Some suggestions about the performance appraisal at casumina corporation

Chapter 3 analyzes performanceappraisal at CASUMINA including the policies affecting the performance> appraisal, the appraisal process, the methods and criteria of performance appraisal.

DEPARTMENT OF INTERNATIONAL BUSINESS ADMINISTRATION

In order to accomplish this graduation thesis,

I would like to express my thankfulness to the professors atHUFLIT University who have equipped me with the essential anduseful knowledge about the economic and social in general aswell as the business administration field in particular

I wish to express my sincere appreciation to my advisor

-Dr Nguyen Huu Than because of his helpful guidance andcomment with whole heart

My heartfelt appreciation also goes out to the CASUMINACorporation, expressly to Human resource department's staff whocreates the good conditions as well as supplies the necessarydocuments relating to my thesis After the period of probation, Icould obtain some valuable working experience for my job innear future

With own heart, I would like to thank my family and friends whoalways stand by to encourage and help me so much

July 2007Nguy€n Nhu Quynh Bao NgQc

•.

During the period of advising Nguyen Nhu Quynh Bao Ngoc with the topic "Some

Suggestions about the Performance Appraisal at CASUMINA" I have some'remarks as follows: '

ABOUT THE STUDYING ATTITUDE

,Nguyen Nhu Quynh Bao Ngoc has had a serious working attitude, She has beenserious about correcting her thesis many times and has contacted the advisorregularly With all of her enthusiasm she has successsfully completed her paper

in compliance with HUFLIT requirements

ABOUT THE FORM

• The research paper cuver is designed in accordance with the school sample.

• The paper layout is arranged clearly, elegantly, and the chosen font is easy to

read; the colored paper at the beginning of each chapter helps readersdistinguish different chapters easily

• The "table of content" pages are laid out clearly and brightly and thenumerical codes \ire set in line with the school regulations

• The figures list page i~ set after the "table of content "pages

• The paper has introduction at the beginning of each chapter to introduce themain headings of individual chapter In addition, there is a summary paragraph

at the end of each chapter so that it,can cover the whole chapter

• Tlie paper has enough illustrated figures and charts with notes and quotations

of the reference materials coded scientifically (the initial number is the chapterordinal number, and next number is figure and chart ordinal number)

• The top, bottom, left, and right margins of the paper sheets are appropriate tothe international standards

• The paper consists 0f"footnotes" cited from 10 references t hat a re arrangedaphabetically in accordance with the international standards

• The style is concise and clear-cut

• The introduction chapter meets the requirements of a research paper including

the purpose, the scope of the paper, research methods, and its contents

ABOUT THE CONTENTS

The research paper is logically structured In addition to the introduction chapter, the paper begins with chapter 1 "an overview of Casumina Corporation" to explainits history, the organizational structure and business activities Next, the

The main parts are in the next two chapters Chapter 3 analyzes performanceappraisal at CASUMINA including the policies affecting the performance

> appraisal, the appraisal process, the methods and criteria of performance

appraisal Based on this analysis, she concentrates on "Some Suggesiions about

the Pe,formance Appraisal at CASUMINA" in chapter 4 All of her suggestionsare feasible

CONCLUSION.

Considering the seriousness of the author in her preparation of the research paper

as well as the seriousness in the scientific approach, I appreciate highly theresearch paper and recommend that the Board of Examination allow Nguyen Nhu

Quynh Bao Ngoc to defend and pass this research paper with a very good grade,

Hochiminh City, July 10, 2007

Dr Nguyen Huu Than

III

>

I v

The integration process into the worldwide communities of Viet Nam has beenapproaching a new stage, the essential stage in implementing internationalengagements and agreements Viet Nam expects to establish economicrelations to many countries in the world From then, Vietnamese business willhave a plenty of chances also the challenges to overcome There will be awfullots of obstacles for internal companies in the competition with foreign giants.

If any company does not have sufficient ability to join in this competition, itcan not survive In the past, it was believed that the company was strong or notdepending on the tangible assets they owned for instance the capital, thefactory, machinery, and so on Nowadays, still there is one more very valuableasset that is the human force If a company is equipped with the moderntechnical system, without the human being to operate it, it will become useless

This graduation paper would like to provide some suggestions about theperformance appraisal in CASUMINA With the current performanceappraisal, CASUMINA might be still in good position and face no problems.However, for the growth of business, the success of company in the future afterequitizing, the analyzing and suggestions carried out in this paper will be

XI

INTRODUCTION

C Human Resource Features In Casumina 15

33

333341

1 Human Resource Planning

2 Recruitment and Selection

3 Training and Development

4 Career Planning and Development

II. RESPONSIBILITY FOR PERFORMANCE APPRAISAL

A Performance Appraisal Process

B Method

IV PROBLEMS IN PERFORMANCE APPRAISAL

III. TYPICAL PERFORMANCE APPRAISAL METHOD

C The objectives and developing strategies of CASUMINA 53

II ANALYZING PERFORMANCE APPRAISAL PROCESS 55

A Performance Appraisal Process of Management and Staff 55

B Performance Appraisal Process of factory Workers 56III METHOD OF PERFORMANCE APPRAISAL

A Rating Scale

B Work Standard

IV CRITERIA FOR PERFORMANCE APPRAISAL

575757

B Criteria for self-appraising of technical staff 58

V THE ADVANTAGES AND DISADVANTAGES OF CURRENT

CHAPTER 4: SOME SUGGESTIONS

I SUGGESTIONS ABOUT METHOD OF PERFORMANCE

A Performance Appraisal of Managerial and technique staff 67

B Performance Appraisal of Workers 70

II. SUGGESTIONS ABOUT THE PERFORMANCE APPRAISAL

III SUGGESTIONS ABOUT THE APPRAISAL INTERVIEW 73

IV SOME OTHER SUGGESTIONS ABOUT THE EVALUATION

Picture 1.1: CASUMINA Joint Stock Venture

7Figure 1.1: Organizational Chart of CASUMINA Corporation

12

Table 1.2 : Education level of employee

16Chart 1.2: Education level of employee

17Table 1.3: Distribution by occupation 17

Chart 1.3: Distribution by occupation 18Table 1.4: Total output and turnover (1997 - 2002)

19Table 1.5: Total output and turnover (2003 - 2007)

20Table 1.6: The result of business activities

22Figure 2.1 Components of a Human Resource Management System

1 RESEARCH PAPER OBJECTIVES

2 SCOPE OF THE RESEARCH

3 RESEARCH METHOD

4 CONTENTS

In the market economy, most of enterprises have to be confronted withthe situation of the tough competition One of the vital matters is raisedfor every business is how to manage effectively the human resource inorder to create the relative advantage How to attract, use, develop andmaintain the talent employees is always a headache issue of themanagement level.

1 Research paper objective

Since Vietnam became a member of ASEAN, our government hasencouraged domestic companies to co-operate and trade with foreigncompanies within the ASEAN organization When our country enteredinto WTO (world trade organization), this opened the door for foreigninvestors to do business in Vietnam and become in favor of directinvestments Subsequently resulting in many huge foreign companies tocome to Vietnam to make profits since our country is a potential place forinvestments

In this circumstance, the government reduced either its interference incompany's operation or capital in support of business' development.Many State own companies has been transferred to public section Charles

E.McCabe stated that "In today's rapidly changing business environment, organizations are concerned about competition, the quality of their products, their services and operating more efficiently". Gaining thecooperation and active involvement of employees is critical to anorganization's success In practice, every organization has tried to clearlyidentify and focus on the factors that impact its success; therefore moreattention has been given to those who work for an organization The labor

is an uncertainty factor, so the creative and faithful employee'scompetitive advantage has a significant impact on the company'sperformance Organizations whether small or large have an experience

that they can not lack effective human resource investment smceworkforce is considered a basic foundation for the development of acompany Management today looks at this strategic asset as needing to bedeveloped and taken care of After investing considerable time and moneyrecruiting and training employees, one must determine how to make surethese valuable employees stay productive and remain loyal to the firm.Retention of employees is essential to maintain client relationships, aswell as to keep recruiting and training costs in line Losing anexperienced employee almost always results in significant costs to thefirm Thus the research on Human resource Management can helpentrepreneurs to better choose the right person for the job, learn moreabout the communicated methods, or know how to evaluate theiremployee's performance to effectively motivate them.

CASUMINA Corporation was transferred into a joint stock company from

a State own company a few years ago Many things must be reorganized

to suit the new trend of market without any support from State Thesuccess of a business is influenced by many internal and external factorssuch as: ideas, finances, techniques, reputation, market, policies, etc.Having talent, skillful, and appropriate employees for a vacant position isnot enough, but how to maintain the excellent employees, and developtheir abilities, their skills is much more difficult The keys to employeesatisfaction and retention are founded on strong leadership and soundmanagement practices If these arts are mastered, the company will havehappy, loyal employees and clients, resulting in growth, profits andpersonal satisfaction The golden key to mastering these arts is to have aneffective performance appraisal procedure

The topic: "Some suggestions about the performance appraisal atCASUMINA" rises from the company's imperative need That is how toassess the performance of the workforce since then the corporation can

promote the skillful employees and motivate them This graduation paperwill analyze the current performance appraisal process as well as thepolicies of CASUMINA in order to make some suggestions

2 A Scope of the research

The Human Resources Management function includes a variety ofactivities such as human resource planning, recruitment, selection,training and development, career planning, compensation programs,internal employee relations and so on The key among them is decidingwhat staffing needs and whether to use independent contractors or hireemployees to fill these needs Recruiting and training the best employees,ensuring they are good performers, dealing with performance issues, aswell as ensuring the personnel and management practices conform tovarious regulations is not easy The management function includes themanagmg of employee benefits, compensation, employee records, andpersonnel policies, performance management, etc Since there arerestrictions of capacity and time, this graduation paper can not analyze allissues of human resource management functions, but only focuses onperformance appraisal The performance appraisal process atCASUMINA is deeply researched in this paper

3 Research method

The research in this paper has been conducted by using the desk methodwith materials and data collected from textbook, company documents,and websites The method of effective administration of theCASUMINA's workforce is given out based on the analyzing, evaluatinginformation from secondary data also primary data The field ofresearching has also been conveyed by observing the performance ofemployees and directly interviewing the official staffs The information

on the current situation of human resource management is collectedthrough the discussions with the Human resource managers

4 Content

This graduation paper is organized in 4 chapters:

Chapter I is divided into 3 parts about the overview of CASUMINACorporation: its history, the organizational structure and businessactivities

Chapter 2 IS continues with the theoretical bases of performanceappraisal, which includes 5 parts on the role of performance appraisal,responsibility for performance appraisal, typical performance appraisalmethod, problems in performance appraisal, and characteristics of aneffective performance appraisal system

Chapter 3 IS connected by analyzing performance appraisal atCASUMINA including analyzing the policies that affect the performance,appraisal of the company, analyzing the appraisal process, method ofperformance appraisal, criteria for performance appraisal and finally iscontinued with the advantages and disadvantages of its currentperformance appraisal

Chapter 4 ends with some suggestions for management performanceappraisal at CASUMINA with four parts: suggestions about method ofperformance appraisal for official staff and for Workers, suggestionsabout the performance appraisal policies, suggestions about the appraisalinterview and finally other suggestions about the evaluation ofperformance and rewards

OVERVIEW OF CASUMINA

Contents

CORPORATION

III BUSINESS ACTIVITIES

In this chapter, the author would like to overVIew the CASUMINACorporation In the first part, the paper introduces the history of CASUMINACorporation, its period of development as well as its mission After that, in thesecond part, the organizational structure will be mentioned; the paper alsoanalyzes the human resource features in CASUMINA Finally, the third partwill focus on the result of business activities.

Picture 1.1: CASUMINA Joint Stock Venture

Source: Documents from company

CASUMINA Joint Stock Venture which is specialized in producing and tradingthe inner tube, tube tire, tubeless tire of automobile as well as other productsfrom rubber has been established over thirty years Its history and periods ofdevelopment will be mentioned to generate the overlooking of this company

After the liberation on the South of Vietnam April 30th, 1975 there are manyfactories and enterprises of old regime, also there are some enterprises whichmanufacture and trade with rubber On April 19th, 1976 the Southern RubberIndustry Company was established with an assigned responsibility from thegovernment to maintain and develop the rubber industry (on the base industry

According to the Government policy on May 220dI993, the Southern RubberIndustry Joint Stock Company CASUMINA is re-established.

Full name: The Southern Rubber Industry Joint Stock Company

Transaction name: CASUMINA

Head office: 180 Nguyen Thi Minh Khai District 3, Ho Chi Minh City

Picture : CASUMINA' s logo

Source : Document from Company

CASUMINA subsidiaries:

• Hoc Mon Rubber factory: specializing in producing bicycle tire& tube;motorcycle, scooter and industrial- tube tire; tubeless tire; automobiletire

• Dong Nai Rubber factory: specializing in producing bicycle tire & tube;motorcycle, scooter tube tire; tubeless tire and automobile tire

• Dien Bien Rubber factory

• Tan Binh Rubber factory

• Binh Loi Rubber factory

• Binh Duong Rubber factory

• Viet Hung glove Rubber factory

CASUMINA Joint venture enterprise

YOKOHAMA TIRE Vietnam Joint- Venture Company

With these subsidiaries, it is easily to recognize that the organizationalframework of CASUMINA is energetic, well-organized and specialized Thecompany current products are broaden and diversified than ever before.Besides those subsidiaries, CASUMINA also associates with YOKOHAMATIRE from Japan to establish the YOKOHAMA TIRE Vietnam Joint- VentureCompany Over the 25 years of development, CASUMINA has gone throughmany unexpected changes and overcome many obstacles to establish its solidreputation in the market today

B PERIODS OF CASUMINA's DEVELOPMENT

From 1976 -1990

This is the stage that the economy IS operated through central planningmechanism; the company is subsidized by a State Consequently as a State owncompany, CASUMINA can not avoid all production and trading activities thatmust be complied with the State's production target and plan, for instance:

• The raw material is supply with inexpensive price

• All products are subsidized by the State

• Having the exclusive right to export products to foreign countries likeEastern Europe countries, having condition to regenerate foreign

currency to put new equipments in the company

• There are no competitors in domestic market

From 1991 to present

In this stage, our economic has a profound change, the speed of economicgrowth is high, GOP per head increases, and the investment from domestic or

many difficulties, challenges The first difficulty is self- responsible for theresult of doing business without the protection from the State That is the moreand more tough competition from inside and outside country such as GoddenStar, Chensin etc Above all, there are not only the unprejudiced problems butalso the subjective reasons caused from newly entering to the market In order

to deal with those obstacles, the whole company works together to find out thesolutions and right direction for the survival and growth of CASUMINA, forinstance:

• Investing in modem equipment to improve the products' quality alsoreduce the cost of good sold

• Always innovating the design and diversifYing the kind of line products

as well as raising the sense of initiative in developing new product

• Searching and expanding the domestic and foreign market Cooperatewith partners all round the world

• With the appropriated directions for operating, CASUMINA graduallyasserts their first rank in the domestic market and also beat thecompetitors in the oversea market

With the purpose to change the management strategy III order to promotemaximum abilities of each department but maintain the current form ofpossession On April 4th 2006, the Southern Rubber Industry Companybecomes Southern Rubber Industry Joint Stock Company In 2006, the firstyear of the 5-year plan from 2006 - 20 I 0, CASUMINA restructures thecompany in order to comply with the policy of a joint stock company.Although facing the price fluctuation of the raw materials during 2006 due touncertainties of the domestic and world market, the company still manages toachieve its 2006 target This is the result of the excellent leadership of thecompany management and the determination of the company as a whole

The year 2006 also marks an obvious advance of the company in the process ofintegrating into WTO: cooperate with famous tube tire companies such as:Continental, Apollo

C MISSION:

The long term target of CASUMINA is rapidly build a strong enterprise,becoming the first- rank supplier of bicycle tire& tube, motorcycle and scooterand industrial- tube tire & tubeless tire, automobile tire in Vietnam Thecompany guideline strategy is: "Strong and stable developing", CASUMINAdesires to be at the rank 2151 in the top 100 enterprises achieving the title

"Vietnamese high quality good" in 2007 The value of company was thehighest over past 10 years through first 6 months in the year 2007 The value,revenues of company as well as the payment for tax is expected to increasetwofold in the year 2010, after equitizing The objectives to achieve in the year

2007 are: Increasing the exporting to foreign countries in ASEAN and in theWorld, reducing rate of faulty products, reducing the cost of good sold,increasing 7% productivity than in the year 2006, keeping up the high growthrate of strategic products such as the motor types and tubes as well asmaintaining the growth rate of main product line in stability, enhancing theaverage salary of the whole company over 3 million vnd/ month, fulfilling theduties of delivering tax to the treasury, ensuring a safety at work place alongwith environment sanitation

(Decision43/HDQT on April 1'1, 2006)

BOARD OF DIRECTORS

CEO

Vice president

(1) of

subsidiary

Director of subsidiary

Plant manager IShift boss (Manufactory without Plant manager)

Vice president

Chief of Mechanical

Chief of technique dept.

Labour safety and

environment manager

Chief of Exporting Dept.

Chief of investment department

Chief of material department

Chief of production Plan Dept.

Chief of administration Department

Figure 1.1: Organizational Chart of CASUMINA Corporation

Source: Human resource department's document

The organization is formed by directly function, there's one CEO (chiefexecutive officer) who is responsible directly for the making decisions ofcorporation The vice presidents and chief of function departments playa role

as advisors for the director They implement the proficient assignments andsuggest solution for business matters such as administration, investment,production and so forth They are also responsible to report the result ofbusiness activities to the board of directors Via CASUMINA's organizationstructure model, this is truly a compact organization, which helps decision-making more centrally so that it allows the leaders to use and Improveefficiently their professional knowledge as well as managing abilities

o

B FUNCTION OF EACH DEPARTMENT:

1 Board of directors:

They operate and get a responsibility for the whole company's activities Allimportant decisions in relation to the daily activities or studying, monitoring,analyzing the business activities also competitors of CASUMINA are made bythem in order to built a suitable strategic for the whole company

2 Office departments:

a Selling domestic manufactures department:

The function of this department are introducing, selling products, managing thebase depot, delivering, recovering the debt, investigating the productconsumption market of all regions in Vietnam, doing advertising to polish thebrand name and 'Supporting the selling and consumption

b Selling exporting manufactures department:

The main function of this department is expanding the international economicrelations to seek the opportunity for cooperating, trading not only in domesticbut also in foreign, investigating and researching the oversea market, improvethe prestige and value of the company

c Environment and labor safety department:

The function for this department is to manage and control the labor safety aswell as the working environment of the whole company in order to ensure thatall company's activities complied with the standard and rules of the company.The department also records the industrial accident in the working place,supervises and speeds up method to prevent the industrial accident andindustrial disease

d Mechanical energy department:

This department administer the company's devices, equipment repair

prepare techniques share, necessary machine for a project, and take part in thecorporation initiative board of company.

e Production plan department:

With the role of making and protect the yearly plan or every 5- year plan forcompany, this department makes a specific plan monthly, quarterly for insight

of the company also for enterprises It also prepares a report to summarize theoutcome of doing business, manages the information technology, and makes aplan to develop the short and long- term information technology for company

j Technology Department:

The Technology Department does research, packages, manages the process ofproduction, monitors quality/ environment system, issues and controls theproduct standard, raw materials, supports subsidiaries in technology also inquality management

g Accounting Department:

The tasks of this department are managing the financing-accounting system,effectively consulting for the investment project to the board of directors,checking and taking corrective action as needed in accounting and financingmission as well as suggesting the solutions of finance issue in CASUMINA

h Personnel department:

The functions of the Personnel Department are managing the performingpolicies, working regulations; planning, organizing, staffing, leading,controlling, establishing goal and standard; developing rules and procedures,delegating authority to subordinates; maintaining the morale and motivatingsubordinates; setting standard such as sales quotas, or production level;checking to see how actual performances compares with these standards;determining suitable position for increasing productivity; managing humanforce- salary, wage- fund; storing and rotating official dispatch, documents,records, the seals according to the State regulations

i.Material Department:

The main tasks for this department are purchasing, selling materials indomestic and foreign countries; managing the materials for producing andtrading of the whole company; making a payment with supplier effectively

j Import- export Department:

Import-Export Department main tasks are performing and finishing the export formalities; analyzing and suggesting the solutions to make thesmoothly import and export procedure

import-k Investment Department:

This department is making plan, defending the asking permission projects anddeveloping the assignments after having the permission; coordinating withmechanical energy department to fit up the machinery; instructing thenecessary investment formalities for CASUMINA's subsidiaries

C HUMAN RESOURCE FEATURES IN CASUMINA

1 Distribution by Gender

Percentage of male is higher than females in CASUMINA workforce since this

is an industry required good health The female employees are about 24% oftotal employees They merely concentrate on indirect production parts forinstance technique department, personnel, import-export, accounting, qualityinspection The gender of CASUMINA workforce is represented in the chartbelow:

oFemale DMaie

Chart 1.1: Distribution of Gender

Source: Human resource department

2 Distribution by education level of employee

Most of people working in the office have the university or college degree.Direct workers also have the qualification in the rank of 3/7; the rest has thehigh school diploma The distribution by education level is presented in thestable below:

13.04Technical secondary school 216

secondary school

03 grade technical 01-2 grade technical

• primary

ounskilled primary

Universltyfcollege 3 grade technical

Chart 1.2: Education level of employee

Source: Human resource department

3 Distribution by occupation

The workforce is distributed according to the profession groups The rubberindustry has a largest share of the occupation distribution as indicate in thetable below since Rubber indusuy jobs often requires constant monitoring ofthe machines and processes

Group Number of people Percentage %

• rubber industry Deconomics

oaccounting chemistry mechanics/electricity economics

omechanics/ electricity

Chart 1.3: Distribution by occupation

Source: Human resource department

III BUSINESS ACTIVITIES

1 Main business line:

CASUMINA is leading manufacturers in the Vietnam Rubber Industry,consisting of great factories in the South of Vietnam, CASUMINA specializes

in producing many kind of tires and inner tubes for bicycles, motorcycles,industrial cars, automobile, tractors, and other tuber products such as gloves,rubber accessories, conveyor belts, bridge fenders, dock fenders, etc

CASUMINA has a directly imported and exported function and it can carry outvested import for rubber, chemical, bead wire, nylon cord, sewing-weavingproduct and China products

CASUMINA supplies other manufactures with raw materials; chemical in therubber industry and semi product such as rubber compounds, mixed and tiecord etc

2 Consumption market:

Products of the company are leading the international market and have beenexporting to Germany, France, Sweden, USA, Canada, Brazil, Taiwan, Korea,Japan, Singapore, Malaysia, East European countries, and Africa

The high quality products are exporting over 25 countries on the World

ASIA: Indo-China countries, Japan Korea, Philippine, Iraq, India

EUROPE: France, England, Germany, Russia, Halia, Hungary, Czech

AFRICA: Algeria, Nigeria, Egypt

AMERICA: United State, Canada

AUSTRALIA: Australia

3 The Result of Business Activities

The table below will show the total out put and turnover through past years ofCASUMINA

Table 1.4: Total output and turnover (1997 - 2002)

Source: document from production department

salary/ head

Table 1.5: Total output and turnover (2003 - 2007)

Source: document from production department

Comments/or the result o/business activities

Business trading of CASUMINA over last few years has an outstanding result.Total output and turnover gradually increase year by year even thoughcompany is influenced by many fluctuations of market and tough competitorssuch as: Yokohama from Japan, Brighton from Europe, etc Corporation'sproducts are consumed spaciousness over the whole country especially themotorcycle and bicycle tube tires The scooter tires and other products ofCASUMINA are exported to foreign market and they are accepted quicklybecause of its high quality and well design Although the tax which is given tothe State budget also increased with negligible quantity but somewhatdemonstrates that the strategy of CASUMINA is heading in the right direction

In other to obtain such the accomplishment, there must be the endeavorceaselessly of the board of directors as well as the whole workforce in theindustrial joint stock company Casumina Their efforts are coordinated andtheir combined effort moves the organization in the right direction At present,CASUMINA also applies a number of strategies with a vision to increase theproceeds sale in next few years Based on the data from figure above, we canfind total output value and proceeds of a sale of the corporation The figureshows an upward trend of growth at a dramatically high speed in the last fewyears The value of gross output of the year 2001 and 2002 is 2-3 times incomparison with total value of gross output of the year 1997 and in 2007 thevalue of gross output is nearly 2 times in comparison with 1997 The increasingrate of2001 and 2002's output compare with the 1997's are 230%, and 328%.The corporation's proceeds of sales every year not only can cover the cost, butalso achieves the high profit More over the company's policy also tries toenhance the salary per head in order to assure the standard and stable life forworkers, that is the good point ofCASUMINA We can say that these numbersare very impressive which affirm that the company is heading to the rightdirection for investment as well as development

Chapter 1: Overview of CASUMINA Corporation

In term of development, production is increasing incrementally to meet all themarket demand as well as use the capital source owing from the public toinvest according with the incentive policy and trigger export The corporation'stask is extending and developing production, reducing expenses, investingmodem appliance so as to enhance the product quality Moreover,CASUMINA always tries to intensifY, increase the current outlets along withseeking to develop new markets in order to bring back foreign currency sourcefor our country Beside the aim of increasing the profit, CASUMINA alwaysfulfill its duty to the state, participates in social service and environmentalprotection Besides that, the company is constantly working to enhance qualityoflife for its employee

Thus, after 25 years of developing, CASUMINA has strongly position itself inthe market CASUMINA is also honoured to earn trust from customers It isalso proud of all the achievement in their business activities, such as:

- The first inner tube, tire manufacturing company has the standard ISO

9002 and nearly the ISO 9001

The product meets the standard of Japan JIS K6366, K 6367

The safety standard of America DOT 5G

The development speed is always over 20 percent each year

- CASUMINA with the "red lion" logo is successively voted into theTOPTEN Vietnamese high- quality goods from 1997-2002

Honor to receive several flags and labour medals of government

Through what have already been achieved, CASUSMINA will surely moreand more develop in the future

4 The importance of exporting activities towards the development ofCASUMINA corporations

domestic 225.863 69,63 327.384 81,63 484.324 84,90 +101.52 156.940 Rev from

exporting 54,561 23,74 47.468 11,84 55.356 9,70 -7.093 +7.88 Rev from

others 21.104 6,62 26.180 6,53 33.171 5,81 +5.076 +6.99 Total

revenue 301.527 100 401.031 100 570.475 100 +99.504 +169.44

Table 2.6: The result of business activities

Source: document from production department

From the above data, even though it does not show the significant increase ingross sales but exporting is one of the important activities of the companybusiness In recent years, exporting activities face a strong competition fromoversea companies in the rubber market The countries which have a noticeablecompetition are Japan, India, and China Especially the enterprises from China,these companies still use low quality products to capture a market Besides thefiercely competition from the foreign market, CASUMINA also has to face thesituation that in the domestic market, there exists new similar products that aremade of other materials and the customers tend to use this new product fromthe other suppliers Another difficult is that the corporation's level ofproduction is trying to keep up with the current high-technology demand fromthe world market Even with many challenges, corporation still goes ahead withits development strategy by increasing international sales outlets This direction

is necessary for the corporation's developments in the present day of open-dooreconomy.

4.2 CASUMINA's competing position III enterprises system producing andexporting descendant products from rubber:

In system of exporting products from rubber enterprises, CASUMINA is atypification not only in the region of state-owned enterprises but also incomparison with enterprises belongs to another sector of the economy In 2002,corporation's export turnover was over five million USD Although the figuredoes not seem significantly high in comparison with other industries, it is still

an important milestone that deserves an acknowledgement while mostlyrubbery materials must be imported because the manufacturing technologyleveling at present doesn't allow for refinement

SUMMARY

In conclusion, with the current potential and the continuously endeavour in theway of self assertion, CASUMINA brand name will be admitted in the Worldand become the proud of Vietnamese citizen

In order to set up the effective performance appraisal process the managersshould understand clearly about the theoretical issue In the next chapter, theauthor would like to review some theory accordance with the performanceappraisal which is the base data of analyzing the CASUMINA Corporation'sperformance appraisal

THEORETICAL BASES OF

PERFORMANCE APPRAISAL

Contents

I THE ROLE OF PERFORMANCE APPRAISAL

II RESPONSIBILITY FOR PERFORMANCE APPRAISAL

III TYPICAL PERFORMANCE APPRAISAL METHOD

IV PROBLEMS IN PERFORMANCE APPRAISAL

V CHARACTERISTICS OF EFFECTIVE

PERFORMANCE APPRAISAL SYSTEM

Managers are responsible for acquiring, developing, protecting, and utilizingthe resources that an organization needs to be efficient and effective One of themost important resources is human force who involved in the production anddistribution of goods and services It includes all members of an organization,ranging from top managers to the new entry employees The human resourcedepartment has the duty of using activities engage in to attract, retainemployees and to ensure that they perform at a high level and contribute to theaccomplishment of organizational goals These activities make up anorganization's human resource management system, which has five majorcomponents: recruitment and selection, training and development, performanceappraisal and feedback, pay and benefits, and labor relations.

Figure 2.1: Components of a Human Resource Management System

Each component influences to the others, all components must fill together

I THE ROLE OF PERFORMANCE APPRAISAL

Performance appraisal is not only the means of assessing the employees' salarybut also an effective tool to recognize the performance and achievements ofemployees

management, but it is one of the ranges of tools that can be used to manageperformance Performance management system provides the quality evaluation

of an individual's performance in an organization The appraisal is usuallyprepared by the employee's immediate supervisor rather than human resourceprofessionals because they understand how important of performance appraisalcontributes to performance management Human resource professionals play animportant role in develop and coordinating the appraisal system The proceduretypically requires the supervisor to fill out a standardized assessment form thatevaluates the individual on several different dimensions and then discusses theresults of the evaluation with the employee Performance appraisal meansevaluating an employee's current or past performance relative to the person'sperformance standards2. Appraisal involves:

.: Setting work standards

.: Assessing the employee's actual performance relative to these standards

I Wesley D Balderson, Small Business Management Text, Cases, and Incidents, IRWIN, p 279.

2IR WIN Homewood, D Wesley Balderson Small Business Management Text, Cases, and Incidents.

26

.: Providing feedback to the employee with the aim of motivating thatperson to eliminate deficiencies or to continue to perform.3

Performance appraisal is an important part of performance management Theannual Performance Appraisal is the formalization of the ongoing process ofthe Performance Management5.

~ For the Organization, Performance Appraisals provide the mechanism tocascade organizational strategies, goals and core values down to eachemployee This insures that their efforts are coordinated and their combinedeffort moves the organization in the right direction

~ For Managers; the Performance Appraisal can be a practical and versatilemanagement tool that helps them focus their employees' activities, monitortheir progress, and encourage their development Performance Appraisalsare an opportunity to build and sustain good relationships with employees,and for managers to provide guidance and direction in a fair, non-threatening way

~ For Employees, effective Performance Appraisals can have a positive effect

on morale Employees who know what is expected of them and how theywill be evaluated will approach their work with a better attitude and bettersense of ,responsibility When they have a meaningful Development Plan,they feel more positive about their job and have a sense of influence overtheir future

~ Further it can provide a fair and accurate basis for salary decisions and for-performance programs It is also the mechanism by which we can let our

pay-3Gary Dessler, Human resource management, 9th edition, www.prenhall.com/dessler p.24 I.

employees how they are doing on focused objectives or goals, and knowhow well they are meeting standards or expectations This in turn lets both

of managers and employees develop a plan for correcting any right.Effective performance management makes possible the establishment of anEmployee Development Plan to improve performance in the current job,and prepare employees for future assignments or responsibilities becauseappraising performance provides an opportunity to review the person'scareer plans in light of his or her strengths and weaknesses It provides thevehicle for setting individual objectives and goals for the coming appraisalperiod Finally, appraisals help the manager manages and improves the firmperformance better

1 Human resource planning

Well-managed organizations regularly assess their strength to make sure thatthey have the talent in their ranks for their need in the future Companies need

to determine who and where their most talented members are They have toidentifY the departments that are rich with talent and the ones that are suffering

a talent drought Performance appraisal is a vital tool for the company to makesure they have the intellectual horsepower required for the future

2 Recruitment and selection

Nowadays, finding and keeping competent workers is one of major challengefor most employers Employee turnover is costly, causing workforce instability,reduced efficiency, lower effectiveness, and negative impact on the bottomline Only when the performance of newly hired individuals is assessed can thecompany learn whether it is hiring the right people The performanceevaluation ratings may be helpful in predicting the performance of jobapplicants The determination of the selection test's validity would depend onthe accuracy of appraisal results

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