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Human Resource Management (HRM) is a relatively new approach to managing people in any organisation.

People are considered the key resource in this approach. it is concerned with the people dimension in management of an organisation. Since an organisation is a body of people their ac!uisition development of skills motivation for higher levels of attainments as well as ensuring maintenance of their level of commitment are all significant activities. "hese activities fall in the domain of HRM. Human Resource Management is a process which consists of four main activities namely ac!uisition development motivation as well as maintenance of human resources.

HRM involves management functions like planning organi#ing directing and controlling. $. &. (. %t involves procurement development maintenance and management of human resource. %t helps to achieve individual organi#ational and social ob'ectives. HRM is a mighty disciplinary sub'ect. %t includes the study of management psychology communication economics and sociology. ). %t involves team spirit and team work.

The scope of HRM refers to all the activities that come under the banner of HRM. "he activities are as follows *. Human resources planning: + Human resource planning is a process by which the company to identify the number of 'obs vacant whether the company has e,cess staff or shortage of staff and to deal with this e,cess or shortage. $. Job analysis design: + -nother important area of HRM is 'ob analysis. .ob analysis gives a detailed e,planation about each and every 'ob in the company. /ased on this 'ob analysis the company prepares advertisements. &. Recruitment and selection: + /ased on information collected from 'ob analysis the company prepares advertisements and publishes them in the news papers. - number of applications are received after the advertisement is published interviews are conducted and the right employee is selected thus recruitment and selection are yet another important areas of HRM. (. Orientation and induction: + 0nce the employees have been selected an induction or orientation program is conducted. "he employees are informed about the background of the company. "hey are told about the organi#ational culture and values and work ethics and introduce to the other employees. ). Training and development: + 1very employee goes under training program which helps him to put up a better performance on the 'ob. "raining program is also conducted for e,isting

staff that have a lot of e,perience. "his is called refresher training. "raining and development is one area were the company spends a huge amount. 2. Performance appraisal: + 0nce the employee has put in around * year of service performance appraisal is conducted i.e. the HR department checks the performance of the employee. /ased on these appraisal future promotions incentives increments in salary are decided. 3. Compensation planning and remuneration: + "here are various rules regarding compensation and other benefits. %t is the 'ob of the HR department to look into remuneration and compensation planning. 4. Motivation, elfare, health and safety: + Motivation becomes important to sustain the

number of employees in the company. %t is the 'ob of the HR department to look into the different methods of motivation. -part from this certain health and safety regulations have to be followed for the benefits of the employees. 5. !ndustrial relations: + -nother important area of HRM is maintaining co+ordinal relations with the union members. "his will help the organi#ation to prevent strikes lockouts and ensure smooth working in the company.

The Performance "ppraisal


Performance appraisal is a system of review and evaluation of an individual or team6s 'ob performance. -n effective system assesses accomplishments and evolves plans for development. Performance management is a process that significantly affects organi#ational success by having managers and employees work together to set e,pectations review results and reward performance. %ts goal is to provide an accurate picture of past and 7 or future employee performance. "o achieve this performance standards are established. !# The Performance "ppraisal Process: Many of the e,ternal and internal environmental factors previously discussed can influence the appraisal process. 8egislation re!uires that the appraisal systems be nondiscriminatory. "he labor union might affect the appraisal process by stressing seniority as the basis for promotions and pay increases. 9actors within the internal environment can also affect the performance appraisal process. "he type of corporate culture can serve to help or hinder the process. %dentification of specific goals is the starting point for the P- process. -fter specific appraisal goals have been established workers and teams must understand what is e,pected from them in their tasks. %nforming employees of what is e,pected of them is a most important employee relations task. -t the end of the appraisal period the appraiser observes work performance and evaluates it against established performance standards. "he evaluation results are then communicated to the workers. "he performance evaluation discussion with the supervisor serves to reestablish 'ob re!uirements. $teps in the performance appraisal process

*. $. &. (. ).

%dentify the specific performance appraisal goals. 1stablish 'ob e,pectations ('ob analysis). 1,amine work performed. -ppraise performance. :iscuss appraisal with employee.

!!# %ses of Performance "ppraisal Performance appraisal serves two types of the ob'ectives one is to make the evaluation decisions and other is to provide the need assessment source for the training and development if there is a gap between actual and e,pected performance. 9or many organi#ations the primary goal of an appraisal system is to improve performance. - system that is properly designed and communicated can help achieve organi#ational ob'ectives and enhance employee performance. %n fact P- data are potentially valuable for use in numerous human resource functional areas. a. Human Resource Planning;+%n assessing a firm6s human resources data must be available that describe the promotability and potential of all employees especially key e,ecutives. b. Recruitment and $election;+Performance evaluation ratings may be helpful in predicting the future performance of 'ob applicants. c. Training and &evelopment;+- performance appraisal should point out an employee6s specific needs for training and development. /y identifying deficiencies that adversely affect performance strengths and minimi#e their deficiencies. d. Career Planning and &evelopment;+=areer planning and development may be viewed from either an individual or organi#ational viewpoint. e. Compensation Programs;+Performance appraisal results provide the basis for decisions regarding pay increases. f. !nternal 'mployee Relations;+Performance appraisal data are also fre!uently used for decisions in areas of internal employee relations including motivation promotion demotion termination layoff and transfer. g. "ssessment of 'mployee Potential: ( Some organi#ations attempt to assess employee potential as they appraise 'ob performance. !!!# )hat to 'valuate >hat aspect of a person6s performance should an organi#ation evaluate? %n practice the most common sets of appraisal criteria are traits behaviors and task outcomes. human resource and line managers are able to develop "<: programs that permit individuals to build on their

a.

Traits;+Many employees in organi#ations are evaluated on the basis of certain traits such as attitude appearance initiative etc.

b.

*ehaviors;+>hen an individual6s task outcome is difficult to determine it is common to evaluate the person6s task+related behavior.

c.

Tas+ Outcomes;+%f ends are considered more important than means task outcomes become the most appropriate factor to evaluate.

d.

!mprovement Potential;+Some attention must be given to the future and the behaviors and outcomes that are needed to not only develop the employee but also to achieve the firm6s goals. "his involves an assessment of the employee6s potential.

!,# Responsibility for "ppraisal %n most organi#ations from beginning to end. a. !mmediate $upervisor;+-n employee6s immediate supervisor traditionally has been the most common choice for evaluating performance. b. $ubordinates;+Some managers have concluded that evaluation of managers by subordinates is feasible. c. Peers;+Peer appraisal has long had proponents who believed that such an approach is reliable if the work group is stable over a reasonably long period of time and performs tasks that re!uire considerable interaction. d. $elf("ppraisal;+%f individuals understand the ob'ectives they are e,pected to achieve and the standards by which they are to be evaluated they are@to a great e,tent@in the best position to appraise their own performance. e. Customer "ppraisal;+"he behavior of customers determines the degree of success a firm achieves. "herefore some organi#ations believe it is important to obtain performance input from this critical source. the human resource department is responsible for coordinating the design and

implementation of performance appraisal programs. However it is essential that line managers play a key role

Ob-ectives of Performance "ppraisals %se of Performance "ppraisals *. $. &. (. ). 2. 3. 4. Promotions =onfirmations "raining and :evelopment =ompensation reviews =ompetency building %mprove communication 1valuation of HR Programs 9eedback < Arievances

T'CH.!/%'$ 0 M'THO&$ O1 P'R1ORM".C' "PPR"!$"2$ Bumerous methods have been devised to measure the !uantity and !uality of performance appraisals. 1ach of the methods is effective for some purposes for some organi#ations only. Bone should be dismissed or accepted as appropriate e,cept as they relate to the particular needs of the organi#ation or an employee. /roadly all methods of appraisals can be divided into two different categories. Past Oriented Methods Future Oriented Methods !3 Past Oriented Methods or traditional method *. Rating $cales: Rating scales consists of several numerical scales representing 'ob related performance criterions such as dependability initiative output attendance attitude etc. 1ach scales ranges from e,cellent to poor. "he total numerical scores are computed and final conclusions are derived. -dvantages C -daptability easy to use low cost every type of 'ob can be evaluated large number of employees covered no formal training re!uired. :isadvantages C Rater6s biases $. Chec+list: Dnder this method checklist of statements of traits of employee in the form of Ees or Bo based !uestions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. -dvantages C economy ease of administration limited training re!uired standardi#ation. :isadvantages C Raters biases use of improper weighs by HR does not allow rater to give relative ratings &. 1orced Choice Method: "he series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. "he rater is forced to make a choice. HR department does actual assessment. -dvantages C -bsence of personal biases because of forced choice. :isadvantages C Statements may be wrongly framed. (. 1orced &istribution Method: here employees are clustered around a high point on a rating scale. Rater is compelled to distribute the employees on all points on the scale. %t is assumed that the performance is conformed to normal distribution. -dvantages C 1liminates :isadvantages C -ssumption of normal distribution unrealistic errors of central tendency. ). Critical !ncidents Method: "he approach is focused on certain critical behaviors of employee that makes all the difference in the performance. Supervisors as and when they occur record such incidents. -dvantages C 1valuations are based on actual 'ob behaviors ratings are supported by descriptions feedback is easy reduces recency biases chances of subordinate improvement are high. :isadvantages C Begative incidents can be prioriti#ed forgetting incidents overly close supervisionF feedback may be too much and may appear to be punishment. 2. *ehaviorally "nchored Rating $cales: statements of effective and ineffective behaviors determine the points. "hey are said to be behaviorally anchored. "he rater is supposed to say which behavior describes the employee performance. -dvantages C helps overcome rating errors. :isadvantages C Suffers from distortions inherent in most rating techni!ues. 3. 1ield Revie Method: "his is an appraisal done by someone outside employees6 own department usually from corporate or HR department. -dvantages C Dseful for managerial level promotions when comparable information is needed :isadvantages C 0utsider is generally not familiar with employees work environment 0bservation of actual behaviors not possible. 4. Performance Tests 4 Observations: "his is based on the test of knowledge or skills. "he tests may be written or an actual presentation of skills. "ests must be reliable and validated to be useful. -dvantage C "ests may be apt to measure potential more than actual performance. :isadvantages C "ests may suffer if costs of test development or administration are high.

5. Confidential Records: Mostly used by government departments however its application in industry is not ruled out. Here the report is given in the form of -nnual =onfidentiality Report (-=R) and may record ratings with respect to following itemsF attendance self e,pression team work leadership initiative technical ability reasoning ability originality and resourcefulness etc. "he system is highly secretive and confidential. 9eedback to the assessee is given only in case of an adverse entry. :isadvantage is that it is highly sub'ective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc. *G. 'ssay Method: %n this method the rater writes down the employee description in detail within a number of broad categories like overall impression of performance promoteability of employee e,isting capabilities and !ualifications of performing 'obs strengths and weaknesses and training needs of the employee. -dvantage C %t is e,tremely useful in filing information gaps about the employees that often occur in a better+structured checklist. :isadvantages C %t its highly dependent upon the writing skills of rater and most of them are not good writers. "hey may get confused success depends on the memory power of raters. **. Cost "ccounting Method: Here performance is evaluated from the monetary returns yields to his or her organi#ation. =ost to keep employee and benefit the organi#ation derives is ascertained. Hence it is more dependent upon cost and benefit analysis. *$. Comparative 'valuation Method 5Ran+ing 4 Paired Comparisons3: "hese are collection of different methods that compare performance with that of other co+workers. "he usual techni!ues used may be ranking methods and paired comparison method. Ran+ing Methods: Superior ranks his worker based on merit from best to worst. However how best and why best are not elaborated in this method. %t is easy to administer and e,planation. Paired Comparison Methods: %n this method each employee is rated with another employee in the form of pairs. "he number of comparisons may be calculated with the help of a formula as under. Future Oriented Methods or modern methods *. Management *y Ob-ectives: %t means management by ob'ectives and the performance is rated against the achievement of ob'ectives stated by the management. M/0 process goes as under. 1stablish goals and desired outcomes for each subordinate Setting performance standards =omparison of actual goals with goals attained by the employee 1stablish new goals and new strategies for goals not achieved in previous year.

-dvantage C %t is more useful for managerial positions. :isadvantages C Bot applicable to all 'obs allocation of merit pay may result in setting short+term goals rather than important and long+term goals etc. $. Psychological "ppraisals: "hese appraisals are more directed to assess employees potential for future performance rather than the past one. %t is done in the form of in+depth interviews psychological tests and discussion with supervisors and review of other evaluations. %t is more focused on employees emotional intellectual and motivational and other personal characteristics affecting his performance. "his approach is slow and costly and may be useful for bright young members who may have considerable potential. However !uality of these appraisals largely depend upon the skills of psychologists who perform the evaluation. &. "ssessment Centers: "his techni!ue was first developed in DS- and DH in *5(&. -n assessment center is a central location where managers may come together to have their participation in 'ob

related e,ercises evaluated by trained observers. %t is more focused on observation of behaviors across a series of select e,ercises or work samples. -ssessees are re!uested to participate in in+basket e,ercises work groups computer simulations role playing and other similar activities which re!uire same attributes for successful performance in actual 'ob. "he characteristics assessed in assessment center can be assertiveness persuasive ability communicating ability planning and organi#ational ability self confidence resistance to stress energy level decision making sensitivity to feelings administrative ability creativity and mental alertness etc. :isadvantages C =osts of employees traveling and lodging psychologists ratings strongly influenced by assessee6s inter+personal skills. Solid performers may feel suffocated in simulated situations. "hose who are not selected for this also may get affected. "dvantages C well+conducted assessment center can achieve better forecasts of future performance and progress than other methods of appraisals. -lso reliability content validity and predictive ability are said to be high in assessment centers. "he tests also make sure that the wrong people are not hired or promoted. 9inally it clearly defines the criteria for selection and promotion. (. 678(&egree 1eedbac+: %t is a techni!ue which is systematic collection of performance data on an individual group derived from a number of stakeholders like immediate supervisors team members customers peers and self. %n fact anyone who has useful information on how an employee does a 'ob may be one of the appraisers. "his techni!ue is highly useful in terms of broader perspective greater self+development and multi+source feedback is useful. &2G+degree appraisals are useful to measure inter+personal skills customer satisfaction and team building skills. However on the negative side receiving feedback from multiple sources can be intimidating threatening etc. Multiple raters may be less adept at providing balanced and ob'ective feedback.