Unit 2
Human Resource Development
Human resource development is vital to any organisation. HRD mainly involves training and development to enhance commitment and competencies of human resources. There are also other aspects of HRD such as career development and organisational development. Organisations can progress only through the competencies of their human resources.
American Society for Training and Development (ASTD), defines "HRD is the integrated use of training and development, organisational development, and career development, - to improve individual, group and organisational effectiveness."
- Scope/Functions of HRD
The scope of HIRD can be explained with reference to its various sub-systems or mechanisms: The various sub-systems are:
1. Performance Appraisal:
An HRD-oriented performance appraisal is conducted so that it helps the superiors to:
- Understand strengths and weaknesses of the subordinates and accordingly help the subordinates to consolidate strengths and to overcome weaknesses.
- Understand the difficulties faced by their subordinates, so as to solve them.
- Recognise the contributions of employees and accordingly reward them.
- Develop competencies of subordinates to face challenge of jobs"
2. Promotion of Employees:
An important area of HRD relates to promotion of employees who work with commitment and dedication show improved performance. HRD plays an important role in enhancing commitment and dedication of the employees. Committed and dedicated employees are recognized and rewarded with promotion, which involves: higher pay, higher powers and higher position.
3. Training and Development:
One of the major activities of HRD is to provide training to the employees. Training and development programmes enable the Employees to:
- Acquire additional knowledge
- Develop positive attitude towards work and the organisation
- Enhance skills
- Improve social behaviour.
4. Career Development:
HRD facilitates career development of the employees in the organisation. Career development refers to the continuous effort to match long-term individual needs with that of the organisation.
Career development can take place through assigning challenging tasks, counselling, promotion, training and so on Career development not only helps the employees but also the organisation to be dynamic and growth oriented.
5. Organisational Development:
This area focuses attention on assuring healthy relationships throughout the organisation. The O.D experts help individuals, groups or departments to initiate and manage change. They also help any unit or department in the company that is facing any problems such as absenteeism, internal conflicts, low productivity or resistance to change.
6. Motivation:
Rewarding employees is an important area of HRD. Proper rewards and recognition motivates the employees to put in their best efforts. It also indicates that the organisation respects and values the employees.
Rewards may be given to individual employees, teams/groups or departments. They may be in form of:
- Monetary incentives such as higher salaries, incentives and bonuses.
- Non-monetary incentives such as higher status, appreciation, delegation, welfare facilities, etc.
7. Employee Welfare:
HR managers recognise the need to improve employee welfare. Therefore, to develop and motivate employees, the HR managers introduce effective employee welfare measures. The welfare measures include holidays with pay, medical insurance, canteen facilities, recreation facilities, etc.
8. Quality of Work Life:
HRD programmes facilitates QWL. It is a technique for improving productivity and quality of work. It involves labour management co-operation, collective bargaining and participative management.
QWL programmes focus attention on providing good working conditions, job security, good pay and other facilities such as flexible working hours, freedom to suggest changes or improvements, etc. QWL generates a sense of belonging that benefits the organisation as well as the individual employees.
9. Human Resource Information:
- Employee related information must be maintained by the company. The employee information includes:
- Special achievements of individual employees, Training programmes participation records, Performance appraisal reports,
- Potential appraisal information, etc.
The employee related information is utilised whenever there is a need to assign special projects to employees, to provide additional training, to facilitate promotions and transfers, etc.
10. Mentoring:
Progressive firms use mentoring programmes to train and develop the employees, especially at the executive level. Generally, a mentor is a senior person who shares knowledge and experience, and counsels the mentee to attain greater Mentoring aids in problem solving and qualitative decision making. Improved decision-making and action leads to greater performance of the organization.
- Meaning
Training is viewed as a short term learning process by which employees acquire the technical knowledge and skills necessary to perform effectively their tasks and responsibilities. Wayne Cascio defines, "Training consists of planned programs undertaken to improve employee knowledge, skills, attitudes and social behaviour so that the performance of the organization improves considerably."
Development is viewed as a long term learning process by which managerial personnel acquire conceptual and theoretical knowledge and skills for enhancing general administrative abilities.
- Importance of Training and Development
Training serves various purposes. Training is important to their employees as well as to the organisation. The importance of training is explained as follows:
1. Innovation:
Training facilitates innovation in the organisation. Due to training, the employees come up with innovative ideas in respect of:
- New Plans,
- New Products,
- New Schemes, etc.
Innovation gives competitive advantage to the organisation in the market.
2. Corporate Image:
Training enhances corporate image of the organisation. Due to training, the performance of the organisation improves greatly. Therefore, the image of the tirm improves in the minds of various stakeholders: Customers, Employees, Suppliers. Shareholders, Dealers, etc.
3. Efficiency:
Efficiency is the ratio of returns to costs. Training enables the organisation to improve efficiency of its employees. Training helps to improve the performance of the employees. Therefore, the company gets higher returns at lower costs. The returns are in the form of:
- Higher Sales,
- Higher Profits,
- Higher Market Share, etc.
4. Team Work:
Training helps to improve knowledge, skills as well as attitude. Therefore, training facilitates team work in the organisation. Team work brings success to the organisation.
5. Optimum Use of Resources:
Training ensures optimum use of resources such as:
- Physical Resources,
- Capital Resources and
- Manpower.
Optimum use of resources generates higher productivity to the organisation.
6. Motivation:
Training facilitates motivation of the employees in the organisation. Due to training, there is higher performance in terms of sales and profits. Therefore, employees are motivated by giving incentives: Monetary Incentives (salary, bonus,
incentives) and Non-Monetary Incentives (working conditions welfare facilities).
7. Competitive Advantage:
Training generates competitive advantage to the organisation Due to training there can be:
- Improvement in Quality and
- Reduction in Costs.
Therefore, the organisation can gain competitive advantage in the market.
8. Customer Satisfaction:
Training may result in customer satisfaction. Customer satisfaction takes place when product performance matches with customer expectation. Due to training, the overall performance of the employees improves in terms of product quality, delivery of product, service performance, etc.
9. Absenteeism Reduction:
Training helps to reduce absenteeism. It takes place when employees remain absent without prior performance. Absenteeism creates problems to organisation as well as the co-workers. Training helps to develop positive attitude in workers and therefore, the absenteeism may get reduced.
10. Employee Turnover Reduction:
Training facilitates reduction in employee turnover. Employee turnover takes place when employees leave the organisation Due to training, employees become loyal to the organisation which in turn may reduce employee turnover.
11. Benefits to Employees:
Apart from benefits to the organisation, the training programmes benefit the employees in several ways:
- Training helps to upgrade knowledge and skills. Training develops positive attitude.
- Training may result in higher rewards.
- Training may provide an opportunity for promotion.
- The refresher training programmes refreshes the employee.
Training and development is provided to improve work related knowledge, attitude, skills and social behaviour, so that the performance of the trained employees and that of the organization improves considerably.
Training is provided for newly appointed employees so that they perform the tasks as expected by the organization. Training is also provided to the existing employees when they are assigned new tasks or projects. Generally, a training need arises when there is a gap between expected performance of an employee (or a group of employees) and the actual performance. Training needs can be identified throng performance reviews and appraisal system, feedback from the supervisors or employees, customer satisfaction surveys, etc.
For example, a sales executive is expected to achieve a target sale of 1000 units in a given period, but the sales executive actually achieves only 600 units; the gap between expected performance and actual performance is 400 units. This situation may require motivation and training to the sales executive.
- Process of Identifying Training Needs:
An organization needs to identify its training and development needs so as to provide the right training (qualitative and quantitative) to the right employees and maximise the return on investment in training.
The following are the steps in identifying training needs of an organization:
1. Analyze Organizational Needs:
An organization must analyze the need for training its employees. The need for training the employees arises as new knowledge and skills may be required due to changes in:
- Products, equipment and technology.
- Economic, legal, and political factors.
- Industry competition and standards.
- Customers’ expectations.
- International Environment, etc.
An organization must conduct SWOT analysis to identify the organizational needs, so as to plan for its training needs.
2. Analysis of Strategies and Tasks:
Management must frame effective strategies in all functional areas (marketing, production, finance, HR, etc.). Clear goals and targets must be set for all strategies. Also, tasks or activities must be listed to achieve the goals.
At this stage, the tasks requirements must be compared with the existing employee knowledge and skills. This comparison enables to identify the potential gaps. The potential gaps will indicate that there is a need for training to improve the knowledge and skills so as to cope up with the tasks requirement.
Management can conduct this analysis by setting up assessment centres, aptitude and ability tests, observation of employees undertaking key tasks, etc.
3. Analysis of Training Needs of Individual Employees:
Management needs to find out the training needs of individual employees. This is because; some employees may be fully equipped with the knowledge and skills to cope up with tasks requirements, whereas, others may lack the required knowledge and skills. This information can be obtained through l performance reviews and appraisal systems, Observation of employee performance by superiors, feedback from employees, etc.
4. Develop a Training Plan:
The HR manager needs to prepare a training plan. The training plan should indicate:
- The number of training programmes, which employees have to undergo.
- The objective of each training programme.
- The duration of each training programme.
- The place of training-in-house or otherwise.
- The number and quality of training faculty.
- The funds to be utilized for training, etc.
5. Decision on Training Method:
Training method is an important element of training plan. The HR manager must select the right training method depending upon the tasks requirement and the existing level of knowledge and skills of the employees. There are various methods of training which include:
- Seminars and workshops.
- Conferences.
- E-learning/webinars
- Mentoring programmes
- Coaching and Counselling
- Assessment Centres
- Job Shadowing
- Classroom methods such as case study, role playing, etc.
6. Communication with Employees:
The HR manager needs to inform the employees of the reasons for attending certain training programmes. The findings of training needs analysis must be communicated to the employees. Also training plans need to be informed to the employees. The FR manager may invite suggestions from the employees to make training programmes more effective.
7. Implementation of Training Programme:
There must be effective implementation of training programme. Implementation of training programme involves:
- Appointment of effective trainers.
- Arrangement of place and training material.
- Relevant instructions to the trainers.
- Instructions to the trainees.
- Provision of necessary facilities to the trainers to train effectively.
- Arrangement for food and refreshments
- Recording of training sessions, if necessary.
- Obtaining feedback from the trainers and trainees.
8. Review of Training Outcome:
The HIR manager needs to review the outcome of the training programme. The impact of the training programme must be evaluated in terms of knowledge and skills gained by the employees, productivity outcomes, customer/client satisfaction level, and so on.
The HR manager may evaluate impact of the training on the employees by comparing their performance before and after the training. The HR manager needs to provide feedback to the top management regarding the effectiveness of the training programme.
Based on the review, necessary changes can be incorporated in the future training programmes.
The methods of training and development can be broadly divide into two groups:
I. ON-THE OB METHODS
The training is provided on the job. Generally, the training is done with the help of experienced managers within the organisation. There is no disruption of actual work. Special training costs are not incurred by the management.
The following are some of the on-the-job methods of training:
1. Job Rotation:
Employees are transferred from one job to another. For example: a cashier in a bank may be transferred to the accounts department.
Advantages:
- It reduces monotony of doing routine jobs.
- It provides good experience of different jobs.
- It develops competent executives to overcome the problems arising due to employee turnover, transfers, etc.
2. Understudy:
The subordinate is trained to perform the duties and responsibilities of the superior. This is because, the subordinate is likely to take the position of the superior because the superior is likely to be transferred, retired or promoted.
The understudy person is generally asked to do the following:
- Supervise a group of employees to experience leadership qualities.
- Attend executive meetings in place of the superiors.
- Investigate and make written recommendations about problems related to the department.
- Assume superior's position in his absence.
3. Mentoring:
Mentoring can be used for training and developing managers. A mentor is a coach or a guide who counsels and guides the mentee. For instance, a senior manager can act as a mentor to the junior manager.
The mentor is probably someone who had "been there, done that" before. A mentor may use variety of approaches in training the mentee such as coaching, counselling, etc. The mentee may be trained with failure and success stories. The mentor may tell "This is where went wrong This is how achieved success. " Both failure and success stories are powerful lessons that provide valuable insights to the learners. Advantages:
- It helps to develop competent managers.
- It improves confidence of the learners or mentees.
- The efficiency and performance of the organisation improves.
- The organisation can gain good corporate image.
4. Coaching:
Under coaching, the superior plays an active role in training the subordinate. The superior may assign challenging task the subordinate for the purpose of training. The superior ma assists and advice the subordinate to complete the assigned task. In this case, the superior acts as a coach in training the subordinate.
Counselling:
In counselling, the superior plays a passive role in training the subordinate. The superior may assign challenging task to the subordinate for the purpose of training. The superior may provide advice to the subordinate in the completion of task i so required. In this case, the superior acts as a guide rather than a coach in training the subordinate.
6. Apprenticeship Training:
Apprenticeship is a method of job training by which a person learns and craft, trade or job under another person who has already mastered that craft or job. For example, a person may be under apprenticeship to master the knowledge and skill of an automobile mechanic or a carpenter or a plumber, etc. The main advantages of apprenticeship training include:
- The candidate gets hand-on training which helps to develop and improve skills.
- It develops confidence in the trainee to handle the tasks effectively.
7. Planned Progression:
It is similar to job rotation, except that every movement from one job to another involves higher pay, position and duties. In job rotation, every movement involves more or less same pay and position.
Planned regression is more likely to occur at higher managerial levels, whereas, job rotation occurs mainly at lower level positions.
Advantages:
- It motivates employees to perform effectively.
- It may improve corporate image due to higher performance.
- It may lead to innovation in the organisation.
II. OFF-THE- JOB METHODS
Generally, the training is provided outside the area of actual work. The training can be provided by experienced managers/superiors as well as by experts from outside the organisation. Special training costs may be incurred by the management.
The following are some of the off-the-job methods of training:
1. Management Games:
Executives can be trained with the help of management games. Trainees can learn by analyzing problems or situations and by making trial-and-error decisions.
Management games help to develop:
- Communication skills
- Decision-making skills
- Inter-personal skills
- Problem-solving skills
- Team skills, etc.
Example: Management Game for Setting Goals. The trainees may be divided into two or more groups to generate competitive spirit. The members of each group are given rings to toss over a over a small pole from a distance. Each member can toss over the rings thrice. The tossing of rings can be done from a distance of say 5 feet to 15 feet. A successful toss from the shorter distance gets lower points and from longer distance higher points (say 5 points from 5 feet, and 10 points from 10 feet).
The points of successful tossing are totaled up and the team that gets the maximum points is declared as the winner. Initially, a member may start rom shorter distance (lower goals or targets), if successful can move to longer distance (higher goals). This means one can initially settle for lower targets, and if successful in achieving the lower targets may go for higher targets.
2. Role Playing:
The trainees play the role of someone (manager, subordinate. or employee) in a simulated situation. Role playing as a development technique involves human interaction in imaginary situation.
For instance, in a drama or movie, actors play the different roles. While playing the roles, they assume themselves as the persons whose role they play. In training, the trainees are given the roles of different managers who are required to solve a problem or to arrive at a decision. At the end of role playing session, there is a critique session in which trainees are given feedback about their role playing.
Advantages:
- This technique helps the learner to acquire human skills by performing different roles.
- Role playing helps the trainees to develop better perspective of the roles (jobs) they perform, because they may see the jobs from different viewpoints.
- It also develops sensitivity towards others.
- This technique is useful in training managers for higher positions. For instance, understudy can be trained with the help of this technique to groom him to take up the position of the superior.
3. Vestibule Training (VT):
In the early 1800, vestibule training was introduced for factory workers to train them in a training centre close to the actual work place. VT is provided to factory workers to handle machines and tools in a simulated environment. Nowadays, vestibule training can be used for training junior managers. It combines on-the-job training with classroom training. Junior managers can be trained with the help of simulated management decisions supported by expert views of the experienced managers who act as trainers.
4. In-basket Training:
It is also called as in-tray training technique. It involves simulation of a series of decisions, which a trainee may have to perform at the job at a future date.
The trainees are presented with a pack of papers and files in a tray containing simulated management problems. Nowadays, due to the popularity of computers, the simulated management problems are e-mailed to the trainees.
The trainees are required to take decisions within a specified time limit. The decisions taken by several trainees are recorded and compared with one another.
Learning takes place when the trainers or experts present their views on the solutions given by the trainees. The experts present their own views relating to problem solutions, which can enrich the participants.
5. Case Study Method:
It is a technique of class room method of learning. Managers can be trained with the help of a case study. Case studies are analyses of persons, events, decisions, periods, projects, policies, institutions, or other systems that are studied holistically by one or more method.
The main objectives of case study method are:
- To acquaint the learner of the principles and practices of management.
- To develop decision-making abilities.
- To develop independent thinking and to develop cooperative spirit in team situations.
6. Readings and References:
Planned reading of relevant and current management literature is one of the best methods of management development. It is essentially a self-development programme. A manager may be aided by training department, which often provides a list of valuable books. The manager can discuss the relevant articlesi with the senior manager and get necessary clarifications. A
manager can also learn from the internet training material.
7. Conferences:
Itis a large gathering representing various sections or divisions of the organisation. At times, the participants may be from different organisations. Experts may present their views on certain topics or latest developments. For instance, a conference can be called to discuss latest implications of new foreign trade
policy. Participants can gain insights based on the expert views.
8. Brainstorming Sessions:
In a brainstorming session participants can learn from their views/ ideas expressed by different members of the group. In brainstorming session, multiple ideas are generated to solve problems. The idea expressed by one participant would stimulate another participant to come up with a modified idea or a completely new idea.
The following are the essentials of a brainstorming session:
- Encourage free flow of ideas
- No ideas are ever criticized.
- Focus is to be placed on quality of ideas.
Training involves time, effort and money. Therefore, it is advisable to find out the effectiveness of training programme, i.e., the contributions or benefits of the training programme to the organisation and to the employee.
In evaluating the training programme, measures of change can be classified into four broad categories:
- Reaction — The response of the trainees towards the training.
- Learning - The extent of learning new knowledge and skills.
- Behaviour- The behavioural changes in the trainees.
- Results - The effects of the training programme.
The following are the methods of evaluating training effectiveness:
1. Observation Method:
The management must closely observe the activities during their delivery of training programme. Under this method, direct observation takes place to find out the changed knowledge, skills and attitudes of the trainees.
During observation, the problems and mistakes in actual work situation are carefully observed and recorded. Finally, the effectiveness of training can be evaluated through the reaction of trainees.
2. Test-retest Method:
Under this method, the trainees are given a pretest before the start of the training programme to find out their existing knowledge, skills and attitudes. And after completion of the training programme, a similar test (re-test) is conducted to assess their changed behaviour of the trainees. A comparison is made between trainees level of knowledge, skills and attitudes before and after the training program. If a considerable change is observed in the behaviour of the trainees in terms of improvement of knowledge, attitudes and skills; the training programme is said to be effective.
3. Pre-post Performance:
It is similar to the test-retest method but under this method, the focus is on the evaluation of actual job performance. Under this method, the actual job performance is first appraised before any training is provided. After the training program is completed, the participant's job performance is evaluated. A comparison is made between the trainees' job performance in the pre-training period and in the post-training period. If a considerable change is observed in the performance of the trainees in the post training period, the training programme is said to be effective.
4. Test- Control Method:
In this method of evaluating training effectiveness, trainees are first divided into two groups, the first is control group and the second is test group.
Members of control group work on the job but they do not go under any training. On the other hand, members of the test group are given the training and are also given guidance to complete certain work during the training period. At the conclusion of training period, the performance of these two groups is evaluated. If there is considerable improvement in the performance of the test group, it can be said that the training programme is effective. On the other hand, if there is no much difference in the / remains unchanged, the training will be considered unsuccessful.
5. Kirkpatrick's Four Level Model:
Donald Kirkpatrick introduced the Four-Level Training Evaluation Model to analyze the effectiveness of training programme.
The four levels are:
- Reaction.
- Learning.
- Behavior.
- Results.
- Level-1: Reaction
This level measures the trainees' reaction to training programme. The reaction towards various elements of training is evaluated such as:
- Quality of the trainers.
- The topics of the training programme.
- The duration of the training programme.
- The place, facilities and the quality of food and refreshments provided at the training programme, etc.
It is important to measure reaction, because it helps the employer to understand how well the training was received by the trainees. It also helps to improve the training programme for future trainees, including the appointment of quality trainers, the topics to be covered, the duration of the training programme, etc.
- Level-2: Learning:
The management needs to measure the knowledge gained by the trainees and the attitude and skills developed on account of training. In other words, the level 2 will determine whether or not the objectives of training programme are achieved. This measurement is necessary so as to improve the future training programmes with special reference to improving the knowledge, attitudes, skills and social behaviour of the trainees.
- Level - 3: Behaviour
At level 3, the employer evaluates how far the trainees have of training. changed or improved their work-related behavior on account The behaviour change can be judged on the basis of work performance after the training. What the trainees have learnt place. at the training session must be put into practice at the work If there is considerable improvement in the work performance after the training period, it can be said that the trainees have applied what they have learnt during the training programme to improve their work performance.
- Level-4: Results
At this level, the employer analyzes the final results of the training programme. The results include increase in productivity, increase in orders and market share, reduction in absenteeism and employee turnover, etc. If the employer gets good results, it can be assumed that the training programme is successful.
- Meaning
Performance appraisal is a process of evaluating work performance of employees. The purpose of appraisal is to improve individual and organisational effectiveness.
In the words of Wayne Cascio, "Performance appraisal is the systematic description of an employee's job relevant strengths and weaknesses."
Michael Crino, defines "Performance appraisal is the process of assessing quantitative and qualitative aspects of an employee's job performance."
- Benefits/Uses of Performance Appraisal
Performance appraisal serves a two-fold purpose. The purpose could be either for evaluation of performance or for development of employees. In general, performance appraisal serves the following purposes:
1. Performance Feedback:
Performance appraisal provides performance feedback to the employees. Employees can come to know about their job related strengths and weaknesses. Such feedback enables the employees to correct their weaknesses and improve on their strengths.
2. Training and Development:
Performance appraisal information may be used to determine whether or not an employee or a group of employees requires additional training and development. Deficiencies in performance may be attributable to inadequate knowledge or skills. Accordingly, the organisation may decide to provide additional training to the employees.
3. Motivation:
Performance appraisal facilitates motivation of the employees. The high performing employees are given higher ratings in performance appraisal. They may be rewarded with monetary and non-monetary incentives.
4. Promotion:
Performance appraisal gives management a means of identifying employees for promotion. Past appraisals together with other background data enable the management to promote the right employees to higher posts.
5. Transfers:
Performance appraisal is useful in transfer decisions of employees. Effective transfer of employees is possible through the reports of performance appraisal.
6. Human Resource Planning:
The appraisal process aids in human resource planning. Accurate appraisal data regarding employees may provide management with important information to base decisions for future employment.
Without the knowledge of who is capable of being promoted, transferred and terminated; management is at a severe disadvantage with respect to framing various future employment plans.
7. Management-Labour Relations:
Performance appraisal helps to maintain good labour relations between the management and the labour. This is because; performance appraisal creates an healthy atmosphere in the organisation.
The employees are motivated to perform more effectively and the ineffective employees are encouraged to do away with their weaknesses or limitations.
8. Documentary Evidence:
Performance appraisal reports can be used as an important documentary evidence in case of disciplinary action taken against some ineffective employees. This is especially true in the case of organisations having a strong employees union.
9. Effective Communication:
Appraisal interviews and reports can be effective means of communication to the employee and can result in improved performance.
10. Career Development:
Performance appraisal enables managers to coach, counsel and assist employees in their career development.
- LIMITATIONS OF PERFORMANCE APPRAISAL
1. Halo Effect:
The performance appraisal may be based on one positive factor of the ratee. Several work related factors may not be considered for evaluation.
For example: if the ratee is found to be highly punctual in reporting to duty, he may be also given higher scores for quality of work, discipline, etc., without conducting appraisal of such factors.
2. Horn Effect:
The performance appraisal may be based on one negative factor of the ratee. The rater may not evaluate several other job relevant factors.
For example: the ratee may frequently report late to work and therefore, the rater may give him low scores for quality of performance, speed of work, etc., without conducting appraisal of such factors.
3. Central Tendency:
Some raters may follow central tendency approach in rating the ratees. The main aspects of central tendency are:
Average scores are given to all ratees. Those who perform well are given average scores and those who do not perform tell are also given average scores.
Central tendency may be due to lack of information of the ratees performance.
Rater may be unfamiliar with the ratees, and if forced to evaluate, the ratee may play it safe by neither condemning nor praising.
4. Cost Factor:
Performance appraisal s an expensive activity. At times, experts may be appointed to conduct performance appraisal. Therefore, the organisation may have to pay good amount of fees to performance raters.
5. Problem of Leniency:
Some raters are very lenient in performance appraisal. They give high scores to everyone, irrespective of their performance. Those who perform well are given high scores and those who do not perform well are also given high scores. Such situation arises, when the rater wants to maintain good relations, especially with average or poor performers.
6. Latest Behaviour Effect:
Rating is influenced by the most recent behaviour ignoring the commonly demonstrated behaviour during the entire appraisal period. If the latest behaviour is good, the ratee will get high scores and vice-versa.
7. Problem of Strictness:
Some raters are strict in their appraisal. They tend to give low scores to all the ratees irrespective of their performance. Those who perform well are given lower scores and those who do not perform well are also given lower scores.
This situation may arise when the rater has high expectation of ratees' performance.
8. Spillover Effect:
In this case, the present performance appraisal is greatly influenced by past performance. " A person who has not done good work in the past is considered to be bad at work in the present as well."
9. Personal Bias:
The way an appraiser personally feels about a ratee may drastically affect the appraiser's objectivity. Also, if the rater has good relations or connections with the ratee, he may always tend to give higher scores to the ratee, even though the ratee does not deserve such high scores. Thus, personal bias may lead to favoured treatment for some employees.
10. Paper Work:
Some supervisors complain that performance appraisal is pointless paper work. They complain so, because many-a-times, performance appraisal reports are found only in the files rather than serving any practical use.
- METHODS OF PERFORMANCE APPRAISAL
There are several methods or techniques of performance appraisal. The most common methods can be broadly divided into two groups as follows:
TRADITIONAL TECHNIQUES
1. Check List: A list is prepared containing various work related statements
such as:
- Quality of work,
- Speed of work
- Attitude towards work, etc.
Against the list, the employees are rated. The rater marks against the Yes or No squares to various statements. The main advantages are its simplicity, convenience, less time consuming and less expensive.
2. Confidential Reports:
This is an old and traditional method of appraising employees. A confidential report is a report on the subordinate s strengths and weaknesses. The confidential report is used for a variety of personnel decisions such as transfers, promotions, etc. This is a poor method of performance appraisal, as it does not provide proper feedback to the employees.
3. Critical Incident Method:
In this method, the rater records important incidents involving the ratee. If the ratee performs well in such incidents, then he is given high scores and vice-versa. For instance, in a particular incident in which a salesman convinces an argumentative customer to buy the product, then the salesman's performance may be given higher score.
4. Ranking Methods:
There are various ranking methods which are commonly used to evaluate the performance of the employees. Ranking methods offer convenience to evaluate the performance and they are less time consuming. The ranking methods used are:
- Simple ranking method.
- Alternation ranking method.
- Paired comparison method.
5. Graphic Rating Scale:
In this method, the raters use a graphic scale to appraise certain specific factors such as quality of work, quantity of work dependability, etc. The following is an example of graphic scale:
The graphic scale method is simple to understand, easy to conduct and less time consuming. However, there is lot of paper work and there are chances of rater bias.
6. Narrative Essay:
The simplest method is the narrative essay. In this, the rater describes in detail an employee's strengths and weaknesses and potentials, together with suggestions for improvement. If essays are written well, they can give detailed
feedback to the subordinates in respect of their performance.
MODERN TECHNIQUES
7. Role Analysis:
Role analysis is a process of analyzing the role of a manager in relation to roles of other managers who are affected by his performance.
The role set members can conduct performance appraisal of the focal role. The focal role can make necessary changes to improve his performance.
8. Assessment Center:
This technique is used for performance appraisal as well as selection and training. Some firms use this technique of performance appraisal, especially at the time of promoting managers to higher levels. The ratees are subject to various psychological tests, management games, oral presentations and such other various exercises.
9. Management by Objectives (MBO):
This technique can be used to measure the performance of subordinates or lower level managers. In MBO, the process involved is as follows:
- Superior and subordinate jointly define common goals.
- Jointly frame plans.
- Subordinate implements the plan.
- Joint review of plans — where performance appraisal o subordinate is done by the superior.
10. Bell-Shaped Curve Methods:
Nowadays, professional firms adopt Bell-shaped Curve method to appraise the performance of its employees. The performanl of the employees is plotted against a bell-shaped curve. Based on the performance, the employees are categorized into groups:
- High Performers
- Average Performers
- Poor Performers.
- Low Performers
The high performers are motivated with monetary and non-monetary incentives. The average performers may be provided with training. The poor performers may be terminated of transferred or asked to opt for Compulsory Retirement Scheme (CRS). At times, training may also be provided to poor performers to improve their performance.
11. 360 Degree Appraisal:
This method is used by large professional firms to appraise the performance of the employees, especially that of managerial personnel. Performance appraisal is conducted by various parties such as superiors, subordinates, clients, colleagues, pane of experts, etc.
This technique provides a balanced performance appraisal of the ratee. All the raters try to be as objective as possible in their rating.
12. Human Resource Accounting (HRA):
HRA deals with cost and contribution of human resources to the organisation.
- The cost of the employee includes cost of selection, training compensation, etc.
- Employee contribution is the money value of employee service to the organisation. Employee performance can bei rated as positive when contribution is more than the cost and vice-versa.
- POTENTIAL APPRAISAL-IMPORTANCE
Potential appraisal is a future - oriented appraisal, whose main objective is to identify and evaluate the potential of the employees to assume higher positions and responsibilities in the organizational hierarchy. Many organisations consider and use potential appraisal as a part of the performance appraisal processes. The potential appraisal refers to the identification of the hidden talents and skills of an employee. The person may not be aware of them.
Techniques of Potential Appraisal:
- Self- Appraisal
- Peer Appraisal
- Superior Appraisal
- 360 Degree Appraisal
- Brainstorming Sessions
- Assessment Centres
- MBO
- Psychological and Psychometric Tests
- Management Games like Goal Setting Game Leadership Exercises, etc.
- Importance of Potential Appraisal:
Potential appraisal is important to the individual employees as well as to the organisation.
1. Identification of Strengths and Weaknesses:
The potential appraisal enables the employees to know their strengths and weaknesses. This gives a chance or opportunity to the employees to correct their weaknesses and consolidate their strengths.
For instance, a particular employee may have good leadership skills to influence others to work willingly. For such employee the management may assign the leadership of a particular project or activity.
2. Identification of Training Needs:
Potential appraisal may enable the management to identify training needs of the employees. For instance, there may be decrease in productivity after the appointment of new employees. In such a case, management may provide training to the new employees to improve the knowledge and skills so as to increase the productivity of the organisation.
3. Information about Future Prospects:
Potential appraisal may enable the organisation to understand the future potential of the employees. In such a case, the management may make necessary arrangements to groom the employees to take up future assignments.
4. Retention of Competent Employees:
Potential appraisal may help to retain competent employees. Through potential appraisal, the management can identify the competencies and capabilities of the employees. This information can be passed on to the employees so that the employees feel a sense of pride of their competencies. When the management promises the competent employees of future career opportunities in the organisation, the employees may become loyal to the organisation and may not leave the organisation.
5. Advise on Career Development:
Potential appraisal may help the management to advise the employees on their career development. Potential appraisal may help to identify the career potential of the employee. Accordingly, the management may assist the employee to develop the career within the organisation.
For instance, the management may provide adequate training to the employee to develop new skills so that the employee can make career advances.
6. Motivation to Employees:
Potential appraisal may motivate the employees to improve their work performance. Potential appraisal may involve interviewing the employee regarding the level of knowledge attitude and skills which the employee possesses. The employee may feel that the management is seriously interested in the employee, and therefore, the employee will put in best possible efforts.
Greater efforts on the part of the motivated employees leads to higher performance of the organisation, and as a result of this, i the employees are motivated with monetary and non-monetary incentives.
7. Assigning Challenging Projects:
Potential appraisal indicates the strengths or competencies of the employees. The management may assign challenging projects to those employees who show good potential in handling challenging projects.
Career planning is the systematic process by which a person selects career goals and the means to achieve them. To achieve the career goals, the employees need to plan for career path. From the organisation's point of view, career planning implies assisting the employees to plan their career path in terms of their capabilities. Examples of career paths:
• For Management Personnel- Management Trainee —Junior Executive- Assistant Manager -Senior Manager - Departmental Manager - Vice President- CEO.
• For Unskilled Worker - Unskilled - Semi Skilled –Skilled Specialist- Foreman/Supervisor.
Career Development is a continuous process of developing one's career within the same organisation or in another. It involves training on neo skills, moving to higher job responsibilities, and making career advances.' The HR manager can assist employees in career development.
CPD is important to the employee as well as to the organisation. The importance of CPD is explained as follows:
I. Importance to the Employee
1. Career Selection:
Career planning and development enables the employee to select the right career in the organisation. The employee may be subject to various development programmes. The development programmes may help to enhance the capabilities and skills of the employee. Therefore, the employee would be in a better position to opt for the right career depending upon his skills and capabilities.
2. Career Upgradation:
Career planning and development may enable the employee to upgrade his/ her career within the organisation. For instance,. a management trainee can rise even to the position of CEO in i the organisation through proper planning of career paths in the organisation.
3. Improvement in Morale:
Career planning and development may help to boost morale of the employee. Morale is the mental condition with respect to courage, confidence, discipline, enthusiasm, etc., Within an individual or in a group. According to Edwin Flippo, morale is the mental condition or attitude of individuals and groups which determines their willingness to cooperate.
4. Improvement in Performance:
Career planning and development enables the employee to improve his/ her performance in the organisation. It facilitates the right placement of the employee, which improves motivation level of the employee.
Increased motivation may result in greater commitment and dedication of the employee, which in turn helps to increase job performance. Also, job performance improves due to improvement in skills and capabilities on account of career planning and development programmes.
5. Job Satisfaction:
Career planning and development can sharpen the skills and capabilities of the employee. The improvement in skills may lead to higher performance. Higher performance may bring in higher rewards and recognition to the employee. Increased rewards and recognition may lead to higher job satisfaction, which in turn will further improve the employee performance.
6. Satisfaction of Esteem Needs:
Career planning and development can help to satisfy esteem needs of the employees. Esteem or ego needs are higher level needs of the emplovees. These needs can be satisfied, as the
employees may be promoted to higher levels in the organisation.
7. Improves Mental Health:
Career planning and development programmes attempt improve mental health of employees. For instance, coun technique of development helps to improve mental health and personal well-being.
Employees with good mental health feel comfortable about themselves, right about other people and are able to meet the demands of life.
8. Reduces Monotony and Frustration:
Performance of the same type of work for years together may generate monotony and frustration in the employee. Career planning and development helps to overcome monotony and frustration because the employee gets an opportunity for handling higher level jobs.
II. Importance to the Organisation
1.Reduction in Employee Turnover:
Career planning and development helps to reduce employee turnover. The employees become loyal to the organisation, and they may not leave the organisation despite tempting offers from the competing firms. This is because; the employees may be assured of higher positions as and when they fall vacant.
2. Motivated Employees:
Career planning and development leads to highly motivated workforce in the organisation. Employees are motivated because of right careers in the organisation. Due to motivation performance of the organisation improves. Therefore, employees can be further motivated by giving them monetary and non-monetary incentives.
3. Higher Efficiency:
Career planning and development helps to improve efficiency is the ratio of returns to cost. Higher efficiency takes place when the organisation gets higher returns at a lower cost than before. Employees make every possible effort to improve returns and reduce costs, wherever possible.
4. Corporate Image:
Career planning and development promotes the image of the organisation. This is because; well-developed employees make constant efforts to improve performance and productivity. As a result of higher performance and productivity, the image of the firm improves in the minds of various stakeholders.
5. Competitive Advantage:
Career planning and development may give competitive advantage to the firm. Employees may come up with innovative ideas to develop new and quality goods. Innovative ideas may also help to reduce costs. Therefore, the company may be able to offer quality products at right prices, which definitely gives competitive advantage.
6. Reduction in Employees' Grievances:
Career planning and development helps to reduce employee grievances. The employees are fully aware of the company's policies and practices. The management also makes efforts to review and revise company's policies, and improve their practices. Therefore, the employee grievances are reduced to the minimum.
7. Facilitates Succession Planning:
Career planning and development facilitates succession planning. Succession planning is a process of making arrangements to fill up key organisational positions including that of CEO
Career planning and development enables the company to fill up managerial positions as and when they fall vacant. This is because; employees are well developed with the help of various development programmes to handle higher level jobs.
8. Attracts and Retains Talented Employees:
Career planning and development attracts and retains the talented employees. 'This is because employees are more or less certain of career opportunities within the organisation. Also potential employees are more willing to the join the organisation because of career advancement opportunities.
Succession planning is a process of deciding in advance to fill up key positions in the organisation that are likely to fall vacant in the near future. For instance, the key position of CEO is likely to fall vacant within the next one year or so, the organisation may groom up potential successor to take over that position.
- Steps in Succession Planning:
1. Identification of the Positions:
The organisation needs to identify the key positions that are likely to fall vacant in the near future. The key positions include that of CEO, President, Vice Presidents, Departmental Heads, etc.
The key positions may fall vacant due to retirement, transfers, and promotions of the existing managers. At times, new key positions may arise due to diversification, expansion, takeovers, i and mergers.
2. Identification of Successors:
Generally, the successors are from within the organisation. The top management needs to identify the potential successors for the key positions that are likely to fall vacant in the near future. The potential successors should have the right qualities and qualifications to handle the key positions.
3. Grooming of Successors:
The top management needs to groom the potential successors to take over the key positions. Training in the form of mentoring or understudy position may be given to the potential successors. Assigning of challenging tasks with adequate authority may be provided to the potential successors.
- Need for Succession Planning:
1. Grooming of Successors:
Succession planning is needed to groom the successors with the required knowledge and skills to deal with the challenges of key positions that are likely to fall vacant in the near future Effective grooming helps to match the personal competencies of the successor with that of the role requirements.
2. Attracts and Retains Competent Employees:
Succession planning is needed to attract and retain competent employees. Succession planning may attract talented individuals to join the organisation on account of career opportunities that would be available to them in the near future. Also, competent and dedicated employees may not leave the organisation and join elsewhere because of the opportunity to get key positions in the organisation at a later date.
3. Motivation to Potential Successors:
Succession planning motivates the successors to acquire new knowledge and skills to handle the challenges of key positions that would fall vacant in the near future. Competent and motivated employees generate higher performance of the organisation. As a result of higher performance, the employees gain by way of monetary and non-monetary incentives.
4. Ensures Filling up of Key Positions:
Succession planning ensures that the key positions in the organisation are filled up without any delay as and when the positions fall vacant. The top management systematically identifies the potential successors based on their competence, commitment, dedication, and integrity.
However, at times, the top management may make a mistake to identify the right candidates, as some of the candidates may be good at impression management rather but lacking competence, integrity and dedication.
5. Support of Stakeholders:
Succession planning is required to gain support of stakeholders.
Without the support of stakeholders, a company may not prosper and progress in the long-run. The stakeholders such as investors would trust a company that plans for growth and expansion with the help of various strategies including succession strategy.
6. Corporate Image:
Succession planning may help to maintain and improve corporate image in the minds of stakeholders. Due to succession planning, the key positions are held by competent employees, which improve the functioning and performance of the organisation.
7. Competitive Advantage:
Succession planning gives competitive advantage to the firm. The organisation is in a position to get competent managers whenever a need arises. Therefore, the organisation's growth plans move on the right track, which in turn gives competitive advantage to the organisation.
8. Career Upgradation:
Succession planning provides an opportunity to the employees to upgrade their career within the organisation. Succession planning provides the necessary grooming to the potential successors, which results in career upgradation. Career upgradation provides an opportunity to rise to the higher levels in the organisation.
For instance, succession planning may enable a junior executive to rise to the top position in the organisation such as departmental head or even to the position of the CEO.
A mentor is a coach, guide or a teacher who teaches, guides and counsels the learner or mentee. In corporate world, mentoring is considered as a method of human resource development. The mentor is probably someone who had "been there, done that" before. A mentor might use a variety of approaches like coaching, training, discussion, counselling, etc. Example: In a college, the principal act as a mentor to the teachers and teachers can act as mentor to the students. Mentoring is a process of guiding and coaching the mentee for improving individual, group and organisational effectiveness.
- Importance of Mentoring
Mentoring aids in qualitative decision-making on the part of mentee due to the assistance and advice given by the mentor. Improved decision-making generates higher efficiency in the organisation which in turn results in higher profitability of the organisation.
The importance of mentoring is explained as follows:
1. Aids in Decision-making: Mentoring facilitates better decision making in the organisation. The mentee can discuss important aspects of decision-making with the mentor. The mentor may provide expertise to the mentee to take sound decisions. The sound decision-making may enable the organisation to achieve higher productivity and profitability.
2. Better Communication: Mentoring helps in better communication in the organisation. The mentee can develop good communication skills under the guidance of mentor. The mentee can easily communicate or bring to the notice of higher authorities with respect to vital issues. Without the support of mentor, the mentee may find it difficult to bring to the notice of top authorities the vital problems or issues.
Since, the mentee gains confidence and support of the mentor, the mentee can easily communicate with the higher authorities Since the higher authorities respect the mentor, they may easily accept the views and opinions of the mentee. The mentee may also find it easier to communicate with subordinates on vital issues.
3. Competency: Mentoring may improve the competency of the mentee. The mentor acts as a guide in assisting the mentee to improve thinking and creativity. The mentee can discuss vital issues or problems with the mentor. The mentor can give good advice to the mentee based on his rich experience. Therefore, the overall competency of the mentee can improve under the guidance of the mentor.
4. Discipline: Mentoring may facilitate discipline on the part of the mentee. Due to the active advice and support of the mentor the mentee may work with application and dedication. The application and dedication on the part of the mentee largely contributes to his discipline. The discipline on the part of mentee influence the subordinates to be disciplined.
5. Efficiency / Productivity: Mentoring improves efficiency in the organisation. Efficiency is the ratio of returns (output) to costs (inputs). Mentoring facilitates qualitative decision making. Improved decision-making results in higher efficiency or productivity in the organisation.
6. Facilitates Team Work: Mentoring facilitates team work in the organisation. Conflicts and disputes can be easily resolved with the help of mentoring. Also, relationship in the organisation can be improved at all levels. Better relationship between superior and subordinates and also among the various departments can lead to improved team work in their organisation.
7. Goodwill: Mentoring results in higher performance of the organisation. The improved performance leads to improved corporate image in the minds of all stakeholders:
- Customers
- Dealers and Suppliers
- Employees
- Financial Institutions
- Government Authorities
- Shareholders and Society
8. Competitive Advantage: Mentoring aids in better decision making. The mentee can come up with innovative ideas due to
the support of mentor. Therefore, the organisation finds it easier to face competition in the market.
9. Career Planning and Development: Mentoring facilitates career planning and development. 'The mentor can guide the mentee to select the right career and advises the mentee to develop the career within the organisation.
10. Optimum use of Resources: Mentoring leads to higher productivity. Therefore, a firm can make optimum use of resources such as:
- Physical resources
- Capital resources
- Manpower resources.
John Newstrom and Keith Davis in their book 'Organisational Behaviour' state "counselling is discussion with an employee of a problem that usually has emotional content in order to help the employee cope with it better."
Counselling helps to improve employee mental health and wellbeing. Good mental health means that people feel good about themselves, right about other people, and are able to meet the challenges of life.
- Functions of Counselling:
The main objectives of counselling are to enable employees to develop self-confidence, understanding of self and others, self-control, and the ability to work effectively. To achieve these objectives, the counsellors perform the following functions:
1. Advice - The counsellor tries to understand the problem faced by the counselee and tells the counselee the things to be done before guiding.
2. Reassurance - giving the counselee courage and confidence to face a problem.
3. Communication - providing information and understanding of the problem.
4. Release of Emotional Tension - helping the person to feel free of frustrations and stress.
5. Clarified Thinking - encouraging the person to think of the problem in a matured manner, but refrains from telling the counselee what is right.
6. Reorientation - encouraging a change in counselee's psychic self through a change in basic goals and values. For example, the counsellor may help the counselee to recognize and accept one's limitations.
When Counselling is Required:
Employee counselling can be conducted by the employer or by an external counsellor when employees are not performing or behaving as expected. The counselling offered at the company can support and assist employees through work-related problems or personal issues that may interfere with job responsibilities.
- Career problems
- Performance Issues
- Behavioural issues such as Absenteeism and Tardiness
- Slipping deadlines
- Family problems
- Problems in adjusting with organisation's culture Lack of team spirit
Benefits of Counselling:
- Improvement in employee productivity and performance.
- Positive work behaviour, therefore, reduction in absenteeism and employee turnover.
- Enhances quality of decision-making.
- Innovation and creativity on the part of employees.
- Encourages employee to search for alternate solutions to problems.
- Improves superior-subordinate relationships.
Reference
- manan prakashan - commerce 6
- wikipedia
- yourarticelibrary
- businessmanagementideas
- managementstudyguide