WHO’S IN THE ROOM?
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What is HRM and why it
PART I (BRAINSTORMING)
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Personnel Aspects Of A Manager’s Job
Conducting job analyses (determining the nature of each employee’s job)
Planning labor needs and recruiting job candidates
Selecting job candidates
Orienting and training new employees
Managing wages and salaries (compensating employees)
Providing incentives and benefits
Communicating (interviewing, counseling, disciplining)
Training and developing managers
Building employee commitment
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Hire the wrong person for the job
Experience high turnover
Have your people not doing their best
Waste time with useless interviews
Have your company in court because of discriminatory actions
Have your company cited by OSHA for unsafe practices
Have some employees think their salaries are unfair and inequitable relative to others in the
Allow a lack of training to undermine your department’s effectiveness
Commit any unfair labor practices
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“Human resource management is the
function performed in an
organization that facilitates the most
effective use of people(employees) to
achieve organizational and
Ivancevich and Glueck
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Basic HR Concept
◦ The bottom line of managing
HR creates value by engaging
in activities that produce
the employee behaviors
the company needs to
achieve its strategic
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History and evolution of HRM (main
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Scientific management approach (mid 1900s)
Fredrick Taylor- father of scientific
Study of motion and fatigue
‘one-best-way’ to accomplish the task
Workers were solely motivated through money
Workers to maxamise production in order to
satisfy their one work related need- money
Failed to bring behavioural changes and
increase in productivity
Human relations approach
The hawthorne studies – 1930-40’s
Growing strength of unions
Social and psychological factors also affected
Relations and respect >> High Productivity
Why human relations approach Failed??
Did not recognize individual differences
Did not recognize need for job structure
Failed to recognize other factors that could
influence employee satisfaction and
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Strategic Human Resource Management
The linking of HRM with strategic goals and
objectives in order to improve business
performance and develop organizational
cultures that foster innovation and flexibility.
Formulating and executing HR systems—HR
policies and activities—that produce the
employee competencies and behaviors the
company needs to achieve its strategic aims.
Human Resources Approach (1970s)
Employees are assets for organization
Policies, programmes and practices - help in
work and personal development
Organization goal & needs of employee are
capable of existing in harmony
should create contributive work environment
to reap maximum benefit
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HR must take responsibility for:
◦ Clearly defining how management should be treating employees.
◦ Making sure employees have the mechanisms required to contest unfair practices.
◦ Represent the interests of employees within the framework of its primary obligation to senior
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Challenges of HRM
Individuals differ from one another
Customization of stimulation and motivation
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Functions of HRMFunctions of HRM
Planning Organizing Staffing Directing Controlling
Employment HR development Compensation
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Functions of HRMPlanning
•it is an ongoing
accomplish that .
needs of employee
& to predict the
future changes are
part of planning
•It is establishment
structure .Its focus
is on division
control of task . In
this function HR
manager assign the
authority to job
•It is filling the
and keeping it filled
. Recruiting hiring
transferring are the
specific activity of
•it is process of
utilization of human
contribution . It
level of department
•It is establishing
standard based on
and comparing the
Emerging role or HRM
Value of Human Resource
Human Resource Accounting – It is
measurement of the cost and value of people
for an organization
“It is the competence and attitude of the human
resource that can make or break a business.”
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HR and Competitive Advantage
◦ Any factors that allow an organization to differentiate its product or service from those of its
competitors to increase market share.
◦ Superior human resources are an important source of competitive advantage
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Achieving Strategic Fit
◦ Emphasizes the “fit” point of view that all of the firm’s activities must be tailored to or fit its strategy, by
ensuring that the firm’s functional strategies support its corporate and competitive strategies.
Gary Hamel and C. K. Prahalad
◦ Argue for “stretch” in leveraging resources—supplementing what you have and doing more with what
you have—can be more important than just fitting the strategic plan to current resources.
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Human resource accounting
• Human resource accounting is
measurement of the cost and value of
the people for an organization.COST
• Human resource accounting helps
management to value its human
resource and use them with discretion
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[(Number of days absent in month) ÷ (Average number of employees during mo.) × (number of
workdays)] × 100
Cost per Hire
(Advertising + Agency Fees + Employee Referrals + Travel cost of applicants and staff + Relocation costs +
Recruiter pay and benefits) ÷ Number of Hires
Health Care Costs per Employee
Total cost of health care ÷ Total Employees
HR Expense Factor
HR expense ÷ Total operating expense
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HR Metrics (cont’d)
Human Capital ROI
Revenue − (Operating Expense − [Compensation cost + Benefit cost]) ÷ (Compensation cost + Benefit cost)
Human Capital Value Added
Revenue − (Operating Expense − ([Compensation cost + Benefit Cost]) ÷ Total Number of FTE
Revenue ÷ Total Number of FTE
Time to fill
Total days elapsed to fill requisitions ÷ Number hired
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HR Metrics (cont’d)
Training Investment Factor
Total training cost ÷ Headcount
Cost to terminate + Cost per hire + Vacancy Cost + Learning curve loss
[Number of separations during month ÷ Average number of employees during month] × 100
Workers’ Compensation Cost per Employee
Total WC cost for Year ÷ Average number of employees
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Measuring HR’s Contribution
The HR Scorecard
◦ Shows the quantitative standards, or “metrics” the firm uses to measure HR activities.
◦ Measures the employee behaviors resulting from these activities.
◦ Measures the strategically relevant organizational outcomes of those employee
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Creating a Strategy-oriented HR System
Components of the HR process
◦ HR professionals who have strategic and other skills
◦ HR policies and activities that comprise the HR system itself
◦ Employee behaviors and competencies that the company’s strategy requires.
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The High-Performance Work System
High-performance work system (HPWS) practices.
◦ High-involvement employee practices (such as job enrichment and team-based organizations),
◦ High commitment work practices (such as improved employee development, communications, and
◦ Flexible work assignments.
◦ Other practices include those that foster skilled workforces and expanded opportunities to use those
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HR and Corporate Ethics
◦ Make sure employees know about corporate ethics policies
◦ Train employees and supervisors on how to act ethically
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HR and Technology
Benefits of technological applications for HR
Intranet-based employee portals through which employees can self-service HR transactions.
The availability of centralized call centers staffed with HR specialists.
Increased efficiency of HR operations.
The development of data warehouses of HR-related information.
The ability to outsource HR activities to specialist service providers.
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Why structure ???
What structure signifies?
Leads to confusion
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Mechanistic Vs organic organization
Employees are tied by rules &
High degree of centralization
Suitable for operating in static
Decision-making is done by
Ex: Public sector in the pre-
Employees are not tied by rules &
Decentralized style of management
Suitable for operating in dynamic
Decision-making is done by junior
level employees also
Ex: Marico`s Saffola
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Tall Vs Flat structureCMD
PM PM PM PM
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RESPONSIBILITY, AUTHORITY & ACCOUNTABILITY
It is the obligation of a manager to carry out the duties assigned to
It refers to the right to give orders and the power to exact obedience
from others in the process of discharging responsibility.
The employee's answerability on using the authority in discharging
the responsibility is termed accountability.
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HR and Authority
◦ The right to make decisions, direct others’ work, and give orders.
◦ The authority exerted by an HR manager by virtue of others’ knowledge that he or she has access to top
◦ The authority exerted by an HR manager by directing the activities of the people in his or her own
department and in service areas.
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Line and Staff Aspects of HRM
◦ A manager who is authorized to direct the work of subordinates and is responsible for accomplishing
the organization’s tasks.
◦ A manager who assists and advises line managers.
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LINE AND STAFF FUNCTIONS
Departments or employees of a firm that
perform core activities
Contributes directly to the business of the firm
Ex: Manufacturing and Marketing departments
Departments or employees of a firm that
perform a support function
Contributes indirectly to the business of the
Ex: HR and Finance departments
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Functions of the HR Manager
A line function
◦ The HR manager directs the activities of the people in his or her own department and in related service
areas (like the plant cafeteria).
A coordinative function
◦ HR managers also coordinate personnel activities, a duty often referred to as functional control.
Staff (assist and advise) functions
◦ Assisting and advising line managers is the heart of the HR manager’s job.
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What is HRP
Process of anticipating and making provision for the
movement of people into, within, and out of an
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Human resource planning is a
process by which an organization
◦ it has the right number and kinds of
◦ at the right place
◦ at the right time
◦ capable of effectively and efficiently
completing those tasks that will help
the organization achieve its overall
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Objectives of HRP
• Right time
• Right Number
• Right skills
To utilize • Right Cost
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Identify future human
Compare with the
current HR inventory
Determine the redundant
Determine the numbers,
levels & criticality of vacancies
Analyze the cost & time involved
in managing the demand
Analyze the cost & time
required for managing surplus
Choose the resources &
methods of recruitment
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Assessing current human resources and making
HR inventory – HRIS
Generate a fairly accurate picture existing situation
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Job Analysis is a systematic exploration of the activities
within a job.
It defines and documents the duties, responsibilities and
accountabilities of a job and the conditions under which a
job is performed.
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Outputs of job analysis
◦ Written statement of what
jobholder does, how it is done,
under what conditions and why.
◦ Common format: title; duties;
environmental conditions; authority
◦ Used to describe the job to
applicants, to guide new employees,
and to evaluate employees.
◦ States minimum acceptable qualifications.
◦ Used to select employees who have the
◦ Specify relative value of each job in the
◦ Used to design equitable compensation
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Types of Information Collected
Machines, tools, equipment, and work aids
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Uses of Job Analysis Information
Recruitment and Selection
Discovering Unassigned Duties
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Job Analysis Methods
◦ Observation method – job analyst watches employees directly or reviews film of workers on the job.
◦ Individual interview method – a team of job incumbents is selected and extensively interviewed.
◦ Group interview method – a number of job incumbents are interviewed simultaneously.
◦ Structured questionnaire method – workers complete a specifically designed questionnaire.
◦ Technical conference method – uses supervisors with an extensive knowledge of the job.
◦ Diary method – job incumbents record their daily activities.
◦ The position analysis questionnaire (PAQ)
◦ The Department of Labor (DOL) procedure
◦ Functional job analysis: Takes into account the extent to which instructions, reasoning, judgment, and
mathematical and verbal ability are necessary for performing job tasks.
The best results are usually achieved with some combination of methods.
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Compare future needs with current availabity
Analyze companies change plan
Forecasting methods used are Time Series Analysis, Regression Analysis and Productivity Ratios
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Linking Organizational Strategy to Human
Ensures that people are available to meet the requirements set during strategic planning.
Assessing current human resources
◦ A human resources inventory report summarizes information on current
workers and their skills.
Human Resource Information Systems
◦ HRIS are increasingly popular computerized databases that contain important
information about employees.
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Assessing current human resources
◦ Succession planning
◦ includes the development of replacement charts
◦ portray middle-to-upper level management positions that may become
vacant in the near future
◦ lists information about individuals who might qualify to fill the positions
Determining the Demand for Labor
◦ A human resource inventory can be developed to project year-
by-year estimates of future HRM needs for every significant job
level and type.
◦ Forecasts must be made of the need for specific knowledge,
skills and abilities.?
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Matching the inventory with future requirements
If the current inventory exceeds the future requirements
Natural attrition cannot bring down resource to match
What to consider then????
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Matching Labor Demand and Supply
◦ Employment planning compares forecasts for demand and supply of workers.
◦ Special attention should be paid to current and future shortages and
◦ Recruitment or downsizing may be used to reduce supply and balance
◦ Rightsizing involves linking staffing levels to organizational goals.
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Options for Reducing a Surplus
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Options for Avoiding a Shortage
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The Recruitment and Selection Process
1. Decide what positions you’ll have to fill through personnel planning and
2. Build a pool of candidates for these jobs by recruiting internal or external
3. Have candidates complete application forms and perhaps undergo an initial
4. Use selection techniques like tests, background investigations, and physical
exams to identify viable candidates.
5. Decide who to make an offer to, by having the supervisor and perhaps others
on the team interview the candidates.
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Steps in Recruitment and Selection Process
The recruitment and selection process is a series of hurdles aimed at
selecting the best candidate for the job.
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Recruiting Human Resources
The role of human resource recruitment is to build a supply of potential new hires that the
organization can draw on if the need arises.
Recruiting: any activity carried on by the organization with the primary purpose of identifying
and attracting potential employees.
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• Image advertising, such
as in this campaign to
recruit nurses, promotes
a whole profession or
organization as opposed
to a specific job
• This ad is designed to
create a positive
impression of the
profession, which is now
facing a shortage of
Recruitment Sources: Internal Sources
Job Posting: the process of communicating information about a job vacancy:
◦ On company bulletin boards
◦ In employee publications
◦ On corporate intranets
◦ Anywhere else the organization communicates with employees
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Recruiter Characteristics and Behavior
True = A False = B
Applicants respond more positively when the recruiter is an HR
specialist than line managers or incumbents.
Applicants respond positively to recruiters whom are warm and
Personnel policies are more important than the recruiter when
deciding whether or not to take a job.
Realistic job previews should highlight the positive characteristics of
the job rather than the negative.
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Enhancing the Recruiter’s Impact
Recruiters should provide timely feedback.
Recruiters should avoid offensive behavior.
They should avoid behaving in ways that might convey the wrong impression about the
The organization can recruit with teams rather than individual recruiters.
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Measuring Recruiting Effectiveness
What to measure and how to measure
◦ How many qualified applicants were attracted from each recruitment source?
◦ Assessing both the quantity and the quality of the applicants produced by a source.
High performance recruiting
◦ Applying best-practices management techniques to recruiting.
◦ Using a benchmarks-oriented approach to analyzing and measuring the effectiveness of recruiting efforts such as employee
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Evaluating the Quality of a Source
A ratio that expresses the percentage of
applicants who successfully move from one stage
of the recruitment and selection process to the
By comparing the yield ratios of different
recruitment sources, we can determine which
source is the best or most efficient for the type of
COST PER HIRE
Find the cost of using a particular recruitment
source for a particular type of vacancy.
Divide that cost by the number of people hired to
fill that type of vacancy.
A low cost per hire means that the recruitment
source is efficient.
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Results of a Hypothetical
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Recruiting Yield Pyramid
Recruiting yield pyramid
– The historical arithmetic relationships between recruitment leads
and invitees, invitees and interviews, interviews and offers made,
and offers made and offers accepted.
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Developing and Using Application Forms
◦ The form that provides information on education, prior work record, and skills.
Uses of information from applications
◦ Judgments about the applicant’s educational and experience qualifications
◦ Conclusions about the applicant’s previous progress and growth
◦ Indications of the applicant’s employment stability
◦ Predictions about which candidate is likely to succeed on the job
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Personnel Selection: the process through which organizations
make decisions about who will or will not be allowed to join
Selection begins with the candidates identified through
It attempts to reduce their number to the individuals best
qualified to perform available jobs.
It ends with the selected individuals placed in jobs with the
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Figure 6.1: Steps in the Selection Process
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Why Careful Selection is Important
The importance of selecting the right people
◦ Organizational performance always depends in part on subordinates having the right skills and
◦ Recruiting and hiring employees is costly.
◦ The legal or negative implications of incompetent hiring
◦ EEO laws and court decisions related to nondiscriminatory selection procedures
◦ The liability of negligent hiring of workers with questionable backgrounds
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A Strategic Approach
to Personnel Selection
Organizations should create a selection process in support of its job descriptions.
The selection process should be set up in a way that it lets the organization identify people
who have the necessary KASOs.
This kind of strategic approach to selection requires ways to measure the effectiveness of the
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Criteria for Measuring the Effectiveness of Selection Tools and
The method provides reliable information.
The method provides valid information.
The information can be generalized to apply to the
The method offers high utility.
The selection criteria are legal.
How Organizations Select Employees
Process of arriving at a selection
decision by eliminating some
candidates at each stage of the
Process of arriving at a selection
decision in which a very high
score on one type of
assessment can make up for a
low score on another.
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Communicating the Decision
When a candidate has been selected, the organization should
communicate the the offer to the candidate. The offer should
◦ Job responsibilities
◦ Work schedule
◦ Rate of pay
◦ Starting date
◦ Other relevant details
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◦ A procedure for providing new employees with basic background information about the organization.
◦ Information on the benefits
◦ Personnel policies
◦ The daily routine
◦ The Organization’s structure, system and operations
◦ Safety measures and regulations
◦ Facilities tour
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Orienting Employees (cont’d)
A successful orientation should accomplish four things for new employees:
◦ Make them feel welcome and at ease.
◦ Help them understand the organization in a broad sense.
◦ Make clear to them what is expected in terms of work and behavior.
◦ Help them begin the process of becoming socialized into the firm’s ways of acting and doing things.
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Performance management: the process through which managers ensure that employees’
activities and outputs contribute to the organization’s goals.
This process requires:
◦ Knowing what activities and outputs are desired
◦ Observing whether they occur
◦ Providing feedback to help employees meet expectations
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Stages of the Performance Management
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Comparing Performance Appraisal and
◦ Evaluating an employee’s current and/or past performance relative to his or her performance standards.
◦ The process employers use to make sure employees are working toward organizational goals.
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Purposes of Performance Management
Strategic Purpose – means effective performance management
helps the organization achieve its business objectives.
Administrative Purpose – refers to the ways in which organizations
use the system to provide information for day-to-day decisions
about salary, benefits, and recognition programs.
Developmental Purpose – means that it serves as a basis for
developing employees’ knowledge and skills.
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Performance Appraisal Roles
◦ Usually do the actual appraising.
◦ Must be familiar with basic appraisal techniques.
◦ Must understand and avoid problems that can cripple appraisals.
◦ Must know how to conduct appraisals fairly.
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Performance Appraisal Roles (cont’d)
◦ Serves a policy-making and advisory role.
◦ Provides advice and assistance regarding the appraisal tool to use.
◦ Prepares forms and procedures and insists that all departments use them.
◦ Responsible for training supervisors to improve their appraisal skills.
◦ Responsible for monitoring the system to ensure that appraisal formats and criteria comply with EEO
laws and are up to date.
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The Training Process
◦ The process of teaching new employees the basic skills they need to perform their jobs.
Training and Development Process
1. Needs analysis: Identify job performance skills needed, assess prospective trainees skills, and
2. Instructional design: Produce the training program content, including workbooks, exercises, and
3. Validation: Presenting (trying out) the training to a small representative audience.
4. Implement the program: Actually training the targeted employee group.
5. Evaluation: Assesses the program’s successes or failures.
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On-job Training (OJT)
◦ Having a person learn a job by actually doing the job. i.e. by Coaching or understudy, Job rotation,
◦ A structured process by which people become skilled workers through a combination of classroom
instruction and on-the-job training.
◦ The majority of what employees learn on the job they learn through informal means of performing their
jobs on a daily basis.
Job instruction training (JIT)
◦ Listing each job’s basic tasks, along with key points, in order to provide step-by-step training for
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Evaluating the Training Effort
Designing the study
◦ Time series design
◦ Controlled experimentation
Training effects to measure
◦ Reaction of trainees to the program
◦ Learning that actually took place
◦ Behavior that changed on the job
◦ Results that were achieved as a result of the training
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Employee development: the combination of formal education, job experiences, relationships,
and assessment of personality and abilities to help employees prepare for the future of their
Development is about preparing for change in the form of new jobs, new responsibilities, or
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Training versus Development
Focus Current Future
Use of work experiences Low High
Goal Preparation for current job Preparation for changes
Participation Required Voluntary
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What Is Management Development?
◦ Any attempt to improve current or future management performance by imparting knowledge, changing
attitudes, or increasing skills.
◦ A process through which senior-level openings are planned for and eventually filled.
◦ Anticipate management needs
◦ Review firm’s management skills inventory
◦ Create replacement charts
◦ Begin management development
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◦ Indirect financial and nonfinancial payments employees receive for continuing their employment with
Types of employee benefit plans
◦ Supplemental pay
◦ Additional services and facilities
◦ Retirement (Pensions)
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The Role of Benefits
Benefits contribute to attracting, retaining, and motivating People.
The variety of possible benefits helps organizations to tailor their compensation based on
benefits help to maintain economic security.
Benefits impose significant costs.
Benefits packages are more complex than pay structures, making them harder to understand
Sometimes, benefits are subject to government regulation.
◦ Legally required benefits.
◦ Tax laws can make benefits favorable.
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Expectations and Values
Employees expect to receive benefits that are legally required and widely available.
They value benefits they are likely to use.
The value they place on various benefits is likely to differ from one employee to another.
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Expectations and Values(continued)
Organizations can address differences in
employees’ needs and empower their
employees by offering flexible benefits plans
in place of a single benefits package for all
Cafeteria-style plan: a benefits plan that
offers employees a set of alternatives from
which they can choose the types and
amounts of benefits they want.
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Communicating Benefits to Employees
Organizations must communicate benefits information to employees so that they will
appreciate the value of their benefits.
This is essential so that benefits can achieve their objective of attracting, motivating, and
Employees are interested in their benefits, and they need a great deal of detailed information
to take advantage of benefits.
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Incentive pay – forms of pay linked to an employee’s performance as an individual, group
member, or organization member.
Incentive pay is influential because the amount paid is linked to certain predefined behaviors
For incentive pay to motivate employees to contribute to the organization’s success, the pay
plans must be well designed.
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Pay for Group Performance
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Types of Pay for Organizational
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How Incentives Sometimes “Work”
SOURCE: DILBERT reprinted by permission of United Feature Syndicate, Inc.
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Why Incentive Plans Fail
Performance pay can’t replace good management.
You get what you pay for.
“Pay is not a motivator.”
Rewards rupture relationships.
Rewards can have unintended consequences.
Rewards may undermine responsiveness.
Rewards undermine intrinsic motivation.
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Processes That Make Incentives Work
PARTICIPATION IN DECISIONS
Employee participation in pay-related
decisions can be part of a general move
toward employee empowerment.
Employee participation can contribute to the
success of an incentive plan.
Communication demonstrates to employees
that the pay plan is fair.
When employees understand the
requirements of the incentive pay plan, the
plan is more likely to influence their behavior
Important when the pay plan is being
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