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  • 1. Human Resources Management
    • Introduction to Human Resources Management
    • Human Resource Planning
    • Job Analysis
    • Recruitment & Selection
    • Training & Development
    • Performance Appraisal
    • Wages & Salary Administration
    • Promotion & Demotion
    • Transfer
    • Morale
  • 2. 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.
  • 3. 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.
  • 4. 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
  • 5. NEED AND IMPORTANCE OF HUMAN RESOURCE PLANNING
          • 1. Personnel Requirements:
          • 2. Recruitment and Selection:
          • 3. Placement of Personnel
          • 4. Training:
          • 5. Performance Appraisal:
          • 6. Transfers:
          • 7. Promotions
          • 8. Career Planning and Development:
          • 9. Organizational Development:
          • 10 Motivation of Personnel
          • 11. Potential Appraisal and Development
          • 12. Rewards
          • 13. Employee Welfare
          • 14. Quality of Work Life:
          • 15. Human Resource information:
  • 6. FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
  • 7. 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:
  • 8. HUMAN RESOURCE PLANNING
    • 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.
  • 9.  
  • 10. PROCESS OF HUMAN RESOURCE PLANNING
    • 1. Review of Organizational Objectives
    • 2. Personnel Requirements Forecast
    • 3. Personnel Supply Forecast
    • 4. Make Comparison
    • 5. If no Differences
    • 6. If there are Differences
    • 7. Motivating the Manpower:
    • 8 . Monitoring Personnel Requirements
  • 11. Job Analysis
    • 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”
  • 12. 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
  • 13.
    • Job analysis consists of two broad areas
    • Job description
    • Job specification
    • Job description give details of the job in respect of duties, responsibilities and other aspects.
    • Job specification gives details relating to the candidate who is supposed to do the job, such as qualification, experience etc.
  • 14. Purpose of Job Analysis
    • 1. Recruitment and selection
    • 2. Proper placement
    • 3. Performance appraisal
    • 4. Effective training
    • Job evaluation
    • Promotion and transfer
    • Acceptance of the job offer
  • 15. 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
    • Order
    • It precedes job specification
    Job specification give details relating to the candidate who is expected to do the job such as qualities and qualifications
    • Meaning
    • Job description gives details of the job in respect of duties, responsibilities, salary and incentives etc.
    Job Specification Job Description
  • 16. Recruitment and Selection
    • Recruitment and selection are two of the most important functions of Human resource Management.
    • Recruitment precedes selection and helps in selecting a right candidate.
  • 17. Recruitment
    • 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.
  • 18. Selection
    • It is a process of selecting right person for the right job.
    • Today professionally managed companies seek to find the right job for the right person.
  • 19. Sources of Recruitment of Personnel
    • Internal Sources
    • Promotions
    • Transfers
    • Retired Staff
    • Recall from long leave
    • Internal Advertisements
  • 20. Advantages of Internal Sources
    • Time saving and economical
    • No need of induction training
    • Reduces executive turnover
    • Develops loyalty and sense of responsibility
    • Well versed with company’s policies, rules and regulations
    • Improves morale of the company personnel
  • 21. Demerits of Internal Sources
    • Prevents new blood from outside with innovative ideas, fresh thinking and dynamism from entering the company
    • Possibility of not finding the required executive within the company.
    • Position of the person who was promoted or transferred falls vacant.
    • Bias or partiality in promoting or transferring personnel
    • Generate a feeling of discontent among those who are not promoted.
    • Requires well maintained confidential reports of employees so that the right employee is promoted or transferred.
  • 22. External Sources
    • Management Consultants
    • Advertisements
    • Management Institutes
    • Recommendations
    • Deputation of Personnel
  • 23. Advantages of External Sources
    • It encourages new blood with innovative ideas
    • It offers wider scope in selection
    • There are less chances of partiality
    • It does not require well maintained confidential records.
  • 24. Demerits of External Sources
    • There are chances of existing executive turnover, as outsiders are given a chance.
    • It may not develop loyalty among the existing executives.
    • It is time consuming as lengthy selection process is required.
    • It is also expensive as advertisements and various tests need to be conducted.
  • 25. SELECTION PROCESS
    • 1. Job Analysis
    • 2. Advertising the job
    • 3. Initial Screening
    • 4. Application Blank
    • 5. Tests
    • 6. Interview
    • 7. Reference check
    • 8. Medical check
    • 9. Final Interview
    • 10. Job offer
    • 11. Follow-up
  • 26. 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 .
    • Performance Test
    • Personality Test
    • Aptitude test
    • Interest Test
    • Intelligence Test
    • Projective Test
    • General Knowledge Test
    • Perception Test
  • 27. 1. Performance Test:
    • 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
  • 28. 2. Personality Test:
    • 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.
  • 29. 3. Aptitude ‘Test:
    • 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.
  • 30. 4. Interest Test:
    • 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.
  • 31. 5. Intelligence Test:
    • 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.
  • 32. 6. Projective Test:
    • 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.
  • 33. 7. General knowledge Test:
    • Now-a-days, G.K. Tests are very common to find general awareness of the candidates in the field of sports, politics, world affairs, current affairs, etc.
  • 34. 8. Perception Test
    • At times, perception test can be conducted to find out beliefs, attitudes, mental sharpness, etc.
  • 35. Advantages of Tests
    • 1. In selection process much stress is given to mental qualities rather than physical ones.
    • 2. They can be used to check on the reported experience of the applicant.
    • 3. A testing program may be of a great value in personnel selection as a measurement of an applicant’s ability.
    • 4. They can also be used as a basis for objective comparison between applicants.
    • 5. Such tests are commonly used to judge candidates properly and can help in selecting not the best, but the most suitable candidate.
    • 6. Personality test can throw light on the character of the candidate.
    • 7. Vocational aptitude test can enable the firm for proper placement of the selected candidates.
    • 8. They can be used for guiding and counseling persons seeking various jobs.
    • 9. If conducted properly, they can reduce the work of oral interviewers.
    • 10. Tests like I.Q. tests enable to find out the mental capacity of the candidate to deal with any eventuality.
    • 11. The tests can be used to discriminate the suitable candidates from the unsuitable ones.
    • 12. Tests, if systematically conducted, are more objective and reliable as compared to other personal assessment techniques.
  • 36. How to make testing more effective
    • 1. Proper arrangement:
    • 2. Structure the tests:
    • 3. Use of Variety of Tests:
    • 4. Proper supervisors
    • 5. Proper assessment:
    • 6. Avoid Bias
    • 7. Intimation to candidates:
    • 8. Valid and reliable tests:
    • 9. Guidance from experts
    • 10. Follow Up
  • 37. Interview
    • 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.
  • 38. To the Company
    • 1. Information of the candidate
    • 2. Supplements Application Blank
    • 3. Employment Decision
    • 4. New Insights
    • 6. Promotes Goodwill
    • 5. Assists in Promotions, Transfers
  • 39. To the Candidates
    • 1. Opportunity
    • 2. Confidence in Candidates:
    • 3. Information of the company/job
    • 3. Contacts:
  • 40. Guidelines to make interview more effective
    • Guidelines before the interview
    • Make proper arrangement
    • Select proper Interviewers
    • Instructions to Interviewers
    • Schedule the Interviews
    • Structure the interview
  • 41. Guidelines during the Interview
    • 1. Establish rapport
    • 2. Length of interviews
    • 3. Two-way process
    • 4. Guidelines for asking questions
    • 5. Listen attentively
    • 6. Avoid bias
    • 7. Avoid mannerisms
  • 42. After the Interview
    • Examination of Notes / Observations
    • Preparation of Report
    • Follow-up
  • 43. Importance of Scientific Selection Policy
    • Facilitate Placement
    • Facilitate Training
    • Improves Efficiency
    • Better Relations
    • Motivation
    • Optimum use of Resources
    • Reduction in Absenteeism
    • Reduction in Wastages
    • Reduction in Employees Turnover
    • Improves goodwill of the company
    • High Morale
  • 44. Limitations of the Selection Process
    • Problem of Employment Tests
    • Time consuming and Expensive
    • Possible Changes in Employee Needs
    • Selection Bias
    • Problem of Adjustment
    • Problem of Interviewers
  • 45.
    • Medical/Reference Check
    • Selection Decision
    - 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
  • 46. 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  
  • 47. 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
  • 48. 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
  • 49. GROUP DISCUSSIONS
    • 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
  • 50.
    • 1. Initiative:
    • The ability to take action without being told. The candidate who initiates the discussion shows this attribute.
    • 2. Content:
    • The ability to generate sound ideas. What is important is the quality of talk and not quantity of speech.
    • 3. Persuasiveness:
    • The ability to influence others by sound reasoning, i.e. to sell one's point of view to others.
    • 4. Conflict handling ability:
    • The candidate may also sort out or manage differences or disputed viewpoints between two or more members of the group to the satisfaction of all.
    • 5. Leadership:
    • The candidate who takes the lead to start the discussion. He may also guide and encourage others to participate in the discussion.
    • 6. Communication:
    • The ability to express one's thoughts or ideas clearly and concisely.
    • 7. Group Acceptance:
    • Some participants may dominate to grab the limelight. Such attitude is not desirable. Others must be given a chance to present their viewpoints.
    • 8. Time Management:
    • The participant who takes the lead to summarize the discussion just before the completion of allotted time for discussion.
  • 51. Training & Development
    • MEANING OF TRAINING
    • 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.
  • 52. MEANING OF DEVELOPMENT
    • 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,
    • To prepare personnel for advancement.
  • 53. PURPOSES OF TRAINING AND DEVELOPMENT
    • 1. To improve quality of work force
    • 2. To enhance employee growth
    • 3. To prevent obsolescence
    • 4. To motivate personnel
    • 5. To assist new comers
    • 6. To increase productivity
    • 7. To improve health and safety
    • 8. To create reserve managerial force
    • 9. To bridge the ever increasing gap
    • 10. To meet the challenges posed
    • 11. To develop human potential
    • 12. To have trained personnel
    • 13. To facilitate exchange of views
    • 14. To develop and maintain good labour relations
  • 54. AREAS OF TRAINING
    • 1. Knowledge:
    • 2. Technical Skills:
    • 3. Social Skills:
    • 4. Attitudes:
    • 5. Techniques:
    • 6. Administrative’ and Conceptual Skills:
  • 55. BENEFITS I ADVANTAGES 0F TRAINING
    • To the Company :
    • 1. Increased efficiency and productivity:
    • 2. Reduced supervision:
    • 3. Reduced accidents and wastages:
    • 4. Reduced absenteeism and turnover
    • 5. Assist new comers
    • 6. Information about firm's policies and programmes
    • 8. Other benefits
    • 7. Competent and capable employees:
  • 56.
    • Advantages to the Candidates:
    • 9. Confidence in employees
    • 10. Positive attitude
    • 14. Co-operation with others
    • 12. Refreshing
    • 13. High Rewards
    • 11. Chances for promotion
  • 57. Types of Training
    • Induction Training
    • Job Training
    • Training for Promotion
    • Refresher Training
  • 58. Methods of Training for Operative Personnel
    • On – The – Job Training
    • Apprenticeship Training
    • Vestibule Training
    • Job Rotation
    • Classroom Methods
  • 59. Methods of Managerial Training and Development
    • ON-THE-JOB METHODS
    • Job Rotation
    • Planned Progression
    • Coaching and Counselling
    • Understudies
    • Junior Boards
  • 60. OFF-THE-JOB METHODS
    • Classroom Methods
        • Lectures
        • Discussion
        • Case study
        • Role playing
    • Simulation
    • Business or Management Games
    • Committees and Conferences
    • Readings, Television, and Video Instructions
  • 61. PERFORMANCE APPRAISAL
    • 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.
  • 62. Principles of employee appraisal
    • 1. Proper evaluators
    • 2. Proper timing
    • 3. Proper Feedback
    • 4. Proper weightage
    • 5. Provision of appeal
    • 6. Defined job dimensions
    • 7. Behaviour based dimensions
    • 8. Performance Appraisal Policy
    • 9. Reliability
    • 10. Easy to administer
  • 63. Limitations of Performance Appraisal Hallo effect
    • 1. Hallo effect
    • 2. Problem of Leniency or Strictness
    • 3. Central Tendency
    • 4. Personal Bias
    • 5. The Problem of Appropriate Technique
    • 6. Fear of Losing Valued Subordinates
    • 7. Fear of confrontations
    • 8. Paper work
    • 9. Fear of spoiling relations
    • 10. Horn effect
    • 11. Latest behaviour
    • 12. First impressions
  • 64. Techniques of Performance Appraisal
    • Narrative Essay
    • Ranking Methods
    • Graphic Rating Scale
    • Behaviourally Anchored Rating Scale
    • Critically Incident Method
    • Check List
    • Management by Objectives
    • Confidential reports
    • Field Review methods
    • Assessment Centres
  • 65. TECHNIQUES OF PERFORMANCE APPRAISAL
    • 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:
    • (a) Simple ranking method. (b) Alternation ranking method. (c) Paired comparison method.
  • 66. (i) Simple Ranking Method:
    • 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. .
  • 67. (ii) Alternation ranking method:
    • 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.
  • 68. (iii) Paired Comparisons:
    • 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:
    4-5 3-5 2-5 1-5 - 3-4 2-4 1-4 - - 2-3 1-3 - - - 1-2
  • 69.
    • Formula to find out the number of comparisons:
    • No. of Comparisons = ­ N (N - 1) / 2
    • N = Number of subordinates
  • 70. 3. Graphic Rating Scale:
    • 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.
  • 71. 3. Graphic Rating Scale:
    • In this method, the raters use a graphic scale to appraise certain specific factors such as quality of work, quantity of work, dependability, etc.
    Poor Average √ √ Good √ Excellent Dependability Quantity of Work Quality of Work
  • 72. 4. Behaviourally Anchored Rating Scale (BARS) :
    • 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.
  • 73. 5. Critical Incident Method:
    • 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.
  • 74. 6. Check List:
    • 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.
  • 75. 7. Role Analysis:
    • Role analysis is a process of analyzing the role of a manager in relation to roles of other managers or members who are affected by his performance.
    • The role set members can conduct performance appraisal of the focal role. The focal role can make necessary changes to improve his performance.
  • 76. 8. Management by Objectives (MBO)
    • This technique is also used to measure the performance of employees, especially belonging to managerial ranks. In this case, the process involved is as follows:.
    • The superior and subordinate managers of an organization jointly define common goals.
    • Jointly frame plans;
    • The subordinate manager implements the plan.
    • Then there is joint review of plans, whereby, the actual performance is measured against planned performance.
  • 77. 9. Confidential Reports:
    • 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.
  • 78. 10. Assessment Centers:
    • 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.'
  • 79. 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?
  • 80. Wages and Salary
    • 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.
  • 81. Factors influencing Wage Rates
    • Wage rates are influenced by a number of factors. The following are the main factors.
    • Demand and supply of labour
    • Nature of job
    • cost of living
    • Bargaining power of employees
    • State regulation
    • Productivity
    • Ability of the employer
    • Wage level in other enterprise
  • 82. Time Rate System
    • 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.
  • 83. Advantages
    • Simple and easily understandable
    • Regular and stable income.
    • Quality of work
    • Acceptance by trade unions
    • Eliminates wastages
  • 84. Disadvantages
    • No incentive to efficient employees
    • Increased costs
    • Uncertainty of labour cost
    • No distinction between efficient and lazy employees
    • Decline efficiency
  • 85. Piece Rate System
    • 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.
  • 86. Advantages
    • Incentive to employees
    • Certainty
    • Economy
    • Low supervision cost
    • Estimation of labour cost
  • 87. Disadvantages
    • Harmful to employees
    • Heavy wastages
    • Inferior quality
    • High production cost
    • Uncertainty of earnings
    • Rate cutting
    • Disliked by trade unions.
  • 88. 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
  • 89. ESSENTIALS OF A SOUND WAGE PLAN
    • (1) Simplicity:
    • (2) Offering incentives :
    • (3) Just and Fair:
    • (4) Linked with Productivity:
    • (5) Comparable to Prevailing Rates:
    • (6) Related to Cost of Living;
    • (7) Flexibility:
    • (8) Promptness:
    • (9) Protection:
    • (10) Facilitating Control:
    • (11) Equal Pay for Equal Work:
    • (12) Dealing with Grievances:
  • 90. Incentive Wage Plan
    • 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.
  • 91. 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.
  • 92.
    • 8. It must minimize frictions between workers.
    • 9. It should not be very costly in operation.
    • 10. It should be flexible to take care of technological and other changes.
    • 11. It should be compatible with the financial resources of the company.
    • 12. Reward offered under such incentive plans must be consistent with government regulations.
    • 13. It should be fair and equitable to both the management as well as labour.
    • 14. It should provide rewards promptly after the performance.
    • 15. It should not only increase production but also result in higher productivity.
  • 93. Incentive Wage Plans
    • Some important Incentive wages plans are discussed below:
    • 1. Halsey Plan
    • 2 Rowan Plan.
    • 3. Taylor's Differential Piece Wage Plan
    • 4. Emerson's Efficiency Plan
    • 5. Gantt's Bonus Plan
    • 6. Bedeaux Point Premium Plan.
    • 7. Priestman Bonus system,
  • 94. Halsey plan:
    • 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.
  • 95. 2. Rowan plan:
    • 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
  • 96. 3. Taylor's Differential Piece Rate Plan
    • 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.
  • 97. 4. Emerson's Efficiency Plan:
    • 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.
  • 98. 5. Gantt's Bonus Plan :
    • Gantt’s Bonus Plan is slightly modified from the Emerson’s Efficiency Plan. The Main difference is that no bonus is payable to a worker if his efficiency is less than 100%.
    • For example, if a 20 hour job is done in 21 hours reflecting an efficiency of 95 percent, the worker concerned will get wages on time basis for 21 hours only, without any bonus.
    • But at 100% and above efficiency a bonus at the rate of 20% of time wages earned is payable.
    • For example, 20 hour job is done in 20 hours i.e., at 100% Efficiency, and if hourly rate is 50 halala per hour, Total earnings of the worker will be calculated as under:
    • Time Wages = 20 X 0.50 = S.R. 10.
    • Bonus = 10 X 20/100 = S.R. 2.
    • :. Total Earnings will be 10 + 2 = S.R. 12
  • 99. 6. Beadeaux Point Premium Plan:
    • 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.
  • 100. 7. Priestman Bonus System:
    • 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.
  • 101. Project Reports.
    • Project –I
    • A study on “ Performance Appraisal Techniques”
    • Project –II
    • A study on “Incentive Wage Plans”
  • 102. PROMOTION
    • It is a vertical movement of an employee to a position with higher status, more pay and benefits and greater responsibilities.
    • A sound and properly administered promotion policy develops morale, stimulates efficiency and provides opportunity for advancement to loyal employees.
    • The opportunity and hope of promotion motivates employees to better efforts and tends to retain them with the organization. Thus, it reduces labour turnover.
    • It increases interest in training and self-development as a necessary preparation for promotion.
    • A company without any clear-cut promotion policy will have disgruntled and dissatisfied workers. Discontent will produce frustration and turn good workers into trouble-makers.
  • 103. Basis of promotion Seniority, vs. Merit
    • There is controversy as to what should be the criteria for promotion­ seniority or merit.
    • Trade unions prefer seniority while managements prefer merit.
    • Seniority refers to the relative length of recognized service in an organization, while merit includes ability, efficiency, skill, aptitude etc.
  • 104. Arguments for Seniority:
    • (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.
  • 105. Arguments Against Seniority:
    • (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.
  • 106. Arguments For Merit:
    • (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.
  • 107. Arguments Against Merit:
    • (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.
  • 108.
    • ESSENTIALS OF A SOUND PROMOTION POLICY
    • A comprehensive and realistic promotion policy should cover the following points:
    • (1) There should be clear-cut lines of promotion describing education, experience, ability etc. required for each job.
    • (2) The opening for promotions must be communicated to the employees well in advance.
    • (3) Scientific performance appraisal should be used to ensure rational and fair decision regarding promotion.
    • (4) Potential candidates should be given training for promotion.
    • (5) Supervisors recommendation must be duly considered by management
    • (6) There should be a probationary period of say one year before confirmation.
    • (7) The basis of promotion should be seniority at lower levels, seniority-­cum-merit at middle levels and merit at higher levels.
    • (8) Middle and Higher Management level jobs should, whenever possible, be filled up through promotion from within.
    • (9) A provision for arbitration should be available to deal with grievances pertaining to promotion from aggrieved party/trade unions.
  • 109. Demotion
    • 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.
    • Demotion may be used as a disciplinary weapon.
  • 110. Effects of Demotion:
    • Demotions are made infrequently since they produce adverse effects as follows: -
    • There will be dissatisfaction of esteem and self-actualization needs,
    • The employee may become centre of discontent in the organization; - Other employee may lose confidence in the organization
    • There will be overall frustration and demoralization
  • 111. Essential Conditions for Effectiveness:
    • The pre-requisites for demotion to serve its purpose are as follows:
    • Clarity of rules framed, violation of which would subject an employee to demotion,
    • Clear communication of this information to employees,
    • Proper investigation of any alleged violation,
    • Consistent and equitable application of penalty,
    • Provision for review.
  • 112.  
  • 113. TRANSFER
    • 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.
  • 114. 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.
  • 115. Advantages of a Good Transfer Policy:
    • (1) It increases employee productivity and organisational effectiveness,
    • (2) It provides greater job satisfaction to the concerned employees. Hence,they contribute their best efforts to the organization,
    • (3) It remedies faulty placements,
    • (4) It increases motivation by avoiding monotony,
    • (5) It develops the employee for future promotion,
    • (6) It improves superior- subordinate relations,
    • (7) It helps to stabilize fluctuating work requirements.
  • 116. Distinction between Promotion and Transfer
  • 117. Definition and Meaning:
    • 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:
  • 118.
    • 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.
  • 119.
    • Morale is a state of mind or willingness to work which, in turn, affects individual and organizational objectives.
    • Morale means and includes:
    • - Faith in the organization
    • - An attitude of mind
    • - Feelings of employees towards work, fellow workers and employer
    • - Courage, confidence, initiative, drive and enthusiasm
    • - Job satisfaction
    • - A sense of belonging - a feeling of togetherness.
    • Morale implies readiness to co-operate warmly towards achievement of organization’s objectives.
  • 120.
    • Advantages of High Morale:
    • (i) Willing co-operation fur the attainment of organizational objectives;
    • (ii) Loyalty to the organization;
    • (iii) Good discipline;
    • (iv) Strong organizational stamina i.e. the ability to cope up with pressures and difficulties;
    • (v) A high degree of employee interest in the job and in the organization;
    • (vi) A greater degree of employee initiative and drive, devotion and enthusiasm;
    • (vii) Pride in the organization;
    • (viii) High moral reduces grievances, disputes, labour turnover, absenteeism, frustration, accidents, cost of supervision and control.
    • (ix) High morale results in higher productivity and profits.
    • (x) High moral leads to cordial relations between management and labour.
  • 121. Consequences of Low Morale:
    • Low or bad morale, on the other hand, generates an attitude of apathy, non involvement and non-co-operation.
    • It causes mental unrest on the part of employees and weak organizational stamina.
    • A low morale hampers production and reduces productivity.
    • The other consequences of low morale are: high rate of labour turnover and absenteeism; excessive complaints, grievances and disputes; more frustrations etc.
  • 122.  
  • 123. Factors Determining / Affecting Morale:
    • (1) Objectives of the Organization:
    • (2) Job Factors:
    • (3) Working Conditions and Work Environment:
    • (4) Compensation:
    • (5) Top Management Attitudes, Organizational Climate and Company Policies:
    • (6) Supervision:
    • (7) Compatibility with Co-workers:
    • (9) Trade Union's Role:
    • (8) Off the Job Factors:
  • 124. Measures for Raising Employee Morale:
    • (1) Provide Job enlargement, Job enrichment, Job rotation, Job transfer and Job sharing to make the job interesting and to reduce monotony.
    • (2) Provide a fair compensation plan for all employees with bonus and incentives.
    • (3) Provide job security.
    • (4) Ensure good supervision.
    • (5) Provide a congenial work environment and conducive working conditions.
    • (6) Establish a sound grievance procedure for ventilation and redressal of grievances.
    • (7) Have adequate delegation of authority at different levels.
    • (8) Design an effective channel of two-way communication.
    • (9) Pursue sound promotion policy and provide opportunity for promotion.
    • (10) Introduce workers' participation in management through suggestion
    • schemes and joint consultations.
  • 125.
    • (11) Provide employee counselling.
    • (12) Place employees on the right job according to their merits, aptitudes, interests and abilities.
    • (13) Provide welfare facilities like housing, medical, recreational etc.
    • (14) 'Provide adequate training to employees.
    • (15) Encourage group activities for the employees like sports, social get-together etc.
    • (16) Provide sound compensation scheme with incentives for increased efficiency and productivity.
    • (17) Analyze and remove the causes of workers' dissatisfaction.
    • (18) Respect the individual, be courteous and just and fair in dealing with die employees.
    • (19) Encourage initiative.
    • (20) Provide an honest and competent leadership and progressive management team.
    • Remember that morale cannot be purchased or ordered. It has to be earnedor deserved.