MODULE 2

Human Resource Management

Comprehensive Study Notes | For Engineering Students

1. HR Sourcing & Recruitment

1.1 What is Recruitment?

Recruitment is the process of identifying, attracting, and encouraging potential candidates to
apply for a job vacancy. It is a POSITIVE process — it creates a pool of candidates from which
the right person will later be selected.

📌 KEY POINT: Recruitment ≠ Selection. Recruitment is about attracting applicants (positive);

Selection is about choosing the best from those applicants (negative/eliminative).

1.2 Objectives of Recruitment

• Attract a sufficient pool of qualified candidates for the vacancy
• Meet the organization's legal and social obligations regarding workforce composition
• Increase the success rate of the selection process by reducing obviously unqualified
candidates
• Reduce the probability of new employees leaving soon after joining
• Begin identifying and preparing potential job applicants in advance (talent pipeline)

1.3 Sources of Recruitment

Sources are broadly classified into two categories:

A) Internal Sources (Within the Organization)

• Promotions: Moving an existing employee to a higher position
○ Example: A Senior Engineer is promoted to Team Lead
• Transfers: Moving an employee from one department/location to another
○ Example: A marketing manager transferred from Mumbai office to Delhi office
• Employee Referrals: Existing employees recommend candidates from their network
 ○ Example: TCS has an employee referral program with cash bonuses for successful
referrals
• Internal Job Postings: Vacancies advertised on internal notice boards or intranet
• Former Employees: Rehiring retired or previously resigned employees (Boomerang
employees)

✅ Advantages of Internal Recruitment ❌ Disadvantages of Internal Recruitment

Cheaper and faster Limited talent pool — no fresh ideas

Motivates existing employees May create jealousy/politics among colleagues
Candidate is already familiar with company Leaves a vacancy in the original role
culture
Less risk — performance history is known Promotes 'inbreeding' — same old thinking

B) External Sources (Outside the Organization)

• Campus Recruitment / College Placement: Visiting colleges to hire fresh graduates
○ Example: Infosys, TCS, Wipro recruit 10,000s of engineers from IITs and NITs every
year
• Job Portals / Online Recruitment: [Link], LinkedIn, Indeed, [Link]
○ Example: A startup posts a 'Python Developer' job on LinkedIn and receives 500+
applications
• Walk-in Interviews: Open interviews where candidates can come directly without prior
appointment
• Employment Agencies / Consultants: Firms like TeamLease or Manpower that supply
candidates
• Advertisements: Newspapers (Times of India), company website career pages
• Head Hunting / Executive Search: Recruiting senior professionals through specialized
firms
○ Example: A company uses Korn Ferry to find a new CFO from a competitor
• Government Employment Exchanges: Govt-run job centres for unskilled/semi-skilled
workers
• Social Media Recruiting: Using Instagram, Twitter, GitHub profiles to find candidates

💡 EXAMPLE: Complete Recruitment Process at Infosys

1. Infosys plans to hire 20,000 engineers for the year. 2. HR posts jobs on Naukri, LinkedIn, and the
Infosys careers page. 3. They also visit 200+ engineering colleges for campus placements. 4.
Employee referrals are encouraged with a Rs.30,000 bonus. 5. Within 3 months, they receive 5 lakh
applications for 20,000 positions — this entire process is 'Recruitment'.

1.4 Factors Affecting Recruitment

Internal Factors
• Company size — larger companies have more structured recruitment processes
• Company image / employer brand — reputed companies attract more candidates
• Nature of job — technical jobs require specialized recruitment channels
• Cost of recruitment — budget available for the process

External Factors
• Labor market conditions — availability of qualified candidates in the market
• Socio-economic factors — unemployment rate, population literacy levels
• Legal regulations — reservations (SC/ST/OBC), equal opportunity laws
• Competitors — if competitors offer better packages, fewer candidates apply to you

2. Selection: Process & Placement

2.1 What is Selection?

Selection is the process of choosing the most suitable candidate from the pool of applicants
created during recruitment. It is a NEGATIVE or ELIMINATIVE process because at each step,
unsuitable candidates are rejected, narrowing down to the best fit.

📌 KEY POINT: The Selection process starts where Recruitment ends. Recruitment = 'Come join us',
Selection = 'We will now choose the best among you'.

2.2 Difference: Recruitment vs Selection

Basis Recruitment Selection
Meaning Attracting candidates to apply Choosing the best from applicants
Nature Positive process Negative/eliminative process
Objective Create a large applicant pool Reduce the pool to the best fit
Cost Relatively lower cost More expensive (tests, interviews)
Sequence Happens first Happens after recruitment

2.3 Steps in the Selection Process

The selection process typically follows these sequential steps:
Step 1: Screening of Applications / Initial Screening
• HR reviews all received applications and resumes (CVs)
• Eliminates obviously unqualified candidates based on minimum requirements
• Today, many companies use ATS (Applicant Tracking Systems) to auto-screen based
on keywords

💡 EXAMPLE:
If a job requires [Link] + 3 years experience, all applications with only diplomas or less than 3 years
experience are rejected at this stage automatically.

Step 2: Preliminary Interview

• A short, informal interview (15–20 minutes) to get a basic idea of the candidate
• Checks communication skills, attitude, basic knowledge
• Often conducted by HR (not the technical manager)
• Eliminates candidates who clearly do not fit the role

Step 3: Written Tests / Employment Tests

Various tests are used to assess candidate abilities:
• Aptitude Tests: Logical reasoning, mathematical ability, problem-solving (e.g., Infosys
TalentNext exam)
• Technical/Knowledge Tests: Domain-specific knowledge assessment
○ Example: A software company tests candidates on Java, SQL, and Data Structures
• Personality Tests: MBTI, Big Five Personality Test — assess personality traits
• Psychometric Tests: Assess attitudes, values, and mental capabilities
• Intelligence Tests (IQ Tests): Overall mental ability
• Interest Tests: Whether the candidate's interests align with the job

Step 4: Employment Interview

The most important step in selection. Types of interviews include:
• Structured Interview: Pre-set questions, same questions for all candidates — fair and
consistent
• Unstructured Interview: Freeflowing conversation, flexible questions based on responses
• Panel Interview: Multiple interviewers from different departments question the candidate
○ Example: A panel of HR manager + Technical Lead + Department Head interviews a
candidate
• Stress Interview: Deliberately putting the candidate under pressure to observe reaction
○ Example: 'Why should we hire you? You seem underqualified for this role.'
• Behavioral Interview: Questions about past behavior to predict future performance
 ○ Example: 'Tell me about a time when you handled a difficult team member.'
• Telephonic / Video Interview: Used for initial rounds or remote candidates

Step 5: Reference Checks

• Verifying information provided by the candidate through former employers, professors
• Checks honesty, work ethic, and past performance

💡 EXAMPLE:
A company calls the candidate's previous employer and asks: 'Was this person punctual? How was
their attitude toward teamwork? Would you rehire them?'

Step 6: Background Verification

• Formal verification of educational qualifications, employment history, criminal record
• Often done by specialized agencies like AuthBridge or First Advantage in India
• Critical for roles involving security, finance, or access to sensitive information

Step 7: Medical / Physical Examination

• Ensures the candidate is physically fit for the job requirements
• Especially important for physically demanding jobs (police, armed forces, factory
workers)
• Also done to avoid liability for pre-existing conditions

Step 8: Final Selection / Job Offer

• After passing all steps, the candidate receives a Job Offer Letter
• Offer letter specifies: designation, salary, joining date, terms and conditions
• Candidate can accept, negotiate, or decline the offer

Step 9: Placement
Placement is the process of assigning the selected candidate to a specific job role and
department. It involves:
• Assigning the new employee to the most suitable position based on their skills and
organizational needs
• Proper placement improves productivity, job satisfaction, and reduces turnover
• Improper placement leads to poor performance, frustration, and early attrition

💡 EXAMPLE: Placement Example

 A fresh [Link] graduate in Electronics is selected by Bosch. After selection, HR evaluates whether to
place them in: Embedded Systems team (best fit based on their project experience), Quality Control
team, or R&D team. They are placed in Embedded Systems — this is placement.

3. Induction and Socialization

3.1 What is Induction / Orientation?

Induction (also called Orientation) is the formal process of introducing a newly selected
employee to the organization, their job, their colleagues, and the organizational culture. It is the
'Welcome Program' for new employees.

📌 KEY POINT: Induction is the FIRST experience of the organization for a new employee. A good
induction reduces anxiety, builds confidence, and improves retention.

3.2 Objectives of Induction

• Reduce initial anxiety and nervousness of the new employee (the 'first day jitters')
• Familiarize the employee with the organization — its history, mission, vision, values,
structure
• Introduce them to their colleagues, superiors, and work environment
• Explain job responsibilities, expectations, rules, and policies
• Help them understand the organizational culture — how things are done here
• Reduce early turnover — employees who have a good induction stay longer

3.3 Content of Induction Program

Organizational Level (Company-wide)
• History and background of the company
• Mission, Vision, and Core Values
• Organizational structure and key people (CEO, department heads)
• Products and services the company offers
• Company policies: leave policy, dress code, working hours, code of conduct
• Compensation and benefits overview
• Safety and security procedures
Departmental Level
• Introduction to the department — what it does and how it fits in the organization
• Meeting team members and the immediate supervisor
• Department-specific rules and procedures
• Overview of ongoing projects the employee will be part of

Job Level
• Detailed explanation of job responsibilities and KPIs
• Introduction to tools, software, and equipment used
• Performance expectations and appraisal process
• Buddy/Mentor assignment — a senior colleague to guide the new employee

💡 EXAMPLE: Induction at Tata Consultancy Services (TCS)

TCS has a 3-month induction called 'ILP' (Initial Learning Program) for fresh engineering graduates.
Week 1: Company overview, policies, HR formalities, campus tour. Weeks 2–8: Technical training in
Java, SDLC, communication skills. Week 9–12: Project simulation. Only after completing ILP are
employees placed on actual client projects. This thorough induction is why TCS has one of the lowest
attrition rates among freshers in the IT industry.

3.4 Socialization
Organizational Socialization is the process by which a new employee learns the values, norms,
attitudes, knowledge, skills, and behaviors required to function effectively within the
organization. It is a continuous process that goes BEYOND formal induction.

While Induction is a formal, structured program (days/weeks), Socialization is an ongoing,

informal process (months/years) through which the employee truly 'becomes part of the
organization'.

Stages of Socialization (Van Maanen & Schein Model)

• Stage 1 — Pre-arrival: Employee's expectations and assumptions BEFORE joining
(formed through interviews, company reputation, internet research)
• Stage 2 — Encounter: The employee joins and experiences the REALITY of the
organization. May face 'reality shock' if expectations don't match reality.
○ Example: A fresher imagined working on cutting-edge AI projects but is assigned to
maintenance work — this is reality shock.
• Stage 3 — Metamorphosis: The employee ADAPTS — adjusts their behavior, masters
skills, builds relationships, and feels like a true member of the organization.
4. Job Analysis: Job Description & Job Specification

4.1 What is Job Analysis?

Job Analysis is the process of systematically studying a job to determine its duties,
responsibilities, required skills, work conditions, and outcomes. It is the foundation of almost
every HR function — recruitment, training, performance appraisal, and compensation all depend
on it.

📌 KEY POINT: Job Analysis answers two fundamental questions: (1) What does the job involve? →
Job Description. (2) What kind of person is needed to do this job? → Job Specification.

4.2 Methods of Job Analysis

• Observation Method: HR analyst directly observes workers performing their tasks and
records activities
○ Good for: Manual, repetitive jobs (factory workers, assembly line)
○ Not suitable for: Mental/cognitive jobs (programmers, analysts)
• Interview Method: Structured interviews with job holders and their supervisors
○ Advantage: Rich, detailed information; Disadvantage: Time-consuming, possible
exaggeration
• Questionnaire / Survey Method: Standardized questionnaires sent to employees to fill
○ Example: PAQ (Position Analysis Questionnaire) — widely used standardized tool
• Diary / Log Method: Employees maintain a daily diary/log of their activities
• Critical Incident Technique: Identifying behaviors that make the difference between
excellent and poor performance

4.3 Job Description

A Job Description (JD) is a written document that describes what the job involves — the duties,
tasks, responsibilities, and working conditions. It answers: 'What does the job require?'

Contents of a Job Description

• Job Title: e.g., 'Software Engineer — Backend'
• Job Location: Office location, remote/hybrid options
• Job Summary: 2–3 line overview of the role
• Duties and Responsibilities: Detailed list of tasks to be performed
• Reporting Structure: Who the job holder reports to; who reports to them
• Working Conditions: Hours, travel requirements, physical demands
 • Tools and Equipment: Software, machines, or resources used
• Salary Range: Sometimes included (e.g., Rs. 6–10 LPA)

💡 EXAMPLE: Sample Job Description — Software Engineer

Job Title: Software Engineer — Backend | Location: Bengaluru (Hybrid) | Reports to: Engineering
Manager | Summary: Design, develop, and maintain server-side applications. Responsibilities: Write
clean, scalable code in Python/[Link]; Design RESTful APIs; Code review; Optimize database
queries; Collaborate with frontend teams. Working Conditions: 9 AM–6 PM, 2 days WFH/week. Tools:
Python, Django, PostgreSQL, AWS, Git.

4.4 Job Specification

A Job Specification (JS) describes the HUMAN requirements for the job — the qualifications,
experience, skills, and personal characteristics needed to perform it successfully. It answers:
'What kind of person do we need?'

Contents of a Job Specification

• Educational Qualifications: e.g., [Link] in Computer Science or equivalent
• Work Experience: e.g., 2–4 years of backend development experience
• Technical Skills: e.g., Proficiency in Python, knowledge of microservices architecture
• Soft Skills: e.g., Strong communication, problem-solving ability, teamwork
• Physical Characteristics: (if job-specific) e.g., height/eyesight for some roles
• Emotional/Personality Traits: e.g., ability to work under pressure, attention to detail

Job Description (JD) Job Specification (JS)

Describes the JOB Describes the PERSON needed for the job
Focuses on tasks and duties Focuses on qualifications and traits
Answers: What will I do? Answers: What should I be/have?
Example: 'Write code, fix bugs, attend meetings' Example: '[Link], 2 yrs exp, knows Python'

5. Job Design: Approaches & Methods

5.1 What is Job Design?

Job Design is the process of deciding on the content of a job — what tasks are to be done, how
they are to be done, in what order, and under what circumstances. Good job design improves
employee motivation, satisfaction, and productivity.

5.2 Approaches to Job Design

A) Scientific Management Approach (F.W. Taylor)

• Break jobs into the smallest, simplest, most specialized tasks
• Each worker does one simple task repeatedly — maximizes efficiency
• Assumes workers are primarily motivated by money
• Limitation: Leads to boredom, monotony, and low job satisfaction

💡 EXAMPLE: Assembly Line Example

At an automobile factory, one worker only tightens bolts, another only fits doors, another only sprays
paint. Each task is simplified and specialized — this is Taylor's scientific approach to job design.

B) Job Rotation
• Systematically moving employees between different jobs at regular intervals
• Purpose: Reduces boredom; Develops multi-skilling; Helps employees understand the
full business
• Advantage: Flexible workforce; employees cover for each other during absences

💡 EXAMPLE:
A management trainee at Mahindra & Mahindra spends 3 months in Sales, then 3 months in Finance,
then 3 months in Operations before being given a permanent role. This is job rotation.

C) Job Enlargement (Horizontal Loading)

• Adding MORE TASKS of a SIMILAR NATURE to an existing job
• The job becomes wider — more variety, same level of responsibility/difficulty
• Reduces monotony by giving the worker more things to do at the same level

💡 EXAMPLE:
A customer service agent who only handled phone calls is now also asked to handle emails and live
chat — same skill level, but more variety in communication channels. This is job enlargement.

D) Job Enrichment (Vertical Loading — Frederick Herzberg)

• Adding MORE RESPONSIBILITY, AUTHORITY, and CHALLENGE to a job
• The job becomes deeper — more autonomy, decision-making power, and skill utilization
• Based on Herzberg's Two-Factor Theory — intrinsic motivators (achievement,
responsibility) drive satisfaction
 💡 EXAMPLE:
A junior software engineer who only codes is now also given responsibility to: review junior team
members' code, interact directly with clients to understand requirements, and make architectural
decisions. This is job enrichment.

Job Rotation Job Enlargement Job Enrichment

Moving between jobs Adding similar tasks Adding responsibility/authority
Develops versatility Reduces monotony Increases motivation
Horizontal & Vertical change Horizontal change only Vertical change only
Example: Rotate depts Example: Add more same-level Example: Give leadership role
tasks

E) Hackman & Oldham's Job Characteristics Model (JCM)

This is the most comprehensive and widely used model for job design. It identifies 5 core job
dimensions that lead to positive outcomes:

• 1. Skill Variety: The degree to which the job requires different skills and talents
○ High variety = more engaging. Low variety = monotonous.
• 2. Task Identity: The degree to which the job involves completing a whole, identifiable
piece of work
○ Example: A carpenter who builds an entire chair (vs. one who only sands wood) has
higher task identity.
• 3. Task Significance: The degree to which the job has a meaningful impact on others
○ Example: A nurse's job is highly significant — directly impacts patient lives.
• 4. Autonomy: The degree of freedom, independence, and discretion in scheduling and
performing the job
○ High autonomy = high personal responsibility for outcomes.
• 5. Feedback: The degree to which the job provides clear information about performance
effectiveness
○ Example: A salesperson who sees their monthly sales numbers gets direct feedback.

These 5 dimensions create 3 Critical Psychological States → leads to high motivation,

satisfaction, and performance.

6. Job Evaluation: Concept & Methods

6.1 What is Job Evaluation?
Job Evaluation is the systematic process of determining the RELATIVE WORTH or VALUE of a
job within an organization, compared to other jobs. It is the basis for designing a fair and
equitable pay structure.

📌 KEY POINT: Job Evaluation evaluates the JOB, NOT the person doing it. Two people in the same
job get the same base evaluation — individual differences are handled through performance
appraisal later.

6.2 Objectives of Job Evaluation

• Establish a rational and fair pay structure by comparing jobs systematically
• Eliminate pay inequities — ensure equal pay for work of equal value
• Provide a basis for pay negotiations with employees and unions
• Help in designing career paths and promotion ladders
• Ensure legal compliance (Equal Pay Act requirements)

6.3 Methods of Job Evaluation

Method 1: Ranking Method (Simplest)

• Jobs are ranked from highest to lowest based on overall importance/value to the
organization
• No detailed analysis — just a general comparison and ranking
• Suitable for: Small organizations with few jobs
• Limitation: Subjective; doesn't explain WHY one job ranks higher than another

💡 EXAMPLE:
In a small factory: CEO > Factory Manager > Supervisor > Machine Operator > Cleaner. Jobs are
simply ranked without detailed analysis.

Method 2: Job Classification / Grading Method

• Jobs are grouped into pre-defined grades or classes (e.g., Grade A, B, C, D)
• Each grade has a description of the type of work that belongs to it
• Jobs are then slotted into the appropriate grade
• Used widely in: Government and public sector organizations (IAS, IPS pay grades)

💡 EXAMPLE:
Government of India has Pay Levels 1–18. Each level has defined criteria. A clerk fits into Level 2, an
Assistant Section Officer in Level 7, an IAS officer in Level 10+.
Method 3: Point Rating Method (Most Popular & Objective)
• Breaks each job into factors (e.g., skill, effort, responsibility, working conditions)
• Each factor is assigned a maximum points value
• Each job is evaluated against each factor and given a point score
• Total points determine the job's relative worth and pay grade

💡 EXAMPLE: Point Rating Example

Factors and max points: Education (up to 50 pts), Experience (up to 40 pts), Complexity (up to 30
pts), Physical Effort (up to 20 pts), Responsibility (up to 60 pts). A 'Software Engineer' job scores:
Education=45, Experience=35, Complexity=25, Physical=5, Responsibility=40 → Total = 150 points
→ maps to Pay Grade C (Rs. 8–12 LPA).

Method 4: Factor Comparison Method

• A combination of ranking and point methods
• Key jobs (benchmark jobs) are selected and ranked on each factor
• These form a scale against which other jobs are compared
• More complex but more accurate than simple ranking

7. Performance Management System: Appraisal &

Counselling

7.1 What is Performance Management?

Performance Management System (PMS) is a continuous, systematic process of improving
organizational performance by developing the performance of individuals and teams. It is NOT
just an annual appraisal — it is an ongoing cycle of planning, monitoring, developing, rating, and
rewarding performance.

The Performance Management Cycle

• Step 1 — Planning: Setting clear, measurable goals (KPIs/KRAs) for the employee at
the start of the year
• Step 2 — Monitoring: Regular check-ins (weekly/monthly) between manager and
employee to track progress
• Step 3 — Developing: Providing coaching, feedback, and training to improve
performance
• Step 4 — Rating: Formal evaluation at year-end — comparing actual performance
against goals
 • Step 5 — Rewarding: Linking performance to outcomes — increments, bonuses,
promotions, or PIPs

7.2 Performance Appraisal

Performance Appraisal (PA) is the formal, systematic assessment of an employee's job
performance against pre-set standards and goals. It is ONE COMPONENT of the broader
Performance Management System.

7.3 Methods of Performance Appraisal

A) Traditional Methods

1. Graphic Rating Scale (Most Common)

• Rates employees on a scale (e.g., 1–5 or Poor to Excellent) across various
traits/dimensions
• Dimensions: Quality of work, Punctuality, Initiative, Teamwork, Communication
• Simple and easy to use, but subjective and prone to biases

💡 EXAMPLE:
A rating form asks: 'Rate the employee on Quality of Work: 1(Poor) 2(Below Average) 3(Average)
4(Good) 5(Excellent)'. Manager ticks 4. Same for 10 other dimensions. Total score = performance
rating.

2. Essay / Narrative Method

• The appraiser writes a detailed paragraph describing the employee's strengths,
weaknesses, and overall performance
• Advantage: Rich, detailed feedback. Disadvantage: Time-consuming and depends on
writing skill of appraiser

3. Critical Incident Method

• Manager keeps a log of specific incidents — both positive (achievements) and negative
(failures) — throughout the year
• Appraisal is based on these actual documented incidents, not just general impressions

💡 EXAMPLE:
Positive Incident (July): 'Employee delivered the project 2 weeks ahead of schedule saving the client
Rs. 5 lakhs.' Negative Incident (September): 'Employee was absent 3 times without prior notice
causing team disruption.'
4. Ranking Methods
• Simple Ranking: Manager ranks all employees from best to worst
• Paired Comparison: Every employee is compared with every other employee, one pair at
a time. The one who wins more comparisons ranks higher.
• Forced Distribution: Employees are distributed into fixed categories (e.g., Top 20% =
Excellent, Middle 70% = Average, Bottom 10% = Poor)
○ Famous example: GE's 'Vitality Curve' by Jack Welch — top 20% rewarded, bottom
10% fired annually

5. Checklist Method
• Appraiser checks 'Yes' or 'No' against a list of behavioral statements

💡 EXAMPLE:
Checklist items: 'Does the employee complete work on time? Y/N', 'Does the employee help
colleagues? Y/N', 'Does the employee follow safety rules? Y/N'

B) Modern Methods

1. Management by Objectives (MBO — Peter Drucker)

• Manager and employee JOINTLY set specific, measurable, time-bound objectives at the
start of the period
• Performance is evaluated based on whether these mutually agreed objectives were
achieved
• Advantages: Clear goals, participative, reduces subjectivity
• Limitations: Time-consuming to set goals; doesn't evaluate HOW goals were achieved

💡 EXAMPLE: MBO in Practice

A Sales Manager and their executive agree on objectives in April: 'Achieve Rs. 50 lakh sales by
March, acquire 10 new clients, maintain 90%+ customer satisfaction score.' In March, the executive
achieved Rs. 48 lakh, 12 new clients, 92% satisfaction. This actual-vs-target comparison forms the
basis of appraisal.

2. 360-Degree Feedback / Appraisal

• Performance feedback is collected from MULTIPLE sources — not just the immediate
supervisor
• Sources include: Self-assessment, Immediate boss, Peers/colleagues, Subordinates,
Customers/clients
• Provides a comprehensive, multi-perspective view of performance
• Particularly useful for assessing leadership and interpersonal skills

💡 EXAMPLE:
 A team leader gets feedback from: Their own self-assessment, Their department manager, 3
colleagues at same level, 2 junior team members, 1 key client. All perspectives are combined for a
complete picture.

3. Behaviorally Anchored Rating Scales (BARS)

• Combines elements of graphic rating scale and critical incident method
• Each rating scale point is anchored to a specific behavioral description
• Reduces subjectivity — each rating has a clear behavioral example

💡 EXAMPLE: BARS Example

For 'Customer Service' dimension, Rating 5 = 'Employee proactively anticipates customer problems
and resolves them before customer complains.' Rating 3 = 'Employee resolves customer complaints
when raised.' Rating 1 = 'Employee ignores customer complaints or passes them to others.'

4. Assessment Centre Method

• Candidates/employees are assessed through a series of simulated exercises over 1–2
days
• Exercises: In-basket exercises, role plays, group discussions, case studies,
presentations
• Multiple trained assessors observe and rate behavior
• Most used for: Selecting managers and identifying high-potential employees

5. Balanced Scorecard (BSC — Kaplan & Norton)

• Measures performance across FOUR perspectives — not just financial results
• Financial Perspective: Revenue, profit, ROI
• Customer Perspective: Customer satisfaction, retention, market share
• Internal Process Perspective: Quality, efficiency, cycle time
• Learning & Growth Perspective: Employee training, innovation, development

💡 EXAMPLE:
A hospital uses BSC to evaluate a department: Financial: Cost per patient Rs. 5,000 (target met).
Customer: Patient satisfaction 88% (target 90% — missed). Process: Average treatment time 45 mins
(target 60 mins — exceeded). Learning: 80% of staff completed CPR training (target 100% —
missed).

7.4 Common Errors/Biases in Performance Appraisal

Error/Bias Description Example
Halo Effect One positive trait influences all Employee is attractive/well-
other ratings spoken → rated high on all
dimensions
 Horn Effect One negative trait influences all Employee was late once → rated
ratings negatively poor on all dimensions
Central Tendency Appraiser rates everyone as All employees get 3/5 regardless
'average' to avoid controversy of actual performance
Leniency Error Appraiser gives everyone high All employees rated Excellent to
ratings avoid conflict
Recency Error Only recent events influence Employee had a bad last month
rating, ignoring the whole year but great 11 months — gets poor
rating
Similarity Error Appraiser favors employees Manager who is from IIT rates IIT
similar to themselves graduates higher

7.5 Performance Counselling

Performance Counselling is a process where a manager helps an employee understand their
performance issues, identify root causes, and develop an action plan to improve. It is NOT a
punishment — it is a supportive, developmental conversation.

When is Counselling Needed?

• When an employee consistently underperforms against set targets
• When an employee is going through personal difficulties affecting work
• When an employee has the potential to perform better but is not realizing it
• When an employee needs guidance on career development

Steps in Performance Counselling

• Step 1 — Prepare: Gather specific performance data and examples before the meeting
• Step 2 — Create a safe environment: Private, relaxed setting; put the employee at ease
• Step 3 — Explain the purpose: 'I want to help you succeed, not criticize you'
• Step 4 — Discuss performance gaps: Use specific data, not vague impressions
• Step 5 — Listen actively: Understand the employee's perspective and challenges
• Step 6 — Identify root causes jointly: Is it a skill gap? Personal issue? Lack of
resources?
• Step 7 — Develop an action plan: Specific, measurable improvement steps with
timelines
• Step 8 — Follow up: Regular check-ins to monitor progress

💡 EXAMPLE: Performance Counselling Example

Scenario: Priya, a software developer, has missed 3 sprint deadlines in the last quarter. Manager
Rahul calls her for counselling. He shows her the data (3 missed deadlines). Priya explains she has
been struggling with the new React framework introduced 2 months ago. Root cause: Skill gap in new
 technology. Action Plan: Enroll Priya in an online React course (2 weeks), assign a mentor from the
senior dev team, review progress after 1 month. Result: With support, Priya meets all subsequent
deadlines.

Difference: Performance Appraisal vs Performance Counselling

Basis Performance Appraisal Performance Counselling
Purpose Evaluate past performance Improve future performance
Tone Evaluative / Judgmental Supportive / Developmental
Frequency Annual or periodic As and when needed
Focus Past — what happened Future — how to improve
Outcome Rating, increment, promotion Action plan, skill development

— END OF MODULE 2 NOTES —

These notes cover all syllabus topics with examples. Best of luck for your exams!