Performance Appraisal

Meaning :

Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

Definition:

Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.

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 identify the 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 the organization.
• Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
• To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
• To reduce the grievances of the employees. 

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:
   1. Through performance appraisal, the employers can understand and accept skills of subordinates.
   2. The subordinates can also understand and create a trust and confidence in superiors.
   3. It also helps in maintaining cordial and congenial labour management relationship.
   4. It develops the spirit of work and boosts the morale of employees.
   All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS

Numerous methods have been devised to measure the quantity and quality of performance appraisals. Each of the methods is effective for some purposes for some organizations only. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or an employee.

Broadly all methods of appraisals can be divided into two different categories.

• Past Oriented Methods

• Future Oriented Methods

Past Oriented Methods

1.    Rating Scales: Rating scales consists of several numerical scales representing job related performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large number of employees covered, no formal training required. Disadvantages – Rater’s biases

2.    Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. Advantages – economy, ease of administration, limited training required, standardization. Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give relative ratings

3.    Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. The rater is forced to make a choice. HR department does actual assessment. Advantages – Absence of personal biases because of forced choice. Disadvantages – Statements may be wrongly framed.

4.    Forced Distribution 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. It is assumed that the performance is conformed to normal distribution. Advantages – Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.

5.    Critical Incidents Method: The 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. Advantages – Evaluations are based on actual job behaviors, ratings are supported by descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may be too much and may appear to be punishment.

6.    Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors determine the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior describes the employee performance. Advantages – helps overcome rating errors. Disadvantages – Suffers from distortions inherent in most rating techniques.

7.    Field Review Method: This is an appraisal done by someone outside employees’ own department usually from corporate or HR department. Advantages – Useful for managerial level promotions, when comparable information is needed, Disadvantages – Outsider is generally not familiar with employees work environment, Observation of actual behaviors not possible.

8.    Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may be written or an actual presentation of skills. Tests must be reliable and validated to be useful. Advantage – Tests may be apt to measure potential more than actual performance. Disadvantages – Tests may suffer if costs of test development or administration are high.

9.    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 Annual Confidentiality Report (ACR) and may record ratings with respect to following items; attendance, self expression, team work, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly secretive and confidential. Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc.

10.  Essay Method: In 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, existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the employee. Advantage – It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing skills of rater and most of them are not good writers. They may get confused success depends on the memory power of raters.

11.  Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or her organization. Cost to keep employee, and benefit the organization derives is ascertained. Hence it is more dependent upon cost and benefit analysis.

12.  Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of different methods that compare performance with that of other co-workers. The usual techniques used may be ranking methods and paired comparison method.

• Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best and why best are not elaborated in this method. It is easy to administer and explanation.

• Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. The number of comparisons may be calculated with the help of a formula as under.

N x (N-1) / 2

Future Oriented Methods

1.    Management By Objectives: It means management by objectives and the performance is rated against the achievement of objectives stated by the management. MBO process goes as under.

• Establish goals and desired outcomes for each subordinate

• Setting performance standards

• Comparison of actual goals with goals attained by the employee

• Establish new goals and new strategies for goals not achieved in previous year.

Advantage – It is more useful for managerial positions.

Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-term goals rather than important and long-term goals etc.

2.    Psychological Appraisals: These appraisals are more directed to assess employees potential for future performance rather than the past one. It is done in the form of in-depth interviews, psychological tests, and discussion with supervisors and review of other evaluations. It is more focused on employees emotional, intellectual, and motivational and other personal characteristics affecting his performance. This approach is slow and costly and may be useful for bright young members who may have considerable potential. However quality of these appraisals largely depend upon the skills of psychologists who perform the evaluation.

3.    Assessment Centers: This technique was first developed in USA and UK in 1943. An assessment center is a central location where managers may come together to have their participation in job related exercises evaluated by trained observers. It is more focused on observation of behaviors across a series of select exercises or work samples. Assessees are requested to participate in in-basket exercises, work groups, computer simulations, role playing and other similar activities which require same attributes for successful performance in actual job. The characteristics assessed in assessment center can be assertiveness, persuasive ability, communicating ability, planning and organizational ability, self confidence, resistance to stress, energy level, decision making, sensitivity to feelings, administrative ability, creativity and mental alertness etc. Disadvantages – Costs of employees traveling and lodging, psychologists, ratings strongly influenced by assessee’s inter-personal skills. Solid performers may feel suffocated in simulated situations. Those who are not selected for this also may get affected.

Advantages – well-conducted assessment center can achieve better forecasts of future performance and progress than other methods of appraisals. Also reliability, content validity and predictive ability are said to be high in assessment centers. The tests also make sure that the wrong people are not hired or promoted. Finally it clearly defines the criteria for selection and promotion.

4.    360-Degree Feedback: It is a technique 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. In fact anyone who has useful information on how an employee does a job may be one of the appraisers. This technique is highly useful in terms of broader perspective, greater self-development and multi-source feedback is useful. 360-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 objective feedback.

Organizational Behaviour

Organizational behaviour is concerned with the study of the behaviour of people within an organizational setting. It involves the understanding, prediction and control of human behaviour and the factors which influence the performance of people as members of an organization. Organizational behaviour dose not encompass the whole of management; it is more accurately described in narrower interpretation of providing a behavioural approach to management. 

        All organizations face the basic challenge of mongering psychological contract. They want value from their employees, and they must give employees the right inducements. If psychological contracts are created, maintained, and managed effectively, the result is likely to be workers who are satisfied and motivated. On the other hand, poorly managed psychological contract may result in dissatisfied, unmotivated workers. That’s why it is important to study OB.

Definition:
Actions and attitudes of individuals and groups toward one another and toward the organization as a whole, and its effect on the organization's functioning and performance.

INFLUENCES ON BEHAVIOUR IN ORGANIZATION:
1. The individual:
Organizations are made up of their individual is a central feature of organizational behaviour and a necessary part of any behavioural situation, where acting in isolation or as part of a group, in response to expectations of the organisation, or as a result of influences of the external environment. Where the needs of the individuals and the demands of the organization are incompatible, this can result in frustration and conflict. It is the task of management to provide a working environment which permits the satisfaction of individual needs as well as the attainment of organizational goals.
2. The group:
Groups are exist in all organisations and are essential to their working and performance. The organization is comprised of groups of people and almost everyone in an organization will be member of one or more groups. Informal groups arise from the social needs of people within the organization. People in group influence each other in many ways, and groups may develop their own...

Retention Management

What is Employee Retention ?

Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. Every organization invests time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various measures taken so that an individual stays in an organization for the maximum period of time.

Why do Employees Leave ?

Research says that most of the employees leave an organization out of frustration and constant friction with their superiors or other team members. In some cases low salary, lack of growth prospects and motivation compel an employee to look for a change. The management must try its level best to retain those employees who are really important for the system and are known to be effective contributors.

It is the responsibility of the line managers as well as the management to ensure that the employees are satisfied with their roles and responsibilities and the job is offering them a new challenge and learning every day.

Stress Management

Stress Management

Definition :

Stress may be defined as "a state of psychological and / or physiological imbalance resulting from the disparity between situational demand and the individual's ability and / or motivation to meet those demands."

Dr. Hans Selye, one of the leading authorities on the concept of stress, described stress as "the rate of all wear and tear caused by life."

Stress can be positive or negative. Stress can be positive when the situation offers an opportunity for a person to gain something. It acts as a motivator for peak performance. Stress can be negative when a person faces social, physical, organisational and emotional problems.

Causes of Stress :

Factors that cause stress are called "Stressors." The following are the sources or causes of an organisational and non-organisational stress. 

1. Causes of an Organisational Stress

The main sources or causes of an organisational stress are :-

1. Career Concern : If an employee feels that he is very much behind in corporate ladder, then he may experience stress and if he feels that there are no opportunities for self-growth he may experience stress. Hence unfulfilled career expectations are a major source of stress.
2. Role Ambiguity : It occurs when the person does not known what he is supposed to do on the job. His tasks and responsibilities are not clear. The employee is not sure what he is expected to do. This creates confusion in the minds of the worker and results in stress.
3. Rotating Shifts : Stress may occur to those individuals who work in different shifts. Employees may be expected to work in day shift for some days and then in the night shift. This may create problems in adjusting to the shift timings, and it can affect not only personal life but also family life of the employee.
4. Role Conflict : It takes place when different people have different expectations from a person performing a particular role. It can also occur if the job is not as per the expectation or when a job demands a certain type of behaviour that is against the person's moral values.
5. Occupational Demands : Some jobs are more stressful than others. Jobs that involve risk and danger are more stressful. Research findings indicate that jobs that are more stressful usually requires constant monitoring of equipments and devices, unpleasant physical conditions, making decisions, etc.
6. Lack of Participation in Decision Making : Many experienced employees feel that management should consult them on matters affecting their jobs. In reality, the superiors hardly consult the concerned employees before taking a decision. This develops a feeling of being neglected, which may lead to stress.
7. Work Overload : Excessive work load leads to stress as it puts a person under tremendous pressure. Work overload may take two different forms :-
   1. Qualitative work overload implies performing a job that is complicated or beyond the employee's capacity.
   2. Quantitative work overload arises when number of activities to be performed in the prescribed time are many.
8. Work Underload : In this case, very little work or too simple work is expected on the part of the employee. Doing less work or jobs of routine and simple nature would lead to monotony and boredom, which can lead to stress.
9. Working Conditions : Employees may be subject to poor working conditions. It would include poor lighting and ventilations, unhygienic sanitation facilities, excessive noise and dust, presence of toxic gases and fumes, inadequate safety measures, etc. All these unpleasant conditions create physiological and psychological imbalance in humans thereby causing stress.
10. Lack of Group Cohesiveness : Every group is characterised by its cohesiveness although they differ widely in degree of cohesiveness. Individuals experience stress when there is no unity among the members of work group. There is mistrust, jealously, frequent quarrels, etc., in groups and this lead to stress to employees.
11. Interpersonal and Intergroup Conflict : Interpersonal and intergroup conflict takes place due to differences in perceptions, attitudes, values and beliefs between two or more individuals and groups. Such conflicts can be a source of stress to group members.
12. Organisational Changes : When changes occur, people have to adapt to those changes and this may cause stress. Stress is higher when changes are major or unusual like transfer or adaption of new technology.
13. Lack of Social Support : When individuals believe that they have the friendship and support of others at work, their ability to cope with the effects of stress increases. If this kind of social support is not available then an employee experiences more stress.

2. Causes of Non-Organisational Stress

Certain factors outside the scope of an organisation also cause stress.

These main sources or causes of non-organisational stress are :-

1. Civic Amenities : Poor civic amenities in the area in which one lives can be a cause of stress. Inadequate or lack of civic facilities like improper water supply, excessive noise or air pollution, lack of proper transport facility can be quite stressful.
2. Life Changes : Life changes can bring stress to a person. Life changes can be slow or sudden. Slow life changes include getting older and sudden life changes include death or accident of a loved one. Sudden life changes are highly stressful and very difficult to cope.
3. Frustration : Frustration is another cause of stress. Frustration arises when goal directed behaviour is blocked. Management should attempt to remove barriers and help the employees to reach their goals.
4. Caste and Religion Conflicts : Employees living in areas which are subject to caste and religious conflicts do suffer from stress. In case of religion, the minorities and lower-caste people (seen especially in India) are subject to more stress.
5. Personality : People are broadly classified as 'Type A' and 'Type B'.
   1. Feels guilty while relaxing.
   2. Gets irritated by minor mistakes of self and others.
   3. Feels impatient and dislikes waiting.
   4. Does several things at one time.
   While the 'Type B' people are exactly opposite and hence are less affected by stress due to above mentioned factors.
6. Technological Changes : When there are any changes in technological field, employees are under the constant stress of fear of losing jobs, or need to adjust to new technologies. This can be a source of stress.
7. Career Changes : When a person suddenly switches over a new job, he is under stress to shoulder new responsibilities properly. Under promotion, over promotion, demotion and transfers can also cause stress

Strategic Management

Strategic Management Definition :

“Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.”

Proactive management of the employees of a company or organization. Strategic human resource management includes typical human resource components such as hiring, discipline, and payroll, and also involves working with employees in a collaborative manner to boost retention, improve the quality of the workexperience, and maximize the mutual benefit of employment for both the employee and the employer.

Characteristic:

Strategic management is understood as a process of information and decision-making, which is supported by the management functions of planning, organization, motivation and control. Its purpose is to rule on key business issues, company's survival and development, with particular emphasis on environmental impacts and crucial factors of productive capacity.

Strategic management is focused on the one hand to global operations, on the other on particularly sensitive spheres of activity, which due to its uniqueness is crucial for the whole company. This division was adopted due to the fact that the key business issues relate to key areas of activity across the company and it separated the strategic units.

Global activity can be understood in two ways:

• first, as overall purpose related economic activity,
• second, it is a company activity on every market of the world.

Human Resource Management Meaning,Definition

What Is Human Resource Management?

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. 

HRM is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

HRM is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives.

HRM is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of HRM involves strategic direction and HRM metrics and measurements to demonstrate value.

Definition:

According to Gary Dessler:-

"Human resource management refers to the policies and practices one needs to carry out the people or human resource aspects of management position including recruiting, screening, training, rewarding and appraising."

According to G.R. Agrawal:-

"Human resource management is a process concerned with the management of human energies and competencies for achieving organizational goals through acquisition, development, utilization and maintenance of a competent and committed workforce in a changing environment."