Performance Review and Management 1.pdf

B Com (Hons) II Semester
E content
1. Human Resource Management
2. Banking Operations Management
3. Statistical Methods
4. Business Environment
5. Business Communication & Office Management
6. Management Information System

the students of
B. Com. (Hons), Sem: II
Name of Paper Human Resource Management
Prepared by: Deepak Verma
Performance Management
Performance can be understood as the resultant outcome of utilizing the knowledge and skills to
complete any job in accordance with the basic aims and objectives for which the task is being
attended by the job or task holder. Managing the performance of the job holder in desired
manner is known as performance management. Assessing the performance of individual as per
the standards is knowns as performance appraisal.
In present scenario every organization must manage the performance of everyone who is the
member of the organization. Usually it’s easier task to manage the performance of individuals
who are working repetitive job at lower level in the organizational hierarchy. Managing the
performance of the employees who are working at higher or managerial level this task of
performance management becomes difficult.
Concept
There are two basic tasks for the managers and team leaders who have responsibility to manage
the performance of the employees;
· Assigning the job based to right man (Right man is who, has the required skill).
· Assess the job performance.
Based on above responsibilities, further fundamental concept of performance management can
be explained in following manner;
· Assigning the targets to the employee.
· Performing the job by the employee.
· Assessing the performance by the oppressors.
· Rewarding/Awarding the performance of the employee.
Thus, we can say that performance management is a systematic evaluation of performance and
to understand the abilities of person for further growth & development. It is a process of

assessing, summarizing and developing the work of an employee quantitatively and qualitatively.
Definitions
Performance Management can be defined in many ways. Some definitions given by some
authors are as following:
A. Edwin B. Flippo 'Performance appraisal is a systematic and periodic rating of an
employee in methods containing to his present and future job. This definition can be
understood by breaking it in to phrases.
· This is a systematic process as it follows a pattern or definite series of the activities.
These activities are as following.
(1) Assigning the job
(2) Performing the job
(3) Assessing the job
(4) Awarding for the performance
· Performance Management is periodic activity as this activity is supposed to be completed
within one financial cycle. Though this period can differ in different economies as all the
countries don’t follow the same financial years. Some countries follow the financial year
form April to March and some countries follow the financial year from January to
December.
· Based on the performance of employee management gives some rating to employee. For
example, outstanding performance or dissatisfactory performance etc.
· If employees perform well, get rewarded. In the case of underperformance if need of
training is detected, these employees get trained and be prepared for the future job.
B. Dale Yorder
"Performance Appraisal includes all formal procedures used to evaluate personalities and
contribution and potential of group member in a working organization."
Process of Performance Management/Appraisal
As we discussed earlier in this chapter that performance appraisal is a part of performance
management. It’s a cyclic process which occurs through out the year in a systematic and planned
manner. The process of performance appraisal can be classified in to five steps.
1. Planning
2. Assigning the targets and goals
3. Performing the job
4. Monitoring the performance
5. Assessing the performance
6. Awarding the performance

Figurer: Process of Performance management/ Appraisal
As we discussed that the process of performance appraisal is cyclic process and one process
comes after the completion of previous process.
1. Planning: This step has the primacy over the other steps of the performance appraisal.
Planning. Planning is the process to make a bridge between present and future. Like ways
performance management planning helps the managers in identifying the various job in the
organization along with the detailed description of the job. Tools like job analysis and job
evaluation paly a vital role in planning the performance of the employees. Tools like
competency mapping, balanced score card helps in identifying the potential of the members
of the organization and helps in setting goals for the individual members.
First planning is done at corporate level and these planning are documented in the form of
policies. As policies are guidelines for the managers, departmental heads use these policies
to set the targets and annual goals to their employees, to monitor the performance and at last
to asses the performance. Based on these assessments corporate or head office award the
performance of individual.
Two management jargons are more commonly being used at workplaces; KRA & KPA.
KRA is know as Key resultant areas while KPA stands for Key performance areas.
a. Key resultant areas: Key resultant areas are the general responsibilities of the member
of the organization of department. Sometimes these can be common responsibilities for
all the members of the department. For example, issues related to human resources is
common responsibly of all the human resource managers. If any human resource
manager dose something significant in the area of human resource management, this
would be considered as KRA.
b. Key performance areas: KPAs are individual responsibilities assigned to any employee
as per the his or her competencies. Key responsibility to complete such task lies upon the
holder of the job only. For example, for a Capex purchase manger, negotiating the
Planning
the job
Assigning
the job
Performing
the job
Monitoring
the job
Assesing
the job
Awarding
the job
Annual
Performance
Cycle (Financial
Years)

capital purchase proposals are KPA while cost avoidance in service purchase proposals
or participating in CFT (Cross Functional Teams) are KRA.
Employers are more concern about KRAs instead of KPAs as KPAs are prime
responsibilities of the job holders while KRAs shows the dedication and job engagement
of the employees.
Many organizations are using the new terminologies instead of KPAs and KRAs like;
a. Performance Indicators: These indicators are key responsibilities of the employees. For
example, for purchase managers, Savings and Cost Avoidance in purchase negotiations
are performance indicators.
b. Measurables: measurables are actual goals for the performance indicators. For example,
for a purchase manager target of saving in purchase negotiations for any performance
cycle is thirty percent. It means if the manger is achieving the thirty percent average
savings on purchase proposals during any performance cycle will be known as
measurable.
c. Balances Score Card: Balanced score card is a matrix method where goals and targets
related to the performance indicators and measurables of the department or any
organization. These balance score card may contain following elements. (A format for
balance Score card has been given at the last of the chapter as annexure). Usually balance
score card is used for the strategic management, but this matrix is also used for the
assessment of the targets assigned to any organization & departments. These matrices
contain a detail information about the individual targets.
i. Financial
ii. Customers
iii. Internal Process improvement
iv. People & Organizational capacity
2. Assigning the targets and goals: After the completion of the planning part for the
performance management, next task is to assign the targets to the job holders for the period
of performance cycle. During this activity job holders have one to one meeting with the
HODs or appraisers. HODs set the targets for the job holders after consulting the job
holders. These HODs consider following elements while deciding the goals for the job
holders.
i. Past performance of the employees
ii. Current capabilities and competencies of the employee.
iii. Level of job engagement of the employees.
3. Performing the job: This step is the main stage of the performance management. Job
holders perform the assigned job and try to achieve their targets for the performance cycle.
Job holders perform their jobs considering the KPA, KRA, KPI and Balance Score Card
which we discussed in the planning part of the Performance Management.

Job holders divide the larger goals and targets into smaller tactical goals and gradually try to
achieve the larger goals for the better performance.
4. Monitoring the performance: It is very crucial to monitor the performance by the HODs
and appraisers. Monitoring is a systematic activity which involves the periodic pre-
assessment of the performance. Periodic pre-assessment depends on the organizational
policies. These monitoring can be as following;
a. Daily assessment meetings.
b. Weekly assessment meetings.
c. Fortnightly assessment meetings.
d. Monthly assessment meetings.
e. Half yearly assessment meetings (Mid Term Review)
f. Final Review Meeting.
During the midterm review assigned goals can be realigned for the job holders with the
consultation of the job holder. Sometimes employees overestimate their potential and later
realize that they are not in the position to complete the targets successfully with in given
time period. During midterm review such targets can be reassigned.
5. Assessing the performance: This Stage is known as final stage of the performance
assessment. During this stage assigned performance is compared with the current
performance. On assessing the job employees are awarded as Outstanding, Good, Average,
Need to improve or Poor etc.
6. Awarding the performance: After the final assessment of the performance of the
employees its responsibility of the management to award the jobs. Outstanding performers
can be awarded with the promotion, pay hike while poor performers can be punished with
transfer, demotion etc.
Sometimes management take decision of rightsizing or downsizing based on the results of
the performance appraisals. After identifying the black sheeps in the organization,
employees can be shown to the exit door of the organization. In simple words nonperformers
are retrenched form the organization.
Establishing the performance standards
↓
Communicating the performance standards to the employees
↓
Monitor the performance of the employees
↓

Realignment of performance standards
↓
Compare the present performance with sit standards
↓
Discuss the appraisal results with employees
↓
Take corrective actions.
(figure: Process of Performance Management)
Objectives of Performance Appraisal
There may be following objectives of the performance appraisal.
1. Settings target for employees: Target settings is founding stage of the performance
appraisal and involves two dimensions;
a. The quality and quantity of work to be performed by an employee in the future for
long term as well as short term period.
b. The employees’ conduct/ Behaviour and engagement in the organization.
Target setting is a vital issue which involves the participation of job holder his immediate
supervisor the functional head and the corporate plan.
2. Insuring that employee’s performance is on track - Target setting only does not ensure its
achievement. It requires a continuous follow up action in every department with combined
efforts of the HR the respective departments.
3. Assessing performance at the end of the year - once the follow up action or monitoring
process is taken to ensure the attainments of the target ultimately at the end of the year a
performance audit is to be made that will provide a feedback on the actual performance ,
targets, and the deficits if any.
4. Identifying top talent and those members who need to improve their performance -
monitoring the performance, evaluating performance of individuals and the overall
performance of the organization will enable the HR to identify star performers & member
who need to be given support to improve their performance. And, to identify people with
high potential for the purpose of job relocation.
5. Linking the rewards received by employees to their performance - rewards in an
organization are not to be gifts of management to the employees in fact reward should not be
given as gift. They must be linked with performance and as such linking the rewards with
the performance is one of the objectives of performance management.
6. Identifying training needs of employees - performance management includes another
important activity that is imparting training to the employees. Training itself has three basic
objectives namely providing and enhancing knowledge, developing skills and modifying
behavior. These training objectives can easily be attaining by the activities which are
performed under the larger umbrella of performance management.
7. Maintaining the constant dialogue with employees and their supervisor - in an

organization there is a system of performance evaluation of employees normally at the
yearend either to reward the good performance or to punish for bellow slandered
performance or anything wrong that the employee has committed during the previous one
year period as such the performance evaluation emerges as an annual ritual and does not
lead any scope of improvement in employees performance. Very often the objective of
performance appraisal in the corporate world is to determine and declare employees
monitory work for coming one year or six months.
We can summaries the objectives of Performance Management as following
· To plan and set the performance goals for the employees.
· To assess the performance of the employees according to standards.
· To identify areas for appropriate training and developmental is needed for the employees.
· To determine salary increments.
· To help the employees to overcome their weaknesses and improve their strength.
· To build up skills in employees to perform future jobs.
· To enhance the communication between employees and their superiors.
Methods of Performance Appraisal
We can classify methods & techniques of performance appraisal into 2 categories:
(1) Modern Method
(2) Traditional method
Traditional Method
(1) Confidential report
(2) Graphic rating and scale method
(3) Straight ranking method
(4) Paired comparison method
(5) Grading system
(6) Checklist method
(7) Forced distribution method
(8) Critical incident method
(9) Free essay evaluation method
Modern Methods
(1) Management by objective
(2) Behaviorally anchored rating system
(3) Assessment centers
(4) 360" evaluation
(5) Forced ranking bell curve method

Traditional method
(1) Confidential report
Confidential report is a traditional method of performance appraisal. During the British age
confidential reports were used to be sent about the performance or the Viceroy to the Britain.
Based on performance of the Viceroy further tenure was used to be decided. Appraiser makes a
confidential report without discussing with the appraisee and send the same report to the
management for further action. Though this is a traditional method still in some government
sector this method is being used for important jobs.
(2) Graphic rating scale method
In this rating system some grades are determined by the appraiser and then performance of the
employees is placed under such grades. A rating scale treats and range the performance of
employees after evaluating the scores of the employee performance. Performance can be
assessed based on various criteria.
Performance Level
Work Dimension
Very
Poor
Poor Fairly Good Good Excellent
Targets
Achieved
Behaviour
Attendance
Cooperation
(3) Straight Ranked/Ranking method
Under this method appraiser evaluate performance of employees and prepare a merit list of
employees according to their scores. Sometimes appraiser calculate the scores with the help of
average method where scores are gathered after gathering it from more than one supervisor.
According to the scores obtained, appraisers make a merit list. Employee present at the top of
merit list is considered as top performers.
Employee
ID
Supervisor
A
Supervisor
B
Supervisor
C
Total
Score
Average
Score
1
2
(4) Paired Comparison Method
In the method of paired comparison every employee is compared based on individual traits.
Under this methods pairs of employees are formed and then they are compared with each other.
This method can work where number of employees are less. For large workforce it would be
practically impossible to make pairs and compare each employee with others.
Number of pairs = N(N-1) / 2 (N= number of employees)

(5) Grading System
The method of grading system is very similar to graphic scale method and straight ranking
method but here we assign some grade to the employees for their performance. Employees are
places under certain grades. For example, A grade will be given to outstanding performers, B
grade will be given to good performers, C grade will be given to average performers while D
grade will be given to poor performers.
Grade A = Outstanding
Grade B = Good
Grade C = Average
Grade D = Poor
(6) Checklist Method
Here, we as an appraiser, decide few goals or targets for the employees to judge their
performance. At the end of financial cycle, appraiser analyze that how many tasks has been
successfully completed and employee’s performance is rated based on the number of tasks
completed.
There are two types of checklist methods
a. Simple checklist
b. Weighted checklist
In simple checklist method simple scoring is done based on number of targets have been
assigned to the employees. While in weighted checklist method some weightage has been
assigned to some crucial targets. Weighted checklist method motivates the employees to achieve
the crucial targets first.
(7) Forced Distribution Method
Under this method appraiser has to classify the employees according to their performance
ranging from excellent performance to poorest performance. Appraiser has to place every
employee into categories among outstanding to poor performer. This method is bias free method.
Demerit of this method is that poor performer of a good team could be outstanding performer of
a bad team.
(8) Critical Incident Method
Managers keep records whenever employees achieve something during the period of
performance cycle. At the end of performance cycle employees are rated based on those critical
incidents or achievements, employees achieve. Kudos cards or diary method are used to record
the critical incidents.

(figure: Kudo card)
(9) Essay Appraisal Method
Supervisors or appraiser write a detailed report about the employee and their performance. While
writing an essay based on the performance of employee following points should be covered;
a. Employees' duties and targets
b. Employees' potential and competencies
c. Employees behaviour as an individual and in the group
d. Any incident or contribution made by the employee which affected the productivity of
the organization.
Modern Methods
(1) Management by Objective
This concept was given by Peter Drucker in 1954. Management by objective approach tends to
emphasize a participative and joint determination the objectives followed by the employees and
evaluated by managers/ appraisers. It consists of basic steps

a. Set the organizational goals
b. Joint goal setting (Between employee and employer for short period of time)
c. Performance review (Frequent meetings should be conducted between employee and
employers to review the ongoing performance and find out any shortcomings in
performance.)
d. Feedback (On the basis of review process supervisors provide feedback to the employees
and try to improvise it.)
(2) Assessment Centers
Assessment centers are facilities or infrastructures which built outside the organization. In these
facilities or infrastructures, we create similar environment as real workplace. Sometimes,
managers use simulators to create such environment. Under this method, we give some tasks
related to general duties of the employees and they must perform it. Any supervisor or appraiser
closely monitors that how employee is performing individually and how they are performing in a
group.
(3) 3600
& 5400
Appraisal
Under 3600
appraisal method employee provides assessment of his performance by himself and
called as self-appraisal. Including self-appraisal, appraiser collect the performance status of the
employee from various internal sources. (Supervisor peer groups, team members etc.)
(figure: 3600
appraisal)
Under 5400
appraisal method appraisers not only collect the views about the performance of
employees’ form peer groups, superior, direct reports and counterparts but also form customers
and suppliers. Because of adding two more elements (1800
) in to the 3600
collectively this
method becomes 5400.
(4) Behaviour Anchored Rating Scale
Under this method, we consider the behavioural trait of the employees and incidents related to
behaviour of the employees along with the performance of the employee. For example, a level 4
rating for a nurse may require them to show sympathy to patients while a level 5 rating may

require them to show higher levels of empathy and ensure this comes across in all dealings with
the patient in case of an appraisal of nurses in hospital.
(5) Forced Ranking Method along with Bell Curve
This method is like force ranking method we discussed in the traditional method of performance
appraisal. In this method a proper graph is formed which looks like bell shape as shown in the
following table and graph.
Forced Ranking Method
Rating Category Out
standing
Very
good
Good Need to
improve
Poor Total
Code A (1) B (2) C (3) D (4) E (5)
No of Employees Standard 10% 20% 40% 20% 10% 100%
Actual 4 8 16 8 4 40
(figure: Bell curve method)
When a company uses a bell curve for their performance appraisal management system it implies
the performance grading of all the employees is distributed along the bell curve. Here the bell
curve is used to characterize the employees and group them into a top performer, average
performer, and poor performer. Categories may vary from organization to organization. In order
to identify the calibre of employee bell curve performance appraisal management system is often
used in the different organization. The bell curve process makes it easy for HR to provide
rewards to the top performer and put an extra effort for the average performance. The low
performers are identified quite easily, and the action plan can be implemented to improve the

performance.
(6) Cost based Method
Under this method appraisers evaluate the performance based on cost invested in the form of
CTC (cost of company) being given to the employees and what is the contribution of employee
to the organization. For example, if a company is investing 10,00,000 as CTC expectation of
organization would be to get return of more than 10,10,000.
Balance Score Card
Illustration: Goal Sheet
Name of the employee:
Employee ID:
Name of the department:
Assessment Year:

KRA Review for Performance Assessment
Strategic Goals Measure Target Weightage Remark Status
Process Improvements As per mile Stones 1
Tactical Goals Measure Target Weightage
Saving through Negotiation
for Capex
wrt L1 vendor 23%
Uniform 2
Consolidation 1
Individual Goals Measure Target Weightage
Capex Negotiation 10 days Average Time 100%
A- MIS (Capex)
B- Top Projects of Capex Weekly Reports 100%
50 %
30 %
20 %
No's
Cost Cutting Project 2

Sr No
Target Achieved Ratings Target Achieved Ratings Target Achieved
KRA 1:
KRA 2:
KRA 3:
KRA 4:
KRA 5:
Quartertly Ratings
Scale
5 Significantly Below Average
4
3
2
1 Outstanding
Rating System Score
5
1
Average Rating
2
3
Description:
Description:
KRAs
Description:
Description:
4
Below Average
Average
Above Average
Annual Review
e
Quarter 1 Quarter 2
a
b
c
d
Description:
Weight
age in
%

For the students of
Banking Operations Management
Prepared by: Dr. Praveen Joshi
Asset-liability management in commercial banks
Concept of ALM
Ø ALM is a concept which tries to match Assets and Liabilities in terms of Maturities and
Interest Rates. It tries to minimize Interest Rate Risk and Liquidity Risk.
Ø It is concerned with management of net interest margin ratio (net interest margin is ratio
of net interest income to total earnings) to ensure the compatibility of the risk-return
objectives of bank.
Ø This is done by matching of liabilities and assets in terms of maturity, cost and yield
rates. The maturity mismatches and disproportional changes in the level of assets and
liabilities can cause risk of both liquidity and interest rate.
Ø ALM is a risk management technique to maintain a comfortable surplus of assets beyond
liabilities and designed to earn an adequate return. It considers interest rates, earning
power, and degree of willingness to take on debt and therefore is also known as Surplus
Management
Ø Therefore, the focus of ALM is not only on building up of deposits and loan/assets alone
but also on net interest income and recognizing interest rate and liquidity risks. This is
essentially a guide to survive in an environment which is deregulated.
Ø ALM is an integral part of the financial management process of any bank.
Ø ALM is concerned with strategic balance sheet management involving risks caused by
changes in the interest rates, exchange rates and the liquidity position of the bank.
Ø In the process of management, these three risks form the crux of ALM. Credit risk and
contingency risk are also part of the ALM.
Asset Liability Management in Banks
Ø In banking institutions, asset and liability management is managing various risks that
arise due to mismatches between the assets and liabilities (loans and advances) of the
bank.
Ø Banks face various risks and ALM helps to manage these risks. Banks face risks
associated with assets, interest, currency exchange risks.
Ø ALM is nothing but efforts taken by bank board and senior management team to carefully
balance the banks current and long-term potential earnings.

Ø The need is to maintain adequate liquidity and appropriate interest rate risk (IRR)
exposures.
Ø Every bank has a different strategy, customer base, product selection, funding
distribution, asset mix, and risk profile. These differences make the assessments of risk
exposures and risk management necessary practice.
Mismatch of assets and liabilities:
Management of the risks of bank is done by matching various assets and liabilities according to
the maturity pattern, matching the duration and by hedging the securities.
Increasing integrated risks is done on a full mark to market basis rather than the accounting basis
that was at the heart of the first interest rate sensitivity gap and duration calculations.
Definition of ALM:
ALM is defined as, “the process of decision – making to control risks of existence, stability and
growth of a system through the dynamic balances of its assets and liabilities.”
The other definition of ALM:
It is “a risk management technique designed to earn an adequate return while maintaining a
comfortable surplus of assets beyond liabilities. It takes into consideration interest rates, earning
power and degree of willingness to take on debt. It is also called surplus- management”.
ALM is all about managing three central risks:
Interest Rate Risk
Liquidity Risk
Foreign currency risk
The banks which are engaged in forex operations also includes managing Currency risk
ALM information system
Ø Information is the basis of the ALM process. Large network of branches is there, and lack
of an adequate system exists to collect information required for ALM. This will take time
for banks to get the required information.
Ø The core activities of commercial banks are measuring and managing liquidity needs.
liquidity management can minimize the probability of development of an adverse
situation by making sure that bank has the ability to meet its liabilities as and when they
become due.
The importance of liquidity:
Ø Liquidity shortfall in one institution can affect the entire system thus it helps to transcend
individual institutions.
Ø Bank management should examine how liquidity requirements are likely to evolve under
crisis scenarios.

Ø ALM measures not only the liquidity positions of banks on an ongoing basis but also
tries to match the assets and liabilities and minimizes the interest rate risk and liquidity
risk.
Overview of Asset Liability Mismatches:
Ø The future cash inflows & outflows of the bank are represented by the assets and
liabilities of the banks’ balance sheet.
Ø Under Asset Liability Management these inflows & outflows are grouped into different
time bundles. Each of the bundle of assets is matched with the corresponding bundle of
liability.
The differences in both these bundles are known as mismatches.
Is complete matching of Assets and Liabilities in the Balance sheet necessary?
No, complete matching of assets and liabilities in balance sheet is necessary because banks can
make money sometimes even as a result of such mismatches. Alam Greenspan, ex-Chairman of
US Federal Reserve has once observed “risk taking is necessary condition for wealth
creation”. However, keeping large mismatches is a risky proposition it can lead to massive
losses in a volatile market. Therefore, practically the idea is not to aim at zero mismatches but
to limit the mismatches
Evolution of ALM in Indian Banking System:
Ø Under regulated environment in India in 1970s to early 1990s, there was no interest rate
risk as the interest rate were regulated and prescribed by RBI
Ø Spreads between deposits and lending rates were very wide. At that time banks
themselves did not balance their balance sheets as they were being managed through
prescriptions of the regulatory authority and the government.
Ø After deregulation of interest rates, banks were given a large amount of freedom to
manage their Balance sheets. Thus, necessity to introduce ALM guidelines arose so that
banks can be prevented from big losses from ALM mismatches.
Ø First ALM Guidelines was introduced in February 1999 by Reserve Bank of India which
was made effective from 1st
April 1999.
Ø Guidelines covered the interest rate risk and liquidity risk measurement reporting
framework and prudential limits. Gap statements were to be prepared by scheduling all
assets and liabilities according to the stated or anticipated re-pricing date or maturity date.
At this stage the Assets and Liabilities were required to be divided into 8 maturity
bundles (1-14 days; 15-28 days; 29-90 days; 91-180 days; 181-365 days, 1-3 years and 3-
5 years and above 5 years), based on the remaining period to their maturity (also called
residual maturity).
Ø All the liability figures were considered as outflows while the asset figures were
considered as inflows.
As a measure of liquidity management, banks were required to monitor their cumulative
mismatches across all time bundles in their statement of structural liquidity by establishing
internal prudential limits with the approval of their boards/ management committees. As per the

guidelines, in the normal course, the mismatches (negative gap) in the time buckets of 1-14 days
and 15-28 days were not to exceed 20 per cent of the cash outflows in the respective time
buckets
Later, RBI made it mandatory for banks to form ALCO (Asset Liability Committee) as a
Committee of the Board of Directors to track, monitor and report ALM.
Objectives of ALM
Ø The main objective of ALM is to manage the risk in such a way to minimize the impact
of net interest income fluctuations in the short run and protect the net economic value of
the bank in long run. The other objectives of ALM are:
Ø To control the volatility of net interest income and net economic value of a bank.
Ø To control volatility in all target accounts.
Ø To control liquidity risk.
Ø To ensure an acceptable balance between profitability and growth rate.
Utility of ALM for commercial banks
Ø Utility of ALM for banks lies in its effectiveness to enable the management to achieve
the banks objective of maximizing income while controlling its risk exposure.
Ø ALM allows banks to plan for risks well ahead of time.
Ø ALM facilitates the bank management to enhance the quality of its earnings by imparting
stability to its interest margins.

FOR THE STUDENTS OF
BCOM (HONS) SEM 2
NAME OF PAPER-STATISTICAL METHODS
PREPARED BY-PUNEET KUMAR SRIVASTAVA
Correlation Analysis
Correlation
Correlation refers to connection, in correlation analysis we study the connection or the
relation between two or more variables. If two variables vary in such a way that the
change in one variable is accompanied by changes in other variable, these variables are
said to be correlated. For example, relationship between the height and weight of
students in a class, there exists some relation between earning of family and amount
spent on luxurious items, relationship between dose of insulin and the blood sugar, etc.
There may be ‘n’ number of variables which may affect each other and relationship
might exists among all of them for example there are three Variables X, Y and Z, X may
be related to Z and Y both and Z may relate to Y, hence we can state that the correlation
is a statistic tool to find out the relationship between two or more variables.
Definition:
Tuttle defined correlation as: “An analysis of the co-variation of two or more variables is
usually called correlation”. Correlation is the degree of inter relatedness of two or more
Variables. It is a process to determine the amount of relationship between variables with
the help of tools and techniques provided by statistics. Many authors have given

different definitions of correlation in simple terms correlation is the scale of relationship
between variables.
Types of correlation:
1.On the basis of direction correlation is of two types:
i. Positive Correlation
ii. Negative Correlation
When the increase (or decrease) in one variable results in a corresponding increase or
decrease in the other (i.e., the two variables tend to move together in the same direction),
the correlation is said to be positive or direct correlation. For example, demand and
price.
2. On the basis of ratio of change correlation is of two types : (i) linear correlation and
(ii) non-linear correlation.
If the ratio of change between the two variables is uniform i.e., when the amount of
movement in one variable bears a constant ratio to the amount of change in the other, the
correlation is said to be linear otherwise it is called non-linear or curvilinear.
3. On the basis of the number of variables correlation is of three types: (i) simple
correlation, (ii) multiple correlation and (iii) partial correlation.
The correlation between two variables is called simple correlation, when the number of
variables is more than two we study multiple correlation and partial correlation.
Simple Correlation:
When in a problem we only study two variables, the problem is said a simple correlation
problem. For example if we study the wheat production in an area and the degree of
rainfall in that same area, it will be considered as an example of simple correlation.
Multiple Correlation:
When more than two variables are studied then the problem is of multiple correlations.
For example if we study the production of rice in an area, the amount of rainfall and the
amount of fertilizers used in the same area, it will be treated as a problem of this
correlation.
It is of two types as per the influencing nature ofVariables-
Partial Correlation:

Partial Correlation arrives where in a problem we identify more than two variables but
consider only two variables to be influencing each other, assuming other variables as
constant.
Eg. In the problem of wheat production, rainfall and temperature if correlation analysis
is conducted between wheat production and rainfall and is limited to time periods when
a certain average daily temperature existed.
Total Correlation:
When we study all the existing variables it is a problem of total correlation. However it
is normally impossible or close to impossible.
Linear Correlation:
Linear correlation is based on the ratio of change and its consistency between the
variables under study. Variables are said to be linearly correlated when the ratio is
constant. In other words if the degree of change in one variable and amount of change in
the other variable results in the same ratio, then the correlation is said to be linear.
Non-Linear correlation:
When the amount of change in one variable does not hold a constant ratio to the amount
of change in the other variables, it is said to be nonlinear correlation.
Eg.- Doubling the rainfall will not result in increasing the production of rice
wheat by two times. This correlation is also referred as curvilinear relationship
between the variables.
Various techniques of studying correlation:
Following are the techniques used to study correlation:
1.Scatter diagram technique of correlation
2.Karl Pearson’s Coefficient of correlation
3.Spearman’s Rank Correlation
1.Scatter diagram technique of correlation
It is a easy and attractive technique of diagrammatic representation. Here,
the given data are plotted on a graph sheet in the form of dots. The X variable is
plotted on the horizontal axis and y variable on the vertical axis, now we can

know the scatter or concentration of the various points. X and Y variables are
generally referred as independent and dependent variables respectively.
2.Karl Pearson’s Coefficient of correlation
While we study two variables a few immediate questions come in mind, first
is there any relationship between the behavior of these two variables second if
there is any relationship between the variables whether it is statistically
significant enough third what is the type of relationship (+ve or – ve) between
the variables and the fourth is that can the value of one variable be predicted
based on the change in other variables? If these questions can be answered
correctly we can measure and predict the behavior of two variables. Correlation
analysis answers the first three questions and the last question is answered by
regression analysis.
It not only tells about the strength of the relationship among the two
variables but also about their direction of change.
It is widely used in practice and is popularly known as Pearson’s coefficient
of Correlation .It is denoted by ‘r’. It is a mathematical method used for
measuring the degree of linear relationship between variables. It gives a number
that states the strength and the direction of the relationship between the
variables.
Karl Pearson’s coefficient of correlation can be measured in two ways:
When deviation is taken from Actual Mean, the formula is-
r = r(x, y)= Σxy / √ Σx² Σy²
Illustration 1:
Find the Karl Pearson’s Coefficient of correlation between the sales and
expenses from the data
given below:

Roll No. Marks in Subject A Marks in Subject B
1 48 45
2 35 20
3 17 40
4 23 25
5 47 45
Solution:
Let the marks in subject A be denoted by X and that in subject B by Y.
X (X-34) = x x2
Y (Y-35) = y y2
xy
48 14 196 45 10 100 140
35 1 1 20 -15 125 -15
17 -17 289 40 5 25 -85
23 -11 121 25 -10 100 110
47 +13 169 45 10 100 130
∑X = 170 ∑x = 0 ∑x2
=776 ∑Y = 175 ∑y = 0 ∑y2
= 550 ∑xy =280
r =
∑
√∑ √∑
=
√ √∑
=
. .
= 280/653.08 = 0.429
Since r = 0.429 it means that there is moderate positive correlation
between the both the subjects
A and B.
Properties of Coefficient of correlation:
Karl Pearson’s Coefficient of correlation has got following observational
properties like-
1. The value of r is always in between -1 to +1 or -1 ≤ r ≥ +1.
2. Degree of correlation is expressed by the value of r for example is the
value of r is +1 variables are high positively correlated or perfect positive
correlation, if it is -1 variables are high negatively correlated or perfect
negative correlation and if it is 0 there is no correlation between the
variables.
3. Direction of change is indicated by sign (+ve) or (-ve).

4. It is expressed as the geometric mean of two regression coefficient r= √ bxy x by
For the students of
Name of Paper - BCH 205 STATISTICAL METHODS
Prepared by: Ravi Kumar Tolani
Topic – Regression analysis
Regression Analysis
• “Regression analysis is a mathematical measure of the average
relationship between two or more variables in terms of the original
units of the data.”
• Regression is a set of techniques for estimating relationships
between variables.
• It is used to predict continuous (dependent) variable given a set of
independent variables.
• It is used for denoting the estimation and predicting the average
value of one variable for a specified value of the other variable.
• This type of estimation is done by deriving a suitable equation on
the basis of available bivariate data.
• The equation derived is called as Regression equation.
• Its geometrical representation is known as the Regression curve.
For example…..
• In a country like India, the quantity of agricultural produce
depends upon rainfall.

• Like quantity demanded of a product, depends upon many factors.
• And so many other examples are there where one event/thing is
dependent upon other for its occurrence.
Applications/Uses of Regression Analysis
• It helps in predicting the value of dependent variable from the
value of the independent variable.
• It helps managers to make smart, beneficial and more accurate
decisions.
• It helps to forecast future opportunities and risks is the most
prominent application of regression analysis in business.
• It is also used for optimizing business processes.
• It helps in identifying errors in judgment by managers.
• Can give new insights about a relationship between variables.
Types of Variable in Regression
• There are two types of variables in regression analysis –
a. Dependent Variable
b. Independent Variable
• The variable whose value is to be predicted is called the Dependent
Variable.
• And the variable which is used for calculating/predicting the value
of the dependent variable is called the Independent Variable.
• 1. Simple Regression – When regression analysis is done for only
two variables (one dependent variable and other independent
variable), it is called Simple regression.
• 2. Multiple Regression – When regression analysis is done for
multiple variables, or when a particular phenomenon gets affected
by multiple factors, i.e. regression for more than two variables is
called Multiple regression.

• 3. Linear Regression – When relationship between variables can be
represented by a straight line, it is called a linear regression.
• 4. Non-Linear Regression – When relationship between variables
can be represented by a curve rather than a straight line, then it is
known as non-linear or curvilinear regression.
Difference between Correlation and Regression
Correlation Regression
Correlation studies the
degree & direction of
relationship between
variables
Whereas regression studies nature and
extent of relationship between
variables
Correlation may show a no
cause and effect relationship
Whereas regression assumed a cause
and its effect
It’s a relative measure It’s an absolute measure
Coefficients of correlation
are symmetric
Regression coefficients are not
symmetric.
Regression Lines
• Line of regression is the line which gives the best fit estimate of
relationship between the given variables.
• In case of two variables, there are two regression lines – one
regression line of Y on X and other line of X on Y.
• The regression line of Y on X gives us the value of Y for the given
value of variable X.

• Whereas, the regression line of X on Y gives us the value of X for
a given value of variable Y.
Regression Equation
• A mathematical equation/function which tell help us find out the
relationship between variables is called the regression equation.
• It means these are algebraic expressions of the regression lines.
• In case where two variables are give, there would be two
regression equations.
• Since, there are two regression lines, there are two regression
equations of Y on X and X on Y.
The regression equation of X on Y is –
X = a + bY.
The regression equation of Y on X is –
Y= a + bX.
Regression Coefficient
• The regression coefficient is a statically measure used to measure
the average functional relationship between variables.
• This means that it measures the degree of dependence of one
variable on the other variables.
• Regression coefficients are also known as the slope coefficient.
• It is because it determines the slope of the line which is the change
in the independent variable for the unit change in the independent
variable.
Properties of Regression Coefficient
• It is denoted by ‘b’.

• Both regression coefficients have same sign.
• Regression coefficients cannot be greater than one.
• Regression coefficients will be independent of change of origin,
but not independent of scale.
• If regression coefficients are negative, then correlation coefficients
are also negative, and if positive, then they will also be positive.

For the students of
B. Com. (Hons), Sem: 2
Name of Paper: BCH 206 BUSINESS ENVIRONMENT
Prepared by Raman Srivastava
ECONOMIC POLICY- LIBERALIZATION, GLOBALIZATION &
PRIVATIZATION
Former Prime Minister Manmohan Singh is the father of New Economic Policy (NEP) of
India. Manmohan Singh introduced the NEP on July 24,1991.
The main objectives behind the launching of the New Economic policy (NEP) in 1991 by the
union Finance Minister Dr. Manmohan Singh are stated as follows:
· Main objective was to develop Indian Economy in the terms of ‘Globalization & to give it a
new thrust on market orientation.
· NEP aimed to bring down the rate of inflation
· Meant to move towards higher economic growth rate and create sufficient foreign exchange
reserves.
· Achieve economic stabilization and to convert into a market economy by removing all un-
necessary restrictions.
· To permit the international flow of goods, services, capital, human resources and technology,
without many limitations.
· Increase participation of private players in the all sectors of the economy.
· Beginning with mid-1991, the govt. has made some radical changes in its policies related to
foreign trade, FDI, exchange rate, industry, fiscal discipline etc.
· The thrust of the New Economic Policy has been towards creating a more competitive
environment in the economy as a means to improving the productivity and efficiency of the
system.
· Removing the barriers to entry and the restrictions on the growth of firms.
Main Measures Adopted in the New Economic Policy
Following steps were taken under the Liberalization measure:
· Free determination of interest rate by the commercial Banks
· Increase in the investment limit for the Small Scale Industries (SSIs)
· Freedom to import capital goods
· Freedom for expansion and production to Industries
· Abolition of Restrictive Trade Practices and various Act’s
1. Liberalisation
a. Removal of Industrial Licensing and Registration: Previously private sector
had to obtain license from Govt. for starting a new venture. Now they are free
from licensing and other restrictions.

b. Industries licensing is necessary for following industries:
· Liquor
· Cigarette
· Defence equipment
· Industrial explosives
· Drugs
· Hazardous chemicals
2. Privatisation:
· Privatisation means permitting the private sector to set up industries which were previously
reserved for the public sector.
· Under this policy many PSU’s were sold to private sector. Factually speaking, privatisation is
the process of involving the private sector-in the ownership of Public Sector Units (PSU’s).
· Main reason for privatisation was PSU’s were running in losses due to political interference.
· The following steps are taken for privatisation:
· Sale of shares of PSUs
· Disinvestment in PSU’s
· Minimisation of Public Sector: Previously Public sector was given the importance with a
view to help in industrialisation and removal of poverty. Number of industries reserved
for public sector was reduces from 17 to 2.
· Railway operations
· Atomic energy
3. Globalization:
· Globalisation means to make Global or worldwide, otherwise taking into consideration the
whole world.
· Generally speaking, Globalisation means the interaction of the domestic economy with the
rest of the world with regard to foreign investment, trade, production and financial matters.
Following steps are taken for Globalisation:
· Reduction in tariffs: Custom duties and tariffs imposed on imports and exports are reduced
gradually to make economy appealing to the global investors.
· Long term Trade Policy: Forcing trade policy was enforced for longer duration.
o Main features of the policy are:
§ Liberal policy
§ All controls on foreign trade have been removed
§ Open competition has been encouraged.
· Partial Convertibility of Indian currency:
o Partial convertibility can be defined as to convert Indian currency (up to specific
extent) in the currency of other countries.
o In order to maintain the flow of foreign investment in terms of Foreign Institutional
Investment (FII) and foreign Direct Investment (FDI).
§ This convertibility stood valid for following transaction:
· Remittances to meet family expenses
· Payment of interest
· Import and export of goods and services.
· Increase in Equity Limit of Foreign Investment:
o Equity limit of foreign capital investment has been raised from 40% to 100% percent.
o In 47 high priority industries foreign direct investment (FDI) to the extent of 100%
will be allowed without any restriction.

o Hence Foreign Exchange Management Act (FEMA) will be enforced.
If the Indian economy is flashing at the world map currently, its sole attribution goes to the
implementation of the New Economic Policy in 1991.
All Five-Year Plans of India
· The first five-year plan of India was launched in 1951.
· There were 12 Five-year plans have been launched by the Indian Government.
· Concept of economic planning in India is derived from Russia (then USSR).
· Now the present NDA government has stopped the formation of five-year plans. So the
12th five-year plan would be called the last five-year plan of India.
· The decades-old Five-Year Plans will make way for a three-year action plan, which will be
part of a seven-year strategy paper and a 15-year vision document.
· The Niti Aayog, which has replaced the Planning Commission, is launching a three-year
action plan from April 1, 2017.
· First Five-Year Plan:
o The duration 1951 to 1956.
o Based on the Harrod-Domar model.
o Focus was on the agricultural development of the country.
o Plan was successful & achieved growth rate of 3.6% (more than its target)
· Second Five Year Plan:
o The duration 1956 to 1961.
o Based on the P.C. Mahalanobis Model.
o Its focus was on the industrial development.
o Plan was successful and achieved a growth rate of 4.1%
· Third Five Year Plan:
o Duration 1961 to 1966.
o Plan was called ‘Gadgil Yojna’ also.
o Main target was to make the economy independent and to reach the self-active
position of take-off.
o Due to china war, this plan could not achieve its growth target of 5.6%
· Plan Holiday:
o The duration of the plan holiday was from 1966 to 1969.
o Main reason behind the plan holiday was the Indo-Pakistan war & failure of the third
plan.
o During this plan annual plans were made,
o Equal priority was given to agriculture its allied sectors and the industry sector.
· Fourth Five Year Plan:
o Duration 1969 to 1974.
o Main objectives of this plan i.e. growth with stability and progressive achievement of
self-reliance.
o During this plan, the slogan of “Garibi Hatao” is given during the 1971 elections by
Indira Gandhi.
o Plan failed and could achieve a growth rate of 3.3% only against the target of 5.7%.
· Fifth Five Year Plan:
o Duration was 1974 to 1979.
o Top priority was given to agriculture, next came to industry and mines.
o Plan was successful as it achieved a growth of 4.8% against of 4.4%.
o The draft of this plan was prepared and launched by the D.P. Dhar. This plan was
terminated in 1978.

· Rolling Plan: This plan was started with an annual plan for 1978-79 and as a continuation of
the terminated fifth-five-year plan.
· Sixth Five Year Plan:
o Was from year 1980 to 1985.
o Basic objective was poverty eradication and technological self-reliance.
o Based on investment Yojna, infrastructural changing and trend to the growth model.
o Growth target was 5.2% but it achieved 5.7%.
· Seventh Five Year Plan:
o From the year 1985 to 1990.
o The objectives of this plan include the establishment of a self-sufficient economy,
opportunities for productive employment.
o For the first time, the private sector got the priority over public sector.
o Growth target was 5.0% but it achieved 6.0%.
· Annual Plans:
o Eighth five Plan could not take place due to the volatile political situation at the
centre. And two annual programmes are formed in 1990-91& 1991-92.
· Eighth Five Year Plan:
o From 1992 to 1997.
o Priority was given to the development of human resources i.e. employment,
education, and public health.
o During this plan, Narasimha Rao Govt. launched the New Economic Policy of India.
o Plan was successful and got annual growth rate of 6.8% against the target of 5.6%.
· Ninth Five Year Plan:
o From year 1997 to 2002.
o Focus of this plan was “growth with justice and equity”.
o It was launched in the 50th year of independence of India.
o This plan failed to achieve the growth target of 7% and grew at the rate of 5.6%.
· Tenth Five Year Plan:
o Duration was from 2002 to 2007.
o Plan aimed to double the Per Capita Income of India in the next 10 years.
o Aims to reduce the poverty ratio of 15% by 2012.
o Its growth target was 8.0% but it achieved only 7.2%.
· Eleventh Five Year Plan:
o From year 2007 to 2012
o C. Rangarajan prepared
o Main theme was “faster & more inclusive growth”
o Its growth rate target was 8.1% but it achieved only 7.9%
· Twelfth Five Year Plan:
o Its duration is from 2012 to 2017.
o Its main theme is “Faster, More Inclusive and Sustainable Growth”.
o Its growth rate target is 8%.
o It is the current five-year plan of India.
The three-year action plan documents only provide a broad roadmap to the
government. The document does not detail any schemes or allocations as it has no
financial powers. Since it need not be approved by the Union Cabinet, its
recommendations are not binding on the government.
The documents of the Niti Ayog have no financial role. They are only policy guide
maps for the government.

For the students of
B. Com. (Hons), Sem: 2
Name of Paper: BCH 204 BUSINESS COMMUNICATION & OFFICE
MANAGEMENT
Note:
· https://tyrocity.com/topic/concept-of-an-office/
· http://www.himpub.com/documents/Chapter871.pdf
Prepared by Raman Srivastava
What is Office
· “An office may be regarded as a place where the control mechanism of an organization are
located”-George R Terry
· 'office' is a place of where business, clerical or professional activity along with personnel
working in authority or trust and mainly to support functions of a major household.
· In layman terms office is the administrative centre any business.
What is Management
· Management in organizations is the function that coordinates the efforts of people to
accomplish goals and objectives by using available resources efficiently and effectively.
· In layman terms it the process of dealing with or controlling things or people.
What is Office Management
· So, office management is an aspect or method where management & business integrate in
order to maintain and enhance efficiency
· As said by various authors and academician office management is a profession involving the
design, implementation, evaluation, and maintenance of the process of work within an office
or organization, in order to maintain and improve efficiency and productivity.

Basic characteristics of a Modern Office
· Customer Service Unit (Customer Care or act as service centre, i.e., via mail, Telephone)
· Information Tech (IT)
· Service Function
· Control Centres
· Specialization and Decentralization
Role of Office Management
· Assist in Decision Making
· Coordination or Negotiation
· Control Centre (Accounting System)
· Motivation of other employees
What are the main Functions of an Office?
· As George R. Terry says, “The act of collecting, processing, storing and distributing
information comprise functions of the office.”
· As modern business is complex where business organization today is faced with the ever-
changing conditions and various challenge like development and advancement.
Management Key
Plans
·Organizations: People
working together &
coordinating their actions to
achieve specific goals.
·Goal: A desired future
condition that the
organization seeks to
achieve.
Elements of
Office
Management
Office Personnel Means Environment Purpose

The functions of a modern office can be divided into the following categories: and they are:
1) Basic functions of an office:
a) To receive or collect information
b) To prepare records of information
c) To process and arrange information
d) To supply readymade information to the authorities
2) Administrative and Management Functions:
a) Management function
b) Development of office systems and procedures:
c) Form designing and control
d) Selection and purchase of office appliances
e) Personnel functions
f) Controlling office costs
g) Maintenance of records
h) Planning schemes and policies
i) Safeguarding the assets
j) Public relations
Ø Office managers, also called administrative service managers, are business professionals who are
responsible for a diverse set of administrative tasks.
Ø Job Analysis is a process to identify and determine in detail the particular job duties and
requirements and the relative importance of these duties for a given job. Job Analysis is a process
where judgements are made about data collected on a job.
Office Accommodation
a) Office accommodation refers to the selection of must appropriate office location, office
building and other facilities required for office.
b) Appropriate office accommodation helps to achieve a business objective.
c) It motivates employee to work as attractive office with all other required facilities increase
performance.
The office accommodation consists of the following factors:
Office Location
· It refers to the selection of an appropriate location for business and its location is largely
determined by the nature of the business.
· Different nature and size of business demand different location where the cost is minimum
· It affects the performance of the employee, the availability of resource etc.
Function of
OFFICE are:
·Controlling
·Processing
·Storing
·Striving
·Distributing

· The appropriate selection is needed to remove inconvenience to the employees, visitor,
customer and dealing with other business organization.
· There should have service facilities such as a bank, post office, insurance, markets, trade or
stock exchange, transport facilities etc.
· Must be located near the sources of availability of labour.
· Should be a healthy environment where the same line of business is engaged.
Office Building
· office building must be suitable to the nature and size of business.
· It can be available through construction, rent or lease.
· There should be safety and security of the office and its staff.
· There must be facilities of lighting, ventilation, water system, free from dust, noise, smell etc.
· The cost of the office must match the budget of the office.
· It must be adaptable to append additional floor for future expansion and requirement and
should meet the layout needs of machines, equipment, departments, and human resources
Office Layout
Ø A systematic arrangement of different amenities of office area is called office layout.
Ø A systematic and scientific management of machine, equipment, furniture and other
resources in the office to achieve a business objective.
Ø Arrangements of different facilities in order to bring smoothness in work performance and
motivates an employee to work hard and better in smooth nature.
Ø According to Hicks and Place,” Office Layout refers to the arrangement of a workstation in
the space involve so that all equipment, supplies, procedure and personal can function at
maximum efficiency."
Ø Allows free flow of work and free movement of an employee at work.
Ø Also makes maximum utilization of office space and increases profit for the business.
Principles of Office Layout
There is a certain factor that must be considered before designing the office layout. The basic
requirement like the free flow of work, appropriate space, effective supervision, service
facilities etc. helps to achieve office objective easily.
Principle of office layout
1.Flow of
work
1.Sufficient
workspace
1.Effective
supervision
1.Flexibility
and
adaptability
1.Good
lighting and
ventilation
1.Maximum
utilization
1.Safety and
security
1.Service
facilities.

Objectives
of Office
Layout
·Utilization
of floor space
·The smooth
flow of work
·Minimize
risk
·Maintain
safety and
security
·Effective
supervision
and control
·Provide
facilities to
employee
and
customer

For the students of
B. Com. (Hons), Sem: _2__
Name of Paper MANAGEMENT INFORMATION SYSTEM
Prepared by: Dr. Saifuddin Ahmad
Internet & e – commerce, Internet, Extranet &
Enterprise Solutions, Data, Information
Concepts of Networking and Data Communication.
Data communication means the transmission of data in digital form between two or more
computer systems with the help of a computer network or data network and network of
telecommunications which helps the computer to exchange data.
This this connection in physical form between two computer devices is established or formed
using cables for wireless mediums
One of the most well-known computer network is internet is internet but before it you have to
understand what is the concept of network engineering how this interconnection between
computers helps in the transfer of information among them and provides data access to all
connected devices
Network engineering
Network engineering is is a high-level task ok which involves software hardware firmware,
Chip Level engineering and electronic pulses
the whole of networking and its concept is is divided into different layers each layer is
responsible for some different task and they are all independent of others and all of the
networking depends on these layers as they share data between them and take input it and
deliver output to the next player
Internet
combination of networks is called and internet work ok or famously as the internet it is the
largest network which can be found on this planet it connects all the wide area networks
home networks and connection to all the local area networks it uses IP as its addressing
protocol and various levels and layers of network engineering are utilise to perform different
tasks and sharing of input and providing of output to the other layers in the network
By the usage of internet users have access and sharing of information from various sources
all over the world it uses email services face2face video conferencing audio and video
streaming are allowed on it social media and its various different platforms have have
resulted in a very different platform in which we view the internet connected industries
electronic marketing E-Commerce internet is the basic platform which we have all over the
world sharing of information and content is viewed in real-time by various different
connected users

Uses and applications of Computer Network
Various computer systems there peripheral systems interconnected to form a network the
different advantages the offer are as below
● Helps in the sharing of printers and storage devices
● Transfer and exchange of information by email
● using the world wide web
● videoconferencing instant messaging and parallel computing
Types of computer networks
In various computer networks data is transferred or passed in the form of packets the devices
which transfer or retrieve or receive this data examples phone aur computer are known as
notes
Three main types of networks
1. Local area network LAN basically a small network which is limited to a small
geographical area for examples computer network available in a residential building
or a big home
2. Wide area network networks which cover a larger area and are used to connect
various local area networks together so that people and devices can communicate with
each other internet is very e easily applicable example of wide area network
3. Metropolitan Area Network which is larger in a geographical area then and a local
area network but smaller than a wide area network and the number of connected users
are also larger then Local area network but smaller than from a wide area network
Components of a computer networks
1. Computer servers. These are computers that that store and hold the shared
programs files photos data within the connected network they provide access to all
resources in the network examples are like file servers print servers mail servers
database servers Fax service to name a few
2. Clients are those computers that use and access the network and the shared resources
they are also known as uses of the network as the receive services from the Computer
servers
3. transmission media are the facilities used to connect computers in a network for
example optical fibre cable coaxial cable twisted pair cables and these are also known
as channels
4. Shared data these are the data which the server's provide to the users for example data
files and emails photographs which are shared on the computer network
5. Shared computer peripherals these are devices such as share printers or speakers or
different hardware which are simultaneously used by the users of the network they
also include data files software for or any other items used by different clients present
on the network
6. local operating system it helps to allow a personal computer to have access two
different files to print them to use the various types of disks and drives and USB ports
located on the computer
7. network operating system it is a program which runs on a computers there connected
servers and helps the computers to connect and communicate on the network

8. Hub is a device which a single network connection into multiple computers and
works like a distribution system when information is requested from a network the
hub receive the request and transfer it to the entire network the computers connected
on the networks have to figure among them weather the coming data is for them or
not
Extranet
Extranet are private portals or privately controlled network where persons outside the
organisation for example customers vendors partners suppliers and outside businesses can
access information in unauthorised way from the organisations network
It is a restricted user network where members or the authorised users can access the
information submit orders communicate with the business or solve their problems produce
documents and access support information
E-commerce
Also known as Electronic Commerce mobile commerce internet commerce refers to the
buying and selling of goods and services and also show the transactions related to money and
data using the internet
It is not only restricted to the sale of physical products but covers all kind of commercial
activities which can be done online for on the internet transaction of goods and services was
it's one of the vital parts
It can be dated back to August 11 1994 where a man sold a music CD through his website net
market which was an American retail platform this was the first instant where a person
purchase a product from a business in a virtual world or through world wide web so the term
e commerce or Electronic Commerce came out today
The present generation is more widely aware about different organisations such as Amazon
eBay Flipkart which are widely doing E-Commerce transactions Global Giants like Alibaba
and aliexpress are facilitating E-Commerce in a truly Global format it is one of the largest
business categories and helps in trade movements and sales growth we can and say that it in
today's world it is very easy to even purchase a sack of wheat and have it delivered to your
home in a few hours with payment can be facilitated by the usage of different options each
and every one of them safe secure and trustworthy the uses of these e commerce are also very
much thoughtful about the information which they are putting on the Internet these Electronic
Commerce Giants and their businesses are constantly upgrading the security systems
Computer service and connected networks to find any fault and rectify it so that no customer
should lose his information it
Global E-Commerce retail sales are expected to reach 30 trillion dollars by the end of 2020

ERP, CRM & SCM
Enterprise resource planning (ERP) ERP
ERP or enterprise resource planning is a form of software which organisations and businesses
use for managing their various different daily activities for example accounting procurement
project management planning budgeting and reporting of the organisations finances
These systems all software air are made and designed around the defined data heads or
common database so that the information which is used across the organisation is from a
common source and these database or information points are used by different departments in
the organisations for example the Finance Department Human Resource Department
Marketing department engineering department operational department and the people who
work there.
ERP helps in integration of all the organisations processes available Technologies and
integrating the workforce into one system
ERP helps in higher productivity streamlining of business activities automation of business
processes provides different types of insights helps in faster decision making provides more
control and transparency which results in better risk management the organisation
CRM
Customer relationship management or CRM is a process or an approach which are
divided into different practices guidelines how an organisation should interact and connect
with their customers and improve their existing relationship with an organisation can be a
success when it retain their old customers by providing repetitive sales to them and the word
of mouth of these old customers regarding the services and benefits which particular
organisation is providing to them would eventually help in bringing new customers.
CRM integrate customer information in one single place and covers various different aspect
related to the personal information that past purchase history their grievance redressal their
feedbacks on the Purchase on the product usage on the various aspect the product was rated
by them and how they think the organisation or the business can work to provide a greater
customer satisfaction to them. these information points are available on every customers by
the organisation and to the incorporation of cloud computing are available across the
businesses offices all over the world.
The CRM software’s main goal is to make communication with the customers productive
fruitful and efficient a dedicated team of personals look after the CRM objective of an
organisation it is one of the largest tools it covers the organisation mission Technology
information processes the collaboration that strategy and the customer experience available
worldwide as a solution.
SCM
SUPPLY CHAIN MANAGEMENT SCM is the overall management of the movement of
goods and services from the initial stage of procurement of raw materials today last placed
where the product or service is consumed by the end consumer it is the streamlining of an
organisation supply side and various activities connected to it it includes all the processes that

transform raw goods into final ready product supply chain management covers every aspect
of transfer of goods by production product development and usage of information system to
direct these efforts.
With the usage of supply chain management organisation can efficiently control the
procurement production shipment and distribution of finished goods.
Where the goods are stored in what quantity they would be needed what organisations have
thought of demand in the future date these all inputs are very easily covered under the supply
chain management. Where is the anticipated demand of goods in the future what are the
trends in the industry what government restrictions are there for procurement of raw materials
what areas are having conflicts and from where we can source are goods efficiently handled
by SCM.
SCM covers every product which is manufactured and traces the complete journey from
manufacturing to consumption phase and every Point where they are stored. Distribution of
good sales available in when trees different vendors having different quantities of goods is all
covered under SCM . Organisations running SCM tools and modules have value added to the
operations and saving time resources and money and efficiently utilising the available at hand
resources.

Performance Review and Management 1.pdf

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