Fundamental of HRM

FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT

BASIC HUMAN RESOURCE MANAGEMENT Definition of HRM:

“Human resource management is a management concerning with people aspect of an organization”. - De Cenzo “Human resource management is the philosophy, policy, procedure and practice related to the management of people within an organization”. - Wendell French

Features of Human Resource Management: 1. HRM is people oriented management

HRM is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. The resultant gains are us ed to reward people and motivate them further improvement in productivity. 2. HRM is global-oriented management. 3. HRM is an action-oriented management

HRM focuses attention on action, rather than on record keeping, written procedure or rules. The problems of employees at work are solved through rational policies. 4. It is future-oriented management. Features of Human Resource Management:

1.

Pervasive Force: HRM is pervasive is nature. It is present is all enterprises. It permeates all levels of management in an organization. 2. Action Oriented: HRM focuses attention on action, rather than on record keeping, written procedure or rules. The problems of employees at work are solved through rational policies. 3. Individually Oriented: It tries to help employees develop their potential fully. It encourages then to give out their best of the organization. It motivates employees through a systematic process of recruitment, selection, training and development coupled with fair wage policies. 4. People Oriented: HRM is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. The resultant gains are used to reward people and motivate them further improvement in productivity.


5.

Development Oriented: HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of employees. Training is offered to sharpen and improve their skills. Employees are rotated on various jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the service of organizational goals. 6. Integrating Mechanism: HRM tries to build and maintain relations between people working at various levels in the organization. In short, it tries to integrate human assets in the best possible manner in the service of an organization. 7. Comprehensive Function: HRM is, to some extent, concerned with any organizational decision which has an impact on the workforce or the potential workforce. 8. Auxiliary Service: HR departments exist to assist and advise the line or operating managers to do their personal work more effectively. HR manages is a specialist advisor. It is a staff function. 9. Inter Disciplinary Function: HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, sociology, anthropology, economics, etc. To unravel the mystery surrounding the human brain, managers, need to understand and appreciate the contributions of all such ‘Soft’ disciplines. 10. Continuous Function: According to Terry, HRM is not a one short deal. It cannot be practiced only one hour each day or one day a week. It requires a constant alertness and awareness of human relation and their importance in every day operations.

Functions of Human Resource Management:

1. 2. 3. 4. 5. 6. 7. 8. 9.

Human resources planning Job and work design Job analysis Staffing- Recruitment, Selection and Placement Training and development Performance appraisal and review Compensation and reward Protection and representation Organization Development - Wendell French


1. 2. 3. 4.

Acquisition Development Motivation Maintenance - De Cenzo and Robbins


5.

Development Oriented: HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of employees. Training is offered to sharpen and improve their skills. Employees are rotated on various jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the service of organizational goals. 6. Integrating Mechanism: HRM tries to build and maintain relations between people working at various levels in the organization. In short, it tries to integrate human assets in the best possible manner in the service of an organization. 7. Comprehensive Function: HRM is, to some extent, concerned with any organizational decision which has an impact on the workforce or the potential workforce. 8. Auxiliary Service: HR departments exist to assist and advise the line or operating managers to do their personal work more effectively. HR manages is a specialist advisor. It is a staff function. 9. Inter Disciplinary Function: HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, sociology, anthropology, economics, etc. To unravel the mystery surrounding the human brain, managers, need to understand and appreciate the contributions of all such ‘Soft’ disciplines. 10. Continuous Function: According to Terry, HRM is not a one short deal. It cannot be practiced only one hour each day or one day a week. It requires a constant alertness and awareness of human relation and their importance in every day operations.


1. 2. 3. 4. 5. 6. 7. 8. 9.

Human resources planning Job and work design Job analysis Staffing- Recruitment, Selection and Placement Training and development Performance appraisal and review Compensation and reward Protection and representation Organization Development - Wendell French


1. 2. 3. 4.

Acquisition Development Motivation Maintenance - De Cenzo and Robbins


Functions of Human Resource Management: Job Design (JD)

JD can be defined as the function of arranging tasks duties and responsibilities in to an organizational unit of work for the purpose of accomplishing a certain objective. Techniques of JD

Scientific Techniques: This is done by observing past performances. Job Enlargement: Adding more duties to a job that is related to the current duties of involved (Horizontal Loading) Job Rotation: Shifting an employee from one job to another periodically. Job enrichment: Increasing the depth of a job by increasing authority and responsibility for planning Group Technique: The job ids designed so that a group of individuals can perform it, the job being a collective job. Job Analysis

This includes the systematic analysis of the job and the characteristics of the desired job holders. The information collected through a Job Analysis is of two forms; Job Description: Describes the job, its tasks, responsibilities and service conditions of a job. Job Specification: Describes the requirements of the person for the job, including abilities, educational qualifications, special physical and mental skills, training, experience etc. Human Resource Planning (HRP)

HRP can be identifies as the strategy forecasting the organizations future requirements for different types of workers, their acquisitions, utilization, improvement, employee cost control, retention and supply to meet these needs. The HR Planning Process

HRM Planning Process

Factors considered when forecasting future HR requirements. Demand for the organization’s good/services Plans goals and objectives Method of productions Retirement, transfers, resignations • • • •


Death Retrenchments Recruitment • •

This is the initial attraction and screening of the sup ply of prospective Human Resources available to fill a given position/s. In other words, it is the process of involving the attraction of suitable candidates to vacant positions from both internal and external sources of the organization.

INTERNAL Job posting Intranet Succession plans

EXTERNAL Advertising Job Placement Agencies Internet

Referrals

Placement through Colleges and Universities

Selection

This is a systematic process of selecting the most appropriate and suitable person to a particular job. In other words, Selection is choosing an individual to hire from all those who have been recruited/ attracted. Hiring

This is the process of appointing the person selected for a particular job. In this process, letters of appointments will be prepared, employment contracts will be signed and the new employee will be sent in for a probationary period. (Probationary period: the time period where the ne wly appointed employee will have to work till he/she is made permanent) Performance Evaluation

This is a regular systematic assessment of an employee’s performance in order to review whether his/her performance matches the expected performance levels. Performance evaluations are an analysis of an employee’s recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee’s performance in a job based on considerations other than productivity alone. Compensation Management

The main objective of the function is to develop and maintain a good salaried and wages system which is reasonable both internally and externall y. Factors affecting Salaries and Wages • • • •

Cost of living Supply and demand of labor Government requirements (minimum wage rates) Competitor wage scales


• •

Trade Union influences Labor productivity

Training and Development

Training is the process by which the employees are taught skills and given the necessary knowledge to carry out their responsibilities to the required standard. In other words, it is the improvement of the performance to carry out the current job. Development is concerned with the giving the individual necessary knowledge, skills, attitude and experience to enable an employee to undertake greater and more demanding roles and responsibilities in the future. Development is concerned with the long term prospects of a career succession plan. Methods of training and development Apprenticing On the job training Off the job training Simulations Role playing Case studies • • • • • •

Employee Movements

The movements of employees take place in three methods, Promotions: this is the re-assignment of an employee to a hi gher ranked job in terms of responsibility, respect and salaries. Promotions are usually based on seniority, competency and merit. Transfers: this is the movement of an employee from on e job to another on the same occupational level and at the same level of wage or salary. Lay off: This is is the temporary stoppage or suspension suspension of the service of the the employee to various reasons.

•

•

•

Welfare Administration

This refers to all the facilities and comforts given to the employee by the employer emplo yer apart from wages, salaries and incentives. • • • • • • •

Medical facilities Canteen facilities Housing facilities Transport facilities Recreation facilities Loan facilities Educational facilities


Health and safety Administration

This is concerned with maintaining required and reasonable levels of professional Health and safety in the job and its environment. The organization should ensure the employees physical and mental health. The work place should be free of hazards. Discipline Administration

It is important to control the performance and beh avior of the employees according to the rules and regulations of the organization. For this very reason it is important to develop, implement and maintain an appropriate disciplinary system. Importance of a discipline administration: To reduce conflicts and confusions To control the employees in an orderly manner To ensure employees behavior in accordance with performance standards, rules and regulations of the organization. • • •

Labor Relations

The continues relationship between the labour force and the management. Since labour forces are organized as Trade Unions, it is actually a relationship between Trade union representative and the management. However the Government is also an involved as a third party in order to regulate this relationship by wa ys of laws. This relationship is also more commonly known as a tri-partite relationship.

Reasons for the growing importance of HRM: 1. Technological homogeneity 2. Job humanization

In a broader and more value-oriented sense, the word "humanization" is used to convey the idea that since it is people who form the very core of the establishment it is no longer viable to work on the assumption of an unbridgeable clash of interests between employer and employee. Such divergences as there are should consequently, it is felt, be resolved informally and as between colleagues. 3. Job enlargement and enrichment

Job Enrichment should be distinguished from enlargement job enlargement attempts to make a job more varied by removing the dullness associated with performing repetitive operations. In job enrichment, the attempt is to build in to jobs a higher sense of challenge and achievement. The accumulation of achievement must lead to a felling of personal growth accompanied by a sense of responsibility.


4. Recognition to human and civil rights 5. Emergence of new legislation 6. Globalization Recent Challenges to HRM: 1) Workforce diversity -Entry of women into workforce -Old age people -Changing education and expectations of workforce -Pluralism of workforce 2) Quality of work life(QWL) Elements of QWL • • • • • • • •

Adequate and fair compensation Safe and healthy working conditions Opportunity to use and develop human capacity Opportunity for continued growth and security Social integration in the work organization Constitutionalism Balanced role of work Socially beneficial and responsible work

3) Technological change and its adaption in workforce. 4)

Influence of external environment - Economic and political conditions - Differential industry growth - Globalization - Concerns for quality and productivity - Innovations in management

5) Regularity measures and affirmative actions i. Women benefit ii. Polygraph test iii. Drug abuse iv. Major laws- pension with disables


Differences between Personnel Management & HRM Content

Personnel Management

HRM

Beliefs and assumptions Contract Rules Guide to management Behavior referent Nature of relations Conflict

Careful delineation of written contracts Importance of devising clear rules/ mutuality Procedures Norms/custom and practice Pluralist Institutionalized

Aim to go ‘beyond contract’ “Can-do-outlook; impatience with ‘rule’ Business-need Values/mission Unitarist De-emphasized

Strategic Aspects Key relations Initiatives Corporate plan Speed of decision

Labor-management Piecemeal Marginal to Slow

Customer Integrated Central to Fast

Line Management Management role Key managers

Transactional Personnel/IR Specialists

Communication Standardization Prized Management Skills

Indirect High Negotiation

Transformational leadership General/business/line managers Direct Low Facilitation

Key Levers Separate, marginal task Integrated, key task Job evaluation(fixed grades) Performance-based Separately negotiated Harmonization Collective Bargaining Towards individual Contracts contracts Many Few Job categories and grades Restricted flow Increased flow Communication Division of labor Team work Job design Reach temporary truces Manage climate and culture Conflict Handling HUMAN RESOURCE PLANNING Selection Pay Conditions Labor Management


Definition:

“Human Resource Planning is a process of assessing the organizations human resources needs in the light of organizational goals and making plans to ensure that a competent stable workforce is employed.” -Wendell French

“Human Resource Planning is a process of analyzing and organizations human resource needs under changing conditions and developing the activities necessary to satisfy these needs.” - J.W.Walker

Why do we make Human Resource Plan?

1. Human Resource Plan is needed to select right person for the right position. 2. It is done to achieve the operational goals of the organization effectively. 3. It is required to meet changing needs of the environment by selecting the best feed human resources through appropriate culture. 4. It helps developing a talent-pool of qualified persons for future contingencies. 5. It helps developing company strengths for maintaining competitively with increasing competition for talent hunting. 6. It helps making human resource budget in terms of number and financial units. 7. Human resource planning is make to utilize human resources in more efficient and effective manner by providing scope for require training and development, safety design motivational schemes and retirement programmes etc.


Process of Human Resource Planning:

Organization’s mission, vision, goals and objectives and values of key executives’ i.e. organizational internal political environment

External environmental analysis

Strategic choices of organizational growth activities

Perceived market Opportunities

Determine Human Resources Objectives

Job design and structuring

Human resource demand analysis

Determining Human Resource Needs: Surplus or Shortage

Set plan, policies, goals and rules of each function of HRM

Implementation, Evaluation and Follow up

Human Resource Supply analysis


INTERVIEW

An interview is a conversation between two people (the interviewer and the interviewee) where questions are asked by the interviewer to obtain information from the interviewee. OBJECTIVES OF INTERVIEW:

1. To understand the hidden qualities of a candidate which have not been disclosed by other means. 2. To exchange information. 3. To motivate candidate to take favorable decision. 4. To negotiate issues of employment. 5. To help firm to have fair selection. ERRORS/PITFALLS/PROBLEMS/FLOWS OF INTERVIEW: 1. Bias -Is a consideration of such factors that are irrelevant to the decision situation. 2. Halo error On good performance of a candidate in any particular area is taken as conclusion that the candidate is all together good in all other areas too. 3. Horn effect On bad performance of a candidate in any particular area is taken as conclusion that the candidate is all together bad in all other areas too. 4. Central tendency

In the simplest cases, the measure of central tendency is an average of a set of measurements, the word average being variously construed as mean, median, or other measure of location, depending on the context. However, the term is applied to multidimensional data as well as to unvaried data and in situations where a transformation of the data values for some or all dimensions would usually be considered necessary: in the latter cases, the notion of a "central location" is retained in converting an "average" computed for the transformed data back to the original units. In addition, there are several different kinds of calculations for central tendency, where the kind of calculation depends on the type of data (level of measurement). 5. Leniency error Leniency error is defined as the tendency for a rater’s overall positive impression of an individual to influence performance ratings. Hence, the positive impression impacts the ratings provided by the rater. When a ratee receives this feedback, he/she has no reason or motivation to improve or develop performance. Raters should focus on each goal, objective, responsibility, or competency separately and identify independent areas of both strengths and development needs.


6. Strictness error A frequently-occurring management mistake, in which a manager is too strict in evaluating the performance of employees, leading to decreases in motivation and performance. The strictness error is the inverse of the leniency error, in which a manager does not enforce a suitable level of performance and compliance with standards from employees.

7. Similar-to-me error 8. Talk down 9. Playing attorney 10. Irrelevant question. HOW TO OVERCOME:

1. 2. 3. 4. 5.

Interviewer training on how to take interview. Provide job analysis information to interviewer. Discussion about interviewing pattern or structure among interviewers. Develop a neutral mind among interviewers. Prepare ideal interview situation.

ORIENTATION/INDUCTION/TNDOCTRINATION/SOCIALISATION: CONCEPT:

It is mechanism by which new entrance are familiarized with the organizational environment. OBJECTIVES OF ORIENTATION:

1. 2. 3. 4.

To help overcoming first day jitter. To make new entrance acquainted with organizational culture and members. To satisfy inquiries of new entrance with company information. To help the candidate to settle down with the organization.

DURATION:

FROM A FEW MINUTE TO A FEW YEAR.


PROCESS OR STEPS OF ORIENTATION:

1. Welcome to the candidate in the organization by a responsible person. 2. Offer tea or refreshment. 3. Distribution of company information booklets or leaflets. 4. Discussion session ►

Welcome address by HR manager

►

Speech of key executives

►

Question-answer session

5. Lunch 6. In house tour 7. Evening refreshment 8. Out house tour 9. Interview about the orientation programme with the candidate. 10. Follow up the programme for improvement.

JOB ANALYSIS OR WORK STUDY Job Analysis:

“Job analysis is a systematic process for exploring activities within a job and to determine requires responsibilities and qualities that are needed to perform those activities in a job.” -

De Cenzo and Robbins

“Job analysis is the procedure through which one determines the duties of the positions and the characteristics of the people who should be hired for those positions.”

-

Gary Dessler


Process of Performing Job Analysis:

1. 2. 3. 4. 5.

Determine the objectives, criteria, policy and rules of job analysis. Form a job analysis committee consisting of heterogeneous people. Select representative jobs to be analyzed. Review the existing job analysis information if any. Collect information about company, missions, visions, objectives, cultures, products and activities. 6. Collect job information. 7. Check summarized job information with job incumbents or experts. 8. Develop job description and job specification for given jobs. Methods of collecting job data/information: 1. Observation method The observation method involves human or mechanical observation of what people actually do or what events take place during a buying or consumption situation. 2. Individual interview method Individual interviews typically refer to talking with one user at a time (for 30 minutes to an hour) face to face, by telephone, or with instant messaging or other computeraided means. These interviews do not involve watching a user work. Thus, this is different from interviewing users in a usability testing session or conducting contextual interviews. 3. Group interview method The group interview is a qualitative method of collection of data, where 6 to 12 people are gathered either physically or online to discuss an issue. The respondents in the group interview are composed on the basis of criteria, which are established before the respondents are invited to participate. Therefore it is a relative homogeneous group of people, which achieve a feeling of community around the issue that is the centre of the discussion. When a group of people exchange point of views and experiences under regulation of a moderator from MEGAFON, a useful group dynamic is being created, which give a very varied and detailed knowledge about a clearer defined issue. 4. Diary 5. Technical conference The technical conference method of job analysis involves qualified people collaborating to provide information about a specific job. Select subject matter experts for the technical conference method of job analysis. Experts include supervisors, human resource analysts and other individuals who have expertise in the job and know the requirements. Document the functions and tasks of the job. Prioritize them by placing the most important tasks at the top of the list. Describe the data flow using verbs such as compile, copy, analyze and compare. Explain the job's people interaction requirements using verbs


such as negotiate, supervise, persuade, mentor and instruct. Outline how tasks should be handled using verbs such as arrange, manipulate, feed, handle and operate. 6. Performance method 7. Questionnaire method There are two types of questionnaires: structured questionnaire and open-ended questionnaire. The structured questionnaire uses a standardized list of work activities, called a task inventory, then jobholders or supervisors may identify as related to the job. It must cover all job related to tasks and behavior. Each task or behavior should be described in terms of features such as difficulty, importance, frequency, time spent and relationship to performance. The open-ended questionnaire asks the jobholder to describe the work in his or her own words. 8. Critical incident method Critical incident is a method used for many sectors. Critical incident method- Recording of events by appraiser. An incident is critical when it illustrates what the employers has done or failed to do The critical incidents for performance appraisal is a method in which the manager writes down positive and negative performance behavior of employees throughout the performance period. Each employee will be evaluated as such and one’s performance appraisal will be based on the logs that are put in the evaluation form. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. The critical incidents file of performance appraisal is a form of documentation that reflects all data about employee performances.

Outcomes of Job Analysis:

1. Job Description 2. Job Specification

Job Description:


It is a written statement of duties and responsibilities being performed in a given job.

Job Description Job Title…………………….. Occupational Code…………… Job Grade…………………… Scale…………………………. Reports to…………………… Supervises……………………. Date……………………………………………………………

Duties………………………………………………………… ……………………………………………………………… ……………………………………………………………….. Resposibilies………………………………………………… ……………………………………………………………… ………………………………………………………………... Working conditions ………………..……………………………………………… ………………………………………………………………


Job Specification:

Written statement about human qualities to be need ed to perform jobs in a position.

Job Specification

Job Title………………………………. Grade…………………………………… 1. Basic Education…………………………. 2. Physical Quality………………………….. 3. Extra Curriculum Activities……………. 4. Mental Quality……………………. 5. Experience……………………………….. 6. Language proficiency………………………… 7. Special Training…………………………. 8. Maturity……………………………….. 9. Age………………………………………. 10. Others………………………………………………

Uses of Job Analysis:

1. Organization structure and design 2. Human Resource Planning 3. Job Evaluation 4. Recruitment, Selection and Placement 5. Orientation, training and development 6. Performance appraisal 7. Career path planning 8. Job design 9. Safety measurement planning 10. Vocational guiding and rehabilitation counseling 11. Engineering design and method improvement


Uses of Job Analysis: Human resource planning: Job analysis helps in forecasting human resource requirements in terms of knowledge and skills. By showing lateral and vertical relationships between jobs, it facilitates the formulation of a systematic promotion and transfer policy. It also helps in determining quality of human resources needed in an organization. Recruitment: Job analysis is used to find out how and when to hire people for future job openings. An understanding of the skills needed and the positions that are vacant in future helps managers to plan and hire people in a systematic way. For example, a company might be traditionally hiring MBA students for equit y research. A recent job analysis showed that the positions could be filled by graduates with an analytical mind. Now, this would help the company hire equity analysts from a greater number of available graduates by offering even a slightly lesser salary. Selection: Without a proper understanding of what is to be done on a job, it is not possible t o select a right person. If a Super bazaar manager has not clearly identified what a clerk is to do, it is difficult to find if the person selected must be able to position stores items, run a cash register, or keep the account books. Placement and orientation: After selecting people, we have to place them on jobs best suited to their interests, activities and aptitude. If we are not sure about what needs to be done on a job, it is not possible to identify the right person suited for the job. Similarly, effective job orientation cannot be achieved without a proper understanding of the needs of each job. To teach a new employee how to handle a job, we have to clearly define the job. Training: If there is any confusion about what the job is and what is supposed to be done, proper training efforts cannot be initiated. Whether or not a current or potential job holder requires additional training can be determined only after the specific needs of the jobs have been identified through a job analysis. Counseling: Managers can properly counsel employees about their careers when they understand the different jobs in the organization. Likewise, employees can better appreciate their career options when they understand the specific needs of various other jobs. Job analysis can point out areas that an employee might need to develop to further a career. Employee safety: A thorough job analysis reveals unsafe conditions associated with a job. By studying how the various operations are taken up in a job, managers can find unsafe practices. This helps in rectifying things easily. Performance appraisal: By comparing what an employee is supposed to be doing (based on job analysis) to what the individual has actually done, the worth of that person can be assessed. Ultimately, every organization has to pay a fair remuneration to people based on their performance. To achieve this, it is necessary to compare what individuals should do (as per performance standards) with what they have actually done (as per job analysis). Job design and redesign: Once the jobs are understood properly, it is easy to locate weak spots and undertake remedial steps. We can eliminate unnecessary movements, simplify certain steps and improve the existing ones through continuous monitoring. In short, we can redesign jobs to match the m ental make-up of employees. Job evaluation: Job analysis helps in finding the relative worth of a job, based on criteria such as degree of difficulty, type of work done, skills and knowledge needed, etc. This, in turn, assists in designing proper wage policies, with internal pay equity between jobs.


De- Jobbed Organization:

1. Concept 2. Why are companies becoming de-jobbed today? Concept:

De-jobbing refers to broadening the responsibilities of organization’s jobs and encouraging employees not to limit themselves to only described jobs. Why are companies becoming de-jobbed today? ► ► ► ► ► ► ►

Accelerating the product and technological change Globalized Competition De regulation Political instability Demographic changes Information age Emergence of service society

DEVELOPMENT

“Development refers to the program by which executive capabilities to achieve desired objectives are increased.” -

Michael J. Jucius

“Management development is any attempt to improve managerial performance by imparting knowledge changing attitudes or increasing skills.” -

Garry Dessler

Therefore, management development is a learning process through which knowledge and capabilities of executives are changed to make them capable to face environmental challenges successfully. Why Development is needed? ► ► ►

Managerial careers are in a state of flux as new jobs situations are opening up and traditional stable jobs are disappearing. People want to know more about their immediate jobs other jobs in the organization and about their organization as a whole which max development necessary. As more emphasis is palced on team and team-work, inter-disciplinary knowledge and group decision making i.e. management development has become a pivotal mechanism for managers to win the situation.


►

Managers need their organization’s help themselves to be a successful and talented manager for what management development is needed.

Key success factors:

Extensive and visible involvement of C.E.O in the development program. A clearly articulated (communicate something) and understood development policy o and philosophy. Linkage of executive development policies and philosophies to the co-operate o business strategies policies and challenges. Use of integrated approach in development program-succession plan, only job o development and customized development program. Careful blending of new wages of doing things with organizational norms. o Ensure competitively between individual development and organizational needs. o Use existing resources. o o Create multiple feedback loops. Promote volunteerism and choice in selecting managers for the development. o Development program should be the responsibility of line management rather than of o human resource staff. Methods of Development o

-

On the job methods Off the job methods

On the job methods

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Coaching Job rotation Understudy assignments Committee or junior board Mentoring

Off the job development method

a. Seminar, lecture, workshops, symposium etc b. Laboratory Training ► Computer simulation model ► Gaming simulation ► Case studies ► Incidence process ► Role playing c. Transactional analysis


Who is a Mentor?

A mentor is a wise and trusted counselor for teacher, who has strong personality and command on relevant knowledge. Role of a Mentor o o o o

Sponsor Coach Teacher Devil’s advocate [In common parlance, a devil's advocate is someone who, given a certain argument, takes a position he or she does not necessarily agree with, just for the sake of argument. In taking such position, the individual taking on the devil's advocate role seeks to engage others in an argumentative discussion process. The purpose of such process is typically to test the quality of the original argument and identify weaknesses in its structure, and to use such information to either improve or abandon the original, opposing position. It can also refer (less commonly) to someone who takes a stance that is seen as unpopular or unconventional, but is actually another way of arguing a much more conventional stance.] RECRUITMENT

Definition:

“Recruitment is the process of communicating prospective candidates about job vacancies and attracting and motivating them to apply for the opened jobs of the organization.”

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Objectives of Recruitment:

1. 2. 3. 4.

To motivate prospective, talented, qualified candidates. To win competition for talents. To influence people to apply and stay in the organization. To keep morale of the people high.

- Robbins Wendell French


Sources of Recruitment: Internal Sources:

a. Job posting /internal circulation for talents within the organization. b. Referrals c. Skill inventory External Sources:

a. Advertising- local, regional, national and international newspaper, journals etc Public/Government (PSC)

b. Employment agencies Private (BAIRA)

c. Field recruits (Army, Police, BGB only recruitment for soldiers) d. Professional bodies( ICMAB, IEB, BMA, IAB etc) e. Educational and vocational institutes( USEP, German- Technical, Nursing, etc) f. New Sources - Job fair - Web-site/job-site(own and others) - Walk-ins - Internship - Moving wagon - Unsought applicants - Talent scouting( searching/ hunting) - Out placement firms/offices( Retired govt. persons recruit applicants) - Telerecruits - Direct mail Why are internal sources used?

1. Most reliable source 2. Less or no cost source 3. Motivating to incumbents

Merits of External Sources:

1. Injection of new blood into the organization( New ideas can be generated) 2. Wide range of applicants 3. Affirmative action or legal obligation


Selection

Selection is a process of choosing the most desirable candidate for the vacant positions from the applicants.

Selection Process Preliminary screening

No minimum Quality

Application blank or application on plain paper

Incomplete

Employment test

Under Score

R E J

Reference check

Unfavorable

E Interview

Physical Examination

Unimpressive Under Score Unfit

T

Probationary selection

Induction (Oriented to organization)

Foundation Training

Placement

C

Dis-interested Unfit

Under Score

I O N


Employee Selection is the process of putting right men on right job. It is a procedure of matching organizational requirements with the skills and qualifications of people. Effective selection can be done only when there is effective matching. By selecting best candidate for the required job, the organization will get quality performance of employees. Moreover, organization will face less of absenteeism and employee turnover problems. By selecting right candidate for the required job, organization will also save time and money. Proper screening of candidates takes place during selection procedure. All the potential candidates who apply for the given job are tested.

But selection must be differentiated from recruitment, though these are two phases of employment process. Recruitment is considered to be a positive process as it motivates more of candidates to apply for the job. It creates a pool of applicants. It is just sourcing of data. While selection is a negative process as the inappropriate candidates are rejected here. Recruitment precedes selection in staffing process. Selection involves choosing the best candidate with best abilities, skills and knowledge for the required job. The Employee selection Process takes place in following order1. Preliminary Interviews- It is used to eliminate those candidates who do not meet the minimum eligibility criteria laid down by the organization. The skills, academic and family background, competencies and interests of the candidate are examined during preliminary interview. Preliminary interviews are less formalized and planned than the final interviews. The candidates are given a brief up about the company and the job profile; and it is also examined how much the candidate knows about the company. Preliminary interviews are also called screening interviews. 2. Application blanks- The candidates who clear the preliminary interview are required to fill application blank. It contains data record of the candidates such as details about age, qualifications, reason for leaving previous job, experience, etc. 3. Written Tests- Various written tests conducted during selection procedure are aptitude test, intelligence test, reasoning test, personality test, etc. These tests are used to objectively assess the potential candidate. They should not be biased. 4. Employment Interviews- It is a one to one interaction between the interviewer and the potential candidate. It is used to find whether the candidate is best suited for the required job or not. But such interviews consume time and money both. Moreover the competencies of the candidate cannot be judged. Such interviews may be biased at times. Such interviews should be conducted properly. No distractions should be there in room. There should be an honest communication between candidate and interviewer. 5. Medical examination- Medical tests are conducted to ensure physical fitness of the potential employee. It will decrease chances of employee absenteeism. 6. Appointment Letter- A reference check is made about the candidate selected and then finally he is appointed by giving a formal appointment letter.


Selection:

1. Preliminary Screening -Minimum requirements -Firms having printed application blank 2. Application blank An application for employment, job application, or application form (often simply called an application) is a form or collection of forms that an individual seeking employment, called an applicant, must fill out as part of the process of informing an employer of the applicant's availability and desire to be employed, and persuading the employer to offer the applicant employment.


3. Employment Test Concept:

A test is a mechanism or technique to identify knowledge, abilities or skills that a person possesses and to find out the level of such traits for performing the job successful. Types of Test i. Achievement, knowledge or proficiency Test An achievement test is a test of developed skill or knowledge. The most common type of achievement test is a standardized test developed to measure skills and knowledge learned in a given grade level, usually through planned instruction, such as training or classroom instruction. Achievement tests are often contrasted with tests that measure aptitude, a more general and stable cognitive trait. ii. Aptitude Test This test refers to measure the ability of a person to learn a new knowledge. Aptitude tests are structured systematic ways of evaluating how people perform on tasks or react to different situations. They have standardized methods of administration and scoring with the results quantified and compared with how others have done at the same tests. They are increasingly administered on a computer. Id iii.

Personality Test

Ego

Super-ego Some commonly measured personality traits in work settings are extraversion, conscientiousness, openness to new experiences, optimism, agreeableness, service orientation, stress tolerance, emotional stability, and initiative or proactively. Personality tests typically measure traits related to behavior at work, interpersonal interactions, and satisfaction with different aspects of work. Personality tests are often used to assess whether individuals have the potential to be successful in jobs where performance requires a great deal of interpersonal interaction or work in team settings. iv.

Interest/ knack Test

v. Physical ability Test A test instrument used to determine an individual’s ability to perform the functions or tasks of a job where physical strength or endurance is required. Have been demonstrated to produce valid inferences regarding performance of physically demanding tasks. Can identify applicants who are physically unable to perform essential job functions. Will not be influenced by test taker attempts to impression manage or fake responses.


vi. Medical Test A medical test is a kind of medical procedure performed to detect, diagnose, or monitor diseases, disease processes, susceptibility, and determine a course of treatment. Medical tests can be classified by what the test result will be used for, mainly including usage for diagnosis, screening or evaluation, vii. Polygraph Test/ Honesty Test A polygraph (popularly referred to as a lie detector) measures and records several physiological indices such as blood pressure, pulse, respiration, and skin conductivity while the subject is asked and answers a series of questions. The belief is that deceptive answers will produce physiological responses that can be differentiated from those associated with non-deceptive answers. viii. Substance abuse Test A substance abuse test is a technical analysis of a biological specimen – for example urine, hair, blood, sweat, or oral fluid / saliva – to determine the presence or absence of specified parent drugs or their metabolites. Major uses of substance abuse testing are to detect the presence of performance enhancing steroids in sport or for drugs prohibited by laws, such as cannabis, cocaine and heroin. ix. Work sample Test ‘Work sample’ is a method of testing ability by giving the candidate a sample of typical work to do and evaluating their performance. Work samples may appear as short questions along the lines of 'What would you do in this situation' or more complex scenarios to analyze. At its most naturalistic, the candidate is put into a the actual job where they may spend some time actually doing real work. The normal situation however is for the person to be given a role-play or real-life situations where the candidate acts out a realistic situation. This creates a repeatable pattern whereby multiple candidates can be given the same test and hence more easily compared. x. Intelligence Test An intelligence quotient, or IQ, is a score derived from one of several different standardized tests designed to assess intelligence. The term "IQ" comes from the German Intelligenz-Quotient . When modern IQ tests are constructed, the mean (average) score within an age group is set to 100 and the standard deviation (SD) to [1] 15. Today almost all IQ tests adhere to the assignment of 15 IQ points to each standard deviation, but this has not been the case historically.

4. Reference Check: Method: i. ii. iii. iv.

Telephone Check Structured form check Un-structured form check Re-reference check with structural/ un-structural form


Referees should be unrelated with the candidate but know the candidate. 5. Interview:

Face to face conversation with the candidates to unveil such qualities which are not discovered by other means. Interview Administration Method: a. Panel/ Board interview In a panel interview (also called committee interview), you will meet with several individuals at one time, typically sitting around a conference table. Many of these interviewers will be your supervisors and colleagues; they may take turns asking you prepared questions. And generally, other candidates will be asked the same questions so that their answers can be compared. Panel interviews were first used in academia and health care industries, but are becoming more popular in corporate sector nowadays. The advantage of committee interviews is that they are more reliable and job-related since panel members are accountable to each other, and interviewer can make their decisions on the same sample of behavior. To the applicants, the committee interview is less timeconsuming, and can give you an opportunity to see how the staff works together. However, it can be more stressful since several interviewers are involved and the interview questions may be more rapidly paced. b. Group interview Group interview, which is much more common than a candidate group interview, you will most likely be interviewed individually by a panel of two or more people. This type of group interview is almost always a question and answer session, but you might also be asked to participate in some type of exercise or test that simulates your potential work environment.

c. One-one interview d. Computer Aided interview e. Video interactive

Techniques of Interview: • • •

Structured interview Unstructured interview Problem solving interview


Training Training is a learning process by which employees are being taught the way of doing a particular job. “Training is a process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.” - Michael J. Jucius How to identify Training Needs Analysis (TNA): • • • • •

Work breakdown/errors in work Frequent complaints Interpersonal problem Promotion problem Special situation to be handled

Objectives of Training:

Deficient skill Organizational culture Human Relation Communication Language Selection of Trainees:

Skill deficient employees ► Promotees ► Problem child ► New recruits ► Special assignies ►

Training Methods: a. b. -

On the job training methods: Apprenticeship training Vestibule training Pre-employment training Job Instruction training Off the job training methods: Lecture method Workshop, conference etc. method Video interactive method

- Simulation exercise - Experimental exercise


-

Programmed instruction(manual) method

Training Process: Need Analysis

Set Objectives

R E E V A L U A T I O N

Select Trainees

Determine Curricula

Select training methods and media

Develop budget

Validate Programme

Select Trainers

Implementation

Evaluation

F E E D B A C K


Special Training Programme: o o o o o o o o

Literacy training AIDS training International Business Training Value Training Diversity Training Customer service training Team work training Employment training( Make a person to analysis a situation and take decision independently)

Training Media:

-

Oral media Written media

The media of instruction must be a language in which trainees are familiar. Training Budget:

-

Time Budget Financial Budget HRM Budget

An example of Financial Budget related to Training: Items Trainee Allowance Food and lodging allowance Trainer cost Stationary and support service cost Transport cost Ceremony cost Miscellaneous

TK 200 500 3000 1000 100 2000 1000

N.B: The financial budget must be changed according to company’s rules and regulations.


Training Process Validation:

Validity refers to the consistency of same type of results over the period as desired. A training program must be valid in the sense that it will provide expected results i.e. it will satisfy the objectives of training. How the training process:

1. Verify the contents of the training program with their trainees. - Send a copy to them - Ask them whether it will fill up their deficient skills - Get suggestions from them - Review and revise 2. Discuss with training experts and consultants inside and outside. - Review and revise 3. Conduct a pilot project.

Select Trainers Rules:

-

Trainers should be experts and knowledgeable in the area of training. Trainers may be from outside and inside of the organization.

Conduct Training

-

A full proof venue with all facilities. Make trainees and trainers available on time. Start and end the training session on time. Supply materials before session.


Training Evaluation Methods o o o

Test-retest method[ Pre-training and post-trainig method] Pre-post training performance report/rating[Performance evaluation method] Objective achievement method.

Principles of Training All human beings can learn even if not at the same pace/race. Individuals must be motivated to learn. Learning is an action process and it stimulates The quality of learning improves through guidance. The process of learning requires time to accumulate action, except and apply what has been learnt. Learning methods could be varied to combat boredom. Learners need to understand the purpose of what they are learning. Learning should be re-informed with specific and understandable rewards. Standards of performance should be set for the learner. Different individuals will be more receptive to learning at different times.


PERFORMANCE APPRAISAL

Definition

Performance appraisal is a systematic regular assessment of the performance of employees on the basis of established standard and communicates back the employee about his/her level of performance from the point of view of the organization. A performance appraisal, employee appraisal, performance review, or (career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor. A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee's performance in a job based on considerations other than productivity alone. Performance Appraisal is a process that involves communicating to an employee how well he/she is performing the job. It also refers to all those procedures that are used to evaluate the:    

Personality Performance Potential of individual Potential of group members

Why Performance Appraisal Needed

Performance appraisal acts as a catharsis for the problem employees. It recognizes the best performers and bring them out to others and motivator. It helps rewarding achievers of goals and designing development program for deviated performers. It helps selecting employees for promotion, training, disciplining etc.


Methods of Performance Appraisal Traditional method

Modern method

1. Check list method

1. Role analysis

2. Confidential report

2. Assessment centers

3. Critical incident method

3. Management by objectives(MBO)

4. Ranking method

4. Behavioral anchored rating scale

5. Graphic rating scale

5. Psychological testing

6. Narrated essay

6. Human resource accounting 7. 360 º Appraisal

1. Check list method :In this method the senior, the boss is given a list of questions about the junior. These questions are followed by check boxes. The superior has to put a tick mark in any one of the boxes

This method can be explained with the following e.g. Y

N

Does the employee have leadership qualities?

Y

N

Has the employee shown analytical skills? As seen in the above e.g. A questioner containing questions is given to the senior. This method is an extremely simple method and does not involve a lot of time. The same set of questioners can be given foe every employee so that there is uniformity in selecting employee. 2. Graphic rating scale :Graphic rating scale refers to using specific factors to appraise people. The entire appraisal is presented in the form of a chart. The chart contains certain columns which indicate qualities which are being appraised and other columns which specify the rank to be given. E.g. Employee A Quality of work Excellent Very good good satisfactory poor

Quantity of work

Intelligence


The senior has to put a tick mark for a particular quality along with the ranking. Such charts are prepared for every employee. According to the department in which they work. Sometimes the qualities which are judged may change depending upon the department. 3. Narrated essay :-

In this method the senior or the boss is supposed to write a narrative essay describing the qualities of his junior. He may describe the employees strength and weakness, analytical abilities etc. the narrative essay ends with a recommendation for future promotion or for future incentives. 4. Ranking method :-

In this method ranks are given to employees based on their performance. There are different methods of ranking employees. •

Simple ranking method

•

Alternate ranking method

•

Paired comparison method

i. Simple ranking method :-

Simple ranking method refers to ranks in serial order from the best employee e.g. If we have to rank 10 best employees we start with the first best employee nd and give him/her the first rank this is followed by the 2 best and so on until all 10 have been given ranks. ii. Alternate ranking :-

In this method the serial alternates between the best and the worst employee. The best employee is given rank 1 and then we move to the worst employee nd and give him/her rank 10 again to 2 best employee and give him/her rank 2 and so on. iii. Paired comparison :-

In this method each and every person is the group, department or team is compared with every other person in the team/group/department. The comparison is made on certain criteria and finally ranks are given. This method is superior because it compares each and every person on certain qualities and provides a ranking on that b asis.


Critical incident method :-

In this method critical or important incidents which have taken place on this job are noted down along with employee’s behavior and reaction in all these situations. Both positive and negative incidents are mentioned. This is followed by an analysis of the person, his abilities and talent, recommendations for the future incentives and promotions. 5. Management By Objectives(MBO) method :Management by objectives (MBO) is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization. The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. Responsibility of Individuals:

Since individuals are empowered to carry out stretched tasks and responsibilities under MBO, individual responsibilities play a vital role for the success of MBO. In MBO there is a link built between the strategic thinking of the upper management and the operational execution of the lower levels of the hierarchy. The responsibility of achieving the objectives is passed from the organization to each individual of the organization. Management by objectives is mainly achieved through self-control. Nowadays, especially in knowledge-based organizations, the employees are self-managers who are able to make their own decisions. In such organizations, the management should ask three basic questions from its employees. 1. What should be your responsibilities? 2. What information is required by you from the man agement and the peers? 3. What information should you provide the management and peers in return? 6. Behaviorally anchored rating scales:-

This formatted performance appraisal is based on making rates on behaviors or sets of indicators to determine the effectiveness or ineffectiveness of working performance. The form is a mix of the rating scale and critical incident techniques to assess performance of the staff.


Each behavior can rate at one of 7 scales as follows (you can set scales depend on your requirements) • Extremely poor (1 points) • Poor (2 points) • Below average (3 points) • Average (4 points) • Above average (5 points) • Good (6 points) • Extremely good (7 points) 7. 360 Degree performance appraisal Method:-

The style of 360 degree performance appraisal is a method that employees will give confidential and anonymous assessments on their colleagues. This post also information that can be used as references for such methods of performance assessments of 720, 540, 180… 8. Forced Ranking Method:-

In this style of performance appraisal, employees are ranked in terms of forced allocations. For instance, it is vital that the proportions be shared in the way that 10 or 20 % will be the highest levels of performances, while 70 or 80% will be in the middle level and the rest will be in the lowest one. Assessment Pitfalls/Errors

1. Bias 2. Leniency error Performance appraisal or interview bias which occurs when a manager or interviewer rate an employee or the interviewee too positively. Opposite of strictness error. 3. Strictness error A frequently-occurring management mistake, in which a manager is too strict in evaluating the performance of employees, leading to decreases in motivation and performance. The strictness error is the inverse of the leniency error, in which a manager does not enforce a suitable level of performance and compliance with standards from employees. 4. Central tendency error In performance appraisals or recruitment interviews, tendency of managers and interviewers to rate all or most of the employees or interviewees as average. 5. Confrontation error 6. Halo effect 7. Horn effect


8. Bastardization error 9. Irrelevant measures error How to overcome these Errors ► ► ► ► ► ►

Rater training Use of both subjective and objective measures Reward for good rater Use of multiple rater Use of absolute and relative standard Fine print

Wages and Salary (Pay) Administration Definition:

1. Wages are daily or weekly payment to employees or operating people. 2. Salary is the monthly or yearly payment to employee. Need for Pay Administration/management

1. Today, there is competitive hunting for talent to ensure advantage in the market. So, an attractive pay system needs to be made to achieve above target. 2. To retain qualified, talented and committed human resource in the organization. 3. To motivate incumbents to perform best for the organization. 4. To make pay competitive in the market. Methods to set pay 1. -

Ranking Method Ranking committee with experts Select various jobs from each categories of jobs Each member will assign pay on his/her judgm ent Make arrange and fix pay for that category of job Prepare rank

2. -

Job Classification Method Committee with experts Set the number of pay grades(15 or 10) Assign a pay range for each class of job[G1-40,000-45,000 & G2-35,000-40,000] Take a job and set its grade Fine tune the grade


Factors considering in setting pay

1. 2. 3. 4. 5. 6. 7.

Cost of living/standard of living Legal requirements Worth of job Worth of employee Existing pay Ability to pay of organization Labor market condition Point Factor Method

Compensable Factor:

1. 2. 3. 4. 5.

Knowledge Experience Responsibility Supervision/controlling Working conditions Factor

Points

Knowledge Experience Responsibility Supervision Working condition

2000 1000 500 500 200

Relatively value of each point .50 .10 .10 .10 .20

4200

1.00

Levels in each factor

Point in each level

Point in this category

4

2000 1800 1500

1700 600

Take value of each point 10 10

Total Value

17000 6000

If any candidate have PhD, MBA, BBA or B.Sc Engineering he/she will get 4 points in Level in each factor.

According to experience 5 years-1000 points 4 years-800 points 3 years-600 points 2 years-400 points 1 year-200 points 0 year-0 point


Steps of Point Factor Method

1. Determining cluster of job to be evaluated by the job evaluation committee. 2. Collect job information 3. Select from compensable factors 4. Define compensable factors 5. Define factor degrees 6. Determine relative value of factors 7. Assign point value to factors and degrees 8. Write the job evaluation manual 9. Assign BDT value to each and every category(according to note) 10. Total money value of the job 11. Rank the job according to the value Determining cluster of job to be evaluated by the job evaluation committee The first step in the point method of job evaluation is to determine clusters of jobs to be evaluated. In organizations, jobs vary by departments; typically a manager will not use a one-point rating plan for all jobs in an organization. Jobs are clustered b y type (sales jobs, factory jobs, clerical jobs), and an evaluation committee develops a point plan for one cluster or group at a time. After that, managers perform a job analysis, job description and job specification for each job. Collect Job Information Job performance Personal observation Critical incidents Interview Questionnaire method Factor Comparison Method

This method tries to compare involved factors in different category of jobs with their relative positions and assign weight and money value in order to differentiate jobs. It recognizes different conditions and circumstances involved in different jobs that reflect in pay. 1. Obtain job information 2. Select key benchmark jobs(minimum marks) A benchmark job is a job which tends to remain consistent across diverse organizations, allowing employers in various companies and even different industries to use it as a basis for evaluation and comparison. Data about such jobs is readily available so that employers have information which they can use in the development of job descriptions and salaries. People may also refer to benchmark jobs as key jobs. Several characteristics define a benchmark job. The first is that it is a job with a clear definition which is also generally consistent between departments and organizations. Even if the job title varies slightly, it has enough things in common with other types of positions that it is a fair basis


for comparison. In addition, the benchmark job is a common position, which makes data on the job readily available because numerous people across organizations and industries occupy similar positions. 3. Rank key jobs on compensable factors Ranking jobs is the easiest, fastest, and least expensive approach to job evaluation. It is also most effective in smaller organizations with few job classifications. To rank positions, order jobs from highest to lowest based on their relative value to your organization. The process of job ranking typically assigns more value to jobs that require managerial or technical competencies. More value is also assigned to jobs that supervise, exercise decision-making authority, or rely on independent judgment. For example, a jobranking system might rank the job of CEO as the most valued job within the organization and the job of product assembler as the least valued.

4. 5. 6. 7. 8.

Distribute wage rate by factors Rank key jobs according to wages assign to each factors Compare two sets of ranking to screen out unusual key jobs Construct the job comparison scale Use job comparison scale to determine basic pay How t o Set Pay Scales

Employers use pay scales to determine employees’ wages and salaries. Pay scales are usually listed in table form and can take into account education, experience, and other factors. They help employers remain consistent in setting pay and protect against favoritism. In order to understand and set pay scales, there are other key terms HR and compensation professionals should know: •

•

•

•

Pay grades compare and rank jobs within the organization. Many employers use a system such as BLR’s nine-factor analysis, a job evaluation tool to rank jobs based on skill, education, experience, and duties. Based on the factors, a pay grade or job grade is assigned that correlates to the salary range within which positions with that pay or job grade will be paid. Rate range refers to the spread of salaries paid for jobs assigned to the sam e job grade. The rate range for a job grade c onsists of a minimum, midpoint, and maximum rate of pay. Job pricing involves establishing rate ranges; that is, minimum, midpoint, and maximum dollar values for each labor grade. By studying wage and salary surveys, employers can compare wages in the labor market to the jobs within their organization. The result is a scale of wages that allows the employer to compete in the labor market (external equity) while ensuring that jobs that are worth more to the organization are paid more than those of lesser worth (internal equity). The midpoint is the rate at which an employee who is fully qualified and performing the job at an acceptable level would be paid. The rate range for a job grade consists of a minimum, midpoint, and maximum rate of pay. At BLR, the minimum is calculated at 75% of the midpoint and the maximum at 125% of the midpoint.


BENEFITS AND INCENTIVES

Benefits are given and incentives are earned. Benefits

Benefits are those financial payments that an employee receives for continuing his/her employment. Mandatory /Obligatory Maternity leave Casual Leave

Benefit

Earned leave in cash Govt. Holiday Voluntary

How to set benefit

Determine basic pay

Analyze relevant data

Ability to Benefit Why pay Benefits are givensurvey

Management Philosophy

Collective Bargaining Set benefit structure rules

Employment Preference

Govt. Law

P A Y B E N E F I T S

To enhance employee morale Employees’ spirits can easily fall if their day-to-day responsibilities are monotonous or if they don’t feel valued by their supervisors. Over time, this can translate into an unmotivated and unproductive staff. Therefore, it’s important for your company to make sure that employees are interested in and appreciated for their work. Recognize birthdays and personal accomplishments. Most employees appreciate it when their supervisors remember their birthdays or acknowledge personal milestones such as having a child or finishing a marathon. Some companies even offer employees a paid day off on their birthdays. Knowing that managers are aware of employees' lives


outside of work makes them feel like a valued member of the team rather than just anonymous workers. Treat them with respect. This tip sounds like a no-brainer, but it can make a world of difference to employees. Don’t swear, lose your temper or ignore your staff, especially in front of other employees. Treat employees with the courtesy and respect they deserve — say please and thank you, ask about their weekend, and take an interested in projects that they’re working on. Establish an employee-recognition program. Employees want supervisors to be aware and appreciative of their work. Create an employee-of-the-month program or a wall of fame to recognize workers’ notable contributions. Such programs demonstrate an employer's appreciation and also offer incentives for other staff members to increase their productivity.

Check in with staff members. Hold meetings with individual workers or groups of employees several times throughout the year to address any questions or concerns that they may have. Even if you don’t have a meeting scheduled soon, make sure that employees know that you are always there to address any problems that may crop up. Ask for their feedback and reactions to new company policies, and be sure to update them on what steps you've taken to solve any problems. Keep training them. In this ever-evolving world of new technologies and ideas, employees need to stay up-to-date with developments in their field. Staff members can interpret an employer’s unwillingness to invest in training as a disregard for their professional development. They’ll also be less productive than your competitors’ bettertrained employees. Enroll workers in classes and send them to conferences to keep them (and your company) on top of the game. To avoid unionism The forming of a union can be a precarious situation for employers. Employees form unions when they are unhappy with the terms of their employment and the direction the business is taking. Although employers can take certain steps to avoid unions forming within their place of work, they must follow the law and regulations regarding labor law. To comply with law

To attract qualified and talented to the jobs of the organization To make the organization competitive in the organization Organizations use competitive intelligence to compare themselves to other organizations ("competitive benchmarking"), to identify risks and opportunities in their markets, and to pressure-test their plans against market response (war gaming), which enable them to make informed decisions. Most firms today realize the importance of knowing what their competitors are doing and how the industry is changing, and the information gathered allows organizations to understand their strengths and weaknesses. The actual importance of these categories of information to an organization depends on the contestability of its markets, the organizational culture, and personality and biases of its top decision makers, and the reporting structure of competitive intelligence within the company.


To be fair and just to human resource in order to retain into organization.

Companies provide their employees and workers with a variety of benefits. These benefits are basically forms of value or services that are provided by an employer to his employees for their contribution in the performance of the organisation. Such benefits are an important component of a company's remuneration package for attracting and retaining its employees. The benefits serve as incentives to the employees and encourage them to work harder for the organisation. These also help in building up employee job satisfaction. These benefits may be financial or non-financial, long term or short term, free or at confessional rates. They may include educational, residential, medical, or recreational facilities. Such facilities may be provided individually or collectively and inside or outside the organization. Thus the employee benefits are the comforts and the facilities given to employees to enable them to work in a healthy and peaceful atmosphere. What is incentive?

Incentive is financial and non-financial rewards to the employee for their achievements. In economics and sociology, an incentive is any factor (financial or non-financial) that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way. Since human beings are purposeful creatures, the study of incentive structures is central to the study of all economic activity (both in terms of individual decision-making and in terms of co-operation and competition within a larger institutional structure). Economic analysis, then, of the differences between societies (and between different organizations within a society) largely amounts to characterizing the differences in incentive structures faced by individuals involved in these collective efforts. Ultimately, incentives aim to provide value for money and contribute to organizational success.


Types of incentive

Class

Definition

Remunerative incentives

are said to exist where an agent ca n expect some form of material reward — especially money — in exchange for acting in a particular way. financial incentives

are said to exist where a particular ch oice is widely regarded as the right thing to do, or as particularly admirable, or where the failure to act in a certain way is Moral

condemned as indecent. A person acting on a moral incentive can expect a

incentives

sense of self-esteem, and approval or even admiration from his community; a person acting against a moral incentive can expect a sense of guilt, and condemnation or even ostracism from the community.

Coercive incentives

Natural Incentives

are said to exist where a person can expect that the failure to act in a particular way will result in physical force being used against them (or their loved ones) by others in the community — for exam ple, by inflicting pain in p unishment, or by imprisonment, or by confiscating or destroying their possessions.

such as curios nation, mental or ph ysical exercise, admiration, fear, anger, pain, joy, or the pursuit of truth, or the co ntrol over things in the world or people or oneself.

Individual Inceptive Scheme ► ►

Product sales commission Achievement of Professional Qualification


Group Incentive Plan 

Profit-sharing scheme Profit sharing, when used as a special term, refers to various incentive plans introduced by businesses that provide direct or indirect payments to employees that depend on company's profitability in addition to employees' regular salary and bonuses. In publicly traded companies these plans typically amount to allocation of shares to employees. The profit sharing plans are based on predetermined economic sharing rules that define the split of gains between the company as a principal and the employee as an agent. For example, suppose the profits are x, which might be a random variable. Before knowing the profits, the principal and agent might agree on a sharing rule s(x). Here, the agent will receive s(x) and the principal will receive the residual gain x-s(x). 

Suggestions scheme(QC Circle)

Quality Circles are (informal) groups of employees who voluntarily meet together on a regular basis to identify, define, analyze and solve work related problems. Usually the members of a particular team (quality circle) should be from the same work area or who do similar work so that the problems they select will be familiar to all of them. In addition, interdepartmental or cross functional quality circles may also be formed. An ideal size of quality circle is seven to eight members. But the number of members in a quality circle can vary.

Ownership sharing Group Incentive Scheme

Group pay schemes include those based on the performance of the team, plant or company. They also include 'gain sharing', which is a form of added-value scheme which links pay to the achievement of organizational goals. Share incentive plans involve the provision of shares to employees - either by giving them direct or allowing them to be bought - and can be related to performance. Some organizations utilize pay systems based on the performance of the team, or group. Sometimes it may be the performance of the whole plant or enterprise that is the trigger for the performance elements of pay.

Team-based pay While team-based pay has been around for some time - in the shape of departmental or group bonus systems - it has taken on more importance with the increased interest in team working. In team-based pay systems the payments reflect the measurable goals of the team. Team working may be most effective in situations involving high task interdependence and creativity, although it can be difficult to define the team, the goals, and the appropriate reward. Schemes can be divisive if they are not open and transparent. Goals should not be shifted once agreed - they need to be achievable. The aim of team based pay is to strengthen the team through incentives - building a coherent, mutually supportive group of people with a high level of involvement. The team achievements are recognized and rewarded. Peer group pressure can also be helpful in raising the performance of the whole team.


Plant or company b ased pay Plant or company based performance pay schemes are based on larger groups than teams, for instance, divisional, plant or the whole organisation. They may well use the same factors as team-based or individual performance schemes, or perhaps total sales within a set period, or comparative reductions in labour costs. The most common forms of plant or company based payment systems tend to be based on overall profits (profit sharing), or alternatively on schemes that owe more to the improvements within the direct control of the workforce, such as added value or similar types of gain sharing systems. Overall profitability in an organisation is subject to factors outside the workforce's control, such as depreciation, economic changes, taxation, as well as the productivity improvements of individuals and therefore may not reflect real efficiency gains by the workforce. Plant/company based pay schemes are generally most effective in organisations where the workforce can clearly see the results of their efforts. They are successful where communications and employment relations are good and where the performance measurement is not subject to major changes arising from ex ternal causes.

Gainsharing Gainsharing is a form of added-value pay scheme linking workers' pay to the achievement of organisational goals by rewarding performance above a pre-determined target. This may be in the form of a share in the profits generated by sales, or on measures of customer satisfaction, but is almost always led by measures of productivity, performance and quality. Gainsharing schemes have to be based on factors that are in the workers' control. Gainsharing should be part of a long-term strategy to improve communications, staff involvement and teamwork. The goal is not to work harder, but more effectively. It may be used as a replacement for bonus/piecework schemes, where quality is sometimes lost to quantity. All workers and management who have any involvement in the product of the organisation should be included in any gainshare plan. In this way their support is encouraged so that they can feel a direct responsibility for the plan's success. Performance measures and results should be made available and everyone encouraged offering suggestions for improvements. Open communications and exchange of information are crucial.


CAREER TRANSITION

Changes over career of a person during work life. Forms of Career Transition Orientation Job orientation is an essential activity that every new hire should go through. It doesn't matter if you're just working for a part-time or a full time job; you need to go through job orientation or else face bad remarks from your boss and/or employer. •

Promotion A promotion is the advancement of an employee's rank or position in an organizational hierarchy system. Promotion may be an employee's reward for good performance i.e. positive appraisal. Before a company promotes an employee to a particular position it ensures that the person is able to handle the added responsibilities by screening the employee with interviews and tests and giving them training or on-the-job experience. A promotion can involve advancement in terms of designation, salary and benefits, and in some organizations the type of job activities may change a great deal. •

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Transfer

Demotion A demotion is a reduction in an employee's rank or job title within the organizational hierarchy of a company, public service department, or other body. A demotion may also lead to the loss of other privileges associated with a more senior rank and/or a reduction in salary or benefits. An employee may be demoted for violating the rules of the organization by a behavior such as excessive lateness, misconduct, or negligence. In some cases, though, an employee may be demoted as an alternative to being laid off, if the company is facing a financial crisis. A move to a position at the same rank or level elsewhere in the organization is called a lateral move or deployment. •

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Separation Resignation A resignation is the formal act of giving up or quitting one's office or position. It can also refer to the act of admitting defeat in a game like chess, indicated by the resigning player declaring "I resign", turning his king on its side, extending his hand, or stopping the chess clock .[1]A resignation can occur when a person holding a position gained by election or appointment steps down, but leaving a position upon the expiration of a term is not considered resignation. When an employee chooses to leave a position it is considered a resignation, as opposed to termination, which occurs when the employee involuntarily loses a job. Whether an employee resigned or was terminated is sometimes a topic of dispute, because in many situations, a terminated employee is eligible for severance pay and/or unemployment benefits, whereas one who voluntarily resigns may not be eligible. Abdication is the equivalent of resignation of a reigning monarch or pope, or other holder of a non-political, hereditary or similar position.


Retirement Retirement is the point where a person stops employment completely. A person may also semi-retire by reducing work hours. Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don't allow the person to work any more (by illness or accident) or as a result of legislation concerning their position. In most countries, the idea of retirement is of recent origin, being introduced during the 19th and 20th centuries. Previously, low life expectancy and the absence of pension arrangements meant that most workers continued to work until death. Germany was the first country to introduce retirement in the 1880s. Termination Termination is the employee's departure at the hands of the employer. There are two basic types of involuntary termination, known often as being "fired" and "laid off." To be fired, as opposed to being laid off, is generally thought of to be the employee's fault, and therefore is considered in most cases to be dishonorable and a sign of failure. Often, it may hinder the new jobseeker's chances of finding new employment, particularly if he/she has been fired from earlier jobs. Jobseekers sometimes do not mention jobs which they were fired from on their résumés; accordingly, unexplained gaps in employment and refusal to contact previous employers are often regarded as "red flags". Being successively fired from several jobs has the possibility of preventing jobseekers from obtaining gainful employment for a long time.

Discharge Dismissal Dismissal (referred to informally as firing or sacking) is the termination of employment by an employer against the will of the employee. Though such a decision can be made by an employer for a variety of reasons, ranging from an economic downturn to performance-related problems on the part of the employee, being fired has a strong stigma in many cultures. To be fired, as opposed to quitting voluntarily (or being laid off), is often perceived as being the employee's fault, and is therefore considered to be disgraceful and a sign of failure. Finding new employment may often be difficult after being fired, particularly if there is a history of being fired from previous jobs, if the reason for firing is for some serious infraction, or the employee did not hold the job very long. Job seekers will often not mention jobs that they were fired from on their resumes; accordingly, unexplained gaps in employment are often regarded as a red flag.


Promotion

Movement of an employee from lower level to upper level with increased benefits, authorities and responsibilities.

Why Promotion is needed ► ► ► ► ►

To reward talented and better performers. To motivate incumbent for higher performance. To retain talented employee. To attract qualified workforce(manpower, hands etc) to the organization To reduce discontent and unrest.

Bases of Promotion   

Seniority basis Merit performance basis Mixed basis

Reasons for Seniority Basis Promotion   

To ensure commitments and engagement to the job. It motivates incumbents to stay in the organization for a longer time. It increases employee morale and sense of b elongingness with the organization.

Why Merits/Performance basis is given o o

o

It attracts meritorious and brilliant persons to the organization. It enhances organizational dynamism, creativity and innovation that ensure its sustainability and competitiveness in the market. It helps retaining talented employees in the o rganization.

Types of Promotion

- Benefit Promotion - Dry Promotion Dry promotion is an increase in position and responsibility that is not accompanied by an increase in pay.


Transfer

Transfer is a re-assignment of employees from one job to another job, one department to another department, one shift to another shift or one geographic location to another geographical location. Why Transfer

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To make an employee versatile about different job of the organization. To ensure a close match between an employee’s qualification and the position To meet an employee on request to place in a comfortable job To help employees work according to their convenient. To get rid from problem employee To adjust wage or salary with the positional status and responsibilities.

Problems related to Transfer

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Cost Human problems (like socialization, school life etc.) Problem for dual career couples

Retirement

Retirement is the permanent separation of employees from the o rganization. Problems with Retirement

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Retirement is a radical change in the life-style of the incumbent that gives a shock to the person. It is an end of a member’s meaningful relationship and experiences with the organization that puts a person in embarrassing situation. It is a loss of power and status that makes a person unimportant.


Retirement Programs 1. Phased Retirement

This retirement scheme is designed to give retirement rehearsal to the retiring employee to prepare him/her for the final retirement. Gradual Reduction of work loads from the retiring person Gradual reduction of work weeks Progressively longer vacation with pay Progressively longer leaves without pay

2. Deferred Retirement This retirement is given one year/six months/three months before the final retirement starts. Retirement taken after the normal retirement age. For example, if the normal retirement age is 65 or 70 an employee may continue to work beyond those ages. Normally the election of deferred retirement does not increase the monthly retirement income when the employee actually retires.

3. Direct Retirement Retirement Benefits Scheme Gratuity

Gratuity is a lump sum amount given by the organization to the retired person as recognition for their long standing service to the organization. Gratuity is a sum of money tendered to certain service sector workers for a service performed or anticipated. Such payments and their size are a matter of social custom. Tipping varies among cultures and by service industry. Though a tip is seldom required, and its amount is usually at the discretion of the patron being served, in some circumstances failing to give an adequate tip when one is expected is a serious faux pas, and may be considered very miserly, a violation of etiquette, or unethical. In some other cultures or situations, giving a tip is not expected and offering one would be considered at best odd and at worst condescending or demeaning. Provident Fund As per amendment-dated 22.9.1997 in Act, both the employees and employer contribute to the fund at the rate of 12% of the basic wages, dearness allowance and retaining allowance, if any, payable to employees per month. The rate of contribution is 10% i n the case of following establishments: • •

Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97. Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction,

Fundamental of HRM

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