Training & Development and Performance Appraisal by Raja Rao Pagidipalli


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Training & Development and Performance Appraisal by Raja Rao Pagidipalli

  1. 1. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 1TRAINING & DEVELOPMENTAND PERFORMANCE APPRAISALRAJA RAO PAGIDIPALLIM.B.A.(HRM), M.A.(ENG), M.Phil, (Ph.D)
  2. 2. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 2TRAINING & DEVELOPMENTAND PERFORMANCE APPRAISALIntroduction: Organization and individual should develop and progresssimultaneously for their survival and attainment of mutual goals. So, every modernmanagement has to develop the organization through human resources development.Employee training is the most important sub-system of human resources development.Training is a specialized function and is one of the fundamental operative functions forhuman resources management.Meaning: After an employee is selected, placed and introduced in an organizationhe/she must be provided with training facilities in order to adjust him to the job.Training is the act of increasing the knowledge and skill of an employee for doing aparticular job. Training is a short-term educational process and utilizing a systematicand organized procedure by which employees learn technical knowledge and skills for adefinite purpose. Dale S. Beach defines the training as”….. the organized procedure bywhich people learn knowledge and skill for a definite purpose”. In other words, trainingimproves changes and moulds the employee’s knowledge, skill, behavior and aptitudeand attitude towards the requirements of the job and the organization. Training refers tothe teaching and learning activities carried on for the primary purpose of helpingmembers of an organization to acquire and apply the knowledge, skills, abilities andattitudes needed by a particular job and organization.Thus, training bridges thedifferences between job requirements and employee’s present specifications.Training and Development: Employee training is distinct from managementdevelopment or executive development. While the former refers to training given toemployees in the areas of operations, technical and allied areas, the latter refers todeveloping an employee in the areas of principles and techniques of management,administration, organization and allied areas.Importance of Training and Development: Optimum Utilization of HumanResources – Training and Development helps in optimizing the utilization of humanresource that further helps the employee to achieve the organizational goals as well astheir individual goals.Development of Human Resources – Training and Development helps to providean opportunity and broad structure for the development of human resources’ technicaland behavioral skills in an organization. It also helps the employees in attainingpersonal growth.
  3. 3. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 3Development of skills of employees – Training and Development helps inincreasing the job knowledge and skills of employees at each level. It helps to expand thehorizons of human intellect and an overall personality of the employees.Productivity – Training and Development helps in increasing the productivity of theemployees that helps the organization further to achieve its long-term goal.Team spirit – Training and Development helps in inculcating the sense of team work,team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn withinthe employees.Organization Culture – Training and Development helps to develop and improve theorganizational health culture and effectiveness. It helps in creating the learning culturewithin the organization.Organization Climate – Training and Development helps building the positiveperception and feeling about the organization. The employees get these feelings fromleaders, subordinates, and peers.Quality – Training and Development helps in improving upon the quality of work andwork-life.Healthy work environment – Training and Development helps in creating thehealthy working environment. It helps to build good employee, relationship so thatindividual goals aligns with organizational goal.Health and Safety – Training and Development helps in improving the health andsafety of the organization thus preventing obsolescence.Morale – Training and Development helps in improving the morale of the work force.Image – Training and Development helps in creating a better corporate image.Profitability – Training and Development leads to improved profitability and morepositive attitudes towards profit orientation.þ Training and Development aids in organizational development i.e. Organizationgets more effective decision making and problem solving. It helps inunderstanding and carrying out organisational policiesþ Training and Development helps in developing leadership skills, motivation,loyalty, better attitudes, and other aspects that successful workers and managersusually display.
  4. 4. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 4Training Objectives: Generally, line managers ask the personnel manager toformulate the training policies. The personnel manager formulates the followingtraining objectives in keeping with the company’s goals and objectives.ü (i) To prepare the employee, both new and old to meet the present as well as thechanging requirements of the job and the organization.ü (ii) To prevent obsolescence.ü (iii) To impart the new entrants the basic knowledge and skills they need for anintelligent performance of a definite job.ü (iv) To prepare employees for higher level tasks.ü (v) To assist employees to function more effectively in their present positions byexposing them to the latest concepts, information and techniques and developingthe skills they will need in their particular fields.ü (vi) To build up a second line of competent officers and prepare them to occupymore responsible positions.ü (vii) To broaden the minds of senior managers by providing them withopportunities for an interchange of experiences within and outside with a view tocorrecting the narrowness of outlook that may arise from over-specialization.ü (viii) To develop the potentialities of people for the next level job.ü (ix) To ensure smooth and efficient working of a department.ü (x) To ensure economical output of required quality.ü (xi) To promote individual and collective morale, a sense of responsibility, co-operative attitudes and good relationships.Training Methods: As a result of research in the field of training, a number ofprograms are available. Some of these are new methods, while others are improvementsover the traditional methods. The training programs commonly used to train operativeand supervisory personnel are discussed below. These programs are classified into on-the-job off-the-job training programs.On-the Job Training Methods: This type of training, also known as job instructiontraining, is the most commonly used method. Under this method, the individual isplaced on a regular job and taught the skills necessary to perform that job. The traineelearns under the supervision and guidance of a qualified worker or instructor. On-the-job training has the advantage of giving first hand knowledge and experience under theactual working conditions. While the trainee learns how to perform a job, he is also aregular worker rendering the services for which he is placed on rendering services in themost effective manner rather than learning how to perform the job. On-the-job trainingmethods include job rotation, coaching, job instruction or training through step-by-stepand committee assignment.
  5. 5. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 5Job Rotation: This type of training involves the movement of the trainee from one jobto another. The trainee receives job knowledge and gains experience from his supervisoror trainer in each of the different job assignments. Though this method of training iscommon in training managers for general management positions, trainees can also berotated from job to job in work-shop jobs. This method gives an opportunity to thetrainee to understand the problems of employees on other jobs and respect them.Coaching: The trainee is placed under a particular supervisor who functions as a coachin training the individual. The supervisor provides feedback to the trainee on hisperformance and offers him some suggestions of his burden. A limitation of this methodof training is that the trainee may not have the freedom or opportunity to express hisown ideas.Job Instruction: This method is also known as training through step by step. Underthis method, the trainer explains to the trainee the way of doing the jobs, job knowledgeand skills and allows him to do the job. The trainer appraises the performance of thetrainee, provides feedback information and corrects the trainee.Committee Assignments: Under the committee assignment, a group of trainees aregiven and asked to solve an actual organizational problem. The trainees solve theproblem joint6ly. It develops team work.Internship: Internship is one of the on-the-job training methods. Individuals enteringindustry in skilled trade4slike machinist, elect6ician and laboratory technician areprovided with thorough instruction though theoretical and practical aspects. Forexample, TISCO, TELCO, and BHEL select the candidates from polytechnicsengineering colleges and management institutions and provide apprenticeship training.Apprenticeship training programs are jointly sponsored by colleges, universities andindustrial organizations to provide the opportunity to the students to gain real-lifeexperience as well as employment. Exhibit presents the benefits of apprenticeshiptraining.MAKE INTERNSHIPS BENEFICIAL: Most of the Universities and Collegesencourage students for internship as part of the curriculum, as it is beneficial to allconcerned.Benefits to Students:þ Practical knowledge and exposureþ Higher initial salariesþ Faster promotions
  6. 6. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 6þ Quick job orientationBenefits of Universities:þ Touch with market placeþ Improvement in recruitment chancesþ Improvement in attraction of quality studentsBenefits to Potential Employers:þ Competent assistanceþ Opportunity to evaluate potential employeesþ No obligation to continue relationship at the end of internshipþ Reduce recruitment expenses.Off-the-Job Methods: Under this method of training, the trainee is separated fromthe job situation and his attention is focused upon learning the material related to hisfuture job performance. Since the trainee is not distracted by job requirements, he canplace his entire concentration on learning the job rather than spending his time inperforming it. There is an opportunity for freedom of expression for the trainees.Companies have started using multimedia technology and information technologies intraining off-the-job training methods are as follows:Vestibule Training: In this method, actual work conditions are simulated in aclass room, material, files and equipment which are used in actual jobperformance are also used in training. This type of training is commonly used fortraining personnel for clerical and semi-skilled jobs. The duration of this trainingranges from days to a few weeks. Theory can be related to practice in this method.Role Playing: It is defined as a method of human interaction that involvesrealistic behavior in imaginary situations. This method of training involvesaction, doing and practice. The participants play the role of certain characterssuch as the production manager, mechanical engineer, superintendents,maintenance engineers, quality control inspectors, foremen, workers and the like.This method is mostly used for developing inter-personal interactions andrelations.Lecture Method: The lecture is a traditional and direct method of instruction.The instructor organizes the material and gives it to a group of trainees in theform of a talk. To be effective, the lecture must motivate and create interestamong the trainees. An advantage of the lecture methods that it is direct and canbe used for a large group of trainees. Thus, costs and time involved are reduced.The major limitation of the lecture method is that it does not provide for transferof training effectively.
  7. 7. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 7Conference or Discussion: It is a method in training the clerical professionaland supervisory personnel. This method involves group of people who pose ideas,examine and share facts, ideas and data, test assumptions and draw conclusions,all of which contribute to the improvement of job performance. Discussion hasthe distinct advantage over the lecture method, in that the discussion involvestwo-way communication and hence feedback is provided. The participants feelfree to speak in small groups. The success of this method depends on theleadership qualities of the person who leads the group.Programmed Instruction: In recent years, this method has become popular.The subject-matter to be learned is presented in a series of carefully plannedsequential units. These units are arranged from simple to more complex level ofinstruction. The trainee goes through theses units by answering questions orfilling the blanks. This method is expensive and time consuming.The Training Procedure: The training procedure discussed below isessentially an adoption of the job instruction training course, which has beenproved to have a great value. The important steps in the training procedure arediscussed below:Preparing the Instructor: The instructor must know both the job to be taughtand how to teach it. The job must be divided into logical parts so that each can betaught at a proper time without the trainee losing plan. For each part, one shouldhave in mind the desired technique of instruction, that is, whether a particularpoint is best taught by illustration, demonstration or explanation.A serious and committed instructor must:• Know the job or subject he is attempting to teach.• Have the aptitude and ability to teach.• Have willingness towards the profession.• Have a pleasing personality and capacity for leadership.• Have the kno2wledge of teaching principles and methods.• Be a permanent student, in the sense that he should equip himself with the latestconcepts and knowledge.Preparing the Trainee: As in interviewing, the first step in training is to attempt toplace the trainee at east. Most people are some what nervous when approaching anunfamiliar task. Though the instructor may have executed this training procedure, manytimes he or she never forgets its newness to the trainee. The quality of empathy is amark of the good instructor.
  8. 8. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 8Getting Ready to Teach: This stage of the program is class hour teaching involvingthe following activities:• Planning the program.• Preparing the instructor’s outline.• Do not try to cover too much material.• Keep the session moving along logically.• Discuss each item in depth.• Repeat, but in different words.• Take the material from standardized texts when it is available.• When the standardized text is not available, develop the program and course contentbased on group approach. Group consists of employer, skilled employees, supervisors,trade union leaders and others familiar with job requirements. Group preparesteaching material.• Teach about the standard for the trainee like quality, quantity, waste or scrap, abilityto work without supervision, knowledge or procedure, safety rules, human relationsetc.• Remember your standard, before you teach.Ï Presenting the Operation: There are various alternative ways of presentingthe operation, viz. explanation, demonstration etc. an instructor mostly usesthese methods of explanation. In addition, one may illustrate various pointsthrough the use of pictures, charts, diagrams and other training aids.Ï Try Out the Trainee’s Performance: As a continuation of the presentationsequence given above, the trainee should be asked to start the job or operativeprocedure. Some instructors prefer that the trainee explains each step beforedoing it, particularly if the operation involves any danger. The trainee, throughrepetitive practice, will acquire more skill.Ï Follow-up: The final step in most training procedures is that of follow-up.When people are involved in any problem or procedure, it is unwise to assumethat things are always constant. Follow-up cab be adopted to a variablereinforcement schedule as suggested in the discussion of learning principles.Every training program should have follow-up otherwise the training programs inthe future cannot be improved.EVALUATION OF TRAINING PROGRAMME
  9. 9. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 9The specification of values forms a basis for evaluation. The basis of evaluation and themode of collection of information necessary for evaluation should be determined at theplanning stage. The process of training evaluation has been defined as “any attempt toobtain information on the effects of training permance and to assess the value oftraining in the light of that information”. Evaluation leads to controlling and correctingthe training program. Hamblin suggested five level at which evaluation of training cantake place, viz, reactions, learning, job behavior, organization and ultimate value.¶ Positive Attitudes Make an Organisation¶ Determine training needs through job description, performance appraisal formsand potential appraisal discussions.¶ Prepare a training calendar in discussion with managers.¶ Training programs should be well defined specific objectives.¶ Nominate the employees for training based on a need for training.¶ Trainers should be qualified and experienced, and preferably internal.Ï Reactions: Training program is evaluated on the basis of the trainee’s reactionsto the usefulness of coverage of the matter, depth of the course content, methodof presentation, teaching methods etc.Ï Learning: Training program, trainer’s ability and trainee ability are evaluatedon the basis of quantity of content learned and time in which it is learned and thelearner’s ability to use or apply the content he learned.Ï Job Behavior: This evaluation includes the manner and extent to which thetrainee has applied his learning to his job.Ï Organisation: This evaluation measures the use of training, learning andchange in the job behavior of the department/organization in the form ofincreased productivity, quality, morale, sales turnover and the like.Ï Ultimate Value: It is the measurement of the ultimate result of thecontributions of the training program to the Company goals like survival, growth,profitability etc., and to the individual goals like development of personality andsocial goals like maximizing social benefit.MANAGEMENT DEVELOPMENT INTRODUCTIONWhat is Management Development?
  10. 10. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 10Management development is a systematic process of growth and development by whichthe managers develop their abilities to manage. So, it is the result of not onlyparticipation in formal courses of instruction but also of actual job experience. It isconcerned with improving the performance of the managers by giving themopportunities for growth and development, which in turn depends on organizationstructure of the company.Role of the Organisation: “The role of the company in management development isto establish the program and the development opportunities for its present andpotential managers”. “Executive development is eventually something that the executivehas to attain himself. But he will do this much better if he is given encouragement,guidance and opportunity by his company”.Objectives of Management Development: The management developmentprograms are organized with a view to achieving specific objectives. They are:¯ (i)To overhaul the management machinery.¯ (ii) To improve the performance of the managers.¯ (iii) To give the specialists on overall view of the functions of an organization andequip them to coordinate each other’s efforts effectively.¯ (iv) To identify persons with the required potential and prepare them for seniorpositions.¯ (v) To increase morale of the members of the management group.¯ (vi) To increase versatility of the management group.¯ (vii) To keep the executives abreast with the changes and developments in theirrespective fields.¯ (viii) To create the management succession that can take over in case ofcontingencies.¯ (ix) To improve thought process and analytical ability.¯ (x) To broaden the outlook of the executive regarding h is role position andresponsibilities.¯ (xi) To understand the conceptual issues relating to economic, social andtechnical areas.¯ (xii) To understand the problems of human relations and improve humanrelations skills and¯ (xiii) To stimulate creative thinking.Evaluation of Management Development Programs: Management developmentprograms should be evaluated in order to find out whether the objectives of theprograms are achieved or not. The development programs would be effective, if they
  11. 11. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 11contribute to the organizational group and individual goals. Management shoulddelegate the responsibility of evaluation to a senior manager in the HRD department.The evaluation specialist should be clear of the objectives and goals against which theevaluation is conducted. Evaluation should be a continuous process and specific. Theevaluation specialist should inform the trainees well in advance the content, objectives,areas and the method of evaluation. Evaluation must be objective oriented. Evaluationmust be realistic in terms of direction, standards etc., The areas of evaluation includedifferent managerial skills, knowledge, technical skills and knowledge and conceptualskills and knowledge. The areas should be specific for each MDP based on the contentprovided. Further, the evaluation can also be conducted regarding the trainingmethodology, input/output/content, infrastructure and physical facilities, teaching aidsetc.,Evaluation should not only immediately be after the completion of the programs butalso in specific intervals in the long-run in order to find out the impact of the MDP onthe job behavior and efficiency of the trainee. Further, their evaluation may alsomeasure the improvement in decision-making skill, interpersonal relation, strategymaking and implementation skills, role modeling skills etc., these areas depend uponthe content of each MDP. The evaluation results should be provided to the trainees,their superiors, subordinates and HRD department of the organization. These resultscan be used for further improvement of the future programs in the company.Methods of Management Development: There are mainly two types of methods bywhich managers can acquire the knowledge, skills and attitudes and make themselvescompetent managers. One is through formal training and the other is through on-the-job experiences. On-the-job training is of utmost importance as the real learning takesplace only when the learner uses what he has learnt. The saying ”an ounce of practice isworth tons of theory” is true, whoever said it. But it should also be remembered thatclass-room training or pedagogical techniques have also get their own importance inlearning new knowledge, learning new techniques and broader concepts.Performance AppraisalPerformance appraisal is the process of obtaining, analyzing and recording informationabout the relative worth of an employee. The focus of the performance appraisal ismeasuring and improving the actual performance of the employee and also the futurepotential of the employee. Its aim is to measure what an employee does. According toFlippo, a prominent personality in the field of Human resources, “performanceappraisal is the systematic, periodic and an impartial rating of an employee’s excellencein the matters pertaining to his present job and his potential for a better job.”
  12. 12. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 12Performance appraisal is a systematic way of reviewing and assessing the performanceof an employee during a given period of time and planning for his future.It is a powerful tool to calibrate, refine and reward the performance of the employee. Ithelps to analyze his achievements and evaluate his contribution towards theachievements of the overall organizational goals. By focusing the attention onperformance, performance appraisal goes to the heart of personnel management andreflects the management’s interest in the progress of the employees.Objectives Of Performance appraisal:●To review the performance of the employees over a given period of time.●To judge the gap between the actual and the desired performance.●To help the management in exercising organizational control.●Helps to strengthen the relationship and communication between superior –subordinates and management – employees.●To diagnose the strengths and weaknesses of the individuals so as to identifythe training and development needs of the future.●To provide feedback to the employees regarding their past performance.●Provide information to assist in the other personal decisions in theorganization.●Provide clarity of the expectations and responsibilities of the functions to beperformed by the employees.●To judge the effectiveness of the other human resource functions of theorganization such as recruitment, selection, training and development.●To reduce the grievances of the employees.Traditional Methods of Performance Appraisal| Essay Appraisal Method: This traditional form of appraisal, also known as“Free Form method” involves a description of the performance of an employee byhis superior. The description is an evaluation of the performance of anyindividual based on the facts and often includes examples and evidences tosupport the information. A major drawback of the method is the inseparability ofthe bias of the evaluator.| Straight Ranking Method: This is one of the oldest and simplest techniques ofperformance appraisal. In this method, the appraiser ranks the employees fromthe best to the poorest on the basis of their overall performance. It is quite usefulfor a comparative evaluation.
  13. 13. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 13| Paired Comparison: A better technique of comparison than the straightranking method, this method compares each employee with all others in thegroup, one at a time. After all the comparisons on the basis of the overallcomparisons, the employees are given the final rankings.| Critical Incidents Methods: In this method of Performance appraisal, theevaluator rates the employee on the basis of critical events and how the employeebehaved during those incidents. It includes both negative and positive points.The drawback of this method is that the supervisor has to note down the criticalincidents and the employee behaviour as and when they occur.| Field Review: In this method, a senior member of the HR department or atraining officer discusses and interviews the supervisors to evaluate and rate theirrespective subordinates. A major drawback of this method is that it is a very timeconsuming method. But this method helps to reduce the superiors’ personal bias.| Checklist Method: The rater is given a checklist of the descriptions of thebehaviour of the employees on job. The checklist contains a list of statements onthe basis of which the rater describes the on the job performance of theemployees.| Graphic Rating Scale: In this method, an employee’s quality and quantity ofwork is assessed in a graphic scale indicating different degrees of a particulartrait. The factors taken into consideration include both the personalcharacteristics and characteristics related to the on the job performance of theemployees. For example a trait like Job Knowledge may be judged on the range ofaverage, above average, outstanding or unsatisfactory.| Forced Distribution: To eliminate the element of bias from the rater’s ratings,the evaluator is asked to distribute the employees in some fixed categories ofratings like on a normal distribution curve. The rater chooses the appropriate fitfor the categories on his own discretion.Modern Methods of Performance AppraisalAssessment Centers: An assessment centre typically involves the use of methods likesocial/informal events, tests and exercises, assignments being given to a group ofemployees to assess their competencies to take higher responsibilities in the future.Generally, employees are given an assignment similar to the job they would be expectedto perform if promoted. The trained evaluators observe and evaluate employees as theyperform the assigned jobs and are evaluated on job related characteristics. The major
  14. 14. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 14competencies that are judged in assessment centres are interpersonal skills, intellectualcapability, planning and organizing capabilities, motivation, career orientation etc.assessment centres are also an effective way to determine the training and developmentneeds of the targeted employees.Behaviorally Anchored Rating Scales: Behaviorally Anchored Rating Scales(BARS) is a relatively new technique which combines the graphic rating scale andcritical incidents method. It consists of predetermined critical areas of job performanceor sets of behavioral statements describing important job performance qualities as goodor bad (for eg. the qualities like inter personal relationships, adaptability and reliability,job knowledge etc). These statements are developed from critical incidents. In thismethod, an employee’s actual job behaviour is judged against the desired behaviour byrecording and comparing the behaviour with BARS. Developing and practicing BARSrequires expert knowledge.Human Resource Accounting Method: Human resources are valuable assets forevery organization. Human resource accounting method tries to find the relative worthof these assets in the terms of money. In this method the Performance appraisal of theemployees is judged in terms of cost and contribution of the employees. The cost ofemployees include all the expenses incurred on them like their compensation,recruitment and selection costs, induction and training costs etc whereas theircontribution includes the total value added (in monetary terms). The difference betweenthe cost and the contribution will be the performance of the employees. Ideally, thecontribution of the employees should be greater than the cost incurred on them.360-Degree-Performance-Appraisal Method: 360 degree feedback, also knownas ‘multi-rater feedback’, is the most comprehensive appraisal where the feedback aboutthe employees’ performance comes from all the sources that come in contact with theemployee on his job. 360 degree respondents for an employee can be his/her peers,managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors –anyone who comes into contact with the employee and can provide valuable insights andinformation or feedback regarding the “on-the-job” performance of the employee.360 degree appraisal has four integral components:1. Self appraisal2. Superior’s appraisal3. Subordinate’s appraisal4. Peer appraisal.Self appraisal gives a chance to the employee to look at his/her strengths andweaknesses, his achievements, and judge his own performance. Superior’s appraisalforms the traditional part of the 360 degree performance appraisal where the
  15. 15. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 15employees’ responsibilities and actual performance is rated by the superior.Subordinates appraisal gives a chance to judge the employee on the parameters likecommunication and motivating abilities, superior’s ability to delegate the work,leadership qualities etc. Also known as internal customers, the correct feedback given bypeers can help to find employees’ abilities to work in a team, co-operation andsensitivity towards others.360 degree performance appraisal is also a powerful developmental tool because whenconducted at regular intervals it helps to keep a track of the changes others’ perceptionsabout the employees. A 360 degree appraisal is generally found more suitable for themanagers as it helps to assess their leadership and managing styles. This technique isbeing effectively used across the globe for performance appraisals. Some of theorganizations following it are Wipro, Infosys, and Reliance Industries etc.PROCESS OF PERFORMANCE APPRAISALEstablishing Performance Standards: The first step in the process of performanceappraisal is the setting up of the standards which will be used to as the base to comparethe actual performance of the employees. This step requires setting the criteria to judgethe performance of the employees as successful or unsuccessful and the degrees of theircontribution to the organizational goals and objectives. The standards set should beclear, easily understandable and in measurable terms. In case the performance of theemployee cannot be measured, great care should be taken to describe the standards.Communicating the Standards: Once set, it is the responsibility of the managementto communicate the standards to all the employees of the organization. The employeesshould be informed and the standards should be clearly explained. This will help themto understand their roles and to know what exactly is expected from them. Thestandards should also be communicated to the appraisers or the evaluators and ifrequired, the standards can also be modified at this stage itself according to the relevantfeedback from the employees or the evaluators.Measuring the Actual Performance: The most difficult part of the Performanceappraisal process is measuring the actual performance of the employees that is the workdone by the employees during the specified period of time. It is a continuous processwhich involves monitoring the performance throughout the year. This stage requires thecareful selection of the appropriate techniques of measurement, taking care thatpersonal bias does not affect the outcome of the process and providing assistance ratherthan interfering in an employees work.
  16. 16. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 16Comparing the Actual with the Desired Performance: The actual performanceis compared with the desired or the standard performance. The comparison tells thedeviations in the performance of the employees from the standards set. The result canshow the actual performance being more than the desired performance or, the actualperformance being less than the desired performance depicting a negative deviation inthe organizational performance. It includes recalling, evaluating and analysis of datarelated to the employees’ performance.Discussing Results: The result of the appraisal is communicated and discussed withthe employees on one-to-one basis. The focus of this discussion is on communicationand listening. The results, the problems and the possible solutions are discussed withthe aim of problem solving and reaching consensus. The feedback should be given with apositive attitude as this can have an effect on the employees’ future performance. Thepurpose of the meeting should be to solve the problems faced and motivate theemployees to perform better.Decision Making: The last step of the process is to take decisions which can be takeneither to improve the performance of the employees, take the required correctiveactions, or the related HR decisions like rewards, promotions, demotions, transfers etc.Purpose Of Performance Appraisal: Performance Appraisal is being practiced in90% of the organisations worldwide. Self-appraisal and potential appraisal also form apart of the performance appraisal processes. Performance Appraisal is aimed at:þ To review the performance of the employees over a given period of time.þ To judge the gap between the actual and the desired performance.þ To help the management in exercising organizational control.þ To diagnose the training and development needs of the future.þ Provide information to assist in the HR decisions like promotions, transfers etc.þ Provide clarity of the expectations and responsibilities of the functions to beperformed by the employees.þ To judge the effectiveness of the other human resource functions of theorganization such as recruitment, selection, training and development.þ To reduce the grievances of the employees.þ Helps to strengthen the relationship and communication between superior –subordinates and management – employees.The most significant reasons of using Performance appraisal are:þ Making payroll and compensation decisions – 80%þ Training and development needs – 71%
  17. 17. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 17þ Identifying the gaps in desired and actual performance and its cause – 76%þ Deciding future goals and course of action – 42%þ Promotions, demotions and transfers – 49%þ Other purposes – 6% (including job analysis and providing superior support,assistance and counseling)Performance Appraisals as Career Development: Performance appraisal is apart of career development. The latest mantra being followed by organizations acrossthe world being – “get paid according to what you contribute” – the focus of theorganizations is turning to performance management and specifically to individualperformance. Performance appraisal helps to rate the performance of the employees andevaluate their contribution towards the organizational goals. Performance appraisal asCareer Development leads to the recognition of the work done by the employees, many atimes by the means of rewards and appreciation etc. It plays the role of the link betweenthe organization and the employees’ personal career goals.| Potential appraisal, a part of Performance appraisal, helps to identify the hiddentalents and potential of the individuals. Identifying these potential talents canhelp in preparing the individuals for higher responsibilities and positions in thefuture. The performance appraisal process in itself is developmental in nature.| Performance appraisal is also closely linked to other HR processes like helps toidentify the training and development needs, promotions, demotions, changes inthe compensation etc. A feedback communicated in a positive manner goes a longway to motivate the employees and helps to identify individual careerdevelopmental plans. Based on the evaluation, employees can develop theircareer goals, achieve new levels of competencies and chart their careerprogression. Performance appraisal encourages employees to reinforce theirstrengths and overcome their weaknesses.Performance Appraisal Feedback: Performance appraisal process is incompletewithout the feedback given to the employee about his appraisal and his performance.But the way of giving as well as receiving the feedback differs from person to person andtheir way of handling and their outlook towards the issue. Therefore, On the part of theperson receiving the feedback, the following points are important to be taken care of:r The employee should have a positive attitude towards the feedback processr He should listen to the suggestions of the appraiser calmly and try to incorporatethem in his plans.r He should not hesitate to ask for the help of his superiors.r Should have a co-operative attitude during the feedback meeting.
  18. 18. Human Resource Management – M.B.A. PRINCER a j a R a o P a g i d i p a l l i Page 18r Should take the feedback objectively.r Should not judge the appraiser as a person on the basis of the feedback.On the part of the appraiser or the manager / person giving the feedback, the followingpoints are to be taken care of:r The appraiser should make the receiver feel comfortable during the feedbackmeeting.r The appraiser should make it a two – way conversation i.e. let the employeespeak.r Listen to the employee and note his points, suggestions, problems etc.r The appraiser should not adopt a confrontational approach towards the meeting.The goal is not to criticize the employee.r Provide a constructive feedback to the employee i.e. in a way which will motivatehim to perform better.r Have a positive attitude towards the processr Be fair and objectiver Prepare yourself for what to say and how to say.r Make the appraisal feedback meeting useful and productive for the organizationand the employee.