IBMR COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI

Major Concurrent Project (MCP) titled

“A Detail Study on Organizational Study of KMF, Dharwad Co-

operative Milk Union Dharwad”

Submitted to

KARNATAK UNIVERSITY, DHARWAD

In partial fulfillment of the requirement for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

Carried during the academic year 2019-2020

Submitted by

Mr. Jabeen Taj Shirur

Reg No: 17N10816

BBA – VI Semester

Under the guidance of

Internal Guide External Guide

Prof. Shwetha V. Nagendrappa Mr. N.S KODIYALMAT

IBMR College, Hubballi (KMF), DHARAWAD

CO-operative Milk Union, Dharwad

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 ACKNOWLEDGEMENT

I would like to take this opportunity to convey my heartfelt appreciation to them whose
blessing and co-operation was important to bring this project in light. At first, all praise to
Almighty who gave me the stamina to complete this project. I have prepared this project
as a partial fulfillment of Bachelor of Business Administration Degree prescribed by
Karnatak University, Dharwad. I am highly indebted to a number of assistance, guidance,
help and co-operation from various sources to make this project productive.

From the very beginning, I would like to express my sincere thanks to our respected
principal, Prof. Arogyaswamy Karadi, BBA, Institute of Business Management
Research, Hubballi, for giving me an opportunity to undertake this internship.

I am grateful to my project guide Prof. Shwetha V. Nagendrappa, BBA, Institution of

Business Administration and Research, Hubballi, for her constant support and inspiration
throughout the project and for the encouragement, suggestions and guidance to complete
this project successfully.

I express my sincere and hearty thanks to Mr. Kodiyalmat, Deputy Manager (ADMIN),
Co-operative Milk Union, Dharwad for his everlasting suggestion and encouragement
given to pursue this project successfully.

I also acknowledge with a deep sense of reverence, my gratitude towards my parents and
members of my family, who has always supported me morally as well as economically.

Last but not the least, my gratitude goes to all my friends who directly or indirectly
helped me to complete this project.

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 DECLARATION

I, the undersigned, hereby declare that project report entitled “A Detail Study on

Organizational Study of KMF, Dharwad Co-operative Milk Union, Dharwad”

is based on an independent study conducted during the academic year 2019-20 under the
guidance of Prof. Shwetha V. Nagendrappa.

I also declare that this project has not been submitted for the award of any
Degree/Diploma of any other University/Institution.

I submit this report in partial fulfillment of the requirement of Bachelor of Business

Administration Degree awarded by Karnatak University, Dharwad.

Place: Jabeen Taj Shirur

Date: Reg No: 17N10816

BBA – VI Semester

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 EXECUTIVE SUMMARY

Today, in every organization personnel planning as an activity is necessary. It is an

important part of an Organization. Human Resource Planning is a vital ingredient for the
success of the organization in a long run. There are certain ways that are to be followed
by every organization, which ensures that it has right number and kind of people, at the
right place and right time, so that organization can achieve its planned objectives.

Human Resource Management (HRM) is a process of bringing people and organization

together so that the goals of each are met. It is that part of the management process which
is concerned with the management of human resources in an organization. It tries to
secure the best from people by winning their whole hearted cooperation. Human
Resource Management get things done through the efforts of others, this requires
effective HRM. Thus, managers at every level must concern themselves with HRM. The
objectives of Human Resource Department are Human Resource Planning, Recruitment
and Selection, Training and Development, Career planning, Transfer and Promotion, Risk
Management, Performance Appraisal and so on. Each objective needs special attention
and proper planning and implementation.

Performance Appraisal is essential to understand and improve the employee’s

performance through HRD. In fact, performance appraisal is the basis for HRD. It was
viewed performance appraisal was useful to decide upon employee promotion/transfer
salary determination and the like. But the recent developments in Human Resources
Management indicate that performance appraisal is the basis for employee development.
Performance appraisal indicates the level of desired performance level, level of actual
performance and the gap between these two. This gap should be bridged through human
resources development techniques like training executive development etc.

Appraisal is the evaluation of worth, quality or merit. Performance appraisal is the key
ingredient of performance management. Each year, employees and their immediate
bosses enter into an elaborate gaming exercise called the Annual Performance Appraisal.
Most of it is to form filling but every company still goes through the ritual.

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 TABLE OF CONTENTS

SL.NO TITLE

1 Certificate
2 Acknowledgement
3 Declaration
4 Executive Summary
Chapter 1: Introduction
1.1 Introduction
1.2 Objectives of the Study
1.3 Scope of the Study
1.4 Company Profile
1.4.1 Introduction
1.4.2 Milestones of the Company
1.4.3 Vision and Mission Statement
1.4.4 Dharwad Milk Union Limited
1.4.5 Product Profile of the Company
1.5 Industry Profile

Chapter 2: Review Of Literature

Chapter 3: Research Methodology

3.1 Introduction
3.2 Source of Data Collection
3.3 Constraints of the Study

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 Chapter 4: Conceptual Framework
4.1 Meaning of Performance Appraisal
4.2 Importance and purpose of performance appraisal
4.3 Advantages of performance appraisal
4.4 Limitations of performance appraisal
4.5 Factors deterring objective evaluation
4.6 Principles of performance appraisal system
4.7 Factors distorting performance appraisal
4.8 Need for performance appraisal
4.9 Features of performance appraisal
4.10 Objectives of performance appraisal
4.11 Process of performance appraisal
4.12 Types of Appraisers
4.13 Scope of performance appraisal
4.14 How to conduct performance appraisal
4.15 Methods of performance appraisal

Chapter 5: Data Analysis and Interpretation

5.1 SWOT Analysis
5.2 McKinsey 7S Model for the Automobile Industry
5.3 Porter Five Forces Model
Chapter 6: Findings and Conclusions
6.1 Findings
6.2 Conclusion
6.3 Limitations

5 References/Bibliography

Annexure

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 CHAPTER – 1: INTRODUCTION

1.1 Introduction

From the study conducted at Karnataka Milk Federation (KMF), Dharwad Co-operative
Milk Union, Dharwad gives a basic idea of functioning of various departments of the
company has got. Hence, the organization study conducted at Karnataka Milk Federation
(KMF), Dharwad Co-operative Milk Union, Dharwad helped to a large extent to
experience the real work life situation in an Organization.

Organization study helps to convert the theoretical knowledge and practical knowledge
into Experience. An organization is a social unit of people, systematically structured and
managed to meet a need or to pursue collective goals on a continuing basis.
Organizational Study conducted by the School of Management and Business Studies is a
training program that helps management students gain the knowledge and practical
working conditions of an Organization. Organization Study is usually conducted in a
well-structured and reputed organization.

Karnataka Milk Federation (KMF), Dharwad Co-operative Milk Union, Dharwad sells
products such as pedha, paneer, curds and milk in the name of Nandini. It is a federation
of milk producers association working on cooperative principles. Almost every district in
state of Karnataka has milk producing co- operatives. The milk is collected from farmers
who are its members, processed and sold in the market by the brand of Nandini. It is the
second largest milk co-operative in India after AMUL. President- Basavaraj Neelappa
Arabagonda. It was founded in the year 1974.

Karnataka Cooperative Milk Producers' Federation Limited (KMF) is the Apex Body for
the dairy co-operative movement in Karnataka. It is the second largest dairy co-operative
amongst the dairy cooperatives in the country. In South India it stands first in terms of
procurement as well as sales. One of the core functions of the Federation is marketing of
Milk and Milk Products. The Brand "Nandini" is the household name for Pure and Fresh
milk and milk products. KMF has 14 Milk Unions covering all the districts of the State

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which procure milk from Primary Dairy Cooperative Societies (DCS) and distribute milk
to the consumers in various Towns/Cities/Rural markets in Karnataka.

1.2 Objectives of the Study

 To familiarize with the different departments in Karnataka Milk Federation

(KMF), Dharwad Co-operative Milk Union, Dharwad
 To understand the organizational framework

1.3 Scope of the Study

 This report is based on the study conducted at Karnataka Milk Federation (KMF),
Dharwad Co-operative Milk Union, Dharwad
 It aims at understanding the Company’s establishment, Organization structure,
Product profile and Milestones of the Organization
 For this report, Secondary data is collected from the company’s official websites,
relevant report study and the published sources from the internet.
 To help the management for planning future development and growth of the
organization

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1.4 COMPANY PROFILE:

1.4.1 INTRODUCTION:

Karnataka Cooperative Milk Producers' Federation Limited (KMF) is the Apex Body for
the dairy co-operative movement in Karnataka. It is the second largest dairy co-operative
amongst the dairy cooperatives in the country. In South India it stands first in terms of
procurement as well as sales. One of the core functions of the Federation is marketing of
Milk and Milk Products. The Brand "Nandini" is the household name for Pure and Fresh
milk and milk products. KMF has 14 Milk Unions covering all the districts of the State
which procure milk from Primary Dairy Cooperative Societies (DCS) and distribute milk
to the consumers in various Towns/Cities/Rural markets in Karnataka.
Karnataka Dairy Development Cooperation (KDDC), the first ever World Bank/
International Development Agency funded Dairy Development Program in the country
started in Karnataka on co-operative lines with the organization of Village Level Dairy
Co-operatives in 1974. The AMUL pattern of dairy co-operatives started functioning in
Karnataka from 1974-75 with the financial assistance from World Bank/IDA, Operation
Flood II & III. The Anand Pattern three tier organization structure – Dairy Cooperative
Societies at the village level, District Milk Unions at the District level to take care of the
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procurement, processing and marketing of milk and provide technical input services for
enhancing milk production at producers level and Federation at the state level to co-
ordinate the growth of the sector in the State, are resolutely and harmoniously working
hand-in-hand in creating self-sustaining rural economy based on cooperative dairying.
KMF is one of the few federations in the country, who have converted dairying from a
subsidiary occupation into an industry.
Coordination of activities among the Unions and developing market for Milk and Milk
products is the responsibility of KMF. Marketing Milk in the respective jurisdiction is
organized by the respective Milk Unions. Surplus/deficit of liquid milk among the
member Milk Unions is monitored by the Federation. While the marketing of all the Milk
Products is organized by KMF, both within and outside the State, all the Milk and Milk
products are sold under a common brand name NANDINI.

The Federation is striving to create a self-reliant and vibrant rural economy in Karnataka
by providing a supportive and conducive environment for the growth of Dairy
Cooperatives as autonomous economic and social institutions. The Federation is largely
successful in realizing the objectives of dairying during the last four decades of dairy
development in Karnataka State. It is by-and-large successful in providing a viable
subsidiary occupation to unemployed rural poor so as to raise their income earning
capacities and to supply adequate quantity of quality milk at reasonable prices to urban
consumers.

The results of effective dairy development by KMF have made far-reaching and
extensive impact on rural landscape in Karnataka. The best remunerative milk purchase
price to farmers, efficient and timely input services, delivered at the door-steps to
farmers, such as, unfailing veterinary health services to any remote village, quality
artificial insemination for breed improvements, supply of balance cattle feed at less than
the market price, etc., have made the farmers to increasingly patronize their cooperative.
The extent of patronization by farmers is so complete, that dominant share of marketable
surplus milk of farmers in Karnataka is procured by KMF dairies and hardly there is any
organized private dairy milk procurement, which is widely prevalent in other parts of the
country.

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 1.4.2 Milestones of the Company

 1955: First Dairy in Karnataka set up at Kudige, Kodagu Dist

 1965: 50,000 Litres per day liquid milk processing facility was set up at Bangalore and
Expanded to 3.5 Lakh Litres (in 1994)

 1974: World Bank aided Karnataka Dairy Development project implemented

 1974: Karnataka Dairy Development Corporation (KDDC) is born

 1975: First Spear Head Team positioned

 1975: First registration of Milk Producers' Co-operative Society

 1975: Government dairies transferred to KDDC

 1976: First registration of Union

 1980: Karnataka Milk Products Limited established

 1982: First Milk product dairy started at Gejjalagere, Mandya

 1983: Corporate brand name ‘Nandini' given

 1983: First Cattle Feed Plant commissioned at Rajanukunte 21.03.1983 and Capacity
expanded from 100 MT to 200 MT (in 1997)

 1984: Nandini Sperm Station (formerly known as Bull Breeding Farm & Frozen Semen
Bank) Commissioned

 1984: Operation Flood-II implemented

 1984: Karnataka Milk Federation is born and KDDC transformed into KM

 1984: KMPL assets transferred to KMF

 1984: Product Dairy, Dharwad Commissioned

 1984: Mother Dairy Started functioning

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 1985: Remaining Govt. Dairies transferred to KMF

 1987: Operation Flood-III implementation

 1987: Dairies at Hassan, Tumakuru & Mysuru transferred to district milk unions

 1988: Dairies at Bengaluru, Gejjalagere, Dharwad, Belagavi and Mangaluru transferred

to district milk unions

 1988: Training centres at Mysuru, Dharwad & Kalaburagi transferred to unions

 1989: Centralized Marketing Organised

 1989: Last Milk Shed registered as a union (Raichur & Ballari Union)

 1989: Milk Supply to Kolkata Mother Dairy through railway tankers from Mother Dairy,
Bengaluru

 1991: KHAFBA registered (Karnataka Holstein Friesian Breeders Association)

 1991: Chilling & Processing plants at Vijayapura, Kalaburagi, Ballari, Shivamogga and
Kolar transferred to District Milk Union

 1991: First Pilot Project on Embryo transfer technology implemented

 1992: Commercial production & marketing of Nandini flavored milk launched

 1993: Milk procurement on a single day crosses million Kg level in Dec. 1986 & average
milk procurement per day for the year crosses million kg level

 1994: Liquid Milk Sale Crosses Million Litres/day

 1994: Starting of Sales Depot at Bangalore

 1995: Varieties of New Nandini Products viz. Nandini Paneer, Burfi, Khova & Sweet
curds launched in December

 1995: Starting of Sales Depot at Hubli

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 1996: Foundation Stone laid for Cattle Feed Plant at Hassan 09.02.1996 and Production
Started(in 1998)

 1996: Foundation Stone laid for Pouch Film Manufacturing Unit at Munnekolalu,
Bangalore and Production started (1997). Plant restarted production (2002)

 1996: Foundation Stone laid for Mega Dairy & New Powder Plant at Bengaluru, Mini
Dairy Schemes & other development programmes

 1997: Inauguration of Ice-cream manufacturing unit at Mother Dairy Premises,

Bengaluru(1997) and Expansion of Plant from 3000 LPD to 10000 LPD(2005)

 1998: Installation of LN2 Distribution system for Karnataka state

 1998: Launching of New Products Jamoon Mix (March1998), Mysuru Pak (Dec.1998),
Tetra Fino Packaged Nandini “Good life” milk(1999)

 1999: Starting of Sales Depot at Tirupathi

 2000: Launching of New Products Badam Powder(2000), Badam Powder in 10 gm

pouches(2002), Kunda(2003), Yoghurt(2004), Besan Laddoo(2004), Good life High fat
milk(2000), Nandini Goodlife Slim(2002), Goodlife 200ml Tetrabrik(2002), Goodlife 1
Ltr Tetra Brik(2006)

 2000: MOU agreement signing by GOK & NDDB for implementation of Perspective
Plan

 2000: “Mega Dairy”started functioning in Bangalore Union and Chilling Centre of 150
TLPD capacity started at Hoskote

 2001: Starting of Sales Depot at Mangalore in addition to Depos at Bangalore, Hubli &
Thirupathi.

 2002: Adoption of Mnemonic Symbol in Bangalore, DK, Mysore, Shivamogga and

Dharwad.

 2002: Release of 50 gm SMP in metalized polypack

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 2002: Registration of KMF website as “www.kmfnandini.coop”.

 2002: ‘Nandini Shop on Wheels' started (Mobile display cum sales vehicle).

 2002: Release of Urea Molasses Brick(3Kg Pack)

 2002: Powder plant of 30 MT capacity started at Mother Dairy

 2004: MOU agreement signing by GOK & NDDB for implementation of Perspective
Plan 2010

 2005: Laying of Foundation stone for 30 MTs Powder Plant at Channarayapatna

 2005: Launching of‘ Nandini Set Curd'

 2005: Nandini Sperm Station has been awarded with ISO certificate & has been merited
by Ministry of Agriculture, GOI as Second best A Grade Semen Station during 2005-
2006

 2005: Karnataka stands Second in Milk Procurement

 2006: Packing Station commissioned at Kumbalgodu (Mandya Union)

 2006: Depots opened at Kerala (Kannur & Ernakulam)

 2006: Foundation stone laid for New 300 MTs capacity at Hassan & inauguration of
existing Cattle Feed Plant expansion from 100 MTs to 200 MTs

 2006: Expansion of Gubbi (2006)CFP and Dharwad(2007)CFP from 100MTs to 150

MTs completed

 2006: Release of new generation Drinks Tetra Pack variants of flavored milk &
Buttermilk

 2007: Opening of “Nandini Dairy Farmers Welfare Trust” hostel

 2007: Inauguration of additional Infrastructure facilities for UHT milk production at

Kolar from existing 40,000 LPD to 1.5 LLPD

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 2007: Release of Nandini Homogenized cow milk(3.5%Fat / 8.5%SNF) in Bangalore

 2008: Launch of New products in new stunning packs Sundae, Crazy Cone ice cream/
Lite Skimmed Milk /Cool Milcafe/ Choco Milk Shake/Dairy Whitener and Goodlife Slim
in 1 Ltr

 2008: GOK support to milk producers with Rs.2 incentive per litre of milk

 2008: Commissioning of 30MT capacity Plant at Channarayapatna Sep 2008

 2008: Taking over of Kalaburagi Dairy & Milk Marketing by KMF

 2009: Nandini has won “The Most Valuable Brand in Karnataka Award” in the Sunday
Indian & IIPM regional excellence Awards

 2009: New Sales Depots started in Kalaburagi(2009) and in Mysuru(2010)

 2009: Launch of Good Life variants in Cuttack, Orissa, Trichy (Tamilnadu)

 2009: UHT Supplied to Andaman & Nicobar

 2010: Procurement and Selling price of Milk enhanced upwards by Rs. 2 to 3 per litre

 2010: Hosting of new KMF website www.kmfnandini.coop with online order facility

 2011: Installation of UHT Processing & Packing 1.00 LLPD Capacity at

Channarayapattana

 2011: Installation of Good Life 100ml fino pack unit in Channarayapattana

 2012: Re-launch of Samrudhi, Nandini Full Cream Milk

 2012: Commissioning of 1 Lakh ltr UHT Plant at Kumbalgodu (Mandya Milk Union)

 2012: Launching of Mobile Milk testing Vehicle facility in Bengaluru City

 2012: Commissioning of Fodder Densification Unit, first in South India at

Chamarajanagar (Mysuru Milk Union)

 2012: Highest sale of SMP & Butter Export SMP/Ghee to Bangladesh,Pakistan, UAE etc

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 2013: Government of Karnataka raised the incentive from Rs.2/- to Rs.4/- for every litre
of milk supplied by producers to Cooperatives

 2013: Starting of KMF Sales Depot at Hyderabad

 2013: Commissioning of 10000 Lpd Ice Cream Plant at Ballari.

 2013: “KSHEERA BHAGYA”,the prestigious program of distributing milk to school and

Anganwadi children by GOK through KMF,was inaugurated by hon’ble Chief Minister

 2013: Inauguration of Flexi pack Unit at DK Milk union

 2014: Inauguration of new Cattle Feed Plant with 300MT capacity at Shikaripur

 2014: Kalaburagi Dairy which was under KMF control handed over to Kalaburagi Milk
Union.

 2014: Nandini Milk Sales started in Chennai

 2014: Kalaburagi Dairy which was under KMF control handed over to Kalaburagi Milk
Union.

 2014: Nandini Milk Sales started in Chennai

 2014: Nandini Milk Powder worth of Rs. One Crore was sent to Jammu-Kashmir as
flood relief material

 2014: Bengaluru union Launched Nandini Ghee Laddoo

 2014: KMF Launched Nandini Gold Cattle Feed

 2015: Commissioning of Hoskote Dairy of 2 LLPD in Hoskote CC Premises

 2015: Nandini Buffaloe Milk introduced at Mother Dairy

 2015: KMF has launched Nandini Milk and Milk Products at Hyderabad and
Secunderabad

 2015: Corporate Citizen Award(2014-15) to KMF

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 2015: Vijayapura and Bagalkot Union released new product "Nandini Kolhar", thick and
creamy curd

 2015: Dakshina Kannada Milk Union (DKMUL) of KMF launched conventional

buttermilk

 2016: Dakshina Kannada Milk Union launched Milk in Flexi Pack

 2016: Inauguration of Hosakote Dairy and Product block by Bangalore Milk Union

 2016: Launching of Milk & Milk products in Mumbai

 2016: Foundation stone laid for 100 MT/day capacity powder plant by KMF along with
other milk product at an estimated cost of Rs.300 crores at Ramanagara district and Mega
Dairy Plant by BAMUL at Kanakapura with an estimated cost of Rs.450 crores

 2016: Government of Karnataka raised an incentive from Rs.4/- to Rs.5/- for every litre
of milk supplied by producer to cooperatives

 2017: Inauguration of 80,000 Ltr/day capacities Flexi Nandini milk packing unit at
Belagavi.

 2019: Foundation Stone was laid for 150MT per day capacity Cattle Feed Plant at
Sindhanur on 05.01.2019

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1.4.3 Mission and Vision statement:

Mission:

Heralding economic, social and cultural prosperity in the lives of our milk producer
members by promoting vibrant, self-sustaining and holistic cooperative dairy
development in Karnataka State

Vision:

 To march forward with a missionary zeal this will make KMF a trailblazer of
exemplary performance and achievements beckoning other Milk Federations in
the country in pursuit of total emulation of its good deeds.

 To ensure prosperity of the rural Milk producers who are ultimate owners of the
Federation.

 To promote producer oriented viable cooperative society to impart an impetus to

the rural income, dairy productivity and rural employment.

 To abridge the gap between price of milk procurement and sale price.

 To develop business acumen in marketing and trading disciplines so as to serve

consumers with quality milk, give a fillip to the income of milk producers.

 To compete with MNCs and Private Dairies with better quality of milk and milk
products and in the process sustain invincibility of cooperatives.

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1.4.4 DHARWAD MILK UNION LIMITED

Dharwad Co-operative milk producers Union Ltd.,(DAMUL) has been registered under
Karnataka Co-operative Act in March 1986 covering Dharwad, Haveri, Gadag and Uttara
Kannada Districts. DAMUL has 989 numbers of Functional DCSs covering 28 taluks, of
which DAMUL has infrastructure to handle 3.10 lakh litres of milk, produce 30 tons of
milk powder, 9 tons of Butter and 4 tons of ghee per day.

The Union was established in the year 1986 under the Operation Flood II & III. The
Union also later took over in 1988 the Milk Products Factory with a drying capacity of
3.10 Lakh Liters per day, earlier established by the Karnataka Milk Products Limited
(Government of Karnataka Undertaking). The Dharwad Milk Union is Co-operative
society among the 14 establishment, under KMF. The Dharwad Milk Union (DMU) is
one of the most modern plants in the country. It is located in the spacious 25 acres of
land, located in Lakamanahalli Industrial Area, adjacent to the Nation Highway-4. It is
patterned the AMUL Milk Dairy, Anand, Gujarat. The Union covers the districts of
Dharwad, Haveri & Gadag, uttar kannada and has Chilling Centres at Gadag, Haveri,
Sirsi, Ron, Hirekerur & Kumta with chilling capacity of 2.5 Lakhs Liters Per Day.

The Union procures and sells on an average and 90-95 thousand Liters per Day
respectively. There are 7 Bulk Milk Coolers in the Union. Apart from selling milk, it sells
pure buffalo milk & produces very thick 250 gm Curds in specially designed for this
namely, the famous Dharwad Peda, Butter in bulk as well as in retail packs and Ghee,
Skimmed Milk Powder and Pannier. A DMU group of experienced officers, appointed by
the Karnataka Milk Federation surveyed the whole of Dharwad districts (includes two
newly formed district Gadag and Haveri) and Uttar Karnataka. Further they found out
there as a need for a Milk Dairy.

They traveled the surrounding villages, educated the villagers about Milk and Milk
products and the benefits they would get from the Milk Dairy. Seeing the overwhelming
response and untapped resources and the huge market the Federation decided to setup the
Milk Union in 1984, known as the Further in 1988, the Raipur Dairy and Chilling Center,
setup in 1968, also came under the union. In 1989, the training center, which was

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controlled by KMF, came under Dharwad Milk Union. DMU was Rs.7 Crore Projects of
which Government has Rs.2Crore of share capital and authorized capital of DMU is
Rs.5crore for establishment of union

VISION OF THE DHARWAD MILK UNION:

 Cleanliness in the Production House

 Total quality maintenance and making of Brand awareness
 In the union Discipline is maintained
 Co-operation with other milk union and the sub unions
 Transparency in the processing
 Co-operative free of politics
 Respective each other opinion ideas and feelings

MISSION STATEMENT OF DHARWAD MILK UNION:

Dharwad Cooperative milk Union is commuted to provide maximum possible price for
the milk supplied by its members and provided necessary inputs for the milk production
while ensuring economic viability of the union and also committed to provide quality
milk products to consumer and image as one of the most milk union of the co-operative
dairy industry in the country. At DMU we Endeavour to satisfy the taste and nutritional
requirements of the customers. Through excellence in marketing by DMU committed
team, DMU are committed to offering quality products that provide best value for money.

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1.4.5 Product profile of the Company (KMF)

Milk Product

 Nandini Pasteurized Toned Milk

 Nandini Double Toned Milk
 Nandini Homogenized Cow’s Pure Milk
 Nandini Shubham Pasteurized Standardized Milk
 Nandini Samrudhi Pasteurized Full Cream Milk
 Nandini Shubham Gold Milk

UHT Milk

 Nandini Goodlife
 Nandini Slim
 Nandini Goodlife UHT Long Life Milk
 Nandini Smart Fortified with Vitamins A+D
 Nandini Milk Shakes Premium
 Nandini Spiced Buttermilk in tetra pack

Curds & other fermented products

 Nandini Yoghurt
 Nandini Mango Lassi
 Nandini Real Thick Curd
 Nandini Curd
 Nandini Butter Milk
 Nandini Sweet lassi

Milk Powder

 Nandini Dairy Whitener

 Nandini Skimmed Milk Powder
 Nandini Badam Milk Mix

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Ghee & Butter

 Nandini Butter Salted

 Nandini Butter UnSalted
 Nandini Pasteurized Butter Salted-Blister Pack
 Nandini Ghee Bag in Box
 Nandini Ghee in Pet Jar
 Nandini Ghee in Sachets

Ice cream & Frozen Desserts

 Family Pack Fresh Milk Ice Cream

o Butter Scotch
o Black current
o Chocolate
o Kaju Draksh
o Mango
o Kesar Pista
o Pineapple
o Vanilla

Milk Sweets

 Nandini Premium Badam Burfi

 Nandini Premium Cahew Burfi
 Nandini Chocolate Burfi
 Nandini Besan Ladoo
 Nandini Dry Fruit Burfi
 Nandini Dharwad Peda
 Nandini Milk Peda
 Nandini Bite

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Other Products

 Nandini Cheese
 Nandini Paneer
 Nandini Diced Paneer
 Nandini Flavored Milk
 Khara Boondi
 Kodubhale
 Pepper & Jeera Cookies
 Red Chilli Cookies

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1.5 Organizational Structure:

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Responsibilities of President:

 Overseeing budgets, staff, and executives and evaluating the success of the
company.
 Meeting with board members and other executives to assess the direction of the
company, develop short and long-term goals, plans, and strategies, and ensure the
company's compliance with the stated mission.
 Overseeing the complete operation of the company and ensuring all goals are met
based on the company's strategic plans.
 Listening to the viewpoints and reports of the company's Vice Presidents or
directors and making the final decisions. Maintaining awareness and knowledge
of the company's daily finances
 Analyzing budgets and financial reports
 Updating and revising plans to increase the company's profitability and progress.
 Creating and maintaining relationships with the community and industry leaders
and encouraging business investments.
 Looking for alliances, mergers, partnerships, and investment opportunities and
reviewing and advising on contracts.
 Maintaining your knowledge of tax liabilities, implications, and exemptions, as
well as finances and operations

Responsibilities of Director:

 Overseeing day-to-day operations

 Developing organizational policies
 Disbursing funds to managers
 Managing administrative budgets
 Hiring and training administrative staff
 Negotiating contracts and agreements with vendors
 Maintaining corporate relationships
 Monitoring operating expenses
 Liaising with HR and other departments

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Responsibilities of Managing Director:

 Developing and executing business strategies to achieve short and long-term goals
 Reporting to the board, providing market insights and strategic advice
 Developing and implementing business plans to improve cost-efficiency.
 Maintaining positive and trust-based relations with business partners,
shareholders, and authorities
 Overseeing the company's business operations, financial performance,
investments, and ventures
 Supervising, guiding, and delegating executives in their duties
 Ensuring company policies and legal guidelines are clearly communicated
 Assessing, managing, and resolving problematic developments and situations
 Building and enhancing the company's public profile at events, speaking
engagements

Responsibilities of Procurement Department:

 Communicate the value of strategic sourcing and procurement to company

stakeholders, department heads, and executives to the achieve buy-in necessary
for proper resources and investment.
 Work with stakeholders to establish viable, cost effective, and strategic sourcing
objectives.
 Evaluate, select, and successfully implement comprehensive procurement
software.
 Establish and enforce procurement policies and procedures.
 Evaluate and choose suppliers the company will do business with. This includes
examining quality of product, pricing, and delivery time, then deciding which
suppliers best fit company needs. Supplier evaluation is a continuous project,
updated with each contract and shipment to ensure benchmarks are hit and goods
and services continue to meet required standards and timetables. To keep
evaluations accurate and comprehensive procurement managers attend trade
shows, interview vendors, and visit supply plants/ distribution centers.

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  Analyze and compare financial reports and pricing proposals from several trusted
suppliers before negotiating terms and prices to obtain the best deal for the
company.
 Training staff members to be knowledgeable about product quality requirements,
how to determine when products are unacceptable, and what actions to take when
quality standards are not met.
 Monitoring contracts to ensure that the supplier meets expectations and invoices
are approved and paid in a timely manner.
 Making any required adjustments or changes to existing contracts.
 Keep track of all goods and services ordered and received, and maintain accurate
inventory records including details on price, performance, and delivery.
 Ensure responsible procurement practices meet company objectives and
compliance requirements.

Responsibilities of Admin Dept:

 Management of office equipment

 Maintaining a clean and enjoyable working environment
 Handling external or internal communication or management systems
 Managing clerical or other administrative staff
 Organizing, arranging and coordinating meetings
 Sorting and distributing incoming and outgoing post

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1.6 Industry Profile:

India has been the leading producer and consumer of dairy products worldwide since
1998 with a sustained growth in the availability of milk and milk products. Dairy
activities form an essential part of the rural Indian economy, serving as an important
source of employment and income. India also has the largest bovine population in the
world. However, the milk production per animal is significantly low as compared to the
other major dairy producers. Moreover, nearly all of the dairy produce in India is
consumed domestically, with the majority of it being sold as fluid milk. On account of
this, the Indian dairy industry holds tremendous potential for value-addition and overall
development. According to the latest report by IMARC Group, titled “Dairy Industry in
India 2020 Edition: Market Size, Growth, Prices, Segments, Cooperatives, Private
Dairies, Procurement and Distribution”, the dairy market in India reached a value of
INR 10,527 Billion in 2019.

Along with offering profitable business opportunities, the dairy industry in India serves
as a tool of socio-economic development. Keeping this in view, the Government of India
has introduced various schemes and initiatives aimed at the development of the dairy
sector in the country. For instance, the “National Dairy Programme (Phase-I)” aims to
improve cattle productivity and increase the production of milk expanding and
strengthening and expanding the rural milk procurement infrastructure and provide
greater market access to the farmers. On the other hand, the private participation in the
Indian dairy sector has also increased over the past few years. Both national and
international players are entering the dairy industry, attracted by the size and potential of
the Indian market. The focus is being given to value-added products such as cheese,
yogurt, probiotic drinks, etc. They are also introducing innovative products keeping in
mind the specific requirements of the Indian consumers. These players are also
improving their milk procurement network which is further facilitating the development
of the dairy industry in India. Looking forward, the market is expected to reach a value of
INR 25,491 Billion by 2025, exhibiting a CAGR of around 16% during 2020-2025.

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In the early days, animals were domesticated for the fulfillment of household needs and
purposes, but with the passage of time, growth of population and development of
business and commerce, people started using their animals as a source of their earnings.
In the first instance, the surplus milk was collected, stored and sold out in the open
market with a limited number of persons, but their activities gradually swelled and
assumed a complete form of business. The actual beginning of modern dairying has been
in the middle of the nineteenth century. But, significant changes in the structure of dairy
have been marked during the past hundred years or so. However, it was in the second
quarter of the twentieth century that the creamery ice cream factory, fluid milk bottling
plant, condenser and dry milk plant were established and dairying was run in modern
ways and dairying assumed a form of full-fledged industry. On the path of revolution in
the recent years, milk production evolved as the primary rather than the secondary
occupation of farmers. Moreover, the industry is employment oriented as it provides
employment to a large number of persons. A good number of people in Indian population
is engaged in the production, processing and marketing of dairy products and many
persons are needed to process, bottle and deliver fluid mills and other dairy products.
Thus, it helps in combating the unemployment conditions caused by seasonal industries
and casual opportunities of employment.

Farmers in many regions grow fodder in their land for the purpose of cattle raring and
have made dairying as their primary occupation. Milk and milk products are also very
important from nutritional point of view as they contain almost all the essential food
constituents required in human diet. Milk and milk products are very rich in protein,
calcium, vitamins and milk sugar and they provide the nutrients for people in proper
proportions. Dairy Industry also fits in well in diversifying farming programs and
reducing the farmer’s link involved in agriculture. It provides a regular and at least a
subsistence income to the farmers.

Even the annuity over the world business argument having adverse effect on dairy
industry has not stopped the growth of milk producer’s societies and unions, which is
seen to be increasing day by day.

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The establishment of Karnataka Milk Federation (KMF) in Bangalore, and milk
producer’s societies and unions in various districts (and their products under the
corporate brand name) Along the lines of Gujarat AMUL (Anand Milk Union Ltd) has
changed the scenario of milk production and totally revolutionized the dairy industry in
Karnataka.

The confidence of continuous and permanent market for milk has encouraged large
number of people to take up cow and buffalo rearing. This scenario is restricted to
northern, southern and central districts of the state. The Hyderabad – Karnataka region
says a different story. For example, the growth of milk production in Gulbarga district
(where the rivers Krishna, Bhima, Amarja, Mullamari, Bennitore flow) is very meager.
Even in the face of such an adverse condition the Gulbarga milk producer’s co-operative
societies union, that covers both Gulbarga and Bidar districts, has been continuously
trying to restructure dairy industry in the region. They domesticate milk-yielding cattle
but also collect milk directly from the rural areas through their own refrigerated milk
tankers. They generally produce standardized type of milk products, such as milk
pouches, Ghee, Cream etc., GUMUL in this effort though having to face losses has never
left doubt in its determination.

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 CHAPTER 2: REVIEW OF LITERATURE

C Fletcher, Performance appraisal and management, (2001), Performance appraisal

has widened as a concept and as a set of practices and in the form of performance
management has become part of a more strategic approach to integrating HR activities
and business policies. As a result of this, the research on the subject has moved beyond
the limited confines of measurement issues and accuracy of performance ratings and has
begun to focus more of social and motivational aspects of appraisal. This article identifies
and discusses a number of themes and trends that together make up the developing
research agenda for this field. It breaks these down in terms of the nature of appraisal and
the context in which it operates. The former is considered in terms of contemporary
thinking on the content of appraisal (contextual performance, goal orientation and self
awareness) and the process of appraisal (appraiser–appraisee interaction, and multi-
source feedback). The discussion of the context of appraisal concentrates on cultural
differences and the impact of new technology.

Dobbins H. Gregory, Performance Appraisal as Effective Management or Deadly

Management Disease, (1990), Understanding person and system sources of work
variation is fundamental to performance appraisal. Two divergent perspectives on this
issue, the traditional human resource management view and the statistical process control
view (Deming, 1986), are contrasted. Two studies are reported that investigate two
specific questions that arise from a broader view of the appraisal process. Results indicate
that managers and subordinates believe that typical poor performance has different causes
and that actual productivity levels far outweigh person or system sources of performance
variance in appraisal judgments.

Dennis W. Organ, a Restatement of the Satisfaction- Performance Hypothesis,

(1988), this article reviews recent evidence in support of Organ’s (1977) argument that
satisfaction more generally correlates with organizational pro-social or citizenship-type
behaviors than with traditional productivity or in role performance. An attempt is then
made to interpret just what it is in satisfaction measures that provide this correlation,
leading to the suggestion that fairness cognitions comprise the major factor. Implications
of this interpretation for theory, research, and management practice are offered.
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Gregory, a Contingency Approach to Appraisal Satisfaction, (1990), the present
study explored the moderating effects of organizational variables on the appraisal
characteristic appraisal satisfaction relationship. Analyses indicated that the appraisal
characteristics of action plans, frequency, and reviewer training were more positively
related to appraisal satisfaction when subordinates experienced role conflict, were not
closely monitored, and supervisors had a large span of control. The results provide
substantial support for conceptualizing appraisal satisfaction as a contingent function of
both appraisal characteristics and organizational variables. Implications of the findings
for the design of appraisal systems, appraisal effectiveness, and future research are
discussed.

Taylor Cox, Differential Performance Appraisal Criteria, (1986), Performance

appraisal ratings of 125 first-level managers were analyzed to investigate the degree to
which the criteria used to evaluate the overall job performance of black managers differs
from that used to evaluate white managers. The performance appraisal form included
items that measured both the social behavior dimension and task/goal accomplishment
dimension of job performance. The appraisal ratings of both groups on each dimension
were correlated with measures of overall job performance and promo ability. Results
indicated that social behavior factors are more highly correlated with the overall job
performance of black ratees than for white ratees. Implications of these results for both
black managers and organizations are discussed.

David A. Waldman, Predictors of Employee Preferences for Multirater and Group-

Based Performance Appraisal, (1997), This study conceptualizes and measures user
preferences for 360- degree appraisals and group-level performance management (PM).
Users are defined as either recipients of PM processes or those whose job it is to
administer the process. Aspects of individual users, their work design, and current
appraisal context were used to predict preferences. Two studies were conducted involving
data collection in a large Canadian telecommunications conglomerate and a department
of the Canadian government, respectively. Predictors explained significant amounts of
variance in user preferences, especially those pertaining to group-level PM. Practical
implications are suggested with regard to collecting and using user preferences.

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Meyer et.al, Employee Motivation from performance appraisal, (1965), carried out a
study in General Electric Company where certain points relating to performance feedback
was highlighted. In this study, 92 employees were appraised by their managers on two
occasions over two weeks. The study was carried out using questionnaires, interviews
and observation. The first appraisal highlighted performance and salary while the second
one underlined performance and improvement. It was observed that lots of criticisms
were pointed out by the managers, which lead to defensive behavior of the employees.
The conclusion of the study was that criticism leads a negative impact on the motivation
and performance of the employees. Also feedback sessions designed to improve
performance should not at the same time consider salary and promotion issues.

Noe et al, Human Resource Management, 8th Edition, (2006), defines performance
management as “the process through which managers ensure that employees’ activities
and outputs are congruent with the organization’s goals”.

Karol, the effects of performance appraisal on employee attitude, (1996),

performance appraisal includes a communication event planned between a manager and
an employee specifically for the purpose of assessing that employee’s past job
performance and discussing areas for future improvement.

Jacobs, Kafry & Zedeck, Effectiveness of performance appraisal, (1980), employees

perceive PA to give them a proper understanding of their duties and responsibilities
towards the organization. Likewise, organization sees it as a tool to assess employees on
a common ground and one which helps in salary and promotions decisions, training and
development programs.

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 CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction

Research methodology is a way to systematically solve the problem. Every project work
is based on certain methodology, which is a way to systematically solve the problem or to
attain its objectives. It is a very important guideline and lead to completion of any project
work through observation, data collection and data analysis.

“Research Methodology comprises of defining & redefining problems, collecting,

organizing & evaluating data, making deductions & researching to conclusions.”

3.2 Source of Data Collection

Data collection is the process of gathering and measuring the information on targeted
variables in an established system, which enables one to answer relevant questions, test
hypothesis and evaluate the outcomes.

3.2.1 Primary Data

Data that has been collected from first-hand-experience is known as primary data.
Primary data has not been published yet and is more reliable, authentic and objective.
Primary data has not been changed or altered by anyone. Therefore, its validity is greater
than the secondary data. Sources of Primary data: Experiments, Survey, Questionnaire,
Interview and Direct observations.

3.2.2 Secondary Data

Data collected from a source that has already been published in any form is called as
Secondary data. The review of literature in any research is based on secondary data. It is
collected by someone else for some other purpose) but being utilized by the investigator
for other purpose). Sources of Secondary data: Books, Records, Research articles,
Biographies, Magazines, Brochures, company official websites and published sources
from the Internet.

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The information provided in this report was collected from Secondary Data. The data was
collected from Books, Research articles, Biographies, Magazines, Brochures, company
official websites and published sources from the Internet.

It was a nice experience for me as an Intern at Karnataka Milk Federation (KMF). All
the employees from top-level management to low-level management were very helpful
for completion of this study.

3.3 Constraints of the study

 To maintain company secrecy, some information has not been mentioned in this
report
 There has been difficulty in collecting information about the company’s internal
issues
 An excessive research was not carried out due to time constraint

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 CHAPTER 4: CONCEPTUAL ASPECTS

4.1 PERFORMANCE APPRAISAL

Meaning

Performance Appraisal or performance evaluation is a method of evaluating the behavior

of employees in the work spot, normally including both the quantitative and qualitative
aspects of jobs performance. Performance here refers to the degree of accomplishment of
the tasks that make u an individual’s job. It indicates how well an individual is fulfilling
the job demands. Performance is always measured in terms of results. A student, For
example, may exert a great deal of effort while preparing for the examination but may
manage to get a poor grade. In this case, the effort expended is high but performance is
low.

Definition

According to Gomej-Mejia et al., “Performance appraisal involves the identification,

measurement, and management of human performance in organizations”.

According to Flippo, “Performance appraisal is defined as a systematic, periodic and so

far as humanly possible, an impartial rating of an employee’s excellence in matters
pertaining to his present job and to his potentialities for a better job”.

4.2 Need for Performance Appraisal

1. Performance Appraisal is used as a tool in development tool by organizations. It

helps in improving the performance of employees through work planning, skill
identification and potential development.
2. Performance Appraisal’s most popular outcome is its linkage to compensation
adjustment. Employees exhibiting superior performance are rewarded through
increase in their compensation to motivate them to further excel in their job.
Employees showing weaker performance are given lesser compensation raises.

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 3. Performance Appraisal opportunity to employees and their managers to share
information, ideas, requirements, expectations, and feedback to remove any
misconception and/or misunderstanding between the manager and the employees.
4. Performance Appraisal is used as a tool for making decision on employee
placements such as promotion, demotion, transfer, relocation, reassignment, etc.
5. Performance Appraisal provides reliable data and information on the current
performance level, potentialities and developmental needs of employees. Based
on it, career planning and development needs are identified.
6. Performance Appraisal helps in identifying present performance and potentialities
for future development of employees, therefore the accuracy and reliability of
recruitment and selection process can be judged.
7. Poor performance may indicate the need for retraining. Likewise, good
performance may indicate untapped potential that should be developed.

4.3 Process of Performance Appraisal

Analyzing the Job:

Performance appraisal process begins with job analysis which comprises of job
description and job specification. These help in establishing the standard performance.

Establishing standards of performance:

Appraisal systems require performance standards, which serve as benchmarks

against which performance is measured. The standards set for performance must be
clearly defined and unambiguous. They should be attainable by a normal employee. To
be useful, standards should relate to the desired result of each job. Performance standards
must be clear to both the appraiser and appraisee. The performance standards or goals
must be developed with the supervisors to ensure that all the relevant factors have been
included. Where the output can be measured, the personal characteristics, which
contribute to employee performance, must be determined. Goals must be written down.
They must be measurable within certain time and cost considerations.

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Communicating Performance standards to employees: Performance Appraisal
involves at least two parties; the appraiser who does the appraisal and the appraisee
whose performance is being evaluated. The performance standards specified in the
second step are to be communicated and explained to the employees (both appraiser and
appraisee) so that they come to know what is expected of them.

Feedback should also be taken to eliminate any confusion or misunderstanding. Feedback

enables the manager to know that the information has reached the employees. If
necessary the standards may be revised or modified in the light of feedback obtained
from the employees and evaluators. According to DeCenzo and Robbins, “too many jobs
have vague performance standards and the problem is compounded when these standards
are set in isolations and do not involve the employee”.

Measuring actual Performance:

After the performance standards are set and accepted, the next step is to measure the
actual performance. This requires choosing the right technique of measurement,
identifying the internal and external factors influencing performance and collecting
information on results achieved. It can be affected through personal observation, written
and oral reports from supervisors. The performance of different employees should be so
measured that it is comparable. Performance measures must be easy to use, be reliable
and report on the critical behaviors that determine performance.

Comparing Actual Performance with Standards and Discussing Appraisal with the
Employees:

Actual Performance is compared with predetermined performance standards. Actual

performance may be better than expected and sometimes it may go off-track. Deviations
if any from the set standards are noted. Along with the deviations, the reasons behind
them are also analyzed and discussed. Such discussions will enable an employee to know
his weakness and strengths. Weakness is discussed so that employee takes interest in
improving his performance. He will be motivated to improve himself.

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The assessment of another person’s contribution and ability is not an easy task. It has
serious emotional overtones as it affects the self-esteem of the appraisee. Any appraisal
based on subjective criteria is likely to be questioned by the appraisee and leave him
quite dejected and unhappy when the appraisal turns out to be negative.

Initiating Corrective Actions:

The last step in the process is to initiate corrective action essential to improve the
performance of employees.

Corrective action is of two types:

i) One which puts out the fire immediately: Employee, can be scolded or warned
so that he himself can make necessary attempts to improve his performance,
but this is not enough and proper.
ii) Other One, which strikes at the root of the problem permanently; through
mutual discussions with employees, the steps required to improve
performance are to be identified and initiated. The reasons for low
performance should be probed, take the employee into confidence and
motivate him for better performance. Training, coaching, counseling, etc. is
examples of corrective actions that help to improve performance. Counseling
and Coaching can do magic.

4.4 Objectives of Performance Appraisal

1. Providing Feedback is the most common justification for an organization to have

a performance appraisal system. Through its performance appraisal process the
individual learns exactly how well he did during the previous twelve months and
can then use that information to improve her performance in the future.
2. Performance appraisal makes it easier for the organization to make good decision
about the promotion and downsizing to make sure that the most talented
individuals are retained and organizations marginal performers are cut loose.
3. Performance appraisal helps motivate people to deliver superior performance in
several ways. First, the appraisal process helps them learn just what it is that the

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 organization considers being “superior”. Second since most people want to be
seen as superior performers, a performance appraisal process provides them with
a means to demonstrate that they actually are. Finally, performance appraisal
encourages employees to avoid being stigmatized as inferior performers.
4. Goal setting has consistently been demonstrated as a management process that
generates superior performance. The performance appraisal process is commonly
used to make sure that every member of the organization sets and achieves
effective goals.
5. Almost every organization believes in the pay for performance. Performance
appraisal provides the mechanism to make sure that those who do better work
receive more pay.
6. Not everyone meet the organization standards. Performance appraisals forces
managers to confront those whose performance is not meeting the company’s
expectations.
7. Managers are expected to be good coaches to their team members and mentors to
their protégés. Performance appraisal identifies the areas where coaching is
necessary and encourages managers to take an active coaching role.
8. If the Performance appraisal procedure includes a requirement that individual
development plans to be determined and discussed, individuals can then make
good decisions about their skills and competencies they need to acquire to make a
greater contribution to the company. As a result, they increase their chances of
promotion and lower their odds of lay-off.
9. This is the most important reason for an organization to have a performance
appraisal system. A performance appraisal procedure allows the organization to
communicate performance expectations to every member of the team and assess
exactly how well each person is doing.

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4.5 Types of Appraisers

Immediate Supervisors: Immediate supervisor is the person who is probably most

familiar with the individual’s performance. Furthermore, the immediate supervisor is
probably best able to relate the individual’s performance to what the department and
organization are trying to accomplish.

Peers: In some jobs, such as outside sales, the immediate supervisor may observe a
subordinate’s actual job performance only rarely (and indirectly, through written reports).
In other environments, such as self-managed work teams, there is no “supervisor”.
Sometimes objective indicators, such as number of units sold, can provide useful
performance related-information, but in other circumstances the judgment of peers is
even better. Peers can provide a perspective on performance that is different from that of
immediate supervisor.

Subordinates: Appraisal by subordinates can be useful input to the immediate

supervisor’s development and the ratings are of significantly higher quality when used for
that purpose. Subordinates know firsthand the extent to which the supervisor actually
delegates, how well he or she communicates, the type of leadership style he or she is
most comfortable with, and the extent to which he or she plans and organizes.

Self-Appraisal: It provides opportunity to participate in the performance appraisal

process, particularly if appraisal is combined with goal setting, which improves the
ratee’s motivation and reduces her or his defensiveness during the appraisal interview.
On the other hand, self-appraisals tend to be more lenient, less variable, more biased, and
to show less agreement with the judgments of others.

Customers Service: In some situations the “consumers” of an individual’s or

organization’s services can provide a unique perspective on job performance. The
performance that customers provide can serve as useful input for employment decisions,
such as those regarding promotion, transfer, and need for training. It can also be used to
assess the impact of training or as a basis for self-development.

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4.6 Methods of performance appraisal

Traditional Methods Modern Methods

Straight Ranking Method Management by Objectives

Paired Comparison Behaviorally Anchored Rating Scales
Grading Method Assessment Centers
Forced Distribution Method 360- Degree Appraisal
Forced Choice Method Human Resource Accounting Method
Checklist Method
Critical Incident Method
Graphic scale Method
Field review Method

4.6.1 Traditional Performance Appraisal Method

4.6.1.1 Straight Ranking Method:

With the straight ranking approach, all employees are ranked from ‘best’ to
‘worst’ on the basis of comparative overall performance. The primary attraction
of straight ranking is its simplicity. It requires a minimum of bureaucracy and
may be an acceptable solution for small enterprises with just a few employees.
Since it involves rank ordering, it necessarily combats intentional combat errors,
particularly central tendency and leniency errors.

Advantages of straight Ranking Method

1) Convenient to Appraiser: It was quite easy for the appraiser to rank a large
number of people because the names of all the people in question were written on
the left side randomly and the appraiser had to simply select the most efficient
person and write his name on the right side.
2) Useful for Comparative Evaluation: This is one of the oldest and simplest
techniques of performance appraisal. In this method, the appraiser ranks the

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 employees from the best to the poorest on the basis of their overall performance.
It is quite useful for a comparative Evaluation.

Disadvantages of Straight Ranking Method

1) Bias and Snap Judgment: It involves bias and snap judgment because appraisal is
not based on specifically defined measures of job-related performance.
2) Ranking of Varying Traits is Difficult: Ranking of individuals having varying
behavior patterns or traits is difficult especially when a large number of persons
are to be rated.
3) Not Suitable for Comparison: The method only indicates how a person stands in
relation to others in the group but does not tell how much better or worse he is
than others.

4.6.1.2 Checklist Method:

The Checklist is the simple rating technique in which the supervisor is given a list
of statements or words and asked to check statements or words and asked to check
statements representing the characteristics of each employee.
There are three types of checklist methods; viz.

1) Simple Checklist Method: The checklist consists of large number of

statements concerning an employee’s behavior. In this method of appraisal,
the reviewer provides appraisal report by answering a series of questions
relate to the appraisee concerned. Each question has two alternatives Yes OR
No.
2) Forced Choice Checklist Method: In this approach, the appraiser reviews a
series of statements about an employee’s performance and indicates which
statement is most descriptive or least descriptive of that individual’s
performance. After the checklist is completed, the evaluator reviews all of the
behaviors checked and composes a written descriptor of the employee’s
performance.

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 3) Weighted checklist: A more recent variation of the checklist method is the
weighted list. The checklist is an appraisal method that entails the use of lists
of statements with different assigned weights, representing various levels of
favorable and unfavorable performance. One producer for weighting
statements is to prepare a list of various performance levels for each variable
for using a panel of experts to assign values to them. This procedure results in
a weight for each statement in a performance category. Weights are used in
summing ratings to determine the overall performance of an employee.

Advantages of Checklist Method

1) Reduces Emotional Bias: The checklist framework removes some of the

emotional bias that goes into performance review.
2) Ease Fact Gathering: As checklist is relatively quick to fill-out it makes the fact
gathering process easy

Disadvantages of checklist method

1) Expensive and time consuming: This method is both b expensive and time
consuming as a manager has to devote a lot of time in preparation of checklist.
2) Subjected to Reviewer’s Bias: Reviewer may be biased in distinguishing the
positive and negative questions. Reviewers do not know the weights assigned to
each of the statements, creating a barrier to effective performance feedback. The
reviewer’s bias is inherent because some degree of subjectivity cannot be avoided.

4.6.1.3 Critical Incident Method:

The critical incident method of performance appraisal method involves identifying and
describing specific events (or incidents) where the employee did something that needs
improvement. It is a technique based on the description of the event, and does not rely on
the assignment of ratings or rankings, although it is occasionally coupled with the ratings
type system.

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Advantages of Checklist Method

1) Based on Direct Observations: The greatest strength of this approach of that

performance evaluations are based on actual performance that is observed first-
hand by the employee’s manager.
2) Cost efficient: Critical incidents provide rich, in-depths data at a much lower costs
than observations. They are easy and economical to develop and administer.

Disadvantages of Checklist Method

1) Time Consuming and Cumbersome: It is very time consuming and cumbersome

for the superior to maintain a written record for the each employee during every
major event.
2) May Evoke Negative Emotions: Quoting incidents after considerable time, lapse
may evoke negative emotions from employees.

4.6.1.4 Group Appraisal Method:

It is generally observed that some evaluators evaluate their employees according to

very high standards though as per the usual practice, this may not be needed. This
happens when the performance of the evaluator is outstanding, which is why he
expects the same from his group.In order to overcome this difficulty, the group
appraisal method is based on evaluation of performance by a group of people having
knowledge of the job and performance standards. Then, the group appraises the
performance of the employees, compares the actual performance with standards, find
out deviations, discuss the reasons, suggests the ways for improvement of
performance, prepares and action plan, studies the need for change in the job analysis
and standards and recommends changes, if necessary.

Advantages of Group Appraisal Method

1) Well-rounded review: One of the advantages to using group appraisal in

employee appraisals is that the final appraisal can be considered as most accurate
representation of employee’s performance than if it were just the opinion of a
manager.

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 2) Team Building: When Peers point out co-worker performance issues during an
appraisal, that can act as motivation for employees to work closer together to help
to improve each other’s performance. Group performance reviews are an
opportunity for management to develop mentoring programs that can help to
improve the team building process while also increasing employee productivity.
3) Accountability: The idea of having to submit to a group performance appraisal
can act as motivation to continually perform at a high level. If an employee
knows that co-workers, vendors and clients have to say in how his career path
develops, he is more apt to pay close attention to every detail of his business
dealings. The peer group review makes every employee accountable for his
complete work performance.

Disadvantages of Group Appraisal Method

1) Time Consuming: Performance Appraisal by a group is quite a time-consuming

task because the evaluator has to devotee a lot of time to other group members,
explaining to them details about the employees and their performance.
2) Inaccuracy: But if group members are not familiar with employee’s performance,
appraisal may not be accurate.
3) Erodes Loyalty: Employees feelings of loyalty to immediate supervisor may also
be eroded. Sometimes reconciliation of extreme ratings may be pose problems.

4.6.1.5 Field Review Method:

Where subjective performance measures are used, there is scope for reviewer’s biases
influencing the evaluation process. To avoid this, some employees use the field review
method. This method, a trained, skilled representative of the HR department goes into the
field and assists line supervisors with their ratings of their respective subordinates. The
HR specialist requests from the immediate supervisor specific information about the
employees performance.

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Advantages of Field Review Method

1) Suitable for Large Organizations: This method is very suitable for large
organizations.
2) Chances of Bias are less: The advantage of field review method is that since
the reviewer is an ‘outsider’ the chances of bias are reduced. The reviewer is
usually extensively trained to conduct the appraisal interview.

Disadvantages of Field Review Method

1) Time-Consuming and Costly Exercise: This method is time-consuming. The

use of HR experts makes this approach costly and impractical for many
organizations.
2) Dependent on Evaluator’s Competence: This method is solely dependent on
the competence and expertise of the evaluator to elicit desired responses.

4.6.2 Modern Performance Appraisal Method

4.6.2.1 Assessment Centre

Definition

According to Julie Hay, “Assessment centre is a method of predicting future

performance by using stimulations and other techniques to measure a candidate’s ability
to handle future responsibilities”.

According to Radha R. Sharma, “An assessment centre is a multi-faceted and multi-

dimensional approach to design reliable and valid information about a range of
competencies of an individual considered to be necessary for successful performance at a
target level in a specific job”.

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Advantages of AC

 Provided Useful feedback: It can provide useful feedback to test, takers regarding
needed training and development.
 Customizable Assessment centres can be customized for different kinds of jobs,
competencies and organizational requirement.

Disadvantages of AC

 Costly and Time-Consuming: Assessment centers are very costly and time-
consuming
 Causes Demotivation: Those who receive poor assessment might become
demotivated and might lose confidence in their abilities.

4.6.2.2 Management by Objectives (MBO)

Definition

According to Prof. Reddin, “MBO is the establishment of effectiveness areas and

effectiveness standards for managerial positions and the periodic conversions of these
into measurable time bound objectives linked vertically and horizontally and with future
planning”.

According to S.K Chakravarty, “MBO may be defined as a result centered, non-

specialist operational managerial process for the effective utilization of material, physical
and human resources of the organization, by integrating the individuals with the
organization and organization with environment.

MBO is a process of defining objectives within an organization so that management and

employees agree the objectives and understand what they are in the organization. MBO
aims to increase organizational performance by aligning goals and subordinate objectives
throughout the organization. Ideally, employees get strong input to identifying their
objectives, timelines for completion etc. MBO includes ongoing tracking and feedback in
the process to reach objectives

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How MBO works can be described in four steps

The first step is to establish the goals each subordinate is to attain. In some
organizations, superiors and subordinates work together to establish goals in others,
Superiors establish goals for subordinates. The goals typically refer to the desired
outcome to be achieved. These goals can then be used to evaluate employee performance.

The second step involves setting the performance standard for the subordinates in a
previously arranged time period. As subordinates perform, they know fairly well what
there is to do, what has been done, and what remains to be done.

In the third step, the actual level of goal attainment is compared with the goals agreed
upon. The evaluator explores reasons for the goals that were not met and for the goals
that were exceeded. This step helps determine possible training needs. It also alerts the
superior to conditions in the organization that may affect a subordinate but over which
the subordinate has no control.

The final step involves establishing new goals and, possibly new strategies for goals
not previously attained. At this point, subordinate and superior involvement in goal-
setting may change. Subordinates who successfully reach the established goals may be
allowed to participate more in the goal setting process the next time. The process is
repeated. As with the other approaches, MBO too has been criticized. One comment
made against the approach is that it is not applicable to all jobs in all organizations. Jobs
with little or no flexibility, such as assembly-line work, are not compatible with MBO.
An assembly-line worker usually has so little job flexibility that the performance
standards and objectives are already determined. The MBO process seems to be most
useful with managerial personnel’ and employees who have a fairly wide range of
flexibility and self-control in their jobs. Besides, when the result of an MBO system are
to be used to allocate organizational rewards, employees may be less likely to establish
challenging goals which they are confident that they can accomplish. Further, the
allocation of merit pay on a semi-annual or annual basis may encourage the setting up of
goals with short time horizons to the disadvantage of important long-term goals.

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Advantages of MBO

 Increases Employee Motivation: It is so because MBO relates overall goals to the

individual goals; and helps to increase employees understanding of where the
organization is and where it is heading.
 Provides more objectives Appraisal criteria: The targets that emerge from the
MBO process provides sound set of criteria for evaluating the manager’s
performance.

Disadvantages of MBO

 Failure to get Top Level Management Support: The programme can fail when
subordinates fail to get top management support at the beginning. The
subordinates do not get the guidelines needed to set goals.
 Failure to Set Goals: One of the reasons for the failure of MBO cycle, they may
not fully support it. It is the task of the managers to explain to the subordinates
what it is, how it works, why is it useful, what part I will lay in appraising
performance, and of course, how the subordinate can benefit. The basic
philosophy of MBO is built around self-control and self-direction.

4.6.2.3 Behaviorally Anchored Rating Scale (BARS)

Behaviorally Anchored rating scale (BARS) sometimes called behaviorally

expectation scales re rating scales whose scales points are determined by statements of
ineffective behaviors. They are said to be behaviorally anchored in that the scales
represent a range of descriptive statements of behavior varying from the least to the most
effective. A reviewer must indicate which behavior on each scale best describes an
employee’s performance.

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Advantages of BARS

1) Easy to Use: The clear behavioral indicators make the process easier for the
manager to carry out and the employee to accept.
2) Fully Individualized: From the stand point of consistency within a company,
BARS is designed and applied individually and uniquely for every position.

Disadvantages of BARS

1) Time consuming and expensive: The process of creating and implementing BARS
is time-consuming, difficult, and expensive as each BARS form has to be created
from scratch for every position in the company.
2) Requires High Maintenance: Jobs change over time, which means that BARS
requires a high degree of monitoring and Maintenance.

4.6.2.4 360-degree Feedback System or Multi-Rater Assessment and Feedback

System (MAFS)

360-degree feedback can be defined as the systematic collection and feedback on

performance data on an individual or group derived from the number of the stakeholders
in their performance. This technique measures in detail the behaviors and competencies
shown by the individual or group on achieving goals.

360-degree feedback is not a quick process. There are important stages after feedback has
been collected and reported on which are essential for changing behavior, 360-degree
feedback has become popular recently because of changes in what organizations expect
from their employees, increasing emphasis on performance measurement, changing
management concepts and more receptive attitudes.

According to Lepsinger, “The (360-degree) feedback process involves collecting

perceptions about the person’s behavior and the impact of that behavior from the person’s
boss/bosses, direct reports, colleagues, fellow members of project teams, internal and
external customers, and suppliers”.

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Process of conducting 360-Degree Feedback system

1) Develop Questionnaire
2) Ensure Confidentiality
3) Provide/ training orientation.
4) Administer the feedback
5) Analyze the data
6) Develop and distribute results

Advantages of 360-degree feedback

1) Helps in Relationship Building and acts as a key relationship builder which can be
used to enhance team relations and work interrelationships. When co-workers can
be open with each other and hold each other accountable for each performance
and productivity, the working relationships will improve and thus the productivity
will also improve.
2) Helps in career development as employees can take charge of their career
development programme, as they are directly informed by many sources about
where they need to focus. This is more so, because the employees feel that this
method is more accurate and dependable than the traditional evaluation by the
supervisor.

Disadvantages of 360-Degree feedback

1) Focus on Weakness, as it may focus on too much negative aspects of employee

performance, totally ignoring the achievements. This could be dangerous for
employee morale.
2) Time-consuming and Administratively Complex if feedback is not handled
properly it can be damaging.

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4.6.2.5 Human Asset Accounting Method

Human resources are a valuable asset of any organization. This asset can be valued in
terms of money. When competent and well-trained employees leave an organization, the
human asset is decreased and vice-versa.

In this method, the performance appraisal of employees is just in terms of cost

and contribution of employees of the organization. It is also known as Human Resource
Accounting Method. Cost of the employee includes cost of manpower planning,
recruitment, selection, induction, placement, training, development, wages and benefits
etc. Employee contribution is the money value of employee service which can be
measured by labor productivity or value added by human resources. Differences between
cost and contribution will reflect the performance of employees.

Definition

According to Flamholtz, “Human Resource Accounting is the measurement of costs and

value of the people for the organization”.

According to Stephen Knauf, “Human Resource Accounting Method is the

measurement and quantification of human organizational inputs such as recruiting
training experience and commitment

Advantages of Human Asset Accounting

 Human resource accounting helps the management in planning and executing the
HR policies such as transfers, promotions, training, retirement and retrenchment
of human resources.
 Motivation of Employees for Production Purposes, HRA helps in finding the cost
of human asset. If hourly time cost of this asset is brought the knowledge of
various classes of employees, it is hoped that they may devote there every second
for productive purpose only.

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Disadvantages of Human Asset Accounting

 Non-Availability of standards, certain standards are required to measure the

human resources. At present adequate standards are not available for such
measure. Institute of Chartered Accountants of Indian should device certain
standards in this respect.
 Variety of Methods for valuation of human resources, hence they create confusion
so as far as adoption of a particular model is concerned.

4.7 SETTING OBJECTIVES

Objectives must flow from the business and functional plans and address the key result
areas of the job. Objectives must be:-
 Specific: The appraisee must understand them clearly.
 Measurable: In term of quality, quantity, cost and time.
 Attainable: Targets must have inbuilt stretch but yet be within the capabilities of
the appraisee.
 Relevant: to the role and responsibilities with the job and link up with the unit,
business and functional plans.
 Time bound: agree to the timeframe within which the objectives must be
achieved, which will also help prioritization.

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4.8 PROBLEMS WITH APPRAISAL METHODS

A performance appraisal contains three steps - defining the job, appraising performance
and providing feedback. Some appraisals fail because subordinates are not told ahead of
time exactly what is expected of them in terms of good performance. Others fail because
of problem with the form or procedure used to actually appraise the performance. Still
other problems arise during the interview-feedback session, which include arguing and
poor communications. Problems can occur at any stage in the evaluation process. Some
of the pitfalls to avoid in performance appraisal are: -

1. Unclear performance standards: Without standards, there can be no objective

evaluation of results, only a subjective guess or feeling about performance.
Standards should be established by analyzing the job output, to ensure that
standards are job related. Those standards that are reasonable, but challenging
have the most potential to motivate.

2. Use of abstract word: Problems of evaluation standards might arise because of

the use of very common words for grading, viz. good, adequate, satisfactory and
excellent, which mean differently to different evaluators.

3. Rate errors: Rate errors include rates bias or prejudice, halo effect, constant
error, central tendency, and fear of confrontation etc.

4. Poor feedback to employees: Standards and/or ratings must be communicated to

the employee in order to for the performance evaluation to be effective.

5. Negative communication: The evaluation process is hindered by communication

of negative attitudes, such as inflexibility, defensiveness etc.

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4.9 ROLES IN THE PERFORMANCE APPRAISAL PROCESS

a) Reporting Manager

 Provide feedback to the reviewer/HOD on the employees’ behavioral traits

indicated in the PMS Policy Manual.
 Ensures that employee is aware of the normalization/performance appraisal
process.
 Address employee concerns/queries on performance rating, in consultation with
the reviewer.

b) Reviewer

 Discuss with the reporting managers on the behavioral traits of all the employees
for whom he / she is the reviewer.
 Where required, independently assess employees for the said behavioral traits;
such assessments might require collecting data directly from other relevant
employees.

c) HOD (In some cases, a reviewer may not be a HOD)

 Presents the proposed Performance Rating for every employee of his / her
function to the Normalization committee.
 HOD also plays the role of a normalization committee member.
 Owns the performance rating of every employee in the department.

d) HR Head

 Secretary to the normalization committee.

 Assists HOD’s/Reporting Managers in communicating the performance rating of
all the employees.

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 CHAPTER 5: DATA ANALYSIS AND INTERPRETATION

5.1 SWOT Analysis

SWOT Analysis stands for – Strengths, Weaknesses, Opportunities, and Threats that
Karnataka Milk Federation (KMF) encounters both internally and in macro environment
that it operates in. Strengths and Weaknesses are often restricted to company’s internal –
resources, skills and limitations. Opportunities and Threats are factors that are analyzed
in view of the prevalent market forces and other factors such as legal & environmental,
technological, economic , social, health & safety, and political.

The four key elements of SWOT analysis are - Strengths, Weaknesses, Opportunities
and Threats. Karnataka Milk Federation (KMF) can use strengths to create niche
positioning in the market, can strive to reduce & remove weaknesses so that it can better
compete with competitors, look out to leverage opportunities provided by industry
structure, regulations and other development in external environment, and finally make
provisions and develop strategies to mitigate threats that can undermine the business
model of Karnataka Milk Federation (KMF).

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5.1.1 Strengths:

1. It has wide distribution network.

2. Capable to quote competitive prices and reduces price.
3. The quality of milk is good
4. Consumers good will
5. Better financial strengths
6. Good brand name
7. Institutional support
8. Economics of scale of production/operations, which leads reduce the cost of
productive
9. Geographical location in order to quick supply of milk in the market
10. Good distribution and transportation system
11. Nandini enjoys good image.
12. Wide distribution network leads to regular and timely supply.
13. Milk processed is local milk, which reduces the transportation cost.
14. It enjoys highest market shares in the packed milk segment

5.1.2 Weaknesses:

1. Freezing of marketable area

2. Lack of flexibility in system
3. Rivalry among sister unions
4. Government influence
5. Lack of personalize service to channel members
6. High overheads
7. Poor retail serving and consumer grievance handling.
8. Recurring quality problem.
9. Lowest paying brand i.e. commission given by the company is less compared to
other brands.
10. Inadequate sales promotional activity. Due to bad smell that causes low sales.

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5.1.3 Opportunities:

1. Favorable government policy like incentives and grants and infrastructure

facilities
2. Institutional supports
3. Introduce new products
4. Tapping the un served market
5. Servicing the below poverty or low income people with new schemes
6. Evening time milk should be supplied
7. It has to focus on Kirana shops and General stores in slum areas under special
schemes.
8. There is scope for developing in new area.
9. Availability of buffalo milk-improves market milk quality.
10. Predominant of loose milk segment-divide appropriate strategies.

5.1.4 Threats:

1. Cut through competition from emerging competitions

2. The bad smell of milk
3. Rapid growth in Technology
4. Research and Development facilities
5. Threat forms agents and dealers to increase commission
6. Lack of consumer awareness
7. No entry barriers for private players
8. Low level of consumer awareness
9. Persuade benefits of competing brand.

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5.2 McKinsey 7S MODEL FOR THE AUTOMOBILE INDUSTRY

5.2.1 Introduction

The present research which is a study of Customer relationship management in the

Automobile Industry with special reference to Two-wheeler after sales service market has
been conducted with the aim to design 7s model for the automobile industry. The opinion
of the two wheeler users from Mumbai forms the source to know their attitudes &
perceptions towards customer relationship management and after sales service of the two-
wheeler. The efforts has been made through this research to identify the determinants of
7s Model for the automobile industry which has become significant in creating roadmap
for developing the strategy. The 7s Model for the automobile industry has been designed
by considering the detailed

5.2.2 The Seven Elements of McKinsey 7S Model

 Shared Values: called "super ordinate goals" when the model was first
developed, these are the core values of the company that are evidenced in the
corporate culture and the general work ethic. Placing Shared Values in the middle
of the model emphasizes that these values are central to the development of all the
other critical elements. The company's structure, strategy, systems, style, staff and
skills all stem from why the organization was originally created, and what it
stands for. The original vision of the company was formed from the values of the
creators. As the values change, so do all the other elements.
 Structure: the way the organization is structured and who reports to whom.
 Strategy: the plan devised to maintain and build competitive advantage over the
competition.
 Systems: the daily activities and procedures that staff members engage in to get
the job done.
 Style: the style of leadership adopted.
 Staff: the employees and their general capabilities.
 Skills: the actual skills and competencies of the employees working for the
company.

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5.2.3 Structure of Seven Elements of McKinsey 7S Model

SHARED VALUES (SUPER ORDINATE GOALS):

It refers to the core or fundamental values that are widely shared in the organization and
serve as guiding principle that are important. These values have great meaning because
they focus attention and provide a broader sense of purpose.

These shared values include the mission and vision of the organization. It also includes
objective values, Environment Policies etc. KMF, Dharwad has the mission to provide a
lucrative market for farmers to sell their milk and to provide best milk to urban
customers. Its Vision is to produce more milk and milk Products in the forth-Coming

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years. KMF, Dharwad also follows environment Policies. The plant doesn’t pollute the
environment. The organization has its own Effluent Treatment Plant in its own Premises.
The Effluents are properly dumped so that on environment hazards occurs.

STRATEGY:

Strategy is the Systematic action and allocation of resources to achieve company aim. It
also refers to the determination of the purpose and the basic long-term objective of an
enterprise and the adoption of course of action and allocation of resources necessary to
achieve these aims.

Strategy refers to the systematic action and allocation of resources to achieve the
companies aim. The integrated vision and direction of the company as well as the
manner, in which it drives, articulate, communicates and implements that vision and
direction. It can also be defined as the choice of direction and action that the company
adopts to achieve its objectives in a competitive situation.

STRUCTURE:

The structure of the organization is basically a network of authority and

responsibility, which has been assumed by and delegated to the employees.
Organizational structure defines the pattern of formal relationship of superior and
subordinate. It may be regarded as network or role, relationship, assigned work and
delegated authority of employees. It provides the basis on which the managers and non-
managerial employees perform the job assigned to them.

The Union carries on procurement by setting up-operative societies at village level. Later
milk is collected in the Chilling Center. Milk collected from the milk center, is first tested
there are milk-testing equipments for this purpose. Then a survey on availability of
transportation facilities and productive capacity of villages are conducted. If the
marketable surplus is more than 150 liters per day, a society is formed; further 10
promoters are selected from the village and are given the responsibility of collecting the
capital for the society by selling shares.

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Procurement is done twice a day and payment is made on the basis of percentage of the
content and SNF in the milk. After this, Milk is sent to Union else chilling center,
whichever is near. At the chilling center, milk is chilled up to 4degree Celsius. Later this
chilled milk is sent to Union in Insulated Tankers for further processing. The main
function of this department is to procure milk different areas throughout the year. The
main function of P & I Department is to organize, supervise and operate village dairy co-
operative societies and to procure more milk from village societies. Other services
provided are:

 Veterinary services to keep up the good heath of cattle through

 Regular health Camps
 Emergency service round the clock
 First aid, Vaccination, Infertility Camp, Fodder
 Artificial Insemination facility for improvement of cattle breeds
 Facilitating Training Programs regarding management of cattle
 Supply of Fodder to cattle

STAFF:

Staff mainly refers to the people in the organization or enterprise. KMF views
people or employees as valuable resources wherein they carefully nurture, develop,
guard, and allocate them, they believe in transparency as the basis foundation for
employing people.

There is no proper HR department and recruitment is mainly employees reference or

through promotion on its website. The assistant General Managers are the head their
respective departments. Promotion or the promotion gradation of the employees is clearly
based on Merit-cum-seniority basis.

The company secretary takes up the member or secretarial work. He prepares the needed
reports to be provided to the top management. The registration of the new clients is the
responsibility of the senior executives. Inspection work is the duty of respective mangers
of the department. The mangers take up administration. The depository help desk handles

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the queries regarding the depository services. Various desks are responsible for clearing
the queries and communicating with the clients.

STYLE

“Style refers to the way the management behaves and collectively spends its time to
achieve organizational goals or aims”. KMF adopts various styles for the growth and
welfare of the organization like:-

LEADERSHIP STYLE & ORGANIZATIONAL CULTURE:

Here style implies the leadership approach of top management and the company’s
employee’s way of thinking and behaving. The style is the tangible evidence of what
management considers important, the way it collectively spends time and attendance and
uses symbolic behavior.

PARTICIPATIVE STYLE OF LEADERSHIP:

The company is following participative style workers in management (usually the

management will discuss with workers and enter into memorandum of settlement under
sec 12(3) of industrial dispute Act, which comprises terms and condition, labor
compliments i.e. number of operation required to work per day (standard strength) and
work load category wise).

CENTRALIZED DECISION MAKING:

The company is follow centralized decision making style only management people can
participate in the process of decision making.

SKILLS

The term skill includes those characteristics which people use to describe a company, the
dominate skills or the distinctive competence of an organization are part of the
organization character. Training in BRPL is aimed at the systematic development, skills,
attitude, and team work .Training and development of personal skills is considered a high
priority area and it forms an integral part BRPL people and its organization development.

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Suitable training is imparted to enhance the multiple skills of the executives and to enrich
the functional tasks.

 Technical Skills
 Human Skills
 Conceptual Skills

CLASSIFICATION OF SKILL:

 Executives
 Non Executives
 Technicians
 Workmen
The qualification required for the staff in the Karnataka Milk Federation, Dharwad are
described according to the authority and responsibility and nature of work carried.

SYSTEM

A system in the 7S framework refers to all the rules, regulations and procedures both
formal and informal that complement the organization structure.

KMF has its own system, rules and procedures to follow which help the company to
develop a talent pool with competence to take challenges of present and future. The
organization has its own information system, manufacturing process and control process
that aims to delight the customers through good quality products, services and solutions.

Systems are formal and informal procedures that govern everyday activity, covering
everything from management information systems, through to the point of contact with
the customer. Finance department is doing enough to properly plan and control the funds.
There is regular program verification.

INVENTORY CONTROL SYSTEM:

Raw materials will be held in the stores for maximum of 4 days only.
Finished goods will be held in the stores for maximum of 2 days.

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MANAGEMENT INFORMATION SYSTEM:

In company the management information system is well developed. The MIS department
maintains the data of the company. They capture information from different areas of
organization through network spread around the company. This department gives the
information for report to the management. All the data will be stored in main server of
MIS. The purpose of MIS is to give the timeless information to the internal and external
customer. It enables the management to take quick decision and reduced much of paper
work.
The internet and extranet is well connected to all the systems and provided good
communication tools. All the staff members are well aware with the systems. The
integrated information system is used to maintain time lines information for employees.
At present “Enterprise Resource Planning” is installed in the company to well aware of
the day to day activities.

5.3 Porter Five (5) Forces Model

Porter Five (5) Forces Model was proposed by Michael E. Porter in 1979. The purpose
was to assess and evaluate the competitive positioning and strengths of business
organizations. The model has three horizontal competitive forces (Threat of Substitute
Products or services, the threat of new entrants and rivalry among existing firms) and two
vertical forces (Bargaining power of buyers and bargaining power of suppliers).

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Threats of New Entrants:

Brand preferences and consumer loyalty: There is an immense level of Brand Preference
of Nandini milks in the minds of the people. The level of preference specifically in the
liquid milk sector is that they would go to other retailer only if the retailer does not have
Nandini milk.

Bargaining Power of Supplier:

Here is appropriate bargaining power of the supplier. In olden days there were not any
kind of cooperative societies as the farmer was exploited. But, nowadays the farmer’s
rights are protected under the cooperative rules and regulations, which ultimately results
in moderate power of bargaining from the supplier.

Bargaining Power of Buyers:

Cost of switching to competitor brands: The switching of brands is seen very much in
products such as ice cream, curd, milk powders, milk additives etc., but it can be seen
comparatively less in liquid milk category. Even if the buyers shift to the other brands of
milk, the value that they get is less than they would get from consuming Nandini.

Rivalry among Competitors:

Mergers and Acquisitions: As such in the industry there are no mergers or acquisitions.
However, if any MNC wished to enter through this route then the competition might be
severe.

Threats of Substitute:

Availability of attractive priced substitutes: Different substitutes are available for

different category of products. There is ample availability of low priced substitutes from
local vendors and retailers.

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 CHAPTER 6: FINDINGS AND CONCLUSIONS

6.1 FINDINGS
1. According to the SWOT analysis, it is found that the Strengths of the Company
were Good distribution and transportation system; Nandini enjoys good image;
Wide distribution network leads to regular and timely supply; It enjoys highest
market shares in the packed milk segment
2. According to the SWOT analysis, it is found that the Weaknesses of the Company
were Government influence; Lack of personalize service to channel members;
High overheads; Poor retail serving and consumer grievance handling; Recurring
quality problem
3. According to the SWOT analysis, it is found that the Opportunities of the
Company are there is scope for developing in new area; Availability of buffalo
milk-improves market milk quality; Predominant of loose milk segment-divide
appropriate strategies.
4. According to the SWOT analysis, it is found that the Threats of the Company
were Lack of consumer awareness; No entry barriers for private players; Low
level of consumer awareness; Persuade benefits of competing brand
5. According to McKinsey 7S Framework for Automobile Industry, it was found
that the Structure of the Organization is based on horizontal structure
6. According to McKinsey 7S Framework for Automobile Industry, it was found
that they used a different kind of Strategy in which the integrated vision and
direction of the company as well as the manner, in which it drives, articulate,
communicates and implements that vision and direction.
7. According to McKinsey 7S Framework for Automobile Industry, it was found
that the System in KMF, Dharwad is based on MIS (Management Information
System). The purpose of MIS is to give the timeless information to the internal
and external customer. It enables the management to take quick decision and
reduced much of paper work.

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 8. According to McKinsey 7S Framework for Automobile Industry, it was found
that the Skills required in KMF, Dharwad are Technical skills, Human skills and
conceptual skills
9. According to McKinsey 7S Framework for Automobile Industry, it was found
that the Shared value of KMF, Dharwad has the mission to provide a lucrative
market for farmers to sell their milk and to provide best milk to urban customers.
Its Vision is to produce more milk and milk Products in the forth-Coming years.
KMF, Dharwad also follows environment Policies
10. According to McKinsey 7S Framework for Automobile Industry, it was found
that the Staffs were developed, trained and motivated. This leads to strengthening
of relationship between the Employees and no discrimination amongst each other.
11. According to McKinsey 7S Framework for Automobile Industry, it was found
that the Style used in the organization are leadership style and organizational
culture; Participative style of leadership; Centralized decision making
12. According to Porter’s Five Force Model, it was found that the Threats of New
Entrants are low to medium
13. According to Porter’s Five Force Model, it was found that the Threats of
Substitutes Low to Medium.
14. According to Porter’s Five Force Model, it was found that the Power of Suppliers
is moderate
15. According to Porter’s Five Force Model, it was found that the Power of Buyers is
less
16. According to Porter’s Five Force Model, it was found that the there are no
mergers or acquisitions in competitive rivalry

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6.2 CONCLUSION

 All the processes are measured, monitored and continually analyzed to achieve
planned results.
 All the employees working in (KMF), DAMUL are highly qualified, highly
skilled and experienced.
 (KMF), DAMUL is providing milk and milk products under the different kind of
brand names, have made a sufficient name and fame in the minds of people for its
quality, availability and relatively satisfying the needs of the ultimate consumer
and it has made a sufficient mark an established brand among the milk and milk
products.
 Initially when KMF, Dharwad was started, its capacity of production was less, as
for now it has uplifted itself for higher production capacity.
 Dharwad Milk Union is a reputed organization which has developed its goodwill
in the market to compete with other famous brands such as Sphurti, Arokya,
Srikrishna etc. It has to adopt modern technology in the production process and
can do better marketing compared with others. It has to increase the rate of
commission payable to its agents or dealers or retailers.
 DMU is functioning well for the social as well as economical upliftment of the
rural population.
 To survive in the market, the company needs to adapt an aggressive marketing
policy as of competitors.
 Last but not the least I would like to conclude DMU as good organization to work
as well as to interact with people. All the workers and members of the union
motivated me for the completion of this report.

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6.3 LIMITATIONS

 Time limit of the internship was for 1.5 Month (02-Dec-2019 to 20-Jan-2020)
 This project is based on Non-empirical Research
 The information was collected through secondary data. Some of the information
may not be entirely accurate
 The analysis and conclusion made is as per my limited understanding for this
concerned subject.
 No discussion was possible to make with the department heads of the company, as
they were busy with their work and could not spare time for discussion.
 One of the major limitations was gathering information as there are some
confidential matters that a company might not want to disclose

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