ASSIGNMENT-01

Name : Viralkumar Jayeshbhai Shukl Registration No. Learning Center Learning Center Code Course Subject Semester Module No. Date of Submission Marks Awarded : 511110362 : K7 Institute of Management, Vastrapur, Ahmedabad : 03225 : MBA : Management Process & Organization Behavior : Ist : MB0043 : 20/05/2011 :

Directorate of Distance Education Sikkim Manipal University II Floor, Syndicate House Manipal 576 104

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Q-1: Write down the difference between Personnel management and Human Resource management. ANS:Personnel Management and Human Resource Management are more or less then same thing. Personnel Management is one of the core components of Human Resource Management. Personnel Management deals with the selection, recruitment, job description and work load of an employee. On the other hand, Human Resource Management looks after the broader concept of HR. It deals with Personnel Management as well as Organizational Management, Personnel administration, Manpower management, Industrial Management, Organizational Development and also Personnel training and development. Many of experts said there is no difference between human resources and personnel management. They state that the two terms can be used interchangeably, with no difference in meaning. In fact, the terms are often used interchangeably in help-wanted ads and job descriptions. The difference between personnel management and human resources, the difference can be described as philosophical. Personnel management is more administrative in nature, dealing with payroll, complying with employment law, and handling related tasks. Human resources, on the other hand, is responsible for managing a workforce as one of the primary resources that contributes to the success of an organization. There is a key differentiators that make Personnel Management different from Human Resource Management. HRM is clearly based on the foundation of behavioural science knowledge relating to the handling of employees to motivate organisational goals. The focus is more proactive approach and pays attention to employee satisfaction and delight. Personnel management can include administrative tasks that are both traditional and routine. It can be described as reactive, providing a response to demands and concerns as they are presented. Other side, human resources involves ongoing strategies to manage and develop an organization's workforce. It is proactive, as it involves the continuous development of functions and policies for the purposes of improving a company's workforce. PM is that management style that deals with the control and reactive problem solving approach to resolve employee issues in a organizations. The philosophy for the PM approach relied on the Theory X approach that believed that people do not naturally like to work and need to be driven to work. Is more the stick approach rather than carrot approach. and HRM philosophy is based on Theory Y approach where the belief is that people like to work and do not prefer to be supervised and made to perform. Very few organizations today practice this style to people management, as the benefits and the long term gains from a HRM approach, impact business results far more. HRM emphasizes on training, as an important area of people management, which covers the following aspects: 1. Increasing productivity 2. Improving quality 3. Improving organisational climate 4. Ensuring personnel growth etc. This is the mainly differences between two. HRM & PM.

Q.2 Write a note on scope of HR in India. ANS:The scope of HRM is very vast. It includes all activities in the working life of an employee from entry to the exit. The activities include HR Planning, job design, job analysis and recruitment, selection, orientation, placement, motivation and communication, welfare, safety & heath, industrial relations etc. Contrary to these forces, in India the owner manager/government/public sector manager was an industry icon and a national hero of sorts. The Personnel Management practices were dominant of the brick-and-motor industry. Though the approach was largely welfare oriented and reactive in nature it served effectively for the large PSU organizations that built the countrys foundation. Its only in the past 10-12 years with the immense growth on account of the IT industry that winds of change began to blow. It was largely the advent of the Information Technology era in India that brought with it the western management practices. MNCs (multinational companies) started up their operations in India. The FDI (foreign direct investment) went up steeply as the world saw the potential in the countrys human resources. India became a preferred location for MNCs primarily from the USA, followed by other developed countries. The gave birth to a new generation of management as well as HRM practices. New hiring methods, new ways of paying salaries, new employment terms and most importantly increased focus on individual performance and outcomes. There was emphasis on deliverables and linking individual and team performance to business results and success. Given the highly educated workforce there was a de-emphasis in the role of the trade unions. The era of the trade union dominance gave way to the new order of individual negotiated salaries and terms and clearly performance linked assessment systems. Another transformation that the Indian workplace witnessed was the focus on ethics and ethical practices in doing business. It was only fair to expect that with the weak legal system, it needed the support of the government policies and the corporate policies to beat the corruption that existed. This has significantly contributed to India emerging as a preferred destination for doing business. All of this has yielded to give way to the birth of the professional manager Professional managers today are a critical and essential part of the Indian corporate. The professional manager brought about a shift in the culture from a highly authoritarian approach of getting work done, to a more collaborative and participative approach. The entrepreneurs who earlier operated in a secure, sheltered market and hardly face challenges, were challenged by the globalization that swept in with the liberalization policies and measure brought in by the Indian government late 1995 and onwards. Despite the challenges, the Indian employee and his manager evolved. Together they stepped up to face the challenge head-on and to win not only in India but also globally. The levers of (a) low cost, (b) highly skilled, and (c) English as the medium of education and it being the corporate-language: were the key drivers that enabled the flow of global business to India. There was exponential growth in employment both directly (jobs in the international and domestic companies) as well as indirectly (as support industries like transport, catering and ancillary industries). The simultaneous investment of the government in building the necessary infrastructure did its share of providing impetus towards creating more jobs for the people of the country. Hence, human relations movement in India has evolved very differently as compared to what we see in the developed economies of the USA and the UK. What is currently acting as a limitation is the enhanced awareness on the need for research based HRM practices. While there is a lot of work happening in the Indian education system to promote this, it is going to take a while before it can create a distinct body of knowledge that is referenceable. For now the industry relies on emulating westerns HR practices and customizing on a as-needed basis

for the Indian corporation. For the rest the industry forums and consortiums like the NASSCOM act as a hub bringing together organizations on a regular basis to discuss challenges and share best practices and identify ways and means o overcome them together. So far this has been successful and working to the advantage of the Indian corporate. Leading MNC research and consulting firms like Mercer and Hewitt too contribute to the industry through carrying out research and sharing reports on a regular basis. The approach however remains analytical and less prescriptive. Human Resource Management embraces a very wide field of activities. The HR manager plays multiple roles like that of a researcher , of a counsellor, of a bargainer, of a mediator, or a peacemaker, or a problem solver, etc.

Scope of personnel management

Q.3 Explain the critical steps in Human Resource Planning system . ANS:Planning is considered as the first step for task performance. Whenever there is some work that needs to be done, at home or at work, the first thing you do is to plan out. For example if you want to build a custom-fit cupboard for a available space in your bedroom you would seek recommendations from your friends for good carpenters in the neighbourhood, evaluate them per your requirements, agree on time and cost and assign the task to them. Similar is the role of the Human Resource Planning activity in the human resources function. It is the first, most important and crucial step in building and growing an organization. Through human resource planning, the management strives to have the right number and the right kinds of people at the right places, at the right time, to do things which result in both the organization and the individual receiving the maximum long-range benefit. Human resource Planning (HRP) constitutes the significant first step in planning for the human resources requirements of the firm. It is an extremely important step and is closely linked to the business plan of the organizations. Organization in different stages of their life cycle will have a different HRPlan. This unit throws light on the process of recruitment. HUMAN RESOURCE PLANING :Human resource or manpower planning is 'the process by which a management determines how an organization should move from its current manpower position to its desired manpower position. Through planning, a management strives to have the right number and the right kind of people at the right places, at the right time, to do things which result in both the organization and the individual receiving the maximum long-range benefit". The organizations business plan to invest in a particular product/market or a service will drive the HRP activity towards hiring to meet the business need. In the event an organization is divesting or shutting down a particular business unit or a manufacturing division the HRP activities would focus on the redeployment of the workforce that will be rendered unemployed as a result of the business decision. An organization wanting to retain its current market share and revenue projection at status quo would be supported by HRP activities that are limited to only filling positions falling vacant due to natural organizational attrition. Hence the HRP focus in a organizations is closely linked to the business plan and acts as a bridge between what an organization wishes to achieve and how it will go about achieving it the human resources requirements. STEPS FOR HUMAN RESOURCE PLANING SYSTEM: The Human Resource Planning process consists of a set of activities. A) Forecasting manpower:-requirements, either by using mathematical tools to project trends in the economic environment and development in industry, or in by using simple judgemental estimates based on the specific future business plans of the company;

B) Creating an inventory:-present manpower resources and assessing the extent to which these resources are employed/ optimally; C) Identifying:-Manpower problems by projecting present resources into the future to determine their adequacy, both quantitatively and qualitatively; and D) Planning:-The necessary programmes of requirement selection, training, development, utilization, transfer, promotion, motivation and compensation to ensure that future manpower requirements are properly met.

Human Resource Planning System:The steps in the HRP process is a systematic set of activities carried out in a chronological manner. Each step needs to be evaluated and debated with all possible information gathered from the external as well as internal environment.

We will attempt to discuss in details the critical steps. 1. Purpose of Human Resource Planning: Human Resource Planning fulfils individual as well as organizational goals. What it essentially amounts to is striking a balance between the future human resources needs and the future enterprise needs. And this is done with the clear objective of maximizing the future return on investment in human resources. And this objective may be laid down for a short-term (i.e. for one year). 2. Estimating/Forecasting the future Manpower Requirements: the first step in the process is to arrive at the desired organizational structure at a given point in time. Mapping this structure with the existing structure helps in identifying the gap in resources requirement. The number and type of employees needed have to be determined. In

addition to the structure there are a number of external factors that affect this determination. They include business forecasts, competitor strategy, expansion plans, product/skills mix changes, profit/revenue growth projections, in addition to management philosophy and government policies. This step also includes an analysis of the external labour/talent environment, its demographics, demand/supply of the required talent, and cost considerations. Forecasting provides the basic premises on which manpower planning is done. Forecasting is necessary for various reasons: A) The challenges of the general economic business cycles have an influence on the shortrange and long-run plans of all organizations. These are inflation, wages, prices, costs and raw material supplies. B) An expansion / growth initiative might need the business to use additional machinery and personnel, and a re-allocation of facilities, all of which call for adequate advance planning of human resources. C) Changes in management philosophies and top management leadership styles. D) The use of new technology (such as the introduction of automatic controls, or the mechanization of materials handling functions) requiring a change in the skills of workers, as well as a change in the number of employees needed. E) Very often, changes in the quantity or quality of products or services require a change in the organization structure. Plans have to be made for this purpose as well.

3. Auditing Human Resources: Once the future human resource needs are estimated, the next step is to determine the present supply of manpower resources. This is done through what is called "Skills Inventory". A skills inventory contains data about each employee's skills, abilities, work preferences and other items of information which indicate his worth to the company. Skills inventory are also referred to as competency dictionaries. This information is usually retained as part of the performance management system with the HR department. This step in the HRP system helps identify the existing profile of the manpower and its efficiency. It helps highlight where the organization is vs. where it ought to be. The step concludes with identifying clear gaps in the skills / manpower mix required to meet the upcoming business objectives. 4. Job Analysis: After having decided how many persons would be needed, it is necessary to prepare a job analysis. The recorded details of training, skills, qualification, abilities, experience and responsibilities, etc. as needed for a job are studied. Job analysis includes the preparation of job descriptions and job specifications. 5. Developing a Human Resource Plan: This step refers to the development and implementation of the human resource plan, which consists in finding out the sources of labour supply with a view to making an effective use of these sources. Some important considerations at this point are: A) Specific roles/disciplines being hired for, of them which roles are pivotal for the business B) Competencies and capabilities needed C) Manager vs. employee hiring D) Hire internally vs. External sourcing E) Planning for new skills through training existing staff vs. hiring new teams F) In case of surpluses, planning for redeployment / reduction in workforce as required

G) Succession planning for key positions in the company

Q.4 With reference to the compensation and salary system what are the systems that are helpful to raise the effectiveness of employees. ANS:Compensation and salary administration revolves around designing and managing policies and methods of disbursing employee compensation. Traditionally it includes such areas as job evaluation, maintenance of wage structures, wage surveys, incentives administration, wage changes and adjustments, supplementary payouts, profit sharing, control of compensation costs, and other related pay items. Salaried often implies a status distinction, because those who are on salary are generally white-collar, administrative, professional, and executive employees, whereas wage-earners are designated as hourly, non-supervisory, or blue-collar. Wage-earners in some organizations do receive full wage if they are absent for such reasons as sickness, whereas salaried employees, especially at the lower levels, often receive overtime pay when they work over the standard workweek. Compensation/ salary systems are designed to ensure that employees are rewarded appropriately depending on what they do and the skills and knowledge (intellect) required for doing a specific job. It must therefore provide for the following key factors in order to be effective:

A)

Signal to the employee the major objectives of the organizations therefore it must link to the overall goals and objectives of the company. For example if doing a quality job is critical for the company its compensation system has to ensure that this is adequately rewarded. On the other hand if company values productivity and units produced, the compensation system would be designed such that productivity is rewarded.

B)

Attract and retain the talent an organization needs the need to benchmark salaries to the prevalent market standard for that job /skill so that the company is able to attract the right talent. If a enterprise pays a salary lower that what the market does for that job/responsibilities, the probability that suitable candidates would take the job offer and join the company. Even if they do join subsequently when they find that the market pays more for that job they would quickly find a more remunerative job and leave the company

C)

Motivate employees to perform effectively as discussed at the outset, money is a key motivator and it often might be the only motivator for most employees, therefore ensuring that compensation is appropriately disbursed need to be taken care of while designing the compensation system. Jobs in the brick and motor, production setups would focus on higher incentive policies that would motivate the employee to produce more while the base-salary would be low.

D)

Create the type of culture the company seeks to engender compensation systems play a critical role as sponsors for the organizations culture. A performance driven culture would build compensation policies that clearly and significantly reward performance. A company that rewards loyalty would reward employees who stay longer in the company with significantly better incentive programs.

Managing Wages/ Compensation The main purpose of Compensation and salary administration is to establish and maintain equitable Compensation and salary programs. The secondary objective is to design and implement an equitable labour-cost structure. Therefore payout cannot be out-of-sync with the organizations ability to pay it needs to be able to satisfy the employees as well as employers, profits maximised and conflicts minimised. Compensation and salary administration is concerned with the financial aspects of needs, motivation and rewards. Managers, therefore, analyse and interpret the needs of their employees so that reward can be suitably designed to satisfy these needs. We will now review a few of the important theories that support the design of wage systems. The word 'salary' is defined in the Oxford Dictionary as fixed periodical payment to a person doing other than manual or mechanical work. The payment towards manual or mechanical work is referred to as wages/ Compensation. The word pay refers to the payment for services done which would include salary as well as wages. Compensation are commonly understood as price of labour. In ordinary parlance, any remuneration paid for services is etymological wage. Benham defines wage as a sum of money paid under contract by an employer to a worker for services rendered. Labour was always looked upon as a commodity governed by the law of supply and demand. Certain theories were propounded for determination of wages but these could not stand the test of time. A few theories are discussed below: Subsistence theory: This theory, also known as 'Iron Law of Wages', was propounded by David Ricardo (1772 -1823). According to this theory, wages tend to settle at a level just sufficient to maintain the workers and his family at minimum subsistence levels. The theory applies only to backward countries where labourers are extremely poor and are unable to get their share from the employers. Standard of living theory: This theory is a modified form of subsistence theory. According to this theory, wages are determined not by subsistence level but also by the standard of living to which a class of labourers become habituated.

Residual claimant theory: Francis A. Walker (1840-1897) propounded this theory. According to him, there were four factors of production/ business activity viz., land, labour, capital and entrepreneurship. Wages represent the amount of value created in the production which remains after paymenthas been made for all these factors of production. In other words, labour is the residual claimant.

The wage fund theory: According to this theory, after rent and raw materials are paid for, a definite amount remains for labour. The total wage fund and the number of workers determine the average worker's share in the form of wages. Demand and supply theory: According to this theory, wages depend upon the demand and supply of labour. Marginal productivity theory: This is an improved form of demand and supply theory. Wages are determined by the value of the net product of the marginal unit of labour employed. Purchasing power theory: According to this theory the prosperity, productivity and progress of industry depend on there being sufficient demand to ensure the sale of its products and pocketing of reasonable profits. A large pact of the products of industry is consumed by workers and their families and if wages are high, demand will be good. However, if wages and the purchasing power of the workers are low, some of the goods will remain unsold; output will go down, which will result in unemployment. The bargaining theory of wages: John Davidson propounded this theory. According to him, wages are determined by the relative bargaining power of workers or trade unions and of employers. When a trade union is involved, basic wages, fringe benefits, job differentials and individual differences tend to be determined by the relative strength of the organization and the trade union. The Tribunals and Wage/ Compensation Boards have generally followed theprinciples laid down in the Fair Wages Committee's Report on fixing wages. The Committee, in its report, has focused on wage differentials and has identified the following factors for consideration for fixation of wages/ Compensation:

1. 2. 3. 4. 5. 6. 7. 8. 9.

The degree of skill. The strain of work. The experience involved. The training involved. The responsibility undertaken. The mental and physical requirements. The disagreeableness of the task. The hazard attendant on the work, and The fatigue involved.

Q.5 What is competency? How it can be linked to the HR system?

ANS:First popularized by Boyatiz, competency is defined as A capacity that exists in a person that leads to a behavior that meets the job demands within parameters of organizational and that in-turn bring about the desired results; An underlying characteristic of a person results in effective and/or superior performance on the job. Competency can be thought of a as a tool that can be used to map best-in-class performance the best performer is always called the competent performer. Competencies are based on Knowledge-information accumulated in a particular area of expertise, Skills-the demonstration of the expertise, Motive the recurrent thought that drives behavior, Attitude-self-concept, value and self image, Traits a general disposition to behave in a particular way. There are two sets of competencies. Threshold competencies they are the characteristics that any job holder needs to have to do that job effectively, but do not differentiate between average and superior performer; Differentiating competencies are characteristics which superior performers have but is not present in average performers. This thinking holds the key to differentiate employees based on competencies in modern companies. There are therefore competency frameworks that define the competency requirements that cover all the jobs in an organization. These consist of the both work specific as well as behavior competencies. Each job in the organization is profiled for the competencies needed and these are then placed on to a common framework. Depending on the value of that competency, the number of competencies, the proficiency level of the competency and the competencys Uniqueness, the job worth can be assessed in a comparative manner. Linking Competency to HR Systems : One of the key benefits of the competency based management approach is its usage to build all of the other HR systems such as recruitment, performance management, training and development, career development, compensation management and succession planning. Recruitment and selection : The competency profile for a job servers as the reference for the candidate hunt for the position. It is used at multiple stages in the recruitment and selection process Job Description and competency profile shared with the recruitment consultant as well as hosted on the company intranet and internet site for prospective applicants to view. Use the competencies to design the appropriate selection tests and other methods.

 Assessment forms for interviewers to contain the competency list and specify the desired proficiency levels. Performance Management : Increasingly the focus in most organizations using competency frameworks is to build competency based performance assessment processers. The employees performance is assessed on the core tasks and results as well as on the competencies required for the job he/she is doing. If there are gaps between the desired proficiency and the current proficiency of the employee the employee is reviewed for development initiatives to improve the competency. If the employee has competencies above the desired proficiency he is potential talent and needs to be nurtured for other roles and higher responsibilities. Training Needs : As explained above the information on gaps in competencies are collated for employees across the organizations and suitable training interventions are designed. The methodology used for competency improvement is usually action learning based. Focus is on internalizing the learning by ensuring workplace application projects and activities. Manager support in making competency training useful is important. Career Planning : Competency assessments are popularly used for helping an employee discover his strength competencies and therefore serve as effective means for the employee to identify what roles/jobs can be best for the competencies the employee possesses. Most career planning assessment and activities are built on enhancing the employees strength areas and identifying jobs that match the strengths.

Compensation philosophy: While there is significant work done in researching competency based compensation, the practical application of competency based compensation system is not as easy. The competency framework provides a common benchmarking of all jobs across the organization on the competencies required and the proficiency level for the competency. This framework is then mapped to levels or grades that create a job to level mapping. The levels have ranges of compensation that can be paid for any job at a specific level. For example if there are 25 job clusters in a company. Each job cluster can have anywhere between 5 to 17 jobs. Each job in the job cluster is mapped to a level in the company. So if a particular job cluster has 5 jobs each job has a set of competencies and proficiency and this determines the level of the job and let us assumes it maps to level 42 in the compensation system. All Level 42 jobs are mapped to compensation range with a Minimum salary of Rs. 45,000 and a maximum salary of Rs. 1,20,000. This range specifies the recommended salary range for a employee in this job. Ideally a new employee being hired to this job should be paid not less than the minimum specified for this job. A employee doing a extremely good job in the role and has been in the role for close to 3 years should be getting a salary closer to the maximum in the range. Succession Planning: Competency based management is most effective in succession panning initiatives. Competency assessment is a widely used to identify and nurture talent in organizations. Most succession planning decisions use the competency assessment data for the employee and this along with the career planning data are used to

ascertain employee readiness and inclination for new roles and responsibilities in the critical roles identified for succession planning.

Q.6 Dynamic Learning is an organization that wants to revise the HR policies. It has conducted a survey and the results of survey indicated that r=there is employee unrest, tardiness, absenteeism, more grievances. This all clearly indicates low morale. Suggest the measures that can be taken to improve employee morale. ANS:There are a number of measures which can be used to control the warning signals of low morale. The following are the positive measures to be taken to bring job satisfaction to the employees and reconcile individual interests with the interests of the organization. Creation of whole jobs-Under this method, complete jobs are assigned to the employees. The complexity of a job should be increased so that it may appeal to their higher needs. A) Job enrichment job enrichment tries to deal with dissatisfaction by increasing job depth. Under this, individual employees may be given responsibility for setting their own work pace, for concerning their own errors, and/or for deciding on the best way to perform a particular task. B) Building Responsibility in Job Employees should be encouraged to participate and if possible be held responsible for taking decision. Some delegation of responsibility form the manager to the employee could be useful in improving employee ownership.

C) Managerial Effectiveness Developing work groups; Improving the social contacts of the employees- time away from work in team building and fun activities; managerial coaching discussed above Employee stress management activities D) Flexing Working Hours Flex time /work form home provisions allow employees to arrange their work hours to suit their personal needs and life-styles. This is particularly suited to situations with fluctuating workloads. Flex time employees are responsible for co-ordinating their functions with other employees and thereby have more responsibility and autonomy. E) Rotation of job: This reduces employees boredom which arises out of the monotonous nature of his work.