UNIT – I Lesson 1 HRM – AN OVERVIEW Lesson Outline Nature of ...

MERIT RATING
b. Point comparison method.
It is very well known that the workers differ in their abilities, skills, knowledge and
aptitudes. By proper education and training these differences may become small. Yet
these differences remain. It is necessary for management to know these differences so as
to identify special skills and growth potential of their employees to occupy higher
positions of responsibilities through promotions. It is also necessary to know these
differences so that each is paid according to his merits. Higher wages are paid to
employees who perform continuously better. In order to identify these differences,
performance evaluation is needed. This process of performance evaluation of workers is
called merit rating. Thus ‘merit rating’ may be defined as “a systematic, periodic and
objective performance evaluation of labour in order to recognize and reward their
contributions to the organization, and also identify their potential to hold higher level
appointments and jobs”.
Objectives of Merit Rating
� Administrative
� Personnel Development
Administrative objectives
� Wage increase
� Promotion
� Selection and special assignment
� Training
� Transfer
� Discharge
Personnel Development
a) Merit rating reveals deficiencies and gives opportunity to remove these defects.
b) Helps motivation by knowing own performance and achievements
c) Encourages persons to do better by getting recognition and reward of his good
performance
d) Encourages a spirit of competitiveness to perform better.