Performance Appraisal

 Performance Appraisal

The term performance appraisal refers to the regular review of an employee's job performance and overall contribution to a company. Also known as an annual review, performance review or evaluation, or employee appraisal, a performance appraisal evaluates an employee’s skills, achievements, and growth, or lack thereof.

Companies use performance appraisals to give employees big-picture feedback on their work and to justify pay increases and bonuses, as well as termination decisions. They can be conducted at any given time but tend to be annual, semi-annual, or quarterly.

KEY TAKEAWAYS

·         A performance appraisal is a regular review of an employee's job performance and contribution to a company.

·         Companies use performance appraisals to determine which employees have contributed the most to the company’s growth, review progress, and reward high-achieving workers.

·         Although there are many different kinds of performance reviews, the most common is a top-down review in which a manager reviews their direct report.

·         Employees who believe the evaluation's construction isn't reflective of their company's culture may feel dissatisfied with the appraisal process.

·         Performance appraisals are also called annual reviews, performance reviews or evaluations, or employee appraisals.

How Performance Appraisals Work

Performance appraisals are usually designed by human resource (HR) departments as a way for employees to develop in their careers. They provide individuals with feedback on their job performance. It ensures that employees are managing and meeting the goals expected of them, giving them guidance on how to reach them if they fall short.

Because companies have a limited pool of funds from which to award incentives, such as raises and bonuses, performance appraisals help determine how to allocate those funds. They provide a way for companies to determine which employees have contributed the most to the company’s growth so companies can reward their top-performing employees accordingly.

Performance appraisals also help employees and their managers create a plan for employee development through additional training and increased responsibilities, as well as to identify ways the employee can improve and move forward in their career.

Ideally, the performance appraisal is not the only time during the year that managers and employees communicate about the employee’s contributions. More frequent conversations help keep everyone on the same page, develop stronger relationships between employees and managers, and make annual reviews less stressful.

Types of Performance Appraisals

Most performance appraisals are top-down, meaning supervisors evaluate their staff with no input from the subject. But there are other types:

·         Self-assessment: Individuals rate their job performance and behavior.

·         Peer assessment: An individual's workgroup or coworkers rate their performance.

·         360-degree feedback assessment: Includes input from an individual, supervisor, and peers.

·         Negotiated appraisal: A newer trend that utilizes a mediator and attempts to moderate the adversarial nature of performance evaluations by allowing the subject to present first. Also focuses on what the individual is doing right before any criticism is given. This structure tends to be useful during conflicts between subordinates and supervisors.

 

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.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

2.  To identify the strengths and weaknesses of employees to place right men on right job.

3. To maintain and assess the potential present in a person for further growth and development.

4. To provide a feedback to employees regarding their performance and related status.

5. To provide a feedback to employees regarding their performance and related status.

6. It serves as a basis for influencing working habits of the employees.

7. To review and retain the promotional and other training programmes.

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:

a.     Through performance appraisal, the employers can understand and accept skills of subordinates.

b.     The subordinates can also understand and create a trust and confidence in superiors.

c.      It also helps in maintaining cordial and congenial labour management relationship.

d.     It develops the spirit of work and boosts the morale of employees.

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.

Elements of the Organizing –Specialization, Standardization , Coordination, Authority

 Elements of the Organizing –

Introduction

Organizational structure is a formal system of working relationships that both separates and integrates functions and duties. While separation of duties identifies the work responsibilities for each employee, integration of duties guides people how to engage together in teamwork. This enables combining all resources together effectively to achieve the operational and strategic objectives of a company.

​Those Strategic objectives, along with the mission and the vision of a company, shall determine the organizational structure that facilitates the correct implementation of the strategy and business plans.

​Organizational structures are implemented to ensure that every aspect of the organization, employment, decision making, and management is integrated within the strategic objectives of the company and that it contributes to the successful achievement of those objectives. 

Organizational structures help managers and employees work together effectively by forming a basis for the following: 

1.     Assigning employees to well-defined duties that enables them to realize their objectives and incorporate these into the strategic objectives.

2.     Clarifying employees’ responsibilities and how they should use lines of authority based on the organizational structure, which eases responsibility and accountability. 

3.     Designing effective communication channels that define the flow of information and employees’ relationships, to ensure effective organizational performance.

Elements of the Organizational Structure

​The four basic elements in designing a suitable organizational structure for a company.

 

Specialization

Is the process of identifying tasks and assigning them to individuals or work groups who have been trained to do them? Managers could be differentiated into two types: Business Managers who usually supervise one subsidiary and Functional Managers who might oversee a function such as finance.

Standardization

​Standardization is defining the managerial levels in a clear manner, and unifying job titles and organizational entities within the same managerial level.

Coordination

Coordination is the formal and informal procedures that integrate the activities performed by separate groups in an organization. Departmentalization divides the organizations’ work and allows for specialization and standardization of activities. However, in order to achieve organizational objectives, managers also need to coordinate people, and tasks. Coordination facilitates integration between different functions, since coordination can be defined as the process of integrating all the parts of the whole to achieve common objectives. Without coordination, people’s efforts are likely to end in delay, frustration, and waste. 

For these reasons, you need to consider coordination as one of the basic elements of the organizational structure. Whereby, Coordination has three basic principles: 

1. Unity of Command Principle

​The unity of command principle states that an employee should have only one direct supervisor. Every employee needs to know who is giving the orders and to whom he or she reports.

​Organizational structure must minimize any confusion over who makes decisions and who implements them, since uncertainty in this area can lead to serious productivity and morale issues. 

2. Scalar Principle 

​The scalar principle states that a clear and unbroken chain of command should link every person in the organization with someone at a higher level, all the way to the top of the organizational structure. Tasks should be delegated clearly, with no overlapping or splitting of assignments.

3. Span of Management Principle

​The span of management principle states that the number of people reporting directly to one manager must be limited since one manager cannot effectively supervise many subordinates.

​There is no specific number of subordinates that a manager can supervise effectively. The four key factors that determine the best span of management for this given situation:

1.     The competence of the manager and the employees. 

2.     The similarity or dissimilarity of tasks being supervised.

3.     The incidence of new problems in the manager’s department. 

4.     The extent of clear operating standards and rules.

Authority

​Authority is the fourth element of organizational structuring; it is the right to act or decide. Authority implies responsibility and accountability, i.e. managers accept the responsibility for acting and are willing to be held accountable for success or failure. Furthermore, when delegating tasks to others, managers should take into consideration to match the responsibility they confirm with authority and then insist on accountability for results. 

1. Responsibility

​Responsibility is an employee’s obligation to perform assigned tasks. The employee acquires this duty upon accepting the job or a specific assignment. A manager is responsible not only for carrying out certain tasks but also for the actions of subordinates.

2. Accountability

Accountability is the expectation that each employee will accept credit or blame for results achieved in performing assigned tasks. Management also expects employees to report the results of their work. This feedback enables management to determine whether affective decisions are being made and whether tasks are being performed properly. 

A manager cannot check every task an employee performs. The manager should establish guidelines within which work must be done, and then the employee is accountable to perform within these limits. Thus, unlike authority, accountability always flows from the bottom to the top. It should be emphasized that accountability is the point at which authority and responsibility meet.

3. Delegation of Authority

​Delegation of authority is one of the important issues which was considered during establishing the organizational structure and could be defined as the process by which managers assign the right to act and make decisions in certain areas to subordinates. In other words, the manager assigns a task to a subordinate along with adequate authority to carry it out effectively. 

​Delegation starts when the structure of the organization is being established and tasks are divided. It continues as new tasks are added during day to day operations. The basic components of the delegation process are determining expected results, assigning tasks and the authority to accomplish them, and holding others accountable for results achieved.

4. Centralization and Decentralization of Authority

​Centralization and decentralization of authority are basic overall management philosophies of delegation of where decisions are to be made. Centralization of authority is characterized by authority concentrated at the top of an organization or department. 

​Decentralization of authority is characterized by high degree of delegated authority throughout an organization or department. The centralization is an approach that requires managers to decide what and when to delegate, to carefully select and train personnel, and to formulate adequate controls. 

Neither centralization nor decentralization is absolute. A single manager cannot make all the decisions, even in centralized settings, and total delegation would end the need for middle and first line managers. Thus, a combination of centralization and decentralization are taken into consideration in the design of the organizational structure.

Training and Development

 

Training and Development

Employee training and development is an indispensable part of human resource function and management. Both the activities aim at improving the performance and productivity of the employees. Training is a program organized by the organization to develop knowledge and skills in the employees as per the requirement of the job. Conversely, Development is an organized activity in which the manpower of the organization learn and grow; it is a self-assessment act.

In training, the employees are imparted technical knowledge and skills related to the particular job and stresses on improving the abilities of each worker. In contrast, development is a sort of educational process which focuses on the growth and maturity of the managerial personnel. Check out the article given below, that elucidates the difference between training and development, in tabular form.

Comparison Chart

BASIS FOR COMPARISON	TRAINING	DEVELOPMENT
Meaning	Training is a learning process in which employees get an opportunity to develop skill, competency and knowledge as per the job requirement.	Development is an educational process which is concerned with the overall growth of the employees.
Term	Short Term	Long Term
Focus on	Present	Future
Orientation	Job oriented	Career oriented
Motivation	Trainer	Self
Objective	To improve the work performances of the employees.	To prepare employees for future challenges.
Number of Individuals	Many	Only one
Aim	Specific job related	Conceptual and general knowledge

 

Definition of Training

Training is a process in which the trainees get an opportunity to learn the key skills which are required to do the job. Learning with earning is known as training. It helps the employees to understand the complete job requirements.

Nowadays, many organisations organise a training program for the new recruits just after their selection and induction, to let them know about the rules, policies and procedures for directing their behaviour and attitude as per the organisational needs. Training also helps the employees to change the conduct towards their superior, subordinates and colleagues. It helps to groom them for their prospective jobs.

 

Training Process

Induction training, vestibule training, apprenticeship training, job training, promotional training, internship training are some of the major types of training. The merits of the training are given as under:

• It results in higher productivity both quantitatively and qualitatively.
• It develops a number of skills in the employees.
• Improved performances.
• The cooperative environment of the organisation.
• It builds confidence in the employees for doing a job.
• Decreased employee turnover.
• Lesser chances of accidents.

Definition of Development

The training for the top level employees is considered as development, also known as management or executive development. It is an on-going systematic procedure in which managerial staff learns to enhance their conceptual, theoretical knowledge. It helps the individual to bring efficiency and effectiveness in their work performances.

Development is not only limited to a particular task, but it aims to improve their personality and attitude for their all round growth which will help them to face future challenges. It changes the mindset of the employees and makes them more challenging or competing.

As the technology needs updating, the manpower of the organisation also needs to be updated, so the development is a must. Development is an educational process which is unending, as education has no visible end. It involves training a person for higher assignments. It digs out the talents of the managerial staff and helps in applying the new knowledge, which is a requirement of the organisation.

Coaching, mentoring, counselling, job-rotation, role playing, case study, conference training, special projects are some of the methods of development.

The performance of an organisation is based on the quality of its employees, and so the greater the quality of employees, the greater will be their performance. The primary purpose of development is that the second list of managers or executives is prepared for future replacement.

 

 

Key Differences Between Training and Development

The major differences between training and development are as under:

1.     Training is a learning process for new employees in which they get to know about the key skills required for the job. Development is the training process for the existing employees for their all round development.

2.     Training is a short-term process i.e. 3 to 6 months, but development is a continuous process, and so it is for the long term.

3.     Training focuses on developing skill and knowledge for the current job. Unlike, the development which focuses on the building knowledge, understanding and competencies for overcoming with future challenges.

4.     Training has a limited scope; it is specific job oriented. On the other hand, development is career oriented and hence its scope is comparatively wider than training.

5.     In training, the trainees get a trainer who instructs them at the time of training. In contrast to development, in which the manager self-directs himself for the future assignments.

6.     Many individuals collectively attend the training program. Development is a self-assessment procedure, and hence, one person himself is responsible for one’s development.

Recruitment and Selection , Difference between Recruitment and Selection

 

Recruitment

Recruitment refers to the process of identifying, attracting, interviewing, selecting, hiring and on boarding employees. In other words, it involves everything from the identification of a staffing need to filling it.

Recruitment is the first step in building an organization's human capital. At a high level, the goals are to locate and hire the best candidates, on time, and on budget.

Recruitment is the process of actively seeking out, finding and hiring candidates for a specific position or job. The recruitment definition includes the entire hiring process, from inception to the individual recruit’s integration into the company.

Definition of Recruitment

Recruitment is a process of finding out the prospective applicants and stimulating them to apply for the vacancy. It is a long process which involves a series of activities that starts with analysing the job requirements and ends on the appointment of the employee. The activities involved in the recruitment of employees are as under:

·         Analysing job requirement

·         Advertising the vacancy

·         Attracting candidates to apply for the job

·         Managing response

·         Scrutiny of applications

·         Shortlisting candidates

The recruitment is done by the Human Resource managers either internally or externally. The sources of internal recruitment are promotion, transfers, retrenched employees, contact or references, ex-employees, retired employees, etc. On the other hand, sources of external recruitment are recruitment through advertisement, campus recruitment, recruitment by employment exchanges, recruitment by third parties (recruitment agencies), internet recruiting, unsolicited applicants, etc.

Definition of Selection

Selection is an activity in which the organisation selects a fixed number of candidates from a large number of applicants. It involves the actual appointment of the employee for filling up the vacancies of the enterprise. The term selection means the placement of the right man at the right job. We all know that a lot of people apply for a single job at the time of recruitment, in which the recruiters have to decide which candidate fits the best for the job.

The selection also involves a set of activities which are given as under:

·         Screening

·         Eliminating unsuitable candidates

·         Conducting the examination like aptitude test, intelligence test, performance test, personality test, etc.

·         Interview

·         Checking References

·         Medical Test

The process of selection is a time-consuming one because the HR managers have to identify the eligibility of every candidate for the post. Besides this, the educational qualification, background, age, etc. are also some of the most important factors in which they have to pay more attention. After this, the written examination and interview is also a very tough task.

BASIS FOR COMPARISON	RECRUITMENT	SELECTION
Meaning	Recruitment is an activity of searching candidates and encouraging them apply for it.	Selection refers to the process of selecting the best candidates and offering them job.
Approach	Positive	Negative
Objective	Inviting more and more candidates to apply for the vacant post.	Picking up the most suitable candidate and rejecting the rest.
Key Factor	Advertising the job	Appointment of the candidate
Sequence	First	Second
Process	Vacancies are notified by the firm through various sources and application form is made available to the candidate.	The firm makes applicant pass through various levels like submitting form, written test, interview, medical test and so on.
Contractual Relation	As recruitment only implies the communication of vacancies, no contractual relation is established.	Selection involves the creation of contractual relation between the employer and employee.
Method	Economical	Expensive