Report on Performance Appraisal System of  RABAB FASHION INDUSTRIES LTD
Subject: Textile | Topics:

1.1 Introduction:

Background: Business is such is thing where there are very few similarities or sometimes contradictions between theories and practices and Human Resource Management is the most crucial part of a business. But actually a business organization there is the highest contradiction and conflict between theories and actual life practices. Management, particularly human resource, in real life is not that easy like the theories. The intention of this report is to find out the actual picture in the growing business organizations of Bangladesh.

Particularly in the private sector (We exclude public sector, because the bureaucrats of the country, where the human resource management practice is very poor, run this sector). According to the direction of course instructor, I selected single organization each without overlapping and surveyed on the Human Resource Department of the organization. I choose the Rabab Fashion Ind. Ltd, one of the well reputed private organizations in garments sectors in our country to work on.

Managing human resources in today’s dynamic environment is becoming more and more complex as well as important. Recognition of people as a valuable resource in the organization has led to increases trends in employee maintenance, job security, etc

My research project deals with “Performance Appraisal System of Rabab Fashion Ind. Ltd.”. In this report, I have studied &evaluated the performance appraisal process as it is carried out in the company.

The 2nd and 3rd chapter of my report deals with a detailed profile of RMG sector of Bangladesh with detailed information about the company and the nature of it’s functioning. It includes the history: activities and operations, organizational structure, etc.

The 4th chapter deals with performance appraisal. In this section, I have given a brief conceptual explanation to performance appraisal. It contains the definition, process and significance of performance appraisal.

In the rest of my report, I have conducted a research study to evaluate the process of performance appraisal at Rabab Fashion Ind. Ltd.; this section also contains my findings, conclusions, suggestions and feedback.

 

1.2 Objectives of the study:\

This study has been conducted to focus on the following key objectives and their relevant facts:

  1. To analyze and explain performance appraisal process of Rabab Fashion Ind. Ltd.
  2. To asses and evaluate the existing performance appraisal Practice and identify strengthens and weaknesses of existing performance appraisal Practice of. Rabab Fashion Ind. Ltd.
  3. To summarize and find out the performance appraisal process and practice are conducting now in Bangladeshi Garments.
  4. To evaluate performance management system in the organization.
  5. To measure the compensation management practice.

 

1.3 Scope of the Study:\

The scope of the study is very bright, because to make this report about the performance appraisal system I got the chance to communicate with assistant HRM manager of the organization, and can observe what performance appraisal systems they are follow and how they implement. It is a vast opportunity for me to develop my skill in this sector, and also to make them a complete report of the garments.

To make this report I use both primary and the secondary data. The primary data is collected from both DGM and the assistant HRM officer by asking question when I got any problem in the time of research and also to make this report.

The secondary data is collected from their every kind of rules, policies and also from their various reports.

By this report I try to find out what kind of theoretical procedure are implied in the practical life to run this kind of organization.

I get all kind of help both from the worker and also from the employees for the information.

 

1.4 Limitations of the study:

Some limitations or barriers were faced while conducting the study, among which is making textbook knowledge compatible with real life scenario while talking to the organization, which was sometimes disappointing. Again, this report is the first of its kind prepared by me. This also proved to be a limitation. These limitations were:-

There is no previous study and written information on such topic was available.

Getting relevant papers and documents were strictly prohibited.

The human resources department was reluctant to provide information because of confidentiality.

In many cases the latest information was not available.

1.5 Methodology:

The company provides readymade garments and for the purpose they have different types of employees according to the position order. The authority has assigned the HR department, which is responsible for the recruitment, training, position assigning, promotion, performance appraisal, motivation, monitoring employees’ performance etc. The objective of this report to find out the performance appraisal process and its implementation in an organization like garments sector.

Here I use both primary and the secondary data to make this report.

 

1.6 Source of Data:

Collection of facts (raw facts) is known as data. There are two types of data are available based on source. There are-

  1. Primary source of data.
  2. Secondary source of data.

1.6.1 Primary Data:

The data collected for a purpose or when the researcher investigates a particular problem at hand is known as primary data.

  • Sources of primary data:

The primary data for this study collected through surveys and personal interview, like the AGM, HRM officer of Rabab Fashion Ind. Ltd.

1.6.2 Secondary data:

When an investigator uses data, which have already been collected by others for another purpose, such data is called the secondary data. This type of data is primary data for the agency who collected them for the first time, and become secondary data for some else who uses these data for his own purpose.

  • Source of Secondary data:

The major data have been used in this study are of primary data. Secondary data for this study was collected from the Rabab Fashion Ind. Ltd.s several reports, their policies.

2.1 RMG sector of Bangladesh:

If globalization provides the backdrop for drama, then the achievements of the garment industry in Bangladesh are indeed dramatic. in the short space of 15 years ,Bangladesh emerged as the eighth largest garment exporter to the united states by 1991.approximately 100 different types  are now exported to 50 countries around the globes .

Large production of readymade garments (RMG) in organized is a relatively new phenomenon in Bangladesh .until early sixties, individual tailors made garments as per specifications provided by individual customers who supplied the fabrics.

Since the late 1970s, the RMG industry started developing in Bangladesh primarily as an export-oriented industry although; the domestic market for RMG has been increasing fast due to increase impersonal disposable income and change in life style. The sector rapidly attained high importance in terms of employment, foreign exchange earnings and its contribution to GDP. In 1999, the industry employed directly more than 1.4millon workers, about 80% of whom were female. With the growth of RMG industry, linkage industries supplying fabric, yarns, accessories, packaging materials, etc have also expanded. In addition, demand for service like transportation, banking, shipping and insurance has increased. All these have created additional employment. The total indirect employment crated by the RMG industry in Bangladesh is estimated to be some 200,000 worker.

The RMG industry is highly depended on imported raw materials and accessories because Bangladesh does not have enough capacity to produce export quality fabrics and accessories. About 90% of woven fabrics and60% of knit fabric are imported to make garments for export. The industry’s based primarily on sub-contracting, under which Bangladeshi entrepreneurs work as sub-contractors of foreign buyers. It has grown by responding to orders placed by foreign  buyers on C-M (CUT and MAKE ) basis .During its early years ,the buyers supplied all the fabrics and accessories or recommended the sources of supply from which Bangladesh  sub-contractors were required to import the fabrics .However ,situation has improved .At present , there are many large firms ,which do their own sourcing.

The hundred percent export-oriented RMG industry experienced phenomenal growth during the last 15 or so year’s .In 1978, there were only 9 export–oriented garment manufacturing units, which generated export earnings of hardly one million dollar. Some of this unit was very small and produced garments for both domestic and export markets. Four such small and old units were Reaz Garments, Paris Garments, Jewel Garments and Baishakhi Garments. Among them the Reaz Garments is pioneer, was established in 1960 as a small tailoring outfit, named Reaz Store in Dhaka. It served only domestic markets for about 15 years. In 1973it changed its name to M/S Reaz Garments Ltd. and expanded its operation into export market by selling 10,000 pieces of men’s shirts worth French France 13 millon to a pairs-based firm in 1978. It was the first direct exporter of garments from Bangladesh. Desh Garments Ltd., the first non-equity joint-venture in the garment industry was established in 1979. Desh had technical and marketing collaboration with Daewoo Corporation of South Korea. It was also the first hundred percent export-oriented company. It had about 120 operators including 3 women trained in south Korea, and with this trained workers it started its production in early 1980.Another South Korean firm, Yongones Corporation formed the first equity-venture garments factory with a Bangladeshi firm, Trexim Ltd. In 1980. Bangladeshi partners contributed 51% of the equity of this new firm, named Yongones Bangladesh. It exported its first consignment of padded and non-padded jackets to Sweden in December 1980.

Within a short period Bangladesh entrepreneurs got familiar with the world apparel market and marketing. They acquired the expertise of mobilizing resources to export-oriented RMG industries. Foreign buyers found Bangladesh an increasingly attractive sourcing place. To take advantage of this cheap source, foreign buyers extended, in many cases, suppliers credit under special arrangement. In some cases, local banks provided part of the quantity capital. The problem of working capital was greatly solved with the introduction of back-to-back letter of credit, which also facilitated import of quality fabric, the basic raw material of the industry. The government assigned the high priority to the development of RMG industry.

2.1.1 BGMEA:rabab fashion

Chart 2.1: BGMEA organ gram.

2.1.1.1  Introduction:

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is the apex trade body that represents the export oriented woven knit and sweater garment manufacturers and exporters of the country. Readymade Garment (RMG) is the leading sector of Bangladesh in terms of employment, production and foreign exchange earning. Readymade garment (RMG) alone earned about 78% of the yearly foreign exchange earning of the country. About 3.5 million people are employed in the garment – manufacturing sector. The growth rate of RMG export was over 20% per over the last two decades.

2.1.1.2  A Success Story of RMG Sector:

The importance of RMG sector can hardly be over emphasized. There has been a steady growth in the field of RMG during last two decades. The RMG industry enjoyed a meteoric rise from 30 enterprises in 1980 increased to about 4825 in 2007-08 fiscal year. The growth of the industry in terms of number of units and employment generation is shown in table – 1 below:

YEAR

NO. OF GARMENTS

EMPLOYMENT IN MILLION WORKERS

1983-1984

134

0.040

1984-1985

384

0.115

1985-1986

594

0.198

1986-1987

629

0.283

1987-1988

685

0.306

1988-1989

725

0.317

1989-1990

759

0.335

1990-1991

834

0.402

1991-1992

1163

0.582

1992-1993

1537

0.804

1993-1994

1839

0.827

1994-1995

2182

1.200

1995-1996

2353

1.290

1996-1997

2503

1.300

1997-1998

2726

1.500

1998-1999

2963

1.500

1999-2000

3200

1.600

2000-2001

3480

1.800

2001-2002

3618

1.800

2002-2003

3760

2.000

2003-2004

3957

2.000

2004-2005

4107

2.000

2005-2006

4220

2.200

2006-2007

4490

2.400

2007-2008

4743

2.800

2008-2009

4825

3.100

Table 2.1: Growth of the industry and Employment

Out of 3.1 million manpower employed in BGMEA member factories, 2.38 million are women (85%), majorities of them are disadvantaged and economically poverty stricken women folk. The country’s RMG sector, to a creditable level has relieved Bangladesh from over populous unemployment burden through providing the largest employment next to agriculture, transport, trade and industry sector. This sector has uplifted the neglected section of the population, thus radically transforming the socio-economic condition of the country. Such empowerment and employment raised awareness regarding children education, health safety, population control disaster management only so for. It is an epoch making event in the history of Bangladesh.

 

2.1.1.3  Main Functions of BGMEA:

BGMEA is being run by a 27-member elected Board of Directors. Four Vice Presidents having important portfolios, along with a secretariat of experienced officials, assists the Board in formulating and executing vital policies and programs of the organization. The President is the highest executive authority of the BGMEA.

The fundamental objective of BGMEA is to establish a healthy business environment for a close and mutually beneficial relationship between the manufacturers, exporters and importers in the process ensuring a steady growth in the foreign exchange earnings of the country. BGMEA issues UD to its exporters thereby monitors export as well. BGMEA plays a very strong role to lead the industry in concurrence with the government. The following are the regular activities of BGMEA for its members, apparel buyers and other partners.

To Protect and uphold the interest of the industry by aiding the formulation of government policies consistent with a congenial growth of the sector.

•    Committed to protect the interests of its members and their employees by implementing legitimate rights and privileges for garments workers.

•    To negotiate and consult with foreign and local agencies to promote the garments sector in every possible fields.

•    To maintain liaisons with foreign buyers, business associations and chambers.

•    To provide foreign buyers with all necessary information regarding all issues concerned with the RMG sector.

•    BGMEA brings the opportunities for local manufacturers to interact with foreign buyers and form new rapport by arranging different apparel fairs at home and abroad.

•    To keep the BGMEA factories child labor free through continued monitoring.

•    Continue and expand collaboration with relevant Ministries of the Governments.

•    Continue educational support to workers’ children and make a provision for skill training for children removed from the BGMEA’s member factories.

•    Provides information services to its members by publishing monthly newsletters, issuance of circulars and through Dhaka’s first B2B web portal which directly links exporters and buyers around the world.

•    BGMEA also established its own Institute called “BGMEA Institute of Fashion & Technology (BIFT)” in 1999. Till the day BIFT is continuously developing professionals for this sector through the courses of Fashion Designing and Garment Merchandising; and other certificate, diploma and short courses. Transforming it into University is under process.

•    Promotes computer oriented solutions for better management to its member units.

•    Participates actively in all trade negotiations for the sector in order to get easier market access and GSP benefits.

•    BGMEA’s appointed lobbyist firm has been working to get duty free access in the US market. The New Partnership for Development Act (NPDA)of 2007 was introduced in the US House of Representatives by Congressman McDermott and our lobbyist is working to get the bill passed.

•    BGMEA has introduced Service Books for each and every workers employed in the factories.

•    BGMEA is going to launch a workers welfare committee in the factories.

•    BGMEA has ensured the minimum wage implementation to the tune of 99.49% of all factories.

•    BMGEA has set up a Crisis Management Committee for emergencies.

•    BGMEA regularly helps out the victims of natural calamity by providing relief, rehabilitation and other support. BGMEA stood beside the SIDR affected people with huge relief and support. BGMEA also rehabilitated 100 families by establishing a weaver’s village (Taath Palli) in Manikgonj.

•    BGMEA provides scholarship to meritorious children of the garments workers.  Each year 2000 students are getting the scholarships at Dhaka and Chittagong.

•    BGMEA runs training programs through 27 TechnicalTrainingCenters and 3 other centers with the objective of producing skilled workers for the RMG sector. More than 15000 trainees will be shaped up through this program and BGMEA will appoint them in the factories. BGMEA has trained and employed 10,000 people till the date.

•    BGMEA is in the process of taking over 34 vocational training centers to provide various skill sets to the unemployed.

•    BGMEA regularly conducts fire drills and fire safety program at the member factories. Although 18 fire incidents took place in 2007 and 2008, there were no casualties.

•    BGMEA runs 10 medical centers for its workers and provides HIV/AIDS awareness. Around 4.5 million workers have already received medical treatment and 55,000 workers have been made aware of HIV/AIDS and reproductive health.

•    BGMEA is going to develop a central database system for the garment workers, which will cover all workers’ information of the readymade garment sector.

•    BGMEA is going to start a UD automation system to speed up custom procedures. Such online system will bring dynamism in a way that reduces lengthiness in custom procedures.

•    BGMEA has distributed essential food items among workers at subsidized price during the last Ramadan through 12 centers at Dhaka and Chittagong.

•    A Memorandum of Understanding (MoU) has been signed between BGMEA and IFC-SEDF on 17th June 2008 to monitor occupational safety and health status of the workers employed in the member factories of BGMEA operating at Dhaka. Under this program all the running factories at Dhaka have already been audited by the social compliance monitors of BGMEA and a database in being prepared.

2.1.2    FBCCI:

 

FBCCI (Federation of Bangladesh Chambers of Commerce and Industry) the apex organisation for trade and industry in Bangladesh. It was established in 1973 under the Trade Organisations Ordinance 1961 (amended in 1994) and companies act 1913 (amended in 1994). The main objective of the FBCCI is to safeguard interests of private sector trade bodies and industry in Bangladesh through promoting the interests of its member units, both chambers and association bodies. FBCCI also deploys its efforts in developing agriculture, human resources and communication sectors of the country. The Federation has two types of members, namely, the Chambers of Commerce and Industry and the Trade and Industrial Associations. At present, there are 234 members, of whom 67 belong to the former category and the remaining to the latter category. A 32-member executive committee or board of directors, elected for a term of 2 years by direct vote of members of both categories conducts the activities of FBCCI. The Chambers of Commerce and Industry elects the president and vice-president, as well as 15 members of the executive committee. The other 15 members are elected from the category of Trade and Industry Associations.

FBCCI represents the private sector in 94 permanent committees of the government and autonomous bodies. It sends representatives to different committees and task forces on specific issues constituted by the government. The foreign investors’ chamber of commerce and industry (FICC&I) in Bangladesh is a member of FBCCI.

FBCCI assists in the organization of chambers and associations throughout the country. It collects and disseminates statistical and other information for advancement of trade and industry. It organizes training, seminars and workshops on trade, commerce and industry, conducts research on major policy issues, and co-operates in settlement of trade disputes through conciliation, negotiation and arbitration. FBCCI consults and advises the government in formulating the commercial, industrial and fiscal policies of the country. It maintains close relations with overseas national chambers of commerce and other trade and industrial associations. It is a member of the International Chamber of Commerce (ICC), the Islamic Chamber of Commerce and Industry, the Confederation of Asia-Pacific Chambers of Commerce and Industry and the SAARC Chamber of Commerce and Industry. The FBCCI has joint chamber/co-operation agreements with the national trade organizations of Australia, Belgium, Egypt, Finland, Germany, India, Indonesia, Iran, Italy, Japan, the Republic of Korea, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Russia, Romania, Sri Lanka, Taiwan, Thailand, Turkey, Peru and Vietnam. The Federation has also collaboration agreements with the national chambers of 16 countries and the General Union of Chambers of Commerce and Industry and Agriculture of Arab countries.

2.1.3    BKMEA:

Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) was formed in 1996 by the all out efforts of few knitwear manufacturers. Soon after the formation it undertook activities to look after the interest of the knitwear sector of the country. Today it is an association of about 1700 knitwear manufacturers and exporters that represent the largest export earning sector of the country.

BKMEA has grown enormous network in home and abroad. The members are the core strength and primary network of BKMEA. Besides, BKMEA works closely with national and International bodies and maintains close relationships with all stakeholders. On areas of common interest, it also works with similar organizations like, International Apparel Federation (IAF), Global Alliance for Fair Textile Trade (GAFTT) and American Manufacturing Trade Action Coalition (AMTAC). To boost up trade and to enhance cooperation between countries, BKMEA has signed agreement with concerned associations like China Yunnan Light & Textile Industry Association on June 10, 2005, Botswana Manufacturers & Exporters Association on October, 8, 2009.

Presently Bangladesh is the 3rd largest knitwear exporter in the world just after China and Turkey. To lead the world apparel market, BKMEA is putting diligent efforts to diversify export market, and ensure better market access of the country’s knitwear products to EU, USA, China, South Africa, Japan and other countries.

To promote the sector, BKMEA is implementing development projects with German Technical Cooperation (GTZ) and other international organizations in this regard. The association has signed MoU with GTZ on March 16, 2005 and Metro Group, Germany on 26 April, 2010. The development works include: enhance productivity and improve social compliance status of its member factories, promote workers welfare through centralized day care centre health care centre, prepare sector related research and publication, organize trade promotion missions and fairs in home and aboard. BKMEA has strong relationship with Govt. to formulate strategies and national policies on sector related and other socio economic important issues.

BKMEA is run by a 27-member Board of Directors led by the President. The Board of Directors is elected for a 2-year period. To run the association efficiently, different committees are also working.

BKMEA Was Formed To Address The Following Agenda:

Protect the Interest of the Sector

Promotion & Development of the Market

Promotion & Development of the Sector

CapacityBuilding of the Sector

Social Compliance Status Enhancement

Basic Rights Education and Awareness Raising

BKMEA’s Services to the Member Units:

Product & Market Promotion

Social Compliance

Research & Development

Productivity Improvement

Arbitration

One stop service point regarding UD/UP

Other necessary services at the shortest possible time

3.1 Organizational overview:

Rabab Fashion Ind. Ltd. started as a company of private sector business. It is one of the companies of Rabab Group. It has always given the highest value of its entire component contributing to the production, management and revenues where the human resources were considered as the prime sector. It was established in May 2006 with the help of 29 employees and initial capital was 10 Core. Mainly the set up was established at 2005 but started its’ marketing operation from 2006. Rabab Fashion endlessly strives to achieve the best output, by developing and improving and properly utilizing its human capital.

It has an excellent environment in the Human Resource Management having very good employee- management communication and relationship, attractive remuneration, benefits and incentive schemes, superb working condition. The highest level of job satisfaction resulted in retaining of skilled manpower through which the sheer success for the company was obtained. At the same time the company believes its employees are the asset of the company and they are the most important element of our precious environment. Therefore its pursuit of excellence includes occupational health safety measurements of its employees at the company’s policy. Mainly there are six departments in Rabab Fashion Ind. Ltd. to manage the overall activity of 1375 workers.

 

3.2 DEPARTMENT:

Account:

There are six employees in the account department including 2 DGM, 2 Asst. Manager, 1 Sr. Executive and 1 Jr. Executive.

Commercial:

 There are five employees in the commercial department including 1 DGM, 2 Asst. Manager, 1 Sr. Executive and 1 Jr. Executive.

Merchandising:

There are five employees in the merchandising department including 2 DGM, 2 Asst. Merchandiser, and 1 Jr. Merchandiser.

IT: There are three employees in the IT department including, 1 Asst. IT Manager, 1 Sr. IT officer and 1 Jr. IT officer.

Compliance:

There are four employees in the compliance department including 2 Asst. Manager, 1 Sr. Executive and 1 Jr. Executive.

HRM/ADMIN:

There are six employees in the HRM department including 2 DGM, 2 Asst. Manager, 1 Sr. Executive and 1 Jr. Executive. This department controls personnel documentation and filling, Time section, cleaning and mechanical maintenance, Security and Store etc with their scheduled HR activities.

 

3.3 OBJECTIVE:

Rabab Fashion Ind. Ltd. situated near to NationalUniversity, Board Bazar, Gazipur. The capacity of the said project is 20,000 Dozen per month. The sponsors by this time have gathered sufficient experience in production, management and marketing. Being inspired by excellent production and financial performance, this will not only increase profitability, but also enable to add more value, considering the growing worldwide market for its product. The excellence of the technology, the genius of company’s personnel, clear vision and commitment of management in the garments arena is the stronghold of this bold initiative.

3.4 TARGET MARKET:

Rabab Fashion Ind. Ltd. generally does not directly sale its product because they receive order from foreign buyer and buying house etc. Their important buyers are TARGET, WALLMART, JORDUS, KOLS and GAP which are the well known brand in USA, CANADA as well as the whole world.

Corporate Headquarter:

Gulshan Tower (3rd floor), Gulshan 2, Dhaka 1212.

Factory:

565/566, Kalmeshaar, NationalUniversity, Gazipur.

Date of Incorporation:

Rabab Fashion Ind. Ltd. established in2006.

Listing status:

Private Limited Company.

Production Capacity:

Its production capacity is 20,000 dozen per month.

Number of Employees:

The total numbers of employees are 229.

Product of RababFashion Ind. Ltd:

PANT, TROUSER (Short/Long).

4.1 Literature Review (HRM):

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human Resource (or personnel) management, in the sense of getting things done through people, is an essential part of every manager’s responsibility, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently.

“People are our most valuable asset” is a cliché, which no member of any senior management team would disagree with. Yet, the reality for many organizations are that their people remain under valued, under trained and under utilized. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop ‘cultural awareness’, product / process / organization knowledge and experience for new staff members.

Human Resource Management has come to be recognized as an inherent part of management, which is concerned with the human resources of an organization. Its objective is the maintenance of better human relations in the organization by the development, application and evaluation of policies, procedures and programmes relating to human resources to optimize their contribution towards the realization of organizational objectives.

In other words, HRM is concerned with getting better results with the collaboration of people. It is an integral but distinctive part of management, concerned with people at work and their relationships within the enterprise. HRM helps in attaining maximum individual development, desirable working relationship between employees and employers, employees and employees, and effective modeling of human resources as contrasted with physical resources. It is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organization.

4.1.1 Human Resource Management: Evolution

The early part of the century saw a concern for improved efficiency through careful design of work. During the middle part of the century emphasis shifted to the employee’s productivity. Recent decades have focused on increased concern for the quality of working life, total quality management and worker’s participation in management. These three phases may be termed as welfare, development and empowerment.

 

4.1.2 Human Resource Management: Nature

Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include:
• It is pervasive in nature as it is present in all enterprises.

• Its focus is on results rather than on rules.

• It tries to help employees develop their potential fully.

• It encourages employees to give their best to the organization.

• It is all about people at work, both as individuals and groups.

• It tries to put people on assigned jobs in order to produce good results.

• It helps an organization meet its goals in the future by providing for competent and well-motivated employees.

• It tries to build and maintain cordial relations between people working at various levels in the organization.

• It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.

4.1.3 Human Resource Management: Scope

The scope of HRM is very wide:

1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc.

2. Welfare aspect-It deals with working conditions and amenities such as canteens, crèches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc.

3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

4.1.4 Human Resource Management: Beliefs

The Human Resource Management philosophy is based on the following beliefs:
• Human resource is the most important asset in the organization and can be developed and increased to an unlimited extent.

• A healthy climate with values of openness, enthusiasm, trust, mutuality and collaboration is essential for developing human resource.

• HRM can be planned and monitored in ways that are beneficial both to the individuals and the organization.

• Employees feel highly motivated if the organization provides for satisfaction of their basic and higher level needs.

• Employee commitment is increased with the opportunity to discover and use one’s capabilities and potential in one’s work.

• It is every manager’s responsibility to ensure the development and utilization of the capabilities of subordinates.

4.1.5 Human Resource Management: Objectives

• To help the organization reach its goals.

• To ensure effective utilization and maximum development of human resources.

• To ensure respect for human beings. To identify and satisfy the needs of individuals.

• To ensure reconciliation of individual goals with those of the organization.

• To achieve and maintain high morale among employees.

• Toprovidetheorganizationwithwell-trainedandwell-motivatedemployees.

• To increase to the fullest the employee’s job satisfaction and self-actualization.

• To develop and maintain a quality of work life.

• To be ethically and socially responsive to the needs of society.

• To develop overall personality of each employee in its multidimensional aspect.

• To enhance employee’s capabilities to perform the present job.

• To equip the employees with precision and clarity in transaction of business.

• To inculcate the sense of team spirit, team work and inter-team collaboration.

4.1.6 Human Resource Management: Activities

In order to achieve the above objectives, Human Resource Management undertakes the following activities:

1. Human resource or manpower planning.

2. Recruitment, selection and placement of personnel.

3. Training and development of employees.

4. Appraisal of performance of employees.

5. Taking corrective steps such as transfer from one job to another.

6. Remuneration of employees.

7. Social security and welfare of employees.

8. Setting general and specific management policy for organizational relationship.

9. Collective bargaining, contract negotiation and grievance handling.

10. Staffing the organization.

11. Aiding in the self development of employees at all levels.

12. Developing and maintaining motivation for workers by providing incentives.

13. Reviewing and auditing manpower management in the organization

14. Potential Appraisal, Feedback, Counseling.

15. Role Analysis for job occupants.

16. Job Rotation.

17. Quality Circle, Organization development and Quality of Working Life.

4.2 Functions of Human Resource Management:

Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization:

1.    Recruitment

2.    Selection

3.    Induction

4.    Compensation

5.    Performance Appraisal

6.    Training & Development

4.2.1 Recruitment:

The process of recruitment begins after manpower requirements are determined in terms of quality through job analysis and quantity through forecasting and planning. The recruitment and selection is the major function of the human resource department and recruitment process is the first step towards creating the competitive strength and the strategic advantage for the organizations. Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews and requires many resources and time. A general recruitment process is as follows:

  • Identifying the vacancy

The recruitment process begins with the human resource department receiving requisitions for recruitment from any department of the company. These contain:

• Posts to be filled

• Number of persons

• Duties to be performed

• Qualifications required

  • Preparing the job description and person specification.
  • Locating and developing the sources of required number and type of employees (Advertising etc).
  • Short-listing and identifying the prospective employee with required characteristics.
  • Arranging the interviews with the selected candidates.
  • Conducting the interview and decision making.

Recruitment process:rabab fashion

Figure 4.1: Recruitment Process

  1. Identify vacancy
  2. Prepare job description and person specification
  3. Advertising the vacancy
  4. Managing the response
  5. Short-listing
  6. Arrange interviews
  7. Conducting interview and decision making

The recruitment process is immediately followed by the selection process i.e. the final interviews and the decision making, conveying the decision and the appointment formalities.

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Figure 4.2: Recruiting Yield Pyramid

 

Recruiting yield pyramid:

 

The historical arithmetic relationships between recruitment leads and invitees, invitees and interviews, interviews and offers made, and offers made and offers accepted.

Recruitment process importance:

Each organization needs the members to be the live organism. The recruitment process is the main process to bring new members to the organization. Each Human Resources Department has some kind of the support for the recruitment process.

The recruitment process involves many steps and optimization. The recruitment process includes quite heavy HR Marketing as the organization can attract enough job candidates from the external job market. Also, HR Marketing is used internally in the organization to promote broad job opportunities and the employees are not pushed to look for a new job on the external job market. Even a small company needs its recruitment process, including job offers posted on the entrance door. The owner has to have the recruitment strategy and the vision how to attract new potential employees.

Currently, we live in the times of the war for the talents. The employees are one of the most valued assets of the organization and the recruitment process is one of the best weapons in the war for talents. The organization without the recruitment process cannot survive as it cannot find new members and it is not able to hire them on board. The bigger the organization the more formalized recruitment process it needs.

The recruitment process can have a significant impact on the motivation of employees. As the recruitment promotion and HR Marketing can make the organization very visible on the job market and the employees can feel good about working for a well known company.

 

4.2.2 Selection:

The selection is the process of ascertaining whether or not candidates possess the requisite qualifications, training and experience required. The steps in Selection process in human resource management are:

1. Initial screening interview

2. Completion of the application form

3. Employment tests

4. Comprehensive interview

5. Background investigation

6. Conditional job offer

7. Medical/physical exam

8. Permanent job offer

Selection Process in HRM:

The selection process consists of various steps. At each stage facts may come to light which may lead to rejection of the applicant. Steps involved in the selection are: -application
1. Preliminary interview: Initial screening is done to weed out totally undesirable/unqualified candidates at the outset. It is essentially a sorting process in which prospective candidates are given necessary information about the nature of the job and the organization.

2. Application blank: Application form is a traditional and widely used device for collecting information from candidates. The application form should provide all the information relevant to selection.

3. Selection test: Psychological are being increasingly used in employee selection. A test is sample of some aspects of an individual’s attitude, behavior and performance. It also provides systematic basis fro comparing the behavior, performance and attitudes of two persons.

4. Employment interview: An interview is a conversation between two persons. In selection it involves a personal, observational and face to face appraisal of candidates for employment.

5. Medical examination: Applicants who have crossed the above stages are sent for a physical examination either to the company’s physician or to a medical officer approved for the purpose.

6. Reference checks: The applicant is asked to mention in his application form the names and addresses of two or three persons who know him well.

7. Final approval: The short listed candidates by the department are finally approved by the executives of the concerned department. Employment is offered in the form of appointment letter mentioning the post, the rank, the grade, the date by which the candidate should join and other terms and conditions in brief.

 

4.2.3 Induction:

Induction is the technique by which a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of the organization. Once an employee is selected and placed on an appropriate job, the process of familiarizing him with the job and the organization is known as induction.
Induction is the process of receiving and welcoming an employee when he first joins the company and giving him basic information he needs to settle down quickly and happily and stars work.

Objectives of induction:

Induction is designed to achieve following objectives:

* To help the newcomer to overcome his shyness and overcome his shyness nervousness in meeting new people in a new environment.

* To give new comer necessary information such as location of a café, rest period etc.

* To build new employee confidence in the organization.

* It helps in reducing labor turnover and absenteeism.

* It reduces confusion and develops healthy relations in the organization.

* To ensure that the new comer do not form false impression and negative attitude to wards the organization.

* To develop among the new comer a sense of belonging and loyalty to the organization.

Contents of induction program:

 

A formal induction program should provide following information:

* Brief history and operations of the company.

* The company’s organization structure.

* Policies and procedure of the company.

* Products and services of the company.

* Location of department and employee facilities.

* Safety measures.

* Grievances procedures.

* Benefits and services of employee.

* Standing orders and disciplinary procedures.

* Opportunities for training, promotions transfer etc.

* Suggestion schemes.

* Rules and regulations.

Benefits of an induction program:

An induction program is an important process for bringing staff into an organization. It provides an introduction to the working environment and the set-up of the employee within the organization. The process will cover the employer and employee rights and the terms and conditions of employment. As a priority the induction program must cover any legal and compliance requirements for working at the company and pay attention to the health and safety of the new employee.

An induction program is part of an organizations knowledge management process and is intended to enable the new starter to become a useful, integrated member of the team, rather than being “thrown in at the deep end” without understanding how to do their job, or how their role fits in with the rest of the company. Good induction programs can increase productivity and reduce short-term turnover of staff. These programs can also play a critical role under the socialization to the organization in terms of performance, attitudes and organizational commitment.

 

Advantages of formal induction:

The advantages of formal induction are:

* Induction helps to buildup a two way channel of communication between management and workers.

* Proper induction facilitates informal relation and team work among employee.

* Effective induction helps to integrate the new employee in to the organization and to develop a sense of belonging.

* Induction helps to develop good relation.

* A formal induction program proves that the company is taking interest in getting him off to good start.

* Proper induction reduces employee grievances, absenteeism and labor turnover.

* Induction is helpful in supplying information concerning the organization, the job and employee welfare facilities.

 

4.2.4 Compensation:

Would anybody work for free? No. They would, like us all, expect something in return. We must have heard a common phrase: Give and Take. We always have to give things to people in return to what we take from them. Compensation refers to this exchange, but in monetary terms. Compensation is the employer’s feedback for an employee’s work. It simply is the monetary value one would give to his/her employees in return of their services.

Gary Dessler in his book Human Resource Management defines compensation in these words “Employee compensation refers to all forms of pay going to employees and arising from their employment.” The phrase ‘all forms of pay’ in the definition does not include non-financial benefits, but all the direct and indirect financial compensations.

Types of Compensation:

One of the distinctions is that rewards can be both intrinsic and extrinsic. Intrinsic rewards may include praise for completing a project or meeting performance objectives. Other psychological and social forms of compensation also reflect intrinsic type of rewards. Extrinsic rewards are tangible and take both monetary and non-monetary forms. One tangible component of a compensation program is direct compensation, whereby the employer exchanges monetary rewards for work done and performance results achieved. Base pay and variable pay are the most common forms of direct compensation. Indirect compensation commonly consists of employee benefits.

 

Base Pay:

The basic compensation that an employee receives, usually as a wage or a salary, is called base pay. Many organizations use two base pay categories, hourly and salaried, which are identified according to the way pay is distributed and the nature of the jobs. Hourly pay is the most common means and is based on time. Employees paid hourly receive wages, which are payments directly calculated on the amount of time worked. In contrast, people paid salaries receive consistent payments each period regardless of the number of hours worked. Being paid a salary has typically carried higher status for employees than has being paid a wage. However, overtime may have to be paid to certain salaried employees as defined by federal and state laws.

 

Variable Pay:

Another type of direct pay is variable pay, which is compensation linked directly to individual, team, or organizational performance. The most common types of variable pay for most employees are bonuses and incentive program payments. Executives often receive longer-term rewards such as stock options.

 

Benefits:

Many organizations provide numerous extrinsic rewards in an indirect manner. With indirect compensation, employees receive the tangible value of the rewards without receiving actual cash. A benefit is an indirect reward for instance, health insurance, vacation pay, or a retirement pension given to an employee or a group of employees for organizational membership, regardless of performance. Often employees do not directly pay for all of the benefits they receive.

 

HR Metrics and Compensation:

 

Employers spend huge amounts of money for employee compensation. Just like any other area of expenditures, compensation expenditures should be evaluated to determine their effectiveness. Many measures can be used for this evaluation. Employee turnover/retention is one widely used factor. This usage assumes that how well compensation systems operate affects employees’ decisions about staying or leaving the organization. The numbers for calculating these measures are readily available to most HR professionals and Chief Financial Officers, but such calculations are not made in many firms. Often the importance of using these numbers is not a priority for managers or CFOs. Ideally, compensation metrics should be computed each year, and then compared with metrics from past years to show how the rate of compensation changes compares with the rate of changes in the organization overall (revenues, expenses, etc.).

HR Performance Area

Method of Calculation

1. Pay and benefits as percentage of operating expense.Total pay and benefits expenditures ÷ Total operating expenses.
2. Human value added.Revenue – Operating expense – Pay and benefits = Adjusted profit ÷ Full time equivalent employees (FTEs).
3. Return on human capital

Invested.Revenue – Operating expense – Pay and benefits = Adjusted profit ÷ Pay and benefits.4. Employee cost factor.Total compensation and benefits ÷ FTEs.

Table 4.1: HR Metrics for Compensation

 

4.2.5 Performance Appraisal:

A performance appraisal is a review and discussion of an employee’s performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee’s personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor’s only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor’s willingness to complete a constructive and objective appraisal and on the employee’s willingness to respond to constructive suggestions and to work with the supervisor to reach future goals.

Steps in performance appraisal:

  • Defining the job

–     Making sure that you and your subordinate agree on his or her duties and job standards.

  • Appraising performance

–     Comparing your subordinate’s actual performance to the standards that have been set; this usually involves some type of rating form.

  • Providing feedback

–     Discussing the subordinate’s performance and progress, and making plans for any development required.

Objectives of Performance Appraisal:

Performance Appraisal can be done with following objectives in mind:

  1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
  2. To identify the strengths and weaknesses of employees to place right men on right job.
  3. To maintain and assess the potential present in a person for further growth and development.
  4. To provide a feedback to employees regarding their performance and related status.
  5. To provide a feedback to employees regarding their performance and related status.
  6. It serves as a basis for influencing working habits of the employees.
  7. To review and retain the promotional and other training programs.

Scope:

The scope of any performance appraisal should include the following: provide employees with a better understanding of their role and responsibilities; increase confidence through recognizing strengths while identifying training needs to improve weaknesses; improve working relationships and communication between supervisors and subordinates; increase commitment to organizational goals; develop employees into future supervisors; assist in personnel decisions such as promotions or allocating rewards; and allow time for self-reflection, self-appraisal and personal goal setting.

Advantages of Performance Appraisal:

It is said that performance appraisal is an investment for the company which can be justified by following advantages:

  1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programs for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.

  1. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. A compensation package which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.

  1. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programs. It helps to analyze strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programs.

  1. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.

  1. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:
    1. Through performance appraisal, the employers can understand and accept skills of subordinates.
    2. The subordinates can also understand and create a trust and confidence in superiors.
    3. It also helps in maintaining cordial and congenial labor management relationship.
    4. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

  1. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

4.2.6 Training and Development:

In the field of human resource management, training and development is the field which is concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings. It has been known by several names, including employee development, human resource development, and learning and development.

Training and development encompasses three main activities: training, education, and development. Garavan, Costine, and Heraty, of the Irish Institute of Training and Development, note that these ideas are often considered to be synonymous. However, to practitioners, they encompass three separate, although interrelated, activities.

  • Training: This activity is both focused upon, and evaluated against, the job that an individual currently holds.
  • Education: This activity focuses upon the jobs that an individual may potentially hold in the future, and is evaluated against those jobs.
  • Development: This activity focuses upon the activities that the organization employing the individual, or that the individual is part of, may partake in the future, and is almost impossible to evaluate.

The “stakeholders” in training and development are categorized into several classes. The sponsors of training and development are senior managers. The clients of training and development are business planners. Line managers are responsible for coaching, resources, and performance. The participants are those who actually undergo the processes. The facilitators are Human Resource Management staff. And the providers are specialists in the field. Each of these groups has its own agenda and motivations, which sometimes conflict with the agendas and motivations of the others.

The conflicts are the best part of career consequences are those that take place between employees and their bosses. The number one reason people leave their jobs is conflict with their bosses. And yet, as author, workplace relationship authority, and executive coach, Dr. John Hoover points out, “Tempting as it is, nobody ever enhanced his or her career by making the boss look stupid.” Training an employee to get along well with authority and with people who entertain diverse points of view is one of the best guarantees of long-term success. Talent, knowledge, and skill alone won’t compensate for a sour relationship with a superior, peer, or customer.

Training and Development Objectives:

The principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization. In addition to that, there are four other objectives: Individual, Organizational, Functional, and Societal.

Individual Objectives – help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization.

Organizational Objectives– assist the organization with its primary objective by bringing individual effectiveness.

Functional Objectives– maintain the department’s contribution at a level suitable to the organization’s needs.

Societal Objectives– ensure that an organization is ethically and socially responsible to the needs and challenges of the society.

5.1 History of performance appraisal:

The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor’s pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War-not more than 60years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world’s second oldest profession!  There is, says Dulewicz (1989), “… a basic human tendency to make judgments about those one is working with, as well as about oneself.” Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified.

The process was firmly linked to material outcomes. If an employee’s performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different level so motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence.

5.2 WHAT IS “Performance Appraisal”?

Performance Appraisal is defined as the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in working organizations and potential of employees. According to Flippo, “Performance Appraisal is the systematic, periodic and an important rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job.”

A performance appraisal is a review and discussion of an employee’s performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee’s personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor’s only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor’s willingness to complete a constructive and objective appraisal and on the employee’s willingness to respond to constructive suggestions and to work with the supervisor to reach future goals.

5.3 Why Appraise Performance?

Periodic reviews help supervisors gain a better understanding of each employee’s abilities. The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for the further development of skills and strengths. A careful review will stimulate employee’s interest and improve job performance.  The review provides the employee, the supervisor, the Vice President, and Human Resources a critical, formal feedback mechanism on an annual basis; however these discussions should not be restricted solely to a formal annual review.

5.4 Objectives of Performance Appraisal:

Performance Appraisal can be done with following objectives in mind:

  1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
  2. To identify the strengths and weaknesses of employees to place right men on right job.
  3. To maintain and assess the potential present in a person for further growth and development.
  4. To provide a feedback to employees regarding their performance and related status.
  5. To provide a feedback to employees regarding their performance and related status.
  6. It serves as a basis for influencing working habits of the employees.
  7. To review and retain the promotional and other training programs.

5.5 SCOPE:

The scope of any performance appraisal should include the following: provide employees with a better understanding of their role and responsibilities; increase confidence through recognizing strengths while identifying training needs to improve weaknesses; improve working relationships and communication between supervisors and subordinates; increase commitment to organizational goals; develop employees into future supervisors; assist in personnel decisions such as promotions or allocating rewards; and allow time for self-reflection, self-appraisal and personal goal setting.

5.6 Characteristics:

1.    Performance Appraisal is a process.

2.    It is the systematic examination of the strengths and weakness of an           employee in terms of his job.

3.    It is scientific and objective study. Formal procedures are used in the study.

4.    It is an ongoing and continuous process wherein the evaluations are arranged periodically according to a definite plan.

5.    The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee.

5.7 Advantages of Performance Appraisal:

It is said that performance appraisal is an investment for the company which can be justified by following advantages:

  1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programs for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.
  2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. A compensation package which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.
  3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programs. It helps to analyze strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programs.
  4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.
  5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:
    1. Through performance appraisal, the employers can understand and accept skills of subordinates.
    2. The subordinates can also understand and create a trust and confidence in superiors.
    3. It also helps in maintaining cordial and congenial labor management relationship.
    4. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

  1. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

5.8 Limitations:

1.    Errors in Rating

2.    Lack of reliability

3.    Negative approach

4.    Multiple objectives

5.    Lack of knowledge

5.9 Modern appraisaL:

Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

In many organizations – but not all – appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. Whether this is an appropriate use of performance appraisal – the assignment and justification of rewards and penalties is a very uncertain and contentious matter.

 

5.10 CONTROVERSY:

Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources – researchers, management commentators, and psychometricians – who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it. At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially “… the most crucial aspect of organizational life”.

Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it. There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward outcomes – such as pay rises and promotions. This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward-linked process is perceived as judgmental, punitive and harrowing.
For example, how many people would gladly admit their work problems if, at the same time, they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result? Very likely, in that situation, many people would deny or downplay their weaknesses. Nor is the desire to distort or deny the truth confined to the person being appraised. Many appraisers feel uncomfortable with the combined role of judge and executioner.

Such reluctance is not difficult to understand. Appraisers often know their appraises well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another.

The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines. On the other hand, there is a strong rival argument which claims that performance appraisal must unequivocally be linked to reward outcomes.

The advocates of this approach say that organizations must have a process by which rewards – which are not an unlimited resource – may be openly and fairly distributed to those most deserving on the basis of merit, effort and results. There is a critical need for remunerative justice in organizations. Performance appraisal – whatever its practical flaws – is the only process available to help achieve fair, decent and consistent reward outcomes.

It has also been claimed that appraises themselves are inclined to believe that appraisal results should be linked directly to reward outcomes – and are suspicious and disappointed when told this is not the case. Rather than feeling relieved, appraises may suspect that they are not being told the whole truth, or that the appraisal process is a sham and waste of time.

 

5.11 Process:

rabab fashion

The process of performance appraisal:

1.   Establishing performance standards

2.   Communicating the Standards

      3.   Measuring Performance

      4.   Comparing the actual with the standards

5.   Discussing the appraisal

6.   Taking Corrective Action

 

5.12 techniques in performance appraisal :

Certain techniques in performance appraisal have been thoroughly investigated, and some have been found to yield better results than others.

Encourage Discussion: 

Research studies show that employees are likely to feel more satisfied with their appraisal result if they have the chance to talk freely and discuss their performance. It is also more likely that such employees will be better able to meet future performance goals.

Employees are also more likely to feel that the appraisal process is fair if they are given a chance to talk about their performance. This especially so when they are permitted to challenge and appeal against their evaluation.

Constructive Intention:

It is very important that employees recognize that negative appraisal feedback is provided with a constructive intention, i.e., to help them overcome present difficulties and to improve their future performance. Employees will be less anxious about criticism, and more likely to find it useful, when they believe that the appraiser’s intentions are helpful and constructive.

In contrast, other studies have reported that “destructive criticism” – which is vague, ill-informed, unfair or harshly presented – will lead to problems such as anger, resentment, tension and workplace conflict, as well as increased resistance to improvement, denial of problems, and poorer performance.

Set Performance Goals:

It has been shown in numerous studies that goal-setting is an important element in employee motivation. Goals can stimulate employee effort, focus attention, increase persistence, and encourage employees to find new and better ways to work.

The useful of goals as a stimulus to human motivation is one of the best supported theories in management. It is also quite clear that goals which are “…specific, difficult and accepted by employees will lead to higher levels of performance than easy, vague goals (such as do your best) or no goals at all.”

Appraiser Credibility:

It is important that the appraiser (usually the employee’s supervisor) be well-informed and credible. Appraisers should feel comfortable with the techniques of appraisal, and should be knowledgeable about the employee’s job and performance.

When these conditions exist, employees are more likely to view the appraisal process as accurate and fair. They also express more acceptance of the appraiser’s feedback and a greater willingness to change.

5.13 Methods of Performance appraisal:

The foregoing list of major program pitfalls represents a formidable challenge, even considering the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing away with appraisals themselves is like trying to solve the problems of life by committing suicide. The more logical task is to identify those appraisal practices that are (a) most likely to achieve a particular objective and (b) least vulnerable to the obstacles already discussed.

Before relating the specific techniques to the goals of performance appraisal stated at the outset of the article, I shall briefly review each, taking them more or less in an order of increasing complexity. The best-known techniques will be treated most briefly.

5.13.1 Essay appraisal:

In its simplest form, this technique asks the rater to write a paragraph or more covering an individual’s strengths, weaknesses, potential, and so on. In most selection situations, particularly those involving professional, sales, or managerial positions, essay appraisals from former employers, teachers, or associates carry significant weight.

In the essay method approach, the appraiser prepares a written statement about the employee being appraised. The statement usually concentrates on describing specific strengths and weaknesses in job performance. It also suggests courses of action to remedy the identified problem areas. The statement may be written and edited by the appraiser alone, or it be composed in collaboration with the appraise.

Advantages:

The essay method is far less structured and confining than the rating scale method. It permits the appraiser to examine almost any relevant issue or attribute of performance. This contrasts sharply with methods where the appraisal criteria are rigidly defined. Appraisers may place whatever degree of emphasis on issues or attributes that they feel appropriate. Thus the process is open-ended and very flexible. The appraiser is not locked into an appraisal system the limits expression or assumes that employee traits can be neatly dissected and scaled.

 

Disadvantages:

Essay methods are time-consuming and difficult to administer. Appraisers often find the essay technique more demanding than methods such as rating scales.

The techniques greatest advantage – freedom of expression – is also its greatest handicap. The varying writing skills of appraisers can upset and distort the whole process. The process is subjective and, in consequence, it is difficult to compare and contrast the results of individuals or to draw any broad conclusions about organizational needs.

5.13.2 Graphic rating scale:

This technique may not yield the depth of an essay appraisal, but it is more consistent and reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is he outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication.

The rating scale method offers a high degree of structure for appraisals. Each employee trait or characteristic is rated on a bipolar scale that usually has several points ranging from “poor” to “excellent” (or some similar arrangement). The traits assessed on these scales include employee attributes such as cooperation, communications ability, initiative, punctuality and technical (work skills) competence.

The nature and scope of the traits selected for inclusion is limited only by the imagination of the scale’s designer, or by the organization’s need to know. The one major provision in selecting traits is that they should be in some way relevant to the appraisee’s job. The traits selected by some organizations have been unwise and have resulted in legal action on the grounds of discrimination.

Advantages:

The greatest advantage of rating scales is that they are structured and standardised. This allows ratings to be easily compared and contrasted – even for entire workforces.

Each employee is subjected to the same basic appraisal process and rating criteria, with the same range of responses. This encourages equality in treatment for all appraisees and imposes standard measures of performance across all parts of the organization.

Rating scale methods are easy to use and understand. The concept of the rating scale makes obvious sense; both appraisers and appraisees have an intuitive appreciation for the simple and efficient logic of the bipolar scale. The result is widespread acceptance and popularity for this approach.

Disadvantages:

Trait Relevance –

Are the selected rating-scale traits clearly relevant to the jobs of all the appraisees? It is inevitable that with a standardised and fixed system of appraisal that certain traits will have a greater relevance in some jobs than in others. For example, the trait “initiative” might not be very important in a job that is tightly defined and rigidly structured. In such cases, a low appraisal rating for initiative may not mean that an employee lacks initiative. Rather, it may reflect that fact that an employee has few opportunities to use and display that particular trait. The relevance of rating scales is therefore said to be context-sensitive. Job and workplace circumstances must be taken into account.

Systemic Disadvantage –

Rating scales, and the traits they purport to measure, generally attempt to encapsulate all the relevant indicators of employee performance. There is an assumption that all the true and best indicators of performance are included, and all false and irrelevant indicators are excluded.

This is an assumption very difficult to prove in practice. It is possible that an employee’s performance may depend on factors that have not been included in the selected traits. Such employees may end up with ratings that do not truly or fairly reflect their effort or value to the organization. Employees in this class are systemically disadvantaged by the rating scale method.

5.13.3 Management by objectives (MBO):

To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in some organizations are being asked to set – or help set – their own performance goals. Within the past five or six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell on it here.

The use of management objectives was first widely advocated in the 1950s by the noted management theorist Peter Drucker.

MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they seek to measure employee performance by examining the extent to which predetermined work objectives have been met. Usually the objectives are established jointly by the supervisor and subordinate. An example of an objective for a sales manager might be: Increase the gross monthly sales volume to $250,000 by 30 June. Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills needed to achieve the objective. Typically they do not rely on others to locate and specify their strengths and weaknesses. They are expected to monitor their own development and progress.

Advantages:

The MBO approach overcomes some of the problems that arise as a result of assuming that the employee traits needed for job success can be reliably identified and measured. Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance. Employees are judged according to real outcomes, and not on their potential for success, or on someone’s subjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed, whereas the traits and attributes of employees (which may or may not contribute to performance) must be guessed at or inferred. The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied elements that go to make up employee performance. MBO advocates claim that the performance of employees cannot be broken up into so many constituent parts – as one might take apart an engine to study it. But put all the parts together and the performance may be directly observed and measured.

Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance. Employees are judged according to real outcomes, and not on their potential for success, or on someone’s subjective opinion of their abilities. The guiding principle of the MBO approach is that direct results can be observed easily. The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied elements that go to make up employee performance.

MBO advocates claim that the performance of employees cannot be broken up into so many constituent parts, but to put all the parts together and the performance may be directly observed and measured

Disadvantages:

MBO methods of performance appraisal can give employees a satisfying sense of autonomy and achievement. But on the downside, they can lead to unrealistic expectations about what can and cannot be reasonably accomplished.

Supervisors and subordinates must have very good “reality checking” skills to use MBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self-monitoring.

Unfortunately, research studies have shown repeatedly that human beings tend to lack the skills needed to do their own “reality checking”. Nor are these skills easily conveyed by training. Reality itself is an intensely personal experience, prone to all forms of perceptual bias.

One of the strengths of the MBO method is the clarity of purpose that flows from a set of well-articulated objectives. But this can be a source of weakness also. It has become very apparent that the modern organization must be flexible to survive. Objectives, by their very nature, tend to impose a certain rigidity. Of course, the obvious answer is to make the objectives more fluid and yielding. But the penalty for fluidity is loss of clarity. Variable objectives may cause employee confusion. It is also possible that fluid objectives may be distorted to disguise or justify failures in performance.

This approach can lead to unrealistic expectations about what can and cannot be reasonably accomplished. Supervisors and subordinates must have very good “reality checking” skills to use MBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self-monitoring. Variable objectives may cause employee confusion. It is also possible that fluid objectives may be distorted to disguise or justify failures in performance.

5.13.4 Field review:

The field review is one of several techniques for doing this. A member of the personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employee’s rating with them to (a) identify areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine that each rater conceives the standards similarly.

5.13.5 Forced-choice rating:

Like the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party.

5.13.6 Ranking methods:

For comparative purposes, particularly when it is necessary to compare people who work for different supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to which a host of additional facts and impressions must somehow be added. There is no single form or way to do this. The best approach appears to be a ranking technique involving pooled judgment.

The two most effective methods are alternation ranking and paired comparison ranking.

  1. 1.        “Alternation ranking”:

Ranking of employees from best to worst on a trait or traits is another method for evaluating employees. Since it is usually easier to distinguish between the worst and the best employees than to rank them, an alternation ranking method is most popular. Here subordinates to be rated are listed and the names of those not well enough to rank are crossed. Then on a form as shown below, the employee who is highest on the characteristic being measured and the one who is the lowest are indicated. Then chose the next highest and the next lowest, alternating between highest and lowest until all the employees to be rated have been ranked.

  1. 2.        “Paired-comparison ranking”:

 This technique is probably just as accurate as alternation ranking and might be more so. But with large numbers of employees it becomes extremely time consuming and cumbersome.

Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or more people are asked to make independent rankings of the same work group and their lists are averaged), are among the best available for generating valid order-of-merit rankings for salary administration purposes.

5.13.7 Assessment centers:

So far, we have been talking about assessing past performance. What about the assessment of future performance or potential? In any placement decision and even more so in promotion decisions, some prediction of future performance is necessary. How can this kind of prediction be made most validly and most fairly?

 

5.13.8 360 Degree Feedback:

Many firms have expanded the idea of upward feedback into what the call 360-degree feedback. The feedback is generally used for training and development, rather than for pay increases.

 rabab fashion

Figure-5.2: 360 Degree Feedback.

Many firms have expanded the idea of upward feedback into what the call 360-degree feedback. The feedback is generally used for training and development, rather than for pay increases.

Most 360 Degree Feedback system contains several common features. Appropriate parties – peers, supervisors, subordinates and customers, for instance – complete survey, questionnaires on an individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings are not given just by the next manager up in the organizational hierarchy, but also by peers and subordinates. Appropriates customer ratings are also included, along with the element of self appraisal. Once gathered in, the assessment from the various quarters are compared with one another and the results communicated to the manager concerned.

Another technique that is useful for coaching purposes is, of course, MBO. Like the critical incident method, it focuses on actual behavior and actual results, which can be discussed objectively and constructively, with little or no need for a supervisor to “play God.”

5.14 Benefits of Performance Appraisals:

  • Measures an employee’s performance.
  • Helps in clarifying, defining, redefining priorities and objectives.
  • Motivates the employee through achievement and feedback.
  • Facilitates assessment and agreement of training needs.
  • Helps in identification of personal strengths and weaknesses.
  • Plays an important role in Personal career and succession planning.
  • Clarifies team roles and facilitates team building.
  • Plays major role in organizational training needs assessment and analysis.
  • Improves understanding and relationship between the employee and the reporting manager and also helps in resolving confusions and misunderstandings.
  • Plays an important tool for communicating the organization’s philosophies, values, aims, strategies, priorities, etc among its employees.
  • Helps in counseling and feedback.

5.15 Problems in Performance Appraisals:

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as ‘rating errors’. These errors can seriously affect assessment results. Some of the most common rating errors are: –

Leniency or severity: – Leniency or severity on the part of the rater makes the assessment subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are lenient for the following reasons:

a)    The rater may feel that anyone under his or her jurisdiction who is rated unfavorably will reflect poorly on his or her own worthiness.

b)    He/She may feel that a derogatory rating will be revealed to the rate to detriment the relations between the rater and the ratee.

c)     He/She may rate leniently in order to win promotions for the subordinates and therefore, indirectly increase his/her hold over him.

 

Central tendency: – This occurs when employees are incorrectly rated near the average or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from certain doubts and anxieties, which the raters have been assessing the rates.

 

Halo error: – A halo error takes place when one aspect of an individual’s performance influences the evaluation of the entire performance of the individual. The halo error occurs when an employee who works late constantly might be rated high on productivity and quality of output as well ax on motivation. Similarly, an attractive or popular personality might be given a high overall rating. Rating employees separately on each of the performance measures and encouraging raters to guard against the halo effect are the two ways to reduce the halo effect.

Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score are given only to certain individuals or groups based on the rater’s attitude towards them and not on actual outcomes or behaviors; sex, age, race and friendship biases are examples of this type of error.

 

Primacy and Regency effects: – The rater’s rating is heavily influenced either by behavior exhibited by the rate during his early stage of the review period (primacy) or by the outcomes, or behavior exhibited by the rate near the end of the review period (regency). For example, if a salesperson captures an important contract/sale just before the completion of the appraisal, the timing of the incident may inflate his or her standing, even though the overall performance of the sales person may not have been encouraging. One way of guarding against such an error is to ask the rater to consider the composite performance of the rate and not to be influenced by one incident or an achievement.

Performance dimension order: – Two or more dimensions on a performance instrument follow each other and both describe or rotate to a similar quality. The rater rates the first dimensions accurately and then rates the second dimension to the first because of the proximity. If the dimensions had been arranged in a significantly different order, the ratings might have been different.

 

Spillover effect: – This refers lo allowing past performance appraisal rating lo unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating for current period although the demonstrated behavior docs not deserve the rating, good or bad.

 

Perceptual Errors:

 

This includes various well-known problems of selective perception (such as the horns and halos effect) as well as problems of perceived meaning. Selective perception is the human tendency to make private and highly subjective assessments of what a person is “really like”, and then seek evidence to support that view (while ignoring or downplaying evidence that might contradict it).

This is a common and normal psychological phenomenon. All human beings are affected by it. In other words, we see in others what we want to see in them.

An example is the supervisor who believes that an employee is inherently good (halo effect) and so ignores evidence that might suggest otherwise. Instead of correcting the slackening employee, the supervisor covers for them and may even offer excuses for their declining performance.

On the other hand, a supervisor may have formed the impression that an employee is bad (horns effect). The supervisor becomes unreasonably harsh in their assessment of the employee, and always ready to criticize and undermine them.

The horns and halo effect is rarely seen in its extreme and obvious forms. But in its more subtle manifestations, it can be a significant threat to the effectiveness and credibility of performance appraisal.

5.16 STEPS TO LIMIT EFFECTS:

There are reasonable steps which can be taken to limit the effects of supervisory bias.

 Awareness Training:

The first line of defense lies in raising awareness of the problem. Supervisors need to be informed of the types of subtle bias that can interfere with their performance as appraisers. They need to understand that the ingroup/outgroup bias, for instance, reduces them orally and motivation of their subordinates.

 Developing Poor Performers: Incentives, financial or non-financial, may offered to encourage supervisors to make special efforts to help poor performers improve. Supervisory appraisals, for example, might stress the importance of working with poor performers to upgrade their performance. The possibilities are extensive.

 Counseling, Transfer, Termination: There is always the possibility that an employee who receives poor appraisal results is in fact a chronic poor performer. No employer is obliged to tolerate poor performance forever. Consistently poor appraisal results will indicate a need for counseling, transfer or termination. The exact remedy will depend on the circumstances

6.1 Performance Appraisal Systems of Rabab fashion Ind. Ltd:

 

Today every organization is interested – in doing better performance appraisals-

 

For the organization, Performance Appraisals provide the mechanism to cascade Organizational strategies, goals and core values down to each employee. This ensures that their efforts are coordinated and their combined effort moves the organization in the right direction.

 

For Managers, the Performance Appraisal can be a practical and versatile management tool that helps them focus their employees’ activities, monitor their progress, and encourage their development

 

For Employees, effective Performance Appraisals can have a positive effect on morale. Employees who know what is expected of them and how they will be evaluated will approach their work with a better attitude and better sense of responsibility.

 

Reasons for an Appraisal:

Reasons for introducing performance appraisal in Rabab Fashion explaining below:-

a)      To identify any training that, may be needed

b)      To make personal / business objectives clear

c)      To identify employees that are potential for promotion

d)     To review salaries or payment methods

e)      To identify individual strengths of employees

f)       To increase motivation

g)      To improve performance

h)      To update job descriptions

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The main benefits for using an appraisal system are as follows:

a)      Gives you an idea of what you should expect from your employees

b)      Develops further yourself as a manager (or supervisor)

c)      The supervisors develop a better relationship with the employees by getting to

            know them better and what their job consists of more precisely

      d)  Improves communication in the business

 

Developmental performance appraisal purposes:

 

One of the most important aspects of performance appraisal is that of personal development. The developmental approach to performance appraisal recognizes employees as individuals with concerns and needs. The developmental approach uses performance appraisal as a contributor to employee motivation, development, and human resources planning. Rabab Fashion  HRD following the additional purposes:-

a)      They provides a formal structure for communications between employees and

            managers to help clarify local issues, needs and expectations

b)      They provide employees with the formal opportunity to indicate their career

            direction, level of ambition and how it could be attained.

c)      They provide formal recognition and informal encouragement to the employee who has been trying to perform well.

d)     They formally shows organizational interest and support opportunities for personal development.

6.2 HR Plan of Rabab Fashion Ind. Ltd:

In the Rabab Fashion Ind. Ltd. Fair labor standard Act 1938 and the Equal Pay Act: passed in 1963 are both are followed and comments of the compensation system; Job Descriptions, Job Analysis, Evaluation, Pay Structures are also followed for the compensation.

 

6.2.1 Appraisal system of Rabab Fashion Ind. Ltd:(For office)

Rabab fashion Ind. Ltd. Generally used employees previous performance on his job and behavioral activities with colleagues and management. After the provision period of six months, an employees salary is increased with confirmation by the companies existing policy.

 

Method:

Rabab fashion Ind. Ltd. Use Performance + Behavioral method to evaluate their employee.

 

Period:

a)      After every 12 months an automatic salary is increase of each employee.

b)      Special increase for special performance.

c)      In every 06 months company gives performance wise appraisal.

d)     Religious festival (Eid, Pooja) allowance.

e)      Tour allowance.

6.2.2 The pay structure of Rabab Fashion Ind. Ltd: (For the factory)

In the Rabab Fashion Ind. Ltd. there are 1375-worker work for them they have there pay structure according to the government rules, and the labor wages law. And the wages laws are describing bellow.

Wages: every worker for 8 hour work, 6 days a week in a month have to work, and it call the basic work and they will get for the basic salary Tk.4000/-

Compensation of Over time: over 8 hour work in working day is calling the over time work. And for that they will get Tk. 26.10/- per hour. If any worker does the work over 12 hours then he will get 400/-taka. But no worker can work more then 54 hour in a week as overtime.

The total wage: Every worker will get 14% of his base salary as a house rent, and medical allowance (fixed) 200/- taka. So as a total he will get 5800/- taka.

Time card: For every worker they have their won time card. In these card workers arrivals and departure time from the work is recorded. And the organization timekeeper will give his sign to the time card according to the time. And thus way workers wages are calculated by there time card.

6.3 Bonus system by the Rabab Fashion Ind. Ltd:

Like every other organization run their benefit program with their own rule.

  • If the worker working duration is 1year over then he will get 100% bonus.
  • If the worker working duration is 6 months over then will get 1/4 from the                                                basic.
  • If the worker working duration is 3 months then will get 1/8 from the basic.
  • If the worker working duration is lower than 3 years he will get 1/16from the basic. But the lowest bonus for the new worker is 100/- taka.

6.4 Allowance for the travel, meal, and housing:

Travel allowance: Rabab Fashion Ind. Ltd. give the travel allowance to the officer but not to the worker. For the officer the garments have their won vehicle. As the worker amount is huge so it’s quite impossible to give the travel allowance to the worker or give them the transportation service.

 

Meal allowance: For the meal the organization officer has their mass meal system, but worker have to bring their won meal from their home.

Housing allowance: The housing allowances are given for the worker good accommodation, and also to their officer. For the worker is 14% of their basic salary, And for the officer it’s 50% of their basic.

Merit pay system: there is no system for the merit pay system, both for the worker and officer. Because the organization believes, every one will get the same salary by their skills or work.

6.5 Benefits:

Employee benefit: Every organization try to give there employee or the worker benefit. This kind of benefit can be the financial or could be the non financial. But in this benefit part would like to describe the non financial benefit part, which are given by Rabab Fashion Ind. Ltd. to there workers and the employees.

Medical allowance: The Rabab Fashion Ind. Ltd has there own medical team for the emergence. Every week the organization fixed doctor checkup the entire worker and if he got any disturbances then he takes the action. And every 9.00am to5.00pm the doctor stays in the organization, and from the organization the free medicine also provided to the ill workers. And the organization also give the facility to the worker with minimum charge they can do the pathological test. If any kind of accident happens in the organization then they are ready to give the medical service. And also the workers are getting the fixed medical allowance (taka-200) with their total salary. And also for the major accident happen to doing the work, and then organization takes the whole responsibility for the medical expense.

Health Insurance: For the safety of every worker the organization has taken the group health and accident insurance policy.

Holiday & vacation leave: The Rabab Fashion Ind. Ltd gives their workers the several types of vacation to maintain the labor law for the leave and also the government rules.

CHAPTER #7

Findings

            Findings of the Study:

Human resource function in the organization makes the organization more smooth and easy to operate. Many HR professional believe their function has become more involved in business decision, more strategically oriented and more effective as a business partner. The HR function is adding more value to the modern organization day by day. The changing HR profession makes this profession more challenging & responsible.At the time of my survey at Rabab Fashion Ind. Ltd, I found the strengths and also the weaknesses in the present HRM practice of Rabab Fashion Ind. Ltd.

 

7.1.1 Strengths of the Rabab Fashion Ind. Ltd:

1)      They really follow the government labor law and international labor act and other terms that I found in the HRM theory.

2)      There environment of the work is very net and clean, and healthy for the worker health.

3)      The performance appraisal process is very modern, and gives reward in the basis of good performance.

4)      The officers of the Rabab Fashion Ind. Ltd are very much friendly with their worker.

5)      All labor are very much friendly with their superior, and can raise there logical demand, which is also a good sign for the HR practice

6)      In case of having unutilized Earned Leave employees get additional payment that Keeps employees motivated.

7)      In the time of my research, I noticed that there is no office politics in that organization which is a positive sign of fair employee evaluation.

8)      No violence has been happened till now in this organization which represents a strong HR activities within the organization.

7.1.2 Weakness of the Rabab Fashion Ind. Ltd:

If organization is very much protect by the organizational rules and also implement the rules perfectly then there are no chance for error. But some points are always missed thought they are carefully observe.

So like there are some slight weaknesses I have found and they are:

  1. There are only two junior HR officers, which is some time insufficient to control such a large number of workers.
  2. This is very difficult for those two HR officers to assess subordinates fairly.
  3. Maximum recruitment is appointed internally who are inexperienced. So there is a chance to affect in overall performance of the organization.
  4. Appraisal system is only based on performance basis which limits the area of employee evaluation.
  5. There is no training or counseling facilities for the poor performers within the organization.
  6. The organizations have no lady doctor or lady medical representative for the woman worker.
  7.  The Rabab Fashion Ind. Ltd, web site is still under construction, which is not good for the competitive market, to spread there information about their organization.

CHAPTER #8

Recommendation &Conclusion

8.1 Recommendation

I have completed my dissertation program in the Rabab Fashion Ind. Ltd. During this time I have found some scope for the development of the Rabab Fashion Ind. Ltd. There are some opinions for the further development of the Rabab Fashion Ind. Ltd.

  1. They may hire more Hr officer for better HR practice and done them in perfect time.

  1. They can implement other performance appraisal methods to evaluate their employees.

  1. Reward system is considered as one of the most important motivational factors in any organization. So they should implement this system for better outcome.

  1. They may include giving certificates and positive feedback towards their employees which enables the employees to gain more self-esteem and trust to them, which in return will reflect to their individual performances.

  1. Appraisals and incentives should be kept separate. Appraisals should be only about the training needs, performance and career development of an employee, and that there should be separate salary reviews done periodically to decide the incentives and rewards of the employees. However, research in this field has shown that if rewards are de-linked from performance appraisals, it creates dissatisfaction among the employees.

  1. They should not west time to develop their Web site for meet the challenge of new marketing strategy in the information world.

8.2 CONCLUTION

Performance Appraisal is the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in the working organizations to evaluate personalities, contributions and potentials of employees

Today’s organization demand that the HR function delivers value added service. This requires a sharp business focus from Hr professional and the delivery of high quality HR systems that are integrated into the organization’s strategy and operations.

The study “Performance Appraisal System of Rabab Fashion Ind. Ltd” under HRD revealed that the people are the most valuable resource of the progress of the organization like garments sector. Here in the garments human or the worker are the primary resource to make the product, the worker have to execute the whole operation. So for the development of this valuable resources there are many factor involved. And to increase the productivity of an organization effective, dynamic HRM practice of Rabab Fashion Ind. Ltd is essential.

Thus, looking at the strengths and weaknesses of annual performance appraisals, and these research findings, it can be concluded, that though there are both advantages as well as disadvantages of conducting an appraisal, it is a necessary employee motivation tool without which organizations cannot function properly.

The practice of Performance Appraisal in Rabab Fashion Ind. Ltd is very much satisfactory, and the truth of this word proved by my report, that make Rabab Fashion Ind. Ltd. the ruling garments in the garments industry.

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