EKLAVYA ACADEMY

COMMERCE & MANAGEMENT

BUSINESS MANAGEMEN

By,
Mrs. Abhilasha. N
M.Com, MPhil, NET-JRF,SET, (Ph.D. in commerce),
Contact No: 9620925899
TRAINING

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 TRAINING AND DEVELOPMENT
TRAINING (MANY)
•It is the process in which employees get
an opportunity to develop skills,
competency and knowledge as per the job
requirement
• Short term and present
• Job oriented and specific job related
•Improves work performance of
the employees
• Reactive process to meet current needs
DEVELOPMENT (ONLY)
•It is a educational process which is
concerned with overall growth of the
employees
• Long term and future
•Career oriented and aims at conceptual
and general knowledge
•To prepare employees for future
challenges
• Proactive process to meet future needs
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TYPES OFTRAINING
ON THE JOB TRAINING OFF THE JOB TRAINING
(Trainee learns under the guidance and (Trainee learns outside the organisation and devote
supervisions of the supervisor) full time on learning)
1) Coaching- In this method superior guides and instructs the trainee as a coach. The coach
or counsellor sets mutually agreed upon goals, suggest how to achieve these goals,
periodically reviews the trainee’s progress and suggest chances required in behavior &
performance. It is a learning by doing.
2) Understudy – An understudy is a person selected and being trained as the heir apparent
to assume at a future time the full duties & responsibilities of the position presently held
by his superior.
3) Position rotation- It involves movement or transfer of executives from one position or
job to another on some planned basis. It is also known as job rotation. Aim is to broaden
the knowledge, skills & outlook of executives. It is a horizontal process.
4) Project assignment – A number of trainee executives are put together to work on a
project directly related to their functional area. The group called project team or task force
will study the problem & find appropriate solutions.
5) Committee assignment- A permanent committee consisting of trainee executives is
constituted & all the trainees participate in the deliberations of committee.
6) Multiple management- This technique is developed by Charles Mc cormick. Under it a
junior board of young executives constituted and major problems are analyzed in the
junior board which makes recommendations to the board of directors.
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7. Selective readings- By reading selected professional books and journals, managers can
keep in touch with the latest research findings, theories & techniques in management.
8)Lectures- These are formally organized talks by an instructor on specific topics. It is a one
way communication as listeners are passive.
9) Group Discussion – under it, paper is prepared and presented by one or more trainees and
presented by one or more trainees on the selected topic and followed by critical evaluation.
10)Case study- under it, a real or hypothetical business problem or situation demanding
solution is presented in writing to the trainees. They are required to identify & analyse the
problem, suggests & evaluate alternative course of action and choose the most appropriate
solution.
11)Conference method- it is a formal meeting conducted in accordance with an organized
plan, problems of common interest are discussed. The participants pool their ideas &
experiences to deal with the problems effectively.
12)Role playing – In this method the trainees act out a given role as they would in a stage
play. Two or more trainees are assigned parts to play before the rest of the class. Thus it is a
method of human interaction which involves realistic behavior in an imaginary or
hypothetical situation. It involves simulation i.e creating an environment similar to real work
situation, two other methods based on simulation are in basket & management games.
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13) In basket exercise- In this method, the trainee is provided with a basket or tray of papers
files related to his functional areas. He is expected to carefully study these & make his own
recommendation on the problem situation. The recommendations, observations of different
trainees are compared & conclusions are arrived at.
14. Management games- Management or business games are designed to be representative of
real life situations. These are classroom simulation exercise in which teams of individuals
compete against one another or against an environment in order to achieve a given objectives.
15)Programmed Instructions- This method incorporates a pre- arranged and proposed
acquisitions of some specific skills or general knowledge. Information is broken into
meaningful units & these units are arranged in proper way to form a logical & sequential
learning package. The package involves presenting questions, allowing learners to respond and
instant feedback is given to indicate the accuracy of answers.
16)Sensitivity training – This method is also called T-group training and laboratory training.
The purpose is to increase self- awareness, develop interpersonal competence & sharpen
teamwork skills. It was developed by Kurt lewin. It is a group experience designed to provide
maximum possible opportunity for the individuals to expose their behavior give and receive
feedback, experiment with new behavior and develop awareness of self & of others.
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 SUCCESSION PLANNING
“Process of identifying and developing new leaders who can replace old
leaders when they leave, retire or die”. It is also called as “REPLACEMENT
PLANNING”

PROCESS OF SUCCESSION PLANNING:

1. Identify positions
2. Identify skills
3. Assess the people
4. Develop plan
5. Monitor plan
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 SIX SIGMA
Motorola corporation introduced this concept which aims to improve quality and reduce
cost so as to increase customer satisfactions. The ultimate target is zero defect production
and process.
DMAIC : Define, measure, analyse, improve and control
KAIZEN:
“It refers to continuous improvement with the involvement of everybody in
the organisation so as to generate customer value”
BENCH MARKING
“It is given by Xerox Corporation. It is the process of identifying, studying and building
best practices in industry to match competitors.

TOTAL QUALITY MANAGEMENT (TQM)

“It is the continuous improvement in all aspects of an organisation with the
involvement of everyone”
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 PERFORMANCE APPRAISAL

• Earlier Performance Appraisal is known by different name as Man To Man Rating,

Rating Scores, Merit Rating.

• Performance appraisal is the systematic, periodic and impartial rating of an employee

excellence in matters pertaining to his present job& his potential for a better job.

• Performance appraisal and merit rating used as synonymously but performance

appraisal is a wider term than merit rating.

• Merit rating- To decide salary increment.

• Performance Appraisal- Focus on the performance & future potential of employee.

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FEATURES OF PERFORMANCE APPRAISAL

1) It is a series of steps.

2) It is a systematic examination.

3) It is a scientific & objective study

4) It is an ongoing or continuous process.

5) It secure information for making correct decisions.

6) It aims at both Judgementals & development efforts.

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PROCESS OF PERFORMANCE APPRAISAL

1) Establishing performance standards

2) Communicating the standards

3) Measuring performance

4) Comparing the actual with the standard performance

5) Discussing the appraisal

6) Taking corrective actions

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 PROBLEMS IN PERFORMANCE APPRAISAL
1) ERRORS IN RATING
A) Hallo Effect- It is the tendency to rate an employee consistently high or low on the basis
of overall impression.
B) Stereotyping- This implies forming a mental picture of a person on the basis of his age,
sex, caste or religion.
C) Central Tendency- It means assigning average ratings to all the employees in order to
avoid commitment or involvement.
D) Constant Error- some evaluators tend to be lenient so performance is overrated
(leniency norms) some are strict so performance is underrated (strictness error)
E) Personal Bias- performance appraisal depends on rater likes or dislikes.

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 PROBLEMS IN PERFORMANCE APPRAISAL

F) Spill-Over Effect- This arises when past performance affects assessment of present
performance. Recent behavior or performance of an employee may be used to judge him
this is called recency.
2) Lack of reliability- Reliability implies stability & consistency in the measurement.
3) Incompetence- Raters may fail to evaluate performance accurately due to lack of
knowledge & experience.
4) Negative approach
5) Multiple objectives
6) Resistance
7) Lack of knowledge
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ESSENTIALS OF AN EFFECTIVE PERFORMANCE
APPRAISAL SYSTEM :

1) Mutual trust
2) Clear objectives
3) Standardization
4) Training
5) Job relatedness
6) Documentation
7) Feedback & participation
8) Individual differences
9) Post appraisal interview, review & appeal.
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METHODS OF PERFORMANCE APPRAISAL

TRADITIONAL METHOD MODERN MOTHOD

1) Confidential report. 1) Assessment center.
2) Free form & essay. 2) Human resource accounting.
3) Straight ranking. 3) BARS (Behaviorally
4) Paired Comparison. anchored rating scales.
5) Forced distribution. 4) Appraisal through MBO.
6) Graphic rating scales. 5) 360” Degree appraisal
7) Checklist method.
8) Critical incidence.
9)Group appraisal.
10)Field review.

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METHODS IN PERFORMANCE
➢ Confidential Report – It is a report prepared by the employee’s immediate superior. It
covers the strengths & weakness, achievement & failure of employee. It is descriptive
appraisal used for promotions & transfers of employees. As appraisal is based on
impression rather that data.
➢ Free Form Or Essay Method- under this evaluator writes a short essay on the
employee’s performance on the basis of overall impression.
➢ Straight Ranking Method- The evaluator assigns relative ranks to all the employees in
the same work unit doing the same job. Employees are ranked from the basis of overall
performance. Oldest & simplest method.
➢ Paired Comparison Method – modified of form of straight ranking each employee is
judged better than the other determines his rank. Comparison is made on the basis of
overall performance.
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➢ Forced Distribution Method – The rates is required to distribute his ratings in the form of a
normal frequency distribution. The purpose is to eliminate the rater’s bias of central tendency
based on the questionable assumption that all groups of employees have the same distribution of
good & performance.
➢ Graphic Rating Scales- It is a numerical scale indicating different degrees of particular trait. The
rates is given a printed form for each employee which contains several characteristics relating to
the personality & performance of employees. The numerical points given to an employee are
added up to find out his overall performance a standing in the group. Two scale – 1) continuous
scale (0 to 5) 2) discrete or discontinuous scale (in the form of square box).
➢ Critical Incidence Method – In this method the superior keeps a written record of critical events
and how different employees behaved during such events. The rating of an employee depends on
his positive/ negative behaviors during this event.
➢ Group Appraisal Method- under this method a group of evaluators assesses employees. The
group determine the standards of performance for the job, measures actual performance of an
employee analyze the causes of poor performance and offer suggestions for improvement in
future.
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➢ Checklist Method – A checklist is a list of statements that describe the characteristics & performance
of employees on the job. The rater checks to indicate if the behavior of an employee is positive or
negative to each statement. The performance of an employee is rated on the basis of number of
positive checks.
➢ Field Review Method – In this method a training officer from the human resource department
interviews line superiors to evaluate their respective subordinates. The interviewer prepares in
advance the questions to be asked. By answering these questions a supervisor gives his opinions
about the level of performance of his subordinate, the subordinates work progress, his strengths &
weakness.
➢ Assessment Center Method- An assessment center is a group of employees drawn from different
work units. These employees work together on an assignment similar to the one they would be
handling when promoted. Assessment center generally measures interpersonal skills, communicating
ability, ability to plan & organize. It help to determine training & development needs of employees.
➢ Field Review Method – In this method a training officer from the human resource department
interviews line superiors to evaluate their respective subordinates. The interviewer prepares in
advance the questions to be asked. By answering these questions a supervisor gives his opinions
about the level of performance of his subordinate, the subordinates work progress, his strengths &
weakness. EKLAVYA- 9620925899
➢ Assessment Center Method- An assessment center is a group of employees drawn from different
work units. These employees work together on an assignment similar to the one they would be
handling when promoted. Assessment center generally measures interpersonal skills, communicating
ability, ability to plan & organize. It help to determine training & development needs of employees.
➢ Human Resource Accounting Method – under this method a performance is judged in terms of
costs, contributions of employees. Cost of human resources consist of expenditure n human resource
planning, recruitment, selection, induction, training etc. difference between cost and contributions of
employees will reflect the performance of employees.
➢ BARS (Behaviorally Anchored Rating Scale) – It includes graphic rating scale + critical incidence method.
The rater records the observable job behavior of an employee & compares these observations with BARS.
BARS are descriptions of various degree of behavior relating to specific performance dimension. The ratings
are likely to be accurate because these are done by experts. Behaviors used are more activity oriented than
result oriented, time consuming and expensive too.
➢ Performance Appraisal Through MBO (Management By Objectives) – The concept was developed by
Peter F Drucker In 1954. It is also known as Management By Results. It is a process whereby the superior and
subordinates managers of an organization jointly identify its common goals, define each individuals major
areas of responsibility in terms of result expected of him & uses these measures as guides for operating the
unit & assessing the contribution of each of its members.
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 • Steps of MBO- set organizational objectives> define performance targets> performance
review> feedback.
➢ 360’ Appraisal- In order to make appraisal more objective, transparent & participative
concepts such as Self- Appraisal, Peer- Appraisal, Subordinates Appraisal, Superior
Appraisal were introduced. It involves evaluation of managers by everyone. Structured
questions are used to collect responses about a manger from his bosses, peers, Subordinate.

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 IMPORTANT TERMINOLY
➢ Internal mobility : Employees moves from one job to another within an organization through
transfers, promotions & demotions such movement is known as internal mobility.
➢ External mobility: Employees leaves the organizations due to resignation, retirement and termination
is called external mobility.
➢ Transfers- It refers to a horizontal or lateral movement of an employee from one job to another in the
same organization without any significant change in status & pay.
➢ Promotion- It refers to advancement of an employee to a higher post carrying greater responsibility
higher status & better salary. It is the upward movement of an employee in the organization hierarchy.
➢ When an employee is assigned to a higher level job without increase in pay it is called a dry
promotion.
➢ Up gradation implies movement of an employee to higher pay scale without change of job.
➢ Demotion – It implies the assignment of an employee to a job of lower rank with lower pay it refers to
downward movement of an employee in the organizational hierarchy with lower status & lower
salary. EKLAVYA- 9620925899
➢ Resignation- Resignation or quit is a voluntary separation initiated by the employee himself. An
employee may resign on grounds of ill health, marriage, pregnancy better opportunities in other
organizations.
➢ Retirement- It is the main cause of separation of employees from the organizations. Compulsory
retirement – after attaining specified age. Pre mature retirement- retire before attaining the
specified age because of ill health, family problem etc. voluntary retirement- when an
organizations want to cut down its operations or to close forever, it may give an option to its
employees with a certain minimum service for voluntary retirement in return for a lump sum
payment. It is called golden handshake scheme.
➢ Layoff- It implies temporary removal of an employee from the payroll of the organization due to
circumstances beyond the control of the employer.
➢ Retrenchment – It means permanent termination of an employee’s service for economic
reasons of a concern.
➢ Dismissal- It refers to terminating the service of an employee by way of punishment,
misconduct or unsatisfactory performance.
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➢ Exit interview- It is an interview held with an employee who is leaving the organization voluntarily.
The purpose of an exit interview is to find out the reasons why the employee is leaving.

➢ Outplacement- It is a human resource programme used to help separated employees deal with the
emotional stress of job loss & to provide assistance in finding a new job.

➢ Absenteeism – It means the failure of a worker to report for work when he is scheduled to work.
Absenteeism is unauthorized, avoidable & willful absence from duty.

➢ Labour turnover (attrition) – It refers to the rate of change in the workforce of an enterprise during
a given period. The time to time changes in the composition of the workforce that result from hiring,
release & replacement of employee. It is a measure of extent to which old employees leave & new
employee enter the service of a concern.

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1. Which one of the following is not the operative function of HRM?

(A)Development

(B) Controlling

(C ) Compensation

(D) Integration

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2.Under which method of performance appraisal one person is compared
with all others for the purpose of placing them in a simple order of work?

(A) Grading

(B) Person to Person comparison

(C) Ranking

(D) None of the above

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3. The purpose of job evaluation is

(A) Fixation of Responsibility

(B) Promotion

(C) Wages determination

(D) Transfer to a better job

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4. What is M.B.O?

(A) Management by objective

(B) Multiple Business Organisation

(C) Management by Organisation

(D) Multiplicity of Business Operations

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5. Which among the following are parts of job description?
i. duties performed
ii. Job summary
iii. Job identification
iv. Supervision given
v. Delegation of authority
(A) i ii iii and iv
(B) ii, iii, iv and v
(C) i, iii, iv, and v
(D) i, ii, iii and v

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6. Appointment of independent Directors is the part of Corporate
Governance as per the

a) SEBI

b) Indian Companies Act, 1956

c) Government of India

d) RBI

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7. HRM does not include

a) job evaluation

b) performance appraisal

c) Sales promotions

d) job enrichment

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8. Induction of employees relates to

a) Organisational awareness

b) Training programme

c) Introduction

d) Assignment of duties

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10. Which of the followings are the modern method of performance appraisal?
I. 360 degree performance appraisal.
II. Graphic rating scale.
III. Management By Objectives (MBO).
IV. Forced distribution method.
V.Behaviourally Anchored Rating Scales (BARS).
Select the correct answer from the codes given below:
(A) (i), (ii), (iii)
(B) (ii), (iv), (v)
(C) (i), (iii), (v)
(D) (iv), (ii), (i)
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9. Which of the following is not included in the model of the systems
approach to Human Resource Management?

a) Human Resource Planning

b) Recruitment and Selection

c) Performance appraisal

d) Departmentation

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11. HRM is viewed as a management process, consisting of four functional activities :
(i) Acquisition
(ii) Motivation
(iii) Development
(iv) Resolution of industrial disputes
(v) Maintenance
Select the correct combination:
(i), (ii), (iii) and (iv)
(B) (i), (ii), (iii) and (v)
(C) (i), (ii), (iv) and (v)
(D) (i), (iii), (iv) and (v)

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12. Which among the following is the most popular approach for accomplishing the
results?

(A) Management by exception

(B) Reward system

(C) Management of objectives

(D) Mentor system

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