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Human Resource Management – M.B.A.

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M.B.A.(HRM), M.A.(ENG), M.Phil, (Ph.D)

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Introduction: Organization and individual should develop and progress
simultaneously for their survival and attainment of mutual goals. So, every modern
management has to develop the organization through human resources development.
Employee training is the most important sub-system of human resources development.
Training is a specialized function and is one of the fundamental operative functions for
human resources management.

Meaning: After an employee is selected, placed and introduced in an organization
he/she must be provided with training facilities in order to adjust him to the job.
Training is the act of increasing the knowledge and skill of an employee for doing a
particular job. Training is a short-term educational process and utilizing a systematic
and organized procedure by which employees learn technical knowledge and skills for a
definite purpose. Dale S. Beach defines the training as”….. the organized procedure by
which people learn knowledge and skill for a definite purpose”. In other words, training
improves changes and moulds the employee’s knowledge, skill, behavior and aptitude
and attitude towards the requirements of the job and the organization. Training refers to
the teaching and learning activities carried on for the primary purpose of helping
members of an organization to acquire and apply the knowledge, skills, abilities and
attitudes needed by a particular job and organization.Thus, training bridges the
differences between job requirements and employee’s present specifications.

Training and Development: Employee training is distinct from management
development or executive development. While the former refers to training given to
employees in the areas of operations, technical and allied areas, the latter refers to
developing an employee in the areas of principles and techniques of management,
administration, organization and allied areas.

Importance of Training and Development: Optimum Utilization of Human
Resources – Training and Development helps in optimizing the utilization of human
resource that further helps the employee to achieve the organizational goals as well as
their individual goals.

Development of Human Resources – Training and Development helps to provide
an opportunity and broad structure for the development of human resources’ technical
and behavioral skills in an organization. It also helps the employees in attaining
personal growth.

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Development of skills of employees – Training and Development helps in
increasing the job knowledge and skills of employees at each level. It helps to expand the
horizons of human intellect and an overall personality of the employees.

Productivity – Training and Development helps in increasing the productivity of the
employees that helps the organization further to achieve its long-term goal.

Team spirit – Training and Development helps in inculcating the sense of team work,
team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within
the employees.

Organization Culture – Training and Development helps to develop and improve the
organizational health culture and effectiveness. It helps in creating the learning culture
within the organization.

Organization Climate – Training and Development helps building the positive
perception and feeling about the organization. The employees get these feelings from
leaders, subordinates, and peers.

Quality – Training and Development helps in improving upon the quality of work and

Healthy work environment – Training and Development helps in creating the
healthy working environment. It helps to build good employee, relationship so that
individual goals aligns with organizational goal.

Health and Safety – Training and Development helps in improving the health and
safety of the organization thus preventing obsolescence.

Morale – Training and Development helps in improving the morale of the work force.
Image – Training and Development helps in creating a better corporate image.

Profitability – Training and Development leads to improved profitability and more
positive attitudes towards profit orientation.
þ Training and Development aids in organizational development i.e. Organization
gets more effective decision making and problem solving. It helps in
understanding and carrying out organisational policies
þ Training and Development helps in developing leadership skills, motivation,
loyalty, better attitudes, and other aspects that successful workers and managers
usually display.

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Training Objectives: Generally, line managers ask the personnel manager to
formulate the training policies. The personnel manager formulates the following
training objectives in keeping with the company’s goals and objectives.

ü (i) To prepare the employee, both new and old to meet the present as well as the
changing requirements of the job and the organization.
ü (ii) To prevent obsolescence.
ü (iii) To impart the new entrants the basic knowledge and skills they need for an
intelligent performance of a definite job.
ü (iv) To prepare employees for higher level tasks.
ü (v) To assist employees to function more effectively in their present positions by
exposing them to the latest concepts, information and techniques and developing
the skills they will need in their particular fields.
ü (vi) To build up a second line of competent officers and prepare them to occupy
more responsible positions.
ü (vii) To broaden the minds of senior managers by providing them with
opportunities for an interchange of experiences within and outside with a view to
correcting the narrowness of outlook that may arise from over-specialization.
ü (viii) To develop the potentialities of people for the next level job.
ü (ix) To ensure smooth and efficient working of a department.
ü (x) To ensure economical output of required quality.
ü (xi) To promote individual and collective morale, a sense of responsibility, co-
operative attitudes and good relationships.

Training Methods: As a result of research in the field of training, a number of
programs are available. Some of these are new methods, while others are improvements
over the traditional methods. The training programs commonly used to train operative
and supervisory personnel are discussed below. These programs are classified into on-
the-job off-the-job training programs.

On-the Job Training Methods: This type of training, also known as job instruction
training, is the most commonly used method. Under this method, the individual is
placed on a regular job and taught the skills necessary to perform that job. The trainee
learns under the supervision and guidance of a qualified worker or instructor. On-the-
job training has the advantage of giving first hand knowledge and experience under the
actual working conditions. While the trainee learns how to perform a job, he is also a
regular worker rendering the services for which he is placed on rendering services in the
most effective manner rather than learning how to perform the job. On-the-job training
methods include job rotation, coaching, job instruction or training through step-by-step
and committee assignment.

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Job Rotation: This type of training involves the movement of the trainee from one job
to another. The trainee receives job knowledge and gains experience from his supervisor
or trainer in each of the different job assignments. Though this method of training is
common in training managers for general management positions, trainees can also be
rotated from job to job in work-shop jobs. This method gives an opportunity to the
trainee to understand the problems of employees on other jobs and respect them.

Coaching: The trainee is placed under a particular supervisor who functions as a coach
in training the individual. The supervisor provides feedback to the trainee on his
performance and offers him some suggestions of his burden. A limitation of this method
of training is that the trainee may not have the freedom or opportunity to express his
own ideas.

Job Instruction: This method is also known as training through step by step. Under
this method, the trainer explains to the trainee the way of doing the jobs, job knowledge
and skills and allows him to do the job. The trainer appraises the performance of the
trainee, provides feedback information and corrects the trainee.

Committee Assignments: Under the committee assignment, a group of trainees are
given and asked to solve an actual organizational problem. The trainees solve the
problem joint6ly. It develops team work.

Internship: Internship is one of the on-the-job training methods. Individuals entering
industry in skilled trade4slike machinist, elect6ician and laboratory technician are
provided with thorough instruction though theoretical and practical aspects. For
example, TISCO, TELCO, and BHEL select the candidates from polytechnics
engineering colleges and management institutions and provide apprenticeship training.
Apprenticeship training programs are jointly sponsored by colleges, universities and
industrial organizations to provide the opportunity to the students to gain real-life
experience as well as employment. Exhibit presents the benefits of apprenticeship

MAKE INTERNSHIPS BENEFICIAL: Most of the Universities and Colleges
encourage students for internship as part of the curriculum, as it is beneficial to all
Benefits to Students:
þ Practical knowledge and exposure
þ Higher initial salaries
þ Faster promotions

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þ Quick job orientation

Benefits of Universities:
þ Touch with market place
þ Improvement in recruitment chances
þ Improvement in attraction of quality students

Benefits to Potential Employers:
þ Competent assistance
þ Opportunity to evaluate potential employees
þ No obligation to continue relationship at the end of internship
þ Reduce recruitment expenses.

Off-the-Job Methods: Under this method of training, the trainee is separated from
the job situation and his attention is focused upon learning the material related to his
future job performance. Since the trainee is not distracted by job requirements, he can
place his entire concentration on learning the job rather than spending his time in
performing it. There is an opportunity for freedom of expression for the trainees.
Companies have started using multimedia technology and information technologies in
training off-the-job training methods are as follows:

Vestibule Training: In this method, actual work conditions are simulated in a
class room, material, files and equipment which are used in actual job
performance are also used in training. This type of training is commonly used for
training personnel for clerical and semi-skilled jobs. The duration of this training
ranges from days to a few weeks. Theory can be related to practice in this method.

Role Playing: It is defined as a method of human interaction that involves
realistic behavior in imaginary situations. This method of training involves
action, doing and practice. The participants play the role of certain characters
such as the production manager, mechanical engineer, superintendents,
maintenance engineers, quality control inspectors, foremen, workers and the like.
This method is mostly used for developing inter-personal interactions and
Lecture Method: The lecture is a traditional and direct method of instruction.
The instructor organizes the material and gives it to a group of trainees in the
form of a talk. To be effective, the lecture must motivate and create interest
among the trainees. An advantage of the lecture methods that it is direct and can
be used for a large group of trainees. Thus, costs and time involved are reduced.
The major limitation of the lecture method is that it does not provide for transfer
of training effectively.

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Conference or Discussion: It is a method in training the clerical professional
and supervisory personnel. This method involves group of people who pose ideas,
examine and share facts, ideas and data, test assumptions and draw conclusions,
all of which contribute to the improvement of job performance. Discussion has
the distinct advantage over the lecture method, in that the discussion involves
two-way communication and hence feedback is provided. The participants feel
free to speak in small groups. The success of this method depends on the
leadership qualities of the person who leads the group.

Programmed Instruction: In recent years, this method has become popular.
The subject-matter to be learned is presented in a series of carefully planned
sequential units. These units are arranged from simple to more complex level of
instruction. The trainee goes through theses units by answering questions or
filling the blanks. This method is expensive and time consuming.

The Training Procedure: The training procedure discussed below is
essentially an adoption of the job instruction training course, which has been
proved to have a great value. The important steps in the training procedure are
discussed below:

Preparing the Instructor: The instructor must know both the job to be taught
and how to teach it. The job must be divided into logical parts so that each can be
taught at a proper time without the trainee losing plan. For each part, one should
have in mind the desired technique of instruction, that is, whether a particular
point is best taught by illustration, demonstration or explanation.

A ser ious and committed instr uctor must:
• Know the job or subject he is attempting to teach.
• Have the aptitude and ability to teach.
• Have willingness towards the profession.
• Have a pleasing personality and capacity for leadership.
• Have the kno2wledge of teaching principles and methods.
• Be a permanent student, in the sense that he should equip himself with the latest
concepts and knowledge.

Preparing the Trainee: As in interviewing, the first step in training is to attempt to
place the trainee at east. Most people are some what nervous when approaching an
unfamiliar task. Though the instructor may have executed this training procedure, many
times he or she never forgets its newness to the trainee. The quality of empathy is a
mark of the good instructor.

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Getting Ready to Teach: This stage of the program is class hour teaching involving
the following activities:

• Planning the program.
• Preparing the instructor’s outline.
• Do not try to cover too much material.
• Keep the session moving along logically.
• Discuss each item in depth.
• Repeat, but in different words.
• Take the material from standardized texts when it is available.
• When the standardized text is not available, develop the program and course content
based on group approach. Group consists of employer, skilled employees, supervisors,
trade union leaders and others familiar with job requirements. Group prepares
teaching material.
• Teach about the standard for the trainee like quality, quantity, waste or scrap, ability
to work without supervision, knowledge or procedure, safety rules, human relations
• Remember your standard, before you teach.

Ï Presenting the Operation: There are various alternative ways of presenting
the operation, viz. explanation, demonstration etc. an instructor mostly uses
these methods of explanation. In addition, one may illustrate various points
through the use of pictures, charts, diagrams and other training aids.

Ï Try Out the Trainee’s Performance: As a continuation of the presentation
sequence given above, the trainee should be asked to start the job or operative
procedure. Some instructors prefer that the trainee explains each step before
doing it, particularly if the operation involves any danger. The trainee, through
repetitive practice, will acquire more skill.

Ï Follow-up: The final step in most training procedures is that of follow-up.
When people are involved in any problem or procedure, it is unwise to assume
that things are always constant. Follow-up cab be adopted to a variable
reinforcement schedule as suggested in the discussion of learning principles.
Every training program should have follow-up otherwise the training programs in
the future cannot be improved.


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The specification of values forms a basis for evaluation. The basis of evaluation and the
mode of collection of information necessary for evaluation should be determined at the
planning stage. The process of training evaluation has been defined as “any attempt to
obtain information on the effects of training permance and to assess the value of
training in the light of that information”. Evaluation leads to controlling and correcting
the training program. Hamblin suggested five level at which evaluation of training can
take place, viz, reactions, learning, job behavior, organization and ultimate value.

¶ Positive Attitudes Make an Organisation
¶ Determine training needs through job description, performance appraisal forms
and potential appraisal discussions.
¶ Prepare a training calendar in discussion with managers.
¶ Training programs should be well defined specific objectives.
¶ Nominate the employees for training based on a need for training.
¶ Trainers should be qualified and experienced, and preferably internal.

Ï Reactions: Training program is evaluated on the basis of the trainee’s reactions
to the usefulness of coverage of the matter, depth of the course content, method
of presentation, teaching methods etc.

Ï Learning: Training program, trainer’s ability and trainee ability are evaluated
on the basis of quantity of content learned and time in which it is learned and the
learner’s ability to use or apply the content he learned.

Ï Job Behavior: This evaluation includes the manner and extent to which the
trainee has applied his learning to his job.

Ï Organisation: This evaluation measures the use of training, learning and
change in the job behavior of the department/organization in the form of
increased productivity, quality, morale, sales turnover and the like.

Ï Ultimate Value: It is the measurement of the ultimate result of the
contributions of the training program to the Company goals like survival, growth,
profitability etc., and to the individual goals like development of personality and
social goals like maximizing social benefit.


What i s Management Development?

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Management development is a systematic process of growth and development by which
the managers develop their abilities to manage. So, it is the result of not only
participation in formal courses of instruction but also of actual job experience. It is
concerned with improving the performance of the managers by giving them
opportunities for growth and development, which in turn depends on organization
structure of the company.

Role of the Organisation: “The role of the company in management development is
to establish the program and the development opportunities for its present and
potential managers”. “Executive development is eventually something that the executive
has to attain himself. But he will do this much better if he is given encouragement,
guidance and opportunity by his company”.

Objectives of Management Development: The management development
programs are organized with a view to achieving specific objectives. They are:

¯ (i)To overhaul the management machinery.
¯ (ii) To improve the performance of the managers.
¯ (iii) To give the specialists on overall view of the functions of an organization and
equip them to coordinate each other’s efforts effectively.
¯ (iv) To identify persons with the required potential and prepare them for senior
¯ (v) To increase morale of the members of the management group.
¯ (vi) To increase versatility of the management group.
¯ (vii) To keep the executives abreast with the changes and developments in their
respective fields.
¯ (viii) To create the management succession that can take over in case of
¯ (ix) To improve thought process and analytical ability.
¯ (x) To broaden the outlook of the executive regarding h is role position and
¯ (xi) To understand the conceptual issues relating to economic, social and
technical areas.
¯ (xii) To understand the problems of human relations and improve human
relations skills and
¯ (xiii) To stimulate creative thinking.

Evaluation of Management Development Programs: Management development
programs should be evaluated in order to find out whether the objectives of the
programs are achieved or not. The development programs would be effective, if they

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contribute to the organizational group and individual goals. Management should
delegate the responsibility of evaluation to a senior manager in the HRD department.
The evaluation specialist should be clear of the objectives and goals against which the
evaluation is conducted. Evaluation should be a continuous process and specific. The
evaluation specialist should inform the trainees well in advance the content, objectives,
areas and the method of evaluation. Evaluation must be objective oriented. Evaluation
must be realistic in terms of direction, standards etc., The areas of evaluation include
different managerial skills, knowledge, technical skills and knowledge and conceptual
skills and knowledge. The areas should be specific for each MDP based on the content
provided. Further, the evaluation can also be conducted regarding the training
methodology, input/output/content, infrastructure and physical facilities, teaching aids

Evaluation should not only immediately be after the completion of the programs but
also in specific intervals in the long-run in order to find out the impact of the MDP on
the job behavior and efficiency of the trainee. Further, their evaluation may also
measure the improvement in decision-making skill, interpersonal relation, strategy
making and implementation skills, role modeling skills etc., these areas depend upon
the content of each MDP. The evaluation results should be provided to the trainees,
their superiors, subordinates and HRD department of the organization. These results
can be used for further improvement of the future programs in the company.

Methods of Management Development: There are mainly two types of methods by
which managers can acquire the knowledge, skills and attitudes and make themselves
competent managers. One is through formal training and the other is through on-the-
job experiences. On-the-job training is of utmost importance as the real learning takes
place only when the learner uses what he has learnt. The saying ”an ounce of practice is
worth tons of theory” is true, whoever said it. But it should also be remembered that
class-room training or pedagogical techniques have also get their own importance in
learning new knowledge, learning new techniques and broader concepts.

Performance Appraisal
Performance appraisal is the process of obtaining, analyzing and recording information
about the relative worth of an employee. The focus of the performance appraisal is
measuring and improving the actual performance of the employee and also the future
potential of the employee. Its aim is to measure what an employee does. According to
Flippo, a prominent personality in the field of Human resources, “performance
appraisal is the systematic, periodic and an impartial rating of an employee’s excellence
in the matters pertaining to his present job and his potential for a better job.”

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Performance appraisal is a systematic way of reviewing and assessing the performance
of an employee during a given period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It
helps to analyze his achievements and evaluate his contribution towards the
achievements of the overall organizational goals. By focusing the attention on
performance, performance appraisal goes to the heart of personnel management and
reflects the management’s interest in the progress of the employees.

Objectives Of Performance appraisal:


subordinates and management – employees.
the training and development needs of the future.
rovide feedback to the employees regarding their past performance.
performed by the employees.
organization such as recruitment, selection, training and development.

Traditional Methods of Performance Appraisal

| Essay Appraisal Method: This traditional form of appraisal, also known as
“Free Form method” involves a description of the performance of an employee by
his superior. The description is an evaluation of the performance of any
individual based on the facts and often includes examples and evidences to
support the information. A major drawback of the method is the inseparability of
the bias of the evaluator.

| Straight Ranking Method: This is one of the oldest and simplest techniques of
performance appraisal. In this method, the appraiser ranks the employees from
the best to the poorest on the basis of their overall performance. It is quite useful
for a comparative evaluation.

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| Paired Comparison: A better technique of comparison than the straight
ranking method, this method compares each employee with all others in the
group, one at a time. After all the comparisons on the basis of the overall
comparisons, the employees are given the final rankings.

| Critical Incidents Methods: In this method of Performance appraisal, the
evaluator rates the employee on the basis of critical events and how the employee
behaved during those incidents. It includes both negative and positive points.
The drawback of this method is that the supervisor has to note down the critical
incidents and the employee behaviour as and when they occur.

| Field Review: In this method, a senior member of the HR department or a
training officer discusses and interviews the supervisors to evaluate and rate their
respective subordinates. A major drawback of this method is that it is a very time
consuming method. But this method helps to reduce the superiors’ personal bias.

| Checklist Method: The rater is given a checklist of the descriptions of the
behaviour of the employees on job. The checklist contains a list of statements on
the basis of which the rater describes the on the job performance of the

| Graphic Rating Scale: In this method, an employee’s quality and quantity of
work is assessed in a graphic scale indicating different degrees of a particular
trait. The factors taken into consideration include both the personal
characteristics and characteristics related to the on the job performance of the
employees. For example a trait like Job Knowledge may be judged on the range of
average, above average, outstanding or unsatisfactory.

| Forced Distribution: To eliminate the element of bias from the rater’s ratings,
the evaluator is asked to distribute the employees in some fixed categories of
ratings like on a normal distribution curve. The rater chooses the appropriate fit
for the categories on his own discretion.

Modern Methods of Performance Appraisal

Assessment Centers: An assessment centre typically involves the use of methods like
social/informal events, tests and exercises, assignments being given to a group of
employees to assess their competencies to take higher responsibilities in the future.
Generally, employees are given an assignment similar to the job they would be expected
to perform if promoted. The trained evaluators observe and evaluate employees as they
perform the assigned jobs and are evaluated on job related characteristics. The major

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competencies that are judged in assessment centres are interpersonal skills, intellectual
capability, planning and organizing capabilities, motivation, career orientation etc.
assessment centres are also an effective way to determine the training and development
needs of the targeted employees.

Behaviorally Anchored Rating Scales: Behaviorally Anchored Rating Scales
(BARS) is a relatively new technique which combines the graphic rating scale and
critical incidents method. It consists of predetermined critical areas of job performance
or sets of behavioral statements describing important job performance qualities as good
or bad (for eg. the qualities like inter personal relationships, adaptability and reliability,
job knowledge etc). These statements are developed from critical incidents. In this
method, an employee’s actual job behaviour is judged against the desired behaviour by
recording and comparing the behaviour with BARS. Developing and practicing BARS
requires expert knowledge.

Human Resource Accounting Method: Human resources are valuable assets for
every organization. Human resource accounting method tries to find the relative worth
of these assets in the terms of money. In this method the Performance appraisal of the
employees is judged in terms of cost and contribution of the employees. The cost of
employees include all the expenses incurred on them like their compensation,
recruitment and selection costs, induction and training costs etc whereas their
contribution includes the total value added (in monetary terms). The difference between
the cost and the contribution will be the performance of the employees. Ideally, the
contribution of the employees should be greater than the cost incurred on them.

360-Degree-Performance-Appraisal Method: 360 degree feedback, also known
as ‘multi-rater feedback’, is the most comprehensive appraisal where the feedback about
the employees’ performance comes from all the sources that come in contact with the
employee on his job. 360 degree respondents for an employee can be his/her peers,
managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors –
anyone who comes into contact with the employee and can provide valuable insights and
information or feedback regarding the “on-the-job” performance of the employee.
360 degree appraisal has four integral components:
1. Self appraisal
2. Superior’s appraisal
3. Subordinate’s appraisal
4. Peer appraisal.

Self appraisal gives a chance to the employee to look at his/her strengths and
weaknesses, his achievements, and judge his own performance. Superior’s appraisal
forms the traditional part of the 360 degree performance appraisal where the

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employees’ responsibilities and actual performance is rated by the superior.
Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superior’s ability to delegate the work,
leadership qualities etc. Also known as internal customers, the correct feedback given by
peers can help to find employees’ abilities to work in a team, co-operation and
sensitivity towards others.

360 degree performance appraisal is also a powerful developmental tool because when
conducted at regular intervals it helps to keep a track of the changes others’ perceptions
about the employees. A 360 degree appraisal is generally found more suitable for the
managers as it helps to assess their leadership and managing styles. This technique is
being effectively used across the globe for performance appraisals. Some of the
organizations following it are Wipro, Infosys, and Reliance Industries etc.


Establishing Performance Standards: The first step in the process of performance
appraisal is the setting up of the standards which will be used to as the base to compare
the actual performance of the employees. This step requires setting the criteria to judge
the performance of the employees as successful or unsuccessful and the degrees of their
contribution to the organizational goals and objectives. The standards set should be
clear, easily understandable and in measurable terms. In case the performance of the
employee cannot be measured, great care should be taken to describe the standards.

Communicating the Standards: Once set, it is the responsibility of the management
to communicate the standards to all the employees of the organization. The employees
should be informed and the standards should be clearly explained. This will help them
to understand their roles and to know what exactly is expected from them. The
standards should also be communicated to the appraisers or the evaluators and if
required, the standards can also be modified at this stage itself according to the relevant
feedback from the employees or the evaluators.

Measuring the Actual Performance: The most difficult part of the Performance
appraisal process is measuring the actual performance of the employees that is the work
done by the employees during the specified period of time. It is a continuous process
which involves monitoring the performance throughout the year. This stage requires the
careful selection of the appropriate techniques of measurement, taking care that
personal bias does not affect the outcome of the process and providing assistance rather
than interfering in an employees work.

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Comparing the Actual with the Desired Performance: The actual performance
is compared with the desired or the standard performance. The comparison tells the
deviations in the performance of the employees from the standards set. The result can
show the actual performance being more than the desired performance or, the actual
performance being less than the desired performance depicting a negative deviation in
the organizational performance. It includes recalling, evaluating and analysis of data
related to the employees’ performance.

Discussing Results: The result of the appraisal is communicated and discussed with
the employees on one-to-one basis. The focus of this discussion is on communication
and listening. The results, the problems and the possible solutions are discussed with
the aim of problem solving and reaching consensus. The feedback should be given with a
positive attitude as this can have an effect on the employees’ future performance. The
purpose of the meeting should be to solve the problems faced and motivate the
employees to perform better.

Decision Making: The last step of the process is to take decisions which can be taken
either to improve the performance of the employees, take the required corrective
actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

Purpose Of Performance Appraisal: Performance Appraisal is being practiced in
90% of the organisations worldwide. Self-appraisal and potential appraisal also form a
part of the performance appraisal processes. Performance Appraisal is aimed at:

þ To review the performance of the employees over a given period of time.
þ To judge the gap between the actual and the desired performance.
þ To help the management in exercising organizational control.
þ To diagnose the training and development needs of the future.
þ Provide information to assist in the HR decisions like promotions, transfers etc.
þ Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
þ To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.
þ To reduce the grievances of the employees.
þ Helps to strengthen the relationship and communication between superior –
subordinates and management – employees.

The most significant reasons of using Performance appraisal are:

þ Making payroll and compensation decisions – 80%
þ Training and development needs – 71%

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þ Identifying the gaps in desired and actual performance and its cause – 76%
þ Deciding future goals and course of action – 42%
þ Promotions, demotions and transfers – 49%
þ Other purposes – 6% (including job analysis and providing superior support,
assistance and counseling)

Performance Appraisals as Career Development: Performance appraisal is a
part of career development. The latest mantra being followed by organizations across
the world being – “get paid according to what you contribute” – the focus of the
organizations is turning to performance management and specifically to individual
performance. Performance appraisal helps to rate the performance of the employees and
evaluate their contribution towards the organizational goals. Performance appraisal as
Career Development leads to the recognition of the work done by the employees, many a
times by the means of rewards and appreciation etc. It plays the role of the link between
the organization and the employees’ personal career goals.

| Potential appraisal, a part of Performance appraisal, helps to identify the hidden
talents and potential of the individuals. Identifying these potential talents can
help in preparing the individuals for higher responsibilities and positions in the
future. The performance appraisal process in itself is developmental in nature.

| Performance appraisal is also closely linked to other HR processes like helps to
identify the training and development needs, promotions, demotions, changes in
the compensation etc. A feedback communicated in a positive manner goes a long
way to motivate the employees and helps to identify individual career
developmental plans. Based on the evaluation, employees can develop their
career goals, achieve new levels of competencies and chart their career
progression. Performance appraisal encourages employees to reinforce their
strengths and overcome their weaknesses.

Performance Appraisal Feedback: Performance appraisal process is incomplete
without the feedback given to the employee about his appraisal and his performance.
But the way of giving as well as receiving the feedback differs from person to person and
their way of handling and their outlook towards the issue. Therefore, On the part of the
person receiving the feedback, the following points are important to be taken care of:

r The employee should have a positive attitude towards the feedback process
r He should listen to the suggestions of the appraiser calmly and try to incorporate
them in his plans.
r He should not hesitate to ask for the help of his superiors.
r Should have a co-operative attitude during the feedback meeting.

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r Should take the feedback objectively.
r Should not judge the appraiser as a person on the basis of the feedback.

On the part of the appraiser or the manager / person giving the feedback, the following
points are to be taken care of:

r The appraiser should make the receiver feel comfortable during the feedback
r The appraiser should make it a two – way conversation i.e. let the employee
r Listen to the employee and note his points, suggestions, problems etc.
r The appraiser should not adopt a confrontational approach towards the meeting.
The goal is not to criticize the employee.
r Provide a constructive feedback to the employee i.e. in a way which will motivate
him to perform better.
r Have a positive attitude towards the process
r Be fair and objective
r Prepare yourself for what to say and how to say.
r Make the appraisal feedback meeting useful and productive for the organization
and the employee.