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1.

Induction and on boarding

Induction and ‘onboarding’ are the processes that should happen when someone
first starts a new job.

These processes are largely the responsibility of the line manager of the new
recruit, and ensure that new starters are able to settle in quickly and become
productive in their job.

These processes are vital in ensuring that you get value for money from
your recruitment process. Poor induction and onboarding processes lead to high
employee turnover within the first year after recruitment.

Inductionor orientation is a process which introduces the new recruit to the team,
the office and the organisation. It might include, for example, meetings with the
line manager, any direct reports, being shown around the building, and being given
information about any health and safety issues that are relevant.
Onboarding is the process that introduces the new recruit to the business, and gets
them ready to perform in the job. It should, for example, provide information
about:

 The business environment, including challenges facing the organisation;


 The people, such as culture and values of the team and organisation, and
information about stakeholders, including their level of current engagement;
 The recruit’s own plans for learning more about the job, and information
about possible resources that might be useful.

2 MBO

Management by objectives (MBO) is a strategic management model that aims


to improve the performance of an organization by clearly defining objectives
that are agreed to by both management and employees.

 Management by objectives (MBO) is a strategic management model that


aims to improve organizational performance by clearly defining objectives
that are agreed to by both management and employees.
 According to the theory, having a say in goal setting and action plans
encourages participation and commitment among employees, as well as
aligning objectives across the organization.
4. Succession and career planning:
Succession and career planning is the process of identifying, nurturing,
developing, and training new leaders for future requirements or replacement of the
existing leaders to continue the trend of dependable leadership in the organization.
Following are the stages to follow to ensure fruitful succession and career
planning −
 Identify the Critical Position − Organization should always keep a watch on
what are the key elements or contributors to their business, how to motivate
and retain talent, and what will be the next step if the main contributors
leave the organization due to any reason. Who are the specialized people to
perform the critical role?
 Analysis − This stage tells about the requirements to fill with a fit successor.
What are the gaps? What are the internal and external sources to fill the
gaps, what will be the strategy? What will be the competencies required?
 Development of Succession and Career Plan − It is also called as backup
plan to streamline the function of the organization. It identifies the
requirements and outlines a strategy to fill the gap and make sure that
functions are being performed well.
 Evaluate, Monitor, and Observe − This is the process of evaluation. It
involves constant monitoring, even after the gap or requirement is fulfilled.
Performance is observed to find out if any changes are required. In case if
any changes are required, quick action is taken.
Organizations have to face many barriers while implementing succession and
career planning. Following is the list of roadblocks −

 Delay in planning
 Dividing the business equally among partners
 Trusting the inheritor
 Being secretive about the plan
 Fearing your retirement years
 Not having a potential successor
 Assuming that a family member will take over the business

5. On the job training method:


There are two methods through which managers can improve their knowledge and
skills. One is through formal training and other is through on the job experiences.
On the job training is very important since real learning takes place only when one
practices what they have studied.
On the job training helps facilitate the career growth of an individual and helps
strengthen the skills they already possess, thereby reducing training costs the
company would otherways incur while individually training each new joiner.
This process is now recognised as a standard process in every industry.

The advantages of OJT are as follows:


1. On the job method is a flexible method.

2. It is a less expensive method.

3. The trainee is highly motivated and encouraged to learn.

4. Much arrangement for the training is not required.

On-the-job training methods are as follows:


1. Job rotation:
This training method involves movement of trainee from one job to another gain
knowledge and experience from different job assignments. This method helps the
trainee understand the problems of other employees.

2. Coaching:
Under this method, the trainee is placed under a particular supervisor who
functions as a coach in training and provides feedback to the trainee. Sometimes
the trainee may not get an opportunity to express his ideas.

3. Job instructions:
Also known as step-by-step training in which the trainer explains the way of doing
the jobs to the trainee and in case of mistakes, corrects the trainee.

4. Committee assignments:
A group of trainees are asked to solve a given organizational problem by
discussing the problem. This helps to improve team work.

5. Internship training:
Under this method, instructions through theoretical and practical aspects are
provided to the trainees. Usually, students from the engineering and commerce
colleges receive this type of training for a small stipend.
6. Internal Sources of Recruitment
Internal sources of recruitment refer to hiring employees within the organization
internally. In other words, applicants seeking for the different positions are those
who are currently employed with the same organization.
Internal sources of recruitment are the best and the easiest way of selecting
resources as performance of their work is already known to the organization. Let
us now discuss more on the various internal sources of recruitment.
Pros and Cons of Internal Sources of Recruitment
Internal sources of recruitment, i.e., hiring employees within the organization, has
its own set of advantages and disadvantages. The advantages are as follows −
 It is simple, easy, quick, and cost effective.
 No need of induction and training, as the candidates already know their job
and responsibilities.
 It motivates the employees to work hard, and increases the work relationship
within the organization.
 It helps in developing employee loyalty towards the organization.
The drawbacks of hiring candidates through internal sources are as follows −

 It prevents new hiring of potential resources. Sometimes, new resources


bring innovative ideas and new thinking onto the table.
 It has limited scope because all the vacant positions cannot be filled.
 There could be issues in between the employees, who are promoted and who
are not.
 If an internal resource is promoted or transferred, then that position will
remain vacant.
 Employees, who are not promoted, may end up being unhappy and demotiva

Promotions
Promotion refers to upgrading the cadre of the employees by evaluating their
performance in the organization. It is the process of shifting an employee from a
lower position to a higher position with more responsibilities, remuneration,
facilities, and status. Many organizations fill the higher vacant positions with the
process of promotions, internally.
Transfers
Transfer refers to the process of interchanging from one job to another without
any change in the rank and responsibilities. It can also be the shifting of
employees from one department to another department or one location to another
location, depending upon the requirement of the position.
Let’s take an example to understand how it works. Assume there is a finance
company called ABC Ltd. Having two branches, Branch-A and Branch-B, and an
employee from Branch-A resigned from his job responsibilities. Hence, this
position has to be filled for the continuation of the project in Branch-A.
In this scenario, instead of searching or sourcing new candidates, which is time
consuming and expensive, there is a possibility of shifting an employee from
Branch-B to Branch-A, depending upon the project requirements and the
capabilities of that respective employee. This internal shifting of an employee
from one branch to another branch is called as Transfer.
Recruiting Former Employees
Recruiting former employees is a process of internal sources of recruitment,
wherein the ex employees are called back depending upon the requirement of the
position. This process is cost effective and saves plenty of time. The other major
benefit of recruiting former employees is that they are very well versed with the
roles and responsibilities of the job and the organization needs to spend less on
their training and development.
Internal Advertisements (Job Posting)
Internal Advertisements is a process of posting/advertising jobs within the
organization. This job posting is an open invitation to all the employees inside the
organization, where they can apply for the vacant positions. It provides equal
opportunities to all the employees working in the organization. Hence, the
recruitment will be done from within the organization and it saves a lot of cost.
Employee Referrals
Employee referrals are an effective way of sourcing the right candidates at a low
cost. It is the process of hiring new resources through the references of employees,
who are currently working with the organization. In this process, the present
employees can refer their friends and relatives for filling up the vacant positions.
Organizations encourage employee referrals, because it is cost effective and saves
time as compared to hiring candidates from external sources. Most organizations,
in order to motivate their employees, go ahead and reward them with a referral
bonus for a successful hire.
Previous Applicants
Here, the hiring team checks the profiles of previous applicants from the
organizational recruitment database. These applicants are those who have applied
for jobs in the past. These resources can be easily approached and the response
will be positive in most of the cases. It is also an inexpensive way of filling up the
vacant positions.
2. Functions of human resource management

The functions of human resource management are designed to recruit potential


employees, hire and train them, and then support them in improving their
performance so they can reach their full potential and help the organization
achieve its targets. Put simply, it’s important to find the right people, develop
their skills over time, and create an environment where they can do their best
work. 

No matter the industry or the size of the organization, human resource


management plays a lead role in the success of the business and its people. Here
are five of the functions of human resource management.

1. Recruitment and hiring

One of the most well-known functions of human resource management is


recruitment and hiring. To remain competitive in the industry, businesses need to
attract and retain top talent. 

The HR team typically meets with a hiring manager to learn more about open
positions and gain a detailed understanding of the kind of people that will fit best
in those roles. While they also consider education, experience, and skills, HR
must look at personality traits and working styles to increase the chances of
long-term compatibility. 

A strategic HR department has a long-term recruiting and hiring plan that aligns
with the company’s growth goals. This plan includes creating job postings and
sharing them through their networks, screening incoming applications,
conducting interviews, performing reference and background checks, and
finalizing hiring paperwork.

2. Onboarding and ongoing training and development

Once a company hires employees, it’s vital to properly onboard and train them
so they have the tools to excel in their roles. Human resource management
provides on boarding for new employees, which can include sharing the
company mission, vision, and values, in addition to internal policies and
procedures. It may also include safety training, depending on the workplace. 
In addition to on boarding, HR also facilitates ongoing professional development
through training, seminars, workshops, and certifications. They may create
internal training or outsource it to training experts. Investing in employees’
professional development helps build loyalty and reduce turnover, not to mention
increasing performance and productivity.

3. Managing employee and employer relationships

A company’s success relies on its people, so human resource management must


focus on fostering healthy relationships among all levels of employees. 

This can include conflict resolution during tense situations or negotiating


positive outcomes for all involved parties. It may also include providing specific
types of training, such as anger management or mindfulness, to ensure
employees have the resources to manage themselves effectively in the
workplace. 

4. Creating a rewarding company culture 

One of the most overlooked functions of human resource management is


developing an engaging company culture. Keeping employee morale high
doesn’t happen only during team lunches or after-work drinks. It happens
through the ethos of the company — the mission, vision, and core values. 

Another HR responsibility includes making sure employees have competitive


pay and both tangible and intangible benefits. The department should identify
potential negative workplace cultural issues that could create problems among
employees and help steer the organization in the right direction.

5. Overseeing disciplinary action

A difficult aspect of human resource management is disciplining employees


when required. HR professionals must have a disciplinary process in place and
must ensure all employees are aware of it as part of their on boarding. 

If an incident occurs that requires disciplinary action, HR may need to notify the
employee with a written warning and include it in their file. It may even be
necessary to suspend, demote, or terminate the employee, depending on the
issue. It’s best to have a legal expert on the HR team who can ensure the
company follows all labor laws properly in terms of disciplinary actions.
Functions of human resource management can also include meeting compliance
regulations and industry safety standards, maintaining the integrity of employee
data, and overseeing employee benefits. Above all, the goal is to support
employees in performing to their full potential to help the company reach its
objectives.

Q4. The PLI concept has since expanded with schemes rolled out for multiple
sectors to boost India’s manufacturing capabilities and encourage export-oriented
production. The PLI schemes aim to develop capacities in the local supply chain,
introduce new downstream operations, and incentivize investments into high-tech
production.

1. Analyzing Current Manpower Inventory: The next step is to analyze the current


manpower supply in the organization through the stored information about the
employees in terms of their experience, proficiency, skills, etc. required to perform
a particular job.
Also, the future vacancies can be estimated, so as to plan for the manpower from
both the internal (within the current employees) and the external (hiring candidates
from outside) sources. Thus, it is to be ensured that reservoir of talent is
maintained to meet any vacancy arising in the near future.

2. Forecasting Demand and Supply of Human Resources: Once the inventory of


talented manpower is maintained; the next step is to match the demand for the
manpower arising in the future with the supply or available resources with the
organization.
Here, the required skills of personnel for a particular job are matched with the job
description and specification.

3. Analyzing the Manpower Gaps: After forecasting the demand and supply, the
manpower gaps can be easily evaluated. In case the demand is more than the
supply of human resources, that means there is a deficit, and thus, new candidates
are to be hired.
Whereas, if the Demand is less than supply, there arises a surplus in the human
resources, and hence, the employees have to be removed either in the form of
termination, retirement, layoff, transfer, etc.
4. Employment Plan/Action Plan: Once the manpower gaps are evaluated, the action
plan is to be formulated accordingly. In a case of a deficit, the firm may go either
for recruitment, training, interdepartmental transfer plans whereas in the case of a
surplus, the voluntary retirement schemes, redeployment, transfer, layoff, could be
followed.
5. Training and Development: The training is not only for the new joinees but also for
the existing employees who are required to update their skills from time to time.
After the employment plan, the training programmers are conducted to equip the
new employees as well as the old ones with the requisite skills to be performed on
a particular job.

6. Appraisal of Manpower Planning: Finally, the effectiveness of the manpower


planning process is to be evaluated. Here the human resource plan is compared
with its actual implementation to ensure the availability of a number of employees
for several jobs.
At this stage, the firm has to decide the success of the plan and control the
deficiencies, if any.

Thus, human resource planning is a continuous process that begins with the
objectives of Human Resource planning and ends with the appraisal or feedback
and control of the planning process.

Q6. Recruitment vs. Selection: Explore the Difference between Recruitment and
Selection
Recruitment and selection are both famous terms related to the hiring process.
Recruitment is a process which entails searching for candidates, and selection is a
process of picking the candidates from the shortlisted ones. Let’s find out more
differences between recruitment and selection.
What is Recruitment?
A process of actively searching and hiring applicants for a job role is known as
recruitment.
What is Selection?
A process of choosing suitable applicants from the shortlisted candidates is known
as selection. It is an important process that helps the HR to identify the difference
between qualified and unqualified applicants.
Difference between Recruitment and Selection

S.No. Recruitment Selection

A process of actively searching and A process of choosing suitable applicants


hiring applicants for a job role is from the shortlisted candidates is known
1 known as recruitment. as selection.

It is an activity to boost the candidate It is an activity to reduce the candidate


2 pool. pool until we find the ideal candidate.

This process allows the HR to proceed


It allows the candidates to apply for a further with suitable applicants, and
3 vacant place. reject the remaining.

In recruitment, we advertise the job Selection is the process in which we


role and encourage the candidates to finally appoint the candidate for the
4 apply. particular job role.

It is the first step towards the hiring It is the second step towards the hiring
5 process. process.

6 This process is economical. The process is comparatively expensive.

There is no contractual relation in the Selection involves a contractual relation


7 recruitment process. between the organisation and employee.

Q11. Performance Appraisal Methods: Traditional and Modern Methods!


Each method of performance appraisal has its strengths and weaknesses may be
suitable for one organisation and non-suitable for another one. As such, there is no
single appraisal method accepted and used by all organisations to measure their
employees’ performance.

All the methods of appraisal devised so far have been classified differently by
different authors. While DeCenzo and Robbins’^ have classified appraisal methods
into three categories: absolute methods, relative methods and objective methods;
Aswathappa has classified these into two categories past-oriented and future-
oriented.

Michael R Carrell et. al. have classified all appraisal methods into as many as six
categories: rating scales, comparative methods, critical incidents, 6ssay, MBO and
combination methods. Rock and Levis” have classified the methods into two broad
categories: narrow interpretation and broad interpretation. Beatty and Schneier
have categorised various methods of appraisal into four groups: comparative
methods, absolute methods, goal setting, and direct indices.

A more widely used classification of appraisal methods into two categories, viz.,
traditional methods and modem methods, is given by Strauss and Sayles”. While
traditional methods lay emphasis on the rating of the individual’s personality traits,
such as initiative, dependability, drive creativity, integrity, intelligence, leadership
potential, etc.; the modem methods, on the other hand, place more emphasis on the
evaluation of work results, i.e., job achievements than the personal traits! Modem
methods tend to be more objective and worthwhile. The various methods included
in each of the two categories are listed in Table 28.4.
Q14. What is the Kirkpatrick Evaluation Model?

The Kirkpatrick Evaluation Model was first introduced in 1959 by Donald


Kirkpatrick, a former Professor Emeritus at the University of Wisconsin. It has
since undergone several iterations over the years by Kirkpatrick and his family—
the most recent update, called the “New World Kirkpatrick Model,” was released
in 2016.

The model outlines four levels of training evaluation:

 Reaction
 Learning
 Behavior
 Results

The Kirkpatrick Model remains a popular and widely used evaluation strategy
because of its simplicity and relevancy across industries and organizations.

Benefits and limitations of the Kirkpatrick Model

The Kirkpatrick Model has a number of advantages that make it an attractive


choice for trainers and other business leaders:

 Provides clear evaluative steps to follow


 Works with traditional and digital learning programs
 Gives HR and business leaders valuable insight into their overall training
programs and their impact on business outcomes

Additionally, its simple approach is highly flexible and adaptable across industries
and applications, making it easy for trainers to implement the model.

However, there are limitations and tradeoffs. The system can be time-consuming
and requires costly investment to conduct all the pre-tests, post-tests, and analyses
of learning outcomes.

It is also difficult to directly link business results to specific training. Proving


efficacy and return on investment (ROI) is hard since the causes are often complex
and multifaceted. To do so accurately requires further resources and expertise.

Kirkpatrick’s 4 levels of training evaluation

Level 1: Reaction

The first step is documenting your employees’ reactions to the training. Employee
engagement (at work or in the “classroom”) is crucial for running a productive
business—but it’s not so easy to achieve.

Understanding how employees perceived the training can give you insight into
what is working well or needs improvement.

Level 2: Learning

Here you measure exactly what the employees learned (or didn’t learn) in the
training. To do this effectively, you should test your employees before and after the
training to measure progress. You can use skills-based evaluations or interviews to
record your findings.

Unlike simple or subjective reactions to the training, during this stage, you’ll want
to measure specific outcomes. Start by identifying what learning outcomes or
results you’re aiming for in the training, then test for those outcomes before and
after.
Level 3: Behavior

The next step is to gauge whether your training has impacted behavior. In other
words, are your employees applying what they learned?

This process takes time—after all, it can take weeks or months for employees to
build confidence or have the opportunity to apply their knowledge.

Level 4: Results

The final step of the Kirkpatrick Model is measuring results. This is the stage
where you evaluate how the behavioral changes impacted the business and whether
your training investment resulted in a good ROI.

Q16. The Kirkpatrick Model is a globally recognized method of evaluating the


results of training and learning programs. It assesses both formal and informal
training methods and rates them against four levels of criteria: reaction, learning,
behavior, and results.
Level 1: Reaction

The first level of criteria is “reaction,” which measures whether learners find the
training engaging, favorable, and relevant to their jobs. This level is most
commonly assessed by an after-training survey (often referred to as a “smile
sheet”) that asks students to rate their experience.

A crucial component of Level 1 analysis is a focus on the learner versus the trainer.
While it may feel natural for a facilitator to fixate on the training outcome (such as
content or learning environment), the Kirkpatrick Model encourages survey
questions that concentrate on the learner’s takeaways.

Level 2: Learning

Level 2 gauges the learning of each participant based on whether learners acquire
the intended knowledge, skills, attitude, confidence and commitment to the
training. Learning can be evaluated through both formal and informal methods, and
should be evaluated through pre-learning and post-learning assessments to identify
accuracy and comprehension.

Methods of assessment include exams or interview-style evaluations. A defined,


clear scoring process must be determined in advance to reduce inconsistencies.
Level 3: Behavior

One of the most crucial steps in the Kirkpatrick Model, Level 3 measures whether
participants were truly impacted by the learning and if they’re applying what they
learn. Assessing behavioral changes makes it possible to know not only whether
the skills were understood, but if it's logistically possible to use the skills in the
workplace.

Oftentimes, evaluating behavior uncovers issues within the workplace. A lack of


behavioral change may not mean training was ineffective, but that the
organization’s current processes and cultural conditions aren’t fostering an ideal
learning environment for the desired change. 

Level 4: Results

The final level, Level 4, is dedicated to measuring direct results. Level Four


measures the learning against an organization's business outcomes— the Key
Performance Indicators that were established before learning was initiated.
Common KPI’s include higher return on investments, less workplace accidents,
and larger quantity of sales.

Using the Kirkpatrick Model creates an actionable measurement plan to clearly


define goals, measure results and identify areas of notable impact. Analyzing data
at each level allows organizations to evaluate the relationship between each level
to better understand the training results— and, as an added benefit, allows
organizations to readjust plans and correct course throughout the learning process.

Q 13. As you will see from the types of training below, no one type would be
enough for the jobs we do. Most HR managers use a variety of these types of
training to develop a holistic employee.

Technical or Technology Training

Depending on the type of job, technical training will be required. Technical


training is a type of training meant to teach the new employee the technological
aspects of the job. In a retail environment, technical training might include
teaching someone how to use the computer system to ring up customers. In a sales
position, it might include showing someone how to use the customer relationship
management (CRM) system to find new prospects. In a consulting business,
technical training might be used so the consultant knows how to use the system to
input the number of hours that should be charged to a client.

Quality Training

In a production-focused business, quality training is extremely important. Quality


training refers to familiarizing employees with the means of preventing, detecting,
and eliminating nonquality items, usually in an organization that produces a
product. In a world where quality can set your business apart from competitors,
this type of training provides employees with the knowledge to recognize products
that are not up to quality standards and teaches them what to do in this scenario. 

Skills Training

Skills training, the third type of training, includes proficiencies needed to actually
perform the job. For example, an administrative assistant might be trained in how
to answer the phone, while a salesperson at Best Buy might be trained in
assessment of customer needs and on how to offer the customer information to
make a buying decision.

Soft Skills Training

Our fourth type of training is called soft skills training. Soft skills refer to


personality traits, social graces, communication, and personal habits that are used
to characterize relationships with other people. Soft skills might include how to
answer the phone or how to be friendly and welcoming to customers.

Professional Training and Legal Training

In some jobs, professional training must be done on an ongoing basis. Professional


training is a type of training required to be up to date in one’s own professional
field. For example, tax laws change often, and as a result, an accountant for H&R
Block must receive yearly professional training on new tax codes (Silkey, 2010).
Lawyers need professional training as laws change. A personal fitness trainer will
undergo yearly certifications to stay up to date in new fitness and nutrition
information.
Q12. What’s the difference?

Traditional methods tend to measure an employee’s past performance and focus


on assessing employee personality traits — such as initiative, dependability, and
leadership potential — while modern methods weigh job achievements more
heavily, regardless of the employee’s personality traits, which is thought to be a
less biased approach.

Traditional Methods of Performance Appraisal


1) Rating Scales Method

It is a popular traditional method of performance appraisal. In this method, a rating


scale is created to evaluate the performance of employee against certain
parameters. These parameters usually include his attitude, attendance, punctuality
and interpersonal skills. The rating scale used in this method ranges from 1 to 10.
Low score indicates negative feedback and high score indicates positive feedback.

2) Checklist Method

In this method, a checklist is prepared. It is comprised of descriptive statements


related to behavior of the employee. Each statement has two options, Yes & No or
True or False. The rater can choose one out of two options which he thinks
correctly describes the behavior of the employee.

3) Forced Distribution Method

This method was popular in big organizations. It is based on the fact that the
performance of employees varies greatly in an organization, some would be more
productive and some would be less productive. So in this method, the manager is
forced to distribute employees on the basis of their performance on all points of the
bell shaped scale. Some fall into outstanding zone, some into average and some
into the bottom region of the curved scale.

4) Critical Incident Method

Critical incident method gives emphasis on critical behaviors of employees such as


the reaction of employee to a certain situation. So in this method, the performance
is evaluated against a list of critical behaviors. For example,

00:00/01:02

On July 22 the manager efficiently handled an annoyed customer. He was very


prompt and polite in solving the issue ? It is a positive critical incident.

On July 22, the manager was very rude in handling an annoyed customer ? it is a
negative critical incident.
5) Essay Method

In this method, the rater writes a description about the behavior and performance
of the employee. The description includes all relevant information like employee?s
attitude, job knowledge, current performance and potential for growth.

6) Paired Comparison Method

In this method, one particular trait is considered to evaluate the employees. Based
on this trait, each employee is compared with others on one to one basis, in pairs.
The possible number of pairs is calculated by the formula: N (N-1)/2. N is the
number of employees to be evaluated. Let us understand it with an example:

There are five employees A,B,C,D,E who are to be evaluated. So on applying the
formula 5(5-1)/2, there will be 10 pairs to be compared.

A with B B with C C with D D with E

A with C B with D C with E

A with D B with E

A with E

7) Field Review Method

This method is based on superiors' opinion on the performance, behavior and skills
of the employee. The HR specialist asks seniors to answer questions related to
employee's employment and appraises the employee on the basis of feedback
received from the superiors.

Modern Methods:
Management by Objectives (MBO):
The management by objectives method is an approach that focuses on improving
an organization’s performance across the board by articulating clear objectives
for the business. The entire team, both management and employees, sets those
objectives.
2. 360 degree feedback

The 360 degree feedback method is designed to get feedback from all the key
players an employee impacts in their day-to-day activities — managers and
supervisors, peers, subordinates, and even clients and customers. The employee
also completes a self-evaluation.

3. Behaviorally anchored rating scale (BARS)

According to HR software company TalentLyft, BARS is “a measuring system


which rates employees or trainees according to their performance and specific
behavioral patterns.”

This is considered one of the most effective modern methods of performance


appraisal because it relies on both quantitative and qualitative forms of
measurement. In this approach, the employer compares each employee’s
performance with specific behavioral examples that are anchored to numerical
ratings.

4. Psychological appraisal

This approach to performance appraisal attempts to evaluate how an employee


might perform in the future rather than assessing how they have performed in the
past.

A qualified psychologist conducts in-depth interviews, psychological tests, and


private conversations to assess an employee. The psychologist analyzes
components such as interpersonal skills, cognitive abilities, intellectual traits,
leadership skills, personality traits, emotional quotient, and other factors.
5. Assessment center

In the assessment center method, an organization tests its employees on both job
capabilities and social interaction skills. Written tests help evaluate ability, while
situational exercises and role-playing scenarios assist with determining an
employee’s likelihood of success in carrying out responsibilities that are part of
their day-to-day role.

Advantages of Performance Appraisal:


1. Performance improvement:
Appraisal systems always aim at improving the performance of employees. It helps
to analyse and evaluate opportunity factors such as technology and social process.

2. Development of employees:
Appraisal systems determine which employee needs more training and becomes
primary source of information regarding the strengths and potentialities of the
employees.

3. Corrective actions:
Any deficiency of employees can be detected and corrective steps can be taken
through appraisal system.

4. Career planning:
Performance appraisal serves as a valuable tool in the case of career planning to
the employees, since it helps in preparing SWOT analysis of every employee.

5. Promotions:
Performance appraisal also helps the management in deciding about the
promotions, transfers and rewards of the employee.
Disadvantages of Performance Appraisal:
1. The Halo effect:
Halo effect is defined as the ‘influence of a rater’s general impression on ratings of
specific rate qualities’. It tends to occur when an evaluation rates an employee high
on all jobs criteria, even if he has performed well only in one area.

2. Contrast error:
The rating is always based on performance standards. The contrast error occurs
when employee is rated without taking into account the performance standard. This
can also occur if a rater compares an employee’s present performance with their
past performance.

3. Rater bias:
The rater’s prejudices and biasness can also influence rating. For example, a
supervisor can underrate an employee based on race, sex, religion, appearance and
favouritism.

4. Central tendency error:


When the supervisor rates all the employees within a narrow range, thinking all
employees are of average level, this type of error occurs.

5. Leniency or severity:
Performance appraisal demands that the rater should objectively draw a conclusion
about employee’s performance.
Q1.6 . What is indirect compensation?

Indirect compensation refers to the various forms of non-monetary pay offered to


employees, that can include everything from common contractual features to
useful, attractive benefits.

What are examples of indirect compensation?

Casually called “employee benefits,” companies commonly offer employees


indirect compensation in a variety of different ways. See this list of indirect
compensation examples:

 Pension funds
 Cell phones
 Company cars
 Health insurance
 Life insurance
 Overtime pay
 Annual leave
 Childcare
 Tuition reimbursement. Some companies support employees in earning a
degree or taking additional classes that ultimately benefit both employee and
employer. 

 Meals. Some companies provide occasional pizzas when people work late


nights, but others give this delicious form of employee benefits every day
through free lunches. While it saves employees time and money, it’s also a
sneaky trick businesses use to keep you at the office and not wasting time in
restaurants.

 Phones and computers. These are necessary tools for many jobs, but they
can also be a perk if you can use them for personal reasons and work. 

 Retirement funds. While this is ultimately a cash payment, its deferred


nature tends to put it in the indirect compensation category. Whether it’s a
traditional pension plan or some other form of retirement savings, it’s a
benefit employees often look for.

 Life and other insurance. Health insurance is not the only type of insurance
companies can provide. Life, disability (short and long term), legal
insurance, pet insurance, and even discounts on car and property insurance
can be indirect compensation examples.

 Company cars. This perk is generally limited to salespeople and executives,


but it can still be a powerful recruitment and retention tool.

 Stock and other company ownership plans. Again, while this ultimately is


monetary compensation because it doesn’t immediately hit your paycheck
many consider these essential compensation tools part of indirect
compensation. Many of these plans require employees to vest – that is, work
for three to five years (usually) before accessing any of the benefits from this
perk.
 Childcare and private school tuition. Daycare is expensive. Companies that
can offer free or subsidized daycare boost the disposable income level of
their employees with young children. Companies that employ many foreign
employees often cover some or all of the tuition for expatriate children to
attend private schools. This is especially attractive to employees who don’t
speak the local language and prefer to have their children educated in their
native language or English.

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