DAV DAV INSTITUTE INSTI TUTE OF MANAGEMENT MANAGEME NT FARIDABAD Chapter : 1 Human Capital Management 1.1 INTRODUCTION An organization is made up of four resources, namely men, material, money and machinery. Of these, the first one id living one, i.e. human resource and other three are non-living i.e.non human. It is the human/people that make use use of non non huma human n reso resour urce ces. s. Henc Hence, e, peop people le are are the the most most sign signif ific ican antt resources in an organization. It is man who makes all the difference in organizations. L.F.Urwick had remarked that “business houses are made or broken in the long run not by markets or capitals, patents or equipments, but by men”. According to Peter F.Drucker, “ man, of all the resources available to man, can grow and develop.” The main objective of this chapter is to present a perspective for human capi capita tall mana manage geme ment nt in the the Indi Indian an cont contex ext. t. Acco Accord rdin ingl gly y the the mean meanin ing, g, objectives, scope and functions become the subject matter of this chapter. chapter. Before we define HRM, it seems pertinent to first define the term “human resou resourc rces es.” .” In comm common on parl parlan ance ce,, huma human n reso resour urce cess mean mean peop people le.. OR Perso Personn nnel el mean meanss the the pers person onss empl employ oyed ed.. Pers Person onne nell mana manage geme ment nt is the the management of people employed. Orga Organi niza zati tion on may may be a manu manufa fact ctur urin ing g firm, firm, a busi busine ness ss conc concer ern, n, an insurance company, a governmental agency, social organizations, hospital, a university and even families. It may be small or large, simple or complex. An Orga Organi niza zati tion on is a huma human n grou groupi ping ng in whic which h work work is done done for for the the accomplishment of some specific goals, or missions.
1.2 MEANING & DEFINITION OF HUMAN RESOURCE MANAGEMENT 1.2.1 Human Resource Management means:
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“The management of human resources is viewed as a system in which participants seeks to attain both individuals of group goals”. If an anal analys ysis is is made made of this this defi defini niti tion on it will will be seen seen that that perso personn nnel el mana manage geme ment nt invo involv lves es proc proced edur ures es and and prac practi tices ces thro throug ugh h whic which h huma human n resources resources are managed managed (i.e. organized organized and directed) directed) towards the attainment attainment of the the indi indivi vidu dual al,, soci social al and and orga organi niza zati tion onal al goal goals. s. By cont contro roll llin ing g and and effectively using manpower resources, management tries to produce goods and services for the society. society. 1.2.2 Definitions: 1.2.2a Human Resource Management involves all management decisions and practices that directly affect or influence the people, or human resources, who work work for the Organ Organiza izatio tion. n. An organ organiza izatio tion’ n’ss emplo employees yees enable enable an Organ Organiza izatio tion n to achiev achievee its goals, goals, and the manage managemen mentt of these these human human resources is critical to an organization’s organization’s success. 1.2 1.2.2b .2b Accor ccord ding ing to Management means:
Proce ocess
System tems
View
Human uman
Res Resour urcce
“ Human Resource Management is the systematic planning, development, and control of a network of inter related process affecting and involving all members of an Organization”. Key Terms used in this definition:
Processs is an identi identifia fiable ble flow flow of interr interrela elated ted events events moving moving Process: Proces towa toward rdss some some goal goal,, cons conseq eque uenc ncee and and end. end. An exam exampl plee of the the huma human n resource management is the staffing process, a flow of events that results in the continuous filling of positions within the Organization. These events include such activities as recruiting applicants, making hiring decisions, and managing career transitions such as transfers and promotions. Flow: Flow implies movement through time and in the direction of a result; Inter-related : implies interaction within the process and between events; Goal and Consequence (Purpose): suggest a human objective; Events: are activities, happenings or change; End: implies some conclusion or consequence that may not necessarily be sought or planned by man.
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System: System is a particular set of procedures or devices designed to cont contro roll a proc proces esss in a pred predic icta tabl blee way way. For For e.g. e.g. Staf Staffin fing g Syst System em of an Organization.
As a process it includes: Human Resource Planning; Job and Work Design; Staffing; Training and Development; Training Performance Appraisal and Review; Compensation and Reward; Employee protection and representation; Organization Improvement. 1.2.2c “Human Resource Management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational organizational and societal objectives are accomplished". Edward Flippo This This defi defini niti tion on is a comp compre rehe hens nsiv ivee and and cove covers rs both both the the mana manage geme ment nt functions and the operative functions. The purpose of all these functions is to assist in the accomplishment of basic objectives. 1.2.2 General Definition:
“Perso “Personn nnel el Mana Manage geme ment nt is the the recru recruit itme ment nt,, sele select ctio ion, n, deve develo lopm pmen ent, t, utilization of and accommodation to human resources by organizations. The human resources of an organization consists of all individuals regardless of their role, who are engaged in any of the organizations activities”. activities”. 1.3 Three aspects of Human Resource Management:
Welfare Aspect: concerned with working conditions and amenities such as canteens, crèches, housing, personal problems of workers, schools and recreations; Labor or Personnel Aspect: concerned with recruitment, placement of employees, remuneration, promotion, incentives, productivity etc.;
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Industrial Relations Aspect: concerned with trade union negotiations, sett settle leme ment nt of indu indust stri rial al disp disput utes, es, join jointt cons consul ulta tati tion on and and coll collec ecti tive ve bargaining.
1.4 Difference between Personnel Management and Human Resource Management Table: 1 Dimensions PM Nature of relations Pluralist Perception of conflict Conflict is institutionalized Contract Emphasis on compliance Role of procedures Rules dominated Planning perspective Adhoc, reactive Acceptability of Acceptable unions Level of trust Low Key relation Labour management Management’s Role Transactional Basis of job design Division of labour Key people PM/IR specialist Skills acquisition Training and Development Reward Management Standardized job evaluation
HRM Unitarist or neo-unitarist Conflict is pathological
Beyond contract commitment Culture and values dominated Integrated, proactive Non desirable High Customer Transformational Teams Line people and general mangers Learning Organization Performance related
1.5Characteristics of Human Resource Management
1. Human Human Resource Resource Managem Management ent is concer concerned ned with managin managing g people people at work. It covers all levels of personnel, including blue collared employees and white collared employees; 2. It is concerned concerned with with employees employees,, both as indivi individuals duals as as well as group; group; 3. Human Resource Resource Managem Management ent is concerned concerned with with helping helping the employees employees to develop their potentialities and capacities to the maximum possible extent, so that they may derive great satisfaction satisf action from their jobs;
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4. It is a major major part of the genera generall manageme management nt functio function n and has roots roots and branches extending throughout and beyond each Organization; 5. Human Resour Resource ce Managemen Managementt is of a continuo continuous us nature; nature; 6. Huma Human n Reso Resour urce ce Mana Manage geme ment nt atte attemp mpts ts at gett gettin ing g the the will willin ing g cocooperation of the people for the attainment of the desired goals. HRM can be of full value to an Organization only when it is consistently throughout out and applied at all levels and to all management functions; in corporate policies, in the systems, procedures and in employment practices, etc. this integrative aspect of HRM is, therefore, of vital importance.
Employee Relations
Personnel Administratio n
HRM
Industrial Relations
Fig, 1 1.6 Objectives of Human Resource Management Objectives are pre-determined ends or goals at which individual or group activity in an Organization is aimed. Objectives can be divided in to two parts: 1.6.1 Primary Objectives: Objectives: HRM’s main goal is the creation of a workforce with the ability and motivation to accomplish the basic organizational goals; They relate to the satisfaction of the personal objectives of the members of an Organizat Organization ion through monetary and non monetary devices; They rela relate te to the the sati satisf sfac acti tion on of comm commun unit ity y and and soci social al They objec bjecttives ives,, such such as serv servin ing g the custo ustome mers rs hones onestl tly y, promoting a higher standard of living in the community, bringing comfort and happiness to the society, protecting women and children and providing for aged personnel; To utilize human resource effectively;
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To establish and maintain a productive and self respecting relationship among all members of an Organization; Organization; To esta establ blis ish h and and main mainta tain in an adeq adequa uate te orga organi niza zati tion onal al structure; To bring about maximum individual development of the members of an Organization; to maintain a high morale and better human relations inside an Organization by sustaining and improving the conditions which have been established so that employees may stick to their jobs for a longer period;
1.6.2 Secondary Objectives: The seco second ndar ary y obje object ctiv ives es aim aim at achi achiev evin ing g the the prim primar ary y The objectives economically, efficiently and effectively. 1.7 Functions of Human Resource Management
According to different authors HRM functions can be divided in to different categories. Some of the categories are as follows: 1. Gene General ral and Specific Specific func function tions; s; 2. Personnel administration administration and Industrial relations functions. 3. Manageri Managerial al and and Oper Operativ ativee functi functions ons 1.7.1 General and Specific functions: General Functions: To conduct personnel research; To assist in the programmes of personnel administration; To develop appraisal plans; To launch education and training programmes; To develop a competent work force; establ blish ish and and admi admini nist ster er vari varied ed perso personn nnel el serv servic ices es dele delega gate ted d to To esta personnel department. Specific Functions: Employment; Safety; Wage and salary; Benefit Schemes; Community relations and
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Advice and counseling the employees. em ployees. 1.7.2 Personnel Administration and Industrial Relations Functions:
Personnel Administration: These functions relate to the function of managing people from the lower to the upper level of the Organization and embraces policy determination as well as implementation of policies by the personnel at the lower levels; Industrial Relations Functions: These These functi functions ons relate relate to intera interacti ctions ons betwee between n the manage managemen mentt and the repre represe sent ntat ativ ives es of the the unio unions ns.. Such Such func functi tion onss invo involv lvee all all acti activi viti ties es of empl employ oyer er empl employ oyee ee rela relati tion onsh ship ip,, such such as Orga Organi niza zati tion on of the the unio union n membe members, rs, nego negoti tiat atio ions ns of cont contra ract cts, s, coll collec ecti tive ve barg bargai aini ning ng,, grie grieva vanc ncee handling, disciplinary actions, arbitration etc- the purpose of all these being to prevent conflict between two parties. 1.7.3 Managerial and Operative Functions; Managerial Functions: Management is Personnel administration. It is the development of the people and not the direction of the things. Managing people is the heart and essence of being a manager. Thus, a Human Resource Manager is a manager and as such he performs the basic functions of management. Inputs Human and Economic Resources interacting with environment al changes
Planning Determination of short to long range plans to accomplish Organization objectives
Organizing Development of the Orgn. Structure according to predetermined plans
Directing Stimulation and motivation of Organization personnel according to predetermined lans
Feedback of significant deviations from planned performance
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Controlling Assurance that directed action is taking place according to predetermined plans.
Outputs Goods and services needed by the organization customers
(Managerial Functions) Fig: 2 Operative Functions: These functions are concerned with the activities specifically dealing with procu procurin ring, g, develo developin ping, g, compen compensat sating ing and mainta maintaini ining ng an effic efficien ientt work work force. These functions are also known as service functions. Procurement Function; Development function; Compensating function; Integrating function; Maintenance function. Managerial Functions:
Planning: Is a predetermined course of action. Planning is a hard job, for it involves the ability to think, to predict, to analyze and to control the acti action onss of its its perso personn nnel el and and to cope cope with with a comp comple lex, x, dynam dynamic ic flui fluid d environmen environment. t. They bridge the gap from where we are to where we want to go. go. The The two two impo import rtan antt feat featur ures es of plan planni ning ng are are rese resear arch ch and and fore foreca cast stin ing. g. The The task task of fore foreca cast stin ing g perso personn nnel el need needss in rela relati tion on to changes in production or seasonal variations and the leveling out of differences in the production extremely important, both for employees and for management. Therefore, planning and decision making has to be unde undert rtak aken en much much in adva advanc ncee of an acti action on so that that unfo unfore rese seen en or anticipated problems and events may be properly handled. This as also stressed by the saying: “ Good managers make things happen”. Organizing: An Organization is a means to an end. It is essential to carry out the determined course of action. Complex relationships exist betwe between en the specia specializ lized ed depart departmen ments ts and the genera generall depart departmen ments ts as many top managers are seeking the advice of personnel manager. Thus, Organization establishes relationship among the employees so that they can collectively contribute to the attainment of company goals. Direction ion is an import important ant manage manageria riall functi function on in buildi building ng Directing: Direct sound industrial relations besides securing employee contributions. Coordina ordinatio tion n deals deals with with the task task of blendi blending ng effor efforts ts in order order to ensure ensure succes successfu sfull attain attainmen mentt of an object objective ive.. The person personnel nel manage managerr has to 8
coor coordi dina nate te vari variou ouss mana manage gers rs at diff differ eren entt leve levels ls as far far as perso personn nnel el functions are concerned. Personnel management function should also be coordi coordinat nated ed with with other other functi functions ons of manage managemen mentt like like manage managemen mentt of money, money, machine, and material.
Controlling: Controlling involves checking, verifying and comparing of the actualize with the standards, identification of deviations if any and corre correct ctin ing g of iden identif tifie ied d devi deviat atio ions ns.. Thus Thus,, acti action on and and oper operat atio ion n are are adjusted to predetermined plans and standards through control. Fig. 3: Functions of Personnel Office/ Personnel Management. Functions of Personnel Office
Managerial Functions
Operative Functions
Planning Organizing Directing Controlling
Employment HRD
Compensation Compensatio n
Human Relations, Placement.
H R P; Perform formaance- Job Evaluation; Motivation; Recruitment; Appraisal; Wage & Salary Morale; Sel Select ection; ion; Train rainin ing; g; Quali ualitty- Circ Circlles. es. Orgn.C n.Chan hange & Dev Dev. Indu Induct ctio ion; n; Mgmt Mgmt.. Dev Dev. Frin Fringe ge Bene Benefi fits ts.. Career Planning
Operative Functions: The operative functions of human Resource Management are related to spec speciific fic acti ctiviti vitiees of pers person onne nell mana manag gemen ementt e.g. e.g. empl employ oyme men nt, deve develo lopm pmen ent, t, comp compen ensa sati tion on & Rela Relati tion ons. s. All All thes thesee func functi tion onss are are interacted by managerial functions. Employment: Employment is concerned with securing and employing the the peop people le posse possessi ssing ng requ requir ired ed kind kind and and leve levell of huma human n reso resour urce cess necessary to achieve the organizational objectives. It covers the functions
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such as job analysis, human resource planning, recruitment, selection, placement, induction and internal mobility. mobility. Human Resource Development: It is the process of improving, molding and changing the skills, knowledge, creative ability, aptitude, attitude, valu values es,, commi ommitm tmeent etc. tc. based ased on pres presen entt and and fut future ure job and and orga organi niza zati tion onal al requ requir ireme ement nts. s. This This func functi tion on incl includ udes es Perfo Performa rmanc ncee Appraisal, Appraisal, Training, Training, Management Management Developmen Development, t, Career Career Planning Planning and Development, Internal Mobility (Promotion, Demotion), Organizational Development. Compensation : It is the process of providing adequate, equitable and fair remuneration to the employees. It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits, social security measures etc. Human Human Relation Relationss: Prac Practi tici cing ng vari variou ouss huma human n reso resour urce ce poli polici cies es and and progr programme ammess Loire Loire employ employmen ment, t, develo developme pment nt and compen compensat sation ion and interaction among employees create a sense of relationship between the individual worker and management, among workers and trade unions and mana manage geme ment nt.. It is the the proc process ess of inte interac racti tion on amon among g huma human n bein beings gs.. Human relations is an area of management in integrating people in to work work sit situat uation ion in a way way that hat moti motiva vattes them hem to work toget ogeth her productively, cooperatively and with economic, psychological and social satisfaction. 1.8 Human Resource Management Environment HR manag nager can’t perform his job in a vacuum as a number of environmental factors affect the HRM. In fact, these factors influence the Organization through human resources. Environment Environment (with special reference to Human Resource Management): means the totality of all factors, which influence both the Organization and HRM sub system. Fig. 4: Environmental Scanning of HRM Technological Marketing Government & Legal Orgn. Politics
Customers HRM
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Production
Political Unions
Trade
Finance
Orgn. Structure
Economic Social & Religious The environment furnishes the macro context and the Organization is the micro unit. The external environment is comprised of those factors, which affect affect an organiza organization’ tion’ss human resources from outside outside the Organiza Organization. tion. Important among them are: Economic; Social; Political; Governmental; Legal; Technological; Manpower in the country; Tradition and culture; Tradition Customers; organizations; Other organizations; organizations. Trade Unions in other organizations. 1.8.1 Internal Environment:
The internal environment also affects the job of a personnel manager. The internal internal environmen environmental tal factors factors include include Organiza Organization tion objectiv objectives, es, policies, policies, organizational structure, and the functional areas of the Organization with which the personnel manager works continuously like finance, marketing and production. Impact of internal environment factors is profound as they frequently and closely interact with HRM function in an Organization. 1.8.2 External Environment: Environment:
The influence of external environment on HRM is also equally important, thou though gh the the seve severi rity ty is comp compar arat ativ ivel ely y less. less. Peop People le are are essen essenti tial ally ly self self-managing. In other words, while people manage other resources, themselves manage personnel. People themselves decide about the nature, time, and place of their employment. And people react to the changing conditions and 11
to the techniques of management unlike money, material and machine. The changes includes in the external environment are: Technological obsolescence; Cultural and social changes; Changes in the policies of govt.; Politics and the like. With the result result,, the work work enviro environme nment nt change changess thereb thereby y affec affectin ting g their their productivity level. Considering the complexities and the challenges in the HRM now and in near near futu future re mana manage geme ment nt has has to deve develo lop p soph sophis isti tica cate ted d tech techni niqu ques es and and efficient specialists to among the personnel on sound lines 1.9 Functional Areas/ Scope of Human Resource Management
1. 2. 3. 4. 5. 6. 7. 8. 9.
Organizat Organizational ional planning planning,, development development and task specifica specification; tion; Staffin Staffing g and and Employm Employment ent;; Trainin raining g and Deve Develop lopmen ment; t; Compensati Compensation, on, Wage Wage and Salary Salary adminis administrati tration; on; Motiva Motivatio tion n and and Incen Incentiv tives; es; Employe Employeee service servicess and Bene Benefit fits; s; Emplo Employe yeee rec recor ords ds;; Labor Labor and and Industr Industrial ial Rela Relatio tions; ns; Personnel Personnel Researc Research h and Personnel Personnel Audit. Audit.
1.10 Role of HR Practitioner
The coordination and integration of activities in an organization just not happ happen en,, it has has to be work worked ed out. out. Peop People le tend tend to head head off off in diff differ eren entt directions- to go their own sweet way. They will jot necessarily cooperate with one another. Thus, to begin with, the HR manager should have three main objectives in mind: 1. To gain the commitme commitment nt and coopera cooperatio tion n of all the members members in his work group; 2. To get the group group into into action action to achieve achieve agreed agreed objectiv objectives; es; 3. To make make the best use of the skills skills,, ener energi gies es and tale talent ntss of all the the members.
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In the modern era, the personnel manager typically performs a variety of the roles, such as a role of a conscience, of a counselor, a mediator, a company spokesman, a problem solver and a change agent. He performs many roles as per needs of the situation. Such as: I. The The cons consci cien ence ce role is that that of humani humanita tari rian an who who remin reminds ds the management of its moral and ethical obligations to its employees; e mployees; II. The personn personnel el manager manager plays plays the role of of a counselor counselor to whom whom the employees frequently go for consultation and with whom they disc discus usss thei theirr mari marita tal, l, heal health th,, ment mental al,, phys physic ical al and and care career er problems; III. III. As a medi mediat ator or,, he plays plays the role of a peac peacema emake kerr, offe offeri ring ng to settle the disputes that may arise among individuals or groups. He acts a liaison and communicating link between an individual and a group and between labour and management; IV. IV. The person personnel nel a manger manger has always always been been a freque frequent nt spokesm spokesman an for or representative of the company because he has a better over overal alll pict pictur uree of his his compa company ny’’s oper operat atio ion, n, sinc sincee he deal dealss intimately with many key organizational activities and functions; V. The personne personnell manager manager also acts acts as a problem problem solver solver with with respect respect to the issues that involves human resources management and overall long range organizational planning; VI. He works works as a change change agent agent within within the organi organizatio zation n because because he is bes bestt suit suited ed to intr introd oduc ucee and and impl impleme ement nt majo majorr inst instit itut utio iona nall chan change ges. s. He take takess init initia iati tive ve for for inst instal alli ling ng orga organi niza zati tion onal al development programmes and convinces the top management of their need. It is he who alerts the top management regarding managerial obsolescence in his organization; VII. II. The The pers person onne nell mana manage gerr play playss many many othe otherr role roless as well well.. Any Any matter which need someone’s attention and which no body wants to deal with is, often handled by the personnel department. Such activi activitie tiess may be periph periphera erall but import important ant and crucial crucial to the efficient and effective operation of an organization. It has been now fully recognized that the basic role of the personnel manager if “the management of the manpower resources.” Such management is concerned with “leadership” both in-group and individual relationship, and labo labour ur mana manage geme ment nt rela relati tion ons. s. It effec effecti tive vely ly desc descri ribe bess the the proc process ess of planning, and directing the application, development and utilization is now consid considere ered d as one of the four four main main functi functions ons,, viz. viz. financ finance, e, produc productio tion, n, marketing, and human relations.
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The ideal personnel manager is not a “decision maker” but a counselor not “collector of responsibilities” but an “advisor” to help the management make more reliable personnel decisions. In any organization it is these “line man” who determine the “personnel climate” for the entire organization. If the personnel man can meet the challenge of “staff role” he would make the effective contribution to industry.
Personnel Role
Welfare Role
Administrative Role Advisory: Research in Time keeping advising per perso sonn nnel el and and mana manag geme ement on organizational effe effect ctiv ivee use of problems human resources Manpower Managing Salary and wage planning: servicesadministration Recruitment, canteens, selection etc. transport etc. Training and Group Human engineering: dev develo elopme pment of dynamics: man machine line man group relationship counseling, motivation, leadership, communication etc. Measurement Measurement and assessment of individual and group behavior Table 2 1.11Evaluating HR Function
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Fire Fighting/Legal Fighting/Legal Role Grievance handling
Settlement disputes
of
Handling disciplinary actions
Collective bargaining
Joint consultation
Organizations can promote human excellence by offering a potential site for the flowering most forms of human excellence. Within an organization, if there is meritocracy, people compete for promotion and other rewards on the basis of good work rather than on the basis of “pull.” Recognition and rewards for creative ideas, discoveries, inventions, innovations etc. promote creative excellence. The human resource development movement in industry is aime aimed d at faci facili lita tati ting ng orga organi niza zati tion onal ally ly usef useful ul indi indivi vidu dual al grow growth th and and deve develo lopm pmen ent. t. The The more more an orga organi niza zati tion on prom promot otes es indi indivi vidu dual al or team team excellence, the more the organization itself is likely to excel because the work work of any any orga organi niza zati tion on is depe depend nden entt on the the work work of its its indi indivi vidu dual al members and employee groups. The human factor across all organizations comprises three basic elements: 1. The people people themselve themselvess who work work in the organi organizatio zation; n; the skills skills and capabi capabilit lities ies they they possess possess and their their attitu attitude de toward towardss the company; 2. The The mana manage geme ment nt styl stylee prev preval alen entt in the the orga organi niza zati tion on,, whic which h usua usuall lly y stem stemss from from the the top. top. The The styl stylee may may be aggr aggress essiv ive, e, authoritarian, democratic or laissez faire and each type has a different impact on the way people work as individuals or in groups; 3. The The orga organi niza zati tion onal al clim climat atee i.e. i.e. the the work work atmo atmosp sphe here re in the the comp compan any y, as dete determ rmin ined ed by the the degr degree ee of inte interp rper erso sona nall cooper cooperati ation, on, the types types of confli conflict ct resolu resolutio tion, n, the amount amount of trustworthiness, the prevalent organizational politics etc.; The quality of HRM practices prevalent in a particular organization can be rated by scrutinizing the following factors: 1.11.1Organization Climate: 1. Do people people feel feel they are giving giving enough enough responsi responsibilit bility? y? 2. Do people people know know what is expecte expected d of them them in the shape of objecti objectives ves and standards of performance? 3. Do people people see themselv themselves es being being fairly fairly rewarded rewarded for their work work and feel that promotion policies are fair? 4. Do the employe employees es feel that they they belong belong to a worthwhi worthwhile le company company and are valuable members of working teams? 5. Is there adequat adequatee feedback feedback to people people on their their performance, performance, whether whether it is good, bad or indifferent? 6. Is there there sufficie sufficient nt to challenge challenge in in their their jobs? 15
7. Are people people given given enough enough support support by their their managers managers or supervisors supervisors in the shape of guidance or help? 1.11.2 Type of Management Style:
1. 2. 3. 4. 5.
Does Does it tend tend to be be Auto Autocra cratic tic?? Does it tend tend to be Task Task centered centered or people people centere centered? d? Do managers managers tend tend to be distant distant or cold cold or approachab approachable le and friendly friendly?? Do managers managers tend tend to to be hard hard or soft on people? people? Thus Thus,, an amalga amalgama mati tion on of all all the the fact factor orss thro throws ws some light light as an indicator of the quality of HRM practiced in an organization. organization. PERSONNEL POLICIES
The dictionary meaning of “policy” is a “planned action” and that “plan” is a policy. Policy making and planning are, therefore, synonymous. “A policy,” says Flippo, “is a man made rule of pre-determined course of action that is established to guide the performance of work toward the organization objective it is a type of standing plan that serves to guide subord subordina inates tes in the execut execution ion of their their tasks. tasks.”” Accord According ing to Calhoo Calhoon, n, personnel polices constitute guides to action. They furnish the general standards or base on which decisions are reached. Their genesis lies in an organization’s values, philosophy, concepts and principles.” “Policies are statements of the organization over all purpose and its objective in the various areas with which its operation are concerned –personnel finance production marketing and so on.” AIMS AND OBJECTIVE OF PERSONNEL POLICIES
The aims of personnel policies should be/are: 1. To enable enable an organiz organizati ation on to fulfil fulfilll or carry out the main objecti objective ve whic which h have have been been laid laid down down as the the desi desira rabl blee minim minimaa of gene genera rall employment policy; 2. To ensure that that its employees employees are informed informed of these these items items of policy and and to secure their cooperation for their attainment; 3. To provide provide such conditio condition n of employment employment and produces produces as will will enable all all the the empl employ oyee eess to deve develo lop p a sinc sincer eree sens sensee of unit unity y with with the the 16
ente enterp rpri rise se and and to carry carry out out thei theirr duti duties es in the the most most will willin ing g and and effective manner; 4. To provide provide an adequate, adequate, competent competent and trained trained personnel personnel for all levels levels and types of management; and motivated them;
5. To protect protect the common common intere interest st of all the parties parties and recogni recognize ze the role of trade union in the organization. 6. To prov provid idee for for a cons consul ulta tati tive ve part partic icip ipat atio ion n by empl employ oyee ee in the the management management of an organiza organization tion and the framing of condition condition for this par parti tici cipa pati tion on,, whic which, h, howe howeve verr shal shalll not not take take plac placee in tech techni nica cal, l, financial or trading policy; 7. To provid providee an efficien efficientt consul consultat tative ive service service which aims at creati creating ng mutual faith among those who work in the enterprise; •
•
•
By developing management leadership which aims is bold and imaginative and guide by moral values; By effe effect ctiv ivel ely y dele delega gati ting ng the the huma human n rela relati tion on aspe aspect ctss of personnel function of line managers by enforcing discipline on the basis of cooperative understanding and humane application of rules and regulation; and By providing for a happy relationship at all levels
. 8. To establ establish ish the condit condition ionss for mutual mutual confid confidenc encee and avoid avoid confusion misunderstanding between the management and the workers, by developing suggestion plans, joint management councils, work committees, etc., and by performance appraisal discussion; 9.To provide security of employment to workers so that may not be distracted by the uncertainties of their future; 10. To provid providee an opport opportuni unity ty for growth growth within within the organ organiza izatio tion n to person who are willing to learn and undergo training to improve their future prospects.
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11. To provide for the payment of fair an adequate wages and salary to the workers so that their healthy cooperation may be ensure for efficient working of the undertaking; 12. To recognize the work and accomplishment of the employees by offering non-monetary incentives rewards; 13. To To create a sense of responsibility on the part of those in authority, for the claims of employees as human being, who should be guaranteed prote protecti ction on of their their fundam fundament ental al rights rights and offere offered d enough enough scope scope for developing their potential. ESSENTIAL CHARACTERSTICS OF A SOUND PERSONNEL POLICY
The main features of a good personnel policy are: 1. The statement statement of any any policy policy should be definit definite, e, positive, positive, clear clear and easily easily understood by anyone in the organization so that what it proposes to achieve is evident. 2. It should should be written written in order to preserve preserve it against against loss loss to stimulate stimulate careful careful consideration before its formulation and to prevent the promulgation of numerous, differing and temporary oral policies from multiple sources. 3. It must be reason reasonabl ably y stable stable but not rigid, rigid, i.e., i.e., it should should be period periodica ically lly revised, evaluated, assessed and revised and should, therefore, be in tune with the challenge of changes in the environment and should have built in resilience for adjustment from time to time. 4. It must be supplemen supplementary tary to the over-a over-all ll policy policy of an organiza organization, tion, for if departmental policy were made such as to come into conflict and violet the company policy, it would be tantamount to insubordination. Peter drucker drucker has observed: observed: “the policies of an enterprise enterprise have to be balanced with the kind of reputation an enterprise wants to build up with special reference to the social and human needs, objectives and value.” 5. It should should be indicate indicate that that the manageme management nt knows knows that workers workers prefer prefer to deal with the management on an individual basis.
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6. It should should recognize recognize the desire desire of many workers workers for recognit recognition ion as groups groups in many of their relationships. 7. It shou should ld be form formul ulat ated ed with with due due rega regard rd for for the the inte intere rest stss of all all the the conc concer erne ned d part partie iess-th thee empl employ oyer ers, s, the the empl employ oyee eess and and the the publ public ic community. 8. It should should be the result result of a careful analy analysis sis of al the availa available ble facts. facts. 9. It must ust prov proviide a twotwo-wa way y com communi munica cattion ion syst system em betwe etweeen the management and the employees so that the latter are kept informed of the latest developments. In the organization and the employers are aware of the action and reaction of employees on particular issues. 10.It should be consistent with public policy, i.e., with the spirit rather than the letter of the law, so that the intensions and settled course of an orga organi niza zati tion on are are appr apprec ecia iate ted d in terms terms of publ public ic opin opinio ion n from from the the standpoint of national, economic and social justice for the employees and for the community at large. 11.All interested parties should generally know it. 12.It must have not only the support of the management but also the cooperation of employees at the shop floor level and in the office. 13.Before evolving such a policy, policy, trade unions should be consulted in 14.Matters of industrial relations; and the role of trade unions should be restricted only to this area. 15.It should be progressive and enlightened, and must be consistent with professional practice and philosophy. philosophy. 16.It must make a measurable impact, which can be evaluate and qualified for the guidance of all concerned, especially in the field of the three ‘R’s of personnel management viz., recruitment, retainment and retirement. 17.It should be uniform throughout the organization, though, in the light of local conditions, slight variation may be permitted in specific policies relating to staffing compensation, benefits and services. 19
18.It 18.It shou should ld have have a soun sound d base base in appr approp opri riat atee theo theory ry and and shou should ld be translable into practices, terms and peculiarities of every department of an enterprise. 19.Except in rare cases, policies should not prescribed detailed procedures. HUMAN RESOURCE PLANNING INTRODUCTION Planning is thought prior to action
Planning has been visualized as a thought proper to action, embracing a sche scheme me of acti action on invo involv lvin ing g the the dete determ rmin inat atio ion n of the the stre streng ngth thss and and weaknesses in the choice of the best course of action from the standpoint of strategy and programmes. The term “Plan” is defined as a forecast of future attainment and forms a written statement of what will be the outcome of this action specifying a time period ranging from one year to five years. Meaning of Human Resource Planning:
Is both a process and a set of plans. It is the process used by organisations for assessing the supply and demand for future human resources. In addition, an effective HR plan also provides the mechanisms that will be used to eliminate any gaps that may be exist between supply and demand. Thus HR planning is process that is used to determine the number of employees to be recruited in to the organisation or the phased out of it. Human Resource Planning as a process involving the following activities: activities: 1. Forecastin Forecasting g of future future human human resourc resourcee requiremen requirements; ts; 2. Task of inventoryi inventorying ng present present resources resources and assessing assessing the extent to which which these resources are optimally utilized; 3. Anticipat Anticipation ion of of human human resources resources problem, problem, and and 4. Planning Planning of necessar necessary y human human resource resource programme. programme. Manpower Planning Provides information in three dimensions:
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The The esti estima mate ted d manp manpow ower er requ requir ireme ement ntss (inc (inclu ludi ding ng expe expect ctat atio ions ns of manpower utilization); The analysis of the external manpower market situation,& The The resu result ltin ing g est estimat imatee of manpo anpowe werr avai availlabi ability lity from from the two dimensions. Strategies for Manpower Planning
Manpower planning involves the application of a set of 9 strategies: 1. Collec Collect, t, mainta maintain in and interpre interprett releva relevant nt inform informati ation on regard regarding ing human resources; 2. Repo Report rt peri period odic ical ally ly manp manpow ower er obje object ctiv ives es,, requ requir irem emen ents ts and and exis existi ting ng employment and allied features of manpower; 3. Develo Develop p proced procedure uress and techniq techniques ues to determ determine ine the requir requireme ements nts of different types of manpower over a period of time from the standpoint of organizational goals and modify these goals, if they make unrealistic demands for human resources; 4. Develo Develop p measur measures es of manpower manpower utiliza utilizatio tion n as a compon component ent of foreca forecasts sts of manp manpow ower er requ requir irem emen ents ts alon along g with with –if –if poss possib ible le-- inde indepe pend nden entt validation; 5. Employ Employ-- if suitab suitablele- techniqu techniques es leadin leading g to effectiv effectivee alloca allocatio tion n of work work with a view to improving manpower utilization; 6. Conduct Conduct research research to determine determine factors factors hampering hampering the the contribut contribution ion of the individuals and groups to the organization with a view to modifying or removing these handicaps; 7. Deve Devellop and and emp employ loy meth method odss of eco economi nomicc asse assess ssme men nt of huma human n reso resour urce cess refl reflec ecti ting ng its its feat featur ures es as incom incomee gene genera rato torr and and cost cost and and accordingly improving the quality of decisions influencing manpower; 8. Eval Evalua uate te the the proc procur ureme ement nt,, promo promoti tion on and and rete retent ntio ion n of the the effe effect ctiv ivee huma human n reso resour urce cess in the the cont contex extt of the the forec forecas astt requ requir irem emen ents ts of the the enterprise; & 9. Analyz Analyzee the dynami dynamicc process process of recrui recruitme tment nt , promot promotion ion and and loss loss to the organization and control these processes and organization structure with a view to encouraging the maximum individual and group performance without involving excessive costs. Reasons for Human Resource Planning
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All organ organiza izatio tions ns perform perform human human resourc resourcee planni planning, ng, either either formal formally ly or informally. informally. The major reasons for employment planning are:
More effective and efficient use of human resources: Huma Human n reso resour urce cess plan planni ning ng shou should ld prec preced edes es all all othe otherr HRM HRM acti activi viti ties es.. Care Carefu full anal analys ysis is of all all HRM HRM acti activi viti ties es show showss that that thei their r effectiveness and efficiency, which result in increased productivity, depend on human resource planning. More satisfied and better developed employees: Employees who work for organizations that use good human resource planning systems have a better chance to participate in planning their own careers and to share in training and development experiences. Thus they are likely to feel their talents are important to the employer, and they have a better chance to utilize those talents; More effective equal employment opportunity planning: The govt. has increased its demands for equal employment opportunities.In sum, effective human resource planning ensures that HRM activities and programme will be built on a foundation of good planning. Proper planning should cut down on the number of surprises that occur involving human resource availability, availability, placement and orientation. The HR Planning Process
HR Planning involves four distinct phases or stages: Situation analysis or environmental scanning; Forecasting human resource records; Human resource supply analysis; Action plan development.
Situation analysis and Environmental scanning:
The first stage in HR Planning is where the HRM function and stra strate tegi gicc plan planni ning ng init initia iall lly y inte interac ract. t. The The stra strate tegi gicc plan plan must must adap adaptt to environmental circumstances, and the HRM function is one of the primary mechanisms that an organization can use during the adaptation process. For e.g. e.g. rapi rapid d chan change gess in the tech echnol nologic ogicaal envi nvironm ronmen entt can forc forcee an
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organization to quickly identify and hire employees with new skills that previously weren’t needed by the organization. Without an effective HR plan to support the recruitment and selection functions in the organization, it will be impossible to move fast enough to stay competitive. Thus, organizations are becoming more dependent on an ability to gather relevant information about their environment and to react to this information. Forecasting future demand for employees: The The next next phas phasee of an effe effect ctiive HR Plan Planni ning ng proce rocess ss is estimating not only how many but what kinds of employees will be needed in the future. Forecasting yields these advanced estimates or calculations of the the orga organi niza zati tion on’’s staf staffi fing ng requ requir irem emen ent. t. Alth Althou ough gh ther theree are are many many quantitative tools to help with forecasting, forecasting, it is a proc proces esss that that invo involv lves es a great deal of human judgment. In addition, many successful HR planners also rely heavily on their “gut instincts” about future conditions. For e.g., pla plann nner erss at Unil Unilev ever er attr attrib ibut utee much much of thei theirr glob global al succ succes esse sess to such such instincts. Analysis of the supply of current Employees: The third phase of HR Planning id designed to answer the question “How many and what kind of employees do I currently have in terms terms of the the skil skills ls and and trai traini ning ng nece necessa ssary ry for for the the futu future re?” ?” It shou should ld be obvious that this phase of HR Planning involves much more that simply counting the number of current employees in the organisation. The major tool used to assess the current supply of employees is the Skill Inventory. It is a list of names, certain characteristics and skills of the people working for the organisation. It provides a way to acquire these data and makes them available where needed in an efficient manner. Action decisions in Human Resource Planning: After the HR Planning system has analyzed both the supply of and and dema demand ndss for for futu future re work worker ers, s, thes thesee two two fore foreca casts sts are are comp compar ared ed to dete determi rmine ne what what,, if any any, acti action on shou should ld be take taken. n. When Whenev ever er ther theree is a discrepancy between these two estimates, the organization needs to choose a course of action for elimination the gap. No matter how good the HR Planning system is, an exact match between supply and demand forecasts is rare. Even when overall estimates are similar, there are frequently important gaps in certain subgroups. These 23
data data beco become me inpu inputs ts to facil facilit itat atee deci decisi sion onss abou aboutt trai traini ning ng,, prom promot otio ion, n, demotion and similar decisions. Action decisions with a shortage of employees: When When employ employmen mentt specia specialis lists ts compar comparing ing demand demand to supply supply find the supply of workers is less than the demand, several possibilities are open to the organization. If the shortage is small and employees are willing to work overtime, it can be filled with present employees. If there is shortage of highly skilled employees, training and promotions of present employees, together with the recruitment of lower skilled workers, are possibilities. Action decisions in surplus conditions:
When comparison of employee demand and supply indicates a surp surplu lus, s, the the alte altern rnat ativ ivee solu soluti tion onss incl includ udee attr attrit itio ion, n, earl early y reti retirem remen ents ts,, demo demoti tion ons, s, layo layoff ffs, s, and and term termin inat atio ions ns.. Emplo Employe yeee deci decisi sion onss in surp surplu luss conditions are some of the most difficult decisions managers must make, because the employees who are considered surplus are seldom responsible for the conditions leading to the surplus. A shortage of raw material such as fuel, or a poorly designed or marketed product can cause an organization to have a surplus of employees. Fig. 1: Human Resource Planning Process Strategi Strategicc Manageme Management nt Decisions Technological Forecasts; Economic Forecasts; Market Forecasts; Organisational Planning; Investment Planning; Annual Operating Plans.
Human Human Resour Resource ce Demand Annual Employment Requirements; Numbers; Skills; Occupational Categories .
Human Human Resour Resource ce Supply Existing Employment Inventory;
After Application of Expected Loss and Attrition rates.
Variances
End If None:
If surplus
If Shortage
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Decisions: Overtime etc.
Decisions: La off etc.
End
End
In short, Human Resource Planning is a process by which the management of an organization ensures that it has the right number and kind of people at the right places and at the right times to successfully achieve its overall objectives. Human Resource planning differs from Manpower Planning in the sense that the former is primarily concerned with the human aspects of people, the latter mainly concentrates on the power of the people.
Long Answer Type Questions
1. What do do you understan understand d by Human Resourc Resourcee Planning? Planning? Explain Explain with with suitable illustrations the process of Manpower Planning. 2. Discuss Discuss the problems problems faced faced in Human Human Resource Resource Planning Planning.. How can these problems be overcome? 3. “The Human Human Resource Resource Planning Planning is becomin becoming g more and and more important and complex with organizations are becoming more global ”. Comment. 4. What What do you you mean mean by Pers Person onne nell Poli Policy cy?? Expl Explai ain n the the obje object ctiv ives es behind implementation of Personnel Policies in an organization? 5. Explain Explain various various features features of Personnel Personnel Policies Policies of an organizati organization. on. 6. What What is mean meantt by the term Human Human Resou Resourc rce? e? What What does does Human Human Resource Management mean? 7. What What is the differen difference ce between between Human Human Resour Resource ce Manageme Management nt and Personnel Management? 8. Eluc Elucid idat atee the the role role and and func functi tion onss of an effe effect ctiv ivee Huma Human n Reso Resour urce ce Manager? 9. Write rite a short short note note on the vario various us HRM Programm Programmes es which which could be implemented in the organizational set up? 25
10.Enlist some key organizational indicators, which could highlight the practice of favorable HRM policies in the work set up? 11.Discuss the issues impending on future HR managers.
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Human Resource Management Unit 2 Job Analysis Job Analysis is one of the most important functions of Human Resource Manage Managerr. Performa Performance nce Apprai Appraisal, sal, Job Design Designing ing,, Person Personnel nel select selection ion,, employee training, career development and planning are among the many activities that depends upon the information gathered in the job analysis. Key terms: Job: A job may be defined as “a collection or aggregation of tasks, duties and responsibilities which as a whole is regarded as a regular assignment to individual employees”. Putting in different words the meaning of a job can be described as a pocket containing differentiated set of total workload in an organization.
Positi tion on is coll collec ecti tion on of task taskss and and resp respon onsi sibi bili liti ties es regu regula larl rly y Position : Posi assigned to a person.
It is to be noted that job is impersonal and position is personal.
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Today, however, the word job has many mutations depending upon how, when and by whom it is used. It is often used interchangeably with the terms like position and tasks. Before proceeding with a detailed discussion on “job Analysis” it would be fruitful to familiarize ourselves with terms that form specific job attributes. Fig. Relationship among the different job components: 9 8 7 6 5
4 3 2 1 1 – Micro Motion 2 – Elements 3- Tasks 4- Duties 5- Posi Positi tion onss 6- Job 7- Job Job Fami Familly 8- Occu Occupa pati tion on 9- Career Micro Motion: The simplest unit of work is the micro motion. A micro motion involves a vary elementary movement such as reaching different work performed in an organization can be traced from a micro motions to an occupa occupatio tion n graspi grasping, ng, positi positioni oning ng and releas releasing ing an object object.. It is the most most elementary unit in to which a job can be broken down. Elements: An element is alignment of two or more micro motions to make a basic movement like picking up an object. A task is congregation of elements to constitute an activity for a specific purpose like preparing a lecture. Two or more related tasks performed in carrying out specific job responsibilities are referred to as duty.
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consti titu tute tess spec specif ific ic duti duties es and and task taskss grou group p toge togeth ther er.. In an A position cons organization there may be one or more person assigned a position. A position position constitutes the whole unit of work assignment Job: When positions are combined they create a job. A job family is a group of two or more jobs that either call for similar worker characteristics or contain parallel work tasks as determined by job analysis. Occupation: A grouping of similar jobs or job families across organizations is termed as occupation. A Career represents a sequence of positions, jobs or occupations that a person has over his or her working life.
Having familiarized oneself with the basic conceptual framework which acts as foundation stone for the knowledge on job analysis, we shall now proceed with a step-by-step discussion of the main topics. Job Analysis Job Job Anal Analys ysis is is a writ writte ten n recor ecord d of actu actual al requ requir irem emen ents ts of the the job job activities. Definitions:
“Job “Job Anal Analys ysis is is the the proc process ess of dete determi rmini ning ng and and repo report rtin ing g pert pertin inen entt information relating to the nature of a specific job.” Bayers and Rue It is the the dete determi rmina nati tion on of task tasks, s, whic which h comp compri rise se the the job job of the the skil skills ls,, knowle knowledge dge,, abilit abilities ies,, and respon responsib sibili ilitie tiess requir required ed of the holder holder for the successful job performance. Putting it in other words it is the process of getting information about the job incumbent’s skills, education and training to carr carry y out out the the job job effe effect ctiv ivel ely y and and term termss on time time for for comp comple leti tion on,, performance standard. It is procedure by which pertinent information is obtained about a job, i.e. it is detailed and systematic study of information relating to the operations and responsibilities of a specific job. 28
A job analysis results in two important documents: • Job Description; • Job Specification. Job Description:
Job Job desc descri ript ptio ion n is writ writte ten n reco record rd of the the duti duties es,, resp respon onsi sibi bili liti ties es and and requirements of particular jobs. It is concerned with the job itself and not with the work. It is a statement describing the job in such terms as its title, location, duties, working conditions and hazards. In other words, it tells us “What to be done, and how it is to be done and why.” It is a standard of function, in that it defines the appropriate and authorized contents of a job.
Job Specification: Specification:
Job specification is a standard of personnel and designates the qualities requi require red d for for an acce accept ptab able le perfo performa rmanc nce. e. It is a writ writte ten n reco record rd of the the requirements sought in an individual worker for a given job. In other words, it refers to a summary of the personnel characteristics required for a job. It is a statement of the minimum acceptable human qualities necessary for the proper performance of a job. Purpose and Uses of Job Analysis
Job Analysis is not useful but an essential part of organizational strategies to serve the following purposes: •
•
Organization and Manpower Planning: It is helpful in organization planning, for it defines labour needs in concrete terms and coordinates the the acti activi viti ties es of the the work work force force,, and and clea clearl rly y divi divide dess duti duties es and and responsibilities; fic job Recr Recrui uitm tmen entt and and Se Sele lect ctio ion n: By indicating the specific requirements of each job (i.e. the skills and knowledge), it provides a real realis isti ticc basis basis for for the the hiri hiring ng,, trai traini ning ng,, plac placeme ement nt,, tran transfe sferr and and promo promotio tion n of person personnel nel.. “Basic “Basicall ally y, the goal goal is to match match the job requirements with a worker’s aptitude, abilities and interests”. It also
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helps in charting the channels of promotion and in showing lateral lines of transfer; • Wage and Salary Administration : By indicating the qualification required required for doing doing a specified job and the risks and hazards hazards involved in its performance, it helps in salary and wage administration. Job analysis is used as a foundation for job evaluation; Job Anal Analys ysis is prov provid ides es info informa rmati tion on,, whic which h • Job Re-Engin Re-Engineerin eering g: Job enables us to change jobs in order to permit their being managed by personnel with specific characteristics and qualification. • Employee Training and Management Development : Job Analysis provides the necessary information to the management of training and deve develo lopm pmen entt prog program ramme mes. s. It help helpss to dete determi rmine ne the the cont conten entt and and subj subjec ectt matt matter er of in trai traini ning ng cour course ses. s. It also also help helpss in chec checki king ng application information, interviewing, weighing test results, and in checking references. • Performance Appraisal : It helps in establishing clear cut standards whic which h may may be comp compar ared ed with with the the actu actual al cont contri ribu buti tion on of each each individual; provid ides es an oppo opport rtun unit ity y for for iden identi tify fyin ing g • He Heal alth th and and Safe Safety ty: It prov hazard hazardous ous condit condition ionss and unheal unhealthy thy enviro environme nmenta ntall factor factorss so that that corrective measures may b taken to minimize and avoid the possibility of accidents. • Employ Employee ee Orient Orientati ation on: Effective job orientation cannot be accomplished without a clear understanding of the job requirements. The duties and responsibilities of a job must be clearly defined before a new employee can be taught how to perform the job. Job Anal Analy ysis sis info inform rmaation tion can help elp both both • Utilizin Utilizing g Personne Personnell: Job employees and managers, pinpoint the root of a problem if employee functions are not adequate. In sum, it may be noted that job analysis is a systematic procedure for securing and reporting the information, which defines a specific job. Steps in Job Analysis/Process The The majo majorr step stepss to be foll follow oweed in carry arryin ing g out out job job ana analysis ysis in an organization can be described as follows: Step 1: Studying job vis a vis the organization : Review the available Background information through organization workflow or process
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charts. Studies the job inter relationships. Often, a restructuring, down sizing, merger, or rapid growth will initiate this review. review. Step 2: Selection of uses of job analysis information : Be selective regarding the future uses of job analysis. The employee or the manager may request a job analysis to determine the appropriate compensation, but they also be interested in formally documenting changes in recruitment, placement and training for a particular job.
advisable to Step 3: Identify the “job” to be analyzed : it is always advisable choose flow representative and key positions for job analysis, thus avoiding unnecessary time and financial f inancial expenditure. Step 4: collection of Job Analysis Analysis data : manager should consider using a number of different methods of data collection because it is unlikely that any one method will provide all the necessary information needed. Three of the most popular form of data collection is: • Observation of tasks and behavior with the job incumbent i.e. both physical and mental activities; • Interviews; • Questionnaires and checklists; Step 5: Develop a Job Description: Highlight the major tasks, pertaining to effective job performance through the written description; Step 6: Develop a Job Specification: Transcript the information obtained after step 4 highlight what personal qualities, trait, skills, background is necessary for optimal job performance. perfor mance.
Data Collection methods
Job Performance Observation Interview Critical incident technique Questionnaires Diary method Training Training material Dictionary of occupation
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Degree of interaction with personal
Step 7: Review and update of information : If no major changes have occurred in the organization, then a complete review of all jobs should be performed every three years.
Contents of Job Analysis
A job Analysis Analysis provides the following information: 1. 2. 3. 4. 5. 6. 7.
Job Job Ident Identifi ifica cati tion on;; Significan Significantt charact characterist eristics ics of of a job; What What the typi typical cal work worker er does; does; Which Which materials materials and and equipme equipment nt of a worker worker uses; How How a job job is per perfo forme rmed; d; Requir Required ed person personnel nel attri attribut butes; es; Job Job rela relati tion onsh ship ip..
It is obvi obviou ouss from from the the fore forego goin ing g that that a job job anal analys ysis is is usua usuall lly y a clea clear r indication of a job description and job specification. Recruitment
Successful human resource planning should identify our human resource needs. Once we know these needs, we still want to do something about meet meetin ing g them them.. The The next next step step in the the acqu acquis isit itio ion n func functi tion on,, ther theref efor ore, e, is recruitment. This activity makes it possible for us to acquire the number and type typess of peop people le nece necess ssar ary y to ensu ensure re the the cont contin inue ued d oper operat atio ion n of the the Organisation.
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the disc discov over erin ing g of pote potent ntia iall cand candid idat ates es for for actu actual al or Recruiting is the anticipated organizational vacancies or from other perspective, it is a linking activity- bringing together those with jobs to fill and those seeking jobs. “ Recruitment a process to discover the sources of manpower to meet the requirement requirementss of the staffing schedule schedule and to employ employ effective effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force” Yoder & others “It is a process of searching for prospective employees and stimulating and encouraging them to apply for jobs in an Organisation. It is often termed positive in that it stimulates people to apply for jobs to increase the “hiring” ratio i.e. the no. Of applicants for a job.” Flippo Technically speaking, the function of recruitment precedes the selection function and it includes only finding, developing the sources of prospective employees and attracting them to apply for jobs in an organization, organization, whereas the selection is the process of finding out the most suitable candidate to the job out of the candidates attracted (recruited). Objectives of recruitment:
♦
♦ ♦ ♦
♦
♦ ♦ ♦ ♦ ♦
To attract people with multi dimensional skills and experience that suit the present and future organizational strategies; To induct outsiders with a new perspective to lead the company; To infuse fresh blood at all levels of the Organisation; To develop an organizational organizational culture that attracts competent people to the company; To search or head hunt/ head pouch people whose skills fit the company’s values; To devise methodologies for assessing psychological psychological traits; To seek out non-conventional development grounds of talent; To search for talent globally and not just with in the company; To design entry pay that competes on quality but not on quantum; To anticipate and find people for positions that does not exist yet.
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Fig. 1:Recruiting and other Human Resource Management activities
Human Resource Planning
Recruiting
Job Applications
Selection
Which provides new employees for
Orientation; ♦ Training/ Development; ♦ Etc.
♦
Factors affecting Recruitment
There are a number of factors that affect recruitment. These are broadly classified in to two categories: 1. Inte Intern rnal al Fact Factors ors;; 2. Exte Extern rnal al Fact Factor ors. s.
external factors factors include include supply supply of and demand for External Factors: The external human resources, resources, employment employment opportuni opportunities ties and /or unemployme unemployment nt rate, labour market conditions, political and legal requirement and govt. Policies, social factors, information systems etc. External factors: Socio economic factors; Supply and demand factors; Employment rate; Labour market conditions; Political, legal and governmental factors; 34
Information systems.
Internal Factors: The internal factors include the company’s pay package incl includ udin ing g sala salary ry,, frin fringe ge bene benefi fits ts and and ince incent ntiv ives es,, qual qualit ity y of work work life life,, organiza organizationa tionall culture, culture, career career planning planning,, growth growth opportuni opportunities, ties, size of the company, company’s product and services, company’s growth rate, role of trade unions and cost of recruitment. r ecruitment. Internal factors: Company’s pay package; Company’s Quality of worklife; Organizational culture; Organizational Career planning and growth; Company’s size; Company’s Company’s products and services; Company’s company’s operations; Geographical spread of the company’s Company’s growth rate; Company’s Role of trade unions; Cost of recruitment; Company’s name and fame. Company’s
External Environmental Influences: ♦ The union; Requirements, ♦ Govt. regulations and laws; ♦ Economic conditions;
HRM activities: employment ♦ Equal opportunities; ♦ Job analysis; ♦ Recruitment; ♦ Planning; ♦ Selection; Training and development; ♦ Training ♦ Career planning and development; ♦ Benefits and services;
Internal Environmental Influences : ♦ Strategy; ♦ Goals; Organizational Culture; ♦ Organizational ♦ Nature of the task;
People Abilities; Attitudes Preference s Organi nisa sati tion on End End Orga Results; Competitive 35 products; Competitive services.
Effectiveness Criteria: Performance; Satisfaction; Absenteeism; Turnover; Scrap rates; Grievance rates; Accident rates.
Sources of Recruitment
Recruitment is more likely to achieve its objectives if recruiting sources reflect the type of position to be filled. Sources are those where prospective prospective employees are available like employment exchanges while techniques are those, which stimulate the prospective employees to apply for jobs like nomination by employees, advertising, promotion etc. Certain recruiting sources are more effective than others for filling certain types of jobs are. The The sour source cess of recr recrui uitme tment nt are are broa broadl dly y clas classi sifi fied ed in to internal sources and external sources. Internal Sources: are the sources within organizational pursuits. It includes (a) Present permanent employees; (b) present temporary/ casual employees; (c) retrenched or retired employees; (d) dependents or deceased, disabled, retired and present employees; (e) Promotions; Pr omotions; (f) Transfers. Present Permanent Employees : Organizations consider the candidates from this source for higher-level jobs due to: (1) availability of most suitable candidates for jobs relatively or equally to the external source, (2) (2) to meet meet the the trad tradee unio unions ns dema demand nds; s; (3) (3) to the the poli policy cy of the the Organisation to motivate the present employees. Present Present temporar temporary y or Casual Casual employe employees: es: Organizations find this source to fill the vacancies relatively at lower levels owing to the availability of suitable candidates or trade and pressures or in order to motivate them on the present job. nerallly a part partic icu ular lar Ret Retrenc nche hed d or Reti Retirred emp employe loyees es:: Genera Organisation retrenches the employees due to lay-off. The Organisation takes of the candidates for employment from the retrenched employees due to obligation, trade union pressure and the like. Sometimes the organizations prefer to re employ their retired employees as a token of their loyalty to the Organisation or to postpone some inter personal conflicts for promotion etc.
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Dep Depen end den entts of Dece Decea ased ed,, Dis Disable abled d, Reti Retirred and Presen esentt Emplo Employee yees: s: Some ome orga organi niza zati tion onss with with a view view to deve develo lopi ping ng the the commitment and loyalty of build up image provide employment to the depe depend nden ent( t(s) s) of dece deceas ased ed,, disa disabl bled ed and and pres presen entt empl employ oyee ees. s. Such Such organizations find this source as an effective source of recruitment. Promotions: Most of the internal candidates would be stimulated to take take up higher higher respons responsibi ibilit lities ies and express express their their willin willingne gness ss to be enga engage ged d in the the high higher er leve levell jobs jobs if mana manage geme ment nt give givess them them the the assurance that they will be promoted to the next higher level. Transfers: Employees will be stimulated to work in the new sections or places if management wishes to transfer them to the places of their choice.
Why do organizations prefer Internal Source? Internal recruitment can be used as a technique of motivation; Morale of the employees can be improved; Suitab abil ilit ity y of the the inte intern rnal al cand candid idat ates es can can be judg judged ed bett better er than than the the Suit external candidates as “known devils are better than unknown angles”; Loyalty, commitment, a sense of belongings and security of the present employees can be enhanced; Employee’s psychological needs can be met by providing an opportunity for advancement; Employe yees es econ econom omic ic need needss for for prom promot otio ion, n, high higher er inco income me can can be Emplo satisfied; Cost of selection can be minimized; Cost of traini training, ng, induct induction ion,, orient orientati ation, on, period period of adapta adaptabil bility ity to the Cost Organisation can be reduced; Social responsibility towards employees may be discharged; Stability of employment can be ensured. Why organizations don’t prefer internal sources? It often leads to inbreeding and discouraging new blood from entering in an Organisation; There are possibilities that internal source may “dry up”, and it may be difficult to find the requisite r equisite personnel from within an Organisation; Sinc Sincee the the lear learne nerr does does not not know know more more than than the the lect lectur urer er does does,, no innovations worth the name can be made. Therefore, on jobs which require original thinking (such as advertising, style designing and basic research), this practice is not followed;
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As promotion is based on seniority, the danger is that really capable hands may not be chosen. The likes and dislikes of the management may also play an important role in the selection of personnel. External External Sources: Sources: Exte Extern rnal al Sour Sources ces are are thos thosee sour source ces, s, whic which h are are outside outside the organiza organization tional al pursuits. pursuits. These sources sources include: include: (1) Campus Recruitment; (2) Private Employment Agencies/ Consultants; (3) Public Employment Exchanges; (4) Professional Associations; (5) Data Banks; (6) Casual Applications; (5) Similar Organizations; (6) Trade Unions; (7) Advertisements; (8) Employee Referrals. differ eren entt type typess of orga organi niza zati tion onss like like Campus Campus Recruitme Recruitment: nt: diff industries, business firms, service organizations, social or religious organiza organization tionss can get inexperie inexperienced nced candidate candidatess of different different types types from various educational institutions like colleges and universities impart imparting ing educat education ion in scienc science, e, commer commerce, ce, arts, arts, engine engineeri ering ng and technology, agriculture. Medicines from the training institutes. Most of the univer universit sities ies and instit institute utess impart imparting ing techni technical cal educat education ion in variou variouss discip disciplin lines es provi provide de facili facilitie tiess for campus campus recrui recruitmen tmentt and selection.
Fig.3 process of Campus Recruitment: Form manpower
Identify campuses to recruit on
Conduct pre-placement Tasks
Secure place in the queue on each campus
Check application form of
Conduct written test for knowledge
Interview intensively for competence Identify suitable candidates
Cross check for 38
Stay in touch with those who accept Advice through final year’ year ’s specialization
Make job offers
Provide support to ease stress
Continue informal interaction
Thesee agen agenci cies es or cons consul ulta tant ntss perf perform orm the the Employme Employment nt Agencies Agencies: Thes recruitment function on the behalf of a client company by charging fee. Line Line mang manger erss are are reli reliev eved ed from from recr recrui uitme tment nt func functi tion onss so they they can can concentrate on their operational activities and recruitment functions are entrusted to a private agency or consultants. These agencies are also called Executive Search Companies . Public Public Employm Employment ent Agencies Agencies: The govt. set up Public Employment exchanges in the country to provide information about vacancies to the cand candid idat ates es and and to help help the the orga organi niza zati tion onss in find findin ing g out out suit suitab able le candidates. Public sector and private sector industries have to depend on public employment exchanges for the specified vacancies. Profess Professiona ionall Organiza Organization tions: s: Profess Profession ional al organ organiza izatio tions ns mainta maintain in comp comple lete te data data of thei theirr memb member erss and and prov provid idee the the same same to vari variou ouss organizations on requisition. They also act as an exchange between their members members and recrui recruitin ting g firms firms in exchan exchangin ging g informa informatio tion, n, clarif clarifyin ying g doubts etc. Data Banks: The management can collect the bio data of the candidate from different sources like employment exchanges, educational Training Institutes, candidates etc. and feed them in the computer. It will become another source and the company can get the particulars as and when they need. Casual Applicant: Depending upon the image of the Organisation, its prompt response, participation of the Organisation in the local activities, level of unemployment, candidates apply casually for the jobs through mail or hand over the applications in Personnel Department. This would be a suitable source for temporary and lower level jobs. Generally,, unemploye unemployed d or underemplo underemployed yed persons persons or Trade Unions: Generally employees seeking change in employment put a word to the trade union leader with a view to getting suitable employment due to latter’ latter ’s intimacy with management. 39
Similar Organizations: Organizations: Generally, experienced candidates are available in organizations producing similar products or are engaged in similar business. The management can get most suitable candidates from this source. This would be the most effective source for executive positions and and for for newl newly y esta establ blis ishe hed d orga organi niza zati tion onss or dive divers rsifi ifies es or expa expand nded ed organizations. Advertising: Advertising is widely accepted technique of recruitment, though though it mostly mostly provid provides es one-wa one-way y commun communica icatio tion. n. It provid provides es the cand candid idat ates es in dif differen ferentt sour source ces, s, the the info informa rmati tion on abou aboutt the the job job and and company and stimulates them to apply for jobs. It includes advertising through different media like newspapers, magazines of all kinds, radios, television etc. Employee referrals: Friends and relatives of present employees are also a good source from which employees may be drawn. When the labour market is very tight, large employers frequently offer their employee’s bon bonus uses es or priz prizes es for any any refe referra rrals ls that that are are hire hired d and and stay stay with with the the company for a specific length of time.
Modern sources or techniques of Recruitment:
WALK IN: The busy organizations and the rapid changing companies do not find time to perform various functions of recruitment. Therefore, they advise the potential candidates to attend for an interview directly and without a prior application on a specified place. The suitable candidates among the interviewees will be selected for appointment after screening the candidates through tests and interviews. Consult In: The busy organizations encourage the potential job seekers to approach them personally and consult them regarding the jobs. The companies select the suitable candidates from among such candidates through the selection process. Head Hunting: The companies request the professional organizations to sear search ch for for the the best best cand candid idat ates es part partic icul ularl arly y for for the the seni senior or exec execut utiv ivee positions. The professional organizations search for the most suitable cand candid idat ates es and and advi advise se the the comp compan any y rega regard rdin ing g the the fill fillin ing g up of the the positions. headhunters are also called search consultants. Body shopping shopping:: Professi Professiona onall organ organiza izatio tions ns and the hi tech tech traini training ng inst instit itut utes es deve develo lop p the the pool pool of huma human n reso resour urce cess for for the the poss possib ible le employment. The prospective employers contact these organizations to recruit the candidates. Otherwise, the organizations themselves approach the the pros prospe pect ctiv ivee empl employ oyee eess to plac placee thei theirr huma human n reso resour urce ces. s. Thes Thesee 40
institutions are called body shoppers and these activities are known as body shopping. Business Alliances: Business alliances like acquisitions, mergers, and takeovers help in getting human resources. In addition, the companies do also have alliances in sharing their human resources on ad-hoc basis. Tele Recrui Recruitm tment ent:: The technological revolution in the Tele communication helped the organizations to use Internet as a source of recruitment. recruitment. Organiza Organization tionss advertise advertise the vacancies vacancies through through the World Wide Web (www) (www) Intern Internet. et. The job seeker seekerss send send their their applic applicati ations ons through e-mail or Internet.
In short: successful and effective recruitment programme necesseciates to have certain attributes such as: A well defined recruitment policy; A proper organizational structure; A well laid down procedure for locating potential job seekers; suitable le method method and techni technique que for tappin tapping g and utiliz utilizing ing these these A suitab candidates; A continuous assessment of effectiveness of recruitment programme and incorp incorpora oratio tion n of suitab suitable le modifi modificat cation ionss from time to time to improve the effectiveness of the programme; An ethically sound and fool proof practice telling an applicant all abou aboutt the the job job and and its its posi positi tion on,, the the firm firm to enab enable le the the cand candid idat atee jud judic icio ious usly ly deci decide de whet whethe herr or no to appl apply y and and join join the the firm, firm, if selected.
SELECTION
Selection procedure is concerned with securing relevant information about an applicant. The objective of the selection decision is to choose the individual who can most successfully perform the job from the pool of qualified candidates.
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The selection procedure is the system of functions and devices adopted in a given company to ascertain whether the candidate’s specifications are matched with the job specifications and requirements or not. The selection procedure cannot be effective until and unless: 1. Recruitme Recruitment’ nt’ss of the job to be filled, filled, have been clearly clearly specifie specified d (Job analysis, etc. 2. Employee specifications specifications (physical, (physical, mental, social, behavioral, etc.) have been clearly specified; 3. Candidat Candidates es for screenin screening g have been been attract attracted. ed.
SELECTION PROCEDURE There is no standard selection process that can be followed by all companies in all the areas. Companies may follow different selection techniques or methods depending upon the size of the company, nature of the business, kind and no. Of persons to be employed, govt. regulations to be followed etc.
Application Form
Written Examination
Preliminary Interview
Group Discussion
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Tests
Final Interview
Medical Examination Reference Checks
Line Manager’s Decisions
Application Form: Also known as application blank. This technique is wide widely ly acce accept pted ed for for secu securi ring ng info inform rmat atio ion n from from the the pros prospe pect ctiv ivee candidates. It can also be used as a device to screen the candidates at the preliminary stage. Information is generally required on the following items in the application forms: a) Personal Personal background background informatio information; n; b) Educat Education ional al attainmen attainments; ts; c) Work experi experienc ences; es; d) Sal Salary; e) Perso Persona nall det detai ails; ls; f) Refe Refere renc nces es.. Written Examination: The organizations have to conduct examination for the qualified candidates after they are screened on the basis of the appl applic icat atio ion n blan blanks ks so as to meas measur ures es the the cand candid idat ate’ e’ss abil abilit ity y in arithmetical calculations, to know the candidates attitude towards the job, to measure measure the candidate candidate’’s aptitude, aptitude, reasoning, reasoning, knowledge knowledge in various various disciplines, general knowledge and English language. Preliminary Interview: The Preliminary interview is to solicit necessary in formation from the prospective applicants and to assess the applicant’s suitability to the job. This step is useful as a process of eliminating the undesirable and unsuitable candidates. Group Discussions: Discussions: The technique of group discussion is used in order to secure further information regarding the suitability of the candidates for the job. Group discussion is a method where groups of the successful
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applicants are brought around a conference table and are asked to discuss either a case study or a subject matter. Tests: The next stage in the selection process is conducting different tests. The objective of tests is to solicit further information to assess the employee suitability to the job. The important tests are:
Aptitude Test: a) Intel Intellig ligenc encee test test b) Mechan Mechanica icall Test Test c) Psych Psychom omoto otorr Test Test d) Cleric Clerical al Test Test Achieve ment Test: Test: • Achievement a) Job Know Knowled ledge ge Tes Test; t; b) Work Sample Sample Test. • Situational Test: a) Gr Group oup Discus Discussio sion; n; b) In Bas Baske ket. t. • Interest Test: • Personality Test: a) Ob Objec jectiv tivee Test Test;; b) Project Projective ive Test. • Aptitude Tests: Thes Thesee test testss meas measur uree whet whethe herr an indi indivi vidu dual al has has the the capacity or latent ability to learn a given job if given adequate training. Aptitudes can be divided in to general and mental ability or intelligence or specific aptitudes such as mechanical, clerical, manipulative capacity etc. These are: 1. Intelligence Tests: These tests in general measure intelligence quotient of a candidate. In detail these tests measures capacity for for comp compre rehe hens nsio ion, n, reaso reasoni ning ng,, word word flue fluenc ncy y, verb verbal al comp compre rehe hens nsio ion, n, numbers, memory and space. Thesee tests tests measu measure re the the capa capaci citi ties es of spat spatia iall 2. Mechanical Tests: Thes visualization, perceptual speed and knowledge of mechanical matter. matter. Tests: These tests measure abilities like manual dexterity, 3. Psycho meter Tests: motor ability and eye hand coordination of candidates. 4. Clerical Aptitude: Measure specific capacities involved in office work, item itemss of this this test test incl includ udee spel spelli ling ng,, comp comput utat atio ion, n, comp compre rehe hens nsio ion, n, copying, word measuring etc. • Achievement Tests: These tests are conducted when applicants claim to know know some someth thin ing g as thes thesee test testss are are conc concer erne ned d with with what what one one has has •
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acco accomp mpli lish shed ed.. Thes Thesee test testss are are more more usefu usefull to meas measur uree the the valu valuee of spec speciific fic ach achiev ieveme ement whe when an Organi anisat sation ion wish wishes es to emp employ loy experienced candidates. These are: Underr this this test test a cand candid idat atee is test tested ed in the the 1. Job Knowled Knowledge ge Test: Unde knowledge of a particular job. 2. Work Sample Test: Under this test a portion of the actual work is given to the candidate as a test and the candidate asked to do it. • Situational Test: This test evaluates a candidate in a similar real life situ situat atio ion. n. In this this test test the the cand candid idat atee is aske asked d eith either er to cope cope with with the the situation or solve critical situation of the job. 1. Group Discussion: This test is administered through group discussion approach to solve a problem under which candidates are observed in the areas initiating, leading, proposing valuable ideas, conciliating skills, oral communicating skills, co-ordination and concluding skills. 2. In Basket Test: The candidate in this test is supplied with actual letters, telephone and telegraphic message, reports and requirements by various offic officers ers of the Organ Organisa isatio tion, n, adequa adequate te inform informati ation on about about the job and Organisation. The candidate is asked to take decisions on various items bas based ed on the the in bask basket et info informa rmati tion on rega regard rdin ing g requ requir irem emen ents ts in the the memoranda. • Interest Tests: These tests are inventories of the likes and dislikes of candidates in relation to work, job, occupations, hobbies and recreational activities. Thesee test testss prov provee deep deeply ly to disc discov over er clue cluess to an • Personality Tests: Thes indivi individua dual’ l’ss value value system system,, his emotio emotional nal reacti reactions ons,, and maturi maturity ty and characteristic mood. 1. Objective Test: most personality tests are objective tests as they are suitable for group testing and can be scored objectively. objectively. 2. Projective Projective tests: Candidates are asked to project their own interpretation of certain standard situations basing on ambiguous pictures, figures etc., under these tests Final Interview: Final Interview is usually followed by testing. This is the the most most esse essent ntia iall step step in the the proc process ess of sele select ctio ion. n. In this this step step the the interv interview iewer er matche matchess the inform informati ation on abstai abstained ned about about the candid candidate ate through various means to the job requirements and to the information obtained through his own observation during interview. interview. Types Of Interview: Type
Type of questions
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Usual applications
Structured
Unstructured
Mixed
Behavioral
Stress
A predetermined checklist if questions, usually asked of all applicants. Few Few, if any any, plan lanned ned questions. Questions are made up during the interview.
Useful for valid results, especially when dealing wit with lar large numb umber of applicants. Useful when the interviewer tries to probe personal details of the candidate to analyze why why they they are are not not righ rightt for the job. A combination of A realistic approach that structured and yields comparable unstru unstructu ctured red questi questions ons,, answ answer erss plus plus in dept depth h which which resemb resembles les what, what, insights. is usually done in practice. Questions limi imited to hypothet hypothetical ical situation situations. s. Eval Evalua uati tion on is base based d on the solution and approach of the applicant. A series of harsh, rapidfire questi questions ons intend intended ed to upset the applicant.
Usef Useful ul to unde unders rsta tan nd appl applic ican ant’ t’ss reas reason onin ing g and analyt analytica icall abilit abilities ies under modest stress.
Useful for stressful jobs, such as handling complaints.
ertain jobs require certain certain physical physical qualities qualities Medical Examination: Certain like like clear clear vision vision,, perfec perfectt hearin hearing, g, unusua unusuall stamin stamina, a, tolera tolerance nce of hard hard working conditions, clear tone etc. Medical examination reveals whether or not a candidate possesses these qualities. Reference Checks: After completion of the final interview and medical exam examin inat atio ion, n, the the pers person onne nell depa depart rtme ment nt will will enga engage ge in chec checki king ng references. Candidates are required to give the names na mes of reference in their appl applic icat atio ion n forms forms.. In case case the the refe refere renc ncee chec check k is from from the the prev previo ious us employer, information for the following areas may be obtained. They are: job title, job description, period of employment, pay and allowances,
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gross emoluments, benefits provided, rate of absence, willingness of the previous employer to employ the candidate again etc. line manage manager r Final Final dec decis ision ion by the line line manag manager er concer concerned ned:: The line concerned has to make the final decision whether to select or reject the candid candidate ate after after solici solicitin ting g the requir required ed informa informatio tion n throug through h differ different ent tech techni niqu ques. es. A true true unde unders rsta tand ndin ing g betw betwee een n the the line line mana manage gers rs and and personnel mangers should be established to take proper decisions. Employment: Thus, after taking the final decision the Organisation has to inti intima mate te the the deci decisi sion on to the the succ succes essf sful ul as well well as unsu unsucc ccess essfu full cand candid idat ates. es. The The Orga Organi nisa sati tion on send sendss the the appo appoin intme tment nt orde orders rs to the the successful candidates either immediately or after sometime depending upon the time schedule.
Placement When once the candidate reports for duty, the Organisation has to place him initially in that job for which he is selected. Immediately the candidate will be trained in various related jobs during the period of probation of training or trial. The Organisation, generally, decides the final placement after the initial training is over on the basis of candidate’s aptitude and performance during the training/probation period. Probation period generally ranges between six months and two years. If the performance is not satisfactory, the Organisation may extend the probation or ask the candidate to quit the job .If the employee performance during the probation period is satisfactory, his services will be regularized and he will be placed permanently on a job. Fig. 6: Employee Placement Process Collect data about the employee Construct the employee’s profile Match between sub group profile and individual’s profile Compare sub-group profile to job family profile Match between job family profiles and sub-group profiles Assign the individuals to job family
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Assign the individual to specific job after further counseling and assessment Placement is “the determination of the job to which an accepted candidate is to be assigned and his assignment to that job. It is a matching of what the supervisor has reason to think he can do with the job demands (job requirements), it is a matching of what he imposes (in strain, working conditions) conditions) and what he offers in the form of pay roll, companionship with others, promotional possibilities etc. It is not easy to match all factors to the new employee who is still unknown to many. So the new employee e mployee is placed as a probationer until the trial period is over.
INDUCTION Introducing the new employee who is designated as a probationer to the job, job location, surroundings, surroundings, Organisation, organizational surroundings, various employees is the final step of employment process. This process is important because of the high turnover rate among the new employees compared to that among senior employees. This is mainly because of the problem of adjustment and adaptability to the new surroundings and environment. further absence of information, lack of knowledge about new Organisation, cultural gap, and behavioral variations, different levels of technology, variations in the requirements of the job and the Organisation also disturb the new employee. Induction is necessary as the newcomer feel insecure, shy, nervousness and disturbing. This situation leads to instability and turnover. “Induction is the process of receiving and welcoming an employee when he first joins a company and giving him the basic information he needs to settle down quickly and happily and start work”. Lecture, handbook, film, group seminar are used to impart the information to new employees about the environment environment of the job and the Organisation in order make new employee acquaint himself with the following heads: 1. Abou Aboutt the the comp compan any; y; 2. About About the dep depart artme ment; nt; 3. About About the the superi superiors, ors, subordin subordinates ates;;
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Objectives of Induction: I. Putting th the ne new em employee at at hi his ea ease; II. II. Crea Creati ting ng inte intere rest st in his his job job and and the the com compa pany ny;; III. III. Provi Providin ding g basic basic inform informati ation on about about work working ing arra arrange ngeme ments nts;; IV. IV. Indic Indicati ating ng the the standa standards rds of of perform performan ance ce and and behavi behavior or expec expected ted of of him. Making the employee feel that his job, however small, is, meaningful, meaningful, that he is not a cog in the vast wheel; V. Info Inform rmin ing g him him abou aboutt tra train inin ing g fac facil ilit itie ies; s; VI. VI. Crea Creati ting ng the the fee feeli ling ng of soci social al secu securi rity ty;; VII. VII. Mini Minim mizin izing g the the reali eality ty shoc shock k whic which h woul would d be caus caused ed du duee to incompati incompatibili bility ty caused caused between between the employee employee expectati expectations ons and actu actual ally ly what what the the com company pany pr prov ovid ides es/o /off ffer erss rega regard rdin ing g pay pay, benefits bene fits,, status, status, working working conditio conditions, ns, respons responsibil ibility ity,, opportun opportunity ity for growth, innovations, creative ideas etc. Advantages of Induction I. Firs Firstt impr impres essi sion on matt matter erss a goo good d dea deall and and resu result ltss in in les lesss tur turno nove ver; r; II. II. Newc Newcom omer er adju adjust stss himse himself lf to the the work work quic quickl kly y, and it save savess the time of the supervisor; III. III. Reduce Reducess emplo employee yee dissat dissatisf isfact action ion and grieva grievance nces; s; IV. IV. Deve Develo lop p a sens sensee of bel belon ongi ging ngss and and commi commitm tmen ent. t.
In general, productivity forms a measure of the output of goods and services to the input of labour, material and mach machine inery ry.. The The more more produc producti tive ve a sect sector or,, the bett better er its its competitive position will be, as its unit cost will be lower. With the increase in productivity, earnings will improve, raising the standard of living. Improving productivity does not not mean working harder. Rather it means working effectively. It means getting more out of what is put in. It is doing better with what one has. Dismissal
Dismissal is a termination of service of an employee as a punitive measure. This This may may occu occurr eith either er on acco accoun untt of unsa unsati tisf sfac acto tory ry perf perfor orma manc ncee of misconduct. Persistent failure on the part of employee to perform up to the expe expect ctat atio ions ns or spec specif ifie ied d stan standa dard rd is cons consid ider ered ed as unsa unsati tisf sfac acto tory ry
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performance. Willful violation of rules & regulation by the employee is treated as misconduct. Dismissal is a drastic step seriously impairing the earnings and image of an employee. Therefore, dismissal as a measure should be resorted to with great care and caution. It must be justifies and duly supported by the just and suffi suffici cien entt cause cause.. Befo Before re an emplo employe yeee is dismi dismiss ssed ed,, he must must be serv served ed advance notice to explain his position. the reasons for dismissal must be clearly made known to the employee. TRAINING
Training is the act of increasing the knowledge and skill of an individual for doing a particular job. In the present scenario training is increasingly viewed as a means of fostering the growth of the individual employee but as an integrated part of organizational growth. Training is a process of learning a sequence of programmed behaviour. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It attempts to improve their performance on the current job or prepare them for an intended job. Development is a relate related d proces process. s. It covers covers not only only those those activi activitie ties, s, which which improv improvee job performance, but also those, which bring about growth of the personality; help individual in the progress towards maturity and actualization of their potential capacities so that they become not only good employees but better man and women.
Definition Of Training:
“Training is the act of increasing the knowledge and skills of an employee for doing a particular job.” Edwin. B.Flippo
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“Training is the organized procedure by which people learn knowledge and \or skill for definite purpose”. Dale S.Beach
It is the the trai traini ning ng that that brid bridge gess the the gap gap betw betwee een n Job Job requ requir irem emen ents ts and and employees present specifications. Training is a process by which attitudes, skills and abilities of employees to perform specific jobs are increased. Thus, it can be concluded that training is a process that tries to improve skills or add to the existing level of knowledge so that the employee is better equipped to do his present job, or to mould him to be fit for a higher job involv involving ing higher higher respon responsib sibili ilitie ties. s. In other other words, words, traini training ng is a learni learning ng experience that seeks a relatively permanent change in an individual that will improve his/her ability to perform his job.
Distinction between training and development
Train rainin ing g is a shor shortt-te term rm proc process ess util utiliz izin ing g a syst system emat atic ic and and orga organi nize zed d procedure by which non-managerial personnel learn technical knowledge and skills for a definite purpose. Development is a long-term educational process utilizing a systematic and organised procedure by which managerial personnel learn conceptual and theoritical knowledge for general purpose. Train rainin ing g refe refers rs only only to inst instru ruct ctio ion n in tech techni nica call and and mech mechan anic ical al operat operation ions, s, while while develo developme pment nt refers refers to philos philosoph ophica icall and theore theoretic tical al educ educat atio iona nall conc concep epts ts.. Train rainin ing g is desi design gned ed for for nonnon-ma mang nger erss whil whilee development is designed for managerial personnel. Training and development differs in four ways:
“What” is learned;
“Who” is learning; 51
“Why” such learning takes place;
“When” learning occurs.
Learning Dimensions Who? What?
Training Development Non Managerial Personnel Managerial Personnel Technical and Managerial Theoretical and
Why? When?
operations Specific job related Short Term
Conceptual ideas General knowledge Long Term
Objectives Of Training
The primary purpose of training is to establish a sound relationship between the worker and his job –the optimum man task relationship.
To upgrade skills and prevent obsolescence.
To develop healthy and constructive attitude
To prepare employees for future assignments
The Focus Of Training Is On Three Broad Objectives:
To bring about attitudinal change.
To bring about quality to be the very top of agenda.
To savagely cut waste.
Importance And Benefits Of Training
Training is important to develop the employees and make them suitable for the job. Training constitutes signif significa icant nt part part of manage managemen mentt contro control. l. Benefi Benefits ts of training to following are:
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Organization Level:
It leads to improve profitability It improves the job knowledge, skills and morale of the work force It helps in organizational organizational development and preparation of guidelines for work It enhances quality of work and appropriate climate for growth It supports in improving organizational communication
Individual Level: -
It help in encouraging and achieving self development
It provides a sense of growth in learning It increases job satisfaction and recognition It helps the individual in effective problem solving
A Model Training Program Should Encompass The Following Points:
Mana Manage geme ment nt over overal alll resp respon onsi sibi bili lity ty righ rightt from from plan planni ning ng stag stagee to successful implementation.
The The comp compan anie iess appr approa oach ch to the the trai traini ning ng func functi tion on,, whic which h woul would d include guidance for design and execution as well as dissemination of relevant information to all employees.
Prov Provis isio ion n for for annu annual al or peri period odic ic surv survey eyss in orde orderr to ensu ensure re that that training are need based and development oriented.
Identification of priority area since resources are always scarce and programs must be prioritized according to felt needs.
Identification Of Training Needs
53
Organizational Organizational Analysis: - It involves a study of entire organization
in
term termss
of
ana analysis ysis of obj object ectives ives,,
uti utiliza lizattion ion
of reso resour urce ce,,
environmental scanning and organizational climate analysis.
Task/Role Analysis: - It involves a careful study of jobs within in an
organization in a further effort to define specific content of training. It requires systematic collection of data about the job, role or position and what type of behavior, skill, and knowledge the jobholder must have to perform certain specified tasks.
Manpow Manpower er Analys Analysis is:
- It
is
conducted through approp ropria riate
observatio observation, n, supervisor supervisory y evaluation evaluation.. This analysis analysis is undertake undertaken n to know about the specific areas in which training is needed DESIGNING TRAINING METHODS
Training methods are means of attaining desired objectives set for a training programme. In practice, a variety of training methods are employed for achiev achieving ing these these object objective ives. s. But an organi organizat zation ion cannot cannot use all types types of training methods for the reason like cost involved and also their relevance to organiza organizationa tionall need hence, organizati organization on needs to select a method method or mix of methods to meet its training needs the choice of training method would depend on a Varity Varity of factors, such as purpose of training, nature of contents, rel relevance to the participants, level of trainees, es, comp ompetence of trainers/instructors, cost, etc. Depending on the training result and the process employed to attain these, the various training methods can broadly categorized into four groups as under: 1. On- the job orient oriented ed meth methods ods 2. Off Off the the job job train training ing method methodss On the job oriented training methods . As the name itself denotes, method methodss includ includee in this this cluste clusterr are those those whose whose main main object objective ivess are centered around the job, i.e., learning on the job itself by a variety of 54
methods. The main methods, which fall into this category, are discussed here under: On the job training (OJT). On the job training is probably the most Common approach to training, which can range from relatively unsophisticated “observe and copy” method to highly, structured courses. In this method, the new employee is placed on a job and taug taught ht the the skil skills ls nece necessa ssary ry to perfo perform rm it a trai traine nerr or supe superi rior or teac teache hess the the empl employ oyee ee.. Sinc Sincee trai traine neee lear learns ns by obse observ rvin ing g and and handling the job this is also termed as ‘observing, and copying’ or ‘learning by doing.’
Job instruction training (JIT). In this method, a trainer or supervisor gives instruction to an employee how to perform his job. This method of training is appropriate for acquisition or impr improv ovem emen entt of moto motorr skil skills ls and and rout routin inee and and repe repeti titi tive ve operations.
Coaching: this is similar to the JIT .in this method, the superior teaches or guides the new employee about the knowledge and skills of a specifically defined job. The superior points out the mistakes committed by the new employee and then also gives suggestions to improve upon.
Job rotation: in this method, a trainee moves from one job to anot anothe herr and and from from one one depa depart rtme ment nt to anot anothe herr. This This type type of training method is more appropriate for developing multiskilling, operational flexibility, flexibility, providing satisfaction from rout routin inee jobs jobs and and broa broade deni ning ng the the over overal alll pers perspe pect ctiv ivee of the the trainee.
Vestibule training: this is a system in which employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. This type of training is commonly used for training personnel of clerical and semi-skilled grades.
55
OF THE JOB TRAINING METHOD:
Role-play: this is just like acting out a given role as in stage play. play. In this method of training, training, the trainees trainees are required required to enact defined roles on the basis of oral or written description of particular situation.
Case method: the case is an actual event or situation on organizational problems, which is a written description for discussion purpose. Trainees are asked to analyses the event or circumstances with an objective to identifies problems, trace out the causes for it and find out the solution to solve the problems.
Management games: the game is devised on the model of business situation. Then, trainees are divide into groups who represent the management of competing companies. They make ake deci decisi sion onss just just like ike the these are are mad made in rea real life ife situations. Decisions made by the groups groups are evaluated evaluated and the likely implications of the decisions are fed back to the groups.
In basket exercise: this is also called ‘in tray’ method of trai traini ning ng.. This This is buil builtt arou around nd the the ‘inc ‘incom omin ing g mail mail’’ of manager. manager. The trainees is presented with a pack of papers and files files in tray tray contai containin ning g admini administra strativ tivee proble problems ms and are asked to take decision on these within a specified time limit. The The deci decisi sion on take taken n by the the trai traine nees es are are comp compar ared ed with with anot anothe herr. The The trai traine nees es are are prov provid ided ed feed feedba back ck on thei their r decisions.
Lectures: lecture is by far the most commonly used direct meth method od of trai traini ning ng.. In this this meth method od the the trai traine nerr prov provid ides es know knowle ledg dgee to the the trai traine nees es usua usuall lly y from from prep prepar ared ed note notes. s. Notes are also given to the trainees. This method is found more appropriate in simulations where some information is required to be shared to a large number of audience and which does not require more participation from audience. It is a low cost method. The major limitation of this method is
56
that that it dose dose not not prov provid idee for for acti active ve invo involv lvem emen entt of the the trainees. Conferences/seminars : in this method, the trainer delivers a lect lectur uree on the the part partic icul ular ar subj subjec ect, t, whic which h is foll follow owed ed by queries and discussions. The conference leader must have the necessary skills to lead the discussion in a meaningful way without losing sight of the topic or theme. This method is used to help employees develop problem-solving skills. Programmed Programmed instructions instructions: this is the recently developed technique based on the principle of positive reinforcement developed by B.F.Skinner. This technique is used to teach nonmotor and behavioral skills. The subject matter to be learne learned d is prepar prepared ed and conden condensed sed into into logica logicall sequen sequence ce from from more more comp comple lex x. The The train rainer er monit onitor orss train rainee ee’’s independent progress through the programme. The trainee gets instant feedback on his learning however; this method is expensive and time consuming also. Sensitive training: sensitive training is also known by a Varity of names such as t-groups, laboratory training and encounter groups. (The “T” is for training.)The objective of sensitive sensitive training is to increase increase participa participants’ nts’ insights insights into their behavior and the behavior of others by encouraging an open expression of feelings f eelings in the trainer guide T-group. T-group. This approach approach is useful for understan understanding ding people’ people’ss behavior behavior particular particularly ly when when they they are involv involved ed in inter inter person personal al relati relations onship hips. s. Develo Developme pment nt of posit positive ive thinki thinking, ng, improv improveme ement nt in inter inter-pe -perso rsonal nal relati relations onship hips, s, proper proper motiva motivatio tion n of people people and organ organiza izatio tional nal develo developme pment nt are some some of the important benefits of transactional analysis as a technique of training.
Conclusion:
To conclude, each method of training has some strengths and weaknesses. Given the purpose of a training programme, the level of participants the competence of trainers, etc., the appropriate method has to be chosen to impart training. MANAGEMENT DEVELOPMENT While drawing a distinction between training and development in previous chapter, we introduced in brief, the concept of development/ based on that concept, we elaborate it in more detail.
57
The The term term “dev “devel elop opme ment nt”” impl implie iess over overal alll deve develo lopm pmen entt in a perso person. n. Accordingly, Management development means not only improvement in job job perform performanc ance, e, but also also improv improveme ement nt in knowle knowledge dge,, person personali ality ty,, attitude,
behaviorism
of
an
executive,
etc.
It
means
that
executive/m executive/managem anagement ent developmen developmentt focuses focuses more on the executive executive’’s personal growth. Mana Manage geme ment nt Deve Develo lopm pmen entt is a syst systema emati ticc proc proces esss of grow growth th and and develo developme pment nt by which which manage managers rs develo develop p their their abilit abilities ies to manage manage.. Management Development is concerned with improving the performance of the the manag anageers by giv giving ing them them oppo opport rtun uniities ties for for grow rowth and development. Definition: “Executive /Management Development includes the process by which
managers and executives acquire not only skills and competency in their present job but also capabilities for future managerial tasks on increasing difficulty and scope. ”
Flippo.
“Any activity designed to improve the performance of existing managers and and to prov provid idee for for a plan planne ned d grow growth th of mana manage gers rs to meet meet futu future re organizational organizational requirements is called management development.” S.B.Bhudiraja
Techniques Of Management Development There are mainly two techniques of management development, one is the formal training and the other is through the on the job experience.
58
On-The On-The-Jo -Job b Techn Technii ue
Coaching
Job
Case method
-
Under
Incident
Role-playing
Simulation
Grid training
On The Job Techniques
-
Multiple
In basket
Conference
Business
Sensitivity
Lectures
1 Coaching : In coaching the trainee is place under a particular supervisor who acts as an instructor and teaches job knowledge and skills to the trainee. 2. Job Rotation: The transferring of executive s from job to job and from department to department in a systematic manner is called job rotation. 3. Under Study : An under study is as person who is in training to assure at a future future time, time, the full full respon responsib sibili ility ty of the positi position on curren currently tly held held by his superior. 4 Multiple Multip iple le mana manage geme ment nt is a syst system em in whic which h Multiple Managemen Management t : Mult permanent advisory committees of managers study problems of the company and make recommendations to higher management.
Off-The Job Technique 1.
The Case Study : Cases are prepare prepared d on the basis basis of actual busine business ss
situations that happened in various organizations. organizations.
2. Incident Method : This method was developed by Paul Pigors. It aims
to develo develop p the traine traineee in the area area of intell intellect ectual ual abilit ability y, practi practical cal judgment and social awareness. 59
proble lem m situ situat atio ion n is simu simula late ted d by aski asking ng the the Role Playin Playing g : A prob 3. Role participants to assume the role of particular person in the situation.
In 4. In
Bask Basket et Me Meth thod od : The The trai traine nees es are are firs firstt given iven back backg groun round d
informatio information n about a simulated simulated company company,, its products, products, key personnel, personnel, various memoranda and all data pertaining to the firm. f irm. The trainee has to understand all of this and make notes of it.
Training : The main objective objective of sensitivity sensitivity training is the 5. Sensitivity Training
“Development of awareness of and sensitivity of behavioral patterns of oneself and others”.
6. Simulation: Under this technique the situation is duplicated in such a
way that it carries a closer resemblance to the actual job situation.
7. Managerial grid : It is a six-phase programme lasting from three to
five five years. years. It stats stats with with upgrad upgrading ing manage manageria riall skills skills,, contin continues ues to grou group p impro improve veme ment nt,, impro improve vess inte interr grou group p rela relati tion ons, s, goes goes into into corporate planning, develops implementation method and ends with an evaluation phase.
Conference: A conference is a meeting of several people to discuss 8. Conference:
thee subject of common interest.
Lectures: It is the simplest technique. The lacquerer organizes the 9. Lectures
material and gives it to a group of trainees in the form of talks. 60
Objectives of Executive/Management Executive/Management Development
1. Improve Improve the performance performance of mangers mangers at all levels levels;; 2. Identify Identify the persons persons in the organi organizatio zation n with the required required potenti potential al and prepare them for higher position in future; 3. Ensu Ensure re avai availa labi bili lity ty of requ requir ired ed numb number er of exec execut utiv ives es mang manger erss succession who can take over in case of contingencies as and when these arise in future; 4. Prev Preven entt obso obsole lesc scen ence ce of exec execut utiv ives es by expo exposi sing ng them them to the the late latest st concepts and techniques in their respective areas of specialization; s pecialization; 5. Replace Replace elderly elderly executive executivess who have have risen from the the ranks by highly highly competent and academically qualified professionals; 6. Improve Improve the thought thought process process and and analytical analytical abili abilities; ties; 7. Provide Provide opportuniti opportunities es to executives executives to fulfill their their career aspiration aspirations; s; 8. Unde Underst rstan and d the the prob proble lem m of huma human n rela relati tion onss and and impro improve ve huma human n relations skills.
CONCEPTS AND AREAS OF MANAGEMENT DEVELOPMENT PROGRAMMME General administration administration
Q 1: How to decide overall company strategy? Q 2: How to evaluate capital expenditure proposals? Q 3: How How to impr improv ovee the the flow flow of info inform rmat atio ion n need needed ed to cont contro roll the the organization? Q4: How to launch a new project? 61
Marketing & Sales
Q 1: How to forecast demand? Q 2: How to generate new product ideas? Q 3: How to launch a new product? Q 4: How to determine the profitability of a product or product line? Q 5: How to improve product design? Production
Q 1: How to remove factory f actory bottleneck? Q 2: How to improve product quality and reliability? Q 3: How to cope with complex co mplex mixes? Such as several factories, delivery to many customers, or several products from many raw materials available from many many differ different ent sources sources,, or severa severall produc products ts profit profitabi abilit lity y made made by several process, etc. Q 4: How to cut labour cost? Q 5: How to improve labour relations? r elations? Human Resource
Q 1: How to improve training methods? Q 2: How to bring order and equality into wages and salary schemes? Q 3: How to recruit the right r ight number of the right type of people? Purchasing
Q 1: How to check quality and reliability of raw r aw materials? Q 2: How to cut down the cost of purchasing holding stocks? Research
Q 1: How to reduce the time taken to complete research?
CAREER MANAGEMENT Introduction 62
Career Management: A career is all the jobs that are held during ones
working life. Edwin B. Flippo defines career as a sequence of separate but related work activities that provides continuity and, order and meaning in a person’s person’s life.
Care Career er mana manage geme ment nt focu focuse sess on care career er goal goalss and and it is the the proc proces esss of desi design gnin ing g and and impl implem emen enti ting ng goal goals, s, plan planss and and stra strate tegi gies es to enab enable le the the organization to satisfy employee needs while allowing individuals to achieve their career goals.
Following are the key ingredients for career management, which focuses on the process of implementing organizational organizational career planning.
Top management support.
Coordination of other human resource activities.
Involvement of superiors.
Use of human resource managers as consultants.
Periodic skill assessment.
Realistic feedback about career progress.
Equal access and open enrollment.
Focus on psychological success rather than advancement.
Flexibility for individual needs.
Climate setting for career development.
Small Pilot Programmes.
Periodic programme assessment.
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Career management involves both organizational actions and individuals’ initiatives to ensure that when the career plans developed by the organizational organizational requirements and individuals aspirations undergo unanticipated changes, they are managed appropriately on a continuing basis. Categories for Career Management
There are three major categories to undertake career management. To select a field of employment and employer : - One cannot manage
his career unless one has a long-range objective and the first point is to think in terms of where you ultimately want to be. Other important point is to view your potential employer and position in terms of long-range career goals. To know where you are: - To be aware of the opportunities available to
you in the current position and to carefully and honestly posses current performance. Plan your exit : - To leave the current organization on good terms and not
under questionable circumstances.
Career management is complementary to management development and it is concerned with planning and shaping the path, which people take in thei theirr care career er prog progre ressi ssion on with within in the the orga organi niza zati tion on.. The The unde underl rlyi ying ng assumption assumption of career career management management is that, that, in the context context of management management succession, the organization should be alert to provide able people with traini training, ng, guidan guidance ce and encour encourage agemen mentt to enable enablerr them them to fulfil fulfilll their their potential.
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HR APPROACHES TO IMPROVING COMPETENCIES
Following are the approaches, which help in improving competencies among the employee of the organization. The term term in ince incent ntiv ives es mean meanss an indu induce ceme ment nt,, whic which h 1. Incentives. The rouses of, stimulates one to action in a desired action. An incentive has a motivational power, and may be broadly grouped into (a) Financial incentives: - Common use of money as incentive are
in form form of wage wagess and and sala salari ries es,, bonu bonus, s, reti retirem remen entt bene benefi fits ts,, medical reimbursement, etc. money plays a significant role in satisfying physiological and security/ social needs. Non-Financia nciall Incentiv Incentive: e: - the the foll follow owin ing g non non – fina financ ncia iall (b) Non-Fina
incentives could be effectively usedi.
Apprec reciation of of wo work Done
ii.
Competition
iii.
Knowledge of res result
iv. iv.
Worke orker’ r’ss part partic icip ipat atio ion n In Mana Manage geme ment nt::
v.
Opportunity fo for Gr Growth
vi. vii.
Suggestion System Job Enrichment
2. Management By Objectives (MBO): - Management by Objective
can simply be defined as a programme that encompasses specific goals, anticipatively set for an explicit time period, with feed back on goal progress.
raining ning is a proc proceess of lear learni ning ng a sequ sequen ence ce of 3. Training: raining: - Trai programmed behavior. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It is 65
used to teach the employee the most efficient and effective ways of performing their job. Also used for better quality of their working. Techniques could be very effectively 4. Off the job techniques: - Many Techniques used for the purpose and these are: a) The The Cas Casee Stu Study dy b) b) Rol Role Play Play c) In-Ba In-Bask sket et Meth Method od d) Sensit Sensitivi ivity ty Trai Trainin ning g (already explained in previous chapter on Training and Development) SUCCESSION PLANING Meaning: Orga Organi niza zati tion onss run run on eter eterna nall basi basis. s. The The surv surviv ival al and and thri thrive ve of any any organization on continuous basis requires a succession of person to fill key position. This is done through “ succession planning.” Succession Successio n planning planning can can be defi define ned d as an exec execut utiv ivee inve invent ntor ory y repo report rt indicating what individuals are ready to move into higher positions in the organization. In an organization, position at higher levels fall vacant due to various reasons like retirement, resignation, promotion, transfer, death etc. Therefore, the very purpose of succession planning is to identify, groom, develop and make the people ready to occupy higher levels job as and they fall vacant. SOURCES
1. Inte Intern rnal al Sour Source ces; s; 2. Exte Extern rnal al Sou Sourc rces es..
uccess ssio ion n INTERN RNAL AL SO SOUR URCE CES: S: Succe 1. INTE
from from inte intern rnal al sour source cess is advantageous to the organization as well as to the internal employees. This is so because while organization can buy employees loyalty and commit commitmen ment, t, employ employees ees feel feel belong belonging ingss and shared shared feelin feelings gs and development along with the organizations. In order to groom internal emp employe loyees es to assum ssumees hig higher her resp respon onsi sibi billity ity in fut future, ure, som some pro profe fess ssio iona nall lly y run run larg largee orga organi niza zati tion on ask ask thei theirr mana manage gers rs and and
66
supervisors to identify the internal employees having potentialities to replace them in jobs should the need arise. Succes Successio sion n throug through h outsi outside de talent talent in certai certain n cases cases like like when when compet competent ent and qualif qualified ied are not availa available ble internally, when major expansions, diversification and growth plans are in offer offering ing.. Experi Experienc ences es sugges suggestt that that comple complete te depend dependenc encee on either internal or external sources is not advisable to any organization what is often advisable in this regard is judicial balance between the two sources should be maintained
2. EXTERNAL SOURCES:
The succession planning involves the following f ollowing core activities: i. ii. iii. iii.
iv. iv. v. vi. vi. vii. vii. viii viii..
Anal Analys ysis is of the the deman demand d for exec execut utiv ives es,, manag manager erss and professional by level, function and skills. Audit udit of exis existi ting ng exec xecutiv utives es and and inve inven ntory tory of like likelly future supply from both internal and external sources. Pla Plannin nning g indi ndividu viduaal caree areerr path pathss base ased on obje objecctiv tive esti estima mate tess of futu future re need needss and and draw drawin ing g on reli reliab able le appraisal and assessment of potential. Unde Undert rtak akin ing g caree careerr couns counsel elin ing g in the the conte context xt of futu future re requirements of executives and managers. Accelerated promo omotion scheme with developmen ment targeted against the future needs of the organization. Train rainin ing g and and deve develo lopm pmen entt acti activi viti ties es to groom groom peopl peoplee for future roles. Plan Planne ned d recr recrui uitm tmen entt to fill fill shor shortt-te term rm vaca vacanc ncie iess and and provide people for development to meet future needs. The The actua actuall proc proces esss by whic which h jobs jobs are are fill filled ed incl includ udes es recruitment procedure internal appointment procedure, methods of assessments, internal search mechanism and often use of computer based information systems Socialization
Concepts of socialization: In simple words socialization is the process of adaptation. Different thinkers have defined socialization differently. For example, Feldoman, has defined soci social aliz izat atio ion n as “acq “acqui uisi siti tion on of work work skil skills ls and and abil abilit itie iess adop adopti tion on of
67
appropriate role behavior and adjustment to the norms and value of the work group.” In the opinion of Manen and Schein, “socialization can be conceptualized as a process made up of three stage: pre- arrival, encounter and metamorphosis.” Thus socialization can be defined as a process of adaptation that takes place as individual attempt to learn the values and norms of work roles.
PHASES OF SOCIALISATION PROCESS
The socialization process involves the following three phases: i. Pre- arrival ii. Encounter iii. Metamorphosis Pre- arrival: the pre- arrival phase explicitly recognizes that all the new recruits arrive the organization with a set of values attitudes expectation and learning. in other word pre arrival refers to all the learning that occurs before a new member joins the organization. organization.
upon entry entry into into organ organiza izatio tion, n, the new member member enters enters the Encounter: upon enco encoun unte terr stag stages es.. The The role role-p -pla layi ying ng star starts ts here here.. The The membe member’ r’ss star starts ts comparing expectation, the image of the organization, which he had formed during pre arrival phase with reality. If expectation and reality concur the encounter is smooth. But seldom it concurs. When the two differ, stress and frustration set in what follows thereafter is mental process of adjustment. In the process of adjustment. In the process of adjustment the individual tries to replace his/her own values and norms with those of the organization. At the other extreme, the member simply cannot reconcile to those values and norms of the organization and gets disillusioned and quits the job. Metamorphosis: In this stage, the member master the skills required to adjust with the organization norms and values. This is a stage going through changes. Hence, this is called metamorphosis stage. This is of course a voluntary process and a conscious decision, which enables the new member to become compatible with the organization. This signals the completion of socialization process. 68
MANAGING ORGANISATIONAL RENEWAL
You’ve just taken over as CEO of a company; what aspects of that company can you change / there are several, including its strategy, culture, structure tasks, tasks, techno technolog logies ies,, and the attitu attitudes des and skills skills of its people people.. All such such changes will require the support and expert advice of the HR department.
Organi niza zati tion on chan change ge ofte often n star starts ts with with STRATEGIC STRATEGIC CHANGE: Orga strategic change, a change in the firm strategy, mission and vision. Strategic change may require other changes for instance in the firm production technology, technology, structure and culture.
mplementi nting ng a strate strategic gic change change often often CULTURAL CULTURAL CHANGE: CHANGE: Impleme requires changing the culture the firm’s shared values and aims. For example, it created a new set of “heroes ”, individuals and teams who were publicly congratulated whenever their behavior reflected new values of quality, teamwork. and customer focus.
HR plays an important role in changing culture. For example one expert advocates five “ primary embedding mechanisms “ to change a company’s culture, each of which requires HR support and advice: 1. Make Make it clear clear to your your employee employeess what what you pay attenti attention on to measure measure and control. 2. React appropri appropriately ately to critical critical incident incidentss and organizatio organizational nal crises. 3. Deli Delibe bera rate tely ly role role mode model, l, teac teach h and and coac coach h the the valu values es you you want want to emphasize 4. Commun Communica icate te your priorit priorities ies by the way way you alloca allocate te rewards rewards and status. 5. Make your your HR procedure proceduress and criteria criteria consisten consistentt with the the values values you espouse. STRUCURAL CHANGE: Organizing redesigning the organizations departmentalization, coordination coordination span of control, reporting relationship or centralization of decision-making is relatively direct and quick method of changing an organization. organization.
69
TASK REDESING: The task and authority assigned to individual and teams within the organization are often changed as well.
Techn echnol olog ogic ical al chan change gess are are TECHNOLO TECHNOLOGICA GICAL L CHANGE CHANGE: modification to the work method the organization uses to accomplish its its task tasks. s. They They may may incl includ udee new new prod produc ucti tion on tech techno nolo logi gies es,, new new select selection ion and screen screening ing proced procedure uress and new perform performanc ancee apprai appraisal sal techniques.
CHANGE IN PEOPLE ATTITUDES AND SKILLS: Sometimes the employees themselves must change. Techniques such as lecture conferences and on-the – job training and often used to provide new or present employees with the skills they need to perform their job adequately
A 10- STEP PROCESS FOR MANAGING ORGANISATION RENEWAL
1. Establ Establish ishing ing a sense sense of of urgenc urgency y 2. Mobilizin Mobilizing g commitment commitment to change change through joint joint diagnosis diagnosis of business business problems 3. Create Create a guidi guiding ng coal coaliti ition on 4. Develo Develop p a shared shared vision vision 5. Commun Communica icate te the vision vision 6. Enable Enable employee employeess to facilit facilitate ate the the changes changes 7. Gene Genera rate te shor shortt term term win win 8. Consolida Consolidate te gains gains and and produce produce more chang changee 9. Anchor Anchor the new ways ways of doing doing things things in the company company’’s culture culture 10.Minorities progress and adjust the visions as required.
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Review and Discussion questions
1. Brie Briefl fly y desc descri ribe be the the conc concep eptt of job job anal analys ysis is,, and and expl explai ain n the the job job analysis process. 2. From the Human Human Resource Resource Manager Manager points points of view, view, what are the uses uses of job analysis? 3. Define Define recruitment. recruitment. Bring Bring out the factors factors which which effect recruitm recruitment? ent? 4. What What are the various various sources sources of recrui recruitme tment? nt? Discuss Discuss their their relati relative ve merits and demerits? 5. If you were a personne personnell officer officer in a scientific scientific institu institution tion and and asked to recruit scientists, which source of recruitment you will use for this purpose and why? 6. What What are are the the key key attr attrib ibut utes es that that make make a recr recrui uitm tmen entt prog progra ramm mmee effective? 7. What What do you mean mean by traini training? ng? How will will you identify identify the traini training ng needs in an organization? organization? 8. What are are the objecti objectives ves of training? training? Explain Explain the the need for for training training in an industrial organization? organization? 9. “Traini “Training ng programmes programmes are helpful helpful to avoid avoid personnel personnel obsolescen obsolescence ce ” Discuss. 10.Explain the various methods of training.
71
11.Write short notes on:
Management Games;
Case Study;
Vestibule Training;
Sensitivity Training; Training;
Transactional Transactional Analysis.
12.W 12.Wha hatt do you mean ean by exe execut cutive ive deve devellopme opmen nt? What hat are its its objectives? 13.Disc 13.Discuss uss the method methodss of Execut Executive ive Develo Developme pment. nt. Which one you consider the most suitable for developing middle level managers and why? 14.“Y 14.“You cannot cannot develo develop p manage managers. rs. Peopl Peoplee either either have have the abilit ability y to manage or they don’t.” Do you agree or Dis-agree? Discuss. Discuss. 15.“Career Development is a waste of money for a company. All is does is raise employee’s expectations and then, frustrated, they quit.” Do you agree or disagree? Discuss. 16.Wh 16.What at type type of info informa rmati tion on woul would d you you seek seek from from huma human n reso resour urce ce department to help you develop your own career plan if you were just starting with a large multinational corporation?
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Unit III HUMAN RESOURCE DEVELOPMENT
HRD impli implies es that that the organ organizat ization ion wants wants to enhance enhance the overal overalll capabil capabiliti ities es of its employees to develop their potential in directions best suited to them.
Basic Concepts Of HRD: The belief that every person has potential which can be utilized for better productivity or services has enabled to establish a process of converting this potential into reality. In this process the human being is continuously helped to acquire knowledge and skill and to change to the organizational culture. Therefore the basic concepts of HRD are: •
To acquire capability to meet present and future job specification.
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•
To develo develop p an organi organizat zation ional al climat climatee to bring bring about about team team spirit spirit and group group dynamism.
ORGANISATIUONA L DEVELOPMENT
HUMAN RESOURCE TRAINING
JOB ENRICHMENT
HUMAN RESOURCE INPUT
ORGANISATIONAL CLIMATE
JOB SATISFACTION
There are efforts being made to synchronies three basic elements of HRD: •
Education
•
Training
•
Development
To fulfill desired objectives. Training and education can be appraised immediately by simple question answer approach but development evaluation needs ability to predict the long term results. A realistic and long-term HRD plan appears to be difficult but if planned properly, funded adequa adequate tely ly and and super supervi vise sed d minu minute tely ly,, impl impleme ement ntat atio ion n of HRD HRD pract practic icee helps helps the the organization to grow fast.
Facts About HRD:
It is with belief that under certain circumstances people are capable of improving their capability.
It is the process of helping people to acquire competencies.
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E X C E L L E N C E
In an organizational context HRD “…is a process by which employees of an organization are helped in a continuous and planned way to acquire or sharpen capabilities.
HRD HRD devel develops ops an organ organiz izat atio ional nal cult cultur uree in whic which h super supervi viso sorr-su subor bordi dinat natee relationshi relationships, ps, team work, collaboration collaboration among units are strong and contribute to the professional well being, motivation and pride if employees.
Employ Employees ees are continu continuous ously ly helped helped to acquir acquiree new compete competenci ncies es through through a process of planning, feedback, training etc.
Why HRD Is Needed?
It is required for continuous development of competencies.
To avoi avoid d a satur aturat atiion poin pointt in term termss of gro growth wth of an empl employ oyee ee by enhancement of competencies.
To improve the service and effectiveness of employees. emplo yees.
Benefits Of HRD
Unlike education, training in HRD not only develops the competence of the individuals but also develops his/her latent potential for the total effectiveness of the organization. The benefits from HRD are therefore many man y. Some of them are:
It helps employee to diagnose his/her own strengths and weaknesses.
It develops creativity in employees.
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It helps employee to develop himself/her in a given organizational climate to improve not only his/her performance but that of the organization.
It develops trust and openness amongst employees thus enriches interpersonal relationships.
It creates environment for realistic feedback and guidanc e from superiors.
It provides long term & short term development op portunities.
It smoothens the career development plans.
It helps organizations to use available human resource for future challenging responsibilities after developing them.
It enab enable less an over overal alll deve develo lopm pmen entt of pers person onal alit ity y of empl employ oyee eess and and the the organizations.
Systema Systematic tic Repres Representa entation tion Of Linkag Linkages es Bet Between ween HRD Instrum Instruments ents,, Process Processes, es, Outcomes And Organizational Effectiveness. HRD
Mechanisms
or
Subsystems or Instruments • HRD Department •
•
Professional
Proc Proces esse sess
&
HRD HRD
Appraisals
deve develo lopm pmen entt
by
Review
every employee
Counseling sessions
Orga Organi niza zati tion onal al Effe Effect ctiv iven enes esss
More More
Dimensions • Higher Productivity
•
of
feedback
HRD HRD Outc Outcom omes es Varia ariabl bles es
Climate Variables • Role clarity
Planning
Discussions,
•
HRD HRD
•
•
Awareness
People •
of
for for
Better Better
•
Develo Developed ped
roles •
competencies requ requir ired ed
Comp Compet eten entt
•
performance
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Diversification •
Core Reduction
Job
•
More Profiles
commitment & job
•
Better Image
Higher
involvement
job job
Growth
More
Proble m
&
•
Role
analysis
•
exercises •
Organizations
Potential
•
More Trust
development
•
Coll Collabo abora rati tion on
exercisers •
•
•
communication
•
Openness
•
Risk taking
•
Value Generation
•
Clar Clarif ific icat atio ion n
Rewards
•
Job Job
Human
Better Organizational
Authentic
OD exercises
Utilizati Utilization on
Resources
&
•
Job Rotations
Better Better of
Training
•
Health •
More More
Teamwor eamwork, k,
Synergy Resp Respec ectt
Of
and of
each each
other
Norms & Standards
enri enrich chme ment ntss
•
programs •
•
Team Work
policies •
Solving
Practice
Increased Communication
Other mechanisms
•
More More
Obje Object ctiv ivee
rewards •
Generation
of
objective objective,, Data on employee etc
Other Factors
Other Factors Other Factors
Personnel Policies, Top
Environment, Technology, Resource Availability, Environ Nature ment, of Business History Nature History etc
Management styles, Investment on HRD, Top Management Commitments, History, Previous Culture, Line Manager’s Interest etc.
Features Of HRD In An Organization
Founded on the belief that people are capable of growth and management has to create an environment of growth.
This belief is to be manifested in managerial practices and in the behavior of managers and supervisors who are the key k ey agents of HRD in the organization.
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For operational purposes large Organizations focus on HRD, generally the areas concern are Recruitment, raining, Appraisal, planning etc.
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LEARNING AND DEVELOPMENT Definition of Learning : Any relative permanent change in behavior that occurs as a
result of experience.
Learning is a kind of action, and it takes place through number of development methods undertaken by the organizations. There are four important points in terms of learning and development.
Learning involves a change in behavior and opens a way for development.
Any temporary change in behavior due to fatigue or any reason is not a part of learning.
Learning is totally based on some form of practice or experience.
There must be practice or experience must be reinforced in order for learning to occur
The most effective and quick method of Learning is Learning on the job, this is been refe referr rred ed as on the the job job trai traini ning ng.. In this this meth method od the the trai traine neee has has dire direct ct per persona sonall responsibility.
Facts About Learning And Development:
Learning if it is adopted to the real needs is enforced it creates a long-term impact.
The technique of on the job training is very useful in the case of leaning and Development in teaching skills at the work place or the desk or in the laboratory.
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The focus is mainly on imparting practical inputs in order to convert it into a more fruitful training.
Characteristics And And Principles Of Learning And Development:
It requires purposeful activity. activity.
It is a Problem solving process.
Learning and development go hand in hand.
Friendly competition stimulates learning and development..
Ear Early
Succe uccessses
incr increa ease sess
the
chan chance cess
for
eff effect ective ive
lear earning ning
and and
d3evelopment.
Benefits Of On The Job Training In Order To Highlight The Relevance Of Learning And Development:
The trainee learns effectively as he experiences the same problem, which he will be facing on the job.
Learns to locate the fault and corrects error. error.
Conf Confid idenc encee in spee speed d and sens senses es of produ product ctiv ivene eness ss,, and and gets gets posi positi tive ve and and reinforcive support.
Benefits Of Job Rotation Method In Order To Highlight The Relevance Of Learning And Development.
It is a effective method to develop small number of people in various jobs by rotation.
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It is mainly used for management development methods where managers are exposed to handle the situation of other departments.
Such a exposure gives you the opportunity of acting in a service role with increased knowledge and sensitivity. sensitivity.
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PERSONAL DEVELOPMENT PLANNING Survival, Growth and Effective existence of an organization require a succession of people to fill various important jobs. Personal Development planning focuses on for main steps
Individual Needs
Vision Vision linked with needs.
Action plan to achieve the vision.
Results focusing on maintaining the change.
Following are the points to highlight Personal Development Planning:
To first of all identify individuals interest, skills and potential.
To identify life goals an d career goals.
To develop a written plan (including schedule to achieve individual goals)
Seeking and obtaining the best first.
Communicating to management the individual career plan.
To seek Counseling from the manager and from the HR organization.
To evaluate the internal and external opportunities.
To making known yourself and your accomplishments.
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Advantages Of Personal Development Planning
It helps the individual to have the knowledge of various career opportunities.
To select the career which is suitable to ones life style.
To satisfy individuals’ esteem needs.
To improve the individual employees performance on the job.
To increase the level of Job Satisfaction.
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TRAINING Training is the act of increasing the knowledge and skill of an individual for dong a particular job. In the present scenario training is increasingly viewed as a means of fostering the growth of the individual employee emplo yee but as an integrated part of organizational growth.
Definition Of Training: Dale S.Beach defines training as “---the organized procedure by which people learn knowledge and \or skill for definite purpose”.
It is the training that bridges the gap between Job requirements and employees present specifications.
Objectives Of Training
The primary purpose of training is to establish a sound relationship between the worker and his job –the optimum man task relationship.
To upgrade skills and prevent obsolescence.
To develop healthy he althy and constructive attitude
To prepare employees for future assignments
The Focus Of Training Is On Three Broad Objectives:
To bring about attitudinal change.
To bring about quality to be the very top of agenda.
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To savagely cut waste.
Importance And Benefits Of Training:
Training is important to develop the employees and make them suitable for the job . Training constitutes significant part of management control. Benefits of training to following. Organization Level:
It leads to improve profitability
It improves the job knowledge, skills and morale of the work force
It helps in organizational development and preparation of guidelines for work
It enhances quality of work and appropriate ap propriate climate for growth
It supports in improving organizational communication
Individual Level: -
It help in in encouraging and achiving self self development
It provides a sense of growth in learning
It increases job satisfaction and recognisition
It helps the individual in effective problem solving
A Model Training Program Should Encompass The Following Points:
Managem Management ent overall overall respon responsib sibili ility ty right right from from planni planning ng stage stage to succes successfu sfull implementation.
The companies approach to the training function which would include guidance for design and execution as well as dissemination of relevant information to all employees.
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Provision for annual or periodic surveys in order to ensure that training is need based and development oriented.
Identification of priority area since resources are always scarce and programs must be prioritized according to felt needs.
Identification Of Training Needs
Organizational Analysis: - It involves a study of entire organization in terms of analys analysis is of objecti objectives ves,, utiliz utilizati ation on of resour resource, ce, enviro environmen nmental tal scanni scanning ng and organizational climate analysis.
Task/Role Analysis: - It involves a careful study of jobs within in an organization in a further effort to define specific content of training. It requires systematic collection of data about the job, role or position and what type of behavior, skill, and knowledge the job holder must have to perform certain specified tasks.
Manp Manpow ower er Anal Analys ysis is::- It is cond conduc ucte ted d
thro throug ugh h
appr approp opri riat atee
obse observ rvat atio ion, n,
supervisory evaluation. This analysis is undertaken to know about the specific areas in which training is needed
Training Techniques
Job instruction training
Coaching
Programmed learning
Job rotation
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Lecture
Conference
Laboratory training
Role Playing
Case study
In basket
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MANAGEMENT DEVELOPMENT Management Development is a systematic process of growth and development by which which manager managerss develop develop their their abilit abilities ies to manage. manage. Managem Management ent Develop Developmen mentt is concer concerne ned d with with impr improvi oving ng the the perfo perform rman ance ce of the the mana manager gerss by givin giving g them them opportunities for growth and development.
Techniques Of Management Development There are mainly two techniques of management development, one is the formal training and the other is through the on the job experience.
Im ort ortant ant Tec Techn hnii ues ues Of Of Man Manaa emen ementt Dev Devel elo o ment ment
-
-
Coaching
Case method
Job
Under
Incident
Role-playing
Simulation
Grid training
-
Multiple
In basket
Conference
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Business
Lectures
Sensitivity
On The Job J ob Techniques Techniques
1 Coaching : In coaching the trainee is place under a particular supervisor who acts as an instructor and teaches job knowledge and skills to the trainee.
2. Job 2. Job Rotation: Rotation: The transferring of executive s from job to job and from department to department in a systematic manner is called job rotation.
Study: An under study is as person who is in training to assure at a future time, 2. Under Study: the full responsibility of the position currently held by his superior. superior.
3 Multiple Management : Multiple management is a system in which permanent advisory committees committees of managers managers study problems problems of the company and make recommendations recommendations to higher management.
Off-The Job Technique Technique
10. The Case Study: Study: Cases are prepared on the basis basis of actual business situations that happened in various organizations.
11. Incident 11. Incident Method : This method was developed by Paul Pigors. It aims to develop the traine traineee in the area area of intell intellect ectual ual ability ability,, practi practical cal judgmen judgmentt and social social awareness.
12. 12. Role Playing : A problem situation is simulated by asking the participants to assume the role of particular person in the situation.
13. In 13. In Basket Method : The trainees are first given background information about a simulated company, its products, key personnel, various memoranda and all data pertaining to the firm. The trainee has to understand all of this and make notes of it.
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Sensitivity Training raining : The 14. Sensitivity The main ain obj object ective ive of sens ensitiv itivit ity y trai traini ning ng is the the “Development of awareness of and sensitivity of behavioural patterns of oneself and others”.
15. Simulation: Simulation: Under this technique the situation is duplicated in such a way that it carries a closer resemblance to the actual job situation.
16. Managerial grid : It is a six-phase programme lasting from three to five years. It stats with upgrading managerial skills, continues to group improvement, improves inter inter group group relati relations ons,, goes goes into into corpor corporate ate planni planning, ng, develo develops ps implem implement entati ation on method and ends with an evaluation phase.
17. Conference: Conference: A conference is a meeting of several people to discuss thee subject of common interest.
18. L 18. Lectures: ectures: It is the simplest technique. The lacquerer organizes the material and gives it to a group of trainees in the form of talks.
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CONCEPTS AND AREAS OF MANAGEMENT OF MANAGEMENT DEVELOPMENT PROGRAMMME General administration Q 1: How to decide overall company strategy? Q 2: How to evaluate capital expenditure proposals? Q 3: How to improve the flow of information needed to control the organization? Q4 : How to launch a new project?
Marketing & Sales Q 1: How to forecast demand? Q 2: How to generate new product ideas? Q 3: How to launch a new product? Q 4: How to determine the profitability of a product or product line? Q 5: How to improve product design?
Production Q 1: How to remove factory bottleneck? Q 2: How to improve product quality and reliability? Q 3: How to cope with complex mixes? Such as several factories, delivery to many customers, or several products from many raw materials available from many different sources, or several products profitability made by several process, etc. Q 4: How to cut labour cost? Q 5: How to improve labour relations?
Human Resource Q 1: How to improve training methods? Q 2: How to bring order and equality into wages and salary schemes? Q 3: How to recruit the right number of the right type of people?
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Purchasing Q 1: How to check quality and reliability of raw materials? Q 2: How to cut down the cost of purchasing an holding stocks?
Research Q 1: How to reduce the time taken to complete research?
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CAREER MANAGEMENT Career Management : A career is all the jobs that are held during ones working life.
Edwin B. Flippo defines career as a sequence of separate but related work activities that provides continuity and, order and meaning in a person’s life.
Career management focuses on career goals and it is the process of designing and implementin implementing g goals, goals, plans and strategies strategies to enable the organizati organization on to satisfy satisfy employee needs while allowing individuals to achieve their career goals.
Following Following are the key ingredients ingredients for career management, which focuses on the process of implementing organizational career planning.
Top management support.
Coordination of other human resource activities.
Involvement of superiors.
Use of human resource managers as consultants.
Periodic skill assessment.
Realistic feedback about career progress.
Equal access and open enrollment.
Focus on psychological success rather than advance ment.
Flexibility for individual needs.
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Climate setting for career development.
Small Pilot Programmes.
Periodic programme assessment.
Career management involves both organizational actions and individuals’ initiatives to ensure that when the career plans developed by the organizational requirements and individuals aspirations undergo unanticipated changes, they are managed appropriately on a continuing basis.
There are three major categories to undertake career management.
To select a field of employment and employer : - One cannot manage his career
unless one has a long-range objective and the first point is to think in terms of where you ultimately want to be. Other important point is to view your potential employer and position in terms of long-range career goals.
To know where you are : - To be aware of the opportunities available to you in the
current position and to carefully and honestly posses current performance.
Plan your exit: - To leave the current organization on good terms and not under
questionable circumstances.
Care Career er mana managem gemen entt is compl complem emen enta tary ry to manag managem emen entt devel developm opment ent and it is concerned with planning and shaping the path, which people take in their career pro progr gres essi sion on with within in the the organ organiz izat atio ion. n. The under underly lyin ing g assu assump mpti tion on of care career er managem management ent is that, that, in the context context of manageme management nt succes successio sion, n, the organi organizat zation ion should be alert to provide able people with training, training, guidance and encouragement encouragement to enabler them to fulfill their potential. 94
HR APPROACHES TO IMPROVING COMPETENCIES Foll Follow owin ing g are are the the appr approac oache hes, s, whic which h help help in impr improv ovin ing g compe compete tenci ncies es among among the the employee of the organization. 5. Incentives. The term term in incent incentive ivess means means an inducem inducement ent,, which which rouses rouses of, stimulates one to action in a desired action. An incentive has a motivational power, and may be broadly grouped into (a) Financial incentives: - Common use of money as incentive are in form of wages and salaries, bonus, retirement benefits, medical reimbursement, etc. money plays a significant role in satisfying physiological and security/ social needs. (b) Non-Financial Incentive: - the following non – financial incentives could be effectively usedi. ii.
Appreci eciation of of wo work Do Done Competition
iii.
Knowledge of of re result
iv. iv.
Worker’ orker’ss par parti tici cipat patio ion n In In Man Manag ageme ement nt::
v.
Opportunity nity for Gr Growth
vi.
Suggestion System
vii.
Job Enrichment
6. Management By Objectives (MBO): - Management by Objective can simply be defined as a programme that encompasses specific goals, anticipatively set for an explicit time period, with feed back on goal progress.
7. Training: - Training is a process of learning a sequence of programmed behavior. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It is used to teach the employee the most efficient and effective ways of performing their job. Also used for better quality of their working.
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8. Off the job techniques: - Many Techniques Techniques could be very effectively used for the purpose and these are: e) The The Cas Casee Stu Study dy f) Role Play g) In-B In-Bas aske kett Metho Method d h) Sens Sensit itivi ivity ty Train Trainin ing g
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Human Resource Management Unit IV Performance Appraisal
Once the employee has been selected, trained & motivated. , He is then appraised for his performance .Performance appraisal is the step where the the mana managem gemen entt find findss out out how how effe effect ctiv ivee it has has be been en at hiri hiring ng and and placing employees .If any problems are identified steps are taken to communicate with the employees employee s & to remedy them. Definitions It is defined “ as a process of evaluating the performance of a job in terms of its requirement.”
process ess of eval evalua uati ting ng the the perfo perform rman ance ce & Accord According ing to Heyel Heyel “ It is proc qualifications of the employees in terms of requirement of the job for which he is employ employed ed for purp purpose osess of admi adminis nistra tratio tion n inclu includin ding g placem placement ent,, selection for promotions providing financial financial rewards & other actions which which requ requir iree dif differe ferent ntia iall trea treatm tmen entt amon among g the the memb member erss of the the grou group p as distinguished from actions affecting all members me mbers equally. equally. “Process of estimating or judging the value, excellence, qualities or status of some object, person or thing.” The Evaluation Process
The proces processs of perfor performan mance ce apprai appraisal sal follow followss a set patter pattern, n, which which is period periodica ically lly apprais appraised ed by his superi superiors ors.. The proces processs of evaluat evaluation ion begins begins with with establi establishm shment ent of performance standards .At the time of designing a job & formulating a job description performance standards are usually developed for the position. These standards set should not be vague but should be clear .The next thing is that these standards should be communicated to the employees for the employees left to themselves & for making communication effective feedback is necessary from the subordinate to the manager.
The third step is measurement of the performance, to determine the actual performance is that, it is necessary to acquire information about it .The sour source cess used used for for measu measuri ring ng the the perf perform orman ance ce can can be thro throug ugh h perso persona nall observation, statistical reports etc .The fourth step is the comparison of the actual performance with the standards. The next step is the results of are discussed periodically with the employees, where plus points & weak points
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are disc discus usse sed d .The .The fina finall step step is init initia iati tion on of corre correct ctiv ivee acti action on wher wheree necessary. Establish performance standards
Communicate performance expectations to employees
Measure actual performance
Compare actual performance with standards
Discuss the appraisal with employee
If necessary, initiate corrective action
Methods of Performance Appraisal
Traditional methods:
oldest st & sim simple plest metho ethod d of Straight Ranking Ranking Method Method: It is olde 1. Straight per perfo forma rmanc ncee appr apprai aisa sall by whic which h the the man man & his his perfo performa rmanc ncee is considered as entity by the rater .The whole man is compared to with the whole man .The relative position of each man is tested in terms of his numerical rank .It may also be done by ranking a person on his job performance against that of another member of competitive group placing him as number 2. Paired Comparison Technique : In this each employee is compared
every trait all other persons in pairs one at a time .In this judgments is simpler than the ordinary ranking method. 3. Man-to-Man Man-to-Man Comparison Method: This technique was used by the
USA army during the First World War. In this method certain factors
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are are sele select cted ed for for the the purp purpos osee of anal analys ysis is (suc (such h as lead leader ersh ship ip,, dependability & imitative) the scale of man is also created for each selector. 4. Grading Method: In this method the rater considers certain features
& marks the carefully carefully according according to a scale. They select select the features features like analytical ability, cooperativeness, dependability, self-expression, job knowledge, judgment, leadership & organizing ability etc. the most most comm common only ly used used meth method od of This is the performance Appraisal .In it one of the each person is rated on a cont contin inuo uous us scal scale. e. These These fact factor orss are are emplo employe yeee chara charact cter eris isti tics cs & employ employee ee contri contribut bution ion which which includ includes es qualit qualities ies such such as initia initiativ tive, e, leadership, cooperativeness, dependability, industry, attitude
5. Graphic Graphic Method: Method:
Forced ed Choice Choice Descri Descripti ption on metho method d: in this this rank rankin ing g meth method od it 6. Forc
attempts to correct a rater’s tendency to give consistently high or cons consis iste tent ntly ly low low rati rating ngss to all all the the empl employ oyee ees. s. This This meth method od uses uses objective reporting & minimum subjective ratings. Under this supervisor supervisor make s a free form, open 7. Free Essay Method: Under ended appraisal of an employee in his own words & puts down his impression about the employee .He take into account of these factors like relationship with fellow supervisors, job knowledge & potential, emp employe loyeee chara haraccteri terist stic icss & attit ttitu udes, des, physi ysical cal cond condit itio ion ns, development needs for future. MODERN METHODS 1. Management By Objectives: It is potentially a powerful philosophy
of managing and an effective way of operationalising the evaluation pro proce cess ss.. It is defin efined ed as “ a proce rocess ss where hereb by the sup superi erior & subordinates managers of an organization jointly identify its common goals, define each individuals major areas responsibility in terms of results expected of him & use these measures as guides for operating the unit & assessing the contributions of each of its members. 2. Assessment Center method : The assessment center concept was initially applied to military situations in the Germany army in the 1930 .The purpose of this method was and is to test candidates in a
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social situations using a number of assessors & a variety of procedures. The most important feature of the assessment centre is job related simulations. These simulations involve characteristics that Managers feel are important to the job success. The evaluators observe & evaluate participants as they perform activities commonly found in these higher levels of jobs.
The appr apprai aisa sall may may be any any degree perf performa ormance nce appraisa appraisal: l: The 3. 360 degree person who has thorough knowledge about the job done by contents to be appraised, appraised, standard standardss of contents & who observes observes the employee employee while performing a job .He should asses the performance without bias .The .The appr apprai aise serr are are supe superv rvis isor ors, s, peer peers, s, subo subord rdin inat ates es emplo employe yees es themselves users of service. Performance appraisal by all the parties is called 360-degree appraisal. Human Asset Asset Accounti Accounting ng method: method: The human 4. Human human asset asset accoun accountin ting g
method refers to activity devoted to attaching money estimates to the value of a firm’s internal human organization & it’s external customer good goodwi will ll .If .If a well well trai traine ned d empl employ oyee ee leav leaves es a firm firm the the huma human n organization is worthless& if they join the company the human assets are increased. This a new appr apprai aisa sall Behavi aviora orally lly Anchor Anchored ed Rating Rating Scales Scales:: This 5. Beh techni technique que which which has been been recent recently ly develo developed ped .It provid provides es better better results as compare to other techniques .The BARS is usually consist of five steps. (a) Generate critical incidents: Person with knowledge of the job
to be appraised are asked to describe specific illustrations of effective performance behaviour (b) Develop performance Dimensions: These people then cluster the incidents into small set of performance dimensions. Each cluster must be defined. (c) Reallocate Incidents: Any group of people who also the job then reallocate the original critical incidents. They are given clusters definition’s & critical& asked to redefine each incident to the dimension Incidents: The second group is generally asked to rate (d) Scale of Incidents: the behaviour described in the incident as to how effectively or
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ineffe ineffecti ctivel vely y it represe represents nts perform performanc ancee on the approp appropria riate te dimensions. (e) Develop Final Instrument: Subsets of incidents are used as behaviour anchors for the performance dimensions.
IMPORTANCE IMPORTANCE OF PERFORMANCE APPRAISAL
Performance appraisal provides systematic judgment to back up salary increases, transfers, demotion or terminations They are means of telling subordinates how he is doing & suggesting needed changes in the behaviour attitudes, skills, and job knowledge. They let him know where he stands with the boss. The superior uses them as a base for coaching & counseling the individual. provid ides es adeq adequa uate te feed feedba back ck to each each indi indivi vidu dual al for for his his or her her It prov performance. It plays a vital role in identifying training & development needs & to evaluate the effectiveness of training & development programmes. 360 DEGREE FEEDBACK Introduction
This attempt to update the traditional employee appraisal process is one of the fashionable techniques of the mid 1990s, fitting in with other newts tools called team management , employee empowerment and total quality management . In 360 degree feedback the appraisal should may be done by any person who has thorough knowledge about the job done by the contents to be apprai appraised sed,, standa standards rds of conten contents ts & who observ observes es the employ employee ee while while performing the job .The appraiser should be capable of deciding what is impo import rtan antt & what what is rela relati tive vely ly less less impor importa tant nt.. He shou should ld asse assess ss the the per perfo form rman ance ce with withou outt bias bias .The .The appr apprai aise sers rs are are supe superv rvis isor ors, s, peer peers, s, subo subord rdin inat ates es empl employ oyee eess thems themsel elves ves user userss of serv servic ices es & cons consul ulta tant nt.. Performance appraisal by all these parties is called 360-degree feedback. Definition
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360-degree feedback , as the term implies, brings together formal appraisals from everybody that the person being assessed comes into contact with— line managers, subordinates, colleagues, peers, and even outsiders such as clie client nts. s. Anot Anothe herr name name for for it is multi-source multi-source feedback and a variant is which h subo subord rdin inat ates es appr apprai aise se thei theirr supe superv rvis isor’ or’ss upward upward feedback feedback , in whic performance. Though it is frequently intimidating or dispiriting for the person concerned, some studies indicate that such feedback can be helpful in changi changing ng behavi behaviour our and improv improving ing perform performanc ance. e. Howeve Howeverr, others others sugges suggestt that that the techni technique que shows shows little little or no improv improveme ement nt over over more more tradit tradition ional al method methodss and has the disadv disadvant antage age that that result resultss need need skille skilled d interpretation.
They say 360-degree feedback should be regarded as an organizational process rather than a mechanical tool. FEATURES OF 360-DEGREE FEEDBACK •
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360360-de degr gree ee feedb feedbac ack k is an asses assessm smen entt proc process ess used used to impr improv ovee mana manage geri rial al effe effect ctiv iven eness ess by prov provid idin ing g the the mana manage gerr with with a more more complete assessment of their effectiveness, and their performance and development needs. The proces processs involv involves es obtain obtaining ing feedba feedback ck from the manage manager's r's key key contacts, normally: The manager him/herself Subordinates Peers Manager Customers Suppliers Feedback is normally gathered by means of a questionnaire, which asks asks part partic icip ipan ants ts to rate rate the the indi indivi vidu dual al acco accord rdin ing g to obse observ rved ed behaviors - usually managerial or business-specific competencies. The 360-degree process will not suit all companies. You You should assess how well it would fit with your current culture before launching a scheme and a pilot scheme is worth building into your programme. Commun Communica icatin ting g the scheme scheme,, it's it's purpos purposee and benefi benefits ts to all those those involved will be a key factor in reducing the participants' fears and gaining their commitment to any new scheme. Presenting the results of the appraisal to managers in a constructive way is critical to the success of the process. All All feedback, positive and o o o o o o
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critical, critical, should be presented, presented, with the aim of highlight highlighting ing and acting acting on areas for development. Resu esults can be aggregated to give you some feedback on organizational strengths and weaknesses in relation to your business objectives and training strategy.
A -- What is a 360° assessment?
It's a full-circle overview of a person's performance on the job. Instead of a single evaluation from the boss, a person receives feedback from many workplace sources. Sometimes 360°s are called multi-source or multi-rater assessments. The boss still gives input, but peers and direct reports (people who report to the participant) also get involved in the evaluation process. The person participating in a 360° gets to rate his or her performance, too. Applying their individual observations and experiences, everyone involved brings different perspectives to the assessment. For parti particip cipant ants, s, the feedba feedback ck from multip multiple le work work associa associates tes is highly highly motivating. Used as a springboard for professional growth, the assessment can make a powerful impact on an individual's career and a company's success. The 360° assessment process is designed as an ongoing process that can be used used at key key inte interv rval als, s, usua usuall lly y annu annual ally ly,, to moni monito torr the the prog progre ress ss of professional growth. B -- How does the Checkpoint 360° system work?
1. The participant and his or her boss, peers and direct reports fill in surveys.
Responses of the peers and direct reports are kept entirely anonymous. The standard Checkpoint survey has 70 items and takes approximately 15 minutes to complete. It covers competencies in the areas of Comm Commun unic icat atio ions ns,, Lead Leader ersh ship ip,, Adap Adapta tabi bili lity ty,, Rela Relati tion onsh ship ips, s, Task ask Mana Manag geme ement, Prod Produc ucttion, ion, Dev Develop elopme men nt of Othe thers and and Pers Person onal al Development. 2. Results Results from all of the the survey surveyss are compile compiled d in a confid confident ential ial feedbac feedback k report. Graphs and charts relate the data in a detailed, easy-to-understand format. format. The report report presen presents ts a balanc balanced ed pictur picturee of percep perceptio tions ns about about a person's skills.
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3. Participants use the information from the feedback report to establish
goals and ongoing action plans, aimed at better utilizing their strong points and improving their weaker skills. They can use the 360° process before and after training opportunities to measure their effectiveness and measure gains. C -- Why should a company implement a 360° process?
The process leads to better job performance, as participants use the 360° to sharpe sharpen n their their skills skills.. As a conseq consequen uence, ce, produc productiv tivity ity in the workpl workplace ace increases, and a company enjoys more success. su ccess. Grou Groups ps have have foun found d that that the the 360° 360° proc proces esss is an exce excell llen entt meth method od for for establishing specific training needs. When a business has a clear objective to accomplish or a specific mission to carry out, a 360° assessment can be a valuable tool. It can help everyone to focus on skills consistent with the company's goals and to target their development plans to fit the direction the business is taking. If a business is struggling in a particular area, a 360° system can help identi identify fy the skills skills requir requiring ing attent attention ion.. Partici Participan pants ts can then then make make the chances necessary to remove obstacles to success. D -- What are the advantages of a 360° feedback system?
Everybody involved in the process benefits:
fairer,, well-r well-roun ounded ded impres impressio sion n of how their their Participants get a fairer work is viewed by others. Applying this valuable information, they can take steps to continuously improve their effectiveness on the job.
get an over overal alll persp perspec ecti tive ve abou aboutt a pers person on's 's skil skills ls and, and, Bosses get consequently, develop a more accurate, on-target training plan for each individual.
Peers and Direct Reports get an opportunity to share concerns, which helps them contribute to constructive changes in their work environment. At the same time, they can confirm positive behaviors that do not need attention.
Team members can use the information to identify and prioritize team development needs. The process can improve their teamwork, increasing their ability to solve problems together. together.
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develop p approp appropria riate te skills skills to consis consisten tently tly The organizat organization ion can develo refl reflec ectt comp compan any y valu values es.. Cont Contin inuo uous us prog progre ress ss can can be achi achiev eved ed through periodic reevaluations using the 360° system. E -- How do companies use the 360° results?
Most businesses initially use the 360° feedback for employee development. Some begin by using it for development planning and then expand to use the 360° system for appraisal and pay decisions. Later, they may also use it in promotion and succession s uccession planning. When the initial use is for development only, everyone has a chance to become become familiar familiar with the process and make any necessary necessary adjustments. adjustments. It also allows time to build trust in the value of the 360°. For uses other than development, specific legal guidelines must be followed.
When implementing a 360° system, its use must be taken into account . For instance, companies will need to have a policy about who sees the 360° survey results. When the feedback will be used solely for development, the participant might be the only person to see the report. If the results will be used for performance management, both the participant and his or her boss will review the report.
Employee Compensation One of the most difficult functions of HRM is that of determining rates of monetary compensation. Not only it is one of the most complex duties, but it is also also one one of the the most most sign signif ific ican antt to both both the the orga organi nisa sati tion on and and the the employees. Wage & salary refers to the establishment & implementation of the sound policies & practices of the employees compensation . It includes such as such areas as job evaluation , surveys of wage & salary, analysis of relevant organiza organizationa tionall problems ,developme ,development nt & maintenance maintenance of wage structure, structure, profi profitt sharin sharing g & incent incentive ivess etc. etc. The The basic basic purpo purpose se of wage wage & sala salary ry admi admini nist stra rati tion on is to esta establ blis ish h & main mainta tain in an equi equita tabl blee wage wage & sala salary ry structure .The secondary objectives to establishment & maintenance of an equita equitable ble labour labour –cost –cost struct structure ure .The .The compen compensat sation ion is mainly mainly concer concerned ned with the financial aspects of the needs ,motivation & rewards. Managers
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Must analyse the needs of the employees so that reward can be designed to satisfy some needs . Definition: Compensation:
Compensation may be defined” as money received in the performance of work , plus many kinds of benefits & services that organization provides their their employe employees es .” Money Money is includ included ed under under direct direct compens compensati ation on while while benefits come under Indirect Compensation. Compensation. may consist of life ,accident & health insurance ,employer’s contribution contribution to retirement ,pay for vacation or or illness . Wages: Wages are defined as the remuneration paid for the services of labour in production, periodically to an employees /worker. These are generally refers to hourly rate or daily rate paid to such groups as production & maintenance employees (Blue Collar). Salary: Salary on the other hand refers weekly or monthly rates paid to the weekly or monthly rates paid to clerical, administrative & professional employees (White collar workers)
AIMS OF COMPENSATION MANAGEMENT As far as the organisation is concerned, employee compensation programs are designed to do three things:
To attract capable employees to the organisation To motivate them toward superior performance, and To retain their services over an extended period of time.
The aims of wage and salary administration are numerous and sometimes conf confli licct with ith each ach oth other. er. The The main ain obj object ectives ives of wage age and and sal salary ary administration are: 1. To acquire qualifie qualified d competent competent personnel: personnel: Candidates Candidates decide decide upon their their career in a particular organisation mostly on the basis of the maount of remuneration the organisation offers. So the organisation should aim at
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payment of salaries at that level, where they can attract competent and qualified people. 2. To secu secure re inte intern rnal al and and exte extern rnal al equi equity ty:: Inte Intern rnal al equi equity ty does does mean mean pay payme ment nt of simi simila larr wage wagess for for simi simila larr job job with within in the the orga organi nisa sati tion on.. Extern External al equity equity implie impliess paymen paymentt of simila similarr wages wages to similar similar jobs jobs in comparable organisations. 3. To retain present present employees: employees: The The organisat organisation ion must keep keep the wage level level at the competitive level, in order to prevent such quits. 4. To ensu ensure re desi desire red d beha behavi viou our: r: Good Good comp compen ensa sati tion on rein reinfo forc rcee desi desire red d bahaviour like performance, loyalty, accepting new responsibilities and changes etc. 5. Contro Controll costs: costs: To To keep keep labour labour and administ administrat rative ive costs costs in line with the ability of the organisation to pay. 6. Comp Comply ly with with Lega Legall regu regula lati tion ons: s: A soun sound d wage wage and and sala salary ry syst system em considers the legal challengers imposed by government and ensures the employer’s compliance. 7. To pay according according to the content content and difficul difficulty ty of the job and in tune with with the effort and merit of employees. 8. To facili facilitat tatee pay roll administ administrat ration ion of budget budgeting ing and wage and salary salary control. 9. To simplify collectiv collectivee bargaining bargaining procedures procedures and negotiation negotiations. s. 10.To promote organisation feasibility.
PRINICPLES Of WAGE & SALARY ADMINISTRATION There are There are severa severall princi principle pless of wage wage and salary salary plans plans,, polici policies es and practices. The important of them are: 1. Ther Theree should should be definite definite plan to ensur ensuree that differ differences ences in pay pay for jobs are based upon difference in job requirements. 2. The genera generall level level of wages wages and salarie salariess should should be reaso reasonab nably ly in line with that prevailing in the labour market. 3. Wage and salary salary plans and policies policies should should be sufficiently sufficiently flexible. flexible. 4. Job evaluati evaluation on must be be done scient scientifical ifically ly.. 5. Wage and salary salary administrati administration on plans plans must always always be consistent consistent with overall organisational plans and programmes. 6. Wage and salary salary admini administr strati ation on plans and programm programmes es should should be in conformity with the social and economic objectives of the country like atta attain inme ment nt of equa equali lity ty in inco income me dist distri ribu buti tion on and and cont contro roll llin ing g inflationary trends. 107
7. Wage age and and sala salary ry admi admini nist stra raio ion n plan planss and and prog program ramme mess shou should ld be responsive to the changing local and national conditions. 8. Thes Thesee plan planss shou should ld be simp simpli lify fy and and expe expedi dite te othe otherr admi admini nist stra rati tive ve processes. ELEMENTS/INGREDIENTS OF A GOOD WAGE PLAN Basic elements of good wage plan are as follows: 1.Should be easily understandable; understandable; 2.Easy Computation; 3.Capable of motivating motivating Employees E mployees;; 4. Should provide remuneration as soon as employees have made efforts; 5.Should be relatively stable; FACTORS AFFECTING WAGE AND SALARY ADMINISTRATION IN AN ORGANISATION
first import important ant factor factor which which organizat zation ion abilit ability y to pay: pay: The first 1. The organi determines determines the pay pay rate is the as the companies companies with with good sales & high profits have the ability ability to pay higher higher wages to the employees employees as compare to any other small scale company . 2. Supply & Demand Force of labour : The labour labour market market condition conditionss or
supply & demand forces at the national ,regional & local levels because if the demand demand for certain certain skills is high & supply supply is low the price price to be paid for these skills will be high & similarly if demand for skill is low & supply of manpower manpower is more than salary paid will will be low . Prevailing Market Rate: The next factor is the prevailing market rate or 3. Prevailing
know known n as goin going g mark market et rate rate or comp compar arab able le wage wage .It .It incl includ udes es the the competition demand ,then the government laws & judicial decision ,trade union encourages this practice so that people have equal pay ,equal work. Thee Cost Cost of livi living ng:: Th Thee Cost 4. Th Cost of livi living ng is the the usua usuall lly y rega regard rded ed as
auto automa mati ticc mini minimu mum m pay pay crit criter erio ion n & it is base based d on the incre increas asee or decrease in an acceptable cost of living index .When the cost of living increases ,workers & trade union union demands adjusted wages. means that that the the wages wages paid should be adequate to 5. The Living wages : It means enable employees to maintain himself & his family at a reasonable level of existence .
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6. Productivity : It is the another criteria measured in the terms of output
per per man man hour hour . Technologic echnological al improvemen improvement, t, better better organiza organization tion & management the development development of better methods of production production by labour labour & management ,greater skill by labour are responsible r esponsible for the increase in productivity . 7. Trade Union Bargaining Power : The trade unions play an important role ,generally the stronger & powerful the trade union, the higher wages, As a strike strike or thre threat at of stri strike ke is is the the most most powerf powerful ul weap weapon on used used by them . : The more difficult a job is more higher is the wage wages. s. As the the jobs jobs are are grad graded ed acco accord rdin ing g to the the rela relati tive ve skil skilll ,effor ,effortt ,responsibility & job condition required .
Requirements ents 8. Job Requirem
9. Managerial Attitudes : The managerial managerial attitudes attitudes plays an imp role like
top management desires to improve or maintain morale morale & to attract high caliber employees to reduce turnover& to provide high living standard . Thesee dete determ rmin inee in a sign signif ific ican antt Psycholo ologic gical al & Social Social Factor Factors: s: Thes 10. Psych measure measure how hard a person will work work for the compensatio compensation n received received or what pressure pressure he will exert exert for his hike in compensatio compensation n .Wages .Wages as a measure of success in life ,people may feel secure or have an inferiority complex . WAGE CONCEPTS
Minimum Wage : must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the workers by providing some measure o f education, medical requirements and amenities. This is the wage established according to the provisions of the law. law.
Living Wage: It represents a standard of living, which provides not merely for bare physical sustenance but decency, decency, protection against illness, requirements of essential social needs and some insurance against important misfortunes;
a ccording to the productive contribution of the Fair Wage: The wage, which is decided according work done by him.
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COMPONENTS OF THE COMPENSATION SYSTEM
Jobs offered by an organization vary in terms of their values. Job value is ascertained by job evaluation. Jon evaluation is a systematic method of appraising the value of each job in relation to other jobs in an organization. We We have already discussed the job evaluation method of in the previous chapter on job evaluation.
Once all the jobs are assigned values, then these are placed in a grade, or say, a rate per job. These grades are arranged in an hierarchical order starting with lower to higher jobs. Thus, job and salary structure consist of the various salary grades and their different levels of single jobs or group of jobs.
Basic Wage/Salary; Dearness Allowance; House Rent Allowance; City Compensatory Allowance; Conveyance Allowance; Leave Travel Concession; Education Subsidy; Bonus (Profit bonus /Incentive Bonus); Medical; Provident Fund; Pension; Overtime; Fringe benefits; Social security benefits. In case of executives, various reimbursements are also made as part of their salaries. These are:
Company leased accommodation; Servant salary reimbursement; Company maintained car; Driver salary reimbursement; House maintenance reimbursement; Children education; Scholarship to the children; Electricity, Electricity, water, gas charges reimbursement; Insurance premium; Hospitalization; Office maintenance at residence; Household furniture and appliances; Holiday homes; Interest free loans for house building & many more.
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In short, the main objective of wage and salary administration is to establish and maintain an equitable wage and salary system to obtain, retain, and motivate people to requ ired skill in an organization. The whole administration of wage and salary payment is based upon three principles, namely, namely, external equity, equity, internal equity and individual equity. equity.
Job Evaluation
Introduction
Job evaluation is the output provided by job analysis. As seen earlier, job analysis describes the duties of a job, authority relationships, skills required, conditions of work, and additional relevant information. Job evaluation on the other hand, uses the information in job analysis to evaluate each jobvaluing its components and ascertaining relative job worth. It involves, in other words, a formal and systematic comparison of job relative to another, so that a wage or salary hierarchy results. So it is a process by which job in an organization are evaluated. If job values are not properly studied, it is very likely that jobs would not be properly priced, i.e., high valued jobs may receive less pay than low valued job jobs. s. When When empl employ oyee ee real realiz izes es that that this this is happ happen enin ing, g, they they beco become me dissatisfied. They may leave the organization, reduce their efforts or perhaps adopt other modes of behavior detrimental to the organization. organization. Definition- “Bureau of labour statistics, USA “Job evaluation is evaluation or rating of jobs to determine their position in job hierarchy. The evaluation may be achieved through assignment of points or use of some other systematic method of essential job requirement such as skills, experience and responsibility”.
According to ‘Kimball and Kimball’ “Job evaluation is an effort to determine the relative value of every job in a plant to determine what the fair basic wage for a job should be”. According to ‘Wendell French’ “Job evaluation is the process of determining the relative worth of the various jobs within the organization, organization, so that different wages may be paid to jobs of different worth”. Objectives of Job Evaluation
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To secure and maintain complete, accurate and impersonal description of each distinct job; Provides standard procedure for determining the relative worth of each job For promotion and transfer To ensure wages are paid to all qualified employees for like work; To consider fair and accurate consideration of all employees for advancement and transfer; To provide information for ‘work organization, employees’ selection, placement, training and numerous other similar problem; Procedure Procedure for Job Evaluation
Step 1: Analyze & prepare job description - this require a preparation of job discription and also a analysis of job requirement for successive performance. Step 2: Select and prepare job evaluation plan- Means job must be broken into small components components i.e it should involve the the selection of factors, elements needed for the performance of all jobs for which money is paid, determining their value and preparing return instructions for evaluation. Step 3:Classify Jobs: This Requires grouping for arranging jobs in a correct sequence in terms of value to the firm and relating them to money terms in order to ascertain their relative value. Step 4:Install the programme : This involves explaining it to employees and putting it into operations. Step 5:Maintain the programme: Jobs cannot continue without updating new jobs and job changing in obedience to changing conditions and situations.
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ADVANTAGES OF JOB EVALUATION a. Job Job eval evalua uati tion on is a logi logica call and, and, to some some extent extent,, an object objectiv ivee method of ranking jobs relative to one another. It may help in remov removin ing g ineq inequa uali liti ties es in exis existi ting ng wage wage stru struct ctur ures es and and in maintaining sound and consistent wage differentials in a plant or industry. b. In case of new jobs, jobs, the method method often facili facilitat tates es fitting fitting them them into existing wage structure. c. The method method may lead lead to greate greaterr uniformit uniformity y in wage rates, rates, thus simplifying wage administration. d. The The meth method od help helpss in remo removi ving ng grie grieva vanc nces es,, aris arisin ing g out out of relative wages; and improves labour management relations and workers morale. e. The informatio information n collected collected in the the process process of job descri description ption and and analysis be also used for the improvement of selection, transfer and and prom promo otio tion proce roced dure ure on basi basiss of comp compar arat ativ ivee job job requirements. f. The method method replac replaces es many many accide accidenta ntall
LIMITATIONS LIMITATIONS OF JOB J OB EVALUATION
These are: 1) Thou Though gh many many ways ways of appl applyi ying ng the the job job eval evalua uati tion on tech techni niqu ques es are are available, rapid changes in technology and in the supply and demand of particular skills have given rise to the problem of adjustment. These need to be probed. 2) Subs Substa tant ntia iall diff differ eren ence cess exis existt betw betwee een n job job fact factor orss and and the the facto factors rs emphasized in the market. These differences are wider in cases in whic which h the the aver averag agee ay offe offere red d by a comp compan any y is lowe lowerr than than the the prevalent in other companies in the same industry or in the same geographical area. evaluatio tion n frequen frequently tly favour favourss groups groups differe different nt from those, those, 3) A job evalua which are favoured from the market. ‘Kerr and Fisher’ observes, “the jobs which tends to rate high as compared with the market those of janitor, nurse and typist, while craft rates are relatively low. Weaker groups are better served by an evaluation plan than by the market; the former places the emphasis not on force but on equity”.
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4) Job factor factorss fluctu fluctuate ate becaus becausee of change changess in produc productio tion, n, techno technolog logy y, information system, and division of factors and such other factors. Therefore the evaluation of the job today is made on the basis of job factors and does not reflect the time job factor in future. 5) Job Job eval evalua uati tion on take takess a long long time time to inst instal all, l, requ requir ires es spec specia iali lize zed d technical personnel, and may be costly. 6) A large large number number of jobs jobs are called ‘red ‘red circle jobs’. jobs’. Some of these may may be be gett gettin ing g more more and and othe otherr less less than than the the rate rate dete determi rmine ned d by job job evaluation. JOB EVALUATION METHODS / SYSTEMS There are four basic, traditional system of job evaluation: (1) The ranki ranking ng syst system, em, (2) The grading grading or job classi classificati fication on system; system; (3) The point point system system;; (4) The factor factor comparison comparison system. system. The first two systems are popularly known as non-analytical or non-quantitative or summary systems , because they utilize non-quantitative methods of listing jobs in order analytical or to difficulty and are, therefore, simple. The last two systems are called the analytical quantitative systems , because they use quantitative techniques in listing the jobs.
1) THE RANKI RANKING NG SYSTE SYSTEM M Mechanism: Under this system, all jobs are arranged or in order of their importance from the simplest to the hardest, or in the reverse order, each successive job being higher or lower than the previous job in the sequence. It is not necessary to have job description
Generally speaking, the following five steps are involved in the system: Step 1: Preparation of job description, particularly when the ranking of the job is done by different individuals and there is a disagreement among them. Step 2: Selection of raters, jobs may be usually ranked by department or in cluste clusters. rs. This This elimin eliminate atess needs needs for direct directly ly compari comparing ng factor factory y jobs jobs and clerical jobs. Most organization uses a committee of raters. Step 3: Selection of rates and key jobs, usually a series s eries of key jobs or benchmark mark jobs jobs (10 (10 to 20 jobs jobs,, whic which h incl includ udee all all majo majorr depa depart rtme ment ntss and and functions) are first rated; then the other jobs are roughly compared with these key job to establish a rough rating.
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Step 4 : Ranking of all jobs. Each job is than compared in details with other similar job to establish its exact rank in the scale. For this each rater must be given a set of ‘index card’, each of which contains a brief description of jobs. These jobs are than ranked from ‘lowest to highest’ or or from ‘highest to lowest’ are ranked first and than the next highest and next lowest and so forth until all the cards have been ranked. Step 5: Preparation of job classification from the rating: The total ranking is divided into an appropriate number of groups or classifications, usually 8 to 12. All the jobs within a single group or classification receive the same wage or range of rates.
Merits of Ranking Method of Job Evaluation:
1. The system system is simple, simple, easily easily understood understood,, and easy to to explain explain to employees. Therefore, it is suitable for small organizations with clearly defined jobs. 2. It is far less expensi expensive ve to put into into effect effect than than other systems, systems, and and requires requires little effort for maintenance. 3. It requires requires less time, time, fewer fewer forms and less less work, unless unless it is carried carried to a detailed point used by company. Demerits: 1. As there is is no standard standard for an analysis analysis of the the whole job job position position different bases of comparison com parison between rates occur. The process is initially based on judgment and tends to be influenced by a variety of personal biases. 2. The system system merely merely produce producess a a job order order and does does not indic indicate ate yo what extent it is more important than the one below it. 3. Specific Specific job requireme requirements nts are not normally normally analyse analysed d separately separately..
2) JOB CLASSIFICATION OR GRADING METHOD Under this system, a number of pre-determined grades or classifications are first established by a committee and than the various jobs are assigned within each grade or class. Grade descriptions are the result of basic job info inform rmat atio ion n whic which h is basi basica call lly y arri arrive ved d from from the the job job anal analys ysis is.. Afte After r formulating and studying job description and job specifications, jobs are 115
grouped into classes or grades which represent different pay levels ranging from low to high. Steps: The following 5 steps are generally involved: 1. The preparati preparation on of job descrip descriptions tions,, which gives gives us basic basic job information usually derived from a job analysis. 2. The preparati preparation on of job descripti descriptions, ons, so that different different levels levels or grades grades of job may be identified. 3. Selection Selection of grades grades and key key jobs. jobs. About About 10 to to 20 jobs are select selected, ed, which include all the major department and functions and cover all the grades. 4. Grading Grading the key key jobs. Key Key jobs are assigne assigned d to an appropria appropriate te grade grade levels and their relationship to each other studied. 5. Classificat Classification ion of all jobs. jobs. Jobs are classified classified by grade grade definition definitions. s. All All the job in the same grade receive the same wage or range of rates. For example, menials may be put into one class, clerks in another, junior officers in other class, and the top executive in high class.
1. 2.
3.
4.
5.
Merits: This method method is simple simple to operate operate and and understand understand,, for it does not not take much time or require technical help. The use of fully fully describe described d job classes classes meets meets the need for for employing employing systematic criteria in ordering jobs to their importance. i mportance. Since many workers think of job in, or related to, cluster or groups, this method makes it easier for them to understand rankings. If an organizat organization ion consists consists of 500 people people holding holding to different different jobs, jobs, the jobs might be broken up into perhaps 5 classes, arranged in order of importance from high to low, and described class by class. The grouping grouping of jobs jobs into classific classificatio ations ns makes pay pay determinatio determination n problems administratively easier to handle. Pay grades are determined for, and assigned to, all the job classifications. It is used in important important government government and and operates operates efficientl efficiently y, but it is rarely used in an industry. Demerits
1. Alth Althou ough gh it repr repres esen ents ts an adva advanc ncee in accu accura racy cy over over the the rank rankin ing g method, it still leaves much to be desired much because personal
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evaluations by executives establish the major classes, and determine into which classes each job should be placed. 2. Since no detail detailed ed analysis analysis of a job is done, done, the judgment judgment in respect respect of a whole range of jobs may produce an incorrect classification. 3. It is rela relati tive vely ly diff diffic icul ultt to writ writee a grad gradee desc descri ript ptio ion. n. The syst system em become difficult to operate as the number of job increases. 4. It is difficult difficult to to know how much much of a job’s job’s rank is influence influenced d by a man on the job. 5. The system system is rather rather rigid rigid and unsuit unsuitabl ablee for a large large organi organizat zation ion or for very varied work. 3) THE POINT SYSTEM This method is the most widely used type of job evaluation type. It requires a identifying number of compensable factors and than determining degree to which each of these factor is present in the job. Once the degree to which each factor is determined, the corresponding number of points of each factor are added and an overall point value is obtained. Steps : This system requires a detailed examination of the jobs. The Steps in these method followed are: Step 1: The jobs have to be determined first which are to be evaluated. They are usually clustered. The jobs, which require (1) similar activities, (2) the same workers characteristic or traits and work on the same kind of materials (say wood or metal are placed in the same cluster or family). Step 2: For the purpose, a pre-determined number of factor are arbitrarily selected by raters. The number of factors used varies a great deal from company to company. The common factors are: Education and training; experience; physical skills and effort; planning for the supervision of others; external contacts, internal contacts; confidential information and working conditions. Step 3: The next step is to break down each factors into degrees or levels, and to assign a point value each level or degree.
factor. For Step 4: Determination of relative values or weighs to assign each factor. each job or cluster of jobs some factors are more important than others. For example for executives, “the mental requirements” factor would carry more
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weight than “physical requirements”. The opposite might be true of “factory jobs”. as sign money values to points. For this purpose, Step 5: The next step is to assign points are added to give the total value of a job; its value of a job is translated into terms of money with a pre-determined formula. 4) THE FACTOR COMPARISON METHOD Under this system, jobs are evaluated by means of standard yardstick of value. It entails deciding which jobs have more of compensable factors than others. The evaluation committee selects some’ key’ or benchmark jobs for which they are clearly understood job description and counterparts in other organizations and for which the pay rates are such as agreed upon and are acceptable to both management and table. Steps involved: Step 1: Clear-cut job descriptions are written and job specifications are preferably in terms of compensable factors. The people specifications are generally provided with a set of definitions which have been used in each of the compnsable factor selected. Step 2: Selecting of key jobs: Such jobs are those jobs which represent the job under study; and for which pay is determined to be standard or reference points and for which there is no controversy between management and the employees. Step Step 3: Rank Rankin ing g of key key jobs jobs:: Seve Severa rall dif differe ferent nt memb member erss of the the job job eval evalua uati tion on comm commit itte teee rank rank the the key key job job on each each of five five fact factor orss (men (menta tall requi requirem remen ents ts,, phys physic ical al requ requir ireme ement nts, s, skil skilll requ requir irem emen ents ts and and work workin ing g conditions). Step 4: Valuing the factors: The basic pay for each ‘key’ job is allocated to each factor. Step 5: Comparing all job with each jobs: All the other jobs are than compared with the key jobs, factor by factor, to determine their relative importance and position in the scale of jobs. Step 6: Establishing the monetary units value for all jobs: monetary values are assigned to each factory of every key job. Merits:
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1. It is a systematic systematic,, quantifiabl quantifiablee method method for which detail detailed ed step by step step instructions are available. 2. Jobs are are compared compared to other other job job to determin determinee a relative relative value. value. 3. It is a fairly easy system system to to explain explain to employee employeess 4. There are are no limits limits to the value, value, which which may be assigned assigned to each each factor factor.. 5. The plan plan does not requir requiree a translation translation from from points points to money money. 6. The reliab reliabili ility ty and validit validity y of the system system are greater greater than than the same statistica statisticall measures measures obtained obtained from group standardized standardized job analysis analysis plans. Demerits: 1. It is costly costly to instal install, l, and somewha somewhatt difficul difficultt to operat operatee for any one who is not acquainted with the general nature of the job evaluation techniques. 2. Wage level level change from time time to time, and there there minor inconsiste inconsistencies ncies may be brings in order to bring all the job in alignment. 3. Mone Money y rate rates, s, when when used used as a basi basiss of rating rating,, tend tend to infl influe uenc ncee the the actual rate more than the abstract rate. 4. The system system is complex complex and cannot cannot be explaine explained d to, and underst understood ood by every day non-supervisory organizational employees.
Once a job is evaluated, or say ranked, the next step is to convert this measurement in to salary bracket. In other words, it implies simply breaking up the total salary structure in to sun divisions corresponding to the number of classes of job arrived at through job evaluation. However, several other factors factors also need to be looked looked in to before a right right type of salary structure structure is evolved.
Establishing Pay Equity People have no basic or instinctive need for money, a commodity that is impo import rtan antt only only if it can can sati satisf sfy y othe otherr need needs. s. Orga Organi niza zati tion onss frequ frequen entl tly y over overes esti tima mate te the the valu valuee work workers ers plac placee on mone moneta tary ry rewa reward rds. s. The The equi equity ty theories can help explain employees’ e mployees’ reaction to compensation system. EQUITY: Employees wanted to be treated fairly. fairly.
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Equity is the balance between the inputs an individual brings to a job and the outc outcom omee he or she she rece receiv ives es from from the the it. it. An empl employ oyee ee inpu inputt incl includ udes es experi experienc ence, e, educat education ion,, specia speciall skills skills,, effor effortt and time time worked worked.. Outcom Outcomes es include pay benefits, achievement, recognition and any other rewards.
Indi Indivi vidu dual alss use use a comp comple lex x proc proces esss to dete determi rmine ne what what is fair fair.. Inpu Inputs ts are are continually compared with outcomes-the individual’s special skills and efforts are weighe weighed d agains againstt the pay and recogn recogniti itions ons given given by the organ organiza izatio tion. n. However inputs and outputs are in different units, and are hard to compare to each other directly. However, inputs and outcomes are in different units, and are hard to compare to each other directly. directly. Thus, equity theory suggests that individuals determine whether whe ther they are being fairly treated by comparing their own input/outcome ratio to the input/outcome ratio of someone else. This other person may be in the same job or in other jobs, in the company or outside o utside the company, company, in the same industry or outside the industry sense of inequity arises when the comparison process uncovers an imbalance between inputs and outcomes of the employees compared with others.
Equity Theory
My rewards (outcomes) My contr ontrib ibu ution tionss (In (Inputs puts))
=
Other’ Other’ss Reward Rewardss = Othe Other’ r’ss Cont Contri rib buti ution
My rewards rewards My contributions
<
Other’s Other’s Rewards Rewards = Other’s Contribution
Equity
Inequity ( under-reward)
Action to Restore Equity from Under-Reward Equity: 1. Person Person could could ask ask for for a raise. raise. 2. Persons Persons could could reduce reduce contrib contribution ution (work harder). harder). 3. Person could could try try to get other other to increase increase contribu contribution tion (work (work harder). harder). 4. Last resorts: resorts: Quit Quit or choose choose another another comparison comparison other other..
My rewards My contributions
>
Ot Other’s r’s Rewards Other’s Contribution
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=
Inequity ( over-reward)
Action to Restore Equity from Over-Reward Equity 1. Pers Person on coul could d incre increase ase cont contri ribu buti tion onss (wor (work k hard harder er or long longer er,, cult cultiv ivat atee additional skills). 2. Person Personss could could ask ask for for a pay pay cut. cut. 3. Person could attempt attempt to get other other a raise. raise. 4. Person could could attempt attempt to get get other other to reduce reduce his or her contribu contribution. tion. 5. Last resorts: resorts: Quit Quit the job job or choose choose another another comparison comparison other other.. DESIGNING EQUITABLE COMPENSATION SYSTEM Internal Equity: It refe refers rs to the the rela relati tion onsh ships ips amon among g jobs jobs with within in a sing single le orga organi niza zati tion on.. Intern Internal al equit equity y exists exists when when the pay differ different ential ialss betwee between n differ different ent jobs jobs within the organization and perceived as fair - neither too large nor too small. External Equity:
It refers to the comparisons of similar jobs in different organizations (for example, the pay received by presidents of various electrical manufacturing firms. Individual Equity:
It refers to comparisons among individuals in the same job with the same organization Ther Theree are are acce accept pted ed proc proced edur ures es for for esta establ blis ishi hing ng inte intern rnal al,, exte extern rnal al and and individual with an organization.
METHODS FOR ESTABLISHING ESTABLISHING INTERNAL EQUITY 1. Job Evalua Evaluatio tion n meth methods ods:: The major purpose of job evaluation is to determine the relative worth of the jobs within an organization. A systematic comparison can define an internal
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job hierarchy that ranks jobs in terms of their relative contribution to the organizational organizational objectives. The five most frequently used job evaluation methods are 1. Job Job ra rankin nking g 2. Job grad grading ing or classi classific ficati ation on 3. The The poin pointt meth method od 4. Fact Factor or comp compar aris ison on (Already explained) Establishing External Equity Methods of Establishing External Equity:
1. Wage and Salary surveys : - to establish a competitively priced wage
structure, organizations typically rely on wage and salary survey data collec collected ted from other other organ organiza izatio tions. ns. The surve survey y proces processs involv involves es identifying the jobs to be included, selecting the organizations to be surveyed, and then actually collecting the data. The data then must be interpreted so that wage rates can be set within the context of the organization’s pay policy. 2. Identifying Key Jobs : - in practice, employers do not seek market
data on all jobs. Instead, they gather survey information information only for key jobs, which generally have the following characteristics: a.) The job content is relatively stable stable over time. b.) The jobs occur frequently frequently,, both in the organizat organization ion and in the surveyed organizations. c.) The jobs can be defined defined quite precisely. precisely. d.) The jobs are perfo rforme rmed in a simil milar manner in most organizations. Key jobs should span the range of position to be included in the Wage structure. For example, it would not be desirable to identify Only entry-level positions as key jobs. Jobs at the middle and upper levels also need to be included. Moreover, jobs need to be carefully defined.
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:-Identifying ing organizat organizations ions to 3. Select Selecting ing Organi Organizat zation ionss to Su Surve rvey y:-Identify survey can be important. Organizations to covered in a wage survey typically include those that Employ workers with the same skills. within geographic geographic distances distances that would make employees willing Are within to commute or relocate, and industry. Are in the same or similar industry. However, the considerations that go into selecting a set of organizations to be surveyed vary for different jobs. 4. Collecting Data: - rather than running their own wage survey, many
organiza organizations tions obtain the results results of surveys surveys undertake undertaken n by industry industry associ associati ations ons,, profes professio sional nal associ associati ations ons,, governm government ent agenci agencies, es, or consulting firms. Numerous annual surveys cover a wide choice of job families and industries. At local levels, chapters of Society for Human Resource Management or Chambers of Commerce often undertake surveys for their membership. For a company that wants to collect and analyze its own data, it is important to obtain information on the charac character terist istics ics of the respon respondin ding g organ organiza izatio tion, n, as well well as on both both direct and indirect compensation. The organizational information is needed to judge the comparability of the competitor in terms of size, products, and financial condition. It is also crucial to know the types and amounts of benefits offered as well as a s incentives and hourly pay. pay. Of the three summary measures, the median is the most useful in setting wage ranges. The mean can easily become distorted if a few workers are paid at extreme rates. The median is not the subject to such distortion. 5. Pay Level Policy: - once an organization has completed an internal job evaluation and obtained wage survey data, it needs to translate this information into pay rates for each class of jobs. This process involves appropriate interpretation of survey results, the merging of the job evaluation with the sur survey data, and consideration of the organization’s pay level policy.
Establishing Individual Equity
As mentioned earlier, jobs evaluated as having nearly the same value are usually usually combined combined into a single single wage grade. A single single wage may be selected selected for each grade and paid to every person whose job falls in the grade. More 123
commonly, commonly, however, a range of pay rates is set for each grade. When a range is set, the issue of individual equity becomes salient, and the organization must have a system for determining where in the range the compensation of each employee should be. Steps in designing Individual Equity: Designing pay ranges: The range associated with a pay grade sets the upper upper and lower lower bonds bonds of possib possible le compen compensat sation ion for indivi individua duals ls whose jobs fall in the grade. Setting Individual pay: Individual equity requires that rewards to employees be allocated fairly across individuals performing the same jobs. The two commonly used approaches to determine how workers are placed placed and progress progress throug through h the pay ranges ranges are senior seniority ity and merit. merit. A newer method method bases increm increment entss on the number number of skills skills mastered.
In short, equity concern centers on setting the pay of individuals within a wage grade. Typical Typical bases for this decision include seniority, seniority, merit, and skill. Merit pay system has the potential to motivate high performance, but they are difficult to administer in a way that employees e mployees perceive as fair.
EMPLOYEES BENEFITS & SERVICES Management Management is concer concerned ned with with attracting attracting & keepin keeping g employees, employees, whose performance meets at least minimum levels of acceptability ,& at keeping absenteeism absenteeism & turnover turnover to tolerable tolerable levels levels .The provision provision of benefits benefits & serv servic ices es are are impo import rtan antt in main mainta tain inin ing g the the empl employ oyee eess & redu reduci cing ng the the turnover & absenteeism low . The financial incentives are paid to specific employees whose performance whose work is above standard. On the other hand the employees benefits & services are provided to to all the employees employees based on their their membership in the organization. Accord According ing to the Emplo Employee yee Federat Federation ion of India India has def defin ined ed Fringe Fringe Benefits “Fringe Benefits includes payments for non working time ,profits & bonus ,leg ,legal ally ly sanc sancti tion oned ed paym paymen ents ts on soci social al secu securi rity ty sche scheme mess ,wor ,worke ker’ r’ss compen compensat sation ion ,welfa ,welfare re & contri contribut bution ion made made by the worker workerss under under such such 124
voluntary schemes for the post retirement ,medical ,educational ,educational ,cultural ,cultural & recreational needs of the workmen .” According to the Cockman “ Those benefits which are provided by the employer to or for the benefit of the employees employees & which are not in in the form of wages ,salaries & time related payements.” Features of Fringe Benefits
1) Wages are directly directly related related to the work done done & paid regularly regularly usually usually weekly monthly & benefits which a worker enjoys in addition to the the wages or salary he receives. 2) Bene Benefi fits ts are are not not give given n to worker workerss for for any any spec specif ific ic jobs jobs they they have have performed but are offered to them to stimulate their interest in their work & to make their job more attractive & productive for them. 3) Fringe Fringe represe represents nts a labour labour cost for the employe employerr , it is basica basically lly an expenditure incurred 4) Fringe Fringe is never a direct direct reward reward geared geared to the outpu output, t, effort for for merit of an employees not on the basis of hard work or long hours of work but on the basis of length of of services ,his sickness ,sex the hazard of life . 5) The fringe fringe benefi benefitt is enjoye enjoyed d by all all . 6) Frin Fringe ge bene benefi fitt must must cons consti titu tute te a posi positi tive ve cost cost to the the emplo employe yerr & should be incurred to finance an employee benefit. OBJECTIVES OF FRINGE BENEFITS
To create & improve sound industrial relations. To Boost up employee morale To moti motiva vate te the the empl employ oyee eess by iden identi tify fyin ing g & sati satisf sfyi ying ng thei their r unsatisfied needs. To provide qualitative work environment To protect health & safety of the employees To promote employees welfare by providing welfare measures like recreation facilities. COVERAGE/SCOPE OF BENEFITS
1) Employee Employee Secu Security rity Payments Payments::
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(a) Employ Employers ers Contri Contribut bution ion stipul stipulate ated d in legal legal enactm enactment ent:: old age, age, survivor, survivor, disability health (b) Payments under the workmen’s workmen’s compensation Act. (c) Supplement Supplemental al unemployment unemployment benefits benefits (d) Accident Accident insura insurance nce (e) (e) Pens Pensio ions ns (f) Contribut Contribution ion to the saving saving plans & health health & welfare benefits. benefits. 2) Payment Payment ffor or the the time time not not worked: worked: (a) (a) Rest Rest Period Period:: Among the office jobs the breaks popularly known as rest break or coffee break are allowed during the day to the workers (b) Holidays Holidays:: Holidays which includes Christmas ,New Years, Holi ,Diwali ,Diwali on which which the employees employees have to be paid paid & they do not have to work. vary from 15 days days to 1month in a year (c) Vacatio acation n : Paid vacations vary . (d) (d) Sick Sick Leave Leave : This is provided to the employees when is out on illness (e) Severa Severance nce Pay Pay : This provides one time payment to an employee when he is terminated Thesee are are gene genera rall lly y educ educat atio iona nall leav leavee (f) Leave eave of Absen bsence ce:: Thes provi provided ded to manage managers rs or manage managemen mentt traine trainees es durin during g traini training ng period . (g) Pension Pension Programmes Programmes (h) Insuranc Insurancee ( C) Bonus & Awards :These consist of financial amenities & advantages as holidays ,over time & shift premium ,attendance ,attendance bonus, Diwali bonus etc. EMPLOYEES SERVICES
In addition addition to the above fringe fringe benefits, benefits, organizati organization on provides provides a wealth wealth of service that employees find desirable .These services are usually provided by by the orga organi niza zati tion on at no cost cost to the the employ employee eess .These .These servi service cess are are provided provided at the discretion discretion of the managemen managementt & are generally generally are concern concern to trade union. These services mainly include: 126
1) Services Services related related to the type of work performed, performed, includi including ng subsidies subsidies for the purchase & upkeep clothing, uniforms 2) Eating Eating facilities facilities cafeteria, cafeteria, lunch lunch rooms, rooms, canteens, canteens, lunch lunch rooms 3) Transpor Transportati tation on facilities facilities including including parking parking & bus services services 4) Chil Childc dcar aree faci facili liti ties es,, comp compri risi sing ng nurs nurser erie ies, s, day day care care cent center erss for for children. 5) Housing Housing services services including including company company owned housing housing projects. projects. 6) Financial Financial & legal legal services services including including sponsorin sponsoring g of loan funds. funds. 7) Recreational social & cultural programmes programmes including including athletics, athletics, beauty beauty, social clubs , parties ,picnics . 8) Educat Education ional al servic services es 9) Medi Medica call servi service cess 10)Flexitime POTENTIAL APPRAISAL Evalu Evaluati ating ng what what a perso person n can perfo perform rm or do is calle called d ‘pote ‘potenti ntial al appr apprais aisal al or evaluation.’ Potential refers to the abilities present but not currently utilized. It is a latent capacity in a person to discharge a responsibility.
“Peo “Peopl plee are are like like iceb iceber ergs gs.. Wh What at you you see see abov abovee the the surf surfac acee (performance) is only a small part. A large large part of the attributes needed to pe perf rform orm exce excell llen entl tly y in futu future re job, job, whic which h I call call pote potent ntia iall is not not immediately visible. It is hidden below surface.”
Pote Potent ntia iall repr represe esent ntss late latent nt capa capaci citi ties es and and qual qualit itie iess in a perso person, n, whic which h manifest while performing the job. WHY POTENTIAL EVALUATION?
The objectives of potential evaluation are to: 1. Promote an employee employee to higher higher levels levels of jobs involv involving ing higher higher order order or respon responsib sibili ility ty,, which which the employ employee ee can effec effectiv tively ely discha discharg rgee without being over burden and stretched. 2. Assist the the organizati organization on to allocate allocate jobs among among employees employees as per per their capabi capabilit lities ies so that that organ organiza izatio tional nal respons responsibi ibilit lities ies are discha discharg rged ed effectively. A potential employee is characterized by the following attributes:
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1. 2. 3. 4. 5.
Ability Ability to foresee foresee future future opportun opportunities ities.. Consistenc Consistency y in approach approach and performance. performance. Responsive Responsive to to condition condition whatev whatever er comes in the the way. way. Person with high level of integrit integrity y. Broader Broader vision vision and micro perceptio perception. n.
HOW TO EVALUATE EVALUATE EMPLOYEE POTENTIAL? The potential of employees can be evaluated by following the following steps: Determ rmin inat atio ion n of role ole dime dimens nsio ion: n: the the pr proc oces esss of pote potent ntia iall 1. Dete evaluation starts with determining the role dimension of the employee whose hose pote poten ntial tial is to be eva evaluat luateed. Job Job descr escrip ipti tio on and job job specification help determine the role dimensions. The former provides information about the responsibilities involved in a job, while the later provides information on attributes the jobholder should possess. 2. Determination of mechanism: having determined the role dimension a mechanism to evaluate these attributes in an employee is evolved. Obviou Obviously sly,, the mechan mechanism ism should should be approp appropria riate te to apprai appraise se the potential of employee by a designated appraiser. appraiser. 3. Linking potential with other elements: in order to evaluate potential in a meani eanin ngful gful manne annerr, other ther elem elemen entts of huma human n reco recou urse rse management such as feedback, counseling, training, job rotation, etc. should also be lined with it.
PAY FOR PERFORMANCE PERFOR MANCE Pay Pay for for pe perf rfor orm mance ance syst system em invo involv lves es rewar ewardi ding ng the the empl employ oyee eess according to their performance, or results achieved or contribution to organization’s performance as individuals or as a part of a group. It involves a shift in focus from remuneration models based on the worth of jobs and employee skills to their performance.
Designing a performance linked reward systems is conditioned by a variety of factors such as the nature of business, type of technology, the attitude of unions and human resource management strategies of the organization.
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This This syst system em redu reduce cess labo labour ur cost cost,, resu result lt in incr increas easee in real real wage wagess and and motivate motivate performance performance.. They provide provide a method method of absorbing absorbing cost escalation escalation on account of pay increases and thus help in sustaining competitiveness of the organization. organization. Forms and Choice of Performance Linked Reward System There are several types of Performance linked reward schemes. Generally these are designed to share with or distribute to employees as individuals groups or a collectivity productivity gains, profit improvement or financial resu result ltss of ente enterp rpri rise se perf perfor orma manc nce. e. Such Such sche scheme mess fall fall into into the the broa broad d categories: 1. Scheme Schemess based based on indivi individua duall or small small group group performan performance ce includin including g piece rates, traditional merit pay and sales commission. 2. Incentive Incentive schemes schemes which which may relate relate pay to profits profits on the the basis of pre determined formula. 3. Bonus schemes schemes based on contrib contributio ution n to productivity productivity and profitab profitability ility acco accord rdin ing g to a pred predet eter ermi mine ned d form formul ulaa with with gain gainss some someti time mess distri distribut buted ed among among the indivi individua duall employ employees ees on the basis basis of merit merit rating. 4. Produc Productiv tivity ity bargai bargainin ning. g. 5. Employe Employeee strike strike optio options ns plan plan (ESOP) (ESOP) 6. Compet Competenc ency y base based d pay pay. 1. Merit Incentive Pay The merit incentive pay scheme provides another method of recognizing and reward rewarding ing differe differenti ntial al perform performanc ance. e. This This method method could could partic particula ularly rly be suitable for office staff. The scheme essentially involves the following steps: a) The determina determination tion of result result oriented oriented merit merit rating rating procedures, procedures, b) The identific identification ation of job and and their relative relative importanc importancee c) The formulatio formulation n of scale of reward reward and d) The communic communicatio ation n of the basis basis of moneta monetary ry reward. reward. Under a system of merit increments, there is no prompt relationship between reward and effort. The quantum of reward at a point of time will be considered inadequate. inadequate. Additional cost on the form of enhanced allowances is built for the company on perm perman anen entt basi basis. s. Empl Employ oyee eess cont contin inue ue to bene benefi fitt from from thei theirr best best performance even if it remains re mains below standard in the future. Emplo Employe yees es gett gettin ing g meri meritt awar awards ds cann cannot ot visu visual aliz izee a prop propor orti tion onat atee rela relati tion onsh ship ip betw betwee een n thei theirr perf perfor orma manc ncee and and rewa reward rds. s. The The basi basiss of 129
determining the quantum cannot be explained to employees who are not given such awards. This may evoke jealousy and friction and may thus jeopardize cooperation and goodwill. 2.Incentive schemes Output based incentive scheme are appropriate where tasks are repetitive and measurable These involve the following steps: 1. Select Selecting ing the object objectives ives 2. Determ Determini ining ng the paramet parameters ers of perform performanc ancee in accorda accordance nce with the objective 3. Determ Determini ining ng the norms or base values values or benchmar benchmark k values values for each each parameter 4. Determinin Determining g performan performance ce reward reward relationsh relationship ip 5. Fixing Fixing the relative relative importanc importancee of the selected selected parameters parameters that that is, their their weightings. 6. Designing Designing informatio information n and procedure procedure formats. formats. 7. Dete Determi rmini ning ng the the maxi maximu mum m paya payabl blee ince incent ntiv ivee amou amount nt (inc (incen enti tive ve opportunity) and payment period. 8. Formulating Formulating a communic communication ation and review review scheme These are, however, not suitable for technology and service activities, which which requir requiree informa informatio tion n sharin sharing g proble problem m solvin solving g and team team work. work. Productivity gain or profit sharing or employee stock option plan (ESOP) may be suitable types for such activities
3. Group incentive and productivity gain sharing.
Under Under the produc productiv tivity ity gain gain sharin sharing g scheme schemess produc productiv tivity ity gains gains are shared in accordance to an agreed pre-determined formula. Profit sharing gives a share of profit. Sometimes, the quantum of bonus is determined on the basis of profit as well as productivity improvements according to pre determined benchmark value for each of them. Productivity bargaining
Productivity bargaining can provide yet another method of improving pro produ duct ctiv ivit ity y and and link linkin ing g wage wage incr increa ease se to such such impr improv ovem emen ents ts.. Productivity bargaining, however dose not mean an incentive scheme or
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wage increase in return for assurance and promise from union in return for achieving production targets. This method implies: im plies: a) A detailed detailed analy analysis sis of the the firms operation operationss b) The identific identification ation of cost reduct reduction ion possibili possibilities ties c) Estima Estimatio tion n of savin savings gs in cost cost d) The developme development nt of a system of of indexing indexing wages wages increase increase with cost cost reduction actually realized over time. The The clima climate te for for prod produc ucti tivi vity ty barg bargai aini ning ng has has neve neverr been been more more favorable than now it is for managements to take initiative and build this approach in their collective bargaining relationship with unions. Long-term incentive (ESOP) Long term incentive in the form of employee stock options schemes are operated both to improve long-term incentives and to reduce fixed cost.
ESOP envisages employee participation in and ownership of company equity. equity. This plan is intended to provide an incentive to the employees to improve the all round performance and growth of the company and share its prosperity. The plan usually involves allotments of equity shares according to laid down procedure and subject to governmental regulations, laws and rules. The employees benefit in the form of enhanced market value of his share and capital gains, which in turn depend on company and employee performance .several software and high tech organization such as infosys have conceived and designed such plans . Competency based pay
The competency is a critical determinant of performance. Therefore there is an incr increa easi sing ng inte intere rest st in offe offeri ring ng mone moneta tary ry ince incent ntiv ivee for for acqu acquir irin ing g competencies required for higher performance on the present job or the next job job.. Such Such comp compet eten ency cy may may for for inst instan ance ce incl includ udee valu values es,, atti attitu tude de and and behavioral characteristics, which influence performance. In designing a performance linked reward scheme, choice of an appropriate scheme should be considered as critical. The choice will be determined by a Varity Varity of factors f actors such as nature of the organization, organization, the nature of technology, technology, the nature of profits the nature of markets, the human 131
resource strategy and business objective. For reviewing an incentive scheme and designing an appropriate scheme.
ISSUES AND TRENDS
1. 2. 3. 4. 5. 6. 7.
Leve Levell of of edu educa cati tion on Trade rade unio union n Organ Organiza izatio tion n cultu culture re Package Package of moneta monetary ry and non moneta monetary ry incentiv incentives es Reward Rewarding ing good good perform performanc ancee Performance Performance pay and performance performance management management Caveats
Questions for Discussions
1. What What do you you mean mean by Perfo Perform rman ance ce Appr Apprai aisa sal? l? Disc Discuss uss the three purposes Performance Perfor mance Appraisal Appraisal can meet. 2. Discus Discusss the various various steps involve involved d in Perform Performan ance ce Apprai Appraisal sal system? 3. “Perfo “Performan rmance ce Appra Appraisa isall is not merely merely for apprais appraisal al but is for accomplishment and improvement of performance”. Discuss. 4. Discuss Discuss a 360-degre 360-degreee appraisal appraisal with with its merits merits and and demerits. demerits.
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5. What What do you you mean mean by fring fringee bene benefi fits ts?? What What is the the rati ration onal alee behind offering benefits to the employees? 6. Appreciat Appreciatee the need for for and significa significance nce of Fringe Fringe Benefits. Benefits. 7. What What is mean meantt by remu remune nera rati tion on /com /compe pens nsat atio ion? n? What What are are the the basi basicc objectives and principles of wage and salary administration? 8. What What do you mean by wage struc structur ture? e? Outline Outline the compon component entss of wage and salary administration. 9. Explai Explain n wage determ determina inatio tion n process process in detai detail. l.
10.W 10.Wha hatt is Job Job Eval Evalua uati tion on?? What What are are the the obje object ctiv ives es of Job Job Evaluation? 11.Discuss the advantages of Job Evaluation? Does job evaluation have any limitations? What are these? 12.Briefly explain the various methods of Job Evaluation. 13.“J 13.“Job ob Eval Evalua uati tion on is the the rank rankin ing g of job job not not the the job job hold holder er.” .” Discuss. 14.What are the three elements of compensation equity? Why is each important? 15.Wh 15.What at does does equi equity ty theo theory ry says says abou aboutt the the way way indi indivi vidu dual alss evaluate and respond to their pay level?
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