Unit - 3

Employee Training and

Development
 Employee training
• Employee training is defined as a planned set of activities for imparting
knowledge to employees, such that it leads to a growth in job skills
required for organizational growth.
• Employee training and development is a crucial aspect of organizational growth
and success. It involves activities and initiatives aimed at enhancing employees'
knowledge, skills, and competencies to improve their performance, productivity,
and overall job satisfaction. Here are the key elements and benefits of employee
training and development:
• 1. Training Needs Assessment: Before designing training programs,
organizations conduct a training needs assessment to identify the skills and
knowledge gaps within the workforce. This assessment can be done through
surveys, performance evaluations, skill assessments, or employee feedback.
• 2. Training Program Design: Based on the identified training needs, organizations design training programs
that align with their strategic objectives and address the specific skill gaps. Training programs can be
conducted in various formats, such as classroom-style workshops, online courses, on-the-job training,
mentoring, coaching, or a combination of these methods.
• 3. Skills Development: Training programs focus on developing both technical and soft skills relevant to
employees' roles and career growth. Technical training covers job-specific knowledge, tools, systems, and
processes, while soft skills training may include communication, leadership, problem-solving, teamwork,
and time management.
• 4. Onboarding and Orientation: Training and development start with onboarding and orientation programs
for new employees. These programs help new hires understand the company culture, policies, procedures,
and job expectations. It ensures a smooth transition into their roles and helps them become productive
members of the organization.
• 5. Continuous Learning: Employee training and development are not limited to new hires. Continuous
learning opportunities are provided throughout an employee's career to keep skills updated, adapt to
industry changes, and foster professional growth. This can include workshops, conferences, webinars, e-
learning platforms, and educational reimbursements.
• 6. Leadership Development: Organizations invest in leadership development programs to cultivate future leaders
within the company. These programs provide leadership skills training, mentorship, coaching, and opportunities to
take on challenging assignments or projects to develop managerial capabilities.
• 7. Performance Improvement: Training and development initiatives directly contribute to improving employee
performance. By providing employees with the necessary skills and knowledge, organizations can enhance
individual and team productivity, quality of work, and overall organizational performance.
• 8. Employee Engagement and Retention: Offering training and development opportunities shows a commitment to
employee growth and development, which leads to increased engagement and job satisfaction. Employees feel
valued when organizations invest in their professional development, which, in turn, improves employee retention
rates.
• 9. Adaptation to Technological Changes: In a rapidly evolving technological landscape, organizations need to ensure
employees are equipped with the skills to utilize new technologies effectively. Training programs help employees
stay updated with technological advancements and leverage them for increased efficiency and innovation.
• 10. Succession Planning: Training and development efforts also play a role in succession planning. By identifying
and developing high-potential employees, organizations can groom them for future leadership roles, ensuring a
smooth transition when key positions become vacant.
 Importance of Employee Training
• 1. Enhances Employee Skills and Knowledge: Training provides employees with the opportunity to develop and
enhance their skills, knowledge, and competencies. It equips them with the necessary tools a techniques to perform
their job roles effectively and efficiently. Whether it's technical skills, industry-specific knowledge, or soft skills like
communication and problem-solving, training helps employees stay updated a relevant in their fields.
• 2. Improves Job Performance: Proper training leads to improved job performance. When employees receive training
that aligns with their roles and responsibilities, they gain a deeper understanding of their tasks, processes, and best
practices. This, in turn, increases their confidence and competence, allowing them to perform their jobs more
effectively and achieve better results.
• 3. Boosts Employee Morale and Job Satisfaction: Employees who receive training feel valued and appreciated by
their organization. They recognize that their employer is investing in their professional development, which
contributes to higher job satisfaction and increased morale. Training creates a positive work environment and a
culture of continuous learning, fostering a sense of commitment and loyalty among employees.
• 4. Facilitates Adaptation to Change: In today's fast-paced and ever-changing business landscape, organizations need
employees who can adapt quickly to new technologies, processes, or market trends. Training helps employees
acquire the skills and knowledge necessary to embrace change and navigate transitions effectively. It prepares them
to handle new challenges and ensures they remain agile and competitive in their roles.
• 5. Promotes Employee Engagement and Retention: Employees who receive training are more engaged in
their work. They feel motivated and challenged to apply their newly acquired skills, which leads to increased
productivity and job satisfaction. Moreover, organizations that invest in training demonstrate a commitment
to their employees' growth and development, which helps in attracting and retaining top talent.
• 6. Enhances Organizational Performance and Productivity: Well-trained employees contribute to improved
organizational performance and productivity. When employees possess the necessary skills and knowledge,
they can perform their tasks efficiently, make informed decisions, and contribute to achieving business goals.
Training helps align individual performance with organizational objectives, resulting in overall growth and
success.
• 7. Supports Innovation and Creativity: Training programs can encourage creativity, innovation, and problem-
solving skills among employees. By providing them with new perspectives, knowledge, and tools, training
opens up opportunities for fresh ideas and approaches. It empowers employees to think critically, identify
new solutions, and contribute to continuous improvement within the organization.
• 8. Ensures Compliance and Risk Management: Training plays a crucial role in ensuring compliance with
laws, regulations, and industry standards. It educates employees on legal and ethical guidelines, safety
protocols, data protection measures, and other regulatory requirements. Compliance training helps mitigate
risks and prevent costly legal and reputational consequences for organizations.
• 9. Supports Succession Planning and Career Development: Training is essential for developing future leaders
within an organization. It allows organizations to identify high-potential employees and provide them with
the necessary training and development opportunities to prepare them for leadership roles. Additionally,
training programs help employees advance their careers by acquiring new skills, certifications, and
qualifications.
• 10. Builds a Learning Culture: Training fosters a culture of continuous learning within organizations. When
employees are encouraged and supported in their professional growth, they are more likely to seek out new
knowledge, share insights, and contribute to a culture of learning and innovation. This helps organizations
stay competitive, adapt to market changes, and embrace new opportunities.
 Methods of Training
On-the-Job Training Methods
• Following are the On-The-Job methods:
• Apprenticeship Programs: Apprenticeship programs place the trainee under the guidance of
well-trained personnel. These programs are designed to obtain skills and knowledge of higher
levels. Such programs are necessary for people entering skilled jobs, like, plumbers, electricians,
etc. These apprentices are trainees who enter into these programs and invest some time working
under the guidance of a professional or a trainer. The trainees are required to spend a specified
time here where both fast and slow learners are trained together. The slow learners may be
provided with additional training.
• Coaching: In this method, the trainer who is known as the coach guides and instructs the trainee.
The coach or the trainer sets the required goals with a mutual discussion, advises on how to
achieve those goals, analyzes the trainees’ progress from time to time, and suggests changes
necessary in the attitude and performance. The trainee works under the senior manager and the
manager takes full responsibility for the employees’ training. The training is done to take the place
of the senior manager so that he can be freed from some of his duties. This is also a chance for the
trainee to learn about his job and the working of the organization.
• Internship Training: Internship training is a cooperation of educational institutions and business
firms. These trainings are generally a joint program. The candidates who are selected continue to
pursue their studies regularly and also work in a factory or office to gain the practical knowledge
and skills required for a job.
• Job Rotation: Job rotation involves shifting trainees from one job to another . This allows the
trainee to gain a better understanding of the working of the organization and all its parts. The
rotation enables the trainee to indulge in all kinds of operations, and also allows them to enhance
their knowledge and skills. This is also beneficial for the trainees, as they get to interact with other
employees, which creates cooperation among employees. Such training of employees makes it
easier for the organization at the time of promotions, replacements, or transfers.
 Off-the-Job Training Methods

• Following are the Off-the-Job methods:

• Class Room Lectures or Conferences: The lecture or conference method is generally used for
conveying specific information, rules, procedures, or methods. The use of audio-visual means
makes a formal classroom presentation more interesting along with increasing the memory and
proving an instrument for clearing difficulties or doubts.
• Films: Films supply information and show a definite display of skills that are not easily
represented by other techniques. The use of films together with conference discussion is a very
effective method in most cases.
• Case Study: Case studies are the actual experiences faced by the organization. They display the
events that the managers have faced in real life. The trainees study these cases and analyze them
sincerely to find out the problems and their causes, come up with possible solutions, select the best
solution and at last, implement it.
• Computer Modelling: It encourages the work environment by developing a computer program
that copies a few of the realities of the job and enables learning to take place securely. It also
allows the organization to see the mistakes that may occur and how much they would cost. This
saves the organization from making mistakes in such situations in real life.
• Vestibule Training: In vestibule training, the employees are given training on the equipment that
they will be using during their jobs. Though the training is conducted away from the actual
workplace, the trainees are provided with a work environment in which all the pieces of
equipment, files, and materials to be used are present. This method is usually used when the
employees need to handle advanced or complex equipment and machinery.
• Programmed Instruction: Such a method includes a predetermined and proposed acquisition of
some definite skills or general knowledge. In this method, the information is divided into
meaningful units, and these units are arranged in a proper way to form a logical and consecutive
learning bundle or collection, i.e., from simple to complex. The trainee is required to answer the
questions asked or by filling in the blanks.
 Types of Training
• 1. Orientation Training: Orientation training, also known as onboarding, is provided to new employees
to familiarize them with the organization's culture, policies, procedures, and work environment. It helps
new hires quickly adapt to their roles and become productive members of the organization.
• 2. Technical Skills Training: Technical skills training focuses on developing specific job-related skills
and knowledge. It can include training on operating machinery, using software applications,
understanding technical processes, or acquiring industry-specific expertise. Technical skills training
ensures employees have the competencies required to perform their jobs effectively.
• 3. Soft Skills Training: Soft skills training focuses on developing interpersonal and behavioral skills
that are essential for effective communication, teamwork, leadership, problem-solving, and customer
service. Examples of soft skills training include communication skills, emotional intelligence, time
management, conflict resolution, and presentation skills.
• 4. Compliance and Regulatory Training: Compliance and regulatory training ensure that employees
understand and comply with laws, regulations, and industry standards relevant to their roles. It covers
topics such as workplace safety, data privacy, diversity and inclusion, ethical conduct, and anti-
harassment policies. Compliance training helps organizations mitigate risks and maintain legal and
ethical standards.
• 5. Sales and Customer Service Training: Sales and customer service training are specifically designed for
employees involved in sales or customer-facing roles. It equips them with the skills and techniques needed to
understand customer needs, build relationships, handle objections, and effectively sell products or services.
This training enhances customer satisfaction and sales performance.
• 6. Leadership and Management Training: Leadership and management training focuses on developing
leadership skills among employees at different levels of the organization. It covers topics such as strategic
thinking, decision-making, communication, team management, and performance evaluation. Leadership
training prepares employees for managerial roles and cultivates future leaders within the organization.
• 7. Diversity and Inclusion Training: Diversity and inclusion training promotes awareness and understanding
of diversity, equity, and inclusion in the workplace. It helps employees recognize and challenge biases, foster
inclusive work environments, and value individual differences. Diversity and inclusion training enhances
teamwork, collaboration, and employee satisfaction.
• 8. Professional Development Training: Professional development training aims to enhance employees' overall
professional growth and career advancement. It can include training on project management, problem-
solving, critical thinking, negotiation skills, presentation skills, and networking. Professional development
training enables employees to continuously upgrade their skills and knowledge.
• 9. Team Building Training: Team building training focuses on improving collaboration,
communication, and teamwork among employees. It includes activities and exercises that foster
trust, enhance interpersonal relationships, and promote effective teamwork. Team building training
contributes to better coordination, increased productivity, and a positive work environment.
• 10. Change Management Training: Change management training prepares employees to adapt to
organizational changes, such as new processes, systems, or restructuring. It helps employees
understand the reasons behind the change, overcome resistance, and acquire the skills needed to
navigate and thrive in a changing environment.
Career planning
• Career planning involves the process of setting goals, identifying career paths, and creating development
plans to help employees achieve their professional objectives. It includes assessing employees' skills,
interests, and aspirations, and aligning them with organizational needs. Career planning supports employees
in mapping out their desired career trajectories and guides them in acquiring the necessary skills and
experiences to progress in their chosen paths.
• 1. Self-Assessment: Start by assessing your interests, values, personality traits, and skills. Reflect on your
strengths, weaknesses, and areas of improvement. Consider what motivates and energizes you in your work.
This self-assessment helps you understand yourself better and identify career paths that align with your
interests and strengths.
• 2. Define Career Goals: Set clear and specific career goals based on your self-assessment. Determine the
level of responsibility, the desired position or role, the industry or field you want to work in, and any other
relevant factors. Your goals should be challenging yet achievable and aligned with your long-term aspirations.
• 3. Research Career Options: Explore different career options that match your interests and goals. Conduct
research on industries, job roles, and organizations that appeal to you. Consider factors such as job
prospects, growth opportunities, work-life balance, and required qualifications. Talk to professionals in fields
of interest and gather information through online resources, networking, and informational interviews.
• 4. Identify Development Needs: Assess the skills and qualifications required for your desired career path Identify
any gaps in your current skill set and knowledge. Determine the training, education, or experiences needed to
bridge those gaps. This helps you create a development plan to acquire the necessary competencies and make
yourself more marketable in your chosen field.
• 5. Create a Career Action Plan: Develop a concrete action plan with specific steps and timelines to achieve your
career goals. Break down your goals into smaller, manageable tasks. Include milestones, deadlines, and
evaluation points to track your progress. Your action plan may include activities such as acquiring certifications,
attending workshops, pursuing higher education, seeking mentorship, or taking on new projects at work.
• 6. Seek Development Opportunities: Actively pursue opportunities to develop your skills and gain experience.
Look for training programs, workshops, seminars, or conferences that can enhance your knowledge and
competencies. Seek out projects or assignments that allow you to expand your skill set and showcase your
abilities. Take advantage of networking events and mentorship opportunities to learn from experienced
professionals in your field.
• 7. Review and Adjust: Regularly review and assess your progress in relation to your career goals. Evaluate
whether you are on track or if any adjustments need to be made to your action plan. Revisit your goals
periodically to ensure they are still aligned with your interests and aspirations. Be open to reevaluating and
adjusting your career path as needed.
Process of Career Planning

• Self- Assessment
• Define Career Goals
• Research Career Options
• Identify Development Needs
• Create a Career Action Plan
• Seek Development Opportunities
• Review and Adjust
• Continuous Learning and Adaptation
Promotions
• Promotion refers to the advancement of an employee to a higher-level position within an organization,
typically accompanied by increased responsibilities, authority, and often higher compensation. Promotions are
an important aspect of career development and recognition of an employee's accomplishments and potential.
Here are some key points to understand about promotions:
• 1. Performance and Merit: Promotions are usually based on an employee's performance and merit.
Organizations typically consider factors such as job performance, achievements, skills, experience, and
potential when determining whether an employee is ready for promotion. Consistently demonstrating high
performance and exceeding expectations in current roles increases the likelihood of being considered for
promotion.
• 2. Job Requirements and Qualifications: Promotions often involve taking on more challenging roles or positions
with greater responsibilities. Employees need to meet the job requirements and qualifications for the higher-
level position, including the necessary skills, knowledge, and experience. It's important for employees to
proactively develop and acquire the competencies needed for advancement within their chosen career paths.
• 3. Recognition and Rewards: Promotions serve as a form of recognition and reward for an employee's
contributions and dedication to their work. They demonstrate that the organization values and acknowledges
an employee's efforts and achievements. Promotions often come with increased compensation, benefits, and
opportunities for career growth.
• 4. Career Advancement and Development: Promotions play a crucial role in an employee's career advancement and
development. Moving to higher-level positions provides new challenges, learning opportunities, and the chance to
expand skills and expertise. Promotions can also lead to increased visibility within the organization, broader
networks, and exposure to new projects and responsibilities.
• 5. Clear Criteria and Promotion Policies: To ensure fairness and transparency in the promotion process, organizations
should have clear criteria and promotion policies in place. These criteria should be communicated to employees,
outlining the performance expectations, competencies, and experience required for each level of promotion.
Organizations may also establish promotion timelines and guidelines to ensure consistency and equal opportunities
for employees.
• 6. Career Pathing and Succession Planning: Organizations can support employee promotions by implementing career
pathing and succession planning strategies. Career pathing involves mapping out potential career trajectories within
the organization and providing guidance on the skills and experiences needed for advancement. Succession planning
identifies high-potential employees who can fill key positions in the future and prepares them for leadership roles
through targeted development initiatives.
• 7. Communication and Feedback: Transparent communication and regular feedback are essential during the
promotion process. Managers should provide constructive feedback to employees, helping them understand areas
for improvement and development. When promotions occur, managers should clearly communicate the reasons
behind the decision and provide guidance on the expectations and responsibilities of the new role.
Transfer
• A transfer in an organizational context refers to the movement of an employee from one
position or department to another within the same organization. Transfers can be
voluntary or initiated by the organization, and they can occur for various reasons.
• 1. Reasons for Transfers: Transfers can happen due to several reasons, including:
• Organizational Needs: Transfers may occur to address changes in workload, staffing
requirements, or departmental restructuring.
• Employee Development: Transfers can be used as a means to provide employees with
new experiences, challenges, and opportunities for skill development.
• Employee Request: Sometimes, employees may request transfers to different
departments or locations for personal reasons, such as commuting convenience or
career interests.
• Talent Management: Organizations may initiate transfers to utilize and develop the skills
and potential of high-performing employees in different areas of the organization.
• 2. Types of Transfers: There are different types of transfers that can occur:
• Lateral Transfer: A lateral transfer involves moving an employee to a different position at a similar
level of responsibility, without a significant change in job title or compensation. Lateral transfers are
often aimed at providing employees with new experiences or addressing specific organizational
needs.
• Vertical Transfer: A vertical transfer refers to moving an employee to a higher or lower level position
with increased or decreased responsibilities and often accompanying changes in job title and
compensation. Vertical transfers can occur due to promotions, demotions, or changes in
organizational structure.
• Departmental Transfer: Departmental transfers involve moving an employee from one department to
another within the organization. This can be done to fill a need in another department, provide cross-
functional exposure, or align the employee's skills with the requirements of a different department.
• Geographic Transfer: A geographic transfer involves relocating an employee from one location to
another. This can be within the same organization or to a different branch or office location.
Geographic transfers may occur due to business expansion, operational needs, or employee requests.
• 3. Benefits of Transfers: Transfers can provide several benefits for both the organization and the
employee:
• Skill Development: Transfers offer employees the opportunity to gain new skills, knowledge, and
experiences by working in different roles or departments.
• Career Advancement: Transfers can help employees broaden their career horizons and increase
their chances of advancement by exposing them to different areas of the organization.
• Employee Engagement: Transfers can boost employee morale and engagement by providing fresh
challenges and reducing monotony or stagnation in a current role.
• Organizational Flexibility: Transfers enable organizations to respond to changing business needs,
utilize talent effectively, and optimize resource allocation.
• 4. Process and Considerations: When implementing transfers, organizations should consider the
following:
• Employee Preferences: Whenever possible, organizations should take into account employee
preferences, skills, and career aspirations when making transfer decisions.
• Communication and Support: Clear communication should be
provided to employees regarding the reasons for the transfer, the
expectations of the new role, and any support available to facilitate a
smooth transition.
• Employee Development: Organizations should ensure that employees
receive the necessary training and support to succeed in their new
positions and provide ongoing feedback and coaching.
• Fairness and Equity: Transfers should be implemented in a fair and
equitable manner, without any discriminatory practices, and based on
objective criteria and business needs.
Demotion
• Demotion, in an organizational context, refers to the downward movement of an employee from a higher-
level position to a lower-level position within the same organization. It typically involves a reduction in job
responsibilities, authority, and often a decrease in compensation. Demotions can occur for various reasons,
and here's some information about demotions:
• 1. Reasons for Demotions: Demotions can happen due to several factors, including:
• Performance Issues: If an employee consistently fails to meet performance expectations or does not
perform at the required level, a demotion may be considered as a means to address performance concerns
and provide an opportunity for improvement.
• Disciplinary Action: In cases of serious misconduct, violation of company policies, or unethical behavior, a
demotion may be part of the disciplinary process as a consequence for the employee's actions.
• Organizational Restructuring: During times of organizational change, such as downsizing or restructuring,
demotions can occur as a way to realign the workforce and match available positions with the skills and
qualifications of employees.
• Job Redesign: When job roles or responsibilities change, and an employee's skills or capabilities no longer
align with the revised job requirements, a demotion may be considered to place the employee in a role
better suited to their current abilities.
• 2. Process and Considerations: Implementing a demotion should be handled carefully and thoughtfully,
considering the following factors:
• Communication: Clear and open communication is crucial when initiating a demotion. The reasons for
the demotion should be communicated to the employee in a professional and compassionate manner,
providing them with a clear understanding of the decision.
• Fairness and Consistency: Demotions should be carried out fairly and consistently, following established
policies and procedures. The criteria for demotion should be objective, applied consistently across
employees, and free from discrimination.
• Development and Support: After a demotion, employees should be provided with support and resources
to help them improve their performance, address any skill gaps, and regain confidence. Development
plans, training, coaching, or mentoring can be offered to assist the employee in their career recovery.
• Legal Considerations: It's essential to consult legal counsel and comply with employment laws and
regulations when implementing a demotion. Employment contracts, collective bargaining agreements,
and local labor laws should be considered to ensure that demotions are implemented within the
boundaries of legal requirements.
• 3. Employee Impact and Considerations: Demotions can have significant effects on
employees, and it's important to consider the following:
• Employee Morale and Motivation: Demotions can have a negative impact on an employee's
morale, self-esteem, and motivation. It's crucial to provide ongoing support,
encouragement, and opportunities for the employee to regain confidence and grow
professionally.
• Retention and Engagement: The demotion process can impact employee retention and
engagement.
• Organizations should proactively address the concerns of demoted employees, provide
opportunities for growth, and explore ways to re-engage them in their work.
• Alternative Solutions: Before resorting to a demotion, organizations may explore other
alternatives such as additional training, coaching, performance improvement plans, or role
changes that could help the employee improve their performance or address any skill gaps.
Separation
• Separation, refers to the process of an employee leaving their employment with a company. It can
occur for various reasons and can take different forms. Here are some common types of separations:
• 1. Resignation: Resignation occurs when an employee voluntarily chooses to terminate their
employment with the organization. Employees may resign due to personal reasons, career
advancement opportunities elsewhere, dissatisfaction with the current job or work environment, or a
desire for a change in career path.
• 2. Retirement: Retirement is a planned separation that occurs when an employee reaches a certain age
or fulfils specific eligibility criteria for retirement benefits. Retirement may be voluntary or mandatory,
depending on the organization's policies and employment agreements. Employees often retire to
enjoy their post-work years, pursue personal interests, or spend time with family.
• 3. Termination: Termination refers to the involuntary separation of an employee from their job by the
employer. This can happen due to various reasons, including poor performance, disciplinary issues,
violation of company policies, downsizing, restructuring, or the expiration of a fixed-term contract.
Termination can be a difficult and challenging experience for employees.
• 4. Layoff: A layoff is an involuntary separation initiated by the employer due to reasons beyond
the employee's control, such as economic downturns, restructuring, or the organization's need
to reduce its workforce. Unlike termination, layoffs are not a reflection of the employee's
performance but rather a response to external factors affecting the organization's financial
stability.
• 5. Retrenchment: Retrenchment refers to the permanent elimination of jobs or positions due to
factors such as financial constraints, technological advancements, or changes in business
strategy. It involves the organization downsizing or restructuring its operations, resulting in the
separation of employees from their roles. Retrenchment often involves offering severance
packages or outplacement services to support affected employees in finding new employment.
• 6. End of Contract: Separation can occur when an employee's fixed-term contract reaches its
predetermined end date. If the contract is not renewed or extended, the employee's
employment with the organization comes to an end. Contractual separations are often planned
in advance and are based on the terms outlined in the employment agreement.
Performance appraisal

• Performance appraisal, also known as performance evaluation or performance review, is a

systematic process of assessing and evaluating an employee's job performance and
productivity in relation to predetermined goals, expectations, and job requirements. It
involves gathering feedback, measuring performance against established criteria, and
providing constructive feedback to employees. Performance appraisals serve several
purposes within an organization, including:
• 1. Feedback and Communication: Performance appraisals provide a formal mechanism for
managers and supervisors to provide feedback to employees about their performance,
strengths, areas for improvement, and overall contributions to the organization. It facilitates
open and constructive communication between the employee and the supervisor.
• 2. Goal Setting and Alignment: Performance appraisals help align individual goals and
objectives with the broader organizational goals. The process often involves discussing and
setting specific, measurable, achievable, relevant, and time-bound (SMART) goals for the
upcoming performance period.
• 3. Performance Measurement: Performance appraisals involve assessing an employee's
performance against predetermined performance criteria, such as key performance
indicators (KPIs), job competencies, and behavioral expectations. It provides a quantitative
and qualitative assessment of how well an employee is meeting job requirements and
expectations.
• 4. Performance Recognition and Rewards: Performance appraisals can be used to
recognize and reward employees who have consistently performed well and achieved
their goals. It helps identify high-performing employees who may be eligible for salary
increases, bonuses, promotions, or other forms of recognition.
• 5. Performance Improvement and Development: For employees who may be struggling to
meet performance expectations, performance appraisals provide an opportunity to
identify areas for improvement and develop performance improvement plans. It enables
supervisors to offer support, training, mentoring, or additional resources to help
employees enhance their performance.
Performance Appraisal Process
• 1.Establishing performance standards
• The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to
compare the actual performance of the employees.
• This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of
their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in
measurable terms.
• In case the performance of the employee cannot be measured, great care should be taken to describe the standards.
• 2.Communicating the standards
• Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The
employees should be informed and the standards should be clearly explained to the employees. This will help them to understand
their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the
evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the
employees or the evaluators.
• 3.Measuring the actual performance
• The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the
work done by the employees during the specified period of time. It is a continuous process which involves monitoring the
performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking
care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an
employees work.
• 4.Comparing actual performance with desired performance
• The actual performance is compared with the desired or the standard performance. The comparison tells
the deviations in the performance of the employees from the standards set. The result can show the
actual performance being more than the desired performance or, the actual performance being less than
the desired performance depicting a negative deviation in the organizational performance. It includes
recalling, evaluating and analysis of data related to the employees’ performance.
• 5.Discussing results [Feedback]
• The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The
focus of this discussion is on communication and listening. The results, the problems and the possible
solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be
given with a positive attitude as this can have an effect on the employees’ future performance.
Performance appraisal feedback by managers should be in such way helpful to correct mistakes done by
the employees and help them to motivate for better performance but not to demotivate. Performance
feedback task should be handled very carefully as it may leads to emotional outburst if it is not handing
properly. Sometimes employees should be prepared before giving them feedback as it may be received
positively or negatively depending upon the nature and attitude of employees.
Methods of Performance Appraisal
• Ranking Method
• It is the first and easiest formalized structured traditional method of performance appraisal in which a single
employee is contrasted to all others with the goal of determining their relative worth. Employees are given ratings
from highest to lowest, or from best to worst.
This identifies the employee with the highest and lowest rating on the quality that is being evaluated. Then, among
the subsequent highest and lowest, rank the next best and worst employees. Thus, if there are a total of ten
employees to be evaluated, there are going to be 10 ranks ranging from one to ten.

• Paired Comparison Method

• Using this performance appraisal traditional method, every employee contrasts every characteristic with all other
employees in pairs, one at a time. This strategy makes assessment less difficult and more straightforward than the
traditional ranking system. The number of times someone is contrasted with another individual is recorded on paper.
These numbers produce the rank number for each pair.
The findings are compiled and each person is granted a rank. The rater considers the individual with the highest
points to be the most significant employee, while the one with no points is viewed as the one with the least worth.
This strategy is unsuitable for huge businesses.
•
Checklist Method
• The checklist approach ranks as one of the most straightforward traditional performance appraisal methods. Under this
conventional method of performance review, HR creates a checklist and sends it to the management. The checklist might
contain a set of questions (about employee conduct and work performance), to which the manager must respond with a
simple ‘YES’ or ‘NO’.
The management evaluates the question and the employee and responds based on their assessment of the employee.
Questions in the checklist are assigned a number score depending on how crucial they are to work efficiency. As a result,
the appraisal grade is derived by summing the ratings for all of these distinct elements.
• Critical Incidents Method
• This employee traditional method of performance appraisal in HRM concentrates on core behaviors that influence how the
work is performed. Critical events are those that have either a beneficial or detrimental effect on how a work responsibility
is done. The method begins by defining particular habits that impact the work setting. A group of human resources
professionals then begins assigning value to these specific behavioral events.
The next thing to do is to create a checklist. The ‘rater’ selects and stamps whether the employee’s individual behavior is
positive or negative. The idea underlying this strategy is to outline uncommon behavior. The hypothesis holds that pursuant
to normal conditions, employees with the exact same knowledge base should produce the exact same outcomes.
• Essay Appraisal Method
• This method of traditional performance appraisal, frequently referred to as the “Free Form method,” consists of an
explanation of an employee’s performance by their boss. The summary is an appraisal of a person’s achievements according
to data, and it often features instances and proof to back up what is stated.
One major disadvantage of the process is that the evaluator’s subjectivity cannot be separated. Under this approach, the
rater is expected to convey both the strengths and weaknesses of the employee’s conduct. This method is usually employed
in conjunction with a graphical scale for rating since the rater can comment on the scale by providing a context for their
evaluation.
• Force Distribution Method
• This traditional method of performance appraisal in HRM was prevalent in big businesses. It relies on the notion that staff
efficiency varies widely within a company, with certain individuals being highly efficient while others are less effective.
In this approach, the management is required to disperse employees based on how they perform across every aspect of the
bell-shaped curve. Some are in the excellent range, while others are mediocre or at the bottom portion of the curving scale.
The primary flaw in this approach is the belief that staff performance levels consistently adhere to a standard distribution.
• Graphic Rating Scale Method
• The graphic scale of ratings serves as one of the most common and traditional methods for performance appraisal. It
is additionally known to be a linear rating system. This approach uses a paper-based evaluation form to assess each
employee. The form includes features like dependability and excellence, as well as work performance attributes
ranging from poor to excellent for each characteristic.
The rating is based on the points on the spectrum. A five-point scale is most commonly used. The rater values each
appraise by selecting the rating that most accurately characterizes employee performance for each of the
characteristics. Finally, all allocated characteristic scores are tallied.
• Grading Method
• In this performance appraisal traditional method in HRM, specific types of merit are predetermined and precisely
specified. Employees can be classified into the following groups: excellent, satisfactory, and unsatisfactory. There
could be three more levels. Employee performance is evaluated against grade standards.
The individual is then assigned to the rating that most closely matches their performance. This sort of rating is used
in an annual evaluation pattern and when selecting candidates in the broader domain. One of the primary
disadvantages of this approach is that the assessor can assess the majority of employees on the top end of their job
performance.
• 360-Degree Feedback: 360-degree feedback involves collecting feedback from multiple sources, including
supervisors, peers, subordinates, and sometimes even external stakeholders. This comprehensive feedback provides
a holistic view of an employee's performance, incorporating different perspectives. It offers a broader assessment of
an employee's skills, behaviours, and contributions.
• Management by Objectives (MBO): MBO is a goal-oriented performance appraisal method. In this approach,
employees and their supervisors collaboratively set specific and measurable performance goals at the beginning of a
performance cycle. Performance is then assessed based on the achievement of these goals. MBO focuses on the
results and outcomes that employees are expected to accomplish.
JOB EVALUATION
• Job evaluation is a systematic and formal process used by organizations to assess and determine
the relative worth or value of different jobs within the organization. It involves analyzing and
comparing various job factors and characteristics to establish a job's internal value and its position
in the overall job hierarchy.
• The primary purpose of job evaluation is to create a fair and consistent basis for establishing
internal pay structures, ensuring that jobs with similar levels of responsibilities, skills, and
qualifications are appropriately compensated. By assessing job value, organizations can establish
equitable salary ranges, determine appropriate job classifications, and make informed decisions
regarding compensation, promotions, and organizational structure.
Methods of Job Evaluation
• 1. Job Ranking: This method involves arranging each role in a hierarchy, based on its value to the
company or the complexity of its duties. It is particularly suitable for smaller companies due to its
simplicity and can handle up to 100 jobs. It is also useful when reducing positions, as similar roles can be
grouped together during the ranking process. However, it is subjective and may benefit from being
combined with a quantitative method for more accurate results.
• 2. Job Classification: This method involves sorting roles based on a pre-established grading system or
classification method. For instance, categories could include executives, skilled workers, semi-skilled
workers, and unskilled workers. Each role is then placed into a category, which helps determine the
salary for each position within that category. This method can be subjective and may struggle to
categorise unique roles.
• 3. Market Pricing: This external job evaluation method involves setting salaries based on what other
companies pay employees in the same position. This can be determined through third-party
compensation surveys, allowing you to offer competitive wages. However, it does not consider internal
equity, which could result in an employee earning less than their colleagues or the demands of their
work if the market rate for their role is low. To mitigate this, market pricing can be combined with an
internal job evaluation method.
• 4. Point Factor: This method involves assigning points to each role
and then ranking them. A detailed point system is developed, where
each skill or job responsibility could represent a point. The roles are
then assigned a total number of points and ranked from highest to
lowest to help determine their salaries.
• 5. Factor Comparison: This method combines the job ranking and
point factor methods. Each job is ranked based on certain factors,
such as the number of skills required or the necessary knowledge.
These factors are then assigned points, and the total number of
points determines the job’s ranking.