HUMAN RESOURCE MANAGEMENT

NTPC
NTPC incorporated in 1975 has evolved as progressive, high performing organization capable of competing globally. ONGC a Maharatana considered as one of the best company to work. TATA spends over 250 cr annually for up keeping the Jamshedpur city.

HRM
NTPC People first & in 2008 ranked no. 1 as best workplaces for large organization. ONGC HR is strength. TATA Value HR

HRM

Management of work force of an organisation ie how to manage the different people working together in a organisation. HRM is a management function that helps managers recruit, train and develop members for an organisation.

HRM

HRM is concerned with the people dimension in management. Since every organisation is made up of people, acquiring their services, developing their skills, motivating them to higher level of performance, and ensuring that they continue to maintain their commitment to the organisation are essential to achieving organisational objectives. This is true, regardless of the type of organisation ie government, business, education, health.

Objectives of HRM

Societal objectives To be socially responsible to the needs of the society. Organisational Objective To recognise the role of HRM in bringing about organisational effectiveness.

Functional objective To maintain departments contribution at a level appropriate to the organisations needs. Personal Objective To assist employees in achieving their personal goals, at least in so far as these goals enhance the individuals contribution to the organisation.

Objective of HRM

HRM Obj.
Societal Objective

Supporting function
1. Legal compliance 2. Benefits 3. Union Management relations

Organisational Objectives

1. HRP 2. Employee relations 3. Selection 4. Training & Development 5. Appraisal 6. Placement

Objectives of HRM

HRM Obj.
Functional objectives

Supporting function
1. Placement 2. Assessment

Personal Objectives

1.Training & Development 2. Compensation

Competitive challenges and HR

1.

2.
3. 4. 5.

Going global Embracing new technology Managing change and organisation culture Responding to the market Containing costs

Downsizing Outsourcing and employee leasing Enhancing productivity

Other challenges faced

Demographic and Employee concerns

Diversity of backgrounds Age distributions Gender distribution Rising level of education Concern for employee rights Changing attitude towards work Balancing work and family

Cultural changes

Functions of HR
MANAGERIAL FUNCTIONS Planning Organising Directing Controlling OPERATIVE FUNCTIONS Staffing Development Compensation Motivation

Maintenance
Integration

Operative functions of HR
STAFFING
Job analysis, HRP, Recruitment, Selection, Placement, Induction, Internal Mobility Competency profiling, Training and development, Performance & potential management, Career management, 360 degree feedback Job design, Work scheduling, Job evaluation, Compensation administration, Incentives and benefits

DEVELOPMENT

COMPENSATION & MOTIVATION

Operative functions of HR (contd.)

MAINTENANCE
Health, Safety, Welfare

INTEGRATION

Employment relations, Grievance, Discipline, Trade unions, Participation

Scope of HRM
Labour or Personnel aspect Recruitment, Selection, Transfer, Promotion etc. Welfare aspect Housing, Lunch room, Health and Safety, Transport, education etc. Industrial relation aspect Union Management relations, Negotiation, Grievance handling etc.

HRM Environment - External

Technology

Professionalism

Economic

HRM

Social & cultural

Political & legal

Union

HRM Environment - Internal

Policies

HRM

Mission

Organisational Conflict

Xerox
In 2000 Xerox was in debt of $17 billion, stock was tumbling & it was loosing money. Securities & exchange commission was investigating the way company had been accounting for copier leases. Company made the remarkable come back & returned to profitability and the stock prices increased.

Xerox ?

Question

How did the company turn around?

HR the Xerox way

Cost cutting but major focus remain towards quality ie product, services through Quality .....? Xerox CEO Anne M. Mulcahy said companys strategy of offering world class products & services requires world class people. Brand of employment employer branding through implementing express yourself initiative.

HR the Xerox way

Employer branding justified through making Xerox a place where passion, diversity, ideas & contributions of every member of the family proves the capability for bold innovation and leading edge work environment. Xerox relies on HR service center takes care of routine as well as critical HR services as well as with R & D.

HR the Xerox way

During rainy times HR at Xerox played a responsible role and supported even those employees who were to separate. Laid off employees who were near retiring age were treated with dignity & was given a year off with out paid which kept their status active and all qualified for retirement benefits. Employee surveys to know the internal customers perception / views on company & its practices.

HR the Xerox way

During sunny days Xerox focuses on talent management by improving KSA & prepare future leaders by exposing employees to different environment which includes transfers on international assignments. Xerox top managements philosophy every employee is unique and is able to bring valuable difference. Treat HR as Biggest Asset

Possibility..
Properly

managing human resources can provide solutions to how best to satisfy the objectives of multiple stakeholders, even when the objectives seem to conflict.

HRM Cycle

HRM Policies

Policy is predetermined course of action established to guide the performance of work towards accepted objectives. Importance -:

(1) Clear Thinking (2)Uniformity & Consistency of Admin. (3)Sence of Security (4)Control

Types of HR Policies

Originated policies Made by top Management. Appealed policies Made on request to handle certain situation, or if certain aspects are missing in the main policy. Imposed policies Imposed by Govt & Legal authorities. General policies Do not relate any issue, may represent the priority of Top Mgmt. (WPM). Specific Policy Related to specific issues like Recruitment, Transfer, Promotion etc.

GHRM or IHRM
Scope -: 1. Cross cultural management 2. Comparative industrial relation 3. HRM in multinational firms

Cross Cultural Management

IHRM in MNC

Comparative IR systems

HRM v/s GHRM

HRM activities includes HRP Staffing Performance Management Training & Development Compensation & benefits IR

1. 2.

3.
4. 5. 6.

HRM v/s GHRM

GHRM- includes 1. Broad HR activities (procurement, allocation & utilization) 2. National or Country categories ie a) Host country Subsidiary may be located b) Parent country Firm is Head quartered c) Other country Source of labour 3. Category of employees ie HCN, PCN & TCN

GHRM
HCN Host country national like Indian company has its unit in US and employs US locals. PCN Parent country nationals like Indian company employs Indian locals or Indian company sends Indian employee to US unit. TCN Third country National like Indian company employs Japanese to work in US unit.

Expatriates

In GHRM the staff generally moves across national boundaries into various roles, these employees are traditionally been called as expatriates. An expatriates is an employee who is working and temporarily residing in a foreign country. Some firms prefer to call them international assignees. PCN & TCN are always expatriates but what when HCN transferred to Parent country of the organization? Inpatriate or expatriates.

Is GHRM complex?
More HR activities Need of broader perspective More involvement in employees personal lives Managing workforce mix of expatriates and locals Risk exposure Broader external influences

Is GHRM complex?

In addition to complexity, there are four other variables that moderate differences between domestic and international HRM. These variables are below:

1.

The Cultural nepotism.

Environment

cultural

shock

&

2. 3.

Industry Type
Reliance of the Multinational on its Home-Country Domestic Market small home market.

4.

Attitudes of Senior Management to International Operations failure in managing human resources.

Global staffing

Ethnocentric approach PCN preferred Polycentric approach HCN preferred

Geocentric approach Best people for key jobs.

Approaches to staffing - GHRM

Ethnocentric approach PCN preferred, because of lack of qualified HCNs and also to have better 3 Cs at initial internationalization process. Polycentric approach HCN preferred, treat subsidiary as separate entity, PCN dont get transferred to subsidiary, chances of promoting HCN to hold key position in HQ, further eliminates language issues, adjustment issues & reduces the expenses in terms of training cost. Geocentric approach Best people for key jobs, helps MNC to develop international executive teams, it overcomes federation drawback of polycentric approach, supports cooperation & resource sharing across units.

Approaches to staffing - GHRM

Ethnocentric approach High compensation package, adapting to culture & environment. Polycentric approach Career path of HCN & PCN, complexities in bridging the gap between HQ & subsidiary. Geocentric approach Host country requirement to place high number of their citizen, extensive documentation related to expatriates, increased training & relocation cost.

Barriers to GHRM

There are a number of unique problems that global companies face when trying to implement consistent practices across their global HR networks. These problems act as barriers to effective Global HRM. These are: Variations Perception of HR Attitude and actions of headquarters toward HR Resistance to change Cultural differences in learning and teaching styles

Human Resource Planning

Meaning Assessment of Human Resource Requirements & also the time & stages of requirement. Right person ---At Right place ---At Right time. Definition HRP is defined as the process by which management determines how an org should move from its current manpower position to its desired manpower position.

Objectives of HRP
To ensure optimum use of existing HR. To forecast future requirement for HR. To provide control measures to ensure that necessary HR are available as and when required. To asses the surplus and shortage of HR. (Downsizing/expansion). To anticipate the impact of technology on jobs and HR.

Objectives of HRP Contd.

To determine the level of Recruitment and Training. To estimate the cost of HR and Housing needs of employees. (Or HRA). To provide the basis of MDP. To meet the needs of expansion and diversification programmes.

Importance of HRP

Future Personnel needs defective planning leads to surplus or shortage. Govt. companies. Creating highly talented personnel Talent management.

International Strategies - Diversification & expansion Foundation of personnel function Resistance to change and move Test of loyalty & dedication? Increasing investment in HR

Factors Affecting HRP

Organisational growth cycle & planning

Outsourcing

HRP

Environmental Uncertainties

Strategy of Organisation

Factors Affecting HRP

Organisation growth cycle and planning-: HRP is Critical when organisation enters the growth stage. Mature organisations experiences less flexibility and variability, growth slows down. HRP is dominated by Layoffs, Retrenchment, Retirements.

Factors Affecting HRP

Environmental Uncertainties -: When Political, Social and other changes affect the organisation, HR planners deal with uncertainties. It can result in Recruitment, Training, Succession Planning, Retrenchment etc.

Factors Affecting HRP

Strategy of Organisation -:
Strategic plan of the organisation defines the organisations HR needs.
Internal Growth Narrow Informal Reactive Inflexible
Growth through Mergers

Broad Formal Proactive Flexible

Factors Affecting HRP

Outsourcing -: Most organisations have surplus labour and they do not want to worsen the problem by hiring more people. Outsourcing is the option left.

HRP Process
Environment
Org objectives & policies

HR Need Forecast

HR Supply Forecast

HR Programming
HRP Implementation

Control & Evaluation

Surplus

Shortage

HRP Process (Contd.)

1) 2) 3) 4) 5)

Environmental Scanning - :
Economic factors including general & regional conditions Technological Changes including automation Demographic changes including age, composition & literacy Political and legislative issues including laws & administrative rulings Social concerns including child care & educational facilities

HRP Process (Contd.)

Org objectives and policies-: HR plans need to be based on org objectives, this implies that the objectives of the HR plan must be derived from Org objectives.

HRP Process (Contd.)

HR Demand forecast-: The process of estimating the future quantity and quality of people required. The basis of forecast will be annual budget and long term corporate plans. Demand forecasting must consider several factors like internal (Budget constraints, employee separations, production level) and external (Competition, laws, change in technology).

HRP Process (Contd.)

Demand forecasting techniques are-: Managerial judgment Managers sit to gather to reach a common solution. Ratio trend analysis Based on the past sale & worker ratio predicting the future. Delphi technique Expert surveys & formulate the report but the process goes on till every one reaches the common conclusion. Regression analysis Similar to ratio trend analysis but more use of statistical tool. HR Supply forecasting-: Supply forecasting measures the number of people likely to be available from within and outside an org. Based on existing HR, internal & external sources of supply.

HRP Process (contd.)

HR Programming-: Once the Orgs HR Demand and Supply are forecast, the two must be reconciled or balanced in order that vacancies can be filled by the right employee at the right time. HR Plan Implementation-: Implementation requires converting an HR plans into action. (Recruitment, Training, Succession plan, retention plan, redeployment etc.)

HRP Process (contd.)

Control and Evaluation -: Critical to have proper control and regular checks to know the achievements of HRP. Surplus Restricted hiring VRS, Lay off Shortage R&S

E - HRM

E-HRM is the planning, implementation and application of information technology for both networking and supporting at least two individual or collective actors in their shared performing of HR activities. E-HRM is not the same as HRIS or VHRM VHRM - a network-based structure built on partnerships and typically mediated by information technologies to help the organization acquire, develop, and deploy intellectual capital

HRIS

HRIS is a database system that keeps important information about employees in a central and accessible location. The information provided by HRIS can help the organisation to gain competitive advantage. (SWOT of org.)

Information categories of HRIS

Basic non confidential information-: Employee name, Org name, Work location

General non confidential information -:

Social security number, Position related information (codes, tittles, effective date)

Info categories of HRIS (contd.)

General information with salary -: Current salary, Effective date, Amount of last change, Reason for last change. Confidential information with salary -: Information of previous category, Educational data

Info categories of HRIS (contd.)

Extended information with salary -: Information of previous category, Bonus information, Projected salary increase information, Performance evaluation information.

Job Analysis

Job analysis is the process of collecting job related information. Such information helps in the preparation of job description and job specification. Job Analysis

Job Description

Job Specification

Job Analysis (contd.)

Job description -: A statement containing items such as Job title, Location, Job summary, Working condition etc. Job specification -: A Statement of human qualifications necessary to do the job. Usually contains items such as Education, Experience, Training, Communication skills etc.

Purposes of Job Analysis

HRP Recruitment & Selection Training & Development Remuneration Safety & Health Performance Appraisal

Methods of Collecting Job Data

Observation Interviews Questionnaire Technical Conference Method

Process of Job Analysis

Strategic Choices Gather Information

Process Information Job Description

Job Specification

Process (contd.)
1.

2.
3. 4. 1.

Strategic Choices : Employee Involvement Level of Details When and How often Past oriented and Future oriented Gather Information : What type of Data to Collected (machine, tools & work activities) Data collection methods Who to collect Data (Trained analyst, Supervisors, Job incumbents)

2.
3.

Process (contd.)

Information Processing -: How collected information will be used in forming Job Description and Job Specification. Job description : Job Specification -:

Problems with Job Analysis

Support from Top management Single Means or Source

No Training or Motivation Activities may be Distorted

Job Design

Job Design is defines as -: It integrates work content (tasks, function), the rewards & the qualifications required (skills, knowledge) for each job in a way that meets the need of the employees and the organisation.

Job Design

Job Design involves three steps -: Specification of individual tasks.

1)

2)

Specification of the methods of performing each tasks.

Combination of tasks into specific jobs to be assigned to individuals.

3)

Methods of Job Design

Job Design Methods -:
Job Rotation

Job Simplification

Job Design

Job Enlargement

Job Enrichment

Job redesign

Restructuring the elements including tasks, duties and responsibilities of a specific job in order to make it more encouraging and inspiring for the employees or workers is known as job redesigning. The process includes revising, analyzing, altering, reforming and reshuffling the jobrelated content and dimensions to increase the variety of assignments and functions to motivate employees and make them feel as an important asset of the organization.

Job redesign

Job redesign process:

Revising the job content

Analyzing job related content

Altering job related content Reforming job description & specification Reshuffling job related duties & tasks

Advantages of Job redesign

Enhances the Quality of Work-Life Increases Organizations and Employees Productivity Brings the Sense of Belongingness in Employees Creates a Right Person-Job Fit

Job carving

Job carving is a technique used by our job developers as they probe the needs of prospective employers. They analyze an organization's operations in order to identify repetitive tasks that do not make the best use of a current employee's time. Then with the help of the employer combine such tasks into a position matching the skills of our internal customer. This is a win-win approach that increases the productivity of all concerned

Job carving

ensure the most suitable person carries out each task. It is a concept that can benefit both employers and employees through increasing productivity by realigning workers tasks.

Job Carving is a way of splitting jobs to

Advantages to employer
Develop existing employee skills Create a diverse workforce Increase understanding of Disability Positive impact in your local community Access to a valuable, committed source of recruitment

Advantages to employee
Improved confidence and self-esteem Learn new work-based skills Increased independence Better social networks Career development

Recruitment
The process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected. Recruitment is a process of inviting applications from prospective employees. Recruitment is a positive process.

Determine the present and future requirements of the organisation in relation with the HRP and Job Analysis.

Purpose & Importance of Recruitment

Increase the pool of job candidates at minimum cost. Meet the organisations legal and social obligations regarding the composition of its workforce.

Sources of Recruitment

Internal Sources -: Transfer , Promotions. External Sources-: Press Advertisements , Educational Institutions, Placement Agencies, Employment Exchange, Labour Contractors, Recruitment at factory Gate.

Recruitment Process
Recruiting Required Personnel Search for Perspective Employees

Internal Sources External Sources

Evaluating effectiveness of process

Recruitment Process
Personnel Requisition -: Requisition for recruitment from other deptt., Contains info like no of person required, duties to be performed, desired qualification, time of appointment, info about job. Locating and developing sources of required no and type of employees. Identifying the prospective employees with required characteristics.

Process (contd.)
Communicating the info about the org, the job and the terms and condition of service. Encouraging the identified candidates to apply for jobs in the org. Evaluating the effectiveness of recruitment process.

Alternatives to Recruitment

Overtime Employee Leasing

Temporary Employment

Selection

Selection is the process of picking individuals (out of the pool of job applicants) with requisite qualifications and competence to fill jobs in the organisation. Selection is a negetive process.

Selection Procedure
Preliminary Interview Application blank Selection Test Employment Interview Reference Check and Background Analysis Medical Examination Final Approval Evaluation

Test and Interview

Psychological tests -: Aptitude test

Informal Interview Formal Interview Depth Interview Stress Interview

Induction Or Orientation

Planned introduction of employees to their jobs, their co workers and the organisation.

Orientation also called Induction, is designed to provide a new employee with the information he or she needs to function comfortably and effectively in the organisation.

Objectives of Induction
To help new comer overcome his natural shyness and nervousness in meeting new people in the environment. To develop among the newcomers a sense of belonging and loyalty to the organisation. To develop a close and cordial relationship between newcomers and the old employees and their supervisor.

Objectives (contd.)
To ensure that the newcomers do not form negative or false impression and attitude towards the organisation or the job because first impression is the last impression. To give newcomers necessary information such as leave rules, rest period, locker room etc.

Advantages of Formal Induction

Helps in build up a two way channel of communication between management and workers. Proper induction facilitates informal relations and teamwork among employees. Effective induction helps to integrate the new employees into the organisation and to develop the sense of belonging.

Types of Induction Programme

Formal Informal Individual collective

Contents of Induction Programme

History and operation of company Products and services of company Policies and procedures of company Grievance procedure Benefit and services for employees Opportunities for training and development, promotion, transfer etc.

Placement

Placement refers to the allocation of people to jobs. It includes initial assignment of new employees and promotion, transfer, or demotion of present employees.

Placement Problems

Difficulty with the placement is that we tend to look at the individual but not at the job.

1.

2.
3.

Job in this context may be classified into three categories. Independent Sequential Pooled

Training & Development

Training is an attempt to improve current or future employee performance by increasing an employees ability to perform through learning, usually by changing the employees attitude or increasing his or her skills and knowledge. Training refers to the process of imparting specific skills. (Employees)

T&D

Development refers to learning opportunities designed to help employees grow. (Executive) Education is theoretical learning in classroom.

T&D

The need for training and development is determined by the employees performance deficiency computed as follows-:

Training & Development need = Standard Performance Actual Performance

Difference between T & Edu

Training -: 1. Application base, 2.Job Experience, 3. Specific Task, 4. Narrow Perspective.

Education -: 1.Theoretical Orientation, 2. Classroom learning, 3. General Concepts, 4. Broad Perspective.

Inputs in T & D
Skills Education Development Ethics Attitudinal Changes Decision making and Problem solving skills

T & D as a source of Competitive Advantage

T & D offer competitive advantage to a firm by removing performance deficiencies, making staff stay long, minimising accidents, Scrap & damage and meeting future employees needs.

Training Program
Need Assessment Deriving Instructional Objectives Designing Training & Development Program Implementation of Training Program Evaluation

Training Process

Need Assessment -: Diagnoses the present problems & future challenges to be met through training and development. Need Assessment Methods -: As follows Group Assessment (intro of new product.) Org goals & objectives. Personnel skill inventories Exit interviews Customers Satisfaction data

1. 2. 3. 4.

Training Process

Needs Assessment & Remedial measures

Performance Deficiency

Lack of Skill & Knowledge

Other Causes

Training

Non Training Measures

Training process
1.

2.
3. 4. 1.

Individual Analysis -: Performance Appraisal Interviews Questionnaires Attitude Surveys. Issues in need assessment -: Org Support Org Analysis Task and KSA analysis Person Analysis

2.
3. 4.

Training Process
Deriving an instructional objectives -: It help to know the inputs for the training program and as well as for the measures of success that would help assess effectiveness of the training program. Designing training & development program -: 1. Who are the trainees? 2. Who are the trainers? 3. Methods & techniques? 4. Level of training? 5. Learning principles? 6. Where to conduct the program?

Training process

Implementation of training program Evaluation

Types of training
1. 2.

3.
4. 5. 6.

On the job -: Orientation Training ie Induction Job instruction Info about how to conduct the job. Apprentice training - ITI Internship / Assistantship - Doctors Job rotation - Bank Coaching Cricket team

Types of training
1.

2.
3.

4.

5.

Off the job -: Vestibule Utilisation of actual equipments. Lecture Verbal presentation of information. Role playing is to create realistic situation. Simulation technique that duplicates as nearly as possible actual condition encountered on the job. Laboratory / Sensitivity training smaller group ie 12 or less. Provides awareness about their own behaviour & how other percieve them.

Performance Appraisal

It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.

Objectives of Performance Appraisal

Promotions based on competence and performance. To confirm the services of probationary employees upon their completing the probationary period satisfactorily.

To asses the training and development needs of employees.

Objective of Performance Appraisal

To decide upon pay rise where regular pay scales have not been fixed. Finally, performance Appraisal can be used to determine whether HR programmes such as selection, training and transfers have been effective or not.

Relationship of PA and Job Analysis

Job Analysis Describe work and Personnel requirement of a particular job. Performance Standards Translate job requirements into levels of acceptable or unacceptable performance. Performance Appraisal Describes the job relevant strengths and weaknesses of each individual.

PA and Competitive Advantage

Improving Performance Making Correct decisions

Minimizing job dissatisfaction and turn over

Consistency between organizational strategy

Performance Appraisal process

Objective of Performance Appraisal

Establish Job expectations

Design an Appraisal Programme Appraise Performance

Performance Interview
Use Appraisal Data for Appropriate Purposes

P A Process

Objective Correct or Improve performance Expectation In forming what is expected from employee Design Appraisal Helps in posing question which needs answers like Formal v/s Informal Appraisal, whose performance should be rated (group, team, individual), Who are Raters, What should be rated (Quality, Quantity, Time, Cost effectiveness, Need For Supervision), When to Evaluate, What Methods to be opted.

P A Process
Appraise the Performance Quantity, Quality and time of Output. Performance Interview Use the Appraisal Data HRP, Promotion, Remuneration, Training and Development etc.

Performance Appraisal Methods

90 Degree Only Supervisor is Evaluator. 180 Degree Superior and Peer Group 270 degree Superior, Peer and Subordinates 360 Degree Superior, Peer, Subordinates, Clients and Self 540 Degree - Superior, Peer, Subordinates, Clients and Self 720 Degree - Superior, Peer, Subordinates, Clients, Self and Family

Performance Appraisal Methods

Past Oriented Methods - : Rating Scales Excellent-Good-AcceptableFair-Poor (Simplest & most popular) Checklist Yes / No (Is employee interested in job? Does have adequate qualification?) Forced Choice Method Two Choices and no other option (The rater is forced to select statements which are readymade) Learns fast ----- Work hard. Critical Incident Method this approach focuses on certain critical behaviours of an employee

Performance Appraisal Methods

Behaviourally Anchored Rating Scales On the basis of the behavioural criteria of the employee rating is being done by the superior. Field Review Method Some one outside the assessees own department, usually from corporate office or HR department.

Future Oriented Methods

360 Degree Appraisal Assessment Centers (Potential Appraisal) Psychological Counseling

Problems in Performance Appraisal

Leniency or Severity Central Tendency Halo Error Rater Effect Rating based on raters attitude towards ratee Primacy or Recency effects Perceptual Set Raters perception

Job Evaluation

Job evaluation seeks to determine the relative worth of each job so that salary differentials can be established.

In job evaluation only jobs are rated unlike in performance appraisal where only job holders are rated.

Job Evaluation Process

Objectives of Job Evaluation

Job Analysis
Job Description Job Specification

Job Evaluation Programme

Wage Survey
Employee Classification

Methods of Job Evaluation

Non Analytical Methods Analytical Methods

Non Analytical method

Ranking Method The evaluation committee assesses the worth of each job on the basis of its title or on its contents, if the later is available. Job Grading Method There is a yardstick in the form of job classes or grades.

Compensation
Remuneration is the compensation an employee receives in return for his or her contribution to the organisation. Society Some people see pay as a measure of justice. Stockholders To stockholders, executive pay is of special interest, as linking executive pay to company performance is supposed to increase stockholders wealth.

Compensation
Managers Compensation influences their success in two ways. First, it is a major expense. In addition to treating it as an expense, a manager also uses it to influence employee behaviour and improve organisation performance. Employees The pay individuals receive in return for the work they perform is usually the major source of their financial security.

Components of Compensation
1. 2. 3.

4.

Financial : Hourly and monthly rated wage and salary. Incentives ie individual plans and group plans. Fringe benefits ie PF , Gratuity, Medical care, Group Insurance. Perquisites are Company car, furnished house (Offered to retain competent executives)

Components of Compensation

Non Financial -: Recognition, Growth Prospects.

 1. 2. 3. 4.

5.

External -: Labour Market Demand & Supply, Going Rate Cost of Living Escalatory clause Labour Unions Labour Laws Payment of wages act1936, Minimum wages act 1948, Payment of Bonus act 1965, Equal remuneration act 1976, Payment of gratuity act 1972. Society

Factors Influencing Employee Remuneration

Factors Influences Employee Remuneration

Internal -: Business Strategy Rapid growth = High Pay Job Evaluation and Performance Appraisal Employee Performance , Experience, Seniority

1. 2. 3.

Devising a Remuneration Plan

Job Description Job Evaluation

Job Hierarchy Pay Survey

Pricing jobs

Challenges of Remuneration
Salary reviews Pay secrecy Skill based pay Employee Participation Above Market or Below Market Rates Monetary V/S Non Monetary Rewards Comparable Worth

Concept of Wages

Minimum Wage Wage for sustenance of life plus for preservation of the efficiency of worker. (Determined through Legislation) Fair Wage Equal to the rate prevailing in the same trade and in the neighborhood or equal to the predominant rate for similar work throughout the country. Living Wage Higher than fair wage. Provides for bare essentials plus frugal comforts.

Incentives

Incentives are variable rewards granted to employees according to variations in their performance. The other name for incentives is Payments by results. But the word Incentives is most appropriate because of its motivational content.

Importance of Incentives
Motivation of worker for higher efficiency and greater output. Earning of employees would be enhanced due to incentives. Increased earning helps employee to improve standard of living. Other advantages Reduced Supervision, better utilisation of equipments, reduced lost time, reduced absenteeism and turnover and increased output.

Disadvantages of Incentives

Deteriorate the quality of product as employee want to earn more by producing more quantity of products. When job is restudied there are chances that it may yield in lower earning in terms of earning incentives as new and high challenging jobs offers more scope for earning as compared to old jobs. Increases jealousy among the workers as the person earning less is jealous of the person earning more.

Employee benefits

Employee benefits and services include any benefits that the employee receives in addition to direct remuneration. Employee benefits and services are alternatively known as fringes or hidden payroll.

Types of employee benefits

1) 2)

3)

For fringe benefits three criterias are needed to be fulfilled. It should be computable in terms of money. The amount of benefit is not generally predetermined. No contract, indicating when the sum is payable, should exists.

Fringe benefits
Legally required payments -: Old age, survivors, disability and health insurance. Contingent benefits -: pension plans, group life insurance, group health insurance, maternity leave, sick leave, service awards. Other benefits -: payments for the time not worked like holidays, leaves.

Benefits and services

Treats -: free lunches, festival bashes, dinner for the family. Awards -: trophies, certificates, letter of appreciation. Office environment -: flexible hours. Tokens -: movie tickets, vacation trips. On the job -: job rotation, representing the company at public meetings.

Administration of fringe benefits

Establish benefits objectives Assess environmental factors

Access competitiveness Communicate benefit information

Control benefit cost and evaluation

Executive remuneration
1) 2)

3)
4) 5)

Components of remuneration -: Salary Bonus Commission Long term incentives Perks

Industrial Relation

Industrial Relations

IR is concerned with the system , rules and procedures used by unions and employers to determine the reward for effort and the conditions of employment, to protect the interest of the employed and their employers, and to regulate the ways in which employers treat their employees.

IR contd

IR is concerned with the relationship between management and workers and the role of regulatory mechanism in resolving any industrial dispute. IR specially covers the following areas-: Collective bargaining Role of management , unions and govt. Machinery for resolution of industrial dispute Individual grievance and disciplinary policy and practice

1) 2) 3) 4)

Approaches to IR
Unitary Approach Direct negotiation with employee and participation of Govt. Tribunals, and unions are not sought. Pluralistic Approach (a) org as coalitions of competing interest, where the managements role is to mediate amongst the different interest group. (b) TU are legitimate representatives of employee interest. (c) Stability in IR is a product of concession and compromises between management and unions.

Approaches to IR

Marxist Approach same as Pluralistic but feels conflict arises not because of rift between management and workers, but because of the division in the society between those who own resources and who have only labour to offer.

Parties to IR
Employees Employee Associations Government

Employer Employee Relations Employers Employer Associations Courts and Tribunals

Trade Unions

TU are voluntary organisations of employees or employers formed to promote and protect their interest through collective action. Though the terms employees and employers are used, when we say trade unions they generally refer to employees.

Why do employees join unions?

Dissatisfaction Lack of power Union Instrumentality

Union Tactics

Unions employ several tactics to deal with management are-: Strike Invoking political patronage Blackmailing Unionising

1)

2)
3) 4)

Strategic choices before Management

Mgmt must decide whether the org should remain union free or allow unionisation. If mgmt decide company should remain union free then they must take steps to keep union away from the org. If unionisation should be allowed, managers must decide what type of union mgmt relations they want. Mgmt must also choose the type of tactic to use while negotiating a new wage settlement.

Strategic choices before Unions

Bread and Butter V/S Political objective Adversarial V/S Co operative role Traditional issues V/S New services

Strategies and Tactics for remaining Union - Free

Effective supervision Open communication Effective personnel search Healthy and Safe working environment Effective Employer and Employee relations Effective remmuneration

Some of the major Trade Unions

INTUC Indian National Trade Union Congress CITU Centre of Indian Trade Unions HMS Hind Mazdoor Sabha AITUC All India Trade Union Congress BMS Bhartiya Mazdoor Sangh UTUC United Trade Union Congress

Disputes and Their Resolution

Acc to Industrial Dispute Act, 1947, industrial dispute mean any dispute or difference between employers and employers or between employers and workmen, workmen and workmen, which is connected with the employment or non employment or terms of employment.

Causes of Disputes

Wage Demands Union Rivalry (Singareni Collieries - 445 TU loss 3.12 million tones) Political Interference (ideology differs, union works on party lines, CITUCommunist love to fight but hate to win so they have not signed any settlement in last 15 years)

Causes of Disputes
a) b)

Unfair Labour Practice - : Management unwillingness to recognise a particular TU and dilatory tactics. Negotiation of settlement of dispute the representatives of employers take the side of management which results in disputes. Multiplicity of Labour Laws

Settlement of Disputes
a) b) c) d) e) f)

Collective Bargaining (reps of employees & employers meet to solve the issue) Collective Bargaining Process-: Preparing for negotiation Identifying bargaining issues Negotiations Reaching the agreement Ratifying the agreement Administration of agreement

Settlement Contd.

Collective Bargaining takes place when representatives of trade union meet management representatives to determine employee wages and benefits and to solve other issues. Collective Bargaining is the most effective method of resolving industrial disputes.

Settlement of Disputes
Grievance Procedure Arbitration Conciliation Adjudication Consultative Machinery

Settlement Contd.

Grievance Procedure -: Stage One (Sectional Head) 5 days

Stage two (Deptt Head) 5 days Stage Three (Divisional Head) 10 days
Fourth Stage (Union)

Settlement Contd

Arbitrations refers to the procedure in which a neutral third party studies the dispute, listen to both the parties and collects the information , and make recommendations which are binding on both the parties. Conciliation -: As per the Industrial Dispute act 1947, Sec 4, says that the govt shall appoint conciliation officers and their main duty is to mediate and promote settlement of Industrial Dispute.

Settlement Contd

Adjudication a mandatory settlement of Industrial Dispute by a labour court or Tribunal. Consultative Machinery

Safety and Health

There is a saying

Precaution is always better than cure.

Safety and Health

Bhopal Gas Tragedy 23 years ago, there was a gas leak from a Union Carbide plant which led to killing over 20000 thousands of people in Bhopal and become the worst industrial accident in India due to negligence of proper safety features. Survivors still suffer from various diseases and battling for life and waiting for their turn to get compensated.

Safety and Health

Major Accident in last decade (India)-: 1) Bhopal gas leak in December 1984. 2) Delhi gas leak from Sriram foods and fertilizers in December 1985. 3) Gwalior blast at a dyeing department of GRASIM in December 1991. 4) Khalgaon boiler explosion in NTPC in October 1992. 5) Mumbai ONGCs helicopter crash in the offshore Heera Panna oilfields Neelam area in August 2003.

Safety and Health

Major International accident-:

1) NASA Columbia space shuttle broke apart during reentry on Feb 1, 2003. Wing damage sustained during launch by a chunk of fuel tank insulation was cited as the accident cause.

Safety and Health

Safety -: refers to the absence of accidents. Stated differently, safety refers to the protection of workers from the danger of accidents. Research says Every twenty seconds of working minute of every hour throughout the World, someone dies as a result of an industrial accident.

Safety and Health

Types of accidents -: Accidents Internal

Major

External
Minor

Fatal

Disability

Safety and Health

Disability Temporary
Partial Total

Permanent
Partial Total

Safety and Health

Internal If a bone is fracture which cant be seen and judged from open eyes. External wounds which are seen through our open eyes. Major Accidents results in death or results in prolonged injury. Minor A scratch or injury does not seriously disable. Temporary If a person recovers disability from which he can recover fully after certain period.

Safety and Health

Permanent Any injury which permanently disabled the person.

Safety and Health

1)

2)

Need for safety -: Cost saving Direct cost ie compensation and Indirect cost ie loss of production, damages of equipment, wastage of time. Increased productivity Safety promotes productivity, employees feel safe and produce good quality and quantity.

Safety and Health

3) Moral Providing safety to the employee has moral dimension, in addition to being a legal requirement. An employer has no right to cause accident to an employee which might kill the person. Monetary compensation does not bring the person back as a healthy individual. Can monetary compensation be a substitute for person?

Safety and Health

4) Legal Supreme court says An enterprise which is engaged in a hazardous dangerously industry which poses a potential threat to the health and safety of the persons working in the factory or industry must ensure that neither the workers nor the society suffers any kind of damages . All safety related requirements to be fulfilled by the industry as legal requirement before start of work.

Safety and Health

Safety Program -: Safety program deals with the prevention of accidents and with minimising the resulting loss and damage to person and property. Five principles that govern the safety program of an organisation are -: 1) Industrial accidents are a the result of multiple factors. So these factors have to be traced to their root causes, which are usually falls in the management system arising from poor leadership from top, inadequate supervision, no attention to design safety system.

Safety and Health

2) The most important function of safety programmes is to identify potential hazards, provide effective remedial actions. This is possible only if there are -: a) Effective system for reporting all accidents causing damage or injury. b) Adequate accidents records. c) Systematic procedures for carrying out safety checks, inspections. d) Methods of ensuring that safety equipment is maintained.

Safety and Health

3) Safety policy of the organisation should be determined by the top management and it must continuously involved in monitoring safety performance. 4) The management and supervision must be made fully accountable for safety performance in the working areas they control. 5) All employees should be given thorough training in safe methods of work and they should get regular guidance on eleminating safety hazards.

Safety and Health

Safety Process -: Strategic choices development of safety policy Organisation for safety Analysis of causes of accidents

Implementation of program
Evaluation of effectiveness

Safety and Health

1)

2)

Strategic choices Management must make decision regarding safety of their workers. Some strategic choices are-: Must determine the level of protection. Some co because of financial constraints prefer low level. Must decide whether a safety program will be formal or informal. Formal have written regulation & carefully monitored. Informal are enforced because of pressure and include good training.

Safety and Health

3) Management can be proactive or reactive. 4) Management can use safety of workers as a marketing tool of the organisation.

Safety and Health

1) 2)

3)
4) 5)

Health - : The well being of the employees in an industrial establishment is affected by accidents and by ill health physical as well as mental. Health in Industry can be discussed through following angles-: Physical health Mental health Noise control Stress management Violence at work place

Safety and Health

Health hazards -: Health hazards

Causes

Lung cancer oven emissions, smokes Leukemia Radiation Reproductive problems Radiation Vision Chemical fumes, Office equip. Hearing High noise level

Safety and Health

Mental health -: Specially at executive cadre. Three reasons for this development are mental breakdowns because of pressure & tensions. Mental disturbances because of reduced productivity & lower profits. Mental illness alcoholism & poor human relations.

Safety and Health

Noise Control -: Noise can only be minimised but can not be totally eliminated. Constant exposure to noise not only effects hearing ability but also effect the general health of the employees.

Safety and Health

Work stress -: refers to an individuals response to a disturbing factor in the environment . Stress is mostly understood to be negative, but it has positive dimension also. When stress brings out something better from an individual, it is called eustress. Violence at work place -: