Chapter 4, 5 & 6

(4) Human Resources Planning/

(5) CLASS ACTIVITY
(6) PERFORMANCE MANAGEMENT
Human Resource Planning
 Definition of Resource Planning
• Human Resource Planning (HRP) is the
process of forecasting the future human
resource requirements of the organization
and determining as to how the existing
human resource capacity of the organization
can be utilized to fulfill these requirements. 
 Definition Cont..
• What Is Human Resource Planning (HRP)?
• Human resource planning (HRP) is the continuous
process of systematic planning ahead to achieve
optimum use of an organization's most valuable asset—
quality employees. 
• Human resources planning ensures the best fit
between employees and jobs while avoiding manpower
shortages or surpluses.
 Defn of HRP Cont.

• Similarly, Bulla & Scott (1994), defines HRP as a

process of identifying HR requirement and planning
accordingly to meet those requirements.
• Beardwell & Claydon (2007) has defined HRP as the
process for identifying an organization's current and
future human resource requirements, developing and
implementing plans to meet these requirements and
monitoring their overall effectiveness.
 Significance of HRP in Changing
Environment
• Human resource planning is important to
cope with the change associated with the
external and internal environmental factors.
• It helps assess the current human resources
through HR inventory and adapts it
to changing technological, political, socio-
cultural, and economic forces.
JOB ANALYSIS
 Job Analysis and SHRM
• Strategic HRM lays emphasis on developing and
implementing policies and strategies in order to
get the desired output. Therefore, job analysis
and strategic HRM are inter-related. In fact, we
can say, establishing a person-job-environment
fit is the basic function of SHRM.
 Competency-based Job Analysis

• Writing job descriptions based on core competencies,
instead of job duties. It emphasizes what the
employee must be capable of doing, rather than a list
of duties he or she must perform. 
• Competencies = demonstrable characteristics of a
person that enable performance of a job.
HRP Horizons
HRP Process
Special Challenges on HRP and Outsourcing

SPECIAL HRP CHALLENGES

Compliance with law and regulations
Management change
Workforce Training and Development (lack of resources
Adoption to innovation
Recruitment of Talented Employees
Retaining Talented Employees
 CLASS ACTIVITY

• LOOK AT CHAPTER 5 ACCORDING TO COURSE OUTLINE.

• I WILL PICK ANY ONE TO PRESENT ON ANY OF THE AREAS

FOR 5 MINUTES, AND WILL BE AWARDED 3 MARKS OF YOUR
COURSE WORK
 5. Acquiring Human Resources

• Human Resource Acquisition: An Overview

• External Influences on Staffing
• Internal Influences on Staffing
• Recruitment Sources: Internal versus External
• Methods of Recruitment
• New Approaches to Recruitment
• Methods of Employee Selection
• New Approaches to Executive Selection
• Staffing Process: Recruiting and Selecting Employees
• Evaluation of Staffing Process
• Selection Outcomes
• Strategic Recruitment and Selection
• Hiring for a Diverse Workforce
• Alternatives to Hiring Permanent Employees
 CHAPTER 6
PERFORMANCE MANAGEMENT
• Definition
• History of Performance Management
• Current Themes in Performance Management
• Performance Appraisal Methods
• Traditional and Modern Appraisal methods
• Sources of Ineffective Performance
 INTRODUCTION

• Performance management is an important

HRM process that provides the basis for
improving and developing performance and
is part of the reward system in its most
general sense.
 DEFINITION OF PERFOMANCE
• Performance management is a systematic process for improving
organizational performance by developing the performance of individuals
and teams. It is a means of getting better results by understanding and
managing performance within an agreed framework of planned goals,
standards and competency requirements.
• As Weiss and Hartle (1997) commented, performance management is: ‘A
process for establishing a shared understanding about what is to be
achieved and how it is to be achieved, and an approach to managing
people that increases the probability of achieving success.’
 Objectives of Performance Management 

• To enable the employees towards achievement of superior standards of work

performance.
• To help the employees in identifying the knowledge and skills required for performing
the job efficiently as this would drive their focus towards performing the right task in
the right way.
• Boosting the performance of the employees by encouraging employee empowerment,
motivation and implementation of an effective reward mechanism.
• Promoting a two way system of communication between the supervisors and the
employees for clarifying expectations about the roles and accountabilities,
communicating the functional and organizational goals, providing a regular and a
transparent feedback for improving employee performance and continuous coaching.
 OBJECTIVES OF PM CONT..

• Identifying the barriers to effective performance and resolving

those barriers through constant monitoring, coaching and
development interventions.
• Creating a basis for several administrative decisions strategic
planning, succession planning, promotions and performance
based payment.
• Promoting personal growth and advancement in the career of
the employees by helping them in acquiring the desired
knowledge and skills.
HISTORY OF PERFORMANCE MANAGEMENT

First Phase:
• The origin of performance management can be traced in the
early 1960’s when the performance appraisal systems were
in practice.
• During this period, Annual Confidential Reports
(ACR’s) which was also known as Employee service
Records were maintained for controlling the behaviors of the
employees and these reports provided substantial
information on the performance of the employees.
History of Performance Management Cont..

Second Phase: 
• In this process of appraising the performance, the reviewing
officer used to enjoy a discretionary power of overruling the
ratings given by the reporting officer. The employees
usually used to get a formal written communication on their
identified areas of improvements if the rating for any
specific trait used to be below 33%.
History of Performance Management Cont..

THIRD PHASE: 
• In this phase the term ACR was replaced by performance appraisal. One of the key changes that
were introduced in this stage was that the employees were permitted to describe their
accomplishments in the confidential performance reports. The employees were allowed to
describe their accomplishments in the self appraisal forms in the end of a year. Besides inclusion
of the traits in the rating scale, several new components were considered by many organizations
which could measure the productivity and performance of an employee in quantifiable terms
such as targets achieved, etc. Certain organizations also introduced a new section on training
needs in the appraisal form. However, the confidentiality element was still being maintained and
the entire process continued to be control oriented instead of being development oriented.
History of Performance Management Cont..

FOURTH PHASE: 
• In this phase, the appraisal process was more development
driven, target based (performance based), participative and
open instead of being treated as a confidential process. The
system focused on performance planning, review and
development of an employee by following a methodical
approach.
History of Performance Management Cont..

FIFTH PHASE: 
• This phase was characterized by maturity in approach of
handling people’s issues. It was more performance driven and
emphasis was on development, planning and improvement.
Utmost importance was given to culture building, team
appraisals and quality circles were established for assessing
the improvement in the overall employee productivity.
 CLASS ACTIVITY
Go and look for:
CURRENT TRENDS IN PERFORMANCE MANAGEMENT
Employ­ee Well­be­ing Will Become Part of Per­for­mance Discussions
Feed­back will Need to Be Sup­port­ed By Reg­u­lar Coach­ing Conversations
​Mean­ing­ful” and ​“Human”
Make Employ­ees and Man­agers More Effective
Arti­fi­cial Intel­li­gence (AI) 
 Performance Appraisal Methods

Critical incident method

Weighed checklist
Paired comparison
Graphic rating scales
Essay Evaluation
Behaviourally anchored
Management By Objectives
 Performance Appraisal Methods
360 Degrees
720 Degrees
Balance Scores Cards
 Components of Performance Management
System

Performance Planning
• Performance planning is the first crucial component of any performance
management process which forms the basis of performance appraisals. Performance
planning is jointly done by the appraisee and also the reviewee in the beginning of a
performance session. During this period, the employees decide upon the targets and
the key performance areas which can be performed over a year within the
performance budget., which is finalized after a mutual agreement between the
reporting officer and the employee.
 Components of PM
Performance Appraisal and Reviewing: 
The appraisals are normally performed twice in a year in an organization in
the form of mid reviews and annual reviews which is held in the end of the
financial year. In this process, the appraisee first offers the self filled up
ratings in the self appraisal form and also describes his/her achievements
over a period of time in quantifiable terms. After the self appraisal, the final
ratings are provided by the appraiser for the quantifiable and measurable
achievements of the employee being appraised
 Components of PM
Feedback on the Performance followed by personal counseling and performance facilitation: 
Feedback and counseling is given a lot of importance in the performance management process. This
is the stage in which the employee acquires awareness from the appraiser about the areas of
improvements and also information on whether the employee is contributing the expected levels of
performance or not. The employee receives an open and a very transparent feedback and along with
this the training and development needs of the employee is also identified. The appraiser adopts all
the possible steps to ensure that the employee meets the expected outcomes for an organization
through effective personal counseling and guidance, mentoring and representing the employee in
training programmes which develop the competencies and improve the overall productivity.
 Components of PM
• Rewarding good performance: 
This is a very vital component as it will determine the work motivation of an
employee. During this stage, an employee is publicly recognized for good
performance and is rewarded. This stage is very sensitive for an employee as
this may have a direct influence on the self esteem and achievement
orientation. Any contributions duly recognized by an organization helps an
employee in coping up with the failures successfully and satisfies the need
for affection.
 Components of PM
Performance Improvement Plans:
• In this stage, fresh set of goals are established for an employee and new deadline is
provided for accomplishing those objectives. The employee is clearly
communicated about the areas in which the employee is expected to improve and a
stipulated deadline is also assigned within which the employee must show this
improvement. This plan is jointly developed by the appraisee and the appraiser and
is mutually approved.
 Components of PM
Potential Appraisal: 
• Potential appraisal forms a basis for both lateral and vertical movement of
employees. By implementing competency mapping and various
assessment techniques, potential appraisal is performed. Potential
appraisal provides crucial inputs for succession planning and job rotation.
PERFORMANCE APPRAISAL AND PERFORMANCE MANAGEMENT

PERFORMANCE APPRAISAL PERFORMANCE MANAGEMENT

Focus is on top down assessment Stresses on mutual objective setting through a process of joint
dialogue

Performed annually Continuous reviews are performed

Usage of ratings is very common Usage of ratings is less common

Focus is on traits Focus is on quantifiable objectives, values and behaviors

Monolithic system Flexible system

Are very much linked with pay Is not directly linked with pay
Traditional and Modern Appraisal
methods
 720 Degrees
• 720 degree performance appraisal is an integrated method
of performance appraisal where, the performance of an employee is
evaluated from 360 degrees (Management, Colleagues, Self and also
customers) and timely feedback is given and performance is evaluated
again based on the targets that are set.
 720 Degree

360 Degree 360 Degree

Pre Evaluation Review &Feedback Post Evaluation Review &Feedback

FINAL RESULTS
SOURCES OF INEFFECTIVE PERFORMANCE

Improper goals setting

• Performance Appraisal  to be successful needs  clear goal setting.
• Let us take a look at this example.
• The employee needs to write at least three white papers
• The employee needs to learn new technology
• While the former is a clear cut goal , the latter is vague. If the goal setting is not
precise and measurable then it may lead to ineffective Performance Appraisal
Changes to goals due to any reason are not updated in time

• Changes in organization’s business may cause changes to the employee

goals as well. For example, if the organization now requires its employee
to concentrate on selling new product instead of the old one the goal has
changed and thus performance needs to be measured against new goal.
Managers bring personal bias into the appraisal

• Managers may often bring in their personal likes and dislikes of

subordinates in the performance appraisal thus reducing its effectiveness.
Though constructive criticism is acceptable, personal bias may muddle the
system and people may not be judged on the goal set.
Organizations that do not have a clear cut plan of action

The important question is “What does organization expect out the

performance appraisal system”. If it is just to generate reports, then probably
it is not good. Performance appraisal should have common expectation and
plan built around it that can be put in action once the process is completed. If
the plan is to hike salaries or promote individuals after appraisals, then it
needs to be followed to the end.
 Not effectively preparing employees and managers

It is the job of Human resource department to make performance appraisal system

easy and transparent. Lack of proper training on performance appraisal system often
lead to incorrect appraisals.
Complicated performance appraisal systems

• An organization has a grade “Above average performer”. It means the

employee consistently does his job above the average. Another grade is
added “ Exceeds expectation” which is quite similar to the one before.
 Managers are not trained to handle outcome of performance
exercise

Managers are often not trained to provide feedback sensitively. In a bid to be honest
about the performance of expectation, they may cause resentment among employees.
The goal of the exercise is to assess and improve performance. If it leads to
resentment in team , then the whole purpose is defeated.
Feedback that appear out of no where suddenly at the end of year

• The employee gets a shock when during the performance exercise , manager brings
up those points that the employee feels are not important. A sudden deluge of
feedback at the year end leads employee to think that the management is driven by
hidden agenda. Feedbacks needs to happen whole of the year and not only on the
performance appraisal day