O

ver
vi
ew
of
H
RM
i. It encompasses everything we do to get the best from

your organizations most valuable resource: your

employees.
ii.Motivation on the basis of :
1.stimulating work
2.fair compensation
3.Good management,
4.A supportive and friendly workplace.
5.Open communications. They stay in or leave organizations
in any sector for the same reasons. HR activities
include recruitment, selection, training and development,
compensation, benefits, performance appraisal, employee
relations, health and safety, and strategic HR planning.
iv.The contributions of HR professionals make it possible for
organizations to attract, motivate, and retain a qualified and
effective work force.
www.culturalhrc.ca.

D efi
nitions ofH RM
Edwin Flippo defines HRM as

"planning, organizing, directing, controlling of

procurement,development, compensation,
integration , maintenance and separation of
human resources to the end that individual,
organizational and socialobjectives are achieved.
By Harvard Business School:
Human resource (HR) management can be
defined as the effective use of human resources in
an organization through the management of
people-related activities. It is a central and
strategic organizational activity of increasing
complexity and importance.

Role ofH R M anagers

Executive role in this role the HR Managers are viewed as the

specialists in the areas that encompass Human Resources or

people management.
Audit role in this capacity the HR Managers will check other
departments and the organization as a whole to ensure all HR
policies such as Health & Safety, Training, Staff Appraisal etc are
being carried out in accordance with the companys HR policy.
Facilitator role in this role, the HR Managers help or facilitate
other departments to achieve the goals or standards as laid out
in the HR policies of the organization. This will involve training
being delivered for issues that arise in the areas relating to
people management.
Consultancy role the HR Managers will advise Project
managers on how to tackle specific managing people issues
professionally.
Service role in this capacity the HR Manager is an information
provider to raise awareness and inform departments and
functional areas on changes in policy.

Contd..

Human Resource Man as a Leader:

Human Resource Man as a Humanist :
Human Resource Man as a Visionary :
Human Resource Man as an Intellectual :
Human Resource Man as an Educator :

Contd .

The process of recruiting suitable

candidates for the organization.

Identifying and meeting the training
needs of existing staff.
Ensuring employee welfare and employee
relations are positive.
Ensure the working environment is safe
for employees.
Raising awareness of current workplace
legislation.

HRM Sub System s

Sub-system is a system, consisting of elements like men,

machinery, materials and or information, which is not an end by

itself but instead forms part of the main system and coexists with
one or more of other systems -Job analysis, human resource
planning, recruitment and selection, performance management,
training and development, 360-degree feedback, mentoring and
executive coaching, and reward management.
Research findings:HRM subsystems should develop their
integrative technological infrastructure so that they can have a
wideranging view about their activities. Also, informal
mechanisms may enhance the integrating process, as well as the
formal mechanisms. Thus, managers should support and
encourage the informal climate, and facilitate especially on
informal communication.
The findings suggest a new approach for analyzing the integration
process within an organizational HR subsystem. On the one hand,
the continuity of integration demonstrates how each category may
contribute to the integration process on a high level. On the other,
the low level of each category illustrates the opposite side of
integration

Functions ofHRM

Human Resource Management (HRM) is all about

balancing the organizations people and processes to

best achieve the goals and the strategies of the
organization, as well as the goals and the needs of
employees. The main role an HR manager has to fulfill
is integrating business operations and strategies
across a wide array of culture, products, and ideas,
while effectively delegating work among human
resource specialists and line management.
1. Recruitment
Companies that value their people put a
serious amount of investment in recruiting and
staffing services.
2. Training and Development
.

Contd .

3. Professional Development:
4. Benefits and Compensation
Flexible working hours or workdays,
Extended vacation time,
Paternity leave or childcare
Medical/dental insurance,
Corporate gym membership discounts
Continuing education/skills
development
Award & recognition programs

Contd..
5. Ensuring Legal Compliance

Compliance with labor, tax and

employment laws is a vital part of
safeguarding the organizations
continued existence.

Policy m akers points

Recognition of people needs and Expectations

at work.
Respect for individuals.
Fair and equitable reward systems.
EEO.
Professional working environment.
Opportunities for personnel development and
career progression.
Democratic functions.
Full compliance to all laws and code of
conduct in relation to employment.

Exam ples ofspecifi

c H RM policies
1.Equal opportunity:
2.Managing Diversity:
3.Employee development:
4.Health and Safety:
5.Reward:
6.Discipline:
7.Harrassment:
8.Grievances:
9.Whistle blowers:
10.Recruitment
11.Pay
12.Intellectual property
13.Confidential information.

W ipro Recruitm ent policy

ROUND 1 :

* Written test.
* Verbal test.
* Aptitude test.
* Technical test.
ROUND 2 :
Round 2 is a technical test.
ROUND 3 :Round 3 is the final stage of
the recruitment process and it concludes
with the HR meeting.

Retention policy ofTCS

CEO:N.Chandra sekaran Turn over:52.97 billion

rupees.
Profit net :55Emp turn over:300464 .1 rise.
by Reuters
TCS tries to retain its associates through:
Career Development:
Rewards and Recognition:
Associate friendly HR policies
Performance Based Incentives:
Scalability:
Performance improvement plan:
Competency gap addressed:

Research fi
ndings
1.HRM for a global firm has become extremely

challenging.
2. Challenges loom over right from the planning
stage of Human Resource Management down to
retention.
3. Among all the functions, talent management
and retention appears to be the most significant
function of Human Resource Management.
4. A retention policy at TCS reveals that the
dynamic and employee oriented flexible
retention policy based on its own values is a
clear X factor for the success of TCS in
retention.

O rganization ofH RM
1.Collobaration: At all levels of the

organization, managers and HR

professionals work together to develop
employees' skills.
2.Commitment Building:Matching
employees with Responsibilities.
3.Building capacity: " It's not just about
hiring talent; this game is about
keeping people and helping them grow
and stay committed over the long
term.

Contd

An organization's HRM function

focuses on the people side of

management.
In the post-hire phase, the
organization develops HRM
practices for effectively managing
people once they have "come
through the door."

D evelopm entofH RM ,India.

Recenttrends ofH RM

1)The world is your oyster (No boundaries

to hire talent pool).

2)Technology-technology-technology.
(Technology compatibility)
3)Real time talent analytics and big data
management.(Spontaneous real time
assessment.
4)Mobile hone.(Now your talent lives and
breathes in real time portable connectivity)
5)Sweeten the deal.(If youre curtailing
certain benefits then balance with add ons
like Free lunch,flexi time,Child care,gyms
.).

Contd..
6) There Will Be AMoveFrom

Quantity To Quality.
7. Its All About Implementation.
8. Analytics Is The Special
Sauce.
9.Social
MediaAndContinuousLearning
Continues To Grow In
Significance.
10.A Paradigm shift from
Resources to Assets.

Harnessing
New
Technology

Externalconducive fram e w ork

Im pactofG lobalization

1. Diversity Recruitment:
2. Push for Professional Development: Win

win situation.
3. Greater Emphasis on Training: It might
also teach its employees how to use a
new global software platform
4.Management of Laws Across
Jurisdictions:

H RM Case let

US-based Yahoo Inc (Yahoo), the worlds largest

software company, had been going through tough

times since 2008. The company had seen a steep
decline in its revenues. Revenues, which had been
US$7.21 billion in 2008, had fallen to $4.98 billion
by 2012. In the search engine market too, Yahoo
found itself facing problems. As of 2013, its
market share in the search engine market was
17%, as against Google Inc.s (Google) 61%.
Yahoo, which had once been the biggest seller of
display ads, had lost that position to Google and
Facebook. According to some analysts, the work
culture at Yahoo and the lack of innovation were
responsible for the companys position

Case let

They were of the opinion that its culture was

broken/toxic , and that it was this that had

had an adverse impact on employees
performance and productivity. Ultimately,
Yahoo had come to be known as a distracted,
demoralized, and inefficient company. A
continuous change in leadership was also cited
as one of the reasons for Yahoos plight. In
comparison with the other successful tech
giants, Yahoos employees were
underperforming. For example, revenue per
employee in Google was US$ 931,657, while at
Yahoo, it was US$ 344,758 ...
Questions for Discussion

Unit-2

Scope of HRP:
1. To make the list of current manpower.
2. To check how much current manpower is

being utilized.
3. To find out how much manpower is
required.
4. To make manpower procurement plans.
5. To make the training programmes .

Contd..
6.To be ethically and socially responsive to the needs of
society.
7.To develop overall personality of each employee in its
multidimensional aspect.
8.To enhance employee's capabilities to perform the
present job.
9.To equip the employees with precision and clarity in
transaction of business.
10.To inculcate the sense of team spirit, team work and
inter-team collaboration.

Job Analysis
Job Analysis is a procedure by which

pertinent information is obtained about a

job, i.e., it is a detailed and systematic
study of information relating to the
operation and responsibilities of a specific
job.
Job analysis provides the following
information :
1. Job Identification : Its title, including its
code number;
2. Significant Characteristics of a Job : Its
location, physical setting, supervision,
union jurisdiction, hazards and
discomforts; trust;

Contd

3. What the Typical Worker Does :

4. Which Materials and Equipment a Worker
Uses : Metals,plastics, grains, yarns, milling
machines, punch presses and micrometers;
5. How a Job is Performed : Nature of operation
6. Required Personal Attributes : Experience,
training, apprenticeship, physical strength,
co-ordination or dexterity, physical demands,
mental capabilities, aptitudes, social skills;
7. Job Relationship : Experience required,
opportunities for advancement, patterns of
promotions, essential co-operation, direction,
or leadership from and for a job.

Job Analysis

Contd

Job Analysis M ethods

1. Personal Observation :

2. Sending out of Questionnaires :

This method is usually employed
by engineering consultants. After
corrections to Job analyst.
3. Maintenance method: The
employee maintains a daily record of
duties he performs, marking the time
at which each task is started and
finished.

JD and its vitality

Job D escription

Job description is a written record of the

duties, responsibilities and requirements of a

particular job. In other words, it tells us what
is to be done and how it is to be done and
why.
1. Job identification:
2. Job Summary:quick capsule explanation
3. Job duties: Vertical Relationship
4.Supervision: General, intermediate or close
supervision.
5.Working conditions:cold,heat, dust,
wetness, moisture, fumes, odour, oily
conditions

Form at ofJD
Job title:
Reports to:
Job Purpose:
Duties and Responsibilities:
Qualifications:
Working conditions:
Physical Requirements:
Direct reports:
Approved by:
Date Approved:
Reviewed:

O bjectives ofJD
Interview questions:
Filtration of unfit:
Grading:
Indicative of faulty work flow:
Limits of authority:
Hiring specifications:
Providing performance indicators:

Job D esign
The main objective of job design is to
integrate the needs of the individual and the
requirements of the organisation.
1. Classical Approach(F.W.Taylor) : Planned
by Management . (Class I Class II Class III and
IV).
2.Behavioural Approach(Hackman and
Oldham):Based on assumptions of
motivation, satisfaction and performance on
the job.
Behavioural approach to job design is a
socio-technical approach as it deals with both
the technical and social aspects of a job.

Contd..
The job characteristics model, however,
suffers from some limitations. It is
probabilistic and has an intuitive
appeal.
In one study of bank employees in
India growth need has not been found
coaching,counselling etc., are examples
of corrective actions that help to
improve performance.

Levels ofResponsibility

Job evaluation
Job evaluationis a systematic and objective

process used by organizations to compare the jobs

within the organization to determine the relative
value or worth of each job.
Criteria:Education qualifications, skills needed,
working conditions and job responsibilities.
Job ranking method:This method involves putting
all jobs in an organization in rank order of
importance based upon their contributions towards
the achievement of an organization's goals.
Classification method:In this method, a series of
classes and grades are defined. Each class will
describe a group of jobs. Each grade in a class will
represent different levels of difficulty and
responsibility.

Point-Factor R ating and Factor

parison m ethod
Com
The point factor method uses specific factors to
determine the relative value of a job compared
to the others in the organization.. Examples of
a compensable factor may be problem-solving
or supervisory skills.Therefore give relative
weight to each factor.
Factor comparison Method:Each job is ranked
according to a series of factors. These factors
include mental effort, physical effort, skill
needed, responsibility, supervisory
responsibility, working conditions and other
such factors (for instance, know-how,problem
solvingabilities, accountability, etc.

Factor com parison m ethod

Recruitm ent
Dale S. Beach has defined

Recruitment as the development

and maintenance of adequate
manpower resources.
According to Edwin B. Flippo :
Recruitment is the process of
searching for prospective employees
and stimulating them to apply for
jobs in the organisation.

M ethods ofrecruitm ent

The various sources of recruitment are
generally classified as internal source and
external source.
(a) Internal Sources : This refers to the
recruitment from within the company. The
various internal sources are promotion,
transfer, past employees and internal
advertisements.
(b) External Sources : External sources refers
to the practice of getting suitable persons
from outside. The various external sources
are advertisement, employment exchange,
past employees, private placement agencies
and consultants, walks-ins,campus
recruitment, trade unions, etc.

Em ploym ent and Recruiting

W ho H andles It? (percentage
ofallem ployers)

Em ploym ent Exodus:

Projected Loss ofJobs and
W ages

ExternalRecruitm ent m ethods

Raiding : Raiding is a technical term used

when employees working elsewhere are

attracted to join organizations.
Telecasting:
Labour Contractors:
Recommendation:
Employment Agencies:
Direct Recruitment: Notice board (Unskilled)
Casual Callers or Unsolicited Applications:
Media Advertisement:

Types ofTests

Intelligence Tests Intelligence (IQ) tests are tests

of general intellectual abilities. They measure not

a single trait but rather a range of abilities,
including memory, vocabulary, verbal fluency,
and numerical ability.

Cognitive Ability Test

PhysicalAbility test

D exterity and PhysicalAbilities

Personality and Interesttests

As one consultant put it, most people are

hired based on qualifications, but most are

fired for nonperformance.
Non performance (or performance) is usually
the result of personal characteristics, such as
attitude, motivation, and especially,
temperament.
Hewlett-Packard put its eventual choice,
Carleton Fiorina, and other finalists through a
two-hour, 900-question personality test.
Candidates had to indicate whether
statements like When I bump into a piece of
furniture, I usually get angry were true or
false. After years,fiorina was not a part.

Personality testsam ple

It does not make sense to work hard on something if no one will notice.
a. Definitely true
b. Somewhat true
c. Neither true nor false
d. Somewhat false
e. Definitely false
I tend to let others do most of the talking in conversations.
a. Definitely true
b. Somewhat true
c. Neither true nor false
d. Somewhat false
e. Definitely false
I have remained calm in situations where others have become upset.
a. Definitely true
b. Somewhat true
c. Neither true nor false
d. Somewhat false
e. Definitely false

Big Five

The Big Five Industrial psychologists often

emphasize the big five personality

dimensions as they apply to personnel
testing: extraversion, emotional
stability/neuroticism, agreeableness,
conscientiousness, and openness to
experience.
Neuroticism represents a tendency to exhibit
poor emotional adjustment and experience
negative effects, such as anxiety, insecurity,
and hostility. Extraversion represents a
tendency to be sociable, assertive, active,
and to experience positive effects, such as
energy and zeal.

Types ofselection tests

Testing Program G uidelines

1. Use tests as supplements.
2. Validate the tests.
3. Monitor your testing/selection
4.
5.
6.
7.

program
Keep accurate records.
Use a certified psychologist.
Manage test conditions.
Revalidate periodically.

Sam ple Picture Card from

Them atic Apperception Test.

How do you interpret this picture?

Selection process

Research study
Intrinsic success from Job satisfaction.
Extrinsic success from income and

occupation status.
Conscientiousness Both.
In personality research, conscientiousness
has been the most consistent and universal
predictor of job performance.

Types ofInterview s
Interview Definition:A procedure designed to
obtain information from person through oral
responses to oral inquiries.
1.Selection Interview: A selection procedure
designed on the basis of applicants oral
responses to oral inquiries.
2.Appraisal Interview:A supervisor and
employee discuss the employees rating
and possible remedial actions.
3.Exit Interview: An elicit information about
the job.

Form ats ofInterview s

Unstructured interview: Conversational

style interview.
Structured interview: Set of sequence of
queries.
Content types;
Situational interview
Behavioural interview.
Job related interview:
Stress interview: Rude queries.
Puzzle interview: cognition under
pressure.(out of box solutions)

Factors aff
ecting interview s
First impressions;
Negative bias:
Misunderstanding the job:
Candidate order error: Interviewing

extremely wise or reverse way.

Non verbal behaviour and impression
management:
Physically unattractive
Gender .
Race.

Selection errors

The False Positive Error

An organization that makes a false positive error

incurs three types of costs. The first type of costs
are those incurred while the person is employed.
The False Negative Error
In the case of false negative error, an applicant
who would have succeeded is rejected because
failure was predicted. Most false negative
selection errors go unnoticed, except when the
applicant is a member of a protected class and
files a discrimination charge.Costs are
unpredictable.

Unit-3

Induction and Orientation

Definition 1:
It is a Planned Introduction of employees to
their jobs, their co-workers and the
organization per se.
Orientation conveys 4 types of
information:
1. Daily Work Routine.
2. Organization Profile.
3. Importance of Jobs to the organization.
4. Detailed Orientation Presentations.

Purpose ofO rientation

1.To make new employees feel at home

in new environment
2.To remove their anxiety about new
workplace
3.To remove their inadequacies about
new peers.
4.To remove worries about their job
performance
5. To provide them job information,
environment.

Types ofO rientation

1. Formal or Informal
2. Individual or Group
3. Serial or Disjunctive
Problems of Orientations
1. Busy or Untrained supervisor
2. Too much information
3. Overloaded with paperwork
4. Given menial tasks and discourage interests
5. Demanding tasks where failure chances are

high
6. Employee thrown into action soon
7. Wrong perceptions of employees

D iff
erence betw een Induction and O rientation

Induction referred toformal

trainingprograms that an employee

had to complete before they could start
work.
Orientation was theinformal
informationgiving that made the
recruit aware of the comfort issues
where the facilities are, what time
lunch is and so forth. How long should
the induction process take?

Training m ethods
Training
The process of teaching new employees

the basic skills they need to perform their

jobs.

The strategic context of training

Performance management: the process

employers use to make sure employees are

working toward organizational goals.
Web-based training
Distance learning-based training
Cross-cultural diversity training

M ethods

On-the-job training (OJT)

Having a person learn a job by actually

doing the job.

OJT methods
Coaching or understudy
Job rotation
Special assignments

Advantages
Inexpensive
Immediate feedback

 Apprenticeship training
A structured process by which people become

skilled workers through a combination of

classroom instruction and on-the-job training.

Informal learning
The majority of what employees learn on the job

they learn through informal means of performing

their jobs on a daily basis.

Job instruction training (JIT)

Listing each jobs basic tasks, along with key

points, in order to provide step-by-step training

for employees.

Contd..

Effective lectures
Programmed instruction (PI)
A systematic method for teaching job skills involving:
Presenting questions or facts
Allowing the person to respond
Giving the learner immediate feedback on the accuracy of his
or her answers

Literacy training techniques

Responses to functional illiteracy
Testing job candidates basic skills.
Setting up basic skills and literacy programs.

Audiovisual-based training
To illustrate following a sequence over time.
To expose trainees to events not easily demonstrable in

live lectures.

Contd..

Simulated training (occasionally called

vestibule training)
Training employees on special off-the-job equipment

so training costs and hazards can be reduced.

Computer-based training (CBT)
Electronic performance support systems (EPSS)
Learning portals

Computer-based Training (CBT):

Types of CBT
Intelligent Tutoring systems
Interactive multimedia training
Virtual reality training

Advantages:

Contd..

Teletraining
A trainer in a central location teaches groups

of employees at remote locations via TV

hookups.

Videoconferencing
Interactively training employees who are

geographically separated from each otheror

from the trainervia a combination of audio
and visual equipment.

Training via the Internet

Using the Internet or proprietary internal

intranets to facilitate computer-based training.

Training m anual
Atrainingmanualis abookorbookletof

instructions, designed to improve the

quality of a performed task.
A training manual may be particularly
useful as:
An introduction to subject matter prior to
training.
An outline to be followed during training.
A reference to subject matter after training.
A general reference document.

Types ofm anuals

Work books used in training sessions to

provide basic information, examples and

exercises.
Self-paced guides: designed for trainees to
work through on their own.
Reference manuals: for containing detailed
information on processes and procedures.
Handouts: provide general information to
support training done during the session.
Job aids: provide step-by-step instructions
to be used in theworkplace.

M anagem ent D evelopm ent Program s

Management development: Any attempt to

improve current or future management

performance by imparting knowledge,
changing attitudes, or increasing skills.
Succession planning:
A process through which senior-level openings are
planned for and eventually filled.
Anticipate management needs
Review firms management skills inventory
Create replacement charts
Begin management development

Training under ISO

1.Training need identification

2.Training Planning(Base on
Identification)
3.Training circular
4.Training Agenda
5.Conduct training Program.
6.Feed back about training
7.Training Evaluation(2types)
a) On Job evaluation
B) Off Job evaluation
8.Skill Matrix

D ocum ents for ISO and Q S certifi

cations
HR Documents:

1. Employee Details file

2. Attendance Registers
3. Competency Matrix
4. Training Need Identification
5. Annual Training Calendar (Scheduled)
6. Training Effectiveness Evaluation
7. Unscheduled Training reports
8. Re-training records
9. Internal & External Communication File
10. Compliance to legal evaluation
11. Contract agreements for vendors
12. Pest Control records
13. Housekeeping records
14. Canteen records etc

Executive developm ent program m es

Alternative Career Paths
One approach to alternative career pathing

involves incorporating the skills employees

already have with what their hearts want to do.
Career Pathing
Career pathing, also called career tracking, is a
process of outlining an individual career plan,
usually within an organization. Career pathing
is most often used as a part of management
training and development, although individuals
may develop their own career track, either
alone, or in conjunction with a career coach.

 Dual Career Tracks

Dual career tracks should not be confused with alternative

career paths. Creating dual career paths involves preparing

employees to succeed and be rewarded without necessarily
being on a management or vertical organization career path.
Career Coaching/Counseling
Career coaching frequently involves helping individuals prepare
for a career change or helping employees advance in their
existing jobs.
Cross-Training
Cross-trained workers are taught skills outside their current job
assignment so they can be called upon to perform a variety of
tasks as the need arises.
Flexitime
Flextime is one of the most popular and most widely known
career development interventions. Flexitime gives employees
the opportunity to balance their work and personal lives by
restructuring the typical workday to accommodate individual
employee schedules.

Contd..

Job Rotation
Job rotation is the systematic movement of employees

from job to job within an organization, as a way to achieve

many different human resources objectives :
Job Enlargement
Job enlargement is defined as increasing the number of
tasks a worker performs, with all of the tasks at the same
level of responsibility, and is also sometimes referred to as
``horizontal job loading'' . Be careful not to confuse job
enlargement with job enrichment, which will be discussed
now.
Job Enrichment
Job enrichment involves increasing a worker's
responsibility and control over his or her work, and is also
called ``vertical job loading''. Job enrichment allows you to
expand your responsibilities or change your role to develop
new competencies without leaving your current position or
the organization altogether.

Unit4 Perform ance M anagem ent

KRA defines the outcome or end result

expected to be delivered while KPA

defines all the activities, not always
result oriented, an individual has to
perform being on job.
Key Result Area(KRA) and Key
Performance Area(KPA) , though the
terms hold different meaning but are
often used interchangeably and more
or less assumed to have same
applicability .

KRA and KPAs form ula

Key Result Area
Key = crucial/main
Result = outcome/end/consequence
Area = space/range
Key Performance Area
Key = crucial/main
Performance =

Achievement/Attainment
Area = space/range/field of operation

Areas ofsignifi
cance

Key Result Area

Customer Satisfaction.
Product Management.
Operational Cost Control.
Quality Check.
Record keeping.
Key Performance Areas
Maintaining good working condition in plant.
Optimum Resource Utilization.
Process Improvement.
Safety and Prevention planning and control.
Working within the companys SLA(Service Level

Agreement), GRC(Governance, Risk Management

and Compliance) policies

Pointstorem em ber..

KRA is not the result.

KRA is the area identified as important or crucial where a result

will assist in the achievement of the set objectives or goal.

KRA defines what a job is expected to accomplish.
KRAs might fall within the scope of Key Performance Areas
(KPA).
KPA is the overall scope of activities that an individual on a job
role has to perform.
KPA is not always result focused.
KPAs can be inclusive of KRAs
KRA is not the result.
KRA is the area identified as important or crucial where a result
will assist in the achievement of the set objectives or goal.
KRA defines what a job is expected to accomplish.
KRAs might fall within the scope of Key Performance Areas
(KPA)

Tradition Vs M odern PM
According to Flippo performance

appraisal is the systematic, periodic

and an impartial rating of an
employees excellence in matters
pertaining to his present job and his
potential for a better job

Traditionalm ethods

Prepared by employees immediate boss,

covers strength and weakness,
achievement and failure, personality and
behavior of the employee.
1. It is descriptive appraisal used for promotions

and transfer of employees.

2. It involves subjectivity as is based on
impression rather than on data.
3. It s credibility is very low therefore no
feedback is provided to the employee being
appraisal.

M odern m ethods

The traditional methods all focus more on the traits of an

employee than his performance.

In absence of pre-decided performance criteria or
standards, the personal bias or subjectivity or the
evaluator affects on ratings.
In order to overcome these weaknesses some new
techniques of performance appraisal have been
developed.

1. Assessment centre An assessment centre is group of employee drawn from

different work unites.

These employees work together on an assignment similar
to the one they would be handling when promoted.
Evaluators observe and rank the performance of all the
participants.

Experienced manager with proven ability serve as

evaluator.

Contd..

This

group of evaluators evaluates all employees both

individually and collectively by using simulations technique
like role playing, business games and basket exercises.
The evaluators observe and evaluate employee as they
perform jobs.
Assessments are done generally to determine employee
potential for promotion.
The evaluators prepare a summery report and feedback is
administered on a face to face basis to the employees.
This

method measures generally inter personal skill,

communication ability, ability to plan and organize etc.
This method helps to determine training and development
need of employee and provides data for HRP. It helps to select
students for entry level position. All of them get equal
opportunity to prove their merit. They are evaluated by a team
of trained assessors
This method is a time consuming and expensive. Candidates
who receive a negative report may feel demoralized.

PotentialAppraisal
The potential appraisal refers to the

appraisal i.e. identification of the

hidden talents and skills of a person.
The person might or might not be
aware of them. Potential appraisal is
a future oriented appraisal whose
main objective is to identify and
evaluate the potential of the
employees to assume higher
positions and responsibilities in the
organizational hierarch

O bjectives ofP A

To inform employees of their future prospects]

To enable the organisation to draft a

management succession programme;

To update training and recruitment activities;
To advise employees about the work to be done
to enhance .their career opportunities.
Note: The Potential for Improving Performance,
or PIP, measures the performance of the
average worker versus the best person
performing a particular task. Large differences
suggest that performance can be improved by
bringing average performance up closer to the
best performance. Small differences suggest
little potential for improvement.

M ethods of potential
appraisal:

Self appraisals
Peer appraisals
Superior appraisals
MBO
Psychological and psychometric tests
Management games like role playing
Leadership exercises etc.

M BO

This concept of management by objective MBO was developed

by Peter Drucker in 1954.

He called it management by Objective and self control.
It is also known as work planning and review or goal setting
approach to appraisal.

It has been defined as a process whereby the

superior
and
subordinate
managers
of
an
organization jointly identify its common goals, define
each individuals major areas of responsibility in
terms of results expected of him and use these
measure as guides for operating the unit and
assessing the contributions of each of its members
MBO Process:

1.The main steps involved in MBO are as2.Set organizational goals

3.Define performance targets
4.Performance reviews
5.feedbacks

PotentialRating Scale AppraisalProblem s

Unclear standards
An appraisal that is too open to

interpretation.

Halo effect
Occurs when a supervisors rating of a

subordinate on one trait biases the rating

of that person on other traits.

Central tendency
A tendency to rate all employees the same

way, such as rating them all average.

Feed back system s

Provide immediate positive and

developmental feedback in a private

location.
Q Ask for the employees view about what
could have been done differently.
Q Be specific about what behaviors were
effective or ineffective.
Q Focus on what the person did or did not
do, not personal characteristics.
Q Collaboratively plan steps to address
development needs.
Q Offer help in addressing development
needs and providing resources.

Job evaluation

Ranking each job relative to all other

jobs, usually based on some overall

factor.
Identifying the need for the job

evaluation
Getting the cooperation of employees
Choosing an evaluation committee.
Performing the actual evaluation.

Job evaluation M ethod:Job Ranking

1.Obtain job information.

2.Select and group jobs.
3.Select compensable factors.
4.Rank jobs.
Combine ratings.

Job Evaluation M ethods:Point M ethod

A quantitative technique that involves:
1.Identifying the degree to which each
compensable factors are present in the job.
2.Awarding points for each degree of each
factor.
3.Calculating a total point value for the job by
adding up the corresponding points for each
factor.

Job Evaluation M ethods:

Job Classifi
cation

Raters categorize jobs into groups or

classes of jobs that are of roughly the

same value for pay purposes.
Classes contain similar jobs.
Grades are jobs that are similar in difficulty but
otherwise different.
Jobs are classed by the amount or level of
compensable factors they contain.

Job Evaluation m ethod:CAJE

A computerized system that uses a

structured questionnaire and statistical

models to streamline the job evaluation
process.
Advantages of computer-aided job evaluation
(CAJE)
Simplify job analysis
Help keep job descriptions up to date
Increase evaluation objectivity
Reduce the time spent in committee meetings
Ease the burden of system maintenance

Job Evaluation M ethods:

Factor Com parison
Each job is ranked several timesonce for each of

several compensable factors.

The rankings for each job are combined into an overall
numerical rating for the job.
Samples:
Cognition requirements: Mental traits, such as
intelligence, memory, reasoning, facility in verbal
expression, ability to get along with people, and
imagination.
Skill: In automobile repair, the ability to determine the
significance of a knock in the motor would be skill.
Physical Requirement: Physical status, such as age,
height, weight, sex, strength, and eyesight.

Unit-5

Wages and Salaries:

1.Largest single expenses.
2.How do we manage a balance

between remunerating market and

business expenses?
3.We have to make a decision where do
we have to base salaries either on
Operating expenses or gross revenues

 A job that is used to anchor the

employee pay scale and around

which other jobs are arranged in
order of relative worth.
Standard positions that are

commonly defined among different

organizations.

Percentage ofO perating expenses

Calculate your salaries as a percentage of

operating expenses by dividing the total salary

expenses by your total operating expenses.
As an example, if you pay $145,000 in total
operating expenses with a salary expense of
$41,000, 28 percent of your operating
expenses are salaries. A report by the Society
for Human Resource Management indicates
that retail industry businesses may have a
salary to expense percentage of as little as 18
percent. Education and health care fields may
have salaries that are as much as 52 percent
of total expenses.

Percentage ofRevenue M odel

An alternative method of calculating salary

percentages is to compare your salary

expense to your company's total revenues.
This percentage is established by dividing
the total salaries by the total revenues. As
an example, if your company's gross
revenue equals $320,000 and the total
salaries for the same period are $38,600,
your company spends 12 percent of all
monies earned on salaries. Second Wind
Consultants, Inc recommends a range
between 15 to 30 percent.

Adjustm ents M odel

Track your salary percentages during each reporting period to
ensure that you remain within the target range that you
determined for your company's operation. Strive to keep your
salaries at the lower end of the range if you need funding
available to account for newly-hired employees or merit
increases. As your revenues and expenses change, adapt your
salary percentage accordingly. Understanding the impact that
changes in your financial position can have on your operations
and reporting is essential to protecting your company's financial
health.
If you recognize a permanent increase in revenue, you may opt to
disseminate some of the increase to your employees as raises or
bonus payments. For example, if you want to issue a raise based
on a revenue increase, determine the percentage increase first,
then decide how much of that you want to pass along to your
staff. If you recognize a 12 percent revenue increase, you could
offer a 5 percent raise to your staff, allowing the business to
recognize the remaining 7 percent as increased revenue.

Perks

Perks areemployee benefits, usually in

addition tosalary andstandard employee

benefits. The word, perk or perks, is a short
form of the word perquisite which means
incentives, bonuses, extras, or sweeteners.
In use in business, the term perks has come
to mean benefits or extras above and
beyond the normalcomprehensive benefit
package.
Perks also refers tononstandard benefits
that are unusual or for which only a limited
number of employees are eligible.

Contd..

Company supplied cars

Free lunches or beverages
Company logoed shirts, hats, and other merchandise supplied

at low cost or no-cos

First choice of vacation schedule.
First chance to workovertime.
Professional association membership.
Conference attendance.
First chance forlateral movesorpromotions.
Job openings posted and filled internally before externally.
Flexible schedules
Telecommutingopportunities
Office, larger office with window
Tuition reimbursement
Cafeteria benefits plan

Fringe Benefi
ts

Fringe benefits are forms of compensation

you provide to employees outside of a

stated wage or salary. Common examples
of fringe benefits
includemedicalanddental insurance,
use of acompany car,housing
allowance, educational
assistance,vacation pay, sick pay, meals
and employee discounts

Sam ples ofFringe

A)Payment For Time Not Worked: Benefits

Under This Category Include: Sick Leave

With Pay, Vacation Pay, Paid Rest And
Relief Time, Paid Lunch Periods, Grievance
Time, Bargaining Time, Travel Time Etc.
B)Extra Pay For Time Worked: This
Category Covers The Benefits Such As:
Premium Pay, Incentive Bonus, Shift
Premium, Old Age Insurance, Profit
Sharing, Unemployment Compensation,
Christmas Bonus, Deewali Or Pooja Bonus,
Food Cost Subsidy, Housing Subsidy,
Recreation

Contd
1.For Employment Security :

Benefits Under This Head Include

Unemployment, Insurance, Technological
Adjustment Pay, Leave Travel Pay, Overtime Pay,
Level For Negotiation, Leave For Maternity,
Leave For Grievances, Holidays, Cost Of Living
Bonus, Call-Back Pay, Lay-Off, Retiring Rooms,
Jobs To The Sons/Daughters Of The Employees
And The Like.
2.For Health Protection:
Benefits Under This Head Include Accident
Insurance, Disability Insurance, Health
Insurance, Hospitalization, Life Insurance,
Medical Care, Sick Benefits, Sick Leave, Etc.
3.For Old Age And Retirement:

Contd..
Benefits Under This Category Include: Deferred

Income Plans, Pension, Gratuity, Provident Fund, Old

Age Assistance, Old Age Counseling , Medical
Benefits For Retired Employees, Traveling Concession
To Retired Employees, Jobs To Sons/Daughters Of The
Deceased Employee And The Like.
4.For Personnel Identification, Participation And
Stimulation:
This Category Covers The Following Benefits:
Anniversary Awards, Attendance Bonus, Canteen,
Cooperative Credit Societies, Educational Facilities,
Beauty Parlor Services, Housing, Income Tax Aid,
Counseling, Quality Bonus, Recreational Programs,
Stress Counseling, Safety Measures Etc.

Bonus
Bonus pay is used by many organizations

as a thank you to employees or a team

that achieves significant goals. Bonus pay
is also used to improveemployee morale,
motivation, and productivity.
As long as bonus pay is discretionary by
the employer, it is not considered to be a
contract. If the employer promises a
bonus, however, the employer may be
legally liable to pay the bonus

Incentives

A payment or concession to stimulate

greater output or investment.

Anincentiveis something that
motivates an individual to perform an
action.

M onetary incentives
Pay and allowances. Regular increments in

salary every year and grant of allowance act as

good motivators.
Profits sharing. The organization offer share in
the profits to the employees as a common
incentive for encouraging the employees for
working efficiently. Perhaps ,a fixed slab above
and over makes it applicable.
The co-partnership is offered by issue of
shares on exceeding a fixed target.
Bonus. Bonus is a onetime extra reward offered
to the employee for sharing high performance.

Contd
Commission. Commission is the common incentive

offered to employees working under sales department.

Suggestion system. Under suggestion system the
employees are given reward if the organization gains with
the suggestion offered by the employee. For example, if an
employee suggests a cost saving technique of then extra
payment is given to employee for giving that suggestion.
Productivity linked with wage incentives. These are
wage rate plans which offer higher wages for more
productivity.
Retirement benefits. Some organizations offer
retirement benefits such as pension, provident fund,
gratuity etc. to motivate people. These incentives are
suitable for employees who have security and safety need.
Perks/fringe Benefits/ perquisites.

Non m onetary incentives

1.Status.
2. Organizational climate.(Relations)
3. Career advancement.(Promotions).
4.Job enrichment/ assignment of challenging job.

(Multifarious).
5. Employees recognition.Recognition means giving
special regard or respect which satisfies the ego of the
subordinates.
6.Job security.
7.Employees participation.It meansinvolving
employee in decision makingespecially when decisions
are related to workers.
Autonomy/ employee empowerment.It means giving
more freedom to subordinates. This empowerment
develops confidence in employees. They use positive skill
to prove that they are performing to the best when
freedom is given to them.

Com pensation surveys

Salary Surveysare tools used to

determine the median or average

compensationpaid to employees in one
or more jobs.Compensation data,
collected from several employers, is
analyzed to develop an understanding of
the amount ofcompensationpaid.
?
Paying people fairly is good for business.
Underpay, and employees will eventually
look for a better offer. Overpay, and the
payroll budget and profitability will suffer.

Signifi
cance ofCom pensation surveys
Compensation surveys are specific to an

industry.
More than 80 percent of business managers
and HR professionals said their companies
either participate in or purchase at least
onesalary surveyeach year, according to a
Salary.com poll. Companies with fewer than
500 employees spend an average of $2,000
annually on salary surveys, and companies
with more than 5,000 employees spend up
to $15,000 or more each year on these
important data sources.

H ow do researchers conduct surveys?

1.Surveys are conducted on a semiannual,

annual, or biennial basis.

2.Surveys normally fall into one of two
categories: Custom and standard.
3.Custom surveys are ones that attempt to
answer very specific questions from a narrow
selection of peer companies (e.g., What is the
prevailing pay rate for salespeople in the
pharmaceuticals business in the Northwest?).
These custom surveys tend to be available to,
and used by, the participants only.

Contd
4.Standard surveys, on the other hand,

are often published each year and

attempt to cover the same range of
companies and jobs.
5.These broad surveys are sometimes
sold to non-participants and made
available to members or customers of
the survey sponsor/vendor.

Check listto buy Com pesnsation survey

The background of the survey research firm

and cosponsors, if any.

The scope of the survey.Look for studies that
cover industries, jobs, and regions that are most
applicable to your purposes; and that provide data on
enough jobs to be cost-effective.
The survey methodology.Review the summary of
the methodology to make sure it's consistent with
standards set forth by reputable industry.
The number of participants in the survey.A
good survey should cover a representative number of
companies for its target population.
The names of participants.Look for your
competitors and peers.

Contd

The number of incumbents covered by the

survey; and the sample size for each salary.A

sample size of 30 or more is more statistically
significant
The relevance of the job descriptions to the
positions being benchmarked.Look for a good
match between the survey and your company. Be
sure to compare job descriptions, not just job titles.
The effective date of the survey data.The
date a survey is published is always later than the
effective date of the data within the survey. If
necessary, age the data from the effective date to
the current month.

Com pensation structure

The employee compensation and benefit package is

a crucial factor for attracting potential employees

and retaining them as well. Organizations need to
strike a balance between the financial success of the
business while offering attractive benefits and
packages. Though performance is not only driven by
monetary aspects, a good Compensation Structure is
effective in achieving corporate goals.
The importance of designing an efficient
Compensation Structure.
An efficient Compensation Structure paves a way for
acquiring top quality talent and helps in retention of
employees. At the same time it also accounts and
minimizes the cost accrued to the Business.

Contd
There are three stages involved 1.Preliminary Consulting
2.Implementation
3.Assessment
Conduct a review on a regular

schedule or tied to specific events.

As a general rule, employers should
examine the overall salary structure
at least every three to five years.

 Listen to managers up to a point. In some cases

front-line managers will bring salary-structure

issues to HRs attention.
Link the salary structure back to HR strategy and
the market. There should not be strategic
disconnection between how organization competes
and drives values to its people.
Has the organization established appropriate pay
grades and maintained updated job descriptions
with required skills?
Does the company have a clear idea of whether it is
paying for the position or for the skills that people
bring to it and to the organization?

Contd .

Look broadly when necessary:

(Globalized industries prevalence).

Communicate the results. Once the
company is ready to adjust the salary
structure, it is important to educate
and communicate with employees
about the changes.

Productivity

1.Incentives pay ,Individual and Group Bonuses.

Applicable in Private and Public Sectors.

2.High powered incentives hikes retention of
dramatically abled employees.
3.Complementary factors with incentives pay
(team work and Group bonuses) (Decentralization
with IT).
4.Perverse Incentives -When rewards are tied to
specific periods of time so that workers manipulate
commissions to hit quarterly targets.
5.Incentive pay schemes tend to be associated
with greater dispersion of productivity as the
effects are stronger on the more able workers, and
this is stronger than the selection effect.
(which pushes towards reduced dispersion)

Perform ance linked Com pensation

Aperformance-linked incentive(PLI) is a

form of payment from anemployerto

anemployee, which is directly related to the
performance output of an employee and which
may be specified in anemployment contract.
PLI may either be open-ended (does not have a
fixed ceiling) or close-ended (has an upper
ceiling which is normally stipulated in the
employment contract).
Open-ended incentives are normally applicable
to revenue-generating activities (e.g., sales),
while close-ended incentives are associated
with support functions (e.g., operations, human
resources, administration, etc.)

H arvard Business responses

Pay for performance: Why do we assume so much and

know so little? Pay for performance is an important

element of good management, judging from responses to
this month's column.
Ashok Malhotra favors "reasonable incentives for shortterm performance" and "higher incentives for long-term
performance.
Gary Johnson cautions that "Because excitement is so
critical to success, pay for performance value can be
diminished the longer the time delay for receiving
performance pay.
Sometimes we forget why we pay people." Sivaram
Parameswaran.
CEO Nari Kannan noted that CEOs seek "less loss on the
downside, more gains on the upside. The company's goals
are the (opposite)."