Appraising Employee Performance

Need for Appraising Employee Performance in Organizations

There are several reasons to appraise subordinates performance. First, appraisals play, or should play, an integral role in the employer’s performance management process; it does little good to translate the employer’s strategic goals into specific employees’ goals, and then train the employees. Second, the appraisal lets the boss and subordinate develop a plan for correcting any deficiencies the appraisal might have unearthed, and to reinforce the things the subordinate does correctly. Third, appraisals should serve a useful career planning purpose by providing the opportunity to review the employee’s career plans in light of his or her exhibited strengths and weakness. And, last but not least, the appraisal almost always affect the employer’s salary raise and promotional decisions.

In reviewing the appraisal tools we discuss below don’t miss the forest for the trees. It doesn’t matter which tool you use if you’re less than candid when your subordinate is under-performing. Not all managers are devotees of such candor, but some firms like GE are famous for hard-hearted appraisals. GE’s former CEO,  Jack Welch is of the opinion that, for instance, that there’s nothing crueler than telling someone who’s doing a mediocre job that he or she is doing well. Someone who might have had the chance to correct bad behavior or find a more appropriate vocation may instead end up spending years in a dead-end situation, only to leave when a tough boss comes along.

There are many practical motivations for giving soft appraisals: the fear of having to hire and train someone new; the unpleasant reaction of the appraisee; or a company appraisal process that’s not conducive to candor for instance.… Read the rest

Outsourcing of Training and Development

Organizations now are using a unique approach to provide training internally by outsourcing their training departments. This they have found is a way that reduces costs improves productivity and relives them from the need of constant upgradation. Handing over the organizations training function over to “experts” in many ways also improves the quality of training. These experts have a lot of advantages; they are constantly upgrading themselves to differentiate themselves from the competition and add value to their clients, by virtue of the multiple clients they serve – they have an upfront feel of the best industry practices; training costs can be tracked more objectively and can help align your training’s with your strategic objectives in a far better manner.

Outsourcing of training and development activities means comprehensive, end-to-end outsourcing—from the management of the training function to the design, delivery and reporting. Training BPO refers to the transfer of management and execution of one or more complete ongoing training and development processes or the entire training function to an external services provider. For many companies, outsourcing employee training and development makes financial as well as business sense.

Outsourcing of training and development functions makes a lot of sense for most organizations. The training function is often a decentralized operation. Most companies are unsure of how much they spend on training across the enterprise, and don’t really know what or how much they need. Of course the process of identification, analysis, design, development, deployment and evaluation varies from group to group, department to department and division to division, even within an organization.… Read the rest

Role of Case Studies in Employee Training and Development

One way to help trainees learn analytical and problem solving skills is by presenting a story (called a case) about people in an organization who are facing a problem or decision. Cases may be faced on actual events involving real people in an organization, or they can be fictional. Business case studies are included in college text books and courses in management, public administration, law, sociology, and similar subjects. They are increasingly available using video and other media. While cases vary in complexity and detail, trainees should be given enough information to analyze the situation and recommend their own solutions. In solving the problem, the trainees are generally required to use a rational problem-solving process that includes the following steps:

  1. Restating important facts.
  2. Drawing inferences from the facts.
  3. Stating the problem or problems.
  4. Developing alternative solutions and then stating consequences of each.
  5. Determining and supporting a course of action.

Proponents of the case study method argue that this form of problem solving within a management setting offers illustrations of the concepts employees are respected to learn and use, improves communications skills, and facilities the linking between theory and practice. Proponents also claim that cases allow participants discuss, share, and debate the merits of different inferences, problems, and alternative courses of action. Such insight can help employees to develop better analytical skills and improve their ability to integrate new information.

A business case study can present a real-life situation, which lets trainees to consider what they would do. It can present a wide variety of skills in which applying knowledge is important.… Read the rest

Wage Issues under Collective Bargaining

Almost all contract negotiations pivot upon, and most grievances and arbitration procedures thus ultimately deal with, four major areas : (1) wages and issues that can be directly related to wages; (2) employee benefits or economic “fringe” supplements to the basic wage rate; (3) “institutional” issues that deal with the rights and duties of employers and trade unions; and (4) “administrative” clauses that treat such subjects as work rules and job tenure.

Probably no issues under collective bargaining continue to give rise to more difficult problems than do wages and wage-related subjects. When negotiations reach a stalemate, they frequently do so because management and trade union representatives are not able to find a formula to resolve wage disputes. And wage controversies are, for that matter, by far the leading overt cause of strikes; Over the past decade, for example, they have accounted for over 40 percent of all such work stoppages.

This record highlights the vital character of wage issues under collective bargaining and also suggests that in the area of wages much can be done to decrease management-labor conflict substantially. In any area of human relations, ignorance breeds suspicion, distrust, and conflict; this principle of human behavior is fully applicable to wage negotiations under collective bargaining. To the extent that understanding is substituted for ignorance, there will be a greater opportunity for peaceful settlement of wage controversies, even if conflict of interest in such matters never disappears.

It is not difficult to understand why wages do play such an important and controversial role in labor relations.… Read the rest

Profit Sharing as an Incentive Scheme

Profit sharing is the most popular method rewarding the employees. Under profit sharing incentive plan, the employees are paid in addition to the regular wage, a particular share of the net profits of the business as incentive.

Characteristics of Profit Sharing Incentive Plans

The key features of profit sharing incentive plans may be stated as follows:

  • It is based on an agreement between the employer and the employees.
  • It is a payment made after ascertaining the net profits of the business. It is not therefore, a charge on profits.
  • The amount paid to the employees is over and above their normal pay.
  • The amount to the paid is determined based on some agreed formulas.
  • The payments based on seniority and wage level of individual workers.
Merits of Profit Sharing

The advantages of profit sharing incentive plans are as follows:

  • Better employer-employee relations – This is possible, as the employer is ready to share the profits of the enterprise with his employees.
  • Increase in productivity -The employees make every possible effort to increase productivity because they know very well that higher profits for the enterprise would mean higher bonus for them.
  • Better living standards – It helps to increase the living standards of the employees as the amount received is in addition to the usual wages.
  • Reduced costs of supervision – The workers themselves are duty conscious and, therefore, they need no close supervision. Thus, costs of supervision are reduced.
  • Promotion of team spirit – The employees know the importance of teamwork, as only such an effort would result in higher output.
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Advantages and Disadvantages of Incentive Schemes

Merits of Incentives

The following are the advantages derived by providing incentives to employees:

  • Higher output: By providing incentives to his employees, the employer is able to induce them to work better. This leads to higher output.
  • Greater profits: Needless to say, higher output results in greater profits for the business. This happens in two ways. First, the cost per unit becomes less and second, the enterprise is able to keep the selling price low and this results in greater sales.
  • No problem of idle time: In an organisation where no proper incentives are available for the workers, the tendency will be to while away the time. When suitable incentives are available, the workers become time conscious. They begin to see every minute in terms of money.
  • Supervision does not pose any problem: When suitable incentives are available, the workers become duty conscious. The need for close supervision, thus, does not arise.
  • Efficient workers are able to earn more: Such of those workers who are highly efficient are able to earn more by way of performance bonus, higher commission and so on.
  • Possible to identify inefficient and dull workers: If, in spite of the incentive schemes, some workers are able to earn only their normal wage, it should mean that they are basically dull. The employer, therefore, has to decide whether to retain them or subject them to rigorous training.
  • Rate of labor turnover is bound to be low: If adequate incentives are available to the workers, they may not have a feeling of dissatisfaction.
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