Feasibility of Potential Appraisal for Managerial Employees in Selected PSUs in the State of Kerala

International Journal of Human Resource Management Vol. 16, n. 9, pp. 513-519 ISSN 0065-8094 Feasibility of Potential Appraisal for Managerial Employees in Selected PSUS in the State of Kerala Mohammed Sulaiman ∗ Arumugam Dharmaraj 1 Abstract With emerging complexities in business and industry and with the rise of the competitive market people are at the center stage of all sources of energy and power. It is imperative to say that good potential appraisal system is vital for the success of the organisation in the ever-changing competitive business. In today’s context every organisation’s performances appraisal systems have to be framed based on twin perceptive that will fulfill the organisation’s goal and their employees’ expectations. This study aims to assess the employees’ perception towards feasibility of potential appraisal for managerial employees in selected PSUs of Kerala. The study observed that the employee claim doubt related to the feasibility of the future potential appraisal metric systems. The study concluded that though PAS system adopted in public sector organisations are beneficial to the employees’. But, the employees’ feel that the PAS system should be developed further in order to get the optimum results. Thus, study suggests both central and State Public Sector Undertakings to adhered a three dimensional focus while planning future potential appraisal metrics i.e., administrative functions (e.g. promotion and salary), informative functions (e.g. generate performance data for management and employees), and motivational functions (e.g. training, learning, career planning). Keywords: Performance Appraisal, Potential Appraisal, Public Sector Enterprises. Introduction Performance appraisal as a system has been in existence in well-managed organisations for a few decades. The earlier conventional approach to performance appraisal, which required the manager to pass judgment on the subordinate, is outdated. The performance plan was basically designed for administrative purpose, like promotion annual wage increments, transfers, and even demotion of employee from one position to the other. With emerging complexities in business and industry and with the rise of the competitive market people are at the center stage of all sources of energy and power. It is imperative to say that good potential appraisal system is vital for the success of the organisation in the ever-changing competitive business. In today’s context every organisation’s performances appraisal systems have to be framed based on twin perceptive that will fulfill the organisation’s goal and their employees’ expectations. Organisational development aims for increase in productivity and fulfillment of corporate objectives and employees have aspirations to advance and grow in their organisation, and have a desire to achieve higher and more satisfying performance. Performance management in government owned enterprises is the managerial activity necessary to promote well-performing employee to the next position, as per the organization policies. But, the irony is that the current practice is to appraise the ∗ Assistant Manager –Personnel & Administration, Malabar Cement, Palakkadu, Kerala and Research Scholar, Karpagam university Coimbatore, Tamil Nadu, India. Email: lmdsulaiman@grgsms.com. 1 Arumugam Dharmaraj, Associate Professor, Department of Management Studies & Research, Karpagam University, Coimbatore, Tamil Nadu, India. 513 International Journal of Human Resource Management IJHRM, Vol. 16, n. 9 (2016) ‘individual’ rather than his/her ‘performance’, making the assessment almost personality oriented and not function related. In the absence of a mechanism to link the individual performance with the organizational goals and achievements, the appraisals are reduced or say narrow down its focus largely to the context of performance management. Based on the issues discussed this study aims to assess the employees perception towards feasibility of potential appraisal for managerial employees in selected PSUs of Kerala. Statement of Problem Public Sector Enterprises (PSEs) both at state and central level are characterised by rule-based approaches. The importance of the civil services in India is on processregulation. With such focus on procedures, structures in government are oriented towards input usage i.e., how much resources, staff and facilities that are positioned in a scheme, program or project and whether such placement is in accordance with rules and regulations. The main performance measure thus restricted to the amount of money spent and the success of the schemes, programs and projects. In short, job evaluation is focused in terms of the inputs consumed. However, since, Liberalisation of Indian economics during 1991, the performances of the public sector enterprises are reshaping and its faces heavy rivalries, from the private sectors enterprises. In order to realise the effective performances and to enhance the productivity of Public Sector Units (PSUs), the conservative performance management system has been adopted in India. It focuses on the input–output aspects, rather than the measurement of impacts or outcomes of policies or programs. In recent years it has been observed that the adoption of advanced performance appraisal systems are more relevant for civil services organisation of PSEs and it is not actively implemented in other industrial and services oriented PSEs. To overcome the existing gap in the performances appraisal systems adhered by the PSUs in India, there is an urgent and timely need for a wellmodified potential performances metric. The above discussion draws a significant rationality for the conduct of a study that would focus on proposing a health potential appraisal metrics that can be used by the PSUs both at state and central level across India. Review of Literature Literature reviews pertaining to performance appraisal, its measuring techniques, need and importance of performance appraisal for the better of organisation and employees are briefly discussed in this section. Sridevi.M and Manivannan (2011) study aimed to identify the factors determining performance approach of an invariant technique. The authors comment that a successfully operated system of performance appraisal is to benefit both individuals and the organisation they work for. This study provides a valuable database on personnel decisions concerning: placement, pay, promotion, transfer, punishment etc. Puttappali and Vuram (2012) study analysed the effectiveness of performance appraisal practices implementation by the Bharat Sanchar Nigam Limited (BSNL) and also aimed to observe the preparations of employees towards their existing performance appraisal system. The study recommended that there is a need for framing an effective appraisal technique for measuring performance of employees of BSNL in a more systematic and scientific manner, which is current, absent or inefficient. Madhaviah et. al, (2013) study reviewed various service quality measurement models in general and the various mythological issues pertaining to the use of importance performance analysis and suggested an effective measures to the organization to adopt in near future. 514 International Journal of Human Resource Management Feasibility of Potential Appraisal for Managerial Employees in Selected PSUS in the State of Kerala Bekele et. al, (2014) study findings indicated that the employees’ perception on performance appraisal practice had positively and significantly influence their work performance and affective organisational commitment. It has negatively and significantly influenced employees’ turnover intention. Dharmaraj, A., & Sulaiman, I. M. (2015) in our earlier study most of the respondents feel that the PAS must help in maintaining and improving the morale of teams and should help the employees in the identification of organizational objectives. Xavier. J (2015) study found that there exist positive associations between: (i) age, gender, work experience, salary, marital status of the respondents and their overall performance appraisal system. The study comments that employee’s performance appraisal is necessary to the industry to achieve the goals of the industry. It is the duty of every HR manager in an organisation to train and improve the efficiency of the employees in a better way. From the above mentioned reviews it has been understood that only few Indian authors had commented that performance appraisal provides consistent feedback to employees that enable them to improve performance and performance appraisal data supports organisation to take various decisions like: reward management, competency mapping potential matrix, satisfaction level measurement, commitment level measurement and training needs identification etc. But, the irony is that not much study were conducted in the past on the link of performance appraisal with employees’ performance, organisational culture, design of HRM policies and practices, the prevailing research dearth has provided required scope for conduct of this study. Objectives of the Study 1. To measure the PSUs employees per caption towards execution of PAS in their organisation, its fairness, its effectiveness and its feasibility. 2. To measure the scope for implementing a potential performance appraisal metrics among the selected PSUs in the State of Kerala. Hypotheses of the Study 1. There exist close association between employees’ perception towards execution of PAS in their organisation and scope for implementing a potential performance appraisal metrics. 2. There exist close association between employees’ perception on the fairness of PAS adopted in their organisation and scope for implementing a potential performance appraisal metrics. 3. There exist close association between employees’ perception towards the effectiveness of PAS in their organisation and scope for implementing a potential performance appraisal metrics. 4. There exist close association between employees’ perception towards feasibility of PAS and scope for implementing a potential performance appraisal metrics. Research Methodology The study has applied both quantitative and qualitative techniques of research analysis. Thus, study is both explorative and descriptive. The first stage of the research was exploratory in nature. This was done in two phases. The initial phase was to assume detailed secondary literature search on the performances appraisal techniques and systems. In this second stage, a well-structured questionnaire was constructed for collection of data from the employees working in State and Central Owned Public Sector Units operation in Kerala. Results and Discussion From the empirical data analysis it has been observed that, 77.14 per cent of public sector employees’ in Kerala are male and most of the employees’ have completed under graduate degree. It has been clearly inferred that 63.21 per cent of respondents’ 515 International Journal of Human Resource Management IJHRM, Vol. 16, n. 9 (2016) surveyed are state government employees, 49.64 per cent of employees’ are low-level managers and majority of the respondents’ monthly earning ranges between Rs.30,000 and Rs.40,000. It has been found that their immediate superior to minimize the errors periodically reviews the work performance of public sector employees. The study observed that majority i.e., 74.20 per cent of the respondents’ have agreed that the PAS adopted in their organisation creates performance expectations among both appraiser and appraise. Similarly, the employees’ working in public sector organisations believe that PAS adopted in their organisation helps to meet the organisational objectives and enhances their analytical and conceptual thinking. Further it has been inferred that the employees’ expect that Potential Performance Metric Appraisal (PPAM) should help in maintaining and improving morale of teams and it should help the employees’ in identification of organisational objectives. The employees’ have also said that PPAM must help in man power planning to meet the expansion and other needs and it should support good maintenance of data that in turn should the help HR managers to identify training needs and career development plans for an employee. SEM Modeling was performed to measure the current performance appraisal systems have a scope for changes and application of new modified potential appraisal metrics. PEFF Table 1: Variables Expansion Perception on Potential Performance Appraisal metrics perception towards execution of Performance Appraisal System perception towards fairness of Performance Appraisal System perception towards effectiveness of Performance Appraisal System PFEA perception towards feasibility of Performance Appraisal System PPAM PEXC PFAI Table 2: Testing of Hypotheses Results Employees Perception of Potential Appraisal Metrics for Managerial Employees in Selected PSUS of Kerala H0 Hypotheses There exist close association between employees perception H1 towards execution of PAS in their organisation and scope for implementing a potential performance appraisal metrics There exist close association between employees perception on the fairness of PAS adopted in their organisation and H2 scope for implementing a potential performance appraisal metrics There exist close association between employees perception towards the effectiveness of PAS in their organisation and H3 scope for implementing a potential performance appraisal metrics There exist close association between employees perception H4 towards feasibility of PAS and scope for implementing a potential performance appraisal metrics Hypothetical Relationship Results Positive Confirmed Positive Confirmed Positive Confirmed Negative Unconfirmed 516 International Journal of Human Resource Management Feasibility of Potential Appraisal for Managerial Employees in Selected PSUS in the State of Kerala Exhibit 1: Structural Equation Modelling Analysis Goodness-Fit Model Table 3: Chi-Square Result and Goodness of Fit Indices of the Proposed Model Accepted Obtained Acceptable Fit Indices Thresholds Value Value Levels 834.098 NA NA .000 <0.05 <0.05 Scaled Goodness of Fit Index (GFI) .428 Adjusted Goodness of Fit Index(AGFI) .430 Tucker-Lewis Index (TLI) .611 Comparative Fit Index (CFI) .034 Normed Fit Index (NFI) .038 Parsimonious Normed Fit Index (PNFI) .023 Parsimony Comparative Fit Index (PCFI) .020 Relative Fit Index (RFI) .604 Incremental Fit Index (IFI) .038 Root Mean Square Approximation Method (RMSEA) .000 Value Greater than 0.95 Value Greater than 0.95 Value Greater than 0.95 Value Greater than 0.95 Value Greater than 0.95 0=Poor Fit, 1=Good Fit 0=Poor Fit, 1=Good Fit 0=Poor Fit, 1=Good Fit 0=Poor Fit, 1=Good Fit Value less than 0.07 0-1 0-1 0-1 0-1 0-1 0-1 0-1 0-1 0-1 .05 or less would indicate a close fit of the model Level of Significance: 5 per cent 517 International Journal of Human Resource Management IJHRM, Vol. 16, n. 9 (2016) Table 4: Path Analysis Structure – Maximum Likelihood –Regression Weightage Unstandardized P. S.E C.R Relationship Path Estimates (β) Value PPAM <--- PEXC .264 .051 5.154 *** Significant PPAM <--- PFAI -.200 .052 -3.852 *** Significant PPAM <--- PEFF .212 .047 4.522 *** Significant PPAM <--- PFEA -.025 .043 -.577 .564 Insignificant Level of Significance: 5 Per cent On the basis of these measurements, the result of the study shows that the proposed model has a reasonable data fit χ2= 834.098 (p=.000), GFI=.428, AGFI=.430, TLI=.611, CFI=.034, NFI=.038, PNFI=.023, PCFI=.020, RFI=.604, IFI=.038, RMSEA=.000). The study concluded that the employees’ perception towards the current potential appraisal systems adopted in their organisation and the expected changes to be made in this system i.e., the scope for adoption of future potential appraisal metric is positively correlated, except in case of it feasibility. The employee claim doubt related to the feasibility of the future potential appraisal metric systems. The first three hypotheses framed stands accepted and the fourth hypothesis stands rejected. The measure of co-efficient of variances reveals that employees’ perception towards execution of performance appraisal system (β= .264, p=0.000), perception towards fairness of performance appraisal system (β= -.200, p=0.000), perception towards effectiveness of performance appraisal system (β= .212, p=0.000) are observed to be significant. Employees’ level of perception co-efficient is negatively correlated in case of (β= -.025, p=.564). The study observed that the employee claim doubt related to the feasibility of the future potential appraisal metric systems. The first three hypotheses framed stands accepted and the fourth hypothesis stands rejected. Conclusion The study concluded that though PAS system adopted in public sector organisations are beneficial to the employees’. But, the employees’ feel that the PAS system should be developed further in order to get the optimum results. 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