MODULE – IV

TRAINING AND DEVELOPMENT

Training

Training is a systematic process of developing employee skills and knowledge to improve their job
performance. The employer organizes training for his employees to increase their job knowledge, skills
and improve their attitude and knowledge.
Training is the act of increasing the knowledge and skills of an employee for performing the job
assigned to him. It is a short-term process. After an employee is selected, placed and introduced in an
organization he must be provided with training facilities so that he can perform his job efficiently and
effectively.
Training refers to a planned effort by a company to facilitate employees’ learning of job related
competencies. These competencies include knowledge, skills, or behaviours that are critical for
successful job performance. The goal of training is for employees to master the knowledge, skill, and
behaviours emphasized in training programs and to apply them to their day to day activities.
Thus, training bridges the differences between job requirements and employees, present specifications.
Definition:
According to Edwin B. Flippo, “Training is the act of increasing the knowledge and skills of an
employee for doing a particular job.”
According to Dale S Beach, "Training is the organized procedure by which people learn knowledge
and for skill for a definite purpose."
Importance of Training
Training is crucial for organizational development and success. It is fruitful to both employers and
employees of an organization. An employee will become more efficient and productive if he is trained
well. The benefits of training can be summed up as:
a) Improves Morale of Employees: Training helps the employee to get job security and job
satisfaction. The more satisfied the employee is and the greater is his morale, the more he will
contribute to organizational success and the lesser will be employee absenteeism and turnover.
b) Less Supervision: A well trained employee will be well acquainted with the job and will need
less of supervision. Thus, there will be less wastage of time and efforts.
c) Fewer Accidents: Errors are likely to occur if the employees lack knowledge and skills required
for doing a particular job. The more trained an employee is, the less are the chances of
committing accidents in job and the more proficient the employee becomes.
d) Optimum utilization of human resources: Training helps in optimizing the utilization of human
resource that further helps the employee to achieve the organizational goals as well as their
individual goals.
 e) Development of human resources: It helps to provide an opportunity and broad structure for the
development of human resources’ technical and behavioral skills in an Organization. It also
helps the employees in attaining personal growth.
f) Development of skills of employees: It helps in increasing the job knowledge and skills of
employees at each level. It helps to expand the horizons of human intellect and an overall
personality of the employees.
g) Chances of Promotion: Employees acquire skills and efficiency during training. They become
more eligible for promotion. They become an asset for the organization.
h) Increased Productivity: Training improves efficiency and productivity of employees. Well
trained employees show both quantity and quality performance. There is less wastage of time,
money and resources if employees are properly trained.
i) Team spirit: It helps in inculcating the sense of teamwork, team spirit, and inter-team
collaborations. It helps in inculcating the zeal to learn within the employees.
j) Organization Culture: It helps to develop and improve the organizational health, culture and
effectiveness. It helps in creating the learning culture within the Organization.
Methods of Training
A large variety of methods of training are used in business. Even within one organization different
methods are used for training different people. All the methods are divided into two classifications:

 On-the-job training Methods:

Under these methods new or inexperienced employees learn through observing peers or managers
performing the job and trying to imitate their behavior. These methods do not cost much and are less
disruptive as employees are always on the job, training is given on the same machines and experience
would be on already approved standards, and above all the trainee is learning while earning.
Advantages of On-The-Job Training:
1. On the job method is a flexible method.
2. It is a less expensive method.
3. The trainee is highly motivated and encouraged to learn.
4. Much arrangement for the training is not required.
5. Training improves the productivity of employees.
6. Training makes the employees multi-skilled.
7. On the job training provides the learning environment to the trainees, which make them quick
learner.
Disadvantages of On-The-Job Training Methods
1. On Job training method is costly.
2. When the trainees work on the floor the risk of accidents increases.
Types of On-The-Job Training Methods are:
1. Coaching: Coaching is a one-to-one training. It helps in quickly identifying the weak areas and tries
to focus on them. It also offers the benefit of transferring theory learning to practice. The biggest
problem is that it perpetrates the existing practices and styles. In India most of the scooter mechanics
are trained only through this method.
2. Mentoring: The focus in this training is on the development of attitude. It is used for managerial
employees. Mentoring is always done by a senior inside person. It is also one-to- one interaction, like
coaching.
3. Job Rotation: It is the process of training employees by rotating them through a series of related
jobs. Rotation not only makes a person well acquainted with different jobs, but it also alleviates
boredom and allows to develop rapport with a number of people. Rotation must be logical.
4. Internship Training: The internship is a pre-job experience of future employees. In internship pre-
placed employees work on the floor and learn the real experiences of the company. It helps the college
graduated to learn the real experiences of the company.
5. Job Instructional Technique (JIT):
It is a Step by step (structured) on the job training method in which a suitable trainer
(a) prepares a trainee with an overview of the job, its purpose, and the results desired,
(b) demonstrates the task or the skill to the trainee,
(c) allows the trainee to show the demonstration on his or her own, and
(d) follows up to provide feedback and help.
The trainees are presented the learning material in written or by learning machines through a series
called ‘frames’. This method is a valuable tool for all educators (teachers and trainers). It helps us:
• To deliver step-by-step instruction
• To know when the learner has learned
• To be due diligent (in many work-place environments)
6. Apprenticeship Training: Apprenticeship is a system of training a new generation of practitioners
of a skill. This method of training is in vogue in those trades, crafts and technical fields in which a long
period is required for gaining proficiency. The trainees serve as apprentices to experts for long periods.
They have to work in direct association with and also under the direct supervision of their masters.
The object of such training is to make the trainees all-round craftsmen. It is an expensive method of
training. Also, there is no guarantee that the trained worker will continue to work in the same
organization after securing training. The apprentices are paid remuneration according the
apprenticeship agreements.
7. Understudy: In this method, a superior gives training to a subordinate as his understudy like an
assistant to a manager or director (in a film). The subordinate learns through experience and
observation by participating in handling day to day problems. Basic purpose is to prepare subordinate
for assuming the full responsibilities and duties.
 Off-the Job Training Methods-
In order to have the overall development of employee’s off-the-job training can also be imparted. The
methods of training which are adopted for the development of employees away from the field of the job
are known as off-the-job methods. Off-the-job training methods are conducted in separate from the job
environment, study material is supplied, there is full concentration on learning rather than performing,
and there is freedom of expression.
Advantages of Off-The-Job Training Methods:
1.Effective Method: Off the job training is well organized and conducted by experts and specialists
which makes the training program more effective.
2. High Productivity: It is conducted outside the organization or workstation and trainees are not
involved in the production process. Only trained and skilled workers are placed at the work place. So,
productivity will be higher.
3. Minimize Errors: Under this method, newly appointed employees are trained outside the production
area and skilled and trained manpower perform the job. So, it lowers the production errors.
4. Economical: It is a cost effective method.
5. No Disturbance : Trainees are not allowed to work in the actual work place. So, production process
will not be disturbed and existing employees can do their jobs smoothly.
Disadvantages of Off-The-Job Training
1. More Expensive: This method of training may be very expensive due to extra space, accommodation
and transportation costs and experts' fees etc.
2. Less Effective: Off the job training is less effective than on the job training method because it is
conducted outside the working environment. Employees need extra induction training to handle their
job.
3. May lead to Dissatisfaction: Training is conducted artificially outside the work place. So, employees
cannot learn properly in this training method. Dissatisfaction may arise among the employees.
4. No Production: In this method, Trainees cannot take part in the production process. So, potential
output and time is lost in this method of training.
Types of Off the Job Training Methods are-
1. Special lectures: This is also called as classroom training wherein the employees are given lectures
about the job requirements and the necessary skills required for implementing the job. There is
generally a classroom or a workshop wherein the complete job knowledge is given to the workers by
the experts or specialists from the professional institutes. The main purpose of this training is to make
the employees well informed about their job roles and discussing their queries arising out of the
lectures.
2. Simulation: Under this training, the trainee is required to learn the operations of machines and
equipment that are reasonably designed to look similar to those installed at the actual work floor. This
is one of the most common methods of training wherein the worker learns to operate tools and
machinery that look alike to those, they would be using in the actual work environment.
3. Case study method: Usually case study deals with any problem confronted by a business which can
be solved by an employee. The trainee is given an opportunity to analyze the case and come out with
all possible solutions. This method can enhance analytic and critical thinking of an employee.
4. Role play: In this case also a problem situation is simulated asking the employee to assume the role
of a particular person in the situation. The participant interacts with other participants assuming
different roles. The whole play will be recorded and trainee gets an opportunity to examine their own
performance.
5. In-basket method: The employees are given information about an imaginary company, its activities
and products, HR employed and all data related to the firm. The trainee (employee under training) has
to make notes, delegate tasks and prepare schedules within a specified time. This can develop
situational judgments and quick decision making skills of employees.
6. Business games: Under this method, the trainees are divided into groups and then they are presented
with the simulated marketplace or the situations, wherein they are required to apply their learning and
solve the problems accordingly.
7. Conferences: A meeting of several people to discuss any subject is called conference. Each
participant contributes by analyzing and discussing various issues related to the topic. Everyone can
express their own view point.
8. Vestibule Training: This type of training is specifically given to the technical staff, office staff and
the employees who learn the operations of tools and equipment assembled at a place away from the
actual work floor. This type of training is conducted to give the real feel to the trainees, that they would
be experiencing at the actual plant.
Managerial Development
Managerial development is the process of enhancing the skills, knowledge, and abilities of managers in
an organization. It is a continuous process that helps managers to improve their effectiveness and
efficiency in managing people and resources. The main objective of managerial development is to
improve the performance of managers and their subordinates, as well as the overall performance of the
organization. It is a long term education process utilizing a systematic and organized procedure by
which managerial personnel learn conceptual and theoretical knowledge. It is a systematic process of
learning and growth by which managerial personnel gain and apply knowledge, skills, attitudes and
insights to manage the work effectively and efficiently. The main aim of managerial development is to
improve the performance of managers at all levels in their present jobs and to ensure the availability of
required number of managers with the needed skills so as to meet the present and anticipated future
needs of the Organization.
Purpose-
Management Development has multidimensional aspects. The goals of management development are
discussed underneath-
 It is used to enhance the knowledge, skills and aptitude of executives so that they can perform
more productively on their current and future positions
 To make sure that organisation has an adequate supply of personnel to serve its future
requirements
 To open avenues and provide opportunities for managers and help them in their career
advancement
 To equip executives with latest trends and knowledge so that they can perform more efficiently
and also prevent obsolescence of knowledge
Techniques/ Methods of Development

The various techniques of executive development may be classified into two broad categories: -
1. On the Job Techniques: It is delivered to employees while they perform their regular jobs. In this
way, they do not lose time while they are learning. After a plan is developed for what should be
taught, employees should be informed of the details. A time-table should be established with
periodic evaluations to inform employees about their progress. On-the-job techniques include
 orientations, job instruction training, apprenticeships, internships and assistantships, job rotation
and coaching. It consists of: -
 Coaching - Coaching is a one-to-one relationship between trainees and supervisors which offer
workers continued guidance and feedback on how well they are handling their tasks. The
coach assigns the task, monitors the trainee behavior, and provides reinforcement and
feedback. Coaching is commonly used for all kinds of trainees, from unskilled to managerial
position. This method is critically depends on the quality of the coach.
 Under Study - An understudy may be assistant to someone or special assistant to some
supervisory or executive positions. He learns by experience, observation, guidance and
coaching.
 Position Rotation - This involves the movement of the trainee from one job to another. This
helps him to have a general understanding of how the organization functions. Apart from
releasing boredom, Job rotation allows workers to build rapport with a wide range of
individuals within the organization, facilitating future cooperation among various departments.
Such cross-trained personnel offer a great deal of flexibility for organizations when transfers,
promotions or replacement become inevitable.
 Multiple Management - It provides knowledge about the organization to the junior and middle
managerial personnel. Here the members are exposed to all types of the decision taken at
higher level.
2. Off-the-Job Technique: It consists of:
 Lectures - It is a traditional and direct method of instruction. The instructor organizes the
material and gives it to a group of trainees in the form of a talk. To be effective, the lecture
must motivate and create interest among the trainees. An advantage of this method is that it is
direct and can be used for a large group of trainees. The major limitation of this method is that
it does not provide for the transfer of training effectively.
 Case Studies - It presents the trainees with a written description of a business or organizational
problem. The object of the case method is to teach the trainees how to analyze information,
generate alternative decisions, and evaluate the alternatives. Cases can be analyzed by
individuals or small groups. Feedback and reinforcement are provided through oral discussion
or written comments from the instructor.
 Group Discussions - This method is a direct discussion on a specific topic conducted with a
relatively small group of trainees. This method is useful for teaching and exploring difficult
conceptual materials, and for changing attitudes and opinions. It provides opportunity for
feedback, reinforcement practice, motivation, and transfer, largely due to the active
interchange of ideas between the participants.
 Role Playing - In most of role-playing assignments, each of the student takes the role of a
person affected by an issues on human life and effect the human activities all around us from
the perspective of that person.
 Management Games - Verities of business and management games have been devised and are
being used with the varying degree of success in the developing programmes. A management
 game is classroom exercise in which a number of team of trainees competes against each other
to achieve certain objectives.
 Sensitivity Training - It has been successfully employed by behavioral scientists over the past
thirty years. Sensitivity to the circumstances and feeling of others is the cornerstone of human
relationships. It is important to note that sensitivity is not just an emotion; it must express
itself in actions as well, especially when people we know are experiencing pain and
difficulties.
Importance of Development
Executive development is more future oriented. It is more concerned with education than is employee
training. In today’s competitive environment, an organization has to be concerned about the
development of supervisors, middle level managers and top-level executive. Executive development is
important for the following reasons: -
 Executive development programmes are required to train and develop professional managers.
 It helps managers to develop skills to face cut throat competition.
 It enables managers to face problems related to technology and institution.
 It helps in developing better relations with the labors.
 Executives need training and education to understand and adjust to changes in socio-economic
changes.
 Executive development is required to broader the outlook of managers.
Difference between Training and Development

Basis Training Development

Training refers to the process of Development refers to the overall

increasing the knowledge, skills, and growth of the employees. These are
Meaning
abilities of employees for doing learning opportunities that are designed
work. for employees to grow.

Its main aim is to help the employee Its main aim is the overall growth of
Aim
to do the job better. employees.

Orientation It is job oriented. It is career oriented.

Scope of It has a narrow scope as it is a part of It has a broader scope as it includes

learning development. training.

Suitability It is more suitable for technical staff. It is more suitable for managerial staff.
 Basis Training Development

It involves teaching technical, human,

Skills It involves teaching technical skills.
and conceptual skills.

It is a long-term process as it is career

Duration It is a short-term process.
oriented.

Level of
trainees Trainees are non-managerial here. Trainees are managerial here.
involved

Depth of
Knowledge is imparted for doing a Knowledge is imparted for the growth
knowledge
specific kind of job. of an employee in all respects.
imparted

Employers take the initiative in Individuals take initiative by

Initiative in
providing training to their themselves for their growth and
learning
employees. development.

PERFORMANCE APPRAISAL
Performance Appraisal refers to all the formal procedures used in working organizations to evaluate the
personalities and contribution of group members. Performance Appraisal is a formal system of
measuring and evaluating an employee’s job related behavior and outcomes to discover how the
employee is presently performing on the job and how the employee can perform more effectively in the
future.
According to Flippo, a prominent personality in the field of Human resources, “Performance appraisal
is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining
to his present job and his potential for a better job.”
Nature of Performance Appraisal
• Subjectivity and Objectivity: Performance appraisal involves a combination of subjective judgment
and objective evaluation. While aspects of employee performance, such as productivity and meeting
targets, can be objectively measured, other factors, such as interpersonal skills and teamwork, may
involve subjective assessment by managers.
• Two-Way Communication: Performance appraisal is not only about evaluating employees
performance but also about facilitating a two-way communication process between managers and
employees. It provides an opportunity for employees to receive feedback on their performance, discuss
their career aspirations, and address any concerns they may have.
• Continuous Process: While performance appraisal often occurs on a scheduled basis, such as
annually or semi-annually, it is part of a continuous process of performance management. Regular
feedback, coaching, and goal-setting sessions throughout the year complement formal performance
appraisals to support ongoing employee development and improvement.
• Developmental and Evaluative: Performance appraisal serves both developmental and evaluative
purposes. On one hand, it aims to identify areas for improvement, provide support and guidance for
employee development, and align individual performance with organizational goals. On the other hand,
it involves evaluating employees' performance against predetermined criteria to make decisions related
to rewards, promotions, and career development.
• Multifaceted Evaluation: Performance appraisal evaluates various aspects of employee
performance, including quantitative measures such as productivity, quality of work, and meeting
targets, as well as qualitative factors such as communication skills, teamwork, and leadership abilities.
A holistic approach to performance appraisal considers both quantitative and qualitative aspects to
provide a comprehensive assessment of employee performance.
Objectives of Performance Appraisal
Performance appraisal in any organization is undertaken to meet certain objectives which may be in the
form of salary increase, promotion, recognizing training and development needs, providing feedback to
employees and putting stress on employees for better performance.
a) Salary Increase: Performance appraisal plays an important role in making decision about increase
in salary. Increase in salary of an employee depends on how he is performing his job. Evaluation
of an employee takes place on a continuous basis which may be formally or informally. In a large
as well as in small organizations performance appraisal takes place but it may be in a formal or
informal way. It shows how well an employee is performing and to what extent a hike in salary
would take place in comparison to his performance.
b) Promotion: Performance appraisal gives an idea about how an employee is working in his present
job and what his strong and weak points are. In comparison to his strength and weaknesses it is
decided whether he can be promoted to the next higher position or not. If necessary what
additional training is required. Similarly it could be used for demotion, discharge of an employee
and transfer.
c) Training and Development: Performance appraisal gives an idea about strengths and weaknesses
of an employee on his present job. It gives an idea about the training required by an employee for
overcoming the limitations that an employee is having for better performance in future.
d) Feedback: Performance appraisal gives an idea to each employee where they are, how they are
working, and how are they contributing towards achievement of organizational objectives. Feed
works in two ways. First, the person gets view about his performance and he may try to conquer
his weaknesses which may lead to better performance. Second, the person gets satisfied after he
relates his work with organizational objectives. It gives him an idea that he is doing a meaning full
work and can also contribute in a better way.
e) Pressure on Employees: Performance appraisal puts a sort of stress on employees for better
performance. If the employees are aware that they are been appraised in comparison to their
performance and they will have positive and acceptable behaviour in this respect.
Key elements of performance appraisal could be summarized as follows:
 Basis for job change and promotion
 Training and development program
 Feedback to the employee
 Incentive to all the employees
 Provide the rational foundation for the payment and increment of price, rate, wages, bonus etc.
 Evaluating the effectiveness of devices used for the selection and classification of workers.
 Put some sort of stress on employees for better performance.
Performance Appraisal Methods
Traditional methods
The traditional methods of Performance Appraisal are as follows:
1. Ranking method: In this method, the employees are ranked by taking their performance levels and
other characteristics into consideration.
 Very useful to divide a good and an average performer.
 Can be used easily for a small set of employees.
 The ranking becomes difficult when a large set of employees have similar characteristics.
2. Grading method: In this method, different grades are given to the employees based on their
contribution to the organization. Grades may be in the form of alphabets (A, B, C, D, E, F…) or in
words like excellent, very good, moderate, bad, very bad, worst or excellent, good, bad. Based on the
grades given, promotions, hikes, training, etc. are planned.
3. Paired comparison method: In this method, the appraiser compares two employees and marks the
better performer. The process is continued until all the employees are compared with one another in
this manner. After the entire process is completed, ranking is given to all the employees based on the
number of times that the employee has been marked as a better performer. This method is very
difficult for an organization that has a large number of employees.
4. Forced choice method: In this method, the appraiser is given a set of statements and asked to select
only one statement which defines the employee. Let us consider the following three statements,
 He/ She is a team player.
 He/ She needs to be trained to improve the skill set.
 He/ She completes the assigned tasks in time.
The appraiser has to select one statement as a part of the evaluation process. This is a time-consuming
method.
5. Graphical rating method: In this method, different characteristics of the employees are rated. The
appraiser rates the employees on each characteristic in the form of points like 1, 2, 3, 4, 5, 6, 7 or in the
form of excellent or average or bad, etc.
Let us consider two characteristics like efficiency and training. If an employee performs very well in
the training sessions, then that employee will be given the rating as 6 or 7 on 7 point scale. If the same
employee performs poorly on the project related tasks, then that employee will be given 2 points or 1
point for efficiency.
6. Forced distribution method: In this method, the appraiser has to distribute the employees into five
levels like excellent, very good, average, very bad and worst performers. For example, if there are
1000 employees, the appraiser has to distribute the employees into various categories as per their
performance levels. If there are 200 excellent performers, they fall into the excellent category. If the
performance levels of another 200 employees are not up to the mark, then they fall into the very bad
category. This method is continued until every employee is distributed into some category.
7. Checklist method: In this method, all the characteristics in the question form are written in order
and two options yes and no is given to the appraiser for every question. The appraiser has to tick the
yes box when the given characteristic is found and no box when it is not. All the responses are
counted, and a final rating is obtained. It is a time taking process and not accurate.
8. Essay method: In this method, the appraiser writes about the characteristics of the employee in his
own words in the form of an essay. With this, the strong and weak points can be easily known. But the
essay depends on the writing skills of the appraiser. Sometimes, there may be a chance of weak areas
getting more highlighted than the strong areas of an employee. This may demotivate the employee.
9. Critical incidents method: In this method, the performance of the employees during critical
incidents is taken into consideration. All the critical tasks performed by each employee are written and
are compared with each other by the appraisal team. The rating is done based on the severity of the
critical incident.
10. Field review method: In this method, the appraiser takes the help of subordinates and supervisors
to rate an employee. This method is mostly used during the promotions and increments. It is a time-
consuming process.
Modern Methods
The modern methods of Performance Appraisal are as follows:
1. Management by Objectives (MBO): This method was developed by Peter Drucker. In this method,
certain tasks (objectives) based on their job role are given to the employees and a team is assigned to
monitor the tasks. This will help the organization to know the skill gap of the employees. This will help
the organization to plan the training modules.
The basic nature of MBO is participative, setting their goals, selecting a course of actions to achieve
goals and then taking decision. The most important aspect of MBO is measuring the actual
performances of the employee with the standards set by them. It is also said to be a process that
integrates organizational objectives into individual objectives.
Entire programme of MBO is divided in four major steps i.e. setting up of goal, action planning,
comparison and timely review.
Setting up of goal-In goal setting superior and subordinate together set certain goals, i.e the expected
outcome that each employee is supposed to achieve.
In action planning, the manner in which goals could be achieved is determined i.e. identifying the
activities which are necessary to perform; to achieve pr determined goals or standards. When the
employees start with their activities, they come to know what is to be done, what has been done, and
what remains to be done and it also gives an idea about the resources to be achieved.
In the third step, the goals set by the individual employee are compared with the actual goals achieved.
It gives an idea to the evaluator as why there is a variation in desired outcome and actual outcome.
Such a comparison helps create need for training so as to enhance employees’ performance.
Finally, in the timely review step, corrective actions are taken so that actual performances do not
deviates from standards established in beginning.
The main reason for conducting reviews is not to humiliate the performer but to assist him in better
performances in future. Few advantages of MBO are
a) It is outcome –oriented.
b) It co-ordinates the planning and control functions and provides motivation.
c) Employees are clear about the task that they are expected to perform and also how they may be
evaluated.
MBO do have certain limitations such as it is time consuming, employees and the superiors jointly
setting the goals may lead to conflict as employee would always like to set lower goal and the superior
would like to set it on the higher side, lack of confidence in employee by management.
2. 360-degree appraisal: This method is also known as ‘multi-rater feedback’, it is the appraisal in a
wider perspective where the comment about the employees’ performance comes from all the possible
sources that are directly or indirectly related with the employee on his job.
In 360 degree performance appraisal an employee can be appraised by his peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into direct
or indirect contact with the employee and can provide necessary information or feedback regarding
performance of the employee the “on-the-job”.
The four major component of 360 degree performance appraisal are
1. Employees Self Appraisal
2. Appraisal by Superior
3. Appraisal by Subordinate
4. Peer Appraisal.
Employee self appraisal gives an option to the employee to know his own strengths and weaknesses,
his achievements, and judge his own performance. Appraisal by superior forms the traditional part of
the 360 degree performance appraisal where the employees’ responsibilities and actual performance is
judged by the superior.
Appraisal by subordinate gives a chance to evaluate the employee on the basis of communication and
motivating abilities, superior’s ability to delegate the work, leadership qualities etc. It is also known as
internal customers; the correct opinion given by peers can aid to find employees’ who are co-operative,
employees who ready to work in a team and understanding towards others.
3. Assessment centres: In this method, a group of employees are selected and are asked to perform a
few tasks individually and a few tasks in teams. These tasks are mainly aimed to check the teamwork,
leadership qualities and skill set of the employees. The tasks are mostly related to their job
responsibilities. This method is used to decide whether an employee is to be promoted or trained.
4. Behaviourally Anchored Rating Scales (BARS): In this method, all the critical incidents are
identified and are divided into different groups based on their departments. The employees are rated on
their behaviour towards the incidents rather than on the traits. This will enable the organization to
know the involvement of the employees.
This method is a combination of traditional rating scales and critical incidents methods. It consists of
preset critical areas of job performance or sets of behavioral statements which describes the important
job performance qualities as good or bad (for e.g. the qualities like inter personal relationships,
flexibility and consistency, job knowledge etc). These statements are developed from critical incidents.
These behavioral examples are then again translated into appropriate performance dimensions. Those
that are selected into the dimension are retained. The final groups of behavior incidents are then scaled
numerically to a level of performance that is perceived to represent. A rater must indicate which
behavior on each scale best describes an employee’s performance. The results of the above processes
are behavioral descriptions, such as anticipate, plan, executes, solves immediate problems, carries out
orders, and handles urgent situation situations.
This method has following advantages:
a) It reduces rating errors
b) Behavior is assessed over traits.
c) It gives an idea about the behavior to the employee and the rater about which behaviors bring good
Performance and which bring bad performance.
5. Cost Accounting Method: In this method performance of an employee is evaluated on the basis of
monetary returns the employee gives to his or her organization. A relationship is recognized between
the cost included in keeping the employee in an organization and the benefit the organization gets from
him or her. The evaluation is based on the established relationship between the cost and the benefit.
The following factors are considered while evaluating an employee’s performance:
a) Interpersonal relationship with others.
b) Quality of product produced or service given to the organization.
c) Wastage, damage, accidents caused by the employee.
d) Average value of production or service by an employee.
e) Overhead cost incurred.