Part-A

1) Define Human Resource Planning

Human Resources Planning:- Human resources planning, often abbreviated as HR planning,

is the strategy that the HR department uses when hiring. It shows HR how many employees
need to be hired, what areas they must specialize in, and what kind of training they will receive.
Without HR planning, larger companies would struggle to meet the demands of their position
with an adequate workforce, and knowledge would not be spread across the company in an
efficient manner.
E.W Vetter viewed human resources planning as “ a process by which an organization should
move from its current manpower position to its desired manpower position. Through planning
management strives to have the right number and right kind of people at the right places at the
right time, doing things which result in both the organization and the individual receiving
maximum long-run benefit”.
2) HRM Versus HRD

a. HRD is a sub section of HRM, i.e. HRD is a section with the department of HRM.
b. HRM deals with all aspects of the human resources function while HRD only deals with
the development part.
c. HRM is concerned with recruitment, rewards among others while HRD is concerned with
employee skills development.
d. HRM functions are mostly formal while HRD functions can be informal like mentorships.

3) What are the steps involved in Induction programme?

Steps In Induction Programme

The HR department may initiate the following steps while organizing the induction programme:
o Welcome to the organization
o Explain about the company.
o Show the location, department where the new recruit will work. .
o Give the company's manual to the new recruit.
o Provide details about various work groups and the extent of unionism within the
company.
o Give details about pay, benefits, holidays, leave, etc. Emphasize the importance of attendance or punctuality.
o Explain about future training opportunities and career prospects.
o Clarify doubts, by encouraging the employee to come out with questions.
o Take the employee on a guided tour of buildings, facilities, etc. Hand him over to his
supervisor.
4) Explain Vestibule training.

Vestibule training is a type of instruction using a vestibule, a small area away from the actual
worksite, consisting of training equipment exactly duplicating the materials and equipment used
on the job. The purpose of vestibule training is to reproduce an actual work setting and place it
under the trainer's control to allow for immediate and constructive feedback. Training vestibules
are useful because they allow trainees to practice while avoiding personal injury and damage to
expensive equipment without affecting production. Training effectiveness is dependent on the
fidelity level of the simulated equipment and the trainee's ability to behave as in his or her work
setting.
5) Discuss the need of career planning.

Your career planning decisions and the career path you choose will determine the patterns and
texture of your life and career – whom you marry, where you live, your income, how much time

Page 1 of 51
 you spend at home, your travels, and how you spend your leisure time. Nevertheless, after
years of research and work in career planning, we have concluded that most students leave
high school and college without any clear plan to guide them in selecting and pursuing a career
or occupation.
We have also concluded that when people feel overwhelmed by a job or career, they often fail to
plan adequately for the changes they need to make to restore balance in their lives. The
recognition of a career problem does not automatically trigger the career planning that is
necessary to alleviate the problem.
6) Discuss the causes of labor turnover.

Causes of labour turnover

• A high level of labour turnover could be caused by many factors:
• Inadequate wage levels leading to employees moving to competitors
• Poor morale and low levels of motivation within the workforce
• Recruiting and selecting the wrong employees in the first place, meaning they leave to seek
more suitable employment
• A buoyant local labour market offering more (and perhaps more attractive) opportunities to
employees
• Employees quitting, retiring, getting fired, dying, getting disabled, or abandoning the job.
7) Discuss the objectives and uses of performance appraisal?

Objectives of Performance appraisal:

• To review the performance of the employees over a given period of time.
• To judge the gap between the actual and the desired performance.
• To help the management in exercising organizational control.
• Helps to strengthen the relationship and communication between superior – subordinates
and management – employees.
• To diagnose the strengths and weaknesses of the individuals so as to identify the training
and development needs of the future.
• To provide feedback to the employees regarding their past performance.
• Provide information to assist in the other personal decisions in the organization.
• Provide clarity of the expectations and responsibilities of the functions to be performed by
the employees.
• To judge the effectiveness of the other human resource functions of the organization such as
recruitment, selection, training and development.
• To reduce the grievances of the employees.
8) List some of the issues that come under collective bargaining?

The major issues dealt with in collective bargaining are broadly categorized as below:
Wage Related issues – These include topics like how basic wage rates are determined, cost –
of-living adjustments, wage differentials, overtime rates, wage adjustments etc.
Supplementary economic benefits – These include issues as pension plans, paid vacations,
paid holidays, health insurance plans, dismissal plans, supplementary unemployment benefits
etc.
Institutional Issues – These consists of rights & duties of employers, employees & unions,
including union security, check off procedures, quality of work-life program etc.
Administrative Issues – These include issues such as seniority, employee discipline and
discharge procedure, employee health & safety, technological changes, work rules, job security
and training, attendance, leave etc.
9) What are the drawbacks of counseling?

Page 2 of 51
 Drawbacks of Counseling
a) Counseling may help an employee for better adjustment with his superior but it does not
improve the working environment.
b) Counseling attempts to change individual attitudes and behaviour, which does not last in
the long run.
c) In most of the cases, the employees blames their superiors or supervisors which
generally objected by them, thus effecting counseling.
d) Counseling usually follows an appeasement policy. Employees do not want to annoy the
management by telling the reality.
10)Discuss the Importance of QCs.

Successful businesses inevitably place great emphasis on managing quality control - carefully
planned steps taken to ensure that the products and services offered to their customers are
consistent and reliable and truly meet their customers' needs. Multinational corporations have
entire departments of highly trained specialists to design and implement their quality assurance
programs. For a custom countertop fabricator, as for other small businesses that make unique,
handcrafted products, quality control is also essential. Such companies cannot rely on a staff of
trained experts or the standardization inherent in mass production to take care of quality control.
One or a handful of managers must handle it themselves, along with every other management
function. That is part of being a small business person. It is all too often true, though, that
fabricators fail to institute their own carefully planned quality control procedures. I would like to
suggest a few simple steps that can help a countertop fabricator or any similar small business
improve the quality of its products and services.
What is job description?
A broad, general, and written statement of a specific job, based on the findings of a job
analysis. It generally includes duties, purpose, responsibilities, scope, and working conditions of
a job along with the job's title, and the name or designation of the person to whom the
employee reports. Job description usually forms the basis of job specification.

What are the advantages of Human Resources Planning?

Answer:
-setting the strategic direction
-designing the human resource management system
-planning the total workforce
-generating the required human resource
-investing in human resource developing and performance

What is job specification?

A statement of employee characteristics and qualifications required for satisfactory performance
of defined duties and tasks comprising a specific job or function. Job specification is derived
from job analysis.

Job satisfaction
Job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of one’s
job an affective reaction to one’s job; and an attitude towards one’s job. [3] Weiss (2002) has argued that
job satisfaction is an attitude but points out that researchers should clearly distinguish the objects of
cognitive evaluation which are affect (emotion), beliefs and behaviours.[4] This definition suggests that we
form attitudes towards our jobs by taking into account our feelings, our beliefs, and our behaviors.

Induction programme
An induction programme is the process used within many businesses to welcome new employees to
the company and prepare them for their new role.

Page 3 of 51
 Induction training should, according to TPI-theory, include development of theoretical and practical skills,
but also meet interaction needs that exist among the new employees[1].
An Induction Programme can also include the safety training delivered to contractors before they are
permitted to enter a site or begin their work. It is usually focused on the particular safety issues of an
organisation but will often include much of the general company information delivered to employees.
Off-the-job training
As the name implies, off-the-job training is the training done on behalf of employers, usually away from their
premises. It can involve both theory (background knowledge) and practical training and may include assessment
and examinations. Although usually delivered on the premises of the provider it may involve online learning in
the workplace and visits from provider staff to the employer in order to deliver aspects of training.
OR
This is training provided away from the employee’s usual work environment and the
employee will stop their usual duties/work during the training. Off the job training may be
in the same building or off site. This training may be provided by trainers working for the
same employer as the employees being trained or an outside company hired by the
employer.
GROUP INCENTIVE SCHEME
In circumstances where tasks are necessarily interdependent (such as assembly lines) group incentive
schemes rather than those which offer rewards to individuals may be set up. These schemes generally
give incentives on the basis of profits earned or cost savings against estimated costs. Where group
performance can be measured, group members believe they can affect performance and if a culture of
participation exists such schemes can be beneficial.
However, changes in any variables which affect group productivity, such as the introduction of new
technologies, changes in the product mix and changes in work methods, may become more difficult to
introduce if workers perceive such changes as having a negative impact on their ability to meet
performance targets.
What Does Fringe Benefits Mean?
A collection of various benefits provided by an employer, which are exempt from taxation as long as
certain conditions are met. Any employee who receives taxable fringe benefits will have to include the
fair market value of the benefit in their taxable income for the year, which will be subject to tax
withholdings, and social security benefits payments.

Or

Human resource management: Compensation in addition to direct wages or salaries, such as

company car, house allowance, medical insurance, paid holidays, pension schemes, subsidized
meals. Some fringe benefits are regarded part of a taxable income.

Absenteeism
Absenteeism is a habitual pattern of absence from a duty or obligation. Traditionally,
absenteeism has been viewed as an indicator of poor individual performance, as well as a
breach of an implicit contract between employee and employer; it was seen as a management
problem, and framed in economic or quasi-economic terms. More recent scholarship seeks to
understand absenteeism as an indicator of psychological, medical, or social adjustment to work.

Employee discipline

Employee discipline requires organization to implement effective disciplinary rules and

regulations to maintain order in the workplace.
But the purpose of the rules is not merely to control and manage disorderly or unsatisfactory
conduct of employees.
It is also meant to protect your other employees who are committing their talents, time and
efforts to the organization. This demonstrates to them that your organization is fair and just.
Quality of work life

Page 4 of 51
Quality of life is defined as the level of enjoyment in a person's life. In general, it is based on
many factors. At a minimum, a person's basic needs must be met for them to have a high
quality of life---they must be generally healthy, have enough to eat and have a place to live.
Once a person's basic needs are met, that person's quality of life is largely determined by their
own personality, their desires and their level of personal fulfillment. A person with a high quality
of life tends to feel as though all of their important needs and wants are fulfilled.
Employee participation
Employee participation is the process whereby employees are involved in decision making processes,
rather than simply acting on orders. Employee participation is part of a process of empowerment in the
workplace.

Empowerment involves decentralizing power within the organisation to individual decision makers further
down the line. Team working is a key part of the empowerment process. Team members are encouraged
to make decisions for themselves in line with guidelines and frameworks established in self managing
teams.

Employee participation is in part a response to the quality movement within organizations. Individual
employees are encouraged to take responsibility for quality in terms of carrying out activities, which meet
the requirements of their customers. The internal customer is someone within the organisation that
receives the 'product of service' provided by their 'supplier' within the organisation. External customers
are buyers and users outside of the organisation. Employee participation is also part of the move towards
human resource development in modern organisations.

DEMOTIONS
A demotion is a reduction in an employee's rank or job title within the organizational hierarchy of a
company, public service department, or other body. A demotion may also lead to the loss of other
privileges associated with a more senior rank and/or a reduction in salary or benefits. An employee may
be demoted for violating the rules of the organization by a behavior such as excessive lateness,
misconduct, or negligence. In some cases, though, an employee may be demoted as an alternative to
being laid off, if the company is facing a financial crisis. A move to a position at the same rank or level
elsewhere in the organization is called a lateral move or deployment. The opposite of a demotion is a
promotion.

Objectives of job analysis

One of the main purposes of conducting job analysis is to prepare job description and job
specification which in turn helps to hire the right quality of workforce into the organization.
The general purpose of job analysis is to document the requirements of a job and the work
performed. Job and task analysis is performed as a basis for later improvements, including:
definition of a job domain; describing a job; developing performance appraisals, selection
systems, promotion criteria, training needs assessment, and compensation plans. [1]

Stress Interview

Stress interviews are still in common use. One type of stress interview is where the employer uses a succession
of interviewers (one at a time or en masse) whose mission is to intimidate the candidate and keep him/her off-
balance. The ostensible purpose of this interview: to find out how the candidate handles stress. Stress
interviews might involve testing an applicant's behavior in a busy environment. Questions about handling work
overload, dealing with multiple projects, and handling conflict are typical.[60]

Another type of stress interview may involve only a single interviewer who behaves in an uninterested or hostile
manner. For example, the interviewer may not make eye contact, may roll his eyes or sigh at the candidate's
answers, interrupt, turn his back, take phone calls during the interview, or ask questions in a demeaning or
challenging style. The goal is to assess how the interviewee handles pressure or to purposely evoke emotional
responses. This technique was also used in research protocols studying stress and type A (coronary-prone)

Page 5 of 51
 behavior because it would evoke hostility and even changes in blood pressure and heart rate in study subjects.
The key to success for the candidate is to de-personalize the process. The interviewer is acting a role,
deliberately and calculatedly trying to "rattle the cage". Once the candidate realizes that there is nothing
personal behind the interviewer's approach, it is easier to handle the questions with aplomb.

CAREER PLANNING

The Career Planning covers areas like choosing of an occupation, getting a job, growing in your job,
achieving the desired growth and eventually retiring. This a very important part of our life. One wrong
decision can make you regret your decision. Everything you do is directly related to your future. So
before you make any hasty decision make it a point to think twice. Understand every point and the
consequences of your decision completely.

Performance appraisal

A performance appraisal, employee appraisal, performance review, or (career) development discussion[1] is a method by which the
job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding
manager or supervisor.[2] A performance appraisal is a part of guiding and managing career development. It is the process of obtaining,
analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of
an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is
also the judgement of an employee's performance in a job based on considerations other than productivity alone.

Definition: human relations

An interdisciplinary study of social relations in the workplace that embraces sociology, social anthropology, and social
psychology. The human relations movement presents a counterpoint to the scientific management view that focuses on
maximizing the productivity and income of individual manual workers and on the separation of mental and physical
work between management and workers. In contrast, supporters of the human relations movement believe that
workers want to feel part of a team with socially supportive relationships and to grow and develop. Motivation,
communication, employee participation, and leadership are significant issues.

Benefits of training
• As the business world is continuously changing, organisations will need to provide their employees with
training throughout their careers. If they choose not to provide continuous training they will find it
difficult to stay ahead of the competition.
• The other benefit of training is that it will keep your employees motivated. New skills and knowledge can
help to reduce boredom. It also demonstrates to the employee that they are valuable enough for the
employer to invest in them and their development.
• Training can be used to create positive attitudes through clarifying the behaviours and attitudes that are
expected from the employee.
• Training can be cost effective, as it is cheaper to train existing employees compared to recruiting new
employee with the skills you need.
• Training can save the organisation money if the training helps the employee to become more efficient.
Quality circle
A quality circle is a volunteer group composed of workers (or even students), usually under the leadership of their
supervisor (but they can elect a team leader), who are trained to identify, analyze and solve work-related problems and
present their solutions to management in order to improve the performance of the organization, and motivate and
enrich the work of employees. When matured, true quality circles become self-managing, having gained the confidence
of management.
Quality circles are an alternative to the dehumanizing concept of the division of labor, where workers or individuals are
treated like robots. They bring back the concept of craftsmanship, which when operated on an individual basis is
uneconomic but when used in group form can be devastatingly powerful. Quality circles enable the enrichment of the
lives of the workers or students and creates harmony and high performance.

Employee turnover is a ratio comparison of the number of employees a company must replace in a
given time period to the average number of total employees. A huge concern to most companies,
employee turnover is a costly expense especially in lower paying job roles, for which the employee

Page 6 of 51
turnover rate is highest. Many factors play a role in the employee turnover rate of any company, and
these can stem from both the employer and the employees. Wages, company benefits, employee
attendance, and job performance are all factors that play a significant role in employee turnover.

Placement is a process of assigning a specific job to each of the selected candidates. It involves
assigning a specific rank and responsibility to an individual. It implies matching the requirements of a job
with the qualifications of the candidate.

Once an employee is selected and placed on an appropriate job, the process of familiarizing him with
the job and the organization is known as induction.

Induction is the process of receiving and welcoming an employee when he first joins the company and
giving him basic information he needs to settle down quickly and happily and stars work.

“Training imparts knowledge and skills while development enhances behaviors and improves
performance. Every organization needs both in order to see return and measure results.”
Training vs. Development
Training imparts basic, foundational knowledge necessary to bring learners up to a basic performance
competency level. It usually involves a formalized curriculum and a structured learning environment
and can be applied to an unlimited range of disciplines to prepare individuals to effectively carry out job
responsibilities, facilitate the accomplishment of personal performance goals and to prevent and solve
problems. To be effective, training initiatives should be straightforward, well-organized and have
planned curriculums with clear expectations. Such programs can be systematically implemented
throughout an organization, and it would be reasonable to expect that the training content would be
adopted in a uniform and consistent manner by all learners who were exposed to it.
Development initiatives center on enhancing capabilities associated with current roles as well as
preparing people for future responsibilities. As with training, there is a focus on positive change in
knowledge and skills, but unlike training where the emphasis is usually on well-organized, short-term
learning opportunities with specific, immediate outcomes, development centers on more gradual, less-
structured, experience-based learning over time. While the approach of development is more long-term
than that of training, the objectives of both disciplines need to be specific and based on accepted,
recognized performance improvement needs. Developmental programs are sometimes better suited to
changing attitudes than training because they can leverage the advantages that time, experience and
exposure to organizational culture can convey. Effective development methods include coaching,
internships, participation in teams and mentoring.
Objectives Of Job Evaluation:
• To establish impartial judgment
• To establish satisfactory wage and salary
• To select employees more accurately
• To promote employee goodwill
• To provide management with a basis for proper control
• To determine the rate of pay for each job
Advantages Of Job Evaluation:
• Indicates the relative worth of different jobs
• Establishes a hierarchy of jobs
• Useful for introducing a satisfactory, rational and balanced wage structure
• Provides scientific base for promotions and transfers
• Avoids injustice to employees

Page 7 of 51
 • Removes grievances and disputes among employees

Part-B

1) Discuss the objectives of HRM. Why HRM gaining Importance?

a. Societal objective. To be socially responsible to the needs and challenges of society

while minimizing the negative impact of such demands upon the organization. The failure of
organizations to use their resources for society's benefit may result in restrictions. For
example, societies may pass laws that limit human resource decisions.
b. Organizational objective. To recognize that HRM exists to contribute to organizational
effectiveness. HRM is not an end in itself; it is only a means to assist the organization with its
primary objectives. Simply stated, the department exists to serve the rest of the organization.
c. Functional objective. To maintain the department's contribution at a level appropriate to
the organization’s needs. Resources are wasted when HRM is more or less sophisticated
than the organisation demands. A department's level of service must be appropriate for the
organisation it serves.
d. Personal objective. To assist employees in achieving their personal goals, at least insofar
as these goals enhance the individual's contribution to the organisation. Personal objectives
of employees must be met if workers are to be maintained, retained and motivated.
Otherwise, employee performance and satisfaction may decline, and employees may leave
the organisation.

Why HRM is important for Organization today to make their HR into a competitive
advantage. The three competitive challenges are the challenge of sustainability, the global
challenge, and the technology challenge.
(i). the Challenge of Sustainability
There are many different type of companies/organization to operated in the world and also
competed each other to gain competitive advantage and also sustainable so they try to
implement many strategic for develop their HR. Among them sustainability is the main part that
can be influence and encourage to reach organizational goal. Anyway they also take action
immediately to introduce, orientate, prepare guideline, provide high quality products and
services and especially use the right person in the right position and on job training many time to
gain staff capacity. There are many ways that can bring the organizations to reach goal are:
- A learning organization: This embraces a culture of lifelong learning, enabling all employees
to continually acquire & share knowledge.
- The Balanced Scorecard: The balanced scorecard gives managers an indication of the
perspective for company to satisfy internal and external customers, employees and
shareholders & it should link HRM activities to the company’s business strategy. This include
being customer-focused, improve quality, emphasizing teamwork and managing for long time.
Using the balance scorecard to manage the human resources by communicating the scorecard
to employee gives them a framework that helps them to see the company goals and strategies
and how they influence the critical indicators. For example, Chase Mahattan bank used the
balance scorecard to change the behavior of customer services representative would have
simply met the customer’s need.
- Total Quality Management (TQM): A cooperative form of doing business that relies on the
talents and capabilities of labor and management, the ways people, machines, and systems
accomplish work to continually improve quality and productivity. For example, quality expert W.
Edwards Deming emphasized how well the product or service meets customer needs. To
ensure this TQM need to create an environment that support innovative, creativity, and risk
taking to meet customer demands. 3

Page 8 of 51
 - Changing demographics: The workforce today is getting more diverse & therefore need to be
managed carefully.
- Legal & ethical issues: It’s increasingly important to comply with laws and ethics concerning
employee health and safety, employee pay and benefits and job security.
- Increased value placed on intangible assets and human capital: Today, more and more
companies are interested in using intangible assets and human capital as way to gain an
advantage over competitors. A company’s value includes 3 types of assets that are critical for
the company to provide goods and services.
(ii). The Global Challenge
Increasingly, organizations are finding that to survive they must cooperate with organizations
around the world. Companies/organizations must both defends their domestic markets from
foreign competitor and broaden their scope to encompass global markets. In order to reach the
goal of organizations/companies HRM play the important role to run the business and make the
good business environment to create smoothly work and also compete with the other to gain
competitive advantage by expansion to the global area/broaden, integration of cultures &
values, got and received the feedback from the consumers to develop the product and service,
training staff many time and encourage getting high competencies.
While many large firms such as Exxon, Ford, and Procter & Gamble are already multinational
corporations that span the globe, many medium-sized and small businesses are becoming
increasingly international. To succeed in the global marketplace, the challenge for all business is
to understand culture and invest in human resources. For example, U.S. company must be
willing to train and develop foreign employees to win foreign business. Several companies (such
as Boeing and CSX Corporation) bring foreign workers to the United States for training and then
return them to their home countries. Another, Boeing brings workers from India and Poland to
the Unites States. They return home with needed knowledge in aircraft design and
manufacturing.
(iii). The technology Challenge
This challenge is also very important that organizations/companies should be consider and
prepare strategic plan to up-date it on time and saving the cost also. New technology cause
change in basic skill requirements and work roles and often results in combining job. For
example, U.S. Company to compete with foreign competitors, they have to learn to better utilize
employees’ talents and skills and new technology. Like computer integrated manufacturing uses
robots and computer to automate the manufacturing process. The computer allows the creation
of different product to meet market demands simply by reprogramming the computer. As a
result, laborer, material handler, operator-assembler, and maintenance job may be merged into
one position. Technology also has made human resource information databases more available
and accessible and has created a need to develop HRM practices that integrate technology with
people also increase the production speed to meet the demand of customer more effectively.
2) What is HR audit? Explain HR audit process and also cover main areas of HR audit.

HR Audit means the systematic verification of job analysis and design, recruitment and
selection, orientation and placement, training and development, performance appraisal and job
evaluation, employee and executive remuneration, motivation and morale, participative
management, communication, welfare and social security, safety and health, industrial relations,
trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the
organizational goal and also is a vital tool which helps to assess the effectiveness of HR
functions of an organization.
The audit process
The HR audit process is conducted in different phases. Each phase is designed to build upon
the preceding phase so that the organization will have a very strong overview of the health of
the HR function, at the conclusion of the audit. These phases include:

Page 9 of 51
 Pre-Audit Information: This phase involves the acquiring and review of relevant HR manuals,
handbooks, forms, reports and other information. A pre-audit information request is forwarded to
the client who compiles the necessary information for review by auditors.
Pre-Audit Self-Assessment: In order to maximize the time spent during subsequent portions of
the audit, a pre-audit self-assessment form, if sent to the client can be of use. The self-
administered yes/no questionnaire asks a number of questions about current HR policies and
practices.
The completion of this self-administered questionnaire allows auditors to identify key areas for
focus during the HR audit.
On-site Review: This phase involves an on-site visit at the client's facility interviewing staff
regarding HR policies and practices. A very in-depth HR audit checklist is completed.
Records Review: During the on-site visit, a separate review is conducted of HR records and
postings. Employee personnel files are randomly examined as well as compensation, employee
claims, disciplinary actions, grievances and other relevant HR related information are checked.
Audit Report: The information gathered is used to develop an HR audit report. The audit report
categorizes action needs into three separate areas. The areas that are urgent and important
(UI), not urgent needs but important (NUI), not urgent but not important needs (NNI)), and
important opportunities needs (IO). As a result of this scheme of classification, managements
can prioritize their steps.
The critical areas
The comprehensive HR audit covers all areas of HR management like recruitment practices,
training and development, compensation and benefits, employee and union relations, health,
safety and security, miscellaneous HR policies and practices-welfare, strategic HR issues,
manpower planning/budgeting.
Besides classifying needs in each of the above areas, the HR audit also cites relevant laws,
cases and research to support the recommendations.
3) Discuss on-the-job methods of Executive development.

It is most popular method of developing the executive talent. The main techniques are
(a) Coaching. Under this technique, the superior coaches the job knowledge
and skill, to his subordinates. He briefs the trainees what is expected of them and guides
how to get it. He also watches their performance and directs them to correct the mistakes.
The main objective of this training is to provide them diversified knowledge. Coaching is
recognised as one of t managerial responsibilities, and the manger as an obligation to train
an develop the subordinates working under him. He delegates his authority to the
subordinates to prepare them to handle the complex situations.
(b) Understudy. This system is quite different from the system discussed
above. Under this system, a person is specifically designated as the their apparent who is
called the understudy. The understudy's future depends on what happens to his superior
leaves his post due to promotion, retirement or transfer. Te department manger picks up one
individual from the department to become his understudy. He guides him to learn his job and
tackle the problems tat confront the manger.
(c) Job Rotation. Under this system, an individual is transferred one job to
another or from open department all to another in the co-ordinated and planned manager
with a view to broaden the general background of the trainee in the business. The trainees is
rotated from one job to another and thus the acquires a considerable degree of specialised
knowledge and skill but a man can never acquire t diversified skill needed for promotion
unless is deliberately put in different types of situations.
(d) Special Project. A special assignment is a highly useful training device,
under which a trainee is assigned a project that is closely related to his job. He well study the
problem and submit the written recommendations upon it. It will not only only provide the
trainee a valuable experience in tackling the problem but would also have the other values of

Page 10 of 51
 educating the trainees about t importance of t problem but would also have the other values
of educating the trainees about the importance of the problem and to understand the
organisational relationship of the problem with different angles. Thus the trainee acquires
knowledge of the assigned task and learns to work with other s having different view points.
(e) Committee Assignments: This system is similar to special project.
Under this system an adhoc committee is constituted and is assigned a subject related to the
business to discuss and make recommendations. The committee will study the problem,
discuss it and submit to be report containing the various suggestions and recommendations
to the departmental manager. With a view to avoid the unnecessary hardships in studying
the problem, the members of the committee should be selected from different departments,
having specialised knowledge in different fields but connecting to the problem.
4) Discuss the methods of wage payment with merits and demerits.

Wage Payment Systems are the different methods adopted by organizations by which they
remunerating labour. There exist several systems of employee wage payment and incentives,
which can be classified under the following heads :
• Time Rate Systems
The time rate system is that system of wage payment in which the workers are paid on the basis
of time spent by them in the factory. Under this system, the workers and employees are paid
wages on the basis of the time they have worked rather than the volume of output they have
produced. Hence, according to this system, wages are paid on hourly, weekly or monthly basis.
Under time rate system, the wages earned by a worker is determined by using the following
formula.
Wages Earned = Time spent(Attended) x Wage rate per hour/day/week/month
Advantages Of Time Rate System
The following are some of the important advantages of time rate system of wage payment:
 Time rate system is simple to understand and easy to calculate.
 Time rate system is quite useful for organizations that use costly inputs for quality
outputs.
 Time rate system is beneficial for average and below workers.
 Time rate system assures regular income and creates the feeling of economic security
among the workers.
 Time rate system does not discriminate the workers and is preferred by trade unions.
Disadvantages of Time Rate System
 The following are some notable disadvantages of time rate system of wage
payment.
 Time rate system does not help in increasing output and improving efficiency as
there is no correlation between effort and reward.
 Time rate system is not justifiable between efficient and inefficient workers and
skilled and unskilled workers.
 Time rate system pays for idle time, which increases the cost of production.
 Time rate system encourages a go-slow tendency among workers during working
hours and encourages them to work overtime.
 It is difficult to estimate exact labor cost in advance
 It requires strict supervision to get the required quantity of output

Piece rate system

The piece rate system is that system of wage payment in which the workers are paid on the
basis of the units of output produced. Piece rate system does not consider the time spent by the
workers. Piece rate system is the method of remunerating the workers according to the number

Page 11 of 51
of unit produced or job completed. It is also known as payment by result or output. Piece rate
system pays wages at a fixed piece rate for each unit of output produced. The total wages
earned by a worker is calculated by using the following formula.

Total Wages Earned= Total units of outputs produced x Wage rate per unit of output.
OR,
Total Wages Earned= Output x Piece Rate
Advantages Of Piece Rate System
The following are some important advantages of piece rate system of wage payment.
 Piece rate system pays wages according to the output produced by the workers. It
encourages efficient workers.
 Piece rate system helps to reduce idle time.
 Piece rate system gives incentives to the workers to adopt a better method of
production for increasing their production and earning.
 Piece rate system helps the management to determine the exact labor cost per
unit for submitting quotation.
 Piece rate system reduces per unit cost of production due to increased volume of
production.
 Piece rate system requires less supervision cost.

Disadvantages Of Piece Rate System

The following are the notable disadvantages of piece rate system

 Piece rate system does not help in producing quality output as the workers are
concentrated more on quantity instead of quality.
 Piece rate system does not help for a uniform flow of production and makes difficult
to regulate the production schedule.
 It is very difficult to fix an acceptable and reasonable piece rate for each item of
output or job.
 Piece rate system adversely affects the workers' health as well.
 It requires extra supervision cost for quality output and effective use of materials,
tools and equipment.
5) State the provisions of the factories Act 1948 with regard to health and safety of
workers.

Health and safety concerns of employees are gaining more and more importance in the current
work environment. They have become factors contributing to workers welfare and are thus
considered while studying workers’ job satisfaction.
A wider interpretation needs to be attributed to the concept of health and safety at work. This is
because apart from occupational health and safety matters it also covers the adversities
developing from working conditions. Stress, short temperedness and such other problems due
to conditions of work involving night shifts, long working hours, etc. are some examples of such
adversities. Though such adversities are not specifically provided for, provisions have been
made under Constitution to ensure occupational health and safety of workers. Article 24, 39(e),
39(f) and 42 of the Constitution provides for the same.
Statutes have also been framed in this regards affording provisions ensuring health and safety
at work. Factories Act, 1948, Mines act, 1952, Dock workers (safety, health and welfare) Act,
1986, etc. are legislations which lays down specific provisions ensuring health and safety of
workers. These legislations consolidates law regulating health of workers by making provisions
with regards to matters like cleanliness, ventilation, manner of disposing waste and effluents,
etc. Also safety measures with respect to workers working on dangerous machines or work

Page 12 of 51
involving hazardous processes, aerial ropeways, loading and unloading ships, etc. are provided
for.
Legislations provide safety norms especially for working women and children, like the Factories
Act, 1948 which prohibits employment of women and children near cotton openers. The shift
timings and work hours for women and children employed in factories, mines, etc. are also
regulated by statutes.

Also implementation of these legislations can be witnessed in Gujarat where now the provisions
of the Factories Act, 1948 will apply to classes or places of Schedule XVII and Schedule XVIII
which cover units with single worker. This was done with a view to fix the responsibilities for
occupational hazards in cases of silicosis among the agate workers. Also the government is
considering amendments in Factories Act, 1948 and ratification of ILO conventions related to
occupational safety and health to enlarge scope of health and safety provisions for workers.

Besides that, there are other legislations providing health and safety measures for workers like
Workmen’s Compensation Act, 1923 and Employees State Insurance Act, 1948. These
legislations safeguard interests of workers who suffer from any such occupational diseases or
accidents or any problem covered under this legislations.

All the above legislation mostly covers those employed in organized sector. There is dire need
to enhance the scope of these legislations to cover untapped unorganized sectors. On the
positive end, ensuring such health and safety measures not only boosts employee morale but
also reduces absenteeism. This will certainly increase the productivity of an employee and the
organization and thus, benefiting the economy of the nation.
6) What are the causes of employee grievances suggest various ways to overcome
grievance among the employees.

In order to handle the grievances efficiently, it is necessary to find and analyse the grievances of
the subordinates. If a grievance is found to be genuine or real (factual), the corrective action
should be taken immediately. But if the grievance arises due to imagination or disturbed
frame of mind of the worker, then it is necessary to explain and clear up the matter. Before
dealing with the grievances, their causes must be diagnosed. But when the grievances are not
given expression by the subordinates, it is manager’s job to detect the possible grievances and
their causes. He may realize the existence of grievances because of high turnover, high rate of
absenteeism and poor quality of work. These problems will go on multiplying if the causes of
grievances are not cured.

The causes of grievances may be broadly classified into the following categories:
(1) Grievances resulting from working conditions

(i) Improper matching of the worker with the job.

(ii) Changes in schedules or procedures.
(iii) Non-availability of proper tools, machines and equipment for doing the job.
(iv) Unreasonably high production standards.
(v) Poor working conditions.
(vi) Bad employer – employee relationship, etc.
(2) Grievances resulting from management policy
(i) Wage payment and job rates.
(ii) Leave.
(iii) Overtime.
(iv) Seniority and Promotional.

Page 13 of 51
 (v) Transfer.
(vi) Disciplinary action.
(vii) Lack of employee development plan.
(viii) Lack of role clarity.

(3) Grievances resulting from personal maladjustment

(i) Over – ambition.
(ii) Excessive self-esteem or what we better know as ego.
(iii) Impractical attitude to life etc.
Guidelines for Effective Grievance Handling:
While dealing with grievances, a manager cannot depend upon some ready-made, solutions.
Every case has to be dealt with on merit. The following guidelines may help to deal effectively
with the grievances:
• The complaint should be given a patient hearing by his superior. He should be
allowed to express himself completely. The management should be empathetic.
• The superior should try to get at the root of the problem. It should be remembered
that symptoms are not the problems. It should also be noted that if there are symptoms,
there would be a problem as well.
• The management must show it anxiety to remove the grievances of the workers.
The workers should feel that the management is genuinely interested in solving its
problems.
• If the grievances are real and their causes located, attempts should be made to
remove the causes.
• If the grievances are imaginary or unfounded, attempts should be made to
convince the workers.
• Every grievance must be handled within the reasonable time limit. I am sure you
will agree with this. Imagine you have a genuine problem and you share it with the
authorities. You will also expect immediate action taken to take care of your problem.
• All grievances should be put into writing. Some proofs required as well….
• Relevant facts about the grievance must be gathered. The management should
not haste!
• Decision taken to redress the grievance of the worker must be communicated to
him.
• Follow up action should be taken to know the response of the forced employee.
This is to make sure that he is happy or not! At the end of the day the satisfaction of the
aggrieved party is necessary.

The objectives of HRM may be as follows:

1. To create and utilize an able and motivated workforce, to accomplish the basic organizational goals.
2. To establish and maintain sound organizational structure and desirable working relationships among
all the members of the organization.
3. To secure the integration of individual or groups within the organization by co-ordination of the
individual and group goals with those of the organization.
4. To create facilities and opportunities for individual or group development so as to match it with the
growth of the organization.
5. To attain an effective utilization of human resources in the achievement of organizational goals.
6. To identify and satisfy individual and group needs by providing adequate and equitable wages,
incentives, employee benefits and social security and measures for challenging work, prestige,
recognition, security, status.
7. To maintain high employees morale and sound human relations by sustaining and improving the
various conditions and facilities.
8. To strengthen and appreciate the human assets continuously by providing training and development

Page 14 of 51
programs.
9. To consider and contribute to the minimization of socio-economic evils such as unemployment,
under-employment, inequalities in the distribution of income and wealth and to improve the welfare of
the society by providing employment opportunities to women and disadvantaged sections of the
society.
10. To provide an opportunity for expression and voice management.
11. To provide fair, acceptable and efficient leadership.
12. To provide facilities and conditions of work and creation of favorable atmosphere for maintaining
stability of employment.

Characteristics of Sound Personnel policy

While developing sound personnel policies, management should pay attention to the following:

1) Related to objectives: Policies must be capable of relating objectives to functions, physical factors and company
personnel.
2) Easy to understand: Policies should be stated in definite, positive ,clear and understandable language .
3) Precise: Policies should be sufficiently comprehensive and prescribe limits and yardsticks for future action,
4) Stable as well as flexible: Personnel policies should be stable enough to assure people that there will not be
drastic overnight changes. They should be flexible enough to keep the organization in tune with the times.
5) Based on facts: Personnel policies should not built on the basis of facts and sound judgment and not on personal
feelings or opportunities decisions.
6) Appropriate number: There should be as many personnel policies as necessary to cover conditions that can be
anticipated, but not so many that they become confusing or meaningless.
7) Just, fair and equitable: Personnel policies should be just, fair and equitable to internal as well as external groups.
For example, a policy of recruitment from within my limit opportunities to bright candidates form outside and a policy of
recruitment from outside only would limit promotional avenues to promising internal candidates. To ensure justice, it is
necessary to pursue both the policies scrupulously and to apply them carefully.
8) Reasonable: Personnel policies must be reasonable and capable of being accomplished. To gain acceptance and
commitment from employees, they should be conditioned by the suggestions and reactions of those who will be affected
by the policy.
9) Review: Periodic review of personnel policies is essential to keep in tune with changing times and to avoid
organizational complacency or managerial stagnation. For instance if the current thinking is in favor of workers’
participation in management , the personnel policy should be suitably adjusted to accommodate the latest fad, accepted
by many in the organization.
Personnel policies to be sound should also have broad coverage in addition to satisfying the above conditions. Hence, it
would be appropriate to discuss the coverage of personnel policies here.
Coverage of Personnel Policies:
The coverage of personnel policies has been classified on the basis of functions of HRM by Michael Armstrong ad is
outlined as:
Social responsibility>>>
1) Equity: Treating employees fairly and justly by adopting an even handed approach.
2) Consideration: Considering individual circumstances when decisions affect the employee’s prospects seniority or
self respect.
3) Quality of work life: increase the interest in the job and organization by reducing monotony increasing variety of
responsibility avoiding stress and strain
Employment policies: Provision of equal employment opportunities involves –selecting the candidates based on job
requirements and encouraging them to put in their 100%.
Promotion policies: Promotion policies should reconcile the demands of employees for growth and the organization’s
demands for fresh and much more promising talent. Promotion policy should be fair and just to all.
Development policies: Policies should cover the kind of employees to be trained tem span of training programs,
techniques, rewarding and awarding system, qualifications and experience of the trainer, encouraging the employees
for self advancement, etc. These policies also cover areas like career planning and development, performance appraisal,
organizational change and organizational development.
Relations policies: Relations policies cover different aspects of human relations like: policies regarding motivation,
morale, communication, leadership styles, grievance procedure, disciplinary procedure, employee counseling etc. These
policies also cover the areas of industrial relations like union recognition union representation collective bargaining,
prevention and settlement of industrial disputes and participative management. In order to be effective they must be
written on the basis of authentic information available from different sources.

Page 15 of 51
Meaning and Objectives for Human Resources Planning

1.

Human resource planning involves the hiring, development and retention of employees in the achievement
of organizational goals. This includes analysis of the current workforce and how it aligns with future employment
needs. By planning for the future, human resources creates action plans aimed to satisfy organizational goals.

Consider Future Workforce

An organization must analyze its future employment needs. If an organization decides it must increase
productivity by 25 percent, it may need to grow its workforce by 2 percent. If an organization wants to increase
market share by moving offices into new locations, it must consider the human resource requirements.

Analyze Current Workforce

With future workforce needs considered, human resource planning must analyze the competency of the
present workforce. Comparing future needs with current workforce strengths and abilities will identify gaps or
surpluses.

Future Preparation

Considering workforce surpluses and deficits, human resources must prepare action plans for the
workforce. This includes identifying the type and number of employees needed, employee competency, budget
considerations, recruiting and retaining measures, and the development and training of employees.

Evaluation Process
Ensuring objectives are being met by the future workforce requires an evaluation process. This will
determine if the workforce is adequate to satisfy strategic goals. Planning for this process now will more easily
and quickly identify future workforce gaps or surpluses.

Elements of Human Resource Planning

Human resources planning involve how to best provide manpower for an organization through staffing,
training, development and compensation policies and practices. Without a road map, HR cannot address the
people factor that enables an organization to reach its goals. HR plans, therefore, complement organizational
strategy and objectives.

Environmental Assessment

The first step in the human resource planning process is to understand the context of human resource
management. Human resource mangers should understand both internal and external environments. External
assessment involves --- social, political, economic, legislative, technological, globalization and industry-related
outside factors that might detract from company performance. This internal assessment examines company
culture, technological capability, customer service expectations and existing talent that drive workforce
requirements.

Setting HR Objectives
The second major element of an HR plan entails establishing measurable objectives to address the
issues raised through environmental assessment. A growing market may mandate increasing the payroll,
adapting recruitment efforts to attract workers with different competencies and introducing skill-specific

Page 16 of 51
 training programs. Dropping a product line might lead to HR objectives that target labor cost reduction,
employee communication or retraining for retention. Anticipated changes in legislation could suggest the need
to revamp document retention policies, benefits administration or diversity initiatives. This stage outlines how
human resources will react to ensure that the organization has the right personnel and employee-support
systems in place.

Defining Tactics
The third element of HR planning defines the tactics or actions that will be executed to achieve the HR
objectives. Each tactic has a time frame against which it will be measured. Tactics may include policies and
programs related to employee communication, training, development, recruitment, performance management,
compensation and career pathing as well as management development, succession planning and job
definition. HR tactics and their related strategies "build and reinforce" the organization's competencies.

Steps in the Human Resource Planning Process

Designing the Management System

The overall aim of this system is to manage human resources in line with organizational goals. The system is
in charge of human resource plans, policies, procedures and best practices. For example, the system should
track emerging human resource management trends, such as outsourcing certain non-core functions,
adopting flexible work practices and the increased use of information technology, and, if appropriate,
implement them.

Environmental Analysis
The first step in the human resource planning process is to understand the context of human resource
management. Human resource mangers should understand both internal and external environments. Data on
external environments includes the following: the general status of the economy, industry, technology and
competition; labor market regulations and trends; unemployment rate; skills available. Internal data required
include short- and long-term organizational plans and strategies and the current status of the organization's
human resources.

Forecasting Human Resource Demand

The aim of forecasting is to determine the number and type of employees needed in the future.
Forecasting should consider the past and the present requirements as well as future organizational directions.
Bottom-up forecasting is one of the methods used to estimate future human resource needs by gathering
human resource needs of various organizational units.

Analyzing Supply
Organizations can hire personnel from internal and external sources. The skill inventories method is
one of the techniques used to keep track of internal supply. A forecast of the supply of employees projected to
join the organization from outside sources, given current recruitment activities, is also necessary.

Reconciliation and Planning

The final step in human resource planning is developing action plans based on the gathered data,
analysis and available alternatives. The key issue is that the plans should be acceptable to both top

Page 17 of 51
 management and employees. Plans should be prioritized and their key players and barriers to success
identified.

The strategic HR planning process

The strategic HR planning process has four steps:

1. Assessing the current HR capacity

2. Forecasting HR requirements
3. Gap analysis
4. Developing HR strategies to support organizational strategies

Assessing current HR capacity

Based on the organization's strategic plan, the first step in the strategic HR planning process is to assess the current HR capacity of the
organization. The knowledge, skills and abilities of your current staff need to be identified. This can be done by developing a skills
inventory for each employee.

An employee's performance assessment form can be reviewed to determine if the person is ready and willing to take on more
responsibility and to look at the employee's current development plans.

Forecasting HR requirements

The next step is to forecast HR needs for the future based on the strategic goals of the organization. Realistic forecasting of human
resources involves estimating both demand and supply. Questions to be answered include:

• How many staff will be required to achieve the strategic goals of the organization?

• What jobs will need to be filled?

• What skill sets will people need?

When forecasting demands for HR, you must also assess the challenges that you will have in meeting your staffing need based on the
external environment.

• How will the external environment impact on our HR needs?

Gap analysis

The next step is to determine the gap between where your organization wants to be in the future and where you are now. The gap analysis
includes identifying the number of staff and the skills and abilities required in the future in comparison to the current situation..
Questions to be answered include:

• What new jobs will we need?

• What new skills will be required?

Page 18 of 51
 • Do our present employees have the required skills?

• Are employees currently in positions that use their strengths?

• Do we have enough managers/supervisors?

• Are current HR management practices adequate for future needs?

Developing HR strategies to support organizational strategies

There are five HR strategies for meeting your organization's needs in the future:

1. Restructuring strategies
2. Training and development strategies
3. Recruitment strategies
4. Outsourcing strategies
5. Collaboration strategies

1. Restructuring strategies

This strategy includes:

• Reducing staff either by termination or attrition

• Regrouping tasks to create well designed jobs

• Reorganizing work units to be more efficient

If your assessment indicates that there is an oversupply of skills, there are a variety of options open to assist in the adjustment.
Termination of workers gives immediate results. Generally, there will be costs associated with this approach depending on your
employment agreements. Notice periods are guaranteed in all provinces.

What is the role of human resource planning in human resource management?

For any function planning is one of the important tool. This is the 1st step. People is the most important resource which
is required to run any business or organization. Now this also very important to under stand the need of human
resources on time so that neither my organisation falls short of resources nor faces surplus. If organisation falls short of
resources then will not be able to deliver on time to client on the other hand if it has surplus resource then company
has to bear that cost which will effect organisation's profitability. There is another aspect also in this company also need
to plan resources based on the skill required to run the business. Otherwise they will have surplus in one area shortfall
in other area which Will result to poor management. Hence until & unless you do correct resource planning you will be
able to manage human resources properly.

Human Resources Steps in Budget Planning & Execution

Managing a human resources department involves budget planning and execution like any other company
department. Steps include preparing a forecast, developing your personnel, analyzing jobs, and preparing a
short- and long-term plan to execute your vision. By accurately assessing what work needs to be done and
who can do it most efficiently, managers can ensure an organization's success.

Page 19 of 51
 Preparing a Forecast
Depending on the current size of a business and its strategic goals, hiring plans may be minimal or
global in nature. Using previous results or by comparing a business with similar companies to get the
needed data, a manager can predict the growth pattern and the type of personnel needed to maintain or
expand the business.

Developing Employees
o In addition to interviewing and hiring new employees, developing career plans for existing employees
(including executive leadership) requires budget planning and execution. Workshops, seminars, self-paced
courses and formal education degrees typically cost money, so assessing company needs carefully requires
thought..

Analyzing Work Flow

o By accurately defining each job's scope, responsibilities, required experience, skills and knowledge,
managers can plan to develop, retrain or hire personnel to accomplish each task. Providing training for
professional or technical development motivates employees to utilize their skills on the job to execute the
company's strategic goals.

Creating a Comprehensive Plan

Using industry standard tools, managers can create comprehensive plans including budgets for
wages, training and recruitment programs for current and future fiscal years. Tracking and monitoring actual
expenditures should influence future planning strategies.

The Strengths & Weaknesses of Human Resource Planning Stages

Human resource planning is an important part of maintaining a good human resources department (HR). This type of
plan is developed in stages and examines the role of employees within the business, analyzes existing benefit
packages and prepares new employees for future positions. However, this type of planning has its strengths and
weaknesses, especially with existing employees, as the plan essentially evaluates individual workers and compares
them to new talent.

Evaluating Existing Employees

One of the stages of creating an HR plan is to evaluate present employees. This stage is a type of strength for
the company, as problematic employees are identified and hardworking employees are recognized. Knowing
which employees struggle can help HR plan ahead so the skills and capabilities of the employees are put to
good use elsewhere.

Getting New Employees

o One of the planning stages for HR includes recruiting more employees or representatives. This stage
can prove to be a weakness, as simply recruiting qualified individuals is sometimes a daunting task. For
instance, getting a handful of qualified individuals before a given deadline may prove impossible if applicants
are less than qualified. This lack of trained individuals can delay other departmental plans.

Internal Opportunities
o Another benefit of HR planning stages is that present employees are often considered before a new
worker when internal opportunities arise. This saves the company time and money, because spending to find
new employees becomes unnecessary. It is also a positive stage for existing employees, since it is the
qualified and hardworking who get considered for promotions.

Page 20 of 51
Budgets and Benefit Packages
o One of the stages of HR planning includes handling the available budget for the department and
employee salaries. This stage, however, can become a weakness for progression if the budget is limited. A
limited budget can affect the hiring of new employees, the benefit or health packages existing employees are
provided and the resources that HR offers. One of the goals of planning is to ensure the budget is utilized to
its potential, but this is not always possible, given the ramifications of the company's overall available budget.

Factors Affecting Human Resource Plans

o .

Human resource management helps to maintain sufficient staff levels for current productivity and projected
company growth. A human resources department often makes decisions based on the projected financial
return of hiring a candidate, according to the Cornell University School of Industrial and Labor Relations
website. But there are other factors affecting human resource plans that should also be taken into
consideration.

Labor Force
o It costs money in relocation fees to bring in qualified employees from out of a company's immediate
geographic location. Even transferring employees from other corporate offices can be expensive. The
preference for a human resources professional is to reduce costs by hiring candidates from the immediate
geographic area. But when the talent pool in the local labor force does not match the needs of the company,
that can cause human resources plans to change.

Company Budgets
o The human resources department needs to work within the budgets of the various departments it is
hiring for, and that can limit the kind of employees that can be hired. If the sales department needs a new vice
president of sales in a field that averages $100,000 per year in compensation, but the budget only allows for
$80,000 per year, then that limits the kind of employee the human resources group can hire. The sales
department may have to accept a vice president who does not have all of the qualifications the company is
looking for.

Bad Planning
o The human resources department works with the managers of all of the other departments to create
staffing plans that will sustain the company and allow for future growth. But when staffing projections are not
accurate, the plans of the human resources department are affected. Bad planning by departmental
managers, such as not projecting how many qualified engineers the production department will need in the
coming year, can cause the human resources department to have to scramble to meet the company's needs.

Competition
o Competition in the human resources field is different than almost any other department in the
company. When it comes to finding the right talent, your company is competing with every other company in
the area. If you need logistics people, then you are competing with any other company in the area with a
warehouse, regardless of what the company sells.

The Role of Human Resources & Planning

Page 21 of 51
The human resources department shepherds a company's most valuable resource: its employees. Thus, the HR
department has a breadth of responsibilities, including compensating and training workers, ensuring workplace safety,
and working with employee unions. However, one of its most important functions is human resource planning, as this
keeps a company plugged into the job market and able to tap top talent.

Compensation
o One of HR's many roles is compensation. Without a competitive compensation package, a company
will never be able to retain its most valuable workers, which can crimp innovation and performance.
Compensation is mainly monetary, but even when budgets are tight, human resources can motivate workers
with other rewards, like perks and benefits.

Health and Safety

o HR is also charged with ensuring the health and safety of employees. Safety refers to avoiding on-the-
job hazards and injuries, while health is an umbrella term for physical and emotional wellness. Healthy
workers not only are more productive and satisfied, but also reduce a company's medical insurance costs.

Labor Relations
o Not as many workers belong to unions today as in the past, but businesses still have a legal obligation
to work with these organizations in good faith. HR is deeply involved in issues like contract negotiations. HR's
role is to keep things running smoothly and have information on hand that can lead to compromise. This
keeps animosity to a minimum and ensures good future relations with unions.

Human Resource Development

o HR takes on the role as trainer to new employees, giving them the information they need to be
valuable additions to the company. It also works with existing employees to map out long-term career goals.
Giving workers the feeling of empowerment and mobility helps them stay motivated and keeps them from
looking to rival companies for promotions and other opportunities.

Staffing
o HR must work to ensure that a company always has the right number of employees, deployed in the
positions that best utilize their talents. This means grooming employees to take on promotions, as well as
actively looking to recruit new talent. The latter, known as human resource planning, is one of its most
important functions, as it keeps a company abreast of a competitive job market and ensures that it will not fall
behind on its goals due to lack of talent.

Human Resource Planning

o Human resource planning consists of pairing workers--both internal candidates and those outside the
company--with future job openings. By always anticipating a company's staffing needs, HR can make
transitions as quick as possible, so that companies do not fall behind while searching for the right person to fill
an opening.

Page 22 of 51
 First, HR must forecast a company's requirements: how many employees with what abilities it will need.
Then, it must forecast availability: Do these people exist in the job market and how likely are they to join
the company? By proactively analyzing a company's future workforce, HR can stay on top of labor
trends. For example, if not enough college students are majoring in an area critical to a company's
success, it should encourage more young people to consider the career path, while also actively
stepping up campus recruiting to beat rivals to the top graduating talent.

Forecasting Techniques in Human Resource Planning

Human resource planning involves studying the future staffing needs of an organization. Employees will leave
their positions for many reasons, including better jobs, to retire and to pursue educational opportunities. Firms
also eliminate positions because of economic conditions and when shifting the focus to new projects. As an
HR professional, you can use forecasting techniques to advise managers on how many and what types of
workers they will need, and the skills workers must possess to help the company reach its goals.

Job Analysis
o A human resources planner must forecast what kinds of jobs the company will need to fill in the future.
This might include replacing employees who leave and finding employees to fill positions that don't yet exist in
the organization. Job analysis ensures that HR planners know the skills needed to fill positions and, when
employees join the organization, what kinds of qualifications and personal traits successful workers exhibit.

Macroeconomic Modeling
o Forecasters can also use computer macroeconomic modeling programs to predict future workforce
needs. This type of program uses various economic indicators to determine how a workforce must grow or
shrink in response to changes in the labor market. A program may or may not include analysis of past
economic trends.

Employer Survey
o Organizations can also understand their own workforce needs by looking at industry reports. The U.S.
Bureau of Labor Statistics and trade associations are entities that prepare forecasts of workers needed in
specific industries. Organizations can also compare their forecasts to predictions made by other employers
responding to employer surveys. These surveys are available in the U.S. and in other advanced industrialized
nations. A survey asks an employer to predict how many of each type of worker it will need in the future.

Other Options
o Human resource forecasters also use other techniques to predict the need for future workers.
International comparisons involve comparing the needs of one labor sector in one nation with the needs of the
same labor sector in another nation. A U.S. entity would compare its workforce needs with companies in other
advanced industrialized nations. Another technique, the labor-output ratio, uses a formula including data
gained from the past, such as number of people employed in occupational or educational categories, and
output. Other options include analyzing job announcements in major publications and analyzing labor turnover
surveys.

What Are the Benefits of Human Resource Planning?

o .

Page 23 of 51
 Different than front-line positions such as sales, human resource (HR) positions are typically responsible for
strategic planning and employee development. HR planning includes recruiting plans, employee training
programs, and organizational development. There are many benefits to having strong HR planning tools in
place.

Recruiting
o Human resource departments are usually responsible for recruiting new employees when positions
are created or vacant. Recruiting and selecting employees is a time-consuming process that involves
advertising for the open position, managing the application process, interviewing prospective candidates, and
making job offers. Effective HR planning helps the company to prepare ahead of time for these vacancies
rather than acting in a reactionary manner when an employee resigns unexpectedly. Another benefit of having
a recruiting plan in place is that the recruiters know where to target their job search to find the best
candidates. Successful recruiters plan ahead and know what skill sets (hard and soft) are essential for the
right candidates, and they know how to interview effectively. Companies that include HR planning are
prepared for future open positions that result from business growth and expansion.

Career Development
o Another benefit of HR planning is having career-development procedures, which consist of identifying
future company leaders and helping them grow. This means that when an executive or manager leaves or
retires, there is already someone ready to promote into the position. Retention is an important factor in
successful companies because it means that promotions come from within the organization and current
employees are motivated to work harder to get ahead. Career development also looks at cross-training
opportunities and has career-path plans in place.

Training
o Successful HR planning includes training models and procedures. This training includes new-hire
training to teach new employees about the company culture, internal databases, software, and the skill sets
necessary for specific positions. The benefit of this type of training is that all employees are taught the same
thing in the same manner, which creates consistency and accuracy in daily work. Other training models
include information about new company initiatives, new product roll outs, and career progression classes. For
example, if an employee has been successful in his current role, training may include coaching or
management classes that will help him prepare for a future promotion.

Employee Management
o Effective HR planning incorporates aspects of employee management, such as performance reviews
and disciplinary procedures. Companies benefit from having these systems in place because they help
managers do their jobs and prevent potential lawsuits. Standardized performance reviews help managers look
for key items when reviewing and ranking subordinates and ensure that everyone is reviewed on the same
scale. Standardized disciplinary procedures ensure that the rules are followed and they clearly identify their
consequences when they are broken.

Advantages & Disadvantages of Human Resource Planning

Businesses grow based on the work performed by the employees of the company. Companies rely on their human
resource departments to build the workforce that will drive the business in the future. Human resource planning
involves recruiting the best employees, training those employees and developing those employees for the future.
Human resource planning requires the department to consider current and future business needs. Companies that
want to implement human resource planning need to consider the advantages and disadvantages before proceeding.

Proactive, Not Reactive

Page 24 of 51
 o Human resource planning takes a proactive approach to meeting the company's needs, an advantage
to the company. With a proactive approach, the company anticipates future needs, evaluates the company's
current workforce and determines what actions to take to prepare for the future. The human resource
department enjoys the ability to consider all aspects and the potential implications of different actions before
acting. Companies without human resource planning react to employee needs without allowing enough time
to consider all the options.

Employee Development
o Another advantage of human resource planning involves employee development. As the human
resource department identifies potential employees to move into future management positions, it can
implement actions that will develop those employees' management skills. Human resource planning allows
the company to review performance appraisals to see what skills an employee lacks and provide training
opportunities to that employee.

Culture Shift
o One disadvantage of human resource planning relates to the current cultural thinking of the
employees. Many employees work in the same manner they were originally trained. These employees learn
to perform their work efficiently and take pride in their ability. When human resource management decides to
take a new approach and implement human resource planning, these employees feel threatened. Their
current skills may not transfer to the new processes and the employee would need to learn a new system.

Larger Investment Up Front

o A company must invest time and money for human resource planning to become fully functional, a
disadvantage for cash-strapped businesses. Understanding human resource planning requires employees to
research alternative approaches to planning, evaluating which approach fits the company best and
proceeding to implement that process. The human resources manager needs to determine how the new
process fits in with the current staff and assign new responsibilities to each employee. Once the
responsibilities are assigned, each employee needs to learn a new role, which requires additional training.

Human Resource Planning Tools

A strong Human Resources department is important for any organization hoping to hire and retain the most
qualified staff. HR specialists must have the right tools to complete the administrative tasks of a company. In
many organizations, human resources personnel work with top executives to change policies, provide training
and aid in strategic planning. Without proper planning tools and procedures, human resources workers would
not be able to achieve a majority of the duties demanded of them.

Annual Human Resources Audit

o Conduct an annual human resources audit to gather valuable information about the organization and
how to improve weaker departments heading into the future. The audit should assess your company's past
performance and provide a comprehensive review of all facets of the Human Resources department. HR
audits usually consist of planned interviews with members of the staff and a thorough review of employee
handbooks to safeguard from outdated material.

Employee Handbook
o Every company, large or small should be equipped with an employee handbook. The employee
handbook is the Human Resources department bible, as it helps employees comprehend what is expected of
them in the workplace. It also acts as an important tool for human resources staff since it organizes key
procedures and highlights company policy. Job service workforce centers offer a free software program to
help you create an employee handbook tailored to your company's needs.

Page 25 of 51
Surveys and Guidance Materials
o Aptitude tests and informative books are great tools to help train new employees and plan for the
future. Aptitude tests help HR personnel decide which employees are better fits for specific positions within an
organization. Additionally, aptitude tests give employees insight into their individual strengths and
weaknesses. Reference materials or books also offer new employees a go-to guide to help them get settled in
their new position.

Behavioral Factors in Human Resource Planning

Human resource planning is concerned with the hiring, training and retention of employees to satisfy the
company's strategic objectives. But in order to hire, train and retain quality employees and prepare future
workforce requirements, human resource planning must strive to understand certain behavioral differences.
These differences relate to an employee's situation and his personality. An employee's personality is reflective
of her values, attitudes and perception.

Personality
o An employee's personality can be described as the characteristics that comprise his normal or
consistent behavior. These characteristics relate to the employee's psychology and manifest themselves in
several ways. A person's extroversion/introversion, conscientiousness, emotionality and overall
agreeableness are related to her personality. When considering the organization's staff, human resources
must consider personality differences when hiring, transferring and promoting. Choosing a personality that
works to the benefit of an organization can be a difficult task. Many organizations use tools such as
personality tests to screen and match job-candidate personalities.

Attitudes
o Attitudes can be considered synonymous with opinions. They are often the result of past experiences.
An individual may view a particular person or situation based on previous occurrences. Attitudes are
particularly difficult to change because they have evolved as a result of a person's environment and past
situation. Negative attitudes can take form as criticism, anger, dislike or disdain. While human resource
planning cannot alter an individual's previous experience, it can affect future attitudes. This is accomplished
through hiring, training and retention efforts that focus on employee satisfaction.
Communication is an important factor for preserving employee relations. It can be spoken or unspoken in the
way employees are treated. Orientations, training programs and recognition programs such as rewards,
promotions and raises focus on experiences that keep employee attitudes positive.

Values
o Values refer to to needs, wants, interests, moral obligations, likes and dislikes. They comprise what
matters most to employees. Values are often learned and can be subjective (good or bad). Human resource
planning must work with managers to consider what values employees have and how they align with the
organization's own values. By pairing employee values to that of the organization, strategic objectives are
better achieved. Employees are also more likely to find satisfaction in the workplace.

Perceptions
o Employee perception relates to attitude in that it is the result of past experience. Perception takes
information from various senses and combines it with a person's needs, past experience and expectations.
The result is how an individual or employee perceives or sees his external environment.
Employee perception is vital to human resource planning. If a job candidate perceives an organization in a
negative way, she is probably less inclined to work for that company.

Retaining employees becomes difficult if their view of the company has changed. Human resource planning
must continue to attract and retain workers by keeping an affirmative perception. This is most easily achieved

Page 26 of 51
 if the organization's actions take into consideration employee needs and expectations. This shows the
organization values its employees. Employee safety training, rewards, company-sponsored activities and
recognition efforts such as raises, promotions and announcements can display this value and keep employee
perceptions of the organization high.

Problems & Issues of Human Resource Planning

Human resources planning involves projecting how many people will be needed to fill positions in an organization.
This planning occurs in a changing environment. Organizations study their short-term and long-term needs to hire
new employees. Uncertain economic conditions, such as overseas competition, and changes in technology are
examples of why an organization might adjust its hiring needs.

Mismatch Between Applicants and Skills

o An organization may find it difficult to fill the positions called for by HR planners. This might be
because there is more demand in the organization than there is in available talent in the job market. Another
reason is that the organization's recruiting strategies aren't attracting the right talent. Not being able to fill
positions that are critical to achieving operational goals leaves the organization in a weak business position.
That's why forecasting human resources needs should be followed up with effective recruitment, replacement
and retention of employees.

Environmental Issues
o Environmental issues can occur inside an organization. Demographic changes affect the internal work
climate. Differences in work values between generations, such as Baby Boomers and Generations X and Y,
mean that employees want different things to be satisfied with their work. Programs must address these
different needs in one culture. Also, technological changes require workers to continuously add new technical
skills. If employees' current skills aren't needed, they may become redundant. HR planning involves planning
for organizational learning, or developing staff skills, to keep pace with changes in the business market.

Recruitment and Selection

o Organizations get better staffing results when they can count on HR departments and line managers
to do their own jobs effectively. For example, HR personnel depend on line managers to use web-based tools
to perform recruiting and selection (or hiring) functions with limited assistance. The HR department posts the
steps in the hiring process, policies and procedures, and documents on the company intranet. Although HR
personnel may consult about questions, line managers must be able to follow guidelines for recruitment and
hiring without exposing the organization to liability.

Training and Development

o Line managers must do more than recruitment and hiring. They must perform other jobs that used to
be associated with personnel departments. They must address their own employees' training and
development needs. Line managers must find all of the resources inside and outside the organization to
ensure employees develop the required skills. This takes place in the context of keeping employees motivated
to perform. Effective communication between line managers and HR personnel planners can result in
effective identification of training and development needs exceeding current resources
Why Human Resources Planning Is Important to an Organization
. Human resources planning used to be directed mainly at filling positions in a timely and
appropriate manner. Today, in a rapidly shifting work environment, the priorities of human
resources planning have moved toward a staffing approach that can accommodate different
contingencies. Human resources planning is important to an organization because it ensures that
your staff can handle unanticipated situations that arise as your company evolves.

Hiring

Page 27 of 51
 Hiring is a vital aspect of human resources planning because it provides the gateway for bringing in
new employees and choosing individuals suited to the company's culture and activities. When hiring,
your human resources department can look for an applicant who specifically fits the job criteria or
someone who is the most versatile individual. The former approach is safe and relatively predictable,
while the latter approach more effectively prepares your company for changing markets and
circumstances such as new products and new challenges.

Staffing
The staffing aspect of human resources planning is important for an organization because it ensures
that individual employees are delegated responsibilities suited to their skills and proclivities. When
creating a schedule, your human resources department can schedule employees for job
responsibilities that specifically fit their experience and skill sets or assign them to situations that
build skills and expand their comfort zones. The former approach meets immediate needs, but the
latter approach more effectively prepares your organization for new challenges.

Benefits
Human resources planning with respect to benefits ensures that your workforce will be satisfied and
stay with your company long enough to build skills and knowledge. Your employees are arguably
your company's most important resource because they develop insights, experience and innovations
that are collectively greater than the contribution of any single individual. Benefits such as health
insurance and matching IRA contributions can be expensive, but it can be even more expensive to
lose employees and rebuild your company's knowledge base from scratch.

Troubleshooting
Few companies function smoothly all of the time, and this is fortunate because new challenges arise
from trying new products and services and entering new markets. Troubleshooting is important for
human resources planning because it enables your company to hire individuals who can deal with
unforeseen circumstances. In addition, a human resources department engages in troubleshooting of
its own by adjusting staffing needs and schedules as circumstances change and key employees
move on or request scheduling adjustments because of shifting personal circumstances.

Consequences of Poor Human Resource Planning

Human Resources (HR) Planning is integral to the efficient running and continued success of businesses, enterprises
and even start-up companies. At times, many corporations and business owners due to circumstances, certain
business factors or extraneous issues have a badly mismanaged top management tier and inconsequential HR
departments. The resultant poor human resource planning has an immediate and long-term impact on organizational
functioning, employee recruitment and management policies and corporate profitability.

Poor HR Planning and Management

o An incompetent and poorly functioning human resources department reflects the overall state of
affairs of an organization and its possible uncompetitive position in the marketplace. There is a disconnect
between the HR department and the executive management leading to miscommunication, poor decision
making on operational aspects and critical mistakes. Employee training and development programs are not
properly budgeted for and hiring practices are skewed. Bad HR planning ensures that the HR assets of the
organization are not aligned to organizational goals and objectives.

Unmotivated Employees
o The indifferent attitude of top management and HR quickly filter across organizational levels and
employee hierarchies. Work ethics get affected, there are personality conflicts and teamwork becomes non-
existent. There is gross underutilization of skills and capabilities of experienced employees. Other talented
professionals are not groomed in a generally negative working environment. Poor motivation and lack of

Page 28 of 51
 incentives and recognition lead to poor performance and even production of poor quality of goods and
services.

Employee Demand-Supply Mismatch

o Recruiting and selecting employees is a continuous cycle. Based on business growth, expansion
plans and requirements for specific projects and assignments, employees need to be hired. In a mismanaged
organization, HR personnel with a lackadaisical attitude and lack of communication with departmental
managers and supervisors are hard-pressed to address workforce requirements. Vacancies and job postings
don't get filled in time and key business functions and operations get affected--having a knock-on affect
across the organization.

Higher Staff Turnover

o Poor human resource planning begins to reflect on the corporate ethos of an organization. The
working culture is affected and is generally negative. Performance reviews and performance appraisal
systems are badly managed and employees uncertain about their immediate and future prospects. Employee
safety practices and working conditions can be compromised at factories and manufacturing facilities. Poor
working conditions force many workers to quit. Many other employees are also forced to leave the
organization.

Impact on Bottom Line

o A dysfunctional HR roadmap or ineffective HR management strategy has long-term consequences for
an organization. It affects the performance of a business and the productivity levels of employees. Customer
service on all fronts gets affected. The loss of customers and medium-term revenues is quite immediate. Over
a period of time, the freefall leads to an impact on the bottom line of an organizati

What is Performance Appraisal?

Performance appraisals are a valuable performance management tool to evaluate the performance and value
employees provide as well as set goals for the next review period. Most companies conduct performance appraisals
annually, but they may also be done after a new hire completes the first 90 days of employment or on a monthly basis
in situations where performance is an issue.

History
o Formal performance appraisal has its origins in Frederick Winslow Taylor's 1911 Time and Motion
work, which used the scientific method to assess and improve worker productivity. In 1960, the Theory of X
and Y was introduced to categorize employees. With X employees, performance appraisals are income-
justification exercises. With Y employees, they are a cooperative exercise in aligning personal and
professional goals. Currently, management favors the Y employee model and uses performance appraisals to
develop skills and talent.

Types
o There are a variety of performance appraisal types as well as variances in terminology, but the most
common performance appraisal types are: rating scales, essay methods, results oriented (also known as
Managing By Objective). Rating scales are the most popular type of performance appraisal followed by the
essay and results oriented appraisal formats. Regardless of the performance appraisal type the main purpose
of an appraisal is to encourage and develop employees, facilitate corporate goals, identify improvement areas
and training needs.

Rating Scale
o Rating scales are a structured appraisal of employee performance and, as their name suggests, use a
scale to grade work quality. Scales may be numeric or rate from poor to excellent. While rating scales are
objective in their format, their use is subjective and open to supervisor interpretation. In addition, their

Page 29 of 51
 inflexibility can be problematic if a problem or achievement area is not included on the scale because both
good and poor performance can slip under the radar.

Essay
o The essay method of performance appraisal involves a supervisor writing a paper outlining employee
strengths, weaknesses, goals and objectives. A supervisor can introduce any topic at his discretion and there
are no limits or objective metrics to ensure the performance appraisal is appropriate or productive. The
subjective nature and freedom of essay appraisals could open the door to employee contention and legal
liability if a supervisor is not well-informed on employment law. In addition, a study published by the European
Journal of Social Sciences found the essay appraisal to be the least effective appraisal method (see
References for a link to the study).

Results Oriented
o Results oriented or Managing by Business Objective (MBO), is a metric based performance appraisal
method that focuses on work outcome. Employee performance is judged primarily on goal achievement.
Managing by Business Objective is considered to be the most objective and effective appraisal method, but
the emphasis on measuring performance can result in inappropriate goals. For example, once an employee
reaches 100% on a given metric, it would typically be unproductive to set a new goal of 150%.

Preparing for a Performance Appraisal

o Employees should track their goals throughout the year, documenting their professional achievements
and performance as much as possible. Prior to a performance appraisal, they should informally discuss their
work performance with their supervisor to avoid surprises and make suggestions on goals for the next review
period. Proactive communication is the best way to positively influence performance review outcome and
most supervisors are pleased when their staff partners with them to assist with the review process.

The Objectives of a Performance Appraisal System

For the employer, the performance appraisal is a time to reflect on an employee's skills, knowledge, work
habits and performance. For the employee, the performance appraisal is a time to learn what her boss thinks
of her performance as well as to receive raises and possibly even bonuses based on this criteria.

Competencies
o One of the main objectives of performing performance appraisals is to rate or evaluate employees on
the core competencies, or skills, that are vital to thriving and succeeding in a career. This will help
communicate to employees the knowledge, skills and traits that they must work on strengthening or building
to advance in their careers and meet their goals more effectively.
The manager or supervisor should rate the employee based on how strong they are in each competency and
give recommendations and suggestions on how to improve those which are identified as weaknesses.

Goals
o Another aspect of the performance appraisal is evaluating and setting new short- and long-term goals
for the employee and their department or organization. The first part is reviewing goals set either during the
hiring process or at the last performance appraisal and reviewing how they were met, why they were unable
to be met or how they could have been more effectively met.
After this evaluation, the next step is to set goals for the upcoming year, or quarter. These goals may be
personal, like obtaining a certificate or taking continuing education courses to strengthen a skill, or they may
be directly tied to organizational goals like improving profits or increasing market share.

Pay Increases

Page 30 of 51
 o One of the most vital aspects of the performance appraisal in many organizations, particularly for the
employee, is the opportunity to receive an annual pay increase. Many organizations earmark this time for
determining if an employee is receiving a raise and how much the raise shall be. This is typically justified by
linking the increase, or the amount of the increase, to work performance and how effectively goals were met.
Many organizations may use this period to also determine or announce bonuses. Bonuses are typically linked
to organizational performance or how an individual contributed to this performance.

Objectives & Scope of Performance Appraisal

Performance appraisals are systematic ways of measuring, reviewing and analyzing employee performance over a
given period of time and using the information gathered to plan for the employee's future with the organization. This
periodical, impartial feedback is used to judge employee effectiveness as well as provide necessary development and
training to improve the employee's contributions to the organization's goals.

Significance
o Employees are the most significant resource of any business, and performance appraisals reflect the
organization's commitment in developing this important resource of human capital. Performance appraisals
grant upper management an opportunity to reward excellent performance or reprimand unsatisfactory
performance. This powerful managerial tool should directly reflect the overall organization's goals and
objectives; the employee assessment should provide useful feedback about the employee's contributions or
lack of contributions toward these goals.

Process
o According to North Carolina State University's Employee Performance Appraisal Program, the
"appraisal process consists of three stages: planning, managing, and appraising." The planning stage requires
communication between the employee and supervisor about the employee's work plan, development plans
and job expectations. The managing stage includes monitoring performance and providing feedback
throughout the process. The appraising stage involves making decisions regarding rewards, punishments and
possible training or development needed. (See Reference 1: Employee Performance Appraisal Program)

Methods
o The most common methods of performance appraisals include straight ranking, paired comparison,
scale rating and free response. Managers using the straight ranking method rank employees from best to
worst starting with the best employee and worst employee, and working their way toward the mediocre
employees, one ranking at a time. The paired comparison method is a systematic method of ranking
employees only after comparing each employee to every other employee. The scale rating method has
specific categories relating to performance with employees receiving either a number score, usually between
1 and 5, or a letter grade, such as A, B, C, D, or F, for each category. The free response method is basically a
performance appraisal essay written by the supervisor with no requirements or limitations. (See Reference 2:
What Are the Different Types of Performance Appraisals?)

Scope
o The scope of any performance appraisal should include the following: provide employees with a better
understanding of their role and responsibilities; increase confidence through recognizing strengths while
identifying training needs to improve weaknesses; improve working relationships and communication between
supervisors and subordinates; increase commitment to organizational goals; develop employees into future
supervisors; assist in personnel decisions such as promotions or allocating rewards; and allow time for self-
reflection, self-appraisal and personal goal setting. (See Reference 3: Performance Appraisal System)

Considerations
o Although performance appraisals have many intended benefits for both the organization and
employee, if the process isn't carefully implemented and managed, it can result in employee backlash.
Constructive criticism can help improve performance, but there is a fine line between providing helpful
feedback and upsetting an employee. Management should always make sure to recognize and reward

Page 31 of 51
 excellent performance to avoid coming off as too negative. Employees who work hard and take pride in their
work will have a hard time correctly utilizing the feedback if none of their accomplishments or positive
contributions are noticed and appreciated.

Negative Aspects of Performance Appraisals

Performance appraisals are work-related processes that managers use to review and rate employees underneath
them. Companies use a variety of performance appraisal types based on their philosophies and what qualities they
are interested in employees having. Most appraisals resemble checklists or rating systems for specific skills and
qualities. While these tools help businesses find problem areas in employees and ensure employees are earning their
compensation, they also have issues companies should be aware of.

Subjectivity
o Managers are subjective. They are influenced by their experiences with employees and their personal
feelings or ideas about employees, regardless of how accurate they are. This means that performance
appraisals will also be bent slightly by the bias of the manager, even if it is unconscious. A purposefully
negative or selfish manager may warp appraisals to punish employees or keep ambitious and talented
employees from rising up in the company.

Misunderstanding
o Appraisals are not necessarily understood by employees. A manager may mark an employee down on
a particular area where the manager would like to see improvement, but the employee may take it as a
personal insult, ruining the relationship between them. Also, cultural barriers can make appraisals even more
confusing, since different cultures place different values on correction or praise. This is a specific problem for
companies expanding into global areas.

Appraisal Limitations
o Most appraisals are by nature strict reviews that limit the review to only certain qualities that the
employee needs to have. This makes it difficult for managers to review other characteristics of the employee.
The appraisal may not leave room to discuss emotional intelligence, relationships with other employees or
specific attitudes which the manager may want to discuss.

Focus on Appraisals
o If companies use appraisals to make important decisions on salary or promotions, then the
performance review process can become very competitive. Employees may focus too much on fulfilling
specific aspects of the review or treating managers well instead of concentrating on their tasks and performing
work that helps the entire company. Appraisals fail if they devolve into backstabbing.

Limitations of a Performance Appraisal

An employee performance appraisal can be an effective tool for determining the development of your staff. But in
order to get results you can apply to staff management from your performance appraisals, you need to understand
the limitations of a performance review system. A comprehensive evaluation system is needed to address the
limitations inherent in the process.

Relevance
o Performance appraisals tend to be uniform throughout an entire company. The production manager
uses the same forms and the same process to complete her employee reviews as the logistics manager.
According to the Performance Appraisal website, this creates a limitation in the appraisal system. The
standard questions may not apply to each department, or even each individual job. When you try to apply a
standard set of values over a system that is based on variables, you get results that may not all be relevant.

Page 32 of 51
Consistency
o Each manager in your company has a different approach to managing and has a different demeanor
when it comes to employees. When you apply a standard appraisal system, or even an appraisal system that
is customized to each department, you are still going to get inconsistent results due to managerial styles,
according to the Soft Technology website. For example, if an employee gets an appraisal from a manager in
year one, but gets a new manager in year two, then the resulting appraisals will not necessarily be
comparable. There is no consistency between the managers giving the appraisals. Trying to compare each
employee using a numbering system is also limited because of the different styles of management in each
department.

Motivation
o A performance appraisal system based on numbers is designed to identify areas in the employee's
performance that require attention. The manager and the employee then work on a developmental program
that will address those issues and attempt to improve performance. But the employee may be more motivated
to raise her scores rather than learn substantial ways to improve performance, according to the Performance
Appraisals website. The only motivation the performance appraisal offers is the incentive to raise appraisal
scores from one year to the next. The system lacks the ability to reward proactive attempts to become a better
all-around employee.

Scope
o When a candidate is interviewed prior to being hired, he is sometimes given a test that measures how
he would react in certain situations and whether he is proactive. Once he becomes an employee, he is
subjected to annual performance reviews rather than continued testing to determine if he is a self-starter, has
ability to take on responsibility or the response time to different job-related situations. A performance appraisal
is very limited in scope. It creates impressions based on past performance rather than real ability. If someone
shows the ability to do his job well, then the appraisal will reward him. But if he also possesses the ability to
reduce production costs by creating innovative ways to do his job, then the appraisal has no way of
determining that.

The 6 Steps to Performance Appraisals

Companies seek to maximize productivity from their employees and continually develop employees' skill levels so
further productivity gains can be achieved in the future. Performance appraisals are a tool companies use to
accomplish both of these objectives. Appraisals also are used to determine who are the very best employees in the
organization in order to fairly and rationally allocate rewards such as bonuses, pay increases and promotions.

Create Appraisal Form

o Having a fair and consistent performance appraisal process enables a company to protect itself from
being sued for wrongful termination by an employee who believes he was fired without cause. The process
begins with creating an appraisal form that is used throughout the organization so everyone is treated equally.
The written appraisal is kept in the employee's personnel file, documenting whether the employee performed
his duties up to the standards that were expected or required. The supervisor meets with the employee and
discusses the content of the appraisal with him.

Set Performance Goals

o A supervisor is given goals for her department by the individual she reports to. She breaks down these
goals into component goals for each of her employees. These are discussed with the employee during the in-
person meeting. Goals should stretch the capabilities of the employee but not be so challenging that the
employee deems them to be unfair.

Grade Current Year Performance

o A frequently used format for the appraisal form contains a list of job performance dimensions on the
left side with a grading scale across the top, showing a range such as unsatisfactory to outstanding. The

Page 33 of 51
 dimensions could include initiative, creativity, attitude, leadership, knowledge, teamwork, work quality, overall
productivity and punctuality. The supervisor checks off a rating for each job dimension that applies and then
writes out a brief explanation for each rating.

Outline Areas That Need Improvement

o The most difficult part of the appraisal process for many supervisors is giving out criticism to
employees. How the criticism is dispensed is as important as the criticism itself. The supervisor should try to
show the employee that the purpose of the process is to position the employee for further career
advancement and even make his job easier. Underperforming employees are often frustrated and seeking
ways to improve. Good employees actively seek advice on how to perform even better.

Recommend Additional Training

o Providing opportunities for additional training has benefits for both employee and employer. The
employee can accelerate career advancement by acquiring additional skills. Information technology (IT) skills,
for example, increasingly are required as part of the job description for positions throughout organizations.
Acquiring these skills can enable employees to qualify for higher-paying jobs. For the company, having a
more highly skilled workforce means a more productive workforce -- the company can get more work done
with the same level of staff.

Provide Praise
o Companies can use the performance appraisal as an opportunity to motivate valued employees to
even greater achievement in the upcoming year by making sure they are praised for their effort and
accomplishments. Although employees work for financial rewards, they also seek recognition from their
supervisor that they put forth more than the minimum effort required. When a supervisor meets with an
employee to go over the written appraisal, providing praise can not only motivate the employee but increase
the likelihood he will accept any criticism given rather than resent it.

Methods Used in Performance Appraisal

Performance appraisal methods differ according to an organization's size, number of employees and employee
position. Common performance appraisal methods include graphic rating scales, management by objectives, 360-
degree feedback and forced distribution. Each performance appraisal method comes with its own advantages and
disadvantages; however, the effectiveness of each method depends largely on how frequently managers provide
ongoing feedback to employees and how managers conduct performance appraisal meetings.

Graphic Rating Scales

o Production-oriented work environments operate at a frenetic pace, and because of this managers of
large departments often do not have the time to devote to lengthy, narrative-format performance appraisals.
The answer to measuring performance for large departments with little time to spare is a graphic rating scale.
Graphic rating scale performance appraisals contain performance standards, or expectations, for each job
task. Managers evaluate employees using a numerical scale and add the total to arrive at an average rating
for the employee's overall job performance. This performance appraisal method offers precision and ease,
particularly when assigning wage increases. Compensation structure tied to precise ratings eliminates much
of the subjectivity and guesswork in determining raises and bonus amounts.

Management by Objectives
o Aligning individual employee goals and organizational goals is relatively easy using a management by
objectives (MBOs) performance appraisal method. Managers and employees work together to identify
employee goals, the steps necessary to attain each goal and the time and resources required for reaching
milestones. Benefits of this performance appraisal method include the manager-employee open dialogue and
their mutual agreement on goals and objectives. MBOs also provide assurance that employee tasks are
relevant to the job and congruent with the company's expectations and goals. Frequent interaction is required
as a part of monitoring progress for MBOs -- it's much simpler to review quarterly milestones and readjust the
employee's goals accordingly.

Page 34 of 51
360-Degree Feedback
o Companies that use 360-degree feedback realize the importance of well-rounded assessments and
varied perspectives when it comes to evaluating the performance of front-line employees as well as managers
and directors. In 360-degree feedback appraisals, employees are evaluated by others with whom they have
regular interaction in the workplace, regardless of position, level or status. Workers evaluate managers and
directors in the same manner directors and managers evaluate workers. Some workers are not accustomed
to conducting employee appraisals; therefore, training is an essential step in this performance appraisal
method. In companies that use 360-degree feedback, the human resources staff provides training on how to
give meaningful, objective feedback that can be helpful in constructive feedback.

Forced Distribution
o The forced distribution performance appraisal method is not without its critics; however, it's a
straightforward approach to evaluating performance and limiting the power that nonperformers have in the
workplace. Employers who use this method are usually concerned about maintaining productivity and
engagement, because the forced distribution ranking method provides financial rewards and motivation for top
performers. Managers who utilize forced distribution appraisals determine which employees demonstrate
performance and commitment that earn them ranking in the top 20 percent of the workforce. Average
performers constitute roughly 70 percent of employees, and poor performers make up about 10 percent of the
workforce. The bottom 10 percent of employees -- poor performers -- are usually terminated or voluntarily
resign. Eliminating poor performers frees up time to develop average performers and seek qualified applicants
to fill the slots left open by departing employees

Critical Incidents As a Method of Performance Evaluation

The critical incidents method is a qualitative method of appraising a worker's performance. A manager uses words,
not numbers, to describe the level of success or failure an employee experiences during particular events. The
manager logs very good or bad examples of an employee's work, and revisits the log with the worker at pre-
established times. If you select this model to appraise workers, you will only highlight their performances on isolated
occasions during each year.

Positive and Negative Behaviors

o When utilizing the critical incidents method, a supervisor maintains a writeup of each incident,
including specifics of positive and negative behaviors observed. The supervisor will discuss the record of
critical incidents collected over the year and use this record as the basis for annual performance ratings.
Think of this evaluation, as performed by some supervisors, as the sum of mini-evaluations throughout the
year.

Advantages
o A supervisor keeping this type of performance record does not need to collect continuous examples of
an employee's performance. He uses his professional judgment, deciding which events to record on a
periodic basis. This method offers the advantage of detailing how an employee performs. For example, you
might describe how an employee specifically provided excellent or poor customer service to a customer, or
describe to the worker what she must do to correct performance weaknesses. Critical incidents are recorded
throughout a period of time, so they do not just highlight an employee's most recent performance
observations.

Disadvantages
o A supervisor must find time to note critical incidents when they happen. He must also find time to meet
with the employee and discuss his findings, both positive and negative. An employee will not receive
numerical ratings, or ratings on a scale such as one to five, based on events described in the critical incidents
log. The lack of numerical ratings makes it hard for a supervisor to compare performances and decide
important personnel matters, such as which worker gets a pay increase.

Page 35 of 51
Performance Evaluations
o After you've considered some advantages and disadvantages, consider how critical incidents can help
an employee improve. A supervisor who takes time to conduct observations often, even weekly, and meets
with the employee to discuss findings soon after, provides regular feedback. A supervisor can also use the
critical incidents log to show how a worker is progressing toward meeting yearly goals.

Types of Performance Appraisal Techniques

Performance appraisals are a way to provide feedback on an employee's performance to both the employee and the
management of the organization. The benefits to the organization are that it can base major decisions like
promotions, terminations, transfers, wage hikes and training needs on this information. The employees get an
opportunity to find flaws in performance and rectify them. The basic aim of any appraisal system is to have a smooth
and open flow of communication within the organization. Each has its relative merits and demerits.

Confidential Reports
o This technique of appraisal is an individual form and is perhaps the oldest method. Prepared by the
employee's senior in a confidential manner, the employee's highs and lows in performance during the past
year are evaluated. As this information is kept secret and confidential, the employee is not given a chance to
improve upon his performance as he is not notified of the shortcomings in performance.

Critical Incident Technique

o This, too, is a type of appraisal for the employee alone. Here, the employee's best and worst incidents
of behavior are analyzed annually. These events are the ones that are the most critical in appraising the
employee.

Checklist Technique
o This is an individual person appraisal form. The superior is given a checklist to mark answers as "Yes"
or "No." Typical questions are on the performance and behavior of the employee. The inherent flaw here is
that this method allows no scope for subjectivity.

Management by Objectives
o The superior here examines measurable and tangible goals at the end of the year. This appraisal form
is a multiple person form and measurement of performance of any employee is against her peers. At the
beginning of the year, the superior lets his team know of key result areas and results expected. After which,
the work is delegated and definition of the authorities and responsibilities takes place.

Paired Comparison
o All the employees working in a team are compared against one another. The analysis of their
performance is then ranked. The rankings could be either in ascending or descending order of performance.

How Does A Performance Review Help Improve Employee Job Performance?

o Productive job performance is an essential element in the success of large corporations and small
businesses. Employees are the lifeblood of a company, and their collective attitude can greatly affect the
direction and objective of any business plan. There are several proven ways to increase employee morale,
improve job performance and thereby boost overall productivity. These strategies include an established
system of pay raises, coverage of critical benefits and the practice of open two-way communication. One of
the most constructive ways to influence morale is with a yearly performance review.

Communication
o Perhaps the most evident benefit of a review is the exchange of face-to-face dialogue in a one-on-one
conversation with each employee. During a typical workday, employees and managers operate completely
focused on the task at hand. They spend very little time briefing others on their current status. An employee

Page 36 of 51
 review session presents an ideal platform for gauging the state of affairs for both employee and manager and
making sure everyone is on the same page. This exchange also gives the employee an opportunity to bring
up issues that may be frustrating her or suggestions to increase efficiency. Opening a clear line of
communication between worker and supervisor aids the process of eliminating obstacles and improving
operations.

Appreciation
o A constructive attitude cannot be forced onto a person; instead, morale comes from a positive work
environment and gratified contribution. People who consistently present their best deserve recognition for the
role they play in the success of the company. Without this acknowledgement, an employee can feel taken for
granted. As a result, he may begin to work less effectively. Additionally, employees who do not receive
feedback on the execution of their job may lack confidence in what they are doing. They may be asking
themselves, "Am I doing this right?" or "Is there a better way?" This vacillation in conviction can make an
employee stagnant or ineffective.

Promotion
o Financial compensation for a job well done is always a swift motivator for employee performance. An
annual review may offer the opportunity to note the achievements of employees and determine whether or not
their skills are being used to best benefit the company. A job promotion, even without a raise, can elevate
employee gratification just as much as a pay raise without a title change. Having a clear and consistent
structure for issuing promotions will affect productivity in a positive way based on the natural human response
to a rewards system.

360 Degree
o All the persons who interact with any employee during the course of her work are taken as
stakeholders in this method. The stakeholders comprise of the immediate boss, the immediate subordinates,
top management and all the people with whom the employee interacts for work. All these people provide
feedback on her work and working style. The feedback thus obtained helps the employee improve her
performance.

How to Improve Your Performance Appraisal

Process
Implementing employee appraisals is an important responsibility of company managers and supervisors; employees
are commended for their contributions and given constructive ways to improve areas that are still being learned.
Unfortunately, many managers needlessly delay these appraisals, offer them without preparation or do not give them
at all. As a result, employee morale suffers, and highly qualified personnel become disillusioned and look for work at
other companies. With just a little planning, supervisors can enrich both the employees and organization with a
supportive appraisal process.

o 1 Review the appraisal process with all new employees during their orientation. This can be done
either by the human resource department or individual managers. The purpose is for personnel to know that
every person will be appraised at certain increments in relationship to their overall work plan and individual
responsibilities. Employees should be encouraged to ask questions during the year about the appraisal, if and
when they arise.

o 2 Provide training to all managers in how to perform employee appraisals so that they see the value
in this process and feel comfortable completing the procedure. Ensure that all management, even at the
senior level, know how to appraise their employees and receive their own performance review.

Page 37 of 51
 o 3 Ensure that all supervisors complete a detailed work plan with each of their employees, which
includes the person's specific responsibilities, goals and timeline with milestones. Reinforce that appraisals
are based on the outcome of these plans.

o 4 Have all managers keep an open file on each of their employees between appraisals where notes
are made on programs as they are completed. It is too difficult to try and backtrack several months after a
project is completed. Comments should go in the file while they are still fresh. Any letters received from
people in the organization regarding the employee's performance should be put in the file as well.

o 5 Give the employees a couple of weeks' notice before the date of the appraisal. Make a copy of the
appraisal form, and have the employee fill it out, and bring it to the meeting. The two appraisals should be
compared and areas of agreement and disagreement discussed. The two signatures should be on each
appraisal, and they should go into the file as well.

o 6 Encourage the employee to talk with a designated person in the company if there is any area of
disagreement that cannot be clarified in the meeting. The person should not be afraid of repercussions to ask
for further clarification or more time for discussion.

o 7 Discuss areas of strength and where more improvement is needed. Offer suggestions on ways to
make these improvements, and provide names of other individuals who can provide additional support.
Managers should ask for feedback on their own ability to supervise and how they can best help their
employees succeed in their jobs and with the company. Talk about possible promotions and/or other
employment in the company of interest. Review areas that will be covered in the next review and the date for
meeting.

What Is the Meaning of a Performance Appraisal?

In a performance appraisal, the HR department of a company rates performances of employees to determine their net
worth to the organization. The immediate superior of the employee provides pointers on his performance during the
past year.

Features
o This exercise helps the organization classify all its employees into star performers and non-
performers. Also, the areas where employees need to be trained and developed are ascertained by
performance appraisals.

Function
o Companies conduct performance appraisals to decide on the treatment they must provide their
employees with. The performers are generally rewarded by means of promotions and raises in pay. The
under-performers are cautioned and often demoted, transferred or terminated.

Time Frame
o Performance appraisals are usually conducted once every year. Organizations also conduct
performance appraisals when they have a vacancy and wish to promote an employee internally. They
appraise the performances of a few employees and select the best one.

Types
o Performance appraisals are grouped under two categories--individual employee methods and multiple
employee methods. In the individual employee appraisal method, the employee's performance is gauged on a
number of determinants such as targets achieved, initiative, drive and behavior. In the multiple employee

Page 38 of 51
 appraisal method, an employee's performance is evaluated in comparison to other employees working on her
team.

Benefits
o Management is able to classify its employees as performers and non-performers and then take
appropriate steps for them. Performance appraisals enhance communication flows in the organization. The
employees, when appraised of their strengths and weaknesses in performance, get an opportunity to further
hone their strengths and allay their weaknesses.
o

What Are the Benefits of Using an Annual Performance Appraisal?

Annual employee appraisals benefit employees, managers and the company as a whole. An employee appraisal is an
evaluation of the employee's performance, and usually involves an in-depth discussion between the employee and
manager to review the employee's performance compared to goals from the past year, and set expectations for the
next year. Some companies use the annual performance appraisal as a means to determine whether the employee
qualifies for a pay increase. There are a variety of other benefits, as well.

Measure Success
o An annual performance appraisal gives both the manager and employee a chance to evaluate the
success of the employee from the past year. If you had a similar discussion last year, then you should have a
list of set goals to measure the employee's work against. Did the employee meet the goals laid out in last
year's performance review? If so, consider setting even more-challenging goals for the upcoming year, and
praise the employee for her success. Measuring actual work against the goals is beneficial to determine
whether the employee has the correct workload and whether she really is the best person for the job.

Get Feedback
o An annual performance review is also a time to get feedback from your employee. Ask how the
workload is, whether she is enjoying the work for the most part and what can be done to improve the working
situation. Employees can open up to managers about relationships with other employees or their ideas for the
company. Listen and document all ideas and comments the employee shares with you, and encourage her to
be open and honest. The feedback might help you improve your management and communication
techniques, and might provide some insight into how to improve the company as a whole. Managers can also
give feedback to employees to help them develop new skills or work habits, which improves their position in
the company and career in general.

Recognition
o One benefit of annual performance appraisals for employees is that the meeting gives employees a
chance to toot their own horns. This is a time for an employee to make sure her manager knows about all of
the work or projects she completed successfully in the past year. Sometimes, it is hard for managers to keep
up with all projects and tasks employees work on in a year, so employees should use the review as a chance
to remind managers exactly what was worked on, and include details like extra work or early completion of a
project. If possible, the employee should also talk about how the work impacted the company's revenue or
company goals.

Motivation
o An annual review of an employee's performance is also beneficial in that it motivates the employee to
do well. The discussion should end with clear goals and objectives for the employee. The employee should
keep these goals and objectives documented throughout the next year, and work specifically towards the
goals. The focus and motivation needed to successfully achieve the goals creates a more productive
employee, which benefits your company.

Page 39 of 51
Roles of Performance Appraisals
Measuring employees' performances is imperative to achieving organizational goals and objectives. With this task,
the organization assesses the net worth of all its employees. It distinguishes between its good and bad performers.
Also, the organization can leverage the employees' future potentials and potencies. The HR department procures,
analyzes and records facts about the performances of all the employees of the organization at least once a year. The
management then makes decisions based on the results of these appraisals.

Function
o By conducting performance appraisals, the management can decide on the future fate of the
employees in the organization. Management makes these decisions depending on the employees'
performances in the appraisal period. The company can reward good performers with promotions, bonuses
and pay raises. Management can demote, transfer or even terminate bad performers.

Features
o Performance appraisals allow supervisors to establish goals and targets for their subordinates. At the
end of the year, the performance appraisal mechanism enables them to ascertain whether his team met the
preset targets.
Also, performance appraisals reinforce both the upward and downward communication channels. The
managers clearly explain what they expect of their subordinates, and the when doubts arise, the subordinates
look up to their superiors for advice. The employees also tell the managers of areas where they feel they need
training.

Types
o Performance Appraisals fall into two categories. In the first type, the Individual Person Appraisal, a
company analyzes an employee's performance during the appraisal period on factors such as attainment of
targets, behavior, initiative and attendance. The examples of such analysis include MBO (Management by
Objectives) and ACR (Annual Confidential Reports).
The second category analyzes an employee's performance with respect to other employees working in his
department. Examples here include the Ranking Method and 360-Degree Appraisal Technique.

Process
o At the beginning of the year, the management lets all the departmental managers know of the tasks
that they need to accomplish during the course of the year. These managers sit down with their subordinates,
assign them work and fix targets for them. Work progresses for the rest of the year, and superiors and
subordinates work together in close contact to achieve organizational motives.
At the end of the year, the HR department asks all the managers to rate and analyze the performances of all
their subordinates. The superiors analyze and record their observations and forward the reports to the HR
department. The HR department, in turn, tabulates all the observations and forwards them to the top
management to make decisions.

Benefits
o All the three involved parties benefit from performance appraisals. The interested parties are the
management, the employees and their immediate superiors. Management can make a distinction between the
performers and non-performers.
The employees themselves profit immensely from performance appraisals. They learn of their abilities and
shortcomings in performance. In the future, they take steps to leverage on their strengths and nullify their
weaknesses. This proves advantageous to both the organization as well as the employees themselves.

Page 40 of 51
 Their immediate superiors get to work with motivated and driven employees and, hence, work progresses
very smoothly.

The Role of HR in a Performance Appraisal

Human Resources (HR) departments are essential in the processing of employee performance appraisals. While
appraisals are usually done by immediate managers or supervisors, HR provides the necessary tools and procedures
for the process.

HR Functions : HR provides the necessary forms and guidelines to management to ensure that appraisals are
done in a timely, consistent manner. The department notifies managers when appraisals are due, usually on
the anniversary of employment.

Legal Responsibilities of HR
o Conforming to Equal Employment Opportunity Commission (EEOC) rules and standards also falls
under the jurisdiction of HR. Properly trained HR personnel with strong knowledge of labor laws can save an
organization large amounts of money by making sure that these laws are not violated. It is HR's responsibility
to provide employees with consistent, fair and legal evaluations.

HR Records
o HR must also keep employee appraisals on file for future reference. If there are changes in
management, these records will be a valuable tool in measuring an employee's progress over the years and
may help decide if he is prepared for promotion.

Types of Training for Human Resource

Management
Rowena Odina has been writing handbooks, manuals and employee communication pieces since 2002 as part
of her human resources management functions. She specializes in writing about human resources topics. She
has a certificate in human resources management from Seneca College and a certificate in payroll management
from the Canadian Payroll Association.

By Rowena Odina, eHow Contributor

updated October 06, 2010

•
•
•
• Print this article

Related Searches:

• HR Policies
• HR Trends 2010

1.

o Through training, HR professionals acquire skills essential to the practice of human resource management.

Page 41 of 51
 Human resource professionals can train in human resource management through the Society for Human
Resource Management. As the world's largest HR association, SHRM offers comprehensive training through
classroom sessions, online courses, webinars and conferences. Universities, colleges and other providers
also provide similar educational programs. Through training, practitioners learn human resource management
ideas, tools, best practices and relevant legislation.

Basic Training
o HR beginners need training that provides an overview of roles and responsibilities in human
resources. This training covers the different HR disciplines, as well as current HR issues and best practices.
The generalist program includes compensation and benefits, staffing, orientation, training and development,
employee relations and performance management. Beginners to the profession can attend the two-day
classroom sessions, although many learn through on-the-job training.

Specialized Skills Training

o HR professionals often seek to develop specific skills in HR functions. They can attend specialized
training on areas such as compensation, metrics, diversity, behavioral interviewing, labor relations and
employment law. Participants can choose between classroom sessions and e-learning courses, which are
about one hour long and include an assessment.

Certification Training
o HR practitioners can attend training to prepare for certification as Professional in Human Resources,
Senior Professional in Human Resources, Global Professional in Human Resources or California Certification
in Human Resources. Certification is a sign of professional competence and credibility, and leads to
advancement opportunities. Training methods consist of classroom sessions, outside-of-the-classroom
assignments, study tools and interactive case studies. To renew certification, HR professionals can earn
credits by attending courses, conference sessions, webcasts and public policy updates.

Executive Training
o Senior human resource management professionals require more in-depth programs that tackle HR
strategy, leadership and change management. This type of training is for experienced HR managers and
directors. Business experts often conduct advanced training in business schools such as UCLA and Harvard.
They make use of discussions, assessments and one-to-one coaching.

Human Resource Management Training Methods

Economic challenges have forced business leaders to deliver immediate business value, do more with less,
and ensure that employees are engaged, motivated and focused. Therefore, Human Resources should
provide management training methods that support immediate business impact. Management training
methods are varying approaches to developing management skills and techniques. Six basic training methods
have proved to be successful and economical, and provide a variety of possible applications.

Traditional Method
o The traditional apprenticeship method has been in existence since ancient times. While this method
has evolved over the years, the primary objective is to provide the necessary education to get the job done.
Presentation techniques are popular when using this method. The learners receive explicit instruction on new
information and then they practice what they have learned through structured exercises and on the job
training. The traditional training method is most cost effective when leaders are being required to attain new
knowledge and immediately implement new skills.

Page 42 of 51
Discovery Method
o The discovery method requires that managers have a fundamental knowledge of the topic prior to
training. During the training, this method incorporates the managers interacting with their environment by
exploring and manipulating objects, wrestling with questions and controversies, and performing specific
experiments. The discovery method is most effective when managers need to develop critical thinking,
problem solving, research skills, and collaborative fresh perspectives.

Situational Method
o Also known as "Hersey and Blanchard Situational Leadership," the situational method focuses on the
amount of task direction and emotional support a leader must provide for their employees. Managers are
required to diagnose a situation and choose the appropriate style in response to the specific circumstance.
The situational method focuses on four possible response choices: directing, coaching, supporting, and
delegating. This method is appropriate during organizational transitions so managers can provide direction,
implement new plans, support diversity and effectively motivate employees. Although the situational method is
effective, it can also be one of the more costly learning initiatives.

Participative Method
o The utilization of the participative method is similar to that of the discovery method in that managers
are solving problems, wrestling with questions, and drawing conclusions or analysis concerning a situation.
But rather than performing experiments, managers are presented with situations relative to real world
experiences and asked to formulate solutions and role play situations in order to draw conclusions. It also
helps managers to observe and offer feedback while watching other participants' role play. In addition, the
approach aids the development of interpersonal, communication, conflict resolution, awareness and team
decision making skills. This method is often used because it is cost effective.

Total Quality Management (TQM) and 5S Method

o TQM and 5S methods focus managers on the concept of a continuous quality improvement effort with
the goal of achieving enhanced efficiency and cost savings. In a TQM effort, the management training offers
education focused on improving processes, products, services and the culture in which they work. The 5S
system focuses on creating a cleaner, safer, and more organized work environment. The 5S's are sort
(remove unneeded items), set (have everything in its place), shine (clean work area), standardize (systemize
cleaning and identification methods) and sustain (involving people to maintain the program for the long term).
Involvement, accountability and education are imperative to a profitable business outcome and successful
implementation. (See Reference to learn more about implementing a 5S program.)

What Is Job Specialization & Job Evaluation?

Human resources processes tend to be complicated when entering the realm of determining a job function and
related salary ranges. Two of these approaches include job specialization and job evaluation, both of which require
updated analysis and research to support related conclusions.

Job Evaluation Defined

o Job evaluation describes the process of defining a job position salary cost relative to the employer
organization, industry, and location. The result of this work and analysis tends to be determining pay ranges
for job classifications to remain competitive but to also control labor costs as well. Whether formal or not,
every company and organization that pays people to work goes through the process of job evaluation,
particularly when establishing the pay levels of new positions.

Method Utilization
o The formalized approach of job evaluation tends to be used and discarded as the balance between
centralized control and flexibility moves back and forth. Organizational management will affect it when

Page 43 of 51
 processes are needed to keep decentralized areas in line. Formal evaluation gets thrown out when a
company wants to be flexible and nimble to move quickly in business.

Job Specialization Defined

o The method of job specialization involves breaking down a task to its lowest level and designing jobs
around each part. This creates specialization, expertise, and improved quality. Job specialization design in the
workplace is frequently seen in manufacturing and assembly lines where a worker focuses on one specific
task and ability during the entire work shift. The task frequently repeats all day long.

Benefits
o Because job specialization allows significant expertise buildup in a specific task, the learning and
speed of production happen faster. The job does not involve complex processes, so it can be taught faster to
new workers. In theory, this approach reduces quality control costs and improves production efficiency.

Problems
o The downside of job specialization tends to be that people can only do one task. They aren’t trained to
multitask or handle multiple areas of a workplace. As a result, when a critical expertise is lost, the process can
suffer. Additionally, workers under job specialization don’t have a wide array of applicable skills, so it becomes
hard for them to adapt to a new function or need in the organization. As a result, unemployment is a
significant problem when a company has to shut down a factory or assembly line. Many of the laid-off workers
usually have a hard time adjusting to new occupations.

Job Analysis & Evaluation

Lindsay Bayer is a freelance lifestyle writer from the Midwest. Her articles, ranging from interior design ideas to
beauty product reviews, have been featured on various websites. Bayer holds a Bachelor of Arts in speech
communication from Augustana College, where she studied the influences of popular culture in the media and
society. She is pursuing a graduate degree in child and adolescent literature.

By Lindsay Bayer, eHow Contributor

•
•
•
• Print this article

Related Searches:

• Nursing Job
• ETL Tools Evaluation

Page 44 of 51
 Job Analysis & Evaluation
Job analysis and evaluation are important processes in order for human resource professionals to accurately review
the content of a particular position within an organization. Cornell University offers management programs that outline
the job analysis and evaluation process. This process is done by undergoing fact checking, gathering and analyzing
data and documentation and creating an environment of non-partiality.

Definition
o A job analysis is done to review the current positions within an organization to determine job content,
including tasks, conditions to perform those tasks, skills needed, objectives and methods. A job evaluation is
performed to judge the size and value of one job in relation to other positions.

Function
o The job analysis serves to accomplish many functions, including: improving hiring practices,
establishing discipline guidelines, uncovering job hazards and developing staff training and improvement
programs.
The job evaluation can clarify what the internal ranking of positions should look like within an organization,
which can aid in developing a clear organizational chart, chain of command and/or pay scale.

Process
o The job analysis process requires the human resources professional to uncover information
concerning: the position summary, description of tasks, percentage of the employee's time devoted to each
task, supervisory duties, decision making duties, problem solving and troubleshooting, position requirements
and budget impact. Through collecting this data and undergoing analysis, the human resources professional
may be able to determine if the objectives of the position are being adequately fulfilled, if the position can be
combined with another or if a new position should be created.
Job evaluations should be completed after the job analysis. Human resources professionals will asses job
factors to determine the size and importance of each position through implementing a rank, point and/or
classification system based on the factors assessed during the job analysis. According to management
consultant, Susan M. Heathfield evaluating through a point system is most commonly used within
organizations today. Jobs are valued in monetary terms and points are awarded based on various factors of
compensation for that position.

Benefits
o The job analysis will adequately assist the human resources staff in developing accurate job
descriptions. This process will also help the staff to conduct employee evaluations, future reclassification and
employee recruitment.
The job evaluation aids the organization in developing an attractive and competitive salary scale that can not
only attract talented job candidates, but retain them as well. It also clarifies the high-level management chain
for the entire employee base.

Page 45 of 51
Warning
o Human resource professionals conducting these processes must be cautious to only evaluate the
jobs, not the individuals within the positions. According to Accel Team Development in the UK, the focus
should be placed on the work that is being (or should be) accomplished, even though it is hard to disregard
the particular individual working within the position. An employee evaluation will assess the employee's ability
and enthusiasm to perform the position to the standards of the organization.

What Are the Benefits of a Job Evaluation?

Vivian Pearson is a consultant specializing in nonprofit development, civil litigation and family law. After earning
degrees in political science and English, she attended law school. Pearson is now working on a master's degree
in mental health counseling. Currently, she writes for various websites and private clients while managing a law
blog network.

By Vivian Pearson, eHow Contributor

•
•
•
• Print this article

Related Searches:

• Employee Assessment
• Job Performance Goals

What Are the Benefits of a Job Evaluation?

Job evaluations frequently entail review of an individual worker's performance, but companies may also use them to
evaluate more widespread corporate needs. When conducted regularly, job evaluations can maximize profits,
promote consistency and provide a tool for assessing the company's internal structures.

Individual Performance
o Job evaluations can help individual employees identify what areas of their performance need
development.

Feedback/Expectations
o Conducting regular job evaluations can ensure that all workers know what is expected of them and
ensure that everyone is working toward a common set of goals.

Page 46 of 51
Employee Performance
o Objective job evaluations can give employers an objective tool to help them identify which employees
qualify for raises, bonuses and promotions.

Job Descriptions
o Job evaluations allow employers to evaluate whether employees' current job descriptions are accurate
and relevant.

Indentifying Services
o Job evaluations can help companies identify the training, services and other needs that employees
may need in order to perform their work effectively.

The Effects of Training & Development in Human

Resources
Based in Bethlehem, Pa., Kermit Burley has been writing articles for over 30 years. His articles have appeared
in "Training" magazine, as well as numerous company publications throughout the course of his career. Burley
holds a Masters of Education in instructional design from Penn State and is certified as a trainer and
instructional designer.

By Kermit Burley, eHow Contributor

updated March 27, 2011

•
•
•
• Print this article

Related Searches:

• Free Effects
• Business Training Seminar

Training has many effects on Human Resources. From how to recruit and hire to understanding employment law
policies; training has a lasting effect on the performance of your human resource department. Providing skill-building
workshops and seminars increases proficiency and professional abilities. Training increases performance and greatly
reduces the likelihood of costly mistakes. Continuing education creates high-performing human resource associates.

People Effects
o Excellent training produces lasting results for Human Resources. Human resources vice presidents
are better able to plan and implement new systems. Directors manage human resource information systems
with fewer errors. Managers recruit and hire qualified applicants through new systems learned in training.
Administrators track trainees easier and more accurately through the new learning management system that
they learned to use in the latest seminar. Fewer mistakes, better quality and increased profits are just a few of
the results of outstanding training.

Page 47 of 51
Legal Effects
o Decreased legal costs and fewer lawsuits -- two of the most important effects training has on human
resources. Education provides human resource associates with the skills and knowledge to draft employment
policies. Effective employment policies reduce the likelihood of labor violations and lawsuits. Understanding
how to draft better job descriptions provides better clarity of job expectations. Better clarity results in fewer
misunderstandings, leading to increased job satisfaction and fewer labor issues. Outstanding training results
in a lowering of your company's legal costs and expenses.

Workforce Effects
o The entire workforce gains when human resource training is provided. Human resource professionals
who are better trained, resolve employee conflicts faster, easier and better. Educated human resource
associates also conduct employee discipline sessions more effectively; solving human performance issues
before they ever become a problem. Trained human resource employees are better able to design effective
and lasting incentive programs, increasing sales and earnings for everyone. A well-educated human resource
department anticipates problems and averts disasters before they occur.

Company Effects
o Your entire company benefits when human resource associates are well-trained. Turnover is reduced
when human resource professionals understand how to retain employees. Job satisfaction increases when
human resource employees learn to create job descriptions that truly describe what is required for each
position. Outside recruiting costs are reduced or eliminated when human resource directors are trained how to
create career development programs. Profits increase as human resource managers learn how to train
effectively and with more impact. Excellent training positively affects everyone and every area of your
company.

What Are the Four Different Measures of Training in Human

Resource Development?
For more than 50 years, the Four Level Evaluation Model has been the gold standard for evaluating the
effectiveness of training. Donald Kirkpatrick, a professor at the University of Wisconsin, developed the
concept of transfer of learning to daily work activities in 1959. He identified four methods for measuring
training effectiveness: reaction, learning, transfer and results. According to adult learning expert Don Clark,
"Kirkpatrick nailed it the first time" and even with the increasing use of workplace technology, there is "no
viable option to replace Kirkpatrick's model."

Level 1: Reaction.
Level 1 measures how participants react to training. It is usually measured by questionnaires answered at the
end of the training session. Level 1 asks participants to rate various aspects of the training and rate the extent
to which it met their needs.

Reaction does not measure actual transfer of learning. It measures the participants' perception of the value of
the training. Because of the subjective nature of Level 1, some trainers and instructional designers downplay
its importance.

However, Level 1 evaluation is an indicator of the relevance of the training because most workers are results-
oriented learners. They expect training to give them what they need to do their jobs. If participants rate the
training as helpful, it is more likely to be relevant to their daily work.

Level 2: Learning

Page 48 of 51
 Level 2 measures the knowledge acquired or the skills improved by the training. Typically, it is a test
that measures what has been learned but does not evaluate actual on-the-job performance. For example, a
person who wants to become a notary public must first attend a training course and then take a test on the
laws and procedures for notarizing a document in order to be licensed as a notary.

Ideally, Level 2 evaluation should include both pre- and post-tests so that trainee progress can be accurately
measured. In addition, Level 2 measurement helps both the trainer and instructional designer identify training
areas that need to be improved.

Level 3: Behavior
Level 3 can be measured formally by having the trainee perform a specific task taught in the training; for
example, accurately completing an online insurance claim for payment. It may also be measured informally by
observation of the worker on the job and reports from the supervisor about the employee's performance.

Because practice changes performance, it may be necessary to measure behavior over time; for example, at
30, 60 and 90 days. This helps the trainer and instructional designer identify gaps in knowledge or steps in a
process that were overlooked in the training so that the training can be improved.

Level 4: Results
Level 4 measures results in terms of productivity, sales, customer satisfaction, return on investment,
employee turnover, performance standards compliance or employee satisfaction. It helps decision makers
evaluate the effectiveness of training.

Harvard Business School professor Robert S. Kaplan suggests that Kirkpatrick's Level 4 measure is an
effective strategic planning tool because it allows decision makers to examine training in the context of
finances, customers, internal processes and innovation and learning, which are the key elements of the
balanced scorecard -- a simple, effective one-page business plan.

Objectives of Executive Development

Executive development is management development: a process of learning and growth that managerial personnel
undergo. They then apply the skills, knowledge, attitudes and insights they learn to work in the organization. The
whole idea of executive development is for managers to not only apply the skills and competencies learned in their
present role, but also to prepare for future managerial roles -- of a wider scope and a higher difficulty level. Executive
development is an ongoing process because managers are expected to grow from strength to strength.

Importance of a Job Evaluation

Employers do not enjoy high turnover rates, unproductive employees or other issues that weaken the company. A job
evaluation can help an employer avoid these issues--if the evaluation is used effectively. Although a job evaluation
does not determine pay--at least not directly--it establishes a basis for internal job rankings.

Types of Evaluation
Companies rate their employees several different ways. These methods include job classification, job
rankings, point evaluation, factor comparison and market comparison.

Factors
A job evaluation is based on factors such as working conditions, cross-training of employees, complexity of
tasks, knowledge and skill requirements, degree of supervision required and other issues.

Potential
A job evaluation has the potential to attract desirable job candidates, retain high-potential employees and
clarify job descriptions, allowing an employee to understand his role within an organization.

Page 49 of 51
Job Importance
A job evaluation allows employers to determine whether a specific job is benefiting the company or the
position can be eliminated without causing productivity to decrease.

Prevention
To prevent an employee from being intimidated by a job evaluation, employers need to communicate with the
employee to help ease the outcome.

Employee Turnover Causes

Salary Scale
This is the most common cause of the employee turnover rate being so high. Employees are in search of jobs which pay
well. If the companies which they are working in don't offer good salaries, they tend to hunt for jobs that pay them
considerably well. In order to resolve this problem, the employers should make it a point to offer salaries that would be
competitive enough to retain and attract well-qualified and talented personnel. Unsatisfactory performance appraisals is
also one of the reasons for employees leaving a company.

Benefits
Employees always flock to companies who offer more benefits. There are many employees who are not aware of the
benefits that are provided to them in their compensation package. The employers need to reduce their bureaucratic
procedures in order for the employees to receive the best available benefits without any difficulty. They should make a
note of what all benefits other organizations are providing, which may attract their current employees.

Advancements and Promotion Policies

This is the prime reason why many mid-level executives leave the company. Due to no potential opportunity for
advancements or promotions, they prefer other companies which may provide them with higher posts and increased
compensation packages. The companies need to evaluate and modify their promotion policies in a fair way which would
enable promotions for candidates only on the basis of employee performance.

Working Environment
This is also one of the main causes for employee turnover. Employees prefer to work in an environment which is
suitable for them. This is the most common reason why they jump from company to company in just a few months. If
they find an appropriate work environment in a specific company, they may work in the same organization for several
years.

Working Procedures
The companies should analyze and alter their work procedures and policies in a way which would enable employees to
use their full potential and even gain significant work experience. There are many cases where employees have left the
company due to no projects or assignments which do not require their full potential. Employees would certainly leave if
their don't get experience and are just placed on the 'bench'.

These are some of the principal causes of employee turnover which can surely be avoided by the organizations after
taking some necessary steps to better their in-house services towards employees. However, there are many more
causes which contribute to employee turnover; such as lack of employee motivation, work pressure, job stress,
partiality and favoritism, employee egos and attitudes, poor employee management, etc.

Duties & responsibilities of a Labour Welfare Officer

Some duties and responsibilities are prescribe under factory act 1948. that are.
1) to Act as a negotiating officer.
2) To shape and formulate labour olice
3) to establish contact.
4)to deal with wages and employment.
5)To prevent from anti social activities.
6)to bring about peace full settlement.
7)to comply with provision of factory.

Page 50 of 51
8)to promote relation between teh factory and warers .
9)to encourage formation of committes.
10)to secute provision of aminites.
11) To help factory managment in regulation Leave.
To) to secure welfare provisions.
13) To advice factory managmetn.

Page 51 of 51