Introduction to Human Resource Management By Dr. Jacob Cherian M.Com., M.S.W., M.Phil., Ph.D. Chairman, Marketing Dept., College of Business Administration, Jeddah.
Human Resource Management Human Resource Management is a management function involving procurement of suitable human resources, train and develops their competencies, motivate them, reward them effectively and create in them an urge to be part of the management team whose aim should be rendered, dedicated, committed service for the success and growth of the organisation.
Personnel vs Human Resource Management ( (5) Employees are utilized for mutual benefit both for organisation and employees’ own (5) Employees are utilized for organizational benefit (4) Employee is treated as a resource. Employees are utilized for organizational benefit (4) Employee is viewed as a tool or equipment which can the purchased and used (3) Employees are treated as profit centre and hence they invest in Human Resources Development -and future accrues from this resources (3) Employee is treated as cost centre and hence controls cost of “Personnel” in the organisation (2) HRM views man not only as economic person but looks at him as a full person — taking social and psychological factors in views. (2) Personnel Management views man as economic person (1) HRM is management of employees’ skills, knowledge, abilities, talents, aptitude, and creative abilities. 1) Personnel Management is management of people
Limitations of Human Resource Management 1. Future is uncertain: 2. Conservative attitude of management: 3. Problem of discarding surplus staff: 4. Time Consuming and Paper Work: 5. Problem of recognizing change: 7. Expensive: 6. Shortages of highly skilled personnel:
HRR sometimes called as manpower planning, involves identifying staffing needs, ana1ysing available personnel, and determining what additions and / or replacements are required to maintain a staff of the desired size and quality.
It may be defined as a strategy for the acquisition, utilization, improvement and preservation of an organization’s human resources.
In simple words, HRP is a process of identifying human resource requirements in terms of quality and quantity It is not Just the quantity of manpower that matters, but more so the quality of manpower.
Job analysis is the starting point of recruitment and selection. It is the systematic process of collecting and studying information about the various jobs in the organization.
In the words of Edwin Flippo “ Job analysis is the process of studying and collecting information relating to the operations and responsibility of a specific job”
Job Analysis Job Description Job Specification Job title Duties & responsibilities Working conditions Salary & incentives Qualification Qualities Experience Family background Machines to be used Training Inter-personal skills
It gives a clear idea about he requirments of the candidates 6. Use to Candidate It gives a clear information about the job to be done It contains details of candidate 5. Contents It contains details of the job It is more simple in nature 4. Nature It is in more complex in nature It focuses on candidate 3. Job / Candidate Focus It focuses on job It follows job description
It precedes job specification
Job specification give details relating to the candidate who is expected to do the job such as qualities and qualifications
Job description gives details of the job in respect of duties, responsibilities, salary and incentives etc.
It is a process to discover the sources of man-power to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of efficient personnel.
In simple words, it is a process of attracting people to apply for jobs available in the company.
Types of Employment Tests Use of employment tests is fairly widespread in personnel selection. Such tests provide a systematic basis for comparing performances, personality traits, and intelligence .
This test tries to measure the performance of candidates in respect of a certain job. Such test is specially designed to measure specific skills and knowledge required for a job. For example, typing test can measure speed and accuracy of a typist
It is conducted to judge maturity, social or inter-personal skills, behaviour under stress and strain, etc. This test is very much essential in case of selection of sales force, public relations staff, etc. where personality plays an important role.
It helps to judge specific talent or ability to acquire a particular skill. Some people have good talents or aptitude for selling, others for accounting, and so on. This type of test helps the company to select the right candidate and then provide the right job best suited to him.
This test is conducted to find out likes and dislikes of candidates towards occupations, hobbies, etc. Such tests indicate which occupations are more in line with a person’s interest. Such tests also enable the company to provide vocational guidance to the selected candidates and even to the existing employees.
These tests help to evaluate traits of intelligence. Mental ability, presence of mind (alertness), numerical ability, memory and such other aspects can be measured. Such tests are used for admission to MBA courses, recruitment for executive positions in banks and other organizations.
This test requires interpretation of problems or situations. For example, a photograph or a picture can be shown to the candidates and they are asked to give their views, and opinions about the picture.
An interview is an oral examination. It is a two-way communication where the interviewers can obtain as much as required information from the candidate and the candidate can ask for information about the company and the job.
- Conducting Interviews - Advertising job. - Application of Tests - Determining sources - Initial Screening - Job analysis . It involves a series of steps It normally involves Steps Involves It is a process of choosing the most suitable candidate from those who apply for job. It is a process of searching for prospective employees and stimulating them to apply for jobs Meaning SELECTION RECRUITMENT
The purpose of selection is to select the most suitable candidate and rejecting others. The purpose of recruitment is to attract as much candidates as possible. Purpose Selection follows recruitment. Recruitment precedes selection. Order The final selection decision is a major factor. Advertising the job is a major factor. Major Factor
It is complicated process and normally experts are required to conduct tests and interviews. It is a simple process and normally does not require help from experts Help from experts Selection is a lengthy process and as such time consumed is quite more. Recruitment requires less time as it normally involves advertising the job. Time required a line function. the top department and it is so it is a staff function department concerned or by personnel departmental, Selection is done by the Recruitment is done by the Staff / Line Function
Selection is subjective as there may be favouritism, and bias in selection. Recruitment is more objective in nature. Subjective/Objective conducting interviews. - money is spent on testing and advertising the job. Selection is quite expensive as Recruitment normally is not Cost factors
Now-a-days, group discussions play an important role in the selection of candidates, especially at managerial level. It has become an important tool in the selection process. In group discussion, the participants may be divided into two groups. A topic is presented to them. For example: 'Leaders are born and not made’. One group may talk in favour of it and another group may talk against it. At times the participants may not be divided into two groups, i.e. there will be only one group. The participants will present their viewpoints on the topic. Accordingly, the selectors may judge the candidates. The following attributes of candidates could be evaluated from the group discussion
Training is one of the important aspects of manpower development. It has gained significance since 1960s and continues to be of growing importance for organizations today. Training is normally viewed as a short term educational process utilizing a planned, systematic and organized procedure by which non-managerial personnel acquire the technical knowledge and skills necessary for increased effectiveness in achieving organizational goals.
In the words of Wayne Cascio, "Training consists of planned programs undertaken to improve employee knowledge. skills, attitudes, and social behaviour so that the performance of the organization improves considerably. “
In simple words, training is a process of developing or imparting skills, knowledge and changing attitudes so as to increase individual and organizational effectiveness.
Development is viewed as a long term educational process utilizing a planned and systematic procedure by which managerial personnel acquire conceptual and theoretical knowledge for enhancing general administrative abilities. The major objectives of training and development programmes are:
To improve individual and organizational performance,
Performance appraisal is a process of evaluating work performance of the personnel so as to facilitate individual and organizational effectiveness. Performance appraisal is also referred as merit rating, employee rating, and service rating.
There are several methods or techniques of performance appraisal. The most common methods are as follows:
1. Narrative essay:
The most simplest method is the narrative essay. In this, the rater describes in detail an employee's strengths and weaknesses, and potential, together with suggestions for improvement. If essays are written well, they can give detailed feedback to the subordinates in respect of their performance.
2. Ranking Methods:
There are various ranking methods which are commonly used to evaluate the performance of the employees. Ranking methods offer convenience to evaluate the performance and they are less time consuming. The ranking methods used are:
The oldest and most elementary method is the simple ranking method. In this case, a rater ranks all employees from best employee to worst employee or from highest to lowest. For example, if there are 10 employees under a supervisor, then the best employee will get rank 1, the second best will get rank 2 and so on. .
In this case, the rater initially lists all employees on a sheet of paper. From this list he first selects the best employee as (No.1), then the worst performer (No.n), then the second best performer as (No.2), and then the second worst (No.n-l), and so on, alternating from the top to the bottom of the list until all employees have been ranked.
For example if there are 10 employees, then the best employee would be ranked on No.1 and the worst as No.10. The second best as No.2 and second worst as No.9 and so on.
Paired comparison is a variation of simple ranking method. A person is compared with other individuals and given a rank by the number of times he is considered better. For example, if a company has five employees (1, 2, 3, 4, and 5), then there will be 10 paired comparisons like this:
In this method, the raters use a graphic scale to appraise certain specific factors such as quality of work, quantity of work, dependability, etc. The following is an example of graphic scale:
The graphic scale method is simple to understand, easy to conduct and less time consuming. However, there is lot of paper work and there are chances of rater bias. This is the most commonly used method. In this case, the raters use a graphic scale to appraise certain specific factors, such as quality of work, quantity of work, dependability, and so on.
It is a variation of simple graphic scale. In this case, the behaviour or attitude towards the job is appraised. There are employees who have a positive attitude towards the job, and they make every effort to upgrade and update their knowledge and skills to handle their activities.
There are other employees who may tend to develop a negative attitude or behaviour towards their job and as such they may make least efforts to upgrade and update their knowledge and skills to perform their activities.
In this case, the supervisor gives a brief report of things which employees did that were particularly effective or ineffective in accomplishing their jobs. There are times, when certain incidents that take place have a direct bearing on the performance of the employee.
For instance, a salesman may overcome a suspicious and rude customer and finally effects a sale to the satisfaction of the customer. This was made possible because the salesman used his patience and tact to convince the rude and suspicious customer to buy the product. The sales supervisor may record such incident in the performance appraisal of the salesman.
In this case, a list is prepared containing various statements relating, to employee's behaviour on the job. The rater indicates the individual performance by checking yes or no squares to various statements. Naturally, the rater must be very familiar with the job behaviour of the employees.
The greatest advantages are its simplicity, convenience, less time consuming, and less expensive.
The greatest drawback is that the statements are structured and it lacks the depth of critical incidents and essays.
This is an old and traditional method of appraising employees. A confidential report is a report on the subordinate by the immediate superior and covers a limited range of aspects such as the employee's strengths, weaknesses, major failures or achievements and information on some personality traits and behavioural aspects. The confidential report is used for a variety of personnel decisions such as transfers, promotions, etc.
This technique is used more so in the case of selection rather than performance appraisal. However, now-a-days, some firms use this technique in performance appraisal, especially at the time promoting managers to higher levels.
The ratees’ are subject to various psychological tests, management games, oral presentations, and such other various exercises. The ratees are asked questions and accordingly judged by the raters.'
WHO SHOULD BE INVOLVED IN PERFORMANCE APPRAISAL
The answer to this question involves a number of related questions such as the following:
1 . What should be evaluated?
2. Who should be evaluated?
3. When should the evaluation take place?
4. Who is responsible for conducting performance appraisal?
Employees' are paid for their services in terms of money called wage payment. Wages are usually paid in cash at the end of one day or one month. Wage payment is important to all categories of employees. Their life, welfare and even social status depend on wage payment. Wage payment is equally important to employers as their profit depends on the total wage bill.
Time rate system is the oldest and simplest method of wage payment. In the time rate system, wages are paid as per the time spent by the employees in the organization. The production given by the employees is not taken into consideration. The employer buys the hours and pays them compensation accordingly.
Piece rate system is another basic system of wage payment. It is just opposite to time rate system. It is also treated as incentive wage system as it encourages employees to produce more and also to earn more. In the piece rate system, wages are paid as per the production given by the employee and not as per the time spent by the employees.
Strict supervision is not necessary Strict supervision is necessary 7. Supervision Production goes faster but quality may suffer Production goes slow but quality is maintained 6. Effect on production It makes distinction It does not make any distinction between the efficient and inefficient employees 5. Distinction between employees Employers and efficient employees support this system Employees & trade unions supports this system 4. Acceptability It is complicated method It is easy to understand and simple to administer 3. Nature of method It does not give guarantee of minimum wages It gives guarantee of minimum wages 2. Guarantee of minimum wages Payment is made on the basis of production given by the employees Payment is made on the basis of time spent by the employees 1. Payment basis Piece wage system Time wage system Points of difference
It is observed that both Time wage system and .Piece-rate system have their strong points and weaknesses. Hence some incentive wage plans need to be developed to enhance the production and for promoting cordial employer-employee relations. The basic object of good wage incentive plan should be to encourage workers to put in their best on their jobs overcoming their weaknesses like laziness, suspicion, indifference, distrust of management.
ESSENTIAL FEATURES OF A GOOD INCENTIVE WAGE PLAN
1. It should ensure that efforts and rewards are directly related.
2. The reward must be clearly identifiable.
3. The reward must be valuable to Employee.
4. It should be simple and easy to understand and easily calculable by the employee.
5. The standards on which the plan is based should be effective.
6. It should guarantee an hourly base rate.
7. It should develop clear policies and rules for attaining the standards.
This incentive plan developed by an American Mechanical Engineer, Mr. F.A Halsey to encourage efficiency amongst workers and to guarantee them wages according to time basis.
Under this plan standard time required for the job is predetermined on the basis of past experience. Workers who perform the job in less than the standard time are rewarded with the Bonus which is equal to 50% of the time saved.
For example if a job requiring 40 hours is done in 32 hours and if the worker is paid at the rate of 50 halala per hour. Then the total wages of the worker will be calculated as follows:
Time Wage = 32 x 0.50 = S.R.16
Time Saved for Payment of Bonus = 8 X 50/100 = 4 Hours
:. Bonus = 4 X 0.5 = S.R. 2
Total earnings of the worker will be S.R. 16 + 2 = S.R. 18.
In 1901 Mr. James Rowan developed his incentive plan, which is essentially a modified version of Halsey Plan.
The only difference between Halsey Plan and Rowan Plan relates to the calculation of the Bonus. Under this Plan, bonus is calculated on that proportion of the time saved which the time taken bears to the standard time.
For e.g. if a 40 - hour job is done in 32 hours and if the hourly rate in 75 halala the total earnings of the worker will be calculated as under:
Guaranteed Time Wage = 32 X 0.75 = S.R. 24
Bonus = Time Saved X Time Taken/ Standard Time X Hourly Rate
= 8 X 32 / 40 X 0.75 = S.R. 4.8
:. Total earnings will be = S.R. 24 + 4.8 = S.R. 28.80
F.W. Taylor, the father of scientific management developed his incentive plan in 1880, which puts, premium on efficiency. Inefficiency under this plan is penalized. ]
The standard of output per hour or per day is predetermined on the basis of time and motion studies and two piece-wage rates are laid. Those workers who attain or exceed the standard output are paid at a higher rate and those workers who fail to attain the standard output are paid at a lower rate.
For example the standard output may be fixed at 40 units per day and the piece-rate payable laid down is 60 halala and 50-halala per unit.
If a worker produces 42 units, he will be paid at the higher piece rate i.e., 42 X 0.60 = S.R. 25.20
whereas if another worker produces 38 units, he will be paid at a lower rate i.e., 38 X 0.50 - S.R. 19.00.
Thus efficiency is rewarded and inefficiency is penalized.
Emerson developed his incentive plan, which is no doubt modified version of Taylor’s plan but with a big difference.
Under this plan the worker is guaranteed wages on time basis even if he fails to attain the standard output.
For the purpose of determining efficiency, either the standard output per unit of time is fixed or the standard time for a job is determined and the efficiency is measured by comparing the actual performance against the predetermined standards.
Percentage of efficiency (on the basis of time) = Standard time allowed / Time taken X 100
Percentage of efficiency (on the basis of production) = Actual production / Standard production X 100
For example, the standard output per day is 40 units and the actual output is 30, then the efficiency is 75 percent If the output is 45, the efficiency is 112.5 percent..
The rate of Bonus payable at 90 percent efficiency is 10 percent of Time wages earned. At 100 percent efficiency, bonus payable is 20 percent of Time Wages earned and beyond 100 percent efficiency, Bonus of 30 percent of Time wages earned is paid.
Emerson proposed that no bonus should be payable if the efficiency was less than 66.7 per cent.
This incentive plan is modified versions of Halsey and Rowan Plan with a difference that the benefit of time saved by the worker in the process of production is shared with the foreman in the ratio of 3:1.
The sharing of benefit is, made on the assumption that worker cannot produce better results without the full cooperation of the foreman. And hence the foreman is also entitled to an incentive so that the workers get right encouragement and impetus to produce better result.
Under this plan total earnings of the worker would include actual time wages plus a Bonus equivalent to 75% of the time saved represented by the excess of standard.
Under, entire workforce as a whole is considered for payment of bonus to workers. If, during a particular year, the output rises either above the standard output or the previous year’s output, the wages of the workers are increased in the same ratio.
Thus, for e.g. in 1988 the average output per worker was 10 units and in 1989, the average output per worker is likely to be 11 units,- the wages payable to workers in 1989 will be 10%higher than in 1988.
(1) The system is simple to understand and easy to operate.
(2) It recognizes the older member's need for respect. Respect for elders is a part of cultural value system in a number of societies. Seniority as the basis of promotion is consistent with such cultural value system of the society. Subordinates are willing to work under a senior person. Therefore, seniority has a wide acceptance on the part of most employees.
(3) There will be no chance of favouritism or bias, whimsical or arbitrary action. Thus, objectivity can be ensured. Also, there will be lesser grievances or disputes regarding promotion since the measurement of seniority are simple as well as exact.
(4) Promotion will be given as a matter of course and every employee will know his place in the promotion list.
(5) It promotes discipline and morale in the organization, since all are assured that promotion will come when it is due. It offers a greater feeling of security and develops a sense of belonging among employees.
(6) Seniority is lost if an employee quits the job. Hence, there will be a tendency to stay with the organization. Thus, the rate of labour turnover will be reduced.
(7) Seniority and experience go hand in hand. A senior employee is a more experienced person.
(1) Seniority and competence do not necessarily go together. It is quite likely that inefficient, unskilled and second grade employees may get promotion.
(2) It provides no incentive to employees particularly beginners to increase their knowledge or improve their skills or performance because they know that there are no chances of their promotion until those senior to them leave the organization or are promoted.
(3) The worth of ail, individual is not appreciated and given due recognition. This generates frustration and may constrain employees to leave the organization for better prospects elsewhere.
(4) It fails to attract young, promising and capable persons to the organization.
(1) Merit as the basis of promotion offers maximum inducement for improvement of knowledge, skills and performance. Employees know that competence is the only basis for getting promotion. It also motivates employees having potential for development.
(2) It encourages an employee to work hard and ensures more efficiency due to the opportunity for advancement in the organization.
(3) Merit-based promotion policy attracts young and promising Candidates to apply for jobs in the organization. This infuses fresh blood into the organization.
(4) There is greater loyalty on the part of employees since the employees is satisfied that their merit and competence will be properly appreciated and rewarded.
(1) The 'merit' criterion ignores the value of experience.
(2) Since there is no fool proof method of judging the ability of an employee, it is likely to lead to faulty judgement. Besides, the judgement varies from individual to individual. An employee may be considered able and fit for promotion by one rater but not by the other.
(3) It may also lead to favouritism, injustice etc. on the part of management. This will result in discontent among those who are not promoted and unhealthy employer-employee relationships.
(4) It lacks trade union support.
It can be said that at lower level, seniority should be the basis of promotion. In respect of middle management level, Seniority-cum-merit should be the criterion. For higher managerial positions, merit alone should be guiding factor.
Demotion is just the opposite of promotion. It implies lowering down of status, salary and responsibilities of an employee. Demotion is generally used as a measure of punishment and is a preliminary step leading to discharge.
Reasons for Demotion:
An employee may be demoted for the following reasons:
The employee's job may not exist or become less important because of re-organization of company.
The employee may no longer be thought of capable of carrying out his present responsibilities efficiently.
Transfer refers to the change in which the pay, status and responsibilities of the new post are mostly the same as of the old. It is a lateral movement of an employee, not involving promotion or demotion. A transfer may require an employee to change his work place, work group, work content, department or an organizational unit.
A good transfer policy should have the following features.
(1) Clarify the conditions under which transfers will be made.
(2) Decide the persons who will have authority for initiating and implementing transfers.
(3) Clarify the jurisdiction within which transfers will be made such as within a unit, between departments, divisions, plants, etc.
(4) Decide the basis of transfer.
(5) Decide the rate of pay and the cost of moving to be given to the transferee.
(6) Communicate duly the fact of transfer in writing to the concerned persons well in advance and all other concerned persons.
(7) Avoid frequent transfers and transfer for the sake of transfer only.
Organisational co-operation and conflict are significantly affected by employee morale. Hence, in human resource management, it is important to understand the meaning of morale, the effects of morale and the factors of morale development.
The term 'Morale' has been variously defined by different authors.
Flippo has described morale "as a mental condition or attitude of individuals and groups which determines their willingness to co-operate".
Theo Haimann says: "It is a state of mind and emotions affecting the attitude and willingness to work which, in turn, affect individual and organizational objectives.”
Davis observes: "Organisational morale is basically a mental condition of groups and individuals which determine their attitude".
Leighton holds the view that "Morale is the capacity of a group of people to pull together persistently and consistently in the pursuit of a common purpose.“
According to Jucius , "Morale is a state of mind or of a willingness to work which, in turn, affects individual and organizational objectives". Morale, he adds, is composed of the following:
What is it? - It is an attitude of mind, an esprit de corps, a state of wellbeing, and an emotional force.
What does it do? - It affects output, quality of a product, costs, co-operation, enthusiasm, discipline, initiative and other ingredients of success.
Where does it reside? - It resides in the minds and emotions of individuals and in their group reactions.
Whom does it affect? - Immediately, it affects the employees and executives in their interactions. Ultimately, it affects the consumers and the community.
What does it affect? - It affects an employee's or a group's willingness to work and to co-operate in the best interests of the organizations for which they work.
It is clear from the above that morale refers to the degree of enthusiasm and willingness with which the individual members of a group pull together persistently and consistently in the pursuit of a common purpose.