HRM at Shahjalal Islami Bank Limited

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 management is based in the efficient utilization of employees in achieving two main goals within a corporation or other type of organization. The first goal is to effectively make use of the talents and abilities of employees to achieve the operational objectives that are the ultimate aim of the organization. Along with realizing the goals of the organization, Human Resource management also seeks to ensure that the individual employee is satisfied with both the working environment and the compensation and benefits that he or she receives.

At times, the two main functions of Human Resource management (HRM) seem to be at odds with one another. There are certainly instances where it is impossible to arrive at solutions that are in line with both the aims of the company and the desires of the employee. When this happens, effective Human Resource management is faced with the task of finding a resolution that protects the interests of the company, but at the same time provides and acceptable level of satisfaction to the employee. This process can sometimes take a great deal of expertise on the part of the Human Resource personnel, but ultimately will help establish the best solution for all concerned parties.

Among the human resource issues that are generally handled by HR management personnel are the drafting of position descriptions for all levels of employment within the company, setting the standards and procedures that are used for hiring new employees, and determining benefits that are extended to existing employees. Disciplinary procedures, as well as procedures for recognizing employees for exemplary work, also fall under the province of Human Resource management. Human Resource management often seeks to provide the highest quality benefit packages possible, given the current financial position of the company. To this end, personnel concerned with Human Resources will seek the best in group health insurance, retirement programs, profit sharing, and vacation and personal days.

Preparing and maintaining a company employee handbook is often the province of Human Resource management. As part of that process, the management team will ensure that all guidelines and regulations contained within the text are in compliance with local, state, and federal laws that impact the status of employees. Human Resource management will also provide all employees with opportunities to understand the provisions within the handbook, both as part of new employee orientation and as an ongoing employee education process.

Often, Human Resource management and personnel are called upon to mediate grievances between employees and immediate supervisors. In these situations, the mediator will seek to represent the best interests of the company, ensure that the dialogue and process is in compliance with laws governing employment within the country of residence, and seek to affect resolution and reconciliation of all parties.

2.0 Importance of human resource management in any organization:

Do you think organization can be successful just by their marketing strategies and other edge they have over their competition? Definitely not, there is more to it. Everybody would agree that people are the foremost asset of any organization. If you agree to this point then it is necessary to have a management team that deals with the important asset, the people. The efficiency of that HR department is reflected in the business too. Most of the top management agrees to it.

Each and every employee has to contribute individually and also collectively to the success of the organization. At the low level they have to contribute to a goal. To make them contribute the human resource management team has to work harder. It is found that the contribution of an employee is low when they do not know what they are doing.

The Lack of knowledge on a particular process or technology, leads to low productivity in the organization. The human resource department should identify such employees and train them in the necessary skills. They should also know the individual and group psychology to deal such employees in the organization.

The HR management team should attract the right talent to their organization, give appropriate compensation, retain them and also develop them to meet the current and future organizational goals. The HR management team is dedicated to this work round the clock. Without them it is not possible to have the right team to execute projects. They need to keep track of the skill acquired by the employees during their tenure in the organization and deploy them for the right projects.

The employees need to be properly trained and motivated by the human resource management team. The ethical policies should be communicated to them at the right time and the problems in the organization should be revealed to get the right solution from them. Thus they should make the employees work more efficiently to meet the organization’s goal.

3.0 Organization Selection:

For the study purpose the Shajalal Islami Bank Limited (SJIBL) is selected. The main core business of the organization is the Islamic banking services in Bangladesh. Other than six Islamic bank the SJIBL is one of the bank. Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. During last nine years SJIBL has diversified its service coverage by opening new branches at different strategically important locations across the country offering various service products both investment & deposit. Islamic Banking, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP of the economy.

4.0 Human Resource in Banking:

The core function of HR in banking industry is to facilitate the performance improvement among its people. Factors such as skills, attitudes and knowledge of personnel, play a critical role in determining the competitiveness within the organization or the industry (2002). The quality of human resources indicates the ability of banks to deliver the value to clients or customers.

Indian banking industry has been an important driving force behind the nation’s economic development. The emerging environment poses both opportunities and threats, particularly to the public sector banks, as well as the human resource in changing economic and business environment. The primary emphasis needs to be on integrating human resource strategies with the business strategy. Above the aspects of recruitment, placement, performance management, rewards and employee relations – a radical transformation of the existing personnel structure in public sector banks like the seniority over performance is not the best environment for attracting the best talent from the young competitive environment. However, recruitment practices as well as on-the-job-training and redeployment are considered as one of those many improvements of HR in Indian Banks (2002).

5.0 HRM Background and Practices:

To make the Indian Banking System stronger, efficient and low-cost, the creation of fundamentals must include in the bank’s operations, strategies and processes: strengthening the prudential norms and market discipline; adoption of international benchmarks; management of organizational change and consolidation within the financial system; upgrading the technological infrastructure of the financial system; and human resource development as the catalyst of the transformation (2002).

The Human Resource field in the Banking Industry is considered as one of the process of discovery and transformation. The field of Human Resource can be described as emergent and dynamic within the cultural business aspect in a Banking Industry. The success of today’s banking business will sparsely depends on the human resources of the organization, in which plays a crucial role in providing the services needed.

The evolution of banking system in India affected the human resource practices, recruitment and selection practices, and training system. It is very important that the details of human resource are discussed along with the employees, to build their own career planning, perceptions and development.

The primary strength of the industry is the human resource that is why the efforts to develop the skills and management are the main subject placed before the human resource. A major challenge for many banks will be to develop the special competencies and skills for credit appraisal and risk management. Putting the information technology is a key contributed in human resource development. Therefore, the HR model of the future will require professionals to be both driving and anticipating change, understanding the complexities of the new business environment and forces shaping it (2002).

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6.0 Recruitment, Selection and Training:

As part of the initial yet possibly the most crucial HR function, recruitment and selection is part of the general management function of staffing and plays a major role in ensuring the implementation of strategies. Recruitment is the process of discovering, developing, seeking and attracting individuals to fill actual and/or anticipated job vacancies and has three general purposes: to fulfill job vacancies, to acquire new skills, and to allow organizational growth. The Identifies some factors that affect the recruiting efforts including organizational reputation, attractiveness of the job, cost of recruiting, recruiting goals, and recruiting philosophy. These factors are deemed essential in hiring the best individuals for the job. Selection, on the other hand, is the partner of recruitment and directed to the attainment and accomplishment of goals. An effective selection process decreases the possibility of wasting financial resources in various HR activities such as repetitive training and documentation. The current conditions of the labor market necessitate organizations to undergo changes and utilize various job recruitment and selection methodologies. Each organization has a distinctive recruitment and selection system, wherein the applicants are subjected to both the basic criteria of an employee and the specific criteria for the job description.

There are mainly two recruitment systems in the organizations. The SJIBL follow the external recruitment process.

The external recruitment process is a very complex HR Process, which involves many parties and the clear follow up of the individual process steps is essential. The HRM Function is responsible for setting and defining the external recruitment process and it has to be sure to solve several success factors in the external recruitment process.

At the SJIBL the external recruitment process includes_

Job Advertisement: SJIBL circulate the advertisement in the daily newspapers and also in the internet job sites. Job Advertising is Techniques and practices used to attract the suitable applicants’ attention for the business to apply for a specific job and it should be paid announcements in the print, broadcast, or electronic media. At the advertisement all the requirement are mentioned. Such as the age limit, the information CV must have the minimum education qualifications and the many more matters.

Screening the applications: After that the SJIBL HR sorting out the applications and screening the applications. After that the actual applicants who have fulfilled the requirements are selected for the written examination.

Written Examination: The SJIBL management makes a question paper and asks the all selected candidates for the examination. Who appear in the written examination is called for viva procedures. And finally select the final employee.

Training: The Human Resources department of SJIBL assesses the need for the training. For this, several measures are taken. The department sends out a detailed questionnaire to the managers and their subordinates to know the areas where training is needed of SJIBL. The department meets with managers of various departments to help identify those areas. After the assessment of training needs is complete, the results are tabulated, summarized and shared with stakeholders. For this, the SJIBL HR department sends out the summary pointer and feedback and an anticipated training program.

Under the out job training the SJIBL arrange the various class room theoretical learning training. The SJIBL oldest on-the-job development technique is coaching, which is the daily training and feedback given to employees by immediate supervisors. SJIBL coaching involves a continual process of learning by doing. For effective coaching, a healthy and open relationship must exist between employees and their supervisors or managers. Many firms conduct formal training courses to improve the coaching skills of their managers.

Through this type of training actually the employee like SJIBL manufacturing company’s can learn practical knowledge. Through this their on job performance becomes excellent.

SJIBL have a training center where the new employee and the new matters are learned by rotations. Each of the employee are toughed various matters on products and software and the marketing process in these training process.

7.0 The objectives of SJIBL’s HRM are helped to achieve the organizational goals as follows:

1. To create and utilize an able and motivated workforce, to accomplish the basic goals of SJIBL’s.

2. To establish and maintain sound organizational structure and desirable working relationships among all the members of SJIBL’s.

3. To secure the integration of individual or groups within the organization by co-ordination of the individual and group goals with those of SJIBL’s.

4. To create facilities and opportunities for individual or group development so as to match it with the growth of SJIBL’s.

5. To attain an effective utilization of human resources in the achievement of SJIBL’s goals.

6. To identify and satisfy individual and group needs by providing adequate and equitable wages, incentives, employee benefits and social security and measures for challenging work, prestige, recognition, security, status of SJIBL’s.

7. To maintain high employees morale and sound human relations by sustaining and improving the various conditions and facilities of SJIBL’s.

8. To strengthen and appreciate the human assets continuously by providing training and development programs of SJIBL’s.

9. To consider and contribute to the minimization of socio-economic evils such as unemployment, under-employment, inequalities in the distribution of income and wealth and to improve the welfare of the society by providing employment opportunities to women and disadvantaged sections of the society.

10. To provide an opportunity for expression and voice management of SJIBL’s.

11. To provide fair, acceptable and efficient leadership of SJIBL’s.

12. To provide facilities and conditions of work and creation of favourable atmosphere for maintaining stability of employment of SJIBL’s.

SJIBL’s management has to create conductive environment and provide necessary prerequisites for the attainment of the personnel management objectives after formulating them.

Effective HR of SJIBL’s management objective and achieve the following goals by achieving above three activities:

Helping the SJIBL to reach its goals as becoming the top bank in Bangladesh and establish as an Islamic bank. Realizing the aims and objectives by means of strategic planning.

At the SJIBL employing the skills and abilities of the workforce efficiently. Suitable person at the suitable place.

Providing the SJIBL with well-trained well-motivated and well dedicated employees. Because bank is an organization of service providing organization. If the employee becomes satisfied and well trained, they can provide the actual service and satisfy the customers.

AT the SJIBL increasing to the fullest the employee’s job satisfaction and self-actualization.

Developing and maintaining a quality of work life that makes employment in the SJIBL desirable and encourage able.

Communicating the SJIBL’s HRM policies to the employees to get awareness of the Employees to dedicate their work force towards the realization of the aims and objectives of the firm.

Helping to maintain ethical policies and socially responsible behaviour to maintain ethical and social values by SJIBL.

8.0 HR models used by SJIBL:

Estimates can be either top-down or bottom-up, but essentially people who are in a position to know are asked, “How many people will you need next year at SJIBL?”

Rules of thumb rely on general guidelines applied to a specific situation within the SJIBL. For example, a guideline of “one operations manager per five reporting supervisors” aids in forecasting the number of supervisors needed in a division. However, it is important to adapt the guidelines to recognize widely varying departmental needs.

The Delphi technique uses input from a group of experts at the SJIBL. The experts’ opinions are sought using separate questionnaires on what forecasted situations will be. These expert opinions are then combined and returned to the experts for a second anonymous opinion. The process continues through several rounds until the experts essentially agree on a judgment. For example, this approach was used to forecast effects of technology on HR management and staffing needs.

The nominal group technique, unlike the Delphi technique, requires experts to meet face to face. Their ideals are usually generated independently at first, discussed as a group, and then compiled as a report at the SJIBL.

9.0 Human Resource Planning:

The competitive SJIBL organizational strategy of the firm as a whole becomes the basis for human resource (HR) planning. It includes the process of analyzing and identifying the need for and availability of human resources so that the SJIBL can meet its objectives. This section discusses HR planning responsibilities of SJIBL, the importance of HR planning in SJIBL, and the HR planning process. So the planning includes the matter_

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Needs of new Human Resources for SJIBL

Availability of new Human Resources

10.0 HR Planning Process:

The SJIBL’s HR planning processes are described here. The HR planning process begins with considering the SJIBL’s objectives and strategies. Then both external and internal assessments of HR needs and supply sources must be done and forecasts developed. Key to assessing internal human resources is having solid information, which is accessible through a human resource information system.

Once the assessments are complete, forecasts must be developed to identify the mismatch between HR supply and HR demand. SJIBL’s HR strategies and plans to address the imbalance, both short and long term, must be developed. SJIBL’s HR strategies are the means used to aid the organization in anticipating and managing the supply and demand for human resources. These HR strategies provide overall direction for how HR activities will be developed and managed. Finally, specific HR plans are developed to provide more specific direction for the management of HR activities.

SJIBL’s Objectives and Strategies

Scan External Environment for Changes Affecting Labor Supply

Analyze Internal Inventory of SJIBL’s HR Capabilities

Forecasting for SJIBL

SJIBL’s Need for People

Survey of People Available

SJIBL’s HR Strategies and Plans

SJIBL’s HR planning diagram

SJIBL’s human resource planning is under taken are as follows

(1) SJIBL HR determine recruitment needs – an essential prerequisite to the process of recruitment is to avoid problems of unexpected shortage, wastage, blockage in the promotion flow and needless redundancies.

(2) SJIBL HR determining training needs – this is fundamentally important to planning training programmed for which it is necessary to not only quality but also quantity in terms of the skills required by the SJIBL.

(3) Management development for SJIBL: – a succession of trained and experienced manager is essential to the effectiveness of the SJIBL and this depends on accurate information about present and future requirement in all management parts.

(4) Balancing the cost between the utilization of branches and workforce for SJIBL: – these in values comparing costs of these two resources in different combinations and selecting the optimum. This is especially important when costing projects.

(5) Organizational relations at SJIBL: – the business plan will of necessity make assumptions about productivity of the human resource. It will have an impact on the organization industrial relations strategies in practice; hr planning is concerned with the demand and supply of labor and problems arising from the process of reconciling these factors. Any system has to be based on analyses of demand and supply and the plans and decisions, which follow these analyses.

11.0 SJIBL HR Development Approaches:

The SJIBL arrange the development process for their employee and management in the two ways. Development can be thought of as growing capabilities that go beyond required by the current job; it represents efforts to improve employees’ ability to handle a variety of assignments. Development is beneficial to both the SJIBL and the individuals. Employees and managers with appropriate experiences and abilities enhance the ability of SJIBL to compete and adapt to a changing competitive environment. In the development process, the individuals’ careers also gain focus and evolve.

SJIBL’s HR development approaches are described, under two major headings: job-site development and off-site development. Both are appropriate in developing managers and other employees. The HR Perspective discusses the variables

that facilitates participation in development.

12.0 SJIBL’s Job-Site Methods:

SJIBL Company had undertaken a number of job-site development methods. A major difficulty with development that takes place on the job site is that too often, unplanned activities are regarded as development. It is imperative that managers plan and coordinate development efforts so that the desired development actually occurs.

COACHING The SJIBL’s oldest on-the-job development technique is coaching, which is the daily training and feedback given to employees by immediate supervisors. SJIBL’s coaching involves a continual process of learning by doing. For effective coaching, a healthy and open relationship must exist between employees and their supervisors or managers. Many times the SJIBL also conduct formal training courses to improve the coaching skills of their managers.

Through this type of training actually the employee like SJIBL bank service providing organization can learn practical knowledge. Through this their on service offer quality becomes excellent.

JOB ROTATION: AT the SJIBL job rotation process happen of change an employee from job to job. In SJIBL have precisely planning the program for each employee. Job rotation is widely used as a development technique. For example, a promising young manager may spend three months in the customer service unit of SJIBL, three months in corporate planning, and three months in cash department. When properly handled, such job rotation fosters a greater understanding of the SJIBL. At SJIBL, job rotation is used during a 15-month sales training program. Trainees work in at least three areas, such as industrial sales, retail sales, and product training. Especially when opportunities for promotion are scarce, job rotation through lateral transfers may be beneficial in rekindling enthusiasm and developing new talents. The best lateral moves do one or more of the following:

Move the person into the core business.

Provide closer contact with the customer.

Teach new skills or perspectives.

In spite of its benefits, managers of SJIBL recognize that job rotation can be expensive. Furthermore, a substantial amount of managerial time is lost when trainees change positions, because they must become acquainted with different people and techniques in each new unit.

13.0 SJIBL’s Off-Site Methods:

Off-the-job-site development techniques are playing at SJIBL an effective role because they give the individual an opportunity to get away from the job and concentrate solely on what is to be learned. At SJIBL, meeting with other people who are concerned with somewhat different problems and come from different organizations may provide an employee with new perspectives on old problems. Various off-site methods are used at SJIBL.

BANKING CUSTOMER RELATIONS TRAINING: Though SJIBL’s main customers are the individual people this type of training are very effective. In SJIBL customer relations training originated. Initially, the purpose of the training was to prepare supervisors for “people problems” brought to them by their employees. This type of training focuses on the development of the human relations skills a person needs to work well with others. In SJIBL customer relations training programs are aimed at new or relatively inexperienced first-line supervisors and middle managers. Human relations programs typically have sessions on motivation, leadership, employee communication, and humanizing the workplace.

The problem with such programs is the difficulty in measuring their effectiveness. The development of human relations skills is a long-range goal; tangible results are hard to identify over the span of several years. Consequently, such programs often are measured only by participants’ reactions to them. In SJIBL reaction-level measurement is the weakest form of evaluating the effectiveness of training.

OUTDOOR TRAINING: SJIBL send executives off to ordeals in the wilderness, called outdoor training, as a development tool. SJIBL has sent executives and managers to the outdoors for stays of several days or even weeks. The rationale for these wilderness excursions is as follows: For individuals, such experiences can increase self-confidence and help them revaluate personal goals and efforts. For work units, a shared risk outside the SJIBL’s office environment can create a sense of teamwork. The outdoor training includes sending the managers to get training on Islamic banking and many times for getting the training on development on banking system. The survival-type management development course may have more impact than many other management seminars.

ROLE PLAYING at various departments: Role playing is a development technique undertaken at SJIBL for the trainee to assume a role in a given situation and act out behaviours associated with that role at SJIBL. Employees gain an appreciation of the many behavioural factors influencing on-the-job situations. For instance, a labour relations director may be asked to play the role of a union vice-president in a negotiating situation in order to give the director insight into the constraints and problems facing union bargaining representatives at SJIBL. Role playing is a useful tool in some situations, but a word of caution applies. At SJIBL trainees are often uncomfortable in role-playing situations, and trainers must introduce the situations well so that learning can occur.

This type of training will help the employee of SJIBL to achieve the knowledge about the all department of the Banking activities. If any time there shortage of employee the service will be continued by the others. The employee can also solve the banking critical problems with the team. If any problem arises in any department’s activities, any employee can find out the problem and solution

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14.0 Benefits of Development Programs for SJIBL:

Batter knowledge in Islamic banking system for serve and attract the customer for adapting Islamic banking System.

Batter knowledge on banking software and make efficient in providing banking service.

Helps remove performance deficiencies in employees and achieve the SJIBL’s goal.

Greater stability, flexibility and capacity for growth in the SJIBL

Accidents, scraps and damages to machinery avoided at the SJIBL

Serves as effective source of recruitment for the SJIBL

SJIBL can reduces dissatisfaction, absenteeism, complaints and turnover of employees

Helps person handle stress, tension, frustration and conflict to achieve the SJIBL’s goal.

Provides a good climate for learning, growth and co-ordination to achieve the SJIBL’s goal.

SJIBL’s employee improves management relations

Aids improving SJIBL’s communication

Helps employees adjust to change and achieve the SJIBL’s goal.

Improves the moral of workforce of SJIBL’s employee

Develops a sense of responsibility to the organization for being competent and knowledgeable

It is an investment in HR with a promise of better returns in future and to achieve the SJIBL’s goal.

15.0 Purpose of Performance Management:

Performance management is an outgrowth of management controls whose purpose is to ensure that work is progressing according to the organization’s plans. Performance management according to is the principal set of practices by which control is manifested in organizations. Control is defined as any process that is used to align the actions of individuals to the interests of the organization. Controlling is the management function concerned with monitoring performance to ensure that it conforms to plans. Control is accomplished by comparing actual performance with predetermined standards or objectives and then taking action to correct any deviations from the standard. The three basic requirements of the control process are:

Establishing performance standards – Standards are used to set expected performance levels for machines, tasks, individuals, groups of individuals and the organization as a whole.

Monitoring performance and comparing it with those standards – The primary purpose of monitoring performance is to provide information on what is actually happening in the organization.

Taking necessary corrective actions – Corrective action can be taken after the actual performance has been assessed and compared with performance standards.

As part of the control process, the purpose of performance management is to make sure that employee goals, employee behaviors used to achieve those goals, and feedback of information about performance are linked to the organizational strategy. Performance management systems also help organizations reduce turnover of highly skilled and experienced employees by providing environments conducive to growth and development and help eliminate outdated expectations for career opportunities. Performance management helps to motivate employees, who take responsibility for their own development and continue to add value, encourage employees and managers to support continuous learning, and help managers develop their employees. Performance management systems permit employees to understand the importance of keeping skills and abilities current and increase retention of experienced employees by providing career advancement. They enable employees to create meaningful development plans and match realities in the organization to recruiting promises.

16.0 Performance Appraisal:

Performance appraisal is the process by which an employee’s contribution to the organization during a specified period of tine is assessed. Performance appraisal is integral to the successful operation of most organizations. During this process, employees are evaluated formally and informally to determine the nature of their contributions to the organization. Appraisal occurs during time periods and in meetings that are scheduled to produce reasoned consideration of contributions, but it also occurs informally as employee contributions are observed, or when an evaluation is brought to the attention of others.

Performance appraisal is treated as an evaluation and development tool, as well as a formal legal document. Appraisals review past performance – emphasizing positive accomplishments as well as deficiencies and drafting detailed plans for future development. The performance evaluation also serves a vital organizational need by providing the documentation necessary for any personnel action that might be taken against an employee.

Management by objectives (MBO) specifies the performance goals that an individual hopes to attain within an appropriate length of time. The objectives that each manager sets are derived from the overall goals and objectives of the organization,

although MBO should not be a disguised means for a superior to dictate the objectives of individual managers or employees. Although not limited to the appraisal of managers, MBO is most often used for this purpose. Other names for MBO include appraisal by results, target-coaching, work planning and review, performance objectives, and mutual goal setting.

Though The SIBL is a service oriented organization means the banking organization so that the Management by objective appraisal method is applicable for evaluate the performance.

THE SJIBL MBO PROCESS In the SJIBL implementing a guided self-appraisal system using MBO is a four-stage process.

Job review and agreement of SJIBL Employee: The employee and the superior review the job description and the key activities that comprise the SJIBL employee’s job. The idea is to agree on the exact makeup of the job.

Development of performance standards of SJIBL: Specific standards of performance must be mutually developed. In this phase a satisfactory level of performance that is specific and measurable is determined. For example, a quota of selling five cars per month may be an appropriate performance standard for a salesperson.

Guided objective setting: Objectives are established by the employee in conjunction with, and guided by, the superior. For the automobile salesperson, an objective might be to improve performance; the salesperson might set a new objective of selling six cars per month. Notice that the objective set may be different from the performance standard. Objectives should be realistically attainable.

Continuing performance discussions: The employee and the superior use the objectives as bases for continuing discussions about the employee’s performance. Although a formal review session may be scheduled, the employee and the manager do not necessarily wait until the appointed time to discuss performance. Objectives are modified mutually, and progress is discussed during the period.

17.0 Problems and Difficulties in Performance Appraisal:

Unclear standards

Harshness bias – some managers are prone to harshness bias, which is, rating employees more severely than their performance merits.

Leniency bias – managers with this bias rate their employees more favorably than their performance merits.

Central tendency – central tendency characterizes the responses to many types of questionnaires. Central tendency is the tendency to select ratings in the middle of the scale. This bias causes a manager to miss important opportunities to praise or correct employees.

Similarity bias – this refers to the tendency to judge others more positively when they are like us.

Regency syndrome – this refers to the human tendency to place the most weight on events that have occurred most recently. In a performance appraisal, a manager might give particular weight to a problem the employee caused last week or an award the employee just won whereas he or she should be careful to consider events and behaviors that occurred throughout the entire period covered by the review.

Halo effect – this refers to the tendency to generalize one positive or negative aspect of a person to the person’s entire performance.

Prejudices – the manager’s prejudices about carious types of people can unfairly influence a performance appraisal.

18.0 Conclusion: Overcoming Problems and Difficulties in Performance Appraisal-

Performance appraisal should be completely objective. Appraisals should reflect an employee’s performance. However, it is impossible to do appraisals perfectly. There are problems and difficulties that occur during the performance appraisal like bias and central tendency. Ways of avoiding of overcoming these problems include

Understand the problems and difficulties in performance appraisal. Understanding the problem helps in avoiding it.

Choose the appropriate appraisal tool. Each tool has its own advantages and disadvantages. It is important that the manager select the most appropriate tool for the organization.

Train supervisors properly to eliminate rating errors such as halo, tendency and leniency. In a typical training program, raters are shown a videotape of jobs being performed and are asked to rate the worker.

Diary keeping – through diary keeping the adverse effects of appraisal problems can be reduced by having raters carefully write down positive and negative critical incidents as they occur during the period to be appraised.


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