Human Resource Development Part 1

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Human Resource Development

Importance: Total of 10 Questions
1. 1 Question on Job Specification – 1 mark

2. 1 Question on 360 degree feedback – 1 mark
3. 1 Question on Jon Enrichment – 1 mark
4. 1 Question on Performance Appraisal – 1 mark
5. 3 Questions on Job Enrichment + Performance Appraisal – 2 marks each
6. 2 Questions on HRM Functions– 2 marks each
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Contents
1 Concept of HRD ..................................................................................................................................... 4
2 Difference between HRD and HRM ...................................................................................................... 5
3 Importance of HRD ............................................................................................................................... 5
4 Goals of HRD ......................................................................................................................................... 6
5 Job Analysis and Design ........................................................................................................................ 7
5.1 Purpose of Job Analysis................................................................................................................. 7
5.2 Job Analysis Method ..................................................................................................................... 8
5.3 Job Description and Job Specification........................................................................................... 8
5.4 Job Design ................................................................................................................................... 10
5.5 Job Evaluation ............................................................................................................................. 12
5.6 Job Rotation ................................................................................................................................ 14
5.7 Job Enrichment ........................................................................................................................... 16
5.8 Job Enlargement ......................................................................................................................... 17
6 Performance Appraisal ....................................................................................................................... 18
6.1 Importance or Use of Performance Appraisal ............................................................................ 18
6.2 Biases/Errors Performance Appraisal ......................................................................................... 19
6.3 Steps in Performance Appraisal .................................................................................................. 20
6.4 Techniques of Performance Appraisal ........................................................................................ 21
7 Potential Appraisal .............................................................................................................................. 29
7.1 Requirements for Potential Appraisal......................................................................................... 29
7.2 Techniques for Potential Appraisal ............................................................................................. 30

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1 Concept of HRD
HRD is basically concerned with the development of human resources in the organization for improving
the existing capabilities and acquiring new capabilities for achievement of the corporate and individual
goals. HRD should help employees increasing their knowledge, skills, and capabilities and create
positive attitude towards work
Larson and Tubro was the first company in India to set up practices of HRD.
According to T.V. Rao who is father of HRD in India, Human Resource Development in the organization
context refers to the process whereby the workers are continuously helped in a planned way to –
1. Acquire or sharpen capabilities required to perform various tasks and functions associated with
their present or future expected roles.
2. Develop their general enabling capabilities as individuals so that they are able to discover and
exploit their own inner-potential for their own and/ or Organizational development purposes
3. Develop an organizational culture where ‘superior/ subordinate’ relationships, ‘team-work’ and
‘collaboration’ among different sub-units, are strong and contribute to the professional well-
being and motivation
Companies now days see people as the most important asset. People also have high aspirations and
they want to learn and grow. There has been paradigm shift in the ways companies have started
managing their employees over the last decade. Employees are accepted as partners in the progress of a
company. They should have a feeling that the organization is their own. To this end, managers must
offer better quality of working life and provide opportunities to people to exploit their potential fully.
There should be opportunities for self-fulfillment in one’s work.

2 Difference between HRD and HRM
HRD and HRM are closely related. HRD is also basically one of the functions of HRM. In the above figure
all the functions (including functions of HRD) are part of HRM but specifically 4 functions listed below
are part of HRD
1. Training and Development
2. Organization Development
3. Career Development
4. Job Design
In the RBI Syllabus – the unit is on HRD but many sub-parts in this unit are related to HRM. But
regardless of that we will discuss all the parts given in RBI syllabus. We might touch (not in detail) up on
other parts also which are not in syllabus but are important for exam or from which questions have been
asked in the previous year and we expect this tear also
3 Importance of HRD
1. Develops Hidden potential for the resources as they are motivated and trained to realize their
potential
2. Improves the communication system to open the channel of communication so that everyone
understands the other person in a better way and there is no chance of ambiguity
3. Enhances the employee morale as well as develops the sense of belongingness

4. It helps in bringing Innovation in the company as resources are given the environment in which
their skills and knowledge is increased and they are able to realize self-actualization
5. Makes employees ready to change and undergo transformation and relearn after unlearning
what they had already learnt
Henry Ford once said that “Take out my building, take out my machines and all capital but leave my men
with me I will become Henry Ford again”. This statement puts emphasis on the importance of Human
resources in an organization and hence importance of HRD.
4 Goals of HRD
HRD aims at developing
1. The capabilities of each employees as individuals

2. The capabilities of each individual employee in relation to his/her present job
3. The capabilities of each individual employee in relation to his/her expected future role
4. The superior-subordinate (dyadic) relationship
5. A cohesive and congenial atmosphere of working
6. Collaboration among different units of an organization
7. To develop the constructive mind and overall personality of employees
8. The organization’s overall health and self-renewing capabilities
9. Increase the organizational capabilities in a comprehensive manner
10. To humanize the work in an organization
11. To ensure better quality work, higher productivity and higher profits.
12. Equal opportunities to all irrespective of cast, color and creed
In this Unit we will discuss the following topics

1. Job Analysis and Design
2. Performance Appraisal
3. Potential Appraisal
4. Feedback and Performance Counselling
5. Employee Welfare
6. Rewards
7. Career Planning
8. Training and Development
First three points – Job Analysis and Design, Performance Appraisal and Potential Appraisal would be
discussed in this Part and rest would be discussed in Part 2

5 Job Analysis and Design
Job Analysis is a procedure, by which information is obtained about a job, i.e., it gives us
information about the skills, knowledge, abilities and responsibilities required from the worker
for a successful performance of the Job‖. Job Analysis helps us in identifying
1. Job Identification: Its title, including its code number. For Example -JOB2341: Special
Data Analyst. Here JOB2341 is the code number and Data Analyst is the title
2. Significant Characteristics of a Job : It location, physical settings, hazards and
discomforts
3. Actual Work to be performed: What needs to be done in the job? Like job requires
person to analyze the financial data and find the gaps
4. Skills Required for the Job: Like Analytical skills, proficiency in MS excel etc.
5.1 Purpose of Job Analysis

The main purposes of conducting a job analysis process is to use this particular information to
create a right fit between job and employee, to assess the performance of an employee, to
determine the worth of a particular task and to analyze training and development needs of an
employee delivering that specific job
1. Recruitment and Selection: Job Analysis helps in determining what kind of person is required to
perform a particular job. It points out the educational qualifications, level of experience and
technical, physical, emotional and personal skills required to carry out a job in desired fashion.
The objective is to fit a right person at a right place.
2. Performance Analysis: Job analysis is done to check if goals and objectives of a particular job are
met or not. It helps in deciding the performance standards, evaluation criteria and individual’s
output. On this basis, the overall performance of an employee is measured and he or she is
appraised accordingly.
3. Training and Development: Job Analysis can be used to assess the training and development
needs of employees. The difference between the expected and actual output determines the
level of training that need to be imparted to employees. It also helps in deciding the training
content, tools and equipments to be used to conduct training and methods of training.
4. Compensation Management: Of course, job analysis plays a vital role in deciding the pay
packages and extra perks and benefits and fixed and variable incentives of employees. After all,
the pay package depends on the position, job title and duties and responsibilities involved in a
job. The process guides HR managers in deciding the worth of an employee for a particular job
opening.
5. Job designing and Redesigning: The main purpose of job analysis is to streamline the human
efforts and get the best possible output. It helps in designing, redesigning, enriching, evaluating
and also cutting back and adding the extra responsibilities in a particular job. This is done to
enhance the employee satisfaction while increasing the human output
5.2 Job Analysis Method

1. Conducting an interview with the person doing the Job
2. Sending a questionnaire to the person doing the job
3. Observing the employee doing the job and recording the analysis
5.3 Job Description and Job Specification
Job Analysis is a primary tool to collect job-related data. The process results in collecting and
recording two data sets including job description and job specification
1. Job Description: Job Description is about the Job. For example Job requires candidate to do
financial analysis on daily basis for the transactions conducted in the bank. As part of Job

description the title and code of the Job is identified. The title and Code of the job are also
called Job Identification.
Example- JOB1002: Data Analyst. Here JOB2341 is the code number and Data Analyst is title.
This when combined is called Job Identification
2. Job Specification: Also known as employee specifications, a job specification is a written

statement of educational qualifications, specific qualities, level of experience, physical,
emotional, technical and communication skills required to perform a job. For example
Analytical skills required, proficiency in MS excel, go-getter attitude etc.


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5.4 Job Design

Job Design follows Job analysis. While Job analysis gives the description of the job, Job duties at high
level etc., the job design lays out the process of deciding on the contents of a job in terms of its duties
and responsibilities in depth, on the methods to be used in carrying out the job, in terms of techniques,
systems and procedures. It helps in
1. What tasks are required to be done or what tasks is part of the job?
2. How are the tasks performed?
3. What amount of tasks are required to be done?
4. What is the sequence of performing these tasks?
Approaches to Job Design
There are three approaches to Job Design.
Approach Name Founder Details

Human Approach Theorists who The human approach of job design laid emphasis on designing a job around the people
laid down or employee. According to this approach jobs should gratify an individual’s need for
Motivational recognition, respect, growth and responsibility. Employees should feel motivated
theories
Engineering FW Taylors This introduced the idea of the task that gained prominence in due course of time.
Approach According to this approach the work or task of each employee is planned by the
management a day in advance.
Work, according to this approach should be scientifically analyzed and fragmented into
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logical tasks. Due emphasis is then laid on organizing the tasks so that a certain logical
sequence is followed for efficient execution of the same
Job Characteristics Hackman and
Approach Oldham This puts emphasis on the Job Satisfaction. They laid down five core dimensions that
can be used to describe any job - skill variety, task identity, task significance, autonomy
and feedback.
 Skill variety: The employees must be able to utilize all their skills and develop
new skills while dealing with a job.
 Task Identity: The extent to which an identifiable task or piece or work is
required to be done for completion of the job.
 Task Significance: How important is the job to the other people, what impact
does it create on their lives?
 Autonomy: Does the job offer freedom and independence to the individual
performing the same.
 Feedback: Is feedback necessary for improving performance.
Aspects/Techniques of Job Design

There are three main aspects of Job Design
1. Job Rotation
2. Job Enrichment
3. Job Enlargement
We will discuss about them later in detail in this unit
5.5 Job Evaluation
In simple words, job evaluation is the rating of jobs in an organization. This is the process of establishing
the value or worth of jobs in a job hierarchy. The principle upon which all job evaluation schemes are
based is that of describing and assessing the value of all jobs in the firms in terms of a number of factors,
the relative importance of which varies from job to job
Why do organizations undertake Job Evaluation?
1. Designing new organization and roles/jobs

2. Changing the organizational design or roles
3. Aligning roles and pay to organizational changes
4. Defining interdependencies among different jobs
5. Clarifying accountabilities of jobs
6. Managing succession in organization
7. Reviewing the existing pay structure
8. Auditing legal compliance of pay policies
9. Implementing benchmark pay structures
Primary reason for Job evaluation is for developing equitable salary structure in which salary is paid for a
job as much as it deserves.
Methods of Job Evaluation
1. Ranking Method: The ranking method is the simplest form of job evaluation. In this method, each
job as a whole is compared with other and this comparison of jobs goes on until all the jobs have
been evaluated and ranked. All jobs are ranked in the order of their importance from the simplest to
the hardest or from the highest to the lowest. The importance of order of job is judged in terms of
duties, responsibilities and demands on the job holder. The jobs are ranked according to “the whole
job” rather than a number of compensable factors.
2. Grading Method (Mostly used in Government Jobs): Under this method, job grades or classes are
established by an authorized body or committee appointed for this purpose. A job grade is defined
as a group of different jobs of similar difficulty or requiring similar skills to perform them. Job grades
are determined on the basis of information derived from job analysis. The grades or classes are
created by identifying some common denominator such as skills, knowledge and responsibilities.
The example of job grades may include, depending on the type of jobs the organization offers,
skilled, unskilled, clerical, Managerial
3. Points Rating: Under this method, jobs are broken down based on various identifiable factors such
as skill, effort, training, knowledge, hazards, responsibility, etc. Weights are given to factors
depending on their importance to perform the job. Thereafter, points are allocated to each of these
factors. Points so allocated to various factors of a job are then summed. Then, the jobs with similar
total of points are placed in similar pay grades
4. Factor Comparison Method: This method is a combination of both ranking and point methods in
the sense that it rates jobs by comparing them and makes analysis by breaking jobs into
compensable factors. This system is usually used to evaluate white collar, professional and
managerial positions
5.6 Job Rotation
Job Rotation is a management approach where employees are shifted between two or more
assignments or jobs at regular intervals of time in order to expose them to all verticals of an
organization. Job rotation is a well-planned practice to reduce the boredom of doing same type of job
every day and explore the hidden potential of an employee. The process serves the purpose of both the
management and the employees. It helps management in discovering the talent of employees and
determining what he or she is best at. On the other hand, it gives an individual a chance to explore his or
her own interests and gain experience in different fields or operations
During Job Rotation it must be taken care that
1. Employees are given proper training

2. Their performance is monitored
3. They are given proper feedback


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Objectives of Job Rotation
5.7 Job Enrichment
Job enrichment adds new sources of job satisfaction by increasing the level of responsibility of the
employee in organization. Job enrichment is a way to motivate employees by giving them increased
responsibility and variety in their jobs. It is an idea that was developed by the American
psychologist Frederick Hertzberg in the 1950s (You will read about Frederick in the Motivation Unit)
In Job Enrichment, this increase in responsibility is often vertical. Vertical means that Employee is
given the responsibility of work earlier done by his superior.
Research studies on job enrichment found out decreased levels of absenteeism among the employees,
reduced employee turnover and a manifold increase in job satisfaction
5.8 Job Enlargement

Job enlargement is a job design technique wherein there is an increase in the number of tasks associated
with a certain job. In other words, it means increasing the scope of one’s duties and responsibilities but
these new duties and responsibilities are the ones which earlier use to be taken up by your peers and
not your boss. It is also known as horizontal loading in that the responsibilities increase at the same
level and not vertically
Job Enlargement helps in increasing flexibility and reducing monotony of the job
Difference between Job Enrichment and Enlargement
1. The difference between job enrichment and job enlargement is essentially of quantity and quality.
Whereas job enlargement means increasing the scope of job quantitatively by adding up more tasks,
job enrichment means improvement in the quality of job such that employees are more satisfied
and fulfilled.
2. Through job enrichment an employee finds satisfaction and contentment in his job and through job
enlargement employee feels more responsible and worthwhile in the organization.
3. Job enrichment entails the functions of planning and organizing and enlargement involves execution
of the same. Both complement each other, in that job enrichment empowers and enlargement
executes.
4. Job enrichment depends upon job enlargement for success and the reverse in not true.
5. Job enrichment means a vertical expansion in duties and responsibilities and span of control
whereas in job enlargement the expansion is horizontal in nature.
6. Job enrichment has been found to have greater impact in terms of motivation when compared to
job enlargement. Since enrichment gives employee greater insights in managerial functioning and a
better work profile, it is looked upon as an indicator of growth and development. The same is not
true in case of job enlargement which is seen as an employer tactic to increase the workload
6 Performance Appraisal
Performance Appraisals is the assessment of individual’s performance in a systematic way. It is a
developmental tool used for all round development of the employee and the organization. The
performance is measured against such factors as job knowledge, quality and quantity of output,
initiative, leadership abilities, supervision, dependability, co-operation, judgment and
versatility. So it does not only evaluate knowledge but also evaluates behavioral qualities
Objectives of Performance appraisal
1. To maintain records in order to determine compensation packages, wage structure, salaries

raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To review and design the training and development programmes at the organization level
6. To find the areas where employees need individual development and design future plan for
them
7. To take feedback from employees regarding company policies
6.1 Importance or Use of Performance Appraisal

1. Helps in Deciding Promotion: It is in the best interest of the management to promote the
employees to the positions where they can most effectively use their abilities. A well-
organized, development and administered performance appraisal programme helps in
determining whether an individual should be considered for promotion because the system
not only appraises the performance on the present job but also evaluates his potentialities
for higher job
2. Help in Wage and Salary Administration: The wage increase given to some employees on
the basis of their performance may be justified by the performance appraisal results.
3. Help in Training and Development: An appropriate system of performance appraisal helps

the management in devising training and development programmes and in identifying the
areas of skill or knowledge in which several employees are not at par with the job
requirements. Thus the appraisal system points out the general training deficiencies which
may be corrected by additional training
4. Employee Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It also helps
in framing future development programmes
5. Motivation: Performance appraisal serves as a motivation too
6.2 Biases/Errors Performance Appraisal

Managers commit mistakes while evaluating employees and their performance. Biases and judgment
errors of various kinds may spoil the performance appraisal process
1. First Impression (primacy effect): Raters form an overall impression about the employee on the
basis some first impression. The identified qualities and features may not provide the correct
information about the employee
2. Halo Effect: The individual’s performance is completely appraised on the basis of a perceived
positive quality, feature or trait. In other words this is the tendency to rate a man uniformly high
in other traits if he is extra-ordinarily high in one particular trait. If a worker has few absences,
his supervisor might give him a high rating in all other areas of work.
3. Horn Effect: The individual’s performance is completely appraised on the basis of a negative
quality or feature perceived. This results in an overall lower rating than may be warranted. “He
is not formally dressed up in the office and therefore he cannot be a good worker.
4. Central Tendency: Appraisers rate all employees as average performers. That is, it is an attitude
to rate people as neither high nor low and follow the middle path. For example, a professor,
with a view to play it safe, might give a class grade near the equal to B, regardless of the
differences in individual performances.
5. Personal Biases: The way a supervisor feels about each of the individuals working under him -
whether he likes or dislikes them has a tremendous effect on the rating of their performances.
Personal Bias can stem from various sources as a result of information obtained from
colleagues, considerations of faith and thinking, social and family background and so on.
6. Spillover Effect: The present performance is evaluated much on the basis of past performance.
“The person who was a good performer in distant past is assured to be okay at present also”.
Example would be employee being given high rating because he has good ratings in the past
too.
7. Recent Effect: Rating is influenced by the most recent behavior ignoring the commonly
demonstrated behaviors during the entire appraisal period. For example if a person has
performed good in the last one month but was not performing well for the rest of the year then
he might not be an excellent performer but may be rated excellent
8. Stereotyping: This implies forming a mental picture of a person on the basis of his age, sex,
caste or religion. It results in an over-simplified view and blurs the assessment of job
performance.
6.3 Steps in Performance Appraisal
1. Setting Performance Standards: The process of evaluation begins with the establishment of
Performance Standards. While designing a job and formulating a job description, performance
standards are usually developed for the position. These standards should be very clear and
not vague, and objective enough to be understood and measured.
2. Communicating Performance Expectations to Employees: The next important step is to

communicate the aforesaid standards to the concerned employees. Their jobs and jobs-
related behavior should be clearly explained to them. The employee should not be presumed
to guess what is expected of him. It should be noted that here communication means that the
standards have been transmitted to the employee and he has received and understood them
3. Measuring Actual Performance: The third step is the measurement of actual performance. To
determine what actual performance is, it is necessary to acquire information about the
performance and we should be concerned with how we measure and what we measure. Four
sources of information are frequently used to measure actual performance : personal
observation, statistical reports, oral reports and written reports
4. Comparing Actual Performance with Standards: The next step is comparison of actual
performance with the standards. By doing so the potentiality for growth and advancement of
an employee can be appraised and judged. Efforts are made to find out deviations between
standard performance and actual performance.
5. Discussing the Appraisal with the Employee: After comparing actual performance with
standards, the next step is to discuss periodically the appraisal with the employee. Under this
discussion good point, weak points, and difficulties are indicated and discussed so that
performance is improved. The information that the subordinate receives about his
performance assessment has a great impact of his self-esteem and on his subsequent
performance. Therefore care must be taken while communicating bad news.
6. Initiating Corrective Action: The final step is the initiation of corrective action whenever
necessary. Immediate corrective action can be of two types. One is immediate and deals
predominantly with symptoms. The other is basic which is detailed. Immediate corrective
action is often described as putting out fires whereas basic corrective action gets to the source
of deviation and seeks to adjust the difference permanently. Coaching and counseling may be
done or special assignments and projects may be set. Persons may be deputed for formal
training courses, and decision making responsibilities and authority may be delegated to the
subordinates.
6.4 Techniques of Performance Appraisal

Numerous methods have been devised to measure the quantity and quality of performance appraisals.
Broadly all methods of appraisals can be divided into two different categories.
 Past Oriented Methods (Traditional Methods)

 Future Oriented Methods (Modern Methods)
Traditional Methods
1. Ranking Method: Here, each employee is compared with all others performing the same job
and then he is given a particular rank i.e. First Rank, Second Rank etc. It states that A is
superior to B. B is superior to C and so on. This method ranks all employees but it does not tell
us the degree or extent of superiority i.e. by how much one employee is superior to another.
Secondly, this ranking is based on only mental assessment so it is not possible to give any
objective proof about why the rater has ranked one employee as superior to another. In this
method, the performance of individual employee is not compared with the standard
performance. The ranking method is highly subjective. Similarly, here the employees are
compared as a whole rather than the individual factors
2. Paired Comparison: In this method, each employee is compared with other employees on
one- on one basis, usually based on one trait only. The rater is provided with a bunch of slips
each coining pair of names; the rater puts a tick mark against the employee whom he thinks
the better of the two. The number of times this employee is compared as better with others
determines his or her final ranking. This method is not useful for Large number of employees
3. Grading Method: In this method, certain categories of worth are established in advance and
carefully defined. There can be three categories established for employees: outstanding,
satisfactory and unsatisfactory. There can be more than three grades. Employee performance
is compared with grade definitions. The employee is, then, allocated to the grade that best
describes his or her performance. Such type of grading is done in Semester pattern of
examinations and in the selection of a candidate in the public sector. Major drawbacks of this
method is that the rater may rate most of the employees on the higher side of their
performance
4. Forced Distribution Method: This method was evolved by Tiffen to eliminate the central
tendency of rating most of the employees at a higher end of the scale. The method assumes
that employees’ performance level confirms to a normal statistical distribution i.e., only 10
percent employees can be higher performer and only 10 percent can be poor performer and
like this for every rating a certain percentage is predefine. This is useful for rating a large
number of employees’ job performance and promo ability. The drawback is that there is
chance that sometimes more than 10% of people are exceptional performers but then only
10% of them would get the best rating
5. Forced Choice Method: Forced-choice method is developed by J. P. Guilford. It contains a
series of groups of statements, and rater is forced to select a statement which describes each
individual being evaluated. Common method of forced-choice method contains two
statements, both positive and negative Examples of positive statements are:
1. Gives good and clear instructions to the subordinates.
2. Can be depended upon to complete any job assigned.
A pair of negative statements may be as follows:
1. Makes promises beyond his limit to keep these.

2. Inclines to favor some employees.
Each statement carries a score or weight, which is not made known to the rater. The human
resource section does rating for all sets of statements— both positive and negative. The
final rating is done on the basis of all sets of statement. The only problem associated with
this method is that the actual constructing of several evaluative statements also called
‘forced-choice scales’, takes a lot of time and effort
6. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or
No based questions is prepared. Here the rater only does the reporting or checking and HR
department does the actual evaluation. It is difficult to assemble, analyse and weigh a number
of statements about employee characteristics and contributions
7. Critical Incidents Method: In this method, the rater focuses his or her attention on those key or
critical behaviors that make the difference between performing a job in a noteworthy manner
(effectively or ineffectively). The basic idea behind this rating is to apprise the workers who can
perform their jobs effectively in critical situations. This is so because most people work alike in
normal situation but actual capability is known in case of critical situations. Its drawbacks are to
regularly write down the critical incidents which become time-consuming and burdensome for
evaluators. It is rater’s inference that determines which incidents are critical to job
performance which makes it subjective assessment
8. Graphic Rating Scale Method of Performance: Under this method, scales are established for a
number of fairly specific factors. A printed form is supplied to the rater. The form contains a
number of factors to be rated. Employee characteristics and contributions include qualities
like quality of work, dependability, creative ability and so on. These traits are then evaluated
on a continuous scale, where the rater places a mark somewhere along the scale. The scores
are tabulated and a comparison of scores among the different individuals is made. These
grades may be as follows : (i) Excellent; (ii) very good; (iii) Good; (iv) Average; (v) Bad; (vi)
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9. Essay Method: Essay method is the simplest one among various appraisal methods available. In
this method, the rater writes a narrative description on an employee’s strengths, weaknesses,
past performance, potential and suggestions for improvement. Its positive point is that it is
simple in use. However, essay method, like other methods, is not free from drawbacks. In the
absence of any prescribed structure, the essays are likely to vary widely in terms of length and
content. Moreover, because the essays are descriptive, the method provides only qualitative
information about the employee. In the absence of quantitative data, the evaluation suffers
from subjectivity problem
10. Confidential Report: It is the traditional way of appraising employees mainly in the Government
Departments. Evaluation is made by the immediate boss or supervisor for giving effect to
promotion and transfer. Usually a structured format is devised to collect information on
employee’s strength weakness, intelligence, attitude, character, attendance, discipline, etc.
report
Modern Methods
1. MBO: MBO is Management by Objectives. The concept of “Management by Objectives‟ (MBO)
was first given by Peter Drucker in 1954. It can be defined as a process whereby
I. The employees and the superiors come together to identify common goals
II. The employees set their goals to be achieved
III. The standards to be taken as the criteria for measurement of their performance and
contribution
For more details on MBO Please refer our notes on the Unit – “Management – Nature and Scope”
2. Assessment Centers: This concept was first applied to military situations by Simoniet in the
German Army in the 1930s. In business field, assessment centers are mainly used for evaluating
executive or supervisory potential. By definition, an assessment center is a central location where
managers come together to participate in well-designed simulated exercises. They are assessed by
senior managers supplemented by the psychologists and the HR specialists for 2-3 days. Assesse is
asked to participate in basket exercises, work groups, simulations, and role playing which are
essential for successful performance of actual job. Having recorded the assesse’s behavior the
raters meet to discuss their pooled information and observations and, based on it, they give
their assessment about the assesses. At the end of the process, feedback in terms of strengths
and weaknesses is also provided to the assesse’ s
Advantages are more accurate evaluation, minimum biasedness, right selection and promotion
of deserving executives, and so on
3. 360 degree Feedback: Another method used to appraise the employee’s performance is 360 –
degree appraisal. This method was first developed and formally used by General Electric Company
of USA in 1992.
Under 360 – degree appraisal, performance information such as employee’s skills, abilities and
behaviors, is collected “all around” for an employee, i.e., from his/her supervisors, subordinates,
peers and even customers and clients
4. Cost Accounting Method: This method evaluates an employee’s performance from the
monetary benefits the employee yields to his/her organization. This is ascertained by
establishing a relationship between the costs involved in retaining the employee, and the
benefits an organization derives from Him/her.
5. Behaviorally Anchored Rating Scales (BARS): It was developed by Smith and Kendall to
provide a better method of rating employees .The problem of judgmental performance evalu-
ation inherent in the traditional methods of performance evaluation led to some organizations
to go for objective evaluation by developing a technique known as “Behaviorally Anchored
Rating Scales (BARS)”. BARS are descriptions of various degrees of behavior with regard to a
specific performance dimension. It differs from "standard" rating scales in one central respect,
in that it focuses on behaviors that are determined to be important for completing a job task
or doing the job properly, rather than looking at more general employee characteristics (e.g.
personality, vague work habits).So, rather than having a rating item that says: Answers phone
promptly and courteously, a BARS approach may break down that task into behaviors: For
example:
 Poor: Answers phone within five rings.
 Good: Greets caller with "Hello, This is the Dingle Company, how may I help you?"
 Excellent: Wishes the Customer Good Morning and offers help
For example the below BAR is to gauge the behavior-involvement in the job. The performance
dimension here is ‘involvement in job’
7 Potential Appraisal
The potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a
person. The person might or might not be aware of them. Potential appraisal is a future – oriented
appraisal whose main objective is to identify and evaluate the potential of the employees to assume
higher positions and responsibilities in the organizational hierarchy.
The purposes of a potential appraisal are:
1. To inform employees of their future prospects;

2. To enable the organization to draft a management succession programme;
3. To update training and recruitment activities;
4. To advise employees about the work to be done to enhance their career opportunities.
7.1 Requirements for Potential Appraisal

1. Role Description: A good potential appraisal system would be based on clarity of roles and
functions associated with the different roles in an organization. This requires extensive job
descriptions to be made available for each job. These job descriptions should spell out the
various functions involved in performing the job.
2. Qualities Required: Besides job descriptions, it is necessary to have a detailed list of qualities
required to perform each of these functions. These qualities may be broadly divided into four
categories
I. Technical Knowledge and Skills

II. Managerial Capabilities and Skills
III. Behavioral Capabilities
IV. Conceptual Capabilities
3. Indicators of Qualities: A good potential appraisal system besides listing down the functions
and qualities would also have various mechanisms for judging these qualities in a given
individual. Some of the mechanisms for judging these qualities are:
I. Rating by Others
II. Psychological tests
III. Simulation games and exercises
IV. Performance appraisal records
4. Organizing the System: After covering the above preliminaries, we must set up a system that
will allow the introduction of the scheme smoothly giving answers to some puzzling questions:
i. How much weightage to merit in place of seniority in promotions?

ii. How much weightage to each of the performance dimensions – technical, managerial,
behavioral qualities?
4. Feedback: If the organization believes in the development of human resources it should

attempt to generate a climate of openness. Such a climate is required for helping the
employees to understand their strengths and weaknesses and to create opportunities for
development. A good potential appraisal system should provide an opportunity for every
employee to know the results of assessment.
7.2 Techniques for Potential Appraisal
1. Self – appraisals: It allows an employee complete freedom in accessing his or her strengths
objectively and identifying the areas of development. The employees get a chance to share
the development areas with their seniors based on their self-appraisal and jointly worked out
a plan in tune with the organizational realities like the availability of resources and time. It also
gives a chance to the employee to express his career plans which is in the interest of the
organization as it knows beforehand the aspirations of its employee
2. Peer appraisals (Discussed in 360 degree feedback)
3. Superior appraisals (Discussed in 360 degree feedback)
4. MBO (Discussed in Techniques of Appraisal)
5. Management games like role playing (Discussed in Assessment Centers)
6. Leadership exercises etc. (Discussed in Assessment Centers)
We have discussed all methods in the Modern Techniques of Appraisal. So we can say that
modern methods of appraisal also evaluates the future potential of the candidate i.e. they also do
potential appraisal


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Human Resource Development

1. 1 Question on Job Specification – 1 mark

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1. The capabilities of each employees as individuals

In this Unit we will discuss the following topics

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5.1 Purpose of Job Analysis

5.2 Job Analysis Method

5.3 Job Description and Job Specification

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2. Job Specification: Also known as employee specifications, a job specification is a written

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5.4 Job Design

Approaches to Job Design

There are three approaches to Job Design.

Approach Name Founder Details

Aspects/Techniques of Job Design

We will discuss about them later in detail in this unit

Why do organizations undertake Job Evaluation?

1. Designing new organization and roles/jobs

During Job Rotation it must be taken care that

1. Employees are given proper training

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Objectives of Job Rotation

5.8 Job Enlargement

Difference between Job Enrichment and Enlargement

Objectives of Performance appraisal

1. To maintain records in order to determine compensation packages, wage structure, salaries

6.1 Importance or Use of Performance Appraisal

3. Help in Training and Development: An appropriate system of performance appraisal helps

4. Employee Development: The systematic procedure of performance appraisal helps the

5. Motivation: Performance appraisal serves as a motivation too

6.2 Biases/Errors Performance Appraisal

6.3 Steps in Performance Appraisal

2. Communicating Performance Expectations to Employees: The next important step is to

6.4 Techniques of Performance Appraisal

 Past Oriented Methods (Traditional Methods)

A pair of negative statements may be as follows:

1. Makes promises beyond his limit to keep these.

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The purposes of a potential appraisal are:

1. To inform employees of their future prospects;

7.1 Requirements for Potential Appraisal

I. Technical Knowledge and Skills

i. How much weightage to merit in place of seniority in promotions?

4. Feedback: If the organization believes in the development of human resources it should

7.2 Techniques for Potential Appraisal

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