Question no 1: why HR is called the most important asset and competitive advantage of any organization in the world??

HR and Competitive Advantage In order to have an effective competitive strategy, the company must have one or more competitive advantage, factors that allow an organization to differentiate its product or service. Wal-Mart builds its low cost leader strategy on the dual competitive advantage of a satellite based inventory and distribution system, and on employment policies that help it to achieve extraordinary low employment costs. Southwest Airlines achieves low cost leader status through employment policies that produce a highly motivated and flexible workforce. Its workforce is its competitive advantage. Larger airlines like Delta, faced with union rules and restrictive work rules and salary structures, find it hard to compete with Southwest, whose employees eagerly rush to turn around an airplane in a fraction of the time it takes a Delta team. Every successful company has one or more competitive advantages around which it builds its competitive strategy. The competitive advantages can take any forms. For a pharmaceutical company, it may be the quality of its research team, and its patents. For a Web site like ebay, it may be a proprietary software system. Many years, ago, Wal-Marts satellite based distribution system was so revolutionary that it was probably the firms predominant competitive advantage The New Workplace presents another example. Today, most companies have easy access to the same technologies, so technology itself is rarely enough to set a firm apart. Its usually the people and the management system is rarely enough to set a firm apart. Its usually the people and the management system that make the difference. For example, an operations expert from Harvard University studied manufacturing firms that installed special computer integrated manufacturing systems to boost efficiency and flexibility. Data in studies point to one conclusion: operational flexibility is determined primarily by a plants operators and the extent to which

managers cultivate, measure and communicate with them. Equipment and computer integration are secondary. In a growing number of organizations human resources are now viewed as a source of competitive advantage. This is in contrast to the traditional emphasis on transferable resources such as equipment. Increasingly, it is being recognized that competitive advantage can be obtained with a high quality workforce that enables organizations to compete on the basis of market responsiveness, product and service quality, differentiated products, and technological innovation. Strategic Human resources Management: The term HR strategies refers to the specific human resources management courses of action the company pursues to achieve its aims. Thus, one of FedExs strategic aims is to achieve superior levels of customer service and high profitability through a highly committed workforce. The overriding aim of its HR strategy is to build a committed workforce, preferably in a nonunion environment. FedExs specific HR strategies stem from this aim. They include: using various methods to build two way communications; screening out potential mangers whose values are not people oriented guaranteeing to the greatest extent possible; fair treatment and employee security for all employees; and utilizing various promotion from within activities to give employee every opportunity to fully realize their potential. Strategic human resources management means formulating and executing HR systems HR policies and activities that produce the employee competencies and behaviors the company needs to achieve its strategy aims. 1) Linking Corporate and HR Strategies: 2)Companys Competitive Environment 3)Economic, political demographic, 4)competitive and technological trends. 5)Companys strategic Situation>

6)Companys Strategic Plan For example Should we expand geographically? Cuts Costs? Diversify? 7)Companys HR (and Other Functional) strategies What are the basic courses of action HR will pursue? To ensure that the recruiting selecting training, appraising and compensation systems are consistent with the companys strategic plan; Organizational Performance. Companys Internal Strengths and Weakness. Companys Strategic Situation. Gaining a Competitive Advantage. HRM cant be summarized in less than 900 words, but some first insights can be given in order to create interest in investigating the issue and some ideas on what it deals with! HR is viewed as having 3 product lines (admin., business partner and strategic services) and to successfully manage it, individuals need personal credibility, business strategy understanding, technology and business knowledge and the ability to deliver HR services. HRM practices should be evidence-based, on data showing the relationship between practice and business outcomes related to key company stakeholders, contributing to a company's business strategy and helping companies deal with sustainability, globalization, and technology challenges. HRM Strategic approach proactively gives competitive advantage via firms more important asset (its HR). So, HRM function needs to be integrally involved in strategy formulation to identify people-related

business issues as HRM has profound impact on the implementation by developing and aligning HRM practices ensuring the company has motivated employees with necessary skills. Its Emerging strategic role requires HR professionals in the future develop business, professional-technical, change management and integration competencies: requires more than simply developing a valid selection procedure or Performance management system (PMS). The analysis and design of work is an important component to develop/maintain competitive advantage as strategy implementations virtually impossible w/out attention to work-flow, job analysis and design. Understanding of the work-flow process and existing jobs, managers can redesign to ensure work unit is able to achieve its goals while individuals within it benefit on the various work outcome dimensions as motivation, satisfaction, safety, health and achievement; key to competitive advantage. Immigration issues showed how changes in labor and product markets create struggle to find/retain the most talented/motivated workers at lowest cost. Early anticipation of labor surplus allows firm to use less disruptive labor reduction strategies and of labor shortages allows employers to use more creative and effective recruitment techniques. All personnel selection methods should conform to 5 critical standards (reliability, validity, utility, generalizability, and legality) but theres no need to use only one type of test for any one job Systematic approach to training includes needs assessment, design of the learning environment, and consideration of employee readiness for training and transfer-of-training issues. The key to successful training is choosing a method that would best accomplish the objectives of training. PMS serve strategic, administrative, and developmental purposes, so should be evaluated against the criteria of strategic congruence, validity, reliability, acceptability, and specificity. Hence, comparative, attribute, behavioral, results, and quality approaches have different strengths and weaknesses. Managers should take action based on the causes for poor performance (ability, motivation or both) and ensure their PMS can meet legal scrutiny, especially if used to discipline or fire poor performers. Development methods: formal education, assessment, job experiences, interpersonal relationships. Relative to job experiences, a mentor can help employees better

understand the company and gain exposure and visibility to key persons in the organization and part of a manager's job responsibility may be to coach employees. Regardless of development approaches, employees should have a development plan to identify the type of development needed, development goals, the best approach for development and whether goals have been reached. For development plans to be effective, the employee and the company have responsibilities that need to be completed. Make labor costs more competitive while hedging off employee relations problems and inequity perceptions via open communication because management should realign pay structure and global workforce to support changes to strategy for competing in markets. Pay structure decisions influence strategy execution success by influencing costs, employee perceptions of equity and the way different structures provide flexibility and incentives for employees to learn and be productive. Equity theory states social comparisons are an important influence on how employees evaluate their pay, making external and internal comparisons. In the other hand, pay benchmarking surveys and job evaluation are two administrative tools widely used in managing the pay level and job structure components of the pay structure, influence employee social comparisons. The nature of pay structures is undergoing a fundamental change in many organizations: move to fewer pay levels to reduce labor costs and bureaucracy and some employers shifting from paying employees for narrow jobs to giving them broader responsibilities and paying them to learn the necessary skills. Pay is an important influence on employee's standard of living and has two important implications as it can be a powerful motivator and its importance means employees care a great deal about the fairness of the pay process. However, as organizations differ in business and HR strategies, also effective pay strategy may differ from one to another. The roles required of HRM function have changed as people start to recognize it as true source of competitive advantage, requiring a transformation of HRM function from focusing solely on transactional to an increasing focus in strategic activities. HRM today play roles as an administrative expert, employee advocate, change agent and strategic partner and the function must also deliver transactional, traditional and transformational services and activities to the firms, being efficient and effective.

HR as strategic partner is gaining momentum as being one of the best way yet in making human resources as the most important asset in an organization. The Importance of Making HR as Strategic Partner "Being a strategic partner" is understood as a long-term relationship to achieve defined objectives common to all partners. In the context of strategic human resource management, the HR function and activities are intended to ensure the organization's financial success. As partners your HR people and employees in the various areas of the organization's operations must not get in each other's way. Partners do not hinder one another. They support each other to achieve common objectives. This includes business objectives. It is said that the implementation of "HR strategic partnership is not easy." HR people may hinder its implementation. A strategic plan will ensure that your people will carry out their own specific role in their assigned area of operation in partnership with other employees.

Question 2 (a):
what is meant by job analysis? explain how woud u conduct a job analysis? And how can you make use of information it provides?

A job analysis is the process used to collect information

about the duties, responsibilities, necessary skills, outcomes, and work environment of a particular job. You need as much data as possible to put together a job description, which is the frequent

outcome of the job analysis. Additional outcomes include recruiting plans, position postings and advertisements, and performance development planning within your performance management system. The job analysis may include these activities: reviewing the job responsibilities of current employees, doing Internet research and viewing sample job descriptions online or offline highlighting similar jobs, analyzing the work duties, tasks, and responsibilities that need to be accomplished by the employee filling the position, researching and sharing with other companies that have similar jobs, and articulation of the most important outcomes or contributions needed from the position. Purpose of Job Analysis The purpose of Job Analysis is to establish and document the 'job relatedness' of employment procedures such as training, selection, compensation, and performance appraisal. Determining Training Needs Job Analysis can be used in training/"needs assessment" to identify or develop: training content assessment tests to measure effectiveness of training equipment to be used in delivering the training methods of training (i.e., small group, computer-based, video, classroom...) Compensation Job Analysis can be used in compensation to identify or determine: skill levels compensable job factors work environment (e.g., hazards; attention; physical effort) responsibilities (e.g., fiscal; supervisory) required level of education (indirectly related to salary level) Selection Procedures Job Analysis can be used in selection procedures to identify or

develop: job duties that should be included in advertisements of vacant positions; appropriate salary level for the position to help determine what salary should be offered to a candidate; minimum requirements (education and/or experience) for screening applicants; interview questions; selection tests/instruments (e.g., written tests; oral tests; job simulations); applicant appraisal/evaluation forms; orientation materials for applicants/new hires Performance Review Job Analysis can be used in performance review to identify or develop: goals and objectives performance standards evaluation criteria length of probationary periods duties to be evaluated Methods of Job Analysis Several methods exist that may be used individually or in combination. These include: review of job classification systems incumbent interviews supervisor interviews expert panels structured questionnaires task inventories check lists open-ended questionnaires observation incumbent work logs A typical method of Job Analysis would be to give the incumbent a simple questionnaire to identify job duties, responsibilities, equipment used, work relationships, and work environment. The completed

questionnaire would then be used to assist the Job Analyst who would then conduct an interview of the incumbent(s). A draft of the identified job duties, responsibilities, equipment, relationships, and work environment would be reviewed with the supervisor for accuracy. The Job Analyst would then prepare a job description and/or job specifications. The method that you may use in Job Analysis will depend on practical concerns such as type of job, number of jobs, number of incumbents, and location of jobs. What Aspects of a Job Are Analyzed? Job Analysis should collect information on the following areas: Duties and Tasks The basic unit of a job is the performance of specific tasks and duties. Information to be collected about these items may include: frequency, duration, effort, skill, complexity, equipment, standards, etc. Environment This may have a significant impact on the physical requirements to be able to perform a job. The work environment may include unpleasant conditions such as offensive odors and temperature extremes. There may also be definite risks to the incumbent such as noxious fumes, radioactive substances, hostile and aggressive people, and dangerous explosives. Tools and Equipment Some duties and tasks are performed using specific equipment and tools. Equipment may include protective clothing. These items need to be specified in a Job Analysis. Relationships Supervision given and received. Relationships with internal or external people. Requirements The knowledges, skills, and abilities (KSA's) required to perform the job. While an incumbent may have higher KSA's than those required for the job, a Job Analysis typically only states the minimum requirements to perform the job.

Question 2 (b): Describe the types of information typically found in job specifiaction?

1. General HR job specification It include job specification of positions as follows: HR director HR manager HR coordinator HR officer HR executive HR assistant. 2. Recruitment job specification It include job specification of positions as follows: Recruitment manager Recruitment specialist Recruitment officer Recruitment coordinator Recruitment assistant 3. Training job specifications It include job specification of positions as follows: Training director Training manager Training officer Training coordinator Training specialist Training assistant 4. Compensation and benefits job specification It include job specification of positions as follows: Compensation Compensation Compensation Compensation Compensation and benefits manager and benefits officer and benefits specialist and benefits coordinator and benefits assistant

5. Payroll job specification It include job specification of positions as follows: Payroll manager Payroll specialist Payroll supervisor Payroll clerk Payroll coordinator Payroll assistant

Question 3: Do you think job rotation is a good method to use for seveloping managment trainees? why or why not? Job Rotation Policy
PURPOSE. The purpose of this policy is to establish a framework for job rotation within the office. Although the policy outlines a whole of office approach to job rotations, it in no way limits rotations within branches and divisions. RESPONSIBILITY The Director Corporate is responsible for ensuring this policy is implemented. Branch Management, following advice from managers and supervisors, are responsible for identifying appropriate positions for job rotation and ensuring each branch has systems in place to allow rotations to take place. The Director Corporate and Division Managers are responsible for ensuring staff are made aware of opportunities for rotation. Division Managers are responsible for providing support and

guidance to staff taking part in the job rotation program. Branch Management are responsible for ensuring staff job rotations run as efficiently and effectively as possible. DEFINITIONS Job Rotation The transfer of permanent staff for a set period of time between positions at the same grade. Such a rotation will not result in any loss of salary or other benefits. POLICY STATEMENT 1. Benefits for staff Job rotation provides an opportunity for staff to work in different areas of the office, gaining valuable insight into the diverse work of the Ombudsman. It is also an opportunity to improve staff motivation and morale, particularly for those who have worked in one position for a long period of time, or whose job has repetitive or stressful elements. Job rotation opportunities will only be available to permanent members of staff. 2. Benefits for the office Job rotations are not only beneficial for those staff taking par and Divisions of the office, giving them an opportunity to share their processes and approaches. Rotations also improve relationships across the office, leading to more efficient and effective exchanges of information and expertise. 3. How job rotations will work Job rotations will be for six months, with the option of extending for a further six months, subject to the concurrence of all parties. Rotations will be available for permanent staff at the Clerk Grade 7/8 level or below. The program aims to place a minim Consideration of job rotation should form part of staff performance management and, where relevant,

be included within individual work plans and training and development plans. (a) Identify rotation opportunities Each Division Manager will regularly review positions managment trainees and below within their division and maintain a list of positions suitable for job rotation. (b) Expressions of interest sought from staff A call for expressions of interest to take part in the job rotation start of each year. The Personnel Manager is responsible for managing this process. (c) Select staff to take part in job rotation Division Managers, or their delegates, will review the expressions of interest and match ap candidates to the identified job rotation positions. Informal interviews may be conducted before selecting a staff member to take part in the program. (d) Monitor and review the progress of the rotation In addition to the normal supervisory arrangeme member of staff to be a mentor for staff on rotation. Staff taking part in a rotation will meet with the managers of the Divisions involved and initially the convenor of the Leadership Working Party at the beginning, middle and end of their six month placement. This will allow them to discuss any issues with the program and make recommendations for future job rotations. (e) Prepare a report at the end of the rotation At the conclusion of the rotation the Division outlining their experiences, including their recommendations for changing the program. These reports, which will be provided to the Senior Officers Group and the Division Managers Meeting, will inform

future job rotation placements. Job rotations are not only beneficial for those staff taking part. Rotations benefit the various Branches and Divisions of the office, giving them an opportunity to share their processes and approaches. Rotations also improve relationships across the office, leading to more efficient and effective exchanges How job rotations will work Job rotations will be for six months, with the option of extending for a further six months, subject to the concurrence of all parties. Rotations will be available for permanent staff at the Clerk Grade 7/8 level or below. The program aims to place a minimum of four staff each year. Consideration of job rotation should form part of staff performance management and, where relevant, be included within individual work plans and training and development plans. Identify rotation opportunities ger will regularly review positions Managment trainee and below within their division and maintain a list of positions suitable for job rotation. Expressions of interest sought from staff A call for expressions of interest to take part in the job rotation program will be sent to all staff at the start of each year. The Personnel Manager is responsible for managing this process. Select staff to take part in job rotation. Division Managers, or their delegates, will review the expressions of interest and match ap candidates to the identified job rotation positions. Informal interviews may be conducted before selecting a staff member to take part in the program. Monitor and review the progress of the rotation:

In addition to the normal supervisory arrangements, Division Managers will nominate a suitable member of staff to be a mentor for staff on rotation. Staff taking part in a rotation will meet with the managers of the Divisions involved and initially the convenor of the Leadership Working Party at the ginning, middle and end of their six month placement. This will allow them to discuss any issues with the program and make recommendations for future job rotations.

Question no 4: Discribe the significance of on the job and off the job training nethods in organization with examples. what major benefts each of these training methods provide to employees and organization.?
Trainings in an organization can be divided to two broad types. They are on-the-job trainings and off-the-job trainings. These on-the-job trainings are given to the employees while they are conducting their regular works at the same places. In this way they do not lose time while they are training or learning. After a plan is developed for what should be taught, employees should be informed about the details. A time table should be establish with periodic evaluations to inform employees about their progress. On-the-job training techniques include orientations, job instruction training, apprenticeships, internships, assistantships, job rotation and coaching. Off-the-job techniques include lectures, special study, audio visual conferences or discussions, case studies, role playing, simulation, programmed instructions, and laboratory trainings. Most of these techniques are too costly. Methods of trainings can be basically divided to four types, namely, a. the telling method b. the showing method

c. the role playing method uman Resource Management is concerned with the planning, acquisition, training & developing human beings for getting the desired objectives & goals set by the organization. The employees have to be transformed according to the organizations' & global needs. This is done through an organized activity called Training. Training is a process of learning a sequence of programmed behavior. It is the application of knowledge & gives people an awareness of rules & procedures to guide their behavior. It helps in bringing about positive change in the knowledge, skills & attitudes of employees. Thus, training is a process that tries to improve skills or add to the existing level of knowledge so that the employee is better equipped to do his present job or to mould him to be fit for a higher job involving higher responsibilities. It bridges the gap between what the employee has & what the job demands. Since training involves time, effort & money by an organization, so an organization should to be very careful while designing a training program. The objectives & need for training should be clearly identified & the method or type of training should be chosen according to the needs & objectives established. Once this is done accurately, an organization should take a feedback on the training program from the trainees in the form of a structured questionnaire so as to know whether the amount & time invested on training has turned into an investment or it was a total expenditure for an organization. Training is a continuous or never ending process. Even the existing employees need to be trained to refresh them & enable them to keep up with the new methods & techniques of work. This type of training is known as Refresher Training & the training given to new employees is known as Induction Training. This is basically given to new employees to help them get acquainted with the work environment & fellow colleagues. It is a very short informative training just after recruitment to introduce or orient the employee with the organization's rules, procedures & policies.

Training plays a significant role in human resource development. Human resources are the lifeblood of any organization. Only through trained & efficient employees, can an organization achieve its objectives. * To impart to the new entrants the basic knowledge & skills they need for an intelligent performance of definite tasks. * To prepare employees for more responsible positions. * To bring about change in attitudes of employees in all directions. * To reduce supervision time, reduce wastage & produce quality products. * To reduce defects & minimize accident rate. * To absorb new skills & technology. * Helpful for the growth & improvement of employee's skills & knowledge. METHODS OF TRAINING: The most widely used methods of training used by organizations are classified into two categories: On-the-Job Training & Off-the-Job Training. ON-THE-JOB TRAINING is given at the work place by superior in relatively short period of time. This type of training is cheaper & less time-consuming. This training can be imparted by basically four methods: Coaching is learning by doing. In this, the superior guides his subordinates & gives him/her job instructions. The superior points out the mistakes & gives suggestions for improvement. Job Rotation: - In this method, the trainees move from one job to another, so that he/she should be able to perform all types of jobs. E.g. In banking industry, employees are trained for both back-end & front-end jobs. In case of emergency, (absenteeism or resignation), any employee would be able to perform any type of job. OFF THE JOB TRAINING: - is given outside the actual work place. Lectures/Conferences:- This approach is well adapted to convey

specific information, rules, procedures or methods. This method is useful, where the information is to be shared among a large number of trainees. The cost per trainee is low in this method. Films: - can provide information & explicitly demonstrate skills that are not easily presented by other techniques. Motion pictures are often used in conjunction with Conference, discussions to clarify & amplify those points that the film emphasized. Simulation Exercise: - Any training activity that explicitly places the trainee in an artificial environment that closely mirrors actual working conditions can be considered a Simulation. Simulation activities include case experiences, experiential exercises, vestibule training, management games & role-play. Cases: - present an in depth description of a particular problem an employee might encounter on the job. The employee attempts to find and analyze the problem, evaluate alternative courses of action & decide what course of action would be most satisfactory. Experiential Exercises: - are usually short, structured learning experiences where individuals learn by doing. For instance, rather than talking about inter-personal conflicts & how to deal with them, an experiential exercise could be used to create a conflict situation where employees have to experience a conflict personally & work out its solutions. Vestibule Training: - Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. While expensive, 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. Role Play: - Its just like acting out a given role as in a stage play. In this method of training, the trainees are required to enact defined roles on the basis of oral or written description of a particular situation. Management Games: - The game is devised on a model of a business situation. The trainees are divided into groups who

represent the management of competing companies. They make decisions just like these are made in real-life situations. Decisions made by the groups are evaluated & the likely implications of the decisions are fed back to the groups. The game goes on in several rounds to take the time dimension into account. In-Basket Exercise: - Also known as In-tray method of training. The trainee is presented with a pack of papers & files in a tray containing administrative problems & is asked to take decisions on these problems & are asked to take decisions on these within a stipulated time. The decisions taken by the trainees are compared with one another. The trainees are provided feedback on their performance. RECOMMENDATIONS & CONCLUSION: No doubt Training is a very powerful tool for the smooth functioning of the organization, but it needs to be used with care in order to derive all the benefits. Here are seven recommendations for getting the best out of this tool: 1. Learn about the needs and proficiency of each and every employee before an organization invests its effort, time & money on training. Its better to identify the needs & shortcomings in an employee before actually imparting training to him/her. 2. Experienced & skilled trainer, who possesses good amount of knowledge & understanding about the organization's objectives, individual abilities & the present environment, should give training. 3. Active participation from the trainees should be encouraged. There should be a two-way communication between the trainer & trainee. 4. Feedback should be taken from the trainees after the training is over, so that the organization comes to know about the deficiencies in the training program & also suggestions to improve upon the same. 5. Focus of training should be on priority development needs and to produce strong motivation to bring change in employees. 6. The cost incurred on the training program should not exceed its

benefits. 7. The method or type of training should be very cautiously selected by the organization depending upon the organizations' resources & an employee's individual need for training. Thus, training is a vital tool to cope up with the changing needs & technologies, & ever-changing environment. It benefits both the organization as well as the employees.

Question no 5: If an organization is going in profit then why there is a need of performance mamnagment..discuss with arguments.
Performance Appraisal is an objective system to judge the ability of an individual employee to perform his tasks. A good performance appraisal system should focus on the individual and his development, besides helping him to achieve the desired performance. This means that while the results are important the organization should also examine and prepare its human capital to achieve this result. This holds true even for new inductees. There is a strong linkage between induction, training and appraisal. In a large number of firms worldwide, a new recruit is expected to discuss his schedule of work in achieving his induction objective. This schedule of work becomes a part of his job for the next few months. Objectives of Appraisal Almost all organizations practice performance appraisal in one form or another to achieve certain objectives. These objectives may vary from organization to organization or even within the same organization from time to time. It has been found that there are two primary objectives behind the use of this methodology. One is to use it as an evaluation system and second, to use it as a feedback system.

The aim of the evaluation system is to identify the performance gap. This means that it helps determine the gap between the actual performance of the employee and that required or desired by the organization. The aim of the feedback system is to inform the employee about the quality of his work or performance. This is an interactive process by which the employee can also speak about his problems to his superior. An effective performance appraisal system should emphasis individual objectives, organizational objectives and also mutual objectives. From the viewpoint of individual objective the performance appraisal should talk about a) What task the individual is expected to do? b) How well the individual has done the task? c) How can his performance be further improved? d) His reward for doing well. From the organizational view point a performance appraisal should generate manpower information, improve efficiency and effectiveness serve as a mechanism of control and provide a rational compensation structure. In short the appraisal system establishes and upholds the principle of accountability in the absence of which organization failure is the only possible outcome. Finally, talking about mutual goals, the emphasis is on growth and development, harmony, effectiveness and profitability. Methods of Performance Appraisal In order to achieve the objectives, a variety of performance appraisal methods have been developed. The choice of method depends on organizational ethos, its objectives, size, product and technology. The most traditional method is the Confidential Report method where the supervisor makes an evaluation of his subordinate on the basis of certain characteristics like loyalty, intelligence, conduct, character etc. In some other methods like Graphic Rating scale and the Ranking

Methods though the process is simple it is plagued with subjectivity. In the Critical Incidents method a balance sheet of on-job-behavior for each employee is generated which can then be used at the end of the year to see how well the employee has performed. In 1961 Peter Drucker popularized the Management by Objectives (MbO) method. In this method the subordinate in consultation with the supervisor chalks out short term objectives followed by specific actions that he has to carry out. The goals are finally set and are action oriented. The goals set should be specific, measurable, achievable, review able and time bound and most importantly it should be aligned with the goal of the organization. At the end of a specified time period, the activities are jointly reviewed by both the subordinate and his supervisor. Depending on the performance of the subordinate, the goals are modified or redesigned for the next period of time. The MbO is thus a performance oriented system. A well thought out MbO system provides multiple benefits. It establishes a link between the performance of the individual and the organization. It is easy to implement because those who carry out the plan also participates in setting it up. Each employee becomes aware of the task he has to perform. This leads to better utilization of capacity and talent. It promotes better communication and information sharing. It provides guidelines for self evaluation as well as evaluation by the superior against set tasks and goals. It facilitates guidance and counseling. But most organizations engage in a retrospective performance appraisal. In this process some objectives that were agreed upon in the beginning of the year are dragged out and the appraisee and the manager discuss and debate about how well each of these objectives was achieved. This procedure has many flaws. It does not address the basic human needs in the motivation process. Feedback should be as immediate as possible, it should focus on actual things and the individual involved should be given the opportunity to correct his behavior. But the traditional procedure is too late. It is difficult to remember events a month old let alone events that had occurred over ten months ago.

Performance Management and Performance Appraisal Many people mistake performance appraisal for performance management. Actually, performance management is a much bigger system, and is much more valuable to managers and companies (and employees) than performance appraisal. The essential components or parts of an effective performance management system include: Performance Planning (includes employee goal setting / objective setting) Ongoing Performance Communication Data Gathering, Observation and Documentation Performance Appraisal Meetings Performance Diagnosis and Coaching Performance Management is an ongoing process of measuring and adjusting performance continually focusing on behaviors throughout the year. It is a continuous process not an event. It is not the same as performance appraisal, which is an assessment of the employees performance by both the employee and his superior jointly, with the purpose of allocating a score that may be used for both development and salary or promotion purposes. Performance Management includes Performance Appraisal as one of its elements. Performance Management should became part of day to day workplace behavior. Some organizations have adopted an online Performance Management system. Going online with performance management puts ownership of the process in the hands of the individual as opposed to the traditional manager driven system. It allows direct communication between the individual and the manager via online journals at times convenient to both. It links performance with the individuals learning and development plans and also to the organizational goals, values and competencies. In fact performance appraisal is the least important component of a performance management system. To quote Robert Bacal If all you do is appraisal -- if you don't do planning and have ongoing communication, collect data, and diagnose problems, you are wasting your time. In fact it's even worse than that. If all you do is performance appraisal, you will almost be guaranteed that morale will suffer, performance problems will increase, and the manager's job

will become much harder. Modern Trends A growing number of front running organizations like Ford, Microsoft and Sun Microsystems, have adopted a performance appraisal model in which best-to-worst ranking methods are used to identify poor performers. The identified poor performers are then given a time period during which they have to show an improvement in their performance. In cases where the employee fails to improve his performance he is asked to leave the organization gracefully and a severance package is offered to him. If the employee refuses to leave then his service is terminated and no compensation is offered. This system is called rank and yank strategy. Advocates of this system feel that it continually motivates employees to better their performance since nobody would like to be included in the poor performance band. But the flip side of this strategy is that employees become too competitive and team spirit is not nurtured. Effective organizations are not build merely on investment and returns but more on the quality of the workforce, its commitment to the organizational goals and investments made to attract train and retain superior human capital. An integrated Performance Management system is essential to get the best out of its people. Employee performance is linked to company performance. This helps in achieving the organizational goal and creates a performance culture in the company. Invention, creativity, diversity of perspectives is fostered. Employees act as one company one brand.