Human Resource

Management

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Human Resources Management

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Organization as Input-Output system

Acquiring
inputs from Conversion
Exporting to
environment Process Outputs
Environment

Using financial
resources by By human By human
human resources resources 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.”
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 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:

Personnel Welfare
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, maintenance-
oriented 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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 MARKETING

GOVERNMENT TECHNOLOGICAL
& LEGAL
ORGN. CUTOMERS
POLITICS
POLITICAL HRM
UNION PPRODUCTION

FINANCE TRADE
ECONOMICS
SOCIAL& ORGN. STRUCTURE
RELIGIOUS

FIGURE:Environmental
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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.
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 Rich bell 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. Managers are reluctant to follow
guidelines as it curtails their freedom.
2. Conflict between implied and
expressed policy.
3. Not easy to Communicate.
4. 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) Planning
b) Organizing
c) Directing
d) Coordinating and Controlling

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 MANAGERIAL FUNCTIONS

Directing:
Planning stimulation and
INPUTS Organizing:
Determination Motivation of
Human And Economic Development of the
of short to long Organization
Resources Interacting orgn. structure
Range plans to Personnel
With according to
Accomplish According to
Environmental Changes Predetermined
Organization predetermined
Objective plans
plans

Controlling:assurance
Outputs: that directed action is
goods and services Taking place According to
needed by the Predetermined plans.
Organization customers

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Operative Functions
The operative functions of HRM are
concerned with the activities specifically
dealing with:

• 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 Activating
and threats strategy
Choice of
Structural
strategy implementation
Behavioral
Corporate implementation
mission Functional
and Strategic Strategy
implementation
objectives Alternatives Implementation

Corporate Personal Values and Role of HRM

strengths aspirations of Acquiring,
and strategists Developing,
weaknesses Integrating, and
Retaining right
personnel

Role of HRM in corporate strategic management

process
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 Human Resource Information System
• It is a system designed to supply information
required for effective management of human
resources in an organization;
• A Computerized HRIS is designed to monitor,
control and influence the movement of people
from the time they join the organization till the
time they separate from the organization.

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 Scope of Computerized HRIS

• Recruitment sub system information;

• Manpower Planning Sub system information;
• Personnel administration sub system information;
• Training sub system information;
• Maintenance Sub System Information;
• Appraisal sub system information system;
• Payroll sub system information system;
• Personnel Research Sub System Information;
• Job Analysis and Design subsystem Information.

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 Objectives of HRIS
• To make the desired information available in the
right form to the right person at the right time;
• To supply the required at the reasonable cost;
• To use the most efficient methods of processing
data;
• To provide necessary security and secrecy for
important and/or confidential information;
• To keep the information up to date.

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Uses of an
HR
Information
System
(HRIS)

Figure 2–12
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 Applications of HRIS
• Job Descriptions;
• HR Planning;
• Staffing;
• Succession Planning;
• Training and Development;
• Performance Appraisal;
• Job Evaluation;
• Compensation;
• Climate Analysis.

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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
Forecasting supply
needs for human Human Resource of human resources
resources
Planning

Identification of human
resource gap
Surplus human Shortage of human
resources 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. Improper Linkage between HRP and
Corporate Strategy
2. Inadequate Appreciation of HRP
3. Rigidity in Attitudes
4. Environmental Uncertainty
5. Conflict between Long-term and short-
term HRP
6. 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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 Stages in
the Job
Analysis
Process

Figure 6–8
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 Job Analysis
in
Perspective

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 Job Analysis Methods
Job
Job Analysis
Analysis
Methods
Methods

Specialized
Specialized
Observation Job
JobAnalysis
Analysis
Observation
Methods
Methods Computerized
Computerized
Interviewing
Interviewing Questionnaires
Questionnaires
Work
WorkSampling
Sampling Job
JobAnalysis
Analysis
Diary/Log
Diary/Log PAQ
PAQ
MPDQ
MPDQ

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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

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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
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:
 Company’s pay package;
 Quality of work life;
 Organizational culture;
 Career planning and growth;
 Company’s size;
 Company’s products and services;
 Geographical spread of the company’s operations;
 Company’s growth rate;
 Role of trade unions;
 Cost of recruitment;
 Company’s name and fame.
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 External factors:
 Socio economic factors;
 Supply and demand factors;
 Employment rate;
 Labour market conditions;
 Political, legal and governmental factors;
 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

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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 Application Blanks
Human Resource Plan Written Examination
Recruitment Preliminary Interview
Business Games
Tests
Final Interview
Assess the fit between Medical Examination
The job and the candidate 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
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References
Ritu Arora 59
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 :-
(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

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 (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.

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 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.

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 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.

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 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

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 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

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 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

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 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.

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 Separations
• Temporary leaves or absence
• Resignation
• Retirement
• Death
• Lay off and retrenchment
• Outplacement
• Suspension
• Discharge and dismissal

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Training

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 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

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 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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 PRINCIPLES OF TRAINING
• Motivation
• Progress information
• Reinforcement
• Practice
• Full v/s part
• Individual differences

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 AREAS OF TRAINING
• Company policies and procedures
• Specific skill
• Human relations
• Problem solving
• Managerial and supervisory skills
• Apprentice training

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 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

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• 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

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 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

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 OBJECTIVES
• Determine the ability of the trainees to perform
jobs for which they were trained.
• Determine the specific nature of training
deficiencies.
• Determine whether the trainees require any
additional on the job training.
• Determine the cost effectiveness of the
programme.

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 PRINCIPLES
• Evaluator must be clear about the goals &
purpose of evaluation.
• Continuous
• Specific
• Provides the means & focus for the trainers to
appraise themselves, their practices & their
products.
• Based on objective method and standards.

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 ADVANTAGES
• Helps in controlling & correcting the training
programme.
• Helpful to see what future changes in training
phase should be made to make it more effective.
• It’s utility to achieve the goal of an organization.
• Helpful to get new ideas, reactions & identify
weak segments in the total training programme.

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FIVE LEVELS FOR EVALUATION

REACTION

ULTIMATE
LEARNING
VALUE
FIVE
LEVELS

JOB
ORGANISATION
BEHAVIOUR

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CRITERIA FOR EVALUTION
INTERNAL

PARTICIPANTS
EXTERNAL
REACTION

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 TECHNIQUES OF
EVALUATION
• Experimental & control groups…
• Longitudinal or time series analysis…
• Questionnaires and structured
interviews…
• Cost benefit analysis…

Prepared by Ms. Ritu Arora 96

 ISSUES TO CONSIDER IN AN
EVALUATION
RELEVANT WHAT WHAT TO HOW TO
ISSUES TO TO EXAMINE FOR COLLECT DATA
EVALUATE ANSWERS
MEASURE
Are the participants Participants attitudes Comments Interviews;
learning, changing or skills before and Methods of participations questionnaires;
attitudes, or after training or Co-workers records;
improving skills? development
sessions.
superiors observations
Are the training or Participants on-the- Subordinates Records; interviews;
development job performance, performance, Questionnaires;
materials used on the behavior, attitudes & style Critical incidents
jobs? And style observations
What are the costs of Fixed and variable Cost of trainers; Budget records
training and costs of conducting Participants time; Travel
expenses; Consultants
development training or
fees; training aids; rent
programs and development utilities
techniques?
How long does the Participant on-the-job Subordinates Records; interviews;
training or performance, performance, Questionnaires;
development have an behavior & style over attitude & style Critical incidents
effect on an extended period of
participants? time observations
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 CAREER PLANNING

Individual Career Planning

Organizational Career
Planning

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 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.

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 CAREER STAGES:
1. Exploration

2. Establishment

3. Mid-Career stage

4. Late Career

5. Decline

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P Establish - Late
ment Career
E
R Exploration Mid-
Decline
career
F
O
R
M Getting
Transition first job Performance The
from college and increaseor elder
A decrease or states Retirement
to work being
N accepted maintain person

C
E

AGE
Stages in Career Development
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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.

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 PROCESS

Individual
needs and
aspirations

Review
Placement
Individual strengths of
on career
and weaknesses career
path
plans

Organizational
needs and
opportunities

Career Planning Process

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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

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 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

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 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.
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 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

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 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

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 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.

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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.

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 Knowledge and skills of the manager:
1} Technical Skills : -
2} Human Skills : -
3} Conceptual Skills : -

These skills need constant up gradation as the process

of evolution of executive development programme has
gained momentum.

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 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.

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 Objectives of Executive Development
 To overhaul the management machinery.
 To improve the performance of the managers.
 To give the specializes on overall view of the function of
an organization and equip them to co-ordinate each
other’s efforts.
 To identify the persons with the required potential and
prepare them for positions.
 To increase the morale of employees.
 To increase the versatility of the mgt. Group.
 To keep the executives updated with the changes in
their fields.
 To improve thought process and analytical ability.
 To stimulate creative thinking.
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 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.

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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 Off – the Job

Coaching The case method

Incident method
Job Rotation Role playing
In basket method
Understudy Business games
Sensitivity training
Multiple Management Simulation
Grid training
Conferences
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 On the Job Techniques: -

 Job Rotation

 Under study

 Multiple management

 Coaching

Prepared by Ms. Ritu Arora 116

 Off – the Job Techniques: -
• Incidents method
• Role playing
• In-basket method
• The case study
• Business games
• Simulation
• Managerial grid
• Conferences
• lectures

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ORGANISATIONAL
RENEWALS

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 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…….

Can be defined as an activity of making change in the

internal environment commensurating with the external
environment…….

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 NEED FOR ORGANISATIONAL
RENEWALS
 Changing economic landscape
 Customer’s awareness
 Technological changes

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 EFFECTS OF “ORGANISATIONAL
RENEWALS”
POSITIVE EFFECTS
 Coping up with the changing environment.
 Adoption of new techniques.
 Freedom from monotonous jobs.
 Increase in the efficiency.

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 REQUISITES FOR THE
IMPLEMENTATION OF ORG.
RENEWALS………
 Vision defined by leadership.
 Managing the risk.
 Innovation starts with creativity.
 Organizational integration

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 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.

RENEWAL FRAMEWORK….
 GET GROUNDED.
 GET REAL.
 GET GOING.

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 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.

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 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

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 Compensation Systems Should
Include: -
1) Signal to employees the major objectives of the
organizations, such as quality, customer focus etc;
2) Attract and retain the talent, an organization needs;
3) Encourage employees to develop the skills and
abilities they need;
4) Motivate employees to perform effectively;
5) Create the type of culture the company seeks to
engender.

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Compensation Management
Process
Organization’s Strategy

Compensation Policy

Job Analysis & Evaluation

Analysis of contingent factors

Design and implementation of

compensation plan

Evaluation and Review

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 Progression of compensation:
 Wage: is the remuneration paid, for the service of labor in
production, periodically to an employee/worker? It usually refers
to the hourly rate or daily rate paid to such groups as production
and maintenance employees.
 Salary: refers to the weekly or monthly rates paid to clerical,
administrative or professional employees.
 Wage levels: represents the money an average worker makes in
a geographical area or in his organization.
 Wage structure/grade: is used to describe wage/salary
relationships within a particular grouping. This grouping can be
according to occupation or organization. It mainly comprised of
jobs evaluation.
e.g.
Rs. 2500-100-3000-E.B-200-5000
(E.B. efficiency bar means performance standards)
Prepared by Ms. Ritu Arora 128
 Components of Compensation
System
Indirect Direct

Basic pay Merit pay

Salary wages
Incentive pay Deferred pay
Protection Pay for Services&
program time not perquisites
worked Bonus comm. Saving plan
Medical
Insurance Recreational Piece rate Stock purchase
Life ins. Vacations Facilities Profit sharing Annuity
Disability Holidays Car Stock option
Income Sick leave Financial Shift differential
Pension Jury duty
Social
Planning
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Free meals
Components of the compensation system:
• Basic Wage/Salary;
• Dearness allowance;
• House rent allowance;
• City compensatory allowance;
• Conveyance allowance;
• Leave travel concession;
• Education subsidy;
• Bonus(profit bonus/ incentive bonus);
• Medical;
• Provision fund;
• Pension;
• Overtime;
• Fringe benefits;
• Prepared by Ms. Ritu Arora
Social security benefits.
130
 In case of executives, various reimbursements are
also made as part of their salaries. These are:
 Company leased accommodation;
 Servant salary reimbursement;
 Company maintained car;
 Driver salary reimbursement;
 Children education;
 Scholarship to the children;
 Electricity, water, gas charges reimbursement;
 Insurance premium;
 Hospitalization;
 Office maintenance at residence;
 Household furniture and appliances;
 Holiday homes;

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 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.

Prepared by Ms. Ritu Arora 132

 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.

Prepared by Ms. Ritu Arora 133

 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 organisation, 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.

Prepared by Ms. Ritu Arora 134

 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.
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 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.

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 Essentials for the of job evaluation
programme
1) Compensable factors should represent all of the
major aspects of job content.
 Avoid duplication in excess.
 Be definable & measurable
 Not excessive cost.
2) Operating managers must be convinced about the
techniques and programmes.
3) Complete information has to be provided to the
employees
4) All groups and grades of employees must be covered
under this programme
5) The techniques selected must be understandable
6) Trade union’s acceptance and support must be
obtained.
Prepared by Ms. Ritu Arora 137
Job Evaluation Methods / Techniques

Job Evaluation Methods / Techniques

Quantitative Qualitative

Points Rating Factors Ranking

Method Comparison Method
Method
Job
classification
& Grading
Method Prepared by Ms. Ritu Arora 138
 Non – Quantitative method
Ranking Method
(a) Simple Ranking
(b) Ranking the key jobs
(c) Paired Comparison
(d) Single factor ranking method.

Prepared by Ms. Ritu Arora 139

 ADVANTAGES
1] It is a simplest and most cost effective method.
2] This method is appropriate in small organization.
3] It is useful as a first and basic step of job
evaluation.

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 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.

Prepared by Ms. Ritu Arora 141

 JOB CLASSIFICATION AND
GRADING METHODS

Class and grade are used differently in this method.

A GRADE 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.
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 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.

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 ADVANTAGES : -
1) Same pay (rates) scale can be arrived at for the same
jobs.
2) Definitions are written in applicable terms to the jobs.
3) Points score cannot be manipulated.
4) Wage differentials would be systematic and according
to the content of job.

Prepared by Ms. Ritu Arora 144

 DISADVANTAGES : -
1) It is difficult to determine factor levels and assign point
values.
2) It is somewhat difficult to explain this method to
employees.
3) Operation of this method needs heavy expenditure.

Prepared by Ms. Ritu Arora 145

 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.

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 ADVANTAGES
1) It is analytical $ quantitative
2) It is a combination of 2 good methods.
3) Modus operandi is really understandable.
4) The technique is reliable and valid compared to other
techniques as it consists of 2 aspects
factor rank order
factor comparison

Prepared by Ms. Ritu Arora 147

 DISADVANTAGES
1) It is costly and somewhat difficult to operate compared
to the conventional non – quantitative methods.
2) This technique does not consider all the sub – factors
as the operation of the system would be difficult if it
considers all the factors.

Prepared by Ms. Ritu Arora 148

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.

Prepared by Ms. Ritu Arora 149

 Establishing Pay
Rates
The need for equity is the most important factor in
determining pay rates.
This is achieved through following steps:-
1. Find out the worth of each job through job
evaluation.
2. Conduct a salary survey to find what other
employers are paying for comparable jobs.
3. Group similar jobs into pay grades
4. Price each pay grade by using wage curves
5. Fine tune pay rates.

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 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
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 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.

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 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.

Prepared by Ms. Ritu Arora 153

Rewards Systems

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 Pay for
Performance/Incentives
An incentive or reward can be anything that attracts
an 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.”

Prepared by Ms. Ritu Arora 155

 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.

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 Determinants of incentives

•The individuals

•Work situation
-Technology
- Satisfying job assignment
- Feedback
- equity

•Type of Incentive plan

Prepared by Ms. Ritu Arora 157

Types of Pay-for-performance
Plans

Prepared by Ms. Ritu Arora 158

 Types of Incentive Plans
• Individual incentive/recognition programs
• Sales compensation programs
• Team/group-based variable pay programs
• Organization-wide incentive programs
• Executive incentive compensation
programs

Prepared by Ms. Ritu Arora 159

 Types of Pay-for-performance Plans
Individual-based plans
• Individual-based plans
– Merit pay
– Bonus programs
– Lump-sum payments
• Advantages
– Rewarded performance is likely to be repeated – expectancy
theory
– Financial incentives can shape an individual's goals
– Help the firm achieve individual equity
– Fit in with an individualistic culture
• Disadvantages
– May promote single-mindedness
– Employees do not believe pay and performance are linked
– They may work against achieving quality goals, and they may
promote inflexibility.
Prepared by Ms. Ritu Arora 160
 Types of Pay-for-performance Plans
Individual-Based Plans

• Conditions under which individual-based

plans are most likely to succeed
– When the contributions of individual
employees can be accurately isolated
– When the job demands autonomy
– When cooperation is less critical to successful
performance or when competition is to be
encouraged

Prepared by Ms. Ritu Arora 161

 Types of Pay-for-performance Plans
Sales Compensation Programs
• Combination plan
– Pay is a combination of salary and commissions, usually with a
sizable salary component.
– Plan gives salespeople a floor (safety net) to their earnings.
– Salary component covers company-specified service activities.
– Plans tend to become complicated, and misunderstandings can
result.
• Commission-plus-drawing-account plan
– Commissions are paid but a draw on future earnings helps the
salesperson to get through low sales periods.
• Commission-plus-bonus plan
– Pay is mostly based on commissions.
– Small bonuses are paid for directed activities like selling slow-
moving items.
Prepared by Ms. Ritu Arora 162
 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.
Prepared by Ms. Ritu Arora 163
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.
• One worker’s performance reflects not only his
effort, but also of co-workers.
• It encourages co-operation among group
members.
• Group production levels tend to be more stable
than individual ones.
• Group plans also facilitate on-the job training.
Prepared by Ms. Ritu Arora 164
 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.

Prepared by Ms. Ritu Arora 165

 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

Prepared by Ms. Ritu Arora 166

 Types of Pay-for-performance Plans
Team-based Plans
• Team-based plans attempt to support other efforts to
increase the flexibility of the work force within a firm.
• These plans normally reward all team members equally
based on group outcomes.
• Advantages
– Foster group cohesiveness
– Facilitate performance measurement
• Disadvantages
– Possible lack of fit with individualistic cultural values
– Free-riding effect
– Social pressures to limit performance
– Difficulties in identifying meaningful groups
– Inter-group competition leading to a decline in overall
performance.
Prepared by Ms. Ritu Arora 167
 Types of Pay-for-performance Plans
Team-based Plans

• Conditions under which team-based plans are

most likely to succeed-
– When work tasks are so intertwined it is difficult to
single out who did what
– When the firm’s organization facilitates the
implementation of team-based incentives
– When the objective is to foster entrepreneurship in
self-managed work groups

Prepared by Ms. Ritu Arora 168

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.

Prepared by Ms. Ritu Arora 169

Advantages and
Disadvantages

Prepared by Ms. Ritu Arora 170

 Types of Pay-for-performance Plans
Corporate-wide Plans
• Corporate-wide Plans
– macro type of incentive program and is based on the entire corporation's performance
• Differences between Corporate-wide Plan and Gainsharing
– no attempt is made to reward workers for productivity improvements
– they are very mechanistic
– they may used to fund retirement programs although there are exceptions
• Profit-sharing plans
– Cash plans
• Employees receive cash shares of the firm’s profits at regular intervals.
– The Lincoln incentive system
• Profits are distributed to employees based on their individual merit rating.
– Deferred profit-sharing plans
• A predetermined portion of profits is placed in each employee’s account under a trustee’s
supervision.
• Employee stock ownership plans (ESOPs)
– A corporation annually contributes its own stock—or cash (with a limit of 15% of
compensation) to be used to purchase the stock—to a trust established for the
employees.
– The trust holds the stock in individual employee accounts and distributes it to
employees upon separation from the firm if the employee has worked long enough to
earn ownership of the stock.

Prepared by Ms. Ritu Arora 171

 Types of Pay-for-performance
Plans Corporate-wide Plans
• Advantages
– Financial flexibility for the firm
– Increased employee commitment
– Tax advantages
• Disadvantages
– Risk for employees
– Limited effect on productivity
– Long-run financial difficulties.

Prepared by Ms. Ritu Arora 172

 Types of Pay-for-performance
Plans Corporate-wide Plans
• Conditions favoring corporate-wide
plans
– Firm size
– Interdependence of different parts of
the business
– Market conditions
– The presence of other incentives

Prepared by Ms. Ritu Arora 173

 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.
Prepared by Ms. Ritu Arora 174
 Why Incentive Plans Fail
• Performance pay can’t replace good management.
• You get what you pay for.
• “Pay is not a motivator.”
• Rewards punish.
• Rewards rupture relationships.
• Rewards can have unintended consequences.
• Rewards may undermine responsiveness.
• Rewards undermine intrinsic motivation.

Prepared by Ms. Ritu Arora 175

 Implementing Effective Incentive Plans
• Ask: Is effort clearly instrumental in obtaining the
reward?
• Link the incentive with your strategy.
• Make sure effort and rewards are directly related.
• Make the plan easy for employees to understand.
• Set effective standards.
• View the standard as a contract with your
employees.
• Get employees’ support for the plan.
• Use good measurement systems.
• Emphasize long-term as well as short-term success.
• Adopt a comprehensive, commitment-oriented
approach.

Prepared by Ms. Ritu Arora 176

 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.

Prepared by Ms. Ritu Arora 177

 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.”

Prepared by Ms. Ritu Arora 178

 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.

Prepared by Ms. Ritu Arora 179

 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

Prepared by Ms. Ritu Arora 180

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

Prepared by Ms. Ritu Arora 181

 Types of Pay-for-performance
Plans Corporate-wide Plans
• Corporate-wide Plans
– macro type of incentive program and is based on the entire corporation's performance
• Differences between Corporate-wide Plan and Gainsharing
– no attempt is made to reward workers for productivity improvements
– they are very mechanistic
– they may used to fund retirement programs although there are exceptions
• Profit-sharing plans
– Cash plans
• Employees receive cash shares of the firm’s profits at regular intervals.
– The Lincoln incentive system
• Profits are distributed to employees based on their individual merit rating.
– Deferred profit-sharing plans
• A predetermined portion of profits is placed in each employee’s account under a trustee’s
supervision.
• Employee stock ownership plans (ESOPs)
– A corporation annually contributes its own stock—or cash (with a limit of 15% of
compensation) to be used to purchase the stock—to a trust established for the
employees.
– The trust holds the stock in individual employee accounts and distributes it to employees
upon separation from the firm if the employee has worked long enough to earn ownership
of the stock.

Prepared by Ms. Ritu Arora 182

 Types of Pay-for-performance
Plans Corporate-wide Plans
• Advantages
– Financial flexibility for the firm
– Increased employee commitment
– Tax advantages
• Disadvantages
– Risk for employees
– Limited effect on productivity
– Long-run financial difficulties.

Prepared by Ms. Ritu Arora 183

 Types of Pay-for-performance
Plans Corporate-wide Plans
• Conditions favoring corporate-wide
plans
– Firm size
– Interdependence of different parts of
the business
– Market conditions
– The presence of other incentives

Prepared by Ms. Ritu Arora 184

 Designing Pay-for-performance
Plans
Managers and Executives
• Annual bonus
– Plans that are designed to motivate short-term
performance of managers and are tied to
company profitability.
• Eligibility basis: job level, base salary, and impact on
profitability
• Fund size basis : nondeductible formula (net income)
or deductible formula (profitability)
• Individual awards: personal performance/contribution

Prepared by Ms. Ritu Arora 185

 Designing Pay-for-performance Plans
Managers and Executives
• Stock option
– The right to purchase a specific number of shares of
company stock at a specific price during a specific
period of time.
• Nonqualified stock option
• Indexed option
• Premium priced option
– Options have no value (go “underwater”) if the price
of the stock drops below the option’s strike price (the
option’s stock purchase price).

Prepared by Ms. Ritu Arora 186

 Designing Pay-for-performance
Plans
Managers and Executives
• Other plans
– Guaranteed loans to directors
• Loans provided to buy company stock.
• A highly risky and now frowned upon practice Key employee
program
– Golden parachutes
• Payments companies make to departing executives in
connection with a change in ownership or control of a
company.
– Performance plans
• Plans whose payment or value is contingent on financial
performance measured against objectives set at the start of a
multi-year period
Prepared by Ms. Ritu Arora 187
Productivity

Prepared by Ms. Ritu Arora 188

 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.

Prepared by Ms. Ritu Arora 189

 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.

Prepared by Ms. Ritu Arora 190

 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.

Prepared by Ms. Ritu Arora 191

 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

Prepared by Ms. Ritu Arora 192

 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.

Prepared by Ms. Ritu Arora 193

 WHO WILL APPRAISE ?

The appraiser may be any person who has thorough

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.
Prepared by Ms. Ritu Arora 194
 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.

Prepared by Ms. Ritu Arora 195

 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.

Prepared by Ms. Ritu Arora 196

 Methods of Performance Appraisal

Individual Multiple-Person Other

Evaluation evaluation methods
Methods methods

- Confidential report - Ranking - Performance

tests
- Essay evaluation - Paired comparison - Field review
- Critical incidents - Forced distribution technique
- Graphic rating scale
- Behaviorally anchored rating scales
- MBO. Prepared by Ms. Ritu Arora 197
 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

Prepared by Ms. Ritu Arora 198

 BARS IS CONTRUCTED BY

-Collecting critical incidents

-Identifying performance dimensions
-Reclassification of incidents
-Assigning score values to incidents
-Producing the final instrument

Prepared by Ms. Ritu Arora 199

 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

Prepared by Ms. Ritu Arora 200

 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.

Prepared by Ms. Ritu Arora 201

 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,
 The manager himself
 Subordinates
 Peers
 Manager
 Customers
 suppliers

Prepared by Ms. Ritu Arora 202

 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.

Prepared by Ms. Ritu Arora 203

 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.
Prepared by Ms. Ritu Arora 204
How does the checkpoint 360 system
work ?
1) 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.
2) 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.
3) 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.

Prepared by Ms. Ritu Arora 205

 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”.

Prepared by Ms. Ritu Arora 206

 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.

Prepared by Ms. Ritu Arora 207

 Why Potential Appraisal ?
1) 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.
2) Assist the organization to allocate jobs among
employees as per their capabilities so that
organizational responsibilities are discharged
effectively.

Prepared by Ms. Ritu Arora 208

 Evaluation of Employee Potential:
1) Determination of role dimension
2) Determination of mechanism
3) Linking potential with other elements.

Prepared by Ms. Ritu Arora 209

 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.”

Prepared by Ms. Ritu Arora 210

 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

Prepared by Ms. Ritu Arora 211

 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

Prepared by Ms. Ritu Arora 212

 PARTICIPANTS IN IR
• Workers & their organizations

• Managers and their organizations

• Role of government

Prepared by Ms. Ritu Arora 213

 ASPECTS OF IR
DEVELOPMENT OF HEALTHY LABOUR
MANAGEMENT RELATIONS
• Existence of responsible trade unions
• Collective bargaining,plant discipline &
satisfactory trade union
• Government

Prepared by Ms. Ritu Arora 214

 ASPECTS OF IR
MAINTENANCE OF INDUSTRIAL PEACE
• Legislative enactments & administrative action, labour
courts.
• Implementation & evaluation Committees
INDUSTRIAL DEMOCRACY
• Joint management councils
• Recognition of human rights “Labour is no longer an
article or a commodity of commerce”
• Suitable environment to adapt.

Prepared by Ms. Ritu Arora 215

 STRATEGIES OF IR

IN D U S TR IAL R E LATIO N S
S TR ATE G IE S

IN TE R N AL E XTE R N AL
S TR ATE G IE S S TR ATE G IE S

Prepared by Ms. Ritu Arora 216

 INTERNAL STRATEGIES
• The attitudes of management to employees &
unions
• The attitudes of employees to management
• The attitudes of employees to unions
• The prosperity of company, degree to which it
expands ,stagnates or run down
• Extent to which technological changes are likely
to affect employment conditions & opportunities

Prepared by Ms. Ritu Arora 217

 EXTERNAL STRATEGIES
• The effectiveness of unions & its officials
and extent to which officials can control
the activities of supervisors within the
company.
• The extent to which bargaining is carried
out at national or local plant level.
• .the legal framework within which industrial
relations exists.

Prepared by Ms. Ritu Arora 218

 SCOPE OF IR WORK
• Administration,including overall
organization,supervision and co-ordination.
• Liaison with outside groups and personnel
departments as well as with various cadres of the
management staff.
• The drafting of regulations,rules,laws or orders,and
their construction and interpretation.
• Employee counseling on all types of personnel
problems-educational , vocational, health, or
behavior problems.
• Suggestions plans and their uses in labour ,
management and production committees.

Prepared by Ms. Ritu Arora 219

 FUNCTIONAL REQUIREMENTS OF A
SUCCESSFUL IR PROGRAMME
• Top management support
• Sound personnel policies
• Adequate practices should be developed by
professionals
• Detailed supervisory training
• Follow-up of results

Prepared by Ms. Ritu Arora 220

 OUTPLACEMENT

Professional coaching, practical guidance

and essential facilities to help people
move to the next stage in their careers,
either within their current organizations or
elsewhere.

Prepared by Ms. Ritu Arora 221

 Outplacement assistance

Efforts made by the employer to help a recently

separated worker to find a job.

Assistance-
-paid leave,
-travel charges,
-search firm charges to the retrenched

employees
Prepared by Ms. Ritu Arora 222
 Services & Training Provided in
Outplacement
• Writing better resumes

• Preparing for the interviews

• Mock interviews

• Telling about networks & networkings

Prepared by Ms. Ritu Arora 223

 Services & Training Provided in
Outplacement…
• How to start their own private enterprise
and how to approach venture capitalists.

• A place to continue to operate in with a

cubicle, a computer with Internet
connection.

Prepared by Ms. Ritu Arora 224

 ADVANTAGES
• It shows the human face of the company.
• Eases the pain of retrenchment.
• Preserves the morale of remaining
employees.
• Smoothens the way for further downsizing
moves
• Helps to retain former employee’s respect.

Prepared by Ms. Ritu Arora 225

 DISADVANTAGES
• Time consuming
• Expensive
• Complex task
• Less acceptability
• Limited coverage
• Difficulty in implementation

Prepared by Ms. Ritu Arora 226

OUTSOURCING

Prepared by Ms. Ritu Arora 227

 OUTSOURCING
• Outsourcing is subcontracting a process, such
as product design or manufacturing, to a third-
party company .

• The client organization and the supplier enter

into a contractual agreement that defines the
transferred services.

Prepared by Ms. Ritu Arora 228

 Human Resource Outsourcing

Human Resource Outsourcing-

is a process in
which a company uses the services of a third
party to take care of its HR functions. A
company may outsource a few or all of its HR
related activities to a single or combination of
service providers located in offshore
destinations like India, China, Philippines, etc.

Prepared by Ms. Ritu Arora 229

 Why do you need HRO?

• Are you comfortable letting someone else

handle your HR functions?

• Do you have dedicated HR representatives or

adequate resources to manage your HR needs?

• Can your business afford an HR outsourcing

firm?

Prepared by Ms. Ritu Arora 230

 Basic services offered by HRO

• Overseeing organizational structure and staffing

requirements
• Recruiting, training and development
• Tracking departmental objectives, goals and
strategies
• Employee and manager training
• Benefits administration
• Employee orientation programs

Prepared by Ms. Ritu Arora 231

 Basic services offered by HRO…

• Providing you with skilled professionals who are

focused specifically on HR

• Helping you reduce and manage operating costs

• Improving employee relations If you need to hand

off the entire HR function, consider a
professional employer organization

Prepared by Ms. Ritu Arora 232

 Reasons for outsourcing
• Cost Saving
• Cost Restructuring
• Quality Improvement
• Knowledge
• Contract
• Operational Expertise
• Staffing Issues
• Capacity management

Prepared by Ms. Ritu Arora 233

 Reasons for outsourcing…
• Catalyst for Change
• Reduce Time to Market
• Commodification
• Risk management
• Time zone
• Customer pressure

Prepared by Ms. Ritu Arora 234

 Process of Outsourcing
1.Deciding to outsource
2.Supplier proposals
3.Supplier competition
4.Negotiations
5.Contract finalization
6.Transition
7.Transformation
8.On going service delivery
9.Termination or renewal

Prepared by Ms. Ritu Arora 235

 Criticisms of outsourcing
• Public opinion
• Against shareholder views
• Language skills
• Social responsibility
• Quality of service
• Staff turnover
• Company knowledge
• Qualifications of outsourcer
• Productivity

Prepared by Ms. Ritu Arora 236

 Issues of Concern for HR Manager

• Instability or military tension

• Cultural misunderstanding
• Security & privacy concerns
• Legal regulations.
• Special training requirements.
• Dealing with anxiety of employees abroad.

Prepared by Ms. Ritu Arora 237

 INTERNATIONAL HRM
• An international business must procure,retain
and effectively utilize services of people both at
the corporate office and at the foreign office.
• The process of procuring,allocation,and
effectively utilizing human resources in an
international business is called international
human resources mgmt.

Prepared by Ms. Ritu Arora 238

 Human Resource Activities

Procure Allocate Utilize Other

Home

Host-Country Nationals (HCNs) Host

Countries
Parent-Country Nationals (PCNs)

Third-Country Nationals (TCNs)

Types of Employee

Model of IHRM
Prepared by Ms. Ritu Arora 239
 Basic steps in IHRM
HRP
RECRIUTMENT AND SELECTION
TRANING AND DEVELOPMENT
PERFORMANCE MANAGEMENT
REMUNERATION
REPATRIATION
EMLOYEE RELATIONS

Prepared by Ms. Ritu Arora 240

ETHNOCENTRIC APPROACH
• In this approach, all key mgmt. Positions are
held by parent country nationals
• This strategy may be appropriate during the
early phases of international business, because
firms at that stage are concerned with
transplanting a part of the business that has
worked well in their home country.

Prepared by Ms. Ritu Arora 241

 POLYCENTIRC APPROACH
• The polycentric staffing requires host
country nationals to be hired to
manage subsidiaries ,while parent-
country national occupy key positions
in corporate headquarters

Prepared by Ms. Ritu Arora 242

 GEOCENTRIC APPROACH
• The staffing philosophy seeks the best
people for key jobs throughout the
organization, regardless of nationality

Prepared by Ms. Ritu Arora 243

 The advantages and disadvantages of using PCNs,TCNs and HCNs

Advantages Disadvantages
*Familiarity with home
office,goals objectives *Difficulty in adapting to
*Promising managers are the foreign
given international lang.culture etc
exposure
*Excessive cost of
*Easy organizational control
and coordination selection, training etc

Prepared by Ms. Ritu Arora 244

 HCNs
Advantages Disadvantages
• Familiarity • HCNs have limited
• Lower cost incurred in career opportunity
hiring,training etc outside the subsidiary
• Language and other • Communication
barriers are removed problem with home
office personnel

Prepared by Ms. Ritu Arora 245

 TCNs
Advantages Disadvantages
• TCNs are truly • Host country govt.
international may resent hiring
managers TCNs
• Host country’s
• Salary and benefit
sensitivity with
requirement may be respect to nationals of
lower than for PCNs specific countries

Prepared by Ms. Ritu Arora 246

 The expatriate problem

A person living in a country that is not their own

Cross- Family
Technical -
Cultural
ability requirements
suitability

Selection decision

MNC
language requirements

Factors inPrepared
expatriate selection
by Ms. Ritu Arora 247
 Crisis and Reassignment
Determining the need Adjustment Abroad
for an Expatriate

Post-arrival Repatriation

Departure Orientation and And

Training Adjustment
The
Selection Pre-assignment
Process Training Crisis and
Failure

The Expatriate Assignment Life

Cycle

Prepared by Ms. Ritu Arora 248

 Training and development
• Cultural training
• Language training
• Practical training
• Management development and strategy
• Performance management

Prepared by Ms. Ritu Arora 249

 THE REPATRIATION
PROCESS
• PREPARATION
• PHYSICAL RELOCATION
• TRANSITION
• READJUSTMENT

Prepared by Ms. Ritu Arora 250

 Employee Leasing
An employee leasing company is a business, which by agreement and
for a fee, places employees of a client company on the leasing
company's payroll. In turn, the leasing company "leases" these
employees back to their original employer, usually for an unlimited
period of time.

Through a co-employment relationship with the business and

employees, Employee Leasing Organizations will help to reduce your
administrative burdens like payroll, payroll taxes and personnel
record-keeping. Employee Leasing Organizations can also provide
expert guidance in the areas of human resources, compliance, and
safety as well as minimize employee turnover with enhanced
employee benefits. In many cases employer liability can be
significantly reduced

Prepared by Ms. Ritu Arora 251

PEO Employee Leasing - Discover How to Totally Eliminate

Your Workers Compensation Liabilities

• No More Workers Comp Audits

• Zero Workers Comp Claims
• HR Headaches Eliminated
• Retention Increase 90%
• Affordable Employee Benefits

Prepared by Ms. Ritu Arora 252

 Benefits of EL
• Employee leasing companies provide a number of valuable
services to their clients. Typically, an employee leasing
company will provide payroll services and assist companies in
managing their human resources by providing employee
manuals and other services, which are sometimes difficult for
smaller companies to provide on their own
• . Better management of workplace safety can help control the
cost of worker compensation. Improved hiring practices and
experienced representation in unemployment insurance benefit
and tax matters can help keep the cost of unemployment
compensation down
• In some cases, client employers, which could not afford to
provide certain benefits such as health insurance, find it
affordable to do so when taking advantage of the buying power
of an employee leasing company.

Prepared by Ms. Ritu Arora 253

• Employee Leasing Organizations are growing at a
rate of over 30% per year. Outsourcing non-
productive employee administration responsibilities
have become more and more popular. Employee
Leasing has taken many forms, PEO's Professional
Employer Organizations, ASO's Administrative
Service Organizations, Administrative Employers
and more.

Prepared by Ms. Ritu Arora 254

 HUMAN RESOURCE
AUDIT
HRA AND RESEARCH ARE IMPORTANT
PARTS OF THE HUMAN RESOURCE
MANAGEMENT PROCESS.ALL THE
PERSONNEL POLICIES,PRACTICES AND
PROGRAMMES MUST BE APPRAISED
CRITICALLY IN ORDER TO KNOW THEIR
EFFECTIVENESS.

Prepared by Ms. Ritu Arora 255

 PURPOSE OF PERSONNEL
RECORDS
• ENABLING MANAGERS TO TAKE PERSONNEL
DECISION.
• SUPPLYING INFORMATION REQUIRED BY
GOVERNMENT AGECIES ON VARIOUS MATTERS.
• MAINTENANCE OF UPTO DATE INFORMATION OF
EMPLOYEES.
• CONDUCTING RESEARCH IN THE FIELD OF
INDUSTIAL RELATION.
• PROVIDING DATA TO FACILITATE HUMAN
RESOURCE AUDIT.

Prepared by Ms. Ritu Arora 256

 ESSENTIALS OF RECORD
• SIMPLICITY.

• ACCUARCY.

• ECONOMY.

• USEFULNESS.

Prepared by Ms. Ritu Arora 257

 TYPES
• INDIVIDUAL SERVICE RECORDS.

• PERFOMANCE RECORDS.

• LEAVE RECORDS.

• TRAINING RECORD.

• HEALTH AND SAFTY RECORDS.

Prepared by Ms. Ritu Arora 258

 PRINCIPLES OF RECORD
• PURPOSE FOR WHICH THE RECORD IS KEPT MUST
BE JUSTIFIABLE.
• RECORDS MUST BE CAPABLE OF VERIFICATION.
• RECORDS MUST BE CLASSIFIED.
• THE REQUISITE INFORMATION MUST BE AVILABLE
WHEN NEEDED.
• RECORDS MUST BE PRODUCED AND MAINTAINED
AT A REASONABLE COST.
• RECORDS MUST BE PRECISE.
• THE SYSTEM OF RECORD KEEPING MUST BE
ELASTIC.

Prepared by Ms. Ritu Arora 259

 RECRUITMENT AND
SELECTION AUDIT
• Recruitment and selection policy:
• Determine recruitment and selection
policy.
• Policy formulation.
• Communication of policy.
• Consistency of policy.
• Recruitment & selection practices.
• Programmes.

Prepared by Ms. Ritu Arora 260

HR IN KNOWLEDGE
ERA

Prepared by Ms. Ritu Arora 261

 WHAT IS KNOWLEDGE ???
• KNOWLEDGE IS THE CAPACITY TO
ACT

• IT IS ABOUT ISSUES AND CONTEXT

Prepared by Ms. Ritu Arora 262

 TYPES OF KNOWLEDGE
• TACIT KNOWLEDGE

PERSONAL KNOWLEDGE GAINED

THROUGH EXPERIENCE AND IS
SHARED THROUGH DIRECT AND FACE
TO FACE CONTACT

Prepared by Ms. Ritu Arora 263

 EXPLICIT KNOWLEDGE
• IS A FORMAL KNOWLEDGE THAT CAN
BE PACKAGED AS INFORMATION

• FOUND IN THE DOCUMENTS OF

ORGANISATION – REPORTS ,
ARTICLES AND MANUALS.

Prepared by Ms. Ritu Arora 264

 KNOWLEDGE MANAGEMENT
• IS A SYSTEMATIC , EXPLICIT AND DELIBERATE BUILDING ,
RENEWAL,AND APPLICATION TO MAXIMISE ORGANISATION’S
KNOWLEDGE RELATED EFFECTIVENESS AND RETURN FROM
KNOWLEDGE ASSETS
A PROCESS WHEREBY DATABASE IS MAINTAINED TO ENSURE
THAT RIGHT INFORMATION REACHES TO THE RIGHT
PERSON AT RIGHT TIME.

Prepared by Ms. Ritu Arora 265

 WHY WE NEED IT
• INDUSTRIAL ECONOMY TO
DECENTRALIZED GLOBALIZED ECONOMY.
• INFORMATION DRIVEN ECONOMY
• KNOWLEDGE OF LOCAL AREA
• CROSS CULTURAL DIMENSIONS
• SHIFTING FOCUS FROM CONSUMPTION OF
MATERIAL THINGS TO THE CONSUMPTION
OF INFORMATION.

Prepared by Ms. Ritu Arora 266

FOUR COMPONENTS OF KM
• DEVELOPING NEW KNOWLEDGE
• SECURING NEW AND EXISTING
INFORMATION
• DISTRIBUTING KNOWLEDGE
• COMBINING AVAILABLE INFORMATION

Prepared by Ms. Ritu Arora 267

 THE WORK OF FOLLOWING IS
TOTALLY KNOWLEDGE BASED
• CUSTOMER SERVICE
• INFORMATION SYSTEM
• FINANCE
• HR/ ADMINISTRATION
• MANAGEMENT

Prepared by Ms. Ritu Arora 268

PROCESS OF KNOWLEDGE
MANAGEMENT

Prepared by Ms. Ritu Arora 269

 IDENTIFY COLLECT

SHARE AND APPLY

SELECT
CREATE AND SELL

STORE

Prepared by Ms. Ritu Arora 270

CHALLENGES OF KM
PAST
EXPER.

BOUNDED
RULES&
RATIONA KM
NORMS
LITY

TUNNEL
VISION

Prepared by Ms. Ritu Arora 271

 ADVANTAGES
• INCREASE IN PRODUCTIVITY
• IMPROVES QUALITY
• LEADS TO BETTER COORDINATION
• IMPROVES WORK ENVT
• CREATIVE THINKING

Prepared by Ms. Ritu Arora 272

 CONCLUSION
• NECESSARY TO MAKE
ORGANIZATIONS INNOVATIVE AND
COMPETITIVE

• ROLE OF HR MANAGER TO TAKE UP

THIS CHALLENGE AND TO CREATE
AND MANAGE KNOWLEDGE

Prepared by Ms. Ritu Arora 273

 VIRTUAL ORGANISATIONS
• IT IS A SOCIAL NETWORK IN WHICH ALL
HORIZONTAL AND VERTICAL BOUNDARIES
ARE REMOVED.
• INDIVIDUALS WORKING AT DIFFERENT
WORKSPACES
• CREATION OF NETWORK RELATIONSHIP
THAT ALLOWS FOR CONTRACTING ,
MANUFACTURING , DISTRTIBUTION,
MARKETING, OR ANY OTHER BUSINESS
FUNCTION

Prepared by Ms. Ritu Arora 274

 CHARACTERSTICS
• POWER FLEXIBILITY
• INFORMAL COMMUNICATION
• FLAT ORGANISATION
• GOAL ORIENTATIONS
• DYNAMICS
• HOME WORK
• NO ORG. BOUNDARIES
• CUSTOMER ORIENTATION

Prepared by Ms. Ritu Arora 275

 FEAURES OF VIRTUAL
ORGANISATIONS
• TECHNOLOGY
• E-MAIL INTEGRATION (EXPRESS WAY)
• OFFICE SYSTEMS INTEGRATION
• VOICE MAIL ALERT
• MOBILE DATA

Prepared by Ms. Ritu Arora 276

 ADVANTAGES
• SAVES TIME, MONEY ELIMINATES
LACK OF ACCESS TO EXPERTS
• PROXIMITY NOT REQUIRED FOR
ORGANISATION
• EXPANSION
• BALANCE PERSONAL AND
PROFESSIONAL LIFE

Prepared by Ms. Ritu Arora 277

 HR ISSUES IN VIRTUAL
ORGANISATIONS
• CAREER DYNAMICS

1. RECRUITMENT IS CONDUCTED UNDER HIGH

PRESSURES
2. HIGH PERFORMANCE IS EXPECTED
3. NETWORKING AND SKILLS BECOME CRITICAL
4. STABILITY IN RELATIONS IS NOT REQUIRED
5. NEED OF MOBILITY IS HIGH
6. HEAVY INVESTMENT

Prepared by Ms. Ritu Arora 278

 PERFORMANCE MANAGEMENT

• DEFINE PERFORMANCE
• FACILITATE PERFORMANCE
• ENCOURAGE PERFORMANCE
• COMMUNICATION
• SELECTION PROCESS

Prepared by Ms. Ritu Arora 279

 HR IN MERGER AND
ACQUISITIONS
• MERGER --- TWO COMPANIES COME
TOGETHER TO CREATE A NEW
IDENTITY
• ACQUISITION--
ONE COMPANY BUYS
OTHER AND APPLIES ITS OWN RULES
AND REGULATIONS

Prepared by Ms. Ritu Arora 280

 WHY M &A FAIL
• EXPECTATIONS ARE UNREALISTIC
• TALENT IS LOST OR MISMANAGED
• REQUIRES AN IMPOSSIBLE DEGREE OF
SYNERGY
• CULTURAL DIFFERENCES
• UNDER ESTIMATION OF COST
• ILL CONCEIVED HR INTEGRATION
STRATEGIES

Prepared by Ms. Ritu Arora 281

Stages in M & A

POST UNION PRE UNION

IN PROCESS
UNION

Prepared by Ms. Ritu Arora 282

 KEY TO SUCCESS
• WELL THOUGHT GOALS
• KEY TALENT RETAINED
• PLANNING AND TIMELY ACCOMPLISH
• DUE DILLIGENCE ON ISSUES
• WELL MANAGED TEAM
• EFFECTIVE LEADERSHIP

Prepared by Ms. Ritu Arora 283

 SKILLS AND COMPETENCIES
• STRATEGIC KNOWLEDGE
• EFFECTIVE COMMUNICATION
• MOTVATING SKILLS
• ANALYTICAL SKILLS
• GOOD TRAINOR AND FACILITATOR
• GOOD MEDIATOR
• GOOD LEADER

Prepared by Ms. Ritu Arora 284

 CONCLUSION
• HR DEPARTMENT SHOULD PLAY PRO-
ACTIVE ROLE TO ANCHOR THE
WHOLE PROCESS AND TO MINIMISE
THE REASONS OF FAILURE

Prepared by Ms. Ritu Arora 285