L. R. Associates Pvt. LTD.: Manpower Planning

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Manpower Planning The need for companies to take a searching look at their future manpower requirements has become more and more evident, and manpower planning is more important for management than it has ever been. There are three main arguments in favour of manpower planning. Firstly, there is considerable evidence to indicate that for some time to come there will be a shortage of quality manpower, particularly technological and scientific manpower, the demand for which is steadily increasing. Secondly, changes in manpower requirements in skill terms are likely to be much more rapid in the future than they have been in the past. No longer is a man able to learn a skill in his youth, which will carry him through the whole of his working life; it is probable that the young and the not so young man will have to change his skill once, or even twice, in the course of his working life. Thirdly, the ever increasing costs of manpower. Demands for higher standards of living and increased leisure are tending to push these up at an even faster rate.
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Assuming that the average stay in a company of a newly recruited graduate engineer is three years, and that such a recruit is normal, but not exceptional; then the cost in salary alone over the three-year period is likely to be (at current values) of the order of Rs. 8,000/- per month. If, however, one adds on the other costs of staff pensions, various fringe benefits, accommodation and office services, etc. then the total cost is of the order of Rs. 20,000/- per month. No one contemplating the purchase of a piece of plant or equipment, with a similar life-span, costing that amount would do so without the most careful study of its suitability for the purpose for which it was intended, its capacity, the means by which that capacity could be utilized to the full, its place in the scheme of production, and the expected return on the investment. Few companies apply the same level of criteria of consideration to manpower. The reason for this difference in approach lies in the traditional attitude to manpower as a cost rather than as an investment. Yet while machinery
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depreciates and eventually become obsolete, properly developed manpower can continue to grow in usefulness and capacity. The view that there is likely to be a shortage of quality staff over the longer term, or in the one that presently exists, is not universally shared. Some take the view that there is considerable under-use of talents and abilities, and that there is a large, as yet untapped, potential for the exercise of higher skills if only adequate training and education can be made available. This, in itself, is a very large subject. The objective of manpower planning is, and must be, to improve manpower utilisation and to ensure that there is available manpower of the right number and the right quality to meet the present and future needs of the organization. It must, therefore, produce, a realistic recruitment policy and plan and must be very much concerned with costs and productivity.
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Role and Content of Manpower Planning Manpower planning, in its broadest sense, covers all those activities traditionally associated with the management of personnel records, recruitment, selection, training and development, appraisal, career planning, management succession and so on. But it is important, both for analytical purposes and ultimately for executive purposes, to disentangle these activities and to think of them as a number of sequential phases. Phase 1: The development of manpower objectives: This is concerned with the development of forecasts of the manpower necessary to fulfill the companys corporate objectives, with looking at the totality of situations rather than at individuals. It is concerned with detailed analysis in order to identify and foresee problem areas, to assess future demands and to establish how those demands may be met. It is directed towards the development of manpower strategy as an integral part of company strategy. Phase 2: The management of manpower: In this phase, the question is one of managing manpower resources to meet objectives and the development, in more specific and individual terms, of recruitment plans, training and development plans, succession plans, appraisal systems, etc.

Phase 3: Control and evaluation: This concerns the continual evaluation and amendment of plans in the light of achievement and changing circumstances. Planning starts from a given factual position and tries to look ahead through a range of possibilities. Evaluation in this context means thoroughly checking forecasts and forecasting methods against what eventually happens, and making such revisions as may prove necessary. Any planning activity must have a system for this regular checking built into it. In other words, planning must be a continuing process. The components of the second phase are fairly familiar in industry and are often taken to be synonymous with manpower planning.

It is the ultimate aim of any complete system of manpower planning that all three phases should be fully integrated. Manpower planning must be fully integrated with the company plan. Indeed without a company plan, there can be no realistic manpower planning.
The present position and the analysis of trends
In manpower planning there are three basic elements to be considered the present stock of manpower; wastage, and future requirements for manpower. Information will be needed in a series of permutations and combinations according to the needs of the company. The following are the basic building blocks that will probably be needed in most circumstances: 1. Present total manpower. 2. Manpower resources by appropriate planning groups, for example, sex, grade, function/department, profession/skill, qualification, age group, and length of service. 3. Total manpower costs. 4. Total costs by appropriate component elements, for example, salaries, wages, pension contributions, welfare, canteen, etc.
5. Costs by functions/departments. 6. Costs indices and ratios (see control and evaluation below). 7. Total numbers related to sales, production or such other criteria as may be appropriate, in physical and financial terms. 8. Attrition and retention rates by appropriate groups, that is, overall, by function/department, profession, sex, age group, etc. 9. Recruitment patterns by age, education, etc. for each function/department. 10. Resources of promotable staff.
Forecasting future manpower movements Future manpower requirements are self-evidently governed by the companys corporate plan and they can only be considered in that context. Indeed, without a corporate plan there can be no realistic manpower plan. It follows that no forecast for the forward demand of manpower can be more precise than the formulation of the companys overall objectives. Clearly, it is also important that a companys objectives should be so stated as to be interpretable in terms of manpower involvement. The factors affecting manpower demand fall into two main groups: trading and production patterns and technological change. Some indication of the extent to which volume and patterns of trade, and technological change affect manpower will have been gathered from the analyses. Control and Evaluation Two broad and complementary approaches to the control and evaluation of the manpower plan are necessary, one in terms of numerical trends and the other in terms of costs criteria.
Assuming that the planning period is of five years, then the plan prepared in 1992 would go through to the end of 1997. In the autumn of 1993, the plan should have been reviewed and up-dated where necessary and extended to include 1998. The first step is, as has been stated, the review and up dating of the corporate plan. This normally takes the form of a package of expectations and objectives, all of which are considered mutually consistent and feasible. The strategy for achieving these objectives determines the form of organization to be used and the amount and form of resources required, including manpower. In this review, management will want to question the degree to which the various specific goals of the manpower plan were achieved. This can be shown by the use of a number of numerical controls and gauges, such as change in numbers by total/department/function, changes in wastage (turnover) rates and the reasons for wastage, changing age structures and their implications, all related to the original targets set. Another approach, which has been found useful in giving a comparative picture of the contribution being made by personnel to the operation of the company, is the development of cost ratios. Conclusion
In a world of rapidly changing technology with an ever-growing demand for more and different skills, the need to plan manpower is as great as the need to plan any other resource. The prosperity and growth of any company rests, in the end, on the quality of its manpower and the extent to which their talents are utilized to the full. Manpower planning is concerned with safeguarding the future, with preventing the loss of opportunities through lack of appropriate human abilities and the wastefulness of over-braining the organization. It emphasizes the need for rationalization in keeping with modern needs and technological capabilities and the development of organization structures to match.
Recruitment
Recruitment is a process of searching for prospective employees and stimulating them to apply for jobs in the organization. Steps on Recruitment process
Personnel recruitment process involves three elements viz. A recruitment policy The development of sources of recruitment Different methods / techniques used for utilising these sources Recruitment Policy A good recruitment policy must contain these elements: (a) Organizations objectives (b)Identification of the recruitment (c) Preferred sources of recruitment. (d)Criteria of selection and preferences. (e) The cost of recruitment and financial implications of the same. Prerequisites of a good recruitment policy
The recruitment policy of an organization must satisfy the following conditions: It should be in conformity with its general personnel policies; It should be flexible enough to meet the changing needs of an organization. It should be so designed as to ensure employment opportunities for its employees on a long-term basis so that the goals of the organization should be achievable; and it should develop the potentialities of employees.
It should match the qualities of employees with the requirements of the work for which they are employed; and It should highlight the necessity of establishing job analysis.
Sources of recruitment: Internal External
Methods or Techniques of Recruitment Direct Methods Indirect Methods Factors Affecting Recruitment
All organizations whether large or small, do engage in recruiting activity, though not to the same extent. This differs with: The size of the organization. The employment conditions in the community where the organization is located. The effects of past recruiting efforts which show the organizations ability to locate and keep good performing people Working conditions and salary benefit packages offered by the organization which may influence turnover and necessitate future recruiting. The rate of growth of organization. The level of seasonality of operations and future expansion and production programs. Cultural, economic and legal factors etc. Steps on Recruitment process
Personnel recruitment process involves three elements viz. A recruitment policy The development of sources of recruitment Different methods / techniques used for utilising these sources
Prerequisites of a good recruitment policy
The recruitment policy of an organization must satisfy the following conditions. It Should: Be in conformity with its general personnel policies Be flexible enough to meet the changing needs of an organization. Be so designed as to ensure employment opportunities for its employees on a long-term basis so that the goals of the organization should be achievable; and it should develop the potentialities of employees. Match the qualities of employees with the requirements of the work for which they are employed; and Highlight the necessity of establishing job analysis.
Selection Selection procedure is concerned with securing relevant information about an applicant. The information is secured in a number of steps or stages. The objective of selection process is to determine whether an applicant meets the qualifications for a specific job and to choose the applicant who is most likely to perform well in the job. The formal definition of selection is:
It is the process of differentiating between applicants in order to identify (and hire) those with the greater likelihood of success in a job. Role of selection: The role of selection in an organizations effectiveness is crucial for at least, two reasons: 1. Work performance depends on individuals 2. Cost incurred in recruiting and hiring personnel. Selection process involves the following steps: 1. Environmental factors affecting selection 2. Preliminary interview 3. Selection tests 4. Choosing tests 5. Employment interview 6. Reference and background checks 7. Selection decision 8. Physical examination 9. Job offer 10. Contracts of employment and 11. Evaluation of selection program Barriers to effective selection: Perception Fairness Validity Reliability Pressure
Four approaches to selection Ethnocentric selection Polycentric selection Regiocentric staffing Geocentric staffing
Induction and Placement of Human Resources
Whenever new employees join an organization there is always a period of learning and adaptation before they become fully effective. Partly, this involves finding out about the practicalities of the job and facts about pay, other employee benefits and the organizations rules and regulations. But there is also the need to understand the less tangible but very powerful influence of the way we do things around here. Every organization has its own style or culture and new employees are unlikely to be fully effective or feel comfortable in their work until they have absorbed this cultural influence and adjusted to it. In a very general sense, induction is this process of initial learning and adjustment, whether or not the process is planned or structured by the employer. In organizations that provide no form of induction, many new staff may eventually settle in, relying on their own efforts to learn about the organization and with informal help from their colleagues. But there are two major risks involved in leaving induction to chance. The process is likely to take far longer than if induction was planned, and this slow learning period carries hidden costs. Not all new entrants will learn and adapt. Not all new entrants will learn and adapt successfully, and the organization is then likely to experience the significant disruption and costs of replacing early leavers. The costs of early leaving
Many employees who leave soon after joining an organization do so because they have not been helped either to understand their role or to adapt to the organizational culture both aspects being central to effective induction. An organization that experiences a high incidence of employees leaving during their first few months may also acquire a reputation as a poor employer. Early leavers are often disillusioned and tend to put all the blame on the organization even if in some cases they may themselves have failed to put sufficient effort into making a success of their new jobs. Most are likely to tell friends and family that the organization is a bad employer, and a reputation of this kind will spread and make it increasingly difficult to recruit good-quality staff. One aim of an effective induction policy is to generate enthusiasm for working for the organization, and this enhances its employment retention.
Elements of Induction Induction is a planned and systematic process, structured and implemented by the organization, to help new employees settle into their new jobs quickly, happily and effectively. There is much more to it than the running of formal induction courses, useful though these are. The longer-term process of tuning in to the style of the organization and understanding its aims and values cannot be achieved by simply attending a course. New employees bring with them expectations about the job and the organization, gained through the organizations reputation and by contact during the recruitment and selection process so parts of that process need to be treated as pre-induction. How the new employee is received on the first day at work creates a strong first impression and so requires particular attention. Also, the way supervisors and managers behave in their day-to-day contacts with their staff has a major influence on how well and how quickly new employees settle in. It is also important to recognise that existing employees who transfer or who are promoted within the organization require help in settling into their new jobs, as do those returning to work after lengthy career breaks. Home-based employees and part-timers are often omitted from formal induction programmes, but their needs for assistance in adjusting to new working
circumstances can be considerable. So induction should not be limited to new recruits to full-time jobs. It is necessary, too, for induction to reflect the specific characteristics of different types of work and of different economic sectors. A thorough and well-planned approach to induction carries dividends to the employer in helping to secure a competent, motivated workforce; and it benefits the individual employee by contributing positively to career development. An Induction Checklist Topics
Reception Initial reception Initial documentation Bank account details Next of kin Issue of : ID/security pass Car park permit Staff handbook Introduction to supervisor or manager Site
geography and facilities General tour of the site Cloakrooms and lavatories Staff restaurant and vending machines Car/motor cycle/bicycle parking Notice boards Employees work location Fire exits First aid room/first aid boxes
Time recording equipment Issue of equipment Protective clothing Pager/mobile phone
Heath and safety Fire and emergency drills Security alerts General safety rules Specific hazards (e.g. toxic chemicals0 Smoking regulations Accident procedures Hygiene regulations Introduction to workplace safety representative Introduction to workplace first-aider Occupation health service Pay Pay system Basic pay Bonus schemes Grading/job evaluation Allowances (shift, overtime, standby, etc.) Deductions (savings schemes, etc.) Explanation of payslip Method of payment
Other conditions, benefits and employment policies Attendance : hours of work, flexitime, meal/rest Breaks
Leave : entitlement, notification Sick pay : notification of absence, entitlements Extra-statutory holidays Pension scheme and life assurance Company cars Expenses : entitlements and claims procedure Private medical/dental insurance Staff purchase/discounts etc. Maternity/paternity leave Company loans (season tickets, mortgages, etc.) Any flexibility in choice of benefits Social sports, fitness facilities Counseling and welfare scheme Disciplinary rules and procedure Grievance procedure Equal opportunity policy Alcohol/substance abuse policy Disability policy and equipment Anti-harassment/bullying policy and procedure Customer care and contact policies and procedures Code of conduct (organizational ethics, anti-corruption, etc.)
Transfer
Management Staff, as per the contract of employment, are expected to be prepared for a transfer at the same location, from one location to another, from
one function to another function, or one group, company to another, in order to meet the Companys and / or Groups plans and requirements. The reasons for transfer normally are : To provide an employee a better opportunity for growth. To meet the Companys and/or Groups plan strategic and technical which are business compulsions. To place the right man in the right job at the right place. To accommodate employee request, based on personal requirements. To correct erroneous placements and incompatibility of a person in a group. A transfer can be initiated by the individual through a letter addressed to the Department Manager or by the Department Manager who specifically asks or a person to be transferred in or out of his Department. All transfers need the approval of the Function General Manager and Managing Director. On transfer an employee will be entitled to the reimbursement of expenses incurred in transfer and resettlement, however in case of voluntary transfer request for such reimbursement will be at the discretion of the company. Promotion
Employees have a strong desire to achieve goals and towards making a career. They seek recognition through advancement. Opportunities for promotion are provided to employees when: New jobs are created at higher levels because of company growth/technology/environment. Vacancies need to be filled in. A job changes over a period of time and an additional set of responsibilities are added to the job. Performance of the employee is excellent for 2/3 years consistently.
The employee possesses potential to handle the next higher level of job that automatically means a substantial and qualitative additional set of responsibilities.
Compensation and Benefits
The Foundations of Reward Management
The foundations of reward management are considered under the following headings: reward management defined; the total reward process; aims; how the aims can be achieved; the transactional and transformational nature of reward management; the context within which reward policies are developed; developments in the concept of reward management; the evolution of reward processes.
Reward Management Defined Reward management is about the development, implementation, maintenance, communication and evaluation of reward processes. These processes deal with the assessment of relative job values, the design and management of pay structures, performance management, paying for performance, competence or skill (contingent pay), the provision of employee benefits and pensions, and the management of reward procedures.

Importantly, reward management is also concerned with the development of appropriate organizational cultures, underpinning core values and increasing the motivation and commitment of employees. Reward management processes cover both financial and non-financial rewards. The concept of the psychological contract is at least as important in understanding and managing motivation as the technical elements of the economic and transactional aspects of reward. The processes of reward management are led by business needs, but the underlying philosophy must recognize that employees are stakeholders in the organization and that their needs also have to be addressed and their views sought and respected.
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Nonfinancial rewards Employee benefits
The Total Reward Process The total reward process is illustrated in the below figure. This shows reward management as an integrated approach in which the different elements are mutually supportive and, together, lead to improved performance. Figure: The total reward process

Market surveys
Business strategy

Reward strategy Pay structure s Pay levels Total and remunera relativities tion Performa nce pay
Improved performa nce

Performa nce managem ent
Job evaluatio n
Employee developm ent
Total reward strategy flows from the HR and business strategy. It is formulated and put into effect in these areas by the processes described below.
Financial Reward Processes
Financial reward processes are concerned with pay delivery through base and variable pay and with the provision of employee benefits and pensions. Base pay Base or basic pay is the rate for the job as affected by the internal and external employment markets. If performance pay and rewards for competence or skill or service increments are consolidated into an employees base rate, then it becomes the level of pay for that person. The size of cash bonuses is usually set in relation to base pay, as are the level of pension contributions and the size and nature of other benefits.

Levels of pay are influenced by external and internal relativities. External relativities are the levels of pay for similar jobs in the external labour market market rates. Internal relativities reflect the relative value of jobs and people within the organizations internal labour market. Pay surveys and job evaluation External relativities are established by pay surveys and research, which analyze and compare market rates in order to achieve external competitiveness. Internal relativities are assessed by job evaluation, which considers the relative value or size of jobs and sometimes generic roles within an organization as a basis for achieving internal equity. There may be tension when the often competing claims of external competitiveness and internal equity have to be reconciled, particularly in pay markets under pressure through skills shortages. Pay structures Pay surveys and job evaluation provide the data for the design and management of pay structures. They provide frameworks within which levels of pay for jobs and the differentials are described or defined in the form of grades, bands, scales or spot rates (individual job rates). Pay structures also define the limits within which the pay of employees can progress within their grades or bands and how this progression takes place. This can vary in accordance with assessments of performance, competence or skill. Progression may be up a fixed incremental scale or spine, which defines the pre-determined pay increases that employees can receive year by year on the basis of their time in the job. But this approach is becoming much more rare. Progression in a pay structure can also be along a pay or maturity curve, which relates increases in pay to competence growth and /or higher levels of performance.
Pay structures may cover all or only part of the organization. There may, for example, be one structure for staff on salaries and another one for manual
workers on wages (although this often invidious distinction is progressively disappearing). Different structures may exist for separate job families (groups of jobs where the work is similar), or market groups (jobs in which rates of pay are influenced by market pressures so that to attract and retain people they have to be paid more than those in otherwise comparable jobs). Structures may consist of an extended hierarchy of relatively narrow grades or a fairly small number of broad bands (broadbanding). Pay structures are designed by reference to data from job evaluation, competence analysis and analysis of market practice by external benchmarking (pay surveys). Contingent pay Contingent or differential pay is pay, which is influenced by the level of performance of individuals, teams or the organization and /or individual levels of competence or skill. When it takes the form of performance or competence related pay it may be consolidated into base pay. Contingent pay based on output or results may be provided as a sum of money, which is not consolidated into the base rate and is typically not pensionable. In this case it is often referred to as variable pay and, because it is related to potentially variable factors and has to be re-earned at the next pay review, it is sometimes called pay-at-risk.
Employee benefits and pensions Employee benefits are generally elements of remuneration such as pensions, death in service benefits, sick pay, company cars or permanent health insurance provided in addition to the various forms of cash pay. They can also include elements, which are not strictly remuneration, such as annual holidays, child-care provisions and subsidized meals. Total remuneration
The sum of base pay, variable pay and the value of employee benefits and pensions constitutes total remuneration. This represents the complete worth of financial rewards to individuals. Performance Management Processes Performance management processes involve performance planning, covering the agreement of objectives and competence requirements. They include personal development plans and management and coaching throughout the year, as well as the periodic review of achievements and performance in relation to those plans. Their purpose is to develop competence and skill and improve performance. Performance management was traditionally concerned with the appraisal of performance outputs (results) but, increasingly, it is holistic in focus and has been extended to cover the assessment of inputs (knowledge, skill and competence). A distinction is sometimes made between knowledge and skills (proficiencies) as inputs to performance, and competency (the behaviour that generates excellent performance) as a process, which converts inputs to outputs.
The measurement and management of performance at organization, team and individual level may use the balanced scorecard approach. This concept was developed by Kaplan and Norton. It is based on the view that what you measure is what you get and, overall, involves looking at the business from four related perspectives : customer, internal processes, innovation and learning, and finance. This process can be extended to teams and individuals and provides for a longer-term perspective on performance. Performance management reviews may generate ratings, which influence variable pay decisions. They also provide non-financial motivation through feedback, which recognizes achievement. Increasingly, feedback comes from several sources; manager, peer groups and direct reports the process called 360-degree feedback. Performance agreements and reviews identify performance gaps and analyze training needs and lead to the production of personal development plans. The development nature of performance
management is a significant and complementary process to other aspects of reward management leading to improve performance. It typically results in non-financial motivation by providing opportunities for personal growth.
Non-Financial Reward Processes
Financial and non-financial motivation processes have an equally important part to play in reward management. Reward strategies should ensure that both are used effectively as part of an integrated total reward process. Non-financial rewards focus on the needs of people for recognition, achievement, responsibility and personal growth, and therefore contribute to increases in motivation, commitment and improved performance. They can make a deeper and longer-lasting impact on motivation and commitment than transitory financial rewards. They should play a major part in the development and implementation of total reward strategies. Aims of reward management
Reward management aims to : Support the achievement of the organizations strategic and shorter-terms objectives by helping to ensure that it has the skilled, competent, motivated and committed workforce it needs; Help to communicate the organizations values and performance expectations; Support culture management change by matching pay culture to organization culture and ensuring that reward management underpins the existing or desired organization culture and helps the organization respond to change. But pay itself, as Flannery et al state: cannot drive change or lead the change process. It cannot define what the change
should be. It cannot establish values. It cannot define what the change should be. It cannot establish values. It cannot replace effective leadership; Drive and support desired behaviour by indicating what sort of behaviour will be rewarded and how this will be done through performance or variable pay and performance management processes; Encourage value-added performance by focusing performance pay and gainsharing schemes on areas where the maximum added value can be achieved; Promote continuous development through competence-related and skillbased pay schemes, broadbanding and effective performance management; Compete in the employment market by paying competitive rates which attract and retain good-quality employees; Motivate all members of the organization from the shop-floor to the board room through the judicious use of a combination of financial and nonfinancial rewards; Promote teamwork through the use of team pay, the encouragement of multiskilling and by rewarding collaborative behaviours; Promote flexibility by replacing unduly hierarchical and rigid pay structures with more flexible and typically, broadbanded structures, treating job evaluation as a process which can be adjusted to meet specific needs rather than a package which has to be applied rigidly, avoiding the use of over-mechanistic pay-for-performance schemes, making greater use of variable or at risk pay and allowing employees more choice over the benefits they receive; Provide value for money by evaluating the costs as well as the benefits of reward management practices and ensuring that they are operated cost effectively. Achieve fairness and equity by rewarding people consistently according to their competence and contribution.
Pay can play a significant part as an investment, which will support the longterm success of the organization. As Flannery et al point out: Organizations are beginning to understand that pay should no longer be considered only in terms of specific jobs and current financial results. Compensation must inextricably be tied to people, their performance and the organizational vision and values that their performance supports. It is an important tool for communicating and reinforcing new values and behaviours, supporting accountability for results and rewarding the achievement of new performance goals. Achieving the aims
There are certain guiding principles, which provide the foundation for effective reward management. These are to : Align reward strategies with the business strategy; Align reward policies with the culture of the organization and use them to underpin that culture and, as required, help to change it; Value employees according to their competence, skill and contribution; Remember that reward management is about the management of diversity, not the control of uniformity; Ensure that reward processes are transparent and that employees are treated as stakeholders; Adopt an integrative approach which ensures that no innovations take place and no practices are changed without considering how they relate to other aspects of human resource management so that they can become mutually supportive; Provide line managers with the authority and skills needed to use rewards to help achieve their goals, but ensure that they are given the training, guidance and continuing support required to develop and use these skills well;
Remember that pay delivery processes can produce significant performance leverage and motivation, and develop and apply them accordingly; Always bear in mind the wise words of Gilbert and Abosch: Todays best organizations know that values not rules provide the essential guidance employees need to be effective. They know that only empowered employees develop the confidence to act as catalysts for business and personal success; Remember that reward policies and practices express what the organization values and is prepared to pay for they are driven by the need to reward the right things to convey the right message about what is important; Concentrate overall on developing reward management as a strategic, innovative and integrative process designed to meet the evolving needs of organizations and the people they employ.

and Transformational aspects of
To appreciate how reward management processes function in achieving their aims it is necessary to understand their transactional and transformational aspects and the context within which they operate. The Transactional management reward
The traditional approach
Traditionally, the transactional aspects of reward management have predominated. These have been concerned with pay bargaining, the negotiation of individual contracts, the effort bargain (a bargain between employees and employers as to what the former regards as a reasonable contribution and what the latter is prepared to pay for it) and, more recently, the hard performance agreements or contracts embodied in performance management systems the management by contract approach. A strong transactional element is inevitable in most aspects of reward management, but

there is a risk of overdoing it and treating it as a system mechanism for converting inputs to outputs. And there is nothing mechanistic about reward management. It should be regarded as a constantly evolving process rather than a rigidly designed system. A systems approach can also produce what are best described as over-engineered reward practices which may be the pride and joy of the HR function but are either unacceptable to line management or unworkable or both. The transformational approach
The contrast, a transformational approach to reward tends to put the transactional aspects to one side (perhaps as a necessary evil) and emphasizes the role of reward as change agent. This, essentially, is the new pay philosophy as advocated by Lawler and Schuster and Zingheim. They have made a valuable contribution by extolling the virtues of a transformational approach. But it can be taken too far. The naive belief that such devices as performancerelated pay can by themselves act as levers for change has been responsible for many of the failures in reward innovations over the last decade. Indeed, reward policies and practices must respond to change and they can help to consolidate change and facilitate further change. But they cannot initiate change or act as the sole levers for change. They should be regarded as one of the instruments available to achieve transformations, working in conjunction with other instruments as part of top managements overall strategy. Importantly, they must be integrated with the other key areas of business strategy to reinforce the achievement of corporate goals. As Gilbert has said, it is necessary to keep internal processes in line with the way in which the business goes to market. But reward strategies can and should be developed and put into practice as part of a drive for corporate transformation, reflecting and supporting new plans, structures, processes and management practices, as well as underpinning cultural change. As Stevens states :
Pay is switching from being a negotiating or pay and rations issue and is becoming part of a web of practices aimed at developing organizational outcomes by changing attitudes and actions. Pay is no longer treated simply as a motivator to achieve higher levels of effort. It is used to reward the acquisition of skills, the achievement of objectives, the development of careers and the adoption of particular types of behaviour.
The reward management context Both the transactional and transformational aspects of reward management take place within the context of the organization. This consists of its internal environment (its culture, structure, employee relations climate, technology, operational processes and management practices) and its external environment (competition, economic trends, government interventions, etc.). Flannery et al stress that : Two of the most important factors influencing performance and results are an organizations climate its values and culture and its management practices, which include compensation.
The nature of reward management processes and initiatives will be strongly affected by its environment, especially its work culture. A contingency approach to reward management is therefore necessary. Such an approach recognizes the desirability of best practice but is also aware of the needs to achieve best fit. When developing reward strategies, policies and processes it is essential to start with a systematic analysis of the organizations business strategy and plans, culture, structure, management practices and operational processes. An understanding of current changes or plans for change is equally essential. The cultural environment
The following are examples of how organization culture can affect rewards: If the value system includes the belief that people will be well motivated when their work environment provides opportunities for achievement, recognition responsibility and personal growth, the emphasis will be as much on non-financial as on financial rewards, ie. empowerment. When the value system is based on the belief that money is the only thing, which motivates, people will concentrate on financial rewards and neglect the non-financial motivation. If a more performance-oriented culture is wanted, a significant proportion of financial rewards will be dependent on pay-for-performance schemes in the form of at risk (variable) pay which will be expected to deliver powerful messages about the need for high performance. When one of the key values is quality, the pay arrangements will be designed to provide rewards for achieving high quality standards and levels of service delivery. When the culture emphasizes teamwork and the interdependence of everyone in a mutual commitment organization, 360-degree feedback processes may be used for performance reviews although, as yet, and perhaps wisely, they are rarely linked to pay. If the culture favours innovation, the emphasis will be on rewarding initiative, innovation, risk-taking, learning and success in managing change.
The organization structure A very hierarchical organization is likely to have a multi-graded pay structure and be reluctant to move to a broader-graded or broadbanded system. Following a business process re-engineering exercise, the organization may create a boundary-less structure, which emphasizes horizontal processes and cross-functional teamwork. Such an organization may be interested in
broadbanding and team pay. An organization which believes in empowerment and the devolution of business decisions to line managers may be willing to extend that devolution to decisions on employee pay. The employee relations climate A good employee relations climate is one in which there is mutual trust and respect between employers and employees; harmonious relationships are maintained; consultation, communication and participation processes are well established; and management treats employees fairly and consistently. Such a climate will provide the right environment for developing reward policies, which meet and balance the needs of both management and employees. A poor climate will make it more difficult to deliver reward innovations effectively suggestions for new measures are likely to be blocked by a wall of fear and distrust.
Technology The technology of the business exerts a major influence on the internal environment and its work practices how work is organized, managed and carried out. Technological change takes the forms of : a continuing move away from primary manufacturing; increasing complexity; a higher knowledge base; the IT revolution.
The introduction of new technology may result in considerable changes to systems and processes. Different skills are required and new methods of working are developed. Reward processes have to be adapted accordingly. Operational processes
What the organization does and how it does it (with or without new technology) obviously determines the type of people employed and the skills they require. Working methods shape organizational culture and structure. They have to be taken into account when developing reward processes, especially when rapid changes are taking place in operational processes. Management practices
Management practices are the ways in which the business is managed through its structure, procedures, systems and processes, in accordance with the prevailing management style. Management practices are a function of the organizations business strategy, culture, technology and operation. They are the visible manifestation of what the business does and how it does it. They play an important part in influencing how people should be rewarded. Employment practices Employment practices are changing as firms rely more on a core of highly qualified or skilled employees, and outsource activities or use peripheral employees where they can do this more cost effectively. The concept of a job for life is no longer generally applicable for white-collar workers, even though the retention of good staff remains important. Promotion opportunities are more limited in flatter organizations. The focus is on continuous development, flexible working and multiskilling. The emphasis is more on portfolio careers, employability and the development of transferable skills. This means managing careers and providing development opportunities, often laterally, so that as far as possible people gain the right experience from the right employer at the right state in their career path.
The external environment


The main external environmental factors that affect reward management policies are : Business performance profitability, market share, reputation in the City and elsewhere, and in the public service, delivery of public policy objectives. Competition Globalization The need to devote financial resources to maintaining or achieving competitive advantage Falling / stable inflation Changing demography and employment patterns Economic trends The rise in the concept of the stakeholder The drive for change in the public service Trends in market rates, generally or for specific categories of staff Critical skill shortages Government policies and regulations Fiscal, company and employment law.

The new pay philosophy
The new pay concept was originally formulated by Ed Lawler. He emphasized that, when developing reward policies, it is necessary to think and act strategically about reward. Reward policies should take account of the organizations goals, values and culture, and of the challenges of a more competitive global economy. New pay helps to develop the individual and organizational behaviour that a company needs if its business goals are to be met. Pay policies and practices must flow from the overall strategy and they can help to emphasize important objectives, such as customer satisfaction and retention, and product or service quality.
But Lawler pointed out in 1995 that the new pay ideology should be regarded as a conceptual approach to payment rather than a set of prescriptions. The new pay is not a set of compensation practices at all, but rather a way of thinking about reward systems in a complex organization. The new pay does not necessarily mean implementing new reward practices or abandoning traditional ones; it means identifying pay practices that enhance the organizations strategic effectiveness. Lawlers concept of the new pay was developed by Schuster and Zingheim who described its fundamental principles as follows: Total compensation programmes should be designed to reward results and behaviour consistent with the key goals of the organization. Pay can be a positive force for organizational change. The major trust of new pay is in introducing variable (at risk) pay. The new pay emphasis is on team as well as individual rewards, with employees sharing financially in the organizations success. Pay is an employee relations issue employees have the right to determine whether the values, culture and reward systems of the organization match their own.
Evolution of Reward Processes The four life cycle stages
1. Start up / take off This is the stage when a new organization is created. The key elements of reward policy and practice are likely to be as follows: Pay is managed by either the finance director or the company secretary who generally has a fairly limited understanding of professional approaches to reward management. Pay is perceived as an overhead cost to be controlled
rather than a means of rewarding people and therefore as an asset to be managed. A high-risk/high-reward pay philosophy exists for top management typically this is required by the providers of venture capital. There are no pay scales; instead, there are simply spot pay levels for each individual. Pay levels are base don a notional view of market rates rather than the systematic analysis of reliable survey data. Pay may be high in relation to the market because experienced talent has been needed to get the business going. Internal relativities are managed without formal job evaluation the boundaries between jobs tend to be fluid, providing for considerable flexibility in working practices. Performance rewards are discretionary and are not underpinned by any formalized or systematic approach to measuring and assessing performance. Shop-floor workers are probably paid on high day rates. If there is an incentive scheme, it is unlikely to be based on a form of work measurement. Employee benefits tend to be an amalgam of the practices most liked in the organizations the new top management team left behind; decisions on basic elements of the benefits package such as sick pay and overtime payments tend to be ad hoc. The links between skill and competency acquisition and reward are unexplored. Most people are recruited to hit the deck running and training or development policies have yet to take shape.
2. Maturity A mature organization is one, which has reached a fairly stable stage. Management, however, is still responsive and flexible, reacting effectively to competitive pressure, proactively seeking new markets and products, and developing its management processes and systems to grow and improve performance. The key elements of reward policy and practice are as follows :
Remuneration levels are set competitively and are based on systematic monitoring of surveys and other market data. Competitive benefits of which the core (pensions, sick leave, holiday entitlements and subsidized meals) are harmonized amongst employees at all levels as far as possible; other benefits such as company cars are allocated on as cost-effective a basis as possible in relation to market practice, while maximizing perceived benefit value. The management of internal relativities by the use of a formal approach to job evaluation which minimizes bureaucracy (increasingly by using computer-assisted administration processes in larger organizations), reflects specialist career patterns through the use of job family models or generic role definitions, and optimizes on the use of job/role data for other human resource management processes, such as organization design and development, recruitment, performance management, succession planning and training needs analysis. A variety of approaches is used to reward performance according to different job categories; each of these is underpinned by a formal approach to performance management, which is used both for individual development as the decision base for performance-related rewards of various kinds. Some mature organizations will have introduced integrated pay structures which cover all employees up to board level; shop-floor workers are on salaries and a performance-related pay (PRP) scheme is used, based on the same principles as those applying to other employees. Where appropriate, the PRP scheme will be used to support processes such as just in time (JIT) and total quality management (TQM). Company-wide gainsharing or profit sharing schemes may be operating which relate rewards to the generation of added value. Innovative responses are made to skill shortages and market pressures. These focus on different forms of employment (eg. The use of part-timers and various forms of flexible working) rather than throwing money at any problems as they arise. More flexible approaches are adopted to reward management where they help to support what the organization is aiming to achieve.
Continued emphasis is placed on consultation and good communication with employees on reward issues, to ensure that the intent and value of remuneration policies are fully appreciated. A sensible balance is struck between central and devolved control over pay decisions; the approach increasingly emphasizes line management involvement in and ownership of remuneration policy.
3. Old age/stagnation This is the stage which organizations reach if they have grown too large and set in their ways to do anything other than trying to maintain their market share and influence. Hierarchy and bureaucracy have become a way of life and the organization becomes progressively more traditionalist in its management style and culture. Such organizations are often characterized by top management teams that have grown up and matured together and which have not sought actively to bring-in new blood or to challenge their established assumptions and practices. In the UK, many older, larger organizations and much of the public sector have been through this stage and are in varying stages of emerging from it through major change (transformational) initiatives. The practices described below are now more common elsewhere in Europe, eg. France, Germany, Italy and Greece. The key elements of reward policy and practice are as follows:
Rigid pay structures are typically based on fixed service-related increments with growing numbers of employees reaching the top of the scale as promotion opportunities decline. There is rigidity and over-emphasis on status and hierarchy in benefits entitlements. Long-established, bureaucratic and often outdated approaches to job evaluation reflect old organizational values in design, application and hierarchies (which may be stratified by level) and may require an army of specialists to maintain. Both managers and employees manipulate the
scheme to gain pay increases while complaining that it is burdensome and grade drift is common. Non-existent or timid approaches to performance rewards exist; the appraisal scheme is viewed with cynicism as an administrative burden and a dishonest annual ritual. Shop-floor incentive schemes have deteriorated; lack of management control, loose rates and endless pressure on rate fixers create wage drift (increases in earnings unaccompanied by commensurate increases in output); the emphasis on volume prejudices quality standards while earnings fluctuate wildly and are unpredictable. There is complacency in the face of market pressures based on the organizations previous ability to survive. Market monitoring is over-systematized and often very costly. Policy development is over-centralized, often with too many narrowly focused pay specialists working in an environment where administrative convenience wins over strategy and respect for broader HR management issues.
4. Regeneration/renewal This phase follows the collapse or near-collapse of the old age organization. Typically, it starts because a takeover, buyout or the replacement of most of the top management of the organization enables it to pull together what is left, reorganize and head off in new business directions with renewed vigour. This is the time when corporate transformation programmes are conducted, often including a business process re-engineering exercise, delayering, downsizing and the creation of a core/periphery workforce. The key elements of remuneration policy in this phase are as follows: There is a questioning and more cynical attitude to traditional reward practice, often because it is seen as a component in the failure of the old business. Policy is decentralized and devolved down to individual business units.
Old pay structures, incentive schemes and progression systems are abandoned as too costly and too complex to administer. The old approach to job evaluation is jettisoned, as restructuring and downsizing remove many of the old benchmarks and the organization culture is focused on new values. A broadbanded pay structure is introduced to match a delayered organization. Job role measurement is re-introduced, purely as a management process to assess relativities and match against the market. The benefits policy is totally revised, with a bias towards eliminating all superfluous items and allowances in favour of clean cash and a move towards flexible benefits provision. Market monitoring is very limited and confined to tracking broad trends and focusing on hot spots where turnover is still causing problem. Performance awards are paid only for demonstrable added value, often in the form of variable pay unconsolidated bonuses, which have to be reearned against new targets each year; old approaches to performance appraisal may have been abandoned as an unnecessary administrative burden and may not have been replaced; competence-related and/or teambased pay may be introduced. The focus in performance management processes as they are implemented to replace traditional appraisal schemes is on assessing both inputs and continuous development.
The basis of reward management As an organization matures or moves into a regeneration phase, it is necessary to develop or revise its reward philosophy and develop reward strategies, policies and practices which help to achieve new business goals and support organizational and cultural change. Such developments should, however, be based on an understanding of the economic factors affecting pay, the significance of the psychological contract and the practical implications of motivation theory as it affects the provision of both financial and non-financial rewards.

McClelland Achievement Theory of Motivation We have three basic social needs: affiliation, power & achievement. Need for achievement : The drive to excel, to achieve in relation to a set of standards, to strive to succeed. Need for affiliation : The drive for friendly and close interpersonal relationships. Need for power : The need to make others behave in a way that they would not have behaved otherwise. Herzbergs Two-Factor Theory of Motivation In the first category are Maintenance or Hygiene factors, which are necessary to maintain a reasonable level of job satisfaction. Absence of these factors may dissatisfy the employee but will not demotivate them. In the Second category are the Motivators since they seem to be effective in motivating people to superior performance.

Hygiene/Maintenance Motivators Company policy & Adm. Supervision Achievement Recognition
Relationship with supervisor Working conditions Salary Relationship with peers Personal life Relationship with subordinates Status Job security
Work Responsibility Advancement Growth
McGregors Theory X and Theory Y Theory X emphasizes on discipline, incentive programs, welfare measures, close supervision, pension and other benefit programs. Theory Y represents the democratic approach and gives the employees scope for creativity and responsibility. It stresses mans need for work, responsibility and involvement in serious endeavor. Motivating Climate Even if all your subordinates have high potential for self-motivation, a climate should be provided to flourish it. Some suggestions on how to develop such an atmosphere: Establish clear-cut objectives and standards. The individual must know what is expected of him. Evaluate the employees progress against these yardsticks. Discuss his progress with him as often as possible - help him to make necessary adjustments. Take prompt corrective action - including disciplinary action when necessary. Good discipline is essential to any healthy environment.
Use rewards promptly. Rewards must be tied to the specific result and commensurate with the contribution. There must be some differentiation between those who contribute and those who do not. Otherwise, there is no advantage in turning out a superior performance. Encourage and appreciate excellence among your people. Frequently when you expect great things of people, they will deliver beyond their own expectations. Try to assign intermediate goals to give the feeling of achievement. A series of small successes can build confidence and expand their horizons. Give a man difficult challenges on occasion, particularly in less critical areas and after he has had a few successes to build his ego. Give him an understanding of the organizations total goal and the part that he is contributing. This provides him with a sense of involvement essential to his need to grow and develop.
Non-Financial Motivators Appraisal, Praise or Recognition Praise has its greatest value when it is given and received as recognition. An employee would naturally want to be praised by his boss and his colleagues for any work done well. Recognition satisfies human need for esteem by others and his self-esteem. It can be shown in the form of: - Pat on the back - Recommendation for a pay raise - Promotion - Assignment of more interesting tasks - Awards - Banquets honoring certain individual - Certificates, Plaques etc Status and Pride
Pride is regarded as a powerful and valuable motivator towards higher productivity. Status refers to the social rank of a person. It satisfies the social and egoistic needs. Management can satisfy this need by establishing status symbol and distinctions in the organization by providing: - Good furniture/artistic curtains for the office - Private lockers - Separate cabins/chambers - Suitable desks with drawers etc. Competition Competition to certain extent should be encouraged in the organization. It may be in regards to sales, production or safety measures. However, competition leading to jealousy and hostility among the competing members and giving rise to a sense of frustration should not be encouraged. Delegation of Authority An individual entrusted with authority has the right to act, to direct and to demand resources needed to perform a designated activity. The delegation of substantial amount of responsibility to execute a given task often proves to be a strong motivating force. Participation Management must encourage its employees to participate in areas such as decision making to improve the working conditions. This will satisfy the employees ego and self-esteem. It will also give an outlet to creativity and initiatives. Job Security Job security implies that an employee would continue on the job in the same plant or elsewhere and that he shall enjoy economic, social security through health and welfare programs. The welfare programs should provide security against sickness, unemployment, disability, old age and death. Job security
should make arrangements to accommodate surplus manpower in the organization. Job Enlargement It is a process of increasing the complexity of job in order to appeal to the higher-order needs of the employees. Job enlargement implies that the employee performs more varied tasks, which are all on the same level. The idea is to make the job less monotonous. The basic principle in job enlargement is to provide employees with opportunities to make greater use of their minds and skills so that they are able to satisfy their need for self-esteem and dignity.
Job Rotation The basic objective of job rotation is to increase the skill and knowledge of an employee about related jobs. It is basically shifting an employee from one job to another so that monotony and boredom is reduced. An employee learns to do all the different activities necessary for an operation or unit of work. Job Loading To make a job more interesting, horizontal or vertical job loading is done. In Horizontal job loading, the employee is given more work at the same level at which he is currently performing. In Vertical job loading, jobs are restructured to include larger areas of responsibility and make it intrinsically more interesting. Job Enrichment Job Enrichment is usually more successful in improving quality of the work than its quantity. The job to be performed should be less structured and less routine. The quality of work is of prime consideration for enriching a job. The goal of this exercise is not merely to make the work more varied but to make every employee a manager. The job is made to deal with the higher order needs of an employee such as need for advancement, recognition, growth and responsibility.
Quality of Work Life The term Quality of Work Life means different things to different people. In reference to the work and its environment in which the employee performs his job, the following are few factors which will improve the quality of work life: - Adequate and fair compensation - Security and growth opportunity - Safe and healthy working conditions - Opportunity to use and develop creativity - Respect for the individuals personal rights - Work and family life Job Sharing or Twinning It is a novel system, in which two employees prefer to divide one full-time job, especially: - mother and father who want to spend more time with their families - the older people - who want to retire gradually - those with physical limitations - Students In such system, the hours of work, salary and other fringe benefits are shared between both the parties. Flexitime or Flexible Working Hours Employees have the freedom to choose within certain limitations, what time they begin and finish their job each day. It wipes out the 9 to 5 syndrome faced by many employees and enables them to enjoy hours that closely match their personal styles. It improves morale, increases productivity and gives employees a greater sense of control over their own lives.

Job Analysis A Definition Job analysis is the process of collecting, analyzing and setting out information about jobs in order to provide the basis for a job description or role definition and data for job evaluation, performance management and other human resource management purposes. A distinction should be made between a job description and a role definition. A job description sets out the purpose of a job, whether it fits in the organization structure, the context within which the job holder functions and the principal accountabilities of the job holders, or the main tasks they have to carry out. A role definition additionally describes the part to be played by individuals in fulfilling their job requirements. Role definitions refer to broader aspects of behaviour, for example, working flexibly, working with others and styles of management. They may incorporate the results of skills or competence analysis. Job Analysis in Practice

Job analysis is an analytical process involving gathering facts, analyzing and sorting these facts and re-assembling them into whatever consistent format is chosen. Job analysis gets the facts about a job from jobholders, the jobholders manager (preferably both) and the jobholders colleagues or team mates. It is not a matter of obtaining opinions or making judgments. What goes into a job description should be what actually happens and why, not what people would like to think happens, or what they feel people should be like to make it happen. Thus judgmental statements such as Carries out the highly skilled work of should be avoided (who is to say that the work is highly skilled and in comparison with what?) The facts can be obtained by interviews (the best but time-consuming way) or by asking jobholders and/or their managers to write their own job descriptions
in a structured format. It is helpful in both cases to be quite clear about the questions to be asked and answered and it is essential in the latter case to provide guidance on how the analysis should be carried out and expressed on paper. Alternatively questionnaires can be used either universal questionnaires or those designed for job families:
Universal questionnaires Universal questionnaires are designed to cover all the jobs to be analyzed. They are typically used in association with computer-assisted job evaluation. They should be tailored to the particular organization and the range and type of jobs to be covered, and they should focus on those aspects of performance and values that are considered to be important in the organization concerned. Job family questionnaires Job family questionnaires are designed to establish the main factors, which differentiate between jobs at different levels in a job family. A job family consists of jobs in a particular function or discipline such as research scientist, development engineer or personnel specialists that are related in terms of the fundamental activities carried out but are differentiated by the levels of responsibility, skill or competence required. A job family questionnaire is designed with the advice of an expert team of managers from the organization. Job analysis interview check lists What is your job title? To whom are you responsible? Who is responsible to you? (An organization chart is helpful). What is the main purpose of your job? i.e. in overall terms, what are you expected to do? To achieve that purpose, what are your main areas of responsibility (e.g. principal accountabilities, key result areas or main tasks)? Describe what
you have to do and also indicate why you have to do it? i.e. the results you are expected to achieve by carrying out the task. What are the dimensions of your job in such terms as output or sales targets, numbers of items processed, numbers of people managed, and number of customers? Is there any other information you can provide about your job to amplify the above facts, such as: - how your job fits in with other jobs in your department or in the company; - flexibility requirements in terms of having to carry out a range of different tasks; - how work is allocated to you and how your work is reviewed and approved; - your decision-making authority; - the contacts you make with others, inside and outside the company the equipment, plant and tools you use; - other features of your job such as traveling or unsocial hours or unusual physical conditions; - the major problems you meet in carrying out your work; - the knowledge and skills you need to do your work.
The aim is to structure the job analysis interview or questionnaire in line with these headings. Analyzing the facts However carefully the interview or questionnaire is structured, the information is unlikely to come out neatly and succinctly in a way, which can readily be translated into a job description or role definition. It is usually necessary to sort out, rearrange and sometimes rewrite the information. Management By Objectives (MBO)
Management by Objectives is basically a process whereby the superior and the subordinate managers of an enterprise jointly identify its common goals, define each individuals major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members. A number of companies have had significant success in broadening individual responsibility and involvement in work planning at the lowest organizational levels. The concept rests on a philosophy on management that emphasizes an integrated between external control (by managers) and self-control (by subordinates). It can apply to any manager or individual no matter what level or function, and to any organization, regardless of size.
The smooth functioning of this system is an agreement between a manager and subordinate about that subordinates own or group performance goals during a stated time period. These goals can emphasize output variables or intervening variables, or a combination of both. The important thing is that goals are jointly established and agreed upon in advance. This is followed by a review of the subordinates performance in relation to accepted goals at the end of the time period. Both superior and subordinates participate in this review and in any other evaluation that takes place. Consultation and participation in this area tend to establish personal risk for the attainment of the formulated objective by those who actually perform the task. Prior to settling individual objectives, the common goals of the entire organization should be clarified, and at this time, any appropriate changes in the organization structure should be made: changes in titles, duties, relationships, authority, responsibility, span of control, and so forth. Throughout the time period what is to be accomplished by the entire organization should be compared with what is being accomplished; necessary adjustments should be made and inappropriate goals discarded. At the end of the time period a final mutual review of objectives and performance takes place. If there is discrepancy between the two, efforts are initiated to
determine what steps can be taken to overcome these problems. This sets the stage for the determination of objectives for the next period. Job Description Job description is an important document, which is basically descriptive in nature and contains a statement of job analysis. It provides both organizational information (location is structure, authority, etc.) and functional information (What the work is). It defines the scope of job activities, major responsibilities, and positioning of the job in the organization.
Job Description describe jobs, not job holders. It is a vehicle for oganisational change and improvement.
Uses of Job Description
According to Zerga, who analysed 401 articles on job description about 30 years ago, a job description helps us in : Job grading and classification Transfers and promotions Adjustments of grievances Defining and outlining promotional steps Establishing a common understanding of a job between employers and employees Investigating accidents
Indicating faulty work procedures or duplication of papers Maintaining, operating and adjusting machinery Time and motion studies Defining the limits of authority Indicating case of personal merit Facilitating job placement Studies of health and fatigue Scientific guidance Determining jobs suitable for occupational therapy Providing hiring specifications Providing performance indicators
Components of Job Description : Job identification, or Organizational position Job duties and responsibilities Relation to other jobs Supervision Machine, tools and equipment Working conditions Hazards
Guidelines for Writing a job Description A paragraph is allocated to each major task or responsibility. Paragraphs are numbered and arranged in a logical order, task sequence or importance. Sentences have to begin with an active verb, e.g. types letters, interviews the candidates, collects, sorts out, routes and distributes mail. Accuracy and simplicity are emphasised rather than an elegant style. Brevity is usually considered to be important but is largely conditioned depending on the type of job being analysed and the need for accuracy.
Examples of work performed are often quoted and are useful in making the job description explicit. Job descriptions, particularly when they are used as bases for training, often incorporate details of the faults which may be encountered in operator tasks and safety check-points. Statements of opinion, such as dangerous situations are encountered, should be avoided. When job descriptions are written for supervisory jobs, the main factors (such as manning, cost control, etc.) are identified and listed. Each factor is then broken down into a series of elements with a note on the supervisors responsibility.
The British Institute of Management Publication adds four more guidelines. Give a clear, concise and readily understandable picture of the whole job. Describe in sufficient detail each of the main duties and responsibilities Indicate the extent of direction received and supervision given. Ensure that a new employee understands the job if he reads the job description.
Job Evaluation
Job evaluation means to produce a fairly defensible rating of various jobs on which a rational and acceptable pay structure can be built. To do this job evaluation heavily depends upon the description and sometimes job specification also provided by job analysis. Though job evaluation attempts to assess jobs and not people, the methods used for it are highly similar to those used to assess people. Some of the features of job evaluation are :
The standards of job evaluation are relative and not absolute.
Job evaluations are generally carried out by groups and not by individuals. Job evaluation does not determine pay scales but merely guides on the ways in which they may be devised.
Methods of Job Evaluation : The methods of job evaluation can be categorised into two categories :
Non-analytical or non-quantitative methods Job Ranking Method While using this method, we dont break jobs into small components. We put them in order of merit according to their worth them as a whole. The jobs are ranked by a panel of experts simply from highest to lowest. Generally for each department separate rank orders are developed based on job description of the jobs within that department. There are two ways in which ranking order can be given by the panelone by simply allotting continuous ranks, the other is by using paired comparison method. While using this method two jobs are compared at a time and score is allotted on the basis of whether the first job is estimated to be less important, more important or of the same importance than the job is being compared with. Each judge from the panel does the comparing and ranking individually and later on scores are totally up to enable a composite rank order to be drawn up. This method reduce the subjectively element. Once the rank orders for the departments are prepared they are combined with the rank orders prepared by other department and a final rank order for the entire organization covering all the jobs is prepared. Job Classification Method
In this method, major classes or grades are first established and then various jobs are assigned by rankers to those grades. The raters read the jobs description and depending upon their personal interpretation

Analytical or quantitative methods
of the relative difficulty of tasks, responsibilities involved, knowledge and experience required decide in which of the classes each job should be placed.
Two of most known methods are factor comparison method and point system method. * Factor comparison method.

This method was initally developed by Benge, Burke and Flay. The jobs are examined componentwise and not as whole entities. The major steps consist of : Determining the key jobs i.e. those jobs in which there is no disagreement between the management and the union on the amount of salary paid and the jobs which have been described accurately. Second step will be to determine the common factors among all the jobs Then these jobs are rank ordered on each of these common factors. Ranking should be done by a panel of atleast ten raters and these rankings should be done atleast three times with an interval of about a week between every two rankings. The next step will be to assign money value to the factors into which key jobs are divided. This is done by dividing the present salary into the amount being paid for each of the factors. This assigning is done independent of ranks given before.
Then both rank orders are compared for all the factors on each job. The jobs whose rankings show lot of disagreement are removed from the list. Now all other jobs in the organization are compared with the key job factor by factor and wages are determined for them.
Point System
Point system is like job classification approach to some extent. Just like in job classification method different grades are developed for different types of jobs, point systems are also developed separately for different categories of jobs. It is similar to factor comparison method also as jobs are evaluated factorwise. The number of factors and types of factors differ from organization to organization and also within the organization sometimes. Evaluation of Training
Definition Training evaluation means any attempt to obtain information (feedback) on the effects of a training program, and to assess the value of the training in the light of that information. Why Evaluate ? Evaluation has two purposes. First, it can be used for assessing training effectiveness. Secondly, it can itself be used as a training aid. Objectives Objectives of training evaluation is to determine the ability of the participant in the training programme to perform jobs for which they were trained, the specific nature of training deficiencies whether the trainees required any additional on the job training and the extent of training not needed for the participants to meet job requirements. There are various approaches to
training evaluation. To get a valid measure of training effectiveness, the personnel manager should accurately assess trainees job performance two to four months after completion of training. Types of training evaluation It is helpful to distinguish between four types of training evaluation. These are context, input, process and outcome evaluation. They are of differing importance, depending upon whether we are talking about the training of managers or of operatives. Context evaluation Obtaining and using information about the current operational context that is, about individual difficulties, organizational deficiencies and so on. In practice, this mainly the assessment of training needs as a basis for decision. Input evaluation Determining and using facts and opinions about the available human and material training resources in order to choose between alternative training methods. Process evaluation Monitoring the training as it is in progress. This involves continuous examination of administrative arrangements and feedback from trainees. Why Training Fails ? The following factors have been regarded as the main reasons for failure of training programmes. : The benefits of training are not clear to the top management. The top management rarely plans and budgets systematically for training. The middle management, without proper incentives from top management, does not account for training in production scheduling. Without proper scheduling from above, first line supervisors have difficulty production norms if employees are attending training programmes.
Behavioural objectives are often in precise. Training external to the employing unit sometimes teaches techniques on methods contrary to practices of the participants organization. Timely information about external programmes may be difficult to obtain. Trainers provide limited counselling and consulting services to the rest of the organization.
Job - Satisfaction
What Is Job - Satisfaction?
There are three important dimensions to Job - Satisfaction: 1. Job satisfaction refers to ones feelings towards ones job. 2. Job satisfaction is often determined by how well outcomes meet or exceed expectations. 3. The term Job - satisfaction and job attitude is often used interchangeably. Some definitions of Job - satisfaction:
Job - satisfaction is the amount of pleasurable or contentment associated with a job. If you like your job intensely you will experience high job satisfaction. If you dislike your job intensely, you will experience job dissatisfaction. Job satisfaction will be defined as the amount of overall positive affect (or feelings) that individuals have towards their jobs. Consequences Of Job - Satisfaction: High Job satisfaction may lead to: Improved productivity Decreased employee turnover Improved attendance Reduced accidents
Less job stress Lower unionisation
Sources Of Job Satisfaction Several job elements contribute to Job satisfaction they are: Wages Nature of work Promotion Supervision Work group Working conditions Benefits Of Job Satisfaction Study 1. They give management an indication of general levels of satisfaction in a company 2. Improved communication 3. Improved attitude 4. It can help to discover the cause of indirect productivity problems, such as absenteeism, turnover etc. 5. They help management asses training needs 6. It is an indicator of the effectiveness of organizational reward systems. 7. It evaluates the impact of organizational change on employee attitudes. 8. They are useful to the unions Ways Of Measuring Job Satisfaction Rating Scales Critical Incidents Interviews Action Tendencies
Use Of Existing Information
Training needs The Determination of Training Needs with an Enterprise There is a great difference between the way in which training needs would be determined in a perfect world and an ideal company, and the way in which it is often done in the normal working circumstances. Let us consider an example - on one hand, there is a progressive company with highly organized central personnel and training departments, and a plan for integrated manpower development. At the other extreme, there is a company where the personnel and training responsibilities are not very clearly defined, and where the function, if it can be identified at all, is one of a number of general responsibilities carried out by an official whose main responsibility is something quite different. In the first type of company, the determination of training needs is something, which is constantly being carried out and reviewed as circumstances, policies, markets, and company objectives change. In the second type of company, the training is much less likely to be planned globally for the company as a whole. The initiative is often left to one particular department manager who happens to realize the potential benefits of training and is keen to do something about it. He may nominate one member of his staff as training officer and activities may be launched which are related only to the specific needs of that particular department at that particular time. They may even conflict with the needs of the organization as a whole. At the one extreme, training needs are carefully analyzed and reviewed and, the other displays a piecemeal haphazard approach, unplanned, unsystematic, and often unrelated to the needs of the company. In between these two extremes there are all the permutations and combinations.
The approach of each company will vary from that of other companies and so it should, but fundamentally there are a number of common basic steps: Take an inventory: The present manpower should be taken stock of both quantitatively and qualitatively. Information related to manpower will be available in the personnel department, i.e., information about qualifications and previous experience and training already given by the company. Information about how effective the people are in their present job and about their promotion ability should also be included. Forecasts of future requirements: Normal wastage through retirement, transfers, resignations, etc. and the possible effects of changes in the companys policies and objectives, e.g. expansion, re-organization, contraction, etc. should be considered here. To decide where one is going to find the people: Some of the people can be found within the organization unless there is a well-planned scheme for spotting talent. It is in this third step that the results of steps one and two are combined. Step two forecasts all future requirements but in particular it highlights key jobs, which will need to be filled during the review period. Step one has mentioned what type of people organization has and what their potential is. The two can be then matched by allocating people to target jobs. If it is unlikely to fill all vacancies from within the organization then sources outside the company can be tapped.
Decide what one is going to do to develop the manpower: Both those who are there and those who are going to be recruited in order to help them to be fully effective in their present posts and to prepare them for their target jobs. In practice it is a good idea to prepare people wherever possible for two target jobs. This is because some personnel development programs are quite lengthy and in the meantime company objectives and therefore organizations may change. The two-target-job approach ensures greater flexibility.

This, in a nutshell, is the raison detre of the training officers job. The training needs, both short term and long term, will be spotlighted by the development program. The training officers task will be to advise on what is to be done within the company to meet these training needs and also what use, if any, is to be made of external facilities offered by training institutions, consultants, technical and commercial colleges, universities, etc. In order to do this, the training officer needs to keep himself well informed about the work of these organizations and its quality.
The Training and Consultancy Cycle

There is a marked difference between the knowledge of a management technique and the ability to use it properly in a practical management situation. This ability can be defined as a management skill. Knowledge of the technique can be acquired through theoretical study and through simulation exercises in the classroom or laboratory. But the essential skills in practical use and application of the technique cannot be acquired in the same way as the theory. Acquisition of these skills involves identification of practical situations to which the technique can be applied; the adaptation of the technique to the requirements of these situations; co-ordination of the efforts of those people concerned with introduction of the technique, and the overcoming of diverse obstacles. Such skills are only developed and refined through practice and first-hand experience. The aptitudes and efforts of the individuals concerned as well as opportunities provided by the environment greatly influence the process of acquiring management skills. The first activity in which the managers, or young people trained for future jobs participate, are training courses. The next activity in the development cycle is guided practical application of the new techniques and concepts. In some cases, this is done during the training program concerned, which consists thus of two major phases: the first, phase of
classroom or laboratory training is followed by a phase during which the participants work as individuals or in groups on practical projects. In other cases, the formal training program does not include this second phase. But it is almost invariably followed by a follow-up period, which is very similar in objectives and scope. Before the end of the course, each participant is assisted in selecting a practical problem-solving task in which he will apply, in the conditions of his own enterprise, what he has learned in the course. The professional training staff keeps in touch with the participants and work with them in their enterprise enough to ensure that each participant does, in fact, produce practical results. It is considered that this approach is the only way to ensure that participants receive adequate training in, and exposure to, practical management skills. Further, top management is unlikely to accept any alternative approach to training which excludes the practical application of new techniques. At the end of this practical in-plant application phase (whether part of a general course or follow-up phase after the completion of a course) participants return to the training center for a few more days, so that each can present to the group the description of the problem he tackled, the methods used to solve it and the obtained or expected results. Through such evaluation seminars everyone has a further opportunity to learn about additional practical applications.
The Determination of Training Needs with an Enterprise There is a great difference between the way in which training needs would be determined in a perfect world and an ideal company, and the way in which it is often done in the normal working circumstances. Let us consider an example - on one hand, there is a progressive company with highly organized central personnel and training departments, and a plan for
integrated manpower development. At the other extreme, there is a company where the personnel and training responsibilities are not very clearly defined, and where the function, if it can be identified at all, is one of a number of general responsibilities carried out by an official whose main responsibility is something quite different. In the first type of company, the determination of training needs is something, which is constantly being carried out and reviewed as circumstances, policies, markets, and company objectives change. In the second type of company, the training is much less likely to be planned globally for the company as a whole. The initiative is often left to one particular department manager who happens to realize the potential benefits of training and is keen to do something about it. He may nominate one member of his staff as training officer and activities may be launched which are related only to the specific needs of that particular department at that particular time. They may even conflict with the needs of the organization as a whole.
At the one extreme, training needs are carefully analyzed and reviewed and, the other displays a piecemeal haphazard approach, unplanned, unsystematic, and often unrelated to the needs of the company. In between these two extremes there are all the permutations and combinations. The approach of each company will vary from that of other companies and so it should, but fundamentally there are a number of common basic steps: Take an inventory: The present manpower should be taken stock of both quantitatively and qualitatively. Information related to manpower will be available in the personnel department, i.e., information about qualifications and previous experience and training already given by the company. Information about how effective the people are in their present job and about their promotion ability should also be included.
Forecasts of future requirements: Normal wastage through retirement, transfers, resignations, etc. and the possible effects of changes in the companys policies and objectives, e.g. expansion, re-organization, contraction, etc. should be considered here. To decide where one is going to find the people: Some of the people can be found within the organization unless there is a well-planned scheme for spotting talent. It is in this third step that the results of steps one and two are combined. Step two forecasts all future requirements but in particular it highlights key jobs, which will need to be filled during the review period. Step one has mentioned what type of people organization has and what their potential is. The two can be then matched by allocating people to target jobs. If it is unlikely to fill all vacancies from within the organization then sources outside the company can be tapped.
Decide what one is going to do to develop the manpower: Both those who are there and those who are going to be recruited in order to help them to be fully effective in their present posts and to prepare them for their target jobs. In practice it is a good idea to prepare people wherever possible for two target jobs. This is because some personnel development programs are quite lengthy and in the meantime company objectives and therefore organizations may change. The two-target-job approach ensures greater flexibility. This, in a nutshell, is the raison detre of the training officers job. The training needs, both short term and long term, will be spotlighted by the development program. The training officers task will be to advise on what is to be done within the company to meet these training needs and also what use, if any, is to be made of external facilities offered by training institutions, consultants, technical and commercial colleges, universities, etc. In order to do this, the training officer needs to keep himself well informed about the work of these organizations and its quality.

The Training and Consultancy Cycle There is a marked difference between the knowledge of a management technique and the ability to use it properly in a practical management situation. This ability can be defined as a management skill. Knowledge of the technique can be acquired through theoretical study and through simulation exercises in the classroom or laboratory. But the essential skills in practical use and application of the technique cannot be acquired in the same way as the theory. Acquisition of these skills involves identification of practical situations to which the technique can be applied; the adaptation of the technique to the requirements of these situations; co-ordination of the efforts of those people concerned with introduction of the technique, and the overcoming of diverse obstacles. Such skills are only developed and refined through practice and first-hand experience. The aptitudes and efforts of the individuals concerned as well as opportunities provided by the environment greatly influence the process of acquiring management skills.

The first activity in which the managers, or young people trained for future jobs participate, are training courses. The next activity in the development cycle is guided practical application of the new techniques and concepts. In some cases, this is done during the training program concerned, which consists thus of two major phases: the first, phase of classroom or laboratory training is followed by a phase during which the participants work as individuals or in groups on practical projects. In other cases, the formal training program does not include this second phase. But it is almost invariably followed by a follow-up period, which is very similar in objectives and scope. Before the end of the course, each participant is assisted in selecting a practical problem-solving task in which he will apply, in the conditions of his own enterprise, what he has learned in the course. The professional training staff keeps in touch with the participants and work with them in their enterprise enough to ensure that each participant does, in fact,
produce practical results. It is considered that this approach is the only way to ensure that participants receive adequate training in, and exposure to, practical management skills. Further, top management is unlikely to accept any alternative approach to training which excludes the practical application of new techniques. At the end of this practical in-plant application phase (whether part of a general course or follow-up phase after the completion of a course) participants return to the training center for a few more days, so that each can present to the group the description of the problem he tackled, the methods used to solve it and the obtained or expected results. Through such evaluation seminars everyone has a further opportunity to learn about additional practical applications.
Strategic Training System (Planned training) Planned training, as defined by Kenney and Reid (1994), is a deliberate intervention aimed at achieving the learning necessary for improved job performance the process of planned training consists of the following steps (as shown in the figure below): Identify and define training needs This involves analysis of corporate, team, occupational and individual needs to acquire new skills or knowledge or to improve existing competencies. The analysis covers problems to be solved as well as future demands. Decisions are made at this stage on the extent to which training is the best and the most cost-effective way to solve the problem. Define the learning required It is necessary to specify as clearly as possible what skills and knowledge have to be learnt, what competences need to be developed and what attitudes need to be changed. Define the objectives of training Learning objectives are set, which define not only what has to be learnt but also what learners must be able to do after their training program.
Plan training programs These must be developed to meet the needs and objectives by using the right combination of training techniques and locations. Decide who provides the training The extent to which training is provided from within or outside the organization needs to be decided. At the same time, the division of responsibility between the training department, managers or team leaders and individuals has to be determined. Implement the training Ensure that the most appropriate methods are used to enable trainees to acquire the skills, knowledge, level of competence and attitudes they need. Evaluate training The effectiveness of training is monitored during programs and, subsequently, the impact of training is assessed to determine the extent to which learning objectives have been achieved. Amend and extend training as necessary Decide, on the basis of evaluation, the extent to which the planned training program needs to be improved and how any residual learning requirements should be satisfied.
What is Training gap Corporate or functional results possessed required Actual performance of individuals
Identification of training needs
Training must have a purpose and that purpose can be defined only if the learning needs of the organization and the groups and individuals within it have been systematically identified and analyzed. Training needs analysis Aims Training needs analysis is partly concerned with defining the gap between what is happening and what should happen. This is what has to be filled by training i.e. the difference between what people know and can do and what they should know and be able to do. What should be
Corporate or functional standards
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The Training Gap
Training needs analysis Areas Training needs should be analyzed, first, for the organization as a whole corporate needs; second, for departments, teams, functions or occupations within the organization group needs. And third, for individual employees individual needs. These three areas are interconnected, as shown in the above figure. The analysis of corporate needs will lead to the identification of training needs in different departments or occupations, while these in turn will indicate the training required for individual employees. The process also operates in reverse. As the needs of individual employees are analyzed separately, common needs emerge which can be dealt with on a group basis. The sum of group and individual needs will help to define corporate needs, although there may be some super ordinate training requirements which can be related only to the company as a whole to meet its business development needs the whole training plan may be greater than the sum of its parts.

Training needs analysis Areas and Methods

Corporate Group Individual Analysis of strategic plans Analysis of human resource plans Training surveys Performan ce & developme nt reviews Job and role analysis
Methods of analyzing training needs
The four methods of training needs analysis are: Analysis of business and human resource plans Job analysis Analysis of performance reviews Training surveys


Business and human resource plans The training strategy of an organization should largely be determined by its business and HR strategies and plans from which flow human resource plans. The plans should indicate in fairly general terms the types of skills and competences that may be required in the future and the number of people with those skills and competencies who will be needed. These broad indicators have to be translated into more specific plans which cover, for example, the outputs from training programs of people with particular skills or a combination of skills (multi-skilling).

HRD An Overview Introduction In recent times, particularly with liberalization of the Indian economy and its gradual and halting integration with the world economy, the Human Resources (HR) function in India has finally acquired the importance that it has in the developed world. Perhaps, due to the abundant manpower available and relatively low cost, this did not merit undue consideration earlier. But now it is realized that with equal opportunities to acquire technology, finance, systems, the cutting edge of an organization will be its Human Resources. That is, the difference between one company and another in the market place, other things being equal, will be the quality, skill, attitudes and commitment of the Human Resources, which will either see the company achieve good results profits or, decline losses. Human Resource Development is incorporated in organizations to cope with the corporate cultural change. It is important to make the implicit explicit: to continually examine the culture through a variety of feedback mechanisms, mapping out the culture, assessing where the organization is, where it wants to go and thus carefully identifying strategies for change.

Thus, HRD is a continuous process, which matches organizational needs for human resources and the individual needs for a career development. It enables the individual to gain their best human potential by attaining a total all round development. It promotes dignity of employment of every employee of an organization, and provides opportunities for teamwork, personal development and career development. Hence a well-planned HRD system must be a part of human resource management of every organization.
Evolution of The HRD Function

HR management tries to focus on people in the workplace, the need to understand their contribution to the organizations purpose. Consequently, there is now an emphasis on trying to build on HR systems and processes. The evolution of the HRD function went through the following phases: The Initial Phase: This was characterized by a labor welfare approach. The feature of this approach was that the function was basically concerned with maintaining records of employees such as attendance records, leave of different sorts Casual Leave / Earned Leave / Sick Leave / Extraordinary Leave / Study Leave / Restricted Holiday and so on and this data was fed to calculate the wages. Besides the basic wage, other wage components like PF were also recorded. Records were also maintained of PF loans and other retirement benefits, and implementation of safety measures as per the Factories Act. In addition there was some amount of monitoring and providing information to the employee, the accounts department and for the concerned department head. With the advent of trade unions, dealing with the union was an add-on function. This involved receiving the charter of demands from union leaders and interpreting it.
Fire Fighting: In this phase, the function was frequently, dousing fires i.e. resolving conflicts and keeping the wheels of production moving (union demands, dissatisfaction etc.) Management was preoccupied with keeping the engines of production moving at all times, and so work stoppages and discord was an aberration to be speedily got over with, so that the fundamental business of production was not held up. The major policy decisions and negotiating was done by the Top Management, the Personnel Management and Industrial Relations (PMIR) function played a supportive/informative role and was more preoccupied with backroom discussions and negotiations. Such an approach is also referred to as the maintenance role and the obverse is the development role. If the HR position is in the lower rung of the management hierarchy, for example, in the production department or in a labour welfare-oriented department, the HR person would be playing more of the reactive role if there is a problem, he reacts and the problem is sought to be solved. Production should receive the first priority and all industrial disputes should be settled. With the emphasis on the current issues, aspects like longterm strategy, planning, etc. are given low priority. The PMIR function was in the unenviable position of having to douse fires all the time. The major decisions were taken at the factory manager or the managing director level. When the fire or strife erupted the function got some attention, but when the fire was put out, it got no time anymore. Third Phase: This stage in the evolution of the function came about due to the influence of a variety of factors: the increasing cost of human resources due to the increased number of benefits, increased cost of living, higher expectations and higher costs of scarce skilled manpower. The increased HR cost became more pronounced in the service industry than in the manufacturing industry as the Human Resource was the main input in the service sector. The other major influence was that of the behavioral scientists and their contribution to understanding the nature of human behavior at work focusing on issues like leadership, work motivation, participation and factors influencing work productivity. The third factor was the attempt to integrate the Trade Unions/Workers with managements vision of the enterprise, that survival and
prosperity was common to both. In fact the market was such that in many products there was more of rationing distribution, due to either capacity or input constraints. Monopoly or dominant market share remained the major concern rather than production cost and technological efficiencies. Integrated HR Function At the end of the Third Phase organizations soon began focusing on their human resources. Human Resource was in abundant supply and not a very significant cost in the total operating cost, but working in industry itself was a new experience for most people in the initial phase. The PMIR function was thus playing a reactive maintenance role, because of a combination of market, cost, supply and finance factors. But with a few corporations experimenting with innovative approaches to combat the negative fall-out of the traditional approaches to labour, they focused on the positive and the significant contribution they could make to a congenial working environment and consequently, smooth production, including changeover to new technology, flexible manning and increased productivity. The significant shift was that management now began to take the initiative and introducing HR systems and procedures, rather than reacting to a particular problem or a demand. HR issues of major policy initiatives e.g. new products, new plants, and so on, were discussed taking to account the HR implications, which hitherto was not the case. Top managers reviewed and took stock of the situation. Finally, the HR position itself was upgraded to come on par with the other functions in terms of status and salary. A Broad perspective of Personnel, IR and HRD Functions The Management process is made up of four steps embracing the people dimension-getting them, preparing them, activating them and keeping them. The Management of human resources is a very complicated and challenging task for those who are entrusted with the successful running of an organization;
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and this implies considerable knowledge of various aspects of Personnel Management and Industrial Relations. The Personnel Function The nervous system of the organization structure Personnel management may be conveniently described as the part of the management process, which is primarily concerned with the human constituents of an organization. Its object is the maintenance of human relationships on a basis by which, consideration of well-being of the individual, enables all those engaged in the undertaking to make their maximum personal contribution to the effective working of that undertaking. The personnel function has two aspects: there is, in the first place, this responsibility attaching to all managers and supervisors for the way in which they manage their people and weld this human material into the team that carries out effectively the activities of the operating departments or sections. While this is primarily a matter of the exercise of leadership, it is also linked up with the carrying out of the established personnel policy and the smooth application of the procedures designed to secure the fulfillment of that policy. It necessarily entails on the part of the managers and supervisors an understanding of the principles of personnel management as well as close acquaintance with the personnel procedures and methods of the organization itself. A Service facility The second aspect is the specialized responsibility, which falls to the charge of the personnel specialist. His task includes advising the companys Managing Director or General Manager, and through him the Board of Directors, on the formulation of personnel policy and planning and supervising the procedures by which that policy is to be carried into effect. The Personnel Manager is an expert retained to deal with all policy, planning and methods concerning the management of people, parallel, for instance, to the engineering expert who has to deal with production policy, process layouts, engineering methods, tooling or the chemist who is responsible for formulation of quality standards. The Personnel Officers responsibility entails mainly rendering a service to other
managers, as well as advising them in the discharge of their own human responsibilities. He serves the other managers by many of the activities which are carried out within his own specialist department: the procedures of selecting and engaging, the records and returns, the statistics and study of absenteeism, the provision of canteen and medical services, and numerous other facilities. In the language of organization theory, he holds a functional responsibility for all personnel matters. The nearest analogy is in the human body. Personnel management is not the brain, the controller, not only just a limb, a member, nor yet the bloodstream, the energizing force. It is the nervous system. It is centered in the controlling unit of the brain, for personnel policy is a Board responsibility and interpreted through the Managing Director. It is a two-way channel of information reaching out to every part of the body i.e. organization: it is a live channel, not just a duct, and in some respects has automotive force. It is used in every action; if it atrophies, partial paralysis results; if it gets out of balance, there ensues instability, chaotic action, dis-equilibrium, which can be found in all stages of advancement, in close parallel with neurosis. But, above all this, it is inherent in the whole body and intimately associated with its every movement. The nervous system can never be thought of as an adjunct of the body no more can personnel management be an extraneous or superimposed element on the structure of organization. The personnel function lies embedded in the structure, is inherent in the dynamism of that structure, an integral part of the process of management itself.
HR Challenges As companies rush to become global, HR professionals are being asked to navigate through the white-water rapids of a multicultural workplace, complex markets, and a new global competitors. Beneath the turbulent water are the hidden challenges of lost talent, inequities, and the unknown. The signals, the warnings, are often not seen or heard until it is too late, and the damage is
done. Moreover, navigating one river successfully is no guarantee of success on another just as one new global business experience rarely resembles another. Technology and HR Its become a clich to talk about the accelerating pace of change in the business environment . Every commentator on any business trend pays homage to it. But undeniably, todays organization seems to experience change like never before. Over the past decade, HR professionals task was simple - attract, retain, and motivate good people. Certainly nothing was said or expected about creating work environments that encourage interconnecting people, knowledge, and markets. The winds of change are heralding the emergence of the new economy, the information economy, and the digital economy. Seamlessly creating new work environments, shaping new corporate cultures and dictating new business ethics. A new breed of professionals have raised the challenge sweepstakes for the HR managers.
The technology of the business exerts a major influence on the internal environment how work is organized, managed and carried out. The introduction of new technology may result in considerable changes to systems and processes. Different skills are required, new methods of working are developed. The result may be an extension of the skills base of the organization and its employees, including multi-skilling . But it could result in downsizing. Technology can therefore present a considerable threat to employees. The consequences of changing technology Smaller, more productive organizations Growing need for training on how to use technology Increasing need for people to cope with the expectation that they can perform anytime or anywhere Increased productivity

Flatter organizations Increased efficiency Reduced interpersonal contact
Threats of changing technology and the role of HR Increased productivity Technology offers the greatest opportunity for improved productivity and will continue to change abilities and expectations for how and where work is done and who does work. Changing technology necessitates changes in organizational structures, job design, hiring practices, compensation structures, training, and employee relations. As technology changes faster, so too must ways of managing the people who work in technologically dependent work. That responsiveness will require increasingly flexible HR efforts and increasingly rapid HR decision making. Changes in the way work is done The ability to share information is escalating exponentially with personal computers in virtually every office and in many residences and connected to a network. The ability to perform work anywhere and at any time - the virtual office calls for new performance measurement systems and different managerial skills. Increased need for Training To keep pace with changing technology, organizations must increasingly devote resources to training employees on how to use it. Organizations meet this demand by providing continuous retraining to help employees keep pace with changing technology. The human element is key to taking full advantage of technological change, and managing that human element is essential if any benefits of technological change are to be realized. HR can take the leadership role by directing the formulation of systematic action plans or strategies developed to enable people to deal with technological change.

Attraction and Retention of talent
Better talent is worth fighting for. At senior levels of an organization, the ability to adapt, to make decisions quickly in situations of high uncertainty, and to steer through wrenching change is critical. But at a time when the need for superior talent is increasing, big US companies are finding it difficult to attract and retain good people. Executives and experts point to a severe and worsening shortage of the people needed to run divisions and manage critical functions, let alone lead companies. Everyone knows organizations where key jobs go begging, business objectives languish, and compensation packages skyrocket. The Retention Measures Increasing the organizations level of professionalism Moving from family to professional management Making performance appraisals objective Involving employees in the decision making process Ensuring a match between authority and accountability Measuring employee satisfaction Achieving a match between individual and organizational goals Designing a competitive compensation package Increasing organizational transparency Promoting employees from within Helping employees acquire new skills Offering stock options Focusing on welfare measures proposition
Increasing the organizations level of professionalism Employees leave companies where intra-organizational interactions are unstructured, and decisions, ad-hoc and driven more by personal prejudice rather than professional consideration. By adopting systems that introduce an
element of objectivity into its internal operations, a company can create a better workplace. Moving from family to professional management In most family managed organizations, professional managers leave because they cannot see themselves holding key positions, or functioning with the level of independence that their designations merit. By inducting professionals into senior management positions, a company can lower its attrition rate. Making performance appraisals objective Employees like to know how, when and by whom their performance is going to be measured. An appraisal process that lists objective and measurable criteria for performance appraisal removes the uncertainty in the minds of employees that their superiors can rate their performance any which way they please. Involving employees in the decision making process People like to work in organizations where their opinions count. The higher an employees involvement in decision-making, the higher the organizations retention level. A participative decision-making process is good; total empowerment, better. Ensuring a match between authority and accountability Most companies fall into the trap of holding an employee accountable for a specific activity without empowering him/her with the authority to perform it well. Often, the situation is exacerbated by the fact that they vest another employee with the same authority, but do not hold him accountable.
Measuring employee satisfaction

Obsessed with catering to the demands of their external customers, companies ignore their internal customers. Periodic employee satisfaction surveys can highlight the potential flashpoints, and enable the company to take corrective action. Achieving a match between individual and organizational goals Many companies fall into the trap of expecting their employees to subsume their individual objectives before the organizations one, which forces the employee to leave. The best companies achieve a balance between the two. Designing a competitive compensation package Money isnt a motivator, but it is an effective de-motivator. While organizations that pay best-in-industry salaries may find themselves unable to use that fact to motivate their employees, those that could not find their best employees leaving.
Increasing organizational transparency People do not like to work in black box like organizations, where information is rationed out on a need-to-know basis. They prefer a transparent organization that is willing to share every aspect of its functioning with its employees. Promoting employees from within A company that constantly fills vacancies by hiring from outside is certain to face retention problems. Employees who realize that they are unlikely to be promoted to fill the vacancies will leave the organization. Growing your own is a sound retention strategy. Helping employees acquire new skills As the job-profiles and desired skills-sets for a particular job change, companies may feel the need to hire employees with new skills, or retrain their existing employees. Companies that choose to do the latter will find it easier to retain their people since the training signals that the organization values their contribution, and is willing to invest in upgrading their skills. Offering stock options
ESOPS are a sign that the organization recognizes the role of the individual in its performance, and is willing to share the benefits with her. Focusing on welfare measures proposition Employees are not just warm bodies; they are individuals with families and lives of their own outside the workplace. Organizations that recognize this, and help employees achieve a better balance between life work are likely to face fewer problems than those that do not. Attracting Talent From Campus Never before has it been more important for companies to recruit the best and brightest from the campuses of Indias business and engineering schools. The days are over when companies used to recruit raw talent, train and polish them all the facts they needed. This is the day of attracting readymade knowledge worker. As campuses are being the natural filter of intelligence and managerial prowess, the entry barrier to the business & engineering schools for students ensure the major source of top talent from their campuses. We know that Campuses are the major sources of talent. But it is not that easy to select the talent from that pool as there are more than 200 companies try scouting for management trainees from the campuses. Hence it is essential for the companies to prepare themselves adequately before entering any campuses. Here are some insights for the organizations intend to hire talent from campuses. Shortlist campuses Gather the curricula and specialization of the business and engineering schools, mode of selection of students; also find out the faculty at the schools and the mix of teaching staff and visiting faculty. Concentrate on the schools whose curricula and specialization matches the needs of your organization. Choose recruiting team carefully
It is essential for the organization to develop a recruiting team from within. Most companies usually send a team of one senior HR Manager, one or more middle managers and senior executives. But according to research, the team should comprise of a Line Manager rather than a General Manager and have thorough knowledge of the company and the job. It is also advisable to have a team within the age group of 30-45 Years. Composition of the team also reflects the seriousness of the Campus Recruitment. When you are competing with bigger companies to hire on campuses, if possible ask your CEO or MD to address a pre-placement talk to the students and also include the alumni in the talk. This would help in getting the favourable response. Pay smartly not highly In the present era wherein the compensation of a fresh recruitee from campus is touching new high every year, it is not possible for every company to match that salary. In the last five years the highest annual salary has risen to almost 500%. As for startup and other companies it is not possible to match the figure, they should add ESOP, foreign placement, entrepreneurial options in their compensation package. Present a clear image You cannot meet the requirements of all the people all the time. Instead of being something to everybody, offer something unique or special. It is better to have a focused USP - A Learning Environment OR Chance to Work Abroad. These will immediately attract some of the students. Showcase corporate culture Business School Graduates are more interested in Culture than Cash. Their highest priorities are Level of responsibility Degree of autonomy
Extent of elbow room Potential and scope for learning
Dont oversell yourself The first flush of wide eyed MBAs eager for the best paying and most glamorous jobs has been replaced by hard nosed job seekers who can see through inflated claims. You must make a bang at the PPT where your opening pitch to students will determine your place in the order in which companies will get the chance to hire MBAs from the campus. Present all the facts to the students. Not just Living room include even your kitchen- and nothing but facts. Dont promise what you cannot deliver. Campuses have long memories. You can lie and hire good people once. But you wont be taken seriously for many years to come. Get in early Instead of waiting for the annual battle for the best brains, try identifying your target students as early as possible and forge a bond between them and your company. Proctor & Gamble uses a rigorous selection process to pick summer trainees from B-School campuses every year ahead of placement time and putting them to work on live projects. It assesses early and makes job offers on the spot. Flattered MBAs often remember and accept the offers when placements are conducted. Building special relationships with particular B-Schools or Engineering-Schools could also get head-start in the hiring race. Offering scholarships to students, endowing chairs, or sending your managers to teach on campuses will help build bridges with students earlier than your rivals. Not everyone fits the bill The competition to hire on campus may camouflage the fact that you could still end up recruiting an unsuitable MBA. Screen the applicants as carefully as those
apply to ads. Identify the candidates orientation towards work by asking questions like Just why do you want to work for us. The group discussions and interviews that follow must validate the initial impression. Remember that toppers are often too narrowly specialized to be good general managers or too theoretical to enjoy managing. Besides toppers are hot property, making competition tougher. Target all-rounders instead. Sometimes, ensuring that your selected candidate actually joins you can be tough since you could be competing with academic opportunities abroad. To avoid losing them, stay in touch with recruit elects, invite them for visits, tracking changes in their career plans and offering counseling. Todays mba or engineer is looking for excitement and challenge as much as compensation and learning. Offering him those qualities could well become your strongest point in campus hiring war The best practices can be summed up as: Build possibility of Stock Ownership into compensation package. Highlight your corporate culture as a good reason to work for your company Focus on career growth opportunities that your company offers to recruits. Include young line managers and B-School alumni in the recruiting team. Build relationships with institutes and students to grab them before rivals.
Role of Human Resource Management


The Role of HRD in Business A business enterprise is created and managed by people. It is not managed by forces. Economic forces set limits to what management can do. They create opportunities for managements action. But they, by themselves, do not determine what a business is or what it does. Management not only finds these forces; management creates them by its own action. Secondly a business cannot be defined or explained in terms of profit. The basic factor in an economys development must be the rate of brain formation, the rate at which a country produces people with imagination and vision, education, theoretical and analytical skill.

At least as important but unexplored is the increase in productivity achieved by replacing manual labour, whether skilled or unskilled, by educated, analytical, theoretical personnel the replacement of labour by managers, technicians and professionals, the substitution of planning for working. Obviously this substitution must take place before capital equipment is installed to replace mans animal energy; for someone must plan and design the equipment a conceptual, theoretical and analytical task. The planning, design and installation of capital equipment is also only a part of the increase in productivity through the substitution of brain for brawn. At least as important is the contribution made through the direct change of the character of work from one requiring the theoretical analysis and conceptual planning of men of vision and education without any investment in capital equipment whatsoever. Productivity is vitally affected by the business structure and by the balance between the various activities within the business. If, for lack of clear business objectives, managers waste their time trying to find out what they are supposed to do rather than doing it, the companys scarcest resource is being wasted. If top management is interested only in engineering (perhaps because thats
where all the top men came from) while the company needs major attention to marketing, it lacks productivity; and the end result is likely to be more serious than a drop in output per man-hour. Business is crucial to growth and development. A businessman is a person who perceives new economic opportunities and creates a new venture or directs an existing one to seize these opportunities. Today, due to the downtrend of business New HRD techniques need to be evolved so as to encourage development activity in the workmen and managers. The need for human resource planning According to Prof. D. Quinn Mills of Harvard Business School, more and more managers are finding that systematic human resource planning can give their businesses a competitive edge. It has become a standard operating procedure in many of the top businesses. Innovative efforts to manage morale and improve individual and organizational performance complement traditional practices such as staffing forecasts and succession planning at their businesses. Links between human resource activity and strategic planning process are being rapidly forged. A survey of randomly selected 291 companies, each with a sale of $ 50 million or more, had found that among the respondents about 40 per cent included a human resource component in their long term business plan, about 50 per cent drew formal management succession plan and prepared training and development plans for their employees. Only 15 percent respondents reported that they do not do any people planning. In addition, 27 per cent of the survey respondents, who practice human resource planning, are certain that it improves profitability. And 39 per cent, or more than half of the human resource planners, insist that they can measure the difference on the IR balance sheet. It may be recommended that human resource planning, with an intention to introduce a competitive edge for the business in the market place, may be introduced in them.
Compilation - Courtesy L. R. Team For Private Circulation Only

L. R. Associates Pvt. LTD.: Manpower Planning

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