INTRODUCTION

HUMAN RESOURCE MANAGEMENT

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business.[1] The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations.[1] In simple sense, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company .

The HRM function and HRD profession have undergone tremendous change over the past 2030 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

SCOPE OF HRM

The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies.

1. Manpower Planning 2. Recruitment 3. Compensation & Salary Administration 4. Benefits Development & Administration 5. Training & Career Development 6. Labor Relations & Disicipline Management 7. Personnel Movement 8. Performance Management 9. HRIS 10. Payroll & Timekeeping 11. Organization Development

PERFORMANCE APPRAISAL AN INRODUCTION

Performance apparaisal is the process of obtaining , analyzing and recording information about the relative worth of an employee . The focus of the performance apparaisal is measurring and improving the actual performance of the employee and also the future potential of the employee . Its aim is to measure what an employee does.

According to Fillipo, aprominent personality in the field of Human resources,performance appraisal is the systematic ,periodic and impartial rating of an employees excellence in tthe matters pertaining to his present job and his potential for a better job. Performance appraisal is a systematic way of reviewing and assesing the performance of an employee during a given period of time and planning for his future .It is a powerful tool to calibrate , refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contributon towards the achievements of the overall organization goals.

DEFINITION :

A for mal defi nitio n of per for mance app rais al is : It is the s ys temati c eval uation of the indi vid ual with res pect to his or he r per for mance on the job and his of her pote ntial fo r develop ment.

A mor e co mpre hens ive defi nitio n is: Performance appr ais al is a fo rmal s tructur ed s yste m of meas uri ng and ev al uati ng an e mploye es job, rel at ed b ehavior, and outco mes to d iscove r how and why the e mployee is presentl y performi ng on the job and how the employee can perfo r m mor e effectivel y in the fut ure s o th at the emp loyee, organi zation, and the society all be nefit.

NEED OF PERFORMANCE APPRAISAL

To summarize, performance appraisal should be viewed as a beneficial process within the context of an effective system of personnel management. It should be accepted as a normal management responsibility to review the performance of all employees and for all managers to discuss performance with their subordinates on a regular basis.

The key elements of an effective performance appraisal system are: 1. Clearly defined performance standards. 2. An effective monitoring system. 3. Regular discussions of performance. 4. Development of appropriate action plans as a consequence of the appraisal.

Those elements will help to ensure that performance appraisals conducted in any organization will yield the desired benefits and be more readily accepted by all concerned.

Importance of performance appraisal

Performance appraisals provide employees and managers with opportunities to discuss areas in which employees excel and those in which employees need improvement. Performance appraisals should be conducted on a regular basis, and they need not be directly attached to promotion opportunities. During a performance appraisal review, a supervisor and an employee discuss the employee's strengths and weaknesses. This gives the employee individual face time with the supervisor and a chance to address personal concerns.Performance appraisals allow employees and supervisors to discuss goals that must be met to advance within the company. This can include identifying skills that must be acquired, areas in which one must improve, and educational courses that must be completed.

Performance appraisal should be a positive experience and contribute to the overall welfare of the organization. If done properly, performance appraisal is a very effective tool to improve performance and productivity and for developing employees. It helps individuals to do better, raises self-esteem and motivation. Above all it strengthens the management/subordinate relationship and fosters commitment. Performance evaluation is not a process to be avoided; rather it should be implemented in all organizations and promoted as a key management activity. The benefits to be realized from a proper evaluation system far outweigh the time and effort required to develop, implement and maintain the process.

There is much research to show that individuals have a strong need to know how they are doing and where they stand in the eyes if their supervisor. Recognizing the importance of performance feedback, it follows that discussions of performance should take place more than once a year. Frequent, regular discussions of performance should occur on an on-going basis and be seen as an opportunity for useful communication between the individual who assigns work and those performing it. These regular meetings serve to provide feedback so good performance is recognized and performance problems are nipped in the bud. The more formal periodic reviews can then simply be a summary of what has occurred throughout the reporting period recorded on the official performance evaluation form.

SCOPE OF PERFORMANCE APPRAISAL

The performance appraisal has varied scope, it helps each employee understand more about their role and become clear about their functions. It is instrumental in helping employees to better understand their strengths and weaknesses & also help to identify the developmental needs of employees, with respect to their role and function. The scope extends to increase mutuality between employees and their supervisors so that every employee feels happy to work with their supervisor and thereby contributes their maximum to the organization . It acts as a mechanism for increasing communication between employees and their supervisors. In this way, each employee gets to know the expectations of their superior, and each superior also gets to know the difficulties of their subordinates and can try to solve them. It helps create a congenital atmosphere & help employees internalize the culture, norms and values of the organization, thus developing an identity and commitment throughout the organization.

COMPONENTS OF PERFORMANCE APPRAISAL

Identifying key performance areas and set targets through periodic discussion between superior and sub-ordinate . Performance analysis to identify factor that have promoted as well as hindered performance . Identify areas requiring improvement and the kind of training to be imparted . Goal setting for future Final assesment of supervising officer for adminstration purposes Performance Appraisal is essential to understand and improve the employees performance through HRD . In fact , Performance Appraisal is the basis for HRD .It was viewed that performance appraisal was useful to decide upon employee promotion orvtransfer . But the recent developments in human resource mangement indicate that performance appraisal kis the basis of employee development. Performance aapraisal indicates the level of desired performance level , the level of actual performance and the gap between the two. This gap should be bridged through human resources development techniques like training , executive development etc. The purpose of perfomance appraisal is to determine what aspects of performance needs to be evaluated . A distinction as to be made between performance on the job and potential for upward mobility . Sometimes only the potential i.e. the ability of the iondivisual for development is evaluated . However in most cases , raters are asked to asses both the areas . It is easier for raters to appraise performance than determine potential, because the latter requires a greater deal of knowledge and skill. The job environment may not be conducive for an employee to show his/her full potential or he may be restrained from doing so . Attention has to be paid to these aspects before the potential for growth and advancement of an employee is evaluated. Performance appraisal is also a technique of HRD .The performance interview and the process of the performance analysis help thye sub-ordinate to interact closely with his superior. The interaction helps sub-ordiantes learn from their superior the job related and the behavioural aspects .

This process becomes a training or development or educational process . Thus performance Appraisal is closely related to HRD . In fact , performance Appraisal helps employee development.

PROCESS OF PERFORMANCE APPRAISAL

CHALLENGES IN PERFORMANCE APPRAISAL

An organization comes across various problems and challenges Of Performance Appraisal in order to make a performance appraisal system effective and successful. The Performance Appraisal challenges involved in the performance appraisal process are: y Determining the evaluation criteria Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms

Create a rating instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. y

Lack of competence Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.

Errors in rating and evaluation . Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees

Resistance The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.

Objectives Of Performance appraisal:

To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior subordinates and management employees.

To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

PERFORMANCE APPRAISAL AND COMPETITIVE ADVANTAGE

The objectives of performance appraisal, listed above, point out the purpose which such an exercise seeks to meet. What needs emphasis is that performance evaluation contributes to firm's competitive strength. Besides encouraging high levels of performance, the evaluation system helps identify employees with potential, reward performance equitably and determine employee's need for training. Specifically, performance appraisal helps an organization gain competitive edge in the following ways (see Fig below)

Improving Strategy and Behavior Performance Making correct decisions

Competitive Advantage Values and Behaviour Ensuring Legal Compliance

Minimizing dissatisfaction and turnover

Fig: How Performance Appraisal can contribute to Firm's Competitive Advantage?

METHODS OF PERFORMANCE APPRAIAL

LIMITATIONS OF PERFORMANCE APPRAISAL:

SOME TYPI CAL RATING ERRORS : y Firs t impress ions

Rat ers ma y ident ify s ome s pecifi c qua lities or feat ur es of the appra is ee and quic kl y for m a n i mpress ion a bout hi m or her. y Stereo typi ng

It is a standar d ment al pict ur e t hat a n indivi dual hol ds about a per son. It can be of t hat pers ons s ex, caste, age, physi c al char act er ist ics or f eat ur es . St er eo t ypi ng r es ults in over s i mplifi ed vi ew of t he indi vi dual a nd ma y blur the rat ers per cept ion a nd a ss es s ment of the per sons perf or ma nc e on the j ob. y Halo effect

Bas i ng the ent ir e appra isa l on t he basis of own perc ei ved posit ive qua lit y fea ture or trail in t he indi vi dual. Affiliat ion wit h vi ews ma y r es ult in a hi gher rating tha n it s hould be. y Horn effect

Bas i ng t he ent ir e appraisal on t he bas is of own negat i ve qua lity or feat ur e of an indi vi dual. T hes e results in a n over all low rat i ng t ha n what it shoul d b e. y Central te ndenc y

Most of t he a ppr ais al for ms r equir e the rat er to just ify if t he as ses s ment is outsta ndi ng or poor. T heref or e, some of t he r at ers ma y t hi nk of rat ing the most of t he appr ais ees as aver age per for mer s t o avoi d gi vi ng any just ificat ion or clar ificat ion. y Cookie cutter effe ct

Not focus i ng on indi vi dual specific p erf or ma nce a nd rat ing all t he empl oyee s or gr oups of t he empl oyees t he sa me.

RECENT DEVELOPMENTS

Evolution is a part and parcel of everything and so is the same with the performance appraisal system. The various improvements in the field are:

Performance management is the buzz word , the approach has changed from performance analysis & development to performance management.

Nowadays the Organizations are aligning their employee performance goals with corporate performance goals through technology solutions. Research shows there is a clear movement to integrate the traditional HR functions into a more holistic, strategic approach to human capital management.

Increased Automation of Performance Management and HR Functions through use of softwares and with the advent use of technology we find Online performance management systems.

With increasing use of performance management technology, managers and employees more easily communicate regarding performance issues. Annual performance reviews are being replaced with more frequent schedules (quarterly, monthly, etc.). In addition, performance management technology enables organizations to include feedback from a variety of audiences which includes supervisors as well as vendors- this is commonly known as 360 degree feedback.

Customised Performance management systems are in trend these days where seperate system is being designed for each employee to suit their type.