Transcript HRM – Final - Kalyankaari

HUMAN RESOURCE MANAGEMENT
SYLLABUS




Manpower Planning, Job Analysis, Job Description, Scientific
Recruitment and Selection Methods.
Motivating Employees  Motivational Strategies, Incentive
Scheme, Job-enrichment, Empowerment  Job satisfaction,
Morale, Personnel Turnover.
Performance Appraisal Systems  MBO Approach, Performance
Counseling, Career Planning.
Training and Development  Identification or Training Needs,
Training Methods, Management Development Programmes.
REFERENCE TEXT

Human Resource Management  P. Subba Rao

Personnel Management  C. B. Mammoria
Dessler : Human Resource Management (Prentice Hall India)
Personnel / Human Resource Management : DeCenzo &
Robbins (Prentice Hall India)
D. K. Bhattacharya Human Resource Management (Excel)

VSP Rao  Human Resource Management (Excel)

Gomez : Managing Human Resource (Prentice Hall India)



PRESENTATION TOPICS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Role of Internet in HRM
Twitter – A Popular Recruitment Tool
Performance Management – A Necessary Evil
Manage + Men + Tactfully = Management
The New Age of Working through Virtual Teams
Managing Stress in Changing Times
Integrating Six Sigma and HR
Employee Retention – An Art of Keeping People Who keep You
in Business
Promoting Innovation – The Role of HR
Exit Interview – A Tool to Reduce Employee Turnover
Talent Management – An Agile Edge Over Competition
PRESENTATION TOPICS
12.
13.
14.
15.
Employee Involvement – An Approach to Organisational
Development and Change
A Human Resource Perspective on Importance of Global
Managers in a Post Merger Scenario
Corporate CEOs
Diverse Skills of a Manager
MANPOWER PLANNING
& EMPLOYEE RECRUITMENT
DEFINITION OF MANPOWER PLANNING
Process by which an organization ensures that it
has the right number & kind of people at the
right place and at the right time, capable of
effectively and efficiently completing those tasks
that help the organization achieve its overall
objectives.
MANPOWER PLANNING
Company Strategy
Job Analysis
What staff do
we need to do
the job?
What staff is
available within
our organization?
Is there a match??
What is the impact
on Wage and
Salary program
If not, what type of
people do we need,
and how should we
recruit them?
• Performance
Appraisal
•Company
Databanks
• Training
•Employee
Management
and
Development
JOB ANALYSIS



Job analysis is a formal and systematic process used for obtaining
information about the job.
It is an investigation of duties and responsibilities necessary to do
a job
Determination of tasks which comprise the job and of skills,
knowledge, abilities and responsibilities required of the worker for
a successful performance and which differentiates one job from all
others.
Job Description
Job Analysis
Job Specification
USES OF JOB ANALYSIS






Planning
Recruitment and Selection
Training
Performance Appraisal
Job Design
Job Evaluation
METHODS OF COLLECTING JOB ANALYSIS DATA





Personal Observation
Interview of Employee and Supervisors
 Put the worker at ease
 Make the purpose of interview clear
 Phrase question in such a way that the answer will be in YES
or NO
 Summarize the information obtained before closing the
interview
Panel of Experts
Diary Method
Questionnaire Method
IMPACT OF BEHAVIOURAL FACTORS ON JOB ANALYSIS



Exaggerate he Facts
Employee Anxieties
Resistance to change
JOB DESCRIPTION



It defines the purpose and scope of a job.
Describes what job is all about, what are job content, environment
and conditions of employment.
Contents: A job description usually covers the following
information:
 Designation
 Corporate Grade
 Reporting To
 Position Reporting to
this Position
Sample Job Description 1
Sample Job Description 2
 Qualifications
 Experience
 Job Summary
 Main Responsibilities
PROBLEMS WITH JOB DESCRIPTION

It is not easy to reduce all the essential components of
the job in the form of a clear and precise document.

Job description are sometimes not updated as the job
duties change

The can limit he scope of activities of the job holder,
reducing organizational flexibility.
JOB SPECIFICATION




Job specification summarizes the characteristics needed for
completing a job.
It spells out the important attributes of a person in terms of
education, experience, skills, knowledge and abilities to perform a
particular job.
This helps the organization to determine what kind of persons are
needed to take up specific jobs.
Job specifications can be classified into three categories:
 Essential Attributes
 Desirable Attributes
 Contra-Indicators
JOB EVALUATION

Job analysis also helps in finding the relative worth of a job based
on criteria such as:




Degree of difficulty in the work
Type of work done by the employee
Skills and knowledge needed
This, in turn, assists in designing proper wage policies, with
internal pay equity between jobs.
IMPORTANCE OF MANPOWER PLANNING

Talent pool

Prepare people for future

Smooth transition during expansion

Succession Planning

Support to overall business strategy
PROCESS OF HRP
Forecasting the
demand for Human
Resources
• Organisational
Decisions
• Workforce
Factors
Supply Forecasting
• Internal Labor
Supply
• External Labour
Supply
Determining
Manpower Gaps
and Formulating
HR Plans
FACTORS OF MANPOWER PLANNING
Factors in forecasting Personnel
Requirements
Projected
Turnovers (as a
result of
resignation and
terminations)
Quality and
Nature of your
Employees (in
relation to what
you see as the
changing needs
of your
organisation)
The financial
resources
available to
your
organisation
TECHNIQUES TO DETERMINE NO. OF RECRUITS
Trend
Analysis
Study of a firm’s past employment needs
over a period of years to predict future
needs.
Ratio
Analysis
A forecasting technique for determining
future needs by using ratios between sales
volume and no. of Employee needed.
RECRUITMENT FROM EXTERNAL RESOURCES
• Recruiting new staff from external sources will be
influenced by several factors
Macro
Economic
Conditions
of a Nation
When the economic conditions are relatively
difficult, there will usually be an oversupply, or
the no. of applicants will be much higher than the
demand. In such a case the company will find it
relatively easier to select new employees from the
large no of applicants.
RECRUITMENT FROM EXTERNAL RESOURCES
Availability
of
When the sector is one that is considered as ‘Rare
Manpower Sector’, the company will have more difficulty in
in Desired recruiting staff for this sector.
Sector
Company It will tend to be easier for company to find and
recruit the best people if the company has a good
Reputation
reputation.
RECRUITMENT
DEFINITION

Recruitment is a process of locating and encouraging
potential applicants to apply for existing or
anticipated job openings.

Recruitment aims at
 Attracting a large no. of qualified applicants who
are ready to take up the job if its offered
 Offering enough information for unqualified
persons to self-select themselves out
CONSTRAINTS AND CHALLENGES

Poor image

Unattractive jobs

Limited budgetary support

Restrictive policies of government

Compensation not matching as per the industry standard

Economic Environment

Social Environment
METHODS OF RECRUITMENT
Methods
of
Recruitment
METHODS OF RECRUITMENT
Internal Method
 Promotions and Transfers
 Job Posting
 Employee Referrals
Direct Method
 Campus Recruitment
Indirect Method
 Advertisement
 Private Employment Search firms
 Internet Recruitment
EFFECTIVENESS OF RECRUITMENT PROCESS

Cost per hire

Time-lapse between recruitment and placement ratio

Applicant’s performance

Turnover
SELECTION
DEFINITION

To select means to choose.

Selection is the process of picking individuals who have
relevant qualifications to fill jobs in an organization.

The basic purpose is to choose the individual who can
most successfully perform the job, from the pool of
qualified candidates.

How well an employee is matched to a job is very
important because it directly affects the amount and
quality of the employee’s work.
SELECTION PROCESS
Selection Interview
BASIC CONCEPT OF SELECTION TEST

The quality of an employee selection test is determined by the
three main factors:

Criterion Validity: A type of validity based on showing
that scores on the test (predictors) are related to the job
performance (criterion).

Content Validity: Test that contains fair sample of tasks
and skills actually needed for the job.

Reliability: The consistency of scores obtained by same
person when retested with identical or equivalent test.
SELECTION TESTING

Intelligence Test / Aptitude Test

Personality Test
 Confidence, Emotional balance, behavioral pattern,
interpersonal skills, motivation level etc.

Simulation tests

Assessment Centre

Interview
TYPES OF INTERVIEW

Several types of interviews are commonly used depending on the
nature and importance of the position to be filled:
 Non-directive / Unstructured Interview

Directive / Structured Interview

Situational Interview

Behavioural Interview – STAR Technique

Stress Interview

Panel Interview
INTERVIEWING MISTAKES








Not asking right question and hence not getting relevant
responses
Snap Judgments
May allow ratings to be influenced by his own likes and
dislikes
May have forgotten the interview’s content after its
conclusion
Unduly influenced by person origin, cultural background etc.
Halo Affect – Positive
Horn Affect – Negative
Have been under pressure to hire candidates at short notices
INDUCTION
MEANING AND OBJECTIVE

Meaning:
 Induction means the task of introducing the new employees to
the organization and is policies, procedures and rules.

Objective:
 Remove fears
 Creates good impression
 Acts as a valuable source of information
INFORMATION TO BE PROVIDED











Explain about the company
Show the department
Introduce with the colleagues
Introduction with the reporting heads
Overview of the Job responsibilities, Seating place and
relationship with other job
Give the company’s manual to the new recruits
Company policies, rules and disciplinary procedure
Give the details about pay, benefits, holidays, leave, etc.
Idea about work culture
Future training opportunities
Career Path
PERFORMANCE APPRAISAL
WHAT IS PERFORMANCE APPRAISAL

Performance Appraisal (PA) refers to all those procedures/tools
that are used to evaluate employees
 Personality
 Performance
 Potential of employees

PA is the method of evaluating the behaviour of the employees in
the workplace, normally including both quantitative and
qualitative aspect of the job
 How the employee is performing
 How the employee can develop others
 Planning and organising skills
 Initiative
OBJECTIVE OF PERFORMANCE APPRAISAL








Provide information about performance ranks
Provide a basis for promotion and increments.
Enhances employees’ effectiveness by helping to identify their
strengths and weaknesses
Informs about expected levels of performance
Identify Training and Development needs
Remove work alienation: Counseling Employees
Develop Inter-personal relationship
Career planning decisions
PROCESS OF PERFORMANCE APPRAISAL
Establishing
Performance
Standards
JD
Goals
SMART Goal
Discussion
with
employees
Communic
ating
Standards
Measure
Actual
Performance
Comparing
With
Standard
Providing
Feedback
METHODS OF PERFORMANCE APPRAISAL

Individual Evaluation Method:

Confidential report

Essay evaluation

Critical Incidents

Graphic Rating Scale

360 Degree Feedback

Behaviorally Anchored Rating Scale

MBO
METHODS OF PERFORMANCE APPRAISAL

Multiple Person evaluation Method:

Ranking

Paired comparison
1. CONFIDENTIAL REPORT

Descriptive report

Prepared at the end of the year

Prepared by the employee’s immediate supervisor

The report highlights the strengths and weaknesses of
employees

Prepared in Government organizations

Does not offer any feedback to the employee
2. ESSAY EVALUATION

The rater is asked to express the strong as well as weak
points of employee’s behavior

The rater considers the employee’s :

Job knowledge and potential

Understanding of company’s programs, policies,
objectives etc

Relation with co-workers and supervisors

Planning, organizing and controlling ability

Attitude and perception
2. ESSAY EVALUATION

This method has the following limitations:

Highly subjective

Supervisor may write biased essay

Difficult to find effective writers

A busy appraiser may write the essay hurriedly without
assessing properly the actual performance of the worker

If the appraiser takes a long time it becomes uneconomical
from the view point of the firm
3. CRITICAL INCIDENT TECHNIQUE

Manager prepares lists of statements of very
effective and ineffective behavior of an
employee

These critical incidents represent the
outstanding or poor behavior of the employees

The manager periodically records critical
incidents of employee’s behavior
3. CRITICAL INCIDENT TECHNIQUE
Limitation of this technique are:




Negative incidents may be more noticeable than positive
incidents.
Supervisors have a tendency to unload a series of complaints
about incidents.
Results in very close supervision which may not be liked by the
employee.
The recording of incidents may be a chore for the manager
concerned who may be too busy or forget to do it.
4. GRAPHIC RATING SCALE



This is the oldest and most widely method used for
performance appraisal.
The appraiser has to rate the appraisee in different
parameter on a scale of 5.
Job Knowledge as a parameter might be rated 1 (poorly
informed about work duties) to 5 (has complete mastery
of all phases of the job).
Graphic Rating Scale
Employee Name................... Job title .................
Department ......................... Rate ...............
Data ..................................
Quantity of work: Volume of
work under normal working
conditions
Quality of work: Neatness,
thoroughness and accuracy
of work Knowledge of job
A clear understanding of the
factors connected with the job
Attitude: Exhibits enthusiasm
And cooperativeness on the
job
Unsatisfactory Fair Satisfact
(1)
(2)
ory
(3)
Good Out
(4)
Stand
in
g
(5)
BEHAVIOURALLY ANCHORED RATING SCALE (BARS)

Combination of Rating Scale and
Critical Incidents Techniques of
employees performance evaluation.

The critical incidents serve as anchor
statements on a scale of ratings.

Rating forms usually contains six to
eight specifically defined performance
dimensions.
HOW TO CONSTRUCT (BARS)

Emphasis is pinpointed on pooling the thinking of people
who will use the scales as both evaluators and evaluees.

Step I: Collect ‘Critical Incidents’ from Job Holders &
Supervisors.

Step II: Identify performance dimensions – Technical
competence, Relationship with customers, relationship
with peers, meeting day to day deadline etc.
HOW TO CONSTRUCT (BARS)

Step III: Reclassification of Incidents: Another group of
participants are asked to retranslate the critical incidents

Step IV: Assigning scale values to the incidents. Mean and
standard deviation are calculated for the scale value
assigned to each incident.

Step V: Producing final instrument. Each incident is
positioned on the scale according to its mean value.
ADVANTAGES & LIMITATIONS OF BARS




Increased
acceptance by
supervisors and
superiors
Job specific
Identifies
observable and
measurable
behaviour
Reliable and valid
method



Lack of ‘result
orientation’
Time consuming and
expensive to create
BARS
Several appraisal
forms for different
types of Job
5. 360 DEGREE FEEDBACK
360 Degree Feedback is a multi - rater feedback system
where an individual is assessed by a number of
assessors including his boss, subordinates, colleagues,
internal customers and external customers.
WHAT IS 360 DF?
Feedback collected
from
Internal
Customers
Peers
External
Customers
“Boss”
Self
Team
Members
6. MANAGEMENT BY OBJECTIVES (MBO)

MBO emphasizes to set specific, measurable goals with each
employee and then periodically discuss the employees’ progress
towards these goals.

The technique emphasises on setting goals collectively by
superior and subordinates.

MBO focuses attention on what must be accomplished (goals)
rather than how it is to be accomplished.

It is a kind of goal setting and appraisal program.
STEPS INVOLVED IN MBO

Set Organisational goals

Set Departmental goals

Discuss Departmental goals

Define expected results

Performance Reviews

Provide feedback
RANKING METHOD

Ranking of an employee in a work group is done
against that of another employee.

Employees are ranked according to their relative
levels of job performance

In practice, its is very difficult to compare
individuals possessing varied behavioural traits.

It does not tell how much better / worse an
employee is when compared to another employee.

No systematic procedure for ranking individuals
in the organisation
PAIRED COMPARISON METHOD



Each worker is compared with all the other employees in
the group.
The comparison is done for every trait.
Cant be applicable when the group is large.
As compared to
A
A
B
C
D
E
+
_
+
_
+
_
+
+
_
B
_
C
+
_
D
_
+
_
E
_
_
+
_
+
PROVIDING FEEDBACK




Adequate Preparation
Describe Behavior
 Acts, Not attitude
 Listen to recipient
 Data based feedback
 Suggestive
 Reinforcement
 Continuous
Proper Timing
Help the appraisee
PROBLEMS WITH PERFORMANCE APPRAISAL

Judgement Errors
 Primacy Effect
 Halo Effect
 Horn Effect
 Leniency
 Central Tendency
 Recency Effect

Poor appraisal forms

Lack of Rater preparedness
EMPLOYEE TYPE

Low potential – Low Performance

Low potential – High Performance

Low performance – High Potential

High performance – High potential
TRAINING AND DEVELOPMENT
TRAINING
Any attempt to change an employees’
current and future performance by
changing his knowledge, skills and
attitude can be termed as training
IMPORTANCE & NEED OF TRAINING

Aids in new entrants attaining role clarity

To bridge gap between skills requirement and skills availability

Promotions

Improves quality and productivity

Meet organizational objectives

Improves organizational climate
To
support personal growth and development
THEN WHY IS TRAINING OFTEN NEGLECTED?
Training time
Not knowing
exactly what
you want your
people to do
and how
Short-term
worker
Costs
Employee
turnover
TRAINING CYCLE
Training Need
Assessment
Evaluation
Implementation
TRAINING NEED ASSESSMENT



Organisational Analysis
 Analysis of Organization's Objectives
 Resources utilization analysis
 Environmental Scanning
 Organisational Climate analysis
Task or Role Analysis
 Performance Standards
 The task they have to discharge
Person Analysis
IMPLEMENTATION

Selecting the Trainees

Selecting the Trainer

Selecting the Venue

Developing Training Program

Required arrangements before the training session
EVALUATION

Levels of evaluation





How did participants react?
What did participants learn?
How did participants’ behaviour change?
What organisational goals were affected?
Cost Benefit Analysis
MANAGEMENT
DEVELOPMENT PROGRAM
WHAT IS MDP & NEED FOR MDP

Is the process of a conscious and systematic improvement of
managerial effectiveness within the organisation, to achieve
organizational goals and strategies

Need for MDP:
 Skills of executives may become redundant without training
and development
 Change in business environment
 Conglomeration and integration
 Interpersonal skills
MDP PROCESS
output
Desired output
generated
yes
No action to
Be taken
Design an apt
Management devt team
No
Management skill
Only need
improvement
Problem
exists
how to
overcome
the problem?
Either
Or
all
Both managerial
Skills and organizational Which of the two
Can be improved
Elements need
easily
improvement
Either managerial skill
or organizational elements need improvement
Organizational elements
only need improvement
Restructure
organization
elements
NEED ANALYSIS




What type of managers are needed today ?
What type of managers will we need tomorrow ?
Insight may be drawn from
 Organisation structure
 Business strategy
Collect information like: education, experience, training,
special knowledge, skills, and personal traits required
for each job
CURRENT APPRAISAL


Current profiles based on:
 education,
 experience,
 training,
 special knowledge,
 skills, and
 personal traits…
Competency Mapping ???
COMPETENCY MAPPING MATRIX
Position Competency
Personal Competency
A
B
C
D
E
F
Strengths
Development
Areas
EMPLOYEE MOTIVATION
MOTIVATION






Motivation refers to set of forces that cause people to behave
in certain ways
Performance of an individual depends on his or her ability
backed by Motivation
Performance = f (ability X motivation)
It is essential to offer highly motivated employees to the
organisation
It’s a tough challenge because there is no ‘one fit’ approach to
motivation
To which stimulus employee respond, how they respond and
what behavioural outcomes do hey exhibit is difficult to say.
MOTIVATION FRAMEWORK
Identifies
Need
Searches for
ways to
satisfy the
need
Reassess
Needs
Deficiencies
Employee
Engages in
Goal
Directed
Behaviour
Receives
Rewards or
Punishment
Performs
MOTIVATIONAL THEORIES
1.
2.
3.
4.
5.
6.
Maslow’s Theory of Motivation
Two factor Theory by Fredrick
Herzberg
ERG Theory by Alderfer
Achievement Motivation Theory
by David C. McClelland
Expectancy Theory by Vroom
Equity Theory by Adams
Content Theories
Process Theories
2. TWO FACTOR THEORY

Proposed by psychologist Fredrick Herzberg.

Survey of factors affecting work motivation

Survey of 200 accountant and engineers

Respondents were asked essentially two questions


When did you feel particularly good about your job
When did you feel exceptionally bad about your job
FINDINGS
Hygiene Factors
No Dissatisfaction
Dissatisfaction
Motivators
Satisfaction



No Satisfaction
Satisfaction and Dissatisfaction are not opposite poles of one
dimensions, they are separate dimensions.
Satisfaction is affected by Motivators and dissatisfaction by
Hygiene Factors
To achieve motivation, managers should cope with both
satisfiers and dissatisfiers.
HYGIENE FACTORS AND MOTIVATORS
Company Policy
and
Administration
Hygiene
Factors
Security
Status
Achievement
Recognition
Work Itself
Responsibility
Growth
Advancements
Salary
Motivators
Working
Conditions
3. ERG THEORY




Developed by Alderfer
The E, R and G theory stand for Existence, Relatedness and
Growth – the three sets of needs.
Needs stated by Alderfer are same as Maslow’s Need and are
important determinants of Human Behavior
However, the ERG theory differs from the Maslow’s theory in
three respects:



Only three needs
Maslow’s theory follows a rigid step like progression whereas ERG
theory hypothesises that more than one need may be operative
at the same time.
Maslow had stated that a person will stay at a certain level until
that need is satisfied whereas ERG theory states that when a
higher level need is frustrating, the individual’s desire to increase
the lower level needs increases.
4. ACHIEVEMENT MOTIVATION THEORY




Developed by David McClelland
According to this theory the needs that motivate human
behavior are – Power, Affiliation and Achievement
This theory envisages that each person has a need for all the
three, but differ in degree to which various needs motivate their
behavior.
Need for Achievement





Derive satisfaction from reaching their goals
High achievers prefer immediate feedback on their performance
Generally undertake task of moderate difficulty
They dislike tasks with high risks because they get no achievement
satisfaction from accidental successes
They dislike easy tasks because there is no challenge to their skills
4. ACHIEVEMENT MOTIVATION THEORY

Need for Power




Derive satisfaction from the ability to control others
Actual achievement of goals are less important than the means
by which goals are achieved
Organisations that fosters power motive tend to attract individuals
with a high need for power
Need for Affiliation



Derive satisfaction from social and interpersonal activities
There is a need to form strong interpersonal ties and to ‘get close’
to people psychologically
If asked to choose between working at a task with those who are
technically competent and those who are their friends, high need
for affiliation individuals will choose their friends
MATCHING CONTENT THEORIES
Need Hierarchy
Self
Actualisation
ERG Theory
Growth
Self
Esteem
Two – Factor
Theory
Achievement
Motivation
Model
Motivators
• Advancement
• Growth
• Achievement
Need for
Achievement
Need for Power
Affiliation
Relatedness
Security
Existence
Psychological
Hygiene
• Job Security
• Salary
• Working
Conditions
Need for
Affiliation
5. EXPECTANCY THEORY


Pioneered by Victor H. Vroom
Four important variables of Expectancy Theory are:





First and Second Level of Outcomes
Expectancy
Instrumentality
Valence
First and Second Level of Outcomes



Performance achieved as a result of efforts is first level outcome
Performance may be reflected through high productivity, quality of
work etc.
Second level outcomes are the rewards that the first level
outcome is likely to produce. They include pay raise, promotion,
peer acceptance and job security
5. EXPECTANCY THEORY CONTD…

Expectancy



Instrumentality



The belief that particular level of effort will be followed by
particular level of performance is called expectancy
Effort to Performance (E
P)
This is the perception by an individual that first level outcomes
are associated with second level outcomes
Performance to Outcome (P
O)
Valence




Valence is an individual’s preference for a second level outcome.
Desired outcomes have positive valence
Avoided outcomes have negative valence
Outcomes have 0 valence when an individual is indifferent about
receiving it
5. EXPECTANCY THEORY CONTD…

According to Expectancy theory Motivation is:

Expectancy X Instrumentality X Valence

If anyone of these variable is low, motivation is likely to be low

Managers try to ensure that employees’ levels of expectancy,
instrumentality and Valence are high so that they will be highly
motivated
APPLICATION OF EXPECTANCY THEORY
Variable
Objective
Application
Expectancies
To increase the
belief that
employees are
capable of
performing the job
successfully
Select people with required skills
and knowledge
To increase the
belief that good
performance will
result in valued
outcomes
Measure Job performance
accurately
Instrumentality
Provide Training and clarify Job
requirements
Provide performance counseling
Clearly explain the outcomes that
will result from successful
performance
APPLICATION OF EXPECTANCY THEORY
Variable
Valence of
Outcomes
Objective
Application
To increase the
Distribute rewards that employee
expected value of value
outcomes resulting
from desired
performance
6. EQUITY THEORY






Person compares their outcome/input ratio with others
outcome/input ratio.
Inputs refers to the characteristics which individual bring with
them to the job
Outcomes refers to what person gets from job in terms of pay,
promotions benefits and so on.
Inequity is defined as the perception that persons’
outcome/input ratio is not equal to others outcome/input ratio
Negative Inequity
Positive Inequity
COMPENSATION MANAGEMENT
COMPONENTS OF REMUNERATION

Components of Remuneration are:




Salary
Incentives
Fringe benefits
Perquisites
INCENTIVE PAYMENTS



Incentives are variable rewards granted to employees according
to variations in their performance.
Importance
 Greater Output
 Reduced supervision
 High Efficiency
 High Motivation
Disadvantages
 Deteriorated Quality
 Jealousy feeling
 Unwanted Stock
TYPES OF INCENTIVE SCHEMES

Individual Incentive Schemes

Group Incentive Schemes

Company – Wide Incentive Plans
BENEFITS AND SERVICES

Employee Benefits and Services include any benefit that the
employee receives in addition to direct remuneration.

These benefits can be in terms of Fringe Benefits or Perquisites

Fringe benefits include such benefits which are provided to the
employees either having long-term impact like provident fund,
gratuity, pension; or occurrence of certain events like medical
benefits, accident relief, health and life insurance; or
facilitation in performance of job like uniforms, Canteens,
recreation, etc.

Administered for a group mostly
BENEFITS AND SERVICES

These are normally provided to managerial personnel either to
facilitate their job performance or to retain them in the
organization. Such perquisites include company car, club
membership, free residential accommodation, paid holiday
trips, stock options, etc.

Administered individually mostly
FACTORS INFLUENCING REMUNERATION

Internal factors
 Business Strategy
 Employee
 Job Evaluation and Performance Appraisal

External factors
 Labour Market
 Cost of Living
 Economy
 Legislation
IMPORTANCE
Image Building
Ensure
Equity
Institutional
effectiveness
Attract talent
Motivate &
Retain Staff
Effective
Compensation
Employee
Management
Legal
Compliance
Administrati
vely Efficient
Reward Valued
Behavior
CHALLENGES OF REMUNERATION
Monetary
Vs. Non
Monetary
Rewards
Skill based
Pay
Salary
Reviews
Remuneration
Below
Market or
Above
Market
Rates
Pay
Secrecy
Comparable
Worth
COMPENSATION MATRIX
HIGH COMPENSATION –
LOW COMMITMENT
Hired Guns
LOW COMPENSATION –
LOW COMMITMENT
Workers as commodity
HIGH COMPENSATION –
HIGH COMMITMENT
Professionals
LOW COMPENSATION –
HIGH COMMITMENT
Family oriented
organization
REMUNERATION MODEL
Job Description
Job Evaluation
Pay Survey
Pricing Jobs
Job Hierarchy