Outsourcing the human resource (HR) processes is the latest practice being followed by middle and large sized organisations. It is being witnessed across all the industries. In India, the HR processes are being outsourced from nearly a decade now. Outsourcing industry is growing at a higher rate. Outsourcing organizations strive for providing cost saving benefits to their clients.

The functions that are typically outsourced are the functions that need expertise, relevant experience, knowledge and best methods and practices. This has given rise to outsourcing the various HR functions of an organisation. HR Consultancies such as Ma Foi and Planman Consulting provide such services through expert professional consultants.

Human resources business process outsourcing (HR BPO) is a major component of the worldwide BPO market.

Human Resource Outsourcing refers to the process in which an organisation uses the expert services of a third party (generally professional consultants) to take care of its HR functions while HR management can focus on the strategic dimension of their function. Outsourcing HR functions helps. Performance management outsourcing involves all the performance monitoring, measurement, management being outsourced from a third party or an external organisation.
Performance management outsourcing includes the following components :

  • Performance appraisal system
  • Goal setting and the action plans to be followed
  • Developing forms, policies and principles, and procedures
  • Standards or tools to measure performance
  • defining key performance indicators
  • Training and development of managers/ appraisers
  • Employee performance Monitoring and feedback management
  • Incentive and benefits planning and administration
  • Feedback integration (Training and Operational Interventions)
  • Severance, Attrition and exit administration.
  • Implementing the complete system in the organisation
  • talent management and succession planning

Know the Performance Appraisal Process

Outsourcing gives customized solutions and Performance management outsourcing helps to design or re-engineer the HR processes with the optimal utilization of the resources. Apart from cost reduction, technological benefits and the expert knowledge, outsourcing also leads to value creation, operational flexibility and competitive advantage. Performance management outsourcing does not provide much cost reduction but it yields high quality and quantity in terms of improved performance and higher production.