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    • Projectsformba.blogspot.com Chapter : 1 Human Capital Management1.1 INTRODUCTIONAn organization is made up of four resources, namely men, material, moneyand machinery. Of these, the first one id living one, i.e. human resource andother three are non-living i.e.non human. It is the human/people that makeuse of non human resources. Hence, people are the most significantresources in an organization. It is man who makes all the difference inorganizations. L.F.Urwick had remarked that “business houses are made orbroken in the long run not by markets or capitals, patents or equipments, butby men”. According to Peter F.Drucker, “ man, of all the resources availableto man, can grow and develop.”The main objective of this chapter is to present a perspective for humancapital management in the Indian context. Accordingly the meaning,objectives, scope and functions become the subject matter of this chapter.Before we define HRM, it seems pertinent to first define the term “humanresources.” In common parlance, human resources mean people. ORPersonnel means the persons employed. Personnel management is themanagement of people employed. Organization may be a manufacturing firm, a business concern, aninsurance company, a governmental agency, social organizations, hospital, auniversity and even families. It may be small or large, simple or complex.An Organization is a human grouping in which work is done for theaccomplishment of some specific goals, or missions.1.2 MEANING & DEFINITION OF HUMAN RESOURCEMANAGEMENT1.2.1 Human Resource Management means:“The management of human resources is viewed as a system in whichparticipants seeks to attain both individuals of group goals”. 1
    • Projectsformba.blogspot.comIf an analysis is made of this definition it will be seen that personnelmanagement involves procedures and practices through which humanresources are managed (i.e. organized and directed) towards the attainmentof the individual, social and organizational goals. By controlling andeffectively using manpower resources, management tries to produce goodsand services for the society.1.2.2 Definitions:1.2.2a Human Resource Management involves all management decisionsand practices that directly affect or influence the people, or human resources,who work for the Organization. An organization’s employees enable anOrganization to achieve its goals, and the management of these humanresources is critical to an organization’s success.1.2.2b According to Process Systems View Human ResourceManagement means:“ Human Resource Management is the systematic planning, development,and control of a network of inter related process affecting and involving allmembers of an Organization”.Key Terms used in this definition:Process: Process is an identifiable flow of interrelated events movingtowards some goal, consequence and end. An example of the humanresource management is the staffing process, a flow of events that results inthe continuous filling of positions within the Organization. These eventsinclude such activities as recruiting applicants, making hiring decisions, andmanaging career transitions such as transfers and promotions. Flow: Flow implies movement through time and in the direction of a result; Inter-related: implies interaction within the process and between events; Goal and Consequence (Purpose): suggest a human objective; Events: are activities, happenings or change; End: implies some conclusion or consequence that may not necessarily be sought or planned by man.System: System is a particular set of procedures or devices designed tocontrol a process in a predictable way. For e.g. Staffing System of anOrganization. 2
    • Projectsformba.blogspot.comAs a process it includes: Human Resource Planning; Job and Work Design; Staffing; Training and Development; Performance Appraisal and Review; Compensation and Reward; Employee protection and representation; Organization Improvement.1.2.2c “Human Resource Management is the planning, organizing, directingand controlling of the procurement, development, compensation, integration,maintenance and separation of human resources to the end that individual,organizational and societal objectives are accomplished". Edward FlippoThis definition is a comprehensive and covers both the managementfunctions and the operative functions. The purpose of all these functions isto assist in the accomplishment of basic objectives.1.2.2 General Definition:“Personnel Management is the recruitment, selection, development,utilization of and accommodation to human resources by organizations. Thehuman resources of an organization consists of all individuals regardless oftheir role, who are engaged in any of the organizations activities”.1.3 Three aspects of Human Resource Management: Welfare Aspect: concerned with working conditions and amenities such as canteens, crèches, housing, personal problems of workers, schools and recreations; Labor or Personnel Aspect: concerned with recruitment, placement of employees, remuneration, promotion, incentives, productivity etc.; Industrial Relations Aspect: concerned with trade union negotiations, settlement of industrial disputes, joint consultation and collective bargaining. 3
    • Projectsformba.blogspot.com 1.4 Difference between Personnel Management and Human Resource Management Table: 1 Dimensions PM HRMNature of relations Pluralist Unitarist or neo-unitaristPerception of conflict Conflict is Conflict is pathological institutionalizedContract Emphasis on compliance Beyond contract commitmentRole of procedures Rules dominated Culture and values dominatedPlanning perspective Adhoc, reactive Integrated, proactiveAcceptability of Acceptable Non desirableunionsLevel of trust Low HighKey relation Labour management CustomerManagement’s Role Transactional TransformationalBasis of job design Division of labour TeamsKey people PM/IR specialist Line people and general mangersSkills acquisition Training and Learning Organization DevelopmentReward Management Standardized job Performance related evaluation 1.5Characteristics of Human Resource Management 1. Human Resource Management is concerned with managing people at work. It covers all levels of personnel, including blue collared employees and white collared employees; 2. It is concerned with employees, both as individuals as well as group; 3. Human Resource Management is concerned with helping the employees to develop their potentialities and capacities to the maximum possible extent, so that they may derive great satisfaction from their jobs; 4. It is a major part of the general management function and has roots and branches extending throughout and beyond each Organization; 5. Human Resource Management is of a continuous nature; 6. Human Resource Management attempts at getting the willing co- operation of the people for the attainment of the desired goals. 4
    • Projectsformba.blogspot.comHRM can be of full value to an Organization only when it is consistentlythroughout out and applied at all levels and to all management functions; incorporate policies, in the systems, procedures and in employment practices,etc. this integrative aspect of HRM is, therefore, of vital importance. Personnel Administratio Employee n Relations HRM Industrial Relations Fig, 11.6 Objectives of Human Resource ManagementObjectives are pre-determined ends or goals at which individual or groupactivity in an Organization is aimed. Objectives can be divided in to twoparts:1.6.1 Primary Objectives:  HRM’s main goal is the creation of a workforce with the ability and motivation to accomplish the basic organizational goals;  They relate to the satisfaction of the personal objectives of the members of an Organization through monetary and non monetary devices;  They relate to the satisfaction of community and social objectives, such as serving the customers honestly, promoting a higher standard of living in the community, bringing comfort and happiness to the society, protecting women and children and providing for aged personnel;  To utilize human resource effectively;  To establish and maintain a productive and self respecting relationship among all members of an Organization;  To establish and maintain an adequate organizational structure;  To bring about maximum individual development of the members of an Organization;  to maintain a high morale and better human relations inside an Organization by sustaining and improving the conditions 5
    • Projectsformba.blogspot.com which have been established so that employees may stick to their jobs for a longer period;1.6.2 Secondary Objectives:  The secondary objectives aim at achieving the primary objectives economically, efficiently and effectively.1.7 Functions of Human Resource ManagementAccording to different authors HRM functions can be divided in to differentcategories. Some of the categories are as follows: 1. General and Specific functions; 2. Personnel administration and Industrial relations functions. 3. Managerial and Operative functions 1.7.1 General and Specific functions:General Functions: To conduct personnel research; To assist in the programmes of personnel administration; To develop appraisal plans; To launch education and training programmes; To develop a competent work force; To establish and administer varied personnel services delegated to personnel department.Specific Functions: Employment; Safety; Wage and salary; Benefit Schemes; Community relations and Advice and counseling the employees. 1.7.2 Personnel Administration and Industrial Relations Functions:Personnel Administration:These functions relate to the function of managing people from the lower tothe upper level of the Organization and embraces policy determination aswell as implementation of policies by the personnel at the lower levels;Industrial Relations Functions: 6
    • Projectsformba.blogspot.comThese functions relate to interactions between the management and therepresentatives of the unions. Such functions involve all activities ofemployer employee relationship, such as Organization of the unionmembers, negotiations of contracts, collective bargaining, grievancehandling, disciplinary actions, arbitration etc- the purpose of all these beingto prevent conflict between two parties.1.7.3 Managerial and Operative Functions;Managerial Functions:Management is Personnel administration. It is the development of the peopleand not the direction of the things. Managing people is the heart and essenceof being a manager. Thus, a Human Resource Manager is a manager and assuch he performs the basic functions of management. Inputs Planning Organizing Directing Controlling Human and Determination Development Stimulation Assurance that Economic of short to of the Orgn. and directed action Resources long range Structure motivation of is taking place interacting plans to according to Organization according to with accomplish predetermined personnel predetermined environment Organization plans according to plans. al changes objectives predetermined plans Outputs Goods and services needed by theFeedback of significant deviations from planned performance organization customers (Managerial Functions) Fig: 2Operative Functions:These functions are concerned with the activities specifically dealing withprocuring, developing, compensating and maintaining an efficient workforce. These functions are also known as service functions. Procurement Function; Development function; 7
    • Projectsformba.blogspot.com Compensating function; Integrating function; Maintenance function.Managerial Functions: Planning: Is a predetermined course of action. Planning is a hard job, for it involves the ability to think, to predict, to analyze and to control the actions of its personnel and to cope with a complex, dynamic fluid environment. They bridge the gap from where we are to where we want to go. The two important features of planning are research and forecasting. The task of forecasting personnel needs in relation to changes in production or seasonal variations and the leveling out of differences in the production extremely important, both for employees and for management. Therefore, planning and decision making has to be undertaken much in advance of an action so that unforeseen or anticipated problems and events may be properly handled. This as also stressed by the saying: “ Good managers make things happen”. Organizing: An Organization is a means to an end. It is essential to carry out the determined course of action. Complex relationships exist between the specialized departments and the general departments as many top managers are seeking the advice of personnel manager. Thus, Organization establishes relationship among the employees so that they can collectively contribute to the attainment of company goals. Directing: Direction is an important managerial function in building sound industrial relations besides securing employee contributions. Co- ordination deals with the task of blending efforts in order to ensure successful attainment of an objective. The personnel manager has to coordinate various managers at different levels as far as personnel functions are concerned. Personnel management function should also be coordinated with other functions of management like management of money, machine, and material. Controlling: Controlling involves checking, verifying and comparing of the actualize with the standards, identification of deviations if any and correcting of identified deviations. Thus, action and operation are adjusted to predetermined plans and standards through control.Fig. 3: Functions of Personnel Office/ Personnel Management. 8
    • Projectsformba.blogspot.com Functions of Personnel Office Managerial Functions Operative FunctionsPlanning Organizing Directing ControllingEmployment HRD Compensation Human Relations, Placement.H R P; Performance- Job Evaluation; Motivation;Recruitment; Appraisal; Wage & Salary Morale;Selection; Training; Quality- Circles. Orgn.Change & Dev.Induction; Mgmt. Dev. Fringe Benefits. Career Planning Operative Functions: The operative functions of human Resource Management are related to specific activities of personnel management e.g. employment, development, compensation & Relations. All these functions are interacted by managerial functions. Employment: Employment is concerned with securing and employing the people possessing required kind and level of human resources necessary to achieve the organizational objectives. It covers the functions such as job analysis, human resource planning, recruitment, selection, placement, induction and internal mobility. Human Resource Development: It is the process of improving, molding and changing the skills, knowledge, creative ability, aptitude, attitude, values, commitment etc. based on present and future job and organizational requirements. This function includes Performance Appraisal, Training, Management Development, Career Planning and Development, Internal Mobility (Promotion, Demotion), Organizational Development. 9
    • Projectsformba.blogspot.com Compensation: It is the process of providing adequate, equitable and fair remuneration to the employees. It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits, social security measures etc. Human Relations: Practicing various human resource policies and programmes Loire employment, development and compensation and interaction among employees create a sense of relationship between the individual worker and management, among workers and trade unions and management. It is the process of interaction among human beings. Human relations is an area of management in integrating people in to work situation in a way that motivates them to work together productively, cooperatively and with economic, psychological and social satisfaction.1.8 Human Resource Management EnvironmentHR manager can’t perform his job in a vacuum as a number ofenvironmental factors affect the HRM. In fact, these factors influence theOrganization through human resources.Environment (with special reference to Human Resource Management):means the totality of all factors, which influence both the Organization andHRM sub system.Fig. 4: Environmental Scanning of HRM Technological MarketingGovernment & Legal Customers Orgn. Politics HRM Production Political TradeUnions Finance Orgn. Structure Economic Social & ReligiousThe environment furnishes the macro context and the Organization is themicro unit. The external environment is comprised of those factors, which 10
    • Projectsformba.blogspot.comaffect an organization’s human resources from outside the Organization.Important among them are: Economic; Social; Political; Governmental; Legal; Technological; Manpower in the country; Tradition and culture; Customers; Other organizations; Trade Unions in other organizations.1.8.1 Internal Environment:The internal environment also affects the job of a personnel manager. Theinternal environmental factors include Organization objectives, policies,organizational structure, and the functional areas of the Organization withwhich the personnel manager works continuously like finance, marketingand production. Impact of internal environment factors is profound as theyfrequently and closely interact with HRM function in an Organization.1.8.2 External Environment:The influence of external environment on HRM is also equally important,though the severity is comparatively less. People are essentially self-managing. In other words, while people manage other resources, themselvesmanage personnel. People themselves decide about the nature, time, andplace of their employment. And people react to the changing conditions andto the techniques of management unlike money, material and machine. Thechanges includes in the external environment are:  Technological obsolescence;  Cultural and social changes;  Changes in the policies of govt.;  Politics and the like.With the result, the work environment changes thereby affecting theirproductivity level. 11
    • Projectsformba.blogspot.comConsidering the complexities and the challenges in the HRM now and innear future management has to develop sophisticated techniques andefficient specialists to among the personnel on sound lines1.9 Functional Areas/ Scope of Human Resource Management1. Organizational planning, development and task specification;2. Staffing and Employment;3. Training and Development;4. Compensation, Wage and Salary administration;5. Motivation and Incentives;6. Employee services and Benefits;7. Employee records;8. Labor and Industrial Relations;9. Personnel Research and Personnel Audit.1.10 Role of HR PractitionerThe coordination and integration of activities in an organization just nothappen, it has to be worked out. People tend to head off in differentdirections- to go their own sweet way. They will jot necessarily cooperatewith one another. Thus, to begin with, the HR manager should have threemain objectives in mind: 1. To gain the commitment and cooperation of all the members in his work group; 2. To get the group into action to achieve agreed objectives; 3. To make the best use of the skills, energies and talents of all the members.In the modern era, the personnel manager typically performs a variety of theroles, such as a role of a conscience, of a counselor, a mediator, a companyspokesman, a problem solver and a change agent. He performs many roles asper needs of the situation. Such as: I. The conscience role is that of humanitarian who reminds the management of its moral and ethical obligations to its employees; II. The personnel manager plays the role of a counselor to whom the employees frequently go for consultation and with whom they discuss their marital, health, mental, physical and career problems; 12
    • Projectsformba.blogspot.com III. As a mediator, he plays the role of a peacemaker, offering to settle the disputes that may arise among individuals or groups. He acts a liaison and communicating link between an individual and a group and between labour and management; IV. The personnel a manger has always been a frequent spokesman for or representative of the company because he has a better overall picture of his company’s operation, since he deals intimately with many key organizational activities and functions; V. The personnel manager also acts as a problem solver with respect to the issues that involves human resources management and overall long range organizational planning; VI. He works as a change agent within the organization because he is best suited to introduce and implement major institutional changes. He takes initiative for installing organizational development programmes and convinces the top management of their need. It is he who alerts the top management regarding managerial obsolescence in his organization; VII. The personnel manager plays many other roles as well. Any matter which need someone’s attention and which no body wants to deal with is, often handled by the personnel department. Such activities may be peripheral but important and crucial to the efficient and effective operation of an organization.It has been now fully recognized that the basic role of the personnel managerif “the management of the manpower resources.” Such management isconcerned with “leadership” both in-group and individual relationship, andlabour management relations. It effectively describes the process ofplanning, and directing the application, development and utilization is nowconsidered as one of the four main functions, viz. finance, production,marketing, and human relations.The ideal personnel manager is not a “decision maker” but a counselor not“collector of responsibilities” but an “advisor” to help the management makemore reliable personnel decisions. In any organization it is these “line man”who determine the “personnel climate” for the entire organization. If thepersonnel man can meet the challenge of “staff role” he would make theeffective contribution to industry. 13
    • Projectsformba.blogspot.comPersonnel Role Welfare Role Administrative Fire Fighting/Legal Role RoleAdvisory: Research in Time keeping Grievance handlingadvising personnel andmanagement on organizationaleffective use of problemshuman resourcesManpower Managing Salary and wage Settlement ofplanning: services- administration disputesRecruitment, canteens,selection etc. transport etc.Training and Group Human engineering: Handlingdevelopment of dynamics: man machine disciplinary actionsline man group relationship counseling, motivation, leadership, communication etc.Measurement and - - Collective bargainingassessment ofindividual andgroup behavior- - - Joint consultation Table 2 1.11Evaluating HR Function Organizations can promote human excellence by offering a potential site for the flowering most forms of human excellence. Within an organization, if there is meritocracy, people compete for promotion and other rewards on the basis of good work rather than on the basis of “pull.” Recognition and rewards for creative ideas, discoveries, inventions, innovations etc. promote creative excellence. The human resource development movement in industry is aimed at facilitating organizationally useful individual growth and development. The more an organization promotes individual or team excellence, the more the organization itself is likely to excel because the work of any organization is dependent on the work of its individual members and employee groups. 14
    • Projectsformba.blogspot.comThe human factor across all organizations comprises three basic elements: 1. The people themselves who work in the organization; the skills and capabilities they possess and their attitude towards the company; 2. The management style prevalent in the organization, which usually stems from the top. The style may be aggressive, authoritarian, democratic or laissez faire and each type has a different impact on the way people work as individuals or in groups; 3. The organizational climate i.e. the work atmosphere in the company, as determined by the degree of interpersonal cooperation, the types of conflict resolution, the amount of trustworthiness, the prevalent organizational politics etc.;The quality of HRM practices prevalent in a particular organization can berated by scrutinizing the following factors:1.11.1Organization Climate: 1. Do people feel they are giving enough responsibility? 2. Do people know what is expected of them in the shape of objectives and standards of performance? 3. Do people see themselves being fairly rewarded for their work and feel that promotion policies are fair? 4. Do the employees feel that they belong to a worthwhile company and are valuable members of working teams? 5. Is there adequate feedback to people on their performance, whether it is good, bad or indifferent? 6. Is there sufficient to challenge in their jobs? 7. Are people given enough support by their managers or supervisors in the shape of guidance or help?1.11.2 Type of Management Style: 1. Does it tend to be Autocratic? 2. Does it tend to be Task centered or people centered? 3. Do managers tend to be distant or cold or approachable and friendly? 4. Do managers tend to be hard or soft on people? 5. Thus, an amalgamation of all the factors throws some light as an indicator of the quality of HRM practiced in an organization. 15
    • Projectsformba.blogspot.com PERSONNEL POLICIES The dictionary meaning of “policy” is a “planned action” and that “plan” is a policy. Policy making and planning are, therefore, synonymous. “A policy,” says Flippo, “is a man made rule of pre-determined course of action that is established to guide the performance of work toward the organization objective it is a type of standing plan that serves to guide subordinates in the execution of their tasks.” According to Calhoon, personnel polices constitute guides to action. They furnish the general standards or base on which decisions are reached. Their genesis lies in an organization’s values, philosophy, concepts and principles.” “Policies are statements of the organization over all purpose and its objective in the various areas with which its operation are concerned –personnel finance production marketing and so on.” AIMS AND OBJECTIVE OF PERSONNEL POLICIESThe aims of personnel policies should be/are: 1. To enable an organization to fulfill or carry out the main objective which have been laid down as the desirable minima of general employment policy; 2. To ensure that its employees are informed of these items of policy and to secure their cooperation for their attainment; 3. To provide such condition of employment and produces as will enable all the employees to develop a sincere sense of unity with the enterprise and to carry out their duties in the most willing and effective manner; 4. To provide an adequate, competent and trained personnel for all levels and types of management; and motivated them; 5. To protect the common interest of all the parties and recognize the role of trade union in the organization. 6. To provide for a consultative participation by employee in the management of an organization and the framing of condition for this 16
    • Projectsformba.blogspot.com participation, which, however shall not take place in technical, financial or trading policy; 7. To provide an efficient consultative service which aims at creating mutual faith among those who work in the enterprise; • By developing management leadership which aims is bold and imaginative and guide by moral values; • By effectively delegating the human relation aspects of personnel function of line managers by enforcing discipline on the basis of cooperative understanding and humane application of rules and regulation; and • By providing for a happy relationship at all levels. 8. To establish the conditions for mutual confidence and avoidconfusion misunderstanding between the management and the workers, bydeveloping suggestion plans, joint management councils, work committees,etc., and by performance appraisal discussion; 9.To provide security of employment to workers so that may not be distracted by the uncertainties of their future; 10. To provide an opportunity for growth within the organization to person who are willing to learn and undergo training to improve their future prospects. 11. To provide for the payment of fair an adequate wages and salary to the workers so that their healthy cooperation may be ensure for efficient working of the undertaking; 12. To recognize the work and accomplishment of the employees by offering non-monetary incentives rewards; 13. To create a sense of responsibility on the part of those in authority, for the claims of employees as human being, who should be guaranteed protection of their fundamental rights and offered enough scope for developing their potential. ESSENTIAL CHARACTERSTICS OF A SOUND PERSONNEL POLICY 17
    • Projectsformba.blogspot.comThe main features of a good personnel policy are:1. The statement of any policy should be definite, positive, clear and easily understood by anyone in the organization so that what it proposes to achieve is evident.2. It should be written in order to preserve it against loss to stimulate careful consideration before its formulation and to prevent the promulgation of numerous, differing and temporary oral policies from multiple sources.3. It must be reasonably stable but not rigid, i.e., it should be periodically revised, evaluated, assessed and revised and should, therefore, be in tune with the challenge of changes in the environment and should have built in resilience for adjustment from time to time.4. It must be supplementary to the over-all policy of an organization, for if departmental policy were made such as to come into conflict and violet the company policy, it would be tantamount to insubordination. Peter drucker has observed: “the policies of an enterprise have to be balanced with the kind of reputation an enterprise wants to build up with special reference to the social and human needs, objectives and value.”5. It should be indicate that the management knows that workers prefer to deal with the management on an individual basis.6. It should recognize the desire of many workers for recognition as groups in many of their relationships.7. It should be formulated with due regard for the interests of all the concerned parties-the employers, the employees and the public community.8. It should be the result of a careful analysis of al the available facts.9. It must provide a two-way communication system between the management and the employees so that the latter are kept informed of the latest developments. In the organization and the employers are aware of the action and reaction of employees on particular issues. 18
    • Projectsformba.blogspot.com10.It should be consistent with public policy, i.e., with the spirit rather than the letter of the law, so that the intensions and settled course of an organization are appreciated in terms of public opinion from the standpoint of national, economic and social justice for the employees and for the community at large.11.All interested parties should generally know it.12.It must have not only the support of the management but also the co- operation of employees at the shop floor level and in the office.13.Before evolving such a policy, trade unions should be consulted in14.Matters of industrial relations; and the role of trade unions should be restricted only to this area.15.It should be progressive and enlightened, and must be consistent with professional practice and philosophy.16.It must make a measurable impact, which can be evaluate and qualified for the guidance of all concerned, especially in the field of the three ‘R’s of personnel management viz., recruitment, retainment and retirement.17.It should be uniform throughout the organization, though, in the light of local conditions, slight variation may be permitted in specific policies relating to staffing compensation, benefits and services.18.It should have a sound base in appropriate theory and should be translable into practices, terms and peculiarities of every department of an enterprise.19.Except in rare cases, policies should not prescribed detailed procedures. HUMAN RESOURCE PLANNING INTRODUCTION Planning is thought prior to actionPlanning has been visualized as a thought proper to action, embracing ascheme of action involving the determination of the strengths and 19
    • Projectsformba.blogspot.comweaknesses in the choice of the best course of action from the standpoint ofstrategy and programmes.The term “Plan” is defined as a forecast of future attainment and forms awritten statement of what will be the outcome of this action specifying atime period ranging from one year to five years.Meaning of Human Resource Planning:Is both a process and a set of plans. It is the process used by organisationsfor assessing the supply and demand for future human resources. In addition,an effective HR plan also provides the mechanisms that will be used toeliminate any gaps that may be exist between supply and demand. Thus HRplanning is process that is used to determine the number of employees to berecruited in to the organisation or the phased out of it.Human Resource Planning as a process involving the following activities:1. Forecasting of future human resource requirements;2. Task of inventorying present resources and assessing the extent to which these resources are optimally utilized;3. Anticipation of human resources problem, and4. Planning of necessary human resource programme.Manpower Planning Provides information in three dimensions: The estimated manpower requirements (including expectations of manpower utilization); The analysis of the external manpower market situation,& The resulting estimate of manpower availability from the two dimensions. Strategies for Manpower PlanningManpower planning involves the application of a set of 9 strategies:1. Collect, maintain and interpret relevant information regarding human resources;2. Report periodically manpower objectives, requirements and existing employment and allied features of manpower; 20
    • Projectsformba.blogspot.com3. Develop procedures and techniques to determine the requirements of different types of manpower over a period of time from the standpoint of organizational goals and modify these goals, if they make unrealistic demands for human resources;4. Develop measures of manpower utilization as a component of forecasts of manpower requirements along with –if possible- independent validation;5. Employ- if suitable- techniques leading to effective allocation of work with a view to improving manpower utilization;6. Conduct research to determine factors hampering the contribution of the individuals and groups to the organization with a view to modifying or removing these handicaps;7. Develop and employ methods of economic assessment of human resources reflecting its features as income generator and cost and accordingly improving the quality of decisions influencing manpower;8. Evaluate the procurement, promotion and retention of the effective human resources in the context of the forecast requirements of the enterprise; &9. Analyze the dynamic process of recruitment , promotion and loss to the organization and control these processes and organization structure with a view to encouraging the maximum individual and group performance without involving excessive costs. Reasons for Human Resource PlanningAll organizations perform human resource planning, either formally orinformally. The major reasons for employment planning are: More effective and efficient use of human resources: Human resources planning should precedes all other HRMactivities. Careful analysis of all HRM activities shows that theireffectiveness and efficiency, which result in increased productivity, dependon human resource planning. More satisfied and better developed employees: Employees who work for organizations that use good humanresource planning systems have a better chance to participate in planningtheir own careers and to share in training and development experiences.Thus they are likely to feel their talents are important to the employer, andthey have a better chance to utilize those talents; 21
    • Projectsformba.blogspot.com More effective equal employment opportunity planning:The govt. has increased its demands for equal employment opportunities.Insum, effective human resource planning ensures that HRM activities andprogramme will be built on a foundation of good planning. Proper planningshould cut down on the number of surprises that occur involving humanresource availability, placement and orientation. The HR Planning ProcessHR Planning involves four distinct phases or stages: Situation analysis or environmental scanning; Forecasting human resource records; Human resource supply analysis; Action plan development.Situation analysis and Environmental scanning: The first stage in HR Planning is where the HRM function andstrategic planning initially interact. The strategic plan must adapt toenvironmental circumstances, and the HRM function is one of the primarymechanisms that an organization can use during the adaptation process. Fore.g. rapid changes in the technological environment can force anorganization to quickly identify and hire employees with new skills thatpreviously weren’t needed by the organization. Without an effective HR plan to support the recruitment and selectionfunctions in the organization, it will be impossible to move fast enough tostay competitive. Thus, organizations are becoming more dependent on anability to gather relevant information about their environment and to react tothis information.Forecasting future demand for employees: The next phase of an effective HR Planning process isestimating not only how many but what kinds of employees will be neededin the future. Forecasting yields these advanced estimates or calculations ofthe organization’s staffing requirement. Although there are manyquantitative tools to help with forecasting, it is a process that involves agreat deal of human judgment. In addition, many successful HR planners 22
    • Projectsformba.blogspot.comalso rely heavily on their “gut instincts” about future conditions. For e.g.,planners at Unilever attribute much of their global successes to suchinstincts.Analysis of the supply of current Employees: The third phase of HR Planning id designed to answer thequestion “How many and what kind of employees do I currently have interms of the skills and training necessary for the future?” It should beobvious that this phase of HR Planning involves much more that simplycounting the number of current employees in the organisation. The major tool used to assess the current supply of employeesis the Skill Inventory. It is a list of names, certain characteristics and skillsof the people working for the organisation. It provides a way to acquire thesedata and makes them available where needed in an efficient manner.Action decisions in Human Resource Planning: After the HR Planning system has analyzed both the supply ofand demands for future workers, these two forecasts are compared todetermine what, if any, action should be taken. Whenever there is adiscrepancy between these two estimates, the organization needs to choose acourse of action for elimination the gap. No matter how good the HR Planning system is, an exact matchbetween supply and demand forecasts is rare. Even when overall estimatesare similar, there are frequently important gaps in certain subgroups. Thesedata become inputs to facilitate decisions about training, promotion,demotion and similar decisions.Action decisions with a shortage of employees: When employment specialists comparing demand to supplyfind the supply of workers is less than the demand, several possibilities areopen to the organization. If the shortage is small and employees are willingto work overtime, it can be filled with present employees. If there is shortageof highly skilled employees, training and promotions of present employees,together with the recruitment of lower skilled workers, are possibilities.Action decisions in surplus conditions: When comparison of employee demand and supply indicates asurplus, the alternative solutions include attrition, early retirements,demotions, layoffs, and terminations. Employee decisions in surplus 23
    • Projectsformba.blogspot.com conditions are some of the most difficult decisions managers must make, because the employees who are considered surplus are seldom responsible for the conditions leading to the surplus. A shortage of raw material such as fuel, or a poorly designed or marketed product can cause an organization to have a surplus of employees. Fig. 1: Human Resource Planning Process Strategic Management Human Resource Human Resource Decisions Demand SupplyTechnological Forecasts; Annual Employment Existing Employment Economic Forecasts; Requirements; Inventory; Market Forecasts; Numbers; After Application ofOrganisational Planning; Skills; Expected Loss and Investment Planning; Occupational Categories. Attrition rates.Annual Operating Plans. Variances End If None: If surplus If Shortage Decisions: Decisions: Layoff etc. Overtime etc. End End In short, Human Resource Planning is a process by which the management of an organization ensures that it has the right number and kind of people at the right places and at the right times to successfully achieve its overall objectives. Human Resource planning differs from Manpower Planning in the sense that the former is primarily concerned with the human aspects of people, the latter mainly concentrates on the power of the people. 24
    • Projectsformba.blogspot.com Long Answer Type Questions 1. What do you understand by Human Resource Planning? Explain with suitable illustrations the process of Manpower Planning. 2. Discuss the problems faced in Human Resource Planning. How can these problems be overcome? 3. “The Human Resource Planning is becoming more and more important and complex with organizations are becoming more global ”. Comment. 4. What do you mean by Personnel Policy? Explain the objectives behind implementation of Personnel Policies in an organization? 5. Explain various features of Personnel Policies of an organization. 6. What is meant by the term Human Resource? What does Human Resource Management mean? 7. What is the difference between Human Resource Management and Personnel Management? 8. Elucidate the role and functions of an effective Human Resource Manager? 9. Write a short note on the various HRM Programmes which could be implemented in the organizational set up? 10.Enlist some key organizational indicators, which could highlight the practice of favorable HRM policies in the work set up? 11.Discuss the issues impending on future HR managers.------------------------------------------------------------------------------ 25
    • Projectsformba.blogspot.com Human Resource Management Unit 2 Job AnalysisJob Analysis is one of the most important functions of Human ResourceManager. Performance Appraisal, Job Designing, Personnel selection,employee training, career development and planning are among the manyactivities that depends upon the information gathered in the job analysis.Key terms:Job: A job may be defined as “a collection or aggregation of tasks, dutiesand responsibilities which as a whole is regarded as a regular assignment toindividual employees”. Putting in different words the meaning of a job canbe described as a pocket containing differentiated set of total workload in anorganization.Position: Position is collection of tasks and responsibilities regularlyassigned to a person.It is to be noted that job is impersonal and position is personal.Today, however, the word job has many mutations depending upon how,when and by whom it is used. It is often used interchangeably with the termslike position and tasks. Before proceeding with a detailed discussion on “jobAnalysis” it would be fruitful to familiarize ourselves with terms that formspecific job attributes.Fig. Relationship among the different job components: 9 8 7 6 5 4 3 2 26
    • Projectsformba.blogspot.com 1 1 – Micro Motion 2 – Elements 3- Tasks 4- Duties 5- Positions 6- Job 7- Job Family 8- Occupation 9- CareerMicro Motion: The simplest unit of work is the micro motion. A micromotion involves a vary elementary movement such as reaching differentwork performed in an organization can be traced from a micro motions to anoccupation grasping, positioning and releasing an object. It is the mostelementary unit in to which a job can be broken down.Elements: An element is alignment of two or more micro motions to make abasic movement like picking up an object.A task is congregation of elements to constitute an activity for a specificpurpose like preparing a lecture. Two or more related tasks performed incarrying out specific job responsibilities are referred to as duty.A position constitutes specific duties and tasks group together. In anorganization there may be one or more person assigned a position. Aposition constitutes the whole unit of work assignmentJob: When positions are combined they create a job.A job family is a group of two or more jobs that either call for similarworker characteristics or contain parallel work tasks as determined by jobanalysis.Occupation: A grouping of similar jobs or job families across organizationsis termed as occupation.A Career represents a sequence of positions, jobs or occupations that aperson has over his or her working life. 27
    • Projectsformba.blogspot.comHaving familiarized oneself with the basic conceptual framework which actsas foundation stone for the knowledge on job analysis, we shall now proceedwith a step-by-step discussion of the main topics. Job AnalysisJob Analysis is a written record of actual requirements of the jobactivities.Definitions:“Job Analysis is the process of determining and reporting pertinentinformation relating to the nature of a specific job.” Bayers and RueIt is the determination of tasks, which comprise the job of the skills,knowledge, abilities, and responsibilities required of the holder for thesuccessful job performance. Putting it in other words it is the process ofgetting information about the job incumbent’s skills, education and trainingto carry out the job effectively and terms on time for completion,performance standard.It is procedure by which pertinent information is obtained about a job, i.e. itis detailed and systematic study of information relating to the operations andresponsibilities of a specific job.A job analysis results in two important documents: • Job Description; • Job Specification.Job Description:Job description is written record of the duties, responsibilities andrequirements of particular jobs. It is concerned with the job itself and notwith the work. It is a statement describing the job in such terms as its title,location, duties, working conditions and hazards. In other words, it tells us“What to be done, and how it is to be done and why.” It is a standard offunction, in that it defines the appropriate and authorized contents of a job. 28
    • Projectsformba.blogspot.comJob Specification:Job specification is a standard of personnel and designates the qualitiesrequired for an acceptable performance. It is a written record of therequirements sought in an individual worker for a given job. In other words,it refers to a summary of the personnel characteristics required for a job. It isa statement of the minimum acceptable human qualities necessary for theproper performance of a job. Purpose and Uses of Job AnalysisJob Analysis is not useful but an essential part of organizational strategies toserve the following purposes: • Organization and Manpower Planning: It is helpful in organization planning, for it defines labour needs in concrete terms and coordinates the activities of the work force, and clearly divides duties and responsibilities; • Recruitment and Selection: By indicating the specific job requirements of each job (i.e. the skills and knowledge), it provides a realistic basis for the hiring, training, placement, transfer and promotion of personnel. “Basically, the goal is to match the job requirements with a worker’s aptitude, abilities and interests”. It also helps in charting the channels of promotion and in showing lateral lines of transfer; • Wage and Salary Administration: By indicating the qualification required for doing a specified job and the risks and hazards involved in its performance, it helps in salary and wage administration. Job analysis is used as a foundation for job evaluation; • Job Re-Engineering: Job Analysis provides information, which enables us to change jobs in order to permit their being managed by personnel with specific characteristics and qualification. • Employee Training and Management Development: Job Analysis provides the necessary information to the management of training and development programmes. It helps to determine the content and subject matter of in training courses. It also helps in checking application information, interviewing, weighing test results, and in checking references. 29
    • Projectsformba.blogspot.com • Performance Appraisal: It helps in establishing clear cut standards which may be compared with the actual contribution of each individual; • Health and Safety: It provides an opportunity for identifying hazardous conditions and unhealthy environmental factors so that corrective measures may b taken to minimize and avoid the possibility of accidents. • Employee Orientation: Effective job orientation cannot be accomplished without a clear understanding of the job requirements. The duties and responsibilities of a job must be clearly defined before a new employee can be taught how to perform the job. • Utilizing Personnel: Job Analysis information can help both employees and managers, pinpoint the root of a problem if employee functions are not adequate.In sum, it may be noted that job analysis is a systematic procedure forsecuring and reporting the information, which defines a specific job.Steps in Job Analysis/ProcessThe major steps to be followed in carrying out job analysis in anorganization can be described as follows:Step 1: Studying job vis a vis the organization: Review the available Background information through organization workflow or process charts. Studies the job inter relationships. Often, a restructuring,down sizing, merger, or rapid growth will initiate this review.Step 2: Selection of uses of job analysis information: Be selective regarding the future uses of job analysis. The employee or the manager may request a job analysis to determine the appropriate compensation, but they also be interested in formally documenting changes in recruitment, placement and training for a particular job. Step 3: Identify the “job” to be analyzed: it is always advisable to choose flow representative and key positions for job analysis, thus avoiding unnecessary time and financial expenditure. Step 4: collection of Job Analysis data: manager should consider using a number of different methods of data collection because it is 30
    • Projectsformba.blogspot.com unlikely that any one method will provide all the necessary information needed. Three of the most popular form of data collection is: • Observation of tasks and behavior with the job incumbent i.e. both physical and mental activities; • Interviews; • Questionnaires and checklists;Step 5: Develop a Job Description: Highlight the major tasks, pertaining to effective job performance through the written description;Step 6: Develop a Job Specification: Transcript the information obtained after step 4 highlight what personal qualities, trait, skills, background is necessary for optimal job performance. Job Performance Observation Degree of Interview interaction Critical incident technique withData Collection methods Questionnaires personal Diary method Training material Dictionary of occupationStep 7: Review and update of information: If no major changes have occurred in the organization, then a complete review of all jobs should be performed every three years. Review & Update of information Develop a job specification Develop a job description Collection of job analysis data Identify the job to be analyzed Selection of uses of job analysis information Studying job visContents of Job Analysis a vis the organisation 31
    • Projectsformba.blogspot.comA job Analysis provides the following information: 1. Job Identification; 2. Significant characteristics of a job; 3. What the typical worker does; 4. Which materials and equipment of a worker uses; 5. How a job is performed; 6. Required personnel attributes; 7. Job relationship.It is obvious from the foregoing that a job analysis is usually a clearindication of a job description and job specification.RecruitmentSuccessful human resource planning should identify our human resourceneeds. Once we know these needs, we still want to do something aboutmeeting them. The next step in the acquisition function, therefore, isrecruitment. This activity makes it possible for us to acquire the number andtypes of people necessary to ensure the continued operation of theOrganisation.Recruiting is the discovering of potential candidates for actual oranticipated organizational vacancies or from other perspective, it is a linkingactivity- bringing together those with jobs to fill and those seeking jobs.“ Recruitment a process to discover the sources of manpower to meet therequirements of the staffing schedule and to employ effective measures forattracting that manpower in adequate numbers to facilitate effective selectionof an efficient working force” Yoder & others“It is a process of searching for prospective employees and stimulating andencouraging them to apply for jobs in an Organisation. It is often termedpositive in that it stimulates people to apply for jobs to increase the “hiring”ratio i.e. the no. Of applicants for a job.” Flippo Technically speaking, the function of recruitment precedes the selection function and it includes only finding, developing the sources of 32
    • Projectsformba.blogspot.com prospective employees and attracting them to apply for jobs in an organization, whereas the selection is the process of finding out the most suitable candidate to the job out of the candidates attracted (recruited). Objectives of recruitment:♦ To attract people with multi dimensional skills and experience that suit the present and future organizational strategies;♦ To induct outsiders with a new perspective to lead the company;♦ To infuse fresh blood at all levels of the Organisation;♦ To develop an organizational culture that attracts competent people to the company;♦ To search or head hunt/ head pouch people whose skills fit the company’s values;♦ To devise methodologies for assessing psychological traits;♦ To seek out non-conventional development grounds of talent;♦ To search for talent globally and not just with in the company;♦ To design entry pay that competes on quality but not on quantum;♦ To anticipate and find people for positions that does not exist yet. Fig. 1:Recruiting and other Human Resource Management activities Human Recruiting Job SelectionResource ApplicationsPlanning Which provides new employees for ♦ Orientation; ♦ Training/ Development; ♦ Etc. 33
    • Projectsformba.blogspot.com Factors affecting RecruitmentThere are a number of factors that affect recruitment. These are broadlyclassified in to two categories: 1. Internal Factors; 2. External Factors.External Factors: The external factors include supply of and demand forhuman resources, employment opportunities and /or unemployment rate,labour market conditions, political and legal requirement and govt. Policies,social factors, information systems etc.External factors: Socio economic factors; Supply and demand factors; Employment rate; Labour market conditions; Political, legal and governmental factors; Information systems.Internal Factors: The internal factors include the company’s pay packageincluding salary, fringe benefits and incentives, quality of work life,organizational culture, career planning, growth opportunities, size of thecompany, company’s product and services, company’s growth rate, role oftrade unions and cost of recruitment.Internal factors: Company’s pay package; Quality of worklife; 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; 34
    • Projectsformba.blogspot.com  Cost of recruitment;  Company’s name and fame. Internal Environmental External Environmental Influences: Influences: ♦ Strategy; ♦ The union; ♦ Goals; ♦ Govt. Requirements, regulations and laws; ♦ Organizational Culture; ♦ Economic conditions; ♦ Nature of the task; ♦ Composition of the labour ♦ Work Group; Effectiveness People Criteria:HRM activities:  Abilities;  Performance;♦ Equal employment  Attitudes  Satisfaction; opportunities;  Preference  Absenteeism;♦ Job analysis; s;  Turnover;♦ Recruitment;  Scrap rates;♦ Planning;  Grievance rates;  Organisation End♦ Selection; Results;  Accident rates.♦ Training and development;  Competitive♦ Career planning and products; development;  Competitive♦ Benefits and services; services.♦ Discipline; Sources of Recruitment Recruitment is more likely to achieve its objectives if recruiting sources reflect the type of position to be filled. Sources are those where prospective employees are available like employment exchanges while techniques are those, which stimulate the prospective employees to apply for jobs like nomination by employees, advertising, promotion etc. Certain recruiting sources are more effective than others for filling certain types of jobs are. The sources of recruitment are broadly classified in to internal sources and external sources. 35
    • Projectsformba.blogspot.comInternal Sources: are the sources within organizational pursuits. It includes(a) Present permanent employees; (b) present temporary/ casual employees;(c) retrenched or retired employees; (d) dependents or deceased, disabled,retired and present employees; (e) Promotions; (f) Transfers.  Present Permanent Employees: Organizations consider the candidates from this source for higher-level jobs due to: (1) availability of most suitable candidates for jobs relatively or equally to the external source, (2) to meet the trade unions demands; (3) to the policy of the Organisation to motivate the present employees.  Present temporary or Casual employees: Organizations find this source to fill the vacancies relatively at lower levels owing to the availability of suitable candidates or trade and pressures or in order to motivate them on the present job.  Retrenched or Retired employees: Generally a particular Organisation retrenches the employees due to lay-off. The Organisation takes of the candidates for employment from the retrenched employees due to obligation, trade union pressure and the like. Sometimes the organizations prefer to re employ their retired employees as a token of their loyalty to the Organisation or to postpone some inter personal conflicts for promotion etc.  Dependents of Deceased, Disabled, Retired and Present Employees: Some organizations with a view to developing the commitment and loyalty of build up image provide employment to the dependent(s) of deceased, disabled and present employees. Such organizations find this source as an effective source of recruitment.  Promotions: Most of the internal candidates would be stimulated to take up higher responsibilities and express their willingness to be engaged in the higher level jobs if management gives them the assurance that they will be promoted to the next higher level.  Transfers: Employees will be stimulated to work in the new sections or places if management wishes to transfer them to the places of their choice.Why do organizations prefer Internal Source? Internal recruitment can be used as a technique of motivation; Morale of the employees can be improved; Suitability of the internal candidates can be judged better than the external candidates as “known devils are better than unknown angles”; 36
    • Projectsformba.blogspot.com Loyalty, commitment, a sense of belongings and security of the present employees can be enhanced; Employee’s psychological needs can be met by providing an opportunity for advancement; Employees economic needs for promotion, higher income can be satisfied; Cost of selection can be minimized; Cost of training, induction, orientation, period of adaptability to the Organisation can be reduced; Social responsibility towards employees may be discharged; Stability of employment can be ensured.Why organizations don’t prefer internal sources? It often leads to inbreeding and discouraging new blood from entering in an Organisation; There are possibilities that internal source may “dry up”, and it may be difficult to find the requisite personnel from within an Organisation; Since the learner does not know more than the lecturer does, no innovations worth the name can be made. Therefore, on jobs which require original thinking (such as advertising, style designing and basic research), this practice is not followed; As promotion is based on seniority, the danger is that really capable hands may not be chosen. The likes and dislikes of the management may also play an important role in the selection of personnel. External Sources: External Sources are those sources, which are outside the organizational pursuits. These sources include: (1) Campus Recruitment; (2) Private Employment Agencies/ Consultants; (3) Public Employment Exchanges; (4) Professional Associations; (5) Data Banks; (6) Casual Applications; (5) Similar Organizations; (6) Trade Unions; (7) Advertisements; (8) Employee Referrals.  Campus Recruitment: different types of organizations like industries, business firms, service organizations, social or religious organizations can get inexperienced candidates of different types from various educational institutions like colleges and universities imparting education in science, commerce, arts, engineering and technology, agriculture. Medicines from the training institutes. Most of the universities and institutes imparting technical education in various disciplines provide facilities for campus recruitment and selection. 37
    • Projectsformba.blogspot.comFig.3 process of Campus Recruitment: Form manpower Identify campuses to recruit on addition plan Conduct pre-placement Tasks Secure place in the queue on each campus Check application form of candidates Conduct written test for Interview intensively for knowledge competence Cross check for Identify suitable candidates inconsistencies Stay in touch with those who Make job offers accept Advice through Provide support Continue final year’s to ease stress informal specialization interaction Employment Agencies: These agencies or consultants perform the recruitment function on the behalf of a client company by charging fee. Line mangers are relieved from recruitment functions so they can concentrate on their operational activities and recruitment functions are entrusted to a private agency or consultants. These agencies are also called Executive Search Companies. Public Employment Agencies: The govt. set up Public Employment exchanges in the country to provide information about vacancies to the candidates and to help the organizations in finding out suitable 38
    • Projectsformba.blogspot.com candidates. Public sector and private sector industries have to depend on public employment exchanges for the specified vacancies. Professional Organizations: Professional organizations maintain complete data of their members and provide the same to various organizations on requisition. They also act as an exchange between their members and recruiting firms in exchanging information, clarifying doubts etc. Data Banks: The management can collect the bio data of the candidate from different sources like employment exchanges, educational Training Institutes, candidates etc. and feed them in the computer. It will become another source and the company can get the particulars as and when they need. Casual Applicant: Depending upon the image of the Organisation, its prompt response, participation of the Organisation in the local activities, level of unemployment, candidates apply casually for the jobs through mail or hand over the applications in Personnel Department. This would be a suitable source for temporary and lower level jobs. Trade Unions: Generally, unemployed or underemployed persons or employees seeking change in employment put a word to the trade union leader with a view to getting suitable employment due to latter’s intimacy with management. Similar Organizations: Generally, experienced candidates are available in organizations producing similar products or are engaged in similar business. The management can get most suitable candidates from this source. This would be the most effective source for executive positions and for newly established organizations or diversifies or expanded organizations. Advertising: Advertising is widely accepted technique of recruitment, though it mostly provides one-way communication. It provides the candidates in different sources, the information about the job and company and stimulates them to apply for jobs. It includes advertising through different media like newspapers, magazines of all kinds, radios, television etc. Employee referrals: Friends and relatives of present employees are also a good source from which employees may be drawn. When the labour market is very tight, large employers frequently offer their employee’s bonuses or prizes for any referrals that are hired and stay with the company for a specific length of time.Modern sources or techniques of Recruitment: 39
    • Projectsformba.blogspot.com WALK IN: The busy organizations and the rapid changing companies do not find time to perform various functions of recruitment. Therefore, they advise the potential candidates to attend for an interview directly and without a prior application on a specified place. The suitable candidates among the interviewees will be selected for appointment after screening the candidates through tests and interviews. Consult In: The busy organizations encourage the potential job seekers to approach them personally and consult them regarding the jobs. The companies select the suitable candidates from among such candidates through the selection process. Head Hunting: The companies request the professional organizations to search for the best candidates particularly for the senior executive positions. The professional organizations search for the most suitable candidates and advise the company regarding the filling up of the positions. headhunters are also called search consultants. Body shopping: Professional organizations and the hi tech training institutes develop the pool of human resources for the possible employment. The prospective employers contact these organizations to recruit the candidates. Otherwise, the organizations themselves approach the prospective employees to place their human resources. These institutions are called body shoppers and these activities are known as body shopping. Business Alliances: Business alliances like acquisitions, mergers, and takeovers help in getting human resources. In addition, the companies do also have alliances in sharing their human resources on ad-hoc basis. Tele Recruitment: The technological revolution in the Tele communication helped the organizations to use Internet as a source of recruitment. Organizations advertise the vacancies through the World Wide Web (www) Internet. The job seekers send their applications through e-mail or Internet.In short: successful and effective recruitment programme necesseciates tohave certain attributes such as:  A well defined recruitment policy;  A proper organizational structure;  A well laid down procedure for locating potential job seekers; 40
    • Projectsformba.blogspot.com  A suitable method and technique for tapping and utilizing these candidates;  A continuous assessment of effectiveness of recruitment programme and incorporation of suitable modifications from time to time to improve the effectiveness of the programme;  An ethically sound and fool proof practice telling an applicant all about the job and its position, the firm to enable the candidate judiciously decide whether or no to apply and join the firm, if selected.SELECTIONSelection procedure is concerned with securing relevant informationabout an applicant. The objective of the selection decision is to choosethe individual who can most successfully perform the job from the poolof qualified candidates.The selection procedure is the system of functions and devices adoptedin a given company to ascertain whether the candidate’s specificationsare matched with the job specifications and requirements or not.The selection procedure cannot be effective until and unless:1. Recruitment’s of the job to be filled, have been clearly specified (Job analysis, etc.2. Employee specifications (physical, mental, social, behavioral, etc.) have been clearly specified;3. Candidates for screening have been attracted. SELECTION PROCEDUREThere is no standard selection process that can be followed by allcompanies in all the areas. Companies may follow different selectiontechniques or methods depending upon the size of the company, natureof the business, kind and no. Of persons to be employed, govt.regulations to be followed etc. 41
    • Projectsformba.blogspot.com Application Form Written Examination Preliminary Interview Group Discussion Tests Final Interview Medical Examination Reference Checks Line Manager’s Decisions Application Form: Also known as application blank. This technique is widely accepted for securing information from the prospective candidates. It can also be used as a device to screen the candidates at the preliminary stage. Information is generally required on the following items in the application forms: a) Personal background information; b) Educational attainments; 42
    • Projectsformba.blogspot.com c) Work experiences; d) Salary; e) Personal details; f) References. Written Examination: The organizations have to conduct examination for the qualified candidates after they are screened on the basis of the application blanks so as to measures the candidate’s ability in arithmetical calculations, to know the candidates attitude towards the job, to measure the candidate’s aptitude, reasoning, knowledge in various disciplines, general knowledge and English language. Preliminary Interview: The Preliminary interview is to solicit necessary in formation from the prospective applicants and to assess the applicant’s suitability to the job. This step is useful as a process of eliminating the undesirable and unsuitable candidates. Group Discussions: The technique of group discussion is used in order to secure further information regarding the suitability of the candidates for the job. Group discussion is a method where groups of the successful applicants are brought around a conference table and are asked to discuss either a case study or a subject matter. Tests: The next stage in the selection process is conducting different tests. The objective of tests is to solicit further information to assess the employee suitability to the job. The important tests are: • Aptitude Test: a) Intelligence test b) Mechanical Test c) Psychomotor Test d) Clerical Test • Achievement Test: a) Job Knowledge Test; b) Work Sample Test. • Situational Test: a) Group Discussion; b) In Basket. • Interest Test: • Personality Test: a) Objective Test; b) Projective Test. 43
    • Projectsformba.blogspot.com• Aptitude Tests: These tests measure whether an individual has the capacity or latent ability to learn a given job if given adequate training. Aptitudes can be divided in to general and mental ability or intelligence or specific aptitudes such as mechanical, clerical, manipulative capacity etc. These are: 1. Intelligence Tests: These tests in general measure intelligence quotient of a candidate. In detail these tests measures capacity for comprehension, reasoning, word fluency, verbal comprehension, numbers, memory and space. 2. Mechanical Tests: These tests measure the capacities of spatial visualization, perceptual speed and knowledge of mechanical matter. 3. Psycho meter Tests: These tests measure abilities like manual dexterity, motor ability and eye hand coordination of candidates. 4. Clerical Aptitude: Measure specific capacities involved in office work, items of this test include spelling, computation, comprehension, copying, word measuring etc.• Achievement Tests: These tests are conducted when applicants claim to know something as these tests are concerned with what one has accomplished. These tests are more useful to measure the value of specific achievement when an Organisation wishes to employ experienced candidates. These are:1. Job Knowledge Test: Under this test a candidate is tested in the knowledge of a particular job.2. Work Sample Test: Under this test a portion of the actual work is given to the candidate as a test and the candidate asked to do it.• Situational Test: This test evaluates a candidate in a similar real life situation. In this test the candidate is asked either to cope with the situation or solve critical situation of the job.1. Group Discussion: This test is administered through group discussion approach to solve a problem under which candidates are observed in the areas initiating, leading, proposing valuable ideas, conciliating skills, oral communicating skills, co-ordination and concluding skills.2. In Basket Test: The candidate in this test is supplied with actual letters, telephone and telegraphic message, reports and requirements by various officers of the Organisation, adequate information about the job and Organisation. The candidate is asked to take decisions on various items based on the in basket information regarding requirements in the memoranda. 44
    • Projectsformba.blogspot.com• Interest Tests: These tests are inventories of the likes and dislikes of candidates in relation to work, job, occupations, hobbies and recreational activities.• Personality Tests: These tests prove deeply to discover clues to an individual’s value system, his emotional reactions, and maturity and characteristic mood.1. Objective Test: most personality tests are objective tests as they are suitable for group testing and can be scored objectively.2. Projective tests: Candidates are asked to project their own interpretation of certain standard situations basing on ambiguous pictures, figures etc., under these tests Final Interview: Final Interview is usually followed by testing. This is the most essential step in the process of selection. In this step the interviewer matches the information abstained about the candidate through various means to the job requirements and to the information obtained through his own observation during interview.Types Of Interview: Type Type of questions Usual applications A predetermined Useful for valid results,Structured checklist if questions, especially when dealing usually asked of all with large number of applicants. applicants.Unstructured Few, if any, planned Useful when the questions. Questions are interviewer tries to made up during the probe personal details of interview. the candidate to analyze why they are not right for the job.Mixed A combination of A realistic approach that structured and yields comparable unstructured questions, answers plus in depth which resembles what, insights. is usually done in practice.Behavioral Questions limited to Useful to understand hypothetical situations. applicant’s reasoning Evaluation is based on and analytical abilities 45
    • Projectsformba.blogspot.com the solution and under modest stress. approach of the applicant.Stress A series of harsh, rapid- Useful for stressful jobs, fire questions intended such as handling to upset the applicant. complaints. Medical Examination: Certain jobs require certain physical qualities like clear vision, perfect hearing, unusual stamina, tolerance of hard working conditions, clear tone etc. Medical examination reveals whether or not a candidate possesses these qualities. Reference Checks: After completion of the final interview and medical examination, the personnel department will engage in checking references. Candidates are required to give the names of reference in their application forms. In case the reference check is from the previous employer, information for the following areas may be obtained. They are: job title, job description, period of employment, pay and allowances, gross emoluments, benefits provided, rate of absence, willingness of the previous employer to employ the candidate again etc. Final decision by the line manager concerned: The line manager concerned has to make the final decision whether to select or reject the candidate after soliciting the required information through different techniques. A true understanding between the line managers and personnel mangers should be established to take proper decisions. Employment: Thus, after taking the final decision the Organisation has to intimate the decision to the successful as well as unsuccessful candidates. The Organisation sends the appointment orders to the successful candidates either immediately or after sometime depending upon the time schedule.PlacementWhen once the candidate reports for duty, the Organisation has to placehim initially in that job for which he is selected. Immediately thecandidate will be trained in various related jobs during the period ofprobation of training or trial. The Organisation, generally, decides thefinal placement after the initial training is over on the basis ofcandidate’s aptitude and performance during the training/probationperiod. Probation period generally ranges between six months and twoyears. If the performance is not satisfactory, the Organisation may 46
    • Projectsformba.blogspot.comextend the probation or ask the candidate to quit the job .If theemployee performance during the probation period is satisfactory, hisservices will be regularized and he will be placed permanently on a job.Fig. 6: Employee Placement Process Collect data about the employee Construct the employee’s profile Match between sub group profile and individual’s profile Compare sub-group profile to job family profile Match between job family profiles and sub-group profiles Assign the individuals to job familyAssign the individual to specific job after further counseling andassessmentPlacement is “the determination of the job to which an acceptedcandidate is to be assigned and his assignment to that job. It is amatching of what the supervisor has reason to think he can do with thejob demands (job requirements), it is a matching of what he imposes (instrain, working conditions) and what he offers in the form of pay roll,companionship with others, promotional possibilities etc. It is not easyto match all factors to the new employee who is still unknown to many.So the new employee is placed as a probationer until the trial period isover. INDUCTIONIntroducing the new employee who is designated as a probationer to thejob, job location, surroundings, Organisation, organizationalsurroundings, various employees is the final step of employmentprocess. This process is important because of the high turnover rateamong the new employees compared to that among senior employees.This is mainly because of the problem of adjustment and adaptability tothe new surroundings and environment. further absence of information,lack of knowledge about new Organisation, cultural gap, and behavioral 47
    • Projectsformba.blogspot.comvariations, different levels of technology, variations in the requirementsof the job and the Organisation also disturb the new employee. Induction is necessary as the newcomer feel insecure, shy,nervousness and disturbing. This situation leads to instability andturnover.“Induction is the process of receiving and welcoming an employee when hefirst joins a company and giving him the basic information he needs to settledown quickly and happily and start work”.Lecture, handbook, film, group seminar are used to impart theinformation to new employees about the environment of the job and theOrganisation in order make new employee acquaint himself with thefollowing heads:1. About the company;2. About the department;3. About the superiors, subordinates;Objectives of Induction:I. Putting the new employee at his ease;II. Creating interest in his job and the company;III. Providing basic information about working arrangements;IV. Indicating the standards of performance and behavior expected of him. Making the employee feel that his job, however small, is, meaningful, that he is not a cog in the vast wheel;V. Informing him about training facilities;VI. Creating the feeling of social security;VII. Minimizing the reality shock which would be caused due to incompatibility caused between the employee expectations and actually what the company provides/offers regarding pay, benefits, status, working conditions, responsibility, opportunity for growth, innovations, creative ideas etc.Advantages of InductionI. First impression matters a good deal and results in less turnover;II. Newcomer adjusts himself to the work quickly, and it saves the time of the supervisor;III. Reduces employee dissatisfaction and grievances;IV. Develop a sense of belongings and commitment. 48
    • Projectsformba.blogspot.comIn general, productivity forms a measure of the output ofgoods and services to the input of labour, material andmachinery. The more productive a sector, the better itscompetitive position will be, as its unit cost will be lower.With the increase in productivity, earnings will improve,raising the standard of living. Improving productivity doesnot mean working harder. Rather it means workingeffectively. It means getting more out of what is put in. It isdoing better with what one has. DismissalDismissal is a termination of service of an employee as a punitive measure.This may occur either on account of unsatisfactory performance ofmisconduct. Persistent failure on the part of employee to perform up to theexpectations or specified standard is considered as unsatisfactoryperformance. Willful violation of rules & regulation by the employee istreated as misconduct.Dismissal is a drastic step seriously impairing the earnings and image of anemployee. Therefore, dismissal as a measure should be resorted to with greatcare and caution. It must be justifies and duly supported by the just andsufficient cause. Before an employee is dismissed, he must be servedadvance notice to explain his position. the reasons for dismissal must beclearly made known to the employee. TRAININGTraining is the act of increasing the knowledge and skill of an individual fordoing a particular job. In the present scenario training is increasingly viewedas a means of fostering the growth of the individual employee but as anintegrated part of organizational growth.Training is a process of learning a sequence of programmed behaviour. It isapplication of knowledge. It gives people an awareness of the rules andprocedures to guide their behavior. It attempts to improve their performance 49
    • Projectsformba.blogspot.comon the current job or prepare them for an intended job. Development is arelated process. It covers not only those activities, which improve jobperformance, but also those, which bring about growth of the personality;help individual in the progress towards maturity and actualization of theirpotential capacities so that they become not only good employees but betterman and women.Definition Of Training:“Training is the act of increasing the knowledge and skills of an employeefor doing a particular job.” Edwin.B.Flippo“Training is the organized procedure by which people learn knowledge and or skill for definite purpose”. DaleS.BeachIt is the training that bridges the gap between Job requirements andemployees present specifications. Training is a process by which attitudes,skills and abilities of employees to perform specific jobs are increased.Thus, it can be concluded that training is a process that tries to improveskills or add to the existing level of knowledge so that the employee is betterequipped to do his present job, or to mould him to be fit for a higher jobinvolving higher responsibilities. In other words, training is a learningexperience that seeks a relatively permanent change in an individual that willimprove his/her ability to perform his job. Distinction between training and development 50
    • Projectsformba.blogspot.com Training is a short-term process utilizing a systematic and organized procedure by which non-managerial personnel learn technical knowledge and skills for a definite purpose. Development is a long-term educational process utilizing a systematic and organised procedure by which managerial personnel learn conceptual and theoritical knowledge for general purpose. Training refers only to instruction in technical and mechanical operations, while development refers to philosophical and theoretical educational concepts. Training is designed for non-mangers while development is designed for managerial personnel. Training and development differs in four ways:  “What” is learned;  “Who” is learning;  “Why” such learning takes place;  “When” learning occurs.Learning Dimensions Training DevelopmentWho? Non Managerial Personnel Managerial PersonnelWhat? Technical and Managerial Theoretical and operations Conceptual ideasWhy? Specific job related General knowledgeWhen? Short Term Long Term Objectives Of Training  The primary purpose of training is to establish a sound relationship between the worker and his job –the optimum man task relationship.  To upgrade skills and prevent obsolescence.  To develop healthy and constructive attitude  To prepare employees for future assignments 51
    • Projectsformba.blogspot.comThe Focus Of Training Is On Three Broad Objectives:  To bring about attitudinal change.  To bring about quality to be the very top of agenda.  To savagely cut waste.Importance And Benefits Of TrainingTraining is important to develop the employees and make themsuitable for the job. Training constitutes significant part ofmanagement control. Benefits of training to following are:Organization Level: -  It leads to improve profitability  It improves the job knowledge, skills and morale of the work force  It helps in organizational development and preparation of guidelines for work  It enhances quality of work and appropriate climate for growth  It supports in improving organizational communicationIndividual Level: -  It help in encouraging and achieving self development  It provides a sense of growth in learning  It increases job satisfaction and recognition  It helps the individual in effective problem solvingA Model Training Program Should Encompass The Following Points:  Management overall responsibility right from planning stage to successful implementation. 52
    • Projectsformba.blogspot.com  The companies approach to the training function, which would include guidance for design and execution as well as dissemination of relevant information to all employees.  Provision for annual or periodic surveys in order to ensure that training are need based and development oriented.  Identification of priority area since resources are always scarce and programs must be prioritized according to felt needs. Identification Of Training Needs  Organizational Analysis: - It involves a study of entire organization in terms of analysis of objectives, utilization of resource, environmental scanning and organizational climate analysis.  Task/Role Analysis: - It involves a careful study of jobs within in an organization in a further effort to define specific content of training. It requires systematic collection of data about the job, role or position and what type of behavior, skill, and knowledge the jobholder must have to perform certain specified tasks.  Manpower Analysis: - It is conducted through appropriate observation, supervisory evaluation. This analysis is undertaken to know about the specific areas in which training is needed DESIGNING TRAINING METHODSTraining methods are means of attaining desired objectives set for a trainingprogramme. In practice, a variety of training methods are employed forachieving these objectives. But an organization cannot use all types oftraining methods for the reason like cost involved and also their relevance toorganizational need hence, organization needs to select a method or mix of 53
    • Projectsformba.blogspot.commethods to meet its training needs the choice of training method woulddepend on a Varity of factors, such as purpose of training, nature ofcontents, relevance to the participants, level of trainees, competence oftrainers/instructors, cost, etc. Depending on the training result and the process employed toattain these, the various training methods can broadly categorized into fourgroups as under: 1. On- the job oriented methods 2. Off the job training methods On the job oriented training methods. As the name itself denotes, methods include in this cluster are those whose main objectives are centered around the job, i.e., learning on the job itself by a variety of methods. The main methods, which fall into this category, are discussed here under:  On the job training (OJT). On the job training is probably the most Common approach to training, which can range from relatively unsophisticated “observe and copy” method to highly, structured courses. In this method, the new employee is placed on a job and taught the skills necessary to perform it a trainer or superior teaches the employee. Since trainee learns by observing and handling the job this is also termed as ‘observing, and copying’ or ‘learning by doing.’  Job instruction training (JIT). In this method, a trainer or supervisor gives instruction to an employee how to perform his job. This method of training is appropriate for acquisition or improvement of motor skills and routine and repetitive operations.  Coaching: this is similar to the JIT .in this method, the superior teaches or guides the new employee about the knowledge and skills of a specifically defined job. The superior points out the mistakes committed by the new employee and then also gives suggestions to improve upon. 54
    • Projectsformba.blogspot.com  Job rotation: in this method, a trainee moves from one job to another and from one department to another. This type of training method is more appropriate for developing multiskilling, operational flexibility, providing satisfaction from routine jobs and broadening the overall perspective of the trainee.  Vestibule training: this is a system in which employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. This type of training is commonly used for training personnel of clerical and semi-skilled grades.OF THE JOB TRAINING METHOD: -  Role-play: this is just like acting out a given role as in stage play. In this method of training, the trainees are required to enact defined roles on the basis of oral or written description of particular situation.  Case method: the case is an actual event or situation on organizational problems, which is a written description for discussion purpose. Trainees are asked to analyses the event or circumstances with an objective to identifies problems, trace out the causes for it and find out the solution to solve the problems.  Management games: the game is devised on the model of business situation. Then, trainees are divide into groups who represent the management of competing companies. They make decisions just like these are made in real life situations. Decisions made by the groups are evaluated and the likely implications of the decisions are fed back to the groups.  In basket exercise: this is also called ‘in tray’ method of training. This is built around the ‘incoming mail’ of manager. The trainees is presented with a pack of papers and files in tray containing administrative problems and are 55
    • Projectsformba.blogspot.com asked to take decision on these within a specified time limit. The decision taken by the trainees are compared with another. The trainees are provided feedback on their decisions.  Lectures: lecture is by far the most commonly used direct method of training. In this method the trainer provides knowledge to the trainees usually from prepared notes. Notes are also given to the trainees. This method is found more appropriate in simulations where some information is required to be shared to a large number of audience and which does not require more participation from audience. It is a low cost method. The major limitation of this method is that it dose not provide for active involvement of the trainees.  Conferences/seminars: in this method, the trainer delivers a lecture on the particular subject, which is followed by queries and discussions. The conference leader must have the necessary skills to lead the discussion in a meaningful way without losing sight of the topic or theme. This method is used to help employees develop problem-solving skills.  Programmed instructions: this is the recently developed technique based on the principle of positive reinforcement developed by B.F.Skinner. This technique is used to teach nonmotor and behavioral skills. The subject matter to be learned is prepared and condensed into logical sequence from more complex. The trainer monitors trainee’s independent progress through the programme. The trainee gets instant feedback on his learning however; this method is expensive and time consuming also.  Sensitive training: sensitive training is also known by a Varity of names such as t-groups, laboratory training and encounter groups. (The “T” is for training.)The objective of sensitive training is to increase participants’ insights into their behavior and the behavior of others by encouraging an open expression of feelings in the trainer guide T-group.This approach is useful for understanding people’s behavior particularlywhen they are involved in inter personal relationships. Development ofpositive thinking, improvement in inter-personal relationships, proper 56
    • Projectsformba.blogspot.commotivation of people and organizational development are some of theimportant benefits of transactional analysis as a technique of training.Conclusion: To conclude, each method of training has some strengths and weaknesses.Given the purpose of a training programme, the level of participants thecompetence of trainers, etc., the appropriate method has to be chosen toimpart training. MANAGEMENT DEVELOPMENT While drawing a distinction between training and development in previous chapter, we introduced in brief, the concept of development/ based on that concept, we elaborate it in more detail. The term “development” implies overall development in a person. Accordingly, Management development means not only improvement in job performance, but also improvement in knowledge, personality, attitude, behaviorism of an executive, etc. It means that executive/management development focuses more on the executive’s personal growth. Management Development is a systematic process of growth and development by which managers develop their abilities to manage. Management Development is concerned with improving the performance of the managers by giving them opportunities for growth and development. Definition: “Executive /Management Development includes the process by which managers and executives acquire not only skills and competency in their present job but also capabilities for future managerial tasks on increasing difficulty and scope. ” Flippo. “Any activity designed to improve the performance of existing managers and to provide for a planned growth of managers to meet future organizational requirements is called management development.” 57
    • Projectsformba.blogspot.com S.B.Bhudiraja Techniques Of Management Development There are mainly two techniques of management development, one is the formal training and the other is through the on the job experience. Important Techniques Of Management Development On-The-Job Technique Off-The-Job TechniqueCoaching Job Under Multiple Case method Incident Role-playing In basket Business Sensitivity Simulation Grid training Conference Lectures On The Job Techniques 1 Coaching: In coaching the trainee is place under a particular supervisor who acts as an instructor and teaches job knowledge and skills to the trainee. 2. Job Rotation: The transferring of executive s from job to job and from department to department in a systematic manner is called job rotation. 3. Under Study: An under study is as person who is in training to assure at a future time, the full responsibility of the position currently held by his superior. 4 Multiple Management: Multiple management is a system in which permanent advisory committees of managers study problems of the company and make recommendations to higher management. 58
    • Projectsformba.blogspot.comOff-The Job Technique 1. The Case Study: Cases are prepared on the basis of actual business situations that happened in various organizations. 2. Incident Method: This method was developed by Paul Pigors. It aims to develop the trainee in the area of intellectual ability, practical judgment and social awareness. 3. Role Playing: A problem situation is simulated by asking the participants to assume the role of particular person in the situation. 4. In Basket Method: The trainees are first given background information about a simulated company, its products, key personnel, various memoranda and all data pertaining to the firm. The trainee has to understand all of this and make notes of it. 5. Sensitivity Training: The main objective of sensitivity training is the “Development of awareness of and sensitivity of behavioral patterns of oneself and others”. 6. Simulation: Under this technique the situation is duplicated in such a way that it carries a closer resemblance to the actual job situation. 7. Managerial grid: It is a six-phase programme lasting from three to five years. It stats with upgrading managerial skills, continues to group improvement, improves inter group relations, goes into 59
    • Projectsformba.blogspot.com corporate planning, develops implementation method and ends with an evaluation phase. 8. Conference: A conference is a meeting of several people to discuss thee subject of common interest. 9. Lectures: It is the simplest technique. The lacquerer organizes the material and gives it to a group of trainees in the form of talks. Objectives of Executive/Management Development 1. Improve the performance of mangers at all levels; 2. Identify the persons in the organization with the required potential and prepare them for higher position in future; 3. Ensure availability of required number of executives mangers succession who can take over in case of contingencies as and when these arise in future; 4. Prevent obsolescence of executives by exposing them to the latest concepts and techniques in their respective areas of specialization; 5. Replace elderly executives who have risen from the ranks by highly competent and academically qualified professionals; 6. Improve the thought process and analytical abilities; 7. Provide opportunities to executives to fulfill their career aspirations; 8. Understand the problem of human relations and improve human relations skills. 60
    • Projectsformba.blogspot.com CONCEPTS AND AREAS OF MANAGEMENT DEVELOPMENT PROGRAMMMEGeneral administrationQ 1: How to decide overall company strategy?Q 2: How to evaluate capital expenditure proposals?Q 3: How to improve the flow of information needed to control theorganization?Q4: How to launch a new project?Marketing & SalesQ 1: How to forecast demand?Q 2: How to generate new product ideas?Q 3: How to launch a new product?Q 4: How to determine the profitability of a product or product line?Q 5: How to improve product design?ProductionQ 1: How to remove factory bottleneck?Q 2: How to improve product quality and reliability?Q 3: How to cope with complex mixes? Such as several factories, delivery tomany customers, or several products from many raw materials availablefrom many different sources, or several products profitability made byseveral process, etc.Q 4: How to cut labour cost?Q 5: How to improve labour relations?Human ResourceQ 1: How to improve training methods?Q 2: How to bring order and equality into wages and salary schemes?Q 3: How to recruit the right number of the right type of people? 61
    • Projectsformba.blogspot.comPurchasingQ 1: How to check quality and reliability of raw materials?Q 2: How to cut down the cost of purchasing holding stocks?ResearchQ 1: How to reduce the time taken to complete research? CAREER MANAGEMENT IntroductionCareer Management: A career is all the jobs that are held during onesworking life. Edwin B. Flippo defines career as a sequence of separate butrelated work activities that provides continuity and, order and meaning in aperson’s life.Career management focuses on career goals and it is the process ofdesigning and implementing goals, plans and strategies to enable theorganization to satisfy employee needs while allowing individuals to achievetheir career goals.Following are the key ingredients for career management, which focuses onthe process of implementing organizational career planning.  Top management support.  Coordination of other human resource activities.  Involvement of superiors.  Use of human resource managers as consultants.  Periodic skill assessment.  Realistic feedback about career progress. 62
    • Projectsformba.blogspot.com  Equal access and open enrollment.  Focus on psychological success rather than advancement.  Flexibility for individual needs.  Climate setting for career development.  Small Pilot Programmes.  Periodic programme assessment. Career management involves both organizational actions and individuals’ initiatives to ensure that when the career plans developed by the organizational requirements and individuals aspirations undergo unanticipated changes, they are managed appropriately on a continuing basis. Categories for Career Management There are three major categories to undertake career management. To select a field of employment and employer: - One cannot manage his career unless one has a long-range objective and the first point is to think in terms of where you ultimately want to be. Other important point is to view your potential employer and position in terms of long-range career goals. To know where you are: - To be aware of the opportunities available to you in the current position and to carefully and honestly posses current performance. Plan your exit: - To leave the current organization on good terms and not under questionable circumstances. 63
    • Projectsformba.blogspot.com Career management is complementary to management development and it is concerned with planning and shaping the path, which people take in their career progression within the organization. The underlying assumption of career management is that, in the context of management succession, the organization should be alert to provide able people with training, guidance and encouragement to enabler them to fulfill their potential. HR APPROACHES TO IMPROVING COMPETENCIESFollowing are the approaches, which help in improving competencies amongthe employee of the organization. 1. Incentives. The term in incentives means an inducement, which rouses of, stimulates one to action in a desired action. An incentive has a motivational power, and may be broadly grouped into (a) Financial incentives: - Common use of money as incentive are in form of wages and salaries, bonus, retirement benefits, medical reimbursement, etc. money plays a significant role in satisfying physiological and security/ social needs. (b) Non-Financial Incentive: - the following non – financial incentives could be effectively used- i. Appreciation of work Done ii. Competition iii. Knowledge of result iv. Worker’s participation In Management: v. Opportunity for Growth vi. Suggestion System vii. Job Enrichment 64
    • Projectsformba.blogspot.com 2. Management By Objectives (MBO): - Management by Objective can simply be defined as a programme that encompasses specific goals, anticipatively set for an explicit time period, with feed back on goal progress. 3. Training: - Training is a process of learning a sequence of programmed behavior. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It is used to teach the employee the most efficient and effective ways of performing their job. Also used for better quality of their working. 4. Off the job techniques: - Many Techniques could be very effectively used for the purpose and these are: - a) The Case Study b) Role Play c) In-Basket Method d) Sensitivity Training(already explained in previous chapter on Training and Development) SUCCESSION PLANINGMeaning:Organizations run on eternal basis. The survival and thrive of anyorganization on continuous basis requires a succession of person to fill keyposition. This is done through “ succession planning.”Succession planning can be defined as an executive inventory reportindicating what individuals are ready to move into higher positions in theorganization. In an organization, position at higher levels fall vacant due tovarious reasons like retirement, resignation, promotion, transfer, death etc.Therefore, the very purpose of succession planning is to identify, groom,develop and make the people ready to occupy higher levels job as and theyfall vacant. 65
    • Projectsformba.blogspot.com SOURCES 1. Internal Sources; 2. External Sources. 1. INTERNAL SOURCES: Succession from internal sources is advantageous to the organization as well as to the internal employees. This is so because while organization can buy employees loyalty and commitment, employees feel belongings and shared feelings and development along with the organizations. In order to groom internal employees to assumes higher responsibility in future, some professionally run large organization ask their managers and supervisors to identify the internal employees having potentialities to replace them in jobs should the need arise. 2. EXTERNAL SOURCES: Succession through outside talent in certain cases like when competent and qualified are not available internally, when major expansions, diversification and growth plans are in offering. Experiences suggest that complete dependence on either internal or external sources is not advisable to any organization what is often advisable in this regard is judicial balance between the two sources should be maintained The succession planning involves the following core activities: i. Analysis of the demand for executives, managers and professional by level, function and skills. ii. Audit of existing executives and inventory of likely future supply from both internal and external sources. iii. Planning individual career paths based on objective estimates of future needs and drawing on reliable appraisal and assessment of potential. iv. Undertaking career counseling in the context of future requirements of executives and managers. v. Accelerated promotion scheme with development targeted against the future needs of the organization. vi. Training and development activities to groom people for future roles. vii. Planned recruitment to fill short-term vacancies and provide people for development to meet future needs. 66
    • Projectsformba.blogspot.com viii. The actual process by which jobs are filled includes recruitment procedure internal appointment procedure, methods of assessments, internal search mechanism and often use of computer based information systems SocializationConcepts of socialization:In simple words socialization is the process of adaptation. Different thinkershave defined socialization differently. For example, Feldoman, has definedsocialization as “acquisition of work skills and abilities adoption ofappropriate role behavior and adjustment to the norms and value of the workgroup.” In the opinion of Manen and Schein, “socialization can beconceptualized as a process made up of three stage: pre- arrival, encounterand metamorphosis.” Thus socialization can be defined as a process of adaptation thattakes place as individual attempt to learn the values and norms of workroles. PHASES OF SOCIALISATION PROCESSThe socialization process involves the following three phases: i. Pre- arrival ii. Encounteriii. MetamorphosisPre- arrival: the pre- arrival phase explicitly recognizes that all the newrecruits arrive the organization with a set of values attitudes expectation andlearning. in other word pre arrival refers to all the learning that occurs beforea new member joins the organization. Encounter: upon entry into organization, the new member enters theencounter stages. The role-playing starts here. The member’s startscomparing expectation, the image of the organization, which he had formedduring pre arrival phase with reality. If expectation and reality concur theencounter is smooth. But seldom it concurs. When the two differ, stress andfrustration set in what follows thereafter is mental process of adjustment. In 67
    • Projectsformba.blogspot.comthe process of adjustment. In the process of adjustment the individual tries toreplace his/her own values and norms with those of the organization. At theother extreme, the member simply cannot reconcile to those values andnorms of the organization and gets disillusioned and quits the job.Metamorphosis: In this stage, the member master the skills required toadjust with the organization norms and values. This is a stage going throughchanges. Hence, this is called metamorphosis stage. This is of course avoluntary process and a conscious decision, which enables the new memberto become compatible with the organization. This signals the completion ofsocialization process. MANAGING ORGANISATIONAL RENEWALYou’ve just taken over as CEO of a company; what aspects of that companycan you change / there are several, including its strategy, culture, structuretasks, technologies, and the attitudes and skills of its people. All suchchanges will require the support and expert advice of the HR department.  STRATEGIC CHANGE: Organization change often starts with strategic change, a change in the firm strategy, mission and vision. Strategic change may require other changes for instance in the firm production technology, structure and culture.  CULTURAL CHANGE: Implementing a strategic change often requires changing the culture the firm’s shared values and aims. For example, it created a new set of “heroes ”, individuals and teams who were publicly congratulated whenever their behavior reflected new values of quality, teamwork. and customer focus. HR plays an important role in changing culture. For example one expertadvocates five “ primary embedding mechanisms “ to change a company’sculture, each of which requires HR support and advice: 1. Make it clear to your employees what you pay attention to measure and control. 2. React appropriately to critical incidents and organizational crises. 3. Deliberately role model, teach and coach the values you want to emphasize 68
    • Projectsformba.blogspot.com 4. Communicate your priorities by the way you allocate rewards and status. 5. Make your HR procedures and criteria consistent with the values you espouse. STRUCURAL CHANGE: Organizing redesigning the organizations departmentalization, coordination span of control, reporting relationship or centralization of decision-making is relatively direct and quick method of changing an organization.  TASK REDESING: The task and authority assigned to individual and teams within the organization are often changed as well.  TECHNOLOGICAL CHANGE: Technological changes are modification to the work method the organization uses to accomplish its tasks. They may include new production technologies, new selection and screening procedures and new performance appraisal techniques.  CHANGE IN PEOPLE ATTITUDES AND SKILLS: Sometimes the employees themselves must change. Techniques such as lecture conferences and on-the – job training and often used to provide new or present employees with the skills they need to perform their job adequately A 10- STEP PROCESS FOR MANAGING ORGANISATION RENEWAL 1. Establishing a sense of urgency 2. Mobilizing commitment to change through joint diagnosis of business problems 3. Create a guiding coalition 4. Develop a shared vision 5. Communicate the vision 6. Enable employees to facilitate the changes 7. Generate short term win 8. Consolidate gains and produce more change 9. Anchor the new ways of doing things in the company’s culture 69
    • Projectsformba.blogspot.com 10.Minorities progress and adjust the visions as required. Review and Discussion questions 1. Briefly describe the concept of job analysis, and explain the job analysis process. 2. From the Human Resource Manager points of view, what are the uses of job analysis? 3. Define recruitment. Bring out the factors which effect recruitment? 4. What are the various sources of recruitment? Discuss their relative merits and demerits? 5. If you were a personnel officer in a scientific institution and asked to recruit scientists, which source of recruitment you will use for this purpose and why? 6. What are the key attributes that make a recruitment programme effective? 70
    • Projectsformba.blogspot.com 7. What do you mean by training? How will you identify the training needs in an organization? 8. What are the objectives of training? Explain the need for training in an industrial organization? 9. “Training programmes are helpful to avoid personnel obsolescence ” Discuss. 10.Explain the various methods of training. 11.Write short notes on:  Management Games;  Case Study;  Vestibule Training;  Sensitivity Training;  Transactional Analysis. 12.What do you mean by executive development? What are its objectives? 13.Discuss the methods of Executive Development. Which one you consider the most suitable for developing middle level managers and why? 14.“You cannot develop managers. People either have the ability to manage or they don’t.” Do you agree or Dis-agree? Discuss. 15.“Career Development is a waste of money for a company. All is does is raise employee’s expectations and then, frustrated, they quit.” Do you agree or disagree? Discuss. 16.What type of information would you seek from human resource department to help you develop your own career plan if you were just starting with a large multinational corporation? 71
    • Projectsformba.blogspot.com-------------------------------------------------------------------------------------------- Unit III HUMAN RESOURCE DEVELOPMENTHRD implies that the organization wants to enhance the overall capabilities of itsemployees to develop their potential in directions best suited to them.Basic Concepts Of HRD: 72
    • Projectsformba.blogspot.com The belief that every person has potential which can be utilized for better productivity or services has enabled to establish a process of converting this potential into reality. In this process the human being is continuously helped to acquire knowledge and skill and to change to the organizational culture. Therefore the basic concepts of HRD are: • To acquire capability to meet present and future job specification. • To develop an organizational climate to bring about team spirit and group dynamism.ORGANISATIUONA HUMAN JOBL DEVELOPMENT RESOURCE ENRICHMENT EXCELLENCE TRAININGHUMAN ORGANISATIONAL JOB SATISFACTIORESOURCE INPUT CLIMATE N There are efforts being made to synchronies three basic elements of HRD: • Education • Training • Development To fulfill desired objectives. Training and education can be appraised immediately by simple question answer approach but development evaluation needs ability to predict the long term results. A realistic and long-term HRD plan appears to be difficult but if planned properly, funded adequately and supervised minutely, implementation of HRD practice helps the organization to grow fast. Facts About HRD: 73
    • Projectsformba.blogspot.com  It is with belief that under certain circumstances people are capable of improving their capability.  It is the process of helping people to acquire competencies.  In an organizational context HRD “…is a process by which employees of an organization are helped in a continuous and planned way to acquire or sharpen capabilities.  HRD develops an organizational culture in which supervisor-subordinate relationships, team work, collaboration among units are strong and contribute to the professional well being, motivation and pride if employees.  Employees are continuously helped to acquire new competencies through a process of planning, feedback, training etc.Why HRD Is Needed?  It is required for continuous development of competencies.  To avoid a saturation point in terms of growth of an employee by enhancement of competencies.  To improve the service and effectiveness of employees.Benefits Of HRDUnlike education, training in HRD not only develops the competence of the individualsbut also develops his/her latent potential for the total effectiveness of the organization.The benefits from HRD are therefore many. Some of them are:  It helps employee to diagnose his/her own strengths and weaknesses. 74
    • Projectsformba.blogspot.com  It develops creativity in employees.  It helps employee to develop himself/her in a given organizational climate to improve not only his/her performance but that of the organization.  It develops trust and openness amongst employees thus enriches interpersonal relationships.  It creates environment for realistic feedback and guidance from superiors.  It provides long term & short term development opportunities.  It smoothens the career development plans.  It helps organizations to use available human resource for future challenging responsibilities after developing them.  It enables an overall development of personality of employees and the organizations.Systematic Representation Of Linkages Between HRD Instruments, Processes,Outcomes And Organizational Effectiveness.HRD Mechanisms or HRD Processes & HRD HRD Outcomes Variables Organizational EffectivenessSubsystems or Instruments Climate Variables Dimensions • HRD Department • Role clarity • More Competent • Higher Productivity • Professional • Planning of People • Growth & Appraisals development by • Better Developed Diversification • Review every employee roles • Core Reduction • Discussions, • Awareness of Higher Job • More Profiles 75
    • Projectsformba.blogspot.com feedback competencies commitment & job • Better Image • Counseling required for job involvement sessions performance • More Problem • Role analysis • Practice Solving exercises Organizations • Better Utilization • Potential • More Trust of Human development • Collaboration & Resources exercisers Team Work • Better • Training • Authentic Organizational communication • Openness Health policies • Risk taking • More Teamwork, • Job Rotations • Value Generation Synergy and • OD exercises • Clarification Of Respect of each • Rewards Norms & Standards other • Job enrichments • Increased programs Communication • Other mechanisms • More Objective rewards • Generation of objective, Data on employee etc Other Factors Other Factors Other Factors Environment, Technology, Resource Availability, Personnel Policies, Top Environment, History Nature of Business Management styles, Inve- etc stment on HRD, Top Ma- nagement Commitments, History, Previous Culture, Line Manager’s Interest etc.Features Of HRD In An Organization  Founded on the belief that people are capable of growth and management has to create an environment of growth.  This belief is to be manifested in managerial practices and in the behavior of managers and supervisors who are the key agents of HRD in the organization. 76
    • Projectsformba.blogspot.com  For operational purposes large Organizations focus on HRD, generally the areas concern are Recruitment, raining, Appraisal, planning etc. 77
    • Projectsformba.blogspot.comLEARNING AND DEVELOPMENTDefinition of Learning: Any relative permanent change in behavior that occurs as aresult of experience.Learning is a kind of action, and it takes place through number of development methodsundertaken by the organizations. There are four important points in terms of learning anddevelopment.  Learning involves a change in behavior and opens a way for development.  Any temporary change in behavior due to fatigue or any reason is not a part of learning.  Learning is totally based on some form of practice or experience.  There must be practice or experience must be reinforced in order for learning to occurThe most effective and quick method of Learning is Learning on the job, this is beenreferred as on the job training. In this method the trainee has direct personalresponsibility.Facts About Learning And Development:  Learning if it is adopted to the real needs is enforced it creates a long-term impact.  The technique of on the job training is very useful in the case of leaning and Development in teaching skills at the work place or the desk or in the laboratory.  The focus is mainly on imparting practical inputs in order to convert it into a more fruitful training. 78
    • Projectsformba.blogspot.com Characteristics And Principles Of Learning And Development:  It requires purposeful activity.  It is a Problem solving process.  Learning and development go hand in hand.  Friendly competition stimulates learning and development..  Early Successes increases the chances for effective learning and d3evelopment.Benefits Of On The Job Training In Order To Highlight The Relevance Of Learning AndDevelopment:  The trainee learns effectively as he experiences the same problem, which he will be facing on the job.  Learns to locate the fault and corrects error.  Confidence in speed and senses of productiveness, and gets positive and reinforcive support.Benefits Of Job Rotation Method In Order To Highlight The Relevance Of Learning AndDevelopment.  It is a effective method to develop small number of people in various jobs by rotation. 79
    • Projectsformba.blogspot.com  It is mainly used for management development methods where managers are exposed to handle the situation of other departments.  Such a exposure gives you the opportunity of acting in a service role with increased knowledge and sensitivity. 80
    • Projectsformba.blogspot.com PERSONAL DEVELOPMENT PLANNINGSurvival, Growth and Effective existence of an organization require a succession ofpeople to fill various important jobs. Personal Development planning focuses on for mainsteps  Individual Needs  Vision linked with needs.  Action plan to achieve the vision.  Results focusing on maintaining the change.Following are the points to highlight Personal Development Planning:  To first of all identify individuals interest, skills and potential.  To identify life goals and career goals.  To develop a written plan (including schedule to achieve individual goals)  Seeking and obtaining the best first.  Communicating to management the individual career plan.  To seek Counseling from the manager and from the HR organization.  To evaluate the internal and external opportunities.  To making known yourself and your accomplishments. 81
    • Projectsformba.blogspot.comAdvantages Of Personal Development Planning  It helps the individual to have the knowledge of various career opportunities.  To select the career which is suitable to ones life style.  To satisfy individuals’ esteem needs.  To improve the individual employees performance on the job.  To increase the level of Job Satisfaction. 82
    • Projectsformba.blogspot.com TRAININGTraining is the act of increasing the knowledge and skill of an individual for dong aparticular job. In the present scenario training is increasingly viewed as a means offostering the growth of the individual employee but as an integrated part oforganizational growth.Definition Of Training:Dale S.Beach defines training as “---the organized procedure by which people learnknowledge and or skill for definite purpose”.It is the training that bridges the gap between Job requirements and employees presentspecifications.Objectives Of Training  The primary purpose of training is to establish a sound relationship between the worker and his job –the optimum man task relationship.  To upgrade skills and prevent obsolescence.  To develop healthy and constructive attitude  To prepare employees for future assignmentsThe Focus Of Training Is On Three Broad Objectives:  To bring about attitudinal change.  To bring about quality to be the very top of agenda.  To savagely cut waste. 83
    • Projectsformba.blogspot.comImportance And Benefits Of Training: Training is important to develop the employees and make them suitable for the job .Training constitutes significant part of management control. Benefits of training tofollowing.Organization Level: -  It leads to improve profitability  It improves the job knowledge, skills and morale of the work force  It helps in organizational development and preparation of guidelines for work  It enhances quality of work and appropriate climate for growth  It supports in improving organizational communicationIndividual Level: -  It help in encouraging and achiving self development  It provides a sense of growth in learning  It increases job satisfaction and recognisition  It helps the individual in effective problem solvingA Model Training Program Should Encompass The Following Points:  Management overall responsibility right from planning stage to successful implementation.  The companies approach to the training function which would include guidance for design and execution as well as dissemination of relevant information to all employees.  Provision for annual or periodic surveys in order to ensure that training is need based and development oriented. 84
    • Projectsformba.blogspot.com  Identification of priority area since resources are always scarce and programs must be prioritized according to felt needs.Identification Of Training Needs  Organizational Analysis: - It involves a study of entire organization in terms of analysis of objectives, utilization of resource, environmental scanning and organizational climate analysis.  Task/Role Analysis: - It involves a careful study of jobs within in an organization in a further effort to define specific content of training. It requires systematic collection of data about the job, role or position and what type of behavior, skill, and knowledge the job holder must have to perform certain specified tasks.  Manpower Analysis:- It is conducted through appropriate observation, supervisory evaluation. This analysis is undertaken to know about the specific areas in which training is neededTraining Techniques  Job instruction training  Coaching  Programmed learning  Job rotation  Lecture 85
    • Projectsformba.blogspot.com  Conference  Laboratory training  Role Playing  Case study  In basket 86
    • Projectsformba.blogspot.com MANAGEMENT DEVELOPMENT Management Development is a systematic process of growth and development by which managers develop their abilities to manage. Management Development is concerned with improving the performance of the managers by giving them opportunities for growth and development. Techniques Of Management Development There are mainly two techniques of management development, one is the formal training and the other is through the on the job experience. Important Techniques Of Management Development On-The-Job Technique Off-The-Job TechniqueCoaching Job Under Multiple Case method Incident Role-playing In basket Business Sensitivity Simulation Grid training Conference Lectures 87
    • Projectsformba.blogspot.comOn The Job Techniques1 Coaching: In coaching the trainee is place under a particular supervisor who acts as aninstructor and teaches job knowledge and skills to the trainee.2. Job Rotation: The transferring of executive s from job to job and from department todepartment in a systematic manner is called job rotation.2. Under Study: An under study is as person who is in training to assure at a future time,the full responsibility of the position currently held by his superior.3 Multiple Management: Multiple management is a system in which permanent advisorycommittees of managers study problems of the company and make recommendations tohigher management.Off-The Job Technique 10. The Case Study: Cases are prepared on the basis of actual business situations that happened in various organizations. 11. Incident Method: This method was developed by Paul Pigors. It aims to develop the trainee in the area of intellectual ability, practical judgment and social awareness. 12. Role Playing: A problem situation is simulated by asking the participants to assume the role of particular person in the situation. 13. In Basket Method: The trainees are first given background information about a simulated company, its products, key personnel, various memoranda and all data pertaining to the firm. The trainee has to understand all of this and make notes of it. 88
    • Projectsformba.blogspot.com 14. Sensitivity Training: The main objective of sensitivity training is the “Development of awareness of and sensitivity of behavioural patterns of oneself and others”. 15. Simulation: Under this technique the situation is duplicated in such a way that it carries a closer resemblance to the actual job situation. 16. Managerial grid: It is a six-phase programme lasting from three to five years. It stats with upgrading managerial skills, continues to group improvement, improves inter group relations, goes into corporate planning, develops implementation method and ends with an evaluation phase. 17. Conference: A conference is a meeting of several people to discuss thee subject of common interest. 18. Lectures: It is the simplest technique. The lacquerer organizes the material and gives it to a group of trainees in the form of talks. 89
    • Projectsformba.blogspot.com CONCEPTS AND AREAS OF MANAGEMENT OF MANAGEMENT DEVELOPMENT PROGRAMMMEGeneral administrationQ 1: How to decide overall company strategy?Q 2: How to evaluate capital expenditure proposals?Q 3: How to improve the flow of information needed to control the organization?Q4 : How to launch a new project?Marketing & SalesQ 1: How to forecast demand?Q 2: How to generate new product ideas?Q 3: How to launch a new product?Q 4: How to determine the profitability of a product or product line?Q 5: How to improve product design?ProductionQ 1: How to remove factory bottleneck?Q 2: How to improve product quality and reliability?Q 3: How to cope with complex mixes? Such as several factories, delivery to manycustomers, or several products from many raw materials available from many differentsources, or several products profitability made by several process, etc.Q 4: How to cut labour cost?Q 5: How to improve labour relations?Human ResourceQ 1: How to improve training methods?Q 2: How to bring order and equality into wages and salary schemes?Q 3: How to recruit the right number of the right type of people? 90
    • Projectsformba.blogspot.comPurchasingQ 1: How to check quality and reliability of raw materials?Q 2: How to cut down the cost of purchasing an holding stocks?ResearchQ 1: How to reduce the time taken to complete research? 91
    • Projectsformba.blogspot.com CAREER MANAGEMENTCareer Management: A career is all the jobs that are held during ones working life.Edwin B. Flippo defines career as a sequence of separate but related work activities thatprovides continuity and, order and meaning in a person’s life.Career management focuses on career goals and it is the process of designing andimplementing goals, plans and strategies to enable the organization to satisfy employeeneeds while allowing individuals to achieve their career goals.Following are the key ingredients for career management, which focuses on the processof implementing organizational career planning.  Top management support.  Coordination of other human resource activities.  Involvement of superiors.  Use of human resource managers as consultants.  Periodic skill assessment.  Realistic feedback about career progress.  Equal access and open enrollment.  Focus on psychological success rather than advancement.  Flexibility for individual needs. 92
    • Projectsformba.blogspot.com  Climate setting for career development.  Small Pilot Programmes.  Periodic programme assessment. Career management involves both organizational actions and individuals’ initiatives to ensure that when the career plans developed by the organizational requirements and individuals aspirations undergo unanticipated changes, they are managed appropriately on a continuing basis. There are three major categories to undertake career management. To select a field of employment and employer: - One cannot manage his career unless one has a long-range objective and the first point is to think in terms of where you ultimately want to be. Other important point is to view your potential employer and position in terms of long-range career goals. To know where you are: - To be aware of the opportunities available to you in the current position and to carefully and honestly posses current performance. Plan your exit: - To leave the current organization on good terms and not under questionable circumstances. Career management is complementary to management development and it is concerned with planning and shaping the path, which people take in their career progression within the organization. The underlying assumption of career management is that, in the context of management succession, the organization should be alert to provide able people with training, guidance and encouragement to enabler them to fulfill their potential. 93
    • Projectsformba.blogspot.com HR APPROACHES TO IMPROVING COMPETENCIESFollowing are the approaches, which help in improving competencies among theemployee of the organization. 5. Incentives. The term in incentives means an inducement, which rouses of, stimulates one to action in a desired action. An incentive has a motivational power, and may be broadly grouped into (a) Financial incentives: - Common use of money as incentive are in form of wages and salaries, bonus, retirement benefits, medical reimbursement, etc. money plays a significant role in satisfying physiological and security/ social needs. (b) Non-Financial Incentive: - the following non – financial incentives could be effectively used- i. Appreciation of work Done ii. Competition iii. Knowledge of result iv. Worker’s participation In Management: v. Opportunity for Growth vi. Suggestion System vii. Job Enrichment 6. Management By Objectives (MBO): - Management by Objective can simply be defined as a programme that encompasses specific goals, anticipatively set for an explicit time period, with feed back on goal progress. 7. Training: - Training is a process of learning a sequence of programmed behavior. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It is used to teach the employee the most efficient and effective ways of performing their job. Also used for better quality of their working. 94
    • Projectsformba.blogspot.com 8. Off the job techniques: - Many Techniques could be very effectively used for the purpose and these are: - e) The Case Study f) Role Play g) In-Basket Method h) Sensitivity Training 95
    • Projectsformba.blogspot.com Human Resource Management Unit IV Performance AppraisalOnce the employee has been selected, trained & motivated. , He is thenappraised for his performance .Performance appraisal is the step wherethe management finds out how effective it has been at hiring andplacing employees .If any problems are identified steps are taken tocommunicate with the employees & to remedy them.DefinitionsIt is defined “ as a process of evaluating the performance of a job in terms ofits requirement.”According to Heyel “ It is process of evaluating the performance &qualifications of the employees in terms of requirement of the job for whichhe is employed for purposes of administration including placement,selection for promotions providing financial rewards & other actions whichrequire differential treatment among the members of the group asdistinguished from actions affecting all members equally.“Process of estimating or judging the value, excellence, qualities or status ofsome object, person or thing.” The Evaluation ProcessThe process of performance appraisal follows a set pattern, which is periodicallyappraised by his superiors. The process of evaluation begins with establishment ofperformance standards .At the time of designing a job & formulating a job descriptionperformance standards are usually developed for the position. These standards set shouldnot be vague but should be clear .The next thing is that these standards should becommunicated to the employees for the employees left to themselves & for makingcommunication effective feedback is necessary from the subordinate to the manager.The third step is measurement of the performance, to determine the actualperformance is that, it is necessary to acquire information about it .Thesources used for measuring the performance can be through personalobservation, statistical reports etc .The fourth step is the comparison of theactual performance with the standards. The next step is the results of arediscussed periodically with the employees, where plus points & weak points 96
    • Projectsformba.blogspot.comare discussed .The final step is initiation of corrective action wherenecessary. Establish performance standards Communicate performance expectations to employees Measure actual performance Compare actual performance with standards Discuss the appraisal with employee If necessary, initiate corrective action Methods of Performance AppraisalTraditional methods: 1. Straight Ranking Method: It is oldest & simplest method of performance appraisal by which the man & his performance is considered as entity by the rater .The whole man is compared to with the whole man .The relative position of each man is tested in terms of his numerical rank .It may also be done by ranking a person on his job performance against that of another member of competitive group placing him as number 2. Paired Comparison Technique :In this each employee is compared every trait all other persons in pairs one at a time .In this judgments is simpler than the ordinary ranking method. 3. Man-to-Man Comparison Method: This technique was used by the USA army during the First World War. In this method certain factors 97
    • Projectsformba.blogspot.com are selected for the purpose of analysis (such as leadership, dependability & imitative) the scale of man is also created for each selector. 4. Grading Method: In this method the rater considers certain features & marks the carefully according to a scale. They select the features like analytical ability, cooperativeness, dependability, self-expression, job knowledge, judgment, leadership & organizing ability etc. 5. Graphic Method: This is the most commonly used method of performance Appraisal .In it one of the each person is rated on a continuous scale. These factors are employee characteristics & employee contribution which includes qualities such as initiative, leadership, cooperativeness, dependability, industry, attitude 6. Forced Choice Description method: in this ranking method it attempts to correct a rater’s tendency to give consistently high or consistently low ratings to all the employees. This method uses objective reporting & minimum subjective ratings. 7. Free Essay Method: Under this supervisor make s a free form, open ended appraisal of an employee in his own words & puts down his impression about the employee .He take into account of these factors like relationship with fellow supervisors, job knowledge & potential, employee characteristics & attitudes, physical conditions, development needs for future. MODERN METHODS 1. Management By Objectives: It is potentially a powerful philosophy of managing and an effective way of operationalising the evaluation process. It is defined as “ a process whereby the superior & subordinates managers of an organization jointly identify its common goals, define each individuals major areas responsibility in terms of results expected of him & use these measures as guides for operating the unit & assessing the contributions of each of its members. 2. Assessment Center method: The assessment center concept was initially applied to military situations in the Germany army in the 1930 .The purpose of this method was and is to test candidates in a 98
    • Projectsformba.blogspot.com social situations using a number of assessors & a variety of procedures. The most important feature of the assessment centre is job related simulations. These simulations involve characteristics that Managers feel are important to the job success. The evaluators observe & evaluate participants as they perform activities commonly found in these higher levels of jobs. 3. 360 degree performance appraisal: The appraisal may be any person who has thorough knowledge about the job done by contents to be appraised, standards of contents & who observes the employee while performing a job .He should asses the performance without bias .The appraiser are supervisors, peers, subordinates employees themselves users of service. Performance appraisal by all the parties is called 360-degree appraisal. 4. Human Asset Accounting method: The human asset accounting method refers to activity devoted to attaching money estimates to the value of a firm’s internal human organization & it’s external customer goodwill .If a well trained employee leaves a firm the human organization is worthless& if they join the company the human assets are increased. 5. Behaviorally Anchored Rating Scales: This a new appraisal technique which has been recently developed .It provides better results as compare to other techniques .The BARS is usually consist of five steps. (a) Generate critical incidents: Person with knowledge of the job to be appraised are asked to describe specific illustrations of effective performance behaviour (b) Develop performance Dimensions: These people then cluster the incidents into small set of performance dimensions. Each cluster must be defined. (c) Reallocate Incidents: Any group of people who also the job then reallocate the original critical incidents. They are given clusters definition’s & critical& asked to redefine each incident to the dimension (d) Scale of Incidents: The second group is generally asked to rate the behaviour described in the incident as to how effectively or 99
    • Projectsformba.blogspot.com ineffectively it represents performance on the appropriate dimensions. (e) Develop Final Instrument: Subsets of incidents are used as behaviour anchors for the performance dimensions.IMPORTANCE OF PERFORMANCE APPRAISAL  Performance appraisal provides systematic judgment to back up salary increases, transfers, demotion or terminations  They are means of telling subordinates how he is doing & suggesting needed changes in the behaviour attitudes, skills, and job knowledge. They let him know where he stands with the boss.  The superior uses them as a base for coaching & counseling the individual.  It provides adequate feedback to each individual for his or her performance.  It plays a vital role in identifying training & development needs & to evaluate the effectiveness of training & development programmes. 360 DEGREE FEEDBACKIntroduction This attempt to update the traditional employee appraisal process is one of the fashionable techniques of the mid 1990s, fitting in with other newts tools called team management, employee empowerment and total quality management. In 360 degree feedback the appraisal should may be done by any person who has thorough knowledge about the job done by the contents to be appraised, standards of contents & who observes the employee while performing the job .The appraiser should be capable of deciding what is important & what is relatively less important. He should assess the performance without bias .The appraisers are supervisors, peers, subordinates employees themselves users of services & consultant. Performance appraisal by all these parties is called 360-degree feedback. Definition 100
    • Projectsformba.blogspot.com 360-degree feedback, as the term implies, brings together formal appraisals from everybody that the person being assessed comes into contact with— line managers, 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. Though it is frequently intimidating or dispiriting for the person concerned, some studies indicate that such feedback can be helpful in changing behaviour and improving performance. However, others suggest that the technique shows little or no improvement over more traditional methods and has the disadvantage that results need skilled interpretation. They say 360-degree feedback should be regarded as an organizational process rather than a mechanical tool. FEATURES OF 360-DEGREE FEEDBACK • 360-degree feedback is an assessment process used to improve managerial effectiveness by providing the manager with a more complete assessment of their effectiveness, and their performance and development needs. • The process involves obtaining feedback from the managers key contacts, normally: o The manager him/herself o Subordinates o Peers o Manager o Customers o Suppliers • Feedback is normally gathered by means of a questionnaire, which asks participants to rate the individual according to observed behaviors - usually managerial or business-specific competencies. • The 360-degree process will not suit all companies. You should assess how well it would fit with your current culture before launching a scheme and a pilot scheme is worth building into your programme. • Communicating the scheme, its purpose and benefits to all those involved will be a key factor in reducing the participants fears and gaining their commitment to any new scheme. • Presenting the results of the appraisal to managers in a constructive way is critical to the success of the process. All feedback, positive and 101
    • Projectsformba.blogspot.com critical, should be presented, with the aim of highlighting and acting on areas for development. • Results can be aggregated to give you some feedback on organizational strengths and weaknesses in relation to your business objectives and training strategy. A -- What is a 360° assessment? Its a full-circle overview of a persons performance on the job. Instead of a single evaluation from the boss, a person receives feedback from many workplace sources. Sometimes 360°s are called multi-source or multi-rater assessments. The boss still gives input, but peers and direct reports (people who report to the participant) also get involved in the evaluation process. The person participating in a 360° gets to rate his or her performance, too. Applying their individual observations and experiences, everyone involved brings different perspectives to the assessment. For participants, the feedback from multiple work associates is highly motivating. Used as a springboard for professional growth, the assessment can make a powerful impact on an individuals career and a companys success. The 360° assessment process is designed as an ongoing process that can be used at key intervals, usually annually, to monitor the progress of professional growth. B -- How does the Checkpoint 360° system work?1. The participant and his or her boss, peers and direct reports fill in surveys. Responses of the peers and direct reports are kept entirely anonymous. The standard Checkpoint survey has 70 items and takes approximately 15 minutes to complete. It covers competencies in the areas of Communications, Leadership, Adaptability, Relationships, Task Management, Production, Development of Others and Personal Development.2. Results from all of the surveys are compiled in a confidential feedback report. Graphs and charts relate the data in a detailed, easy-to-understand format. The report presents a balanced picture of perceptions about a persons skills. 102
    • Projectsformba.blogspot.com3. 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. They can use the 360° process before and after training opportunities to measure their effectiveness and measure gains. C -- Why should a company implement a 360° process? The process leads to better job performance, as participants use the 360° to sharpen their skills. As a consequence, productivity in the workplace increases, and a company enjoys more success. Groups have found that the 360° process is an excellent method for establishing specific training needs. When a business has a clear objective to accomplish or a specific mission to carry out, a 360° assessment can be a valuable tool. It can help everyone to focus on skills consistent with the companys goals and to target their development plans to fit the direction the business is taking. If a business is struggling in a particular area, a 360° system can help identify the skills requiring attention. Participants can then make the chances necessary to remove obstacles to success. D -- What are the advantages of a 360° feedback system? Everybody involved in the process benefits:  Participants get a fairer, well-rounded impression of how their work is viewed by others. Applying this valuable information, they can take steps to continuously improve their effectiveness on the job.  Bosses get an overall perspective about a persons skills and, consequently, develop a more accurate, on-target training plan for each individual.  Peers and Direct Reports get an opportunity to share concerns, which helps them contribute to constructive changes in their work environment. At the same time, they can confirm positive behaviors that do not need attention.  Team members can use the information to identify and prioritize team development needs. The process can improve their teamwork, increasing their ability to solve problems together. 103
    • Projectsformba.blogspot.com  The organization can develop appropriate skills to consistently reflect company values. Continuous progress can be achieved through periodic reevaluations using the 360° system. E -- How do companies use the 360° results?Most businesses initially use the 360° feedback for employee development.Some begin by using it for development planning and then expand to usethe 360° system for appraisal and pay decisions. Later, they may also use itin promotion and succession planning.When the initial use is for development only, everyone has a chance tobecome familiar with the process and make any necessary adjustments. Italso allows time to build trust in the value of the 360°. For uses other thandevelopment, specific legal guidelines must be followed.When implementing a 360° system, its use must be taken into account. Forinstance, companies will need to have a policy about who sees the 360°survey results. When the feedback will be used solely for development, theparticipant might be the only person to see the report. If the results will beused for performance management, both the participant and his or her bosswill review the report. Employee CompensationOne of the most difficult functions of HRM is that of determining rates ofmonetary compensation. Not only it is one of the most complex duties, but itis also one of the most significant to both the organisation and theemployees.Wage & salary refers to the establishment & implementation of the soundpolicies & practices of the employees compensation . It includes such assuch areas as job evaluation , surveys of wage & salary, analysis of relevantorganizational problems ,development & maintenance of wage structure,profit sharing & incentives etc. The basic purpose of wage & salaryadministration is to establish & maintain an equitable wage & salarystructure .The secondary objectives to establishment & maintenance of anequitable labour –cost structure .The compensation is mainly concernedwith the financial aspects of the needs ,motivation & rewards. Managers 104
    • Projectsformba.blogspot.comMust analyse the needs of the employees so that reward can be designed tosatisfy some needs.Definition:Compensation:Compensation may be defined” as money received in the performance ofwork , plus many kinds of benefits & services that organization providestheir employees .” Money is included under direct compensation whilebenefits come under Indirect Compensation. may consist of life ,accident &health insurance ,employer’s contribution to retirement ,pay for vacation orillness .Wages:Wages are defined as the remuneration paid for the services of labour inproduction, periodically to an employees /worker. These are generally refersto hourly rate or daily rate paid to such groups as production & maintenanceemployees (Blue Collar).Salary:Salary on the other hand refers weekly or monthly rates paid to the weeklyor monthly rates paid to clerical, administrative & professional employees(White collar workers) AIMS OF COMPENSATION MANAGEMENTAs far as the organisation is concerned, employee compensation programsare designed to do three things:  To attract capable employees to the organisation  To motivate them toward superior performance, and  To retain their services over an extended period of time.The aims of wage and salary administration are numerous and sometimesconflict with each other. The main objectives of wage and salaryadministration are:1. To acquire qualified competent personnel: Candidates decide upon their career in a particular organisation mostly on the basis of the maount of remuneration the organisation offers. So the organisation should aim at 105
    • Projectsformba.blogspot.com payment of salaries at that level, where they can attract competent and qualified people.2. To secure internal and external equity: Internal equity does mean payment of similar wages for similar job within the organisation. External equity implies payment of similar wages to similar jobs in comparable organisations.3. To retain present employees: The organisation must keep the wage level at the competitive level, in order to prevent such quits.4. To ensure desired behaviour: Good compensation reinforce desired bahaviour like performance, loyalty, accepting new responsibilities and changes etc.5. Control costs: To keep labour and administrative costs in line with the ability of the organisation to pay.6. Comply with Legal regulations: A sound wage and salary system considers the legal challengers imposed by government and ensures the employer’s compliance.7. To pay according to the content and difficulty of the job and in tune with the effort and merit of employees.8. To facilitate pay roll administration of budgeting and wage and salary control.9. To simplify collective bargaining procedures and negotiations.10.To promote organisation feasibility. PRINICPLES Of WAGE & SALARY ADMINISTRATIONThere are several principles of wage and salary plans, policies andpractices. The important of them are: 1. There should be definite plan to ensure that differences in pay for jobs are based upon difference in job requirements. 2. The general level of wages and salaries should be reasonably in line with that prevailing in the labour market. 3. Wage and salary plans and policies should be sufficiently flexible. 4. Job evaluation must be done scientifically. 5. Wage and salary administration plans must always be consistent with overall organisational plans and programmes. 6. Wage and salary administration plans and programmes should be in conformity with the social and economic objectives of the country like attainment of equality in income distribution and controlling inflationary trends. 106
    • Projectsformba.blogspot.com 7. Wage and salary administraion plans and programmes should be responsive to the changing local and national conditions. 8. These plans should be simplify and expedite other administrative processes. ELEMENTS/INGREDIENTS OF A GOOD WAGE PLANBasic elements of good wage plan are as follows: 1.Should be easily understandable; 2.Easy Computation; 3.Capable of motivating Employees; 4. Should provide remuneration as soon as employees have made efforts; 5.Should be relatively stable; FACTORS AFFECTING WAGE AND SALARY ADMINISTRATION IN AN ORGANISATION1. The organization ability to pay: The first important factor which determines the pay rate is the as the companies with good sales & high profits have the ability to pay higher wages to the employees as compare to any other small scale company .2. Supply & Demand Force of labour : The labour market conditions or supply & demand forces at the national ,regional & local levels because if the demand for certain skills is high & supply is low the price to be paid for these skills will be high & similarly if demand for skill is low & supply of manpower is more than salary paid will be low .3. Prevailing Market Rate: The next factor is the prevailing market rate or known as going market rate or comparable wage .It includes the competition demand ,then the government laws & judicial decision ,trade union encourages this practice so that people have equal pay ,equal work.4. The Cost of living: The Cost of living is the usually regarded as automatic minimum pay criterion & it is based on the increase or decrease in an acceptable cost of living index .When the cost of living increases ,workers & trade union demands adjusted wages.5. The Living wages : It means that the wages paid should be adequate to enable employees to maintain himself & his family at a reasonable level of existence . 107
    • Projectsformba.blogspot.com6. Productivity : It is the another criteria measured in the terms of output per man hour . Technological improvement, better organization & management the development of better methods of production by labour & management ,greater skill by labour are responsible for the increase in productivity .7. Trade Union Bargaining Power : The trade unions play an important role ,generally the stronger & powerful the trade union, the higher wages, As a strike or threat of strike is the most powerful weapon used by them .8. Job Requirements : The more difficult a job is more higher is the wages. As the jobs are graded according to the relative skill ,effort ,responsibility & job condition required .9. Managerial Attitudes : The managerial attitudes plays an imp role like top management desires to improve or maintain morale & to attract high caliber employees to reduce turnover& to provide high living standard .10. Psychological & Social Factors: These determine in a significant measure how hard a person will work for the compensation received or what pressure he will exert for his hike in compensation .Wages as a measure of success in life ,people may feel secure or have an inferiority complex . WAGE CONCEPTSMinimum Wage: must provide not merely for the bare sustenance of life but for thepreservation of the efficiency of the workers by providing some measure of education,medical requirements and amenities. This is the wage established according to theprovisions of the law.Living Wage: It represents a standard of living, which provides not merely for barephysical sustenance but decency, protection against illness, requirements of essentialsocial needs and some insurance against important misfortunes;Fair Wage: The wage, which is decided according to the productive contribution of thework done by him. 108
    • Projectsformba.blogspot.com COMPONENTS OF THE COMPENSATION SYSTEMJobs offered by an organization vary in terms of their values. Job value is ascertained byjob evaluation. Jon evaluation is a systematic method of appraising the value of each jobin relation to other jobs in an organization. We have already discussed the job evaluationmethod of in the previous chapter on job evaluation.Once all the jobs are assigned values, then these are placed in a grade, or say, a rate perjob. These grades are arranged in an hierarchical order starting with lower to higher jobs.Thus, job and salary structure consist of the various salary grades and their differentlevels of single jobs or group of jobs.  Basic Wage/Salary;  Dearness Allowance;  House Rent Allowance;  City Compensatory Allowance;  Conveyance Allowance;  Leave Travel Concession;  Education Subsidy;  Bonus (Profit bonus /Incentive Bonus);  Medical;  Provident Fund;  Pension;  Overtime;  Fringe benefits;  Social security benefits.In case of executives, various reimbursements are also made as part of their salaries.These are:  Company leased accommodation;  Servant salary reimbursement;  Company maintained car;  Driver salary reimbursement;  House maintenance reimbursement;  Children education;  Scholarship to the children;  Electricity, water, gas charges reimbursement;  Insurance premium;  Hospitalization;  Office maintenance at residence;  Household furniture and appliances;  Holiday homes;  Interest free loans for house building & many more. 109
    • Projectsformba.blogspot.comIn short, the main objective of wage and salary administration is to establish and maintainan equitable wage and salary system to obtain, retain, and motivate people to requiredskill in an organization. The whole administration of wage and salary payment is basedupon three principles, namely, external equity, internal equity and individual equity.Job EvaluationIntroductionJob evaluation is the output provided by job analysis. As seen earlier, jobanalysis describes the duties of a job, authority relationships, skills required,conditions of work, and additional relevant information. Job evaluation onthe other hand, uses the information in job analysis to evaluate each job-valuing its components and ascertaining relative job worth. It involves, inother words, a formal and systematic comparison of job relative to another,so that a wage or salary hierarchy results. So it is a process by which job inan organization are evaluated.If job values are not properly studied, it is very likely that jobs would not beproperly priced, i.e., high valued jobs may receive less pay than low valuedjobs. When employee realizes that this is happening, they becomedissatisfied. They may leave the organization, reduce their efforts or perhapsadopt other modes of behavior detrimental to the organization.Definition- “Bureau of labour statistics, USA “Job evaluation is evaluationor rating of jobs to determine their position in job hierarchy. The evaluationmay be achieved through assignment of points or use of some othersystematic method of essential job requirement such as skills, experienceand responsibility”.According to ‘Kimball and Kimball’ “Job evaluation is an effort todetermine the relative value of every job in a plant to determine what the fairbasic wage for a job should be”.According to ‘Wendell French’ “Job evaluation is the process ofdetermining the relative worth of the various jobs within the organization, sothat different wages may be paid to jobs of different worth”. Objectives of Job Evaluation 110
    • Projectsformba.blogspot.com  To secure and maintain complete, accurate and impersonal description of each distinct job;  Provides standard procedure for determining the relative worth of each job  For promotion and transfer  To ensure wages are paid to all qualified employees for like work;  To consider fair and accurate consideration of all employees for advancement and transfer;  To provide information for ‘work organization, employees’ selection, placement, training and numerous other similar problem; Procedure for Job EvaluationStep 1: Analyze & prepare job description- this require a preparation of job discription and also a analysis of job requirement for successive performance.Step 2: Select and prepare job evaluation plan- Means job must be broken into small components i.e it should involve the selection of factors, elements needed for the performance of all jobs for which money is paid, determining their value and preparing return instructions for evaluation.Step 3:Classify Jobs: This Requires grouping for arranging jobs in a correct sequence in terms of value to the firm and relating them to money terms in order to ascertain their relative value.Step 4:Install the programme: This involves explaining it to employees and putting it into operations.Step 5:Maintain the programme: Jobs cannot continue without updating new jobs and job changing in obedience to changing conditions and situations. ADVANTAGES OF JOB EVALUATION 111
    • Projectsformba.blogspot.com a. Job evaluation is a logical and, to some extent, an objective method of ranking jobs relative to one another. It may help in removing inequalities in existing wage structures and in maintaining sound and consistent wage differentials in a plant or industry. b. In case of new jobs, the method often facilitates fitting them into existing wage structure. c. The method may lead to greater uniformity in wage rates, thus simplifying wage administration. d. The method helps in removing grievances, arising out of relative wages; and improves labour management relations and workers morale. e. The information collected in the process of job description and analysis be also used for the improvement of selection, transfer and promotion procedure on basis of comparative job requirements. f. The method replaces many accidentalLIMITATIONS OF JOB EVALUATIONThese are: 1) Though many ways of applying the job evaluation techniques are available, rapid changes in technology and in the supply and demand of particular skills have given rise to the problem of adjustment. These need to be probed. 2) Substantial differences exist between job factors and the factors emphasized in the market. These differences are wider in cases in which the average ay offered by a company is lower than the prevalent in other companies in the same industry or in the same geographical area. 3) A job evaluation frequently favours groups different from those, which are favoured from the market. ‘Kerr and Fisher’ observes, “the jobs which tends to rate high as compared with the market those of janitor, nurse and typist, while craft rates are relatively low. Weaker groups are better served by an evaluation plan than by the market; the former places the emphasis not on force but on equity”. 4) Job factors fluctuate because of changes in production, technology, information system, and division of factors and such other factors. 112
    • Projectsformba.blogspot.com Therefore the evaluation of the job today is made on the basis of job factors and does not reflect the time job factor in future. 5) Job evaluation takes a long time to install, requires specialized technical personnel, and may be costly. 6) A large number of jobs are called ‘red circle jobs’. Some of these may be getting more and other less than the rate determined by job evaluation. JOB EVALUATION METHODS / SYSTEMSThere are four basic, traditional system of job evaluation: (1) The ranking system, (2) The grading or job classification system; (3) The point system; (4) The factor comparison system.The first two systems are popularly known as non-analytical or non-quantitative orsummary systems, because they utilize non-quantitative methods of listing jobs in orderto difficulty and are, therefore, simple. The last two systems are called the analytical orquantitative systems, because they use quantitative techniques in listing the jobs.1) THE RANKING SYSTEM Mechanism: Under this system, all jobs are arranged or in order of their importance from the simplest to the hardest, or in the reverse order, each successive job being higher or lower than the previous job in the sequence. It is not necessary to have job descriptionGenerally speaking, the following five steps are involved in the system:Step 1: Preparation of job description, particularly when the ranking of thejob is done by different individuals and there is a disagreement among them.Step 2: Selection of raters, jobs may be usually ranked by department or inclusters. This eliminates needs for directly comparing factory jobs andclerical jobs. Most organization uses a committee of raters.Step 3: Selection of rates and key jobs, usually a series of key jobs or bench-mark jobs (10 to 20 jobs, which include all major departments andfunctions) are first rated; then the other jobs are roughly compared withthese key job to establish a rough rating. 113
    • Projectsformba.blogspot.comStep 4 : Ranking of all jobs. Each job is than compared in details with othersimilar job to establish its exact rank in the scale. For this each rater must begiven a set of ‘index card’, each of which contains a brief description ofjobs. These jobs are than ranked from ‘lowest to highest’ or from ‘highest tolowest’ are ranked first and than the next highest and next lowest and soforth until all the cards have been ranked.Step 5: Preparation of job classification from the rating: The total ranking isdivided into an appropriate number of groups or classifications, usually 8 to12. All the jobs within a single group or classification receive the same wageor range of rates.Merits of Ranking Method of Job Evaluation:1. The system is simple, easily understood, and easy to explain to employees. Therefore, it is suitable for small organizations with clearly defined jobs.2. It is far less expensive to put into effect than other systems, and requires little effort for maintenance.3. It requires less time, fewer forms and less work, unless it is carried to a detailed point used by company.Demerits: 1. As there is no standard for an analysis of the whole job position different bases of comparison between rates occur. The process is initially based on judgment and tends to be influenced by a variety of personal biases. 2. The system merely produces a a job order and does not indicate yo what extent it is more important than the one below it. 3. Specific job requirements are not normally analysed separately. 2) JOB CLASSIFICATION OR GRADING METHODUnder this system, a number of pre-determined grades or classifications arefirst established by a committee and than the various jobs are assignedwithin each grade or class. Grade descriptions are the result of basic jobinformation which is basically arrived from the job analysis. Afterformulating and studying job description and job specifications, jobs are 114
    • Projectsformba.blogspot.comgrouped into classes or grades which represent different pay levels rangingfrom low to high.Steps:The following 5 steps are generally involved: 1. The preparation of job descriptions, which gives us basic job information usually derived from a job analysis. 2. The preparation of job descriptions, so that different levels or grades of job may be identified. 3. Selection of grades and key jobs. About 10 to 20 jobs are selected, which include all the major department and functions and cover all the grades. 4. Grading the key jobs. Key jobs are assigned to an appropriate grade levels and their relationship to each other studied. 5. Classification of all jobs. Jobs are classified by grade definitions. All the job in the same grade receive the same wage or range of rates. For example, menials may be put into one class, clerks in another, junior officers in other class, and the top executive in high class. Merits: 1. This method is simple to operate and understand, for it does not take much time or require technical help. 2. The use of fully described job classes meets the need for employing systematic criteria in ordering jobs to their importance. Since many workers think of job in, or related to, cluster or groups, this method makes it easier for them to understand rankings. 3. If an organization consists of 500 people holding to different jobs, the jobs might be broken up into perhaps 5 classes, arranged in order of importance from high to low, and described class by class. 4. The grouping of jobs into classifications makes pay determination problems administratively easier to handle. Pay grades are determined for, and assigned to, all the job classifications. 5. It is used in important government and operates efficiently, but it is rarely used in an industry. Demerits 1. Although it represents an advance in accuracy over the ranking method, it still leaves much to be desired much because personal 115
    • Projectsformba.blogspot.com evaluations by executives establish the major classes, and determine into which classes each job should be placed. 2. Since no detailed analysis of a job is done, the judgment in respect of a whole range of jobs may produce an incorrect classification. 3. It is relatively difficult to write a grade description. The system become difficult to operate as the number of job increases. 4. It is difficult to know how much of a job’s rank is influenced by a man on the job. 5. The system is rather rigid and unsuitable for a large organization or for very varied work. 3) THE POINT SYSTEMThis method is the most widely used type of job evaluation type. It requiresa identifying number of compensable factors and than determining degree towhich each of these factor is present in the job. Once the degree to whicheach factor is determined, the corresponding number of points of each factorare added and an overall point value is obtained.Steps : This system requires a detailed examination of the jobs. The Steps inthese method followed are:Step 1: The jobs have to be determined first which are to be evaluated. Theyare usually clustered. The jobs, which require (1) similar activities, (2) thesame workers characteristic or traits and work on the same kind of materials(say wood or metal are placed in the same cluster or family).Step 2: For the purpose, a pre-determined number of factor are arbitrarilyselected by raters. The number of factors used varies a great deal fromcompany to company.The common factors are: Education and training; experience; physical skillsand effort; planning for the supervision of others; external contacts, internalcontacts; confidential information and working conditions.Step 3: The next step is to break down each factors into degrees or levels,and to assign a point value each level or degree.Step 4: Determination of relative values or weighs to assign each factor. Foreach job or cluster of jobs some factors are more important than others. Forexample for executives, “the mental requirements” factor would carry more 116
    • Projectsformba.blogspot.comweight than “physical requirements”. The opposite might be true of “factoryjobs”.Step 5: The next step is to assign money values to points. For this purpose,points are added to give the total value of a job; its value of a job istranslated into terms of money with a pre-determined formula. 4) THE FACTOR COMPARISON METHODUnder this system, jobs are evaluated by means of standard yardstick ofvalue. It entails deciding which jobs have more of compensable factors thanothers. The evaluation committee selects some’ key’ or benchmark jobs forwhich they are clearly understood job description and counterparts in otherorganizations and for which the pay rates are such as agreed upon and areacceptable to both management and table.Steps involved:Step 1: Clear-cut job descriptions are written and job specifications arepreferably in terms of compensable factors. The people specifications aregenerally provided with a set of definitions which have been used in each ofthe compnsable factor selected.Step 2: Selecting of key jobs: Such jobs are those jobs which represent thejob under study; and for which pay is determined to be standard or referencepoints and for which there is no controversy between management and theemployees.Step 3: Ranking of key jobs: Several different members of the jobevaluation committee rank the key job on each of five factors (mentalrequirements, physical requirements, skill requirements and workingconditions).Step 4: Valuing the factors: The basic pay for each ‘key’ job is allocated toeach factor.Step 5: Comparing all job with each jobs: All the other jobs are thancompared with the key jobs, factor by factor, to determine their relativeimportance and position in the scale of jobs.Step 6: Establishing the monetary units value for all jobs: monetary valuesare assigned to each factory of every key job.Merits: 117
    • Projectsformba.blogspot.com 1. It is a systematic, quantifiable method for which detailed step by step instructions are available. 2. Jobs are compared to other job to determine a relative value. 3. It is a fairly easy system to explain to employees 4. There are no limits to the value, which may be assigned to each factor. 5. The plan does not require a translation from points to money. 6. The reliability and validity of the system are greater than the same statistical measures obtained from group standardized job analysis plans. Demerits: 1. It is costly to install, and somewhat difficult to operate for any one who is not acquainted with the general nature of the job evaluation techniques. 2. Wage level change from time to time, and there minor inconsistencies may be brings in order to bring all the job in alignment. 3. Money rates, when used as a basis of rating, tend to influence the actual rate more than the abstract rate. 4. The system is complex and cannot be explained to, and understood by every day non-supervisory organizational employees. Once a job is evaluated, or say ranked, the next step is to convert this measurement in to salary bracket. In other words, it implies simply breaking up the total salary structure in to sun divisions corresponding to the number of classes of job arrived at through job evaluation. However, several other factors also need to be looked in to before a right type of salary structure is evolved. Establishing Pay EquityPeople have no basic or instinctive need for money, a commodity that isimportant only if it can satisfy other needs. Organizations frequentlyoverestimate the value workers place on monetary rewards. The equitytheories can help explain employees’ reaction to compensation system.EQUITY:Employees wanted to be treated fairly. 118
    • Projectsformba.blogspot.comEquity is the balance between the inputs an individual brings to a job and theoutcome he or she receives from the it. An employee input includesexperience, education, special skills, effort and time worked. Outcomesinclude pay benefits, achievement, recognition and any other rewards.Individuals use a complex process to determine what is fair. Inputs arecontinually compared with outcomes-the individual’s special skills and effortsare weighed against the pay and recognitions given by the organization.However inputs and outputs are in different units, and are hard to compare toeach other directly. However, inputs and outcomes are in different units, and are hard to compare to each other directly. Thus, equity theory suggests that individuals determine whether they are being fairly treated by comparing their own input/outcome ratio to the input/outcome ratio of someone else. This other person may be in the same job or in other jobs, in the company or outside the company, in the same industry or outside the industry sense of inequity arises when the comparison process uncovers an imbalance between inputs and outcomes of the employees compared with others. Equity Theory My rewards (outcomes) = Other’s Rewards = Equity My contributions (Inputs) Other’s Contribution My rewards < Other’s Rewards = Inequity My contributions Other’s Contribution (under-reward) Action to Restore Equity from Under-Reward Equity: 1. Person could ask for a raise. 2. Persons could reduce contribution (work harder). 3. Person could try to get other to increase contribution (work harder). 4. Last resorts: Quit or choose another comparison other. My rewards > Other’s Rewards = Inequity My contributions Other’s Contribution (over-reward) 119
    • Projectsformba.blogspot.comAction to Restore Equity from Over-Reward Equity 1. Person could increase contributions (work harder or longer, cultivate additional skills). 2. Persons could ask for a pay cut. 3. Person could attempt to get other a raise. 4. Person could attempt to get other to reduce his or her contribution. 5. Last resorts: Quit the job or choose another comparison other. DESIGNING EQUITABLE COMPENSATION SYSTEMInternal Equity:It refers to the relationships among jobs within a single organization.Internal equity exists when the pay differentials between different jobswithin the organization and perceived as fair - neither too large nor toosmall.External Equity:It refers to the comparisons of similar jobs in different organizations (forexample, the pay received by presidents of various electrical manufacturingfirms.Individual Equity:It refers to comparisons among individuals in the same job with the sameorganizationThere are accepted procedures for establishing internal, external andindividual with an organization. METHODS FOR ESTABLISHING INTERNAL EQUITY 1. Job Evaluation methods:The major purpose of job evaluation is to determine the relative worth of thejobs within an organization. A systematic comparison can define an internal 120
    • Projectsformba.blogspot.comjob hierarchy that ranks jobs in terms of their relative contribution to theorganizational objectives.The five most frequently used job evaluation methods are 1. Job ranking 2. Job grading or classification 3. The point method 4. Factor comparison(Already explained) Establishing External EquityMethods of Establishing External Equity: 1. Wage and Salary surveys: - to establish a competitively priced wage structure, organizations typically rely on wage and salary survey data collected from other organizations. The survey process involves identifying the jobs to be included, selecting the organizations to be surveyed, and then actually collecting the data. The data then must be interpreted so that wage rates can be set within the context of the organization’s pay policy. 2. Identifying Key Jobs: - in practice, employers do not seek market data on all jobs. Instead, they gather survey information only for key jobs, which generally have the following characteristics: - a.) The job content is relatively stable over time. b.) The jobs occur frequently, both in the organization and in the surveyed organizations. c.) The jobs can be defined quite precisely. d.) The jobs are performed in a similar manner in most organizations. Key jobs should span the range of position to be included in the Wage structure. For example, it would not be desirable to identify Only entry-level positions as key jobs. Jobs at the middle and upper levels also need to be included. Moreover, jobs need to be carefully defined. 121
    • Projectsformba.blogspot.com 3. Selecting Organizations to Survey:-Identifying organizations to survey can be important. Organizations to covered in a wage survey typically include those that  Employ workers with the same skills.  Are within geographic distances that would make employees willing to commute or relocate, and  Are in the same or similar industry.However, the considerations that go into selecting a set of organizations tobe surveyed vary for different jobs. 4. Collecting Data: - rather than running their own wage survey, many organizations obtain the results of surveys undertaken by industry associations, professional associations, government agencies, or consulting firms. Numerous annual surveys cover a wide choice of job families and industries. At local levels, chapters of Society for Human Resource Management or Chambers of Commerce often undertake surveys for their membership. For a company that wants to collect and analyze its own data, it is important to obtain information on the characteristics of the responding organization, as well as on both direct and indirect compensation. The organizational information is needed to judge the comparability of the competitor in terms of size, products, and financial condition. It is also crucial to know the types and amounts of benefits offered as well as incentives and hourly pay. Of the three summary measures, the median is the most useful in setting wage ranges. The mean can easily become distorted if a few workers are paid at extreme rates. The median is not the subject to such distortion. 5. Pay Level Policy: - once an organization has completed an internal job evaluation and obtained wage survey data, it needs to translate this information into pay rates for each class of jobs. This process involves appropriate interpretation of survey results, the merging of the job evaluation with the survey data, and consideration of the organization’s pay level policy. Establishing Individual EquityAs mentioned earlier, jobs evaluated as having nearly the same value areusually combined into a single wage grade. A single wage may be selectedfor each grade and paid to every person whose job falls in the grade. More 122
    • Projectsformba.blogspot.comcommonly, however, a range of pay rates is set for each grade. When a rangeis set, the issue of individual equity becomes salient, and the organizationmust have a system for determining where in the range the compensation ofeach employee should be.Steps in designing Individual Equity:  Designing pay ranges: The range associated with a pay grade sets the upper and lower bonds of possible compensation for individuals whose jobs fall in the grade.  Setting Individual pay: Individual equity requires that rewards to employees be allocated fairly across individuals performing the same jobs. The two commonly used approaches to determine how workers are placed and progress through the pay ranges are seniority and merit. A newer method bases increments on the number of skills mastered.In short, equity concern centers on setting the pay of individuals within awage grade. Typical bases for this decision include seniority, merit, andskill. Merit pay system has the potential to motivate high performance, butthey are difficult to administer in a way that employees perceive as fair. EMPLOYEES BENEFITS & SERVICESManagement is concerned with attracting & keeping employees, whoseperformance meets at least minimum levels of acceptability ,& at keepingabsenteeism & turnover to tolerable levels .The provision of benefits &services are important in maintaining the employees & reducing theturnover & absenteeism low .The financial incentives are paid to specific employees whose performancewhose work is above standard. On the other hand the employees benefits &services are provided to all the employees based on their membership in theorganization.According to the Employee Federation of India has defined FringeBenefits“Fringe Benefits includes payments for non working time ,profits & bonus,legally sanctioned payments on social security schemes ,worker’scompensation ,welfare & contribution made by the workers under such 123
    • Projectsformba.blogspot.comvoluntary schemes for the post retirement ,medical ,educational ,cultural &recreational needs of the workmen.”According to the Cockman “ Those benefits which are provided by theemployer to or for the benefit of the employees & which are not in the formof wages ,salaries & time related payements.” Features of Fringe Benefits 1) Wages are directly related to the work done & paid regularly usually weekly monthly & benefits which a worker enjoys in addition to the wages or salary he receives. 2) Benefits are not given to workers for any specific jobs they have performed but are offered to them to stimulate their interest in their work & to make their job more attractive & productive for them. 3) Fringe represents a labour cost for the employer , it is basically an expenditure incurred 4) Fringe is never a direct reward geared to the output, effort for merit of an employees not on the basis of hard work or long hours of work but on the basis of length of services ,his sickness ,sex the hazard of life . 5) The fringe benefit is enjoyed by all . 6) Fringe benefit must constitute a positive cost to the employer & should be incurred to finance an employee benefit. OBJECTIVES OF FRINGE BENEFITS  To create & improve sound industrial relations.  To Boost up employee morale  To motivate the employees by identifying & satisfying their unsatisfied needs.  To provide qualitative work environment  To protect health & safety of the employees  To promote employees welfare by providing welfare measures like recreation facilities. COVERAGE/SCOPE OF BENEFITS1) Employee Security Payments: 124
    • Projectsformba.blogspot.com (a) Employers Contribution stipulated in legal enactment: old age, survivor, disability health (b) Payments under the workmen’s compensation Act. (c) Supplemental unemployment benefits (d) Accident insurance (e) Pensions (f) Contribution to the saving plans & health & welfare benefits.2) Payment for the time not worked: (a) Rest Period: Among the office jobs the breaks popularly known as rest break or coffee break are allowed during the day to the workers (b) Holidays: Holidays which includes Christmas ,New Years, Holi ,Diwali on which the employees have to be paid & they do not have to work. (c) Vacation : Paid vacations vary from 15 days to 1month in a year . (d) Sick Leave : This is provided to the employees when is out on illness (e) Severance Pay : This provides one time payment to an employee when he is terminated (f) Leave of Absence: These are generally educational leave provided to managers or management trainees during training period . (g) Pension Programmes (h) Insurance( C) Bonus & Awards :These consist of financial amenities & advantagesas holidays ,over time & shift premium ,attendance bonus, Diwali bonusetc. EMPLOYEES SERVICESIn addition to the above fringe benefits, organization provides a wealth ofservice that employees find desirable .These services are usually provided bythe organization at no cost to the employees .These services are provided atthe discretion of the management & are generally are concern to tradeunion. 125
    • Projectsformba.blogspot.comThese services mainly include: 1) Services related to the type of work performed, including subsidies for the purchase & upkeep clothing, uniforms 2) Eating facilities cafeteria, lunch rooms, canteens, lunch rooms 3) Transportation facilities including parking & bus services 4) Childcare facilities, comprising nurseries, day care centers for children. 5) Housing services including company owned housing projects. 6) Financial & legal services including sponsoring of loan funds. 7) Recreational social & cultural programmes including athletics, beauty, social clubs , parties ,picnics . 8) Educational services 9) Medical services 10)FlexitimePOTENTIAL APPRAISALEvaluating what a person can perform or do is called ‘potential appraisal orevaluation.’ Potential refers to the abilities present but not currently utilized. It is alatent capacity in a person to discharge a responsibility. “People are like icebergs. What you see above the surface(performance) is only a small part. A large part of the attributes neededto perform excellently in future job, which I call potential is notimmediately visible. It is hidden below surface.”Potential represents latent capacities and qualities in a person, whichmanifest while performing the job. WHY POTENTIAL EVALUATION?The objectives of potential evaluation are to: 1. 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. 2. Assist the organization to allocate jobs among employees as per their capabilities so that organizational responsibilities are discharged effectively. 126
    • Projectsformba.blogspot.comA potential employee is characterized by the following attributes: 1. Ability to foresee future opportunities. 2. Consistency in approach and performance. 3. Responsive to condition whatever comes in the way. 4. Person with high level of integrity. 5. Broader vision and micro perception. HOW TO EVALUATE EMPLOYEE POTENTIAL?The potential of employees can be evaluated by following the followingsteps: 1. Determination of role dimension: the process of potential evaluation starts with determining the role dimension of the employee whose potential is to be evaluated. Job description and job specification help determine the role dimensions. The former provides information about the responsibilities involved in a job, while the later provides information on attributes the jobholder should possess. 2. Determination of mechanism: having determined the role dimension a mechanism to evaluate these attributes in an employee is evolved. Obviously, the mechanism should be appropriate to appraise the potential of employee by a designated appraiser. 3. Linking potential with other elements: in order to evaluate potential in a meaningful manner, other elements of human recourse management such as feedback, counseling, training, job rotation, etc. should also be lined with it. PAY FOR PERFORMANCEPay for performance system involves rewarding the employeesaccording to their performance, or results achieved or contribution toorganization’s performance as individuals or as a part of a group. Itinvolves a shift in focus from remuneration models based on the worthof jobs and employee skills to their performance.Designing a performance linked reward systems is conditioned by a varietyof factors such as the nature of business, type of technology, the attitude ofunions and human resource management strategies of the organization. 127
    • Projectsformba.blogspot.comThis system reduces labour cost, result in increase in real wages andmotivate performance. They provide a method of absorbing cost escalationon account of pay increases and thus help in sustaining competitiveness ofthe organization. Forms and Choice of Performance Linked Reward SystemThere are several types of Performance linked reward schemes. Generallythese are designed to share with or distribute to employees as individualsgroups or a collectivity productivity gains, profit improvement or financialresults of enterprise performance. Such schemes fall into the broadcategories: 1. Schemes based on individual or small group performance including piece rates, traditional merit pay and sales commission. 2. Incentive schemes which may relate pay to profits on the basis of pre determined formula. 3. Bonus schemes based on contribution to productivity and profitability according to a predetermined formula with gains sometimes distributed among the individual employees on the basis of merit rating. 4. Productivity bargaining. 5. Employee strike options plan (ESOP) 6. Competency based pay.1. Merit Incentive PayThe merit incentive pay scheme provides another method of recognizing andrewarding differential performance. This method could particularly besuitable for office staff. The scheme essentially involves the following steps: a) The determination of result oriented merit rating procedures, b) The identification of job and their relative importance c) The formulation of scale of reward and d) The communication of the basis of monetary reward. Under a system of merit increments, there is no prompt relationshipbetween reward and effort. The quantum of reward at a point of timewill be considered inadequate.Additional cost on the form of enhanced allowances is built for the companyon permanent basis. Employees continue to benefit from their bestperformance even if it remains below standard in the future. Employees getting merit awards cannot visualize a proportionaterelationship between their performance and rewards. The basis of 128
    • Projectsformba.blogspot.comdetermining the quantum cannot be explained to employees who are notgiven such awards. This may evoke jealousy and friction and may thusjeopardize cooperation and goodwill.2.Incentive schemes Output based incentive scheme are appropriate where tasks are repetitiveand measurableThese involve the following steps: 1. Selecting the objectives 2. Determining the parameters of performance in accordance with the objective 3. Determining the norms or base values or benchmark values for each parameter 4. Determining performance reward relationship 5. Fixing the relative importance of the selected parameters that is, their weightings. 6. Designing information and procedure formats. 7. Determining the maximum payable incentive amount (incentive opportunity) and payment period. 8. Formulating a communication and review scheme These are, however, not suitable for technology and service activities, which require information sharing problem solving and team work. Productivity gain or profit sharing or employee stock option plan (ESOP) may be suitable types for such activities 3. Group incentive and productivity gain sharing. Under the productivity gain sharing schemes productivity gains are shared in accordance to an agreed pre-determined formula. Profit sharing gives a share of profit. Sometimes, the quantum of bonus is determined on the basis of profit as well as productivity improvements according to pre determined benchmark value for each of them. Productivity bargaining Productivity bargaining can provide yet another method of improving productivity and linking wage increase to such improvements. Productivity bargaining, however dose not mean an incentive scheme or 129
    • Projectsformba.blogspot.com wage increase in return for assurance and promise from union in return for achieving production targets. This method implies: a) A detailed analysis of the firms operations b) The identification of cost reduction possibilities c) Estimation of savings in cost d) The development of a system of indexing wages increase with cost reduction actually realized over time. The climate for productivity bargaining has never been more favorable than now it is for managements to take initiative and build this approach in their collective bargaining relationship with unions. Long-term incentive (ESOP) Long term incentive in the form of employee stock options schemes are operated both to improve long-term incentives and to reduce fixed cost. ESOP envisages employee participation in and ownership of company equity. This planis intended to provide an incentive to the employees to improve the all roundperformance and growth of the company and share its prosperity. The plan usuallyinvolves allotments of equity shares according to laid down procedure and subject togovernmental regulations, laws and rules. The employees benefit in the form of enhancedmarket value of his share and capital gains, which in turn depend on company andemployee performance .several software and high tech organization such as infosys haveconceived and designed such plans .Competency based payThe competency is a critical determinant of performance. Therefore there isan increasing interest in offering monetary incentive for acquiringcompetencies required for higher performance on the present job or the nextjob. Such competency may for instance include values, attitude andbehavioral characteristics, which influence performance. In designing a performance linked reward scheme, choice of anappropriate scheme should be considered as critical. The choice will bedetermined by a Varity of factors such as nature of the organization, thenature of technology, the nature of profits the nature of markets, the human 130
    • Projectsformba.blogspot.comresource strategy and business objective. For reviewing an incentive schemeand designing an appropriate scheme. ISSUES AND TRENDS 1. Level of education 2. Trade union 3. Organization culture 4. Package of monetary and non monetary incentives 5. Rewarding good performance 6. Performance pay and performance management 7. Caveats Questions for Discussions 1. What do you mean by Performance Appraisal? Discuss the three purposes Performance Appraisal can meet. 2. Discuss the various steps involved in Performance Appraisal system? 3. “Performance Appraisal is not merely for appraisal but is for accomplishment and improvement of performance”. Discuss. 4. Discuss a 360-degree appraisal with its merits and demerits. 131
    • Projectsformba.blogspot.com 5. What do you mean by fringe benefits? What is the rationale behind offering benefits to the employees? 6. Appreciate the need for and significance of Fringe Benefits. 7. What is meant by remuneration /compensation? What are the basic objectives and principles of wage and salary administration? 8. What do you mean by wage structure? Outline the components of wage and salary administration. 9. Explain wage determination process in detail. 10.What is Job Evaluation? What are the objectives of Job Evaluation? 11.Discuss the advantages of Job Evaluation? Does job evaluation have any limitations? What are these? 12.Briefly explain the various methods of Job Evaluation. 13.“Job Evaluation is the ranking of job not the job holder.” Discuss. 14.What are the three elements of compensation equity? Why is each important? 15.What does equity theory says about the way individuals evaluate and respond to their pay level? 132