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1. Appendix - B
Nascent Applied Methods & Endeavors
Detailed Description of Services
I. Procedural Specifications of Software to be Developed.
A. Program(s) Description:
1. Name of Program: (Word Processing)
2. Performance Features (Functional Specifications):
a) Menu Structure.
Create Edit Use-Named Settings
Current Named Tabs Justification Spacing Left Right Blanks CRs Auto-Justify Quit
None Left Even Center 123 Set Reset Yes No Yes No Yes No
Margins/Tabs Justification Spacing Line-Marker Use-Named Reset Quit
None Left Even Center 123 Assign Remove
Yes No
b) Setting Menu.
Learn Security Global-Protection Auto-Execute Communication Quit
Unlock Lock Yes No Set Cancel Set Cancel
Range Erase Cancel Yes No Quit
Yes No
1

2. B. Program(s) Description:
1. Name of Program: (Databases)
2. Performance Features (Functional Specifications):
a) Menu Structure.
Attach Criteria Initialize Record-Sort Generate Field Settings
Use Unique Insert Basic
Ignore All Delete Form
Edit Move Underscore
Quit Sort-Keys
Report
One-Record
Name
Cancel
Quit
b) Setting Menu.
Basic Form Underscores Sort-Keys Report One-Record Name Cancel Quit
Database Criterion Output Quit Yes No Yes No Basic Form Sort-Keys Report All
Entry Definition Quit 1st-Key 2nd-Key 3rd-Key
Main Above Below Type Quit
Single Multiple
Use Create Delete Previous Next Initial-Settings Reset Quit
C. Program(s) Description:
2

3. 1. Name of Program: (Spread-Sheet)
2. Performance Features (Functional Specifications):
a) Menu Structure.
Copy Move Erase Insert Delete Width Format Range Graph Query Settings
Columns Columns Set Currency Name Preview Settings Label-Prefix
Rows Rows Restore Punctuated Transpose 1st-Settings Find Recalculation
Global Global Hide Fixed Values 2nd-Settings Extract Titles
Display % Label-Alignment Image-Save Unique Format
General Protect Quit Delete Width
Date Fill Record-Sort Zero
Time Distribution Parse Quit
Scientific What-if Quit
Other
Reset
b) Setting Menu.
Label-Prefix Recalculation Titles Format Width Zero Quit
Left Center Right Yes No
Method Order Iterations Currency Punctuated Fixed % General Date Time Scientific Other
Both Horizontal Vertical Clear
1(DD-MM-YY) 2(DD-MMM) 3(MMM-YY) 4(Full Intn'l) 5(Partial Intn'l)
1(HH:MM:SS AM/PM) 2(HH:MM AM/PM) 3(Full Intn'l) 4(Partial Intn'l)
Natural Column-by-Column Row-by-Row Optimal Bar-Graph Literal Hidden
Automatic Manual
D. Program(s) Description:
1. Name of Program: (Graphics)
2. Performance Features (Functional Specifications):
3

4. a) Menu Structure.
Attach 1st-Settings 2nd-Settings Image-Save
Switch Switch
Type Titles
Range Y-Scale
Hue X-Scale
Format Other
Data-Labels Name
Legend Quit
Cancel
Name
Quit
b) Setting Menu.
Attach 1st-Settings 2nd-Settings Image-Save
(see below)
Switch Type Range Hue Format Data-Labels Legends Cancel Name Quit
A B C D E F Process
Quit
Lines Symbols Both Neither
X A B C D E F Process
Quit
1 2 3 4 5 6 7 None
Entire-Row Range Format Data-Labels Legend Hue
Line Bar Stacked-Bar XY Pie High-Low-Close-Open Graph X A B C D E F Quit
Use Create Delete Previous Next Initial-Settings Reset Quit
Yes No
4

5. Attach 1st-Settings 2nd-Settings Image-Save
Switch Titles Y-Scale X-Scale Other Name Quit
First Second X-axis Y-axis Quit (as above)
Width Type Format Exponent Quit Grid Hide Color Skip Origin Aspect
Automatic Manual Yes No Yes No
Horizontal Vertical Both None
Currency Punctuated Fixed % General Date Time Scientific Other
Manual-Linear Automatic-Linear Logarithmic Bar-Graph Literal Hidden
E. Program(s) Description:
1. Name of Program: (Communication)
2. Performance Features (Functional Specifications);
a) Menu Structure.
Phone Login Transmit-Range File-Transfer Break Settings
A-J Send Receive
Call Wait-Mode Answer Hangup Data-Mode Voice-Mode
Yes No Interface Phone Terminal Send Break Handshaking Capture Login Name Quit
Baud Parity Length Stop-Bits Comm-Port Inbound Outbound Save Retrieve Erase Phone-and-Login
1-8 1-3 12 12 12 Yes No Yes No Maximum-Time Repeat-Time A-J New Quit
Type Dial-Time Answer-Time Number Print Range Erase Cancel Count Send Receive Quit Yes No
Pulse Tone Yes No
Screen Echo Linefeed Backspace Wrap Delay Translation End-of-Line Delay Response Format
Yes No Yes No Yes No Default National Custom Generate Quit Yes No
Full -Screen Window Backspace Delete A-J Current Retrieve Save
b) Setting Menu.
5

6. Page Source Destination Init-String Margins Other Name Quit
Printer File Range Erase Cancel Use Create Delete Previous Next Initial-Settings Reset Quit
Range Database Cancel Space-Compression Attributes Format Top-Labels Left-Labels No-Labels
Length Spacing Number Breaks Wait Header Footer Quit Yes No Yes No As-Displayed Cell-Formula
123 Yes No Left Right Top Bottom Initial-Margins No-Margins Quit
Print-Number Start-Page End-Page Yes No
F. Program(s) Description:
1. Name of Program: (Services)
2. Performance Features (Functional Specifications):
a) Menu Structure.
Window File Print Configuration Application Settings New Exit
Use Save Go File Attach Learn Yes Yes
Create Retrieve Line-Advance Printer Detach Security No No
Delete Combine Page-Advance Communications Invoke Global-Protection
Layout Xtract Align Document Clear Auto-Execute
Hide Erase Settings Window Quit Communications
Isolate Bytes Quit Help Quit
Expose List Auto
Pane Table Other
Settings Import Update
Quit Directory Quit
b) Setting or Configuration Menu.
6

7. File Printer Communications Document Window Help Auto Other Update Quit
Set Cancel Type Name Instant Removable (see below)
SHEET DOC GRAPH FORM COMM
Tabs Justification Spacing Left Right Blanks CRs Auto Justify Hard Tabs Quit
None Left Even Center Set Reset Yes No Yes No
123 Yes No Yes No
Type Auto-LF Wait Margins Page-Length Init-String Name Quit
123 Yes No 1 2...
Yes No Left Right Top Bottm
File Printer Communications Document Window Help Auto Other Update Quit
Clock File-Translation International Application
Standard International None
Default National Custom Generate Quit Set Cancel Quit
Current Retrieve Save 12345678
A(Spanish) B(British) C(French-Canadian) D(Danish/Norwegian) Yes No
E(Finnish) F(French) G(German) H(Swedish) I(Italian) J(Swiss)
Punctuation Currency Date Time Negative Quit
Prefix Suffix Parentheses Minus
A(HH:MM:SS) B(HH:MM:SS) C(HH:MM:SS) D(HHhMMmSSs)
A(MM/DD/YY) B(DD/MM/YY) C(DD.MM.YY) D(YY-MM-DD)
A(.,.) B(,..) C(.;,) D(,;.) E(.,) F(,.) G(.;) H,;)
c) Setting Structure.
7

8. Name Type Restrict Borders Auto-Display Quit
Yes No
SHEET DOC GRAPH FORM COMM Standard Line None
Screen Range None
G. Program(s) Description:
1. Name of Program: (Print Graph)
2. Performance Features (Functional Specifications);
a) Menu Structure.
Image-Select Settings Go Align Page Exit
Image Hardware Action Save Reset Quit
Size Font Range-Colors Quit Pause Eject Quit
12 XABCDEF Graphs-Directory Fonts-Directory Interface Printer Size-Paper Quit
Full Half Manual Quit 12345678 Length Width Quit
Top Left Width Height Rotation Quit
H. Program(s) Description:
1. Name of Program: (Special Terms and/or Keys)
2. Performance Features (Functional Specifications):
a) Window Type and Activities.
DOC Working with documents
FORM Working with forms and databases
SHEET Working with spreadsheets
GRAPH Viewing graphs
COMM Communicating with other computers
8

9. b) Command Menu.
DOC Copy
Move
Erase
Search
Replace
Justify
Format
Page
Line-Marker
FORM Attach
Criteria
Initialize
Record-Sort
Generate
Field
Settings
SHEET Copy
Move
Erase
Insert
Delete
Width
Format
Range
9

10. Graph
Query
Settings
GRAPH Attach
lst-Settings
2nd-Settings
Image-Save
COMM Phone
Login
Transmit-Range
File-Transfer
Break
Settings
II. Technical Specifications.
A. Hardware Compatibility Requirements: (Please refer to Appendix(ices) ____ of this
Agreement.)
III. Allocation of Project Accountabilities.
A. Additional System Design Specifications: (Please refer to Article(s) ____, Section(s) ____
of this Agreement.)
B. Site Preparation: (Please refer to Article(s) ____, Section(s) ____ of this Agreement.)
C. Integration/Interfacing with Existing System: (Please refer to Article(s) ____, Section(s) ____
of this Agreement.)
D. Development of Additional Acceptance Procedures: (Please refer to Article(s) ____
Section(s) ____ of this Agreement.)
E. Procuring of Permits and Licenses: (Please refer to Article(s) ____, Section(s) ____ of this
Agreement.)
IV. Delivery Schedule and Detailed Program Procedural Description(s).
10

11. A. Phase One.
1. Program Detailed Description (P.D.D.):
a. Initial Application Processing. (Please refer to Appendix - A, the Processing
Application.)
b. Personality Profile. (See below)
The Minnesota Multiphasic Personality Inventory
(MMPI 1 or 2) N.C.S. Assessment (Questions 1-700)
The National Computer Systems, Inc.
P.O. Box 1416
Minnesota, Minneapolis 55440
c. Problem Analysis.
i. As a prerequisite, the manager has expectations of what the standards of
performance in area of his or her responsibility should be. He or she observes
what is actually going on, and compares various aspects of the situation
against expectations.
ii. Noticing discrepancies between what "is" and what "should be," the manager
selects one out of several problems to work on. This choice is made
according to priorities of (a) the problem’s urgency, (b) it's seriousness, and
(c) it's potential for growth if left unattended.
iii. The Client specifies "what the problem is" - in terms of it's deviation from a
standard of performance - by describing accurately it's dimensions of
"identity," "location," "time," and "extent." To draw a boundary around it, he
or she may also specify what in general the problem does not include.
iv. Comparing what has and what has not been affected as deviation from
standard, the manager identifies specific effects of the real cause.
v. In each "area of distinction" uncovered in the previous step, the manager looks
for relevant changes that have taken place and which can be logically
connected to the unwanted effect(s).
vi. From the array of relevant changes the manage deduces possible causes of the
deviation. Each such conclusion is put in the form of a testable statement or
hypothetical proposition.
vii. Each "possible cause" is tested against the facts of the problem specification
(established in Step 2). The "most likely" cause of the deviation is described
by that tested hypothesis which exactly explains all the facts of "what the
problem is" (Step 3), not only of what has been affected as deviation from
standard, but also what has not (see Step 4).
11

12. Decision making to solve the problem is possible on completion of the steps above,
according to the additional steps enumerated below.
i. Now that the problem's cause has been identified and verified, the manager
lists the objectives to be accomplished by clearing up the problem.
ii. The Client classifies these objectives into (a) "Musts" - requirements that
cannot be compromised, and (b) "Wants" - aspects of the "best possible
appraisals/performance out of the decision," not all of which can be realized in
combination. The latter are ranked and weighed.
iii. A number of alternative ways of attaining the established objectives are
devised.
iv. Each procedure/alternative is evaluated against the objectives, assessing it in
terms of how well it satisfies each of the "Musts" and "Wants." Requirements
expectations.
v. A tentative decision is made, by choosing whichever alternative (or
combination of alternatives) appears best able to achieve all the objectives.
vi. The tentative decision is evaluated for any future possible adverse
consequences that might be inherent in it.
vii. The final decision includes (a) specific problem solving actions to be taken,
(b) whatever additional actions are considered necessary for avoiding adverse
consequences that might create new problems, and (c) ways of making sure
that the actions decided on are carried out.
d. Transactional Analysis (Group Meetings or Shops). (Please refer to Appendix - F
of this Agreement.)
e. Personal and/or Business Preliminary Surveys or Analysis.
Survey for a Complete Accounting System (Business Development); The basic scheme
here is to start with the broadest possible base, matters of a personal or of company-
wide importance, and work down in progressive degrees to narrower and more detailed
subject. Since this type of system work is generally performed by a public analysis
firm, the time and effort devoted to the gathering of information for the preliminary
survey depends upon whether or not a new client is involved. NAME audit files
already contain some of the information needed, the papers can be quickly and
satisfactorily transferred to the system survey file, thereby accelerating the preliminary
survey. The topics outlined in the following should serve as a check list of the
information needed.
i. History. A complete knowledge of what has gone before serves to orient the
systems man to what the company faces currently. It will shed light on the
company's age, position in the industry, rate of growth, and character of top
12

13. management. Historical financial summaries per independent audit reports or
published annual reports are included in this build-up history.
ii. Products. Gathered under products are classifications by product lines, each of
which is broken to specific items and broken down further by sizes, styles,
models, and other features. Complexity of use of any product is noted together
with customary units in which are sold, factory unit cost, sale price, and similar
factors.
iii. Chart of Accounts. By securing a copy of the classification of accounts in the
general ledger and in each of the subsidiary ledgers, a handy reference is gained of
the general framework of the accounting or database system.
iv. Policies. A study of company or personal policies will usually reveal considerable
uncertainty as to what the actual policies are. The preliminary survey will point to
the lack of definite policies, if any. After all, a responsibility of any accounting or
database procedure is to provide data by which to evaluate policies. It is hardly
possible to proceed with designing a procedure, therefore, if policies are
nonexistent or uncertain. Top management policies are laid down by the board of
directors, by the chief executive officer (president), and by the head of the large
divisions of company-finance, sales, and production. Department policies are
formulated by the heads of departments, and are subject to approval of higher line
authority.
v. Organization. In studying an organization, the object is first to understand how
the
present organization is supposed to function as called for by the official
organization manual and the charts included in it. The second and more difficult
step is to find out how the organization actually functions. To get the facts in the
second step requires a combination of ingenuity, powers of observation, and
mechanical technique.
As to mechanical technique, one effective method is to have each individual in the
organization fill out a report on a certain color paper for himself, setting forth what
he believes are his specific duties. The same individual is then asked (when
applicable) to make a report on different color paper for each person responsible to
him, setting forth the duties and responsibilities involved. A simple collating of the
papers will reveal (a) what a man considers to be his duties and responsibilities and
(b) what his superior(s) considers them to be. A marked discrepancy of opinion
usually indicates a weakness in the organizational plan and, hence, the need for
corrective action by the line officials affected.
vi. Plan of Production Processes. To be secured and studied are the charts showing
(a) the general layout and arrangement of the plant and (b) the physical flow of
production. With the aid of these charts, explanations from production executives,
and trips through the plant, the systems man may acquire a satisfactory general
knowledge of the production processes. Of particular interest here are: materials,
warehousing, and shipping. In the physical plant, the systems man will note the
condition and nature of machinery and equipment and their adequacy, adaptability,
flexibility, and efficiency. It is also necessary to observe the extent to which there
is production planning and therefore, control over production.
13

14. vii. Existing Accounting or Database and Office Procedures. The study of existing
accounting or database and office procedures represents the "heart" of the
engagement. This step in the survey narrows the inquiry and the accompanying
gathering of facts to the technical procedures that are to be reviewed and improved.
The nature and scope of the survey to be made of any procedure that is the object
of design, redesign, or improvement is fundamentally the same regardless of
whether the occasion calls for work on a particular procedure only or on all
procedures comprising the accounting or database system. The survey for any
procedure as outlined in the next section is thus equally applicable to the present
section.
f. Survey for a Particular Procedure.
In gathering the facts for a particular procedure, such as, say, for cash receipts, the
pattern of approach is again from the general to the specific. Study of details will go
forward more smoothly and faster if the systems man first acquires a general
background of information on the procedure as a whole.
i. A complete survey of a given procedure would normally require the gathering of
information in terms of the four topics outlined below. Such a survey would be
aimed at (a) accelerating the "procedure cycle," (b) improving internal and external
control, and (c) reducing costs through better methods. Not all of the topics outlined
are therefore applicable with equal force if an assignment calls for a limited study,
such as of factor (a) only.
ii. Objectives. The analyst must obtain a clear, detailed, and complete statement of the
objectives of a given procedure. Every procedure is conceived and put into
operation to achieve certain definite end results. A systems analyst cannot begin the
study and appraisal of details of a procedure without first being sure of the very
reasons for it's existence.
iii. Organization. Helpful to the study of organizations are tables or charts of
functions, with related information on the supervisors in charge and on the working
force. In the absence of readily available charts or tables, the analyst constructs
them himself from the facts gathered in the survey. In the study of organizational
facts, faulty or cumbersome features are bound to come to notice. For example, the
division of functions may be illogical, as in the case in which Supervisor A is held
responsible for activities the authority over which is also in the hands of Supervisor
B. Or, the division of functions may be uncertain, with no one willing, short of
being ordered, to acknowledge formal and open responsibility. If such defects of the
organization exist and are not corrected, they cannot help but increase costs and
reduce efficiency of the procedure(s).
iv. Policies. A procedure is affected by policies in force. In a department store, for
example, a procedure for putting individual price tags on merchandise is eliminated
when, under approved departmental policy, a practice known as "bulk marking" is
followed. In bulk marking, a price is set up in the area where the merchandise is
sold. The sign is subject to change by the department supervisor, and no record is
kept of what price changes, if any, took place. The analyst studying pricing
procedure in this department store must have knowledge of bulk marking, the
departments that are using it, and the reasons to justify it. In another example, if the
14

15. analyst is making a survey of timekeepinq procedures in a factory, he/she will want
to know whether as a matter of company policy, dressing and washing time shall be
included in attendance time, ant if so, the maximum allowance set, if any.
v. Details of Procedures. Having gathered background information of objectives, the
organization, and it's policies, the analyst is prepared to study details of procedures.
Interest here is concentrated on as many aspects as possible. These include what
work is performed, it's quantity and quality, the sequence in which it is performed,
the methods used and the people who use them, and cost of work.
(a) Flow of Work. Visual aids of various types are usually constructed in the
study of details. One example is a floor layout chart that shows location of
desks, points of pickup and delivery of papers, location of machines, files, and
so on. A second example is a flow chart. A separate flow chart should be
prepared for each form used in the procedures. This type of chart gives a
graphic account of the origin, movement, and final disposition of the form
under study. It notes the successive steps of the work performed; together with
an idea of the length of time required; and, finally, when the form is made in
multicopy, and the people to whom completed copies are sent. The procedural
model located in Appendix D of this Agreement, gives graphic account of
flowchart construction, and a series of other organizational flow-charts
illustrates such a flow chart for a disbursement voucher. Such a detailed
operational study of forms is very valuable in the subsequent design stage of the
or a project. In that stage, the facts of the survey will suggest whether a present
operational step should be eliminated, merged with another step, changed as to
sequence in the line of performance, or simplified.
In taking up details of a procedure, no form, record, document, or report used
in the procedure should be immune to inquiry. As a corollary to this, no
phase of work should be taken for granted simply because someone connected
with it thinks that "it is necessary." The systems man may refer to a manual on
the procedure, if there is one, but in the end the survey is responsible for
gathering facts on the actual, rather than the theoretical, functioning of the
given procedure.
(b) Quantity and Quality of Work. The survey of detailed matters should include
information on both the quantity and quality of the production items handled.
Quantity data are usually expressed in statistical terms. Examples are: number
of invoice line written, material requisitions filled, collection letters prepared,
and lines posted to the ledger. From statistics of this kind, it is relatively easy to
compute the average time of performing a given operation, such as the average
time of writing an invoice line, sorting a batch of papers, or filling out a
particular form. Knowledge of the quality of work done next may be gained by
examining existing statistics on "repeats," disapprovals, and cancellations.
Useful here is also the analyst’s personal inspection of the papers and records,
including those on file, for evidence of their general condition, legibility,
completeness, and any other aspect bearing on the quality of performances of
both people and machines.
(c) Cost of Work. Closely related to matters of quantity and quality of work done
is the question of cost. Over-all cost of a procedure is not difficult to compute if
the procedure is wholly confined to a particular department and if there is a
15

16. departmental budget. Interdepartmental procedures present a more formidable
problem in cost allocation, especially of indirect items. Careful estimates only
are possible here.
Cost figures should be broken down and expressed in terms of meaningful
units whenever feasible. A common practice is to express the direct cost, such
as salary or wage, per unit of production. To illustrate, suppose that, in a given
situation, the standard time for sorting 8 1/2 x 11 inch papers into eight
classifications is .00035 manhours per page sorted. A useful expression of unit
cost here would be sorting cost per 1,000 pages. Assuming an hourly pay rate
of $10.25, the standard cost of sorting 1,000 pages would be $30.47 ($10.25
x .35 manhours).
g. Performance Appraisals.
Performance appraisals are one of the most important human resource functions.
Properly designed, a performance appraisal system integrates all aspects of the
personnel function and affects the organization at the most fundamental level-the
productivity of the enterprise. While the mere existence of a performance appraisal
plan can serve to motivate employees, the design and emphasis of particular plans are
distinguished in their broadest measure by the degree to which they seek either to
motivate or to categorize employees. An organization that chooses employee
motivation as the prime objective of it's appraisal effort will design a system with
features that appeal to employee involvement and "ownership" of their jobs. Employee
participation, communication with the performance appraiser and employee feedback
are hallmarks of rating systems that emphasize motivation. Management-by-objectives
(MBO), under which the employee participates in developing the performance
standards against which he is judged, is the most prevalent system designed to achieve
increased motivation.
If an employer wants an appraisal system to serve mainly as a tool for internal
selection and to build a defensible work record to support such decisions, then the
system will stress rating employees relative to each other. Accurate judgments about
past performance should be stressed. Employee ranking, where each worker is
compared to all others in the job on a broad performance measure, is the purest
example of a rating plan that chooses administrative convenience over motivational
objectives. Although, even pure rank ordering can incorporate some appeal to effective
performance improvement, if the ranking process allows consultation with the worker
and discussion of job performance.
observation: In practice, most performance appraisal systems contain elements
designed to both motivate and categorize employees.
Implementing the System
The scheduling of performance reviews depends on a number of variables that must be
weighed with respect to particular jobs and work groups. However, to accomplish the
goals of a performance review system, a formal performance review of each employee
must be held at least once a year. Many employers feel these goals require more
frequent performance reviews, and give employees six month reviews. Other
16

17. employers provide six month performance reviews for nonexempt employees and
annual reviews for exempt employees.
Another option is to give new employees, or newly promoted employees, a
performance review after a few months on the job, thereafter putting them on the
"normal" review schedule. Yet another option, is to give employees, particularly non-
exempt employees, a six-month performance review as long as they remain at or below
the mid-point for their salary grade, and an annual review once they rise above the
mid-point
Employers may choose to schedule all reviews during the same time period. For
example, a company might decide to evaluate all employees in December of each year.
Such scheduling has the benefit of helping to ensure employees will be evaluated on an
equal basis. However, in large companies or departments it may place such a burden
on individual supervisors (and personnel employees) that it is not a viable approach.
recommendation: If reviewing all employees at one time is not feasible because of
the administrative burden created, the employer should consider the possibility of
reviewing only particular groups at one time, where evaluation of all members of a
group at the same time seems beneficial. For example, the employer might want to
schedule the performance reviews of a supervisory group at one time where there is a
likelihood that particular management positions will be filled from that group.
Employers should reserve the right to conduct unscheduled formal performance
appraisals in the event of drastic changes in performance or other special
circumstances. Exceptional performance, especially where pay is linked directly to
performance, is one occasion for an unscheduled review. Likewise, poor performance
may call for a performance review.
observation: The "unscheduled" formal performance review in an organization using
scheduled reviews is a management tool that is often overlooked. Quite simply, a
supervisor does not have to wait a number of months until an employee's next
scheduled review to deal with an exceptional situation. Thus, the employer can use the
unscheduled review to put an unsatisfactory performer on notice that if his
performance does not reach a satisfactory level by a certain date, he will be terminated.
No matter how frequently formal performance reviews are scheduled, they should not
be the only tool management uses for communicating performance appraise news to
the employee. In fact, in the best performance appraisal systems, the formal
performance review is no more than a summary of performance appraisal information
given to the employee since his last formal performance review. In other words,
performance appraisals should be an on-going part of the work effort.
The major objection from supervisors about on-going review is that it takes too much
time and interfere with production work. Although in some work situations this is a
legitimate objection, or at least an objection that should be considered in determining
the utility of an on-going review system, in many work situations on-going
performance reviews are no more than an extension of existing work practices. For
example, most organizations review in some form the work of employees for quality
control purposes. In these situations, on-going performance appraisals requires only
that the results of the quality control evaluation be communicated to the employee.
17

18. Performance Appraisal Techniques
Formal performance appraisal programs are common in today's workplace. The report
of the type of appraisal technique used reflects a trend toward using ratings as a
motivational instrument. The following listings shows the appraisal techniques used as
the "principle thrust of the performance appraisal form" by survey respondents:
Management-by-objectives
Management-by-objectives is a popular performance evaluation approach. In a typical
MBO system, the supervisor and the employee plan performance goals that the worker
is to strive for over a specified period of time. At the end of the period, the worker and
the supervisor assess the performance achieved against the predetermined objectives
and set new goals for the upcoming period. The goal-setting opens a significant
interchange between supervisors and employees. If the goal-setting interview is truly
cooperative, motivation is increased as employees come to invest personal
commitment in meeting goals that they participated in setting.
For MBO to work, supervisors must have a firm command of departmental and
company plans, so that highly individualized goals do not conflict with other company
objectives. For example, changes in production capacity or output should jibe with
sales goals. Supervisors also must guard against unrealistic goal-setting; overly
enthusiastic workers may reach too high, while others may not want to test themselves
at all.
The MBO process should contain checks against unforeseen developments. There
should be audits during the performance period to see that goals are still consistent
with wider objectives. The process should not allow workers to pursue goals for
purposes of rating that undermine the efforts of others. Finally, goals and rating
outcomes should be adjusted for the effects of extraneous factors. For example,
production quotas become meaningless if there are shortages of raw materials.
MBO is best suited for sophisticated work, such as managerial or supervisory tasks.
The system has the virtue of objectivity in defining what is expected at the outset.
Also, subjective measures of rating are reduced if not eliminated. The system is most
effective in raising employee productivity and morale. The improved communication
between employee and supervisor that results from the goal-setting establishes a
stronger working relationship with the emphasis on cooperation rather than adversarial
judgments. The process is forward-looking, or prospective, rather than retrospective,
or focused purely on judging past performances.
MBO is weak from an administrative point of view. It is time consuming. It demands
a high degree of sophistication of supervisors, both in organizational planning and
interpersonal communication with workers. Also, such a highly individualized method
of assessing employees does not lend itself to ranking employees relative to each
other. MBO is not the best tool to use to justify internal selection among employees.
Employers should consider combining MBO with some other system that facilitates
meaningful comparison of workers to better justify pay, layoff, training, promotion, or
other selection decisions.
18

19. Graphic rating scale
Rating scales are probably the easiest performance evaluation technique to administer.
On rating scales performance characteristics, traits, or criteria are listed and the
worker's performance in each category is judged on a scale. The scale may contain any
number of points, ranging from four to as many as 12 or l5. The performance criteria
can range from the very objective, such as meeting quotas, to the highly subjective,
like "problem-solving."
A list of some common performance characteristics includes: quantity of work, quality
of work, job knowledge, dependability, attendance, initiative, safety, planning and
organizing, accepting responsibility, adaptability, problem-solving, and the ability to
get along with co-workers. Employees are then ranked on the degree to which their
performance measures up on the scale. The scale may be either numerical or verbal,
but in either case there should be verbal anchors that define gradations on the scale.
The relative importance of the specific criteria in a job performance can be
distinguished by weighting the result. Also, performance can be scored and ranking is
achieved by a total score or by an average score.
Rating scales have a number of advantages. They usually have wide applicability to a
number of jobs, and are relatively easy and inexpensive to construct. Rating scales are
easy to understand, and can be used by supervisors without requiring sophisticated
language or interpersonal skill. However, the virtues of rating scales lead to significant
drawbacks. While general trait scales can apply to a number of jobs, it is hard to
demonstrate any relationship between broad traits and job performance. As a partial
remedy, performance traits should be defined in objective terms that relate as closely
to the job as possible. For instance, "leadership" should be elaborated on, such as
"leadership-the ability to gain the cooperation of others and inspire initiative in
subordinates and associates." Also, the rating instrument should encourage comment
on specific examples of work performance supporting rating choices.
Rating scales are susceptible to the most common forms of rater error. Raters who are
unfamiliar with a subject's work or who are reluctant to make difficult choices have a
tendency to rate in the middle. Raters might stress most recent behavior, put improper
emphasis on good or bad traits (halos or horns), or score long-term employees higher
than newer worker just because of the length of service.
observation: If care is taken to construct a rating scale that is job-related, the
technique can be used to establish some quantitative comparison of employees for
selection purposes. Still, such a rating does little to identify particular performance
problems or encourage workers with specific recommendations. Ideally, rating scales
should be combined with MBO or essay techniques to produce a rating instrument that
seeks both to rate employees and to encourage specific performance improvement.
Behaviorally anchored rating scale
The BARS technique is a sophisticated measure of job performance that has a high
degree of validity for any job. However, this technique is expensive and requires
considerable expertise to administer. A BARS method utilizes a painstaking job
analysis of work content and behavior for each job to be rated.
19

20. The BARS system relies for it's validity on identification of critical performance
dimensions covering the major aspects of the job that determine successful
performance. Employees are rated on these critical performance dimensions according
to a scale comprised of various descriptions of behavior ranging from negative to
positive performance of the particular job. Often, statements of behavior are given
numerical value to facilitate comparisons among workers. For instance, if one critical
performance dimension of supervisory position were identified as "safety training,"
further described as "implementing effective training of subordinates," a BARS
method would offer a series of sentences describing behavior along a numerical scale
ranging from the least desirable behavior to the most effective. A BARS rating
instrument would describe the low point as "ignores safety training program," and
would continue in equal intervals through as many significant behaviors as were
identified in the job analysis, to the high point, which would be described as "teaches
others effective use of safety training programs.''
observation: The great appeal of a BARS method is that it produces a highly
objective, job-related, quantitative ranking that can be used in making and defending
selection decisions. Employees are rated according to specific descriptions of actual
job behavior. Also, because it is behavior-specific, the form itself acts as a guide to
performance improvement. It's drawback is that it requires an exhaustive job analysis
for each job, exceeding the human resources administration capacity of all but the
largest employers.
Essay rating
Essay evaluation is the least structured of rating techniques. Appraisers are asked to
comment on the subject's strengths, weaknesses, training needs, and other aspects of
the performance during the rating period. The main problem with the essay technique
is that it allows appraisers an uncontrolled license to comment, which can be
dangerous. Appraisers should instructed to comment on job-related performance
factors only, and to avoid general comments on personal traits. This narrative method
is a good tool for enhancing communication with workers regarding their individual
strengths and weaknesses. However, the high degree of subjectivity makes the method
vulnerable to bias charges. Also, there is no quantitative element in essay ratings that
would serve to support comparisons among workers. Another considerable drawback
is that the effectiveness of essay ratings depends on the verbal skills of the appraisers.
Often, supervisors have neither the time nor the ability i produce a meaningful essay
statement.
recommendation: If essay rating is used, it should be combined with more objective
measures. Essays are frequently called for as additional comments in a rating scale.
Also, a rating instrument could combine employee ranking with essay explanations.
Critical incident rating
This narrative technique is based on an appraiser’s written observations of critical
performance incidents throughout the rating period. The supervisor is called on to
record employee performances during work incidents that are deemed critical, in the
20

21. sense that they serve as diagnostic tools to generalize about performance overall. At
the end of the rating period, the supervisor reviews his log and assesses performance.
The critical incident technique is similar to essay rating, because both methods rely on
the verbal skills of the appraiser. However, the critical incident method focuses on job-
related rating, rather than permitting appraisers the opportunity to wander off into
general traits and personal impressions. Of course, the very process of selecting
incidents to record is vulnerable to challenge as permitting subjectivity and bias. If the
log is maintained evenly throughout the rating period, the system ensures that most
recent performance does not receive undue emphasis. The main problem with such
constant monitoring is the effect it might have on the workplace atmosphere.
recommendation: Supervisors should use some sort of diary or systematic note-
taking to inform appraisals of all workers, as a way of ensuring that appraisal are
balanced and give proper weight to work performed early in the rating period.
However, the recording process should not become the final rating instrument. Rather,
notes should inform judgments made on any rating instrument whether it be a rating
scale, essay, or ranking.
Weighted checklist
With the weighted checklist, the appraiser checks off statements that best describe the
employee's traits or job performance. Each statement is assigned a numerical value
that reflects it's importance in overall job performance. A quantitative measure of
performance derived from the appraiser's responses. The checklist method does not
demand too much of the appraiser's time, and it doesn't require extensive verbal skills.
The quantitative rating serves administrative purposes well, by allowing comparisons
among workers. However, a mere checkmark does little to inform workers of
deficiencies or spur them to increase performance.
This system is different from a BARS method because it is not job specific. However,
it can be nearly as time consuming and expensive to develop. Managers and line
supervisors must identify significant performance criteria and then agree on pertinent
checklist statements and their relative weight.
Forced choice checklist
With a forced choice checklist, appraisers are presented with a set of statements about
performance criteria from which they must choose the most or least applicable to the
subject being rated. There can be as many sets of choices as are necessary to cover
significant traits and aspects of performance, and there may be as many statements to
choose from in each set as are necessary to cover the range of performance--usually
two to five statements.
Each statement can be assigned a relative value. Usually, the appraiser is unaware of
the value of each choice, and the computation of rating values is completed in the
personnel office. In this way, the rater does not know which choices are heavily
weighted and so the possibility of appraiser bias is controlled. Also, the choices are
job-related, and provide a quantitative outcome for administrative purposes. However,
the system is complex and expensive to develop and operate. Also, appraisers may be
reluctant participants because of the complexity of the system. Supervisors may also
21

22. resent not knowing the ultimate result of their evaluations. By controlling against bias
in concealing weights from appraisers, the method may become a sort of distasteful
test for appraisers rather than an instrument of evaluation.
Paired comparison ranking
In paired comparison ranking, each employee in a job is compared to all others in the
group. Usually, the comparison is on a global measure, which is a general trait, such
as "overall effectiveness." For example, in a paired comparison ranking on output of
five workers, Havlicek would be compared to Bird, Sanders, Ramsey, and Nelson,
individually, and so on, in one-on-one match-ups, until each worker had been
compared to all others. The most effective of the two in each comparison would earn a
checkmark. At the end, the worker with the most checkmarks would be top rated. The
process can be duplicated by three or more appraisers and the results averaged. Also,
comparisons can be made on more than one measure. If there are multiple measures,
there should be separate rankings for each.
Comparison ranking provides a quantitative basis of selection for administrative
purposes. The process is simple, yet very time consuming if the job group is large.
The problem with this method is that the differences between workers are not
apparent. The worker rated first may be much better than the second or last worker, or
only slightly better. In addition, the relative ranking does not characterize performance
in ultimate terms. It could be that even the best of the group is just barely acceptable;
or, every worker in a group may be a high achiever. Also, such ranking does little to
motivate employees. A rating subject learns nothing specific about employer
expectations or performance improvement strategy from a mere worker standing list.
Alternation ranking
In alternation ranking, appraisers evaluate all workers in a job or appropriate job group
against a global measure. For example, a single appraiser, or more if an average rank
is sought, picks one employee as "most effective," and then selects another as "least
effective." Selection then continues to alternate between progressive ranks of
effectiveness and ineffectiveness until the group is divided. Employees can be ranked
on any number of traits, but a separate ranking is done for each.
Larger groups are easier to rank in alternation ranking than they are under a paired
comparison system. Administrative utility is high; employers will have a record of
who is best, worst, and in between for purposes of selections. However, the degree and
nature of the differences separating workers is not recorded. To it's credit, the system
does not permit a cluster of ranking in the middle, but, like the paired comparisons,
the ranking does not measure the overall effectiveness of the workforce, and workers
know only where they stand relative to each other, not their ranking relative to
objective or ultimate standards.
Forced distribution ranking
Under forced distribution ranking, appraisers are required to rank employees on a
global measure according to a fixed proportion of the entire group. For example, an
appraiser will be required to rate 10% of the workers in the highest category, 20% next
22

23. highest, 40% in the middle, the next 20% as next lowest, and the last 10% as lowest.
Again, there can be separate rankings for any number of job related traits.
The system is simple and easy to administer, and is a more convenient ranking system
for large groups than either paired comparisons or alternation rankings. Administrative
convenience is the main virtue of forcing a predetermined distribution on any job
group. However, not all groups will, in fact, fit the mold. Some groups may have a
majority of workers who are above average, while others may be filled with poor
performers. The system facilitates comparisons, but it does nothing to shed light on
differences in performance or to spell out strategies for improvement. It does however
eliminate the common error of tending to rate in the middle.
observation: A pure ranking system must be combined with some other rating
technique if the employer is to motivate workers and serve the administrative needs of
the company. At a minimum, appraisers should substantiate rankings with examples of
job behavior. Employee comments should be allowed. As with all ranking or rating
techniques, results should be checked periodically to ensure that women or minorities
are not getting low scores in disproportion to their representation in the groups.
Field review
Under the field review method, supervisors are not the appraisers. Instead,
representatives from the personnel department interview supervisors about each
employee’s performance. The interview data is then used by the personnel officials to
compose an appraisal on a global scale, such as overall performance. The supervisor is
asked to sign the appraisal, which should contain appropriate performance improvement
directions. Given proper interviewing techniques, personnel officials should detect
supervisor bias in relating employee performance in the interview.
This method relieves the supervisor of most of the paperwork burden of merit rating,
but line management still has the responsibility for tracking and relating performance.
The system is expensive to administer, as it involves substantial time and effort by
both the supervisor and the personnel staff member, and requires a substantially larger
personnel force than with other systems.
Peer review
Peer review is designed for use where rating professional employees requires highly
specialized judgment(s) and demands the flexibility and consensus of group decision
making. Typical examples are evaluations of doctors in treating patients and
professors in educational institutions. In the usual peer review process, a panel of
colleagues rates the subject's work in confidential deliberations. The result of such
deliberations may be a characterization of performance that permits comparison with
other workers, but the main benefit of the process is designed to have a credible rating
of equals of highly sophisticated work. Confidentiality is essential to encourage candor
in the deliberations.
caution: If the result of such a process is challenged under federal or state job
discrimination statutes, the remarks made during the deliberations may not remain
23

24. confidential. The social policies underlying the antidiscrimination statutes may
override the benefits derived from confidential deliberations.
Group reviews
The group review appraisal method stresses collective judgment, and focuses on
performance improvement rather than categorizing past performances. Typically, a
group of supervisors, including the rating subject's immediate supervisor, rates
individual performance with which the supervisors are familiar against the job
description and predetermined standards. The group writes a critique of performances
that discusses strengths and weaknesses and stresses strategies for improvement.
The process permits only a very general comparison employees. It's virtue is confined
to it's motivational effect and communication with the worker. The chance of personal
animosity or unlawful bias affecting such a rating is diminished by the group
participation, but the organization will have gone to a great deal of expense by
investing so much supervisory time and effort in merit rating by group deliberations.
Assessment centers
Assessment centers are another form of group performance appraisal. Typically, rating
subjects performs a series of identical individual and group exercises on which they
are observed and evaluated by a group of specially trained judges. These exercises
mirror job tasks, and usually include work samples, in-basket interviews, group
discussions and meetings, written assignments, and other tests. The process usually
lasts several days. Because the process is highly sophisticated and expensive, it
usually is used in only large organizations as a way of identifying potential promotion
candidates, rather than as a routine performance rating instrument.
Assessment centers can help rescue high potential candidates who are hidden in
obscure positions, and also can uncover other potential high-achievers who may be
suffering from underexposure because of supervisor biases.
observation: While simplicity and practicality are the overriding concerns in
designing a rating method, employers do not have to stick to just one of the various
methods. Prominent features from each can be combined without impairing a practical
approach.
h. Job Analysis or Human Resource Planning.
Job evaluation
Job evaluation is the process by which the company determines the relative worth of
all it's jobs after each has been accurately described. The job evaluation effort should
reflect concern for internal equity and external competitiveness. That is, the job worth
hierarchy and the salaries assigned to each job should be perceived by employees as an
24

25. equitable distribution of pay within the firm, as well as fair compensation for the work
compared with pay in competing organizations.
In order to address the major concerns of internal and external equity, two main job
evaluation methods have emerged. The first is the market comparison method, which
uses market pay rates as the primary factor for establishing the relative worth of jobs.
Job content evaluation is the other principal method for ordering company jobs in a
hierarchy. This method focuses on job duties as the primary factors in establishing job
worth.
The market rate comparison method for job evaluation considers relative rates of pay in
the market to be of primary importance in establishing a company's pay structure. The
first step in the market rate method requires collecting competitive pay data for a
number of benchmark jobs in the company. Benchmark jobs are those that have
characteristics that are found in many organizations, and are sufficiently important in
the company to serve as prominent points for organizing all jobs in the company in a
hierarchy.
The surveyed jobs are then assigned pay rates, and arranged in a hierarchy. The next
step is to place the non-benchmark jobs on appropriate levels of the hierarchy, based
on the evaluator's ranking of relative worth. Up-to-date market rate pay data for the
bench- mark jobs is essential. It is also important to have enough benchmark jobs to
construct an accurate scale.
The market rate approach is beneficial for organizations that face a highly competitive
market in which to recruit or hire, and retain employees. Also, the market rate
approach is easy for the company to explain to employees.
However, the drawbacks of the market rate approach are considerable. In the first
place, the market rate comparisons for benchmark jobs do not provide a mechanism
for making certain decisions on the relative worth of non-benchmark jobs. Also, if
there is a lack of adequate survey data on pay for benchmark jobs, then the entire pay
system is vulnerable to this uncertainty. However, the most significant drawback is the
potential challenge to the market rate system as perpetuating inherent sex-bias in pay
for jobs that are traditionally held by men or women.
caution: The comparable worth threat to market rate pay systems is a point of
vulnerability of potentially devastating disruption and expense. Facing this potential
challenge, cautious employers might consider instituting an internal mechanism for
measuring the relative worth of jobs.
observation: To minimize comparable worth vulnerability, some commentators
have suggested that employers limit job analyses and evaluation efforts to smaller job
families, rather than applying them throughout the organization. While the efficacy of
this advice will depend on judicial development of the comparable worth theory,
certainly employers must correct any pay inequities based on sex that are turned up in
any analysis or suffer potential liability for intentional pay discrimination. It remains
an open question whether employers have an affirmative obligation to conduct
analyses to look for sex-based pay inequities.
25

26. Job content method
Job content evaluation is a process by which jobs are arranged in a hierarchy of value
based pay rates on an analysis of the duties performed. In either quantitative or
nonquantitative job content evaluation methods, the employer defines compensable
factors, job elements related to skill, effort, responsibility, or working conditions for
which the employer is willing to pay. The employer then determines the extent to
which each factor exists in each job. The job hierarchy is established according to the
number and weight of compensable factors involved in each job. The following are
common quantitative and nonquantitative job content methods:
* Ranking. Under a ranking approach, the job evaluator compares each job in the
organization against all others using a global scale, such as "difficulty." The evaluator
compares each job against all others on this scale, a paired comparison approach, and
ranks the jobs in a hierarchy from most to least difficult. Ranking is an effective
system for companies that have relatively few jobs, but it is ineffective where there are
great number of jobs or where the jobs are sufficiently similar to prevent easy
comparisons. Ranking is simple, quick, and inexpensive to administer. However, it is
an inadequate tool for making fine distinctions between similar jobs.
* Job Classification. The classification method orders jobs according to a
predetermined series of grades or classifications, which are arranged in order of
importance to the organization. There is a description for each classification or grade
that indicates the kind of duties, responsibilities, and skill levels for the jobs in each
grade. These grade descriptions are then compared with individual job descriptions to
place each job in the right class or grade. This classification method is appropriate for
large organizations that have a limited number of job categories. It is also appropriate
for organizations that have jobs with clearly defined differences in duties or in
required qualifications. The number of grades or classes must be set out before
developing the grade descriptions for classification purposes. Actual dollar values are
assigned to classification levels after market comparisons are made. The virtue of the
classification system is that a relatively large number of employees can be
accommodated by a single, simple structure. However, because of the danger of
overboard or narrow definitions, grade descriptions are extremely difficult to make.
Also, the number of grades themselves is totally arbitrary. As the number and
complexity of jobs increase, it becomes more difficult to classify jobs with accuracy.
* Point factor evaluation plans. Point factor evaluation plans are among the most
common formal job evaluation procedures in American industry. Using this method,
the company begins by selecting the compensable factors governing work in the
organization. These factors are further clarified by a scale of definitions, to which
point values are assigned. Each factor is weighted, to indicate it's relative importance
to the company. For instance, "job knowledge" might be given twice the weight of
another compensable factor, such as "responsibility for subordinate staff." Each job is
then compared to the compensable factor descriptions, and a total point score is
derived for each job. The job are arranged according to score, and further broken down
into logical groups. Benchmark jobs are chosen, and market pay rate data is collected
to allow the assignment of actual pay rates to the benchmark job. The point factor
evaluation system is precise, and can have a high degree of validity. The assignment of
point values allows an accurate hierarchy of job worth. However, point plans are
expensive to implement. Also, they are complex and difficult to explain in most
organizations.
26

27. observation: Point factor systems present a quantitative method for evaluating job
content. While it is true that no method of evaluation can be free of subjectivity or
human judgment, such systems do introduce a high degree of consistency and
precision into job content evaluation.
Human resources planning
Human resources planning (HRP) is a systematic process for ensuring that an
organization has the right number of people with the right skills at the right time order
in to fulfill that organization's needs. An HRP program is a means of managing both
internal and external changes confronting an organization.
A well-conceived program will give managers more options in hiring or contracting
and will reduce crisis management and stop-gap practices in hiring, promotions, and
transfers. The program will provide a context for planning and should support other
personnel policies in the areas of training, recruiting, performance appraisal, and job
analysis. Also, a sound planning program can help in developing and achieving
affirmative action goals, especially in projecting vacancies for purposes of setting
goals and timetables.
Human resources planning is the organization's effort to define it's future human
resources needs and develop strategies for preparing to meet those needs. The term
includes manpower planning, or management succession planning, which is merely a
human resources planning effort that is focused exclusively on management, usually
senior management.
The basic components of an HRP effort include an accessible inventory of the skills of
all employees in the target group, forecasts of human resources supply and demand
that are specifically based on the organization’s strategic business plan, and plans to
reconcile the future needs discovered with the resources available to the organization.
The human resources planning program must take into account the organization's long-
term strategic plan. Planned changes in the nature of the business or in the size of the
organization, which are spelled out in the strategic plan, must be addressed adequately
in the organization's human resources planning. Developing plans for meeting future
human resources requirements cannot be done in a vacuum.
The HRP process should proceed by appropriate groups of employees or departments,
with emphasis on those most crucial to the organization. Most companies with an
HRP program focus on one or more of the following groups:
... the senior executive group;
... management level personnel;
. . . professional personnel, with an emphasis on those in professions with a scarcity
of qualified individuals such as research engineers or electronic data processing (EDP)
systems designers;
27

28. . . . nonmanagement personnel, with emphasis on the identification of employees who
have the potential to move into first-line supervisory positions;
. . . nonexempt employees who represent an especially large proportion of the
organization's workforce, for example, banks would concentrate on ensuring that there
is an adequate number of tellers.
recommendation: In the early stages of an HRP program, the company would do
best to focus it's attention on only one or two groups that have been identified by
management as critical to the company. After treating these priority groups, the
planning process can continue on to encompass other significant groups.
Flow chart
The following flow chart describes the various steps in developing a human resources
planning program. The chart demonstrates the interrelationship between a planning
program and job analysis, training and development, performance appraisal, and
recruitment. (see below).
The bedrock of an HRP program is an accessible inventory of the existing skills,
abilities, experience, and career interests of current employees in the selected work
group. At a minimum, the inventory should include the employee's name, company
service date, education, present position, and past company assignments. Other
information, depending on company requirements and plans, may include employment
history before joining the company, test scores, present and past
STEPS IN HUMAN RESOURCE PLANNING
1. Inventory Present Human Resource Capabilities
o employment history
o skills
o education - (services rendered)
2. Forecast Human Resource Supply
Strategic
3. Forecast Human Resource Demand ----------------------------------- Plans
4. Analyze the Differences in Anticipated Supply and Demand ------ Human
Resource
Implications
5. Develop and Implement Action Plans
Integrate with:
28

29. o job analysis
o training and development
o performance and appraisal
o recruitment
company training and development activities, career interests, and professional
association memberships. Also, the inventory form may elicit from the employee a
self-assessment and job preferences, and also may include performance appraisal data
from the current performance review, as well as an assessment of ability and
development recommendations from the employee' manager.
Much of the information needed for the skills inventory is available in existing
personnel files. For instance, job applications, performance reviews, and records of
training and development activities could supply much of the information needed in a
typical inventory. However, other information that is subject to frequent change is best
gathered from employees in a standardized inventory form that is circulated and
update at regular intervals. And finally, employers should submit a copy of the current
inventory information to employees for review and verification periodically.
recommendation: While personnel files may contain much of the needed
information, it may be a considerable administrative burden to go through and sort out
each employee file for purposes of writing a large number of skills inventories. It may
be more efficient to ask employees to fill out the inventory form, leaving it to the
personnel office to complete only those parts of the record that are not available to the
employees. The personnel office also can ask employees to share the burden of
keeping employee records current, requiring employees to submit a personnel record
change notice whenever there is need to amend the personnel record or skills
inventory.
observation: The virtues of an automated personnel system are never more apparent
than when compiling a new personnel file that is a composite of many other records. In
an automated system, performance appraisal and payroll records can readily be searched
and included in a new skills inventory file. Also, information that tends to become dated
quickly, such as salary information or position descriptions, can be tracked and included
in the inventory easily by distributing the pertinent information electronically. For
example, a change in payroll classification can be programmed to transfer to the skills
inventory file.
(Please see the next page)
HUMAN RESOURCES INVENTORY RECORD
To Be Completed By Employee
29

30. NAME __________________________________ DATE _____________________
Current Department ________________________
Job Title _________________________________ Starting Date with Co. ___________
EDUCATION (Complete record beginning with high school)
FROM TO MAJOR COURSE DEGREE OF
SCHOOL & LOCATION MO./YR. MO./YR. OF STUDY CERTIFICATES
MAJOR TRAINING PROGRAMS OR DEVELOPMENT COURSES (Seminars, Workshops, etc.)
CAREER INTERESTS AND JOB PREFERENCES
SIGNIFICANT HONORS, AWARDS, PATENTS, PROFESSIONAL LICENSES AND ASSOCIATIONS,
PUBLICATIONS, ETC. (Describe and Show Dates)
OTHER PROFICIENCIES (Describe any special skills, aptitudes or accomplishments)
LANGUAGES-SPOKEN AND UNDERSTOOD (Which languages and with what proficiency)
READ AND WRITE (Which languages and with what proficiency)
HUMAN RESOURCES INVENTORY RECORD
NAME _____________________________________ DATE ________________
Last First Int.
COMPLETE WORK EXPERIENCE (List chronologically from first position held to most recent.
Include military service and work with other companies.)
30

31. DATES COMPANY POSITION TITLE &DESCRIPTION
From (Mo./Yr.) AND Underline position title. If managerial position,
To (Mo./Yr.) LOCATION show number types of employees supervised.
Briefly describe responsibilities for each position.
For last two positions, describe significant
achievements or contributions.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
EMPLOYEE SIGNATURE _______________________________________
caution: The questions pertaining to language proficiency should be used only if
language skills bear some relationship to potential employment with the company.
While it is usually non-job-related pre-employment inquiries that present the risk of
turning up as evidence of permissible bias, even such post-employment inquiries are
hazardous. For instance, it is conceivable that an employee who is denied a promotion
may point to an irrelevant question on an inventory form relating to language skills as
evidence that the employer had some animosity against employees of a particular
national origin.
Using the inventory data
In addition to using the inventory information for human resources planning purposes,
it may legitimately be used to help identify individuals for special projects,
management development, and specialized training. The inventory form should be
kept in the employee's personnel file, and should be subject to all the privacy
restrictions that are applied to other personnel file information.
recommendation: If the skills inventory is a manual personnel system, access should
be conditioned on a strict right-to-know basis within the company. Also, release
31

32. outside the company should require a written release from the employee. In automated
personnel data systems, access to such inventory records should be strictly controlled
by access codes that are issued only to those with appropriate authority to handle the
information.
Forecasting Future Human Resources Trends
Forecasting internal human resources supply is a systematic process for estimating the
numbers of employees with appropriate qualifications that will be available at some
time in the future. The forecasting is based on an historical analysis of attrition rates in
the target employee or job groups.
In order to graph a past attrition or turnover rate that can be projected into the future,
employers must look at the two principal factors of attrition-length of employment and
age. In looking at turnover in relation to length of service, employers should draw a
line graph tracking the percentage of employees remaining in any target group along a
length of service axis. Usually, this line will show that losses are heaviest in the first
few years of employment. Likewise, the line graph tracking age and turnover patterns
will show that turnover is greatest among younger employees. Typically, human
resources forecasting is done in three intervals. Short range forecasts cover time
periods of less than two to five year periods; and long-range forecasts extend beyond
five years. The following sample line graphs show attrition rat based on length of
service and age.
(Please see the next pages)
32

33. HUMAN RESOURCE PLANNING
Attrition Rates Based on Age
100
Percentage of employees remaining
0
30 70
33

34. Attrition Rates
Based on Length of Service
100
Percentage of employees remaining
0 5 10 15
Length of Service
34

35. caution: There are many problems in projecting the continuation of past rates.
Employers should be aware that even short-range planning commitments are subject to
disruption by extraneous forces. Social and economic policies, as well as local labor
conditions, can have a sudden impact on traditional labor patterns. For instance,
record-high unemployment or propriety nationally or in a local area may disrupt past
turnover patterns. Likewise, changes in retirement policies may effect traditional
retirement patterns or a new employer in the local area may increase demand for
employees with certain skills so much that the traditional turnover pattern no longer
applies for that job in that area. Intermediate and long-range planning are subject to all
the vicissitudes of short-range plans, and then some. Because social and economic
policies and conditions cannot be predicted over the intermediate or long-range period
with any degree certainty, the planning process should include a procedure for
adjusting these forecasts.
The following form demonstrates a short-term labor supply forecast that can be used to
assess the needs in any job group or department for replacement employees. If there
are plans for growth or contraction in the department or group, these must be factored
in to arrive at the total number of positions to be filled.
The first two columns are merely matters of census taking. To fill in the column for
management-directed staffing changes, the forecaster will have to look at management
directives, memos, and the strategic plans. The retirement and termination columns
should reflect attrition rates, performance appraisal information, disciplinary records,
and other information from informal sources. The number of primary openings may be
affected by promotions (column 7), which would be reflected in the net total (column
8).
(Please see the next page)
Supply Forecast
(two-year time period)
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