Q.Evaluating an employee's current and/or past performance as against certain pre-determined standards, is known as : (A) Selection decision (B) Performance appraisal (C) Compensation (D) Preliminary screening
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🔒 Start your 14-day free trial to unlock the full solution →Concept understanding — Human Resource Functions
Human Resource Functions: The Engine That Runs an Organisation
Think of any organisation — a school, a hospital, a factory, or a bank. It has buildings, machines, money, and raw materials. But none of these things work by themselves. Someone has to operate the machines, teach the students, treat the patients, and manage the money. That "someone" is the human resource — the people.
Now, if you have a group of people working together, you cannot just leave them to figure things out on their own. You need to decide who to hire, how to train them, what to pay them, how to keep them motivated, and what to do if they want to leave. All of this planning, organising, and managing of people is what we call Human Resource Functions.
The Core Idea in One Sentence
Human Resource Functions are the set of activities that an organisation performs to attract, develop, motivate, and retain the right people to achieve its goals.
The NCERT textbook for Class 12 Business Studies (Chapter 6: Staffing) treats "Staffing" as one of the functions of management. Human Resource Functions are essentially the detailed breakdown of that staffing function — plus a few additional responsibilities that have grown over time.
Why This Matters — The Everyday Intuition
Imagine you are the captain of a school cricket team. You cannot just pick eleven random classmates and expect to win. You need to:
- Figure out which positions need filling (a fast bowler? a wicketkeeper?)
- Find people who can actually play those roles
- Train them in team strategies
- Decide who bats where and who bowls when
- Keep everyone motivated when the match gets tough
- Handle it if someone gets injured and needs replacement
That is exactly what HR functions do, but for an entire organisation with hundreds or thousands of employees.
The Major Human Resource Functions
The NCERT textbook and standard business studies curricula group these functions into a logical sequence. Here is how they flow:
1. Human Resource Planning (HRP)
Before you hire anyone, you need to know how many people you need and what kind of skills they should have. HRP is the process of forecasting the organisation's future demand for employees and comparing it with the current supply.
If the demand is higher than supply, you plan to recruit. If supply is higher, you may need to transfer, retrench, or offer voluntary retirement. This function prevents both shortage (work suffers) and surplus (money wasted on idle staff).
2. Recruitment and Selection
Once you know what you need, you have to find the right people.
- Recruitment is the process of inviting applications from potential candidates. It is like casting a net — you want as many suitable applicants as possible to apply. Sources include newspaper ads, campus placements, employee referrals, and online job portals.
- Selection is the process of choosing the best candidate from those who applied. This involves screening applications, conducting tests, interviews, and reference checks. The goal is to match the right person to the right job.
Recruitment and selection are not the same thing. Recruitment brings in applicants; selection picks the best one. A common exam mistake is to treat them as interchangeable.
3. Training and Development
Hiring someone does not mean they are ready to perform perfectly from day one. Training fills the gap between what an employee can do and what the job requires them to do.
- Training focuses on the current job — teaching a new salesperson how to use the company's billing software.
- Development focuses on future roles — preparing a junior manager to become a department head five years from now.
This function improves productivity, reduces errors, and helps employees grow within the organisation.
4. Performance Appraisal
How do you know if an employee is doing their job well? Performance appraisal is the systematic evaluation of an employee's work against set standards. It can be done through annual reviews, 360-degree feedback (where peers, subordinates, and supervisors all give input), or management by objectives (MBO).
The results are used for promotions, salary hikes, training needs, and sometimes termination decisions.
5. Compensation and Benefits
People work for money — but also for other rewards. Compensation includes:
- Direct financial payments: salary, wages, bonuses, commissions
- Indirect payments: insurance, medical benefits, retirement plans, paid leave
The goal is to design a pay structure that is fair, motivates performance, and stays within the organisation's budget.
6. Employee Maintenance and Industrial Relations
This function deals with the well-being of employees and the relationship between management and workers. It includes: …
The question is asking for the term that describes the process of measuring an employee's work against fixed benchmarks. This is a core function of the Human Resource Management chapter in your NCERT textbook.
Let's look at the options:
- Selection decision is the final step in the hiring process, where you choose the best candidate from the pool. It happens before the person joins.
- Performance appraisal is the systematic evaluation of an employee's job performance over a specific period, comparing it to standards set at the start of that period. This is exactly what the question describes.
- Compensation refers to all forms of pay and rewards given to employees for their work. …
Evaluating an employee’s current or past performance against pre-set standards is called Performance appraisal — it is a formal, systematic process, not a one-time hiring step.
In any organisation, once people are hired and placed in roles, the next big question becomes: How well are they actually doing? This is where the Human Resource function of Performance Appraisal steps in. It is the structured, periodic evaluation of an employee’s work behaviour and results, measured against the standards that were set at the beginning of a review period.
Think of it as a report card for working professionals — but far more nuanced. The purpose is not just to label someone “good” or “bad,” but to identify strengths, uncover training needs, decide promotions, and sometimes even to validate the effectiveness of the selection process itself.
Performance appraisal is different from the initial screening or selection. Selection happens before the person joins; appraisal happens after they have been working for some time.
Now, look at the options given in the question:
- (A) Selection decision — This is the final step in the hiring process where the organisation chooses the most suitable candidate from the shortlisted pool. It is about who gets the job, not about evaluating someone already on the job.
- (B) Performance appraisal — This is exactly what the question describes: a systematic evaluation of an employee’s current or past performance against predetermined standards. In plain terms, it means judging how well an employee has performed by comparing the actual work done against the standards fixed in advance.
- (C) Compensation — This refers to all forms of pay and rewards given to employees for their work. While performance appraisal may influence compensation decisions, compensation itself is not the evaluation process. …
Showing the 12 most recent of 13 on this concept.
- CBSE 2026Set 64/1/11 markMCQQ.Match column-I with column-II correctly and choose the appropriate option : Column-I (Approach) a. Income Approach b. Welfare Approach c. Basic Needs Approach d. Capability Approach Column-II (Characteristics) i. Proposed by International Labour Organisation ii. Health, education and access to resources – key factors iii. It is one of the oldest approach iv. Human being – targeted beneficiaries (A) a-ii, b-i, c-iv, d-iii (B) a-ii, b-i, c-iii, d-iv (C) a-iii, b-iv, c-ii, d-i (D) a-iii, b-iv, c-i, d-ii
›Reveal solutionSolution
The correct matching is a-iii, b-iv, c-i, d-ii — option (D).
This question asks you to match four approaches to human development with their defining characteristics. Each approach represents a different way of thinking about what "development" means and how it should be measured. Let us go through them one by one.
The Income Approach is the oldest way of looking at development. For decades, a country's progress was judged almost entirely by its per capita income or GDP. The assumption was simple: higher income means better living standards. So this approach matches with characteristic iii — "It is one of the oldest approach."
The Welfare Approach shifts the focus from money to people. Here, the government or society is seen as responsible for ensuring that basic services and support reach individuals. The human being is the ultimate target — not income figures or growth rates. That is why it matches with characteristic iv — "Human being – targeted beneficiaries."
The Basic Needs Approach was formally proposed by the International Labour Organisation (ILO) in the 1970s. It argued that development must first ensure every person has access to essentials like food, shelter, clothing, clean water, and sanitation. So this approach matches with characteristic i — "Proposed by International Labour Organisation." …
- CBSE 2026Set MARCH1 markMCQQ.The main function of Human Resource Management is .......(a) (A) Increase in sales(b) (B) Quality control(c) (C) Man power planning(d) (D) Production
›Reveal solutionSolution
Man power (human resource) planning is the main function of HRM.
In this GSEB Class-12 Commerce staffing question, HRM covers manpower planning, recruitment, selection, training, development, appraisal and welfare. Its central and first function is manpower planning.
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- CBSE 2025Set 66/4/11 markMCQQ.Evaluating an employee's current and/or past performance as against certain pre-determined standards, is known as : (A) Selection decision (B) Performance appraisal (C) Compensation (D) Preliminary screening
›Reveal solutionSolution
Evaluating an employee’s current or past performance against pre-set standards is called Performance appraisal — it is a formal, systematic process, not a one-time hiring step.
In any organisation, once people are hired and placed in roles, the next big question becomes: How well are they actually doing? This is where the Human Resource function of Performance Appraisal steps in. It is the structured, periodic evaluation of an employee’s work behaviour and results, measured against the standards that were set at the beginning of a review period.
Think of it as a report card for working professionals — but far more nuanced. The purpose is not just to label someone “good” or “bad,” but to identify strengths, uncover training needs, decide promotions, and sometimes even to validate the effectiveness of the selection process itself.
NotePerformance appraisal is different from the initial screening or selection. Selection happens before the person joins; appraisal happens after they have been working for some time.
Now, look at the options given in the question:
- (A) Selection decision — This is the final step in the hiring process where the organisation chooses the most suitable candidate from the shortlisted pool. It is about who gets the job, not about evaluating someone already on the job.
- (B) Performance appraisal — This is exactly what the question describes: a systematic evaluation of an employee’s current or past performance against predetermined standards. In plain terms, it means judging how well an employee has performed by comparing the actual work done against the standards fixed in advance.
- (C) Compensation — This refers to all forms of pay and rewards given to employees for their work. While performance appraisal may influence compensation decisions, compensation itself is not the evaluation process. …
- CBSE 2025Set ANNUAL1 markMCQQ.Name the process that helps in choosing the best person out of a number of prospective candidates for a job.(a) Recruitment(b) Selection(c) Training(d) Education
›Reveal solutionSolution
The process described is Selection.
Staffing involves several sequential steps: estimating manpower requirements, recruitment (inviting applications), selection, placement and orientation, training and development, performance appraisal, promotion and career planning, and compensation. Recruitment only generates a pool of prospective candidates; it does not choose among them. Selection is the step that follows recruitment — it is the process of choosing the best-fit candidate from the applicants through tools such as screening of applications, written tests, interviews, and medical examination, before an offer of appointment is made …
- CBSE 2025Set ANNUAL1 markQ.Fill in the blank: _________ refers to shifting an employee to a higher position.
›Reveal solutionSolution
The blank is filled by "Promotion."
Promotion is the upward reassignment of an employee to a position carrying greater authority, responsibility, status and usually higher pay, typically awarded on the basis of merit, seniority, or both. It is one of the key outcomes of the staffing function, following performance appraisal — an employee who performs well over time becomes eligible for advancement. Promotion differs from transfer (a lateral shift to a similar level position, often in a different department or location) and from training (which builds capability but does …
- CBSE 2024Set 66/1/11 markMCQQ.Match the terms given in Column I with their meanings in Column II: Column I: 1. Placement 2. Recruitment 3. Orientation 4. Performance Appraisal. Column II:(i) Introducing the selected employee to other employees and familiarising him with the rules and policies of the organization(ii) It refers to the employee occupying the position or post for which he/she has been selected(iii) Evaluating an employee's current and/or past performance as against certain predetermined standards(iv) The process of searching for prospective employees and stimulating them to apply for jobs in the organization. Choose the correct option from the following: (A) 1-(i), 2-(ii), 3-(iii), 4-(iv) (B) 1-(ii), 2-(iii), 3-(i), 4-(iv) (C) 1-(ii), 2-(iv), 3-(i), 4-(iii) (D) 1-(ii), 2-(i), 3-(iv), 4-(iii)
›Reveal solutionSolution
Each term in Column I is matched to its correct meaning in Column II, giving 1-(ii), 2-(iv), 3-(i), 4-(iii) — the correct option is (C).
Matching human resource terms to their meanings is a common CBSE Class 12 Business Studies (Staffing) exercise. Let us define each term and pick its meaning.
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Placement — the act of the selected candidate taking up the post for which he/she was selected. This matches meaning (ii): "It refers to the employee occupying the position or post for which he/she has been selected."
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Recruitment — the process of searching for prospective employees and encouraging them to apply for jobs. This matches meaning (iv): "The process of searching for prospective employees and stimulating them to apply for jobs in the organization."
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Orientation — introducing a newly selected employee to colleagues and familiarising him with the organisation's rules and policies. This matches meaning (i): "Introducing the selected employee to other employees and familiarising him with the rules and policies of the organisation." …
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- CBSE 2024Set 66/2/11 markMCQQ.___________ is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. (A) Training (B) Selection (C) Development (D) Recruitment
›Reveal solutionSolution
The process of searching for prospective employees and encouraging them to apply for jobs is known as Recruitment.
In any organisation, human resources are arguably the most vital asset. Managing these resources effectively is the core function of Human Resource Management (HRM). HRM encompasses a wide range of activities, from identifying the need for employees to ensuring their continuous development and well-being. Among these, the initial steps of bringing people into the organisation are crucial, and they begin with understanding the specific roles that need to be filled.
The question describes a fundamental step in the staffing process, which is a key managerial function. Staffing involves finding the right people for the right jobs, and it comprises several distinct stages. Let's break down the options provided in the context of these stages.
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Recruitment: This is the process of identifying, attracting, and encouraging potential candidates to apply for job vacancies within an organisation. It is a positive process because its aim is to generate a large pool of applicants from which the most suitable ones can be chosen. The description in the question — "searching for prospective employees and stimulating them to apply for jobs" — perfectly aligns with the definition of recruitment. Organisations use various methods, both internal (like promotions or transfers) and external (like advertisements, employment exchanges, or educational institutions), to reach out to potential candidates.
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Selection: Following recruitment, once a pool of applicants has been generated, the next step is selection. This is the process of choosing the most suitable candidates from the applicant pool to fill the vacant positions. Unlike recruitment, selection is often considered a negative process because it involves rejecting unsuitable candidates, narrowing down the choices to the best fit. It typically involves interviews, tests, and background checks. …
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- CBSE 2024Set 66/2/11 markMCQQ.The selection tests which are used to measure individual's potential for learning new skills are called : (A) Aptitude Tests (B) Intelligence Tests (C) Personality Tests (D) Interest Tests
›Reveal solutionSolution
Selection tests designed to measure an individual's potential for learning new skills are called Aptitude Tests. The correct option is (A).
When organizations or educational institutions need to assess if someone has the inherent capacity to acquire new knowledge or master new tasks, they use specific types of tests. The core idea is to look beyond what a person already knows (their achievement) and instead gauge their future capability – their potential to learn and adapt.
This distinction is crucial. We aren't just checking if someone can perform a task now, but if they possess the underlying abilities that would allow them to be trained effectively and become proficient in a new skill or role.
Let's examine each option to see which one aligns with this concept:
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Understanding Aptitude Tests (Option A):
Aptitude tests are specifically designed to measure an individual's potential to learn or develop proficiency in a particular area or skill. They assess innate abilities, talents, or predispositions that predict future performance or learning capacity. For example, a mechanical aptitude test might assess a person's ability to understand mechanical principles, which indicates their potential to learn how to operate or repair machinery. Similarly, a verbal aptitude test measures the potential to learn and use language effectively. These tests are forward-looking, focusing on what a person can learn to do.
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Understanding Intelligence Tests (Option B):
Intelligence tests, often referred to as IQ tests, measure general mental ability. They assess a broad range of cognitive functions such as reasoning, problem-solving, memory, and abstract thinking. While intelligence is certainly related to the capacity to learn, aptitude tests are more specific. An intelligence test measures overall cognitive horsepower, whereas an aptitude test measures the potential for learning specific skills or in specific domains. For instance, a highly intelligent person might not necessarily have a high aptitude for musical learning without specific musical abilities.
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Understanding Personality Tests (Option C): …
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- CBSE 2024Set MARCH1 markMCQQ.The main function of Human Resource Management is ____.(a) Increase in sales(b) Quality control(c) Manpower planning(d) Production
›Reveal solutionSolution
The main function of HRM is manpower (human resource) planning.
Human Resource Management deals with the people side of the organisation — planning how many employees are required, recruiting, selecting, training, developing and maintaining them. Its starting and central function is manpower planning: assessing present and future personnel needs. Increasing s …
- CBSE 2024Set ANNUAL1 markMCQQ.Staffing is an activity of (A) Personnel Department (B) Production Department (C) Marketing Department (D) Financial Department
›Reveal solutionSolution
Staffing is handled by the personnel/HR department, so the answer is (A).
Staffing — manpower planning, recruitment, selection, placement, training, appraisal and promotion — concerns people, and in most organisations it is carried out by the personnel (human resource) department. While line managers also take part, staffing as a specialised activity belongs to the personnel department.
…
- CBSE 2023Set ANNUAL1 markMCQQ.Recruitment in the life of organisation is (A) Once (B) Twice (C) Occasionally (D) Continuous
›Reveal solutionSolution
Recruitment is a continuous process in the life of an organisation.
Staffing needs never stop: employees retire, resign, are promoted or transferred, and the organisation grows and creates new jobs. To keep every position filled, recruitment has to be carried on continuously rather than only once …
- CBSE 2022Set ANNUAL1 markQ.What is performance appraisal?
›Reveal solutionSolution
Performance appraisal is a key staffing activity that systematically measures how well an employee is performing against predetermined standards.
Key points:
- It is carried out at regular intervals (e.g., annually, half-yearly) by a supervisor or through self/peer assessment.
- It compares an employee's actual performance against predetermined standards or targets for the job.
- It is used to make objective decisions about increments, promotions, transfers, training needs, and sometimes termination.
- It helps identify an employee's strengths and areas needing improvement, forming the basis for feedback and development plans. …
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