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IMPERIAL INSTITUTE OF HIGHER EDUCATION

Table of Content

Introduction .......................................................................................................................... 6 Performance Evaluation System (PES) ............................................................................... 7 Management’s View Point Towards PES .......................................................................... 12 Employees’ View Point Towards PES .............................................................................. 14 Conclusion ......................................................................................................................... 16

Appendix I - Sample Performance Evaluation Forms ..................................................... 18 Appendix II - Questionnaire (English) with Quantitative Analysis .................................. 19 Appendix III - Questionnaire (Sinhala) ............................................................................ 31

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Introduction

Assignment Objectives  Study a Performance Evaluation System (PES) of an Organization.  Identify the Management’s View Point towards the Performance Evaluation System through interviews and observations.  Understand the Employees’ View Point towards Performance Evaluation System through questionnaire.  Make a final Conclusion regarding the Performance Evaluation System by evaluating the Management’s and Employees’ view points by using quantitative and qualitative analysis methods.

Organization Background The selected organization belongs to apparel industry. It locates in Colombo district. The garment consists of nearly 200+ employees and most of the employees are females. It consists about 10 low level supervisors and another 5 top level supervisors. All the basic positions are available such as machine operators, Cutters, Helpers, Supervisors…etc.

Methodology The data has been collected through Interviews, Observations, Questionnaires and Document Review methods. Technical Director, Human Resource Executive, Officer from ‘Work Study’ department and a supervisor were interviewed at the organization premises in order to gather the data. Observation and document review has been done at the same time. Questionnaires were distributed among 40 low level employees of the organisation in order to collect data to evaluate employees’ view point. Finally, the gathered data were analysed using quantitative and qualitative methods.

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Performance Evaluation System (PES)

The selected organization has a performance evaluation system which evaluates the employees’ performance. According to their organization structure, the performance evaluation is mainly done by a department called ‘Work Study’. However, number of other departments provides separate data to conduct the final performance evaluation. Basically the Evaluation can be divided in to two stages.

Stage 1: Performance Evaluation “To appraise an employee after a period of time based on input and/or output generated by the person. It mainly focuses on individual employee “ (IIHE Slides, 2009) Stage 2: Performance Management “Evaluating employee performance taking performance as an integral part of achieving organizational objectives. The purpose is to establish a high performance culture” (IIHE Slides, 2009) The organization uses ‘Absolute Standards Method’ as the performance evaluation method (Stage 1). It is applicable to all the individual employees who work in the product lines in the garment. The graphical rating mechanism is used to evaluate the performances. This mechanism weight on behaviour in general such as discipline, dress, appearance, communication skills…etc. However this organization uses ‘Discipline’ as measurement criteria.

At the same time the organization uses ‘Direct Index Approach’ as the performance Management methodology related to stage 2. This methodology is basically used to evaluate on objective, impersonal criteria such as Efficiency, productivity, absenteeism. However this organization measures ‘Efficiency’, ‘Absenteeism’ as measurement criteria.

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The organization uses five criteria to measure the performance of the employees as follows.

5%

5%

5%

Service

10%

Efficiency Attendance Discipline Education

75% Figure 1: Performance Evaluation Criteria’s For Product Line Employees [Source: Research Data]

According to the company’s organization structure, the final preparation of evaluation is done by Technical Director. Even though number of other parties involved in this process, none of them have full control over the entire performance evaluation system. The process of collecting and evaluating each criterion can be explained as follows.

Service: This is calculated by Human Resource Executive. Human resource department is responsible to collect all personal data of the employees. Therefore they need to provide the marks of each employee directly to the Technical Director. According to the information provided by the Human Resource Executive there is a clear definition to make the calculation which is approved by the management. Service Years Less than 1 year

Mark (out of 5%) 1%

1-3 years

2%

3-5 years

3%

5-8 years

4%

Over 8 years

5%

Table 1: Marking Definition for Service Criteria

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Efficiency: This is measured by two parties. Both the individual supervisors and officers from ‘Work Study’ department do the measurements. This mechanism is implemented for verification purposes. The target that needs to be completed by each employee is given by the ‘Work Study’ department to the supervisor as well as to product line employees. There is a clear definition to measure the efficiency as follows.

There is a time value (SME) for each product. Employee should finish her unit within that allocated time frame. For Ex: the employee should attach 5 buttons per shirt within 20 seconds. This job is referring to as a unit of work. Target says that how many units each employee should finish during the day or during an hour.

Finally the achieved amount will be compared to the given target in order to get a parentage out of 100%. Even though the criteria said to be award 75%, the actual mark will be award out of 100%. Therefore employees can work hard and earn more makes that 75% for efficiency. His document does not try to illustrate how the exact calculations are done. It is only try to prove the argument that the organization has a clear definition.

Attendance and Education: The organization has clear definition to award marks for ‘Attendance’ and ‘Education’, but could not published here due to the management request. Human resource department is responsible to provide the marks for both these criteria.

Discipline: The only criterion that management does not have a clear definition is ‘Discipline’. Each product line supervisor is responsible to award marks for his product line employees under the criterion ‘Discipline’. This is totally done by under the supervisors’ personal preferences.

Mainly there are two types of performance evaluation forms. 1. For Product Line Employees 2. For Supervisors

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Appendix - I presents the two different forms for illustration purposes with sample data. However, there are slight differences between the two forms. The criteria’s for product line employees are discussed above. However the differences of the supervisor evaluation form can be explained as follows.

10%

5%

Service

5%

Product Line Efficiency Attendance

10%

Retention Education 70%

Figure 2: Performance Evaluation Criteria’s For Supervisors [Source: Research Data]

In the supervisor performance evaluation form, there is no criterion called ‘Efficiency’. However, there is a criterion called ‘Product Line Efficiency’, because each supervisor is assigned to a product line which consists of nearly 40 employees. Therefore supervisor is responsible for the efficiency of entire 40 employees. At the end of the day, the supervisors will get marks by averaging his employees’ efficiency’s. However, the percentage is slightly differs, which is 70%

The ‘Discipline’ criterion is not available for the supervisors. However, there is an additional criterion called the ‘Retention’ to replace ‘Discipline’. The meaning of retention can be explained as the supervisor ability of retaining his employees in the organization. If lot of employees left the organization from his product line, then related supervisor will get low marks under retention.

The ‘Work Study’ department is responsible to give targets to the supervisor and they measure the supervisors’ performance as mentioned in the appendix I. Then they submit it to the Technical director who is responsible for finalizing the performance evaluation.

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Retention (10%), Education (5%), Attendance (5%) and Service (5%) criteria are record and provided by Human Resource Executives and transfer to the Technical Director. The management has defined the marking definition for each criterion, but could not publish here due to the management request. However, the author of this report confirms that, the existence of clear definitions for each of the criteria of the supervisor performance evaluation form.

As illustrated in the appendix – I, the company uses the performance evaluation form to select best performing employees to award prizes time to time. The organization selects best employee for every month as ‘best performer’. In every 3 months they select three best performers separately by considering overall work of three months. All the selected employees will be given a prize which is mostly an incentive payment. Photographs of winners are published on the notice board for recognition purposes.

However, No such mechanism for supervisors, but their performances will lead to earn an incentive payment which will amalgamate to their salary time to time. The performance evaluation form helps to identify the low performing employees. The organization always tries to identify the reasons for the low performances and take necessary action. Evaluation mechanism helps to identify the consoling requirements and training requirements.

Human Resource Department

Technical Director

Supervisors

Work Study Department

Figure 3: Performance Evaluation Responsibility Structure

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Management View Point towards PES

Management’s viewpoint towards the performance evaluation system was gathered during three interviews, with Technical Director, Human Resource Executive and ‘Work Study’ officer. According to the responses of the three officers, it was felt that the organization has no idea about the type of evaluation method they are following. However, after observing their forms, it was felt that they are using the following methods, Stage 01: Performance Evaluation - Absolute Standards Method Stage 02: Performance Management - Direct Index Approach The current performance evaluation system was implemented decades ago, introduced at the beginning of the company. However, they are still continuing it without much change. According to the Technical Director and ‘Work Study’ officer, they have no idea to change the current performance evaluation system very soon. However, management knows that their performance evaluation system in not the best.

The management believes that the current performance evaluation system is more than enough to run the business effectively. The current performance evaluation system is a totally manual system, which does not involve any automated system. All the records are maintained in log books and forms. According to the management, the main objective of the perform evaluation system is to control and track the performances of the employees which will ultimately helps to run a productive business.

Fairness: The organization considers this system as a fair system. One of the main arguments that they present is the decentralized responsibilities in performance evaluation system. According to the management, as there are many people involving in the process, the opportunity to become unfair is much less. According to the provided information, many parties involve in the performance evaluation process.

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 Technical Director - Finalization and Release  Human Resources Executive - Absenteeism, Education, Service  Works study Officers - Efficiency  Supervisors - Efficiency, Discipline

Transparency: The management considers the current system as a transparent system as well, because they always publish the performance evaluation results on the noticeboard with all the marks. Appendix – I presents a sample performance evaluation form. It includes all the percentages under each criterion and the final results as well as the rank. Therefore any employee can verify his or her results with the evaluation sheet and make a request if the results are unacceptable. However up to now no one has complained about the result or ask for any verification. Organization uses it as an argument to say that the current performance evaluation has the full required transparency.

Effectiveness: The organization considers this system as an effective system as well. Because organization is only concentrate on productivity. Therefore this current performance evaluation system allows them to verify that requirement through ‘efficiency’ criterion.

Company identifies the low performing employees through the system and do counselling to them to identify the employees’ problems. Therefore it is not only performance evaluation, but also help to identify the personal matter of the employees. They are facilitating ‘Training Product Lines’ to train the low performing employees as well.

At the same time organization uses their performance evaluation system to reward and motivate their employee. They select best performance employees and publish their photographs on notice boards to give recognition for them and give prizes as motivation mechanism. Management did not accept the fact that employees have requested changes about the performance evaluation system. At the same time they do not want to make their evaluation system more complex or expensive.

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Employees View Point towards PES A questionnaire has given to 40 employees in order to collect data regarding the performance evaluation system of the organization. According to the analysed data most of the employees who answered to the questions are in their twenties. Fairly similar number of males and females has answered the questionnaire. The most common education level is ordinary level exams. Majority of the employees has experience more than five year in the garment industry. Most of the respondents are low level employees who are in the same level. Therefore the responses given by the employees can be considered as valid and matured responses.

Almost all the employees know about the existence of the performance evaluation system in the organization. Even though, there are some minor responses against the current system majority of the employees accept it as a fair, transparent, and an effective system.  87% of the employees say that the current system is fair.  85% of the employees also say it is a transparent system.  92% of employees say that the performance evaluation system is fairly effective.

Majority of the employees agreed with the performance evaluation results which published on the notice board in each time period. Employees had got to know about the performance evaluation system by many ways. It emphasize that company does not have a proper mechanism to provide the information about the evaluation system to the employees. However the information has reached the employees through many ways.

Majority of the respondents know their supervisors and they are close to their supervisors as well. They believe that their supervisor know about them very well. 75% of the employees know the criteria that they are get evaluated. However, half of the employees believe that the current performance evaluation system should be changed, while other half says ‘No’.

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Same kind of responses has been given when the question ask whether the company has collect any feedback from you. Half of the employees say ‘Yes’ and other half say ‘No’. Therefore, the feedback mechanism of the organization is not clear. According to the responses, organization has collected some feedback from limited number of employees. However, some of the employees have conveyed their ideas to the management and they are happy about the management’s reaction to those.

All most all the employees accept the fact that they are always get informed about the target and they also know about the best performance award as well. Majority of the employees work hard to do their best with or without targeting the prizes. However there are some minor responses which are against that idea as well.

Most of the employees know how the marks are calculated during the evaluation under the criteria ‘Efficiency’, ‘Attendance’ and ‘Discipline’. However according the respondents, they are not aware of the marking mechanism of ‘Service’ and ‘Education’.

Even though there are some complaints and disagreements regarding the current performance evaluation system and even though it is not a good system in term of human resource management theories, majority of the employees accept it as fair, transparent and effective system.

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Conclusion Both the management and the low level employees accept the current performance evaluation systems as fair, transparent, effective system. However still half of the employees looking for a change as well. The organization may need to implement a proper feedback mechanism to gather the ideas from employees. Currently organization has a good reputation among the employees by giving positive and encouraging reaction to the employees. That should be maintained it in the future as well.

According to the gathered information, the target is provided by ‘Work Study’ department. However, the efficiency heavily depends on the given target. There for it is important to validate that target to ensure the achievability. This is important to build the employee satisfaction as well.

Organization does well in the area of ‘Performance Evaluation’ by publishing all the results on the notice board openly. They use very simple set of criteria which is also cost effective. Fairly enough transparent and fairness in maintained by the decentralizing the performance evaluation among number of units and departments.

However the marking mechanism for criteria ‘Discipline’ has not defined properly. The total responsibility for allocating marks under discipline for each employee is given to their supervisor. But there are no any log books to record in disciplinary actions. Therefore the company needs to give a feed back to each employee regarding their disciplinary behaviour. Organization should improve this area to facilitate a full transparent system.

The organization uses the performance evaluation system to motivate their employees and to identify the training and development needs as well. It is important to keep the prize in a proper position by adding more value in to it. According to current situation there some minor responses which says that prize does not value much. This is not a good sign for the organization.

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The whole idea of giving a prize for the best performing employee is to motivate the rest of the employees as well as the best performer. However, if employees feel negative about the prize; the objective of the prize may fail. Therefore the organization needs to concentrate on that bit more as it can lead problems in future.

Even though, the both company and the employees satisfy with the current performance evaluation system, they should improve their system to a better one. For example organization should consider a performance evaluation method like ‘360 Degree Combined with Balanced Scorecard’. It will help to improve their quality standards as well as to positioning them better among their competitor. It will also help to improve the employee satisfaction as well.

Currently the performance evaluation is done only for product line employees and their supervisors. It is important to expand it to other employees as well. But it may need to change the criteria and make a new evaluation forms. Even though this new introduction will cost more investment, it will guarantee the long term benefits.

The organization should think about to transfer their manual system to an automated system. Even though it will cost more to build such a system, it would be much more cost effective in long term. It will also help to reduce the human effort and human errors as well. Automation systems can store past data very cheaply compared to manual systems.

Objective of this report is to identify the acceptance level of the performance evaluation system among the employees. Therefore it is not fair enough to propose a new system through this report. However, it is important to conduct another research and a survey to find out what kind of system would suit to the organization to achieve long term success.

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Appendix – I Sample Performance Evaluation Forms EPF

Service Efficiency Attendance Discipline Education Results

Winner

5%

75%

10%

5%

5%

100

001

04

62.24

00

04

04

74.12

-

002

02

59.70

06

02

04

73.70

-

003

02

77.57

10

05

04

98.57

1

004

02

74.82

10

02

04

93.82

2

005

03

53.96

08

05

03

72.96

-

006

02

54.51

09

05

04

74.51

3

007

02

59.63

02

03

04

70.63

-

Table 2 : Sample Performance Evaluation Form - (Normal Employees)

EPF Service

Product Line Efficiency

1

Attendance

Retention

Education

Results

5%

70%

10%

10%

5%

100

001

04

62.24

05

08

05

84.24

002

02

77.57

06

06

05

96.57

003

04

76.36

08

07

04

99.36

004

04

68.36

10

08

05

95.36

005

02

76.98

08

05

05

96.98

006

01

71.52

02

05

04

83.52

007

02

70.85

08

04

04

88.85

Table 3: Sample Performance Evaluation Form - (Supervisors)

1

1

All the provided data is used to give an idea and a look and feel about the Performance Evaluation Form.

No real time data added.

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Appendix – II Questionnaire (English) with Quantitative Analysis

Dear Friends, I’m Charith Perera, a Master of Business Administration (MBA) student of Imperial Institute of Higher Education (IIHE) validated by University of Wales. This Survey is conducted as a partial fulfilment of my degree. Your participation and honest responses will greatly contribute to the success of this survey. Please be assured that the anonymity of your responses and confidentiality will be maintained at all times.

This questionnaire is in two sections. Please be good enough to respond to all questions. Please refer to me if you need any clarification.

Thank You, N.G Charith Perera (BSc)

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Please answer all the questions. Select the most suitable answer and mark it.

Section 01 1. Your age 16 -19

20-23

24-27

28-31

above 32

10%

16 - 24

25%

20 - 23 24 - 27 10%

28 - 31

42%

32 + 13%

Figure 4: Data Analysis for Question No-01 [Source: Research Data]

2. Gender Male

Female

38% Male 62%

Female

Figure 5: Data Analysis for Question No-02 [Source: Research Data]

3. Highest education qualification achieved. Grade 5 passed

Grade 9 passed

Grade 6 passed

Grade 10 passed

Grade 7 passed

G. C. E. Ordinary level (O/L)

Grade 8 passed

G. C. E. Advance level (A/L)

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2% 2% 3%

5%

15%

8%

65%

Grade 5

Grade 6

Grade 7

Grade 8

Grade 9

Grade 10

Ordinary Level

Advanced Level

Figure 6: Data Analysis for Question No-03 [Source: Research Data]

4. How long did you work in this garment? Less than 3 months

Two years

Between 3 - 6 months

Three years

Above 6 months and less than 12 months

Four years

One year

above 5 years

17%

38%

17% 10% 3%

10%

3% 2%

Less than 3 months

3 - 6 months

6 - 12 months

1 Year

2 Years

3 Years

4 Years

5+ Years

Figure 7: Data Analysis for Question No-04 [Source: Research Data]

5. Total experience in Garment Industry Less than 3 months

Two years

Between 3 - 6 months

Three years

Above 6 months and less than 12 months

Four years

One year

above 5 years

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2%

2%

10% 13%

50%

5%

15%

3% Less than 3 months

3 - 6 months

6 - 12 months

1 Year

2 Years

3 Years

4 Years

5+ Years

Figure 8: Data Analysis for Question No-05 [Source: Research Data]

6. Your Designation

5%

5% 5%

50%

Machine Operator Quality Controller

15%

Cutter Helper Supervisor Cleaner

15% 5%

Recorder

Figure 9: Data Analysis for Question No-06 [Source: Research Data]

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Section 02 1. Does your organization has a performance evaluation system Yes

No

5% Yes No

95% Figure 10: Data Analysis for Question No-01 [Source: Research Data]

2. Do you accept it as a fair system? Very fair

Unfair

Fair

Very unfair

8%

5%

22%

Very Fair Fair UnFair Very Unfair

65% Figure 11: Data Analysis for Question No-02 [Source: Research Data]

3. Do you accept it as transparent system? Yes

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15%

Yes No

85%

Figure 12: Data Analysis for Question No-03 [Source: Research Data]

4. Do you accept it as an effective system? Yes

To some extent, Yes

No

8% 27%

65%

Yes

To Some Extent, Yes

No

Figure 13: Data Analysis for Question No-04 [Source: Research Data]

5. Do you agree with the result generated by the performance evaluation system? (Performer of the month) Always agreed

Mostly not agreed

Mostly agreed

Always not agreed

8%

3% Always Agreed

47% 42%

Mostly, Agreed Mostly, Not Agreed Always Not Agreed

Figure 14: Data Analysis for Question No-05 [Source: Research Data]

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6. How did you get to know about the performer evaluation system for the first time? In the interview From Co-Workers Through official letter Through notice on the notice board Through supervisor Through work study division Through counselling

5%

In the Interview

30%

25%

From Co-Workers Through Official Letter Notice on the Noticeboard Through Supervisor

10%

Through Work Study Through Counciling

23%

7%

Figure 15: Data Analysis for Question No-06 [Source: Research Data]

7. Do you know who is your supervisor Yes

No 13% Yes

No

87%

Figure 16: Data Analysis for Question No-07 [Source: Research Data]

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8. Do you think your supervisor know about you and your performance? Know very well

Know up to some extend

Don't know anything

8% 17%

75% Know Very Well

Know up to Some Extend

Do not Know Anything

Figure 17: Data Analysis for Question No-08 [Source: Research Data]

9. Do you know under what criteria you are evaluating by the organization? Know very well

Toto some extend, Yes

Don't know anything

3% 22%

75% Yes

To Some Extent, Yes

No

Figure 18: Data Analysis for Question No-09 [Source: Research Data]

10. Do you think that the current performance evaluation system should be change? Yes

No

45% 55%

Yes No

Figure 19: Data Analysis for Question No-10 [Source: Research Data]

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11. Does the company ever get feedback from your regarding the performance revaluation system? Yes

No

Yes

45% 55%

No

Figure 20: Data Analysis for Question No-11 [Source: Research Data]

12. Have you ever informed / complain regarding the performance evaluation system's weaknesses or expected changes to the management? Yes

No

48%

Yes 52%

No

Figure 21: Data Analysis for Question No-12 [Source: Research Data]

13. If yes to the question No. 12, did the company make a positive responds? Yes

No

32%

Yes No

53%

No Ansewer 15%

Figure 22: Data Analysis for Question No-013 [Source: Research Data]

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14. Did the company provide the targets to be achieved? Always provide

Mostly not provide

Mostly provide

Always not provide 18%

82% Always Provide

Mostly, Provide

Mostly, Not Provide

Always Not Provide

Figure 23: Data Analysis for Question No-14 [Source: Research Data]

15. Did you know the company selects three employees as best performance in every three month time? Yes

No

10%

Yes No

90% Figure 24: Data Analysis for Question No-15 [Source: Research Data]

16. Select the more suitable answer (your attitude regarding best performance prize) Always work hard to win the prize Work as hard as you can no hopes to win the prize. No Willingness to win the prize

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Do not know about the Prize The valve of the awards is very low there for more points of working hard 10% 37%

53%

Work Hard To Win the Price Work Hard , But not target to Win the Prize No Willingness to win the Prize Do not know about Prize No point of working hard as the prize do not value much Figure 25: Data Analysis for Question No-16 [Source: Research Data]

17. Do you know how you are going to get marks under each criterion in the performance evaluation system? Yes

No

13% Yes No

87%

Figure 26: Data Analysis for Question No-17 [Source: Research Data]

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18. Do you know that what you should do in order to get marks in each following criteria? Service Know very well

Know up to some extent

Do not know anything

Know very well

Know up to some extent

Do not know anything

Know very well

Know up to some extent

Do not know anything

Know very well

Know up to some extent

Do not know anything

Know very well

Know up to some extent

Do not know anything

Efficiency

Attendance

Discipline

Education

Education Discipline Attendance Efficiency Service 0

5

Know very well

10

15

20

25

Know up to some extent

30

35

40

45

Do not know anything

Figure 27: Data Analysis for Question No-18 [Source: Research Data]

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Appendix – III Questionnaire (Sinhala)

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Human Resource Management