Human Resource Management II Semester

Unit-3: Training and Development: Definition, Training vs. Development, Importance of

Training and Development, Process of Training, Methods of Training and Management
development programmes. Performance Appraisal: Concepts of Performance
Management, Process of Performance Management, Performance Appraisal, Techniques of
Performance Appraisal, Errors in Performance Appraisal, Career Management
Training and Development: Training and Development in Human Resource
Management is the process of acquiring knowledge, skills, and attitude that helps improve
employees’ job performance and enables future career growth.
Training refers to acquiring specific knowledge and skills for a particular job or task. It is
usually a short-term activity concerned with improving an employee’s current job performance.
It includes formal training courses, on-the-job training, or coaching sessions.
Development is concerned with the long-term growth of an individual’s career. It usually
covers acquiring knowledge that goes beyond the requirements of their current job to prepare
the employees for their future job role or career advancement opportunities. Development
activities include job shadowing, mentoring, attending conferences, or pursuing further
education.
Employees can enhance their job performance, career growth, and job satisfaction through
training and development. In contrast, organizations can benefit from better employee
engagement, retention and higher productivity.
Training and Development Definition by the Eminent Authors: Here below are the
definitions given by the expert and eminent authors:
 Armstrong: “Training is the formal and systematic modification of behavior through
learning which occurs as a result of education, instruction, development and planned
experience. Development is improving individual performance in their present Roles and
preparing them for greater responsibilities in the future”.
 Katz & Kahn: “Training and development is described as a maintenance subsystem,
intended to improve organizational efficiency by increasing routinization and
predictability of behavior”.
 Kllatt, Murdick & Schuster: “Training is a systematic way of altering behavior to
prepare an employee for a job or to improve the employee’s performance on the present
job, and development is preparing an employee for improving the conceptual, decision-
making, and interpersonal skills in complex, in structured situation”
 Lussier: “Training is a process of acquiring the skills necessary to perform a job and
development is the ability to perform both present and future jobs”.

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 McLagan: “Training and development focuses on identifying, assuring and helping

develop, through planned learning, the key competencies that enable individuals to
perform current or future jobs”.
 Kirkpatrick: “Training refers to the teaching of specific knowledge and skills required
on the individual’s present job. The term development refers to the growth of the
individual and preparations for higher-level jobs”.
 Kleiman: "Training and development are planned learning experiences that teach
workers how to perform their current or future jobs effectively."
 Sugar: “Training is defined as an instruction geared towards developing a specific group
of skills or tasks”
 Smith: “Training is a planned process to modify attitude knowledge or skill behavior
through learning experience to achieve effective performance in an activity or a range of
activities”
 Fuller & Farrington: “Training is designed to increase the skills and knowledge of
people.”
Objectives of training and development: The objectives of training and development
in organizations can vary depending on specific needs and goals. However, some common
objectives include:
1. Enhancing Employee Skills and Knowledge: One of the primary objectives of
training and development is to improve the skills, knowledge, and competencies of
employees. By providing relevant training programs, organizations aim to enhance the
capabilities of their workforce, enabling them to perform their jobs more effectively and
efficiently.
2. Increasing Employee Performance: Training and development initiatives are
designed to improve employee performance. By addressing skill gaps and providing
opportunities for growth, organizations aim to enhance individual and team performance,
leading to increased productivity, quality of work, and overall organizational performance.
3. Facilitating Employee Adaptability and Flexibility: In today's rapidly
changing business environment, organizations need employees who are adaptable and
flexible. Training and development programs help employees acquire new skills, adapt to
technological advancements, and stay up-to-date with industry trends, enabling them to
navigate change more effectively.

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4. Promoting Employee Engagement and Motivation: Training and development

initiatives can contribute to higher levels of employee engagement and motivation. By
investing in employee growth and development, organizations demonstrate their
commitment to employee well-being, which can foster a sense of loyalty, job satisfaction,
and motivation among employees.
5. Supporting Succession Planning and Career Development: Training and
development play a crucial role in succession planning and career development. By
identifying and nurturing high-potential employees, organizations can prepare them for
future leadership roles and create a talent pipeline within the organization.
6. Improving Employee Retention and Satisfaction: Providing opportunities for
learning and development can contribute to higher employee satisfaction and retention
rates. Employees are more likely to stay with organizations that invest in their professional
growth and offer opportunities for advancement.
7. Fostering a Learning Culture: Training and development initiatives can help foster
a learning culture within organizations. By encouraging continuous learning and
knowledge sharing, organizations can create an environment that promotes innovation,
creativity, and continuous improvement.
Need for training and development: The need for training and development in
organizations arises from various factors and can be critical for their success. Here are some
key reasons why training and development is necessary:
1. Skills Enhancement: Training and development programs help employees acquire
new skills and enhance existing ones. In today's rapidly evolving business landscape,
employees need to stay updated with the latest industry trends, technological
advancements, and best practices to perform their jobs effectively. By providing relevant
training, organizations can ensure that employees have the necessary skills to meet job
requirements and contribute to organizational goals.
2. Improved Performance: Training and development initiatives can significantly
improve employee performance. By addressing skill gaps, providing job-specific training,
and offering opportunities for professional growth, organizations can enhance employee
productivity, quality of work, and overall performance. Well-trained employees are more
likely to perform their tasks efficiently, make fewer errors, and produce better results.
3. Adaptability to Change: Organizations often undergo changes, such as technological
advancements, process improvements, or shifts in market demands. Training and
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development programs can help employees adapt to these changes more effectively. By
providing training on new technologies, process updates, or changes in job roles,
organizations can minimize resistance to change and ensure a smooth transition.
4. Increased Employee Engagement and Motivation: Investing in employee
training and development demonstrates an organization's commitment to employee growth
and well-being. When employees feel valued and provided with opportunities for learning
and advancement, they are more likely to be engaged, motivated, and satisfied with their
jobs. Training and development initiatives can contribute to higher levels of employee
engagement, leading to increased productivity and reduced turnover.
5. Succession Planning and Talent Development: Training and development
programs play a crucial role in succession planning and talent development. By identifying
high-potential employees and providing them with opportunities for growth, organizations
can prepare future leaders and ensure a smooth transition in leadership roles. It also helps
in building a talent pipeline within the organization, reducing the need for external
recruitment.
6. Enhanced Organizational Reputation: Organizations that invest in training and
development often gain a positive reputation as employers that value employee growth
and development. This can attract top talent and improve the organization's brand image
in the market. Additionally, organizations with skilled and well-trained employees are
more likely to deliver high-quality products or services, leading to increased customer
satisfaction and loyalty.
7. Regulatory Compliance and Risk Management: In certain industries,
compliance with regulations and adherence to specific standards are critical. Training and
development programs can help employees understand and comply with legal and
regulatory requirements, minimizing risks and potential liabilities for the organization.
Training Vs Development: The following are the differences between training and
development:

S.no Aspect Training Development

Acquisition of specific job-related skills and Broader growth and expansion of employee
1 Focus
knowledge. capabilities for future roles.
Time Long-term perspective for personal and
2 Short-term focus on immediate skill gaps.
Orientation professional growth.
Holistic development of various skills and
3 Scope Job-specific skills and knowledge.
competencies.

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S.no Aspect Training Development

Enhancing employee performance in current Preparing employees for future roles and
4 Purpose
roles. responsibilities.

5 Duration Often short-term programs or workshops. Ongoing and continuous development initiatives.

Wide range of skills, including leadership,

6 Breadth Narrow focus on specific job-related skills.
communication, and critical thinking.
Technical skills, job-specific processes, and Leadership development, soft skills, strategic
7 Content
compliance training. thinking, career planning.
Classroom training, workshops, e-learning, Mentoring, coaching, job rotations, experiential
8 Methods
on-the-job training. learning, self-directed learning.
Generally, employees at all levels of the Can include employees at all levels, with a focus
9 Participants
organization. on high-potential individuals.
Scheduled training events based on Ongoing and integrated into employee
10 Timing
identified needs. development plans and career paths.
Emphasizes structured learning and specific Emphasizes continuous learning, self-directed
11 Approach
objectives. growth, and long-term objectives.
Improves immediate job performance and Enhances individual growth, potential, leadership
12 Impact
efficiency. capabilities, and career progression.
Assessing knowledge and skills gained Assessing individual growth, performance
13 Evaluation
through training programs. improvements, readiness for new roles.

Typically, a targeted investment for Considered a long-term investment in building

14 Investment
immediate skill development. talent and organizational capability.
Often standalone initiatives separate from Integrated into the overall talent management and
15 Integration
day-to-day work. organizational development strategy.

Importance of Training and Development: Training and Development attempts to

a) Improve the current or future performance of an employee.
b) Increase employee’s ability to perform through learning.
c) Change employee’s attitude or increase his/her skills and knowledge.
The training and development programmes improve employees’ performance, which directly
helps an organisation to achieve its goals. Thus, training benefits both employees and the
organisation. Let us analyse the importance of training and developments.
1. Importance towards the Organisations: They are as follows:

a) Systematic learning process: In the absence of proper training employees use hit
and trial methods to perform the tasks assigned to them which led to wastage of resources
and effort. With the help of training, employees learn the systematic way of doing specific
jobs.

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b) Enhances productivity: Systematic processes help employees to perform tasks

efficiently and effectively leading to increased productivity and improved performance.
c) Develops future managers: Training improves managerial skills amongst employees
enabling them to manage enterprise in case of emergency.
d) Higher Profits: The systematized learning helps employees to perform tasks most
effectively and efficiently. This not only improves the employee performance but also
increases the quantity and quality of work done in the organisation. The improved
performance leads to higher profits and better growth prospects for the organisation.
e) Lesser wastage and reduced risks of accidents: Proper training enables
employees to use resources in the most optimal manner and operate machines with proper
technical and operating skills. This leads to lesser wastage of resources and reduced risks
of accidents.
f) Reduces absenteeism and employee turnover: With effective training
employees are able to improve their performance. This gives them job satisfaction and
increases their confidence. Satisfaction in work not only reduces absenteeism but also
keeps employees’ content leading to reduced turnover.
g) Helps to adapt changes in business environment: Training programmes aim to
upgrade employees’ knowledge and skills enabling them to respond positively to the
economic and technological changes in the business environment.
2. Importance towards the Employees: They are as follows:
a) Growth opportunities: Training programmes upgrade employees’ knowledge,
develop their skills and prepare them for higher responsibilities. It enables employees to
take challenges and thus have better growth opportunities.
b) Higher income: Training improves employees’ skills and help them to manage
activities effectively leading to improved performance. This gives them opportunities to
earn higher salaries or incentives.
c) Increases efficiency and reduces risks: Training helps employees to learn the
most effective ways of handling machines and jobs assigned to them. This increases their
efficiency and reduces the risks of accidents.
d) High morale and job satisfaction: Training helps employees to complete the jobs
assigned to them in an effective and efficient manner. This increases the job satisfaction
and develops high morale among employees.

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e) Makes new employees comfortable in new environment: Training is a mode

to familiarise newly appointed employees not only with the organisation but also helps
them to acquire knowledge and skills required to perform the duties assigned to them. It
helps new employees to start their work without any hindrance.
Process of Training: The Training Process consists of well-planned step by step process
that should be adopted while deciding a training program. Training is an investment made by
an organization with the objective of achieving some desired results. If the training is effective
then it can be very profitable for the organization. Below are the steps involved in
the training process:
1. Needs Assessment: The first step in the training process is to assess the need for
training the employees. Its analysis what are the long term requirements of the organization
and what does the organization expects from the employees. If there is a mismatch between
the skills and knowledge required, it means there is a learning gap. To assess this learning
gap below three elements is closely examined.
a) Organization analysis: The objectives of the organization are studied. The end
result that a company wants to achieve is examined in context to how it uses its
resources to achieve the same. Organizations’ internal and environment is also
considered.
b) Operation Analysis: A job requires a combination of different activities for
successful completion. Operation analysis focuses on the needs, skills, knowledge,
and attitude required to efficiently complete the job.
c) Person analysis: In-person analysis the focus is on the employee who has to
perform the job. It is analyzed whether the performance of the employee is
satisfactory and he is being able to achieve the organizational goal.
2. Defining Training Objective: After deriving the learning gap organizations should
define the learning objective. Goals and objective of training becomes the foundation of
the training initiatives. Hence determining the training objectives gives a direction to the
entire learning program.

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3. Designing a Training Program: Once the objective of the training program is

determined, it is time to analyze the factors that need to be considered while designing a
training program.
a) Who will be the trainer: As per the skill and
knowledge required for effective training; it
should be decided upon who will conduct the
training program. It can be a supervisor,
university faculty, Industrialist, HR staff,
consultants, etc.
b) Who needs to be trained: It is to be decided who all needs to be trained to fill the
learning gap. It can be on the basis of self-motivation, recommendation by supervisors
of HR department itself.
c) Training Methods: Trainer should have complete information about the
participants and their profile so that he can choose the learning methods that best suits
their requirements. The training content is prepared based on the specific areas that
need development.
4. Implementation of the Training Program: Refers to putting the training plan into
action. There should be a proper environment created which is conducive to learning. It should
be preferably a participative approach and trainer should promote role-playing and interactive
games to keep the trainees involved
5. Evaluation and Follow up: Training evaluation is done to check whether the goals and
objectives of the training have been achieved or not. Feedback needs to be taken from the
participants on the training results. A follow up can be done by asking the supervisors whether
the participants are applying the skills learned in the learning program on their day to day job.
Methods/Techniques of Training: The methods of training are divided into 2
categories:
1. On-the-Job Training Methods: On-the-Job methods refer to the methods that are
applied to the workplace, while the employee is actually working. Various on-the-job
methods are:
a) Job Rotation: This type of training involves the movement of the trainee from one job
to another. The trainee receives job knowledge and gains experience from his supervisor
or trainer in each of the different job assignments. Through this method of training is
common in training managers for general management positions, trainees can also be
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rotated from job to job in workshop jobs. This method gives an opportunity to the trainee
to understand the problems of employees on other jobs and respect them.
b) Coaching: The trainee is placed under a particular supervisor who functions as a coach
in training the individual. The supervisor provides feedback to the trainee on his
performance and offers him some suggestions for improvement. Often the trainee shares
some of the duties and responsibilities of the coach and relieves him of his burden. A
limitation of this method of training is that the trainee may not have the freedom or
opportunity to express his own ideas.
c) Job Instruction: This method is also known as training through step by step. Under
this method, trainer explains the trainee the way of doing the jobs, job knowledge and
skills and allows him to do the job. The trainer appraises the performance of the trainee,
provides feedback information and corrects the trainee.
d) Committee Assignments: Under the committee assignment, group of trainees are
given and asked to solve an actual organisational problem. The trainees solve the problem
jointly. It develops team work.
e) Apprenticeship: Apprenticeship is a formalized method of training curriculum
program that combines classroom education with on-the-job work under close supervision.
The training curriculum is planned in advance and conducted in careful steps from day to
day. Most trade apprenticeship programs have a duration of three to four years before an
apprentice is considered completely accomplished in that trade or profession.
2. Off-the-Job Training methods: Off-the-Job methods are used away from the
workplace. Various off-the-job methods are:
a) Classroom Lectures: under the off the job methods of training, classroom method or
lecture method is well-known to train white collar or managerial level employees in the
organisation. under this method employees are called to the room like that of classroom to
give training by trainer in the form of lectures. This method is effectively used for the
purpose of teaching administrative aspects or on management subject to make aware of
procedures and to give instructions on particular topic.
b) Audio-Visual: Providing training by way of using Films, Televisions, Video, and
Presentations etc. This method of training has been using successfully in education
institutions to train their students in subjects to understand and assimilate easily and help
them to remember forever. New companies have come up for providing audio visual
material for students in their concern subjects. In the corporate sector, mainly in customer
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care centers employers are giving training to their employees by using audio visuals
material to teach how to receive, talk and behaviour with the customer.
c) Simulation: The simulation Method of training is most famous and core among all of
the job training methods. In the simulation training method, trainee will be trained on the
especially designed equipment or machine seems to be really used in the field or job. But,
those equipment or machines are specifically designed for training a trainees were making
them ready to handle them in the real field or job. This method of planning is mostly used
where very expensive machinery or equipment used for performing Job or to handle that
job.
d) Vestibule Training: Mostly this method of training will be used to train technical staff,
office staff and employees who deal with tools and machines. Employees learn their jobs
on the equipment they will be using, but the training is conducted away from the actual
work floor by bringing equipments or tools to certain place where training is provided, but
not work place. Vestibule training allows employees to get a full feel for doing task without
real world pressures. Additionally, it minimizes the problem of transferring learning to the
job. Vestibule training is provided to employees when new or advanced equipment or tools
introduced in to the organisation to do a particular job by using them. For this purpose,
such equipment is brought to a separate place to give demonstration and train how to use
and that handle it by employees safely.
e) Case Studies: It is a written description of an actual situation in the past in same
organisation or somewhere else and trainees are supposed to analyze and give their
conclusions in writing. This is another excellent method to ensure full and whole hearted
participation of employees and generates good interest among them. Case is later discussed
by instructor with all the pros and cons of each option. It is an ideal method to promote
decision-making abilities within the constraints of limited data.
f) Role Playing: During a role play, the trainees assume roles and act out situations
connected to the learning concepts. It is good for customer service and training. This
method is also called ‘role-reversal’, ‘socio-drama’ or ‘psycho-drama’. Here trainees act
out a given role as they would in a stage play. Two or more trainees are assigned roles in
a given situation, which is explained to the group. There are no written lines to be said and,
naturally, no rehearsals. The role players have to quickly respond to the situation that is
ever changing and to react to it as they would in the real one. It is a method of human
interaction which involves realistic behaviour in an imaginary or hypothetical situation.

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Role playing primarily involves employee-employer relationships, hiring, firing,

discussing a grievance problem, conducting a post appraisal interview, disciplining a
subordinate, or a salesman making presentation to a customer.
g) Programmed Instructions: This involves two essential elements: (a) a step-by-step
series of bits of knowledge, each building upon what has gone before, and (b) a mechanism
for presenting the series and checking on the trainee’s knowledge. Questions are asked in
proper sequence and indication given promptly whether the answers are correct. This
programme may be carried out with a book, a manual or a teaching machine. It is primarily
used for teaching factual knowledge such as Mathematics, Physics, etc.
Management development/Executive Development: It is a planned, systematic and
continuous process of learning and growth designed to induce behavioural change in
individuals by cultivating their mental abilities and inherent qualities through the acquisition,
understanding and use of new knowledge, insights and skills as they are needed for effective
management. Management or executive development is a long-term educational future-
oriented process.
Methods/Techniques of Management Development: There are two categories of
methods of management development:
1. On the Job Methods: The following are the methods:

a) Coaching: In coaching the trainee is placed under a particular supervisor who acts as an
instructor and teaches job knowledge and skills to the trainee.
b) Job Rotation: This is particularly useful in the development of diversified skills and to
give executive a broader outlook, which are very important to the upper management
levels.
c) Understudy: An understudy is normally chosen with forethought of making available
to the organization a subordinate who is equal to his superior in the event of retirement,
illness or death of the superior. The subordinate will be able to take over his position and
manage as effectively as his boss could.
d) Multiple Management: This technique is mainly useful in bringing the managers out
of their narrow shells and helps them gain a broader outlook and knowledge in different
functional areas.
e) Special Projects: The trainees may ask to work on special projects related with
departmental objectives. By this, the trainees will acquire the knowledge of the assigned
work and also learn how to work with others.
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f) Experience: It refers to learning by doing. This is one of the oldest methods of on-the-
job training. Although this is very effective method but it also very time-consuming and
wasteful. Thus, it should be followed by other training methods.
g) Committee Assignment: In this, the trainees become members of a committee. The
committee is assigned a problem to discuss and make recommendations.
2. Off-The-Job Methods: These methods require trainees to leave their workplace and
concentrate their entire time towards the training objectives. Following are the main off-
the-job training methods:
a) Special Courses and Lectures: These are the most traditional and even famous
today, method of developing personnel. Special courses and lectures are either designed
by the company itself or by the management/professional schools. Companies then
sponsor their trainees to attend these courses or lectures. These are the quick and most
simple ways to provide knowledge to a large group of trainees.
b) Conferences and Seminars: In this, the participants are required to pool their
thoughts, ideas, viewpoints, suggestions and recommendations. By attending conferences
and seminars, trainees try to look at a problem from different angles as the participants are
normally from different fields and sectors.
c) Selected Reading: This is the self-improvement training technique. The persons
acquire knowledge and awareness by reading various trade journals and magazines. Most
of the companies have their own libraries. The employees become the members of the
professional associations to keep abreast of latest developments in their respective fields.
d) Case Study Method: This technique was developed by Harvard Business School,
U.S.A. It is used as a supplement to lecture method. A case is a written record of a real
business situation/problem faced by a company. The case is provided to the trainees for
discussion and analysis. Identification and diagnose of the problem is the aim in case study
method. Alternate courses of action are suggested from participants.
e) Programmed Instruction/Learning: This is step-by-step self-learning method
where the medium may be a textbook, computer or the internet. This is a systematic
method for teaching job skills involving presenting questions or facts, allowing the person
to respond and giving the learner immediate feedback on the accuracy of his or her
answers.
f) Brainstorming: This is creativity-training technique, it helps people to solve problems
in a new and different way. In this technique, the trainees are given the opportunity to
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generate ideas openly and without any fear of judgement. Criticism of any idea is not
allowed so as to reduce inhibiting forces. Once a lot of ideas are generated then they are
evaluated for their cost and feasibility.
g) Role-Playing: In this method, the trainees are assigned a role, which they have to play
in an artificially created situation. For example, a trainee is asked to play the role of a trade
union leader and another trainee is required to perform the role of a HR manager. This
technique results in better understanding of each other’s situation by putting foot in other’s
shoes.
h) Vestibule Schools: Large organisations frequently provide what are described as
vestibule schools a preliminary to actual shop experience. As far as possible, shop
conditions are duplicated, but instruction, not output is major objective. “A vestibule
school is operated as a specialised endeavour by the personnel department. This training
is required when the amount of training that has to be done exceeds the capacity of the line
supervisor; a portion of training is evolved from the line and assigned to staff through a
vestibule school.” The advantage of a vestibule school is specialisation.
i) Apprenticeship Training: This training approach began in the middle Ages when
those who wanted to learn trade skill bound themselves to a master craftsman and worked
under his guidance. Apprenticeship training is a structured process by which people
become skilled workers through a combination of classroom instruction and on-the-job
training.
j) In-Basket Exercise: In this technique, the trainees are provided background
information on a simulated firm and its products, and key personnel. After this, the trainees
are provided with in- basket of memos, letters, reports, requests and other documents
related with the firm. The trainee must make sense out of this mass of paperwork and
prepare memos, make notes and delegate tasks within a limited time period.
k) Business Games: Business games involve teams of trainees. The teams discuss and
analyse the problem and arrive at decisions. Generally, issues related with inventories,
sales, R&D, production process, etc. are taken up for consideration.
l) Behaviour Modelling: This is structured approach to teach specific supervisory skill.
This is based on the social learning theory in which the trainee is provided with a specific
model of behaviour and is informed in advance of the consequences of engaging in that
type of behaviour.

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m) Sensitivity (T-Group) Training: In this type of training, a small group of trainees

consisting of 10 to 12 persons is formed which meets in an unstructured situation. There
is no set agenda or schedule or plan. The main objectives are more openness with each
other, increased listening skills, trust, support, tolerance and concern for others. The
trainers serve a catalytic role. The group meets in isolation without any formal agenda.
There is great focus on inter-personal behaviour. And, the trainer provides honest but
supportive feedback to members on how they interacted with one another.
Performance Management: Definition:
According to Michael Armstrong and Angela Baron – ‘Performance management is a
process which contributes to the effective management of individual and teams in order to
achieve high levels of organisational performance.’
According to Dr. T. V. Rao – ‘Performance management involves thinking through
various facets of performance, identifying critical dimensions of performance, planning,
reviewing and developing and enhancing performance and related competencies.’
Performance Management is a process that consolidates goal setting, performance
appraisal, and development into a single, common system, the aim of which is to ensure that
the employee’s performance is supporting the company’s strategic aims.
Performance Management is both a strategic and integrated approach to delivering
successful results in the organisation by improving the performance and developing the
capabilities of teams and individuals.
Objectives of Performance Management: The objectives of performance
management include:
1. Clarifying Expectations: Performance management aims to establish clear and
specific performance expectations for employees. This involves setting goals, defining
performance standards, and communicating job responsibilities to ensure everyone
understands what is expected of them.
2. Improving Performance: Performance management seeks to improve individual and
team performance by providing feedback, coaching, and development opportunities. It
aims to identify areas of improvement, address skill gaps, and enhance performance
through training, mentoring, and support.
3. Monitoring Progress: Performance management involves tracking and monitoring
individual and team progress towards achieving goals and targets. Regular monitoring

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allows for early identification of issues or deviations from expected performance, enabling
timely intervention and corrective actions.
4. Providing Feedback: Effective performance management provides ongoing feedback
to employees about their performance. Feedback can be positive to reinforce desired
behaviours or constructive to address areas needing improvement. Timely and specific
feedback helps employees understand how they are performing and make necessary
adjustments.
5. Recognizing and Rewarding Achievement: Performance management aims to
recognize and reward employees for their achievements and contributions. Recognition
can take various forms, such as financial incentives, promotions, public acknowledgment,
or opportunities for growth and development. Rewards motivate employees and reinforce
desired performance.
6. Facilitating Employee Development: Performance management focuses on
supporting employee development and growth. It involves identifying individual
development needs, providing relevant training and learning opportunities, and creating
development plans to enhance skills and competencies.
7. Supporting Decision Making: Performance management provides data and
information to support decision-making processes within the organization. Performance
evaluations and performance-related data help inform decisions about promotions,
transfers, compensation, and talent management.
8. Enhancing Communication: Performance management promotes effective
communication between managers and employees. It facilitates regular discussions about
performance expectations, progress, feedback, and development needs. Open and
transparent communication improves collaboration, teamwork, and overall organizational
effectiveness.
9. Aligning Performance with Organizational Goals: Performance management
ensures that individual and team performance aligns with the strategic objectives of the
organization. It helps employees understand how their work contributes to the overall
success of the organization and ensures that efforts are directed towards achieving desired
outcomes.
10. Driving a Culture of Continuous Improvement: Performance management
fosters a culture of continuous improvement within the organization. It encourages
employees to seek opportunities for growth, learn from their experiences, and continually
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enhance their performance. It also promotes a mindset of innovation, adaptability, and

learning from both successes and failures.
Scope of Performance Management: The following are the various areas in which
performance management is applicable:
1. Identifying Performance Parameters: When any organisation decides to go for
performance management activity, it is very important to decide the parameters of
performance, because when the parameters are clear and set, both, the employer and the
employees can better understand their role in the activity and can reach to the goal
effectively and efficiently.
2. Setting Performance Standards: Once the parameters are set, the next step is to
identify the performance standards. Performance standards are nothing but analysing and
finalising the expected level of performance. This is decided in advance so that gaps, if
any, can be corrected at the earliest.
3. Planning Performance of all Constituents : Performance management activities
involve continuous improvement of all the processes and people in the organisation. So
after setting the performance standards, to get the desired results, it is imperative to mould
the behaviour and performance of the employees in a particular way so that it generates
the preferred output.
4. Identifying Competencies / Competency Gaps: When we are in the process of
moulding the behaviour of the employees, it is important that we understand the
competency gaps if any. Gaps are nothing but a space between standard competencies and
expected competencies. Once it is identified that there are gaps, these can be healed with
the help of training and development programmes.
5. Planning Performance Development Activities: To bridge the gaps between
standard and actual performance, performance development activities are planned in the
organisation. These activities are in the form of on-the-job training, management games,
case studies, outbound training etc.
6. Creating Ownership: This is one of the most important aspects in the entire
performance management initiative. Until and unless the employees feel that they are the
owners of their organisation and their smallest leap of step is going to affect the
organisation in either a positive or negative way, they will not behave in an expected
manner.

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7. Recognising and Promoting Performance Culture: It is very important that the

employees become used to performing better. If the organisation follows performance
culture, every employee would be performance oriented and there are minimal chances of
dissatisfaction, errors, and wastages among the employees.
Significance/Importance of Performance Management: The significance or
importance of performance management in any organisation is given here:
1. Provides a look into the future: By consistently monitoring and managing
workplace performance, leaders can see potential future problems. Like with any type of
issue, early detection is key. The earlier problems are confronted the less effect that they
will likely have
2. Creates Development and Training Strategies: As mentioned above, the earlier
a problem is detected, the better. One of these problems could be that employees do not
know how to perform certain processes correctly. If this continues, the organization might
fall apart due to oversight. However, with performance management, this would probably
be detected. The organization could then create training programs to change the issue into
an opportunity for improvement.
3. Provides Clarity in the Organization: It is a common problem that many
employees are unsure of what exactly their role entails, what is expected of them, and who
they are to report to. Through performance management, the company can make all of this
very clear. A lack of understanding often leads to a lack of productivity. Therefore, by
providing clarity for employees, the result will often be increased productivity and
confidence.
4. Provides the Opportunity for Exchanging Feedback: A lack of
communication in a relationship is grounds for trouble, and this includes working
relationships. Quite often, management speaks to employees about their performance, but
employees do not very often get a chance to voice concerns or frustrations. Effective
performance management provides an avenue through which both the employer and the
employee exchange feedback. In addition to gaining insight, employees often feel much
more valued when they can voice their thoughts.
5. Increases Employee Retention: Performance management also encourages
organizations to reward and recognize their employees. Lack of recognition is a big reason
some employees leave a job and look for another. They want to be appreciated for their
hard work. In addition to the clarity, the ability to share feedback, and the additional
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training when needed, rewards and recognition can play an important role in employee
retention.
6. Boosts Employee Engagement: Performance management, when it truly involves
employees, will boost employee engagement. When there is a disconnect between
management and employees, it is almost as though employees are just going through the
motions of the day. Their position becomes merely a job as opposed to a rewarding career.
However, performance management has the capability of engaging employees fully and
making them feel invested in the company. This leads to job satisfaction and employee
loyalty, all of which increase productivity. It is imperative that you and the other leaders
in your organization acknowledge the importance of performance management. By
avoiding it, you are setting yourself up for disaster.
7. Encourages employee recognition and reward: Most businesses tend to neglect
the importance of recognizing and rewarding their employees. Doing that can be greatly
disastrous to your organization. According to a survey carried out by American Express, a
third of top businesses believe that recognition and reward lead to higher staff retention,
with half also attributing better motivation to giving incentives. Effective recognition and
reward systems can only work in organizations where there is a visible and accurate
process of discussions and performance feedback. With continuous performance
management, the management can identify efforts and activities worthy of encouragement
and reward. Consequently, this drives a development mindset among members of your
team.
8. Boosts employee productivity: One remarkable benefit of an engaged workforce is
that they stay longer, actively contribute to the company, and deliver better results.
Enhancing levels of staff engagement are paramount to maximizing ROI and boosting
productivity. Excellent performance management is a great tool for having an engaged
workforce. The burning question, however, is how to utilize performance management to
increase levels of staff engagement?
Performance management typically creates an ongoing interaction and an atmosphere of
encouragement, support, and trust. It also assists in developing a relationship between the
company and its employees. If members of the staff know that their employer and the
organization cares about their efforts and is committed to assisting them in doing more and
advance their career – the odds are very high that they will want to engage better with the
business.

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9. Enforces goal setting and achievement: A good performance management system

helps employees to understand the goals of the company and what they are expected to do
to achieve these goals. This means they understand how their contributions affect the
overall growth of the business. Thus, performance management will help in business and
executive goal setting. Aligning the whole of your teams with higher organizational goals
sets conspicuous priorities and direction, ensuring that individuals have a beneficial sense
of ownership in the business via personal objectives.
10. Offers mentoring for increasing performance: The ultimate aim of performance
management is to improve performance. It will help managers to devise ways through
which they can increase performance while providing the opportunity to talk about career
prospects and direction. In all, it will help the executive manager and/or HR manager to
provide additional mentoring and training which will be useful in developing criteria for
promotions.
Process of Performance Management/Performance Management Cycle:
Employee management effectiveness is one of the most important factors in achieving
company success and its competitive advantage. Therefore, performance management is the
continuous process of the planning, monitoring and reviewing employees’ work objectives and
their overall contribution to the company.

1. Planning: The planning stage of the performance management cycle involves both the
employees and managers. On this stage, the manager and employee agree what the employee
must accomplish, to what standard (for example, the sales goals), and identify how results
will be measured. They also negotiate about the competencies (such as product knowledge
and customer focus) that are necessary for effectively accomplishing the company's
performance and define the development and studying the employee needs to eliminate gaps
in his/her competence.

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2. Monitoring: Employee performance and progress should be continuously monitored.

"Continuous monitoring" doesn't mean watching every aspect of how the employee fulfils
assigned tasks and activities. Managers should focus their attention on the achieved results,
individual and team dynamics affecting the work environment. So, in the second stage of
the performance management cycle, the employee and manager track the employee’s
development and performance. If it is necessary, the employee’s performance plan is
corrected to meet the changed circumstances.
3. Reviewing: On the third stage of the performance management cycle, the employee’s
accomplishments and standards that have been agreed at the first stage are analysed by the
manager and employee. They also consider what new the employee has studied and how
his/her knowledge can be effectively used within the employee’s current position and in the
future company's jobs. They come to terms about how well the employee performed during
the last period and what he/she needs to consider for achieving the future work standards
and goals. The manager conducts the evaluation of the employee’s performance, especially
if decisions about the employee’s employment, compensation, or rewards must be made.
4. Improving: The next step of performance management is improving employee
performance, and to do that effectively is possible only through understanding reasons why
employees are not performing at the optimal level. It could be valid reasons, removal of
which is a key for fixing the issue without employee replacements. Managers should keep
an open mind to discuss concerns without jumping to conclusions. Clear direction about the
responsibilities, job priorities, and expectations of employee achievement as well as keeping
clear accountabilities in every activity are necessary.
5. Measurement: Performance measurement is a process of collecting data necessary for
the performance measures. All companies (from small business to huge corporations)
measure performance to some extent. Even though many organizations are primarily
focussing on financial measures, there is a large difference among companies in terms of
which performance measures they use. The revolution in performance measurement has
changed the priority in features of performance measurements systems.
Performance Appraisal: Performance appraisal is evaluating an employee’s current
and/or past performance relative to his or her performance standard.– Gary Dessler
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:

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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.
Purpose of Appraising/ Objectives of Appraising: The following are the
objectives/purpose of appraising
1. Evaluation: The major purpose of performance appraisal is to evaluate how well
employees have conducted their duty. Performance appraisal helps to keep a record of each
employee’s job performance, including what efforts they have made and what have they
achieved. Evaluation differentiates employees on the basis of their job performance, along
with other factors like personality, behaviour, etc.
2. Provide continuous feedback: It is essential for the employers to know what
performance and achievements have been made by their employees. But it is also equally
important for an employee to know where they stand, where they are going and how they
are going to get there. Thus, giving feedback to employees is also a major purpose of
performance appraisal.
3. Measure performance accurately: Every company has to set mutually acceptable
criteria or performance standards so that it could compare employee’s performance with
it. This helps in accurate measurement of employee’s job performance which is necessary
for the company to know where it is heading towards.
4. Provide clarity of expectation and actual result: Every employee wants them
to be told about their duties; what the organization really wants them to do. However, this
is not enough to get good output from them. They should also be told how well they have
done their duties and how can they improve their performance. They should be made clear
about how near they are to do their expectation.
5. Provide career path: Performance appraisal works as a mirror to employees and it
clearly shows what they are professionally and where they stand.
On the other hand, it helps the company in recognizing employees with potential.
Companies provide career development opportunities to such employees and pave their
way to a successful and stable career.
6. Determine promotion of employees: Performance appraisal helps in charting
progress of employees. Such charts can be used by the employers to determine whether or
not to promote their employees. They also help in identifying the employees who most
deserves to be promoted.
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7. Decide retention and termination of employees: Progress report of employees

does not only help in determining promotion but also in determining termination.
Employees, with poor reports, are at first consulted. But, if the supervisors don’t find any
growth, they will be forced to take severe action like termination.
8. Evaluate effectiveness of HRM functions: Recruitment, selection, employee
training, rewarding, etc. are some functions of human resource management whose
effectiveness can only be analysed when the performance of employees is appraised.
9. Decide salary and rewards: Performance appraisal of employees helps the
supervisors in knowing their job performance and the right amount to pay them. The
employees will receive wages as per the contribution they have made. The impressive
contributors are also rewarded by the company as per the organization’s policy.
10. Keep communication lines open: The complete process of performance appraisal
includes continuous feedback from the supervisors. This way, performance appraisal
works as a bridge of communication between the employers and employees. Also, open
communication helps in strengthening the employer-employee relationship or superior-
subordinate relationship.
11. Improve decision making ability: It becomes easier for the organization to take
right decision when it has complete knowledge about what’s going on in their company.
Performance appraisal works as a helping hand to the company in making the right
decision as it is a source of the company’s complete statistical data
12. Motivate superior performance: When performances of employees are timely
appraised, they are motivated to make the superior performance. It is because #1 they want
to enjoy the perk of being an excellent employee or they fear negative reactions from the
supervisors. When employees know that they are heading in right direction, it develops a
sense of satisfaction in them.
13. Determine training and developmental needs: Only determining weak points is
not enough. A company should also make efforts to abolish them. A properly carried out
performance appraisal is a tool to determine what necessary steps are to be taken in order
to help the employees in improving their performance. The increment in skills and
knowledge develop an overall personality, attitude and behaviour of the employees.
14. Take corrective actions: Performance appraisal distinguishes excellent and poor
performing employees. Results of performance appraisal help the employers in taking

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corrective actions. Such actions may be counselling or warning the poor performers to
improve performance and to prevent the occurrence of undesirable results.
Significance/ Importance of Performance Appraisal: When we discuss in a deeper
sense, we can say that Performance Appraisal is an asset to the organization. This statement
can be justified as follows:
1. Selection justification: Performance Appraisal helps the HR managers in validating
the selection made by them. It makes them clear as to the strengths and weaknesses of the
employees selected by them. This can be kept as sample study for future selection of
employees.
2. Compensation: Appraisal system helps in merit rating from where a good
compensation program can be chalked out. A compensation system which has good pay,
bonuses, variable allowances and benefits is very much reliant on performance appraisal.
3. Promotion: It helps in deciding promotion programs for competent employees. By this,
inefficient workers can be either demoted or dismissed from the company.
4. Employee Development: A very good appraisal system helps the HR managers in
developing good training programs. This in turn helps the employees to discuss their
interests in getting trained in various programs with their managers.
5. Motivation: Appraisal can be called as a motivational tool for employees. By setting
standards to achieve the targets, the employees are motivated to perform as well as to
develop their performance in future
Steps/ process in Performance Appraisal: The following are the steps used in
performance appraisal:
1. Setting the Performance Standards: The first step in the performance appraisal
process is the setting of standards of performance expected from the employees. The
standards set should be the line with the objectives and the mission of the organisation.
Further the standard set must be realistic and attainable. If unrealistic and unattainable
standards are set, it will demotivate and demoralise the employee. Hence care should be
taken while setting the standards.
2. Communicating the Performance Standard to the Employees: It is not
enough if just the standards are fixed. The expected level of performance should be
communicated to the employees so that they are all well aware of what is expected of them.

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3. Measuring the Actual Performance: This is a crucial step in the performance

appraisal process. Here the actual performances are measured. There are various methods
of measuring the performance.
4. Comparing the Actual with the Standard Performance: Once the standard
levels of performance are set and the actual performances are measured, the next step will
be the comparison of the actual with the standard performance. This comparison will
enable the determination of the gap between the actual and the expected performance; such
gaps can be bridged through training and development.
5. Providing Feedback: The performance appraisal process does not end with mere
evaluation of the performance. It is essential to provide feedback to the employees on their
performance. This will help the employees to identify the weak areas and initiate actions
to overcome them. Such feedback motivates them to perform better in future by avoiding
the repetition of the same mistakes.
6. Initiating Corrective Actions: When a gap is found between the actual and the
expected level of performance, corrective actions should be undertaken. By analysing the
reason for a gap, proper action should be taken so that the gap is bridged. When the actual
and the standard performance match there is no need for any corrective action.

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Methods/Tools/Techniques of Appraising: There are two methods of performance

appraisal:
Traditional Methods: The following are the traditional methods:
1. Rating Scales: Rating scales consists of several numerical scales representing job
related performance criterions such as dependability, initiative, output, attendance, attitude
etc. Each scale ranges from excellent to poor. The total numerical scores are computed and
final conclusions are derived.
Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large
number of employees covered, no formal training required.
Disadvantages – Rater’s bias
2. Checklist: Under this method, checklist of statements of traits of employee in the form
of Yes or No based questions is prepared. Here the rater only does the reporting or checking
and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited training required, standardization.
Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give
relative ratings
3. Forced Choice Method: The series of statements arranged in the blocks of two or
more are given and the rater indicates which statement is true or false. The rater is forced
to make a choice. HR department does actual assessment.
Advantages – Absence of personal biases because of forced choice.
Disadvantages – Statements may be wrongly framed.
4. Forced Distribution Method: Here employees are clustered around a high point on
a rating scale. Rater is compelled to distribute the employees on all points on the scale. It
is assumed that the performance is conformed to normal distribution. Advantages –
Eliminates Disadvantages – Assumption of normal distribution, Disadvantages-
unrealistic, errors of central tendency.
5. Critical Incidents Method: The approach is focused on certain critical behaviours
of employee that makes all the difference in the performance. Supervisors as and when
they occur record such incidents.
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Advantages – Evaluations are based on actual job behaviours, ratings are supported by
descriptions, feedback is easy, reduces recency biases, chances of subordinate
improvement are high.
Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close
supervision; feedback may be too much and may appear to be punishment.
6. Behaviourally Anchored Rating Scales: Statements of effective and ineffective
behaviours determine the points. They are said to be behaviourally anchored. The rater is
supposed to say, which behaviour describes the employee performance.
Advantages – helps overcome rating errors.
Disadvantages – Suffers from distortions inherent in most rating techniques.
7. Field Review Method: This is an appraisal done by someone outside employees’ own
department usually from corporate or HR department.
Advantages – Useful for managerial level promotions, when comparable information is
needed.
Disadvantages – Outsider is generally not familiar with employees work environment,
Observation of actual behaviours not possible.
8. Performance Tests & Observations: This is based on the test of knowledge or
skills. The tests may be written or an actual presentation of skills. Tests must be reliable
and validated to be useful. Advantage – Tests may be apt to measure potential more than
actual performance. Disadvantages – Tests may suffer if costs of test development or
administration are high.
9. Confidential Records: Mostly used by government departments, however its
application in industry is not ruled out. Here the report is given in the form of Annual
Confidentiality Report (ACR) and may record ratings with respect to following items;
attendance, self-expression, team work, leadership, initiative, technical ability, reasoning
ability, originality and resourcefulness etc. The system is highly secretive and confidential.
Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it
is highly subjective and ratings can be manipulated because the evaluations are linked to
HR actions like promotions etc.
10. Essay Method: In this method the rater writes down the employee description in detail
within a number of broad categories like, overall impression of performance, promotability
of employee, existing capabilities and qualifications of performing jobs, strengths and
weaknesses and training needs of the employee.

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Advantage – It is extremely useful in filing information gaps about the employees that often
occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing skills of rater and most of them are
not good writers. They may get confused success depends on the memory power of raters.
11. Cost Accounting Method: Here performance is evaluated from the monetary returns
yields to his or her organization. Cost to keep employee, and benefit the organization
derives is ascertained. Hence it is more dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired
Comparisons): These are collection of different methods that compare performance
with that of other co-workers. The usual techniques used may be ranking methods and
paired comparison method.
 Ranking Methods: Superior ranks his worker based on merit, from best to worst.
However how best and why best is not elaborated in this method. It is easy to administer
and explanation.
 Paired Comparison Methods: In this method each employee is rated with another
employee in the form of pairs. The number of comparisons may be calculated with the
help of a formula as under.
N x (N-1) / 2
Modern Methods: The following are the traditional methods:
1. Management by Objectives: It means management by objectives and the performance
is rated against the achievement of objectives stated by the management. MBO process goes
as under.
 Establish goals and desired outcomes for each subordinate
 Setting performance standards
 Comparison of actual goals with goals attained by the employee
 Establish new goals and new strategies for goals not achieved in previous year.
Advantage – It is more useful for managerial positions.
Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-
term goals rather than important and long-term goals etc.
2. Psychological Appraisals: These appraisals are more directed to assess employees’
potential for future performance rather than the past one. It is done in the form of in-depth
interviews, psychological tests, and discussion with supervisors and review of other
evaluations. It is more focused on employees emotional, intellectual, and motivational and
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other personal characteristics affecting his performance. This approach is slow and costly and
may be useful for bright young members who may have considerable potential. However,
quality of these appraisals largely depends upon the skills of psychologists who perform the
evaluation.
3. Assessment Centers: This technique was first developed in USA and UK in 1943. An
assessment center is a central location where managers may come together to have their
participation in job related exercises evaluated by trained observers. It is more focused on
observation of behaviours across a series of select exercises or work samples. Assessees are
requested to participate in in-basket exercises, work groups, computer simulations, role playing
and other similar activities which require same attributes for successful performance in actual
job.
4. 360-Degree Feedback: It is a technique which is systematic collection of performance
data on an individual group, derived from a number of stakeholders like immediate supervisors,
team members, customers, peers and self. In fact, anyone who has useful information on how
an employee does a job may be one of the appraisers. This technique is highly useful in terms
of broader perspective, greater self-development and multi-source feedback is useful. 360-
degree appraisals are useful to measure inter-personal skills, customer satisfaction and team
building skills.
Benefits /Advantages of Performance Appraisal: The following are the
advantages/benefits of performance appraisal:
1. Improves Performance: Performance appraisals major focus on improving
employee’s performance as it analyses and evaluates the opportunity factors like social
process and technology
2. Employee Development: Performance appraisal helps determine who is in need of
more training as it gives information regarding the strengths and potentials as well as
weaknesses of the employees
3. Corrects Deficiencies: Performance appraisal detects employee deficiency and
suggests on corrective measures to be taken.
4. Career Growth: Appraisal serves as a tool for the employees’ career planning and
development as it assists in preparing each employee’s SWOT analysis.
5. Promotion: Appraisals help the management determine which employee is to be
promoted, transferred or rewarded.

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6. Documentation: A PA provides a document of employee performance over a specific

period of time. It’s a piece of paper that can be placed in an employee file.
7. Structure: This process creates a structure where a manager can meet and discuss
performance with an employee. It forces the uncomfortable conversations that often need
to happen.
8. Feedback: Employees crave feedback, and this process allows a manager the
opportunity to provide the employee with feedback about their performance and discuss
how well the employee goals were accomplished. It also provides an opportunity to
discuss employee development opportunities.
9. Clarify Expectations: Employees need to understand what is expected of them and
the PA process allows for a manager to clarify expectations and discuss issues with their
employee.
10. Annual Planning: It provides a structure for thinking through and planning the
upcoming year and developing employee goals.
11. Motivation: The process should motivate employees by rewarding them with a merit
increase and as part of a comprehensive compensation strategy.
Limitations/ Disadvantages of Performance Appraisal: The following are the
disadvantages/limitations of performance appraisal:
1. Creates Negative Experience: If not done right, the performance appraisal can create
a negative experience for both the employee as well as the manager. Proper training on
processes and techniques can help with this.
2. Time Consuming: Performance appraisals are very time consuming and can be
overwhelming to managers with many employees. I’ve known managers who were
responsible for doing an annual PA on hundreds of employees.
3. Natural Biases: Human assessment are subject to natural biases that result in rater errors.
Managers need to understand these biases to eliminate them from the process.
4. Waste of Time: The entire process can be a waste of time if not done appropriately.
Think about the time investment when the end result is negative. It is time wasted on all
fronts.
5. Stressful Workplace: Performance appraisals can create stressful work environments
for both employees and managers. Proper training can help to reduce the stress involved in
the process.

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Errors of Performance Appraisal: The following are the errors/

disadvantages/limitations of performance appraisal:
1. Central tendency: Clustering everyone in the middle-performance categories to avoid
extremes of good or bad performance; it’s easy, but it’s wrong. This isn’t fair to employees
who are making an effort, and it can be demoralizing.
2. Favouritism: Overlooking the flaws of favoured or “nice” employees, especially those
whom everyone likes.
3. Grouping: Excusing below-standard performance because it is widespread; “Everyone
does it.”
4. Guilt by association: Rating someone on the basis of the company they keep, rather
than on the work they do.
5. The halo effect: Letting one positive work factor you like to affect your overall
assessment of performance.
6. Holding a grudge: A dangerous luxury that may result in your ending up in court.
Never try to make employees pay for past behavior.
7. The horns effect: The opposite of the halo effect—letting one negative work factor or
behavior you dislike colour your opinion of other factors.
8. Bias: Allowing your bias to influence the rating. Bias can come from attitudes and
opinions about race, national origin, sex, religion, age, veterans’ status, hair color, weight,
height, intelligence, etc.
9. Recency: Rating only recent performance, good or bad. Data should be representative of
the entire review period. If you’re not keeping good notes, you may not remember the
whole period. Make sure you are keeping records so that you can adequately describe
performance over an entire performance period.
10. The Sunflower Effect: Rating everyone high, regardless of performance, to make
yourself look good or to be able to give more compensation.
11. Problem of Leniency or Strictness: Many raters are too lenient (not strict) in their
ratings. High scores may be given to all employees, even if they have no merit. Also, a
reverse situation may take place, where all employees are rated very strictly and very low
scores are given.

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12. Spillover Effect: In this case, the present performance appraisal is greatly influenced
by past performance. A person who has not done a good job in the past is considered
(assumed) to be bad for doing present work.
13. Latest Behaviour Effect: The rating is also influenced by the most recent behaviour.
The rater may ignore an average behaviour during the full appraisal period.

Performance Management vs Performance Appraisal: Differences between

Performance Management and Performance Appraisal:
S.No Meaning Performance Management Performance Appraisal
Analysis of employees’
1 Definition Managing the human resources
performance
Developing employee growth
2 Purpose Determining compensation
strategies
Processes to get the best out of
3 Orientation System involving assessments
employees
Supple as per organizational
4 Flexibility Rigid following set procedures
goals
5 Type of Tool Strategic Tool Operational Tool
Reaching business
6 Aim Improving employee efficiency
development goals
Team managers/multiple
7 Ownership Human resources department
stakeholder
8 Time-frame Regular & ongoing Annually
9 Nature Forward-looking Retrospective
10 Approach Based on team values Individual employee-based
Carried out
11 by/Owned Managers HR Managers/HRD Department
by
Kind of
12 Flexible Formal; structured
Structure
Usage of
13 Less Common Very Common
Ratings
Linked With
14 Not very much linked with pay Very much linked with pay
Pay
Quantifiable objectives, values
and behaviours (combines Traits(only quantitative
15 Focus
quantitative and qualitative objectives)
objectives)
16 Assessment Continuous reviews Annually
Less concerned with paper More concerned with paper
17 Paper work
work work
Flexibility
18 Bottom-top Top-Bottom
in

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Communicat
ion
Improving ways in which
employee goals can align with
Pertains to the employees and
19 Application team and organizational goals,
their past performance.
and where engagement can be
fostered.

Career Management: Career management refers to the deliberate and ongoing process of
planning, organizing, and managing one's career development to achieve professional growth,
job satisfaction, and long-term success. It involves identifying career goals, acquiring and
enhancing skills and knowledge, seeking opportunities for advancement, and making strategic
decisions to navigate and shape one's career path.
Objectives of Career Management: Career management defines certain objectives for
every individual, employee or business person. A few of them can be defined as below:
1. Growth: Every person wants to manage their career because they want personal growth
for themselves. Career management helps a person define their personal growth goals and
ambitions.
2. Aspirations: Career management helps people understand where they want to be in their
career in 5, 10 and 20 years. Different people can have different aspirations based on what
they expect from their career. A person with certain qualifications may look for sales role
in future but at the same time a person with same qualifications may look at management
or consulting as future role for oneself.
3. Skill Development: If a person has certain
career goals and aspirations in place, they can
develop their skills and competencies accordingly.
Skills can have a very important impact on one's
career path and overall management. In current
market scenario, the right skills are the key to
success in career. Skill development and
management can help get the right skills through right training and planning leading to
better opportunities in career.
4. Ambition: Having a short, medium and long term plan enables a person to evaluate the
wealth one wants to have in their life. Wealth can include house, car, savings, investments
etc. and how their job and career can help fulfil those goals.

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Elements of Career Management: Below are the three elements of occupational

management programmes:
1. Career planning: Career planning is an intentional process involving determining
career goals, understanding the opportunities and potential constraints and making
decisions, while also considering their consequences and taking active steps to achieve
those goals. Typically, the employee and their supervisor do this together. The employee
usually requires assessing their skills and experience to better understand their strengths
and areas to improve to become more proficient as a professional. They may then discuss
with their supervisors about the opportunities in those areas or fields.
2. Career pathing: A career path is similar to a roadmap that lets employees know their
progress opportunities within an organisation in the long term. By looking at the career
expectations that are set during the planning process, employees and their supervisors can
monitor and consider potential paths for the employee. As an employee may likely have
several career path options available to them, companies often try to have a clear career
development structure in place to encourage employees to join their organisation.
3. Career development: Career development is a process that helps individuals plan
careers that match the company's requirements and help them meet their objectives. It is
an ongoing process for each employee where the organisation's duty is to share training
and development programmes that may help employees progress along their career paths.
Besides helping the individual upskill, it also helps ensure the company benefits from the
acquired skills and proficiencies. It is also a strategic approach to retaining quality
employees and reducing talent acquisition costs in the future
Factors in Career Management: There are many factors in career management which
can be as follows:
1. Market Trends: An individual can use market trends in managing once career.
Growing industry and current market trends can help achieve a person his or her goals
and aspirations in different ways as there may be more opportunities.
2. Individual Situation: For some individuals, career path can be totally different
from other people in similar roles with same qualifications. Some people may need to
get experience from the job and some may see benefits like compensation and relevant
skills
3. Motivation: Each individual is different in terms of self-motivation. Based on the
motivation and aspiration, a person may manage one's career differently
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4. Evaluation: Constant evaluation is very important. If the current career path is not
going according, one's ambition or plan after evaluation, changes can be done through
upskilling or changing roles.
Career Management Process: The career management process is about investing
resources to accomplish your goals and objectives. It includes several concepts that are
described below:
1. Self-awareness: This is the first step in the career management system and provides
self-introspection. What are your interests, what is essential for you, what are the things
you value, what are the things you like, what are your unique skills etc. are some questions
that need to be answered in this phase for discovering specific things about yourself. All
these questions are the means to find your values, traits, interests, and skills so that a person
can set his goals for the future.
2. Career exploration/career development planning: The career development
planning or career exploration is a recurring process that includes the following steps:
a) Career values: It is essential to integrate work values with overall life values to
know what is necessary for you in life. It is the work values that acts as a guiding force
and helps to focus on the essential things. An individual who is happy and satisfied in
personal life will quickly achieve better productivity. Remember, work values keep on
changing at intervals, and it becomes essential to keep on reassessing them regularly
for overall job success.
b) Work preferences: Work preferences play a significant role in career development
planning. It is a personal choice, and it is quite natural for two people to have different
work preferences in life. Dig deeper to assess and identify work preferences and, if
necessary, take the help of assessment tools for your purpose.
c) Strengths: Understand your strengths if you are interested in career
exploration/career development planning. Look for positive qualities like hard-
working, detail-oriented, excellent communication skills, and also specific traits like
good at decision making, soft skills, etc. to develop your full potential. The more
specific your abilities and qualities are, the more you will be successful in the job
interviews.

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d) Weakness: Just like strengths, it is also essential to identify your weakness if you are
interested in career exploration/career development planning. Hiring managers pay
special attention to the weakness of the applicants, and often one of the job interview
questions is what do you consider your weakness. An honest understanding of your
weakness will help you in overcoming them in time so that you are not embarrassed by
it at any moment. Do not be overly self-
critical as this step is designed so that a
person can call attention to perceived
weaknesses and take matters in hand to
eliminate them.
3. Lifelong learning: Technology is reigning
supreme in all the spheres of our life. All the
technical devices like tablets, phones, and
computers have become necessary in the
workplace and often determine how we are managing our work life. Adapt to the ongoing
innovations and devices by updating your skills and know-how regularly.
4. Networking: One of the most critical aspects of career exploration/career development
planning is effective networking. It is an essential asset that can take your career a step
further. Develop and hone your ability to connect and interact with important people.
Building a good and strong relationship will have a direct impact on career opportunities
in the future.
Benefits of Career Management: The following are the benefits of career management:
1. Staffing inventories: Effective career management ensure a continuous supply of
professional, technical and managerial talent for the fulfilment of organisational goal.
2. Staffing from within: Most organisations like to promote employees from within for
available positions because of the many potential advantages. In order to recruit from
within, it requires a strong career management programme that ensures effective
performance of employees in their new jobs.
3. Solving staffing problems: Effective career management may serve as a remedy for
certain staffing problems. Rate of employee turnover can be slashed because of the feeling
that there is existence of opportunity within the organisation. It may be easier to go for
new recruitment as the company develops its employees and provides better career
opportunities.
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4. Satisfying employee needs: The current generation of employees are very different
from those of past generation in terms of their set of needs. Again, higher levels of
education have raised their career expectations and many of the employees hold their
employers directly responsible in providing better opportunities for realization of their
career expectations.
5. Enhanced motivation: Since, progression along the career path is directly related to
job performance, an employee is likely to be motivated and perform at peak levels to
accomplish career goals.
6. Employment equity: Effective career management demand fair and
equitable recruitment, selection and placement and try to eliminate discriminatory
practices concerning promotions and career mobility. Such type of affirmative
programmes contains formal provisions that become helpful for enhancement of the career
mobility of women and other minorities groups emphasizing employment equity.

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