Introduction of HRM

Overview of HRM

i. It encompasses everything we do to get the best from your organizations most valuable resource: your employees.

ii.Motivation on the basis of :

1.stimulating work

2.fair compensation

3.Good management,

4.A supportive and friendly workplace.

5.Open communications. They stay in or leave organizations in any sector for the same reasons. HR activities include recruitment, selection, training and development, compensation, benefits, performance appraisal, employee relations, health and safety, and strategic HR planning.

iv.The contributions of HR professionals make it possible for organizations to attract, motivate, and retain a qualified and effective work force.

www.culturalhrc.ca.

Definitions of HRM

Edwin Flippo defines HRM as"planning, organizing, directing, controlling of procurement,development, compensation, integration , maintenance and separation ofhuman resources to the end that individual, organizational and socialobjectives are achieved.

By Harvard Business School:

Human resource (HR) management can be defined as the effective use of human resources in an organization through the management of people-related activities. It is a central and strategic organizational activity of increasing complexity and importance.

Role of HR Managers

Executive role in this role the HR Managers are viewed as the specialists in the areas that encompass Human Resources or people management.

Audit role in this capacity the HR Managers will check other departments and the organization as a whole to ensure all HR policies such as Health & Safety, Training, Staff Appraisal etc are being carried out in accordance with the companys HR policy.

Facilitator role in this role, the HR Managers help or facilitate other departments to achieve the goals or standards as laid out in the HR policies of the organization. This will involve training being delivered for issues that arise in the areas relating to people management.

Consultancy role the HR Managers will advise Project managers on how to tackle specific managing people issues professionally.

Service role in this capacity the HR Manager is an information provider to raise awareness and inform departments and functional areas on changes in policy.

Contd..

Human Resource Man as a Leader:

Human Resource Man as a Humanist :

Human Resource Man as a Visionary :

Human Resource Man as an Intellectual :

Human Resource Man as an Educator :

Contd.

The process of recruiting suitable candidates for the organization.

Identifying and meeting the training needs of existing staff.

Ensuring employee welfare and employee relations are positive.

Ensure the working environment is safe for employees.

Raising awareness of current workplace legislation.

HRM Sub Systems

Sub-system is a system, consisting of elements like men, machinery, materials and or information, which is not an end by itself but instead forms part of the main system and coexists with one or more of other systems -Job analysis, human resource planning, recruitment and selection, performance management, training and development, 360-degree feedback, mentoring and executive coaching, and reward management.

Research findings:HRM subsystems should develop their integrative technological infrastructure so that they can have a wideranging view about their activities. Also, informal mechanisms may enhance the integrating process, as well as the formal mechanisms. Thus, managers should support and encourage the informal climate, and facilitate especially on informal communication.

The findings suggest a new approach for analyzing the integration process within an organizational HR subsystem. On the one hand, the continuity of integration demonstrates how each category may contribute to the integration process on a high level. On the other, the low level of each category illustrates the opposite side of integration

Functions of HRM

Human Resource Management (HRM) is all about balancing the organizations people and processes to best achieve the goals and the strategies of the organization, as well as the goals and the needs of employees. The main role an HR manager has to fulfill is integrating business operations and strategies across a wide array of culture, products, and ideas, while effectively delegating work among human resource specialists and line management.

1. Recruitment

Companies that value their people put a serious amount of investment in recruiting and staffing services.

2. Training and Development

.

Contd.

3. Professional Development:

4. Benefits and Compensation

Flexible working hours or workdays,

Extended vacation time,

Paternity leave or childcare

Medical/dental insurance,

Corporate gym membership discounts

Continuing education/skills development

Award & recognition programs

Contd..

5. Ensuring Legal Compliance

Compliance with labor, tax and employment laws is a vital part of safeguarding the organizations continued existence.

Policy makers points

Recognition of people needs and Expectations at work.

Respect for individuals.

Fair and equitable reward systems.

EEO.

Professional working environment.

Opportunities for personnel development and career progression.

Democratic functions.

Full compliance to all laws and code of conduct in relation to employment.

Examples of specific HRM policies

1.Equal opportunity:

2.Managing Diversity:

3.Employee development:

4.Health and Safety:

5.Reward:

6.Discipline:

7.Harrassment:

8.Grievances:

9.Whistle blowers:

10.Recruitment

11.Pay

12.Intellectual property

13.Confidential information.

Wipro Recruitment policy

ROUND 1 : * Written test. * Verbal test.* Aptitude test.* Technical test.ROUND 2 :Round 2 is a technical test.ROUND 3 :Round 3 is the final stage of the recruitment process and it concludes with the HR meeting.

Retention policy of TCS

CEO:N.Chandra sekaran Turn over:52.97 billion rupees.

Profit net :55Emp turn over:300464 .1 rise.

by Reuters

TCS tries to retain its associates through:

Career Development:

Rewards and Recognition:

Associate friendly HR policies

Performance Based Incentives:

Scalability:

Performance improvement plan:

Competency gap addressed:

Research findings

1.HRM for a global firm has become extremely challenging.

2. Challenges loom over right from the planning stage of Human Resource Management down to retention.

3. Among all the functions, talent management and retention appears to be the most significant function of Human Resource Management.

4. A retention policy at TCS reveals that the dynamic and employee oriented flexible retention policy based on its own values is a clear X factor for the success of TCS in retention.

Organization of HRM

1.Collobaration: At all levels of the organization, managers and HR professionals work together to develop employees' skills.

2.Commitment Building:Matching employees with Responsibilities.

3.Building capacity: " It's not just about hiring talent; this game is about keeping people and helping them grow and stay committed over the long term.

Contd

An organization's HRM function focuses on the people side of management.

In the post-hire phase, the organization develops HRM practices for effectively managing people once they have "come through the door."

Development of HRM ,India.

Recent trends of HRM

1)The world is your oyster (No boundaries to hire talent pool).

2)Technology-technology-technology.(Technology compatibility)

3)Real time talent analytics and big data management.(Spontaneous real time assessment.

4)Mobile hone.(Now your talent lives and breathes in real time portable connectivity)

5)Sweeten the deal.(If youre curtailing certain benefits then balance with add ons like Free lunch,flexi time,Child care,gyms .).

Contd..

6) There Will Be AMoveFrom Quantity To Quality.

7. Its All About Implementation.

8. Analytics Is The Special Sauce.

9.Social MediaAndContinuousLearning Continues To Grow In Significance.

10.A Paradigm shift from Resources to Assets.

Rising cost of benefits, especially health care

Rising Compensation Costs

Competitive pressure on increasing employee wages

Harnessing New Technology

Evolution of new technologies

Use of technology to communicate with employees

A move toward single software platforms

External conducive frame work

Impact of Globalization

1. Diversity Recruitment:

2. Push for Professional Development: Win win situation.

3. Greater Emphasis on Training: It might also teach its employees how to use a new global software platform

4.Management of Laws Across Jurisdictions:

HRM Case let

US-based Yahoo Inc (Yahoo), the worlds largest software company, had been going through tough times since 2008. The company had seen a steep decline in its revenues. Revenues, which had been US$7.21 billion in 2008, had fallen to $4.98 billion by 2012. In the search engine market too, Yahoo found itself facing problems. As of 2013, its market share in the search engine market was 17%, as against Google Inc.s (Google) 61%. Yahoo, which had once been the biggest seller of display ads, had lost that position to Google and Facebook. According to some analysts, the work culture at Yahoo and the lack of innovation were responsible for the companys position

Case let

They were of the opinion that its culture was broken/toxic , and that it was this that had had an adverse impact on employees performance and productivity. Ultimately, Yahoo had come to be known as a distracted, demoralized, and inefficient company. A continuous change in leadership was also cited as one of the reasons for Yahoos plight. In comparison with the other successful tech giants, Yahoos employees were underperforming. For example, revenue per employee in Google was US$ 931,657, while at Yahoo, it was US$ 344,758 ...

Questions for Discussion1. Discuss telecommuting/work from home. What are the advantages and disadvantages associated with them?2. Do you agree with Marisa Mayers decision? Justify.

Unit -2

Scope of HRP:

1. To make the list of current manpower.

2. To check how much current manpower is being utilized.

3. To find out how much manpower is required.

4. To make manpower procurement plans.

5. To make the training programmes.

Contd..

6.To be ethically and socially responsive to the needs of society.7.To develop overall personality of each employee in its multidimensional aspect.8.To enhance employee's capabilities to perform the present job.9.To equip the employees with precision and clarity in transaction of business.10.To inculcate the sense of team spirit, team work and inter-team collaboration.

Job Analysis

Job Analysis is a procedure by which pertinent information is obtained about a job, i.e., it is a detailed and systematic study of information relating to the operation and responsibilities of a specific job.

Job analysis provides the following information :

1. Job Identification : Its title, including its code number;

2. Significant Characteristics of a Job : Its location, physical setting, supervision, union jurisdiction, hazards and discomforts; trust;

Contd

3. What the Typical Worker Does :

4. Which Materials and Equipment a Worker Uses : Metals,plastics, grains, yarns, milling machines, punch presses and micrometers;

5. How a Job is Performed : Nature of operation

6. Required Personal Attributes : Experience, training, apprenticeship, physical strength, co-ordination or dexterity, physical demands, mental capabilities, aptitudes, social skills;

7. Job Relationship : Experience required, opportunities for advancement, patterns of promotions, essential co-operation, direction, or leadership from and for a job.

Job Analysis

Contd

Job Analysis Methods

Personal Observation :

2. Sending out of Questionnaires : This method is usually employed by engineering consultants. After corrections to Job analyst.

3. Maintenance method: The employee maintains a daily record of duties he performs, marking the time at which each task is started and finished.

JD and its vitality

Job Description

Job description is a written record of the duties, responsibilities and requirements of a particular job. In other words, it tells us what is to be done and how it is to be done and why.

1. Job identification:

2. Job Summary:quick capsule explanation

3. Job duties: Vertical Relationship

4.Supervision: General, intermediate or close supervision.

5.Working conditions:cold,heat, dust, wetness, moisture, fumes, odour, oily conditions

Format of JD

Job title:

Reports to:

Job Purpose:

Duties and Responsibilities:

Qualifications:

Working conditions:

Physical Requirements:

Direct reports:

Approved by:

Date Approved:

Reviewed:

Objectives of JD

Interview questions:

Filtration of unfit:

Grading:

Indicative of faulty work flow:

Limits of authority:

Hiring specifications:

Providing performance indicators:

Job Design

The main objective of job design is to integrate the needs of the individual and the requirements of the organisation.

1. Classical Approach(F.W.Taylor) : Planned by Management . (Class I Class II Class III and IV).

2.Behavioural Approach(Hackman and Oldham):Based on assumptions of motivation, satisfaction and performance on the job.

Behavioural approach to job design is a socio-technical approach as it deals with both the technical and social aspects of a job.

Contd..

The job characteristics model, however, suffers from some limitations. It is probabilistic and has an intuitive appeal.

In one study of bank employees in India growth need has not been found coaching,counselling etc., are examples of corrective actions that help to improve performance.

Levels of Responsibility

Job evaluation

Job evaluationis a systematic and objective process used by organizations to compare the jobs within the organization to determine the relative value or worth of each job.

Criteria:Education qualifications, skills needed, working conditions and job responsibilities.

Job ranking method:This method involves putting all jobs in an organization in rank order of importance based upon their contributions towards the achievement of an organization's goals.

Classification method:In this method, a series of classes and grades are defined. Each class will describe a group of jobs. Each grade in a class will represent different levels of difficulty and responsibility.

Point-Factor Rating and Factor Comparison method

The point factor method uses specific factors to determine the relative value of a job compared to the others in the organization.. Examples of a compensable factor may be problem-solving or supervisory skills.Therefore give relative weight to each factor.

Factor comparison Method:Each job is ranked according to a series of factors. These factors include mental effort, physical effort, skill needed, responsibility, supervisory responsibility, working conditions and other such factors (for instance, know-how,problem solvingabilities, accountability, etc.

Factor comparison method

Recruitment

Dale S. Beach has defined Recruitment as the development and maintenance of adequate manpower resources.

According to Edwin B. Flippo : Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.

Methods of recruitment

The various sources of recruitment are generally classified as internal source and external source.

(a) Internal Sources : This refers to the recruitment from within the company. The various internal sources are promotion, transfer, past employees and internal advertisements.

(b) External Sources : External sources refers to the practice of getting suitable persons from outside. The various external sources are advertisement, employment exchange, past employees, private placement agencies and consultants, walks-ins,campus recruitment, trade unions, etc.

Employment and RecruitingWho Handles It? (percentage of all employers)

Employment Exodus: Projected Loss of Jobs and Wages

External Recruitment methods

Raiding : Raiding is a technical term used when employees working elsewhere are attracted to join organizations.

Telecasting:

Labour Contractors:

Recommendation:

Employment Agencies:

Direct Recruitment: Notice board (Unskilled)

Casual Callers or Unsolicited Applications:

Media Advertisement:

Types of Tests

Intelligence Tests Intelligence (IQ) tests are tests of general intellectual abilities. They measure not a single trait but rather a range of abilities, including memory, vocabulary, verbal fluency, and numerical ability.

Cognitive Ability Test

Physical Ability test

Dexterity and Physical Abilities

Personality and Interest tests

As one consultant put it, most people are hired based on qualifications, but most are fired for nonperformance.

Non performance (or performance) is usually the result of personal characteristics, such as attitude, motivation, and especially, temperament.

Hewlett-Packard put its eventual choice, Carleton Fiorina, and other finalists through a two-hour, 900-question personality test. Candidates had to indicate whether statements like When I bump into a piece of furniture, I usually get angry were true or false. After years,fiorina was not a part.

Personality test sample

It does not make sense to work hard on something if no one will notice.

a. Definitely true

b. Somewhat true

c. Neither true nor false

d. Somewhat false

e. Definitely false

I tend to let others do most of the talking in conversations.

a. Definitely true

b. Somewhat true

c. Neither true nor false

d. Somewhat false

e. Definitely false

I have remained calm in situations where others have become upset.

a. Definitely true

b. Somewhat true

c. Neither true nor false

d. Somewhat false

e. Definitely false

Big Five

The Big Five Industrial psychologists often emphasize the big five personality dimensions as they apply to personnel testing: extraversion, emotional stability/neuroticism, agreeableness, conscientiousness, and openness to experience.

Neuroticism represents a tendency to exhibit poor emotional adjustment and experience negative effects, such as anxiety, insecurity, and hostility. Extraversion represents a tendency to be sociable, assertive, active, and to experience positive effects, such as energy and zeal.

Types of selection tests

Testing Program Guidelines

Use tests as supplements.

Validate the tests.

Monitor your testing/selection program

Keep accurate records.

Use a certified psychologist.

Manage test conditions.

Revalidate periodically.

Sample Picture Card fromThematic Apperception Test.

How do you interpret this picture?

Selection process

Research study

Intrinsic success from Job satisfaction.

Extrinsic success from income and occupation status.

Conscientiousness Both.

In personality research, conscientiousness has been the most consistent and universal predictor of job performance.

Types of Interviews

Interview Definition:A procedure designed to

obtain information from person through oral responses to oral inquiries.

1.Selection Interview: A selection procedure designed on the basis of applicants oral responses to oral inquiries.

2.Appraisal Interview:A supervisor and employee discuss the employees rating and possible remedial actions.

3.Exit Interview: An elicit information about the job.

Formats of Interviews

Unstructured interview: Conversational style interview.

Structured interview: Set of sequence of queries.

Content types;

Situational interview

Behavioural interview.

Job related interview:

Stress interview: Rude queries.

Puzzle interview: cognition under pressure.(out of box solutions)

Factors affecting interviews

First impressions;

Negative bias:

Misunderstanding the job:

Candidate order error: Interviewing extremely wise or reverse way.

Non verbal behaviour and impression management:

Physically unattractive

Gender .

Race.

Selection errors

The False Positive ErrorAn organization that makes a false positive error incurs three types of costs. The first type of costs are those incurred while the person is employed.

The False Negative ErrorIn the case of false negative error, an applicant who would have succeeded is rejected because failure was predicted. Most false negative selection errors go unnoticed, except when the applicant is a member of a protected class and files a discrimination charge.Costs are unpredictable.

Unit-3

Induction and Orientation

Definition 1:

It is a Planned Introduction of employees to their jobs, their co-workers and the organization per se.

Orientation conveys 4 types of information:

1. Daily Work Routine.

2. Organization Profile.

3. Importance of Jobs to the organization.

4. Detailed Orientation Presentations.

Purpose of Orientation

1.To make new employees feel at home in new environment

2.To remove their anxiety about new workplace

3.To remove their inadequacies about new peers.

4.To remove worries about their job performance

5. To provide them job information, environment.

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Types of Orientation

1. Formal or Informal

2. Individual or Group

3. Serial or Disjunctive

Problems of Orientations

1. Busy or Untrained supervisor

2. Too much information

3. Overloaded with paperwork

4. Given menial tasks and discourage interests

5. Demanding tasks where failure chances are high

6. Employee thrown into action soon

7. Wrong perceptions of employees

Difference between Induction and Orientation

Induction referred toformal trainingprograms that an employee had to complete before they could start work.

Orientation was theinformal informationgiving that made the recruit aware of the comfort issues where the facilities are, what time lunch is and so forth. How long should the induction process take?

Training methods

Training

The process of teaching new employees the basic skills they need to perform their jobs.

The strategic context of training

Performance management: the process employers use to make sure employees are working toward organizational goals.

Web-based training

Distance learning-based training

Cross-cultural diversity training

Methods

On-the-job training (OJT)

Having a person learn a job by actually doing the job.

OJT methods

Coaching or understudy

Job rotation

Special assignments

Advantages

Inexpensive

Immediate feedback

Apprenticeship training

A structured process by which people become skilled workers through a combination of classroom instruction and on-the-job training.

Informal learning

The majority of what employees learn on the job they learn through informal means of performing their jobs on a daily basis.

Job instruction training (JIT)

Listing each jobs basic tasks, along with key points, in order to provide step-by-step training for employees.

Contd..

Effective lectures

Programmed instruction (PI)

A systematic method for teaching job skills involving:

Presenting questions or facts

Allowing the person to respond

Giving the learner immediate feedback on the accuracy of his or her answers

Literacy training techniques

Responses to functional illiteracy

Testing job candidates basic skills.

Setting up basic skills and literacy programs.

Audiovisual-based training

To illustrate following a sequence over time.

To expose trainees to events not easily demonstrable in live lectures.

Contd..

Simulated training (occasionally called vestibule training)

Training employees on special off-the-job equipment so training costs and hazards can be reduced.

Computer-based training (CBT)

Electronic performance support systems (EPSS)

Learning portals

Computer-based Training (CBT):

Types of CBT

Intelligent Tutoring systems

Interactive multimedia training

Virtual reality training

Advantages:

Contd..

Teletraining

A trainer in a central location teaches groups of employees at remote locations via TV hookups.

Videoconferencing

Interactively training employees who are geographically separated from each otheror from the trainervia a combination of audio and visual equipment.

Training via the Internet

Using the Internet or proprietary internal intranets to facilitate computer-based training.

Training manual

Atrainingmanualis abookorbookletof instructions, designed to improve the quality of a performed task.

A training manual may be particularly useful as:

An introduction to subject matter prior to training.

An outline to be followed during training.

A reference to subject matter after training.

A general reference document.

Types of manuals

Work books used in training sessions to provide basic information, examples and exercises.

Self-paced guides: designed for trainees to work through on their own.

Reference manuals: for containing detailed information on processes and procedures.

Handouts: provide general information to support training done during the session.

Job aids: provide step-by-step instructions to be used in theworkplace.

Management Development Programs

Management development: Any attempt to improve current or future management performance by imparting knowledge, changing attitudes, or increasing skills.

Succession planning:

A process through which senior-level openings are planned for and eventually filled.

Anticipate management needs

Review firms management skills inventory

Create replacement charts

Begin management development

Training under ISO

1.Training need identification2.Training Planning(Base on Identification)3.Training circular4.Training Agenda5.Conduct training Program.6.Feed back about training7.Training Evaluation(2types)a) On Job evaluationB) Off Job evaluation8.Skill Matrix

Documents for ISO and QS certifications

HR Documents:1. Employee Details file2. Attendance Registers3. Competency Matrix4. Training Need Identification5. Annual Training Calendar (Scheduled)6. Training Effectiveness Evaluation7. Unscheduled Training reports8. Re-training records9. Internal & External Communication File10. Compliance to legal evaluation11. Contract agreements for vendors12. Pest Control records13. Housekeeping records14. Canteen records etc

Executive development programmes

Alternative Career Paths

One approach to alternative career pathing involves incorporating the skills employees already have with what their hearts want to do.

Career Pathing

Career pathing, also called career tracking, is a process of outlining an individual career plan, usually within an organization. Career pathing is most often used as a part of management training and development, although individuals may develop their own career track, either alone, or in conjunction with a career coach.

Dual Career Tracks

Dual career tracks should not be confused with alternative career paths. Creating dual career paths involves preparing employees to succeed and be rewarded without necessarily being on a management or vertical organization career path.

Career Coaching/Counseling

Career coaching frequently involves helping individuals prepare for a career change or helping employees advance in their existing jobs.

Cross-Training

Cross-trained workers are taught skills outside their current job assignment so they can be called upon to perform a variety of tasks as the need arises.

Flexitime

Flextime is one of the most popular and most widely known career development interventions. Flexitime gives employees the opportunity to balance their work and personal lives by restructuring the typical workday to accommodate individual employee schedules.

Contd..

Job Rotation

Job rotation is the systematic movement of employees from job to job within an organization, as a way to achieve many different human resources objectives :

Job Enlargement

Job enlargement is defined as increasing the number of tasks a worker performs, with all of the tasks at the same level of responsibility, and is also sometimes referred to as ``horizontal job loading'' . Be careful not to confuse job enlargement with job enrichment, which will be discussed now.

Job Enrichment

Job enrichment involves increasing a worker's responsibility and control over his or her work, and is also called ``vertical job loading''. Job enrichment allows you to expand your responsibilities or change your role to develop new competencies without leaving your current position or the organization altogether.

Unit 4 Performance Management

KRA defines the outcome or end result expected to be delivered while KPA defines all the activities, not always result oriented, an individual has to perform being on job.

Key Result Area(KRA) and Key Performance Area(KPA) , though the terms hold different meaning but are often used interchangeably and more or less assumed to have same applicability .

KRA and KPAs formula

Key Result Area

Key = crucial/main

Result = outcome/end/consequence

Area = space/range

Key Performance Area

Key = crucial/main

Performance = Achievement/Attainment

Area = space/range/field of operation

Areas of significance

Key Result Area

Customer Satisfaction.

Product Management.

Operational Cost Control.

Quality Check.

Record keeping.

Key Performance Areas

Maintaining good working condition in plant.

Optimum Resource Utilization.

Process Improvement.

Safety and Prevention planning and control.

Working within the companys SLA(Service Level Agreement), GRC(Governance, Risk Management and Compliance) policies

Points to remember..

KRA is not the result.

KRA is the area identified as important or crucial where a result will assist in the achievement of the set objectives or goal.

KRA defines what a job is expected to accomplish.

KRAs might fall within the scope of Key Performance Areas (KPA).

KPA is the overall scope of activities that an individual on a job role has to perform.

KPA is not always result focused.

KPAs can be inclusive of KRAs

KRA is not the result.

KRA is the area identified as important or crucial where a result will assist in the achievement of the set objectives or goal.

KRA defines what a job is expected to accomplish.

KRAs might fall within the scope of Key Performance Areas (KPA)

Tradition Vs Modern PM

According to Flippo performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in matters pertaining to his present job and his potential for a better job

Traditional methods

Prepared by employees immediate boss, covers strength and weakness, achievement and failure, personality and behavior of the employee.

It is descriptive appraisal used for promotions and transfer of employees.

It involves subjectivity as is based on impression rather than on data.

It s credibility is very low therefore no feedback is provided to the employee being appraisal.

Modern methods

The traditional methods all focus more on the traits of an employee than his performance.

In absence of pre-decided performance criteria or standards, the personal bias or subjectivity or the evaluator affects on ratings.

In order to overcome these weaknesses some new techniques of performance appraisal have been developed.

1. Assessment centre-

An assessment centre is group of employee drawn from different work unites.

These employees work together on an assignment similar to the one they would be handling when promoted.

Evaluators observe and rank the performance of all the participants.

Experienced manager with proven ability serve as evaluator.

Contd..

This group of evaluators evaluates all employees both individually and collectively by using simulations technique like role playing, business games and basket exercises.

The evaluators observe and evaluate employee as they perform jobs.

Assessments are done generally to determine employee potential for promotion.

The evaluators prepare a summery report and feedback is administered on a face to face basis to the employees.

This method measures generally inter personal skill, communication ability, ability to plan and organize etc.

This method helps to determine training and development need of employee and provides data for HRP. It helps to select students for entry level position. All of them get equal opportunity to prove their merit. They are evaluated by a team of trained assessors

This method is a time consuming and expensive. Candidates who receive a negative report may feel demoralized.

Potential Appraisal

The potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a person. The person might or might not be aware of them. Potential appraisal is a future oriented appraisal whose main objective is to identify and evaluate the potential of the employees to assume higher positions and responsibilities in the organizational hierarch

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Objectives of P A

To inform employees of their future prospects]

To enable the organisation to draft a management succession programme;

To update training and recruitment activities;

To advise employees about the work to be done to enhance .their career opportunities.Note: The Potential for Improving Performance, or PIP, measures the performance of the average worker versus the best person performing a particular task. Large differences suggest that performance can be improved by bringing average performance up closer to the best performance. Small differences suggest little potential for improvement.

Methods of potential appraisal:

Self appraisals

Peer appraisals

Superior appraisals

MBO

Psychological and psychometric tests

Management games like role playing

Leadership exercises etc.

MBO

This concept of management by objective MBO was developed by Peter Drucker in 1954.

He called it management by Objective and self control.

It is also known as work planning and review or goal setting approach to appraisal.

It has been defined as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measure as guides for operating the unit and assessing the contributions of each of its members

MBO Process:

The main steps involved in MBO are as-

Set organizational goals

Define performance targets

Performance reviews

feedbacks

Potential Rating Scale Appraisal Problems

Unclear standards

An appraisal that is too open to interpretation.

Halo effect

Occurs when a supervisors rating of a subordinate on one trait biases the rating of that person on other traits.

Central tendency

A tendency to rate all employees the same way, such as rating them all average.

Feed back systems

Provide immediate positive and developmental feedback in a private location.

Q Ask for the employees view about what could have been done differently.

Q Be specific about what behaviors were effective or ineffective.

Q Focus on what the person did or did not do, not personal characteristics.

Q Collaboratively plan steps to address development needs.

Q Offer help in addressing development needs and providing resources.

Job evaluation

Ranking each job relative to all other jobs, usually based on some overall factor.

Identifying the need for the job evaluation

Getting the cooperation of employees

Choosing an evaluation committee.

Performing the actual evaluation.

Job evaluation Method:Job Ranking

1.Obtain job information.

2.Select and group jobs.

3.Select compensable factors.

4.Rank jobs.

Combine ratings.

Job Evaluation Methods: Point Method

A quantitative technique that involves:

1.Identifying the degree to which each compensable factors are present in the job.

2.Awarding points for each degree of each factor.

3.Calculating a total point value for the job by adding up the corresponding points for each factor.

Job Evaluation Methods: Job Classification

Raters categorize jobs into groups or classes of jobs that are of roughly the same value for pay purposes.

Classes contain similar jobs.

Grades are jobs that are similar in difficulty but otherwise different.

Jobs are classed by the amount or level of compensable factors they contain.

Job Evaluation method:CAJE

A computerized system that uses a structured questionnaire and statistical models to streamline the job evaluation process.

Advantages of computer-aided job evaluation (CAJE)

Simplify job analysis

Help keep job descriptions up to date

Increase evaluation objectivity

Reduce the time spent in committee meetings

Ease the burden of system maintenance

Job Evaluation Methods: Factor Comparison

Each job is ranked several timesonce for each of several compensable factors.

The rankings for each job are combined into an overall numerical rating for the job.

Samples:

Cognition requirements: Mental traits, such as intelligence, memory, reasoning, facility in verbal expression, ability to get along with people, and imagination.

Skill: In automobile repair, the ability to determine the significance of a knock in the motor would be skill.

Physical Requirement: Physical status, such as age, height, weight, sex, strength, and eyesight.

Unit-5

Wages and Salaries:

1.Largest single expenses.

2.How do we manage a balance between remunerating market and business expenses?

3.We have to make a decision where do we have to base salaries either on Operating expenses or gross revenues

A job that is used to anchor the employee pay scale and around which other jobs are arranged in order of relative worth.

Standard positions that are commonly defined among different organizations.

Percentage of Operating expenses

Calculate your salaries as a percentage of operating expenses by dividing the total salary expenses by your total operating expenses.

As an example, if you pay $145,000 in total operating expenses with a salary expense of $41,000, 28 percent of your operating expenses are salaries. A report by the Society for Human Resource Management indicates that retail industry businesses may have a salary to expense percentage of as little as 18 percent. Education and health care fields may have salaries that are as much as 52 percent of total expenses.

Percentage of Revenue Model

An alternative method of calculating salary percentages is to compare your salary expense to your company's total revenues. This percentage is established by dividing the total salaries by the total revenues. As an example, if your company's gross revenue equals $320,000 and the total salaries for the same period are $38,600, your company spends 12 percent of all monies earned on salaries. Second Wind Consultants, Inc recommends a range between 15 to 30 percent.

Adjustments Model

Track your salary percentages during each reporting period to ensure that you remain within the target range that you determined for your company's operation. Strive to keep your salaries at the lower end of the range if you need funding available to account for newly-hired employees or merit increases. As your revenues and expenses change, adapt your salary percentage accordingly. Understanding the impact that changes in your financial position can have on your operations and reporting is essential to protecting your company's financial health.

If you recognize a permanent increase in revenue, you may opt to disseminate some of the increase to your employees as raises or bonus payments. For example, if you want to issue a raise based on a revenue increase, determine the percentage increase first, then decide how much of that you want to pass along to your staff. If you recognize a 12 percent revenue increase, you could offer a 5 percent raise to your staff, allowing the business to recognize the remaining 7 percent as increased revenue.

Perks

Perks areemployee benefits, usually in addition tosalary andstandard employee benefits. The word, perk or perks, is a short form of the word perquisite which means incentives, bonuses, extras, or sweeteners. In use in business, the term perks has come to mean benefits or extras above and beyond the normalcomprehensive benefit package.

Perks also refers tononstandard benefits that are unusual or for which only a limited number of employees are eligible.

Contd..

Company supplied cars

Free lunches or beverages

Company logoed shirts, hats, and other merchandise supplied at low cost or no-cos

First choice of vacation schedule.

First chance to workovertime.

Professional association membership.

Conference attendance.

First chance forlateral movesorpromotions.

Job openings posted and filled internally before externally.

Flexible schedules

Telecommutingopportunities

Office, larger office with window

Tuition reimbursement

Cafeteria benefits plan

Fringe Benefits

Fringe benefits are forms of compensation you provide to employees outside of a stated wage or salary. Common examples of fringe benefits includemedicalanddental insurance, use of acompany car,housing allowance, educational assistance,vacation pay, sick pay, meals and employee discounts

Samples of Fringe

A)Payment For Time Not Worked: Benefits Under This Category Include: Sick Leave With Pay, Vacation Pay, Paid Rest And Relief Time, Paid Lunch Periods, Grievance Time, Bargaining Time, Travel Time Etc.B)Extra Pay For Time Worked: This Category Covers The Benefits Such As: Premium Pay, Incentive Bonus, Shift Premium, Old Age Insurance, Profit Sharing, Unemployment Compensation, Christmas Bonus, Deewali Or Pooja Bonus, Food Cost Subsidy, Housing Subsidy, Recreation

Contd

1.For Employment Security :Benefits Under This Head Include Unemployment, Insurance, Technological Adjustment Pay, Leave Travel Pay, Overtime Pay, Level For Negotiation, Leave For Maternity, Leave For Grievances, Holidays, Cost Of Living Bonus, Call-Back Pay, Lay-Off, Retiring Rooms, Jobs To The Sons/Daughters Of The Employees And The Like.2.For Health Protection:Benefits Under This Head Include Accident Insurance, Disability Insurance, Health Insurance, Hospitalization, Life Insurance, Medical Care, Sick Benefits, Sick Leave, Etc.3.For Old Age And Retirement:

Contd..

Benefits Under This Category Include: Deferred Income Plans, Pension, Gratuity, Provident Fund, Old Age Assistance, Old Age Counseling , Medical Benefits For Retired Employees, Traveling Concession To Retired Employees, Jobs To Sons/Daughters Of The Deceased Employee And The Like.4.For Personnel Identification, Participation And Stimulation:This Category Covers The Following Benefits: Anniversary Awards, Attendance Bonus, Canteen, Cooperative Credit Societies, Educational Facilities, Beauty Parlor Services, Housing, Income Tax Aid, Counseling, Quality Bonus, Recreational Programs, Stress Counseling, Safety Measures Etc.

Bonus

Bonus pay is used by many organizations as a thank you to employees or a team that achieves significant goals. Bonus pay is also used to improveemployee morale, motivation, and productivity.

As long as bonus pay is discretionary by the employer, it is not considered to be a contract. If the employer promises a bonus, however, the employer may be legally liable to pay the bonus

Incentives

A payment or concession to stimulate greater output or investment.

Anincentiveis something that motivates an individual to perform an action.

Monetary incentives

Pay and allowances. Regular increments in salary every year and grant of allowance act as good motivators.

Profits sharing. The organization offer share in the profits to the employees as a common incentive for encouraging the employees for working efficiently. Perhaps ,a fixed slab above and over makes it applicable.

The co-partnership is offered by issue of shares on exceeding a fixed target.

Bonus. Bonus is a onetime extra reward offered to the employee for sharing high performance.

Contd

Commission. Commission is the common incentive offered to employees working under sales department.

Suggestion system. Under suggestion system the employees are given reward if the organization gains with the suggestion offered by the employee. For example, if an employee suggests a cost saving technique of then extra payment is given to employee for giving that suggestion.

Productivity linked with wage incentives. These are wage rate plans which offer higher wages for more productivity.

Retirement benefits. Some organizations offer retirement benefits such as pension, provident fund, gratuity etc. to motivate people. These incentives are suitable for employees who have security and safety need.

Perks/fringe Benefits/ perquisites.

Non monetary incentives

1.Status.

2. Organizational climate.(Relations)

3. Career advancement.(Promotions).

4.Job enrichment/ assignment of challenging job.(Multifarious).

5. Employees recognition.Recognition means giving special regard or respect which satisfies the ego of the subordinates.

6.Job security.

7.Employees participation.It meansinvolving employee in decision makingespecially when decisions are related to workers.

Autonomy/ employee empowerment.It means giving more freedom to subordinates. This empowerment develops confidence in employees. They use positive skill to prove that they are performing to the best when freedom is given to them.

Compensation surveys

Salary Surveysare tools used to determine the median or average compensationpaid to employees in one or more jobs.Compensation data, collected from several employers, is analyzed to develop an understanding of the amount ofcompensationpaid.

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Paying people fairly is good for business. Underpay, and employees will eventually look for a better offer. Overpay, and the payroll budget and profitability will suffer.

Significance of Compensation surveys

Compensation surveys are specific to an industry.

More than 80 percent of business managers and HR professionals said their companies either participate in or purchase at least onesalary surveyeach year, according to a Salary.com poll. Companies with fewer than 500 employees spend an average of $2,000 annually on salary surveys, and companies with more than 5,000 employees spend up to $15,000 or more each year on these important data sources.

How do researchers conduct surveys?

1.Surveys are conducted on a semiannual, annual, or biennial basis.

2.Surveys normally fall into one of two categories: Custom and standard.

3.Custom surveys are ones that attempt to answer very specific questions from a narrow selection of peer companies (e.g., What is the prevailing pay rate for salespeople in the pharmaceuticals business in the Northwest?).

These custom surveys tend to be available to, and used by, the participants only.

Contd

4.Standard surveys, on the other hand, are often published each year and attempt to cover the same range of companies and jobs.

5.These broad surveys are sometimes sold to non-participants and made available to members or customers of the survey sponsor/vendor.

Check list to buy Compesnsation survey

The background of the survey research firm and cosponsors, if any.

The scope of the survey.Look for studies that cover industries, jobs, and regions that are most applicable to your purposes; and that provide data on enough jobs to be cost-effective.

The survey methodology.Review the summary of the methodology to make sure it's consistent with standards set forth by reputable industry.

The number of participants in the survey.A good survey should cover a representative number of companies for its target population.

The names of participants.Look for your competitors and peers.

Contd

The number of incumbents covered by the survey; and the sample size for each salary.A sample size of 30 or more is more statistically significant

The relevance of the job descriptions to the positions being benchmarked.Look for a good match between the survey and your company. Be sure to compare job descriptions, not just job titles.

The effective date of the survey data.The date a survey is published is always later than the effective date of the data within the survey. If necessary, age the data from the effective date to the current month.

Compensation structure

The employee compensation and benefit package is a crucial factor for attracting potential employees and retaining them as well. Organizations need to strike a balance between the financial success of the business while offering attractive benefits and packages. Though performance is not only driven by monetary aspects, a good Compensation Structure is effective in achieving corporate goals.

The importance of designing an efficient Compensation Structure.

An efficient Compensation Structure paves a way for acquiring top quality talent and helps in retention of employees. At the same time it also accounts and minimizes the cost accrued to the Business.

Contd

There are three stages involved-

1.Preliminary Consulting

2.Implementation

3.Assessment

Conduct a review on a regular schedule or tied to specific events. As a general rule, employers should examine the overall salary structure at least every three to five years.

Listen to managers up to a point. In some cases front-line managers will bring salary-structure issues to HRs attention.

Link the salary structure back to HR strategy and the market. There should not be strategic disconnection between how organization competes and drives values to its people.

Has the organization established appropriate pay grades and maintained updated job descriptions with required skills?Does the company have a clear idea of whether it is paying for the position or for the skills that people bring to it and to the organization?

Contd.

Look broadly when necessary:(Globalized industries prevalence).

Communicate the results. Once the company is ready to adjust the salary structure, it is important to educate and communicate with employees about the changes.

Productivity

1.Incentives pay ,Individual and Group Bonuses. Applicable in Private and Public Sectors.

2.High powered incentives hikes retention of dramatically abled employees.

3.Complementary factors with incentives pay

(team work and Group bonuses) (Decentralization with IT).

4.Perverse Incentives -When rewards are tied to

specific periods of time so that workers manipulate commissions to hit quarterly targets.

5.Incentive pay schemes tend to be associated with greater dispersion of productivity as the

effects are stronger on the more able workers, and this is stronger than the selection effect.

(which pushes towards reduced dispersion)

Performance linked Compensation

Aperformance-linked incentive(PLI) is a form of payment from anemployerto anemployee, which is directly related to the performance output of an employee and which may be specified in anemployment contract.

PLI may either be open-ended (does not have a fixed ceiling) or close-ended (has an upper ceiling which is normally stipulated in the employment contract).

Open-ended incentives are normally applicable to revenue-generating activities (e.g., sales), while close-ended incentives are associated with support functions (e.g., operations, human resources, administration, etc.)

Harvard Business responses

Pay for performance: Why do we assume so much and know so little? Pay for performance is an important element of good management, judging from responses to this month's column.

Ashok Malhotra favors "reasonable incentives for short-term performance" and "higher incentives for long-term performance.

Gary Johnson cautions that "Because excitement is so critical to success, pay for performance value can be diminished the longer the time delay for receiving performance pay.

Sometimes we forget why we pay people." Sivaram Parameswaran.

CEO Nari Kannan noted that CEOs seek "less loss on the downside, more gains on the upside. The company's goals are the (opposite)."