Transcript Human Resource Management notes.ppt

Human Resource
Management
1
Organization as Input-Output
system
Acquiring
inputs from
environment
Using financial
resources by
human resources
Conversion
Process
By human
resources
Outputs
Exporting to
Environment
By human
resources
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Meaning:
It is a process of bringing people and organizations
together so that the goals of each are met.
According to Invancevich and Glueck : “HRM is
concerned with the most effective use of people to
achieve organizational and individual goals.”
According to Milkovich and Boudreau : “Human
Resource Management is a series of integrated
decisions that form the employment relationship;
their quality contributes to the ability of the
organizations and the employees to achieve their
objectives.”
3
Features of Human
Resource Management
•A process
•Pervasive force
•Action Oriented
•Individually Oriented
•People Oriented
•Development Oriented
•Integrating Mechanism
•Comprehensive Function
•Auxiliary Service
•Inter-disciplinary Function
•Continuous Function
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Scope of HRM
The scope of HRM is very wide.
The Indian Institute of Personnel Management has
specified the scope of HRM as follows:
Welfare
Personnel
Aspect
Aspect
Industrial
Relations
Aspect
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Comparison on HRM and Personnel
Management
There have been several approaches on the concepts
of relationship between HRM and Personnel
management:
Comparison includes studying Similarity and
Differences.
Armstrong suggests common features of
Personnel management and Human Resource
Management:
1.
Strategies of both stem from the business strategy.
2.
Both these recognize that line managers are
responsible for managing people. And the line
managers are enabled by the advice and support of the
personnel department to carry out their
responsibilities.
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3.
The value of personnel management and those of soft
version of human resource management are identical
vis-à-vis respect for individual, integration of individual
needs and organizational goals, and development of
people to accomplish competence to facilitate individual
and organizational interests.
4.
Both attach importance to the function of matching
people to ever-changing business requirements.
5.
Both use the same range of selection, competence
analysis, performance management, training,
management development and reward management
techniques.
6.
The soft version of human resource management and
personnel management stresses the process of
communication and participates within the employee
relations analysis.
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Differences between Personnel
Management and HRM
1.
Personnel Management is a routine, maintenanceoriented administrative function; human resource
management places emphasis on a continuous
development of people at work.
2.
Personnel Management function is mainly reactive and
responds to the demands of an organization whenever
they arise, while HRM is proactive function (more future
oriented)
3.
Personnel Management is seen as independent function
and sub-functions without giving due-regard to
organizational strategies and processes. HRM is viewed
as sub-system of the organization as it takes into
account its linkages and interfaces with all other parts of
the organization.
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4. Personnel Management has a narrow focus it mainly works
on improving the efficiency of personnel in isolation without
emphasizing the relevance of efficiency in the organizational
context, while HRM undertakes a systems view which
attempts to create a proper organizational culture.
5. Personnel management emphasizes on economic rewards
and traditional job design for better performances, while HRM
emphasizes on the satisfaction of higher needs for motivating
people, such as autonomous work groups, challenging jobs,
creativity.
6. Personnel Management considers job satisfaction and
higher moral as a cause of improved performance, while HRM
works on the premise that better performance itself is a
source of satisfaction and high morale.
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Evolution of HRM
The evolution to the current state of HRM has
passed through several stages:
Industrial Revolution
Scientific Management
Trade Unionism
Human Relations Movement
Human Resources Approach
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HRM in changing environment
The job of an HR manager is to balance the
demands and expectations of the external
groups with the internal needs and achieve the
assigned tasks in an efficient ways.
So the HRM practices in an organization are
influenced by two broad categories of factors–
Environmental factors and Organizational
factors.
I) Environmental factors:• Economic Environment
• Legal Environment
• Technological Environment
• Socio-cultural Environment
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Economic Environment
• Population v/s workforce
• Workforce market conditions
• National Income
• Inflationary pressures
Legal Environment
• Political Stability
Technological Environment
• Reengineering work processes
• Flexible Manufacturing Systems
Socio-Cultural Environment
• Slashing of jobs
• Trade Unions
• Work force diversity
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II) Organizational factors
• Organization’s Strategy
Corporate level Strategy
Business level Strategy
Functional Level Strategy
• Organizational Culture
High Performing Culture
Low Performing Culture
• Organizational Financial Position
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III) International Perspective
Globalization of industries has led to the
considerations of following international factors.
Cultural Diversity
• Individualism and Collectivism
• Power Orientation
• Uncertainty Avoidance
• Masculinity
• Time Orientation
Workforce Diversity
• Parent-country national
• Host-country National
• Third-country National
Language Diversity
Economic Diversity
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Role of HR Practitioner
The HR department generally acts in an advisory capacity; it
provides information, offer suggestions, counsels and assists all
the line managers in the organization.
Various roles:-
• Advisory Role
• The Conscience Role
• Counsellors Role
• Mediator’s Role
• Representative Role
• Clerical Role
• Fire-Fighting / Legal Role
• Welfare Role
• Problem solver
• Change agent
• Decision Maker
• Executive
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HR Policies
After the establishment of objectives of Human
Resource Management, HR policies are to be
formulated.
Definition:A policy is a plan of action.
Brewster and Richbell defined “HR policies as a
set of proposals and actions that act as a
reference point for managers in their dealings with
employees.”
-They constitute guides to action.
-They furnish the general standards or bases on
which decisions are based.
-Their genesis lies in an organization’s values,
philosophy, concepts and principles
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Advantages of HR Policies
Policies are useful instructional devices, that offer
various advantages to HR working at various levels.
• Delegation
• Uniformity
• Better Control
• Standards of efficiency
• Confidence
• Speedy Decisions
• Coordinating Devices
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Obstacles in Administrating HR
Policies:1.
2.
3.
4.
Managers are reluctant to follow
guidelines as it curtails their freedom.
Conflict between implied and
expressed policy.
Not easy to Communicate.
Makes managers rigid.
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Characteristics of sound HR
Policy.
While developing a HR Policy, management
must pay attention to:• Relation of policies with objectives
• Easy to understand
• Precise
• Stable as well as flexible
• Based on facts
• Appropriate number
• Just, fair and equitable
• Reasonable
• Based on Reviews.
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Coverage of HR Policies:a) Social responsibility
Equity
Quality of Work Life
b) Employment Practices
c) Promotion Policies
d) Development Policies
e) Relations Policies
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Sources of content for formulating
policies
• Past experiences of the organization.
• Existing practices and experiences in other
organizations
• Attitudes and philosophies of management
• Knowledge and experience gained by all
line managers and personnel managers in
handling personnel issues.
• Organizational policies.
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Functions of HRM
As HRM is the management of human resources in
an organization and is concerned with the creation
of harmonious working relationship among its
participants and bringing about their utmost
individual development.
Functions of HRM
Managerial functions
Operative functions
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Managerial Functions
Management is a multi-purpose organ which has
three jobs, two of which are directly related to
personnel managing a business –
“managing employees” and the “work”
a)
b)
c)
d)
Planning
Organising
Directing
Coordinating and Controlling
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Operative Functions
The operative functions of HRM are
concerned with the activities specifically
dealing with:
1)
2)
3)
4)
5)
The Procurement Function
The Development Function
The Compensating Function
The Integration Function
The Maintenance Function
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HRM and Corporate Objectives
HRM is being used to develop competitive advantage
and, therefore, its role in strategic management has
been well recognized. “Strategic management is the
continuous process of relating the organization with its
environment by suitable course of action involving
strategy formulation and its implementation.”
Strategy is course of action through which the
organization relates itself with the environment so as
to achieve its objectives.
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Environmental
opportunities
and threats
Corporate
mission
and
objectives
Choice of
strategy
Strategic
Alternatives
Corporate
strengths
and
weaknesses
Strategy
Implementation
Personal Values and
aspirations of
strategists
Activating
strategy
Structural
implementation
Behavioral
implementation
Functional
implementation
Role of HRM
Acquiring,
Developing,
Integrating, and
Retaining right
personnel
Role of HRM in corporate strategic management
process
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Human Resource Planning
“Human Resource Planning is the process by which an
organization ensures that it has the right number and
kind of people, at the right place, at the right time,
capable of effectively and efficiently completing those
tasks that will help the organization achieve its overall
objectives.”
- HRP is a process
- It involves determination of needs
- It also takes into account the manpower availability at
a future period.
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Importance of Human Resource Planning
• Reservoir of Talent
• Prepare People for Future
• Expand or Contract
• Cut Costs
• Succession Planning
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Human Resource Planning Process
Organizational Objectives,
Plans and policies
Forecasting
needs for human
resources
Human Resource
Planning
Forecasting supply
of human resources
Identification of human
resource gap
Shortage of human
resources
Surplus human
resources
Actions plan for
bridging gap
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Steps in HRP
1 Organizational objectives, plans and policies
2. Human Resource Planning
Forecasting the demand and supply of
human Resources
3. Identification of Human Resource Gap
4. Action Plans
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Techniques for Forecasting Human
Resource Needs
• Managerial judgement Method
• Delphi Technique
• Work-Study Technique
• Ratio-Trend Analysis
• Statistical and Mathematical Models
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Forecasting of Human Resource Supply
• Human Resource Flow Model
• Human Resource Inventory
Skills Inventory
Management Inventory
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Barriers to effective Human resource
Planning
1.
2.
3.
4.
5.
6.
Improper Linkage between HRP and
Corporate Strategy
Inadequate Appreciation of HRP
Rigidity in Attitudes
Environmental Uncertainty
Conflict between Long-term and shortterm HRP
Inappropriate HR Information System
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Job Analysis
Developing an Organization’s structure results in creating
jobs which have to be staffed.
Job:- A job may be defined as a “ Collection or aggregation
of tasks, duties and responsibilities which as a whole, are
regarded as a regular assignment to individual employees”
Job Analysis is the process of studying and collecting
information relating to the operations and responsibilities of
a specific job. The immediate products of the analysis are
job descriptions and job specifications”
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Uses of Job analysis
• Organizational Design
• Acquisition of personnel
• Human resource Development
• Job evaluation and compensation
• Performance Appraisal
• Safety and Health
• Employee counselling
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Determination of uses of job analysis
Strategic Choices in job analysis
Information Collection
Information Processing
Job
Description
Job
Specification
JOB ANALYSIS PROCESS
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Job Description
A job description is an organized, factual statement of
duties and responsibilities of a specific job.
It is basically descriptive in nature. It provides both
organizational information and functional information.
1. Job Identification
2. Job Summary
3. Job duties and responsibilities
4. Relation to other jobs
5. Supervision
6. Machine
7. Working Conditions
8. Hazards
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Job Specification
Job Specification is a statement of the minimum
acceptable human qualities necessary to perform a job
properly.
It tells what kind of person to recruit and for what
qualities that person should be tested.
1. Physical Characteristics
2. Psychological Characteristics
3. Responsibilities
4. Other features of demographic nature
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Recruitment
Recruitment is the process of finding and attracting capable
applicants for employment. The process begins when new
recruits are sought and ends when their applications are
submitted. The result is a pool of applicants from which new
employees are selected. ----- Werther and Davis
Human Resource
Planning
Recruitment
Selection
Placement
Job Analysis
Linkage of recruitment to human resource Acquisition
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Purpose and Importance of Recruitment
Recruitment represents the first contact that a company
makes with the personnel having potential to be
employed.
• It determines the present and future human resource
requirements in conjunction with human resource
planning.
• It helps to increase the pool of potential personnel.
• It helps in increasing the success rate of the selection
process.
• It reduces the rate of initial turnover rate.
• It helps in evaluating the effectiveness of various
recruitment techniques
• It helps to meet the organization’s legal and social
obligations regarding composition of its workforce.
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Factors affecting recruitment
Internal factors:
v Company’s pay package;
v Quality of work life;
v Organizational culture;
v Career planning and growth;
v Company’s size;
v Company’s products and services;
v Geographical spread of the company’s operations;
v Company’s growth rate;
v Role of trade unions;
v Cost of recruitment;
v Company’s name and fame.
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External factors:
v Socio economic factors;
v Supply and demand factors;
v Employment rate;
v Labour market conditions;
v Political, legal and governmental factors;
v Information systems.
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Sources of Recruitment
Sources are those where prospective employees are
available like employment exchange while techniques
are those, which stimulate the prospective employees
to apply for jobs like nomination by employees,
advertising, promotion etc.
Internal sources
• Present Permanent employees
• Present temporary and casual employees
• Retrenched or retired employees
• Dependents of deceased, disabled, retired and
present employees
• Promotions
• Transfers
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External Sources
External sources are those, which are outside
the organizational pursuits. These include:• Campus recruitment
• Private Employment agencies
• Public Employment exchanges
• Professional Associations
• Data Banks
• Casual Applications
• Trade Unions
• Advertisements
• Employee Referrals
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Selection
Once the recruitment is through with, the management
has to perform the function of selecting the right
candidate at right time.
This is done through selection procedure and it a
customized one.
It basically depends upon several factors
• Company’s Requirement
• Financial resources allocated for the same
• Company’s past records
• Company’s image in the market
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Steps in selection procedure : Development bases for selection
Job Analysis
Human Resource Plan
Recruitment
Application Blanks
Written Examination
Preliminary Interview
Business Games
Tests
Final Interview
Assess the fit between
The job and the candidate
Medical Examination
Line Manager’s Decision
Employment
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Selection Procedure
•
Job Analysis:- It is the basis for selecting the right candidate
Job description
Job specification
Employee specification
2.
Recruitment:- It refers to the process of searching for
prospective employees and stimulating them to apply for jobs
in an organization.
3.
Application Blank:- It is a form through which the data is
collected about the candidates and the initial screening is
done.
- Personal Background Information
- Educational Attainments
- Work experience
- Salary
- Personal Details
- References
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4. Written Examination:- The candidate qualified through the
application blank is required to pass through the written test.
- Quantitative knowledge
- Aptitude reasoning
- General knowledge
- English language knowledge
5. Preliminary Interview:- This interview is to solicit necessary
information from the prospective candidates and to assess the
applicant’s suitability for the job.
This is known as stand-up interview.
At this level business games are also used as a tool for judging
candidates suitability for the job, which mainly includes the
techniques used to judge the situation handling and problem
solving.
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6. Group Discussions:- This technique is used in order to
secure further information regarding the candidates suitability for
the job.
7. Tests:- It is a most significant stage in the process of selection.
These employment tests are an instrument designed to measure
the nature and degree of one’s psychological potentialities, based
on psychological factors, essential to perform a job.
Types of tests
• Aptitude tests
• Achievement tests
• Situational tests
• Interest tests
• Personality tests
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8. Final Interview:- In this the interviewer matches the information
obtained about the candidates through various means, to the job
requirements and to the information obtained through his own
observation.
Types of interview
Preliminary Interview
Core Interview
Decision-Making Interview
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9. Medical examination:- Certain jobs require certain physical
qualities like clear vision, perfect hearing, unusual stamina,
tolerance of hard working conditions.
10. Reference Checks:- After the completion of the final
interview and medical examination, the personal departments
checks the references with the candidates.
11. Final decision by line managers:- The final decision has
to be made by the line manager, under whom the candidate has
to actually perform.
12. Employment:- The successful and the unsuccessful
candidates have to be informed and the appointment letter must
be sent.
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Placement
When once the candidate reports for duty, the
organization has to place him initially in that job for
which he is selected.
- Employees are trained for the job and also in relation
to related jobs.
- Employee is placed on the actual position, only when
the probation period is over.
- if the performance is satisfactory then only the
candidates are regularized.
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INDUCTION
“Induction is the process of receiving and welcoming
an employee when he first joins a company and giving
him the basic information he needs to settle down
quickly and happily and start work.”
This process is having lot of significance, as the rate
of turnover among new employees is very high in
comparison to senior executives.
(Lectures, handbooks, films, group seminars are used
to impart the information to new employees about the
environment of the job)
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The employees are made aware with:(i) About the company
•
History, growth, management, products,
markets, customers etc
•
Basic conditions of employment-hours of
work, shifts, holidays, retirement benefits
etc.
•
Pay, allowances, deductions
•
Grievances procedures
•
Canteen and restaurant facilities
•
Unions, negotiating machineries
54
(ii) About the department
•The department head introduces the new employee
to the important employees of the department.
•Functioning style of the department
•Work distribution, assignment, working hours etc.
(iii) About the superiors, subordinates etc
•To person whom he has to report
•To the persons with whom his work is related
•To the persons who are to report him
•To his colleagues
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Objectives of Induction
• Putting new employees at ease
•Creating the interest in his job and the company
•Providing basic information about working
arrangements
•Indicating the standards of performance and
behaviour
•Informing them about training facilities
•Creating the feeling of social security
•Minimizing the reality shock which would be
caused due to incompatibility.
56
Internal Mobility
The lateral or vertical movement (promotion, transfer,
demotion or separation) of an employee within an
organization is called internal mobility.
It may take place between jobs in various departments or
divisions.
Some employees may leave the organization for reasons
such as better prospects, retirement, terminations etc.
Such movements are known as external mobility.
57
Transfers
A transfer is a change in job assignment.
It may involve a promotion or demotion or
no change at all in status and
responsibility.
58
Purpose of Transfer
•
•
•
•
•
•
•
•
To meet the organizational requirements
To satisfy the employee needs
To utilize employees better
To make the employee more versatile
To adjust the workforce
To provide relief
To reduce conflicts
To punish employee
59
Promotion
• Promotion refer to upward movement of an
employee from current from current job to
another that is higher in pay, responsibility
and/or organizational level. promotion brings
enhanced status, better pay, increased
responsibility, better working condition to the
promote.
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Purpose of promotion
• To utilize the employee skill, knowledge
• To develop competitive spirit
• To develop competent internal source of
employees
• To promote employee self-development
• To promote interest in training
• To build loyalty
• To reward committed
61
Demotion
• Demotion is the downward movement of an employee
in the organizational hierarchy with lower status and
pay.
• It is a downgrading process where the employee
suffers considerable emotional and financial loss in
the form of lower rank, power and status, lower pay
and poor working conditions.
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Causes of Demotion
• A promote is unable to meet the challenges
posed by the new job
• Due to adverse business
conditions,organization may decide to lay off
some and downgrade other jobs.
• Demotion may be used as disciplinary tools
against errant employees
63
Separations
“A separations is a decision that the individual
and the organization should part.”
separations can take several forms, such as
temporary leaves of absence, attrition,
layoffs.
64
Separations
•
•
•
•
•
•
•
•
Temporary leaves of absence
Resignation
Retirement
Death
Lay off and retrenchment
Outplacement
Suspension
Discharge and dismissal
65
Training
Organization and individual should develop and
progress simultaneously for their survival and
attainment of mutual goals.
In order to meet these, organization’s formulate
human resource training programmes.
According to dale S. Beach“Training is the organizational procedure by
which people gain knowledge and skill for a
definite purpose.”
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Need for training
Training is not something just meant for new
employees but even it is needed on a continuous
basis.
• To match the employee specification with the job
requirement and organizational needs.
• Organizational viability and the transformation
process
• Technological advances
• Organizational complexity
• Human relation
• Change in job assignment
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Training objectives
To prepare the employee both new and old to meet the
present as well as the changing requirement of the
job.
• To prevent obsolescence.
• To impart the new entrants the basic knowledge and
skill needed for the job.
• To prepare the employee for higher level tasks
• To assist employees to function more effectively in
their present positions
• To build up a second line of competent officer and
prepare them to occupy more responsible position.
• To ensure smooth and efficient working of a
department.
• To ensure economical output of required quality
68
ASSESSMENT OF TRAINING
NEEDS
Training needs are identified on the basis of
organizational analysis, job analysis and man
analysis.
•
•
•
•
•
•
•
•
•
•
Organizational requirement/weaknesses
Department requirement/weaknesses
Job specification
Identifying specific problems
Anticipating failure problem.
Management' requests
Observation
Interviews
Group conferences
Questionnaire surveys
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PRINCIPLE OF TRAINING
•
•
•
•
•
•
Motivation
Progress information
Reinforcement
Practice
Full v/s part
Individual differences
70
AREAS OF TRAINING
•
•
•
•
•
•
Company policies and procedures
Specific skill
Human relations
Problem solving
Managerial and supervisory skills
Apprentice training
71
Types of Training
A variety of training programmes are used in different
organizations, depending on requirements and size of
their manpower. Some of the commonly used
programmes may be listed thus:
•
•
•
•
•
Orientation Training
Job Instruction Training
Refresher Training
Apprenticeship Training
Vestibule Training
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Training methods
• On the job training
–
–
–
–
–
Job-rotation
Coaching
Job Instruction
Training Through Step-by-step
Committee Assignments
73
• Off the job training
–
–
–
–
–
Vestibule Training
Role Playing
Lecture Method
Conferences or Discussions
Programmed Instruction
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Advantage of training
•
•
•
•
•
Increased productivity
Heightened morale
Reduced supervision
Reduced accidents
Increased organizational stability
75
Evaluation of Training Programme
The process of training evaluation has been defined
as “any attempt to obtain information on the
effects of training performance and to assess the
value of training in the light of that information.”
Evaluation helps in controlling and correcting the
training programme.
Hamblin suggessted five levels at which evaluation of
training can take place:•
•
•
•
•
Reactions
Learning
Job Behaviour
Organization
Ultimate Value
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Methods of Evaluation
• Questionnaires
• Tests
• Interviews
• Studies
• Human Resource factors
• Cost Benefit analysis
• Feedback
77
CAREER PLANNING
Individual Career Planning
Organizational Career Planning
78
WHAT IS CAREER PLANNING?
Career is all the jobs that are held during one’s working life.
Career Path is the sequential pattern of jobs that form a career.
Career Planning is the process by which one selects career
goals and the path to these goals
Career Development is those personal improvements one
undertakes to achieve a personal career plan.
Career Management is the process of designing and
implementing goals, plans and strategies to enable the
organization to satisfy employee needs while allowing
individuals to achieve their career goals.
79
CAREER STAGES:
1. Exploration
2. Establishment
3. Mid-Career stage
4. Late Career
5. Decline
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Establish ment
P
Late
Career
E
R
Exploration
Midcareer
F
Decline
O
R
M
A
N
Transition
from college
to work
Getting
first job
and
being
accepted
Performance
increaseor
decrease or
maintain
The
elder
states
person
Retirement
C
E
AGE
Stages in Career Development
81
NEED FOR CAREER PLANNING
 To attract competent persons and to retain them in
the organization
 To provide suitable promotional opportunities
 To enable the employees to develop and make them
ready to meet future challenges
 To increase the utilization of managerial reserves
 To correct employee placement
 To reduce employee dissatisfaction and turnover
 To improve motivation & morale.
82
PROCESS
Individual
needs and
aspirations
Individual strengths
and weaknesses
Placement
on career
path
Review
of
career
plans
Organizational
needs and
opportunities
Career Planning Process
83
Benefits of Career Planning to Employees
In the present context, because of change in the
perspective of criteria for measuring success, the
role of career planning for employees has
expanded.
Career planning benefits employees in following
ways:• Explicit career path
• Focused self-Development
• Increased productivity
84
Career Planning Benefits
to Organization
From an organization’s point of view, career planning
has a long-term orientation for filling various positions
from internal sources. When this practice is followed,
the organization derives the following benefits from
career planning:
•
•
•
•
Assured availability of talent
Attracting and retaining talent
Promoting organizational image
Protecting Interests of Special Groups of Employees
85
SUCCESSION PLANNING
Definition: A succession plan is a plan for identifying
who is currently in post and who is available and
qualified to take over in the event of retirement,
voluntary retirement, dismissal
Three Main Elements.
- The purpose of succession planning is to identify and
develop people to replace current job holders in key
positions.
- It enables to maintain the steady flow of internal talent
to fill important vacancies
- It emphasizes on “hiring from within” and creates a
healthy environment, where employees have careers
and merely job.
86
Need for Succession Planning
Organizations exist as on-going concerns while
personnel come in and go out on regular basis.
Therefore, the continued existence of an organization
over time requires a succession of personnel to key
positions.
So, this basically requires the succession planning:• Identification of right personnel
• Grooming of successors
• Boosts the morale of meritorious employees
87
Measures for effective Succession
Planning
Since succession planning is essential for every large
organization but obstacles generate due to faulty
organizational practices, some measures are needed to
make succession planning effective.
•
•
•
•
•
•
•
Involvement of Supervisory Board
Driven by CEO
Procedural Consistency
External benchmarking
Pool of Successors
Objectivity
Application of emotional intelligence
88
Executive Development
It is a systematic process of growth and
development by which managers develop their
abilities to manage
Role of the organization:
The role of the company in management
development is to establish the programme & the
development opportunities for its present and
potential managers.
89
Who is a manager and what does he
do?
The word manager has been used to mean people at
different levels of hierarchy.
All those who perform all or some of the basic
functions of management to some degree regularly or
occasionally are known as managers.
90
Knowledge and skills of the manager:
1}
2}
3}
Technical Skills : Human Skills : Conceptual Skills : These skills need constant up gradation as the
process of evolution of executive development
programme has gained momentum.
91
Evolution of executive
development:
 Shift from owner managed to professionally
managed enterprises.
 Management has been recognized as a distinct
kind of occupation consisting of acquired skills and
a unified body of knowledge.
92
Objectives of executive development
v To overhaul the management machinery.
v To improve the performance of the managers.
v To give the specializes on overall view of the function of
an organization and equip them to co-ordinate each
other’s efforts.
v To identify the persons with the required potential and
prepare them for positions.
v To increase the morale of employees.
v To increase the versatility of the mgt. Group.
v To keep the executives updated with the changes in their
fields.
v To improve thought process and analytical ability.
v To stimulate creative thinking.
93
Essential ingredients of the executive
development programmes.
Analysis of organizational present and development
needs.
Appraisal of present management talent.
Inventory of management manpower.
Planning of individual development programme.
Establishment of development programme.
Evaluation of the programme.
94
Techniques of management development
There are mainly two types of techniques by which managers can
acquire the knowledge, skills and attitudes and make themselves
competent.
Techniques
On – the Job
Coaching
Job Rotation
Understudy
Multiple Management
Off – the Job
The case method
Incident method
Role playing
In basket method
Business games
Sensitivity training
Simulation
Grid training
Conferences
95
On the Job Techniques: vJob Rotation
vUnder study
vMultiple management
vCoaching
96
Off – the Job Techniques: •
•
•
•
•
•
•
•
•
Incidents method
Role playing
In-basket method
The case study
Business games
Simulation
Managerial grid
Conferences
lectures
97
ORGANISATIONAL
RENEWALS
98
ORGANISATION:
Can be defined as a group of people combined together
for accomplishment of a common goal….
RENEWALS :
Can be defined as a rejuvenating activity…….
99
THEN WHAT IS ORGANISATIONAL
RENEWALS??
Can be defined as an activity of making change in the
internal environment commensurating with the
external environment…….
100
NEED FOR ORGANISATIONAL
RENEWALS
 Changing economic landscape
 Customer’s awareness
 Technological changes
101
EFFECTS OF “ORGANISATIONAL
RENEWALS”
POSITIVE EFFECTS
 Coping up with the changing environment.
 Adoption of new techniques.
 Freedom from monotonous jobs.
 Increase in the efficiency.
102
REQUISITES FOR THE
IMPLEMENTATION OF ORG.
RENEWALS………




Vision defined by leadership.
Managing the risk.
Innovation starts with creativity.
Organizational integration
103
IMPROVING BUSINESS BY
REDESIGNING WORK SYSTEM….
Studying the overall system.
Interconnectedness of the sub-systems.
How the system fits into the environment.
“What if “ scenario.
104
RENEWAL FRAMEWORK….
 GET GROUNDED.
 GET REAL.
 GET GOING.
105
Compensation System
An organization exists to accomplish the specific
goals and objectives. The employees hired by the
organization helps in the fulfillment of these goals.
These employees have their own needs. Needs can be
satisfied by providing money, goods and / or
services in return of their services.
The organizations have to use reward system which
helps in building a competitive / strategic
advantage.
106
Compensation System
“ Compensation includes direct cash payments,
indirect payments in the form of employee benefits
and incentives to motivate employees to strive for
higher levels of productivity.”
Its components:• Wage and Salary
• Incentives
• Fringe benefits
• Perquisites
107
Compensation Systems Should
Include: 1)
2)
3)
4)
5)
Signal to employees the major objectives of the
organizations, such as quality, customer focus etc;
Attract and retain the talent, an organization needs;
Encourage employees to develop the skills and
abilities they need;
Motivate employees to perform effectively;
Create the type of culture the company seeks to
engender.
108
Compensation Management Process
Organization’s Strategy
Compensation Policy
Job Analysis & Evaluation
Analysis of contingent factors
Design and implementation of
compensation plan
Evaluation and Review
109
Equity Theory
Employees want to be treated fairly. Equity is the
balance between the inputs an individual brings to a
job and the outcomes he / she receives from it.
Employee inputs include:Experience, education, special skills, effort and time
worked.
Outcomes include:Pay, benefits, achievement, recognition and any other
rewards.
110
Designing Equitable Compensation
Systems:THERE ARE THREE ELEMENTS OF EQUITY:Internal Equity:- Refers to the relation ship among jobs
within a single organization.
External Equity:- Refers to comparisons among
individuals in the same job within the same
organization.
Establishing Internal Equity:- Job evaluation methods.
111
Job Evaluation
Job evaluation deals with money and work. It determines
the relative worth or money value of jobs.
Wendell l. French defined job evaluation as, “a
process of determining the relative worth of the
various jobs within the organi8sation, so that
differential wages may be paid to jobs of different
worth .
Thus, job evaluation may be defined as a process of
determining the relative worth of jobs, ranking and
grading them by comparing the duties and
responsibilities like skill, knowledge of a job with other
jobs with a view to fix compensation.
112
Objectives of Job - Evaluation
(1) To gather data and information relating to job
description, job specification and employee
specifications of various jobs.
(2) To compare the duties, responsibilities and demands
of a job with that of other jobs.
(3) To determine the hierarchy and place of various jobs
in an organisation.
(4) To determine the ranks or grades of various jobs.
(5) To ensure fair and equitable wages on the basis of
relative worth or value of jobs.
(6) To minimise wage discrimination based on sex, age,
caste, region, religion etc.
113
Procedure of Job - Evaluation
The basic procedure of job evaluation is to compare the
job content of one job with those of another job.
INDIAN INSTITUTE OF PERSONNEL MANAGEMENT
has evolved the following steps for evaluating job.
1} Analyse and prepare job description
2} Select and prepare a job evaluation plan.
3} Classify jobs
4} Install the programme
5} Maintain the programme.
114
Essentials for the of job evaluation
programme
1)
v
v
v
2)
3)
4)
5)
6)
Compensable factors should represent all of the
major aspects of job content.
Avoid duplication in excess.
Be definable & measurable
Not excessive cost.
Operating managers must be convinced about the
techniques and programmes.
Complete information has to be provided to the
employees
All groups and grades of employees must be covered
under this programme
The techniques selected must be understandable
Trade union’s acceptance and support must be
obtained.
115
Job Evaluation Methods / Techniques
Job Evaluation Methods / Techniques
Quantitative
Points Rating
Method
Factors
Comparison
Method
Qualitative
Ranking
Method
Job classification
& Grading Method
116
Non – Quantitative method
Ranking Method
(a)
(b)
(c)
(d)
Simple Ranking
Ranking the key jobs
Paired Comparison
Single factor ranking method.
117
ADVANTAGES
1]
2]
3]
It is a simplest and most cost effective method.
This method is appropriate in small organization.
It is useful as a first and basic step of job
evaluation.
118
DISADVANTAGES
1]
This provides no yardstick for measuring the
relative worth of one job to another.
2]
Job requirements, job specifications and
employee specifications are not considered in
evaluation
3]
It does not indicate the extent or degree to which
one job is worthy than the other.
119
JOB CLASSIFICATION AND
GRADING METHODS
Class and grade are used differently in this method.
A GRDE is a group of different jobs of similar difficulty or
requiring similar knowledge and skill to perform.
A CLASS is a subdivision of a given occupation.
Under this method, jobs at different levels in the
organizational hierarchy are divided into various
grades with a clear cut definition of each grade.
Grades are formulated on the basis of nature of tasks,
requirements of skill, knowledge, responsibilities and
authority of various jobs.
120
QUANTITATIVE TECHNIQUES
POINTS RATING METHOD:This is a first method developed on the quantitative
basis.
This method is analytical in the sense that the jobs are
broken into components for the purpose of
comparison.
The factors like skill, knowledge, responsibility, working
conditions etc are given numerical values. These
totals are calculated and the values for each job is
calculated and accordingly compared.
121
ADVANTAGES : 1)
2)
3)
4)
Same pay (rates) scale can be arrived at for the
same jobs.
Definitions are written in applicable terms to the
jobs.
Points score cannot be manipulated.
Wage differentials would be systematic and
according to the content of job.
122
DISADVANTAGES : 1)
2)
3)
It is difficult to determine factor levels and assign
point values.
It is somewhat difficult to explain this method to
employees.
Operation of this method needs heavy expenditure.
123
FACTOR COMPARISON METHOD
this method is based on both principles of points rating
and ranking.
Under this, first the components sub – factors are
ranked under various factor (rating) headings.
Then monetary values are assigned to the components
or sub – factors.
Thus, each job is ranked a number of times.
124
ADVANTAGES
1)
2)
3)
4)
It is analytical $ quantitative
It is a combination of 2 good methods.
Modus operandi is really understandable.
The technique is reliable and valid compared to
other techniques as it consists of 2 aspects
factor rank order
factor comparison
125
DISADVANTAGES
1)
2)
It is costly and somewhat difficult to operate
compared to the conventional non – quantitative
methods.
This technique does not consider all the sub –
factors as the operation of the system would be
difficult if it considers all the factors.
126
ESTABLISHING EXTERNAL
EQUITY
Employers need to compete for the skills and knowledge
they require to operate their businesses ----- in order
to attract workers with needed skills and to motivate
and retain those already employed.
They use wage and salary surveys to find out what other
organizations are paying for particular skills.
Then, in setting pay rates, they seek to integrate the
external information with what they have learned
through the internal evaluation of jobs.
This process is called pricing the wage structure.
127
Establishing Pay Rates
The need for equity is the most important factor in
determining pay rates.
This is achieved through following steps:1.
2.
3.
4.
5.
Find out the worth of each job through job
evaluation.
Conduct a salary survey to find what other
employers are paying for comparable jobs.
Group similar jobs into pay grades
Price each pay grade by using wage curves
Fine tune pay rates.
128
Types of Wage Payments
1.
Time rate system:- Oldest Method
Under this system, workers are paid according to the
work done during a certain period of time.
The essential point is that the production of a worker is
not taken into consideration in fixing the wages.
Advantages:Employees maintains the quality of the production.
All the workers doing same work gets same
wages, so no jealousy.
Provides stable earnings to the employees.
Disadvantages:No difference between effective and non-effective
employees
129
2.
Piece Rate System:Under this system, workers are paid according to
the amount of work done or the number of units
completed, the rate of each unit being settled in
advance, irrespective of time taken to do the
task.
WE=NR
Workers earning = Number * Rate per piece.
Merits:1. The workers are paid according to their efficiency
as reflected in the amount turned by him.
2. The total unit cost of production remains lower as
the unit production increases.
130
3. Balance or Debt Method
This is a combination of time and piece rates.
The worker is guaranteed an hourly or a day-rate with
an alternative piece rate.
• If the earnings of a worker at piece rate>Amount
through time basis =he gets credit for the balance
• If the earnings through piece rate = time basis =
question of excess payment do not arises.
• If the earnings of a worker at piece rate<Amount
through time basis = he is paid on the basis of time
rate.
131
Pay for Performance
An incentive or reward can be anything that attracts a
employee’s attention and stimulates him to work.
According to BURACK and SMITH –” An incentive
scheme is a plan or programme to motivate individuals
or group performance. An incentive programme is most
frequently built on monetary rewards but may also
include a variety of non-monetary rewards.”
132
Classification or types of incentives:Incentives can be classified into:DIRECT COMPENSATION
INDIRECT COMPENSATION
Direct Compensation :- It includes the basic salary
or wage that the individual is entitled to for his job,
over-time work and holiday premium, bonuses based
on performance.
Indirect Compensation :- It includes protection
programmes (insurance plans, pensions), pay for
time not worked, services and perquisites. ---These
are maintenance factors.
133
Determinants of incentives
The individuals
Work situation
-Technology
- Satisfying job assignment
- Feedback
- equity
Incentive plan
134
Incentive Payments
Incentives are monetary benefits paid to workmen in
recognition of their outstanding performance.
ILO refers to incentives as “PAYMENT BY RESULTS”
- The primary advantage of incentives is the
inducement and motivation for higher efficiency and
greater output.
- Increased earnings would enable the employees to
improve their standard of living and help the
organization to improve their production capacity.
135
Types of Incentive Plans
(i) Plans for blue collar workers
(ii) Plans for white collar workers
(iii) Plans for managerial personnel
Incentive for Blue collar workers
(A) Short-Term
-
-
Systems under which the rate of extra incentive
is in proportion to the extra output.
Systems under which the extra incentive is
proportionately at a lower rate than the increase
in output.
Systems under which the rate of incentives is
proportionately higher than the rate of increase
in output.
136
Long term incentive plans for blue
collar workers.
Under such plans, each member of group receive a
bonus based on the output of the group as a
whole.
The most important reason for adopting group plan
– as the jobs are interrelated.
1. One worker’s performance reflects not only his
effort, but also of co-workers.
2. It encourages co-operation among group
members.
3. Group production levels tend to be more stable
than individual ones.
4. Group plans also facilitate on-the job training.
137
Group incentive plans
-Profit Sharing
- Scanlon plan ( plan to reduce the cost of
operation and improving working methods and
sharing in the gains of increased productivity.
138
Incentive plans for White collar
workers
75% organization pay this incentive to their sales
team.
Due to:The unsupervised nature of most sales work.
Tradition in the market
The assumptions that incentives are needed to
motivate salesmen.
(a) Straight salary method
(b) Straight commission
(c) Combination plans
139
Incentives for managerial personnel
In many organizations, the managers are paid
BONUS.
There are two types of bonus.
1) Determined by formula , like as increase
in sales
2) Determined by some discretion used in
the allocation of bonus
For top level management bonuses are
generally tied to overall corporate results.
140
Non-monetary incentives
While monetary incentives often appear as important
motivators, many factors unrelated to money can also
serve as “attention-getters” and “encouragers of
action”.
Examples:-A person with strong need for affiliation may respond
readily to job assignments.
-The opportunity to communicate with and relate to others
is a factor many workers emphasize.
-An employee with high-level desires for power may
respond easily to opportunity, where he can gain
leadership.
-Persons interested in enhancing their reputations and
receiving recognition in the eyes of others, respond to
verbal praise.
141
Services & Benefits
Besides base compensation and incentives,
employees are provided various types of benefits and
services by the organizations.
These are called by various names such as fringe
benefits, employee welfare, wage supplements, sub
wages, supplementary compensation, social security
etc.
142
Definition:“ Fringe benefits are supplements to wages
received by workers at a cost to the employers.
The term encompasses a number of benefits-paid
vacation, pension, health and insurance plans,
etc.—which usually add up to something more
than a fringe and is sometimes applied to a
practice that may constitute dubious benefits for
workers.”
143
Features of Fringe Benefits
• Fringe Benefits are provided to employees in addition to
their wages and other performance related incentives.
•These are provided to employees not for the performance
of any specific jobs but are offered to them as means for
facilitating the performance of their jobs.
•These are provided to all employees irrespective of their
work efficiency.
144
Types of benefits
There are numerous types of benefits which may be
provided to employees, and there are different ways
to classify them.
One such classification may be STATUTORY and
VOLUNTARY benefits.
Various benefits provided by an organization may be
classified under two groups:-----• Employee welfare
• Social Security
145
Major benefits offered in INDIA
• Payments for time not worked
- Weekly off-day
- Gazzetted holidays
- Personal leave
• Retirement Benefits
- Provident Fund Scheme
- Pension Scheme
- Gratuity
• Compensation Benefits
• Insurance Benefits
• Recreation Benefits
146
Performance Appraisal
After an employee has been selected for a job, has
been trained to do it and has worked on it for a period
of time, his performance should be evaluated.
Performance evaluation or appraisal is the
process of deciding how employees do their jobs
and performance here refers to the degree of
accomplishment of the tasks.
147
Definitions:Performance appraisal is the method of evaluating the
behaviour of employees in the work spot, normally
including both the quantitative and qualitative aspects
of job performance. So, performance appraisal is a
systematic and objective way of evaluating both work
related behaviour and potential of employees.
148
Features:1} The appraisal is a systematic process.
2} It provides an objective description of an employee’s
relevant strengths and weaknesses.
3} It tries to find out how well the employee is performing
the job.
4} The appraisal is carried out periodically, according to
definite plan.
5} It is not job-evaluation, but refers to how well one is
doing the job.
6} It may be formal or informal in nature.
149
Objectives of performance appraisal
Performance appraisal could be taken either for
evaluating the performance of employees or for
developing them.
Evaluation of employees ie appraisal serves several
useful purposes: Compensating decisions
 Promotion decisions
 Training and development programs.
 Feedback
 Personal development
150
WHAT IS TO BE APPRAISED ?
Every organization has to decide upon the content to be
appraised before the programme is approved.
Generally, the content to be appraised is determined
on the basis of job analysis.
The content to be appraised may be in the form of
contribution to organizational objectives like
production, savings in terms of cost, return on capital
etc.
151
WHO WILL APPRAISE ?
The appraiser may be any person who has through
knowledge about the job content, contents to be
appraised, standards of contents, and who observes
the employee white performing a job.
Supervisors
Peers
Subordinates
Self-appraisal
Users of services and consultants.
152
WHEN TO APPRAISE ?
Informal appraisals are conducted whenever the
supervisor or personnel managers feel it is necessary.
However, systematic appraisals are conducted on a
regular basis, say, for ext; every six months or
annually.
153
The Performance Appraisal Process
Performance appraisal is planned, developed and
implemented through a series of steps.
(a) Establish performance standards.
(b) Communicate the standards.
(c) Measure actual performance
(d) Compare actual performance with standards and
discuss the appraisal
(e) Taking corrective action, if necessary.
154
Methods of Performance Appraisal
Individual
Evaluation
Methods
Multiple-Person
evaluation
methods
Other
methods
- Confidential report
- Ranking
- Performance tests
- Easy evaluation
- Paired comparison
- Field review
- Critical incidents
- Forced distribution
technique
- Graphic rating scale
- Behaviorally anchored rating scales
- MBO.
155
Individual Evaluation Methods:
Here Employees are evaluated once at time without
comparing them with other employees:
1) Confidential Report
2) Essay evaluation
3) Critical Incident Technique
4) Graphic Rating Scale
5) MBO
6) Behaviorally Anchored Rating Scale
156
BARS IS CONTRUCTED BY
Collecting critical incidents
Identifying performance dimensions
Reclassification of incidents
Assigning score values to incidents
Producing the final instrument
157
What is 360 assessment ?
It’s a full-circle overview of a person’s performance on
the job. Instead of a single evaluation from the boss, a
person receives feedback from many workplace
source.
The boss still gives input, but peers and direct reports
also set involved in the evaluation process. The
person participating in a 360 gets to rate his or her
performance
158
Advantages of 360 feedback system
Everybody involved in the process benefits:
- Participants gets a fairer, well – rounded impression
of how their work is viewed by others.
- Bosses get an overall perspective about a persons
skills.
- Peers and direct reports get an opportunity to share
concerns which helps them to contribute constructive
changes.
- Team members can use the information to identify
and prioritize team development needs.
159
Features of 360 feedback:
- It is an assessment process used to improve
managerial effectiveness by providing the manager
with a more complete assessment.
- The process involves obtaining feedback from the
manager’s key contacts,
v The manager himself
v Subordinates
v Peers
v Manager
v Customers
160
v suppliers
Features of 360 feedback:
- Feedback is normally gathered by means of a
questionnaire, which asks participants to rate the
individual according to observed behaviours.
- The 360 process will not suit all the companies.
Presenting the results of the appraisal to managers in
a constructive way is critical to the success to the
process.
161
360 performance appraisal
This is an attempt to the updation of the traditional
employee appraisal process & is one of the
fashionable techniques of the mid 1990s, fitting in with
other news tools called team mgt, employee
empowerment and total quality management.
360 - feedback, as the term implies, brings together
formal appraisals from everybody that the person
being assessed comes into contact with line mangers,
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.
162
How does the checkpoint 360
system work ?
1)
2)
3)
The standard checkpoint survey has to items and
takes approx. 15 minutes to complete it covers
competencies in the areas of communications,
leadership,
adaptability,
Relationships,
task
Management, Production, Development of others.
Results from all these surveys are compiled in a
confidential feed back report.
Graphs and charts relate the data in a detailed,
easy – to – understand format.
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.
163
Potential Appraisal
Evaluating what a person can perform or do is called
‘potential appraisal or evaluation’.
Potential refers to the abilities present but not currently
utilized. It is a latent capacity in a person to discharge
a responsibility.
“people are like icebergs. What you see above the
surface is only a small part. A large part of the
attributes needed to perform excellently in future job,
which I call potential is not immediately visible. It is
hidden below surface”.
164
Potential Appraisal
It is characterized by 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 hight level of integrity.
5) Broader vision and micro perception.
165
Why potential appraisal objectives:1)
2)
To 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.
Assist the organization to allocate jobs among
employees as per their capabilities so that
organizational responsibilities are discharged
effectively.
166
Evaluation of Employee Potential:
1)
Determination of role dimension
2)
Determination of mechanism
3)
Linking potential with other elements.
167
INDUSTRIAL RELATIONS
• According to Armstrong“Industrial relation is concerned with the system and
procedures used by unions and employers to
determine the reward for effort and other conditions of
employment, to protect the interest of the employed
and their employers, and to regulate the ways in
which employers treat their employees.”
• According to Industrial Labour Organization (ILO)“Industrial relation deal with either the relationship
between the state and employers and workers
organization or the relation between the occupational
organizational themselves.”
168
Features of industrial relations
• Relation between employees and employer
• The outcome of the practice of human resource HRM
and employment relations
• Accommodating other party’ interest, values and
needs
• Governed by the system of rules and regulations
• To maintain harmonious relation between employees
and employer
• Trade union is another important institution in the
industrial relation
• Develop the skills and methods of adjusting
169
Objectives of industrial relations
• To promote and develop congenial labour
management relations
• To enhance the economic status of the worker
by improving wages, benefits and by helping
in evolving sound budget
• To regulate the production by minimizing
industrial conflicts through state control
170
WHAT EXACTLY IS EQ?
EMOTIONAL QUOTIENT
Emotion reters to a feeling with its distinctive thoughts,
psychological and biological states, and ranges of
propensities to act. There are hundreds of emotions,
along with their blends, variations, mutations and
nuances.
171
WHAT EXACTLY IS EQ?
EMOTIONAL QUOTIENT
 Anger Fury, outrage, resentment, wrath, exasperation,
indignation,
vexation,
acrimony,
animosity,
annoyance, irritability, hostility and, at the extreme,
pathological hatred and violence.
 Sadness Grief, sorrow, cheerlessness, gloom,
melancholy, self-pity, loneliness, dejection, despair
and pathological severe depression.
 Fear Anxiety, apprehension, nervousness, concern, is
giving, wariness, qualm, dread, fright, terror, as a
psychopathology, phobia and panic.
 enjoyment., Happiness, joy, relief, contentment, bliss,
delight, amusement, pride, sensual pleasure, thrill,
rapture, gratification, satisfaction, euphoria, ecstasy
172
and, at the extreme, mania.
EMOTIONAL QUOTIENT
‘Emotional Quotient’ (or EQ) is used interchangeably
with ‘Emotional Intelligence’. In simple terms, this can
be defined as knowing what feels good, what feels
bad, and how to get from bad to good. A more formal
academic definition refers to emotional awareness
and emotional management skills which provide the
ability to balance emotion and reason so as to
maximize long-term happiness.
173
EMOTIONAL QUOTIENT
Emotional intelligence includes components like selfawareness, ability to manage moods, motivation,
empathy and social skills such as cooperation and
leadership. It is believed that learning difficulties as
well as various problems of mal-adjustment at the
workplace have their origin in poorly developed
emotional awareness in early childhood. Emotions
enable human beings to respond appropriately to a
variety of environmental situations.
174
175