Amity Center for eLearning

Amity Center for eLearning

HRM
Session 3
Ms. Snigdha Malhota

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Topics to be covered:
• Performance Appraisal
• Compensation Management
• Industrial Relations

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PERFORMANCE APPRAISAL

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Performance Appraisal
It’s a formal ,structured system of measuring and
evaluating an employee’s performance on the job and
his or her potential for development.
Objectives of Performance Appraisal
• To effect promotion based on competence and performance.
• To confirm the services of probationary employees.
• To assess the training and development needs of the employees.
• To decide upon a pay raise.
• To let the employees know where they stand as their performance.
• Analysis of HR Functions such as recruitments, training and
transfers.

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Advantages of Performance Appraisal

Improving
Performance
Making
Strategic
Correct
Behaviour
Decisions

Advantages
Values
Ensuring
&
Legal
Behaviour
Obligations
Minimizing
Turnovers

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Role of Self- Appraisal
Why Self- Appraisal becomes Important ?
• Making employees equal partners.
• Covers all aspects – strength, weaknesses,
accomplishments, failures.
• Self defining and expectation delivery target
setting.
• Filling in the gap between employee and
immediate senior.

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Process of Performance Appraisal

Actions Strategic
Objective

Establishing
Decision
Performance
Making
Standards

Discussing Defining &

& Communicating
Feedback Performance
sharing Expectation
Comparing
Actual Tracking &
& Measuring
Expected the performance
Performance

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Methods of Performance Appraisal

Traditional Methods Modern Methods
1. Essay Appraisal Method 1. Management By
2. Graphic rating Method. Objective
3. Forced Choice Rating 2. 360 Degree Appraisal
4. Field Review 3. Assessment Centers
5. Critical Incident Review 4. Behaviorally Anchored
6. Work Standard Rating Scales.
Approach 5. Human Resource
7. Ranking Method Accounting

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Management By Objective
• MBO Concept was given by Peter Drucker in 1954.
• Participative goal setting, choosing course of action and
decision making.
• Clarity of Goals – specific , measurable, achievable,
realistic , time allotment.
• The focus is on future than on past.
• Highest Motivation.
• Frequent reviews and two ways of communication
between superiors and subordinates.
DISADVANTAGE ????

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360DegreeAppraisal
• Self Assessment is an
Superior
indispensable part of 360 degree
appraisal.
• High employee involvement.
Customers
Suppliers/ • Strongest impact on behavior and
Vendors
performance.
• Most credible performance appraisal
Employee methods.
• Tracks the changing perception.
Team
Peers
Members

DISADVANTAGE ??
Subordinate

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Assessment Centers
• Involves the use of methods like social / informal
events, test and exercises, assignments etc.
• Based on performing and analysis study of
employees involved in the process.
• They are effective to determine the training and
development needs.

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Behaviorally Anchored Rating Scale

• BARS is a relatively new technique that combines the Graphic
Rating Scale and Critical Incident Method.
• Predetermined critical areas of job performance.
• Actual Behaviour is compared to Desired Behaviour with
BARS.
• Requires Expert Knowledge.

For Whom to Recommend ??

DISADVANTAGE ??

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Human Resource Accounting

• This method tries to find relative worth of Human
Assets in term of money.
• This method is based on analysis of employees cost
and contribution.
• Cost includes their compensation, recruitment cost,
induction and training cost etc.
• Contribution includes total value added (through
performance in monetary terms)

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Job Evaluation
It is a process of analyzing and assessing the various jobs systematically to
ascertain their relative worth in an organization. Jobs are evaluated on the
basis of their content and are placed in the order of their importance.

Job Title
System Hierarchy
Employee Objective of
Classification Job Evaluation

Wage Job Description

Job Analysis Job Specification
Survey

Job
Evaluation
Method

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Difference between
Job Evaluation & Performance Appraisal
Job Evaluation Performance Appraisal
1. Rates the Job 1. Rates the Employee
2. Job is rated before hiring 2. Employee is evaluated after
3. Purpose is to establish hiring.
satisfactory wage 3. The purpose is to effect
differentials promotion, rewards, assess
4. Not Compulsory training
5. Committee of expert is 4. Compulsory
required 5. All employees of the
organization is involved

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COMPENSATION MANAGEMENT

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Compensation Management
Compensation is the
remuneration Motivation
Motivation
received by the
employee in return for
his/ her contribution
to the organization. It
is an organized
Strategic Compensation Need
practice that involves Strategic
Alignment
Alignment
Compensation
Package
Package
Need
Satisfaction
Satisfaction
balancing the work-
employee relation by
providing monetary
and non-monetary
benefits to the Employee
employees. Employee
Retention
Retention

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Need for Compensation Management

• To motivate the employees to increase the
organization productivity.
• Hallmark of organization's success and
prosperity .
• It satisfies other psychological and self
actualization needs to be fulfill.
• To attract and sustain best talent.
• To enhance the process of job evaluation
• Complying to the various labour acts.

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Types of Compensation
Medical
Reimbursements
Basic Special
Salary Allowance

Direct
House Rent Compensation
Bonus
Allowances

Travel
Conveyance
Allowance

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Types of Compensation
Overtime
Policy
Leave
Hospitalization
Policy

Flexible Indirect
Insurance
Timings Compensation

Leave
Holiday
Travel
Homes
Retirement Allowance
Benefits

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Importance of an Ideal Compensation

• Drive Performance
• Reduce Strikes
• Grievances Handling
• Absenteeism
• Employee Turnover
• Job Satisfaction

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Factors affecting Compensation

• Demand and supply of labour
• Ability to pay
• Cost of living
• Productivity of workers
• Labour Unions
• Prevailing Wage Rates
• Job Requirement
• Psychological and Social Factors

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Devising Compensation

Pricing Jobs Job Description

Pay Survey Job Evaluation

Job
Hierarchy

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 COMPONENTS Amity Center for eLearning
COMPENSATION

FINANCIALS NON - FINANCIALS

Fringe Benefits •Challenging job

•PF Perquisites Responsibilities
Hourly & •Gratuity •Company Car •Recognition of
Monthly Merit
INCENTIVES •Medicare •Club Membership
related wages Individual •Accident Relief •Paid Holidays • Growth Prospects
& •Health & Group •Furnished House •Competent
Group
salary •Stock Option Supervision
Insurance
•Recreation Scheme •Comfortable
•Uniform Working conditions
•Job sharing
•Flexi timing

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Incentive Payments
Incentives are variable rewards granted to employees
according to the variations in their performance. The
other name for incentive is “payment by results”
Prerequisites for an Effective Incentive System
• The cooperation of employees.
• Based on scientific work measurement.
• Management commitments to the cost and time.
• Proper Planning

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Types of Incentive
Piece Rate
Commissions
Bonuses
Merit Raises
Standard Hour Plan
Maturity Curves
Gain Sharing
Profit Sharing
Stock Options
Stock Ownership
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Incentive Strategy Formulation

Set Objective

Group Incentive Individual Incentive

Plans Plan

Benefits

Formulate Strategy

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Reward VS Recognition
REWARD
Refers to programs set up by a company to
reward performance and motivate employees or
individuals and group levels.
Are of Monetary Kinds.
RECOGNITION
Are of Non Monetary Kinds- Recognition Trips,
Titles, Certificates, Trophies Increased Authority,
Notice Boards, Greater Choice of Assignments.

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INDUSTRIAL RELATIONS

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Concerned with the systems, rules and

procedures used by the unions and
employers to determine the reward for effort
and other conditions of employment ,to
protect the interests of the employed and
their employers and to regulate the ways in
which employers treat their employees.

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IMPORTANCE OF PEACEFUL IR
• IR is key to increase productivity in
Industrial Establishments.
• It is protection against unethical part of
management to take advantage of the
helplessness of workers and exploit them.
• IR seeks to protect the rights of managers.
• They define set procedures for handling
indiscipline issues.

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 Parties to IR Amity Center for eLearning

Employers

Employer
Employees
Association
Employer
Employee
Relations
Employee Courts &
Association Tribunal

Government

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Proactive IR Strategy
• Communication – How Best can we convey our
philosophy to employees?
• Relationships- How well can we improve our
relationships with employees and unions?
• Competence – How to improve competence of
managers and supervisors in dealing with IR
matters ?
• Discipline and Conflict – How shall we deal with it
?

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 Trade Unions Amity Center for eLearning

Trade Unions are voluntary organizations of

employees formed to promote and protect
their interests through collective action.
Factors leading to Unionization
• Individual Preferences( interest ,preferences ,powers)
• Expectations from Work
• Working Situation
• Union Instrumentality

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Tactics to Remain Union Free

• Effective Supervision
• Open Communication
• Effective Personnel Research
• Healthy and Safe Working Environment
• Effective Employer – Employee Relations
• Effective Remuneration
• Effective Training and Development Programme
• Effective Recruitment and Selection

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Disputes and Their Resolutions
Industrial Dispute refers to any conflict between
employer and employee.

Causes of Industrial Dispute

• Wage Demands
• Union Rivalry
• Political Interference
• Unfair Labour Practices
• Multiplicity of Labour Laws
• Others

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Settlement of Dispute
• Arbitration – procedure in which a neutral third party studies the bargaining situation.

• Conciliation – procedure by which representatives of workers and employers are brought together before third party.

• Adjudication – its mandatory settlement of an industrial dispute by a labour court or a tribunal.

• Consultative Machinery- Labour Advisory Board, Industrial Committees

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Arbitration

Collective
Conciliation
Bargaining

Dispute
Code of Settlement
Adjudication
Discipline

Grievance Consultative
Procedure Machinery

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Collective Bargaining
It takes place when representatives of the
labour union meet the management to
solve the issues.
Approaches to Collective Bargaining
• As a process of Social Change
• Peace Treaty
• Industrial Jurisprudence

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Collective Bargaining
Importance
Administration Preparing
Of the For • Increase economic
Agreement Negotiations
strength of both parties.
• Establish uniform
conditions of
Ratifying
The
Identifying
Bargaining
employment.
Agreement Issues
• Resolve Disputes.
• Lays down rules and
norms
Reaching
The Negotiation
• Democratic Industrial
Agreement World

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Code of Discipline
The code of discipline defines duties and
responsibilities of employers and workers.
Importance
• To ensure employer and employees recognize
each other’s right and duties.
• To promote constructive co-operation between
the parties concerned.
• To secure settlement of disputes.
• To avoid work stoppages.
• To maintain discipline in Industry

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Grievance Procedure
All labour agreements contain some form of grievance
procedure. And if the procedure is followed strictly
,any dispute can be resolved.
Conditions which may give rise to grievance :
• A violation of law
• A violation of the intent of the parties.
• A violation of company rules.
• A change of working conditions
• A violation of healthy and safety working conditions.

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Thank You

Please forward your query

To: smalhotra1@amity.edu

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