Human Resources Management

Human resources may be defined as the total knowledge, skills, creative abilities,
talents and aptitudes of an organizations workforce, as well as the values, attitudes,
approaches and beliefs of the individuals involved in the affairs of the organization. It is
the sum total or aggregate of inherent abilities, acquired knowledge and skills represented
by the talents and aptitudes of the persons employed in the organization.

Human Resource Management: Defined

HRM is the maintenance of better human relations in the organization by the
development, application and evaluation of policies, procedures and programs relating to
human resources to optimize their contribution towards the realization of organizational
objectives.
In other words, HRM is concerned with getting better results with the collaboration of
people. It is an integral but distinctive part of management, concerned with people at work
and their relationships within the enterprise.
HRM helps in attaining maximum individual development, desirable working relationship
between employees and employers, employees and employees, and effective modeling of
human resources as contrasted with physical resources. It is the recruitment, selection,
development, utilization, compensation and motivation of human resources by the
organization
Edwin Flippo defines HRM as planning, organizing, directing, controlling of
procurement, development, compensation, integration, maintenance and separation of
human resources to the end that individual, organizational and social objectives are
achieved.(PODC of PDCIMS)
The purpose of HRM is to ensure that the employees of an organization are used in such a
way that the employer obtains the greatest possible benefit from their abilities and the
employees obtain both material and psychological rewards from their work.

HRM is a process of A3+M3+R3

Attracting (advt thru recruitment)
Accumulating (selection)
Absorbing (orientation and Induction)
Maintaining (wages and salary)
Monitoring (perf/Potential appraisal)
Motivating (career/Succession planning)
Retaining (thru Trg and Dev)
Retrenching (implementing rules/regulations)
Retiring/Re-engaging the people in workplace.
HRM is concerned with Recruitment & selection of right quantity & quality of manpower -
to be placed as per their skill and expertise for performing different tasks and assignments
that leads to the achievement of organizational goal.
HRM: Scope
1. Personnel aspect-This is concerned with manpower planning, recruitment, selection,
placement, transfer, promotion, training and development, layoff and retrenchment,
remuneration, incentives, productivity etc.
2. Welfare aspect-It deals with working conditions and amenities such as canteens,
crches, rest and lunch rooms, housing, transport, medical assistance, education, health
and safety, recreation facilities, etc.
3. Industrial relations aspect-This covers union-management relations, joint
consultation, collective bargaining, grievance and disciplinary procedures, settlement of
disputes, etc
HRM : Nature / characteristics
HRM is a process of bringing people and organizations together so that the goals of each
are met. HRM include:
It is omnipresent in nature as it is present in all enterprises.
Its focus is on results rather than on rules.
It tries to help employees develop their potential fully.
It encourages employees to give their best to the organization.
It is all about people at work, both as individuals and groups.
It tries to put people on assigned jobs in order to produce good results.
It helps an orgn meet its goals in the future by providing for competent and well-
motivated employees.
It tries to build and maintain cordial relations between people working at various levels
in the organization.
It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology,
economics, etc.

HRM: Objectives
To help the organization reach its goals.
To ensure effective utilization and maximum development of human resources.
To ensure respect for human beings.
To identify and satisfy the needs of individuals.
To ensure reconciliation of individual goals with those of the organization.
To achieve and maintain high morale among employees.
To provide the organization with well-trained and well-motivated employees.
To increase to the fullest the employees job satisfaction and self-actualization.
To develop and maintain a quality of work life.
To be ethically and socially responsive to the needs of society.
To develop overall personality of each employee in its multidimensional aspect.
To enhance employees capabilities to perform the present job.
To equip the employees with precision and clarity in transaction of business.
To inculcate the sense of team spirit, team work and inter-team collaboration.

HRM : Activities / Functions

1. Human resource or manpower planning.
2. Recruitment, selection and placement of personnel. HRM activity-
3. Training and development of employees. (R E S O U R C E
4. Appraisal of performance of employees. S)
5. Taking corrective steps such as transfer from one job to another. Recruitment
6. Remuneration of employees. Engage
7. Social security and welfare of employees. Socialization
8. Setting general and specific management policy for organizational relationship.
Outsource
9. Collective bargaining, contract negotiation and grievance handling. Utilization
10. Staffing the organization. Remuneration
11. Aiding in the self-development of employees at all levels. Communicatio
12. Developing and maintaining motivation for workers by providing incentives.
n
Evaluation
Separation
13. Reviewing and auditing manpower management in the organization
14. Potential Appraisal.
15. Feedback Counseling.
16. Role Analysis for job occupants.
17. Job Rotation.
18. Quality Circle, Organization development and Quality of Working Life.
HRM: Major Influencing Factors
Size of the workforce.
Rising employees expectations
Drastic changes in the technology as well as Life-style changes.
Composition of workforce. New skills required.
Environmental challenges.
Lean and mean organizations.
Downsizing and rightsizing of the organizations.
Culture prevailing in the organization etc.

Challenges faced by HR managers in 21st century- CHANGE

Competition:
Find a way to minimize your cost of operations. So you can compete globally. As the world
is now a global market, no businessman is out of reach. Your client can hire someone else
for his project instead of you, only because of low rate. This is one of the biggest modern
challenges in management.
HR challenges-
Managing people, who are very different to each other, is also one of the modern
challenges of management. The workforce has never been more diverse. It is commonly
known as workforce diversity and it means that organizations are now fast becoming a
mixture of different age groups, genders, cultures, races and ethnicities. As a manager,
you cannot expect a same rule to be followed by everyone. Since people have different
values, perceptions and personalities, they also have different preferences, needs and
requirements.
Retention of the employees
Multicultural work force
Handicapped employee
Retrenchment for employees
Automation:
Increased productivity will have many tasks to be shifted to automation in new ways. The
old paradigm was to put robots on the assembly line. The new one is likely to incorporate
automation at the high end of processes, and automation of systems management and
design.
Need of the Users-
The need is to create an innovative and entrepreneurial culture that meets the changing
and ever-increasing demands of customers," .That will allow the organization to compete
effectively nationally or internationally.
Change in demand of government: - Most of the time government rules keep
changing. While a lot of freedom is given to companies some strict rules and regulations
have also been passed. The government has also undertaken the disinvestment in certain
companies due to which there is fear among the employees regarding their job. The
challenge before the HR manager lies in convincing employees that their interest will not
be sacrificed.
 Initiating the process of change: - Changing the method of working, changing the
attitude of people and changing the perception and values of organization have become
necessary today. Although the company may want to change it is actually very difficult to
make the workers accept the change.
Globalization:
Increasingly organizations have multi-cultural teams. Team members might work in one
location, or if the company is large enough, they might be in various locations around the
world. It's important for leaders to understand that diversity and meet the different
cultures' needs and requirements
Economic:

Diversified Role of HR Managers Diversified Role of HR Managers

Attracting & Retaining the
talent Liberalizing the employees
Best place to work Managing diversity
Creating competitive Negotiation
environment Optimum utilization of resources
Developing potential Performance and potential
Encouraging participation management
Fair employment Quality control
Generating opportunities Re-engineering
High standards of living Skill & role up gradation
Increasing productivity / Profit Team building
Human Resource Planning
Job satisfaction Unity & coordination
Also called as Manpower Planning consists of putting right number of people, right kind of
people at the right place, right time, doing the right things for which they are suited for
the achievement of goals of the organization.
HRP is a forward looking approach which tries to assess the manpower requirement with
their qualification, experiences, other Terms & conditions in advance keeping in view the
production schedule, mkt demand and fluctuation, competitor strategy, globalization
effect, customers and employee behavior and attitude.
Objectives of HRP-
Forecasting the manpower requirement
Cope up with the changes
Promoting the employees & preparing them to face the challenges

Reserve the talent

Cost cutting

Succession planning

Steps in Manpower Planning

1. Analyzing the current manpower inventory- Before a manager makes forecast of
future manpower, the current manpower status has to be analyzed. For this the
following things have to be noted-
Type of organization, Number and quantity of such departments, Employees in
these work units
2. Making future manpower forecasts- Once the factors affecting the future
manpower forecasts are known, planning can be done for the future manpower
requirements in several work units.
The Manpower forecasting techniques commonly employed by the organizations are as
follows:
Expert Forecasts: This includes informal decisions, formal expert surveys and
Delphi technique.
Trend Analysis: Manpower needs can be projected through extrapolation
(projecting past trends), indexation (using base year as basis), and statistical
analysis (central tendency measure).
Work Load Analysis: It is dependent upon the nature of work load in a
department/branch/division.
Work Force Analysis: Whenever production and time period has to be
analyzed, due allowances have to be made for getting net manpower
requirements.
Other methods: Several Mathematical models, with the aid of computers are
used to forecast manpower needs, like budget and planning analysis, regression,
new venture analysis.
3. Developing employment programmes- Once the current inventory is compared
with future forecasts, the employment programmes can be framed like recruitment,
selection procedures and placement plans.
4. Design training programmes - These will be based upon extent of diversification,
expansion plans, development programmes, etc. Training programmes depend upon the
extent of improvement in technology and advancement to take place.
Importance of Manpower Planning
1. Key to managerial functions- Managerial functions, i.e., planning, organizing,
directing and controlling are based upon the manpower. Human resources help in the
implementation of all these managerial activities.
2. Efficient utilization- Efficient management of HR becomes an important function in
the industrialization world of today. Setting of large scale enterprises requires
management of large scale manpower.

3. Motivation- Staffing function not only includes putting right men on right job, but it
also comprises of motivational programmes, i.e., incentive plans to be framed for
further participation and employment.

4. Better human relations- Human relations become strong trough effective control,
clear communication, effective supervision and leadership in a concern. Staffing
function also looks after training and development of the work force which leads to co-
operation and better human relations.

5. Higher productivity- Productivity level increases when resources are utilized in best
possible manner. higher productivity is a result of minimum wastage of time, money,
efforts and energies. This is possible through the staffing and it's related activities
( Performance appraisal, training and development etc)
Factors affecting the HR planning-
Internal Factors External Factors
Organizational groups Govt policy
HR policy Business environment
 Trade unions Information Technology
Vision-Mission-Culture Act & Statutes
Working conditions
Target
Recruitment
Recruitment can be defined as process of identifying the right sources from where the
required personnel can be shortlisted, scrutinized and the selection process may be
adopted for finalizing the right quality of people for the required positions in the
organization.
Objective of Recruitment
To introduce appropriate selection processes that suit your business
manage your campaigns to ensure that you recruit the right staff
design and deliver interview processes based on your ideal behaviors and
competencies

introduce recruitment-related analysis, allowing you to evaluate your strategy

set up managed preferred supplier relationships with recruitment agencies

provide psychometric tests, personality profiling, and run assessment centers

Factors Influencing Recruitment:
1. Size of the Enterprise:
A big enterprise requires more persons at regular intervals and will always be in touch with
sources of supply and shall try to attract more and more persons for making a proper
selection.
2. Employment Conditions:
In under-developed economies, employment opportunities are limited and at the same
time suitable candidates may not be available because of lack of educational and
technical facilities.
3. Salary Structure and Working Conditions:
The wages offered and working conditions prevailing in an enterprise greatly influence the
availability of personnel. The working conditions determine job satisfaction of employees.
On the other hand, if employees leave the jobs due to unsatisfactory working conditions, it
will lead to fresh recruitment of new persons.
4. Rate of Growth:
An expanding concern will require regular employment of new employees. There will also
be promotions of existing employees necessitating the filling up of those vacancies.

Steps of recruitment-
1. Recruitment Planning:
The first step involved in the recruitment process is planning. Here, planning involves to
draft a comprehensive job specification for the vacant position, outlining its major and
minor responsibilities; the skills, experience and qualifications needed; grade and level of
pay; starting date; whether temporary or permanent; and mention of special conditions, if
any, attached to the job to be filled Searching out the sources from where required
persons will be available for recruitment. If young managers are to be recruited then
institutions imparting instructions in business administration will be the best source
2. Strategy Development:
Once it is known how many with what qualifications of candidates are required, the next
step involved in this regard is to devise a suitable strategy for recruiting the candidates in
the organization.
Developing the techniques to attract the suitable candidates. The strategic
considerations to be considered may include issues like whether to prepare the required
candidates themselves or hire it from outside, what type of recruitment method to be
used, what geographical area be considered for searching the candidates, which source of
recruitment to be practiced, and what sequence of activities to be followed in recruiting
candidates in the organization. The goodwill and reputation of an organization in the
market may be one method. The publicity about the company being a professional
employer may also assist in stimulating candidates to apply.
Using of good techniques to attract prospective candidates. There may be offers of
attractive salaries, proper facilities for development, etc.
3. Searching:
This step involves attracting job seekers or stimulates as many candidates as possible
to apply for jobs to the organization. There are broadly two sources for this- Internal &
External sources.
Main activities involved:
Analyzing job requirement
Advertising the vacancy
Attracting candidates to apply for the job
Managing response
Scrutiny of applications
Short listing candidates
Conducting examination or interview
Making decisions regarding selection

(A) Internal Sources:

Best employees can be found within the organization When a vacancy arises in the
organization, it may be given to an employee who is already on the pay-roll. Internal
sources include promotion, transfer and in certain cases demotion. When a higher post is
given to a deserving employee, it motivates all other employees of the organization to
work hard. The employees can be informed of such a vacancy by internal advertisement.
1. Transfers:
Transfer involves shifting of persons from present jobs to other similar jobs. These do not
involve any change in rank, responsibility or prestige. The numbers of persons do not
increase with transfers.
2. Promotions:
Promotions refer to shifting of persons to positions carrying better prestige, higher
responsibilities and more pay. The higher positions falling vacant may be filled up from
within the organization. A promotion does not increase the number of persons in the
organization. A person going to get a higher position will vacate his present position.
Promotion will motivate employees to improve their performance.
3. Present Employees:
The present employees of a concern are informed about likely vacant positions. The
employees recommend their relations or persons intimately known to them. Management
is relieved of looking out prospective candidates. The persons recommended by the
employees may be generally suitable for the jobs because they know the requirements of
various positions. The existing employees take full responsibility of those recommended by
them and also ensure of their proper behavior and performance.
Advantages of Internal Sources:
1. Improves morale:
When an employee from inside the organization is given the higher post, it helps in
increasing the morale of all employees. Generally every employee expects promotion to a
higher post carrying more status and pay.
2. No Error in Selection:
When an employee is selected from inside, there is a least possibility of errors in selection
since every company maintains complete record of its employees and can judge them in a
better manner.
3. Promotes Loyalty:
It promotes loyalty among the employees as they feel secured on account of chances of
advancement.
4. No Hasty Decision:
The chances of hasty decisions are completely eliminated as the existing employees are
well tried and can be relied upon.
5. Economy in Training Costs:
The existing employees are fully aware of the operating procedures and policies of the
organization. The existing employees require little training and it brings economy in
training costs.
6. Self-Development:
It encourages self-development among the employees as they can look forward to occupy
higher posts.
Disadvantages of Internal Sources:
It discourages capable persons from outside to join the concern.
It is possible that the requisite number of persons possessing qualifications for the
vacant posts may not be available in the organization.
For posts requiring innovations and creative thinking, this method of recruitment
cannot be followed.
If only seniority is the criterion for promotion, then the person filling the vacant post
may not be really capable.
 In spite of the disadvantages, it is frequently used as a source of recruitment for lower
positions. It may lead to nepotism and favoritism.
(B) External Sources:
All organizations have to use external sources for recruitment to higher positions when
existing employees are not suitable. More persons are needed when expansions are
undertaken.
1. Advertisement:
It is a method of recruitment frequently used for skilled workers, clerical and higher staff.
These advertisements attract applicants in large number of highly variable quality.
Preparing good advertisement is a specialized task.
2. Employment Exchanges:
Employment exchanges in India are run by the Government. For unskilled, semi-skilled,
skilled, clerical posts etc., it is often used as a source of recruitment. The job-seekers and
job-givers are brought into contact. 3. Schools, Colleges and Universities:
Direct recruitment from educational institutions for certain jobs (i.e. placement) which
require technical or professional qualification has become a common practice. A close
liaison between the company and educational institutions helps in getting suitable
candidates. The students are spotted during the course of their studies. Junior level
executives or managerial trainees may be recruited in this way.
4. Recommendation of Existing Employees:
Hence some companies encourage their existing employees to assist them in getting
applications from persons who are known to them.
5. Factory Gates:
Certain workers present themselves at the factory gate every day for employment. This
method of recruitment is very popular in India for unskilled or semi-skilled labour.
6. Casual Callers:
Those personnel who casually come to the company for employment may also be
considered for the vacant post. It is most economical method of recruitment. In the
advanced countries, this method is very popular.
7. Central Application File:
A file of past applicants who were not selected earlier may be maintained. In order to keep
the file alive, applications in the files must be checked at periodical intervals.
8. Labour Unions:
In certain occupations like construction, hotels, maritime industry etc., (i.e., industries
where there is instability of employment) all recruits usually come from unions.
9. Labour Contractors:
The contractors keep themselves in touch with the labour and bring the workers at the
places where they are required. They get commission for the number of persons supplied
by them.
10. Former Employees:
In case employees have been laid off or have left the factory at their own, they may be
taken back if they are interested in joining the concern (provided their record is good).
11. Other Sources:
These include special lectures delivered by recruiter in different institutions, video films -
present the story of company to various audiences, thus creating interest in them, trade
shows which attract many prospective employees.
.
 Merits of External Sources:
1. Availability of Suitable Persons:
Internal sources, sometimes, may not be able to supply suitable persons from within.
External sources do give a wide choice to the management. A large number of applicants
may be willing to join the organisation. They will also be suitable as per the requirements
of skill, training and education.
2. Brings New Ideas:
The selection of persons from outside sources will have the benefit of new ideas. The
persons having experience in other concerns will be able to suggest new things and
methods. This will keep the organisation in a competitive position.
3. Economical:
This method of recruitment can prove to be economical because new employees are
already trained and experienced and do not require much training for the jobs.
Demerits of External Sources:
1. Demoralization:
When new persons from outside join the organisation then present employees feel
demoralised because these positions should have gone to them. There can be a heart
burning among old employees. Some employees may even leave the enterprise and go for
better avenues in other concerns.
2. Lack of Co-Operation:
The old staff may not co-operate with the new employees because they feel that their
right has been snatched away by them. This problem will be acute especially when
persons for higher positions are recruited from outside.
3. Expensive:
The process of recruiting from outside is very expensive. It starts with inserting costly
advertisements in the media and then arranging written tests and conducting interviews.
In spite of all this if suitable persons are not available, then the whole process will have to
be repeated.
4. Problem of Maladjustment:
There may be a possibility that the new entrants have not been able to adjust in the new
environment. They may not temperamentally adjust with the new persons. In such cases
either the persons may leave themselves or management may have to replace them.
These things have adverse effect on the working of the organisation.

Basis Recruitment Selection

1. Meaning 1. Makes contact between employers & 1. Picking up more competent &
2. Objective applicants. suitable ones.
3. Process 2. Encourages large number of Candidates 2. Focus at rejecting unfit candidates.
4. Hurdles for a job. 3. It is a complicated process.
5. Approach 3. It is a simple process. 4. Many hurdles have to be crossed.
6. Sequence 4. Candidates have not to cross over many 5. It is a negative approach.
7. Economy hurdles. 6. It follows recruitment.
8. Time 5. It is a positive approach. 7. It is an expensive method.
Consumin 6. It precedes selection. 8. More time is required.
g 7. It is an economical method.
8. Less time is required.

Selection
Is a process of choosing the right type of individual having relevant qualifications, skill,
knowledge, ability and attitude by which the individual can successfully perform the task?
It is a process where the interviewer will match the level of knowledge of the applicant
with the required knowledge to perform the job/ assignment which will ultimately
contribute to the objective of the organization.
Selection also involves a set of activities which are given as under:
Screening
Eliminating unsuitable candidates
Conducting the examination like aptitude test, intelligence test, performance test,
personality test etc.
Interview
Checking References
Medical Test
The process of selection is a time consuming one because the HR managers have to
identify the eligibility of every candidate for the post. Besides this, the educational
qualification, background, age, etc. are also some of the most important factors on which
they have to pay more attention. After this the written examination and interview is also a
very tough task.

PROCESS / STEPS IN SELECTION

1. Preliminary Interview: The purpose of preliminary interviews is basically to

eliminate unqualified applications based on information supplied in application forms. The
basic objective is to reject misfits.
2. Selection Tests: There are various types of tests conducted depending upon the
jobs and the company. These tests can be Aptitude Tests, Personality Tests, and Ability
Tests and are conducted to judge how well an individual can perform tasks related to the
job. Besides this there are some other tests also like Interest Tests (activity preferences),
Graphology Test (Handwriting), Medical Tests, Psychometric Tests etc.
3. Employment Interview: Here interview is a formal and in-depth conversation
between applicants acceptability. It is considered to be an excellent selection device.
Interviews can be One-to-One, Panel Interview, or Sequential Interviews. Besides there can
be Structured and Unstructured interviews, Behavioral Interviews, Stress Interviews.
4. Reference & Background Checks: Reference checks and background checks are
conducted to verify the information provided by the However it is merely a formality and
selections decisions are seldom affected by it.
5. Selection Decision: After obtaining all the information, the most critical step is the
selection decision is to be made. The final decision has to be made out of applicants who
have passed preliminary interviews, tests, final interviews and reference checks.
6. Physical Examination: After the selection decision is made, the candidate is
required to undergo a physical fitness test. A job offer is often contingent upon the
candidate passing the physical examination.
7. Job Offer: The next step in selection process is job offer to those applicants who have
crossed all the previous hurdles. It is made by way of letter of appointment.
8. Final Selection

Training and Development

Training and Development is a combined role often called Human Resources
Development (HRD), meaning the development of human resources to remain
competitive in the marketplace. Training focuses on doing activities today to develop
employees for their current jobs and development is preparing employees for future roles
and responsibilities.
Function of Training
The singular function of training is to produce change. It is the upgrading of a persons skill
or the addition of a new skill, which in turn can bring about the desired change an agency,
is seeking. It is important to understand that training in and of itself cannot motivate a
work force. However, it is integral parts of what is needed to accomplish the long-term
goals of the agency.There are many reasons agencies provide training to their employees:
to foster growth and development
to provide opportunities for employees to accept greater challenges
to aid employees in contributing to the achievement of orgn goals and the agencys
mission and vision
to build employee self-confidence and commitment
to produce a measurable change in performance
to bring about the desired changes that can solve a variety of problems
Benefits of Training
improving an employees performance
developing the group and team skills needed to achieve organizational goals
giving employees the needed skills and knowledge to complete assigned jobs, duties
and tasks
motivating employees to achieve higher standards
increasing overall efficiency
improving customer service, which leads to customer satisfaction
preparing employees for promotional opportunities
decreasing employee turnover, which reduces down time
enhancing employee morale, motivation, and creativity
enabling managers to reach unit goals and objectives
 giving employees the tools needed to analyze interpersonal and situational factors that
create obstacles to achieving high performance

Training Needs Assessment (TNA)

A training analysis is conducted ultimately to identify what areas of knowledge or
behaviors that training needs to accomplish with learners. The analysis considers what
results the organization needs from the learner, what knowledge and skills the learner
presently has and usually concludes with identifying what knowledge and skills the learner
must gain (the "performance gap").
Usually this phase also includes identifying when training should occur and who should
attend as learners. Ideally, criteria are established for the final evaluation of training to
conclude if training goals were met or not.
Depending on the resources and needs of the organization, a training analysis can range
from a very detailed inventory of skills to a general review of performance results. The
more complete the training analysis, the more likely that the employee's training will
ultimately contribute results to the organization.
Note that employees can require training for a variety of reasons, which usually fall into
two categories:
1. Training to fill a "performance gap" as identified during the performance
management process
2. Training to fill a "growth gap", that is, to be promoted or be able to fill another open
position in the orgn

Determining Training Needs

1. Request from employee Employees usually are the first to recognize the need for
additional training. This need can result from the assignment of a new task,
technological changes, or just a realization that additional training would result in a
more efficient work product.
2. Change in agency vision or mission Agency vision and mission can sometimes
change due to state or federal legislation. Thus employees may be assigned new duties
or positions may be restructured. Before assigning new duties and responsibilities to
employees, decide if the employees will need additional training. Remember, the
reason for providing training is to produce a change or provide support so employees
can reach their goals and objectives; thus attaining the agencys vision and mission.
3. Determination through performance management review An excellent time to
determine training needs is when a performance review is completed on employees.
What additional training would be needed to assist employees to meet or exceed job
expectations? Based on the employees self-assessment of identified strengths and
improvement opportunities, an analysis should follow to determine training that may
be needed to improve overall work performance.
There are four types of needs assessment.
- Organizational needs assessment
Organizational needs emerge from agency goals, objectives, and priorities. This type of
need can be universal for all employees, such as reducing stress, improving productivity,
etc.
- Group needs assessment
These types of needs are easier to determine because they are closely related to specific
job levels and categories of employees, such as team-building, problem solving, etc.
- Individual employee needs assessment
The needs uncovered with this type of assessment are more specific and can be easily
identified by reviewing the individuals background, education, training, experience, skills,
knowledge, and past performance. Individual needs are those skills needed to do the
employees current job, future assignments, and career plans.
- Job needs assessment
Based on the job in question, this type of need can be the most difficult or easiest to
identify. Occupational, job, and task analyses are conducted to determine the type of
training needed.
Challenges and Issues
How can we be assured that agency human capital is competent and contributing to their
fullest? Making sure employees are managed, trained, and developed are primary factors
that lead to efficiency and effectiveness. Therefore, how do we do this?
Ensure employees have the necessary skill, knowledge, and experience needed to
match current job descriptions.
Assist employees in achieving performance potential by:
o Assigning effective developmental opportunities.
o Involving employees in an interactive process to improve performance.
o Increasing motivation.
o Developing a harmonious work environment.
Improve work habits by obtaining employee commitment, developing an action
plan, and providing support.
4. Manage employee performance through top-management involvement and role
modeling of performance management practices, ensuring goals are aligned to agency
mission and vision.

Four Steps to Conducting a Needs Assessment

Step 1 -- Perform a "Gap" Analysis
The first step is to check the actual performance of our organizations and our people
against existing standards, or to set new standards. There are two parts to this:
Current Situation
We must determine the current state of skills, knowledge, and abilities of our current
and/or future employees. This analysis also should examine our organizational goals,
climate, and internal and external constraints.
Desired or Necessary Situation
We must identify the desired or necessary conditions for organizational and personal
success. This analysis focuses on the necessary job tasks/standards, as well as the skills,
knowledge and abilities needed to accomplish these successfully. It is important that we
identify the critical tasks necessary, and not just observe our current practices. We also
must distinguish our actual needs from our perceived needs -- our wants. The gap
between the current and the necessary will identify our needs, purposes and objectives.
We need to look for-
Problems or deficits. Are there problems in the organization which might be
solved by training or other HRD activities?
Impending change. Are there problems which do not currently exist but are likely
due to changes, such as new processes and equipment, outside competition and/or
changes in staffing?
 Opportunities: Could we gain a competitive edge by taking advantage of new
technologies, training programs consultants or suppliers?
Strengths: How can we take advantage of our organizational strengths, as
opposed to reacting to our weaknesses? Are there opportunities to apply HRD to
these areas?
New directions: Could we take a proactive approach, applying HRD to move our
organizations to new levels of performance? For example, could team building and
related activities help improve our productivity?
Mandated training: Are there internal or external forces dictating that training
and/or organization development will take place? Are there policies or management
decisions which might dictate the implementation of some program? Are there
governmental mandates to which we must comply?
Step 2 -- Identify Priorities and Importance
The first step should have produced a list of needs for training and development, career
development, organization development and/or other interventions. Now we must
examine these in view of their importance to our organizational goals, realities and
constraints. We must determine if the identified needs are real, if they are worth
addressing, and specify their importance and urgency in view of our organizational needs
and requirements. For example:
Cost-effectiveness: How does the cost of the problem compare to the cost of
implementing a solution? In other words, we perform a cost-benefit analysis.
Legal mandates: Are there laws requiring a solution? (For example; safety or
regulatory compliance.)
Executive pressure: Does top management expect a solution?
Population: Are many people or key people involved?
Customers: What influence is generated by customer specifications and
expectations?
If some of our needs are of relatively low importance, then we would do better to devote
our energies to addressing other human performance problems with greater impact and
greater value.
Step 3 -- Identify Causes of Performance Problems and/or Opportunities
Now that we have prioritized and focused on critical organizational and personal needs, we
will next identify specific problem areas and opportunities in our organization. We must
know what our performance requirements are, if appropriate solutions are to be applied.
We should ask two questions for every identified need:
1. Are our people doing their jobs effectively?
2. Do they know how to do their jobs?
This will require detailed investigation and analysis of our people, their jobs and our
organizations both for the current situation and in preparation for the future.
Step 4 - Identify Possible Solutions and Growth Opportunities
If people are doing their jobs effectively, then perhaps we should leave well enough alone.
(If it aint broke, dont fix it.) However, some training and/or other interventions might be
called for if it's important enough to move our people and their performance in new
directions.
But if our people ARE NOT doing their jobs effectively, then training may be the solution if
there is indeed a knowledge problem.
Organization development activities may provide solutions when the problem is not based
on a lack of knowledge and is primarily associated with systematic change. These
interventions might include strategic planning, organization restructuring, performance
management and/or effective team building
With the right Needs Assessment, you get:
Training Needs Assessment that gives you a consensus of which of those critical skills
are in Need of Training. Some think this is the same as what's important. There is,
and should be, significant overlap between what is important and what is in need of
training. But in some cases, especially in organizations that train well and often,
people have already received extensive training in the most important skills. In other
situations, people want training in skills that aren't critical to strategy, but which are
recognized or rewarded in their organization.
A needs assessment that gives you a consensus of what skills are actually aligned with
strategy in the way the organization Rewards. Without alignment of rewards and

incentives, your training may succeed, but the skills will not be supported by the
workplace when the training is over. The answers to this question help you determine
when to train, and when to wait until organizational reward and support systems are in
place for the new skills.
An assessment that tells you whether people are answering honestly or
"fudging". The Scaled Comparison cannot be unobtrusively manipulated, so decision
makers are alerted to results that look plausible but can't be trusted. The Scaled
Comparison can distinguish between manipulation and simple confusion about what
the questions or skills mean.
A training tool that is a completely custom product. It will ask the questions you
want to ask, about the skills you want to study, using language your people will
recognize as unique to your organization or industry. No off-the-shelf questionnaire or
one with 10 blank spaces at the bottom to put "your" questions.
Types of Training to Provide
There is no pre-determined "check list" regarding the type of training needed to ensure
employees will always meet performance expectations. Since each individual is different,
supervisors will have to make a thorough assessment of the type of training needed.
Human Resource Management Services conducts a yearly training needs assessment to
ensure programs are being offered that meet agency requirements. There are core or
basic training programs needed when a person accepts supervisory or management
positions, such as:
Understanding management, organizational and motivational theory, and application
Planning, setting, and carrying out organizational objectives
Planning and leading effectively
Specific training needed when an individual enters a supervisory position is:
Planning, scheduling, and delegating work assignments.
Communicating, handling conflict, and handling grievance procedures.
Understanding various state and federal employment laws.
Interviewing and completing performance management reviews.
Setting unit goals and objectives.
On-the-job and Off-the-job training
On-the-job training involves learning new skills through experience at work. A new
employee will be given a mentor to help them settle into the organization and to coach
them. The employee is able to try out new skills in real situations. Charles Anderson of
Lloyds Bank argued (Ashridge Journal, April 1994) that due to the complexity of new
products, higher expectations of customers and ever more elaborate and sophisticated
support systems it is simply impossible to prescribe the correct way to handle all possible
situations. On-the-job coaching is the only way for people to learn the necessary skills: by
working with an experienced coach, who can help them to extract the general principles
and issues which lie behind specific incidents.
Off-the-job training involves taking employees away from their jobs to be trained. It
can be done within the companys premises or externally, at courses run by specialist
training groups. Off-the-job training tends to be more expensive due to trainers fees and
because the employees are unable to produce any work while they are away. However, off-
the-job training enables employees to look at a wider variety of approaches and can
provide a refreshing change of scene.
Training and Development Methods
1. Classroom Lecture Method:
This is the most commonly used, simple, cost effective and conventional method. It is time
saving because it covers maximum number of people in a short period of time. It involves
a speech by the instructor with very limited discussions. Clear and direct methods of
presentation. Weaknesses of the method are that, lecture time is more than the normal
human attention span of fifteen minutes and the contents of the lecture could be easily
forgotten. Since the method does not provide for active participation on the part of the
trainees, the extent of take-home learning is not to be known clearly. Moreover, lecture
might be useful only if the presentation is made skillfully. While lecture is a useful method
in so far as information dissemination is the objective, it has not been highly successful in
modifying human behavior or in building commitments in the audiences minds. An
improvisation of this method is the lecture-cum-demonstration method in which the
lecturer reemphasizes a skill or information by displaying the same in action.

2. Group Discussion Method:

It is a method used to knowledge and attitudinal development of trainees. In this method,
sets of people examine several empirical studies to find out commonalities to derive the
underlying general principles. They then combine their ideas and focus their attention on a
given problem at a time, speaking from multiple points of view within a group. An
instructor is optional, while a leader is necessary in this method. The various advantages
of the method are that more ideas can be generated from each session. Moreover each
member gets an opportunity to present ones own ideas and get feedback from members
of the same group. Peer pressure and commitments made to groups serve to ensure
adherence to decisions jointly taken in the group. As a precaution, care must be taken to
secure the participation of all members and make sure that a few members do not pre-
determine the course of discussions or dominate the whole proceedings.

3. Simulation Exercises Method:

Simulators are a group of training devices of varying degrees of complexity that model the
real world. They range from simple paper mock-ups of mechanical devices to
computerized creations of total environments. In fact, some argue that case-study, role-
play and a host of other methods can be brought under the category of simulation. The
advantage of simulation methods is that they improve the possibility of learning without
damaging the equipments or human life or facing the numerous risks involved in actual
performance. For example, most of traffic rules, signals and procedures of driving could be
taught in a park that resembles main road or through a video game featuring car or two-
wheeler driving. Piloting planes are taught using more complex simulations. The methods
are indirect but could also be expensive. The method calls for a certain level of grasp and
information processing capability and transfer of learning on the part of the trainees.

4. Role Playing Method:

Role is a set of expectations around a given position and is determined by the role
partners. Roles are always reciprocal and described in pairs such as trainer-trainee, buyer
seller, interviewer-interviewee and so on. Playing roles would entail practical problems like
inter-role conflicts, intra-role dilemmas, role overloads and role under loads. As a result of
these hurdles, role confusion ensues. In order to be trained to perform roles, trainees must
attain role clarity. This may involve negotiation among the role senders and role receivers
with regard to their expectations with counter expectations upon one another. Participants
in role-play method are required to respond to specific problems and expectations of
people that they might actually encounter in their jobs. Role-playing is often used to teach
such skills as interviewing, negotiating, grievance handling, performance appraisal, and
buying and selling and effective communication. It promotes healthy human relations skills
among people.

5. Case Study Method:

It is a written down, narrative description of a real situation or incident relating to an

organization and its business, depicting any problem that participants could face in their
employment. Participant trainees are required to propose any number of viable solutions
or decisions that match the variables represented in the case. Case study can be interest
creating and thought stimulating for the participants. It helps to develop analytical,
reasoning and problem-solving skills of the participants. As it shows and reduces gaps in
understanding, a holistic understanding of reality is made possible through case study
method. It also helps to reemphasize messages provided during lectures, group
discussions and other methods. The disadvantage of the method might be the difficulty in
drawing adequate number of stimulating cases that actually represent the real life
situations of the trainees.

6. Sensitivity Training or T Group Training or Laboratory training Method:

It is a set of experiences in unstructured agenda-less groups designed to make people
aware of themselves (self-insight), their immediate situation and their own impact on
others. Unlike many other programs, T-groups are concerned with the real problems
existing within the group itself. People are helped to become more responsive to others
sensitivities and work more harmoniously and responsibly together by encouraging them
to interact freely and actively. The members are enabled to recognize group dynamics and
diagnose human relationship problems. The participants are encouraged to communicate
thoughts and feelings with each other in an open, unstructured, warm and honest manner
than is typically done in the usual work or social situation. A beneficial outcome of the
method is that participants find better means of behavior for effective interpersonal
relationships without the aid of power or authority over others. The method has to be used
carefully as people may resent negative feedback and show anger in response. People
have to be first prepared well to accept criticism in a constructive manner so that conflicts
could be managed properly.

7. Management Games Method:

Games are used as a training tool, than as mere pastimes or amusement. Trainees are
divided into teams and are given common tasks on which they would be competing to
arrive at decisions, and then jointly implementing and evaluating the decisions taken with
regard to the games. For example, blocks of wood would be supplied to every team and
one of the members would be blind-folded with a piece of cloth. The person would have to
arrange the blocks one above the other, as per the instructions and guidance of the other
members. As they set on to reach greater target heights, the rewards would also grow
exponentially. This game is used to bring out the nuances of teamwork, leadership styles
and communication patterns exhibited by the members while playing the game. The
demerits of the method are that, at times, games might result in lack of seriousness in
some trainees and that the learning is indirect and slow. But it helps to convey messages
in a non-threatening and fun-filled manner.

8. Outward Bound Training (OBT) Method:

As part of OBT, managers and other staff members meet and cohabitate as teams at
unfamiliar wilderness out of the workplace and away from the hustles and bustles of daily
life, where they would live in cabins or tents for a certain number of days. They test their
survival skills and learn about their own personality and hidden potentials for creativity,
cooperation and leadership. Participants get opportunities to learn their limits and
capabilities. Participants irrespective of their official position and seniority would have to
learn to be natural in their behavior and get rid of masks worn in an office situation. It is
an expensive method and the learning might not be transferable to others or to other
situations.

9. In -basket Training (IBT) Method:

IBT is a method where the trainee is required to examine a basket full of papers and files
relating to his area of work and make recommendations on problems contained in them.
This method is meant for trainees in a managerial level to improve their decision-making
and problem-solving abilities. This is a form of simulation training designed around day to-
day business situations and hence is transferable to the job experiences. The participant is
usually asked to establish priorities for and then handle a number of office papers, such as
memoranda, reports, telephone messages and emails that would typically cross a
managers desk. The method has at least two main stages. At the outset, the participant
starts by working through the case within a specified time limit all by himself without
discussing the details with anyone. Subsequently, other participants analyze and discuss
the questions of whos, whichs, hows, whats, wheres, whys and whens of each decision
or step. The merits of this method include the best of traditional case study at the same
time combining the refinements to allow greater flexibility, realism and involvement.
The emphasis here is to understand things thoroughly, which is an opportunity too rarely
presented during busy working days. It is done in a permissive atmosphere of
experimenting and learning, rather than within the confines of a boss subordinate
relationship.

10. Vestibule Training Method:

This kind of training takes place away from the production area on equipment that closely
resembles the actual ones used on the job. It is a type of off-the-job training in which
employees get training in a realistic job setting but in a location different from the one in
which they would be working. For example, a group of lathes may be located in a training
center where the trainees will be instructed in their use. The method is used frequently for
training typists and bank tellers, among others. The word vestibule means entrance.
Thus vestibule training serves to facilitate full-fledged entry into job. A primary advantage
of vestibule training is that it removes the employee from the pressure of having to
produce while learning. Disturbance of production or supervisor during training is
minimized. The disadvantages include the extra investment on equipment and additional
persons to be employed as trainers.

11. Apprenticeship Training Method:

It combines classroom instructions with on-the-job training. It is a method in which
trainees at a novice stage called apprentices, work under the guidance of skilled,
licensed instructor and receive lower pay than workers. The method is a combination of
education and employment and is aimed at preparing workforce with certain levels of
qualification to meet the growing needs of the industry. The method develops special skills
like mechanical, electronic, tailoring, etc. Apprenticeship is traditionally used in skilled
jobs, such as those of plumber, carpenter, machinist and printer. The extensive nature of
the training assures quality outputs, though time consumed is long. Employees recruited
from the apprenticeship program are expected to hit the ground running, implying that
they would have to start performing with efficiency. But uniform duration of apprenticeship
training does not permit slow learners to reach the levels of mastery like others.

12. Work shadowing Method:

This training method is chosen while preparing a second-line leader to take up the role of
the headship, in which case, the candidate could not benefit by sending them to any other
formal training program. The best way to be trained for a future executive position would
be through direct participant observation of the crucial events that take place in the
present incumbents work life. The trainees are made to remain in the company of the role
model whose work is to be learnt by the trainees. Trainees learn the intricacies of a job of
high level, by physically being in the presence of the job-holder. Closely following the
styles of working permits greater degree of learning besides helping the trainee to imbibe
the values and principles adhered to by the model. Yet, care needs to be taken to avoid
situations wherein trainees are not warmly welcomed and are seen by supervisors in the
department as obstacles to their routines.

13. Programmed Instruction Method (PIM):

PIM provides instruction without the face-to-face intervention of an instructor. To ensure a
sequential approach to learning, instructions are designed in such a way that all future
learning depends on acquisition and retention of previous learning. With this method,
information is broken down into small portions called frames. The learner reads each
frame in sequence and responds to questions designed to verify learning. Based on the
answers given by the trainees they are provided with immediate feedback on response
accuracy. If the learners have got all the answers right, they proceed to the next frame. If
not they repeat the frame. Primary features of this approach are immediate reinforcement
and the ability of learners to proceed at their own pace. Programmed instructions may be
presented in a book or in computers.

14. Large Scale Interactive Events (LSIE) Method:

The method has a lot of unique advantages when compared to other methods. First, this method
stresses upon the sharing of expertise by all the participants, unlike other methods where the
instructor supplies most of the inputs and might even look down upon trainees as people who are
ignorant or unskilled in the topic being covered. LSIE is based on the belief that all the participants,
by virtue of being in their job for a certain period of time, possess some degree of expertise that
need to be shared and combined with that of others.
Second advantage is that this method transcends the limitation of other methods in terms of the
number of people who could be trained per batch. The major advantage of this method is that a
group as large as 300 400 members could be trained simultaneously without losing the
effectiveness of other training methods. The third advantage is the use of group processes. While
the trainer limits his role with a brief but inspiring presentation to stimulate thinking of the
participant, the methods paves way for active involvement of all the participants who are assigned
various roles such as sub-group leader, recorder, summarizer, presenter etc. A fourth advantage of
the LSIE is that the group emphasizes on extensive on-the-spot documentation of viewpoints
expressed by people. Finally, the method culminates in the entire large group addressing to the
common issues. At this stage, priority is to be set on areas of intervention and a plan of action is
drawn and accepted based on voting by members, thereby building commitment of all the
participants to implement the agreed upon plans. A disadvantage of the method could be that it
requires a lot of volunteers to assist the proceedings .

15. Personal Coaching Method:

It is an on-the-job approach in which a manager has the opportunity to teach an employee,
usually his immediate subordinate, on a one-to-one basis. Coaching is helping self and
others gain new perspectives their intentions and behaviors, to understand whats
possible and how to access inner resources such as motivation, commitment, passion, etc.
as a coach, the supervisor gently confronts employees with their shortcomings and makes
suggestions for corrective actions. The supervisor is also alert to encouraging good
performance. Coaching is considered to be one of the most effective management
development techniques. Constant guidance makes the trainee learn quickly.

16. Mentoring Method:

Mentoring is an on-the-job approach to training in which the trainee is given an
opportunity to learn on a one-to-one basis from more experienced members of the
organization. The mentor is usually an older, experienced executive who serves as a host,
friend, confidant and advisor to a new member of the firm. The mentor is given the charge
of protecting and responsibility of helping the new employee. The relationship may be
formally planned or it may develop informally. For mentoring to be productive, the parties
interests must be compatible and they must understand each others learning styles and
personalities. If mentors form overly strong bonds with trainees, unwarranted favoritism
might result. A highly successful mentor-protg relationship might create feelings of
jealousy among other colleagues who are not able to show equally good results out of the
mentoring process.
 17. Job Rotation Method:
This method of training involves the shifting of trainees from one job to another so as to
widen their exposure and enable them to obtain a general understanding of the totality of
the organization. Besides helping them to overcome boredom, job rotation permits direct
interaction with a large number of individuals within the organization, thereby facilitating
future working relationships. The method should be used at sufficient gaps to permit the
development of a strong degree of expertise in the trainee in an assigned position. Care
should be taken by the organization to ensure that work efficiency does not suffer when a
few trainees are rotate into new jobs where they would be taking time to learn and
perform. There could be some disadvantages of using the method of Job Rotation. Trainees
have to be prepared to face contrasting styles of operation and standards that vary
according to superiors. Some trainees might feel more like visiting casual observers in the
departments than being a part of the workforce, which would negate the purpose of job
rotation. Employees who are looking for more challenging assignments might feel
frustrated when asked to perform different kinds of simple jobs at the same level.
18. Computer-Based Training (CBT) Method:
CBT is a technology-driven training method that takes full advantage of the speed,
memory and data manipulation capabilities of the computer for greater flexibility of
instruction. It involves the trainee sitting in front of a computer terminal rather than
listening to an instructor. Learning is enhanced through presentations combining
automation, stereophonic sound, full motion video and graphics. Increased speed and
decreased dependence on instructor are the strengths of this method. Computer-Managed
Instructions (CMI) is a system that automatically generates and scores tests, tracks
trainees performance and prescribes activities for students. An orderly, step-by-step
manner is possible by using this method. As additional advantages, CBT allows reuse of
the program for any number of time and allows for varying time for fast and slow learners.
But CBT method cannot reduce the learners anxiety and fear, which can be done only by
a trained instructor. CBT is well suited for teaching facts but is less useful for teaching
human skills or changing attitudes.
19. Behavior Modeling Method:
This method involves emulation of behavior from a reference group or a role model whose behavior
is shown live before the trainees or by using videotapes or Compact discs (VCD). The method
entails recording and producing events or situations with clear descriptions in order to cover certain
subjects. The footage could be viewed, reviewed and discussed to enhance learning quality. The
advantages of using this method are many. Many events and discussions can be put on one tape or
CD. It is a handy method for small firms that cannot afford more expensive approaches. It is
particularly helpful for first-line supervisors. Observing a powerful model in the audiovisual form
could help learn activities like mediating during conflict situations, handling customer complaints
and grievances. The challenges involved in using the method include the high level of one-time
production costs in the initial stage. Moreover, projectors and other expensive gadgets would be
required along with continuous power supply.
20. Internship Method:
Internships involve placing young college and university students in temporary jobs in which they
can earn while they learn, with no obligations towards any regular employment from the side of the
employer or from the trainee. Such an arrangement enables to provide a fresher the much-needed
exposure to an organization and also to determine the person organization fit. Students divide their
attention between academic activities and practical work assignments, which help them to
internalize the theory and practices. However, care must be taken to prevent the whole process
from getting reduced to the fulfillment of merely an academic requirement rather than being
treated as a stepping-stone towards an illustrious career.
21. Development Centre Method:
This method is designed based on the structure, styles and contents of assessment centers used to
assess the potential of an individual to meet the demands of a higher-level managerial position.
Multiple facilitators observe the members performing multiple tasks according to multiple criteria,
using multiple methods. However, the difference in development centers is that they focus their
attention on helping to improve the potential of the persons participating in the sessions. This
method of training is found effective in building leadership, decision-making, goal setting and
counseling skills in experienced trainees.

BASIS FOR COMPARISON TRAINING DEVELOPMENT

Meaning Training is a learning process Development is an
in which employees get an educational process in which
opportunity to develop skill, the personnel of the
competency and knowledge organization get the chance
as per the job requirement. to learn the in depth
application of theoretical
knowledge for their overall
growth.
Term Short Term Long Term
Focus on Present Future
Concentrated towards Job Career
Instructor Trainer Self
Objective To improve the work To prepare employees for
performances of the future challenges.
employees.
Number of Individuals Many Only one
Aim Specific job related Conceptual and general
knowledge

PERFORMANCE APPRAISAL
People differ in their abilities and their aptitudes. There is always some difference between
the quality and quantity of the same work on the same job being done by two different
people. Therefore, performance management and performance appraisal is necessary to
understand each employees abilities, competencies and relative merit and worth for the
organization. Performance appraisal rates the employees in terms of their performance.
A performance appraisal is a systematic and periodic process that assesses an
individual employee's job performance and productivity in relation to certain pre-
established criteria and organizational objectives.
Performance appraisal is necessary to measure the performance of the employees and the
organization to check the progress towards the desired goals and aims.
The latest mantra being followed by organizations across the world being get paid
according to what you contribute the focus of the organizations is turning to
performance management and specifically to individual performance. Performance
appraisal helps to rate the performance of the employees and evaluate their contribution
towards the organizational goals. If the process of performance appraisals is formal and
properly structured, it helps the employees to clearly understand their roles and
responsibilities and give direction to the individuals performance. It helps to align the
individual performances with the organizational goals and also review their performance.
Performance appraisal takes into account the past performance of the employees and
focuses on the improvement of the future performance of the employees.
The performance appraisal system should:
Be correlated with the organizational mission, philosophies and value system;
Cover assessment of performance as well as potential for development;
Take care of organizational as well as individual needs; and
Help in creating a clean environment by
- Linking rewards with achievements,
- Generating information for the growth of the employee as well as of the
organization, and
- Suggesting appropriate person-task matching and career plans.
Feedback is an important component of performance appraisal. While positive feedback is
easily accepted, negative feedback often meets with resistance unless it is objective,
based on a credible source and given in a skilful manner.

Objectives of Performance Appraisal

1. Promotions
2. Confirmations
3. Training and Development- strengths and weaknesses of employees to place right
men on right job
4. Compensation reviews- compensation packages, wage structure, salaries raises, etc
5. Competency building- potential present in a person for further growth and
development
6. Improve communication- feedback to employees regarding their performance and
related status
7. Evaluation of HR Programs- review and retain the promotional and other training
programmes
8. Feedback & Grievances- basis for influencing working habits of the employees

Advantages of Performance Appraisal

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be
dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages
for employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which include
 bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent
on performance appraisal. The criteria should be merit rather than seniority.

3. Employees Development: The systematic procedure of performance appraisal helps

the supervisors to frame training policies and programmes. It helps to analyze
strengths and weaknesses of employees so that new jobs can be designed for efficient
employees. It also helps in framing future development programmes.

4. Selection Validation: Performance Appraisal helps the supervisors to understand the

validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future
changes in selection methods can be made in this regard.

5. Communication: For an organization, effective communication between employees

and employers is very important. Through performance appraisal, communication can
be sought for in the following ways:

a. Through performance appraisal, the employers can understand and accept skills
of subordinates.

b. The subordinates can also understand and create a trust and confidence in
superiors.

c. It also helps in maintaining cordial and congenial labour management

relationship.

d. It develops the spirit of work and boosts the morale of employees.

Characteristics of an Appraisal System

Goal focused.
Reliable and consistent.
Practical and simple format
Regular and routine.
Participatory and open.
Rewards Rewards -.
Feedback should be timely , Impersonal and must be noticeable.
Relevance and responsiveness
Commitment
Performance Appraisal Process
1. Objectives definition of appraisal
2. Job expectations establishment
3. Design an appraisal program
4. Appraise the performance
5. Performance Interviews
6. Use data for appropriate purposes
7. Identify opportunities variables
8. Using social processes, physical processes, human and computer assistance
WHO WHAT WHEN HOW WHY(objective)
Senior BEHAVIOUR Yearly Tradition PERFORMANCE
Self Belief/ethics/habit/attitude/value/in Half al Promotion/Encourage/Rem
Subordin tegrity/observation/understanding yearly methods uneration/Feedback/Occup
ate & role Quarterly Modern ational
Peers OUTCOME -Operating style/Use of Monthly methods analysis/Recognition/Motiv
resources/Timely output/Customer Daily ation/Awareness of
satisfaction/Objective weakness/Need for
oriented/Maintain trg/Competition/Empower
quality/Encourage participation ment

TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS

Performance appraisal is a multistage process involving several activities, which can be
administered using a variety of approaches.
Intuitive approach In this approach, a supervisor or manager judges the employee
based on their perception of the employee's behavior.
Self-appraisal approach Employees evaluate their own performance using a common
format.
Group approach The employee is evaluated by a group of persons.
Trait approach This is the conventional approach. The manager or supervisor evaluates
the employee on the basis of observable dimensions of personality, such as integrity,
honesty, dependability, punctuality, etc.
Appraisal based on achieved results In this type of approach, appraisal is based on
concrete, measurable, work achievements judged against fixed targets or goals set
mutually by the subject and the assessor.
Behavioral method This method focuses on observed behavior and observable critical
incidents.

Appraisal techniques
Numerous methods have been devised to measure the quantity and quality of
performance appraisals. Each of the methods is effective for some purposes for some
organizations only. None should be dismissed or accepted as appropriate except as they
relate to the particular needs of the organization or an employee.
Broadly all methods of appraisals can be divided into two different categories.
Traditional methods- Past Oriented Methods
Unstructured methods
Essay appraisal method
The assessor writes a brief essay providing an assessment of the strengths, weaknesses
and potential of the subject. In order to do so objectively, it is necessary that the assessor
knows the subject well and should have interacted with them. Since the length and
contents of the essay vary between assessors, essay ratings are difficult to compare.
Field review method
This is an appraisal done by someone outside employees own department usually from
corporate or HR department. (To overcome this assessor-related bias) In the field review
method, 'a member of the HRM staff meets a small group of assessors from the
supervisory units to discuss each rating, systematically identifying areas of inter-assessor
disagreement.' It can then be a mechanism to help each assessor to perceive the
standards uniformly and thus match the other assessors. Although field review assessment
is considered valid and reliable, it is very time consuming.
Advantages Useful for managerial level promotions, when comparable information is
needed, Disadvantages Outsider is generally not familiar with employees work
environment, Observation of actual behaviors not possible.
Performance Tests & Observations: This is based on the test of knowledge or skills.
The tests may be written or an actual presentation of skills. Tests must be reliable and
validated to be useful. Advantage Tests may be apt to measure potential more than
actual performance. Disadvantages Tests may suffer if costs of test development or
administration are high.
Confidential Records: Mostly used by government departments, however its application
in industry is not ruled out. Here the report is given in the form of Annual Confidentiality
Report (ACR) and may record ratings with respect to following items; attendance, self
expression, team work, leadership, initiative, technical ability, reasoning ability, originality
and resourcefulness etc. The system is highly secretive and confidential. Feedback to the
assessee is given only in case of an adverse entry. Disadvantage is that it is highly
subjective and ratings can be manipulated because the evaluations are linked to HR
actions like promotions etc. It is used for promotion and transfer of an employee and is
prepared by the immediate superior who describes in detail the strength and weaknesses
along with major achievements and failures of the employee. The personality and behavior
of the employee also find mention in this report.
Essay Method: In this method the rater writes down the employee description in detail
within a number of broad categories like, overall impression of performance, promote
ability of employee, existing capabilities and qualifications of performing jobs, strengths
and weaknesses and training needs of the employee. Advantage It is extremely useful in
filing information gaps about the employees that often occur in a better-structured
checklist. Disadvantages It its highly dependent upon the writing skills of rater and most
of them are not good writers. They may get confused success depends on the memory
power of raters. As the name suggests the appraiser write a short essay detailing the
performance of the employee. It is a very time consuming method and is prone to buys
also as specific performance dimensions are not considered. The quality of appraisal also
depends on the writing skills of the appraiser. It is also difficult to compare two Essay
appraisals as there is no common criterion for the appraiser.
Forced-choice rating method
Unlike the field review method, the forced-choice rating method does not involve
discussion with supervisors. Although this technique has several variations, the most
common method is to force the assessor to choose the best and worst fit statements from
a group of statements. These statements are weighted or scored in advance to assess the
employee. The scores or weights assigned to the individual statements are not revealed to
the assessor so that she or he cannot favour any individual. In this way, the assessor bias
is largely eliminated and comparable standards of performance evolved for an objective.
However, this technique is of little value wherever performance appraisal interviews are
conducted.

Critical incident appraisal method

In this method, a supervisor describes critical incidents, giving details of both positive and
negative behaviour of the employee. The approach is focused on certain critical behaviors
of employee that makes all the difference in the performance. Supervisors as and when
they occur record such incidents. These are then discussed with the employee. The
discussion focuses on actual behavior rather than on traits. While this technique is well
suited for performance review interviews, it has the drawback that the supervisor has to
note down the critical incidents as and when they occur. That may be impractical, and
may delay feedback to employees. It makes little sense to wait six months or a year to
discuss a misdeed, a mistake or good display of initiative. . Advantages Evaluations are
based on actual job behaviors, ratings are supported by descriptions, feedback is easy,
reduces recency biases, chances of subordinate improvement are high. Disadvantages
Negative incidents can be prioritized, forgetting incidents, overly close supervision;
feedback may be too much and may appear to be punishment.

Forced Distribution Method:

Specific and limited options were given to identify the individual achievement. Here
employees are clustered around a high point on a rating scale. Rater is compelled to
distribute the employees on all points on the scale. It is assumed that the performance is
conformed to normal distribution. Advantages Eliminates Disadvantages Assumption of
normal distribution, unrealistic, errors of central tendency. In this method the evaluator is
required to distribute his rating in the form of normal frequency distribution. Employees
are shown in categories that range from poor to excellent by the evaluator. This method
was evolved by Joseph Tiffin but it also suffers from certain limitations as the performance
criteria related to a job are not used and the reasons for assigning a category to particular
employee are not clear.

Ranking methods
This is the old and simplest method of performance appraisal. In this method ranks are
assigned relatively to all the employees working in the same unit and doing the same job
without analyzing their performance. The method biased as the ranking is not based on
the specific performance measures of a job. It can be cumbersome if the number of
employees is very large. The other limitations of this method are that it only tells how an
employee stands in comparison with other employees.
Ex- ABCDE are asked to rank all the rest in their group and then the sum and averages are
calculated to make the ranking
(a) Alteration ranking method The individual with the best performance is chosen as
the ideal employee. Other employees are then ranked against this employee in
descending order of comparative performance on a scale of best to worst performance.
The alteration ranking method usually involves rating by more than one assessor. The
ranks assigned by each assessor are then averaged and a relative ranking of each
member in the group is determined. While this is a simple method, it is impractical for
large groups. In addition, there may be wide variations in ability between ranks for
different positions.
(b) Paired comparison The paired comparison method systematizes ranking and enables
better comparison among individuals to be rated. Every individual in the group is
compared with all others in the group. The evaluations received by each person in the
group are counted and turned into percentage scores. The scores provide a fair idea as to
how each individual in the group is judged by the assessor.
(c) Person-to-person rating In the person-to-person rating scales, the names of the
actual individuals known to all the assessors are used as a series of standards. These
standards may be defined as lowest, low, middle, high and highest performers. Individual
employees in the group are then compared with the individuals used as the standards, and
rated for a standard where they match the best. The advantage of this rating scale is that
the standards are concrete and are in terms of real individuals. The disadvantage is that
the standards set by different assessors may not be consistent. Each assessor constructs
their own person-to-person scale which makes comparison of different ratings difficult.
(d) Checklist method The assessor is furnished with a checklist of pre-scaled descriptions
of behavior, which are then used to evaluate the personnel being rated. The scale values
of the behavior items are unknown to the assessor, who has to check as many items as
she or he believes describe the worker being assessed. A final rating is obtained by
averaging the scale values of the items that have been marked. Under this method,
checklist of statements of traits of employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or checking and HR department does the
actual evaluation. Advantages economy, ease of administration, limited training
required, standardization. Disadvantages Raters biases, use of improper weighs by HR,
does not allow rater to give relative ratings.

Rating Scales: Multiple parameters are used to rate a person/organization, gives a

clear picture of the individuals performance. Rating scales consists of several numerical
scales representing job related performance criterions such as dependability, initiative,
output, attendance, attitude etc. Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are derived. Advantages
Adaptability, easy to use, low cost, every type of job can be evaluated, large number of
employees covered, no formal training required. Disadvantages Raters biases
Graphic rating scale/Group appraisal method: Employees are rated by
a group of people comprising the immediate supervisor of the employee and other
supervisor who have the knowledge of the employee work along with the concerned head
of the department and a personnel expert. This group determines the standards and then
measures the actual performance of the employee. It suggests creative measures after
analyzing the causes of poor performance. Though it is a time consuming method, it is
free from bias.
A graphic scale 'assesses a person on the quality of his or her work (average; above
average; outstanding; or unsatisfactory).' Assessment could also be trait centered and
cover observable traits, such as reliability, adaptability, communication skills, etc.
Although graphic scales seem simplistic in construction, they have application in a wide
variety of job responsibilities and are more consistent and reliable in comparison with
essay appraisal. The utility of this technique can be enhanced by using it in conjunction
with the essay appraisal technique. In this method a numerical scale is used which
indicates different degrees to a particular trait. These traits can be initiative,
dependability, creativity attitude, loyalty, emotional stability and co-ordination. The
evaluator gives a particular ranking on each trait to every employee. Two types of rating
scales are used: Continuous and discontinues. In first type degree of a trait is measure
along a continuum like 0 1 2 3. IN discontinues rating scale boxes are used to show the
different degrees of the traits like (I) no interest (II) indifferent (III) Interesting (IV)
enthusiastic (V) very enthusiastic

Modern Methods- Future Oriented Methods

Management By Objectives (MBO)
1. Organizational objectives are set along with Individual skill level/potential identified and
tasks and responsibilities are agreed upon. This avoids the feeling among employees
that they are being judged by unfairly high standards. The employees are asked to set
or help set their own performance goals.
2. Individual requirements are also assessed.
3. Dependency (interdependency/relationship) among other department and personnel
are also identified and established.
Performance is rated against the achievement of objectives stated by the management.
MBO process goes as under.
Establish goals and desired outcomes for each subordinate
Setting performance standards
Comparison of actual goals with goals attained by the employee
Establish new goals and new strategies for goals not achieved in previous year.
Advantage It is more useful for managerial positions.
Disadvantages Not applicable to all jobs, allocation of merit pay may result in setting
short-term goals rather than important and long-term goals etc.
To avoid such problems, the work standard approach is used.
Work standard approach
In this technique, management establishes the goals openly and sets targets against
realistic output standards. These standards are incorporated into the organizational
performance appraisal system. Thus each employee has a clear understanding of their
duties and knows well what is expected of them. Performance appraisal and interview
comments are related to these duties. This makes the appraisal process objective and
more accurate. However, it is difficult to compare individual ratings because standards for
work may differ from job to job and from employee to employee. This limitation can be
overcome by some form of ranking using pooled judgment.
Assessment Development Centers
Process of examining individual capabilities by application of multiple techniques and by
multiple assessors. Multiple techniques like In basket exercise, Ice breaking,
Brainstorming, Simulation, Role play etc are made in order to make the trainees
accumulate and correlate to the organizational culture.
This technique is used to predict future performance of employees were they to be
promoted. The individual whose potential is to be assessed has to work on individual as
well as group assignments similar to those they would be required to handle were they
promoted. The judgment of observers is pooled and paired comparison or alteration
ranking is sometimes used to arrive at a final assessment. The final assessment helps in
making an order-of-merit ranking for each employee. It also involves subjective judgment
by observers.
An assessment center is a central location where managers may come together to have
their participation in job related exercises evaluated by trained observers. It is more
focused on observation of behaviors across a series of select exercises or work samples.
Assessees are requested to participate in in-basket exercises, work groups, computer
simulations, role playing and other similar activities which require same attributes for
successful performance in actual job. The characteristics assessed in assessment center
can be assertiveness, persuasive ability, communicating ability, planning and
organizational ability, self confidence, resistance to stress, energy level, decision making,
sensitivity to feelings, administrative ability, creativity and mental alertness etc.
Disadvantages Costs of employees traveling and lodging, psychologists, ratings strongly
influenced by assessees inter-personal skills. Solid performers may feel suffocated in
simulated situations. Those who are not selected for this also may get affected.
Advantages well-conducted assessment center can achieve better forecasts of future
performance and progress than other methods of appraisals. Also reliability, content
validity and predictive ability are said to be high in assessment centers. The tests also
make sure that the wrong people are not hired or promoted. Finally it clearly defines the
criteria for selection and promotion.
Behaviorally anchored rating scales (BARS) This is a relatively new technique. It
consists of sets of behavioral statements describing good or bad performance with respect
to important qualities. These qualities may refer to inter-personal relationships, planning
and organizing abilities, adaptability and reliability. These statements are developed from
critical incidents collected both from the assessor and the subject. Statements of effective
and ineffective behaviors determine the points. They are said to be behaviorally anchored.
The rater is supposed to say, which behavior describes the employee performance.
Advantages helps overcome rating errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

360-Degree Feedback: It is a technique which is systematic collection of performance

data on an individual group, derived from a number of stakeholders like immediate
supervisors, team members, customers, peers and self. In fact anyone who has useful
information on how an employee does a job may be one of the appraisers. This technique
is highly useful in terms of broader perspective, greater self-development and multi-source
feedback is useful. 360-degree appraisals are useful to measure inter-personal skills,
customer satisfaction and team building skills. However on the negative side, receiving
feedback from multiple sources can be intimidating, threatening etc. Multiple raters may
be less adept at providing balanced and objective feedback

A performance appraisal system could be designed based on intuition, self-analysis,

personality traits, behavioral methods and result-based techniques. Different approaches
and techniques could be blended, depending on the goals of performance appraisal in the
organization and the type of review. For example, management by objectives, goal-setting
and work standard methods are effective for objective coaching, counseling and
motivational purposes. Critical incident appraisal is best suited when supervisor's personal
assessment and criticism are essential. A carefully developed and validated forced-choice
rating can provide valuable analysis of the individual when considering possible promotion
to supervisory positions. Combined graphic and essay form is simple, effective in
identifying training and development needs, and facilitates other management decisions

Potential Appraisal is another powerful tool of employee development. Method to

identify the individual skill level which can be utilized when the situation arises. The ability
is identified on the basis of the past performance or achievement. It is futuristic and skill
level is nurtured and reserved so that it can be used to face the unforeseen challenges.
The skill inventory is kept for use in crisis situations. Whether managers realize it or not,
they are accustomed to make potential assessments. Every time a manager recommends
or fails to recommend an employee for a promotion, a potential assessment has, in fact,
been made. The process of assessing the managerial potential of employees deals with
the question of whether or not they have the ability to handle positions in the future which
involve considerably more responsibility than what they have right now. As long as
individuals are viewed as being able to handle increased or different responsibilities, they
would be considered to have potential (either latent or visible).
Potential appraisal may thus be defined as a process of determining an employees
strengths and weaknesses with a view to use this as a predictor of his future performance.
This would help determine the promotabilty of an individual to a higher position and help
chalk out his career plan. The fundamental difference between reviewing performance and
assessing potential is in the criteria used. In reviewing performance, the criterion used is
what goals the employee achieved and what skills he or she currently possesses that
could be indicators of his or her ability to assume different or more advanced
responsibilities. It is this that makes potential appraisal a very crucial & critical area.

Wages and salary

Someone who is paid a salary is paid a fixed amount in each pay period, with the total of
these fixed payments over a full year summing to the amount of the salary. This person is
considered to be an "exempt" employee. There is no linkage between the amount paid and
the number of hours worked.
The person receiving a salary is not paid a smaller amount for working fewer hours, nor is
he paid more for working overtime.
Someone who is paid wages receives a pay rate per hour, multiplied by the number of
hours worked. This person is considered to be a "non-exempt" employee.
There is also a difference between salary and wages in regard to the speed of payment. If
a person is paid a salary, he is paid through and including the pay date. However, if a
person is paid wages, he is usually paid through a date that is several days may be
weekly, monthly, fortnightly etc. More target oriented. Competitive environment can be
adopted.
Objectives of wage and salary administration:
1. To recruit persons for a firm
2. To control pay-rolls
3. To satisfy people, reduce the incidence of turnover, grievances, and frictions.
4. To motivate people to perform better
5. To maintain a good public image.
A sound plan of wage and salary administration seeks to achieve the following
objectives :
To establish a fair and equitable compensation offering similar pay for similar work.
To attract competent and qualified personnel.
To retain the present employees by keeping wage levels in tune with competitive units.
To keep labor and administrative costs in line with the ability of the organization to pay.
To improve motivation and morale of employees and to improve union management
relations.
To project a good image of the company and to comply with legal needs relating to wages
and salaries.
To establish job sequences and lines of promotion wherever applicable.
To minimize the chances of favoritism while assigning the wage rates.

Compensation and benefits

Compensation is the total amount of the monetary and non-monetary pay provided to an
employee by an employer in return for work performed as required. Essentially, it's a
combination of your pay, vacation, bonuses, health insurance, and any other perk you
may receive, such as free lunches and parking. The right compensation and benefits
schemes ensure that hard-working employees are rewarded fairly and in the most cost-
effective way for the company. This in turn then motivates employees to sustain their
performance.
The compensation, benefits and reward schemes that these HR professionals manage are
not only important for retaining and motivating employees, but also for attracting new
people to the company. Salary and incentive packages are one of the main reasons why
people apply for specific jobs. The more attractive compensation and benefit schemes
tend to generate more interest in new positions.

What are different types of compensation?

Base Pay
Commissions
Overtime Pay

Bonuses, Profit Sharing, Merit Pay

Stock Options

Travel/Meal/Housing Allowance

Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...

Objectives of Compensation:
Recruit and retain qualified employees.
Increase or maintain morale/satisfaction.

Reward and encourage peak performance.

Achieve internal and external equity.

Reduce turnover and encourage company loyalty.

Modify (through negotiations) practices of unions.

What are the components of a compensation system?

Job Descriptions A critical component of both compensation and selection
systems, job descriptions define in writing the responsibilities, requirements,
functions, duties, location, environment, conditions, and other aspects of jobs.
Descriptions may be developed for jobs individually or for entire job families.
Job Analysis The process of analyzing jobs from which job descriptions are
developed. Job analysis techniques include the use of interviews, questionnaires,
and observation.

Job Evaluation A system for comparing jobs for the purpose of determining
appropriate compensation levels for individual jobs or job elements. There are four
main techniques: Ranking, Classification, Factor Comparison, and Point Method.

Pay Structures Useful for standardizing compensation practices. Most pay

structures include several grades with each grade containing a minimum
salary/wage and either step increments or grade range. Step increments are
 common with union positions where the pay for each job is pre-determined through
collective bargaining.
Salary Surveys Collections of salary and market data. May include average
salaries, inflation indicators, cost of living indicators, salary budget averages.
Companies may purchase results of surveys conducted by survey vendors or may
conduct their own salary surveys. When purchasing the results of salary surveys
conducted by other vendors, note that surveys may be conducted within a specific
industry or across industries as well as within one geographical region or across
different geographical regions. Know which industry or geographic location the
salary results pertain to before comparing the results to your company.
Policies and Regulations

Compensation will be perceived as fair if it is comprised of a system of

components developed to maintain internal and external equity
-Human Resource Management-
Probable Questions

Define HRP and state its objective and characteristics

What are the factors affecting manpower planning
What do you mean by human resource management- what are the activities
Define nature, scope and functions of HRM
What are the role, responsibilities and relationship of HRD in an organization?
Difference between Performance Appraisal and Potential Appraisal
Define nature and characteristics of Performance Appraisal