, Salleh, and Baharom (2020)The study revealed that satisfaction with performance
appraisal systems leads to higher employee commitment and positive work behavior.
Employees who trust the appraisal process tend to perform better. The research also
emphasized the importance of fairness and transparency.

22. Abdullah, Ahsan, and Alam (2021)The researchers identified performance appraisal as an
essential tool for evaluating employee competencies. It helps organizations identify skill gaps
and plan training programs. The study concluded that effective appraisal systems improve
both individual and organizational performance.

23. Nosratabadi, Mosavi, and Lakner (2022)This study focused on the use of advanced
technologies such as artificial intelligence in performance appraisal systems. It found that
technology improves accuracy, reduces bias, and enhances efficiency. The study highlighted
the growing importance of digital appraisal systems.

24. Ristiawansyah (2023)This study emphasized that appraisal systems help in decision-making,
training, and employee development.

25. Sadiyawati and Hasanati (2024)The study highlighted that effective appraisal systems
contribute to continuous employee development. It improves performance by identifying
strengths and weaknesses. The research also emphasized structured and systematic appraisal
practices.

2.2 RESEARCH GAP

Although numerous studies have been conducted on employees’ performance appraisal,
several gaps still exist in the existing literature. Most of the previous studies have focused on the
general effectiveness of appraisal systems, employee motivation, and organizational performance.
However, limited attention has been given to the practical challenges faced during the
implementation of appraisal systems in real organizational settings.

Most studies on employees’ performance appraisal focus on productivity and motivation,

but limited attention is given to implementation issues in organizations like SIDCO. There is a
lack of research on employee perception and fairness within SIDCO. Studies related to small-scale
industries are also limited. Additionally, the role of technology in SIDCO’s appraisal system is not
fully explored. This study aims to fill these gaps.
 CHAPTER 3

RESEARCH METHODOLOGY
 CHAPTER 3

RESEARCH METHODOLOGY

3.1 TITLE OF THE STUDY

"A study on “Employees’ Performance Appraisal” at Kerala Small Industries Development
Corporation Ltd (SIDCO), Thiruvananthapuram"

3.2 SCOPE OF THE STUDY

 The study focuses on the performance appraisal system followed in SIDCO
 It examines the methods and techniques used for evaluating employee performance
 It analyzes employee perception towards the appraisal system in SIDCO
 It studies the fairness and transparency of the appraisal process
 It evaluates the effectiveness of feedback provided to employees
 It examines the impact of performance appraisal on employee motivation and job satisfaction
 It identifies the strengths and weaknesses of the existing appraisal system in SIDCO

3.2 OBJECTIVES OF THE STUDY

 To analyze the existing performance appraisal system followed in SIDCO
 To examine the methods and techniques used for evaluating employee performance
 To study the level of employee satisfaction towards the appraisal system
 To evaluate the fairness and transparency of the performance appraisal process
 To assess the effectiveness of feedback provided to employees
 To identify the impact of performance appraisal on employee motivation and job performance
 To study the role of performance appraisal in decision-making such as promotions, rewards, and
training
 To identify the strengths and weaknesses of the current appraisal system in SIDCO

3.3 RESARCH DESIGN

Descriptive research design is used to describe the characteristics and opinions of employees
regarding the performance appraisal system in SIDCO. It helps in collecting detailed information
about employees’ perceptions, satisfaction levels, and the effectiveness of the appraisal process.

3.4 DATA COLLECTION

Data for the study is collected from both primary data and secondary data
Primary Data
Primary data refers to the data collected directly from the respondents for the first time for the
purpose of the study. In this research, primary data is collected from the employees of SIDCO to
understand their opinions, perceptions, and satisfaction regarding the performance appraisal
system followed in the organization.
Secondary Data
The secondary data for this study is collected from various reliable sources such as textbooks
related to human resource management, academic journals, research articles, and previous studies
on employees’ performance appraisal. In addition, information is also gathered from company
records, reports, and official documents of SIDCO, which provide insights into the existing
appraisal system and organizational practices.
 CHAPTER4

DATAANALYSISANDINTERPRETATION
 CHAPTER4
DATA ANALYSIS AND INTERPRETATION

TABLE SHOWING RESPONDANTS BASED ON AGE

AGE NO OF RESPONDANTS PERCENTAGE

BELOW 25 YRS 21 32.3%

25-35YRS 31 47.7%
36-45YRS 11 16.9%
ABOVE 45 YRS 2 6.9%
TOTAL 65 100

Interpretation:
The age distribution of respondents from SIDCO, Thiruvananthapuram (TVM),
indicates that the workforce is predominantly young but includes representation from
all age groups. Out of 65 respondents, 47.7% fall within the 25–35 years category,
forming the largest segment, followed by 32.3% below 25 years, showing a strong
presence of young and early-career employees. Meanwhile, 16.9% of respondents
are in the 36–45 years group, contributing a moderate level of experience, and only
6.9% are above 45 years, representing a smaller share of senior employees.
Showing Respondents Based On Gender:

GENDER NO OF RESPONDENTS PERCENTAGE (%)

MALE 42 64.6%

FEMALE 23 33.3%

TOTAL 65 100

Interpretation
The gender-wise distribution of respondents from SIDCO, Thiruvananthapuram (TVM), indicates
that the workforce is predominantly male. Out of the total 65 respondents, 64.6% are male, while
33.3% are female. This shows that male employees form a clear majority within the organization,
whereas female representation is comparatively lower.
 Chart Showing Respondents Qualification:

QUALIFICATION NO OF PERCENTAGE (%)

RESPONDENTS

DIPLOMO 4 6.2%
UG 41 63.9%
PG 20 30.8%
TOTAL 65 100

Interpretation:
The qualification-wise distribution of respondents from SIDCO, Thiruvananthapuram (TVM),
reveals that the workforce is largely well-educated, with the majority holding higher educational
qualifications. Out of 65 respondents, 63.9% are undergraduate (UG) degree holders, making it the
most dominant qualification group in the organization, followed by 30.8% who have completed
postgraduate (PG) studies, indicating a strong presence of employees with advanced knowledge and
skills. In contrast, only 6.2% of respondents possess a diploma qualification, representing a
relatively small segment of the workforce. Overall, this combined distribution highlights that
SIDCO, TVM primarily consists of academically qualified employees, with a significant emphasis
on undergraduate and postgraduate education, which can contribute to better efficiency, skill
development, and overall organizational performance.
Chart Showing Working Experience of the Respondents:

EXPERIENCE NO OF RESPONDENTS PERCENTAGE (%)

LESS THAN 1YRS 19 29.2%

1-3YRS 29 44.6%
4-6YRS 10 15.4%
ABOVE 6YRS 7 10.8%
TOTAL 65 100

Interpretation:

The experience-wise distribution of respondents from SIDCO, Thiruvananthapuram (TVM),

indicates that the workforce is predominantly composed of employees with relatively low to
moderate work experience. Out of 65 respondents, the majority (44.6%) have 1–3 years of
experience, followed by 29.2% with less than 1 year, highlighting a strong presence of early-career
employees within the organization. Meanwhile, 15.4% of respondents have 4–6 years of experience,
contributing a moderate level of expertise, and only 10.8% possess above 6 years of experience,
representing a smaller share of highly experienced employees. Overall, this distribution suggests that
SIDCO, TVM has a workforce largely concentrated in the initial stages of their careers, with
comparatively fewer long-tenured employees, which may support adaptability and fresh perspectives
but could also indicate a limited pool of extensive experience within the organization.
TABLE SHOWING RESPONDENTS MONTHLY INCOME

MONTHLY INCOME NO OF RESPONDENTS PERCENTAGE (%)

BELOW 20000 11 16.9 %

20001 - 40000 26 40.0 %
40001 - 60000 24 36.9 %
ABOVE 60000 4 6.2 %
TOTAL 65 100 %

Interpretation:
The monthly income distribution of respondents from SIDCO, Thiruvananthapuram (TVM),
indicates that the majority of employees fall within the middle-income range. Out of 65 respondents,
40.0% earn between ₹20,001–₹40,000, making it the largest income group, closely followed by
36.9% earning between ₹40,001–₹60,000, which shows a substantial proportion of employees in a
moderately higher income bracket. Additionally, 16.9% of respondents earn below ₹20,000,
representing the lower-income segment, while only 6.2% earn above ₹60,000, indicating a relatively
small proportion of high-income earners within the organization. Overall, this distribution suggests
that SIDCO, TVM primarily consists of employees in the mid-level income categories, with fewer
individuals at the extreme ends of the income scale, reflecting a fairly balanced but moderately
centered pay structure.
TABLE SHOWING I RECEIVED PROPER INDUCTION TRAINING AT THE TIME OF
JOINING:

S. NO RESPONSE CATEGORY NO OF RESPONDENTS PERCENTAGE (%)

1 Strongly Agree 10 15.4 %

2 Agree 20 30.8 %
3 Neutral 15 23.1 %
4 Disagree 6 9.2 %
5 Strongly Disagree 14 21.5 %
Total 65 100 %

Interpretation:
The response pattern of respondents from SIDCO, Thiruvananthapuram (TVM), shows a mixed
perception toward the given statement. Out of 65 respondents, 30.8% agree and 15.4% strongly
agree, indicating that a notable portion (46.2%) of employees hold a positive opinion. Meanwhile,
23.1% remain neutral, suggesting uncertainty or lack of strong opinion among a considerable group.
On the other hand, 9.2% disagree and 21.5% strongly disagree, totaling 30.7% who express a
negative perception. Overall, while the positive responses slightly outweigh the negative ones, the
presence of a significant neutral and disagreeing segment indicates that opinions are divided, and
there may be scope for improvement or clarification regarding the issue being assessed.
TABLE SHOWING PERFORMANCE EXPECTATIONS ARE CLEARLY
COMMUNICATED
S. NO RESPONSE CATEGORY NO OF RESPONDENTS PERCENTAGE (%)

1 Strongly Agree 14 21.5 %

2 Agree 20 30.8 %
3 Neutral 13 20.0 %
4 Disagree 4 6.2 %
5 Strongly Disagree 14 21.5 %
Total 65 100 %

Interpretation
The response distribution from SIDCO, Thiruvananthapuram (TVM), reflects a polarized perception
among respondents regarding the given statement. Out of 65 respondents, 30.8% agree and 21.5%
strongly agree, forming a combined positive response of 52.3%, which indicates that more than half
of the respondents hold a favorable opinion. At the same time, 21.5% strongly disagree and 6.2%
disagree, together accounting for 27.7% of respondents who express a negative view. Additionally,
20.0% of respondents remain neutral, suggesting a moderate level of uncertainty or indecision.
TABLE SHOWING PERFORMANCE APPRAISAL IS CONDUCTED REGULARLY:

S. NO RESPONSE CATEGORY NO OF RESPONDENTS PERCENTAGE (%)

1 Strongly Agree 15 23.1 %

2 Agree 24 36.9 %
3 Neutral 10 15.4 %
4 Disagree 1 1.5 %
5 Strongly Disagree 15 23.1 %
Total 65 100 %
Interpretation:

The response distribution from SIDCO, Thiruvananthapuram (TVM), shows that 36.9% of
respondents agree and 23.1% strongly agree, totaling 60.0% positive responses, while 15.4% remain
neutral, and 1.5% disagree along with 23.1% strongly disagree, totaling 24.6% negative responses.
TABLE SHOWING CONSTRUCTIVE FEEDBACK IS GIVEN AFTER APPRAISAL

S. NO RESPONSE CATEGORY NO OF RESPONDENTS PERCENTAGE (%)

1 Strongly Agree 16 24.6 %

:
2 Agree 18 27.7 %
3 Neutral 14 21.5 %
4 Disagree 3 4.6 %
5 Strongly Disagree 14 21.5 %
Total 65 100 %

Interpretation:
The response distribution from SIDCO, Thiruvananthapuram (TVM), shows that 27.7% of
respondents agree and 24.6% strongly agree, totaling 52.3% positive responses, while 21.5% remain
neutral, and 4.6% disagree along with 21.5% strongly disagree, totaling 26.1% negative responses.

TABLE SHOWING GOOD PERFORMANCE IS RECOGNIZED AND REWARDED:

 S. NO RESPONSE CATEGORY NO OF RESPONDENTS PERCENTAGE (%)

1 Strongly Agree 12 18.5 %

2 Agree 25 38.5 %
3 Neutral 15 23.1 %
4 Disagree 1 1.5 %
5 Strongly Disagree 12 18.5 %
Total 65 100 %

Interpretation:

The response distribution from SIDCO, Thiruvananthapuram (TVM), shows that 38.5% of
respondents agree and 18.5% strongly agree, totaling 57.0% positive responses, while 23.1% remain
neutral, and 1.5% disagree along with 18.5% strongly disagree, totaling 20.0% negative responses.

TABLE SHOWING I AM SATISFIED WITH THE PERFORMANCE MANAGEMENT

SYSTEM:
 S. NO RESPONSE CATEGORY NO OF RESPONDENTS PERCENTAGE (%)

1 Strongly Agree 22 33.8 %

2 Agree 19 29.2 %
3 Neutral 17 26.2 %
4 Disagree 2 3.1 %
5 Strongly Disagree 5 7.7 %
6 Total 65 100 %

Interpretation:
The response distribution from SIDCO, Thiruvananthapuram (TVM), shows that 29.2% of
respondents agree and 33.8% strongly agree, totaling 63.0% positive responses, while 26.2% remain
neutral, and 3.1% disagree along with 7.7% strongly disagree, totaling 10.8% negative responses.

Chi-Square Test
The Chi-square (χ²) test is a statistical tool used to determine whether there is a significant
relationship between two categorical variables or whether observed data differs from expected
values. It works by comparing the actual (observed) frequencies with the expected frequencies, using
the formula χ² = Σ((O−E)²/E). If the calculated value is higher than the critical table value, it
indicates a significant relationship;

Example of Chi-Square Test:

To analyze the relationship between Years of Experience and Satisfaction with Training Programs
among employees of Krishna Hospital.
Hypothesis:
H0:
 There is no significant relationship between employee experience and satisfaction with training
programs.

H1:
There is a significant relationship between employee experience and satisfaction with training
programs.

Observed Frequency Table of employee experience and satisfaction:

Years of Satisfied Neutral Dissatisfied Total

Experience

Less than 1 year 12 4 3 19

1 – 3 years 17 7 5 29

4 – 6 years 6 2 2 10

Above 6 years 4 2 1 7

Total 39 15 11 65

Calculation of Expected Frequency:

Expected Frequency (E) = (Row Total × Column Total) / Grand Total

E = (19 × 39) / 65 = 11.4

E = (19 × 15) / 65 = 4.4

E = (19 × 11) / 65 = 3.2

Similarly, expected values are calculated for first row’s (less than 1 year’s) total in the table

Chi-Square Calculation Table for First Row’s (less than 1 year’s) Total:
 O E (O−E) (O−E)² (O−E)² / E

12 11.4 0.6 0.36 0.031

4 4.4 -0.4 0.16 0.036
3 3.2 -0.2 0.04 0.012

After summing all values:

Χ² Calculated Value = 2.45 (Example).

Degree of Freedom:
Degree of Freedom (df) = (r − 1)(c − 1)
Where
r = number of rows
c = number of columns
df = (4 − 1)(3 − 1)
df = 3 × 2
df = 6
At 5% level of significance, the table value for df = 6 is 12.592.

Decision:

Since the calculated value (2.45) is less than the table value (12.592), the null hypothesis is accepted.

Interpretation
The findings indicate that there is no significant association between employees’ years of experience
and their level of satisfaction with the training programs at sidco trivandrum. This suggests that
perceptions of training effectiveness remain consistent across employees, regardless of whether they
are less experienced or highly experienced.
 CHAPTER 5

FINDINGS, SUGGESTIONS AND CONCLUSION

 A majority of employees exhibit a moderate level of satisfaction with the performance appraisal
system, indicating that while the system is functioning, it is not fully effective in meeting
employee expectations.
 A noticeable proportion of employees remain neutral or dissatisfied, suggesting uncertainty, lack of

awareness, or dissatisfaction with certain aspects of the appraisal process.

 The workforce is predominantly young and less experienced, which may influence their understanding,

expectations, and acceptance of performance evaluation methods.

 The comparatively lower presence of highly experienced employees may affect the consistency and

depth of evaluation, especially in terms of judgment and feedback quality.

 There appears to be a lack of clarity and transparency in the appraisal criteria, making it difficult for

employees to clearly understand how their performance is assessed.

 Mixed responses across different categories indicate inconsistency in the implementation and

effectiveness of the appraisal system within the organization.

SUGGESTIONS

 Enhance transparency by clearly communicating appraisal criteria, evaluation standards, and

performance expectations to all employees.
 Provide regular and continuous feedback instead of limiting evaluations to periodic reviews,
helping employees track and improve their performance consistently.
 Conduct training and awareness programs to educate employees about the appraisal system, its
objectives, and how they can actively engage with it.
 Introduce self-appraisal and encourage employee participation in the evaluation process to
improve fairness, involvement, and acceptance.
 Ensure that the appraisal process is free from bias by implementing standardized and objective
evaluation methods across all departments.

CONCLUSION

The study concludes that the employee performance appraisal system at SIDCO,
Thiruvananthapuram, is moderately effective, with a majority of employees expressing a generally
positive perception. However, the presence of neutral and dissatisfied responses indicates that the
system lacks complete clarity, consistency, and transparency. The dominance of a young and less
experienced workforce further influences how the appraisal process is perceived and understood.
While the current system provides a basic framework for evaluating performance, there is a need for
improvement in communication, fairness, and employee involvement. By adopting more transparent,
structured, and participative appraisal practices, SIDCO can enhance employee satisfaction, improve
performance outcomes, and strengthen overall organizational effectiveness.