The success and performance o f all institutes, depend in the ultimate analysis on

the men who man the institutions. Cooperatives have for decades been discussing and

debating the problems and issues of professionalization o f their management. A number

of studies have also been conducted and various prescription have been given by these

study teams and committees, but the basic nature and character of the problem persists

with little or at best marginal improvement. Lack of efficiency in their operational

system has been a widespread feature of cooperative functioning in the country.

Therefore, even when they were exposed to a cooperatively mild and regulated

competition, for instance in the credit sector since the seventies, they have been loosing

ground steadily to the commercial banks. The same has been happening in respect of

their share in the supply of agricultural inputs. The marketing cooperatives, with some

exceptions o f a few specialized commodity marketing societies, have never made much

of an impact in the market and have subsisted mainly on the support of Government

procurement agencies. Most of the processing cooperatives, again with a few

exceptions, are in not too healthy a state. Even in widely recognized successful

cooperative sugar and dairy sectors, it is difficult to say whether, with the exception of

some cooperative sugar factories in Maharashtra, some cooperative dairies in Gujarat

and a few others, would cooperative sugar factories and cooperative dairies else where

be able to effectively cope with the competition that they may fallow in the wake of

licening. If these problems are not taken seriously, the cooperative movement will lose

its ground at every front.

Undoubtedly, cooperatives themselves alone can not be held responsible for

their managerial deficiencies and inadequacies which lie at the root of their indifferent

performance subjected to content direction and "back-seat driving" by the state

authorities and ever so rigidly controlled and regulated with little freedom to chose and

build their own professional caders for resolving the burning problems at grass root

level, they could hardly develop the needed capabilities. However, the new economic

scenario that is now emerging in the country admits no longer any laxity in operational

efficiency. Areas of the economy which were hitherto reserved for the public or

cooperative sectors may no longer remain so reserved. This has far-reaching

consequences for the cooperatives. They will have to prepare themselves now to meet

the situation o f no longer being able to count on any distinctly protectionist or

preferential treatment that may have existed in their favour in the past. With the

progressive dismentling of the controls and licening systems and the economy opened

up to full scale competition, such o f the cooperatives as are unable to measure up to the

demands o f the market place in competition with others, will become virtually defunct

and gradually wither away. The question thus, in stark terms, is that o f survival itself.

Only those which are efficient will survive.

The benefits of state aid have largely flown into federal cooperatives at higher

level and the units at operational level or at primary level have not benefited much from

state support. This has created disintegrated functioning of the organizational structure,

each unit pulling in different directions and as a consequence impairing the autonomy

and strength of the cooperative system, as Pt. Nehru rightly visualized the negative

impact o f state aid on cooperation when he observed that Cooperation is not merely

credit and banking operations, but participation in all the primary sectors of the rural

economy. The whole idea of cooperation is that it should be based on public initiative

and not assume the shape o f a Government organized movement from the top.>

Government can help and should help but the whole thing should arise out of the growth

of public appreciation, public opinion and public cooperation. Therefore, it is entirely

opposed to the dependence of the cooperative movement on Government officials. Still

in some states officials push themselves in far too much. They are necessary but they

should not control and direct, we have to make people realise their responsibility" (S. S.

Puri, 1984:1-22).

Cooperatives were conceived in India as the answer o f the small man to the

moneylender-trader nexus and were seen as an instrument o f self-help among the poorer

segments o f the population. Cooperatives have an edge over other sectors so far as their

organizational structure is concerned. The federal structure provides a very wide

network to link up primary producer to the tertiary level of economy. Since cooperatives

are based on the democratic values o f mutuality, equality and integrity, the society

would continue to accept them as a vehicle for socio-economic change.

Despite the importance o f cooperatives in the socio-economic development of

lower level community and its considerable role in various fields of economy, the

cooperatives are not free from criticism on account of their weaknesses and problems.

The movement suffers from various constraints and handicaps like lack of professional

management, weak financial resources base, cooperative laws and taxation laws which

are not conducive to the growth o f the cooperative sector. The cooperative development

has suffered from an uneven progress in different parts o f the country e.g; the credit

cooperative institutions are still weak in some parts o f eastern India. Primary

cooperative societies are very weak particularly at the village level, with the result the

benefits o f the cooperative sector do not flow efficiently to the grass root.

The state support also exacerbated the persistent weakness o f the cooperative

organisation and made them dependent on the Government. In pursuance o f populist

state policies, facile programmes o f "loan melas" were arranged and in any equally

facile manner loans were written off creating a psychology utterly inimical to a sound

system o f agricultural credit. This gave a big setback in different parts of the country.

Overdues become a chronic feature of cooperative credit societies and district

cooperative banks turned them * sick. Programmes for their rehabilitation were

introduced from time to time but were only partially successful. The position has

worsened with outbreak of embezzlement of funds in cooperative banks.

The cooperative loan schemes proposed by the Rural Credit Survey Committee

(1954) had envisaged linkage o f credit with marketing. But this concept never became

an operational success. Cooperative handling o f marketing o f agricultural commodities

remained a weak point. Cooperative marketing organization is hardly geared to handle

surpluses and their export to cash rich quality conscious markets of affluent countries of

Europe and USA. Consumer cooperatives were expected to be price leaders in the

consumer market and guarantors of quality of consumer goods. But many consumer

stores failed and those that survived had hardly any strength to make a decisive mark on

the consumer market. The housing cooperatives were intended to meet the pressing need

for shelter o f the city dwellers . But many of them were more creatures of ambitious

builders with hardly any cooperative character.

Cooperatives over a period of time, have expanded tremendously in terms of

number o f societies, their membership, leadership, staff and executive cadres. Almost

all sectors belonging to weaker section such as scheduled castes, scheduled tribes, small

and marginal farmers, fishermen, weavers etc are represented in cooperative sector.

However, their participation in funding, management and business decision making and

other institutional affairs is very low. They are unaware o f their rights and powers as

members.

According to the task force on training and HRD in cooperatives, there are more

than 28 lakh members o f the boards or managing committees including office bearers.

In the credit sector 1.33 lakh managerial and 1.5 lakh o f other administrative staff

members are trained. Thus out of 7.00 lakh staff, only 38.65% (2.6 lakh) employees are

trained. The rest 4.40 lakh employees, constituting 61.35% of the total, remained

untrained. In the non-credit sector, the training gape, is much more pronounced as out of

6.99 lakh employees only 15.72% were trained and the rest have not been exposed to

any formal cooperative training and education programmes (Sharma, 1994:157). These

estimates highlight serious challanges before the cooperative authorities. These

problems would become explosions for cooperative movement with the time to came

and the movement would be thrown out of gear by the multinationals of private as well

as public sector. Besides, the numerous short comings in the operation of the cadre

system, the fundamental lacuna, that has become glaringly apparent in its functioning, is

that any system which has built in duality of control is bound to develop serious

abberations. Duality of control leads to dilution of accountability which could be fatal

for operational efficiency in the over all cooperative sector.

The significance o f cooperative leadership has also been expressed in several

studies, forums and conferences in more recent times, nevertheless one of the major

factors that continues to handicap the cooperative institutions in India is the lack of

cooperative leadership in adequate numbers and o f appropriate quality. Hence at the

down o f the present century and thereafter, one o f the priority tasks facing the

cooperative movement concerns the development o f its leaders. There are voluminous

historical facts that show that the present pattern o f cooperative leadership in our

country has not been evolved through a spontaneous process o f cooperative

development. But it has been influenced by the Government policy for a directed

cooperative development. Government has always adopted a paradoxical approach in

case of leadership in cooperative system. On the one hand it emphasised leadership as

an essential pre-condition for the success o f cooperatives, but on the other it kept

initiative for their development in its hands. The leadership development programmes

and agencies involved therein have hardly succeeded in creating conducive environment

for growth of cooperative leadership. In many o f the states, the elections for

cooperatives are either postponed indefinitely for years together or Government have

resorted to whole sale supervision for political considerations. The co-operative leaders

have also become apathetic and indifferent towards importance of self reliance and

become ever dependent on Government support.

The Indian cooperative movement, instead of having a democratic character, is

largely influenced by the outsiders. The movement, which was considered only an

exceptional alternative, as a balancing sector o f the economy and ways and means of

economic activity o f the poor, is severely under political grip. Positions in cooperatives

came to be looked upon as stepping stones to advancement in politics. Politicians in

power used cooperatives as their support system and were not prepared to countenance

persons belonging to the opposite political parties as office bearers of cooperatives.

Such cooperatives were often arbitrarily superseded. Such actions gave a death to

cooperatives. Political neutrality is a principle o f cooperation, but it has been given a

short shift by our political leaders. Politicians in power and bureaucrates have controlled

the cooperatives at their will.

The impact o f political influence is some times also seen in the manner in which

the boards o f management of cooperative institutions as superseded or nominated

boards, are packed with nominees of certain political parties or certain groups in the

same party. Another aspect of this picture which has now assumed greater significance

is that the fortunes of cooperatives dominated by one ruling political party might suffer

a set back when another party comes to power. The experience of the last few years

does, therefore, seem to suggest that there is a real danger for .the operational policies

and methods for cooperatives being governed by political considerations.

Another major problem in cooperatives in general and cooperative trade in

particular relates to the communication gape that generally exists from top to bottom in

the cooperative organizational structure. There is not a proper communication system as

in that o f private or public sectors. The whole structure lacks regular flow of

information pertaining to the latest developments, researches and innovations in the

field o f cooperatives. These general organizational problems are not necessarily

confined to external trade faced by the cooperative societies but relate to the present

arrangements in regard to decision making process, planning, controlling, accountability

etc. It has been noticed that in the present setup, the scope for decentralization of the

decision making process in the cooperative sector is limited since almost all decisions of

the executives need ratification.

Added to the above are the infrastructural problems faced by the Indian

cooperative sector. These relate to the shortages in qualified, trained manpower, finance

etc. to undertake export operations on a sustained and regular basis. The number of

cooperative societies in India which have fulfledged export-import departments may

not be many. These infrastructural problems need to be sorted out if the cooperative

sector in India has to play a more effective role in promoting export from the country.

Another lacuna in the management o f cooperatives is the emergence of vested interests.

The existing provisions under its Cooperative Societies Act need to be re-looked in to,

so as to ensure improving the situation and preventing its recurrence.

NEED FOR HRD IN COOPERATIVE SECTOR

In the light o f the above situations, it is important that cooperators and

Government's should take a fresh look at the cooperative development strategies.

Although a number of developmental agencies and programmes have been introduced in

the cooperative sector over the years, unfortunately an integrated concept o f Human

Resources Development was never emphasised. Since the introduction o f cooperatives

till today only cooperative education and training has been emphasised by the

Government and also by the cooperatives. Little efforts has been made to formulate and

disseminate knowledge and skills of Human Resource Management (HRM) functions.

Neither the members are well informed and organized to take up economic ventures nor

do cooperative organizations adopt scientific selection, placement, salary, promotion

and either facilities for their employees. As a result most of the economic ventures

undertaken in the cooperative sector have proved white elephants, yielding no returns in

the absence of members participation in business and management. Hence, there is a

tremendous need to adopt and diversify the HRD strategies by the cooperatives.

It has been well established that the difference between a fast growing

organization as against traditional and stagnant organization lies in the quality o f human

resource. Manpower o f required quality is not readily available for organizations like

cooperatives, particularly in developing countries for various reasons which demands

the exigent need for HRD in cooperatives.

The modern organization is dependent upon so many inter-related factors among

which human being is the most important. They are unlike other resources in that they

have unlimited potential for investment and development. The more an organization

invests in them, the more it can increase its returns on investment. More and more stress

is being laid upon the development of human skills, knowledge, traits, leadership

qualities for the over all achievement and development of organizational set ups. But in

cooperatives, where human capital is in abundance, no serious steps have been taken so

far for its development.

Cooperative organizations have attained such dimensions in terms of size,

employment o f capital and intricacies of functioning that HRD has become a matter of

crucial importance for their survival and growth. The growing diversification of the

cooperative business and its increasing scale calls for adoption of better HRD. Now the

traditional pattern o f administration by "Committee o f Management", needs to be

replaced by the "Board of Directors" which will provide policy direction, leaving the

execution to the paid qualified executives. As such, it is essential that enterprises in the

cooperative sector are enabled to prove their right to existance and growth by sheer

efficiency o f their operations, the excellance o f their services to the patrons and their

increased contribution to agricultural and industrial progress. This can be possible

through better HRD system.

Cooperative education as a means o f HRD in cooperatives teachs people to

cooperate, to foster in them a sense o f loyalty towards cooperative societies and to make

them realise that their loyal patronage would be for their own good and for that of the

cooperatives by prevailing upon them to attain the ultimate objectives of more

widespread membership and achievement for a fuller life. Cooperative education has

also been rightly given its due place as one of the six cardinal principles of cooperatives

by International Cooperative Alliance. It has repeatedly been emphasised that most

urgent need is to educate the cooperators, even before cooperatives are established.

It is recognized that the human content is richer and more important in

cooperatives than in any other form of business organization. Available evidences,

however, show that the growth process of human resources in cooperatives has not been

given the place and significance that it deserves, even though the cooperatives have

grown in size and stature. Historically, manpower planning and HRD in cooperatives

have always received the low priority, if not the lowest, both at the level of the

Government and the cooperative institutions. That is why the linkage between planning

and growth in the cooperative sector has been weak.

In cooperatives, job descriptions are based on the objectives laid down in the

bye-laws of the society and for the achievement of these objectives, the main

responsibility is that of human resource involved in the activities of the cooperatives.

The elected management should prepare a job description o f each paid employee of the

society in a manner that he may be able to perform his job competently. Lack of

suitable personnel policies are the main and challenging problems before the present

state of cooperatives. That is why many of the cooperatives are dormant and defunct.

The crucial areas of HRD programme viz. manpower planning and selection,

employees training and development, leadership development and membership

education are neglected in cooperatives. Though provisions have been made for training

and education of members but these have remained by and large a formality with little

contribution towards HRD. After independence, no serious attempts have been made to

modernize various activities being performed by cooperatives. Now the present

globalization also posses a great challenge and threat to the very survival of the

cooperative movement unless they improve their functioning, with the combined efforts

of management and employees.

In this modern world, which is dominated by freedom of enterprise, competition

and intense inter and intra enterprise interactions, the HRD has gained an added

significance. What distinguishes HRD from traditional models of cooperative education

and training is that it aims at transforming human inputs into "services in terms o f value

added to the production efficiency". Also, the cooperative sector can not escape from

the pressures and challenges in the field of productivity, service aspects, product

quality, development of employee-employed relationship, posed by the multinational

and multi-diversified private as well as public sectors. This would therefore, again call

for timely action on the part o f authorities of cooperatives to take effective and concrete

steps for HRD. This also becomes imperative for cooperatives for strengthening their

autonomous and democratic character. Well developed, motivated, enlightened

members and employees would be very much effective in maintaining the managerial

and operational efficiency that will ultimately result in development of self-reliant and

self-regulated cooperative institutions.

In the matter o f recruiting staff and later their training, it has always been a

matter of adhocism which has resulted in making the cooperatives less efficient, if not

ineffective. Training has never been regarded as an essential input for developing

human resource. Adequate resources and budgetary provisions are not made available

for such training. Expenditure on training and education is considered as an unnecessary

cost rather than an investment in improving and strengthening manpower as most

essential for the successful results. It has been observed that most of the cooperative

institutions are unable to attract well qualified persons because o f the poor salaries and

other service conditions in comparison to private and Government sectors. Without

some exceptions like IFFCO, KAIBHCO, NCDC most of the cooperatives, being small,

provide little opportunities of upword movement and career advancement to their

personnel. Ill-suited persons are giving unsuited training which has not served the

purpose o f imparting knowledge or improving the skills. In career development also,

training has not been giving recognition as an essential input and condition for any

advancement. There are persons who have obtained innumerable training inputs but are

not able to put them to any use and there are others who need the training most but

could not acquire any. In such circumstances, neither the efficiency of management

could improve nor could there be any significant improvement in the services and

operations o f the institutions. A mere increase in the volume o f business or profit in a

given favourable condition can not be the sole index o f efficiency attributable to the

efficient management, unless the HRD policies are be overhulled properly.

Unfortunately, in cooperatives, the elected non-official management has never

thought seriously about the need to strength the management by professionals or by

imparting intensive training programmes for improving the skills or filling the gaps in

knowledge and techniques. Cooperatives have never pursued an objective policy of

manpower planning and development but have always compromised when it comes to

recruiting people of right background and expertise. The service conditions of

cooperatives have also not been attractive to draw competant people for better services

to be provided through cooperatives. Further, the environment in the cooperatives

mostly has not been conducive for working which leads at times to frustration. In order

to over come all these drawbacks an immediate HRD policy is desired to be launched in

cooperatives.

HRD assumes greater importance in the cooperative movement as it is a

movement o f the people. As a matter of fact human resource is the base of the

cooperative movement as distinct from any other economic activities which emphasis

the development of natural resources in terms of capital. Basically human resource is

already available in the cooperative sector, what is needed is the development of this

manpower with improved capacity to handle specific tasks which may vary from

conducting a meeting to the manning of a sophisticated processing unit. Hence, the

HRD principle has to be made applicable to all individuals of cooperative activity.

Wherever there is responsibility whether as a leader, as a manager, as an ordinary

worker or as a member, there must be an appropriate HRD application for enabling that

individual to perform his or her task in an efficient manner.

Further, cooperation is a mass movement, the success of which depends upon

the participation and involvement of the masses. For the success of a private or public

sector enterprises, efficient management is the most important factor, where as in case

of cooperatives, the important factors are not only the efficient management but also

dedicated leadership, participative membership and competant and committed work

force. It is in this sense that cooperative sector for its development will have to develop

not only their employees but also their members and leaders. The success of the

cooperatives depends upon the development of all these three sections o f people which

in turn can be called the HRD in cooperative sector. For the proper growth and

development o f cooperative sector, it is essential that a comprehensive HRD programme

is formulated and implemented. The cooperatives need to develop a functional model

for HRD programme. The whole cooperative movement requires an integrated HRD

effort and approach so as to tnyn, direct and motivate the leaders, employees and

members.

The significance of HRD is more pronounced in cooperatives as they are

organized on the basis of human value. Their success or failure depends on the members

participation, loyalty and initiative and managerial capabilities, resource-fullness, tact,

integrity and sincerity of the members, Board of Directors, Chief Executives and their

subordinates at various levels o f management. To achieve business efficiency and to

ensure survival and growth of enterprises there is a need to develop human capital in

cooperatives.

Members of cooperatives particularly, at primary level, being generally illiterate,

are not as informed as other position holders of other corporate enterprises. There is also

a need to imbibe cooperative values in them. Office bearers and members of Board of

Directors also need continuous and effective sensitization about the fast growing

changes in the economy at national and global level and management techniques

particularly in regard to policy formulation and performance appraisal that may help

them in appropriate decision making with regard to the changing environment for the

benefit o f cooperative enterprise.

HRD infact, has been, as it should be, the abiding concern o f policies and

programmes o f integrated cooperative development in the country, as reflected in the

observation of the committee on Cooperative Law for Democratization and

Professionalization o f Management in Cooperatives (1981). While stressing the urgency

of taking measures for promoting professionalized management, the committee

observed that towards bringing about qualitative improvement and strengthening the

cooperatives as an important sector of our national effort to raise the level of production

and productivity. The need for strengthening democratic character and improving the

professional competance of the staff in cooperatives has been stressed from time to

time. Urgency of taking measures in this respect has acquired added significance in the

wake o f management and technological innovations taking place in the competing

sectors and enterprises. HRD is both foundation and fountain source for developing

sound infrastructure o f professionalized management in cooperatives.

The significance of HRD in cooperatives, indeed transcends mere management

considerations. It is a major bulletin device to preserve the identity and autonomy of

cooperatives. If the cooperatives by themselves do not have cadres of professionally

competent personnel, built through the process of manpower planning, management

development and training, they will obviously fall short o f a basic management

requirement. In such a situation, cooperatives will naturally experience compulsive

need, developing tendency to get managed cooperatives by barrowed personnel. Of

course, there need be no hesitation in drawing competent and suitable personnel from

any source but the aim has to be for the cooperatives to built their own cadres of

personnel, commensurate with the multi-dimensional growth of cooperatives and

consequent multi-faceted manpower requirements of cooperative sector.

In achieving the aim of HRD for cooperatives and in the ideally envisaged

training situation for that matter, personnel in cooperatives at each level, aught to be

enabled to undergo a sequential mosaic of different training programmes at successive

stages o f career path as may be relevant and commensurate with their respective level

and job requirements. It is necessary therefore, that in respect o f each o f the cooperative

sector and in respect of different cooperative units within that sector, a phased

programme of deputation of training may be evolved as a part o f the over all HRD.

It is ironic that the cooperatives try to fallow the approach to HRD almost on

the line o f capital oriented industries and enterprises. In the cooperatives, the human

aspect is almost lost sight of and the conventional approach o f training the human as a

tool o f economic productivity is generally followed. Whatever role we play in our own

sphere o f cooperative activity, we can not lose sight o f the fact that both the server and

the served constitutes the main source of cooperative movement. Hence keen interaction

has to be the basis for any activity we plan for HRD. It should not be a one way traffic

affair.

In terms of cooperative HRD, almost all the cooperative organizations, are still

growing, many of them rather too slowly. In order to face the challenges of the present

century we have to go to the level o f occupational base and categorise functionaries in>

the context o f the specific tasks they are expected to perform in the cooperative

movement. There are four catagories o f functionaries for HRD approach.

I) Members

II) Operational Staff: a) Technical (b) Non-technical

III) Managerial personnel: a) Appointed officials (b) Elected officials

IV) Persons elected to positions with no direct responsibility for management o f cooperatives. (Madane, 1992:49)

The approach to member development should be changed from the member

being treated just as a constituent of the cooperatives, participating in the general body

meeting, to a functionary and as an important partner in the productive effort. If we

consider cooperative as an economic entity and if higher productivity in every sphere is

one of our goals, then member should invariably be treated as an occupational force. If

this be the case then member education on cooperative principles and practices and

training to improve his skills for greater productivity in whatever field he may be

working should be imparted. This section constitutes a major component o f manpower

in the cooperative sector. If the professional or occupational task is weak, the economic

base o f the cooperative can never be strong.

The operational staff which is another component of the cooperative structure

should be developed as per cooperative needs . Many of our training centres have

courses designed for categories such as seniors, intermediates and juniors. All types of

functionaries are grouped together in these classes with not many things in common.

Only very short term courses are conducted for job oriented training, such as course for

industrial cooperative staff. There are so many kinds o f industrial cooperatives that one

differs from the other both in character and in operational method. Hence, for

operational staff we have to design courses for accounts people, for technical jobs, for

member relations and for specific jobs in agriculture, consumer and other types of

cooperatives. Moreover, the training courses which are out dated and are not need based

should be deleted and new and innovating courses should be inserted in the training

courses which is the dire need for the HRD in cooperative sector.

The managerial personnel, up to the level o f general managers, need the general

cooperative management training with the addition of specialized training for their

specific jobs. As most of these persons have already received good university and

professional degrees, the training for the specific cooperative jobs can be imparted

through short term courses and through on the job training. Hence the principle of

training for every one must be accepted as a basis for HRD at managerial level.

In view of recent economic changes, cooperatives must build their competitive

strength. It is necessary to recognize the importance of professional managers in the

modern competitive world. Simultaneously, techniques of modem management are to

be tought to the managers of the cooperative institutions. The expansion and increasing

activities o f cooperative institutions need the modern management and scientific

techniques to cope up with the challenges emerged from the WTO. The mode of

functioning o f elected leaders vis-a-viz professional managers needs to be re-oriented so

as to ensure that elements of HRD components are strengthened. The HRD managers of

cooperatives have encountered a labour turnover in cooperatives, especially in the field

of skilled employees. This tendency demands proper Human Resource Planning at

micro as well as macro level. The labour market should become demand oriented. Such

a strategy needs the involvement o f cooperative movement as a whole with the support

of HRD planning at the national Government level.

The accelerated change in operational technology in general and for cooperatives

in particular has created a big challenge for cooperatives and consequently has

introduced pressures on cooperatives to keep pace with such changes. Obsolescence has

become the order of the day. In such circumstances, it is a question o f adjusting

cooperative systems to integrate technology with a view to bring efficiency. Japan,

South Korea, Australia and Singapur are already in the forefront. Computers and

satellites are extensively used in Japan, South Korean and Singhpore cooperatives.

Therefore, it is important that the cooperatives consider re-thinking on the HRD

concepts themselves and attempt evolve an integrated systems at the macro level as well

as micro level in keeping with the new thinking on HRD policies and concepts.

In the context o f above, the only alternative left for' the cooperatives is to

increase their operational efficiency and to realise the importance of HRD as an

essential and vital part of cooperative development strategy. Manpower planning,

training and development of the employees, career planning and performance appraisal

are some o f the most neglected aspects of cooperatives. Cooperatives are no doubt

service rendering organizations but at the same time they are economic and business

enterprises too. Hence their efficiency and viability are to be safe-guarded through

effective and modern HRD techniques.

CONCEPT OF HRD IN COOPERATIVE

When we talk of HRD in cooperatives belonging to various classes of workers,

various questions o f great importance come forward before us regarding the human

resources itself. What would be the human resource in cooperative sector is of

significant importance for their development at a narrow level and development of

whole cooperative sector in a broader sphere. However, the main components of human

resource in cooperative sector comprise.

a) paid human resource engaged for managing the affairs of the society

b) human resource democratically elected for managing the affairs of thesociety by its members, and

c) human resource o f members itself.

The concept of HRD has been introduced by Leonard Nadler in 1969 at a

Conference o f American Society for Training and Development held of Miami (Hareth,

1996:2).

In the cooperative sector of India, the concept of human resource development

is yet to blossom fully. During post independance period, the concept of state

partnership cooperative enterprises was implemented in the country. This placed dual

responsibility on cooperatives-as members, organizations and as agents of the

Government to implement various developmental programmes. Increased Governmental

investment in the cooperatives accentuated their role as Governmental agencies, over

shadowing the involvement o f members and their elected representatives in the>

management of cooperatives. Although the blue-print o f state partnered cooperative

movement, as given by the All India Rural credit Survey Committee, highlighted the

importance o f cooperative education and training, it could not facilitate the development

of the concept of HRD in cooperative sector.

The concept of HRD in cooperatives means all the planned information,

education, training mobilization and manpower developmental activities undertaken by

cooperatives so as to create economically efficient organizations capable of providing

services required by their member (Sharma, 1994:156). It may be seen that the concepts

mentioned are broader than the education and training concepts earlier held by the

cooperative movements. These concepts together mentioned later are considered as an

integral part o f Human Resource Management (HRM) o f cooperative systems in all

parts o f the developing world.

Cooperative human resource development is a process involving the

development o f the knowledge, interest, skills and mobilization of all the persons

concerned with the cooperative movement in general and with a cooperative

organization in particular. Thus cooperative human resource development is a

developmental process within a cooperative in the frame work of organizational and

sectoral growth and environmental change. In turn the cooperative system as a whole

functions as a part of the socio-economic system at different levels-local, regional,

national and international. HRD embraces all the facets of an organizational system. We

can not conceive a cooperative organization without carrying for the development of its

personnel, viz members, leaders office bearers, employees and even prospective

members. The HRD policies and programmes of ICA and many of its constituents,

fallow a broader concept then an education and training. From the angle of cooperative

human resource development, management o f these services include current prospective

members, participation and development, so that they stand united in case of

competition and in conflicts with other adversaries.

The globalization and liberalization have brought in their wake newjk

opportunities which await exploitation. In this context, cooperatives need to explore

new policy options and take new initiatives. The task before manpower development

including training is to provide new understanding o f cooperative values and ethos and

to impart and indicate new skills and knowledge to equip the cooperative staff at all

levels to face these new challanges by adopting an institutionalised modem

management for up grading the quality of both management and staff. Human resource

development in the cooperative sector is to be aimed at the development of an

enlightened dynamic and forward looking leadership along with responsible

membership. In the training programme, emphasis has to be laid on promotion of

cooperation among various types of cooperatives as well inculcation of cooperative

values and ethos among the cooperative personnel. HRD in the context of cooperatives

has been conceptualized thus:

The concept of HRD in cooperatives has to be looked at as a continuous process

to enable the cooperatives to acquire organizational capabilities to manage their

operations efficiently and to cope with the challanges o f a liberalized economy. In fact

HRD has to be conceived as a broad concept which encompasses within its ambit not

only employees but also members, office bearers, board o f directors of cooperatives.

HRD has to be looked at as an investment in human resources for over all cooperative

growth. It aims at humanization of organizational life and inculcation of human values

in the cooperative organizations.

Human Resource Development (HRD) is a philosophy and a continuous process

which consists o f a package of strategies and instruments directed at the development of

potentialities and competencies o f manpower as well as creation of an organizational

culture and realising them to accomplish both the organizational and individual

objectives. The HRD concept focuses on people who are seen as having knowledge,

skills, potentials and ability to grow, modify and adopt changes. The plant, machinery,

building etc., are physical structures which can be put to some meaningful use by

competant manpower for generating worthwhile results. This concept is very close to

the concept and principles of cooperation which also emphasis development of people

as members of a cooperative society, who in turn, can utilize physical and financial

resources for their betterment. ,

The HRD concept and strategy take a different meaning in the context of

cooperatives which is broader than that of the private and public sector organizations. In

such organisations, this concept is confined to the development of their employees, both

managerial and non-managerial personnel and integrating them with the organization. In

cooperatives, it has broader connotation and is directed at the development of members

who are owners o f the cooperative society, entrepreneurs, managers, and consumers of

the goods and services produced by the organization as well as development of

cooperative employees, who translate organizational objectives into reality. It is,

therefore, essential for the cooperatives to formulate their HRD strategies at two levels

first, the HRD strategy for the members o f the cooperatives, and second, for the

cooperative personnel, both managerial and non-managerial staff. Primary cooperatives

can increase their effectiveness by formulating strategies under the first level in the

beginning and at the later stage they may go to the second level, while the apex

cooperatives can formulate strategies at both the levels to enhance their efficiency and

effectiveness. Thus HRD should not only cover the paid management and employees

but also the members, office bearers and board of directors. The management of the

cooperative organization is evolved out o f the membership. It is therefore, necessary

that both the members at large and the board o f management are suitably trained and

development so as to enable the organization to achieve its objectives of providing

efficient and improved service to the members and society as well.

HRD OBJECTIVES IN COOPERATIVES

HRD objectives for cooperatives may be considered at two levels, since they

have two distinct target groups. Keeping in view the concept of HRD as applied to

members o f a cooperative society, the objectives of HRD for the first level are as under:

1. To create a climate that enables every member or a group of members to

discover, develop and use his capabilities to a fuller extent in order to

build a strong cooperative institution.

2. To develop entrepreneurial competencies among the members to take up

business enterprise successfully in the light of their occupational

qualities, resources and business potential in the .area of operation of the

cooperative society. Members can take up economic activities either

individually or in a group or at institutional level.

3. To develop managerial cooperative leadership potential among the

members, particularly in the managing committee members, in order to

realise both individual and organizational objectives effectively, and

4. To promote a cooperative culture, where relationships, team work and

collaboration among different groups o f members are strong and

contribute to health and dynamism of the cooperative enterprise and

pride to members.

The HRD objectives for the second level, which is concerned with the

development of cooperative personnel, may be stated below.

i) To develop various competencies in the employees enabling them to

contribute to a fuller extent to achieve both organizational and individual

goals.

ii) To create an organization culture which strongly promotes

professionalized effective superior-subordinate relationships, value-

oriental work culture and team work among employees as well as

contribute to organizational health and dynamism.

iii) To provide a systematic framework, opportunities and faculties for

developing manpower in the organization in order to shoulder greater

and larger job responsibilities so as to. achieve organizational growth

linked with individual growth.

iv) To increase the capabilities of the organization to generate systematic

information about manpower for various purposes like organizational

planning, manpower planning, selection, placement, promotion,

motivation, training and development and retirement.

v) To create a climate which promotes professional cooperative

management with effective integration of objectives, thoughts and

actions among members, employees and cooperative institutions as a

whole. (Sah, 1994:2)

ICA POLICY ON HUMAN RESOURCES DEVELOPMENT IN COOPERATIVES

From the very inception of the International Cooperative Alliance (ICA), the

cooperatives are globally concerned with human resource development economically

and socially. As the very foundation o f treating labour as capital, the ICA philosophy

has been humanistic. Only the approaches and strategies have been subject to change in

keeping with the changing socio-economic environment. Many new programmes such

as ‘without boundaries’ have helped the ICA to accelerate the cooperative progress

through sharing and caring.

The 27th congress of ICA held in Moscow adopted a resolution on cooperatives

in the year 2000, embodying the priorities mentioned in the Laidlow Report. The tone of

the report and the resolution emphasise the necessity to make cooperative enterprises

more human. Consequent to the 27th congress, the ICA declared an over all policy for

cooperative development. The statement indicates the need to realise the economic and

social progress from grass root levels by active involvement o f disadvantaged groups

themselves. The policy emphasis the need to develop towards self-reliance through

democratic participation by the involved groups including women. These target groups

should be developed through education and training. The staff should be professionally

developed to realise professionalization o f management. Promotion of effective

personnel policy in cooperatives is another vital priority area for future.

The very structure of the ICA has been subject to drastic changes after this

declaration and subsequent strategy declared. Formation of an HRD policy, keeping

with the over all development policy, was undertaken in 1990: The new HRD policy,

adopted at the ICA executive committee meeting held in June, 1990 at Strasbourg,

followed a broader concept than early education and training concepts. The ICA global

policy on HRD demarcated the rote of the ICA as a catalyst and a coordinator of HRD

programmes for cooperatives. It will also help setting standards for HRD programmes

and systems for assessment and evaluation.

ICA Committee on HRD for Asia and Pacific adopted an HRD policy and

strategy for the region in 1990. The policy has following objectives. (Hareth, 1994:8)

1. Helping individuals who participate in cooperative organizations to

explore their capability in development and potentialities to become self

reliant and self managed persons in achieving their personal needs.

2. Facilitating the process of integrating individual goals in to collective

actions through mobilization of groups of people with common needs

including the marginalized groups such as women and youth.

3. Creating an organizational environment in which all people including

members, leaders and staff members who participate in a development

process could collectively work towards a commonly agreed goal

through identification and demarcation o f roles, developing them in their

capacity to perform such roles and also introducing changes in keeping

with the transient nature of the contemporary society.

4. Strengthening collaboration among cooperatives o f various types and

levels to promote HRD through sharing of experiences and resources.

5. Influencing government and inter-Govemmental organizations to

formulate HRD policies and programmes and create conditions that may

help to strengthen the cooperatives.

The International Cooperative Alliance (ICA) through it Regional Office for

Asia and Pacific (ROAP), New Delhi, emphasised the HRD strategy in the following

areas o f work.

a) Assess the cooperative institutional models adopted by member countries

using the criteria o f members participation in decision making and assist

introducing new models wherever needed.*

b) Introduction of Human Resource Planning and Human Resources

Development not only at micro but also at macro level.

c) Adopt methodologies to ensure the equal participation of marginalized

groups such as women and youth in cooperative activities.

d) Introduction of new technology wherever applicable to bring efficiency

and more economy for HRD and HRD activities in cooperatives.

e) Introduction o f modem management strategies which would ensure the

synthesis of individual goals with group or organizational goals for better

participation and productivity in cooperatives.

f) Involvement of broad HRD policies at the national level.

The present Three Year Plan o f action for HRD in the ICA Regional Office for

Asia and the Pacific (ROAP) expects to undertake activities on these guidelines. The

first priority has been given to introduction o f methodologies for activisation of

members in decision-making in cooperatives. This needs alternative models to suit

different environments. Many successful strategies are already available within the

cooperatives in the region itself. The Regional Office has also taken initiatives to

introduce new technology to improve training systems in India and the Philippines by

introducing computers and electronic media for curriculum development, production of

training materials etc. Creating awareness for change in HRD systems has become a

major task for the ICA in the light of the problems and constraints faced by

cooperatives. Such information is out o f reach of many cooperative movements.

PRESENT STATUS OF HRD IN COOPERATIVES

The cooperative movements functioning in open economics were the first to

recognize Human Resource Development (HRD) as direct management function.

Replacing the narrow focus on education and training, this development has relationship

to the competitive market where they have to compete with the private sector which has

always been recognizing strategies in maximising efficiency o f labour for more

productivity. The corporations such as Me Donald, Walt Disney or Dena Corporation

have shown more progress in this direction.

The cooperatives, as in the case of any other enterprise, are affected by the socio­

economic environment in a given country. Many countries in the Asia Pacific Region,

except Japan and Australia, have experienced weakening cooperative movements in the

face of competition from other sectors. They have never been able to be proactive in

their business strategies and tend to fallow the strategies put forward by the other

enterprises blindly. Even in India, one could see such trends in marketing strategies

through advertising. Therefore, the HRD strategies too are learnt from the private sector

rather than inventing something of their own.

In this context, manpower is considered as an important tool for distribution

schemes rather than a means of more production and profitability. Management culture

has itself shown this thinking resulting in negligence of human resource as a dynamic

force. Many smaller type of cooperatives such as Thrift and Credit, artisans and fishers

functioning in the developing countries do not even have enough staff to have a

function like HRD. However, large cooperative business organizations like IFFCO and

IRMA have initiated their own HRD institutions like in the countries o f Singapore,

Japan, South Korea, Sri Lanka etc. These are the most important examples of HRD in

cooperatives in India. They have introduced training activities covering individual

development as well as organizational development. IFFCO has a unique integrated

HRD development and utilization system. The training has also combined with the

career development of the employees. This development has taken place not

withstanding the hierarchical structure of the organization. The other phenomena, we

find in many cooperative movements, is the separation of education and training

function of business cooperatives. Specially in the case of countries following early

pattern of British cooperative system, the so-called ideological apex cooperative

organizations have been given charge of this function. Countries such as Bangladesh,

India, Malaysia, Indonesia, Sri Lanka and Thailand were few such examples. This

situation has alienated the business training from actual business. Consequently,

manpower development function has been separated from personnel management

function o f business cooperatives. The division o f this function has led to deterioration

of manpower performance in the absence o f an integrated manpower development

function.

Ideally speaking, the business goals o f a particular cooperative would mean the

adjustment o f manpower allocations, forecasts, recruitment and development in order to

achieve such goals. International organizations such as ILO have tried to use the

existing organizational situation of many cooperatives to achieve more integration not

only in terms o f the function but also in terms of organization to serve goals of

cooperatives with limited impact. Service oriented thinking itself has not led to integrate

changing HRD thinking. However, some cooperatives have shown emerging

consciousness of the need to integrate the HRD function with business targets at least in

the case o f emerging young cooperatives. There is an increasing tendency on the part of

large cooperative enterprises in India, Japan, South Korea and Singapur to take over at

least business training with the base cooperatives itself having ideological organizations

with only academic training. However, this trend has to progress far to treat HRD as a

total function achieving overall HRD. This may mean restructuring the existing

cooperative system.

It has been noticed that many countries such as Bangladesh, Malaysia, Sri Lanka

and Thailand, the cooperative education and training has been a major role for

Government agencies. This has negated the actual demand based HRD. The

Government cooperative colleges rarely cater to the changing needs of cooperatives due

to the very structure they have. Thus they conform to academic cooperative education.

This arrangement hardly supports the wholistic approach to HRD.

The ILO project on 'Cooperative Training and Standards' tried to focus on the

totality o f manpower management system and determine a strategy to integrate training

in to organizational objectives at the Marco level. As a pre-requisite, manpower surveys

have been undertaken in many countries in the Asia Pacific Region during 1978-79

which was to be the base for future forecasting and manpower development in

cooperatives. This activity has created an awareness, but failed to sustain the activity.

Therefore, macro level approach to Human Resource Planning and Development has

had a marginal effect.

HRD COMPONENTS IN COOPERATIVES

From the above discussion various components of HRD for cooperatives in an

integrated manner can be derived. This can be termed as integrated HRD strategy for the

cooperatives. The components of which are summarized as under:

1. COOPERA TIVE MEMBERS DEVELOPMENT

The success o f a cooperative society depends on active participation of members

in the business transactions and management of the society. This requires

building up o f a strong cooperative institution and integrating it with the sound

principles o f a business enterprise. It needs proper planning for members’

development, since this aspect is very weak at present. Members’ development

denotes education of members in the democratic process o f cooperative

management, preparing them to assert their rights and duties in the development

o f cooperative business, functional education to upgrade their occupational

practices, and team building to take up profitable business activities in a manner

which provides concrete benefits to them. The member’s developmental efforts

should be regular at certain intervals and should be organized at village levels.

They should also be sent on visits to successful cooperatives elsewhere, which

will motivate them for development.

2. COOPERA TIVE ENTREPRENEURSHIP DEVELOPMENT

Due to socio-economic, cultural and other factors, the rural people, particularly

members o f cooperatives, are not enterprising. So long as they do not come

forward with entrepreneurship qualities, cooperative development in its true

sense will be a mirage. Cooperative entrepreneurship development implies

developing the qualities o f initiative, imagination, scanning the environment,

enterprising ability, risk bearing capacity, introducing innovation, etc. in

members so that they can identify and translate new business prospects into

reality. Apex cooperative federations and the developmental financing

institutions have to play a greater role in this respect through well thought out

plan and provision of a package of services for cooperatives in the light of their

developmental requirements. Formulation o f suitable Cooperative

Entrepreneurship Development programmes linked with financing schemes can

be very useful for the development o f cooperatives. Care should be taken to

formulate specific, need-based and practical training programmes suiting the

requirements o f rural people.

3. COOPERA TIVE MANA GEMENT LEADERSHIP DEVELOPMENT

Cooperative management leadership denotes developing judicious combination

o f both managerial and leadership qualities in the Chairman, members of the

Managing committee and Managers for the smooth functioning of cooperative

societies. Management leadership unites the members and employees together

and lead them to specified objectives and also direct the efforts and resources in

right direction with improved management practices. In this respect,

transformational style is very much required for cooperatives. Hence,

management leadership development programmes need to be organized. This is

very crucial for institution building and integrating business efforts with

professional management.

4. ORGANISATIONAL PLANNING

Organizational planning refers to systematic and conscious preparation of

corporate plan and functional plans and work accordingly to achieve the

objectives. This will help the cooperatives in expansion and diversification of

business activities leading to accomplishment of the objectives of growth,

stability and perpetuity. This strategy is crucial for meeting the developmental

requirements o f members as well as the employees also.

In the context of cooperatives, manpower planning has not been given due

recognition. The cooperative sector comprises of hundreds of thousands of cooperative

institutions, each one of them an autonomous body corporate, ranging from a small

primary agricultural credit society to a giant manufacturing enterprises as IFFCO or

KRIBHCO or a State Cooperative Bank or a major marketing federation. With such a

multiplicity o f employing organizations of various sizes and scope, any exercise in

manpower planning done on a global basis will lead to no meaningful results from the

point o f view of individual organizations. Just as for corporate planning, manpower

planning also must necessarily be done by each cooperative organization itself,

irrespective o f its size, because manpower planning is intimately linked to the corporate

vision that a cooperative seeks to set for itself. The corporate goals of each institution

will be based on its own present level of development. No doubt manpower needs of

small organizations would be small and simple, capable of being worked out with out

much complexity. But, be that as it may, it will be the needs of that particular

cooperative institution specific to its business projectives, and not a mere reproduction

of a standard blue-print from a generalized assessment. The higher federal cooperative

organizations can, and must, help not as much in the manpower planning of their

constituent organizations as in initiating and orienting them to the idea of such planning

and in providing helpful guidelines to them in that behalf.

In cooperative sector, broad details of personnel employed ... category-wise and

sector-wise is available but the estimate o f manpower requirements in terms of

anticipated growth of each sector o f cooperative movement is not readily available. In

view o f large number o f units, undertaking diversified activities and operative at

different levels of economic viability, it is o f course difficult to have such macro-level

estimates, but all the same it may be possible either to have such estimation in respect of

all sectors at state level or in respect o f one particular sector at national level.

Thus the cooperative will have to procure right kind of manpower and develop

them both in number and competance. Clear organization structure and chart,

standardization of jobs and job title, job analysis and description, specification of

qualification and experience for different jobs should be made. This scientific

manpower planning, beyond doubt will constitute an important component of any

strategy o f professionalization in cooperatives. However, the basic responsibility lies

with top management and the line officers. Within the cooperative organizations, on a

close look in the cooperative sector, it is observed that in most of the organizations,

particularly close operating at the primary and secondary level, there is no well defined

personnel management policies in the organization. The top level sectoral federal

organizations, therefore, are most suited to undertake the responsibility o f manpower

planning for the sector as a whole.

RECRUITMENT, SELECTION AND PLACEMENT

It is vital for the efficiency o f the co-operative organizations that recruited staff

should meet the requirements of the job to do. However, at present there is no

uniformity in the co-operative recruitment system. If right people can not be attracted,

even the best of training or career development policies will not have the same impact.

It has been observed that most of the co-operative institutions are unable to attract more

qualified persons, firstly, because o f the inadequacy of salaries as well as other service

conditions in comparison with the private and public sectors. Secondly, most of these

institution, being small, provide little opportunities o f upword movement and career

advancement to their personnel. This leads to good persons leaving the institution in

course o f time for better opportunities elsewhere, or otherwise causing frustration and

deceive in morale. Another lacuna observed in co-operative recruitment, particularly, in

banks is that entry point is confined to the lowest cadre, i.e, clerical posts, who in course

o f time being promoted to higher positions by virtue o f their seniority even if they lack

the comperative knowledge and skills required for these posts.

In most o f the apex level co-operative organizations, the chief executives are all

Government officials placed on deputation by the State Government. Besides, other key

personnel in some cooperative institutions are Government servants on deputation. It is

observed that all Government deputationists do not passes the required degree of

professional skills and relevant experience with the management of business activities,

having no abiding interests in the development of institution during thick short tuners

and lack of continuity in leadership required for efficient and effective management. In

this system of Governmental management of co-operatives by proxy, efficiency and

accountability has become a causality.

In fact, the organization should have clearly specified recruitment procedures

with a view to ensure that right type of staff with requisite qualifications, background

and aptitude for developmental work are selected. An effective recruitment procedure

should also spell out job specifications i.e, what a person, to be recruited, is expected to

perform. There should be standardised selection process like clearly defining the

qualifications and experience required, age limits etc. while placing people in various

positions, the qualifications aptitude o f an employee should be taken in to account to the

extent possible with a view to ensure that a square pay is not put in a round hole and

vice-versa, while ensuring that these is a job rotation attempts could also be made to

make people specilised in a particular branch of the organization. Hence, recruitment

and selection is very crucial as it also invalues cost. It is therefore, pertinent to plan and

implement appropriate procedures and systems for selection o f right kind of people.

Training is an important segment of HRD in any ongoing concern with rapidly

changing environment in which the institutions operates. In cooperatives, the training

need has not been taken so seriously for the development o f every category of staff.

Though the cooperative sector has a good network of training centres ranging from

VAMNICON at national level for senior level personnel to state level CTC for lower

level cooperative personnel. But unfortunately, the training courses are of short duration

and out dated. There is a dire need to devise a need-based and innovative training

system in cooperatives. Management training will include executive development

programmes and specialized management programmes like project financing,

performance budgetting, marketing management, inventory control, net work analysis,

management information system etc. There are vast front line officers/operators doing

jobs, skilled or smi-skilled, who need job training e.g; salesmen and shop managers in

consumers stores, counter clerks or accountants in cooperative banks, secretaries of

village dairy societies need to be developed.

While determining the training facilities required and planning to be done, the

job requirements of the staff should be kept in view. Care has to be taken to devise

suitable training capsules for different categories o f staff. While skill oriented

programmes have to be devised for lower level staff, programmes dealing with

conceptual and managerial skills have to be organized for the staff in the higher grades.

A periodical review and estimation o f trainable at various levels have to be attempted.

Training o f an individual should be by design and not by accident. A training which

does not contribute to performance improvement redundant and futile, and hence,

should be rejected. It is therefore, desirable that training and development efforts should

become a part of an employees growth process and it should be for all levels.

COMPENSATION AND MOTIVATION

After selection, it is important to retain and maintain good quality o f manpower.

This is possible if organization has competitive compensation and motivational package

like salary, perks, facilities and other non-monetary motivator. However, in cooperatives

the compensation and other motivational factors are meager as compared to private and

public sector employees. There is no proper grade revision of pay and other service

benefits which are applicable in other sectors. This usually causes their leaving the

organization, with the result the functioning of cooperatives suffers badly. The

retirement benefits in cooperative unions are beyond the imagination of employees. It is

therefore, essential to have proper compensation policy, and other developmental policy

enabling employees to feel that organization cares and looks after them satisfactorily.

This will create a sense of moral obligation among the employees to work with good

dedication, zeel and psychological involvement with organization. This reduces

employees turnover, absenteeism and grievances on the one hand and on the other

improves organizational effectiveness.

PERFORMANCE APPRAISAL

Performance appraisal is a powerful component of Human Resources

Development (HRD). In order to ensure an employe’s success in accomplishing his job

and other responsibilities, periodic appraisal of his performance becomes necessary. It

provides feed back to the employee as how well he is performing ,reveals his training

needs and may also reveal that redesign of the job tasks may be necessary. Though

performance appraisal in other organizations is an important and useful tool of staff

development, it is the weakest link in the cooperative organizations. It practically doe

not exist in comparative enterprises.

In co-operatives, performance appraisal of the employees has not been given due

attention and subjective appraisal is reducing its significance. While performance

appraisal is a method o f development on the one hand and on the other hand it referes to

identification o f key performance areas, setting performance standards, assessment of

behavioral dimensions and self assessment. It focus on helping the appraisee to

understand job related issues concerning his or her behaviour. The activities included in

the performance appraisal system are designing and reviewing the system periodically,

identifying and defining performance and result areas, providing training for effective

use o f performance appraisal systems and using the derived record for determination of

training and developmental needs, including reward systems.