” ”» as ks EI iS | UNIT 3 G AND DEVELOPMENT EMPLOYEE TRAIL Definition: Employee Training and Development in HRM is defined as a system used by an organization to improve the skills and performance of the employees. It is an educational tool which consists of information and instructions to make existing skills sharp, introduce new concepts and knowledge to improve the employee performance. An effective training & development initiative based on training needs analysis helps the company to enhance the skills of working manpower and improve productivity. Meaning: A program of upgrading of employee’s skills, knowledge and competencies is known as training. The job related training is often provided to the employee to ensure they can well perform on the assigned tasks and contribute to the success of the organization. The development program on the other hand is often preparation to perform the future job. Human Resource Training Development provides a learning opportunity to the employee to increase their work capacities and get ready for the future challenges. Training and development in HRM are two different activities which goes hand-in-hand for the overall betterment of the employee. The short term and reactive process is training which is usedfor operational purpose while the long term process of development is for executive purpose. The aim of training & development is improvement of required skills in the employee whereas aim of development is to improve overall personality of the employee. Management takes the initiative to choose right training methods to fill up the skill gap in the organization; the development initiative is generally taken with the objective of future succession planning Training and Development Definition by the Eminent Authors Here below are the definitions given by the expert and eminent authors: Armstrong “Training is the formal and systematic modification of behavior through learning which occurs as a result of education, instruction, development and planned experience. Development is improving individual performance in their present Roles and preparing them for greater responsibilities in the future”. Katz & Kahn “Training and development is described as a maintenance subsystem, intended to improve organizational efficiency by increasing routinization and predictability of behavior”. Lussier “Training is a process of acquiring the skills necessary to perform a job and development is the ability to perform both present and future jobs”. Fuller & Farrington “Training is designed to increase the skills and knowledge of people.”y Need and Importance of Employee Training and Development in HRM In the dynamic work environment it is important for companies to improve the skill of their manpower. It is critical for employees to learn new things and enhance their skills to meet the work competitions in the business environment. Thus, the training and development programs run by the company is beneficial for both organization and employee. Need of Training and Development The training and development activity is required when company revises its objectives and goal to adjust the changing market conditions, Companies often endorse training and development programs to improve the performance of the employees. The HR training and development is needed to set up a benchmark of performance which employees are expected to achieve in a financial year. There is always a need of training and development efforts to teach the employee new skills such as team management, communication management and leadership behavior. Training and development is also used to test new methods of enhancing organizational productivity. Importance of Training and Development © InHuman Resource Management (HRM) Training and development is important aspect when company wants optimum utilization of their manpower. Training and development is a key for the succession planning of the organization as it helps in improvement of skills like team management and leadership. HR Training and development activities are vital to motivate the employee and to ° increase their productivity.° Training and development in HRM is significant aspect to develop a team spirit in the organization. © Training and development programs are also important from the safety point of view as it teaches employee to perform job properly without any life risk. © From the organizational point of view the HR training and development programs are important performance management tool to increase profitability and enhance corporate image. Objective and Purpose of Training & Development 1. One of the most effective methods to show your employees that you value them is to provide them with training. It demonstrates that you care as much about their well-being and development as they do about your company's. Employees that are well taken care of will never desire to work somewhere else. 2. Training can be used as a preventative measure to prepare people for expected and unforeseen changes and challenges in the workplace. It only makes sense to keep our staff prepared in times like ours, when trends are always changing due to online innovation. 3. There is no better way to produce future leaders than to train the most talented individuals available. Employees will have a clear career path, resulting in lower attrition and discontent. 4. Employees are a significant and most important component of a company’s assets, and caring for them entails caring for the firm as a whole. Therefore, any business organization that invests their time and money in its employees’ education or Training & development can only succeed in achieving their business goals and advance further.y Types of Training and Development Find below few important types of training in HRM: - Technical training is a form of instruction that teaches new employees about the technology components of their jobs. . Quality training is the process of familiarizing personnel with the methods for preventing, identifying, and removing non-quality goods in a manufacturing environment, . Skill Training is the next type of training, which involves developing the ability to execute the job. Soft skills training is another form of training requires to improving the employee's soft skills that are personality traits, social graces, communication skills, and personal routines that are used to define interpersonal interactions. . Professional training is the sort of professional education necessary to stay current in one's line of work. Benefits of Training and Development in HRM ° ° ° Investing in staff training and development boosts work satisfaction and morale. Employee turnover is reduced. Inspires employees to work harder. Improves process efficiency, resulting in financial benefit. Aids in the adoption of new technology and processes. Increases strategy and product innovationCareer Planning Career planning is 2 i deal tte the — oS ie Process through which an individual sets career goals and refered to as career planning em. The process by which individuals plan their life's work is "Car aad “ea rer planning is a process of systematically matching career goals and individual with opportunities for their fulfilment."(Schermerhorn: 2002) ‘Career Planning is a deliberate process of becoming aware of self, opportunities, constraints, choices, and consequences; identifying career-related goals; and "career pathing” or : programming work, education, and related developmental experiences to provide the direction, timing, and sequence of steps to attain a specific career goal.” (McMahon and Merman: 1987) Career Anchors Career anchors denote the basic drives that create the urge to take up a certain type of a career. These drives are as follows: : Managerial Competence: Person having this drive seek managerial positions that provide opportunities for higher responsibility, decision making, control and influence over others. : Technical Competence: People having this anchor seek to make career choices based on the technical or functional content of the work. It provide continuous learning and updating one's expertise in a technical or specialised area such as quality control, engineering, accounting, advertising, public relations etc. : Security: If one’s career anchor is security than he is willing to do what is required to maintain job security (through compliance with organizational prescriptions), a decent income and a stable future. » Creativity: This drive provides entrepreneurial and innovative opportunities to the people. People are driven by an overwhelming desire to do something new that is totally of their own making. these people seek a career that provides freedom of action and 7 Autonom; independence. g the course of his lifetime. Career is viewed as a sequence of position occupied by a person durin; ind motivation that occur, Career may also be viewed as amalgam of changes in value, attitude a1as a person grows older. The implicit assumption is that an individual can make a different in his destiny over time and can adjust in ways that would help him to enhance and optimize the potential for his own career development. Career planning is important because it would help the individual to explore, choose and strive to derive satisfaction with one’s career object. Nature of Career Planning The following are the salient features of career planning: . A Process: Career planning is a process of developing human resources rather than an event. . Upward movement: It involve upward movement in the organisational hierarchy, or special assignments, project work which require abilities to handle recurring problems, human relations issued and so on. . Mutuality of Interest: The individual's interest is served as his needs and aspirations are met to a great extent and the organisation's interest is served as each of its human resources is provided an opportunity to develop and contribute to the organisational goals and objectives to the optimum of its ability and confidence. ‘reer planning is dynamic in nature due to an ever changing . Dynai environment. Objectives of Career Planning Career Planning seeks to meet the following objectives: : To provide and maintain appropriate manpower resources in the organisation by offering careers, not jobs. : To provide environment for the effectiveness, efficiency and growth of its employees and motivating them to contribute effectively towards achieving the objectives of the organisation. ' To map out careers of various categories of employees suitable to their ability, and their willingness to be 'trained and developed for higher positions. 7 To have a stable workforce by reducing absenteeism and employee tumover. s To cater to the immediate and future human resources need of the organisation on a timely basis. . To increase the utilisation of managerial reserves within organisation.> Steps in Career Planning Process Step I: Self-Assessment: The first and foremost step in career planning is to know and assess you. You need to collect information about yourself while deciding about a particular career option, You must analyse your interests, abilities, aptitudes, desired lifestyle, and personal traits and then study the relationship between the career opted for and self. Step 2: Goal Setting: Set your goals according to your academic qualification, work experience, priorities and expectations in life. Once your goal is identified, then you determine the feasible ways and objectives how to realize it. Step 3: Academic/Career Options: Narrow your general occupational direction to a particular one by an informatory decision making process. Analyse the career option by keeping in mind your present educational qualification and what more academic degrees you need to acquire for it. Step 4: >IF>.DBIIAI9I9R9R2X4 Plan of Action: Recognize those industries and particular companies where you want to get into. Make the plan a detailed one so that you can determine for how many years you are going to . work in a company in order to achieve maximum success, and then switch to another. Decide where you would like to see yourself after five years and in which position. Step 5: Catch Hold of Opportunities: Opportunity comes but once. So, whenever you get any opportunity to prove yourself and get into your desired career, try to convert it in every way for suiting your purpose. Remember, a successful professional is also quite opportunistic in his moves, examining every opening to tum to his favour. Advice on Career Planning 1 Try not to waste much time and wait too long between career planning sessions. 2. Don't ever judge and analyze yourself, like your likes and dislikes, abilities, ete. by listening to what people around you say. Be your best judge. 3. Be open to constructive criticisms. Career planning is a very important step that needs to be considered in totality. If need be, you should not be hesitant to take the help of professional guidance and find out the best career planning for yourself.Different phases in the career of an employee: Most working people go through career stages ar expectations change asthe india fed it has been found that individual's needs and ough these stages, could be a result of the individual's ambitions. sop, tStablishment Stage: This could be at the stage where the individual gets his first job, gets accepted by his peers, learns in this job, and also gains the first tangible evidence of success or failure, The establishmentadvancement stage tends to oceay between ages 25 and 44, In this stage, the individual has made his or her careee choice and is concerned with achievement, performance, and advancement, This stage is marked by high employee productivity and career growth, as the individual is motivated to succeed in the organization and in his or her chosen occupation. Opportunities for job challenge and uuse of special competencies are desired in this stage, The employee strives for creativity and innovation through new job assignments. Employees also need a certain degree of autonomy in this stage so that they can experience feelings of individual achievement and personal success. 7 Mid-Career Stage: The individual's performance levels either continue to improve, or levels, or even deteriorates. 7 Late Career: This is regarded as a pleasant phase, where one is allowed to relax and play the role of an elderly statesman in.the organization. . Decline: The stage, where the individual is heading towards retirement. PROMOTION Taking an employee to the next level of grade and designation is termed as promotion. A romotion is an upward advancement of an employee which gets him/her to a higher position, Pp better pay and privileges, bigger profile and job responsibilities.“Promotion is the advar cement of an employee to a better job-better in terms of greater responsibilities, is more prestige or status, greater skill and especially, increased! rate of pay or salary.” —Pigors and Myers e r le “ ‘An employee's promotion is elev: i i a ing him/her to a higher job role with more roles and A responsibilities so that he or she is able to meet the specifications of the next profile in cadre, Potential Performance EMPLOYEE PROMOTION STRATEGY AND CRITERIA AT WORKPLACE Promotion strategies should be carefully crafted at workplace as these depend upon a number of factors other than just performance. Every organization has different strategies of employee promotion, Here are some commonly used criteria which many of the Indian organization follow: 1. Length of service - it is important for an employee to spend a considerable amount of time in the organization before he or she is recommended for promotion so that he or sheis acclimati ‘i ir i is matized with the working environment, Policies and overall culture of the organization. Usually this time ranges from 1 —2 years Perfe ~ Performance 2 Performance ~ Performance plays a crucial role but is not the only deciding factor for Promotion. In most of organization policies, usually 4 or 5 raters only are eligible for promotion. 3. Potential ~ Employee's potential to take up higher roles and responsibilities are significant criteria in deciding whether the employee should be promoted or not. Many companies opt for identifying high pot employees through assessment centers and psychometric tools to identify high pots and hence, recommend them for taking up higher roles in the organization. 4. Organization Structure ~ Employee may deserve a promotion but unless there is a vacancy in organization hierarchy for the new role, he or she may not clear through. Organizations which are highly structured have an approved position and budget for each role in the hierarchy, unless there is a vacancy at a position, the next in line employee may not to be able to succeed to the position. However, in developing organizations and start- ups, the structures are open and flexible and this factor may not be a constraint. 5. Tenure in a particular role/ position — Unless an employee justifies his existence in a role which he or she is currently in, promoting him to next level wouldn’t make sense and he or she would need time to stay and perform at a particular position before hopping on to next role. The range of tenure varies from 2 — 3 years in organization.ret pay Cy Performance ~ EMPLOYEE PROMOTION STRATEGY & CRITERIA Tr aT TY Tne Crary Pua) prorat Why is promotion important in Human Resource Management for employees and its benefits? The process of promotion is important in any organization as without it there will be stagnation in the growth and development of employees. If the employee is made to work in the same role, at the same position for years, there will be monotony in his job which is neither healthy for him/her nor for the environment he or she is working in. Promotions and change of role helps the employees move forward in their career, gives them more challenges, enhances their learning curve, keeps them engaged with the job.Types of Staff yp or employee Promotion and its purpose/ objective: Many companies practice different types of Promotioy Nm: 1. Seniority bas, ion — TI ty based promotion — This is when an employee has spent considerable amount of time in in 4 job role and is required to maintain the overall hygiene of the organization. This happens especially with the senior employees when they have spent a good amount of time with the organization in the same profile! Position. This type of promotion keeps the employees going, reduces attrition and is easy to identify. 2. Merit based promotion — This is solely done on the basis of knowledge, skills, capability and performance. It is a true reward for the deserving employees, enriches the organizations’ value chain and is good way to keep up the employee morale. 3. Seniority based, merit based promotion — This is the most appropriate promotion type which considers the merit as well tenure of the employee while evaluating for promotion. 4. There has been debate and various opinions on whether the promotion should be seniority based or merit based, management and leadership would always have their take on merit based promotion while trade and labor union would favor seniority based promotion. Advantages and Disadvantages of Promotion Backfilling a position in the organizational hierarchy through promotions is a great idea for an organization who values its employees as it:their self esteem, confidence and moral orale, o New perspective to a position ‘omeone who already understands the business, posit bi °Y someone who already unders Is the busi ick fill Quick filling of the Vacancy through intemal Tes 01 Developing a competiti fa 8 8 competitive space among colleagues and fellow members TRANSFER Job tr i ift of job f ‘ansfer is the shift of job for employees; the change can be in terms of place of job, é ; ere lepartment of job or shift of job. The employees are replaced or moved lateral to serve the best for the organization. Flippo has defined the term job transfer as ‘transfer refers to changes in job of a employee without changing the remuneration or the responsibilities of the employee”. This makes transfer different from the job promotion. As job promotion includes increase in remuneration, status, authority and responsibility it is very different than job transfer. In most of the organizations transfers are frequent whereas promotions are irregular in nature. BENEFITS OF TRANSFER It helps to improve the working experience of the employee as they get to work with different people and different environment. It makes the people skill better and prepares the employee for future promotions. It provides a new sense of motivation and satisfaction as transfer is often referred as growth oriented opportunity for the employees. It helps managers to ensure overall skill development of the employees by lateral movement of employees within the organization.os zateral Transfer Definition The lateral transfer is de " 'S defined by Yoder et. al (1958), as a lateral shit of individuals from old osition to new positi i i pe sition by keeping the skills needed to perform duties, job responsibilities , sp ies or compensation un iP changed. The lateral transfer can be initiated by the organization or by the employee. It ¢: ‘an be temporary based on the need of organization or it can be marked as a permanent transfer. Types of Employee Transfer There are six types of transfer which can be implemented in the organization based on the purpose of the transfer. The reason behind the transfer helps to figure out the type of the employee transfer. o Production Transfer Sometimes in few production jobs the requirement of labor gets declined. In order to avoid the lay-off of the efficient employees due to reduction in the manpower requirement, organization often transfers the employees to alternative position. This transfer is known as production transfer. o Replacement Transfer Due to change in technology or market some operations in the organization get shut down. Now in order to retain the long-service employee the organization replaces them with a new employee with shorter service. This is known as replacement transfer. The long-service employee are assigned new job in another department of the organization.° ° Rotation Transfer Enhancement ience ii of job experience is the reason behind rotation transfer. It is also called as versatility si 'y transfer. The management improves the versatility of the employees by their late ve fir ii 1 eral movement from one job to another, This transfer helps in job enlargement of the employee Shift Transfer Itis not a part of rotational shift but it is actual transfer of employees from one shift to another. Employees working in second shift often complain about the lack of social life. Thus, in order to maintain work life balance organization transfer the employee to another shift to help them in participates in their private and social life. Remedial Transfer Sometimes the initial placement of the employee on particular job might be faulty. To correct the mistake, remedial transfer is carried out. It is often the situation in which due to some health issues the employees are not able to continue the given job. Thus they are replaced with other suitable employees who take a remedial transfer at the position. Penal Transfer Here the example of Bangladesh Company is perfect. In this type of transfer the employee is used as a concealed penalty. When trade union activist or a trouble maker employee is located in the organization, this employee is transferred to a remote branch of the organization to make sure he/she will not be able to continue the destructive activities. Such transfer is also known as downgrading as it may include reduction in authority, compensation and duties.Demotion he employee previously held. a lower position than tl ‘The position will typically have less responsibility or required skill, as ‘well as a lower pay grade than the previous position. ‘A demotion is a permanent reassignment to untary, and they can occur as a result of poor employee organisational restructuring. A joyee by returning him or her to his or Demotions can be voluntary or invo performance, position elimination, disciplinary actions, or Femotion in him allows a company to keep a valuable empl her previous position. motion, and if the demotion is the result of ee may not react well to the den ‘ees that the company is lax about However. the employ it may send the message to other employ: employee misconduct, disciplinary action. Reasons to Demote an Employee Employees can be demoted for a variety of reasons. including: «The employee delivered a subpar performanee. +The employee lacks the necessary skills for their current position.TORO SER ce es job. -e for his or her misbehaviour. You're getting rid of the emplo, mploy + You are disciplinit What is the difference between demotion and termination? A demotion of employees may be a good solution if an employee is valuable to your compan but isn't thriving in their current role. If an employee commits a wrongdoing, causes disruptions, or isn't a good fit for your company, these may be good reasons to fire them Problems of demoting employees There are numerous disadvantages to demoting employees that may make it difficult to do so. Employee morale can 1. For some employees. a demotion can be humiliating and demoralising, suffer as a result of public humiliation. 2. If the employee who was demoted was a supervisor, it may be difficult for them to rejoin the people they once managed. 3. Ifyou have already filled that position, you may not be able to demote an employee. If this is the case. you may need to transfer the employee to a different position. 4. If you are disciplining, demotion in hrm may not be the best form of discipline, especially if ipline does not always correct an employee's wrongdoing. used alone. DiP>rRsse >*>FIPMPrddswds Le i ey > In the end, the demoted employee may leave your company for another Position. Create an incentive for the employee to stay with your company if you can, Four steps of demoting an employee {can be difficult to inform an employee that they have been demoted, Here are four steps to successfully navigating a demotion. 1. Inform the employee of the demotion Have a private conversation with the employee before demoting them. What does your employee's demotion entail? Explain why you are demoting the employee, especially ifit is due to poor performance. Express your desire to retain the employee, Afterall, you're not firing them. Explain why you believe the employee will perform better in the new role. 2. Describe the new position After explaining why you are demoting the employee. inform him or her of the new position. List the responsibilities and expectations of the position. Inform the employee at this time if the new position comes with a lower salary. 3. Create a transition strategy Create a transition plan with the employee. Set a date for when the employee will be completely immersed in their new role. Inchide in your plan if the employee needs to pass off projects or documents to another employee. 4. Inform the appropriate individuals It may not be appropriate to notify all of your employees of the demotion. rire . 7 demotion of employees may have an impact on some employees. For example. if the demoemployee supervised others, you should inform those employees as to who they will now report to. ~ You should also think about what you will tell your employees. Employces do not need to be aware of every aspect of their demotion. |e “ale ~ EMPLOYEE SEPARATION : Definitio nployee Separation is the discontinuation of his employment contract with the company. The termination of employees services can be either Voluntary or Involuntary. This can take the form of Retirement, Resignation, Discharge, Layoff, etc. ~ Types of Employee Separation . Either employer or employee may propose separation due to several reasons. The employee ~ separation can be classified into: > «Voluntary Separations : + Involuntary Separations eI ctay Botta : res Bist Dismissal/ erated enn \ NN Involuntary Bereta bi trerato nuts rineeant Cn CORN TET ag Bite arta>>FRIaBa OG »>d> I>? >> Voluntary Separations ition. The most Here, the employee discontinues his services on his own consent in the organi: common forms of voluntary separation are: 1. Resign or Quit 2. Retirement Resign or Quit The employee may quit his job due to personal or professional reasons. It may affect the goodwill of the company when it occurs often. The employee may leave because of reasons like: + Better Career Opportunities + Company Policy + Health + Relocation + Job Dissatisfaction, ete. Retirements Retirement is the completion of employees occupational tenure. This involves discontinuation of service as the employee reaches the age of retirement. However, the employees themselves take retirement from the organization through Voluntary Retirement. Generally, the age of retirement is 60 years. Unlike resignation in retirement, employees gain certain benefits like:- + Lump-Sum Payment + Pension + Leave Encashment « Gratuity, etc Retirement can be of two types: Compulsory Retirement When employees reach the age of superannuation, they have to retire compulsorily. The retirement age varies in different sectors. In the government sector, the retirement age is 58 or 60 years. Whereas there is no fixed age of retirement in the private sector. It depends on the person capabilities of working.Voluntary Retirement Scheme(VRS) The employees can opt for retirement before reaching retirement age. It is also known as the Golden Handshake Scheme. The organization offers VRS to its employees. get a manageable workforce and handle business losses. Through VRS, companies can cut co: Note:- Both the employees and the organization can propose VRS and Resignation. Involuntary Separations Here, the employer terminates the services of their employees due to organizational reasons. The organizations may opt for employee separation because: + They may face ups and downs in the business cycle + Difficulty in handling the workforce + Unprofessional behaviour of the employees The different types of involuntary separation are: Discharges and Dismiss Layoffs Retrenchment Downsizing and Rightsizing Compulsory Resignation yaks Discharges and Dismiss Discharge is an involuntary separation in which the organization ceases employee services. The discharge of the employee might be due to his non-productivity. While discharging, an employee may get offended. Thus, it must be a thoughtful decision and adopted in only extreme cases. It may be a product of: « Job Misfit ¢ Bad Organizational Behaviour « Absenteeism Dismissal is the termination of the employee resulting from his non-performance or misconduct. It is the last step the management take as a punishment to the employee. It may impose adverse effects on employees career opportunities in future.2. Layoffs ‘A Layoff is when an organization separates their employees for a short stretch of time. The organization recalls the employees after the layoff period is over. The objective of laying off the workforce is to make the firm Iean in shape and remain competitive The organization carry out layoff of employees based on their excellence or seniority. The reasons behind layofis can be: Merger Acquisition Competitive Environment Changes in Technology Downsizing. ete vate the reasons and basis of layoff. It has ‘The management must specify and communi ‘managers involved in the layoff process. a negative impact on the victims, survivors and 3. Retrenchment nployees permanently due to economic reasons. The In this, organizations need to separate em organizations may not recall employees. But they can prefer retrenched workers at the time of vacancies. The following can be the economic reasons behind retrenchment:- + Surplus Staff «Machinery Installation + Rationalization + Department Closure « Decreasing Demand for Products + Economic Slowdown ‘The firm has to seek approval from the government. Along with that, it provides a notice to the employees beforehand. 4, Downsizing and Rightsizing s restructure themselves by downsizing and rightsizing their workforce. des cost-saving and adjusting the crew to exact fit. The organization may cut rk, reduced wages, reduced workweeks, etc. The organization: Rightsizing inclu costs by part-time wo! organization lean by reducing the force. Layoffs are mandatory Downsizing refers to making the may adjust the existing workforce. in Downsizing, whereas Rightsizing5. Compulsory Resignation The employer may ask its employee to leave the organization or resign. The organizations opt for obligatory resignation in critical situations and avoid dismissal. Compulsory Resignation is a better option than Dismissal or Discharge. The organization's goodwill remains unaffected. Moreover it does not affect the employee's career too. Benefits of Employee Separation Separation is not necessarily a negative process. Besides it may benefit organization and employees in following ways: To Organizations * Itenables a reduction in labour costs « Replacement of the poor performers It increases opportunities for diversification and enhancement + New recruits bring synergy within the organization + Results in a disciplined work environment + Reshape organization into the right size To Employees « Better career opportunities + Get away from a troublesome workplace + Enjoy benefits associated with retirement schemes PERFORMANCE APPRAISAL ‘An employee performance appraisal system has defined a process in which a predefined standard of factors such as work knowledge, work performance, work attitude, leadership quality, team player behavior, consistency, decision-making abilities, and skills is created and then actualperformance, as well as the personality of employee, is compared with these expected standards by the organization. Meaning: A performance appraisal used in the organization is a regular review of employees’ performance to verify their contribution to the company. It is also known as an annual review or performance evaluation. It evaluates the skills, growth, achievement, or failure of the employees. ‘The performance appraisal is often used to justify the decisions related to promotions, pay hikes, bonuses, and termination of the employee. Edwin B. Flippo “Performance appraisal is a systematic, periodic and so far as humanly possible, an impartial rating of an employee's excellence in matters pertaining to his present job and to his potentialities for a better job.” Gomej-Mejia “Performance Appraisal involves the identification, measurement and management of human performance in organisation.” Types of Employee Performance Appraisal in HRM The four major types of performance appraisal are as follows- behavior are responsible for the performance rating of the employee. collected from the employee, their immediate supervisor, and peers. Self-assessment: Here the employee themselves rate their job performance and work Peer assessment: Under this assessment, the team members, co-workers, and workgroup 360-degree performance appraisal: In this type of appraisal the performance rating is Negotiated appraisal: In order to avoid the conflicts between employee and their supervisors a new trend of appraisal is utilized. In this type of performance appraisal, amediator evaluates the performance of the employee and puts focus on the good side of performance rather than the criticism. Different Methods of Employee Performance Appraisal Spontaneous » and unrestricted appraisal method _, rT Traditional | _ Methods of Methods _ Performance | Appraisal %‘+ Traditional Methods of Employee Performance Appraisal Here isa list of different trad appraisal: nal methods which can be used for employee performance * Rating Seales: In this scale, the factors such as attitude, initiative, dependability, ete are quantified. A range of excellent to poor is provided to the rater and based on the rating the performance of the employee is calculated, Checklist: A checklist form of performance appraisal consist of a column of ‘Yes’ and ‘No’ for different employee traits. The rater has to put a tick mark based on if the traits exist or do not exist in the employee. L. 3. Forced Choice Method: In this method, different statements about the performance of the employee are provided to the rater and he/she is forced to answer the ready-made statements as true or false. Further evaluation of performance is carried on by the Human Resource department based on the answers of the rater. Forced Distribution Method: In this method, it is assumed that the performance of an employee conforms to a bell-shaped curve. Thus, the rater has to put employees on provided points on the scale. Critical Incidents Method: Here the critical behavior of the employee is considered by the supervisor while evaluating the performance.Behaviorally Anchored Rating Scale: Different statements which are descriptive in nature are prepared about the behavior of the employee. These behaviors are put on the scale points and the rater has to indicate the points which explain the employee behavior in a more exact way. 4. 7. Field Review Method: In this method, the reviewer of the performance is generally someone outside the department. The people from the HR department or corporate office do the performance evaluation of the employee based on the records and interviews. Performance Tests and Observations: This is a kind of oral test that is conducted to test the skills and knowledge of the employees in their respective fields. The employees sometimes receive a situation and are asked to demonstrate their skills and then their performance is evaluated based on that presentation. Confidential Reports: Often the government departments follow this method of performance evaluation. The employees are evaluated based on the parameters such as leadership quality, teamwork, integrity, technical ability, attendance, etc. The reviewer sends the confidential review to the concerned authority about the performance of the employee. Essay Method: Under this method, the detailed description of the employee performance is written by the rater. The performance of an employee, his relations with other Co-workers, requirements of training and development programs,strengths and weaknesses of the employee etc. are some of the points that are included in the essay. The efficiency of this traditional method of performance appraisal depends on the writing skills of the rater. 8. Cost Accounting Method: It is a simple method in which the performance of the employee is linked with the monetary benefits of the organization. The rater checks about the cost to the company to keep the employee and the contribution of the employee in terms of monetary business. 9. Comparative Evaluation Approaches: This approach includes a comparison of the performance of co-workers with each other. It is of two types namely the ranking method and paired comparison method. It is a quite popular method of employee performance appraisal in the corporate world. Modern Methods of Employee Performance Appraisal Here is a list of different modern methods which can be used for employee performance appraisal: © Management by Objectives: In this method, the performance of the employee is assessed based on the targets achieved by him/her. The management at the beginning of the financial year conveys the set goals to the employees, at the end of the year the performance of the employee is compared with the set goals and evaluated for the appraisal. Psychological Appraisals: Psychologists are invited to the companies for the performance appraisal of the employees. Here the performance is in the context of thepotential future performance. Psychological tests, in-depth interviews, reviews, and discussions with the managers are the methods used for the evaluation of the performance. Assessment Centers: A series of exercises are conducted at the assessment center of the company to actually evaluate the performance of the employee. The exercises include discussions, role-playing, computer simulations, and many more. The employees are evaluated in terms of communication skills, mental alertness, emotional intelligence, confidence, and administrative abilities. The rater observes the event and evaluates the performance of the employee at the end. 360-Degree Feedback: It is particularly a 360-degree feedback method in which the information about the performance of the employee is collected from supervisors, peers, group members, and self-assessment. Alll the remarks are considered to evaluate the overall work performance of the employee. It is also called multi source feedback, multi rater assessment, full circle assessment and group performance review. 720-Degree Feedback: In line with the 360-Degree feedback system, here the feedback is collected from the stakeholders within the company as well as the people linked from outside the organization. The customers, suppliers, investors, and other financial groups provide feedback about the performance of the employee.Top Management Customers “y Immediate | | | superior ) \ IN i a Degree _enpraisal l sa | Self } Peers \ \ 4 / Subordinates | CS Objectives of Employee Performance Appraisal © The performance appraisal system maintains the records which are used to determine the compensation and wage structure of the employee. Itis very useful to determine the strengths and weaknesses of the employees and helps to place the right person at the right job. It provides access to the potential in the person for future growth and development It gives the necessary feedback regarding the performance of the employee and their actual contribution to the growth of the organization. It guides the HR department about the training needs of the employees. It influences the working habits of the employees and makes them work-oriented.Advantages of Performance Appraisal ° It helps the supervisors to chalk out the promotion for performing employees and dismiss the inefficient workers. ion to decide the compensation of the employee. Also, based on the It helps the organi: performance and the additional efforts put by the employee the extra benefits and allowances can be decided using records of performance appraisal. Special actions can be taken for the development of the employees. The performance appraisal system will highlight the weakness of the employee based on which the training program arrangement can be carried out by the organization. The performance appraisal further suggests the changes in the selection process which will help to hire better employees. Performance review is an effective way to communicate the status of the performance of the employee. It is a way to provide feedback about how the employees are doing on their job. The evaluation of the performance can act as a motivational tool. It provides a picture of the efficiency of the employee and motivates the individual to improve their performance.isadvantages of Performance Appraisal Performance appraisal totally depends on the factors used for the evaluation of the performance. The use of incorrect or irrelevant factors can lead to the failure of performance appraisal. Sometimes the vital factors responsible for the performance are ignored during performance appraisal. The factors like attitude, abilities, and initiative are very vague and difficult to gauge. Sometimes the managers who carry out the performance appraisal are not qualified enough to properly assess the abilities of the employees. Thus, it leads to irrelevant data collection and failure of performance appraisal,° USES OF PERFORMANCE APPRAISAL Human Resource Planning: It is import a firm so that it is easy to identify the pot {ant to record data/information of employees in centials of who deserves to be promoted or have any area to improve. Performance appraisal also helps in revealing if there is insufficient number of workers. An appraisal system should be designed and planned after considering the strengths and weaknesses o Recruitment and Selection: —Throu of the HRM of the organisation. ih the process of performance analysis, organisations can determine the performance potential on an applicant. Studies show that successfull employees display specific behavioral traits while performing tasks. The data processed through performance evaluation help in setting standards for behavioral interviews. In the proce: against which test scores are compared. selection, the employee rating can also be used as a variable o Training and Development: ‘Training and development is crucial for any employee as it acts as way to communicating what is expected and how. Performance appraisal helps in drawing attention to these specific need: training © Career Planning and Development: Career_planning can be described as a never- ending cycle in which an individual sets profession goals and means to achieve them throughout his or her lifetime. Performance appraisal can determine an employee's potential through assessing its weaknesses and strengths. The data is also useful to counsel junior staff member and assisting in career plans. © Compensation Programs: Performance dealing with wage or salary regulations. appraisal evaluations help in making decisions It is believed that organisations should reward employees with increase in pay when excellent performance is achieved. In order to increase performance, an organisation should implement well planned and designed performance appraisal systems and award the efficient workers. This not only increases performance but also keeps employees motivated to achieve better in future. Internal Employee Relations: Performance appraisal evaluation can provide crucial information used in making decision about the internal employee relations ie promotion, demotion, transfers and dismisses etc. as is required in the consideration of transfers. When the performance level is unacceptable, demotion or even termination may be appropriate. oa pp dD DDD?© Assessment of Employee Potential: Some organizations attempt to assess an employee's potential as they appraise his or her job performance. Although past behaviors may be a good predictor of future behaviors in some jobs, an employee's past performance may not accurately indicate future performance in other jobs. Overemphasizing technical skills and ignoring other equally important skills is a common error in promoting employees into management jobs. JOB EVALUATION Definition: The Job Evaluation is the process of assessing the relative worth of the jobs in an organization. The jobs are evaluated on the basis of its content and the complexity involved in its operations and thus, positioned according to its importance. Job Evaluation Methods There are non-analytical and analytical job evaluation methods that are employed by the organizations to realize the worth of a set of jobs. Job Evaluation Methods | | Non-Analytical Analytical q [. a 7 Factor 2 Ranking Job Grading : Point-Ranking Method Method Comparison Method Non-analytical Job Evaluation Methods 1. Ranking Method: This is the simplest and an inexpensive job evaluation method, wherein the jobs are ranked from the highest to the lowest on the basis of their importance in the organization. In this method, the overall job is compared with the other set of jobs and then is given a rank on the basis of its content and complexity in performing it.Here the job is not broken into the factors; an overall analysis of the job is done. The main advantage of the ranking method is, it is very easy to understand and is least expensive. But however it is not free from the limitations, it is subjective in nature due to which employees may feel offended, and also, it may not be fruitful in the case of big organizations. 2. Job Grading Method: Also known as Job-Classification Method, Under this method the job grades or classes are predetermined and then each job is assigned to these and is evaluated accordingly. For Example Class. 1, comprise of the managerial level people under which sub-classification is done on the basis of the job roles such as office manager, department managers, departmental supervisor, etc. The advantage of this method is that it is less subjective as compared to the raking method and is acceptable to the employees. And also, the entire job is compared against the other jobs and is not broken into factors. The major limitation of this method is that the jobs may differ with respect to their content and the complexity and by placing all under one category the results may be overestimated or underestimated. Analytical Job Evaluation Methods I, Factor-Comparison Method: Under this method, the job is evaluated, and the ranks are given on the basis of a series of factors Viz. Mental effort, physical effort, skills required supervisory responsibilities, working conditions, and other relevant factors. These factors are assumed to be constant for each set of jobs. Thus, each job is compared against each other on this basis and is ranked accordingly. The advantage of this method is that it is consistent and less subjective, thus appreciable by all. But however it is the most complex and an expensive method. 2. Point-Ranking Method: Under this method, each job’s key factor is identified and then the subfactors are determined. These sub-factors are then assigned the points by its importance. For example, the key factor to perform a job is skills, and then it can be further classified into sub-factors such as training required, communication skills, social skills, persuasion skills, etc. The point ranking method is less subjective and is an error free as the rater sees the job from all the perspectives. But however it is a complex method and is time-consuming since the points and wage scale has to be decided for each factor and the sub factors.ADVANTAGES OF JOB EVALUATION 1. Sound Wage Policy Job evaluation is basically an attempt to measure the real worth of each job by a process of expert judgement, Therefore, any wage policy based on a scientific job evaluation is bound to be systematic and sound. . 2. Settlement of Wage Disputes The chances for disputes and grievances regarding the individual rates of wages are very rare. Even if there arises any disputes, it can be conveniently settled by referring to the job evaluation machinery. 3. Better Control over Labour Costs Job evaluation enables the management to exercise effective control over the labour costs, because they can give appropriate pays for the each job. 4, Building up of Employee Morale Since this system aims to reward employees’ suitability, it will help to build up employee morale and bring job satisfaction. 5, Proper Placement of Personnel It helps in selecting the right man for the right job. Besides, this system facilitates to form a logical basis for designing training programmes for the worker. 6. Elimination of Personal Bias The evils of personal bias, favoritism, and arbitrary judgement on the part of the management in fixing wage differential etc. are avoided, because wage rates are set by experts other than the management and that too after a careful job evaluation programme. 7, Reliable in All This system provides well-defined methods for measuring various jobs. Besides, it also helps to justify the existence of different scales for different jobs. For these reasons, it is accepted by both workers and the management without any hesitation.DISADVANTAGES OF JOB EVALUATION 1. Lack of Complete Accuracy The accuracy claimed by it is not in fact accurate. The system considers the key factors independent of others which is not so in reality. Consequently, the weights assigned to the factors are also less accurate. This is particularly so if the factors are of highly technical in nature. 2. Unrealistic Assumptions Job evaluation is based on the assumption that wage rates can be related to the work of a given job. It completely ignores the fact that conditions in the labour market exercise greater influence in the determination of wage rates. 3. Formation of the Committee The formation of the job evaluation committee itself creates a serious problem. Only persons who are capable of evaluating the jobs should be appointed as committee members. Besides, there is also difference of opinion regarding the number of members. Authorities suggest 5 to 20 members. All these factors make the installation of a job evaluation programme more costly. 4, Selection of a Suitable Method The selection of a suitable method also poses a serious problem to the management. There are four methods and each method has its own merits and demerits. 5. Number of Factors There is no clear-cut opinion amongst the scholars as to how many factors should be used and what weightage should be assigned to each factor. In many cases, 100 factors are used. This multiplicity of factors creates confusion and so precise ‘results cannot be obtained. 6. Equal Pay for Equal Job This system presumes that job of equal content will be equally attractive to the employees. But this presumption is unreal. For instance, a job offers little or no prospects for a rise or promotion; while another job rated similar to it, has better prospects for the workers; the latter will attract more than the former. Under such circumstances, the business firm has to pay more wages for the former job so as to make it more attractive. 7. Unsuitable for Small Concerns Installing and operating a job evaluation programme requires much time and money, Hence, it is very difficult to introduce it in smaller concerns.