A PROJECT ON

HUMAN RESOURCES PRACTICES IN ICICI BANK

Bachelor of Commerce

Semester V
University of Mumbai
(2015-2016)

SUBMITTED BY:
VINAY PRABHU

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 HUMAN RESOURCES PRACTICES IN ICICI BANK

DECLARATION

I, Mr Vinay Prabhu, the Student of Bachelor of Commerce Semester V (2015-

2016) hereby declare that have completed the Project on HR PRACTICES IN
ICICI BANK

The information submitted is true and original to the best of my knowledge.

Vinay Prabhu

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 Acknowledgment

I am first indebted to the almighty for being there with me and

helping me throughout the process for the completion of my project. His
blessings have given effective momentum to my project.

I sincerely thank MS. LAXMISHAHPURE for giving me an op-

portunity to compile this project and also for providing necessary infor-
mation which helped me in completing this project in a better manner.

I express my gratitude to our honorable and respected Principal for

giving an opportunity to exhibit my skill through this project. I sincerely
thank our Course-coordinator whose positive approach and faith in me con-
stantly motivated me.

I would also like to thank to Bank Manager for sparing their pre-
cious time and providing me with the related information for my project HR
PRACTISES IN ICICI BANK.

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 1. EXECUTIVE SUMMARY OF THE PROJECT

The project named Human Resources Practices in ICICI Bank consists of all the key and important

functions of HR Department in the organisation. ICICI Bank is one of the major multinational companies in
banking business. It carries out all major functions of banking like accepting depos-
its,grantingloans,providing other major financial services and services like insurance (ICICI Prudential Life
Insurance; ICICI Lombard). The project is all about HR practises in the bank and what is procedure of all
functions. The Human resources Department is concerned with collaboration of people and their relation-
ship within the organisation. The main Functionc of HR are as follows:

a) RECRUITMENT AND SELECTION

b) TRAINING DEVELOPMENT

c) PAYROLL MANAGEMENT

d) PERFORMANCE APPRAISAL

Regular process is the selection of employees on the basis of their qualification ,experienceetc.Through
personal interviews, campus recruitment,ties up with consultancies,tiesuo with major portals.Training and
Development is process of making employees understand their work through proper training and organising
development and training programs for the same. Payroll management is process of generating
payslip,salaries,maintaining the records of the employees,leave management system,etc.Performance Ap-
praisal is process of evaluating the performance of employees working and comparing them with planned
objectives and making employees aware of their faults,weaknesses,strengths,potentials and motivating
them for better performance and success.

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 2. OBJECTIVES OF THE PROJECT

1. To study about overall working go HR Department in ICICI Bank.

2. To study what Human Resources is all about

3. To study the Recruitment Strategies of ICICI Bank.

4. To study techniques used by the bank for selection of employees.

5. To study the process of training and development by various levels of HR Department.

6. To study the process of payroll management.

7. To study the process of performance appraisal and the need for feedback by the employees.

8. To study the effects of performance appraisal on employees performance

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 3. COMPANY PROFIEL

ICICI Bank is an Indian multinational banking and financial services company headquar-
tered in Vadodara, Gujarat, India. As of 2014, it is the second largest bank in India in terms
of assets and market capitalisation . It offers a wide range of banking products and financial
services for corporate and retail customers through a variety of delivery channels and spe-
cialised subsidiaries in the areas of investment banking, life, non-life insurance, venture capi-
tal and asset management. The Bank has a network of 4,050 branches] and 12,919 ATMs in
India, and has a presence in 17 countries including India.

ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab
National Bank and Bank of Baroda. The bank has subsidiaries in the United Kingdom and
Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman
,Dubai International Finance Centre and China;] and representative offices in United Arab
Emirates, South Africa, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary
has also established branches in Belgium and Germany.

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CORPORATE GOVERNANCE

Corporate governance broadly refers to the mechanisms, processes and relations by which
corporations are controlled and directed. Governance structures and principles identify the
distribution of rights and responsibilities among different participants in the corporation
(such as the board of directors, managers, shareholders, creditors, auditors, regulators, and
other stakeholders) and includes the rules and procedures for making decisions in corporate
affairs. Corporate governance includes the processes through which corporations' objectives
are set and pursued in the context of the social, regulatory and market environment.

Governance mechanisms include monitoring the actions, policies, practices, and decisions of
corporations, their agents, and affected stakeholders. Corporate governance practices are af-
fected by attempts to align the interests of stakeholders. Interest in the corporate governance
practices of modern corporations, particularly in relation to accountability, increased follow-
ing the high-profile collapses of a number of large corporations during 20012002, most of
which involved accounting fraud; and then again after the recent financial crisis in 2008.

Corporate scandals of various forms have maintained public and political interest in the regu-
lation of corporate governance. In the U.S., these include Enron and MCI Inc. (formerly
WorldCom). Their demise is associated with the U.S. federal government passing the Sar-
banes-Oxley Act in 2002, intending to restore public confidence in corporate governance.
Comparable failures in Australia (HIH, One. Tel) are associated with the eventual passage of
the CLERP 9 reforms. Similar corporate failures in other countries stimulated increased
regulatory interest (e.g. in Italy).

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PRODUCTS
ICICI Bank and Bangalore Metro Rail Corporation Limited (BMRCL) on April 2015, an-
nounced the launch of the ICICI Bank Unifare Bangalore Metro Card. This card offers the
commuters dual benefits of an ICICI Bank credit or debit card and BMRCLs smart card,
called Name Metro Smart Card. This is a cobranded card in association with MasterCard.

In March 2015, ICICI Bank tied up with SADAD Electronic Payments WLL to offer remit-
tance service for NRIs based in Bahrain, enabling them to transfer monies instantly to India
from the latters kiosks spread across the Kingdom of Bahrain. This facility has been named
as Touch n Remit.

In February 2015, ICICI Bank announced the launch of 'Video Banking' for all its NRI (Non
Resident Indian) customers. Using this service, the customers can now connect with a cus-
tomer care representative over a video call, round-the-clock, on all days from anywhere us-
ing their smart phone.

In February 2015, ICICI Bank Re-Launched POCKETS, now working as a "Digital wallet"
for everyone (Android OS users only). The Wallet be can be opened by anyone and can con-
duct transactions like recharge, shopping, transfer money using the virtual visa card which is
issued when signing up for the wallet.

ICICI Bank in January, 2015 launched banking services on Twitter, christened as 'ICICI
BankPay'. This service in India enables ICICI Bank customers to transfer money to anyone
in the country who has a Twitter account, check account balance, view last three transactions
and recharge prepaid mobile in a completely secure manner.

Contactless Credit and Debit Cards

ICICI Bank in January, 2015 announced the launch of the countrys first Contactlessdebit
and credit cards, enabling its customers to make electronic payments by just waving the
cards near the merchant terminal in lieu of dipping or swiping them. These cards are based

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on the Near Field Communication (NFC) technology, which provides customers the im-
proved convenience of speed as these cards require significantly less time than traditional
cards to complete a transaction along with enhanced security as they remain in control of the
customer.

My Savings Rewards
ICICI Bank has rolled-out the program me 'MySavings Rewards' from 1 September 2012,
where reward points are offered to individual domestic customers for a variety of transac-
tions done through the savings bank account. Reward points are offered automatically to cus-
tomers for activating Internet banking, shopping online/ paying utility bills with Internet
banking and auto-debit from savings account towards equated monthly installments for
home/ auto/ personal loan/ recurring deposit. Customers are required to maintain a monthly
average balance of 15,000 or more. the Indian bank will recuire 5.5% interest on short term
loans and long term bonds and mortgages loans up to $2 million up to 20years to pay back
annual interest of 5.5% short term loans from 3 months up to 3years at 5.5% .credit interest
is reduced to 10% annually .

Wish- the flexible recurring deposit

Wish is a flexible recurring deposit product launched by ICICI Bank for its savings account
customers. Unlike a traditional recurring deposit, iWish allows customers to save varying
amounts of money at any time of their choice. Customers can create several goals and track
their progress on an online interface.

ICICI Bank has developed this product in collaboration with Social Money. ICICI Bank has
also launched an app for Android and Apple smart watches. The app will provide the facility
of online banking transaction from smart watch.

Go Green Initiative
The Go Green Initiative is an organization wide initiative that moves beyond moving people,
processes and customers to cost effective automated channels to build awareness and con-
sciousness of our environment, our nation and our society.

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Objective
ICICI Bank's Green initiative is to make healthy environment in the organization i.e.; to cre-
ate intrapersonal skills among the customer and understanding between employees of the or-
ganization.

Insta-banking
It is the platform that brings together all alternate channels under one umbrella and gives
customers the option of banking through Internet banking, i-Mobile banking, IVR Banking.
On 22 September 2014 ICICI Bank launched Four New Next Generation Mobile Banking
Apps.

Vehicle Finance
Auto loans offer 50% waiver on processing fee on car models which uses alternate mode of
energy. The models identified for the purpose are, Maruti's LPG version of Maruti 800,
Omni and Versa, Hyundai's Santo Eco, Civic Hybrid of Honda, Riva electric cars, Tata India
CNG and Mahindra Logan CNG versions.

Carbon Footprint Calculator

Inputs include region, user input of the distance traveled in a particular medium of transport
daily, electricity consumed per month and LPG cylinder/piped natural gas used per month. It
calculates the net carbon footprint to create awareness and sensitize people about the envi-
ronment. It also shows the world's and India's average carbon footprint.

Domestic
ICICI Prudential Life Insurance Company Limited
ICICI Lombard General Insurance Company Limited
ICICI Prudential Asset Management Company Limited
ICICI Prudential Trust Limited
ICICI Securities Limited
ICICI Securities Primary Dealership Limited
ICICI Venture Funds Management Company Limited
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ICICI Home Finance Company Limited
ICICI Investment Management Company Limited
ICICI Trusteeship Services Limited
ICICI Prudential Pension Funds Management Company Limited

International
ICICI Bank USA
ICICI Bank UK PLC
ICICI Bank Canada
ICICI Bank Eurasia Limited Liability Company
ICICI Securities Holdings Inc.
ICICI Securities Inc.
ICICI International Limited

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 Awards and Achievements

2003
"The Asian Banker Excellence in Retail Financial Services Program" by The Asian Banker

2004
Best Bank in India Award presented by Euro money Magazine

2006
Bank of the Year 2006 India by the Banker

2007
ICICI Bank has been conferred the Euro money Award 2007 for the Best Bank in the Asia-
Pacific Region
ICICI Bank wins the Excellence in Remittance Business award by The Asian Banker

2009
ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun & Bradstreet
Banking awards

2010
ICICI Bank won the Best Banking Security System by The Asian Banker.

2011
ICICI Bank is the only Indian brand to figure in the Brand Z Top 100 Most Valuable Global
Brands Report, second year in a row

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2012

Airtel, ICICI among 'top 100 global brands'

ICICI Bank received the Golden Peacock Innovative Product / Service Award.
ICICI Bank received the Dataquest Technology Innovation Awards 2012 for Data center mi-
gration by Dataquest.
ICICI Bank was conferred the Best Performance Award for Self Help Group (SHG) Bank
Linkage Programmed in NABARD's State Level Awards announced by their Maharashtra
Regional Office. The Bank received the first prize for the year 201011 in the Private Sector
Bank category and 2nd runner up for the year 201112 in the Commercial Bank category.
2013

ICICI Bank has been adjudged winner at the Express IT Innovation Award under the Large
Enterprise category
ICICI Bank won the RMAI received the "Gram Samvad", Service for Low cost/Small budg-
et marketing initiative Award by Rural Marketing Association of India (RMAI).
ICICI bank won the 'Next Generation Banking solution' award by Client.
ICICI bank won the Best Domestic Trade Finance Bank and Best Financial Supply Chain
Project Award in India by The Asian Banker
ICICI Bank won the honors of the Medici Innovation Hall of Fame Award, instituted by The
Medici Institute in collaboration with the Medici Group, USA.
2014

According to the Brand Trust Report 2014, ICICI Bank was ranked 28th among India's most
trusted brands, a research conducted by Trust Research Advisory.
ICICI Bank was ranked second at the 'National Energy Conservation Award 2014' under the
office buildings (less than 10 lakh kWh/year consumption) category.
ICICI Bank was fifth in the world and second in India on the 'Top Companies for Leaders' in
a study conducted by Aon Hewitt.
ICICI bank won the Best Private Sector Bank - Global Business Development by Polaris Fi-
nancial Technology Banking Awards 2014.

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IDBRT awarded ICICI for 'Best Bank Award for Business Intelligence Initiatives among
Large Banks' and 'Best Bank Award for Social Media and Mobile Banking Among Large
Banks'.
2015

ICICI Bank won an award in the BFSI Leadership Summit & Awards in the 'Best Phone
Banking for End-userscategory
ICICI Bank won in six categories and was the first runner-up in one category among Private
Sector Banks at IBA Banking Technology Awards, 2015. The bank was declared winner in
the six categories of Best Technology Bank of the Year, Best use of Data, Best Risk Man-
agement Initiatives, Best use of Technology in Training, Human Resources and e-Learning
initiatives, Best Financial Inclusion Initiative and Best use of Digital and Channels Technol-
ogy. ICICI Bank was the first runner-up in Best use of Technology to Enhance Customer
Experience
ICICI Bank has been declared as the first runner up at OUTLOOK MONEY Awards 2015 in
the category of Best Bank
ICICI Bank has been adjudged the Best Retail Bank in Indiaby The Asian Banker. It has
also emerged winners in the categories of Best Internet Banking Initiativeand Best Cus-
tomer Risk Management Initiativeawards given by The Asian Banker.

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Acquisitions
1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai

1997: ITC Classic Finance. Incorporated in 1986, ITC Classic was a non-bank financial firm

that engaged in hire, purchase, and leasing operations. At the time of being acquired, ITC

Classic had eight offices, 26 outlets, and 700 brokers.

1998: Anagram(ENAGRAM) Finance. Anagram had built up a network of some 50 branches

in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in retail financing of

cars and trucks. It also had some 250,000 depositors.

2001: Bank of Madurai

2002: The Darjeeling and Shimla branches of Grind lays Bank

2005: Investissions- Kreditny Bank (IKB), a Russisa Bank

2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in 1916, and

30% owned by the Bahte family. Its headquarters were in Sangli in Maharashtra, and it had

198 branches. It had 158 in Maharashtra and 31 in Karnataka, and others in Gujarat, Andhra

Pradesh, Tamil Nadu, Goa, and Delhi. Its branches were relatively evenly split between met-

ropolitan areas and rural or semi-urban areas.

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2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for 30 bil-

lion. RBI was critical of BOR's promoters not reducing their holdings in the company. BOR

has since been merged with ICICI Bank.

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 4.HUMAN RESOURCES MANAGEMENT

INTRODUCTION

Human resource management (HRM, or simply HR) is a function in organizations de-

signed[by whom?] to maximize employee performance in service of an employer's strategic
objectives. HR is primarily concerned with the management of people within organizations,
focusing on policies and on systems.HR departments and units in organizations typically un-
dertake a number of activities, including employee recruitment, "training and development",
performance appraisal, and rewarding (e.g., managing pay and benefit systems). HR also
concerns itself with industrial relations, that is, the balancing of organizational practices with
requirements arising from collective bargaining and from governmental laws.

HR is a product of the human relations movement of the early 20th century, when research-
ers began documenting ways of creating business value through the strategic management of
the workforce. The function was initially dominated by transactional work, such as payroll
and benefits administration, but due to globalization, company consolidation, technological
advances, and further research, HR as of 2015 focuses on strategic initiatives like mergers
and acquisitions, talent management, succession planning, industrial and labor relations, and
diversity and inclusion.

In startup companies, trained professionals may perform HR duties. In larger companies, an

entire functional group is typically dedicated to the discipline, with staff specializing in vari-
ous HR tasks and functional leadership engaging in strategic decision-making across the
business. To train practitioners for the profession, institutions of higher education, profes-
sional associations, and companies themselves have established programs of study dedicated
explicitly to the duties of the function. Academic and practitioner organizations likewise
seek to engage and further the field of HR, as evidenced by several field-specific publica-

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tions. HR is also a field of research study that is popular within the fields of management and
industrial/organizational psychology, with research articles appearing in a number of aca-
demic journals, including those mentioned later in this article.

In the current global work environment, most companies focus on lowering employee turno-
ver and on retaining the talent and knowledge held by their workforce.[citation needed] New
hiring not only entails a high cost but also increases the risk of a newcomer not being able to
replace the person who worked in a position before. HR departments strive to offer benefits
that will appeal to workers, thus reducing the risk of losing corporate knowledge.

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Scope of Human Resource Management

Human resources are undoubtedly the key resources in an Organization, the easiest and the
most difficult to manage! The objectives of the HRM span right from the manpower needs
assessment to management and retention of the same. To this effect Human resource man-
agement is responsible for effective designing and implementation of various policies, pro-
cedures and programs. It is all about developing and managing knowledge, skills, creativity,
aptitude and talent and using them optimally.

Human Resource Management is not just limited to manage and optimally exploit human in-
tellect. It also focuses on managing physical and emotional capital of employees. Consider-
ing the intricacies involved, the scope of HRM is widening with every passing day. It covers
but is not limited to HR planning, hiring (recruitment and selection), training and develop-
ment, payroll management, rewards and recognitions, Industrial relations, grievance han-
dling, legal procedures etc. In other words, we can say that its about developing and manag-
ing harmonious relationships at workplace and striking a balance between organizational
goals and individual goals.

The scope of HRM is extensive and far-reaching. Therefore, it is very difficult to define it
concisely. However, we may classify the same under following heads:

HRM in Personnel Management: This is typically direct manpower management that in-
volves manpower planning, hiring (recruitment and selection), training and development, in-
duction and orientation, transfer, promotion, compensation, layoff and retrenchment, em-
ployee productivity. The overall objective here is to ascertain individual growth, develop-
ment and effectiveness which indirectly contribute to organizational development.
It also includes performance appraisal, developing new skills, disbursement of wages, incen-
tives, allowances, traveling policies and procedures and other related courses of actions.

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HRM in Employee Welfare: This particular aspect of HRM deals with working conditions
and amenities at workplace. This includes a wide array of responsibilities and services such
as safety services, health services, welfare funds, social security and medical services. It also
covers appointment of safety officers, making the environment worth working, eliminating
workplace hazards, support by top management, job safety, safeguarding machinery, cleanli-
ness, proper ventilation and lighting, sanitation, medical care, sickness benefits, employment
injury benefits, personal injury benefits, maternity benefits, unemployment benefits and fam-
ily benefits.

It also relates to supervision, employee counseling, establishing harmonious relationships

with employees, education and training. Employee welfare is about determining employ-
eesreal needs and fulfilling them with active participation of both management and employ-
ees. In addition to this, it also takes care of canteen facilities, creches, rest and lunch rooms,
housing, transport, medical assistance, education, health and safety, recreation facilities, etc.

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The HRM Function and its Role in Organizational Processes

The Changing Role of the HR Function:

Of all the support functions, the HRM (Human Resource Management) function is a critical
component of any Organization. Apart from finance, which serves as the lifeblood of the or-
ganizational support functions, the HRM function more than any other support function, has
the task of ensuring that the organizational policies and procedures are implemented and any
grievances of the employees are taken care of. For instance, it is common for the HRM func-
tion in many organizations to combine hiring, training, providing assistance during apprais-
als, mentoring employees, and deciding on pay structures and grades. This means that the
HRM function has its task cut out wherein it has to take care of the peopleside of the or-
ganizational processes. Considering the fact that the ascent of the services sector (IT, Finan-
cial Services, BPO) has meant that people are the key assets for organizations, the im-
portance of the HRM function has grown by leaps and bounds thanks to the preponderance
of the services sector. This has given impetus to many aspiring HR professionals to try and
make a career for themselves in the HR field thanks to the burgeoning demand for HR pro-
fessionals.

Change in Conception from Reactive to Proactive:

Many people think of the HR manager as someone who attends to complaints from employ-
ees, appears at the time of appraisals, and generally is useful only when there is a genuine
need for him or her. This is the classic old world thinking wherein HR managers were con-
fined to these activities alone. The reason for such conceptions is that most of us are used to
our parents and other older generation people referring to HR managers as labor officers
whose sole function is to take care of payroll and disputes. However, times have changed
and in the recent decades, the HR function has emerged as a key function in itself wherein
the HR professionals are proactive and preemptive in nature. What this means is that HR
managers anticipate the crises and preempt them from happening instead of waiting for the
crisis to appear and then resolve it.

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Further, unlike in earlier generations where there were chances of strikes and lockouts of the
organizations in the manufacturing sector, the services sector does not have any place for
these and hence, the role of the HR professionals have evolved to a point where they have
moved from reactive mode to proactive mode. This means that in many multinationals, the
HR professionals regularly have what are known as one-on-ones or individual meetings with
the staff to try and understand their grievances, seek feedback, and overall focus on how to
prevent any kind of crisis from happening.

The HR Professionals and Demand for HR courses:

Indeed, apart from hiring, training, and payroll, which still have lot of importance to the
HRM, function, the addition of the activities mentioned above has lent a touch of glamour to
the otherwise staid and dull profession. It is no wonder that in institutes like XLRI have seen
a surge in demand for their courses in HR. Moreover, even in other management institutes,
there is an increase in the number of graduates who are choosing HR as their specialization.
All these trends point to the conclusion that the HR profession is now well sought after and
something that is not relegated to the sidelines.

HR Professionals Have Fun as Well:

The changing role of the HRM function is especially visible in the IT and BPO sector where
they are also engaged in organizing offsite events, which are held in a resort or in a HOTEL
and which provide the employees with a chance to brainstorm about issues in a relaxed and
slow manner outside of the confines of the office. This trend has made the HRM function
very busy because a lot of planning goes into organizing these events and indeed, in multina-
tionals like Fidelity, this is now handled by dedicated HR staff apart from the regular staff.

Objectives of Human Resource Management

According to the Indian Institute of Personnel Management, Personnel Management aims to
achieve both efficiency and justice neither of which can be pursued successfully without the
other. It seeks to bring together and develop into an effective organization the men and

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women who make up an enterprise, enabling each to make up an enterprise, enabling each to
make his or her own best contribution to its success both as an individual and as a member of
a working group. It seeks to provide fair terms and conditions of employment and satisfying
work for those employed.

The general objective of personnel (or) human resource management is to contribute towards
the realization of the organizational goals. The specific objectives of personnel management
may be listed as follows:
a. To achieve and maintain good human relationships within the organization.
b. To enable each person to make his maximum personal contribution to the effective work-
ing of the organization.
c. To ensure respect for human personality and the well-being of each individual.
d. To ensure maximum individual development of personnel.
e. To ensure satisfaction of various needs of individuals for achieving their maximum contri-
bution towards organizational goals.

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Literature Review
1. Management of Human Assets by M.G. Rao, a compendium, threw light on the com-
plexities of Managing human beings in the present day organizations. The various aspects of
HRM in relation to small scale units operating in industrial estates have been presented ini-
tially, followed by theoretical presentation on HRD,
different aspects of training, organizational development, employee participation, etc. The
effects of training and employee developmental activities have also been put to close exami-
nation. It also been put to find how the employee related activities flourish in various other
sectors like urban government, cooperatives,
informal sector and small sector.
2. HRM 2000by P Subaru, a compendium, presented the various developments in the
HRM in a comprehensive form. It is also attempted to look into the current trends in Human
Resource Function with a view to outline the future development that are likely to take place
in the years ahead. It also discussed in a lucid manner the topics such as job analysis, job
evaluation, employee benefits, recruitment and selection ,line staff conflicts, social responsi-
bility policies along with other current topics such as organizational culture and climate, or-
ganizational politics, organizational effectiveness, follower ship, participative management,
dual career problems, quality of work life, qualify circles and organizational development.
3. Emerging Issues in Human Resources Management by Pramod Verma, a volume, at-
tempted to present state-of-the-art explanations and experiences on the emerging issues in
managing human resources in various organizations.
4. Excellence through Human Resource Developmentby M.R.R Nair and T.V.Rao, an ed-
ited compendium, focused on chief executives views and experiences on HRD. It also dealt
with the HRD Philosophy, importance, macro level issues, expectations of line managers and
workers from HRD, role of HRD managers, dimensions of developing HRD facilitators and
programmed.
5. Management of Human Resources in Public Enterprises edited by S.Ravishankar and
R.K.Mishra provided an understanding of the system of HRM rather than merely the activi-
ties assigned to those who provided various personnel services for effective public enterprise

24
management. It also gave a balanced and comprehensive grasp of the concept, problem, ap-
proaches and strategies of HRM.
6. JayanthiLal Jain, in his study entitled An Empirical Model on Micro-Level Manpower
Planning in Banks, presented an empirical model for micro-level manpower planning in
banks and provided a framework required for evolving certain norms which have already
been in vogue in the Indian Bank and have proved to be extremely useful in planning as well
as allocating staff to various branches of the bank. It also suggested values of parame-
ters/norms to be used in micro-level manpower planning and provided a frame work for as-
sessing the viability of norms and gave guidelines for proper implementation of those norms.
7. A Micro-Level Manpower Planning Model for Banks by Jayanthi Lal Jain and
K.Balachandran, was a modified version of the model suggested by the first author (previous
reference) after incorporating the changing requirements of public sector banks for optimal
distribution of manpower, of course without any change in the basic model.
8. Leadership styles among Bank Managers by O.P.Misra and S.K.Srivastava, a research
study, studied the leadership style which is one of the objectives of HRD and its effective-
ness among bank managers belonging to nationalized and private sector banks and relation-
ships between styles and effectiveness among 45 sample managers selected from national-
ized and private sector banks.
9. Job Descriptions in a Public Sector Banks by V.T.Godse and R.Bandyopadhyay, a re-
search study, concerned with the conduct of job description exercise in one of the leading na-
tionalized banks. It identified the problems faced by banks on account of expansion and di-
versification of business activities, suggested ways and means to handle the problems and
portrayed clearly the procedure followed for job description
exercise at various levels of management besides, highlighting the use of interval highlight-
ing the use of interval appraisal in identifying structural deficiencies.
10. Uma Sekaran in his study entitled The perceived quality of working life in banks in ma-
jor cities in India, examined the QWL in the Indian Banking Industry as perceived by or-
ganizational members at different organizational levels and in different job positions, several
variables such as competence, performance,
involvement and satisfaction with various facets of the work life were taken into considera-
tion for the purpose, since these are all indices of the QWL.

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 5. RECRUITMENT AND SELECTION OF ICICI BANK

RECRUITMENT
Definition:
According to Edwin B. Floppy, Recruitment is the process of searching the candidates for
employment and stimulating them to apply for jobs in the
organization.

The word recruitmenthas many meaning and plays an important role. Employees leave the
organization in search of greener pastures- some retire some die in saddle. The most im-
portant thing is that enterprise grows, diversifies, and takes over other units-all necessitating
hiring of new men and women. In fact recruitment functions stop only when the organization
ceases to exist. To understand recruitment in simple terms it is understood as process of
searching for obtaining applications of job from among from which the right people can be
selected. To define recruitment we can define it formally as it is a process of finding and at-
tracting capable applicants for employment. The process begins when new recruit are sought
and ends when their application are submitted. The result is a pool of applicants from which
new employees are selected. Theoretically, recruitment process is said to end with receipt of
application in practice the activity extends to the screening applicants as to eliminate those
who are not qualified for job.

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FACTORS AFFECTING RECRUITMENT
There are a number of factors that affect recruitment. These are broadly classified into two
categories:1. Internal factors2. External factors

INTERNAL FACTORS
The internal factors also called as endogenous factorsare the fact
ors within the organization that affect recruiting personnel in the organization.
Some of these are:
Size of the organization
The size of the organization affects the recruitment process. Larger organization finds re-
cruitment less problematic than organization with smaller in size.
Recruiting policy
The recruitment policy of the organization i.e. recruiting from internal sources and external
sources also affect the recruitment process. Generally, recruitment through internal sources is
preferred, because own employees know the organization and they can well fit in to the or-
ganization culture.
Image of the organization
Image of the organization is another factor having its influence on the recruitment process of
then organization. Good image of the organization earned by the number of overt and covert
action by management helps attract potential and complete candidates. Managerial actions
like good public relations, rendering public service like building roads, public parks, hospi-
tals and schools help earn image or goodwill for organization. That is why chip companies
attract the larger numbers of application.

Image of the job

Better remuneration and working conditions are considered the characteristics of good image
of a job. Besides, promotion and carrier development policies of organization also attract po-
tential candidates.

27
EXTERNAL FACTORS
Like internal factors, there are some factors external to organization, which have their influ-
enceo n recruitment process. Some of these are given below:-
Demographic factors
As demographics factors are intimately related to human beings, i.e. employees, these have
profound influence on recruitment process. Demographic factors include age, sex, Literacy,
economics status etc.
Labor market
Labor market condition I.e. supply and demand of labor is of particular importance in affect-
ing recruitment process. E.g. if the demand for specific skill is high relative to its supply is
more than for particular skill, recruitment will be relatively easier.
Un employment situation
The rate of unemployment is yet another external factor its influence on the recruitment pro-
cess. When the employment rate in an area is high, the recruitment process tends to simpler.
There as on is not difficult to seek. The number of application is expectedly very high which
makes easier to attract the best-qualified applications.
Labor laws
There are several labor laws and regulations passed by the central and state governments that
govern different type of employment. These cover working condition, compensation, retire-
ment benefits, safety and health of employee in industrial undertakings. The child Labour
Act, 1986; for example prohibits employment of children in certain employments. Similarly
several other acts such as the Employment Exchange Act,1958; The Apprentice Act, 1961;
the Factory Act,1948; and The Mines Act, 1952 deal with recruitment.
Legal consideration
Another external factor is legal consideration with regard to employment reservation of jobs
for schedule tribes, and other backward class (OBC) is the popular examples of such legal
consideration. The supreme court of India has given its verdict in favor of 50 per cent of jobs
and seats.

28
RECRUIMENT PROCESS
As stated earlier, recruitment is the process of location, identifying, and attracting capable
applications for jobs available in an organization. Accordingly, the recruitment process com-
prises the following five steps:

Recruitment planning;
Strategy Development;
Searching;
Screening;
Evaluation and Control

29
SELECTION

MEANING AND DEFINITION.

Selection is the process of picking individuals (out of the pool of job applicants) with requi-
site qualifications and competence to fill jobs in the organization. A formal definition of Se-
lection is:-
It is the process of differentiating between applicants in order to identify (and here) those-
with a greater likelihood of success in a job.
Recruitment and selection are the two crucial in the HR process and are often usedinter-
changeably. There I, however, a fine distinction between the two steps. While recruitmentre-
fers to the process of identifying and encouraging prospective employees to apply for jobs,
selection is concerned with picking the right candidates from the pool of applicants. Re-
cruitment is said to be positive in its approach as it seeks to attract as many candidates as
possible. Selection, on the other hand, is negative in its application in as it seeks to eliminate
as many unqualified applicants as possible in order to identify the right candidates.

ROLE OF SELECTION
The role of selection in an organization s effectiveness is crucial for at least, two reasons;
first, work performance depends on individuals. The best way to improve performance is to
hire people who have the competence and the willingness to work. Arguing from the em-
ployee s viewpoint, poor or inappropriate choice can be demoralizing to the individual con-
cerned (who finds himself or herself in the wrong job) and de-motivating to the rest of the
workforce .Effective selection, therefore, assumes greater relevance. Second, cost incurred in
recruiting and hiring personnel speaks about volumes of the selection. Costs of wrong selec-
tion are greater.

30
STEPS IN SELECTION PROCESS

The objectives of recruitment and selection procedures

OBJECTIVES
To ensure all recruitment and selection procedures comply with the Equal Opportunity Poli-
cy.
To ensure that all appointments are made on merit.
To develop and maintain procedures which will assist in ensuring the appointment of the
most suitable candidate .
To ensure that recruitment procedures are clear, valid and consistently applied by those in-
volved in recruitment and that they provide for fair and equitable treatment for those who
apply for employment.

31
SCOPE
1. To structure the Recruitment policy of company for different categories of employees
2. To analyze the recruitment policy of the organization.
3. To compare the Recruitment policy with general policy.
4. To provide a systematic recruitment process.
5. . It extends to the whole Organization. It covers corporate office, sites and works ap-
pointments all over India.
6. It covers workers, Clerical Staff, Officers, Jr. Management, Middle Management and
Senior Management cadres

32
RECRUITMENT AND SELECTION PROCEDURE IN ICICI BANK

The art of choosing men is not nearly so difficult as the art of enabling those one has chosen
to attain their full worth.
Recruitment is the process by which organizations locate and attract individuals to fill job-
vacancies. Most organizations have a continuing need to recruit new employees to replace
those who leave or are promoted in order to acquire new skills and promote organizational
growth.
Recruitment follows HR planning and goes hand in hand with selection process by which
organizations evaluate the suitability of candidates. With successful recruiting to create as-
size able pool of candidates, even the most accurate selection system is of little use Recruit-
ing begins when a vacancy occurs and the recruiter receives authorization to fill it.
The next step is careful examination of the job and enumeration of skills, abilities and expe-
rience needed to perform the job successfully.
Other steps follow:
v Creating an applicant pool using internal or external methods
v Evaluate candidates via selection
v Convince the candidate

v And finally make an offer Scope: To define the process and flow of activities while recruit-
ing, selecting and appointing personnel on the permanent rolls of an organization.

33
Authorization:
Authorized Signatory
1 Head- Human resource
2 Managing director Amendments and deviations: Any amendments to and deviations from
this policy can only be authorized by the Head-human Resources and the Managing Director.
Exclusions:
The policy does not cover the detailed formalities involved after the candidate joins the or-
ganization .ACTIVITY FLOW The organization philosophy should be kept in mind while
formulating the recruitment procedure. The HR department would set the recruitment norms
for the organization.
However, the onus of effective implementation and compliance with the process rests with
the heads of the respective functions and departments who are involved in the recruitment
and selection process. The process is aimed at defining the series of activities that needs to
be performed by different persons involved in the process of recruitment, the checks and
control measures to be adopted and information that has to be captured. Recruitment and Se-
lection is conducted by :v HR & Branch Manager v Functional Head.

34
RECRUITMENT PLANNING
Recruitment planning on the basis of budget A.

The manpower planning process for the year would commence with the
company s budgeting activity. The respective Functional heads would submit the
manpower requirements of their respective functions/ departments to the board of Directors
as part of the annual business plan after detailed discussion with the head of human Resource
Function along with detailed notes in support of the projected numbers assumptions regard-
ing the direct and indirect salary costs for each position. B.

A copy of the duly approved manpower plan would be forwarded by the HR department for
their further actions during the course of the year. The annual budget would specify the
manpower requirement of the entire organization, at different levels, in various func-
tions/departments, at different geographic allocations and the timing of the individual re-
quirements. It would also specify the requirement budget, which is the cost allotted towards
the recruitment of the budgeted staff and the replacement of the existing employees. The
manpower plan would also clearly indicate the exact time at which the incumbent should be
on board in such a way that the Regional HR has adequate notice for the time lapses in-
volved in sourcing any other activities.

The Regional HRs would undertake the planning activity and necessary
preparations in advance of the anticipated requirements, as monthly and quarter activities on
the basis of the approved budget, estimated separations and replacements therefore.

The vacancies sought to be filled or being filled shall always be within the approved annual
manpower budget and no recruitment process shall be initiated without the formal concur-
rence of the Head of the Regional HR under any circumstance. Head of the Regional HR
shall also have the responsibility to monitor the appointments being considered at any point
of time with specific respect to the duly approved manpower budgets. Review of Manpower
Plans and Additional Manpower A. Review of manpower budgets shall take place on a quar-
35
terly basis. In the event of any new position or any deviations to the original plans, details of
the positionsmaybe forwarded to the VP-HR along with the adequate supporting infor-
mation.The recommendations would normally require a formal approval of the ManagingDi-
rector. Alternately, VP-HR may record the summary of his discussion with the Managing Di-
rector and the MDs approval on the recommendations, to signify the final decision taken
regarding the recommendations.

36
SOURCING OF SUITABLE CANDIDATES

Selection of Sources Regional HR would tap various sources/channels for getting the right
candidate .Depending on the nature of the position/grade, volumes of recruitment and any
other relevant factors, the Regional HR would use any one multiple sources such as :v Exist-
ing database (active application data bank);v Employee referral as per any company scheme
that may be approved from time to time;
v Advertisement in the internet/newspapers/magazines/company s sites/job sites or any oth-
er media;
v Placement Agencies (particularly for positions of Managers and above);
v Headhunting firms particularly for senior positions, specialist positions and critical posi-
tions;
v Direct recruitment from campuses/academic institutes;
v Job websites
v Any other appropriate sources. The norms for using any of the sources are not water tight.
Number of positions, criticality of positions and the urgency of the positions, confidentiality
requirements, relative efficacy and cost considerations would play a role in the choice of the
appropriate sourcing mechanism.

37
 6. OBSERVATION AND FINDINGS

Recruitment process is one of the very important processes for any organization. This study
proves that it s one of the major operations of the ICICI Bank.
This study helps to understand what the internal or external sources of recruitment are & also
include the internal or external forces which effects process. It also includes those factors
which are used to control the effects of external or internal sources. This report also includes
the selection processes of the bank, how they do that and what are the various ways to
choose best candidates, tried to make clear all the points which related to recruitment process
and selection process. In ICICI the recruitment policy spells out the objective and provides a
framework for implementation of the recruitment programmed in the form of procedures.
The bank involves a commitment to broad principles such as filling vacancies with best
qualified individuals. In a bank ICICI, there usually a staff un attached with personnel or an
industrial relations department designated as employment or recruitment office. This special-
ization of recruitment enables staff personnel to become highly skilled in recruitment tech-
niques and our evaluation. However, recruitment remains the line responsibility as far as the
personnel requisition forms are originated by the personnel, who hasthe final words in the
acceptance or rejection of a particular applicant. Recruitment is a very
important process in any organization, because it s related to human resources, of the com-
pany, who have to perform according to their ability and skills, so every organization have to
take care about their recruitment processes. Any financial organization like ICICI should
take care aboutinternal or external sources, which related to recruitment process or the selec-
tion process.

38
 7.Training and Development in ICICI Bank

It is the largest private sector bank in India. It has a huge network of 2,528 branches and
about 6,000 ATMs in India and a presence in 19 countries including India. It employs around
36,000 employees.

ICICI bank views and values human resource as a key source of competitive advantage.
Consequently the development and management of human capital is an essential element of
their strategy and an important management activity.

The rapidly changing business environment in banking sector and the constant challenges it
poses to organizations and businesses make it imperative to continuously enhance and im-
prove knowledge and skill sets across the organization. ICICI Bank believes that building a
learning organization is critical for being competitive in products and services and meeting
customer demands and achieving customer satisfaction.

The Bank has built strong capabilities in training and development to build competencies
across various sectors. Training on products and operations is imparted through internet-
based training modules. Special programmes on functional training and leadership develop-
ment are conducted to build knowledge as well as management ability at a dedicated training
facility.
ICICI Bank also learns from the best available training programmes and faculty, both inter-
national and domestic, to meet its training and development needs and build globally
benchmarked skills and capabilities.

Its Human Resource base has following prominent features:

Human Resource (HR) practices high leveraging on technology.
HR Development is used as a critical activity for healthy culture building.

39
It has a fine tuned recruitment process that identifies among other things an individual's de-
gree of customer orientation.

Training and Development in ICICI Bank is referred to the team of employees in the Human
Resource department who are responsible for such activities. Training and Development is
headed by a senior-level officer (who is a member of the executive team) - Chief Human
Capital Officer (CHCO).

Training and Development process in the ICICI bank is considered essential for the progress
and growth of the bank. Since, inadequate training and employee errors constitute a major
operational risk for the bank.

40
Methodology used in gathering information
The group prepared a questionnaire which is attached in the Appendix 1. The questions listed
in the questionnaire were asked by us to the HR manager of Cochin branch of the ICICI bank
Mr. Avinash Chandran.

He very comprehensively answered the nuances of training and development process fol-
lowed by the bank. Some of the things he described include Criteria for selection of T&D
methods, its salient features, new initiatives taken and their results etc. He also pointed out
some of the shortcoming of the process. All these points are covered in the report along with
the groups' analysis and recommendations.

Since we can get only regional level of information from Cochin's branch manager, we re-
ferred Internet for the national practise followed by the bank, all over the country and
abroad. We also analyzed the reasons for the existing differences between regional level and
national level practises. This is described in the sections on levels of authority and role of
corporate HR and field HR.

The group also conducted interviews of the employees , of almost all the ranks like cashier,
accountant, core banking in charge, maintenance and security personnel etc. present in the
Kunnamangalam branch of ICICI bank We have tried to summarise all our findings in the
report.

Levels of authority in Training and Development

After interviewing group identified four levels of authority in the human resource practise
followed by the bank

Corporate level HR

This is the central level of Human Resource officer. Their main job includes laying out HR
policies to be followed by the bank after observing recent trends in the banking industry.
They see to it that bank follows standard and acceptable practises and standard of the train-
ing and development program is at par with international level
41
National level HR

National level HR officer studies, modifies and manages the training and development pro-
grammes according to various differences prevalent in different parts of the country. He
broadly instructs all the regional level HR officer to report to him the issues faced by them in
implementing company policies. He then accordingly modifies policies and procedures of
the training and development programs to ensure that programme is successfully implement-
ed.

Regional HR

Main goal at this level is to ensure proper implementation of the training and development
program and to ensure that methods followed in the program are relevant to the particular re-
gion. Also they report to higher authority in case of discrepancy or issues observed during
implementation of the program.

Field HR

This is the main level of the hierarchy which directly interacts with the customers. They are
in charge of the day to day operations of the bank. They have to interact with a vast diversity
of customers from very rich to very poor, therefore it's important that their training addresses
this issue primarily and they must be train to handle conflicts and daily nuances of the ser-
vice offered.

There are subtle differences between training and development practise followed by various
national and regional branches of the bank. These differences are due to different require-
ments, culture, practises and values cherished by various regions of the country. Also a sig-
nificant contributing factor is difference in the level of education and economic development
of the area, which gives rise to diversity and different requirements for different regions.
42
Interaction between various levels of HR's
As mentioned earlier, Corporate HR and Field HR play a very diverse role in the training and
development program followed by the company.
Listed are some of the issues on which corporate HR consult field HR and vice-versa:

Feasibility of the implementation of a particular policy

Relevance of the policy at the particular region

Implementation issues faced

Modification needed in the current training and development program

Conversion rate of the learning during the program into practise

Conflicts between various regional and national level goals

Training and Development Process

Lets us discuss about the various external variables influencing for the need of the Training
and Development programs in the banks.

Industry and Organizational analysis:

Many banks in India were trying to hire the professionals with higher packages even when
the GDP of country was quite high as they were not able to find the ready available talent.
Few banks have taken steps to build the talent and one among them is ICICI Bank. They
have tried to build the available resources on supply side to billable resources on demand
side.

Our country is mainly dominated by medical and engineering colleges where bank industry
finds it difficult to locate specific institutes who produce only pool of talents for banks. This
made the banking industry to look beyond top cities for talent and moved to small town and
43
rural India that need to be polished on social and corporate skills. ICICI bank wanted to de-
sign programs that would transform educated workforce into skilled bankers and turning
them to future banking sector leaders. They generally prefer students done their MBA pro-
grams and have relevant work experience which is quite longer duration. So they designed
the programs for 12 months making productive employees in lesser time.

Task Analysis:
ICICI bank has focused its business strategy on three key areas:

Expansion of Branch network:

the banking regulator demands strict compliance and deployment of trained personnel to en-
gage with customers as retail banking has high regulations and ICICI bank planned to ex-
pand its branch network by 45%. Without compromising at service quality ICICI has taken
up the challenge to post these new branches with more than 3000 employees. ICICI bank has
implemented the enterprise-wide integrated learning function for the planned program to be
successful.

Opportunities in Corporate Banking Sector:

Corporate banking is well known for high margin businesses which require resources with
specialist skills in credit appraisal, risk evaluation and relationship management. On-the-job
training helps employees to develop skills in a period of 12 to 18 months. The challenge for
banks was to crash the learning cycle for first-day productivity for growing opportunities.

Productivity Improvement:
It was challenge to bring about significant improvement after knowing that ICICI is com-
manding the highest levels of operational productivity and profit per employee in industry
and to be noted that productivity improvement is always been key focus area for success of
ICICI.

Selection of Learning and Training Methods:

ICICI bank has considered two approaches for selection of learning and training methods:

44
Operational-Reaction decision making:
This approach is required to bridge shortfalls in expected levels of services like quality, cus-
tomer service, etc. These are identified through Training need analysis, evident through
feedback and quality data by using feedback surveys, focused managerial discussion, focus
scores.

The design is:

Impact of a problem: Small and localized versus large and representative.
Learning Technology: Best blend of delivery channels such as e-learning, classroom, virtual
classroom, gaming, simulation, mobile learning.

Executive: Delivery time-lines and coverage.

Measurement: Results measured on suitable model.

Strategic-Proactive Decision making:

Organizations capitalize on potential and emerging business opportunities by building their
capabilities for the long term goals. Indian banking industry as a whole has taken initiatives
in this areas to build their capabilities.

Learning and Training Methods:

E-learning courses covering areas of banking, acts as knowledge for every business group.

For building Leadership bench strength of the organization they have introduced Leadership
Mentoring Program for all high potential employees.

Behavioural Programs in line with the competency framework (DNA) ensure cultural align-
ment of all employees. Nearly 275 behavioural courses are conducted every month and every
employee has at least one program every year. This shows the Learning Continuum.

45
INVESTMENT in building innovative and cutting edge learning channels like Gaming and
Simulation for technology based skill practice and Mobile learning for real time performance
support to the sales team.

Banks decided to make structural interventions in education by addressing the issue of sup-
ply of skilled manpower:

Vocational Training: To offer vocational training in the FINANCIAL services domain banks
have entered into partnerships with 172 educational institutions. Curriculum and pedagogy
development, faculty development and up-gradation of infrastructure help banks to involve
in capital infrastructure.

46
Ensuring employee participation and success of T&D program
ICICI bank considers T&D programmes very seriously. They think it to be one of the chief
regions in the success of the bank. Hence they make sure that every employee who needs
training gets it. They also ensure full employee participation and success of T&D pro-
grammes .ICICI bank did a number of things to ensure Employee participation and success
of T&D programmes

Employee understands the Need of T&D

T&D was developed by ICICI bank by keeping the need and skill analysis of the set of em-
ployees who are going to undergo the T&D programme.

Following questions were addressed to identify the need

Does the employee need Technology updation or simple skill enhancement?
Does the Employee suffer from Role conflict?
Does the employee have what it takes to do the job in effective manner
Context of T&D in Employees Career

Employees were made aware of the importance of new skills and skill enrichment. The Inter-
linkages between new skills and job were shown to help motivate the Employees. The Em-
ployee participation was further improved by showing the importance of skill in the future
development of their career and the linkages of the new skill with organization goals.

ICICI bank trained its employee on core banking by showing them the importance of the
technology which will help in furthering their own career.

Measurable objectives and favourable outcomes of T&D

47
The T&D was designed with measurable objectives and favourable outcomes that will be
transferred to the job when training will finish. Measurable objectives help to ascertain the
skill that will be obtained in the training will help in attaining the objective.

Identifying and Interviewing key Stakeholders

ICICI consulted and conducted interview with customers, trainers and employees to find out
the important aspects of training and development practices. They came to know about the
importance of core banking, Credit card and debit card issues related training. They also un-
derstood the practical difficulties that trainers usually face when they train employees

ICICI followed up with online surveys or evaluations of the training program. They later
found it to be very helpful in obtaining feedback from the audience's perspective. They con-
ducted anonymous surveys, to have a better chance of receiving honest feedback

48
 8. Performance Appraisal

A performance appraisal (PA), also referred to as a performance review, performance evalu-

ation, (career) development discussion,or employee appraisal is a method by which the job
performance of an employee is documented and evaluated. Performance appraisals are a part
of career development and consist of regular reviews of employee performance within or-
ganizations.

Main features
A performance appraisal is a systematic and periodic process that assesses an individual em-
ployees job performance and productivity in relation to certain pre-established criteria and
organizational objectives.Other aspects of individual employees are considered as well, such
as organizational citizenship behavior, accomplishments, potential for future improvement,
strengths and weaknesses, etc.

To collect PA data, there are three main methods: objective production, personnel, and
judgmental evaluation. Judgmental evaluations are the most commonly used with a large va-
riety of evaluation methods.Historically, PA has been conducted annually (long-cycle ap-
praisals); however, many companies are moving towards shorter cycles (every six months,
every quarter), and some have been moving into short-cycle (weekly, bi-weekly) PA . The
interview could function as "providing feedback to employees, counseling and developing
employees, and conveying and discussing compensation, job status, or disciplinary deci-
sions".PA is often included in performance management systems. PA helps the subordinate
answer two key questions: first, "What are your expectations of me?" second, "How am I do-
ing to meet your expectations?"

Performance management systems are employed to manage and align" all of an organiza-
tion's resources in order to achieve highest possible performance. Howperformance is man-
aged in an organization determines to a large extent the success or failure of the organiza-

49
tion. Therefore, improving PA for everyone should be among the highest priorities of con-
temporary organizations".

Some applications of PA are compensation, performance improvement, promotions, termina-

tion, test validation, and more.While there are many potential benefits of PA, there are also
some potential drawbacks. For example, PA can help facilitate management-employee
communication; however, PA may result in legal issues if not executed appropriately, as
many employees tend to be unsatisfied with the PA process. PAs created in and determined
as useful in the United States are not necessarily able to be transferable cross-culturally.

Applications of results
A central reason for the utilization of performance appraisals (PAs) is performance im-
provement ("initially at the level of the individual employee, and ultimately at the level of
the organization").Other fundamental reasons include "as a basis for employment decisions
(e.g. promotions, terminations, transfers), as criteria in research (e.g. test validation), to aid
with communication (e.g. allowing employees to know how they are doing and organiza-
tional expectations), to establish personal objectives for training" programs, for transmission
of objective feedback for personal development, "as a means of documentation to aid in
keeping track of decisions and legal requirements"and in wage and salary administra-
tion.Additionally, PAs can aid in the formulation of job criteria and selection of individuals
"who are best suited to perform the required organizational tasks".A PA can be part of guid-
ing and monitoring employee career development. PAs can also be used to aid in work moti-
vation through the use of reward systems.

Potential benefits
There are a number of potential benefits of organizational performance manage-
ment conducting formal performance appraisals (PAs). There has been a general
consensus in the belief that PAs lead to positive implications of organizations. Fur-
thermore, PAs can benefit an organizations effectiveness.One way is PAs can of-
ten lead to giving individual workers feedback about their job performance. From
this may spawn several potential benefits such as the individual workers becoming
more productive.

50
Other potential benefits include:

Facilitation of communication: communication in organizations is considered an essential

function of worker motivation.It has been proposed that feedback from PAs aid in minimiz-
ing employeesperceptions of uncertainty.Fundamentally, feedback and management-
employee communication can serve as a guide in job performance.
Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or issues
may distract employees from their work, and trust issues may be among these distracting fac-
tors.Such factors that consume psychological energy can lower job performance and cause
workers to lose sight of organizational goals. Properly constructed and utilized PAs have the
ability to lower distracting factors and encourage trust within the organization.
Goal setting and desired performance reinforcement: organizations find it efficient to match
individual workers goals and performance with organizational goals. PAs provide room for
discussion in the collaboration of these individual and organizational goals.Collaboration can
also be advantageous by resulting in employee acceptance and satisfaction of appraisal re-
sults.
Performance improvement: well constructed PAs can be valuable tools for communication
with employees as pertaining to how their job performance stands with organizational expec-
tations."At the organizational level, numerous studies have reported positive relationships
between human resource management (HRM) practices"and performance improvement at
both the individual and organizational levels.
Determination of training needs: Employee training and development are crucial compo-
nents in helping an organization achieve strategic initiatives.It has been argued that for PAs
to truly be effective, post-appraisal opportunities for training and development in problem
areas, as determined by the appraisal, must be offered. PAs can especially be instrumental
for identifying training needs of new employees.Finally, PAs can help in the establishment
and supervision of employeescareer goals.

Potential complications
Despite all the potential advantages of formal performance appraisals (PAs), there are also
potential drawbacks. It has been noted that determining the relationship between individual

51
job performance and organizational performance can be a difficult task.Generally, there are
two overarching problems from which several complications spawn. One of the problems
with formal PAs is there can be detrimental effects to the organization(s) involved if the ap-
praisals are not used appropriately. The second problem with formal PAs is they can be inef-
fective if the PA system does not correspond with the organizational culture and system.

Complications stemming from these is

Detrimental to quality improvement: it has been proposed that the use of PA systems in
organizations adversely affect organizationspursuits of quality performance.It is believed by
some scholars and practitioners that the use of PAs is more than unnecessary if there is total
quality management.

Subjective evaluations: Traditional performance appraisals are often based upon a man-
ager's or supervisor's perceptions of an employee's performance and employees are evaluated
subjectively rather than objectively. Therefore the review may be influenced by many non-
performance factors such as employee 'likeability', personal prejudices, ease of management,
and/or previous mistakes or successes. Reviews should instead be based on data-supported,
measurable behaviours and results within the performers control.

52
Negative perceptions:
"Quite often, individuals have negative perceptions of PAs".Receiving and/or the anticipa-
tion of receiving a PA can be uncomfortable and distressful and potentially cause "tension
between supervisors and subordinates. If the person being appraised does not trust their
employer, appraiser or believe that they will benefit from the process it may become a "tick
box" exercise.
Errors: Performance appraisals should provide accurate and relevant ratings of an employ-
ees performance as compared to pre-established criteria/goals (i.e. organizational expecta-
tions).Nevertheless, supervisors will sometimes rate employees more favorably than that of
their true performance in order to please the employees and avoid conflict."Inflated ratings
are a common malady associated with formal" PA.

Legal issues: when PAs are not carried out appropriately, legal issues could result that place
the organization at risk. PAs are used in organizational disciplinary programs as well as for
promotional decisions within the organization. The improper application and utilization of
PAs can affect employees negatively and lead to legal action against the organization.

Performance goals: performance goals and PA systems are often used in association. Nega-
tive outcomes concerning the organizations can result when goals are overly challenging or
overemphasized to the extent of affecting ethics, legal requirements, or quality.Moreover,
challenging performance goals can impede an employeesabilities to acquire necessary
knowledge and skills.Especially in the early stages of training, it would be more beneficial to
instruct employees on outcome goals than on performance goals.

Derail merit pay or performance-based pay: some researchers contend that the deficit in
merit pay and performance-based pay is linked to the fundamental issues stemming from PA
systems.

53
Improvements
Although performance appraisals can be so easily biased, there are certain steps that can be
taken to improve the evaluations and reduce the margin of errors through the following:

Training - Creating an awareness and acceptance in the people conducting the appraisals
that within a group of workers, they will find a wide range in difference of skills and abili-
ties.
Providing Feedback to Raters - Trained raters provide managers who evaluated their subor-
dinates with feedback, including information on ratings from other managers. This reduces
leniency errors.
Subordinate Participation - By allowing employee participation in the evaluation process,
there is employee-supervisor reciprocity in the discussion for any discrepancies between self
ratings and supervisor ratings, thus, increasing job satisfaction and motivation.

Opposition
Not everyone is in favor of formal performance appraisal systems. Many employees, espe-
cially those most affected by such ratings are not very enthusiastic about them. There are
many critics of these appraisals including labor unions and managers.

Labor Unions

Labor unions represent 11% (7% in the private sector) of the work force in the United States.
In some cases they may require that seniority be taken as one of the main criteria for promo-
tion. However, length of job experience may not always be a reliable indication of the ability
to perform a higher level job. That is why some employers give senior people the first oppor-
tunity for promotion, but the employer may seek to further qualify the employee for that
promotion because of their abilities (not solely because of length of service). Performance
appraisals may provide a basis for assessment of employee merit as a component of these
decisions.

54
Managers

Managers who have had unsatisfactory experiences with inadequate or poorly designed ap-
praisal programs may be skeptical about their usefulness.
Some managers may not like to play the role of a judge and be responsible for the future of
their subordinates.
They may be uncomfortable about providing negative feedback to the employees.
This tendency can lead them to inflate their assessments of the workersjob performance,
giving higher ratings than deserved.

55
 9. Conduction of HR practice

Human resource management (HRM) conducts performance management. Performance

management systems consist of the activities and/or processes embraced by an organization
in anticipation of improving employee performance, and therefore, organizational perfor-
mance. Consequently, performance management is conducted at the organizational level and
the individual level. At the organizational level, performance management oversees organi-
zational performance and compares present performance with organizational performance
goals. The achievement of these organizational performance goals depends on the perfor-
mance of the individual organizational members.Therefore, measuring individual employee
performance can prove to be a valuable performance management process for the purposes
of HRM and for the organization. Many researchers would argue that "performance appraisal
is one of the most important processes in Human Resource Management".

The performance management process begins with leadership within the organization creat-
ing a performance management policy. Primarily, management governs performance by in-
fluencing employee performance input (e.g. training programs) and by providing feedback
via output (i.e. performance assessment and appraisal)."The ultimate objective of a perfor-
mance management process is to align individual performance with organizational perfor-
mance.A very common and central process of performance management systems is perfor-
mance appraisal (PA).The PA process should be able to inform employees about the "organ-
ization's goals, priorities, and expectations and how well they are contributing to them".

When they are conducted

Performance appraisals (PAs) are conducted at least annually, and annual employee perfor-
mance reviews appear to be the standard in most American organizations. However, "it has
been acknowledged that appraisals conducted more frequently (more than once a year) may
have positive implications for both the organization and employee."It is suggested that regu-
lar performance feedback provided to employees may quell any unexpected and/or surprising
feedback to year-end discussions. In a recent research study concerning the timeliness of

56
PAs, "one of the respondents even suggested that the performance review should be done
formally and more frequently, perhaps once a month, and recorded twice a year."

Other researchers propose that the purpose of PAs and the frequency of their feedback are
contingent upon the nature of the job and characteristics of the employee.[38] For example,
employees of routine jobs where performance maintenance is the goal would benefit suffi-
ciently from annual PA feedback. On the other hand, employees of more discretionary and
non-routine jobs, where goal-setting is appropriate and there is room for development, would
benefit from more frequent PA feedback. Non formal performance appraisals may be done
more often, to prevent the element of surprise from the formal appraisal.

Methods of collecting data

There are three main methods used to collect performance appraisal (PA) data: objective
production, personnel, and judgmental evaluation. Judgmental evaluations are the most
commonly used with a large variety of evaluation methods.

Objective production
The objective production method consists of direct, but limited, measures such as sales fig-
ures, production numbers, the electronic performance monitoring of data entry workers,
etc.The measures used to appraise performance would depend on the job and its duties. Alt-
hough these measures deal with unambiguous criteria, they are usually incomplete because
of criterion contamination and criterion deficiency. Criterion contamination refers to the part
of the actual criteria that is unrelated to the conceptual criteria.[6] In other words, the varia-
bility in performance can be due to factors outside of the employees control. Criterion defi-
ciency refers to the part of the conceptual criteria that is not measured by the actual criteria.
In other words, the quantity of production does not necessarily indicate the quality of the
products. Both types of criterion inadequacies result in reduced validity of the meas-
ure.Regardless of the fact that objective production data is not a complete reflection upon job
performance, such data is relevant to job performance.

57
Happy-productive worker hypothesis
The happy-productive worker hypothesis states that the happiest workers are the most pro-
ductive performers, and the most productive performers are the happiest workers.Yet, after
decades of research, the relationship between job satisfaction and job performance produces
only a weak positive correlation. Published in 2001 by Psychological Bulletin, a meta-
analysis of 312 research studies produced an uncorrected correlation of 0.18. This correlation
is much weaker than what the happy-productive worker hypothesis would predict.

Personnel
The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents).
Most organizations consider unexcused absences to be indicators of poor job performance,
even with all other factors being equal; however, this is subject to criterion deficiency. The
quantity of an employees absences does not reflect how dedicated he/she may be to the job
and its duties. Especially for blue-collar jobs, accidents can often be a useful indicator of
poor job performance, but this is also subject to criterion contamination because situational
factors also contribute to accidents. Once again, both types of criterion inadequacies result in
reduced validity of the measure. Although excessive absenteeism and/or accidents often in-
dicate poor job performance rather than good performance, such personnel data is not a
comprehensive reflection of an employees performance.

Judgmental evaluation
Judgmental evaluation appears to be a collection of methods, and as such, could be consid-
ered a methodology. A common approach to obtaining PAs is by means of raters. Because
the raters are human, some error will always be present in the data. The most common types
of error are leniency errors, central tendency errors, and errors resulting from the halo ef-
fect.Halo effect is characterized by the tendency to rate a person who is exceptionally strong
in one area higher than deserved in other areas. It is the opposite of the Horns effect, where a
person is rated as lower than deserved in other areas due to an extreme deficiency in a single

58
discipline. These errors arise predominantly from social cognition and the theory in that how
we judge and evaluate other individuals in various contexts is associated with how we "ac-
quire, process, and categorize information".

An essential piece of this method is rater training. Rater training is the "process of educating
raters to make more accurate assessments of performance, typically achieved by reducing the
frequency of halo, leniency, and central-tendency errors".]Rater training also helps the raters
"develop a common frame of reference for evaluation" of individual performance.Many re-
searchers and survey respondents support the ambition of effectual rater training.However, it
is noted that such training is expensive, time consuming, and only truly functional for behav-
ioral assessments.

Another piece to keep in mind is the effects of rater motivation on judgmental evaluations. It
is not uncommon for rating inflation to occur due to rater motivation (i.e. "organizationally
induced pressures that compel raters to evaluate ratees positively"). Typically, raters are mo-
tivated to give higher ratings because of the lack of organizational sanction concerning accu-
rate/inaccurate appraisals, the rater's desire to guarantee promotions, salary increases, etc.,
the rater's inclination to avoid negative reactions from subordinates, and the observation that
higher ratings of the ratees reflect favorably upon the rater.

59
The main methods used in judgmental performance appraisal are:

Graphic Rating Scale: graphic rating scales (see scale (social sciences)) are the most com-
monly used system in PA. On several different factors, subordinates are judged on 'how
much' of that factor or trait they possess. Typically, the raters use a 5- or 7-point scale; how-
ever, there are as many as 20-point scales.
Employee-Comparison Methods: rather than subordinates being judged against pre-
established criteria, they are compared with one another. This method eliminates central ten-
dency and leniency errors but still allows for halo effect errors to occur. The rank-order
method has raters ranking subordinates from "best" to "worst", but how truly good or bad
one is on a performance dimension would be unknown.The paired-comparison method re-
quires the rater to select the two "best" subordinates out of a group on each dimension then
rank individuals according to the number of times each subordinate was selected as one of
the "best". The forced-distribution method is good for large groups of ratees. The raters
evaluate each subordinate on one or more dimensions and then place (or "force-fit", if you
will) each subordinate in a 5 to 7 category normal distribution. The method of top-grading
can be applied to the forced distribution method.This method identifies the 10% lowest per-
forming subordinates, as according to the forced distribution, and dismisses them leaving the
90% higher performing subordinates.
Behavioral Checklists and Scales:behaviours are more definite than traits. The critical in-
cidents method (or critical incident technique) concerns "specific behaviors indicative of
good or bad job performance".Supervisors record behaviors of what they judge to be job per-
formance relevant, and they keep a running tally of good and bad behaviors. A discussion on
performance may then follow. The behaviorally anchored rating scales (BARS) combine the
critical incidents method with rating scale methods by rating performance on a scale but with
the scale points being anchored by behavioral incidents. Note that BARS are job specific. In
the behavioral observation scale (BOS) approach to performance appraisal, employees are
also evaluated in the terms of critical incidents. In that respect, it is similar to BARS. How-
ever, the BOS appraisal rate subordinates on the frequency of the critical incidents as they
are observed to occur over a given period. The ratings are assigned on a five-point scale. The
behavioral incidents for the rating scale are developed in the same way as for BARS through

60
identification by supervisors or other subject matter experts. Similarly, BOS techniques meet
equal employment opportunity because they are related to actual behavior required for suc-
cessful job performance.

Peer and self assessments

While assessment can be performed along reporting relationships (usually top-down), net as-
sessment can include peer and self-assessment. Peer assessment is when assessment is per-
formed by colleagues along both horizontal (similar function) and vertical (different func-
tion) relationship. Self-assessments are when individuals evaluate themselves.There are three
common methods of peer assessments. Peer nomination involves each group member nomi-
nating who he/she believes to be the "best" on a certain dimension of performance. Peer rat-
ings has each group member rate each other on a set of performance dimensions. Peer rank-
ing requires each group member rank all fellow members from "best" to "worst" on one or
more dimensions of performance.

Self-assessments: for self-assessments, individuals assess and evaluate their own behavior
and job performance.

Peer assessments: members of a group evaluate and appraise the performance of their fel-
low group members. There it is common for a graphic rating scale to be used for self-
assessments. Positive leniency tends to be a problem with self-assessments. Peer assessments
from multiple members of a group are often called crowd-based performance reviews, and
solve many problems with peer assessments from only one member.
360-degree feedback: 360-degree feedback is multiple evaluations of employees which of-
ten include assessments from superior(s), peers, and ones self.

Negotiated performance appraisal: The negotiated performance appraisal (NPA) is an

emerging approach for improving communication between supervisors and subordinates and
for increasing employee productivity, and may also be adapted to an alternate mediation
model for supervisor-subordinate conflicts. A facilitator meets separately with the supervisor
and with the subordinate to prepare three lists. What employees do well, where the employee
has improved in recently, and areas where the employee still needs to improve. Because the
61
subordinate will present his or her lists first during the joint session, this reduces defensive
behaviours. Furthermore, the subordinate comes to the joint session not only prepared to
share areas of needed improvement, but also brings concrete ideas as to how these improve-
ments can be made. The NPA also focuses very strongly on what employees are doing well,
and involves a minimum of twenty minutes of praise when discussing what the employee
does well. The role of the facilitator is that of a coach in the pre-caucuses, and in the joint
sessions the supervisor and subordinate mostly speak to each other with little facilitator inter-
ference.
In general, optimal PA process involves a combination of multiple assessment modalities.
One common recommendation is that assessment flows from self-assessment, to peer-
assessment, to management assessment - in that order. Starting with self-assessment facili-
tates avoidance of conflict. Peer feedback ensures peer accountability, which may yield bet-
ter results than accountability to management. Management assessment comes last for need
of recognition by authority and avoidance of conflict in case of disagreements. It is generally
recommended that PA is done in shorter cycles to avoid high-stakes discussions, as is usually
the case in long-cycle appraisals.

Normalization of performance appraisal

Normalization is the process of review of the ratings each group as a whole to ensure the rat-
ings are as per the recommended norms and the percentages are generally decided by man-
agement.

Organizational citizenship behavior

Also referred to as contextual behavior, prosocial behavior, and extra-role behavior, organi-
zational citizenship behavior (OCB) consists of employee behavior that contributes to the
welfare of the organization but is beyond the scope of the employees job duties.These extra-
role behaviors may help or hinder the attainment of organizational goals. Research supports
five dimensions of OCB: altruism, conscientiousness, courtesy, sportsmanship, and civic vir-
tue. Researchers have found that the OCB dimensions of altruism and civic virtue can have
just as much of an impact on managers subjective evaluations of employeesperformances
as employeesobjective productivity levels.[49] The degree to which OCB can influence

62
judgments of job performance is relatively high. Controversy exists as to whether OCB
should be formally considered as a part of performance appraisal (PA).

Interviews
The performance appraisal (PA) interview is typically the final step of the appraisal pro-
cess.The interview is held between the subordinate and supervisor. The PA interview can be
considered of great significance to an organizations PA system. It is most advantageous
when both the superior and subordinate participate in the interview discussion and establish
goals together.Three factors consistently contribute to effective PA interviews: the supervi-
sors knowledge of the subordinates job and performance in it, the supervisors support of
the subordinate, and a welcoming of the subordinates participation.

Employee reactions
Numerous researchers have reported that many employees are not satisfied with their per-
formance appraisal (PA) systems.Studies have shown that subjectivity as well as appraiser
bias is often a problem perceived by as many as half of employees.Appraiser bias, however,
appears to be perceived as more of a problem in government and public sector organiza-
tions.Also, according to some studies, employees wished to see changes in the PA system by
making "the system more objective, improving the feedback process, and increasing the fre-
quency of review."[14] In light of traditional PA operation defects, "organizations are now
increasingly incorporating practices that may improve the system. These changes are particu-
larly concerned with areas such as elimination of subjectivity and bias, training of appraisers,
improvement of the feedback process and the performance review discussion."[14]

According to a meta-analysis of 27 field studies, general employee participation in his/her

own appraisal process was positively correlated with employee reactions to the PA sys-
tem.[22] More specifically, employee participation in the appraisal process was most strong-
ly related to employee satisfaction with the PA system.[22] Concerning the reliability of em-
ployee reaction measures, researchers have found employee reaction scales to be sound with
few concerns through using a confirmatory factor analysis that is representative of employee
reaction scales.[50]

63
Researchers suggest that the study of employeesreactions to PA is important because of two
main reasons: employee reactions symbolizes a criterion of interest to practitioners of PAs
and employee reactions have been associated through theory to determinants of appraisal ac-
ceptance and success.[50] Researchers translate these reasons into the context of the scien-
tist-practitioner gap or the "lack of alignment between research and practice."[50]

[1] Schultz & Schultz notes that opposition to performance appraisals generally don't receive
positive ratings from anyone involved. "So employees that will be directly affected by the
Performance Appraisals are less than enthusiastic about participating in them". [2] When an
employee knows that their work performance has been less than perfect its nerve-racking to
be evaluated. Most workers just dont appreciate constructive criticism or any criticism. Em-
ployees tend to be hostile knowing they could be given bad news on their performance.
Schultz, Duane P. Schultz, Sydney Ellen (2009). Psychology and work today (10th ed., In-
ternational ed. ed.). Upper Saddle River, N.J.: Pearson Education. pp. 108109. ISBN
9780205705870. More than one of |author= and |last= specified Schultz, Duane P. Schultz,
Sydney Ellen (2009). Psychology and work today (10th ed., International ed. ed.). Upper
Saddle River, N.J.: Pearson Education. p. 109.ISBN 9780205705870. More than one of
|author= and |last= specified

Legal implications[edit]
There are federal laws addressing fair employment practices, and this also concerns perfor-
mance appraisal (PA). Discrimination can occur within predictions of performance and eval-
uations of job behaviors.[1] The revision of many court cases has revealed the involvement
of alleged discrimination which was often linked to the assessment of the employees job
performance.[51] Some of the laws which protect individuals against discrimination are "the
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimina-
tion in Employment Act (ADEA), and the Americans with Disabilities Act (ADA)."[1] Law-
suits may also results from charges of an employers negligence, defamation, and/or misrep-
resentation.[1] A few appraisal criteria to keep in mind for a legally sound PA is to keep the
content of the appraisal objective, job-related, behavior-based, within the control of the ratee,
and related to specific functions rather than a global assessment.[51] Some appraisal proce-
dure suggestions for a legally sound PA is to standardize operations, communicate formally
64
with employees, provide information of performance deficits and give opportunities to em-
ployees to correct those deficits, give employees access to appraisal results, provide written

instructions for the training of raters, and use multiple, diverse and unbiased raters.[51]
These are valuable but not exhaustive lists of recommendations for PAs. The Employment
Opportunity Commission (EEOC) guidelines apply to any selection procedure that is used
for making employment decisions, not only for hiring, but also for promotion, demotion,
transfer, layoff, discharge, or early retirement. Therefore, employment appraisal procedures
must be validated like tests or any other selection device. Employers who base their person-
nel decisions on the results of a well-designed performance review program that includes
formal appraisal interviews are much more likely to be successful in defending themselves
against claims of discrimination.[52]

65
Legal implications[edit]
There are federal laws addressing fair employment practices, and this also concerns perfor-
mance appraisal (PA). Discrimination can occur within predictions of performance and eval-
uations of job behaviors.[1] The revision of many court cases has revealed the involvement
of alleged discrimination which was often linked to the assessment of the employees job
performance.[51] Some of the laws which protect individuals against discrimination are "the
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimina-
tion in Employment Act (ADEA), and the Americans with Disabilities Act (ADA)."[1] Law-
suits may also results from charges of an employers negligence, defamation, and/or misrep-
resentation.[1] A few appraisal criteria to keep in mind for a legally sound PA is to keep the
content of the appraisal objective, job-related, behavior-based, within the control of the ratee,
and related to specific functions rather than a global assessment.[51] Some appraisal proce-
dure suggestions for a legally sound PA is to standardize operations, communicate formally
with employees, provide information of performance deficits and give opportunities to em-
ployees to correct those deficits, give employees access to appraisal results, provide written
instructions for the training of raters, and use multiple, diverse and unbiased raters.[51]
These are valuable but not exhaustive lists of recommendations for PAs. The Employment
Opportunity Commission (EEOC) guidelines apply to any selection procedure that is used
for making employment decisions, not only for hiring, but also for promotion, demotion,
transfer, layoff, discharge, or early retirement. Therefore, employment appraisal procedures
must be validated like tests or any other selection device. Employers who base their person-
nel decisions on the results of a well-designed performance review program that includes
formal appraisal interviews are much more likely to be successful in defending themselves
against claims of discrimination.[52]

Cross-cultural implications[edit]
Performance appraisal (PA) systems, and the premises of which they were based, that have
been formed and regarded as effective in the United States may not have the transferability
for effectual utilization in other countries or cultures, and vice versa.[15] Performance "ap-
praisal is thought to be deeply rooted in the norms, values, and beliefs of a society".[53]
66
"Appraisal reflects attitudes towards motivation and performance (self) and relationships
(e.g. peers, subordinates, supervisors, organization), all of which vary from one country to
the next".[54] Therefore, appraisal should be in conjunction with cultural norms, values, and
beliefs in order to be operative.[55] The deep-seated norms, values and beliefs in different
cultures affect employee motivation and perception of organizational equity and justice. In
effect, a PA system created and considered effectual in one country may not be an appropri-
ate assessment in another cultural region.[54]

For example, some countries and cultures value the trait of assertiveness and personal ac-
complishment while others instead place more merit on cooperation and interpersonal con-
nection. Countries scoring high on assertiveness consider PA to be a way of assuring equity
among employees so that higher performing employees receive greater rewards or higher
salaries.[54] Countries scoring low on assertiveness but higher in interpersonal relations may
not like the social separation and pay inequity of higher/lower performing employees; em-
ployees from this more cooperative rather than individualistic culture place more concern on
interpersonal relationships with other employees rather than on individual interests.[54] High
assertive countries value performance feedback for self-management and effectiveness pur-
poses while countries low in assertiveness view performance feedback as "threatening and
obtrusive".[54][56] In this case, the PA of the high assertive countries would likely not be
beneficial for countries scoring lower in assertiveness to employ. However, countries scoring
lower in assertiveness could employ PA for purposes of improving long-term communica-
tion development within the organization such as clarifying job objectives, guide training
and development plans, and lessen the gap between job performance and organizational ex-
pectations.[57]

Developments in information technology[edit]

Computers have been playing an increasing role in PA for some time (Sulsky&Keown,
1998). There are two main aspects to this. The first is in relation to the electronic monitoring
of performance, which affords the ability to record a huge amount of data on multiple di-
mensions of work performance (Stanton, 2000). Not only does it facilitate a more continuous
and detailed collection of performance data in some jobs, e.g. call centres, but it has the ca-
pacity to do so in a non-obvious, covert manner. The second aspect is in mediating the feed-
67
back process, by recording and aggregating performance ratings and written observations
and making the information available on-line; many software packages are available for this.
The use of IT in these ways undoubtedly helps in making the appraisal process more man-
ageable, especially where multiple rating sources are involved, but it also raises many ques-
tions about appraisees' reactions and possible effects on PA outcomes. Mostly, the evidence
so far is positive.[58]

Rater errors[edit]
Mistakes made by raters is a major source of problems in performance appraisal. There is no
simple way to completely eliminate these errors, but making raters aware of them through
training is helpful. Rater errors are based on the feelings and it has consequences at the time
of appraisal.[59][60]

Varying standards

Problem: When a manager appraises (evaluates) his or her employees and the manager uses
different standards and expectations for employees who are performing similar jobs.[citation
needed]
Example: A professor does not grade the exams of all students in the same standards, some-
times it depends on the affection that the professor has towards others. This affection will
make professor give students higher or lower grades.
Solution: The rater must use the same standards and weights for every employee. The man-
ager should be able to show coherent arguments in order to explain the difference. Therefore,
it would be easier to know if it is done, because the employee has done a good performance,
or if it because the manager perception is distorted.
Recency effects

Problem: When the manager, according only to the last performance, that has been quite
good, rates higher.
Example: When a professor gives the course grade based just in the performance of the stu-
dent, only in the last week.

68
Solution: In order to avoid that, the manager should use some methods as documenting both
in positive and negative aspects.
Primacy effects

Problem: When the person who evaluates gives more weight according to information the
manager has received first.
Example: It could be a silly example. When we are watching a TV quiz and conquest have to
remember a list of things, they only remember the first ones. This is apply also in remember-
ing human performance.
Solution: performance. When manager has to take some decision, is better not to do it ac-
cording to what he or she remembers. It is better to based on real actions that has happened
and are recorded.
Central Tendency

Problem: When the manager evaluate every employees within a narrow range, as the average
because he or she is dismissing the differences in the performance that employees have done.
Example: When a professor because the average of the class tends to grade harder. There-
fore, if the performance of the class average is quite high, the professor will evaluate them
more high. In the contrary, if the average of the class is lower, he or she would appraise low-
er.
Leniency

Problem: Rating of all employees are at the high end of the scale.
Example: When the professor tends to grade harder, because the average of the class.
Strictness

Problem: When a manager uses only the lower part of the scale to rate employees.
Example: When the professor tends to grade lower, because the average of the class.
Solution: try to focus more on the individual performance of every employee regardless the
average results.
Rater Bias[61]

69
Problem: Raters when the manager rates according to his or her values and prejudices which
at the same time distort (distorsionar) the rating. Those differentiations can be made due to
the ethnic group, gender, age, religion, sex, appearance...

Example: Sometimes happen that a manager treats someone different, because he or she
thinks that the employee is homosexual.
Solution: If then, the examination is done by higher-level managers, this kind of appraising
can be corrected, because they are supposed to be more partial.
Halo effect

Problem: When a manager rates an employee high on all items because of one characteristic
that he or she likes.
Example: If a worker has few absence but the supervisor has a good relationship with that
employee, the supervisor might give to the employee a high rating in all other areas of work,
in order to balance the rating. Sometimes it happens due to the emotional dependability
based on the good relationship they have.
Solution: Training raters to recognize the problem and differentiating the person with the
performance they do.
Horns effect

70
 10. CONCLUSION
Human resources management deals with important function related to recruit-
ment , section, training and development of employees, performance appraisal
management, payroll management system. Human resources deals with selection
of employees through various portals, consultants etc. Its main responsibility is
to train employees as per their needs and demands and develop their overall per-
formance. They deal with salaries, termination, leave management of the em-
ployees. Performance appraisal is one of the important functions at it involves re-
viewing the performance of the employees by comparing it with the panel out-
come and the objectives And are helped by discussing with them about their
strengths. Weakness etc and the problems are resolved accordingly. TO conclude
Human Resources Management should be linked with strategic goals and objec-
tives in order to improve business performance and develop organizational cul-
tures that foster innovation and flexibility.

71
 11. BIBLOGRAPHY
1.http;//intermediamarketing.wordpress.com/intergrated-marketing-
communication.

2.hht;//www.zdnetasia.com/social media.com

3.http;//google;icici bank.wikipediea.com

4.http;//www.socialmediamarketing.com

5.http/facta.junis.ni.ac.rs/eao/eao2000/eao2000-11.pdf.

6.http/www.sileworld.com/intergrated-marketing.com

7.http;//www.wikipedia.org/wiki/intreated.com

8.http;//sileword.com

9.http;//www.sileword marketing communition.com

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