MBA-EX III- TRAINING & DEVELOPMENT

Performance Appraisal

Performance Appraisal is the systematic evaluation of the performance of employees and to

understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.

2. The supervisor analyses the factors behind work performances of employees.

3. The employers are in position to guide the employees for a better performance.

TECHNIQUES / METHODS OF PERFORMANCE

APPRAISALS

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.

Past Oriented Methods

Future Oriented Methods

Past Oriented Methods

1. Rating Scales: 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
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cost, every type of job can be evaluated, large number of employees

covered, no formal training required. Disadvantages Raters biases

2. Checklist: 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

3. Forced Choice Method: The series of statements arranged in

the blocks of two or more are given and the rater indicates which
statement is true or false. The rater is forced to make a choice. HR
department does actual assessment. Advantages Absence of personal
biases because of forced choice. Disadvantages Statements may be
wrongly framed.

4. Forced Distribution Method: 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.

5. Critical Incidents Method: 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.
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
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incidents can be prioritized, forgetting incidents, overly close

supervision; feedback may be too much and may appear to be
punishment.

6. Behaviorally Anchored Rating Scales: 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.

7. Field Review Method: This is an appraisal done by someone

outside employees own department usually from corporate or HR
department. 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.

8. 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.

9. 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
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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.

10. 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.

11. Cost Accounting Method: Here performance is evaluated

from the monetary returns yields to his or her organization. Cost to keep
employee, and benefit the organization derives is ascertained. Hence it is
more dependent upon cost and benefit analysis.

12. Comparative Evaluation Method (Ranking &

Paired Comparisons): These are collection of different methods
that compare performance with that of other co-workers. The usual
techniques used may be ranking methods and paired comparison
method.

Ranking Methods: Superior ranks his worker based

on merit, from best to worst. However how best and
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why best are not elaborated in this method. It is easy

to administer and explanation.

Paired Comparison Methods: In this method each

employee is rated with another employee in the form
of pairs. The number of comparisons may be
calculated with the help of a formula as under.

N x (N-1) / 2

Future Oriented Methods

1. Management By Objectives: It means management by

objectives and the 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.
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2. Psychological Appraisals: These appraisals are more

directed to assess employees potential for future performance rather than
the past one. It is done in the form of in-depth interviews, psychological
tests, and discussion with supervisors and review of other evaluations. It
is more focused on employees emotional, intellectual, and motivational
and other personal characteristics affecting his performance. This
approach is slow and costly and may be useful for bright young
members who may have considerable potential. However quality of
these appraisals largely depend upon the skills of psychologists who
perform the evaluation.

3. Assessment Centers: This technique was first developed in

USA and UK in 1943. 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.
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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.

4. 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.
ShareShare HRM - Performance Appraisal Metho
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Decision-making process

Decision making is the process of making choices by identifying a decision, gathering

information, and assessing alternative resolutions.

Using a step-by-step decision-making process can help you make more deliberate, thoughtful
decisions by organizing relevant information and defining alternatives. This approach increases
the chances that you will choose the most satisfying alternative possible.

Step 1:
Identify the decision
You realize that you need to make a decision. Try to clearly define the nature of the decision you
must make. This first step is very important.

Step 2:
Gather relevant information
Collect some pertinent information before you make your decision: what information is needed,
the best sources of information, and how to get it. This step involves both internal and external
work. Some information is internal: youll seek it through a process of self-assessment. Other
information is external: youll find it online, in books, from other people, and from other sources.
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Step 3:
Identify the alternatives
As you collect information, you will probably identify several possible paths of action, or
alternatives. You can also use your imagination and additional information to construct new
alternatives. In this step, you will list all possible and desirable alternatives.

Step 4:
Weigh the evidence
Draw on your information and emotions to imagine what it would be like if you carried out each
of the alternatives to the end. Evaluate whether the need identified in Step 1 would be met or
resolved through the use of each alternative. As you go through this difficult internal process,
youll begin to favor certain alternatives: those that seem to have a higher potential for reaching
your goal. Finally, place the alternatives in a priority order, based upon your own value system.

Step 5:
Choose among alternatives
Once you have weighed all the evidence, you are ready to select the alternative that seems to
be best one for you. You may even choose a combination of alternatives. Your choice in Step 5
may very likely be the same or similar to the alternative you placed at the top of your list at the
end of Step 4.

Step 6:
Take action
Youre now ready to take some positive action by beginning to implement the alternative you
chose in Step 5.

Step 7:
Review your decision & its consequences
In this final step, consider the results of your decision and evaluate whether or not it has
resolved the need you identified in Step 1. If the decision has not met the identified need, you
may want to repeat certain steps of the process to make a new decision. For example, you might
want to gather more detailed or somewhat different information or explore additional
alternatives.

TYPES of DM:
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Visionary
The visionary decision maker is "a champion of radical change with a natural gift for
leading people through turbulent times." Such people like change, gather information
relatively narrowly, and are strongly biased toward action but "may be too quick to rush
in the wrong direction."

If you are a visionary leader, you should seek the opinions and views of a broad group
and "encourage dissenters to voice their concerns." Only that way can you get a wider
set of views and information that can be critical to success.

Guardian
A guardian is a "model of fairness who preserves the health, balance, and values of the
organization." Such people have sound decision-making processes, try for fact-based
choices, and plan carefully. They like continuity, are moderately cautious, and gather
information relatively widely.

Those are fine characteristics for normal times. But the guardian can be too cautious
and slow moving during a crisis, when there is "desperate need for change." That is why
a guardian should talk to people outside the organization and have them "challenge
deeply held beliefs about the company and its industry." Task forces are then in order to
"explore major changes in the environment."

Motivator
Motivators are good choices for change. They are charismatic, can convince people of
the need for action, and build alignment among parts of the company. But like all good
storytellers, they risk believing the story in the face of countervailing facts. They gather
information relatively narrowly, and strongly believe that self-interest prevails over
corporate interest.

Rather than looking simply for outside counsel, motivators need to explore the existing
facts and see if there are other ways to interpret them--ways that do not necessarily play
into the narrative they have created. Formal processes are a help. Motivators can use
surveys to get a realistic sense of the rest of the company.

Flexible
Flexible leaders are, as you might expect from the name, more versatile than other
types of leaders: "comfortable with uncertainty, open minded in adapting to
circumstances, and willing to involve a variety of people in the decision making." They
mildly lean to ad hoc approaches rather than formal processes and are fairly cautious.
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The problem with flexible leaders is that they can become too open-minded. Looking at
all the potential issues, solutions, and outcomes can paralyze the decision-making
process. They should set deadlines for decisions before the paralytic debate can
commence. It can also make sense to create a framework for ordinary repetitive
decisions, making them the subject of a set of rules so as not to waste time on
reconsidering.

Catalyst
The catalyst is an excellent person to lead the work of groups, whether making
decisions or implementing them. They are balanced, being in the middle on four out of
the six characteristics, although they slightly prefer action to caution and are slightly
biased toward broadly, rather than narrowly, gathering information. The more extreme
the necessary decision, the more they can naturally resist inherent biases.

That said, being middle of the road can yield only average results. To avoid that, a
catalyst should watch for circumstances that require high-stakes decisions and realize
that they may need a different type of decision process, like having a team look at the
situation and suggest potential approaches.
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Job Description and Job Specification

Job Analysis is a primary tool to collect job-related data. The process results in collecting and recording
two data sets including job description and job specification. Any job vacancy can not be filled until and
unless HR manager has these two sets of data. It is necessary to define them accurately in order to fit the
right person at the right place and at the right time. This helps both employer and employee understand
what exactly needs to be delivered and how.

Both job description and job specification are essential parts of job analysis information. Writing them
clearly and accurately helps organization and workers cope with many challenges while onboard.

Though preparing job description and job specification are not legal requirements yet play a vital role in
getting the desired outcome. These data sets help in determining the necessity, worth and scope of a
specific job.

Job Description
Job description includes basic job-related data that is useful to advertise a specific job and attract a pool
of talent. It includes information such as job title, job location, reporting to and of employees, job
summary, nature and objectives of a job, tasks and duties to be performed, working conditions, machines,
tools and equipments to be used by a prospective worker and hazards involved in it.

Purpose of Job Description

The main purpose of job description is to collect job-related data in order to advertise for a
particular job. It helps in attracting, targeting, recruiting and selecting the right candidate for the
right job.

It is done to determine what needs to be delivered in a particular job. It clarifies what employees
are supposed to do if selected for that particular job opening.
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It gives recruiting staff a clear view what kind of candidate is required by a particular department
or division to perform a specific task or job.

It also clarifies who will report to whom.

Job Specification
Also known as employee specifications, a job specification is a written statement of educational
qualifications, specific qualities, level of experience, physical, emotional, technical and communication
skills required to perform a job, responsibilities involved in a job and other unusual sensory demands. It
also includes general health, mental health, intelligence, aptitude, memory, judgment, leadership skills,
emotional ability, adaptability, flexibility, values and ethics, manners and creativity, etc.

Purpose of Job Specification

Described on the basis of job description, job specification helps candidates analyze whether are
eligible to apply for a particular job vacancy or not.

It helps recruiting team of an organization understand what level of qualifications, qualities and
set of characteristics should be present in a candidate to make him or her eligible for the job
opening.

Job Specification gives detailed information about any job including job responsibilities, desired
technical and physical skills, conversational ability and much more.

It helps in selecting the most appropriate candidate for a particular job.

Job description and job specification are two integral parts of job analysis. They define a job fully and
guide both employer and employee on how to go about the whole process of recruitment and selection.
Both data sets are extremely relevant for creating a right fit between job and talent, evaluate performance
and analyze training needs and measuring the worth of a particular job.
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Human Resource Planning Process

Human resource planning is the process whereby organizations determine the staffing support they will
need to meet business needs and customer demands. There are a variety of considerations that impact
this planning, including impending retirements and transitions, the availability of employees with certain
skills sets and changes in the environment that may require training for existing employees.

Need

Human resource planning is important and ongoing because of both internal and external
environmental changes. Internally, businesses are impacted by turnover and retirements.
Externally, they are impacted by changes in technology, changes in the economy, and
changes in the industry and consumer demand that may require skills that do not currently
exist within the company. All of these impacts have an effect on the type and numbers of
employees that are needed for the business to remain successful.

Phases of Planning

There are four broad phases involved in planning for human resource needs. First, gathering
and analyzing information about expected demand based on the business's future plans and
the supply and availability of staff, internally and externally, to meet these demands.
Second, companies must identify their specific human resource objectives, which can
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involve decisions related to whether candidates will be promoted from within or hired
externally, whether work will be outsourced or done by employees on staff, and whether the
company prefers to staff for excess capacity or take a streamlined approach to staffing. The
third phase of planning involves designing and implementing programs that are aligned with
the company's objectives. These programs will include benefit programs to satisfy employee
needs and impact the ability to retain staff, as well as training programs to ensure that staff
are prepared to meet current and future demands. Finally, the fourth phase of planning will
involve monitoring and evaluating the effectiveness of the human resource plan and making
changes as appropriate.

Forecasting Demand

An important, yet challenging, element of human resource planning is forecasting demand

for certain types of skills and positions. For instance, in the early 21st century, Internet and
social media skills were in increasing demand. In the health care industry, nursing has long
been an area of high demand. Each industry is different and each is impacted by different
factors. Staying on top of industry, regulatory, governmental and economic changes can
help businesses improve their success at forecasting demand for employees and building
the human resource plan.

Succession Planning

Succession planning is the process whereby company leaders and HR professionals identify
key positions within the company and develop plans to fill those positions either with
internal or external staff. Succession planning is closely tied to leadership development,
which is the process of providing training and on-the-job experiences to prepare internal
staff to step into positions that may become vacant. Succession planning is a key element of
human resource planning.

Future

The late 20th and early 21st century saw a number of shifts that suggest changes in the
nature of work in the future. These include the growing use of contingent workers (people
who are hired, as needed, to perform specific tasks, but are not employed by the company),
the use of virtual workers (those who may or may not work for the company but who are not
physically located on the company's premises), and the growing impact of technology on the
need for certain types of employees, which causes increased need in some areas and
declined need in others.
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The major functional areas in human resource

management are:
1. Planning,

2. Staffing,

3. Employee development, and

4. Employee maintenance.

These four areas and their related functions share the common objective of an adequate
number of competent employees with the skills, abilities, knowledge, and experience needed for
further organisational goals. Although each human resource function can be assigned to one of
the four areas of personnel responsibility, some functions serve a variety of purposes. For
example, performance appraisal measures serve to stimulate and guide employee development
as well as salary administration purposes. The compensation function facilitates retention of
employees and also serves to attract potential employees to the organisation. A brief description
of usual human resource functions are given below:

Human Resource Planning: In the human resource planning function, the number and type of
employees needed to accomplish organisational
goals are determined. Research is an important part of this function because planning requires
the collection and analysis of information in order to forecast human resources supplies and to
predict future human resources needs. The basic human resource planning strategy is staffing
and employee development.

Job Analysis: Job analysis is the process of describing the nature of a job and specifying the
human requirements, such as skills, and experience needed to perform it. The end product of
the job analysis process is the job description. A job description spells out work duties and
activities of employees. Job descriptions are a vital source of information to employees,
managers, and personnel people because job content has a great influence on personnel
programmes and practices.

Staffing: Staffing emphasises the recruitment and selection of the human resources for an
organisation. Human resources planning and recruiting precede the actual selection of people
for positions in an organisation. Recruiting is the personnel function that attracts qualified
applicants to fill job vacancies. In the selection function, the most qualified applicants are
selected for hiring from among those attracted to the organisation by the recruiting function. On
selection, human resource functionaries are involved in developing and administering methods
that enable managers to decide which applicants to select and which to reject for the given
jobs.

Orientation: Orientation is the first step toward helping a new employee adjust himself to the
new job and the employer. It is a method to acquaint new employees with particular aspects of
their new job, including pay and benefit programmes, working hours, and company rules and
expectations.

Training and Development: The training and development function gives employees the skills
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and knowledge to perform their jobs effectively. In addition to providing training for new or
inexperienced employees, organisations often provide training programmes for experienced
employees whose jobs are undergoing change. Large organisations often have development
programmes which prepare employees for higher level responsibilities within the organisation.
Training and development programmes provide useful means of assuring that employees are
capable of performing their jobs at acceptable levels.

Performance Appraisal: Performance appraisal function monitors employee performance to

ensure that it is at acceptable levels. Human resource professionals are usually responsible for
developing and administering performance appraisal systems, although the actual appraisal of
employee performance is the responsibility of supervisors and managers. Besides providing a
basis for pay, promotion, and disciplinary action, performance appraisal information is essential
for employee development since knowledge of results (feedback) is necessary to motivate and
guide performance improvements.

Career Planning: Career planning has developed partly as a result of the desire of many
employees to grow in their jobs and to advance in their career. Career planning activities include
assessing an individual employees potential for growth and advancement in the organisation.

Compensation: Human resource personnel provide a rational method for determining how
much employees should be paid for performing certain jobs. Pay is obviously related to the
maintenance of human resources. Since compensation is a major cost to many organisations, it
is a major consideration in human resource planning. Compensation affects staffing in that
people are generally attracted to organisations offering a higher level of pay in exchange for the
work performed. It is related to employee development in that it provides an important incentive
in motivating employees to higher levels of job performance and to higher paying jobs in the
organisation.

Benefits: Benefits are another form of compensation to employees other than direct pay for
work performed. As such, the human resource function of administering employee benefits
shares many characteristics of the compensation function. Benefits include both the legally
required items and those offered at employers discretion. The cost of benefits has risen to such
a point that they have become a major consideration in human resources planning. However,
benefits are primarily related to the maintenance area, since they provide for many basic
employee needs.

Labour Relations: The term labour relations refers to interaction with employees who are
represented by a trade union. Unions are organisation of employees who join together to obtain
more voice in decisions affecting wages, benefits, working conditions, and other aspects of
employment. With regard to labour relations, the personnel responsibility primarily involves
negotiating with the unions regarding wages, service conditions, and resolving
disputes and grievances.

Record-keeping: The oldest and most basic personnel function is employee record-keeping.
This function involves recording, maintaining, and retrieving employee related information for a
variety of purposes. Records which must be maintained include application forms, health and
medical records, employment history (jobs held, promotions, transfers, lay-offs), seniority lists,
earnings and hours of work, absences, turnover, tardiness, and other employee data. Complete
and up-to-date employee records are essential for most personnel functions. More than ever
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employees today have a great interest in their personnel records. They want to know what is in
them, why certain statements have been made, and why records may or may not have been
updated.