Performance Appraisal

Introduction:
The history of performance appraisal is quite brief. Its roots in the early 20th
century and can be traced to Taylor's pioneering Time and Motion studies. But this
is not very helpful, for the same may be said about almost everything in the field of
modern human resources management. As a distinct and formal management
procedure used in the evaluation of work performance, appraisal really dates from
the time of the Second World War - not more than 60 years ago. Yet in a broader
sense, the practice of appraisal is a very ancient art. In the scale of things historical,
it might well lay claim to being the world's second oldest profession.

People differ in their abilities and their aptitudes. There is always some
difference between the quality and quantity of the same work on the same job
being done by two different people. Therefore, performance management and
performance appraisal is necessary to understand each employee’s abilities,
competencies and relative merit and worth for the organization. Performance
appraisal rates the employees in terms of their performance.

Performance appraisals are widely used in the society. The history of

performance appraisal can be dated back to the 20th century and then to the second
world war when the merit rating was used for the first time. An employer
evaluating their employees is a very old concept. Performance appraisals are an
indispensable part of performance measurement. Performance appraisal is
necessary to measure the performance of the employees and the organization to
check the progress towards the desired goals and aims.

The latest mantra being followed by organizations across the world being –
“get paid according to what you contribute” – the focus of the organizations is
turning to performance management and specifically to individual performance.
Performance appraisal helps to rate the performance of the employees and evaluate
their contribution towards the organizational goals. If the process of performance
appraisals is formal and properly structured, it helps the employees to clearly
understand their roles and responsibilities and give direction to the individual’s
performance. It helps to align the individual performances with the organizational
goals and also review their performance.

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Meaning & definition of performance appraisal:

The term performance appraisal has been called by many names, including
performance review, performance evaluation, personnel rating, merit rating,
employee appraisal or employee evaluation. Performance appraisal is a powerful
tool to calibrate, refine and reward the performance of the employee. It helps to
analyze his achievements and evaluate his contribution towards the achievements
of the overall organizational goals. By focusing the attention on performance,
performance appraisal goes to the heart of personnel management and reflects the
management’s interest in the progress of the employees.

A performance appraisal has been defined as

“Any personnel decision that affects the status of employee regarding their
retention, termination, promotion, transfer, salary increase or decrease, or
admission into a training program.”

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.” Performance appraisal is a systematic way of reviewing and
assessing the performance of an employee during a given period of time and
planning for his future.

According to Alford and Beatty,

“A Performance Appraisal is the evaluation or appraisal of the relative worth to the
company of man’s service on his job.”

According to W.D.Scott, R.C.Clothier, W.R.Spriegel,

“Performance Appraisal is a process of evaluation of an employee’s performance
of a job in terms of its requirements.”

Performance appraisal is the process of obtaining, analyzing and recording

information about the relative worth of an employee. The focus of the performance
appraisal is measuring and improving the actual performance of the employee and
also the future potential of the employee. Its aim is to measure what an employee
does.

Objectives of Performance Appraisal:

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

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

 To help the management in exercising organizational control.

 Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

 To diagnose the strengths and weaknesses of the individuals so as to identify

the training and development needs of the future.

 To provide feedback to the employees regarding their past performance.

 Provide information to assist in the other personal decisions in the

organization.

 Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

 To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

 To reduce the grievances of the employees

Characteristics/Features of Performance Appraisal:

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 Performance appraisal cannot be implemented successfully unless it is
accepted by all concerned. There should be a common and clear understanding of
the distinction between evaluation and appraisal. As Patten (1982) argues,
evaluation aims at 'objective' measurement, while appraisal includes both objective
and subjective assessment of how well an employee has performed during the
period under review. Thus performance appraisal aims at 'feedback, development
and assessment.' The process of performance appraisal should concentrate on the
job of an employee, the environment of the organization, and the employee him- or
herself. These three factors are inter-related and inter-dependent. Therefore, in
order to be effective, the appraisal system should be individualized, subjective,
qualitative and oriented towards problem-solving. It should be based on clearly
specified and measurable standards and indicators of performance. Since what is
being appraised is performance and not personality, personality traits which are not
relevant to job performance should be excluded from the appraisal framework.

Some of the important characteristics of

 Goal: The job description and the performance goals should be structured,
mutually decided and accepted by both management and employees.

 Reliable and Consistent: Appraisal should include both objective and

subjective ratings to produce reliable and consistent measurement of
performance.

 Practical and simple format: The appraisal format should be practical,

simple and aim at fulfilling its basic functions. Long and complicated formats
are time consuming, difficult to understand, and do not elicit much useful
information.

 Regular and routine: While an appraisal system is expected to be formal in

a structured manner, informal contacts and interactions can also be used for
providing feedback to employees.

 Participatory and Open: An effective appraisal system should necessarily

involve the employee's participation, usually through an appraisal interview
with the supervisor, for feedback and future planning. During this interview,
past performance should be discussed frankly and future goals established. A

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 strategy for accomplishing these goals as well as for improving future
performance should be evolved jointly by the supervisor and the employee
being appraised. Such participation imparts a feeling of involvement and
creates a sense of belonging.

 Rewards: Rewards - both positive and negative - should be part of the

performance appraisal system. Otherwise, the process lacks impact.

 Feedback should be timely: Unless feedback is timely, it loses its utility and
may have only limited influence on performance.

 Impersonal feedback: Feedback must be impersonal if it is to have the

desired effect. Personal feedback is usually rejected with contempt, and
eventually de-motivates the employee.

 Feedback must be noticeable: The staff member being appraised must be

made aware of the information used in the appraisal process. An open
appraisal process creates credibility.

 Relevance and responsiveness: Planning and appraisal of performance and

consequent rewards or punishments should be oriented towards the objectives
of the program in which the employee has been assigned a role. For example,
if the objectives of a program are directed towards a particular client group,
then the appraisal system has to be designed with that orientation.

 Commitment: Responsibility for the appraisal system should be located at a

senior level in the organization so as to ensure commitment and involvement
throughout the management hierarchy.

Performance Management
Performance appraisal is considered as a most significant and indispensable
tool for an organization as it provides highly useful information in making various

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decisions regarding various aspects such as promotions, training and development,
retirements, transfer, salary administration, etc. it also provides basis for judging
the effectiveness of the employees. Accurate information collected through
performance appraisal plays a vital role in an organization as a whole. Hence,
performance appraisal should be done accurately following an objective method of
judging the relative worth or abilities or performance of an individual employee in
performing the tasks entrusted to him. The effectiveness of performance appraisal,
to a large extent, depends upon how well the organization has prepared itself for
doing it. It is a basic function of performance management. Performance
management is nothing but managing the performance appraisals of the employees
periodically and systematically and covers basically the following areas or steps.
1. Setting of proper standards for the purpose of appraising the performance.
2. Measuring actual performance of employees by adopting suitable method/
methods.
3. Comparing it with standards.
4. Finding out measures for deviations from standards.
5. Taking corrective actions to eliminate these reasons.
6. Revising of performance stands and adopting suitable method of
performance appraisal according to the needs or changing circumstances or
requirement.

All the above mentioned important tasks which are required to be performed by
the performance management, it is the important function of the performance
management to lay down a well and neatly designed performance appraisal
process or plan. Following points make clear the utility of such plan.

 It unifies the appraisal procedure:

The procedure of performance appraisal is basically dependent upon the

purpose or purposes of appraisal. Once the procedure is laid down, in the
same manner, the performances of all the employees should be evaluated
or judged. Then it becomes possible to compare the performance of the
employees properly by finding out their weaknesses and strength.
 It provides useful information:

Management has to take many decisions relating to training, transfers,

promotions, increments, discharge, retirement, salary adjustments, etc.
they all are related to the performance appraisals of the employee. Such

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 decisions can be taken properly on the basis of information by the
appraisal plan.
 It facilitates creation of records:

Firstly, for the purpose of performance appraisal, necessary information

is required to the collected on the basis of which the performance
appraisal is done. After it is done the results of the performance
appraisals are stored in the form of records. All such records can be used
as evidence for different purposes e.g. while handling grievances related
to the decisions based on such appraisals.
 It weeds out inefficiencies:

When inefficient, incapable, undisciplined, lethargically employees are

identified; chances to improve them can be given to them. But, after
giving those chances, if they do not improve, they can be weeded out on
the basis of performance appraisals.
 It keeps superior more alert:

A performance appraisal is considered as a development technique in the

hands of the management. It aims at calling attention of superiors to
subordinates behavior flows in order to improve their performances. It
makes superior more alert as it is their responsibility as appraise the
subordinates.

360-Degree Performance Appraisal:

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 360 degree feedback, also known as 'multi-rater feedback', is the most
comprehensive appraisal where the feedback about the employees’ performance
comes from all the sources that come in contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone
who comes into contact with the employee and can provide valuable insights and
information or feedback regarding the “on-the-job” performance of the employee.

360-degree has four integral components:

 Self Appraisals.
 Superior Appraisals.
 Subordinates Appraisals.
 Peer Appraisals.

Self appraisal gives a chance to the employee to look at his/her strengths and
weaknesses, his achievements, and judge his own performance. Superior’s
appraisal forms the traditional part of the 360 degree appraisal where the
employees’ responsibilities and actual performance is rated by the superior.

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 Subordinates appraisal gives a chance to judge the employee on the
parameters like communication and motivating abilities, superior’s ability to
delegate the work, leadership qualities etc. Also known as internal customers, the
correct feedback given by peers can help to find employees’ abilities to work in a
team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and

therefore 360 degree. Performance Appraisal has high employee involvement and
also has the strongest impact on behavior and performance. It provides a "360-
degree review" of the employees’ performance and is considered to be one of the
most credible performance appraisal methods.

360 degree appraisal is also a powerful developmental tool because when

conducted at regular intervals (say yearly) it helps to keep a track of the changes
others’ perceptions about the employees. A 360 degree appraisal is generally found
more suitable for the managers as it helps to assess their leadership and managing
styles. This technique is being effectively used across the globe for performance
appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance
Industries etc.

Performance Appraisal Process:

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  ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting up of the
standards which will be used to as the base to compare the actual performance of
the employees. This step requires setting the criteria to judge the performance of
the employees as successful or unsuccessful and the degrees of their contribution
to the organizational goals and objectives. The standards set should be clear, easily
understandable and in measurable terms. In case the performance of the employee
cannot be measured, great care should be taken to describe the standards.
 COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards
to all the employees of the organization. The employees should be informed and

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the standards should be clearly explained to them. This will help them to
understand their roles and to know what exactly is expected from them. The
standards should also be communicated to the appraisers or the evaluators and if
required, the standards can also be modified at this stage itself according to the
relevant feedback from the employees or the evaluators.

 MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process is measuring the
actual performance of the employees that is the work done by the employees
during the specified period of time. It is a continuous process which involves
monitoring the performance throughout the year. This stage requires the careful
selection of the appropriate techniques of measurement, taking care that personal
bias does not affect the outcome of the process and providing assistance rather than
interfering in an employees work.

 COMPARING THE ACTUALS

The actual performance is compared with the desired or the standard performance.
The comparison tells the deviations in the performance of the employees from the
standards set. The result can show the actual performance being more than the
desired performance or, the actual performance being less than the desired
performance depicting a negative deviation in the organizational performance. It
includes recalling, evaluating and analysis of data related to the employees’
performance.

 DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on
one-to-one basis. The focus of this discussion is on communication and listening.
The results, the problems and the possible solutions are discussed with the aim of
problem solving and reaching consensus. The feedback should be given with a
positive attitude as this can have an effect on the employees’ future performance.
The purpose of the meeting should be to solve the problems faced and motivate the
employees to perform better.

 DECISION MAKING
The last step of the process is to take decisions which can be taken either to
improve the performance of the employees, take the required corrective actions, or
the related HR decisions like rewards, promotions, demotions, transfers etc.

Uses of Appraisal system:

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  help each employee understand more about their role and become clear
about their functions;

 Be instrumental in helping employees to better understand their strengths

and weaknesses with respect to their role and functions in the organization;

 help in identifying the developmental needs of employees, given their role

and function;

 Increase mutuality between employees and their supervisors so that every

employee feels happy to work with their supervisor and thereby contributes
their maximum to the organization;

 Act as a mechanism for increasing communication between employees and

their supervisors. In this way, each employee gets to know the expectations
of their superior, and each superior also gets to know the difficulties of their
subordinates and can try to solve them. Together, they can thus better
accomplish their tasks;

 Provide an opportunity to each employee for self-reflection and individual

goal-setting, so that individually planned and monitored development takes
place;

 help employees internalize the culture, norms and values of the organization,
thus developing an identity and commitment throughout the organization;

 help prepare employees for higher responsibilities in the future by

continuously reinforcing the development of the behavior and qualities
required for higher-level positions in the organization;

 Be instrumental in creating a positive and healthy climate in the organization

that drives employees to give their best while enjoying doing so;

 Assist in a variety of personnel decisions by periodically generating data

regarding each employee.

Methods of Performance Appraisal:

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Traditional methods
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1. ESSAY APPRAISAL METHOD
This traditional form of appraisal, also known as “Free Form method” involves a
description of the performance of an employee by his superior. The description is
an evaluation of the performance of any individual based on the facts and often
includes examples and evidences to support the information. A major drawback of
the method is the inseparability of the bias of the evaluator.

2. STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this
method, the appraiser ranks the employees from the best to the poorest on the basis
of their overall performance. It is quite useful for a comparative evaluation.

3. PAIRED COMPARISON
A better technique of comparison than the straight ranking method, this method
compares each employee with all others in the group, one at a time. After all the
comparisons on the basis of the overall comparisons, the employees are given the
final rankings.

4. CRITICAL INCIDENTS METHODS

In this method of Performance appraisal, the evaluator rates the employee on the
basis of critical events and how the employee behaved during those incidents. It
includes both negative and positive points. The drawback of this method is that the
supervisor has to note down the critical incidents and the employee behavior as and
when they occur.

5. FIELD REVIEW
In this method, a senior member of the HR department or a training officer
discusses and interviews the supervisors to evaluate and rate their respective
subordinates. A major drawback of this method is that it is a very time consuming
method. But this method helps to reduce the superiors’ personal bias.

6. CHECKLIST METHOD

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The Rater is given a checklist of the descriptions of the behavior of the employees
on job. The checklist contains a list of statements on the basis of which the rater
describes the on the job performance of the employees.

7. GRAPHIC RATING SCALE

In this method, an employee’s quality and quantity of work is assessed in a graphic
scale indicating different degrees of a particular trait. The factors taken into
consideration include both the personal characteristics and characteristics related to
the on-the-job performance of the employees. For example a trait like Job
Knowledge may be judged on the range of average, above average, outstanding or
unsatisfactory.

8. FORCED DISTRIBUTION
To eliminate the element of bias from the rater’s ratings, the evaluator is asked to
distribute the employees in some fixed categories of ratings like on a normal
distribution curve. The rater chooses the appropriate fit for the categories on his
own discretion.

Modern methods
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 1. MANAGEMENT BY OBJECTIVE (MBO)

The concept of ‘Management by Objectives’ (MBO) was first given by

Peter Drucker in 1954. It can be defined as a process whereby the employees
and the superiors come together to identify common goals, the employees set
their goals to be achieved, the standards to be taken as the criteria for
measurement of their performance and contribution and deciding the course
of action to be followed.

The essence of MBO is participative goal setting, choosing course of

actions and decision making. An important part of the MBO is the
measurement and the comparison of the employee’s actual performance with
the standards set. Ideally, when employees themselves have been involved
with the goal setting and the choosing the course of action to be followed by
them, they are more likely to fulfill their responsibilities.

MBO PROCESS:

UNIQUE FEATURES AND ADVANTAGES OF MBO:

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 The principle behind Management by Objectives (MBO) is to create
empowered employees who have clarity of the roles and responsibilities expected
from them, understand their objectives to be achieved and thus help in the
achievement of organizational as well as personal goals.

Some of the important features and advantages of MBO are:

 Clarity of goals – With MBO, came the concept of SMART goals i.e. goals
that are:

Specific
Measurable
Achievable
Realistic,
Time bound.

The goals thus set are clear, motivating and there is a linkage between
organizational goals and performance targets of the employees.

 The focus is on future rather than on past. Goals and standards are set for the
performance for the future with periodic reviews and feedback.

 Motivation – Involving employees in the whole process of goal setting and

increasing employee empowerment increases employee job satisfaction and
commitment.

 Better communication and Coordination – Frequent reviews and interactions

between superiors and subordinates helps to maintain harmonious
relationships within the enterprise and also solve many problems faced
during the period.

2. 360-DEGREE APPRAISAL

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 360 degree feedback, also known as 'multi-rater feedback', is the most
comprehensive appraisal where the feedback about the employees’ performance
comes from all the sources that come in contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone
who comes into contact with the employee and can provide valuable insights and
information or feedback regarding the “on-the-job” performance of the employee.

360-degree has four integral components:

1. Self Appraisals.
2. Superior Appraisals.
3. Subordinates Appraisals.
4. Peer Appraisals.

Self appraisal gives a chance to the employee to look at his/her strengths

and weaknesses, his achievements, and judge his own performance. Superior’s
appraisal forms the traditional part of the 360 degree appraisal where the
employees’ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the

parameters like communication and motivating abilities, superior’s ability to
delegate the work, leadership qualities etc. Also known as internal customers,
the correct feedback given by peers can help to find employees’ abilities to
work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and

therefore 360 degree. Performance Appraisal has high employee involvement
and also has the strongest impact on behavior and performance. It provides a
"360-degree review" of the employees’ performance and is considered to be one
of the most credible performance appraisal methods.

3. ASSESSMENT CENTRES

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 Assessment centre refers to a method to objectively observe and assess the
people in action by experts or HR professionals with the help of various
assessment tools and instruments. Assessment centers simulate the employee’s on-
the-job environment and facilitate the assessment of their on-the-job performance.
An assessment centre typically involves the use of methods like social/informal
events, tests and exercises, assignments being given to a group of employees to
assess their competencies and on-the-job behavior and potential to take higher
responsibilities in the future. Generally, employees are given an assignment similar
to the job they would be expected to perform if promoted. The trained evaluators
observe and evaluate employees as they perform the assigned jobs and are
evaluated on job related characteristics.

An assessment centre for Performance appraisal of an employee typically includes:

 Social/Informal Events – An assessment centre has a group of participants

and also a few assessors which gives a chance to the employees to socialize
with a variety of people and also to share information and know more about
the organization.

 Information Sessions – information sessions are also a part of the

assessment centers. They provide information to the employees about the
organization, their roles and responsibilities, the activities and the
procedures etc.

 Assignments- assignments in assessment centers include various tests and

exercises which are specially designed to assess the competencies and the
potential of the employees. These include various interviews, psychometric
tests, management games etc. all these are focused at the target job.

The following are the common features of all assessment centers:

 The final results is based on the pass/fail criteria

 All the activities are carried out to fill the targeted job.

 Each session lasts from 1 to 5 days.

 The results are based on the assessment of the assessors with less emphasis
on self-assessment.
4. BEHAVIORALLY ANCHORED RATING SCALES

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 Behaviorally Anchored Rating Scales (BARS) is a relatively new technique
which combines the graphic rating scale and critical incidents method. It
consists of predetermined critical areas of job performance or sets of behavioral
statements describing important job performance qualities as good or bad (for
e.g. the qualities like inter-personal relationships, adaptability and reliability,
job knowledge etc). These statements are developed from critical incidents.

In this method, an employee’s actual job behavior is judged against the desired
behavior by recording and comparing the behavior with BARS. Developing and
practicing BARS requires expert knowledge.

5. HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of
money. In this method the Performance appraisal of the employees is judged in
terms of cost and contribution of the employees. The cost of employees include
all the expenses incurred on them like their compensation, recruitment and
selection costs, induction and training costs etc whereas their contribution
includes the total value added (in monetary terms). The difference between the
cost and the contribution will be the performance of the employees. Ideally, the
contribution of the employees should be greater than the cost incurred on them.

Errors/Challenges faced in Performance Appraisal

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 In order to make a performance appraisal system effective and successful, an
organization comes across various challenges and problems. The main challenges
involved in the performance appraisal process are:

 Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems
faced by the top management. The performance data to be considered
for evaluation should be carefully selected. For the purpose of
evaluation, the criteria selected should be in quantifiable or
measurable terms
 Create a rating instrument
The purpose of the Performance appraisal process is to judge the
performance of the employees rather than the employee. The focus of
the system should be on the development of the employees of the
organization.
 Lack of competence
Top management should choose the raters or the evaluators carefully.
They should have the required expertise and the knowledge to decide
the criteria accurately. They should have the experience and the
necessary training to carry out the appraisal process objectively.
 Errors in rating and evaluation
Many errors based on the personal bias like stereotyping, halo effect
(i.e. one trait influencing the evaluator’s rating for all other traits) etc.
may creep in the appraisal process. Therefore the rater should exercise
objectivity and fairness in evaluating and rating the performance of
the employees
 Resistance
The appraisal process may face resistance from the employees and the
trade unions for the fear of negative ratings. Therefore, the employees
should be communicated and clearly explained the purpose as well the
process of appraisal. The standards should be clearly communicated
and every employee should be made aware that what exactly is
expected from him/her.

TRAINING
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Meaning of Training:

Training is a learning experience in that it seeks a relatively permanent

change in an individual that will improve his ability to perform on the job. Training
can involve the changing of skills, knowledge, attitudes or behavior. It may mean
changing what employees know, how they work, their attitudes towards their work,
or their interaction with their co-workers or supervisors.

Training often has been referred to as teaching specific skills and behavior.
Examples of training are leaning to fire a rifle, to shoot foul shots in basketball and
to type. It is usually reserved for people who have to be brought up to performing
level in some specific skills. The skills are almost always behavioral as distinct
from conceptual or intellectual.

Training is meant for operatives. Training aims to improving a special skill

relating to a job. Training is one shot deal. Training is mostly the result of
initiatives taken by management. It is the result of some outside motivation.
Training seeks to meet the current requirements of the job and the individual. In
other words, training is a reactive process. Training focuses on the personal growth
of the employee.

Need of Training:

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 Training is a vital and necessary activity in all organizations. It plays a major
party in determining the effectiveness and efficiency of the establishment. Some of
the reasons why training is needed are outlined below:
 Reduced learning time: By having qualified instructors and carefully
controlled learning situations, management in numerous cases has been able
to obtain shortened learning periods and ensure higher productivity from
new employees.

 Improved performance: Training applies not only to new employees but to

experienced people as well. It can help employees increase their level of
performance on their present job assignments.

 Attitude formation: A common objective of company training programs is

the moulding of employee attitudes to achieve support for company
activities and to obtain better cooperation and greater loyalty.

 Aid in solving operational problems: Training of both supervisory and

hourly aid employees can help reduce turnover, absenteeism, accidents, and
grievance rates. For example, inept supervisor is often a cause of employee
dissatisfaction and grievances. Supervisory training in such areas as labor
relations, leadership, human relations, and administration may improve
superior subordinate relationships. Other operational problems that training
can solve are low morale, poor customer service, and excessive waste and
scrap loss, and poor work methods.

 Managing manpower needs: One manufacturing company found it

impossible to recruit sufficient skilled mechanics and toolmakers. Hence, it
concluded that the best way to solve this manpower problem in the long run
was to establish its own apprentice training program.

 Benefits to employees themselves: As employees acquire new knowledge

and job skills, they increase their market value and earning power. The
possession of useful skills enhances their value to their employer.

Training methods:
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 The most popular raining methods used by organizations can be classified as
either on the job rotation. Apprenticeship, committee assignments, etc, or off the
job training vestibule training, role-playing, lecture method, conferences,
programmed instructions, etc). In the following paragraphs, we will briefly
introduce the better known techniques of each category. The most widely used
training methods take place on the job. This can be attributed to the simplicity of
such methods and the impression that they are less costly to operate. On the job
training places the employees in actual work situations and makes them appear to
be immediately productive. It is learning by doing. For jobs that either is difficult
to stimulate or can be learned quickly by watching and doing, on the job training
makes sense.

One of the drawbacks of on the job training can be low productivity while
the employees develop their skills. Another drawback can be the errors made by
the trainees while they learn. However, when the damage, the trainees can do is
minimal, while training facilities and personnel are limited or costly, and where it
is desirable for the workers to learn the job under normal working conditions, the
benefits of on the job training frequently offset its drawback.

 Apprenticeship Program: People seeking to enter skilled trades to become

for example, plumbers, electricians or iron workers are often required to
undergo apprenticeship training before they are accep0ted to expert status.
Typically, this apprenticeship period is form 2-5 years. During the
apprenticeships period, the trainee is paid less than a fully qualified worker.
Apprenticeship training put the trainee under the guidance of a master
worker. The argument for apprenticeship program is that the required job
knowledge and skills are so c0omplex as to rule out anything less than a
long time period where the trainee studies under a skilled master. Long
apprenticeship may also create barriers to entry and help keep wages high.

 Vestibule training: Under this method, employees learn their jobs on the
equipment they will be using, but the training is conducted away from the

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 actual work floor. Many large cash registers which are much more complex
because they control inventory and perform other functions in addition to
ringing up orders are kept in specially created vestibule laboratories that
stimulate the actual checkout counter environment. This is generally used
for training employees on sophisticated, modern equipment and machinery.
This kind of equipment and machinery usually involves heavy investment.

 Job rotation: It broadens understanding of several business situations.

This is suitable for the young newcomers who are fresh from to learn by
doing. Its major limitation is prevention of specialization by concentrating
on several problems and procedure of different specialized departments.

 Internship: This refers to a joint program of training in which technical

institutes and business enterprises cooperate to enable the students to gain a
good balance between theory and practice. Classroom principles are better
understood against the practical background in a factory. Internship is
virtually a practical training of the theoretical knowledge. During this
period, normally stipend is given to the students. It is not a service contract.
No salary is given during this period. Sometimes it is a part of course of
study of the student.

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