Performance AppraisalIntroduction:

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

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

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

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

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Meaning & definition of performance appraisal:

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

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

According to Flippo, a prominent personality in the field of Human resources, “Performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job.” Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.

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

According to W.D.Scott, R.C.Clothier, W.R.Spriegel, “Performance Appraisal is a process of evaluation of an employee’s performance of a job in terms of its requirements.”

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

Objectives of Performance Appraisal:2

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

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

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior – subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees

Characteristics/Features of Performance Appraisal:

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

Some of the important characteristics of

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

Reliable and Consistent: Appraisal should include both objective and subjective ratings to produce reliable and consistent measurement of performance.

Practical and simple format: The appraisal format should be practical, simple and aim at fulfilling its basic functions. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information.

Regular and routine: While an appraisal system is expected to be formal in a structured manner, informal contacts and interactions can also be used for providing feedback to employees.

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

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

Rewards: Rewards - both positive and negative - should be part of the performance appraisal system. Otherwise, the process lacks impact.

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

Impersonal feedback: Feedback must be impersonal if it is to have the desired effect. Personal feedback is usually rejected with contempt, and eventually de-motivates the employee.

Feedback must be noticeable: The staff member being appraised must be made aware of the information used in the appraisal process. An open appraisal process creates credibility.

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

Commitment: Responsibility for the appraisal system should be located at a senior level in the organization so as to ensure commitment and involvement throughout the management hierarchy.

Performance ManagementPerformance appraisal is considered as a most significant and indispensable

tool for an organization as it provides highly useful information in making various

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decisions regarding various aspects such as promotions, training and development, retirements, transfer, salary administration, etc. it also provides basis for judging the effectiveness of the employees. Accurate information collected through performance appraisal plays a vital role in an organization as a whole. Hence, performance appraisal should be done accurately following an objective method of judging the relative worth or abilities or performance of an individual employee in performing the tasks entrusted to him. The effectiveness of performance appraisal, to a large extent, depends upon how well the organization has prepared itself for doing it. It is a basic function of performance management. Performance management is nothing but managing the performance appraisals of the employees periodically and systematically and covers basically the following areas or steps.

1. Setting of proper standards for the purpose of appraising the performance.2. Measuring actual performance of employees by adopting suitable method/

methods.3. Comparing it with standards.4. Finding out measures for deviations from standards.5. Taking corrective actions to eliminate these reasons.6. Revising of performance stands and adopting suitable method of

performance appraisal according to the needs or changing circumstances or requirement.

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

It unifies the appraisal procedure:

The procedure of performance appraisal is basically dependent upon the purpose or purposes of appraisal. Once the procedure is laid down, in the same manner, the performances of all the employees should be evaluated or judged. Then it becomes possible to compare the performance of the employees properly by finding out their weaknesses and strength.

It provides useful information:

Management has to take many decisions relating to training, transfers, promotions, increments, discharge, retirement, salary adjustments, etc. they all are related to the performance appraisals of the employee. Such

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decisions can be taken properly on the basis of information by the appraisal plan.

It facilitates creation of records:

Firstly, for the purpose of performance appraisal, necessary information is required to the collected on the basis of which the performance appraisal is done. After it is done the results of the performance appraisals are stored in the form of records. All such records can be used as evidence for different purposes e.g. while handling grievances related to the decisions based on such appraisals.

It weeds out inefficiencies:

When inefficient, incapable, undisciplined, lethargically employees are identified; chances to improve them can be given to them. But, after giving those chances, if they do not improve, they can be weeded out on the basis of performance appraisals.

It keeps superior more alert:

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

360-Degree Performance Appraisal:

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

360-degree has four integral components:

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

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

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

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

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

Performance Appraisal Process:

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

COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and

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

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

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

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

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

Uses of Appraisal system:

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

Be instrumental in helping employees to better understand their strengths and weaknesses with respect to their role and functions in the organization;

help in identifying the developmental needs of employees, given their role and function;

Increase mutuality between employees and their supervisors so that every employee feels happy to work with their supervisor and thereby contributes their maximum to the organization;

Act as a mechanism for increasing communication between employees and their supervisors. In this way, each employee gets to know the expectations of their superior, and each superior also gets to know the difficulties of their subordinates and can try to solve them. Together, they can thus better accomplish their tasks;

Provide an opportunity to each employee for self-reflection and individual goal-setting, so that individually planned and monitored development takes place;

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

help prepare employees for higher responsibilities in the future by continuously reinforcing the development of the behavior and qualities required for higher-level positions in the organization;

Be instrumental in creating a positive and healthy climate in the organization that drives employees to give their best while enjoying doing so;

Assist in a variety of personnel decisions by periodically generating data regarding each employee.

Methods of Performance Appraisal:12

Traditional methods13

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

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

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

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

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

6. CHECKLIST METHOD

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

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

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

Modern methods15

1. MANAGEMENT BY OBJECTIVE (MBO)

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.

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

MBO PROCESS:

UNIQUE FEATURES AND ADVANTAGES OF MBO:

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

Some of the important features and advantages of MBO are:

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

SpecificMeasurableAchievableRealistic, Time bound.

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

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

Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.

Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

2. 360-DEGREE APPRAISAL

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

360-degree has four integral components:

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

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

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

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

3. ASSESSMENT CENTRES

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

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

Social/Informal Events – An assessment centre has a group of participants and also a few assessors which gives a chance to the employees to socialize with a variety of people and also to share information and know more about the organization.

Information Sessions – information sessions are also a part of the assessment centers. They provide information to the employees about the organization, their roles and responsibilities, the activities and the procedures etc.

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

The following are the common features of all assessment centers:

The final results is based on the pass/fail criteria

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

Each session lasts from 1 to 5 days.

The results are based on the assessment of the assessors with less emphasis on self-assessment.

4. BEHAVIORALLY ANCHORED RATING SCALES

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

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

5. HUMAN RESOURCE ACCOUNTING METHOD

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

Errors/Challenges faced in Performance Appraisal20

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

Determining the evaluation criteriaIdentification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms

Create a rating instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization.

Lack of competence Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.

Errors in rating and evaluation Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees

ResistanceThe appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.

TRAINING21

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

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

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

Need of Training:

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Training is a vital and necessary activity in all organizations. It plays a major party in determining the effectiveness and efficiency of the establishment. Some of the reasons why training is needed are outlined below:

Reduced learning time: By having qualified instructors and carefully controlled learning situations, management in numerous cases has been able to obtain shortened learning periods and ensure higher productivity from new employees.

Improved performance: Training applies not only to new employees but to experienced people as well. It can help employees increase their level of performance on their present job assignments.

Attitude formation: A common objective of company training programs is the moulding of employee attitudes to achieve support for company activities and to obtain better cooperation and greater loyalty.

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

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

Benefits to employees themselves: As employees acquire new knowledge and job skills, they increase their market value and earning power. The possession of useful skills enhances their value to their employer.

Training methods:23

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

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

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

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

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

Job rotation: It broadens understanding of several business situations. This is suitable for the young newcomers who are fresh from to learn by doing. Its major limitation is prevention of specialization by concentrating on several problems and procedure of different specialized departments.

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

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