Module 1 Human Resource Management

The human beings working in an organisation are known as Human Resource.

To manage human resource is known as human resource management (managing employees)
Human Resource includes 3M:
o Man
o Material
o Money
Human resource development is a sub part of human resource management
o Developing employee in an organisation
o HRM is a broader concept and HRD is a part of HRM.
o Retention
o Attrition (The rate at which people are leaving the organisation)
o Employee Turnover
Meaning of Human Resource Management
o It is concerned with management of people from recruitment to retirement
o To select right person at the right place for the right job.
o Retirement age 60 Years
Volunteer Retirement Scheme (VRS) or Golden Handshake
o When there will be surplus employee then to get rid of those surplus people then the organisation
in provide certain scheme so the people can leave the organisation without any conflict.
o This is the win-win situation for both organisation as well as employee get benefit from this.
According to Edwin B Flippo: Human Resource Management is planning, organizing, directing and
controlling of the procurement, development, compensation, integration, maintenance and separation of
human resources to the end that individual, organisational and societal objectives are accomplished.
Objectives of Human Resource Management
o Procurement of personnel
o Effective utilization of human resources
o To build desirable working relationship
o Maximum individual development
o To satisfy individual needs and groups goals
o Development of team work
o Raising morale of employees
 o Maintaining good relations between employer and employee
o To create disciplined atmosphere
Human Resource includes
o Recruitment
o Selection
o Staffing
o Training and Development
o Employee Engagement (picnic, party)
o Motivation
o Performance Management System (includes performance appraisal)
o Welfare
o Grievance Procedure
o Conflict Management
o Mentorship
o Career Planning: Career of employee is being planned. Generally in big organisations.
o Succession Planning: Planning the successor. Only done to key position (higher authority important
for the organisation). Done by the organisation (finding of potential person for a particular position.
o Salary and Growth
Career The sequence of job positions.
Head Hunting Looking out for individual to fill the C Level jobs.
HRD Human Resource Development activities to improve the quality of existing employees.

HRD HRM

1. Human Resource Development is a sub section of Human Resource Management.

2. All aspects of the human resource function while HRD only deals with development part.
3. HRM Recruitment, rewards etc., HRD Employee skill development
4. HRM functions are mostly formal while HRD functions can be in formal like mentorship.
HRD is a proactive, it copes with changing needs of people as well as anticipate these needs and HRD is
function more independent with separate roles to play.
HRD is developing the whole organisation and HRM is concerned with people only.
 Difference between HRD and HRM (Google)
Way of bringing change: Kurt Levin
o Unfreezing: Changing old mindset
o Changing: Introducing a change
o Refreezing: Making the change a normal
Role of HR Manager
o As specialist or counsellor: Advise different functional heads.
o As an information source
o As a change agent
o The welfare role
o Problem solving role
Qualities of good HR manager
o Approachable
o Adjusting leader
o Ambivert and extrovert
o Role Model
o Good Communication Skills
 Module 2 Human Resource Management

Job Analysis
o Analysis of a job
o In includes two elements
Job description
Job specification
What is Job analysis?
o A systematic approach to collect information about a job such as tasks, responsibilities and the skills
required to perform those tasks.
o An important part of Human Resources (HR) planning.
o A group of tasks makes a job.
How it can be used in your organisation?
o Job analysis assists HR in determining:
Equipment Needed
Skills Required
Supervision
Job Description
o Job Title Marketing Manager
o Department Marketing
o Location Jaipur, Delhi
o Job Code JDeCurtis123
o Reports To Zonal Head / AVP
o Compensation 5 Lakhs 7 Lakhs per annum
o Job Summary You will be handling marketing activities in the west region
o Duties and Responsibilities
You have to recruit his own team
you will be responsible for allocating work to employees
you will be responsible for devising marketing plan for company
You will be training the employees
Maintaining public relations
You will be handling digital marketing
You will be framing marketing strategies
 o Working Conditions Industry based or Desk based job
o Health Hazards
Job Specification
o Job Title Marketing Manager
o Department Marketing
o Location Jaipur, Delhi
o Gender Female
o Age 28 35
o Experience Minimum 5 years
o Qualification MBA / PGDM in marketing or Diploma in Marketing
o Training people looking for this job should have training or certification in this thing
o Skills / Qualities Good communication skills, good negotiation skills etc.
o language English, Hindi, French or local language required
 Module 3 Human Resource Management

Human Resource Planning

o Human resource planning offers and accurate estimate of the number of employees required with
matching skill requirements to meet organisational objectives.
o Human resource planning is a forward-looking function as human resource estimates are made well
in advance. It is, of course, subject to revision.
Objectives
o The basic purpose of Human resource planning is to decide what positions the organisation will have
to fill and how to fill them:
Forecast personnel requirements
Cope with changes
Use existing man power productively
Promote employees in a systematic way
Importance
o Organisations use Human resource planning to meet future challenges, cut costs and achieve greater
effectiveness.
Create a talent pool
Prepare people for future
Cope with organisational changes
Cut costs
Help Succession planning
Process of Human Resource Planning
o The Human Resource Planning is a 4 step process:
Demand Forecasting
Supply Forecasting
Estimating manpower gaps
Formulating HR plans
o The demand for human resources is influenced by several factors.
o Forecasting the demand for human resources
External Challenges:
Economic Development
Political, legal, social, technological changes
 Competition
Organisational Decisions
Workforce Factors
Forecasting Techniques
o Human Resource forecasts are an attempt to find out an organizations future demand for
employees.
Expert Forecasts: These are based on the judgement of those who possess good knowledge
of future human resource needs.
Trend Analysis: This is based on the assumption that the future is an extrapolation from the
past. Human Resource needs, as such, can be estimated by examining past trends.

An example of trend analysis:

2001-02 Production of Units: 5,000
2002-03 No. of workers: 100
Ratio 100:5000
2003-04 Estimated production: 8000
No. of workers required: 8000*(100/5000) = 160
If supervisors have a span of 20 workers, 8 supervisors are also needed in 2003-04.

Q A company is producing 10,000 units by 100 workers. How many workers will be required
to produce 18,000 units?
10,000 100
18,000 X
18,000*(100/10,000) = 180

Span is number of workers under a supervisor.

Workforce Analysis: All relevant factors in planning manpower flows in a firm such as
transfers, promotions, new recruitments, retirement, resignation, dismissal etc. are taken
into account which estimating HR needs.
Manpower flows in a bank:
 Promotions Out
Transfers in > > Job Hopping (switching)
> Transfers Out
> Retirement
> VRS Scheme (Golden
Handshake)
Recruits in > > Discharge or Dismissal
> Terminations
> Resignations
Promotions in > > Retrenchment
> Attractions in other banks etc.

Workload Analysis: Based on the planned output, a firm tries to calculate the number of
persons required for various jobs.
An example of workload analysis:
Planned output for the year 10,000 pieces
Standard hours per piece 3 hours
Planned hours required 30,000 hours
Productive hours per person per year 1,000 hours (estimated on annual basis)
(Allowing for absenteeism, turnover, idle time etc.)
No. of workers required (30,000/1000) = 30
If span of control in the unit is 10 per officer, then 3 officers are also required.
Limitations of Human Resource Planning
o Human Resource professionals are confronted with three problems while preparing and
administering HR plans: - accuracy, inadequate top management support, lopsided focus on
quantitative aspects.
Supply Forecasting
o Internal Labour Supply: A manpower inventory in terms of the size and quality of personnel available
(their age, sex, education, training, experience, job performance etc.) is usually prepared by HR
departments. Several techniques are used while ascertaining the internal supply of manpower (a
supply of employees to fill projected vacancies can come from within the firm or from new hires).
Estimated internal labour supply for a given firm
 Sources of Projected
The Firm
Inflows Outflows
Transfer Promotions
Promotions Quits
Employees
New Employees In Current Staffing Terminations
Out
Recruits Level Retirements

Recalls Deaths
Lay offs

Projected Firms Internal

Current Staffing Projected
- Outflows this + = supply for this
Level inflows this year
year time next year

o Staffing Table: Shows the number of employees in each job, how they are utilized and the future
employment needs for each type of job.
o Marcov Analysis: Uses historical information from personnel movements of the internal labour
supply to predict what will happen in the future.
o Skills Inventory: It is a summary of the skills and abilities of non-managerial employees used in
forecasting supply.
o Replacement Chart: It is a visual representation of who will replace whom in the event of a job
opening.
 Module 4 Human Resource Management

Recruitment
o The process by which a job vacancy is identified and potential employees are notified.
o According to Flippo, Recruitment is the process of searching prospective employees and stimulating
them to apply for jobs in the organisation.
o According to Mathis and Jackson, Recruitment is the process of generating pool of qualified
applicants for organisational jobs.
o Main forms of recruitment through advertising is newspapers, magazines and internal vacancy lists.
Needs and objective of recruitment
o Vacancy created due to transfer, promotion, retirement, termination
o Vacancy due to expansion, diversification and growth of business.
o To cope up with new changes like technology
o To provide a competitive advantage by having skilled employees
o For continuous growth of the organisation.
Recruitment Process
o Begins when Human Resource department receives requisition for recruitment from any department
of the company or when organisation is planning for expansion or vacancy is created
o Assessment of personnel requirement through job description or specification.
o Locating and developing sources of required number and type of employees.
o Communication about the vacancy or requirement of employees by the organisation along with
terms and conditions (if any)
o Encouraging the candidates to apply for the jobs in organisation.
Sources of recruitment
o Internal Sources:
Types -
Promotion
Transfer
Past Employees
Trainees
Advantages
Improves Morale
No error in selection
 Promotes loyalty
No hasty decision
Economy in training costs
Self-development
o External Sources:
Types
Advertisement
Employment Exchange
Professional Bodies
Employee Referrals
Database
Part Time Employees
Waiting List
Campus Placement
Job Fairs
Advantages
Availability of Suitable Persons
Brings new ideas
Economical
Process of Selection
o Application Bank
o Screening Interview Rejected
o Employment Test Rejected
o Interview Rejected
o Checking of Reference Rejected
o Approval by Concerned Department Rejected
o Physical Examination / Medical Tests Rejected
o Selection
o Offer Letter
Different Ways
o Interview most common method.
o Psychometric Testing assessing the personality of the applicant will they fit in?
 o Aptitude Testing Assessing the skills of applicants
o In-Tray Exercise / In-basket Exercise Activity based around what the applicant will be doing. This
comes in training. This is to check the priority for several tasks. Example writing a letter to
disgruntled customer.
o Presentation Looking for different skills as well as the ideas of the candidate.
Selection Tests
o Aptitude Tests
o Knowledge Tests
o Personality Tests
o Graphology Tests For Handwriting
o Polygraph Tests Lie Detector Tests
Interview
o Interview is a means to judge
Sense of humor
Mannerism
Quickness of reaction
Fluency of speed
Ability to organize thought
Appearance
Intelligence
Quick Reasoning
It can be done in 3 ways:
One to one
One to many
Sequential
 Module 5 Human Resource Management

Contrast Effect
o Three people come for interview and you form a perception and then when next person comes you
want to judge him on that basis.
Halo Effect
o Judging a person on basis of one characteristics.
Stereotyping Judging because of group. Making a strong opinion on basis of belongingness. Example First
Benchers or last benchers
Career Planning
o Sequence of job that person holds in his lifetime
o Herbert Simon: Career is an honorable occupation which one normally takes up during his/her youth
with expectation of advancement and pursues it until retirement.
o Career Planning and development is a means by which an organisation can sustain or increase its
employee productivity and at the same time preparing them for changing world or him for a dynamic
world.
o Career Development = Career Management + Career Planning
Objective of Career Planning
o Identifying and making clear opportunities available
o To reduce employee turnover
o To increase the productivity
o To identify career stages and enhance the motivation level
o To achieve organisations goals by providing the employee paths to reach higher order needs with
self-esteem and self-actualization.
Career Planning Flow and Stages
 Career Anchors
o Instrument on ship to hold the ship at the particular place.
o It holds a person to a specific career
o Technical Competence:
Technical expertise, automobile engineering, software engineer B.Tech etc.
o Managerial Competence:
Air traffic control, MBA, etc.
o Stability and Security:
Government Jobs
o Creativity and Challenge:
Something different like Designers, advertisements, Man vs. Wild
o Freedom and Autonomy:
Bloggers, Entrepreneurs, Freelancers
o Dedication to cause:
NGOs, Social Service
o Lifestyle:
Air Hostess, Travelers, Fashion Bloggers
Process of Development Plan
o Case Study Colgate Palmolive:
Employees fill IDP (Individual Development Plan) form
The form is sent to managers
Employees and manager discuss
employee interest
strengths
training
HR arrange for training

Development Actions
Activities Planned Duration Activities Completed
X -- XX
X -- XX
X --
 Why career plans fail?
o Efforts are insincere
o Look for immediate benefits / lack of patience
o Lack of interaction
o No system to evaluate
o Bureaucratic model of organisation
Reverse Mentoring
o When you teach your seniors or say junior person mentors senior person and senior should be open
to new ideas and suggestions and they should not have ego issues.
o Juniors have fresh eyes, open minds and instant link to technology of future.
o Reverse mentoring conversations gave birth to work from home flexibility workweek full circle
program for women with children / caregiving needs.
o This will help to
Flexibility / Breaking hierarchical work structures
Cost effective
No need of external involvement
Promotes idea that you never stop learning and turns the company into self-learning entity
Much caring and informal work culture
Understand social media and fast changing market place
Environmental awareness
Innovation and create leadership pipeline
o Examples
HUL, CEO Nitin Paranjpe
Honda Motorcycle, YS Guleria Senior VP
General Electric, Jack Welch CEO
Price Waterhouse and coopers, Jagjit Singh Chief people officer
Dell and P&G
Microsoft
Starbucks office
Nokia
Marico, Airtel (to re-orient recruitment and HR Strategies)
Accenture
Lens kart Calvin Lyngdoh Chief HR Officer
 Module 6 Human Resource Management

Succession Planning
o It is done to identify and develop people to replace current jobholders in key managerial positions.
(important position which gives business to organisation)
o This plan assures a steady flow of internal talent to fill important vacancies
Need for succession planning
o To prevent organisation from getting headless and directionless functioning.
o Smooth working of organisation
o Organisational survival and growth
o To ensure availability of right no. and right kind of management staff at right time and position.
o Having a contingency place in case someone leaves or dies so that functioning is not disturbed.
Features of Succession Planning
o It is once a year exercise
o Usually done by top management to meet their responsibility
o It is a flexible plan to which cope up with changes in business such as unexpected resignations etc.
o It encourages hiring internally, creates healthy environment where employees have career, and not
merely jobs (career, Motivation, retention, job security, development) (we cant do succession
planning for all, only for key positions)
o It is generally needed for key positions
o Succession planning is generally done in different periods to ensure the availability of right
managerial personnel at right time in right positions for continuing organisational vitality and
strength.
o Example Ranbaxy India:
Ranbaxy Top Pharma company
Chairman Mohan Singh groomed son Dr Parvinder Singh (doctorate in pharma of
Michigan university)
Succession Planning: Key Elements
1. Assessment of key positions
2. Identification of key talent
3. Assessment of key talent
4. Generation of development plans
5. Development monitoring and review
 Module 7 Human Resource Management

Meaning and Definition of Training

o Training is an act of increasing the knowledge and skills of an employee for doing a particular job.
o It is a short-term educational process.
o Or it is a systematic procedure for transferring technical know-how to the employees
o It aims at increasing the ability of the employees, so that they can do the job in an effective and
efficient manner
o According to Flippo, Training is an act of increasing the knowledge and skills of an employee for doing
a particular job.
Characteristics and Nature
o Increasing knowledge and skill
o Learning process and experience
o An aid of Self-development
o It bridges the difference between job requirements and employees present specifications.
o Essential part of management development
o Training complements selection
o Continuous process (training should be updates time to time)
Training and Development Compared

Points of Distinction Training Development

Meant For Operatives Executives
Aim To develop specific skill personality To develop total
Contents Technical & Mechanical Conceptual & Philosophical
From management External Motivation From individual himself Internal
Time Period
Motivation
Nature Reactive Process to meet current needs Proactive Process to meet future needs
Develops Skill Technical & hands on skills Interpersonal and decision making skills

Needs of Training
o Job Requirements
o Technological Changes
o Organisational Viability (Survival in the market. Example Nokia)
 o Increasing Competition
o Change job assignments
o Motivation and Creativity
o To increase productivity
Training Objectives
o To establish a sound relationship between the worker & his job
o To prepare the employee to meet the present as well as the changing requirements of the job and
organisation.
o To impart the new entrants the basic job knowledge and skills
o To prepare employees for higher level tasks
o To assist employees to perform more effectively
o To ensure smooth and efficient working
o To minimize operational errors
o To train employees in the company culture pattern
Advantages
o Higher productivity
o Better quality of work
o Low cost of production
o Reduced Supervision
o Less Learning time and cost
o Less accidents
o High morale
o Personal Growth
o Adaptability
o Job Satisfaction
o Healthy Interpersonal Relations
Designing a Training Programme
 Organisational Objectives & Strategies

Nature of Current or Anticipated

Selection of Trainees
training needs

Establishment of Training Goals

Selection of appropriate training Selection and Application of

techniques and personnel Evaluation design

Application of training techniques Monitoring of training

programme

Overall evaluation of training

programme

Phases of Training
o The objectives of Human Resource Department is to contribute to the organisations overall goals,
training programmes should be developed systematically and with true business needs in mind.
o Training programme has four phases:
Need Assessment
Design and Development of training
Delivery of training
Evaluation of training

Phase 1 Phase 2 Phase 3 Phase 4

1. Assess Training Needs 1. Design and Develop 1. Deliver training 1. Evaluate training
Organisational Training Implement where objectives met
analysis Select training Programme Select Criteria
Job and Task methods Use Training Determine
analysis Develop methods Design
Person detailed Apply Conduct
analysis content expertise and Evaluation
prioritize skills Interpret
needs Results
 Develop Develop Arranging
Training training physical
objectives materials environment
Pilot test Getting
training Started
programme
Train trainers

Phase 1 Example

Reasons / Causes Analyses to be made Outcomes

o Lack of basic skills o What trainees need to

o Poor Performance What is the context? learn

o New Technology o Type of training

Organisational Analysis o Frequency of training
o Customers Request
o Buy vs. Build training
o New Products
Task Analysis decision
o Higher Performance
o Training vs. other HR
o New jobs What do they
Person Analysis options
o Business Growth need training?
o How training should
o Global Business Who needs training? be evaluated
Expansion

Determining Training needs

o A training need is any shortfall in terms of employee knowledge, understanding, skill and attitudes
against what is required by the job, or the demands of organisational change.

Actual Performance Required Performance

Current Competencies, including Performance standards built into
knowledge, understanding skills the job competencies needed to
and attitudes. meet required standards
Training Needs

On-the-Job Training (OJT)

o It is sometimes called direct instruction.
o It is a form of training taking place in a normal working situation.
o It is one of the earliest forms of training.
o Methods
Job Rotation: It is the process of training employees by rotating them through a series of
related jobs. Rotation must be logical.
Example HR Department Hiring, Training & Development and Compensation
As a person is working for months in hiring then for upgradation of skills, he will be moved to
training.
Job Instructional Technique (JIT): It is a step by step (structured) on the job training method
in which a suitable trainer:
Prepares a trainee with an overview of the job, its purpose, and the results desired
Demonstrates the task or the skill to the trainee
Allows the trainee to show the demonstration on his or her own
Follows up to provide feedback and help.

The trainees are presented the learning material in written or by learning machines through
a series called frames. This method is a valuable tool for all educators.

Coaching: Coaching is a one-to-one training. It helps in quickly identifying the weak areas and
tries to focus on them. It also offers the benefit of transferring theory learning to practice.
The biggest problem is that it perpetrates the existing practices and styles. In India, most of
the scooter mechanics are trained only through this method.
Mentoring: The focus in this training is on the development of attitude. It is used for
managerial employees. Mentoring is always done by a senior inside person. It is also one-to-
one interaction, like coaching.
Apprenticeship: It is a system of training a new generation of practitioners of a skill. This
method of training is in vogue in those trades, crafts and technical fields in which a long period
is required for gaining proficiency. The trainees serve as apprentices to experts for long
periods. They have to work in direct association with and under the direct supervision of their
masters. It is an expensive method of training. The apprentices are paid remuneration
according the apprenticeship agreements.
Understudy: In this method, a superior gives training to a subordinate as his understudy like
an assistant to a manager or director (in a film). The subordinate learns through experience
and observation by participating in handling day-to-day problems. Basic purpose is to prepare
subordinate for assuming the full responsibilities and duties.
 Off-The-Job Training
o Off-the-job training methods are conducted in separate from the job environment, study material is
supplied, there is full concentration on learning rather than performing, and there is freedom of
expression.
o Methods:
Lectures and Conferences: Lectures and conferences are the traditional and direct method of
instruction. Every training programme starts with lecture and conference. It is a verbal
presentation for a large audience. However, the lectures have to be motivating and creating
interest among trainees. In the colleges and universities, lectures and seminars are the most
common methods used for training.
Vestibule Training: Vestibule Training is a term for near-the-job training, as it offers access to
something new (learning). In vestibule training, the workers are trained in a prototype
environment on specific jobs in a special part of the plant.
An attempt is made to create working condition similar to the actual workshop conditions.
After training workers in such condition, the trained workers may be put on similar jobs in
the actual workshop.
This enables the workers to secure training in the best methods to work and to get rid of
initial nervousness. During the Second World War II, this method was used to train a large
number of workers in a short period.
Simulation Exercises: Simulation is any artificial environment exactly similar to the actual
situation. There are four basic simulation techniques used for imparting training:
management games, case study, role-playing, and in-basket training.
Sensitivity Training: It is also known as laboratory or T-group training. This training is about
making people understand about themselves and others reasonably, which is done by
developing in them social sensitivity and behavioral flexibility. It is ability of an individual to
sense what others feel and think from their own point of view.
It reveals information about his or her own personal qualities, concerns, emotional issues,
and things that he or she has in common with other members of the group. It is the ability to
behave suitably in light of understanding.
Syndicate: Under this method, five or six groups consisting of about 10 members are formed.
Each group (Syndicate) is composed of men from public sector and private sector
undertakings, civil and defense services, banking, insurance, etc., and on the other hand, a
good well balance team of management from different fields, i.e., production, marketing,
personnel, finance, etc. The groups are given assignments, made up before hand to be
submitted within a specified date and time. Each man in the group is appointed leader of the
group for the performance of the given task by rotation. Each task is assigned in the form of
a 'Brief', a document prepared by the experts on the faculty with meticulous care. The report
prepared and submitted by a group is circulated among the members of the other groups for
comparative study and critical evaluation. The leader or chairman of the group is required to
present the views of his group in the joint session and justify his group's view in case of
criticism or questions.
 Module 8 Human Resource Management

Performance Appraisal
According to Dale.S.Beach Performance Appraisal is the systematic evaluation of the individual. With
respect to his performance on the job and his potential for the development.
Purpose of performance appraisal systems
o Goal: Maintain organisational productivity
o Results: Organisation productivity <-> individual performance
o Methods: Individual Performance <-> Goals
Objectives
o Opportunity to regularly discuss results
o Supervisor identifies strengths and weaknesses
o Fair and equitable format
o Basis for salary / promotion recommendations
Main Purpose of performance management
o Individual Rewards
o Feedback for subordinate (plus & minus)
o Recognition of superior performance
o Documentation of weak performance
o Personnel decision making
o Future goal commitments (planned achievements)
Reasons for appraisals
o Compensation pay for performance
o Job Performance improvements
o Feedback to subordinates
o Documentation for decisions
o Goal setting-later evaluation
o Promotion decision
o Identify training needs
o Human resource planning
Trends in managing performance
 Appraising / Evaluating

Versus

Managing Performance

Superior performance leads to Superior rewards

Issue: How to objectively measure specific goals!

Who performs the appraisal?

o Immediate Supervisor
o Higher Management
o Self-Appraisals
o Peers (co-workers)
o Evaluation teams
o Customers
o 360 Appraisals
The 360 Appraisal Interview
Supervisor

Other Supervisors Other Supervisors

Individual Staff
Peers (Self- Customers
assessment)

Teams Teams

Sub-ordinates

Types of rating errors

o Leniency / Strictness Error: Performance rating error in which the appraiser tends to either give
employees usually high or unusually low ratings.
o Central Tendancy: Performance rating error in which all employees are rated about average.
 o Recency Error: Performance rating error in which the appraisal is based largely on the employees
most recent behaviour rather than on behaviour throughout the appraisal period.
o Similar-to-me Error: Performance-rating error in which an appraiser inflates the evaluation of an
employee because of a mutual personal connection.
Performance Appraisal Modern Techniques / Methods
o Management by Objectives (MBO): It can be defined as a process whereby the employees and the
superiors come together to identify common goals, the employees set their goals to be achieved ,
the standards to be taken as the criteria for measurement of their performance and deciding the
course of action to be followed.
Main Concept The principle behind Management by Objectives (MBO) is to make sure that
everybody within the organisation has a clear understanding & the aims, or objectives of that
organisation, as well as awareness of their own roles and responsibilities in achieving those
aims.

The complete MBO system is to get managers and empowered employees acting to
implement and achieve their plans, which automatically achieve those of the organisation.

Principles
Flowing of organisational vision, goals and objectives.
Specific objectives for each member
Participative decision making
Clear time period
Performance evaluation and feedback
MBO Process

Define Organisational Goals

Performance Appraisals Define Employees Objectives

Continuous monitoring of
Providing Feedback employee performance and
progress

Performance Evaluation /
Reviews

Features & Advantages of MBO

 Motivation: involving employees in the whole process of goal setting. Increasing
employees empowerment increases employee job satisfaction and commitments.
Better Communication & Coordination: Frequent reviews and interactions between
superiors and subordinates helps to maintain harmonious relationships within the
enterprise and solves many problems faced during the period.
o The Smart Method: Clarity of goals with MBO came the concept of SMART goals i.e. goals that are:
Specific
Measureable
Attainable
Relevant
Time bound
o Cost Accounting Method: This method evaluates an employees performance from the monetary
benefits the employee yields to his/her organisation. This is ascertained by establishing a relationship
between the costs involved in retaining the employee, and the benefits an organisation derives from
Him/her.
Performance Appraisal Old Techniques / Methods
o Essay writing method: In this method, the rater writes a narrative description on an employees
strengths, weaknesses, past performance, potential and suggestions for improvement. Its positive
point is that it is simple in use.
o Ranking method: It is the oldest and simplest formal systematic method of performance appraisal in
which employee is compared with all others for the purpose of placing order of worth. The
employees are ranked from the highest to the lowest or from the best to the worst. This is mainly
used in small organisations. It is of two types:
Simple ranking: In this, we simply rank the employees. For example: if there are 5 employees:
A, B, C, D and E. Therefore, I will give them ranks as A-1st, C-2nd, D-3rd, B-4th and E-5th.
Compared ranking: In this, one employee is compared with every other employee. The
employee who got maximum number of positive results so he or she will be appraised.
o Paired Comparison: In this method, each employee is compared with other employees on one- on
one basis, usually based on one trait only. The rater is provided with a bunch of slips each coining
pair of names, the rater puts a tick mark against the employee whom he insiders the better of the
two. The number of times this employee is compared as better with others determines his or her
 final ranking. The number of possible pairs for a given number of employees is ascertained by the
following formula:
N (N-1)/2
o Grading method: In this method, certain categories of worth are established in advance and carefully
defined. There can be three categories established for employees: outstanding, satisfactory and
unsatisfactory. Employee performance is compared with grade definitions. The employee is, then,
allocated to the grade that best describes his or her performance.
Such type of grading is done is Semester pattern of examinations and in the selection of a candidate
in the public service sector.
o Forced Distribution method: This method was evolved by Tiffen to eliminate the central tendency of
rating most of the employees at a higher end of the scale. The method assumes that employees
performance level confirms to a normal statistical distribution i.e., 10,20,40,20 and 10 per cent. This
is useful for rating a large number of employees job performance and promo ability. It tends to
eliminate or reduce bias.
o Forced Choice method: It contains a series of groups of statements, and rater rates how effectively
a statement describes each individual being evaluated. Common method of forced-choice method
contains two statements, both positive and negative.
Examples of positive statements are:
Gives good and clear instructions to the subordinates.
Can be depended upon to complete any job assigned.

Examples of negative statements are:

Makes promises beyond his limit to keep these.

Inclines to favour some employees.
o Checklist method: In this method, a series of statements, i.e., questions with their answers in yes
or no are prepared by the HR department. The checklist is then, presented to the rater to tick
appropriate answers relevant to the appraisee. Each question carries a weight-age in relationship to
their importance. When the checklist is completed, it is sent to the HR department to prepare the
final scores for all appraises based on all questions. It will involve a lot of money, time and efforts.
o Critical Incidents method: In this method, the rater focuses his or her attention on those key or
critical behaviours that make the difference between performing a job in a noteworthy manner
(effectively or ineffectively). There are three steps involved in appraising employees using this
method.
First, a list of noteworthy (good or bad) on-the-job behaviour of specific incidents is prepared.
Second, a group of experts then assigns weightage or score to these incidents, depending
upon their degree of desirability to perform a job.
Third, finally a checklist indicating incidents that describe workers as good or bad is
constructed. Then, the checklist is given to the rater for evaluating the workers.
o Graphic Scale method: It is also known as linear rating scale. In this method, the printed appraisal
form is used to appraise each employee. The form lists traits (such as quality and reliability) and a
range of job performance characteristics (from unsatisfactory to outstanding) for each trait. The
rating is done on the basis of points on the continuum. The common practice is to follow five points
scale.
o Field Review method: The personnel officer in the HR department usually conducts the review
process. The review process involves the following activities:
Identify areas of inter-rater disagreement.
Help the group arrive at a consensus.
Ensure that each rater conceives of the standard similarity.
However, the process is a time-consuming one. Hence, the method is not widely used.
o Confidential method: It is the traditional way of appraising employees mainly in the Government.
Evaluation is made by the immediate boss or supervisor for giving effect to promotion and transfer.
Usually a structured format is devised to collect information on employees strength weakness,
intelligence, attendance, discipline, etc. report.
 Module 9 Human Resource Management

Talent Management
o The person who have right skills and abilities is talent
o Talent Management:
Attracting: You are attracted to those organisations who maintain your talent and they use it
properly.
Developing: Organisational help you to develop your talent or skills by career planning etc.
Retaining: Organisations retain talented employees by providing them different
opportunities to grow, incentives, career development, LTC travelling expense as vacation
is sponsored by organisation mainly in government or big organisation for 4-member family.
According to McKinsy, Talent is the sum of
o A persons ability
o His or her intrinsic gifts
o Skills, knowledge, experience
o Intelligence
o Judgement, attitude
o His or her ability to learn and grow
Evolution of the HR function

Talent Management: A Process

1, 2 and 3 = for attracting, 4, 5 and 6 = for developing, 7 and 8 = for retaining

Talent management includes the following activities and work processes

o Develop clear job descriptions so you know the skills, abilities and experience needed from a new
employee.
o Select appropriate employees who have superior potential and fit your organisations culture, with
an appropriate election process.
o Negotiate requirements and accomplishment based performance standards, outcomes and
measures within a performance development planning system.
o Provide effective employee onboarding and ongoing training and development opportunities that
reflect both the employees and the organizations needs.
o Provide on-going coaching, mentoring and feedback so the employee feels valued and important.
o Conduct quarterly performance development planning discussions that focus on the employees
interests for career development.
o Design effective compensation and recognition systems that reward people for their contributions.
Even if all the rest of your employment processes are employee oriented, people still work for
money. Employees of choice aim to pay above market for talented employees.
o Provide promotional and career development opportunities for employees within a system that
includes career paths, succession planning and on-the-job training opportunities.
o Hold exit-interviews to understand why a valued employee decided to leave the organisation. If the
reasons provide information about company systems that you can improve, make the changes that
will better retain talented employees.