HRM (BAPI CHOWDHURY) CT-2

1. what is performance appraisal?

Appraisal means the evaluation about the worth of an object or person and performance appraisal
means the evaluation of employees’ worth in terms of organisational performance. Performance
appraisal is the process of defining expectations for employee’s performance; measuring, evaluating
and recording employee performance relative to those expectations; and providing feedback to the
employee.

(i) Developing inter-personal relationships between manager and his team.

(ii) Motivating employees to achieve their targets.

(iii) Identifying the need for training the workforce.

(iv) Improving use of working tools like demonstration, material, working documents etc.

(v) Determining and re-allocating employees’ territories and work assignments.

(vi)Determining sound compensation and incentives plans for the employees.

2. Methods of Performance Appraisal.

I. Performance results-oriented methods:

These methods measure the actual performance of employees and bring it in conformity with the
pre-determined standards.

1. Graphic Scales:

The scales list rating factors like quality of work, technical knowledge, punctuality, integrity,
cooperativeness, initiative, creativity, analytical ability, and decisiveness. Employees are rated on a
graphic scale prepared by supervisors, with the highest grade denoting the best rating.

2. Essay evaluation:

This is an unstructured form of performance appraisal where grades are not assigned. Evaluators
keep track of performance and note positive and negative attributes. At the end of the period, they
analyze all these points and give a brief description of performance in the form of an essay. This
method rates employees purely on the basis of their actual performance, reducing personal bias but
may not be entirely error-free due to different raters' styles and perceptions.

II. Employee behaviour-oriented methods:

These methods are also known as comparative methods of evaluation. They compare performance
of employees against each other and rank them accordingly.

1. Straight ranking:

The simplest method of ranking involves rating employees as rank 1, 2, 3, 4, or 5 based on their
performance in specific areas of operation. This method is effective when ranking a small number of
people, but it does not indicate the differences in ability between individuals.

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2. Alternation ranking:

Instead of ranking employees in ascending order of performance, raters first pick the best and give
them rank 1, then pick the worst and rank them 5, and continue this process until all employees are
ranked. This method is similar to straight ranking but with a different approach to assigning ranks.

3. what is the objective or purpose of performance appraisal (Q NO 8)

• Appraisal is a judgment based on set standards and goals. Organizations should establish
clear standards and communicate them to employees to ensure fair judgment. In a good
appraisal system, high goals are set and high performance is expected. The goal-setting
process should be mutual, and the appraisal system should be transparent. Without an
appraisal system, superiors waste time and may make decisions based on chance. To avoid
this, there should be a high-performance appraisal system with clear goals.

• To judge means to apply a set of values. Value judgments without clear, sharp and public
standards are irrational and arbitrary. Such judgment or appraisal will demotivate the
manager and subordinates. It should, thus, be based on sound and objective appraisal
standards.

• Performance appraisal depends on “Merit Rating”. Merit rating refers to what the employee
is. Performance appraisal refers to what the employee does. Appraisal records what is done
by the employee. Merit rating gives information about “Potential”, “Personality” and
“Promise” but appraisal tells about performance. It, thus, helps in deciding employees
worthy of promotion or transfer to work areas that meet their skills and capabilities.

• Standards consider what work was assigned, what resources were granted and what
promises were given regarding salary/rewards. They, thus, provide a measure of evaluation.

4. what is the 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. Many organisations consider and
use potential appraisal as a part of the performance appraisal processes. It helps to identify what can
happen in future so that it can be guided and directed towards the achievement of individual and
organizational growth and goals.

It can be measured through:

• Self – appraisals
• Peer appraisals
• Superior appraisals
• MBO (Management By Objectives)
• Psychological and psychometric tests

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 5. what is MBO in Human Resource Management

Management by objectives (MBO) is a strategic management model that aims to improve the
performance of an organization by clearly defining objectives that are agreed to by both
management and employees. According to the theory, having a say in goal setting and action plans
encourages participation and commitment among employees, as well as aligning objectives across
the organization.

• Employees take pride in their work and are assigned goals they know they can achieve that
match their strengths, skills, and educational experiences.
• Assigning tailored goals brings a sense of importance to employees, boosting their output
and loyalty to the company.
• Communication between management and employees is increased.
• Management can create goals that lead to the success of the company.
6. what is behavioural anchor rating scale in HRM

A behaviorally anchored rating scale is a tool for measuring employee performance by measuring
them based on predefined behavioral patterns. The process typically uses a vertical scale with ratings
ranging from five to nine that represent various degrees of performance, from poor to very good.
Managers who use it first identify all tasks that an employee must perform and then create the rating
scale by adding specific behaviors to all grades from five to nine.

The behaviorally anchored rating scale can measure individual employee behavior, as each specified
behavior on the scale is relevant to a specific role within the organization. For this reason, the
behavior that the manager chooses usually needs to be as specific as possible for each position.
Some of the most common uses of behaviorally anchored rating scales are:

• Talent acquisition: Recruiters who know exactly what behaviors they're looking for in
candidates for specific roles usually have better chances of selecting the most qualified ones.
• Employee development: Managers can use the behaviorally anchored rating scale to set
specific behavioral targets for their employees.
• Performance management: Using predefined behavioral patterns for employee performance
evaluation is usually the most common use of behaviorally anchored rating scales.
• Growth planning: Managers can also use behavioral patterns to provide a direction for
growth for their employees.
7. what is 360 degree appraisal

A 360-degree performance appraisal, also known as 360-degree feedback or multi-rater feedback, is

when employers evaluate employee performance from as many sources as possible instead of only
one-on-one feedback from a direct manager. Once all the feedback is collected, it is used to measure
employee strengths, weaknesses and skills and can provide a well-rounded performance review. If
the 360-degree performance appraisal is well designed, it can boost team performance, promote
self-awareness and create transparent communication. However, there are also some drawbacks to
the 360-degree appraisal method if it's not executed properly.

• They give colleagues new potential areas for development

• They improve working relationships
• They allow colleagues to see things from a different perspective
• They focus on the ‘how’ as well as the ‘what’

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 8. Q NO 3
9. difference between wages and salary

10. what is compensation management

Compensation management is the discipline and process for determining employees' appropriate
pay and benefits. A critical element in talent management and employee retention, it uses financial
and nonmonetary benefits to attract recruits, reduce turnover, spur performance and boost
employee engagement.

Human resources (HR) professionals typically carry out compensation management strategies.
They're responsible for ensuring that salaries and bonuses remain competitive, and benefits change
with the needs of the workforce. The HR leaders in this role must gather and analyze internal and
external salary figures, demographic and economic statistics and other relevant information. They
are also keen to understand the complexities of benefits administration.

1.To attract competent and qualified persons towards organization by offering fair wage and
incentive.

2. To retain present employees by paying competitive remuneration.

3. To establish fair and equitable remuneration so as to avoid pay disparities.

4. To improve production, productivity and profitability of the organization.

11. what is the benefit of compensation management

• Attracting and Retaining Talent: Effective compensation management helps attract high-
quality candidates and retain existing employees by offering competitive salary packages and
benefits that align with industry standards and employee expectations.

• Enhancing Employee Motivation and Productivity: A well-structured compensation plan,

including bonuses, incentives, and performance-based rewards, motivates employees to
perform at their best. It encourages productivity and aligns employee goals with
organizational objectives.

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 • Ensuring Fairness and Equity: Compensation management ensures that pay structures are
fair and equitable, reducing the risk of pay disparities and potential legal issues. By
maintaining transparency and consistency, it fosters a positive workplace culture and
enhances employee trust and satisfaction.

• Supporting Strategic Goals: By aligning compensation strategies with business objectives,

organizations can drive desired behaviors and outcomes. For example, performance-based
pay can incentivize employees to achieve specific targets, directly contributing to the
company's strategic goals and overall success.

Overall, effective compensation management is crucial for building a motivated, productive, and
loyal workforce while supporting the organization's strategic initiatives.

12. DIF

13. what is the objective of compensation management

1. To attract competent and qualified persons towards organization by offering fair wage and
incentive.
2. To retain present employees by paying competitive remuneration.
3. To establish fair and equitable remuneration so as to avoid pay disparities.
4. To improve production, productivity and profitability of the organization.
5. To minimise un-necessary expenditure and to control cost through a device of internal check
and establishment of standard.
6. To improve and maintain good human relation between employer and employee through a
process of payment of bonus, profit sharing and other fringes benefits.
7. To enhance the name and fame of the company through a proper system of wage payment.
8. To ensure prompt and regular payment of wage and salary to all the employees.

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 14. what are the key components of compensation management

1. Wage or Salary:

Wage: The term wage refers to the remuneration paid to the workers appointed on hourly, daily or
weekly basis in return for the service rendered. It varies according to physical and mental
requirement of the job. Wage may be minimum wage, fair wage and living wage.

Salary: The term salary refers to remuneration paid to the employees appointed on monthly or
annual basis in return for the service rendered. Thus it refers to monthly rate of pay irrespective of
number of hours put in by employees.

2. Dearness Allowance (DA):

Under section 3 of the Minimum Wages Act, DA is described as cost of living allowance. It is given to
protect the real wages of workers during inflation. In India it has become integral part of the wage
system.

3. Incentives:

Incentive is a reward paid in addition to wages whether monetary or not that motivates or
compensates an employee for performance above the standard. Payment of incentive depends on
productivity, sales and Profit of the organization.

4. Fringe Benefits and Perquisites:

Fringe Benefits: It is a general term used to describe any of a variety of non-wage or supplemental
benefits that employees receive in addition to their regular wages. These include such employee
benefits as provident fund, gratuity, medical care, hospitalization, accident relief, paid holidays,
health and group insurance, pension etc.

Perquisites (Perks): Perquisites also called perks are the special benefits made available only to the
top executives of an organisation. These may include company car, furnished house, stock option
scheme, club membership, paid holidays etc.

15. from the contact of compensation management discuss about Fringe benefits

Fringe benefits are additions to compensation that companies give their employees. Some fringe
benefits are provided to all employees, while others may be offered to executives only. Some
benefits may include a company car, paid time off, or gym membership. Employers use fringe
benefits to help them recruit, motivate, and retain high-quality talent.

• Fringe benefits help companies recruit, motivate, and retain high-quality employees.
• Companies competing for the most in-demand skills tend to offer the most benefits.
• Some common benefits, like health and life insurance, are not taxable, but others are taxed
at fair market value.

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 16. different types of wages

Wage:

The term wage refers to the remuneration paid to the workers appointed on hourly, daily or weekly
basis in return for the service rendered. It varies according to physical and mental requirement of the
job. Wage may be minimum wage, fair wage and living wage.

i. Minimum Wage:

It is that wage which is sufficient to meet the basic need of a worker and his family. This minimum
wage has to be paid to the worker irrespective of the capacity of the industry to pay. The Committee
on fair wage has defined minimum wage as – “the wage must provide not only for the bare
sustenance of life, but for the preservation of the efficiency of the workers. For this purpose,
minimum wage must provide some measures of education, medical requirements and amenities”.

ii. Fair Wage:

According to committee on fair wage “fair wage is the wage which is above the minimum wage but,
below the living wage”. It is fixed between the minimum wage and capacity to pay by the industry.
The lower limit of the fair wage is the minimum wage; the upper limit is set by the capacity of the
industry to pay.

iii. Living Wage:

It is the wage that provides some of the comforts of life. It provides certain amenities considered
necessary for the well-being of the worker. According to Fair Wage Committee “the living wage
should enable the male earner to provide for himself and his family not merely the bare essentials of
food, clothing and shelter but also a measure of frugal (using only as much money or food as is
necessary) comfort including education for children, protection against ill health, requirements of
essential social needs and measure of insurance against the more important mis-fortunes including
old age”.

17. different system of wage payment

• Time Rate System

Definition: Pay based on time worked (hourly, daily, monthly).

Advantages: Simple, stable income, encourages quality.

Disadvantages: No direct productivity incentive, may reduce efficiency.

• Piece Rate System

Definition: Pay based on output produced.

Advantages: Incentivizes productivity, potential for high earnings.

Disadvantages: Risk of compromised quality, income instability, potential for worker fatigue.

• Commission-Based System

Definition: Pay based on sales or revenue generated.

Advantages: Strong performance incentive, aligns with revenue goals.

Disadvantages: Variable income, potential for aggressive sales tactics, high pressure.

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 • Bonus and Incentive System

Definition: Additional pay based on performance or company profitability.

Advantages: Motivates high performance, aligns with organizational goals, rewards excellence.

Disadvantages: Potential for unhealthy competition, complex administration, focus on bonus-related

goals.

18. what is collective bargaining

The term “collective bargaining” refers to the negotiation of employment terms between an
employer and a group of workers. Employees are normally represented by a labor union during
collective bargaining.

The terms negotiated during collective bargaining can include working conditions, salaries and
compensation, working hours, and benefits. The goal is to come up with a collective bargaining
agreement through a written contract. According to the International Labour Organization, collective
bargaining is a fundamental right for all employees.

• Collective bargaining is the process of negotiating the employment terms between an

employer and a group of workers.
• The process takes place between company management and a labor union.
• Concerns and issues that may come up during collective bargaining include working
conditions, salaries and compensation, working hours, and benefits.
• The goal of collective bargaining is to come up with a collective bargaining agreement or
contract.

19. what is Industrial dispute.

An industrial dispute refers to a conflict between employers and employees or between groups of
employees regarding employment conditions. These disputes can arise over various issues, including
wages, working hours, working conditions, employment terms, or organizational policies. Industrial
disputes can manifest in several forms, such as strikes, lockouts, work-to-rule actions, picketing, and
other forms of industrial action.

Types of Industrial Disputes:

• Wage Disputes: Conflicts over salary scales, wage increases, bonuses, or other forms of
financial compensation.
• Working Conditions Disputes: Issues related to the physical and psychological environment
of the workplace, including safety standards, hours of work, and provision of facilities.
• Employment Terms: Disputes over job security, employment contracts, promotions, layoffs,
and terminations.
• Union Recognition: Conflicts over the recognition of trade unions and collective bargaining
rights.

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 20. cause of industrial dispute

Demand for wages and allowances

The primary cause of industrial disputes in India is demand for higher wages and benefits. Even
though prices are increasing fast, the wage growth has not kept pace with inflation. Therefore,
workers go on strike to demand an increase in their wages. Most of India’s labour disputes arise from
workers demanding increased pay. Disagreements would have been decreased if employers had
taken steps to ensure wages and prices changed automatically.

Demand for bonus

The demand for more bonuses is another big reason for industrial disputes in India. Workers want
employers to share the profits of the industrial units, but employers do not relent on profits so easily.
During the emergency, the Government changed its mind and lowered the bonus rate from 8.33% to
4%. Subsequently, the minimum bonus rate was increased to 8.33%. Between 1961 and 1971, wages
and bonuses were the cause of 46%–50% of industrial disputes in India. Between 1976 and 1984,
wages and bonuses caused 32%–40% of industrial disputes in the country.

Personnel and retrenchment

Retrenchment and personnel issues are also a big cause of industrial disputes in India and are the
primary causes of industrial disputes. Between 1961 and 1976, they caused almost 29% of all
disputes. From 1981 to 1984, 21% to 22% of all industrial disputes in the country were attributed to
retrenchment and personnel issues.

Demand for Improving Working Conditions

Industrial disputes in India arose because workers wanted improved work conditions, such as time
off, fewer hours, better safety measures, canteens, among other amenities. These demands cause
approximately 2% to 3% of all disagreements.

21. what is Human Resource information system and its role in Human Resource Management

A Human Resource Information System (HRIS) is a software or online solution designed to manage
and streamline various human resource functions within an organization. It serves as a central
repository for employee data and integrates multiple HR activities, such as payroll, recruitment,
performance management, benefits administration, and compliance tracking. The role of an HRIS in
Human Resource Management (HRM) is multifaceted and pivotal in enhancing the efficiency and
effectiveness of HR operations.

Role of HRIS in Human Resource Management

Data Management and Storage:

Centralized Database: HRIS stores comprehensive employee information, including personal details,
employment history, performance records, and benefits.

Easy Access and Retrieval: Provides quick and easy access to employee data for HR professionals,
enabling efficient data management and reporting.

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Recruitment and Hiring:

Applicant Tracking: Streamlines the recruitment process by tracking job applicants, managing
resumes, and scheduling interviews.

Onboarding: Automates the onboarding process for new hires, ensuring a smooth and efficient
integration into the organization.

22. what is the importance of succession planning in human resource development

Succession planning is a crucial aspect of human resource development, ensuring the long-term
sustainability and success of an organization. It involves identifying and developing potential future
leaders from within the organization to fill key positions as they become vacant. Here are the key
reasons why succession planning is important in human resource development:

Ensures Continuity and Stability:

• Leadership Continuity: Succession planning helps maintain continuity in leadership by

preparing qualified individuals to step into critical roles, minimizing disruptions during
transitions.
• Business Stability: By having a clear plan for succession, organizations can avoid the
uncertainty and instability that can arise from unexpected vacancies, ensuring smooth
operations.

Talent Development and Retention:

• Employee Development: Succession planning encourages the systematic development of

employees, providing them with the necessary training, mentoring, and career growth
opportunities.
• Retention of Top Talent: Employees are more likely to stay with an organization that invests
in their career development and provides clear pathways for advancement, reducing
turnover rates.
23. how industrial dispute can be resolve
• Negotiation: Direct discussions between disputing parties to find a compromise.

• Mediation: Involves a neutral third party assisting parties to reach a settlement.

• Arbitration: An independent arbitrator makes a binding decision to resolve the dispute.

• Conciliation: A third party suggests solutions to help parties voluntarily agree.

• Collective Bargaining: Negotiation between trade unions and management to reach

agreements on employment terms.

• Legal Action: Resolving disputes through courts or tribunals, often involving formal legal
proceedings.

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 24. cp.cp

25. how leadership play a important role in succession planning

Succession planning is a crucial process for any organization's long-term success. In this process,
leadership plays a pivotal role by identifying, nurturing, and preparing the next generation of leaders.
By setting a clear vision and strategic direction, leaders can delineate the skills and competencies
necessary for future leadership roles. They actively identify high-potential talent within the
organization, offering mentorship, development opportunities, and exposure to diverse experiences.
Leaders contribute valuable insights during succession planning discussions, assessing candidates'
readiness and providing input on their strengths and areas for growth. By fostering a culture of
inclusion and supporting diversity in leadership development, leaders ensure that the organization's
succession pipeline reflects a breadth of perspectives and talents. Ultimately, leadership's
commitment to succession planning is instrumental in securing the organization's long-term success
and resilience by cultivating a robust pool of capable leaders prepared to navigate future challenges
and opportunities.

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 26. difference between human resource management and human resource development

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