Unit 3

Employee Training & Development

Training is a systematic process of developing employee skills and knowledge to improve their job
performance. The employer organises training for his employees to increase their job knowledge, skills
and improve their attitude and knowledge.
Training constitutes a basic concept in human resource development. It is concerned with developing a
particular skill to a desired standard by instruction and practice. Training is a highly useful tool that can
bring an employee into a position where they can do their job correctly, effectively, and conscientiously.
Training is the act of increasing the knowledge and skill of an employee for doing a particular job.
Definition: Edwin B. Flippo, ‘’Training is the act of
increasing the knowledge and skills of an employee
for doing a particular job.’’
According to Planty, Cord and Efferson, “Training
is the continuous, systematic development among all
levels of employees of that knowledge and their skills
and attitude which contribute to their welfare and that
of the company”.

According to Edwin B. Flippo, “Training is an act of

increasing the knowledge and skills of an employee
for doing a particular job”.

According to Wayne F Cascio: Training consists of planned programme designed to improve

performance at the individual, group, and /or organizational levels. Improved performance, in turn, implies
that there have been measurable changes in knowledge, skills attitude, and/or social behavior.

OBJECTIVES
(i) To provide job related knowledge to the workers.
(ii) To impart skills among the workers systematically so that they may learn quickly.
(iii) To bring about change in the attitudes of the workers towards fellow workers, supervisor and the
organization.
(iv) To improve the productivity of the workers and the organization.
(v) To reduce the number of accidents by providing safety training to the workers,
(vi) To make the workers handle materials, machines and equipment efficiently and thus to check wastage
of time and resources.
(vii) To prepare workers for promotion to higher jobs by imparting them advanced skills.

Need and Importance of Training:

1. Improved quality: Organisations aim to improve the quality of their products and services. Training
imparts skills on efficient methods and techniques. This enables employees to produce better quality
goods and services.
2. Higher productivity and profits: Trained employees have the knowledge and skills required to
perform their task. They can produce at a faster rate resulting in higher production and productivity of
the firm. This result in higher sales and profits.
3. Reduced cost: Training improves the ability of employees to use resources in the best manner.
Wastages are avoided and all facilities are used in on optimum manners. This enables economy in
operation and reduced cost.
4. Reduced Supervision: Training improves the job knowledge and confidence of employees. They can
perform task on their own and do not require continue guidance. Therefore the time spent on supervision
and the number of supervisors required is less.
5. Skill improvement: Training improves the skill level of employees. It enables them to identify and
eliminate the weaknesses. This results in a reliable and capable workforce.
6. Improved Performance: A trained employee is aware of his role and responsibilities. He knows the
tools and techniques to be used an confident of his abilities. This results in improved performance on a
consistent basis.
7. Higher employee satisfaction: Training improves job knowledge, confidence and performance.
Employees feel that the organisation in interested in their growth and welfare. This improves the job
satisfaction of employees.
8. Improved Safety: Lack of knowledge in safe handling of machines and safety measures lead to
accidents. Trained employees take safety precautions and handle machines in a proper manner. Chances
of accidents can be reduced and work sport made safer.
9. Better Adaptability: Through training, employees are equipped with latest skills, knowledge and
technology they would have better capacity to adapt to modern trends and new methods of working.
10. Better Morale and Motivation: Training develops positive attitude, job satisfaction, higher
earnings, carrier growth and better job security. All this improve the morale and motivation of employees.
Process of Training or Steps involved in training:
1. Assessment of Training Needs:
It is the first step of Training needs. Training needs of the organisation is based on its objectives, resources
and its environment. Training needs of employees is based on the position, function, experience and stage
in the career.
2. Setting of Training Objectives:
The training objectives should be based on the objectives of the firm and its environment. They can be
short term or long term. Short term training objectives relate to improving employee skills, efficiency
and team spirit. Long term training objectives relate to improving competencies, creativity, innovation
and learning ability.
3. Selection of Training Methods: Training can be either on the job training or off the job training.
Each training method is distinct and offer specific benefits. The training method for operative level
employees and executive level employee would be different.
4. Conduct of Training: Training can be conducted by internal experts who are the employees of the
firm. If internal experts are not available, external experts can be hired. If facilities are available training
can be conducted within the company. If not, it can be conducted in an external setup.
5. Evaluation of training programme: After training is conducted, the result of the training
programme has to be measured. It can be done by collection feedback from the trainees. The feedback
can relate to usefulness of the programme, its practical relevance, ability of the trainer, training setup etc.
Training programmes can also be evaluated based on change in the attitude and behaviour of employees.
Methods of Training and Development

ON THE JOB TRAINING METHODS

On the job training methods are based on the concept of learning by doing. In this method, trainees are
provided with real job settings to do their jobs. In some situations, they are given sole responsibility to
handle the issues on their own and this is how they learn by doing their task. Also, the new employees
gain knowledge of what is to be done from the existing employees and improve their skills under the
guidance of experienced ones. This type of training method has become very popular and is used by most
corporations.

Some of the crucial ON THE JOB training methods are discussed below:

1) Job Instruction Training (JIT)

Under this training process, trainees are given instructions systematically one by one. These instructions
are given by experienced trainers who are well-known for the techniques and procedures to be used and
the functions to be performed during the job. In this training method, the learners first observe their
instructors while performing the task and then follow them by performing the task on their own. This
helps the trainers to easily point out the faults committed by the trainees and rectify them as soon as
possible.
2) Apprenticeship

It follows the principle of “earning while learning”. In this method, an expert and an experienced person
give his knowledge and skills to the trainee who desires to learn that skill. Once the trainee has completed
an apprenticeship programme, the trainee can apply for a permanent job if there is any.

3) Job Rotation

It is that process in which the employees are allowed to perform the functions of other departments in the
organisation. When the employees are rotated from one department to another department or from one
division to another division, they gain new knowledge and experience about the different jobs performed
by different people in the organisation.

Job rotation takes place either in the form of promotions in which the employees are promoted from a
lower level to a higher level or in the form of lateral transfers, in which only the job responsibility changes,
but not the position of the employee. Thus, this training method is the best way to transform an employee
into an expert.

4) Coaching

The guidance given by the superiors of the organisation to their subordinates is called coaching. Besides
being an unofficial and unplanned training method, it improves the bonding between the employees and
their superiors.

The senior manager acts as a coach or instructor and guides the employees on how to perform the task
and how the mistakes can be rectified. Later, they also evaluate the performance of these employees.

5) Understudy

It is the method of preparing the trainees to perform the responsibilities of their trainer or to occupy the
position of their senior in future. In this method, when the superior or manager is about to get separated
from the organisation due to the reasons of transfers, resignation, retirement etc., his position is allotted
to that employee who has received training under him. This method is different from coaching in the sense
that the manager can select employees from his department for understudy.

6) Mentoring

In this method, training is given by a specialised and experienced person. In organisations, mentoring is
usually done by senior employees who try to enhance the skills of junior employees. Many organisations
use mentoring as a nurturing tool that fosters the understanding and proficiency of their employees.

OFF THE JOB TRAINING METHODS

Unlike on the job training methods, off the job training methods are not based on the concept of learning
by doing but follow the rule of learning by gaining knowledge. Under this method, the trainees are called
upon in a classroom which may be situated inside the company or some outside place such as institutes
or centres to provide the training.

Because of the outside location, trainees can learn freely without the stress of job work. The main focus
of this guidance is to improve the knowledge of the new employees.

Some of the well-known off the job training methods are as follows:

1) Lectures

When there is a requirement of imparting technical knowledge to new employees; the lecture method
proves to be the best way to clear the notion, ideas, and hypothesis to the trainee. It is a one-way
communication method in which the mentor collects the entire relevant data for the trainees and conveys
a lecture using various teaching aids such as models, chart papers, visual aids, audio aids, etc. Thus, it is
the simplest method of providing knowledge to the trainees.

2) Simulations/ Vestibule

This training method depicts a real-life situation of the job that may have happened in the organisation in
the past such as damage to any valuable thing, any serious enquiry that may have adversely affected the
company, or any mistake that had cost the company a lot, etc. Several realistic examples can be shown to
the trainees to prepare them to handle the situations accordingly.

By this, the organisation prepares the trainees well in advance about what may happen on the job and how
they have to deal with these types of situations. This method is used in those industries where on the job
training can be expensive or destructive such as the aeronautical industry.

3) Case Study

Under this method, the real business cases are framed and they are provided to trainees. Trainees have to
discuss it and give their ideas of how they would have tackled that situation. This method is called the
case study method and is one of the very common ways of imparting knowledge based on actual business
situations.

4) Role-Play

In this method, trainees are provided with an imaginary or real problem that is generally concerned with
the organisation. They are asked to assume the identity of a particular person and behave as if they are in
that particular situation. To enhance their managerial skills, employees can make use of various visual
aids and tips given by their mentors while executing their performance.

5) In-Basket Exercise

In this method, the trainee is given all the relevant things like letters, reports, records, etc. that are needed
by managers. The trainee is given a specific situation that managers confront regularly. He is asked to
assess the situation, prioritise things, justify his reasons and give the final decision on the issues raised
during the exercise.

The exercise gives the manager a snapshot of the learner’s ability to perform executive functions and roles
in the job. The whole exercise is video-recorded and the concerned candidates are tested on the grounds
of the proposed set of skills and abilities such as problem-solving ability, time management, etc.

6) Conferences

A structured method of communicating thoughts to a large number of audiences who are attending the
event is called a conference. Experts from specific fields come together to share their views on a common
topic and also obtain answers to their questions if they have any.

7) Seminar

Another word for ‘Seminar” is “Seed Plot” which means it is a base ground for gaining knowledge. These
are conducted by experienced and expert people who not only prepare the topic of discussion and deliver
it in front of learners but also help them to share their ideas and explore their views on the topic of
discussion. Since it is focused on any particular topic, learners can understand things more clearly and
respond effectively.

8) Group Discussion

It is one of the very common training methods adopted by numerous organisations. Under this method, a
topic is given to the group of trainees and they are asked to actively participate in it and give their outlook
on the issue. The discussion topic is given on the spot and thus, no time is given to the trainees to prepare
the topic.

This method not only helps in solving the problem related to an organisation but also creates a higher rate
of interest and enthusiasm among the trainees as they can share good experiences and gain new ideas and
knowledge about the subject.

9) Sensitivity Training

Sensitivity training, as by name is very clear that this training is related to emotions and sentiments. It is
also called T-group training or laboratory training. The assessment is based on the behaviour of one for
the other. This training is carried out to make employees aware of and respect the feelings and emotions
of other co-trainees.

10) Syndicates

The syndicate training method has proved to be very useful for training higher management. In this
training method, the employees form a group and get united to execute any particular function. This
method includes numerous groups who work together to achieve the organisational training goals.
 BASIS FOR
TRAINING DEVELOPMENT
COMPARISON
Meaning Training is a learning process in which Development is an educational
employees get an opportunity to develop process which is concerned with the
skill, competency and knowledge as per overall growth of the employees.
the job requirement.
Term Short Term Long Term
Focus on Present Future
Orientation Job oriented Career oriented
Motivation Trainer Self
Objective To improve the work performances of To prepare employees for future
the employees. challenges.
Number of Many Only one
Individuals
Aim Specific job related Conceptual and general knowledge

Career Planning
Definitions:

1. A career may be defined as ‘ a sequence of jobs that constitute what a person does for a living’.

2. According to Schermerborn, Hunt, and Osborn, ‘Career planning is a process of systematically

matching career goals and individual capabilities with opportunities for their fulfillment’.

Career planning is the continuous self-evaluation and planning process done by a person to have a strong
career path which is aligned with one's career goals, aspirations and skills. Career planning process in the
continuous reiterative process of understanding oneself, setting career goals, revising skills and searching
for the right career options which may include basic skills, specialized education and job options.

A person may need to start this planning process from scratch every few years based on the market trends
or demand and also on the based of the outcome of the current plan. The career planning should be overall
aligned to a goal or objective for a career path as it is a continuous process over a long period of time and
would require not only joining a job/occupation but also acquisition of basic as well as special skills to do
those job(s).

For example a person trying to make a career in information technology may require skills like languages,
programming whereas a person looking to have a career goal in marketing may first need a specialized
degree in business or more specifically marketing.
The term career planning and development is used extensively in relation to business organizations. It is
argued that if the organizations want to get the best out of their employees, they must plan the career
development programmes in their organization effectively. Such programmes offer benefits to employees
and also to the organizations. The employees will develop new skills will be available to the organization.
This type of career planning can be described as organizational career planning.
Features of Career Planning and Career Development:
1. It is an ongoing process.

2. It helps individuals develop skills required to fulfill different career roles.

3. It strengthens work-related activities in the organization.

4. It defines life, career, abilities, and interests of the employees.

5. It can also give professional directions, as they relate to career goals.

Process of Career Planning Process

Importance of Career Planning

Career planning is a step-wise process which enables an individual to focus on where to want to be in life
professionally. With the short-term goal and the long-term goals in place, It can help to plan their journey
in their professional life. Self-assessment is necessary to understand one’s capabilities and drawbacks.
The various career options should be explored in detail to find a fit between one’s abilities and the
opportunities provided by a career option. It involves continuous learning and improvement to build and
growth in the chosen career path. A good career planning helps a person grow in life in their professional
career, which also help them grow personally.

If there is no career planning, then the career of an individual would be controlled by external factors and
circumstances. Based on decisions and evaluation done by others, the person would go forward in the
career. It may lead to a desirable career path but it can also lead to a job profile which was not at all part
of individual's aspiration or career goals.

A great career plan early can lead to better planning of skills and education required to achieve career
goals. A career is a long term view of the skills, education and jobs a person would acquire or do in order
to reach a particular objective. A job may or may not align with one's career objective if proper career
planning is not done. A job may be directly opposite to one's path because the required skills or educational
qualifications may be missing due to the lack of a initial plan. The importance of career planning is in
starting early, acquiring the right skills and then applying the same for a particular job or a series of jobs
to achieve long term career goals. But one can re-plan career later as well if the current occupation doesn't
align with the goals or if goals have changed. Sometimes the market demand and business requirements
may also require one to re-plan one's career and acquire new skills. Reskilling should be an active part of
career planning. Sometimes career planning is seen as a short term exercise based on immediate job
requirements but it should be a more long term view of the career rather than one or two jobs.

Elements/ Component of Career Planning

• Career Development
• Career Path
• Career Stages
• Career Mobility
• Career Plateau

Objectives of Career Planning:

1. To identify positive characteristics of the employees.

2. To develop awareness about each employee’s uniqueness.

3. To respect feelings of other employees.

4. To attract talented employees to the organization.

5. To train employees towards team-building skills.

6. To create healthy ways of dealing with conflicts, emotions, and stress.

Benefits of Career Planning:
1. Career planning ensures a constant supply of promotable employees.

2. It helps in improving the loyalty of employees.

3. Career planning encourages an employee’s growth and development.

4. It discourages the negative attitude of superiors who are interested in suppressing the growth of the

subordinates.

5. It ensures that senior management knows about the calibre and capacity of the employees who can

move upwards.

6. It can always create a team of employees prepared enough to meet any contingency.
7. Career planning reduces labour turnover.
8. Every organization prepares succession planning towards which career planning is the first step.

Career Planning Process

Career planning process is an important aspect for an individual’s career development. Some of the basic
steps in a career planning process are:
1. Self-Assessment

The first step in the process is self-assessment to be done by the individual to understand his or her skills,
areas of interest, aspirations etc.

Aspirations and goals are very important here as that would define how person would create future plan.
2. Research on Careers and Opportunities

The second step in the process is to understand the career options, companies available, growth options
in career etc. which are aligned with the self-assessment done already.

Right opportunities need to identified and proper research is required for that. An individual needs to be
aware of the market trends and growth areas.
3. Set Career Objectives
The next step in the career planning is to set short-term as well as long-term career goals for oneself, and
to have a clear career path. These can be defined as the immediate goals and how one looks at the career
further down the line. A plan has to be according to clear objectives.
4. Learn & Improve Skills

The fourth step in the process is to keep acquiring new skills and knowledge to be in line with career
objectives and with industry requirements. Many a times there can be clear gaps in the objectives,
aspirations and skills. To fill those gaps, proper planning is required to acquire and learn those skills so
that career plan can be properly executed.
5. Preparation of CV/Resume

The next step in the planning process is to be fully prepared in terms of CV, cover letter, recommendations
etc. The resume should clearly highlight the skills, qualifications, objectives which is aligned with the
career planning of an individual
6. Job/Work Search

The sixth step is to short-list the companies where an individual is seeking a job & start applying. It can
be also working a entrepreneurship project as well.
7. Revise Career Goals

The last step in the career planning process is to continuously evaluate the career goals and again do a
self-assessment to build a strong career path.

Career Planning Example

Let us take an example of an engineer AJ who has recently graduated and is interested in robotics. to start
the planning, AJ has to first assess what kind of robotics he is interested in and what is his skill level.
After that, he needs to set the objectives with time box approach on how he wants to grow in his robotics
career. If there are gaps, he needs to take trainings and courses to reduce the gaps and search for jobs may
be in manufacturing and automotive sector where robotics are natural fit.

If successful in securing suitable job, career planning can be more precise based on the hands on
experience in the field and then the goals and objective can be defined for new career trajectory.
PERFORMANCE APPRAISAL

A performance appraisal is a systematic and periodic process of measuring an individual’s work

performance against the established requirements of the job. It’s a subjective evaluation of the employee’s
strengths and weaknesses, relative worth to the organization, and future development potential.

Performance appraisals are also called performance evaluations, performance reviews, development
discussions, or employee appraisals.

Performance Appraisals, also known as performance reviews, are a process of assessing and evaluating
an employee’s job performance systematically and formally. The primary purpose of performance
appraisals is to provide feedback to employees about their work performance, identify strengths and
weaknesses, set goals for improvement, and provide a basis for making decisions about promotions,
raises, and other job-related matters. Performance appraisals typically involve a structured evaluation
of an employee’s performance over a specified period with a focus on specific job-related competencies,
skills, and behaviours. The process may involve the use of standardized rating scales, self-assessments,
and feedback from supervisors, peers, and subordinates. The results of performance appraisals are used
to inform decisions about career development, training, compensation, and other personnel actions.

DEFINITION

Acc. to Edward Flippo “Performance appraisal is a systematic, periodic & an impartial rating of an
employee’s excellence in matters pertaining to his present job & his potential for a better job”.

Acc. to Wayne Cascio as “the systematic description of employee’s job relevant, strength, weakness.
Performance appraisal may be conducted once in every 6 months or once in a year. The basic idea of the
appraisal is to evaluate the performance of the employee, giving him a feed back. Identify areas where
improvement is required so that training can be provided. Give incentives and bonus to encourage
employees etc.

• PA is a process of obtaining, analyzing and recording information about the relative worth of an
employee. It has following characteristics -

• It is a systematic examination of an employee’s strengths and weakness in terms of the job

• PA is a scientific and objective process

• It is continuous process
• The main purpose of it is to secure information necessary for making objective and correct
decisions on employees

• ADVANTAGES/NEEDS/IMPORTANCE/USE/PURPOSE OF PERFORMANCE
APPRAISAL
1. Feedback to the employee: - Performance appraisal is beneficial because it provides feedback to

the employee about his performance. It identifies the areas for improvement so that employee can

improve itself.

2. Training and development: - Due to performance appraisal it is easy to understand what type of

training is required for each employee to improve himself accordingly training programs can be

arranged.

3. Helps to decide promotion: - Performance appraisal provides a report about the employee. Based

on this report future promotions are decided, incentives, salary increase is decided.

4. Validation of selection process: - Through performance appraisal the HR department can identify

whether any changes are required in the selection process of the company normally a sound selection

process results in better performance and positive appraisal.

5. Deciding transfers and lay off of the worker: - Employee with specific talent can be transferred

to places where their talents are utilized properly; similarly, decisions regarding termination of

employees depend upon performance appraisal reports.

6. Human resource planning and career development: - Companies can plan for future vacancies

at higher levels based on performance appraisal reports. Similarly, career planning can be done for

the employee on the performance appraisal report.

1. Setting performance standards :- In this very first step in performance appraisal the HR department
decides the standards of performance i.e. they decide what exactly is expected from the employee for each
and every job. Sometimes certain marking scheme may be adopted eg. A score 90/100 =
excellent performance, a score of 80/100 = good. And so on.
2. Communication standard set to the employee :- Standards of performance appraisal decided in 1st
step are now conveyed to the employee so that the employee will know what is expected from him and
will be able to improve his performance.
3. Measuring performance :- The performance of the employee is now measure by the HR department,
different methods can be used to measure performance i.e. traditional and modern method. The method
used depends upon the company’s convenience.
4. Comparing performance with standard :- The performance of the employee is now judged against
the standard. To understand the score achieved by him. Accordingly, we come to know which category
of performance the employee falls into i.e. excellent, very good, good, satisfactory etc.
5. Discussing result :- The results obtained by the employee after performance appraisal are informed or
conveyed to him by the HR department. A feedback is given to the employee asking him to change
certain aspects of his performance and improve them.
6. Corrective action :- The employee is given a chance or opportunity to improve himself in the areas
specified by the HR department. The HR department constantly receives or keeps a check on the
employee’s performance and notes down improvements in performance

METHODS OF PERFORMANCE APPRAISAL

I. Traditional method
Traditional approach is also known as traits approach. it is based on the evaluation of traits in a person.
This system may list ten to fifteen personal characteristics such as ability to get in along with people,
competence, judgement, initiative & leadership etc.
1. Check list method :-
In this method the senior, the boss is given a list of questions about the junior. These questions are
followed by check boxes. The superior has to put a tick mark in any one of the boxes

This method can be explained with the following eg.

* Y N Does the employee have leadership qualities?
*Y N Is the employee capable of group efforts?
* Y N Has the employee shown analytical skills?

2. Confidential report :-
This method is very popular in government departments to appraise IAS officers and other high level
officials. In this method the senior or the boss writes a report about the junior giving him details about the
performance about the employee. The +ve and – ve traits, responsibilities handled on the job and
recommendations for future incentives or promotions. The report is kept highly confidential and access
to the report is limited.
3.Critical incident method :-
In this method critical or important incidents which have taken place on this job are noted down along
with employee’s behavior and reaction in all these situations. Both +ve and –ve incidents are mentioned.
This is followed by an analysis of the person, his abilities and talent, recommendations for the future
incentives and promotions.
4.Ranking method :-
In this method ranks are given to employees based on their performance. There are different methods of
ranking employees. Simple ranking method Alternate ranking method Paired comparison method
i. Simple ranking method :- Simple ranking method refers to ranks in serial order from the best employee
eg. If we have to rank 10 best employees we start with the first best employee and give him the first rank
this is followed by the 2nd best and so on until all 10 have been given ranks.
ii. Alternate ranking :- In this method the serial alternates between the best and the worst employee. The
best employee is given rank 1 and then we move to the worst employee and give him rank 10 again to 2nd
best employee and give him rank 2 and so on.
iii. Paired comparison :- In this method each and every person is the group, department or team is
compared with every other person in the team/group/department. The comparison is made on certain
criteria and finally ranks are given. This method is superior because it compares each and every person
on certain qualities and provides a ranking on that basis.
5.Graphic rating scale :-
Graphic rating scale refers to using specific factors to appraise people. The entire appraisal is presented
in the form of a chart. The chart contains certain columns which indicate qualities which are being
appraised and, other columns which specify the rank to be given.
Eg. Employee A Quality of work Quantity of work Intelligence, Excellent, Very good, good, satisfactory,
poor. The senior has to put a tick mark for a particular quality along with the ranking. Such charts are
prepared for every employee. According to the department in which they work. Sometimes the qualities
which are judged may change depending upon the department.
6.Narrated essay :-
In this method the senior or the boss is supposed to write a narrative essay describing the qualities of his
junior. He may describe the employees strength and weakness, analytical abilities etc. the narrative essay
ends with a recommendation for future promotion or for future incentives. Modern methods Modern
methods of appraisal are being increasingly used by companies. Now days one of the striving feature that
appraisal involves is, the opinion of many people about the employee and in some cases psychological
test are used to analyze the ability of employee.
7.Paired Comparisons Method:-
In this method every person is compared traits-wise, with other person, one at a time, the number of times
one person is compared with other is tallied on a piece of paper. Theses number help in yielding rank
order of employees.

Example:- if there are five perspn to be compared A’ s performance is first compared with that N to find
out who has better performance, then A is compared with C,D & E in turn & performance is recorded.

8.Grading System:-
Under this system certain features like analytical ability, co-opeaativeness, dependability, job-knowledge
etc are selected for evaluation the employees are given grades according to the judgement of the rater.
The grades may be such as
A-Outstanding
B-very Good
C-Satisfactory
D-Average
E-Below average etc.

9.Forced Distribution method:-

Some raters suffer from a constant error i.e. they rate of employees as only good, average or poor. They
thus do not evaluate the employees properly. This system minimises rater’s bias so that all employees are
not similarly rated. This system is based on presumption that all employees can be divided into five
categories i.e. Outstanding, Above average, Average, Below average & poor.

10.Nominations:-
Under the nominations method, appraisers are asked to identify the exceptionally good & exceptionally
poor performers, who are then singled out for special treatment.

11.Work Sample Tests:-

In this method, employees are given from time to time, work related tests which are then evaluated.
II. Modern method

1. Assessment centers :-
Assessment centers (AC) are places where the employee’s are assessed on certain qualities talents and
skills which they possess. This method is used for selection as well as for appraisal. The people who attend
assessment centers are given management games, psychological test, puzzles, questioners about different
management related situations etc. based on their performance in these test an games appraisal is done.

2. Management by objective :-
This method was given by Petter Druckar in 1974. It was intended to be a method of group decision
making. It can be used for performance appraisal also. In this method all members of the of the department
starting from the lowest level employee to the highest-level employee together discus, fix target goals to
be achieved, plan for achieving these goals and work together to achieve them. The seniors in the
department get an opportunity to observe their junior- group efforts, communication skills, knowledge
levels, interest levels etc. based on this appraisal is done.
3. Behavioral anchored rating scale :- (BARS)
In this method the appraisal is done to test the attitude of the employee towards his job. Normally people
with +ve approach or attitude view and perform their job differently as compared to people with a –ve
approach.
4. Human resource audit/accounting :-
In this method the expenditure on the employee is compared with the income received due to the efforts
of the employee. A comparison is made to find out the utility of the employee to the organization. The
appraisal in forms the employee about his contribution to the company and what is expected in future.
5. 360 Degree Performance appraisal :-
In this method of appraisal and all-round approach is adopted. Feedback about the employee is taken from
the employee himself, his superiors, his juniors, his colleagues, customers he deals with, financial
institutions and other people he deals with etc. Based on all these observations an appraisal is made and
feedback is given. This is one of the most popular methods.
LIMITATIONS OF PERFORMANCE APPRAISAL
1. Halo effect :- In this case the superior appraises the person on certain positive qualities only. The
negative traits are not considered. Such an appraisal will not give a true picture about the employee. And
in some cases, employees who do not deserve promotions may get it.
2. Horn effect :- In this case only the negative qualities of the employee are considered and based on this
appraisal is done. This again will not help the organization because such appraisal may not present a true
picture about the employee.
3. Central tendency :- In this case the superior gives an appraisal by giving central values. This prevents
a really talented employee from getting promotions he deserves and some employees who do not deserve
any thing may get promotion.
4. Leniency and strictness :- Some bosses are lenient in grading their employees while some are very
strict. Employee who really deserves promotions may loose the opportunity due to strict bosses while
those who may not deserve may get benefits due to lenient boss.
5. Spill over effect :- In this case the employee is judged +vely or –vely by the boss depending upon the
past performance. Therefore although the employee may have improved performance, he may still not get
the benefit.
6. Fear of loosing subordinates and spoiling relations :- Many bosses do not wish to spoil their relations
with their subordinates. Therefore when they appraise the employee they may end up giving higher grades
which are not required. This is a n injustice to really deserving employees.
7. Goodwill and techniques to be used :- Sometimes a very strict appraisal may affect the goodwill
between senior and junior. Similarly when different departments in the same company use different
methods of appraisal it becomes very difficult to compare employees.
8. Paper work and personal biased :- Appraisal involves a lot of paper work. Due to this the work load
of HR department increases. Personal bias and prejudice result in bosses favouring certain people and not
favouring others.