ASSIGNMENT

ON

HRD MECHANISMS

SUBMITTED TO:
SUBMITTED BY:

Mrs. Sumedha
Kashish

(Assistant Professor) Roll No:

20511

Department of Commerce Mcom

(Final Year)

S.G.G.S. College, Sector 26, Chandigarh

 HRD Mechanisms
Human resource development is the process of increasing human
competencies through knowledge, skills, attitudes and experience in
organization. This is the act of making people working in organization as the
organization needs to accomplish the job. It is the measurement of
organizational excellencies. Human resource development is an integral
part of human resource management. Main areas of human resource
management are training and development, career, planning and
organizational development. Human resource management attains the
organizational efficiency and effectiveness through effective use of human
resource development function.

Human Resource Development aims to identify the gap between required

competencies in human resource and actual competencies to fulfill them
with training and development. In order to achieve the main objective
human resource development, different mechanisms or methods can be
used. These mechanisms carry special features individually and contribute
to human resource development collectively. These mechanisms or
methods are discussed below:

1. Performance Appraisal:

Performance appraisal is a systematic process in which employees job

performance is evaluated in relation to the projects on which employee has
worked and his contribution to the organisation. It is also known as an
annual review or performance review . It helps the managers place the right
employees for the right jobs, depending on their skills. Often, employees
are often curious to know about their performance details and compare it
with their fellow colleagues and how they can improve upon it. So every
company needs a good performance appraisal system.

There are various methods that are used by managers and employers to
evaluate the performance of the employees, but they can be put into two
categories:

 Traditional Methods of Appraisal 

  Modern Methods of Appraisal 

In the discussion that follows, each method under both categories will be
described briefly.

Traditional Methods:

Ranking Method:

It is the oldest and simplest formal systematic method of performance

appraisal in which employee is compared with all others for the purpose of
placing order of worth. The employees are ranked from the highest to the
lowest or from the best to the worst. In doing this the employee who is the
highest on the characteristic being measured and also the one who is L
lowest, are indicated. Then, the next highest and the next lowest between
next highest and lowest until all the employees to be rated have been
ranked. Thus, if there are ten employees to be appraised, there will be ten
ranks from 1 to 10

Paired Comparison:

In this method, each employee is compared with other employees on one-

on one basis, usually based on one trait only. The rater is provided with a
bunch of slips each coining pair of names, the rater puts a tick mark against
the employee whom he insiders the better of the two. The number of times
this employee is compared as better with others determines his or her final
ranking.

Forced Distribution Method :

The forced distribution method is one of the most widely used and also the most
criticised method of performance appraisal. This is a rating system that is used all over
the world by companies to evaluate their workforce. It requires the supervisor to assess
each employee based on certain pre-determined parameters, and thereafter rank them
into 3 or more categories. The forced distribution method is also called bell-curve rating
or stacked ranking.

This method is preferred by many employers as it creates a visible differentiation

between performances of each employee in the organisation. This method of
performance management typically chooses the normal distribution curve to represent
the performance distribution. This ensures that a small fraction of the entire workforce is
to be placed at the extremes, which is the outstanding performers and poor performers. A
relatively large section of the workforce fall in the middle of the distribution.

It is also highly simple to understand and easy to apply in appraising the

performance of employees in organisations. It suffer from the drawback
that improve similarly, no single grade would rise in a ratings.

Check-List Method:

The basic purpose of utilizing check-list method is to ease the evaluation

burden upon the rater. In this method, a series of statements, i.e.,
questions with their answers in ‘yes’ or ‘no’ are prepared by the HR
department . The check-list is, then, presented to the rater to tick
appropriate answers relevant to the appraisee. Each question carries a
weight-age in relationship to their importance.

Critical Incidents Method :

In this method, the rater focuses his or her attention on those key or critical
behaviours that make the difference between performing a job in a
noteworthy manner (effectively or ineffectively). The basic idea behind this
rating is to apprise the workers who can perform their jobs effectively in
critical situations. This is so because most people work alike in normal
situation. The strength of critical incident method is that it focuses on
behaviours and, thus, judge’s performance rather than personalities.

Graphic Rating Scale Method:

The graphic rating scale is one of the most popular and simplest techniques
for appraising performance. It is also known as linear rating scale. In this
method, the printed appraisal form is used to appraise each employee.

The form lists traits (such as quality and reliability) and a range of job
performance characteristics (from unsatisfactory to outstanding) for each
trait. The rating is done on the basis of points on the continuum. The
common practice is to follow five points scale.

The rater rates each appraisee by checking the score that best describes
his or her performance for each trait all assigned values for the traits are
then totaled.

Essay Method:
Essay method is the simplest one among various appraisal methods
available. In this method, the rater writes a narrative description on an
employee’s strengths, weaknesses, past performance, potential and
suggestions for improvement. Its positive point is that it is simple in use. It
does not require complex formats and extensive/specific training to
complete it.

However, essay method, like other methods, is not free from drawbacks. In
the absence of any prescribed structure, the essays are likely to vary widely
in terms of length and content. And, of course, the quality of appraisal
depends more upon rater’s writing skill than the appraiser’s actual level of
performance.

Confidential Report:

It is the traditional way of appraising employees mainly in the Government

Departments. Evaluation is made by the immediate boss or supervisor for
giving effect to promotion and transfer. Usually a structured format is
devised to collect information on employee’s strength weakness,
intelligence, attitude, character, attendance, discipline, etc. report.

Modern Methods:

Management by Objectives (MBO):

Most of the traditional methods of performance appraisal are subject to the

antagonistic judgments of the raters. It was to overcome this problem;
Peter F. Drucker propounded a new concept, namely, management by
objectives (MBO) way back in 1954 in his book .  
The concept of MBO as conceived by Drucker, can be described as a
“process whereby the superior and subordinate managers of an
organization jointly identify its common goals, define each individual’s
major areas of responsibility in terms of results expected of him and use
these measures as guides for operating the unit and assessing the
contribution of each its members”.

In other words, stripped to its essentials, MBO requires the manager to

goals with each employee and then periodically discuss his or her progress
toward these goals.
Behaviorally Anchored Rating Scales (BARS):

The problem of judgmental performance evaluation inherent in the

traditional methods of performance evaluation led to some organisations to
go for objective evaluation by developing a technique known as
“Behaviourally Anchored Rating Scales (BARS)” around 1960s. BARS are
descriptions of various degrees of behaviour with regard to a specific
performance dimension.

It combines the benefits of narratives, critical incidents, and quantified

ratings by anchoring a quantified scale with specific behavioural examples
of good or poor performance. The proponents of BARS claim that it offers
better and more equitable appraisals than do the other techniques of
performance appraisal we discussed so far.

Assessment Centres:

By definition, an assessment centre is a central location where managers

come together to participate in well-designed simulated exercises. They are
assessed by senior managers supplemented by the psychologists and the
HR specialists for 2-3 days.

Assessee is asked to participate in in-basket exercises, work groups,

simulations, and role playing which are essential for successful performance
of actual job. Having recorded the assessee’s behaviour the raters meet to
discuss their pooled information and observations and, based on it, they
give their assessment about the assesee. At the end of the process,
feedback in terms of strengths and weaknesses is also provided to the
assesees.

The distinct advantages the assessment centres provide include more

accurate evaluation, minimum biasedness, right selection and promotion of
executives, and so on. Nonetheless, the technique of assessment centres is
also plagued by certain limitations and problems.

360 – Degree Appraisal:

Under 360 – degree appraisal, performance information such as employee’s

skills, abilities and behaviours, is collected “all around” an employee, i.e.,
from his/her supervisors, subordinates, peers and even customers and
clients.
In other worlds, in 360-degree feedback appraisal system, an employee is
appraised by his supervisor, subordinates, peers, and customers with whom
he interacts in the course of his job performance. All these appraisers
provide information or feedback on an employee by completing survey
questionnaires designed for this purpose.

All information so gathered is then compiled through the computerized

system to prepare individualized reports. These reports are presented to
me employees being rated. They then meet me appraiser—be it one’s
superior, subordinates or peers—and share the information they feel as
pertinent and useful for developing a self-improvement plan.

In 360 – degree feedback, performance appraisal being based on feedback

“all around”, an employee is likely to be more correct and realistic.
Nonetheless, like other traditional methods, this method is also subject to
suffer from the subjectivity on the part of the appraiser. For example, while
supervisor may penalise the employee by providing negative feedback, a
peer, being influenced by ‘give and take feeling’ may give a rave review on
his/her colleague.

 Human-Resource (Cost) Accounting Method:

Human resource (cost) accounting method analyses an employee’s

performance through the monetary benefits he/she yields to the company.
It is obtained by comparing the cost of retaining an employee (cost to
company) and the monetary benefits (contributions) an organization has
ascertained from that specific employee.

When an employee’s performance is evaluated based on cost accounting

methods, factors like unit-wise average service value, quality, overhead
cost, interpersonal relationships, and more are taken into account. Its high-
dependency on the cost and benefit analysis and the memory power of the
reviewer is the drawback of human resources accounting method.

2. Potential Appraisal:
The potential appraisal refers to the appraisal i.e. identification of the
hidden talents and skills of a person. The person might or might not be
aware of them. Potential appraisal is a future – oriented appraisal whose
main objective is to identify and evaluate the potential of the employees to
assume higher positions and responsibilities in the organizational hierarchy.
Many organisations consider and use potential appraisal as a part of the
performance appraisal processes.

The purposes of a potential review are:

 to inform employees of their future prospects;

 to enable the organisation to draft a management succession
programme;
 to update training and recruitment activities;
 to advise employees about the work to be done to enhance their
career opportunities.

 Potential Appraisal Vs. Performance Appraisal

Potential Appraisal is forward looking process whether performance

appraisal is backward looking process. Any good or worse assessment
results of performance appraisal may not be a good factor for potential
appraisal. But current performance of an employee could show evidance
somewhere whether he/she is flexible for new working conditions.

3. Feedback, Performance Counseling and Coaching :

Feedback is way of assessment of work done or processes and is an integral part of the
HR department. Feedback is a way to understand the needs, requirements, performances
etc of employees in an organization. A continuous feedback helps companies evolve as
they are better prepared for improvements required based on the answers received.

An organization is a complex network of employees working in various departments,

domains and profiles. Each employee has a different role, responsibility and decision
making capacity. However, all work towards to objectives and goals set by the company.
Hence, constant monitoring of the work being done is important for the business. This is
where feedback is an important aspect in understanding the work done by an employee in
an organization. The feedback mechanism set up in companies are often referred
as organizational feedback. Feedback is an important aspect for good business and a
pivotal role is to be player by the HR department. Feedback helps in understanding the
performance of employees. Those who are doing good are rewarded and those who are
lacking some skill are trained.

Counselling is a very important element of enhancing job performance and

work output of an employee. Many researchers have worked a lot in order
to see the impact of on the job and off the job counselling on the
performance of employee. Counselling is a systematic approach in order to
analyze problem area where an employee is not performing well. This
means with help of counselling, managers could be able to solve the
problems due to which an employee is not being able to perform efficiently
and effectively. Counselling is a more individual attempt. It is harder
because there are no clear answers. It requires the supervisor to really pay
consideration to the work and career related concerns of the subordinate. A
person stressed with his project or doubtful her abilities want more than
exhortation or training class. They require to be heard and understand first
before they will open themselves to support and new approaches. Even
employees with family or financial problems need to be heard first before
they can be approved along to right company resources (e.g., employee
assistance programs).

Coaching, in its simplest form, means to train, tutor or give instruction. It is

an excellent skill that can be used to enhance growth and performance, as
well as promote individual responsibility and accountability. Performance
coaching is an ongoing process which helps build and maintain effective
employee and supervisory relationships. Performance coaching can help
identify an employee's growth, as well as help plan and develop new skills.
Using their coaching skills, supervisors evaluate and address the
developmental needs of their employees and help them select diverse
experiences to gain necessary skills. Supervisors and employees can work
collaboratively on developing plans that might include training, new
assignments, job enrichment, self-study, or work details .