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Organization as Input-Output system Acquiring inputs from environment Using financial resources by human resources Conversion Process By human resources Outputs Exporting to Environment By human resources
Meaning: It is a process of bringing people and organizations together so that the goals of each are met. According to Invancevich and Glueck : “HRM is concerned with the most effective use of people to achieve organizational and individual goals.” According to Milkovich and Boudreau : “Human Resource Management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organizations and the employees to achieve their objectives.”
Scope of HRM The scope of HRM is very wide. The Indian Institute of Personnel Management has specified the scope of HRM as follows: Personnel Aspect Welfare Aspect Industrial Relations Aspect
Comparison on HRM and Personnel Management
There have been several approaches on the concepts of relationship between HRM and Personnel management:
Comparison includes studying Similarity and Differences.
Armstrong suggests common features of Personnel management and Human Resource Management:
Strategies of both stem from the business strategy.
2. Both these recognize that line managers are responsible for managing people. And the line managers are enabled by the advice and support of the personnel department to carry out their responsibilities.
3. The value of personnel management and those of soft version of human resource management are identical vis-à-vis respect for individual, integration of individual needs and organizational goals, and development of people to accomplish competence to facilitate individual and organizational interests.
Both attach importance to the function of matching people to ever-changing business requirements.
Both use the same range of selection, competence analysis, performance management, training, management development and reward management techniques.
The soft version of human resource management and personnel management stresses the process of communication and participates within the employee relations analysis.
Differences between Personnel Management and HRM
Personnel Management is a routine, maintenance-oriented administrative function; human resource management places emphasis on a continuous development of people at work.
2. Personnel Management function is mainly reactive and responds to the demands of an organization whenever they arise, while HRM is proactive function (more future oriented)
3. Personnel Management is seen as independent function and sub-functions without giving due-regard to organizational strategies and processes. HRM is viewed as sub-system of the organization as it takes into account its linkages and interfaces with all other parts of the organization.
4. Personnel Management has a narrow focus it mainly works on improving the efficiency of personnel in isolation without emphasizing the relevance of efficiency in the organizational context, while HRM undertakes a systems view which attempts to create a proper organizational culture. 5. Personnel management emphasizes on economic rewards and traditional job design for better performances, while HRM emphasizes on the satisfaction of higher needs for motivating people, such as autonomous work groups, challenging jobs, creativity. 6. Personnel Management considers job satisfaction and higher moral as a cause of improved performance, while HRM works on the premise that better performance itself is a source of satisfaction and high morale.
Evolution of HRM The evolution to the current state of HRM has passed through several stages: Industrial Revolution Scientific Management Trade Unionism Human Relations Movement Human Resources Approach
HRM in changing environment
The job of an HR manager is to balance the demands and expectations of the external groups with the internal needs and achieve the assigned tasks in an efficient ways.
So the HRM practices in an organization are influenced by two broad categories of factors– Environmental factors and Organizational factors .
I) Environmental factors:-
Population v/s workforce
Workforce market conditions
Reengineering work processes
Flexible Manufacturing Systems
Slashing of jobs
Work force diversity
II) Organizational factors
Organizational Financial Position
Corporate level Strategy Business level Strategy Functional Level Strategy High Performing Culture Low Performing Culture
III) International Perspective
Globalization of industries has led to the considerations of following international factors.
Individualism and Collectivism
Role of HR Practitioner
The HR department generally acts in an advisory capacity; it provides information, offer suggestions, counsels and assists all the line managers in the organization.
The Conscience Role
Fire-Fighting / Legal Role
After the establishment of objectives of Human Resource Management, HR policies are to be formulated.
A policy is a plan of action.
Brewster and Richbell defined “HR policies as a set of proposals and actions that act as a reference point for managers in their dealings with employees.”
They constitute guides to action.
They furnish the general standards or bases on which decisions are based.
Their genesis lies in an organization’s values, philosophy, concepts and principles
Advantages of HR Policies
Policies are useful instructional devices, that offer various advantages to HR working at various levels.
Standards of efficiency
Obstacles in Administrating HR Policies:-
Managers are reluctant to follow guidelines as it curtails their freedom.
Conflict between implied and expressed policy.
Not easy to Communicate.
Makes managers rigid.
Characteristics of sound HR Policy.
While developing a HR Policy, management must pay attention to:-
Relation of policies with objectives
Easy to understand
Stable as well as flexible
Based on facts
Just, fair and equitable
Based on Reviews.
Coverage of HR Policies:- a) Social responsibility Equity Quality of Work Life b) Employment Practices c) Promotion Policies d) Development Policies e) Relations Policies
Sources of content for formulating policies
Past experiences of the organization.
Existing practices and experiences in other
Attitudes and philosophies of management
Knowledge and experience gained by all
line managers and personnel managers in
handling personnel issues.
Functions of HRM As HRM is the management of human resources in an organization and is concerned with the creation of harmonious working relationship among its participants and bringing about their utmost individual development. Functions of HRM Managerial functions Operative functions
Management is a multi-purpose organ which has three jobs, two of which are directly related to personnel managing a business –
“ managing employees” and the “work”
Coordinating and Controlling
The operative functions of HRM are concerned with the activities specifically dealing with:
The Procurement Function
The Development Function
The Compensating Function
The Integration Function
The Maintenance Function
HRM and Corporate Objectives HRM is being used to develop competitive advantage and, therefore, its role in strategic management has been well recognized. “Strategic management is the continuous process of relating the organization with its environment by suitable course of action involving strategy formulation and its implementation.” Strategy is course of action through which the organization relates itself with the environment so as to achieve its objectives.
Corporate mission and objectives Environmental opportunities and threats Strategic Alternatives Corporate strengths and weaknesses Personal Values and aspirations of strategists Choice of strategy Strategy Implementation Activating strategy Structural implementation Behavioral implementation Functional implementation Role of HRM Acquiring, Developing, Integrating, and Retaining right personnel Role of HRM in corporate strategic management process
Human Resource Planning
“ Human Resource Planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”
HRP is a process
It involves determination of needs
It also takes into account the manpower availability at
a future period.
Importance of Human Resource Planning
Reservoir of Talent
Prepare People for Future
Expand or Contract
Human Resource Planning Process Organizational Objectives, Plans and policies Human Resource Planning Identification of human resource gap Actions plan for bridging gap Forecasting supply of human resources Shortage of human resources Forecasting needs for human resources Surplus human resources
Steps in HRP 1 Organizational objectives, plans and policies 2. Human Resource Planning Forecasting the demand and supply of human Resources 3. Identification of Human Resource Gap 4. Action Plans
Techniques for Forecasting Human Resource Needs
Managerial judgement Method
Statistical and Mathematical Models
Forecasting of Human Resource Supply
Human Resource Flow Model
Human Resource Inventory
Barriers to effective Human resource Planning
Improper Linkage between HRP and Corporate Strategy
Inadequate Appreciation of HRP
Rigidity in Attitudes
Conflict between Long-term and short-term HRP
Inappropriate HR Information System
Job Analysis Developing an Organization’s structure results in creating jobs which have to be staffed. Job:- A job may be defined as a “ Collection or aggregation of tasks, duties and responsibilities which as a whole, are regarded as a regular assignment to individual employees” Job Analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of the analysis are job descriptions and job specifications”
Uses of Job analysis
Acquisition of personnel
Human resource Development
Job evaluation and compensation
Safety and Health
Determination of uses of job analysis Strategic Choices in job analysis Information Collection Information Processing Job Description Job Specification JOB ANALYSIS PROCESS
Job Description A job description is an organized, factual statement of duties and responsibilities of a specific job. It is basically descriptive in nature. It provides both organizational information and functional information. 1. Job Identification 2. Job Summary 3. Job duties and responsibilities 4. Relation to other jobs 5. Supervision 6. Machine 7. Working Conditions 8. Hazards
Job Specification Job Specification is a statement of the minimum acceptable human qualities necessary to perform a job properly. It tells what kind of person to recruit and for what qualities that person should be tested. 1. Physical Characteristics 2. Psychological Characteristics 3. Responsibilities 4. Other features of demographic nature
Recruitment Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected. ----- Werther and Davis Human Resource Planning Job Analysis Recruitment Selection Placement Linkage of recruitment to human resource Acquisition
Purpose and Importance of Recruitment
Recruitment represents the first contact that a company makes with the personnel having potential to be employed.
It determines the present and future human resource requirements in conjunction with human resource planning.
It helps to increase the pool of potential personnel.
It helps in increasing the success rate of the selection process.
It reduces the rate of initial turnover rate.
It helps in evaluating the effectiveness of various recruitment techniques
It helps to meet the organization’s legal and social obligations regarding composition of its workforce.
Factors affecting recruitment Internal factors: Company’s pay package; Quality of work life; Organizational culture; Career planning and growth; Company’s size; Company’s products and services; Geographical spread of the company’s operations; Company’s growth rate; Role of trade unions; Cost of recruitment; Company’s name and fame.
External factors: Socio economic factors; Supply and demand factors; Employment rate; Labour market conditions; Political, legal and governmental factors; Information systems.
Sources of Recruitment
Sources are those where prospective employees are available like employment exchange while techniques are those, which stimulate the prospective employees to apply for jobs like nomination by employees, advertising, promotion etc.
Present Permanent employees
Present temporary and casual employees
Retrenched or retired employees
Dependents of deceased, disabled, retired and present employees
External sources are those, which are outside the organizational pursuits. These include:-
Private Employment agencies
Public Employment exchanges
Once the recruitment is through with, the management has to perform the function of selecting the right candidate at right time.
This is done through selection procedure and it a customized one.
It basically depends upon several factors
Financial resources allocated for the same
Company’s past records
Company’s image in the market
Steps in selection procedure : - Development bases for selection Job Analysis Application Blanks Human Resource Plan Written Examination Recruitment Preliminary Interview Business Games Tests Final Interview Assess the fit between Medical Examination The job and the candidate Line Manager’s Decision Employment
Job Analysis:- It is the basis for selecting the right candidate
Recruitment:- It refers to the process of searching for prospective employees and stimulating them to apply for jobs in an organization.
Application Blank:- It is a form through which the data is collected about the candidates and the initial screening is done.
- Personal Background Information
- Educational Attainments
- Work experience
- Personal Details
4. Written Examination:- The candidate qualified through the application blank is required to pass through the written test. - Quantitative knowledge - Aptitude reasoning - General knowledge - English language knowledge 5. Preliminary Interview:- This interview is to solicit necessary information from the prospective candidates and to assess the applicant’s suitability for the job. This is known as stand-up interview. At this level business games are also used as a tool for judging candidates suitability for the job, which mainly includes the techniques used to judge the situation handling and problem solving.
6. Group Discussions:- This technique is used in order to secure further information regarding the candidates suitability for the job.
7. Tests:- It is a most significant stage in the process of selection.
These employment tests are an instrument designed to measure the nature and degree of one’s psychological potentialities, based on psychological factors, essential to perform a job.
Types of tests
8. Final Interview:- In this the interviewer matches the information obtained about the candidates through various means, to the job requirements and to the information obtained through his own observation. Types of interview Preliminary Interview Core Interview Decision-Making Interview
9. Medical examination:- Certain jobs require certain physical qualities like clear vision, perfect hearing, unusual stamina, tolerance of hard working conditions. 10. Reference Checks:- After the completion of the final interview and medical examination, the personal departments checks the references with the candidates. 11. Final decision by line managers:- The final decision has to be made by the line manager, under whom the candidate has to actually perform. 12. Employment:- The successful and the unsuccessful candidates have to be informed and the appointment letter must be sent.
When once the candidate reports for duty, the organization has to place him initially in that job for which he is selected.
Employees are trained for the job and also in relation to related jobs.
Employee is placed on the actual position, only when the probation period is over.
if the performance is satisfactory then only the candidates are regularized.
INDUCTION “ Induction is the process of receiving and welcoming an employee when he first joins a company and giving him the basic information he needs to settle down quickly and happily and start work.” This process is having lot of significance, as the rate of turnover among new employees is very high in comparison to senior executives. (Lectures, handbooks, films, group seminars are used to impart the information to new employees about the environment of the job)
Basic conditions of employment-hours of work, shifts, holidays, retirement benefits etc.
Pay, allowances, deductions
Canteen and restaurant facilities
Unions, negotiating machineries
(ii) About the department
The department head introduces the new employee to the important employees of the department.
Functioning style of the department
Work distribution, assignment, working hours etc.
(iii) About the superiors, subordinates etc
To person whom he has to report
To the persons with whom his work is related
To the persons who are to report him
To his colleagues
Objectives of Induction
Putting new employees at ease
Creating the interest in his job and the company
Providing basic information about working arrangements
Indicating the standards of performance and behaviour
Informing them about training facilities
Creating the feeling of social security
Minimizing the reality shock which would be caused due to incompatibility.
Internal Mobility The lateral or vertical movement (promotion, transfer, demotion or separation) of an employee within an organization is called internal mobility. It may take place between jobs in various departments or divisions. Some employees may leave the organization for reasons such as better prospects, retirement, terminations etc. Such movements are known as external mobility.
Transfers A transfer is a change in job assignment. It may involve a promotion or demotion or no change at all in status and responsibility.
Purpose of Transfer
To meet the organizational requirements
To satisfy the employee needs
To utilize employees better
To make the employee more versatile
To adjust the workforce
To provide relief
To reduce conflicts
To punish employee
Promotion refer to upward movement of an employee from current from current job to another that is higher in pay, responsibility and/or organizational level. promotion brings enhanced status, better pay, increased responsibility, better working condition to the promote.
Purpose of promotion
To utilize the employee skill, knowledge
To develop competitive spirit
To develop competent internal source of employees
To promote employee self-development
To promote interest in training
To build loyalty
To reward committed
Demotion is the downward movement of an employee in the organizational hierarchy with lower status and pay.
It is a downgrading process where the employee suffers considerable emotional and financial loss in the form of lower rank, power and status, lower pay and poor working conditions.
Causes of Demotion
A promote is unable to meet the challenges posed by the new job
Due to adverse business conditions,organization may decide to lay off some and downgrade other jobs.
Demotion may be used as disciplinary tools against errant employees
“ A separations is a decision that the individual and the organization should part.” separations can take several forms, such as temporary leaves of absence, attrition, layoffs.
Temporary leaves of absence
Lay off and retrenchment
Discharge and dismissal
Organization and individual should develop and progress simultaneously for their survival and attainment of mutual goals.
In order to meet these, organization’s formulate human resource training programmes.
According to dale S. Beach-
“ Training is the organizational procedure by which people gain knowledge and skill for a definite purpose.”
Need for training
Training is not something just meant for new employees but even it is needed on a continuous basis.
To match the employee specification with the job requirement and organizational needs.
Organizational viability and the transformation
Change in job assignment
To prepare the employee both new and old to meet the present as well as the changing requirement of the job.
To prevent obsolescence.
To impart the new entrants the basic knowledge and skill needed for the job.
To prepare the employee for higher level tasks
To assist employees to function more effectively in their present positions
To build up a second line of competent officer and prepare them to occupy more responsible position.
To ensure smooth and efficient working of a department.
To ensure economical output of required quality
ASSESSMENT OF TRAINING NEEDS
Training needs are identified on the basis of organizational analysis, job analysis and man analysis.
Identifying specific problems
Anticipating failure problem.
PRINCIPLE OF TRAINING
Full v/s part
AREAS OF TRAINING
Company policies and procedures
Managerial and supervisory skills
Types of Training
A variety of training programmes are used in different organizations, depending on requirements and size of their manpower. Some of the commonly used programmes may be listed thus:
Job Instruction Training
On the job training
Training Through Step-by-step
Off the job training
Conferences or Discussions
Advantage of training
Increased organizational stability
Evaluation of Training Programme
The process of training evaluation has been defined as “any attempt to obtain information on the effects of training performance and to assess the value of training in the light of that information.”
Evaluation helps in controlling and correcting the training programme.
Hamblin suggessted five levels at which evaluation of training can take place:-
Methods of Evaluation
Human Resource factors
Cost Benefit analysis
Individual Career Planning
Organizational Career Planning
WHAT IS CAREER PLANNING?
Career is all the jobs that are held during one’s working life.
Career Path is the sequential pattern of jobs that form a career.
Career Planning is the process by which one selects career goals and the path to these goals
Career Development is those personal improvements one undertakes to achieve a personal career plan.
Career Management is the process of designing and implementing goals, plans and strategies to enable the organization to satisfy employee needs while allowing individuals to achieve their career goals.
P E R F O R M A N C E AGE Stages in Career Development Exploration Establish -ment Transition from college to work Getting first job and being accepted Mid- career Performance increaseor decrease or maintain Late Career The elder states person Decline Retirement
NEED FOR CAREER PLANNING
To attract competent persons and to retain them in the organization
To provide suitable promotional opportunities
To enable the employees to develop and make them ready to meet future challenges
To increase the utilization of managerial reserves
To correct employee placement
To reduce employee dissatisfaction and turnover
To improve motivation & morale.
PROCESS Individual needs and aspirations Organizational needs and opportunities Individual strengths and weaknesses Placement on career path Review of career plans Career Planning Process
Benefits of Career Planning to Employees
In the present context, because of change in the perspective of criteria for measuring success, the role of career planning for employees has expanded.
Career planning benefits employees in following ways:-
Explicit career path
Career Planning Benefits to Organization
From an organization’s point of view, career planning has a long-term orientation for filling various positions from internal sources. When this practice is followed, the organization derives the following benefits from career planning:
Assured availability of talent
Attracting and retaining talent
Promoting organizational image
Protecting Interests of Special Groups of Employees
Definition : A succession plan is a plan for identifying who is currently in post and who is available and qualified to take over in the event of retirement, voluntary retirement, dismissal
Three Main Elements.
The purpose of succession planning is to identify and develop people to replace current job holders in key positions.
It enables to maintain the steady flow of internal talent to fill important vacancies
It emphasizes on “hiring from within” and creates a healthy environment, where employees have careers and merely job.
Need for Succession Planning
Organizations exist as on-going concerns while personnel come in and go out on regular basis. Therefore, the continued existence of an organization over time requires a succession of personnel to key positions.
So, this basically requires the succession planning:-
Identification of right personnel
Grooming of successors
Boosts the morale of meritorious employees
Measures for effective Succession Planning
Since succession planning is essential for every large organization but obstacles generate due to faulty organizational practices, some measures are needed to make succession planning effective.
Involvement of Supervisory Board
Driven by CEO
Pool of Successors
Application of emotional intelligence
It is a systematic process of growth and development by which managers develop their abilities to manage
Role of the organization:
The role of the company in management development is to establish the programme & the development opportunities for its present and potential managers.
Who is a manager and what does he do?
The word manager has been used to mean people at different levels of hierarchy.
All those who perform all or some of the basic functions of management to some degree regularly or occasionally are known as managers.
Knowledge and skills of the manager:
1} Technical Skills : -
2} Human Skills : -
3} Conceptual Skills : -
These skills need constant up gradation as the process of evolution of executive development programme has gained momentum.
Evolution of executive development:
Shift from owner managed to professionally managed enterprises.
Management has been recognized as a distinct kind of occupation consisting of acquired skills and a unified body of knowledge.
Objectives of executive development
To overhaul the management machinery.
To improve the performance of the managers.
To give the specializes on overall view of the function of an organization and equip them to co-ordinate each other’s efforts.
To identify the persons with the required potential and prepare them for positions.
To increase the morale of employees.
To increase the versatility of the mgt. Group.
To keep the executives updated with the changes in their fields.
To improve thought process and analytical ability.
To stimulate creative thinking.
Essential ingredients of the executive development programmes.
Analysis of organizational present and development needs.
Appraisal of present management talent.
Inventory of management manpower.
Planning of individual development programme.
Establishment of development programme.
Evaluation of the programme.
Techniques of management development
There are mainly two types of techniques by which managers can acquire the knowledge, skills and attitudes and make themselves competent .
On – the Job Off – the Job
Coaching The case method
Job Rotation Role playing
In basket method
Understudy Business games
Multiple Management Simulation
On the Job Techniques: -
Off – the Job Techniques: -
The case study
Can be defined as a group of people combined together for accomplishment of a common goal….
Can be defined as a rejuvenating activity…….
THEN WHAT IS ORGANISATIONAL RENEWALS??
Can be defined as an activity of making change in the internal environment commensurating with the external environment…….
NEED FOR ORGANISATIONAL RENEWALS
Changing economic landscape
EFFECTS OF “ORGANISATIONAL RENEWALS”
Coping up with the changing environment.
Adoption of new techniques.
Freedom from monotonous jobs.
Increase in the efficiency.
REQUISITES FOR THE IMPLEMENTATION OF ORG. RENEWALS………
Vision defined by leadership.
Managing the risk.
Innovation starts with creativity.
IMPROVING BUSINESS BY REDESIGNING WORK SYSTEM….
Studying the overall system.
Interconnectedness of the sub-systems.
How the system fits into the environment.
“ What if “ scenario.
An organization exists to accomplish the specific goals and objectives. The employees hired by the organization helps in the fulfillment of these goals.
These employees have their own needs. Needs can be satisfied by providing money, goods and / or services in return of their services.
The organizations have to use reward system which helps in building a competitive / strategic advantage.
“ Compensation includes direct cash payments, indirect payments in the form of employee benefits and incentives to motivate employees to strive for higher levels of productivity.”
Wage and Salary
Compensation Systems Should Include: -
Signal to employees the major objectives of the organizations, such as quality, customer focus etc;
Attract and retain the talent, an organization needs;
Encourage employees to develop the skills and abilities they need;
Motivate employees to perform effectively;
Create the type of culture the company seeks to engender.
Compensation Management Process Organization’s Strategy Compensation Policy Job Analysis & Evaluation Analysis of contingent factors Design and implementation of compensation plan Evaluation and Review
Employees want to be treated fairly. Equity is the balance between the inputs an individual brings to a job and the outcomes he / she receives from it.
Employee inputs include:-
Experience, education, special skills, effort and time worked.
Pay, benefits, achievement, recognition and any other rewards.
Designing Equitable Compensation Systems:-
THERE ARE THREE ELEMENTS OF EQUITY:-
Internal Equity:- Refers to the relation ship among jobs within a single organization.
External Equity:- Refers to comparisons among individuals in the same job within the same organization.
Job evaluation deals with money and work. It determines the relative worth or money value of jobs.
Wendell l. French defined job evaluation as, “a process of determining the relative worth of the various jobs within the organisation, so that differential wages may be paid to jobs of different worth .
Thus, job evaluation may be defined as a process of determining the relative worth of jobs, ranking and grading them by comparing the duties and responsibilities like skill, knowledge of a job with other jobs with a view to fix compensation.
Objectives of Job - Evaluation
To gather data and information relating to job description, job specification and employee specifications of various jobs.
To compare the duties, responsibilities and demands of a job with that of other jobs.
To determine the hierarchy and place of various jobs in an organisation.
To determine the ranks or grades of various jobs.
To ensure fair and equitable wages on the basis of relative worth or value of jobs.
To minimise wage discrimination based on sex, age, caste, region, religion etc.
Procedure of Job - Evaluation
The basic procedure of job evaluation is to compare the job content of one job with those of another job.
INDIAN INSTITUTE OF PERSONNEL MANAGEMENT has evolved the following steps for evaluating job.
1} Analyse and prepare job description
2} Select and prepare a job evaluation plan.
3} Classify jobs
4} Install the programme
5} Maintain the programme.
Essentials for the of job evaluation programme
Compensable factors should represent all of the major aspects of job content.
Avoid duplication in excess.
Be definable & measurable
Not excessive cost.
Operating managers must be convinced about the techniques and programmes.
Complete information has to be provided to the employees
All groups and grades of employees must be covered under this programme
The techniques selected must be understandable
Trade union’s acceptance and support must be obtained.
Job Evaluation Methods / Techniques
Job Evaluation Methods / Techniques
Points Rating Factors Ranking
Method Comparison Method
& Grading Method
Non – Quantitative method
Ranking the key jobs
Single factor ranking method.
1] It is a simplest and most cost effective method.
2] This method is appropriate in small organization.
3] It is useful as a first and basic step of job
1] This provides no yardstick for measuring the relative worth of one job to another.
2] Job requirements, job specifications and employee specifications are not considered in evaluation
3] It does not indicate the extent or degree to which one job is worthy than the other.
JOB CLASSIFICATION AND GRADING METHODS
Class and grade are used differently in this method.
A GRADE is a group of different jobs of similar difficulty or requiring similar knowledge and skill to perform.
A CLASS is a subdivision of a given occupation.
Under this method, jobs at different levels in the organizational hierarchy are divided into various grades with a clear cut definition of each grade.
Grades are formulated on the basis of nature of tasks, requirements of skill, knowledge, responsibilities and authority of various jobs.
POINTS RATING METHOD:-
This is a first method developed on the quantitative basis.
This method is analytical in the sense that the jobs are broken into components for the purpose of comparison.
The factors like skill, knowledge, responsibility, working conditions etc are given numerical values. These totals are calculated and the values for each job is calculated and accordingly compared.
ADVANTAGES : -
Same pay (rates) scale can be arrived at for the same jobs.
Definitions are written in applicable terms to the jobs.
Points score cannot be manipulated.
Wage differentials would be systematic and according to the content of job.
DISADVANTAGES : -
It is difficult to determine factor levels and assign point values.
It is somewhat difficult to explain this method to employees.
Operation of this method needs heavy expenditure.
FACTOR COMPARISON METHOD
this method is based on both principles of points rating and ranking.
Under this, first the components sub – factors are ranked under various factor (rating) headings.
Then monetary values are assigned to the components or sub – factors.
Thus, each job is ranked a number of times.
It is analytical $ quantitative
It is a combination of 2 good methods.
Modus operandi is really understandable.
The technique is reliable and valid compared to other techniques as it consists of 2 aspects
factor rank order
It is costly and somewhat difficult to operate compared to the conventional non – quantitative methods.
This technique does not consider all the sub – factors as the operation of the system would be difficult if it considers all the factors.
ESTABLISHING EXTERNAL EQUITY
Employers need to compete for the skills and knowledge they require to operate their businesses ----- in order to attract workers with needed skills and to motivate and retain those already employed.
They use wage and salary surveys to find out what other organizations are paying for particular skills.
Then, in setting pay rates, they seek to integrate the external information with what they have learned through the internal evaluation of jobs.
This process is called pricing the wage structure.
Establishing Pay Rates
The need for equity is the most important factor in determining pay rates.
This is achieved through following steps:-
Find out the worth of each job through job evaluation.
Conduct a salary survey to find what other employers are paying for comparable jobs.
Group similar jobs into pay grades
Price each pay grade by using wage curves
Fine tune pay rates.
Types of Wage Payments
Time rate system:- Oldest Method
Under this system, workers are paid according to the work done during a certain period of time.
The essential point is that the production of a worker is not taken into consideration in fixing the wages.
Employees maintains the quality of the production.
All the workers doing same work gets same wages, so no jealousy.
Provides stable earnings to the employees.
- No difference between effective and non-effective employees
Piece Rate System:-
Under this system, workers are paid according to the amount of work done or the number of units completed, the rate of each unit being settled in advance, irrespective of time taken to do the task.
Workers earning = Number * Rate per piece.
The workers are paid according to their efficiency as reflected in the amount turned by him.
The total unit cost of production remains lower as the unit production increases.
3. Balance or Debt Method
This is a combination of time and piece rates.
The worker is guaranteed an hourly or a day-rate with an alternative piece rate.
If the earnings of a worker at piece rate>Amount through time basis = he gets credit for the balance
If the earnings through piece rate = time basis = question of excess payment do not arises.
If the earnings of a worker at piece rate<Amount through time basis = he is paid on the basis of time rate.
Pay for Performance An incentive or reward can be anything that attracts an employee’s attention and stimulates him to work. According to BURACK and SMITH – ” An incentive scheme is a plan or programme to motivate individuals or group performance. An incentive programme is most frequently built on monetary rewards but may also include a variety of non-monetary rewards.”
Classification or types of incentives:- Incentives can be classified into:- DIRECT COMPENSATION INDIRECT COMPENSATION Direct Compensation :- It includes the basic salary or wage that the individual is entitled to for his job, over-time work and holiday premium, bonuses based on performance. Indirect Compensation :- It includes protection programmes (insurance plans, pensions), pay for time not worked, services and perquisites. ---These are maintenance factors.
Determinants of incentives The individuals Work situation -Technology - Satisfying job assignment - Feedback - equity Incentive plan
Incentives are monetary benefits paid to workmen in recognition of their outstanding performance.
ILO refers to incentives as “PAYMENT BY RESULTS”
The primary advantage of incentives is the inducement and motivation for higher efficiency and greater output.
Increased earnings would enable the employees to improve their standard of living and help the organization to improve their production capacity.
Types of Incentive Plans
Plans for blue collar workers
Plans for white collar workers
Plans for managerial personnel
Incentive for Blue collar workers
Systems under which the rate of extra incentive is in proportion to the extra output.
Systems under which the extra incentive is proportionately at a lower rate than the increase in output.
Systems under which the rate of incentives is proportionately higher than the rate of increase in output.
Long term incentive plans for blue collar workers.
Under such plans, each member of group receive a bonus based on the output of the group as a whole.
The most important reason for adopting group plan – as the jobs are interrelated.
One worker’s performance reflects not only his effort, but also of co-workers.
It encourages co-operation among group members.
Group production levels tend to be more stable than individual ones.
Group plans also facilitate on-the job training.
Group incentive plans
- Scanlon plan ( plan to reduce the cost of operation and improving working methods and sharing in the gains of increased productivity.
Incentive plans for White collar workers
75% organization pay this incentive to their sales team.
The unsupervised nature of most sales work.
Tradition in the market
The assumptions that incentives are needed to motivate salesmen.
Straight salary method
In many organizations, the managers are paid BONUS.
There are two types of bonus.
Determined by formula , like as increase in sales
Determined by some discretion used in the allocation of bonus
For top level management bonuses are generally tied to overall corporate results.
Incentives for managerial personnel
Non-monetary incentives While monetary incentives often appear as important motivators, many factors unrelated to money can also serve as “attention-getters” and “encouragers of action”. Examples:- - A person with strong need for affiliation may respond readily to job assignments. -The opportunity to communicate with and relate to others is a factor many workers emphasize. -An employee with high-level desires for power may respond easily to opportunity, where he can gain leadership. -Persons interested in enhancing their reputations and receiving recognition in the eyes of others, respond to verbal praise.
Services & Benefits Besides base compensation and incentives, employees are provided various types of benefits and services by the organizations. These are called by various names such as fringe benefits, employee welfare, wage supplements, sub wages, supplementary compensation, social security etc.
Definition:- “ Fringe benefits are supplements to wages received by workers at a cost to the employers. The term encompasses a number of benefits-paid vacation, pension, health and insurance plans, etc.—which usually add up to something more than a fringe and is sometimes applied to a practice that may constitute dubious benefits for workers.”
Features of Fringe Benefits
Fringe Benefits are provided to employees in addition to their wages and other performance related incentives.
These are provided to employees not for the performance of any specific jobs but are offered to them as means for facilitating the performance of their jobs.
These are provided to all employees irrespective of their work efficiency.
Types of benefits
There are numerous types of benefits which may be provided to employees, and there are different ways to classify them.
One such classification may be STATUTORY and VOLUNTARY benefits.
Various benefits provided by an organization may be classified under two groups:------
Major benefits offered in INDIA
Payments for time not worked
- Weekly off-day
- Gazzetted holidays
- Personal leave
- Provident Fund Scheme
- Pension Scheme
After an employee has been selected for a job, has been trained to do it and has worked on it for a period of time, his performance should be evaluated.
Performance evaluation or appraisal is the process of deciding how employees do their jobs and performance here refers to the degree of accomplishment of the tasks.
Performance appraisal is the method of evaluating the behaviour of employees in the work spot, normally including both the quantitative and qualitative aspects of job performance. So, performance appraisal is a systematic and objective way of evaluating both work related behaviour and potential of employees.
1} The appraisal is a systematic process.
2} It provides an objective description of an employee’s relevant strengths and weaknesses.
3} It tries to find out how well the employee is performing the job.
4} The appraisal is carried out periodically, according to definite plan.
5} It is not job-evaluation, but refers to how well one is doing the job.
6} It may be formal or informal in nature.
Objectives of performance appraisal
Performance appraisal could be taken either for evaluating the performance of employees or for developing them.
Evaluation of employees ie appraisal serves several useful purposes:-
Training and development programs.
WHAT IS TO BE APPRAISED ?
Every organization has to decide upon the content to be appraised before the programme is approved. Generally, the content to be appraised is determined on the basis of job analysis.
The content to be appraised may be in the form of contribution to organizational objectives like production, savings in terms of cost, return on capital etc.
WHO WILL APPRAISE ?
The appraiser may be any person who has thorough knowledge about the job content, contents to be appraised, standards of contents, and who observes the employee white performing a job.
Users of services and consultants.
WHEN TO APPRAISE ?
Informal appraisals are conducted whenever the supervisor or personnel managers feel it is necessary. However, systematic appraisals are conducted on a regular basis, say, for ext; every six months or annually.
The Performance Appraisal Process
Performance appraisal is planned, developed and implemented through a series of steps.
Establish performance standards.
Communicate the standards.
Measure actual performance
Compare actual performance with standards and discuss the appraisal
- Essay evaluation - Paired comparison - Field review
- Critical incidents - Forced distribution technique
- Graphic rating scale
- Behaviorally anchored rating scales
Individual Evaluation Methods:
Here Employees are evaluated once at time without comparing them with other employees:
Critical Incident Technique
Graphic Rating Scale
Behaviorally Anchored Rating Scale
BARS IS CONTRUCTED BY Collecting critical incidents Identifying performance dimensions Reclassification of incidents Assigning score values to incidents Producing the final instrument
What is 360 assessment ?
It’s a full-circle overview of a person’s performance on the job. Instead of a single evaluation from the boss, a person receives feedback from many workplace source.
The boss still gives input, but peers and direct reports also set involved in the evaluation process. The person participating in a 360 gets to rate his or her performance
Advantages of 360 feedback system
Everybody involved in the process benefits:
Participants gets a fairer, well – rounded impression of how their work is viewed by others.
Bosses get an overall perspective about a persons skills.
Peers and direct reports get an opportunity to share concerns which helps them to contribute constructive changes.
Team members can use the information to identify and prioritize team development needs.
Features of 360 feedback:
It is an assessment process used to improve managerial effectiveness by providing the manager with a more complete assessment.
The process involves obtaining feedback from the manager’s key contacts,
The manager himself
Features of 360 feedback:
Feedback is normally gathered by means of a questionnaire, which asks participants to rate the individual according to observed behaviours.
The 360 process will not suit all the companies. Presenting the results of the appraisal to managers in a constructive way is critical to the success to the process.
360 performance appraisal
This is an attempt to the updation of the traditional employee appraisal process & is one of the fashionable techniques of the mid 1990s, fitting in with other news tools called team mgt, employee empowerment and total quality management.
360 - feedback, as the term implies, brings together formal appraisals from everybody that the person being assessed comes into contact with line mangers, subordinates, colleagues, peers, and even outsiders such as clients.
Another name for it is multi – source feedback and a variant is upward feedback, in which subordinates appraise their supervisor’s performance.
How does the checkpoint 360 system work ?
The standard checkpoint survey has to items and takes approx. 15 minutes to complete it covers competencies in the areas of communications, leadership, adaptability, Relationships, task Management, Production, Development of others.
Results from all these surveys are compiled in a confidential feed back report.
Graphs and charts relate the data in a detailed, easy – to – understand format.
3) Participants use the information from the feedback report to establish goals and ongoing action plans, aimed at better utilizing their strong points and improving their weaker skills.
Evaluating what a person can perform or do is called ‘potential appraisal or evaluation’.
Potential refers to the abilities present but not currently utilized. It is a latent capacity in a person to discharge a responsibility.
“ people are like icebergs. What you see above the surface is only a small part. A large part of the attributes needed to perform excellently in future job, which I call potential is not immediately visible. It is hidden below surface”.
It is characterized by following attributes:
Ability to foresee future opportunities
Consistency in approach and performance
Responsive to condition whatever comes in the way.
Person with hight level of integrity.
Broader vision and micro perception.
Why potential appraisal objectives:-
To promote an employee to higher levels of jobs involving higher order or responsibility, which the employee can effectively discharge without being over burden and stretched.
Assist the organization to allocate jobs among employees as per their capabilities so that organizational responsibilities are discharged effectively.
Evaluation of Employee Potential:
Determination of role dimension
Determination of mechanism
Linking potential with other elements.
According to Armstrong-
“ Industrial relation is concerned with the system and procedures used by unions and employers to determine the reward for effort and other conditions of employment, to protect the interest of the employed and their employers, and to regulate the ways in which employers treat their employees.”
According to Industrial Labour Organization (ILO)-
“ Industrial relation deal with either the relationship between the state and employers and workers organization or the relation between the occupational organizational themselves.”
Features of industrial relations
Relation between employees and employer
The outcome of the practice of human resource HRM and employment relations
Accommodating other party’ interest, values and needs
Governed by the system of rules and regulations
To maintain harmonious relation between employees and employer
Trade union is another important institution in the industrial relation
Develop the skills and methods of adjusting
Objectives of industrial relations
To promote and develop congenial labour management relations
To enhance the economic status of the worker by improving wages, benefits and by helping in evolving sound budget
To regulate the production by minimizing industrial conflicts through state control
PARTICIPANTS IN IR
Workers & their organizations
Managers and their organizations
Role of government
ASPECTS OF IR
DEVELOPMENT OF HEALTHY LABOUR MANAGEMENT RELATIONS
Existence of responsible trade unions
Collective bargaining,plant discipline & satisfactory trade union
ASPECTS OF IR
MAINTENANCE OF INDUSTRIAL PEACE
Legislative enactments & administrative action, labour courts.
Implementation & evaluation Committees
Joint management councils
Recognition of human rights “Labour is no longer an article or a commodity of commerce”
Suitable environment to adapt.
STRATEGIES OF IR
The attitudes of management to employees & unions
The attitudes of employees to management
The attitudes of employees to unions
The prosperity of company, degree to which it expands ,stagnates or run down
Extent to which technological changes are likely to affect employment conditions & opportunities
The effectiveness of unions & its officials and extent to which officials can control the activities of supervisors within the company.
The extent to which bargaining is carried out at national or local plant level.
.the legal framework within which industrial relations exists.
SCOPE OF IR WORK
Administration,including overall organization,supervision and co-ordination.
Liaison with outside groups and personnel departments as well as with various cadres of the management staff.
The drafting of regulations,rules,laws or orders,and their construction and interpretation.
Employee counseling on all types of personnel problems-educational , vocational, health, or behavior problems.
Suggestions plans and their uses in labour , management and production committees.
FUNCTIONAL REQUIREMENTS OF A SUCCESSFUL IR PROGRAMME
Top management support
Sound personnel policies
Adequate practices should be developed by professionals