What is HRM

Description
In detail about HRM

Human Resource Management
Prof. DEBASISH DUTTA

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HRM/Prof. DEBASISH DUTTA

Introduction
? The practice of human resource

management (HRM) is concerned with all aspects of how people are employed and managed in the organization.

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HRM/Prof. DEBASISH DUTTA

Introduction
? It covers activities such as:
? Strategic HRM ? Human capital management ? Corporate social responsibility ? Knowledge management ? Resourcing (HRP, recruiting, selection, and talent ? ? ? ? ?

management Performance management Learning and development Reward management Employee relations Employee well being, health and safety and provision of employee services

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HRM/Prof. DEBASISH DUTTA

Definition
? Human Resource Management is concerned

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with the people dimension in management. Since every organisation is made up of people, acquiring their services, developing their skills, motivating them to higher levels 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 – government, business, education, health, recreation or social action. HRM/Prof. DEBASISH DUTTA - David A. Decenzo and

Definition
? Human Resource

Management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organisations and the employees to achieve their objectives. - Milkovich and Boudreau

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HRM/Prof. DEBASISH DUTTA

Definition
? “Human Resource Management is the

planning, organizing, directing and controlling of the procurement, development, compensation integration, maintenance and separation of human resources to the end that individual, organisational, and social objectives are accomplished.”
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Evolution of HRM
? 1800 years BC Babylonia

? 400 years BC Kautilya?s Arthashastra

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–India ? 1932 Royal commission on labour ? 1948 Indian Factories Act ? NIPM ? Personnel management ? Human Resource management ? Concept of Human assets and HRM/Prof. DEBASISH DUTTA Human capital

Evolution of HRM in India
Period 1920s – 1930s 1940s 1960s 1970s – 1980s Developme nt Status Beginning Outlook Pragmatis m of capitalists Technical, legalistic Emphasis Status Statutory, welfare, Clerical paternalism Introduction to techniques Administrativ e Managerial

Struggling for recognition

Achieving Profession Regulatory, sophisticatio al, conforming, n legalistic, imposition of impersonal standard on other (unfriendly functions )

HRM/Prof. DEBASISH DUTTA 91990s Promising

Philosophi

Human values,

Executive

Difference Between PM and HRM
S.No

Dimension Employment contract Rules Guide to management action

PM Careful dimension of written contract Importance of devising clear rules Procedures

HRM Aim to go beyond contract Impatience with rules Business need

1 2 3

4 5 6 7
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Behaviour referent Norms/ customs & practices Managerial task vis-à-vis labour Key relations Initiatives Speed of decision Monitoring Labour Piecemeal Slow

Values/mission Nurturing Customer Integrated Fast

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HRM/Prof. DEBASISH DUTTA

Difference Between PM and HRM
S.No 9 10 11 12 13 Dimension Management role Communication Management skill Selection Pay PM Transactional Indirect Negotiation Separate Job evaluation Direct Facilitation Integrated Performance related HRM Transformational

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15

Conditions
Labour management

Separately negotiated
Collective bargaining contracts Many Division of labour

Harmonisation
Individual contracts

16 17
11

Job categories and grades Job design

Few Team work

HRM/Prof. DEBASISH DUTTA

Difference Between PM and HRM
S.No
18 19 20

Dimension
Conflict handling Training & Development Focus for attention for interventions Respect for employees

PM
Temporary Controlled courses Personnel procedures

HRM
Climate & culture Learning Organization Cultural & structural strategies

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Labour – a tool – People are assets expendable & & to be used for replaceable benefit of organization Organization interest is uppermost Precedes HRM Mutuality of interests Latest

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Shared interests

12

23 HRM/Prof. DEBASISH DUTTA Evolution

Strategic HRM and Role of a HR Manager
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Strategy
“strategy”

-derived from a Greek word“strategos”

-meaning“general”

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HRM/Prof. DEBASISH DUTTA

Oxford Dictionary Meaning

STRATEGY
-The art of war
-The management of an army or armies in campaign

-Plan of action in policy of business or politics
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Strategy – Defined
? Strategy refers to determination of the

purpose (or mission) and basic long term objectives of an enterprise, and the adoption of course of action and allocation of resources necessary to achieve the aims.
? Objectives are part of strategy

formulation.
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Levels of Strategy
Corporate Strategy

Business Strategy Business Strategy

Business Strategy

Functional Strategy
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Corporate Level Strategy
? It identifies the mix of businesses the firm will

engage in.
? Accordingly

Corporate level strategies basically about decisions related to:

are

? allocating resources among the different businesses

of a firm, ? transferring resources from one set of business to others and ? managing and nurturing a portfolio of business in such a way that the overall corporate objectives are achieved.
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? An analysis based on business definition provides

Business Level Strategy
? Each business of a corporate is guided by business

level/competitive strategy.
? It identifies how to build and strengthen the business?s

long term competitive position in the marketplace.
? Business Level Strategies are the courses of action

adopted by a firm for each of its businesses separately to serve identified customer groups and provide value to customer by satisfaction of their needs
? In the process the firm uses its competencies to gain,

sustain, and enhance its strategic or competitive advantage.
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Functional Level Strategy
? It identifies how the unit?s manufacturing, sales, HR,

and other functions will contribute to the business.
? Functional Level Strategies deals with a relatively

restricted plan which provides the objectives for a specific function, for the allocation of resources among different operations within that functional area and for enabling a coordination between them for an optimal contribution to the achievement of the business and corporate level objectives.
? Functional
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strategies are implemented functional and operational implementation.

through

HRM/Prof. DEBASISH DUTTA

Relationship among Strategies
? The Manager?s strategic plan will ideally

seek to balance two sets of force: the firms external opportunities and threats on the other hand internal strength and weaknesses.
? The three levels of decision making

should be interrelated and mutually supportive
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Building Competitive Advantage
? Competitive Advantage can be defined

as any factors that allow an organisation to differentiate its product or services from those of its competitors to increase market share.
? Competitive Strategy aims to establish a

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profitable and sustainable position against the forces that determine industry DUTTA HRM/Prof. DEBASISH competition.

HR as Competitive Advantage
? Competitive

Advantage lies not just in differentiating a product or service or in becoming the low cost leader but also in able to tap the company?s special skills or core competencies and rapidly respond to customer?s need and competitors moves.

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is management?s ability to consolidate corporate-wide technologies and production skills into competencies that empower individual business to adapt quickly to changing opportunities. HRM/Prof. DEBASISH DUTTA
? It

Traditional HR vs Strategic HR
Traditional HR Strategic HR

Responsibility of HR Staff Specialist Focus Employee relation
Transactional, change follower and respondent Slow, reactive, fragmented Initiative Short-term Time horizon Bureaucratic – roles, Control policies, procedures Tight division of labor, Job design independence, specialization Key investments Capital and products Accountability Cost centre HRM/Prof. DEBASISH DUTTA 24 Role of HR

Line Manager Partnership with internal and external customers Transformational, change leader and initiator Fast, proactive, integrated Short, med., long (as reqd) Organic, flexible-whatever necessary to succeed Broad, flexible, cross training, teams People Knowledge Investment centre

Barriers to Strategic HR
• Short term mentality/focus on current • • • • •
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performance Inability to think strategically Lack of appreciation what HR can contribute Failure to understand Top Managers role as HR Manager Difficulty in quantify many HR outcomes Perception of human assets as high risk HRM/Prof. DEBASISH DUTTA investments

Outcome of Strategic HR
Increased Performance Customer and Employee Satisfaction THROUGH Enhanced Shareholder value

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• Effective management of staffing , retention, and turnover through selection of employees that fit with both strategy and culture • Cost effective utilization of employees through investment in identified human capital with potential for high retention • Integrated HR program and policies that clarify follow from corporate strategy • Facilitation of change and adaptation through a flexible, more HRM/Prof. organization dynamic DEBASISH DUTTA • Tighter focus on customer needs, key and emerging markets

Role Assumed by HR Function

1. Administrative Expert 2. Employee Advocate 3. Change Agent 4. Strategic Partner

5. Value Proposer
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Role Assumed by HR Function
Strategic Focus

4. Strategic Partner
System

3. Change Agent

People

1. Administrative Expert2. Employee Advoc
Operational Focus
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Role of HR
? HR Planning ? Motivation

? Recruitment &

? Industrial Relations
? Employee Relations ? Employer Branding ? Employee Branding ? Organizational Culture ? Change Management ? HRIS ? Employee

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Selection ? Induction ? Training & Development ? Employee Appraisal ? Promotion & Transfer ? Employee Welfare ? Retention ? Compensation HRM/Prof. DEBASISH DUTTA management

Separataion

HUMAN RESOURCE PLANNING

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HRM/Prof. DEBASISH DUTTA

Definition - HRP
? Human Resource planning includes the

estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what, if anything, must be done to ensure that personnel supply equals personnel demand at the appropriate point in the future.
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Definition - HRP
? Specifically, human resource planning is the

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process by which an organisation ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organisation achieve its overall objectives. Human resource planning translates the organisation?s objectives and plans into the number of worker needed to meet those objectives. Without a clear cut planning, estimation of an organisation?s human resource DUTTA HRM/Prof. DEBASISHneed is reduced to mere guesswork.
- David A. Decenzo and Stephen P.

Human Resource Planning
? Human Resource Planning (HRP) may

be defined as strategy for acquisition, utilization, improvement and preservation of the human resources of an enterprise. ? The objective is to provide right personnel for the right work and optimum utilization of the existing human resources.
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Objectives of HRP
? The objectives of HRP are mainly to:

? Ensure optimum utilization of human

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resources currently employed ? Assess or forecast future requirements ? Cope up with the changing scenario ? Attaching with business plans of organization ? Anticipate redundancies ? Provide basis for human resource development (HRD) ? Assist in productivity bargaining. HRM/Prof. DEBASISH DUTTA

Importance of HRP
? Future personnel needs

? Part of strategic planning
? Creating highly talented personnel ? International strategies ? Foundation for personnel function ? Increasing investment in human

resources ? Resistance to change and move
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Benefits of HRP
? Proper HRP results into a number

of benefits. Some of them are:
? Create reservoir of talent. ? Preparation for future HR needs. ? Promote employees in a systematic

manner. ? Provide basis for HRD. ? Help in career and succession planning.
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HRP Process
Environment Organizational Objectives & Policies HR Needs Forecast HR Programming
HRP Implementation Control and Evaluation of Programme Shortage
Recruitment and Selection

HR Supply Forecast

Surplus
Restricted Hiring Reduced Hours VRS, Lay off, etc.
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Human Resource Planning

Assessing Current Human Resources

Assessing Future Human Resource Needs

Developing a Program to Meet Needs
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Types of Planning
? Planning is generally done on two

different levels:
? Aggregate Planning ? Succession planning

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HRM/Prof. DEBASISH DUTTA

Aggregate Planning
? Aggregate planning anticipates needs for

groups of employees in specific usually lower level jobs and the general skills employees need to ensure sustained high performance.
? Example:

needed center.
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The number of customer service representative for a call

Steps in Aggregate Planning
? Aggregate planning involves

following steps:
? Demand forecast ? Supply forecast ? Anticipate surplus of employees in a

job category ? Anticipate shortage of employees in a job category
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Demand Forecast
? It is the process of estimating the

quantity and quality of people required to meet future needs of the organization.

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HRM/Prof. DEBASISH DUTTA

Forecasting Techniques
? Ratio Trend

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HRM/Prof. DEBASISH DUTTA

Analysis ? Regression Analysis ? Work Study Technique ? Delphi Technique ? Managerial Judgment

Supply Forecast
? Supply forecast determines whether the

HR department will be able to procure the required number of personnel. Specifically, supply forecast measures the number of people likely to be available from within and outside an organisation.

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HRM/Prof. DEBASISH DUTTA

Supply Forecast
?The supply analysis covers: ? Existing human resources ? Internal source of supply ? External source of supply

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HRM/Prof. DEBASISH DUTTA

Job Analysis
? Job Analysis is a process to identify and

determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. ? Job Analysis is a process where judgments are made about data collected on a job.
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The Job; Not the Person
? An important concept of Job Analysis is

that the analysis is conducted of the Job, not the person. ? While Job Analysis data may be collected from incumbents through interviews or questionnaires, the product of the analysis is a description or specifications of the job, not a description of the person.
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Job Analysis

? The process of job analysis

results in two sets of data: ?Job description ?Job specification

It indicates what all a job involves – tasks and responsibilities, job title, duties, It is the capability of the jobholder. It machines, tools and equipment, states the education, training, working conditions and hazards. experience, judgment, skill, communication skills etc.

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HRM/Prof. DEBASISH DUTTA

JOB ANALYSIS
? JOB DESCRIPTION ? JOB SPECIFICATION • Education • Experience • Training • Initiative • Physical effort • Responsibilities

• Job Title
• Location • Job summary • Duties • Machine tools etc • Material etc • Supervision

• Communication skills
• Emotional characteristics • Sensory system

• Working condition
• Hazards
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Purpose of Job Analysis
? Human Resource ? ? ? ? Counseling ? Employee safety

?
? ?
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Planning Recruitment Selection Orientation Training Career Planning Compensation

? Performance
? ? ?

?
HRM/Prof. DEBASISH DUTTA

Appraisal Job Design and Redesign Job Evaluation Employee Discipline Employee Health

Job Analysis Matrix
What the Worker Does Duties Tasks Responsibilities Why the Worker Does it Products Services
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How the Worker Does it Methods Tools Techniques Worker’s Qual;ification Skills, Knowledge Abilities Physical Demands

What Aspects of a Job Are Analyzed?
on the following areas: ? Duties and Tasks ? Environment ? Tools and Equipment ? Relationships ? Requirements

? Job Analysis should collect information

• This may have a significant impact on the • the performance of The basic unit physical requirements to be tasks to perform a of a job is Some duties and able are performed using specific specific tasks job. duties. Information to be and equipment and collected about these environment may include unpleasant • The work items may include: tools. frequency, duration, effort,such as offensive odors and skill, complexity, conditions Equipment may include equipment, standards, etc. protective clothing. temperature extremes. • also be need risks • There mayThese itemsdefinite to be to the specified in a Job incumbent such as noxious fumes, radioactive substances,Analysis. hostile and aggressive people, and • Supervision givenskills, and abilities • The knowledge, dangerous explosives. and received. (KSA's) required to perform the job. • Relationships with may have higher • While an incumbent internal or external KSA's than those required for the job, a people. Job Analysis typically only states the minimum requirements to perform the job.

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HRM/Prof. DEBASISH DUTTA

Recruitment and Selection

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HRM/Prof. DEBASISH DUTTA

Recruitment
? It is 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 pool of applicants from which new employees are selected.

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HRM/Prof. DEBASISH DUTTA

Initiating the Recruitment Process
? Prior to initiating a recruitment procedure, the

following matters should be considered:
? Clarification of the scope and skill sets required to

successfully perform the duties of the position ? Review of the Job Fact Sheet or Position Description to ensure that the skills and abilities required coincide with the current expectations of the position. If they do not, then a position evaluation should be undertaken. ? Review of the compensation available to the position (i.e. salary and benefit plans, etc.) ? Analysis of the impact that the hiring will have on the budget
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Factors Governing Recruitment
External Factors
?Supply and Demand ?Unemployed Rate ?Labor Market ?Political ?Social ?Sons of Soil ?Image

Internal Factors

Recruitmen t

?Recruitment Policy ?HRP ?Size of the firm ?Cost ?Growth ?Expansion

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HRM/Prof. DEBASISH DUTTA

Recruitment
Building Pool of Candidates

Internal

External

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HRM/Prof. DEBASISH DUTTA

Recruitment
Internal

Sources of Recruitment
External

?Current Employee ? Reference From Present Employee ? Databank of Former Applicants ?Retired Employee ?Former Employee
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?Advertising ?Employment Agencies ?Temporary Help ?Executive Recruiters ?Referrals and Walk in ?College Recruiting ?Company?s Website ?Pay and Free Websites

Recruiting Yield Pyramid
? It is the historical arithmetic

relationships between? Recruitment leads and invitees ? Invitees and interviews ? Interviews and offers made ? Offers made and offers accepted

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HRM/Prof. DEBASISH DUTTA

Recruitment Yield Pyramid
50 100
150 200 1200
New Hires Offers Made 2:1 Candidates Interviewed 3:2

Candidates Invited 4:3
Leads generated 6:1

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HRM/Prof. DEBASISH DUTTA

Internal
versus

External Recruitment
Advantages & Disadvantages
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Internal Recruitment
Advantages
1. It is less costly

Disadvantages
1. It perpetuates the old concept of doing things

2. Candidates are already 2. It abets raiding (make a oriented toward organisation person provide something) 3. Organisation have better 3. Candidate’s current work knowledge about the internal may be affected candidates

4. Enhancement of employee morale and motivation
5. Good performance is rewarded
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4. Politics play greater role
5. Morale problem for those not promoted

External Recruitment
Advantages
1. Benefits of new skill, new talent and experiences to organisation 2. Compliance with reservation policy becomes easy 3. Scope of resentment, jealousies and heartburn are avoided

Disadvantages
1. Better morale and motivation associated with internal recruiting is denied to the organisation 2. It is costly

3. Chances of creeping in false positive or false negative error

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HRM/Prof. DEBASISH DUTTA

Selection
? Selection

is the process of differentiating between applicants in order to identify those with a greater likelihood of success in a job.

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HRM/Prof. DEBASISH DUTTA

Factors affecting selection
? External environment

? Supply and demand of specific

skill ? Unemployment rate ? Legal and political considerations ? Company?s Image

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HRM/Prof. DEBASISH DUTTA

Factors affecting selection
? Internal environment

? Company?s policy
? HRP

? Cost of hiring

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HRM/Prof. DEBASISH DUTTA

Selection Process
R E J C T E D

Preliminary Interview
Selection tests

Employment Interview
Reference & background

Selection Decision
Medical Examination Job Offer Employment Contract Evaluation

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HRM/Prof. DEBASISH DUTTA

Basic Testing Concepts
? Generally these tests are

administered to determine the applicant?s – ? Ability ? Aptitude ? Personality ? Interest
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Basic Testing Concepts
? Ability tests

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? Helps to determine how well one can perform his task ? Aptitude tests ? Helps to determine a persons potential to learn in a given area ? Personality tests ? To measure a prospective employee?s motivation to function in a particular working environment ? Interest tests ? To measure an individual?s activity preferences. (For career change or when there is multiple HRM/Prof. DEBASISH DUTTA career option available)

Selection Tests
Tests
Thomas Profiling MBTI
PAPI 16 PF ASUFA

Description
Identifying behavioural requirement for the job Understanding personality type
Behaviour in work place Measuring personality factors Locus of control

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HRM/Prof. DEBASISH DUTTA

Interviews
? Formal,

in depth conversation conducted to evaluate the applicant?s acceptability.

? Adapted to unskilled, skilled, managerial

and professional employees.
? Two-way exchange of information, the

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interviewers learn about the applicant, and the applicant learns about the HRM/Prof. DEBASISH DUTTA organization

Objectives of Interview
?

Helps obtain additional information from applicant Facilitates giving general information to applicant Help build image of the organization

?

?

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HRM/Prof. DEBASISH DUTTA

Shortcomings of Interviews
? Absence of reliability ? Lack of validity
? Biases

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HRM/Prof. DEBASISH DUTTA

Types of Interview
? One to one interview: ? It consists only two participants – candidate and interviewer. ? Sequential interview: ? Involves series of interviews, candidates move from room to room. ? Panel Interview: ? Two or more interviewer – these are very formal interview
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Placement
? Placement is a process of assigning a specific job

to each of the selected candidates. It involves assigning a specific rank and responsibility to an individual. It implies matching the requirements of a job with the qualifications of the candidate.

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HRM/Prof. DEBASISH DUTTA

Placement
? The significances of placement are as

follows: ? It improves employee morale. ? It helps in reducing employee turnover.

? It helps in reducing absenteeism.
? It helps in reducing accident rates. ? It avoids misfit between the candidate and

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the job. ? It helps the candidate to work as per the predetermined objectives of the HRM/Prof. DEBASISH DUTTA organization.

Induction
? Once an employee is selected and

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placed on an appropriate job, the process of familiarizing him with the job and the organization is known as induction. ? Induction is the process of receiving and welcoming an employee when he first joins the company and giving him basic information he needs to settle down quickly and happily and stars work. HRM/Prof. DEBASISH DUTTA

Induction - Objectives
? Induction is designed to achieve following

objectives: ? To help the new comer to overcome his shyness and

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overcome his shyness nervousness in meeting new people in a new environment. ? To give new comer necessary information such as location of a café, rest period etc. ? To build new employee confidence in the organization. ? It helps in reducing labour turnover and absenteeism. ? It reduces confusion and develops healthy relations in the organization. ? To ensure that the new comer do not form false impression and negative attitude towards the organization. HRM/Prof. DEBASISH DUTTA ? To develop among the new comer a sense of belonging

Induction - Advantages
? The advantages of formal induction are: ? Induction helps to build up a two-way channel of communication
?

?
? ? ? ?
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between management and workers. Proper induction facilitates informal relation and team work among employee. Effective induction helps to integrate the new employee into the organization and to develop a sense of belonging. Induction helps to develop good relation. A formal induction programme proves that the company is taking interest in getting him off to good start. Proper induction reduces employee grievances, absenteeism and labor turnover. Induction is helpful in supplying information concerning the organization, the job and employee welfare facilities.
HRM/Prof. DEBASISH DUTTA

Induction - Contents
? A formal induction programme should provide

following information: ? ? ? ? ? ? ? ? ? ? ? ?
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Brief history and operations of the company. The company?s organization structure. Policies and procedure of the company. Products and services of the company. Location of department and employee facilities. Safety measures. Grievances procedures. Benefits and services of employee. Standing orders and disciplinary procedures. Opportunities for training, promotions, transfer etc. Suggestion schemes. Rules and regulations.

HRM/Prof. DEBASISH DUTTA

Employee Retention
? Employee Retention involves taking measures to

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encourage employees to remain in the organization for the maximum period of time. ? Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. ? There is no dearth of opportunities for a talented person. ? There are many organizations which are looking for such employees. ? If a person is not satisfied by the job he?s doing, he may switch over to some other more suitable job. ? In today?s environment it becomes very important for organizations to HRM/Prof. DEBASISH DUTTA retain their employees.

Measures for Employee Retention
? Proper HRP avoids redundancies.

? Good HR policy related to promotion,

placement and training. ? Good compensation plan. ? Providing reasonable welfare measures. ? Machinery for redressal of grievances.

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HRM/Prof. DEBASISH DUTTA

Continued……./

Measures for Employee Retention
? Provision for retirement benefits.

? Providing proper channel of

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communications in order to improve morale of employee. ? Improved working conditions and work environment. ? Employer?s positive attitude towards the employees. ? Employees participation in HRM/Prof. DEBASISH DUTTA management.

Training and Development

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HRM/Prof. DEBASISH DUTTA

Training
? Training can be described as “the

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acquisition of skills, concepts or attitudes that result in improved performance within the job environment”. ? Training refers to the methods used to give new or present employees the skill they need to perform their jobs. ? Training and development refers to the imparting of specific skills, abilities and knowledge to an employee. ? Represents an ongoing investment in employees and realizes that employees are assets with value. HRM/Prof. DEBASISH DUTTA

Process of Training
? Identifying training needs

? Organizing training programme
? Conduct of training programme

? Presentation of operation and

knowledge ? Evaluation of training programme ? Follow up
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Distinctions between T&D
Learning Dimension Training Development

Meant for
Focus Scope Goal

Operators
Current jobs Individual employee Fixed, current skill deficit

Executives
Current and future jobs Work group Prepare for future work demands

Initiated by
Content Time frame

Management
Specific job related Immediate

Individual
General knowledge Long term

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HRM/Prof. DEBASISH DUTTA

Training and Education
Training Application Education Theoretical orientation

Job experience
Specific tasks

Classroom learning
General concepts

Narrow perspective

Broad perspective

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HRM/Prof. DEBASISH DUTTA

Objectives of Training
? To impart the new entrants the basic knowledge and skills

?

?

?

?

they need for intelligent performance of definite tasks. To assist employees to function more effectively in their present positions by exposing them to the latest concepts, information and techniques and developing the skills they will need in their particular fields. To broaden the minds of senior managers by providing them with opportunities for an inter-change of experiences within and outside with a view to correct the narrowness of the outlook that may arise from over specialisation. To build up a second line of competent officers and prepare them to occupy more responsible positions. To impart customer education for the purpose of meeting the training needs of corporations which mainly deal with the customer at large.

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HRM/Prof. DEBASISH DUTTA

Importance of Training and Development
? Rapid technological changes cause skill

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obsolescence. ? Redesign of work brings about the need for new skills. ? Mergers and acquisitions have increased the need for integrating employees into different corporate cultures. ? Employees are moving between employers more often, necessitating the training of more new hires. ? Globalization of business requires new HRM/Prof. DEBASISH DUTTA knowledge and skills.

Need for Training
? A tool utilized to identify what educational

courses or activities should be provided to employees to improve their work productivity. Focus should be placed on needs as opposed to desires. ? A training need exists when there is a gap between what is required of a person to perform their work competently and what they actual know.

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HRM/Prof. DEBASISH DUTTA

Training need Assessment
A “training needs assessment”, or “training needs analysis”, is the method of determining if a training need exists and if it does, what training is required to fill the gap.
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REQUIRED PERFORMANCE

Need

ACTUAL PERFORMANCE

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Need for Training Need Assessment ? To determine whether training is needed ? To determine causes of poor performance ? To determine content and scope of training ? To determine desired training outcomes ? To provide a basis of measurement ? To gain management support
HRM/Prof. DEBASISH DUTTA

Methods of Training

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HRM/Prof. DEBASISH DUTTA

On the Job Training
? This type of training is usually adopted

where jobs are too varied to permit the establishment of group instruction. It is also used where machinery to be provide to trainees is too costly. ? Generally the training is imparted to the new employee by the older and experienced employee. ? This type of training is reasonable alternative for a company where there are almost as many jobs as there are employees.
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On the Job Training
? On-the-job training is applicable to

all level of job operatives, supervisor and executive trainees.
? It

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HRM/Prof. DEBASISH DUTTA

is primarily concerned with developing an employee skills and habits consistent with the existing practices of an organisation and orienting him to his immediate problems.

Advantages of On the Job Training
The trainee learns on the actual equipment in use and in true environment of the job. He gets a feel of actual production conditions and requirements. ? Since the training is given by immediate supervisor it is highly economical as additional resources are not required. ? Learning of rules, regulations and procedures is done by observation of the day to day applications thereby it is easy for the management to size up them in the organisation. ? Since practical training is provided on the shop floor, the periodicity of training is short. HRM/Prof. DEBASISH DUTTA
?

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Disadvantages of On the Job Training
This type of training is often carried out in a haphazard manner and not properly supervised. ? At times inexperienced trainer are given this job who are unable to impart skills to the trainee. ? Lack of motivation on the part of trainer to impart skills as well lack of motivation on the part of the trainee to receive training. ? Learners are often distracted to the noisy shop floor. ? As the DUTTA employee is unable to develop the HRM/Prof. DEBASISH skills fully there could be low productivity.
?

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Apprentice Training
? Apprenticeship training is the oldest and

99

most commonly used methods. It is a training in crafts, trades and in technical areas. For example: they could be draughtsman, machinist, printer, mechanic, jeweler, electrician etc. ? Major part of training time is spent on the production work. Each apprentice is given a programme of assignments according to a predetermined schedule, which provides for efficient training in HRM/Prof. DEBASISH DUTTA trade skills.

Advantages of Apprentice Training
? A skilled work force is maintained. ? Immediate returns can be expected from ? ? ? ? ? ? ?
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training. A good workmanship can be anticipated hence enhancement in quality. Hiring cost is low because of reduced turnover and lower production cost. Increased loyalty of employee and opportunity for growth are frequent. Higher production can be expected. Satisfied customer. Opportunity for youth. National interest.

HRM/Prof. DEBASISH DUTTA

Apprentice Training in India
?

?

Considerable fillip has been given to the apprenticeship training in India by the Apprenticeship (Amendment) Act 1973 and also the recent public policy. The provision of the act emphasizes mainly on the following points:
? ? ? ?

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Eligibility criterion for the training. Stipend to paid to various trainees. Period of training is also prescribed. Penalty in case of default on the part of establishment or on the part of trainee. ? A final trade test to establish the standard of trainee. ? Award for best apprentice or best HRM/Prof. DEBASISH DUTTA establishment.

Vestibule Training
? It refers to job skill training which is shorter

than the apprenticeship training. It is designed to equip the learner to only one phase of training, to operate one machine or to perform a single operation. The training is imparted at the miniature situation of the real plant so that trainee can practice those skill which he will later use on the job. Sometime practical training is imparted on the shop floor when no shift is working.
? This training is carried out in a well controlled
102 HRM/Prof. DEBASISH DUTTA

situation unlike the on-job-training

Advantages of Vestibule Training
Since the training programme is given in a separate room, distractions are minimized. ? Effective use of trained trainer is generally done ? The correct method can be taught without interrupting production. ? It permits trainee to practice without fear of supervisor as well co-worker's HRM/Prof. DEBASISH DUTTA observation & their possible ridicule.
?

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Disadvantages of Vestibule Training
? ?

?

Splitting of responsibility may lead to organisational problem. Additional investment in equipment may cause extra financial burden. The training situation is artificial.

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HRM/Prof. DEBASISH DUTTA

Simulation
? Simulation method is a technique which

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duplicates the actual conditions encountered on a job. This method is essential in case in which actual on the job practice might result in a serious injury or a costly error. ? The technique is very expensive one. Trainees interest and motivation are high in this kind of training because the action of trainee closely duplicate the HRM/Prof. DEBASISH DUTTA „real job? conditions.

Classroom Method - Lecture
? Classroom instructions, which is simplest way ? ?

?

?

of imparting knowledge to trainees. Concepts, principles, attitudes, theories and problem solving abilities are taught. Method is useful for large group for training in short time which in turn reduces the cost per trainee. Lectures can be enlivened with discussions, interactions, film shows, case studies, role playing and demonstrations. Audio visual aids add to the value. It is simple and efficient and more material can be presented.

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HRM/Prof. DEBASISH DUTTA

Advantages of Lecture
?

The most important uses of lecture in training:
? Reducing anxiety about upcoming

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training programme by explaining its purpose. ? Introduction and presentation of the overview of a subject. ? Presenting basic material as background for subsequent activities. ? Illustrating the application of rules and principles. HRM/Prof. DEBASISH DUTTA

Limitations of Lecture
?

The limitations are
? The learners are passive not active.
? The method requires a long

preparation time. ? The listeners attention span is short lived and drifts. ? It emphasises of memorisation of facts and figures with no stress or application of knowledge.
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Essential Prerequisites of a Lecture
A group interest should be motivated and adapted to the needs ? A lecture should be well planned as to purpose. ? It should be presented by an enthusiastic speaker who has his listeners needs and interest in mind at all times. ? A time span of lecture can be decided. But should not be less than 30 min or more than an hour and half at a stretch. ? Active participation of the learners must be enlisted by posing questions to which listeners should answer. ? Monotony need to avoided. ? Participation of the group can be ensured by HRM/Prof. DEBASISH DUTTA interactive session.
?

109

Class Room Method – Conference and Seminar
? In this method the participating individual

confers to discuss points of common interest to each other. ? A conference is basic to most participative group centered method of development. ? Conference is a formal meeting conducted with a organised plan in which the leader seeks to develop knowledge and understanding by obtaining a considerable amount of oral participation from the trainees. ? It stresses upon small group discussions, on organised subject matter and on active participation of members involved.
110 HRM/Prof. DEBASISH DUTTA

Training Tools and Aids
? Audio visual aids

? Power point presentations
? Internet/web based training

? E-Learning
? Games ? Puzzles

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HRM/Prof. DEBASISH DUTTA

Evaluation of Training
? Objectives of Evaluation of Training: ? To determining if they are accomplishing specific training objectives ? To evaluate whether the non performance on the part of the trainee is because of other HR reasons ? To analyze the cost effectiveness HRM/Prof.To evaluate any other tangible ? DEBASISH DUTTA

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Levels of Training Evaluation
? Reactions

? Learning
? Job behavior

? Organization
? Ultimate value

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HRM/Prof. DEBASISH DUTTA

Career Planning and Succession Planning

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Career Planning
? Career can be defined as a sequence of separate but related

work activities that provides continuity, order and meaning to a person’s life. ? It is not only a series of work related experiences, but also a series of responsibility, status, power, and rewards. ? Career planning means helping the employees to plan their career in terms of their capacities with regard to organizational needs. It includes establishing an organizational system of career movement and growth opportunities from the point of entry of an individual in employment to the point of his retirement.
115 HRM/Prof. DEBASISH DUTTA

Career Planning
? It is also referred to as a process of synthesizing

and harmonizing the needs of the organization with the innate aspirations of the employees, so that while the later realize self-fulfillment, the organizational effectiveness is improved.

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HRM/Prof. DEBASISH DUTTA

Career Planning
? Advantages of career planning: 1. It increases the utilization of managerial reserves within the organization. 2. It ensures satisfactory performance of employees by meeting their needs and aspirations for growth. 3. It reduces the employee turnover for lack of promotional avenues. 4. It improves and maintains motivation and morale of employees.
117 HRM/Prof. DEBASISH DUTTA

Career Planning
? Limitations of career planning:

? Small organizations cannot have career

planning. ? Lack of organizational climate. ? It is difficult to identify a suitable person
?

Despite its limitations, it is an integral part of manpower planning and corporate planning.

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HRM/Prof. DEBASISH DUTTA

Career Development Cycle

?There are four stages of this

cycle

?Exploratory Stage

?Establishment Stage

?Maintenance Stage conduct training organisation many face their stage where programme for their retiring ?Decline Stage mid-career crisis.
employees.
119 HRM/Prof. DEBASISH DUTTA

?This stage starts when a new employee joins an organization. He gets a real shock. He finds a big gap between what an ideal organization should career, ?Once an individual has chosen abe and what it is. He finds feedback on the that neither he this stage, employees his ?In requiresin regularuniversity nor try education the ?Impending theA retirement scares performance. good career to retain theshould provide have name they this induction the development programme is ofalmost everybody. in to prepare him In But it organization is able their career.fully established feedback. The first performance inevitable. Some planningthis for for the job at hand. promotion and the appraisal, the first the fast changing world, given ?However sooner thecan employee is retirement continuous ensure successfully complete assignment are will definite joboccasions for efforts require a very important assignment young and all a Many smooth responsibility hetransition. This the develops rapidly at self development. employee

Succession Planning
? Succession planning ensures that

there are highly qualified members in all positions, not just today, but tomorrow, next year, and five years from now. ? Succession planning focuses on getting the right people in the right roles at all levels of the organization.
120 HRM/Prof. DEBASISH DUTTA

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HRM/Prof. DEBASISH DUTTA

Sample Replacement Chart
R. Sharma
Vice President marketing

Harpreet Singh
GM Sales Ready now

Jay Praksh
Promotion Manager 15 months

R Stanley
GM Market Research 12 months

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HRM/Prof. DEBASISH DUTTA

Succession Planning Outcomes
? Better retention

? Valuable training goals
? Increased preparation for

leadership ? Greater member satisfaction ? Enhanced commitment to work
125 HRM/Prof. DEBASISH DUTTA

Performance Management System

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HRM/Prof. DEBASISH DUTTA

Performance Management
? Performance management consists of a set of

management and analytic processes, supported by technology, that enable businesses to define strategic goals and then measure and manage performance against those goals. ? Performance management processes include financial planning, operational planning, business modeling, consolidation and reporting, analysis, and monitoring of key performance indicators linked to strategy.
127 HRM/Prof. DEBASISH DUTTA

Performance Management Definition
? Performance management is a strategic

and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors. - Armstrong and Baron
128 HRM/Prof. DEBASISH DUTTA

Performance Appraisal
? Performance appraisal is also known as

employee appraisal, is a method by which the performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). ? Performance appraisal is a part of career development. ? It is regular review of employee performance within organizations.
129 HRM/Prof. DEBASISH DUTTA

? Performance appraisal is a systematic

way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. ? Performance appraisal, therefore, is a system of measuring, evaluating, and influencing an employee?s job related attributes behaviors and outcomes.
130 HRM/Prof. DEBASISH DUTTA

Objectives of Performance Appraisal
? Give feedback on performance to

131

employees. ? Identify employee training needs. ? Document criteria used to allocate organizational rewards. ? Form a basis for HR decisions: salary increases, promotions, disciplinary actions, etc. ? Facilitate communication between HRM/Prof. DEBASISH DUTTA employee and administrator.

Performance Appraisal Model
Job Description and Essential Functions Strategic Plan and Annual Goals

Standard of Performance Observation and Feedback Performance Appraisal Performance Development
132 HRM/Prof. DEBASISH DUTTA

Methods of Performance Appraisal
? Ranking Method ? Rating Scale Method ? Check List Method ? Forced Choice Method ? Critical Incident Method

? Confidential Report
? Assessment Center ? Management by objectives
133 HRM/Prof. DEBASISH DUTTA

Ranking Method
? Ranking employees from best to worst on a

particular trait, choosing highest, then lowest, until all are ranked

Alternation ranking Method
1. 2. 3. 4. 5. 6. 7. ……………………….. ……………………….. ……………………….. ……………………….. ……………………….. ……………………….. ………………………..

Highest

Lowest

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HRM/Prof. DEBASISH DUTTA

Rating Scale Method
? It provides a scale for measuring absolute

differences between individuals. ? The evaluator can star mark the category which he feels best about employee.
Excellen Above Just t acceptan acceptable ce level level 1. Job knowledge Below acceptable level Poor

*

2. Cooperation
3. Dependability 4. Decision making
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*
* *

HRM/Prof. DEBASISH DUTTA

Check List Method
? The method has a list of statements related to

an employee. ? This should be done in consultation with line managers. Yes No Doubtfu
l 1. He is very punctual 2. He uses safety gadgets 3. Willing to accept additional responsibility 4. Able to maintain machine independently 5. Methodical problem solving approach 6. Willing to travel if necessary
136 HRM/Prof. DEBASISH DUTTA

Note: Mark in appropriate column

Forced Choice Method
? Forced Choice Method is a performance

intervention, which can be defined as an evaluation method of forced distribution, where managers are required to distribute ratings for those being evaluated, into a pre-specified performance distribution ranking.

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HRM/Prof. DEBASISH DUTTA

Forced Choice Method
? The method operates under an

138

assumption that the employee performance level conforms to a normal statistical distribution. ? Generally, it is assumed that employee performance levels conform to a bell shaped curve. ? For example, the following distribution might be assumed to exist – excellent 10 DEBASISH DUTTA HRM/Prof. %, good 20 %, average 40 %, below

Critical Incident Method
? Under this method, the manager prepares

139

lists of statements of very effective and ineffective behaviour of an employee. ? These critical incidents or events represent the outstanding or poor behaviour of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behaviour. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers' HRM/Prof. DEBASISH DUTTA performance.

Critical Incident Method
? An example of a good critical incident of a sales

140

assistant is the following: ? July 20 – The sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers' problem. ? On the other hand the bad critical incident may appear as under: ? July 27 – The sales assistant stayed 45 minutes over on his break during the busiest part of the day. He failed to answer the store manager's call thrice. He is lazy, negligent, stubborn and uninterested in HRM/Prof. DEBASISH DUTTA work.

Confidential Report
? It is mostly used in government organizations. ? It is a descriptive report prepared, generally at the end ? ? ? ?

?

of every year, by the employee's immediate superior. The report highlights the strengths and weaknesses of the subordinate. The impressions of the superior about the subordinate are merely recorded there. It does not offer any feedback to the appraisee. Since the report is generally not made public and hence no feedback is available, the subjective analysis of the superior is likely to be hotly contested. In recent years, due to pressure from courts and trade unions, the details of a negative confidential report are given to the appraisee.

141

HRM/Prof. DEBASISH DUTTA

Assessment Center
? This technique is used to predict future

142

performance of employees were they to be promoted. ? The individual whose potential is to be assessed has to work on individual as well as group assignments similar to those they would be required to handle were they promoted. ? The judgment of observers is pooled, and paired comparison or alteration ranking is sometimes used to arrive at a final assessment. ? The final assessment helps in making an orderof-merit ranking for each employee. ? It also involves subjective judgment by observers. HRM/Prof. DEBASISH DUTTA

Assessment Center
Role Play Method ? Candidates will have to assume the future roles and play the same. ? Assessors will have special skills and keen observation. ? Video films are also made for subsequent observation.

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HRM/Prof. DEBASISH DUTTA

Assessment Center
Training Instrument Method
? Various instruments are developed.
? A questionnaire is designed. ? Questions are to be answered in a given

period of time. ? The specialist analyses the answers and interpret them.

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HRM/Prof. DEBASISH DUTTA

Assessment Center
Personal Interview/Discussion Method ? This is the final stage. ? Individual is interviewed by the assessor. ? Assessor also discusses the performance with the individual. ? Final recommendations are worked out.
145 HRM/Prof. DEBASISH DUTTA

Assessment Center
? The whole exercise is laboratory

146

experimentation. ? It is very popular method and gives choice for the best selection. ? It is one of the highly fair method. ? Subjective factors get eliminated automatically. ? Candidates feel it is time consuming. ? It is highly transparent and rational HRM/Prof. DEBASISH DUTTA assessment.

Management By Objectives
• Described by Peter Drucker in 1954

• It seeks to minimize external controls

147

and maximize internal motivation through joint goal setting between the manager and the subordinates and increasing the subordinates own control of his work • It allows the subordinate to participate actively in the decisions that affect him directly HRM/Prof. DEBASISH DUTTA

Management By Objectives Definition
? “A system approach to managing an

148

organization, where those accountable for directing the organization first determine where they want to take the organization; a process requiring and encouraging all key management personnel to contribute their maximum to achieving the overall objectives; an effort to blend and balance all the goals of all keyDUTTA personnel; and an evaluation HRM/Prof. DEBASISH mechanism.”

MBO Processes
• Set the organizational goals

• Set departmental goals
• Discuss departmental goals

• Define expected results
• Performance reviews

• Provide feedback
149 HRM/Prof. DEBASISH DUTTA

Advantages of MBO
? Encourages employee participation. ? Increases job satisfaction. ? Employee get a sense of achievement and

150

involvement in the work. ? Appraisal is specific rather than subjective judgments. ? Training need can be assessed. ? Employees are made to focus on their roles and objectives. ? Targets are clarified and crucial element in each job is identified. ? Coordination between various levels of management can be achieved. HRM/Prof. DEBASISH DUTTA

Problems of MBO
• Setting unclear or immeasurable

goals or objectives • It is time consuming • Setting objectives with the subordinates causes a problem and may lead to conflict
151 HRM/Prof. DEBASISH DUTTA

360 Degrees Performance Appraisal
? It is a systematic collection of performance data on an

individual or group. ? It is derived from number of stakeholders ? The stakeholders –
? ? ? ? ?

the immediate superiors, the team members, the customers, and the peers, including the individual himself.

In fact, anyone who has useful information on ‘how an employee does his job’ may be one of the appraisers.
152 HRM/Prof. DEBASISH DUTTA

360 Degrees Performance Appraisal
SUPERIOR

PEERS

INDIVIDUAL

CUSTOMERS

SUBORDINATE

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HRM/Prof. DEBASISH DUTTA

360 Degrees Performance Appraisal
? Definition ? The systematic collection and feedback of performance data on individual or group derived from a number of stakeholders on their performance Ward (1997)
154 HRM/Prof. DEBASISH DUTTA

Benefits of 360 Degrees Appraisal
1. It provides a broader perspective about an 2. 3. 4. 5. 6. 7.
155

employees performance It facilitates greater self development of the employees It enables an employee to compare his or her perception about self with perceptions of others It provides a formalized communication link between an employee and his or her customers It makes employee to feel much more accountable to his or her internal or external customers It is helpful in assessing soft skill of an employee It identifies and measures interpersonal skills, customer satisfaction, and team building skills

HRM/Prof. DEBASISH DUTTA

Rating Errors in?We tend to favor those who Performance ?This error is mostly are similar ?Central tendency error ?Severity to us. occurs Appraisal ?This errorerrormore likely by ?Supervisors is typically intentional and ? This errorare caused to occurs when
? ? ? ? ?

?
? ?

occurs whenassign low when raters raters uses caused by occurs weight Similar to megive highertooccurs when error arater place occursrating desire ?This error employees. ?This errorperformance ?This errorrater assigning middlemostgive high to point more when rating ratings to thoseon thebased perceived performance rating Leniency erroron negativeoccurs rating error evaluation is toscores using appraiser. ?Thisis and avoidfrom is performance information evaluation performanceintentional when scales similar to them in ?Thisoverall impression of be more also on a positive indicated Severity error influencedmainlyneutral ?Research alsoor by than rater influenced reviewbyby when error caused the extremes.. preferences, terms of attitude, has an of previous instead of typeerror mainly the error is collected Central tendencyindividual this information. information collected information intentional personality, demographic ?This is also also caused oversimplified to shock appraiser unjustly desire of periods ofgenerally of evaluating each phase of Halo effect ?duringthe initialphase of because The including variables the last race and duringrater personality type of error caused by employees. current on individuals dimension based influence period. performancethe negative Primacy errorthe review period. gender remember the review the appraiser. to play it appraiser desire independently. ignore the ratings. and Recency errorgroup membership. incidents safe. Negativity error positive one

? Spillover error
? Stereotype error
156 HRM/Prof. DEBASISH DUTTA

Competency Management
? Any underlying characteristic required

performing a given task, activity, or role successfully can be considered as competency. ? Competency may take the following forms: ? Knowledge ? Attitude ? Skill
157 HRM/Prof. DEBASISH DUTTA

Competency Management
? Other characteristics of an individual

includes: ? Motives ? Values ? Traits ? Self Concept etc.

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HRM/Prof. DEBASISH DUTTA

Competency Management
? Competencies may be grouped in to

various areas:
? Technical or Functional (Knowledge,

159

Attitudes, skills etc. associated with the technology or functional expertise required to perform the role) ? Managerial (knowledge, attitudes, skills etc. required to plan, organise, mobilise and utilise various resources) ? Human (knowledge, attitudes and skills required to motivate, utilise and develop HRM/Prof. DEBASISH DUTTA human resources)

Competency Management
? Best Practices for Competency Based

Performance Management System:
? Integrate competencies into training and

160

development ? Assess and build competencies ? Determine the ROI of competency initiative ? Implement competency based strategies ? Assess and develop leadership competencies ? Strengthen functional and technical competencies ? Link individual or team based competencies HRM/Prof. DEBASISH DUTTA with core competencies and strategic intent

Compensation Management

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HRM/Prof. DEBASISH DUTTA

Compensation
? Compensation refers to all forms of financial

returns and tangible services and benefits employees receive as part of an employment relationship. ? In India compensation was sometimes referred to Workmen's compensation act 1923. And wage and salary administration was stated to be the term used by managers for remunerating the employees.
? However in modern India with the acceptance

162

of current management systems the compensation is now referred to as what employees receive in exchange for their HRM/Prof. DEBASISH DUTTA contribution to the organization.

?The demand for and the ?Inflation reduces supply Factors Affecting Compensation ? Job vary greatly in their difficulty, ?Projects determine capacity ?Highly unionized sectors

?This certain skills trend of in of the current complexity and challenge. Some purchasing have determine powerlevels paying. wage rates. higher generally private 1. Job Needs ofprevailingHigh profit wages most sector needs high levels of skills and ? While fixing ?There companies to where employees. many canpay To enables are others state wages because well knowledge while be organizations prevailing wage rates in 2. Ability to pay handled wage.wages can linked higher by almost anyone. exert organised workforces’ regulationsthis, unions in respect to overcome unions are taken ?Oversupplyfirmsof are certain competing pressure on management to 3. Cost of living their productivity levels.lead minimumof benefitsalso into account. ? Simple, routine tasks that can be and worker prefer wages, category ?Remuneration employees and will to link and can obtain people with done steep fall in in wage many to rates earning power 4. Prevailing ?If one’s to for workers.rateis wage byskills receivecost of of bonus, job the dearness wages upon performance depend concession minimal relatively ? It may be difficult to attract ofemployees. the other other good, one get good lowthe organization. wages. pay. On hand, allowances, living index. employee by 5. Unions and retain challenging tasks complex, ?On the and other hand if the those that sickbe unit is those who done etc.,software few people ?A can companies forstronger pay 6. Productivityallowances, bycompanies ?Higher demandcannot that ?Multinational management do not skill pay comparable with high the levels generally competitive in determine index higher ?Whenindustrieswagesrises and IT pay professionals, unionwage R&D than highthe the in receive 7. State regulations pay.to other profit wages. comparisonin the industry. salary. to risingdrug industry negotiation the wage rates professionals in structure due prices, making units. 8. Demand and etc.,beare of labor higher supply ensuring may less.

wages follow suit.
wages.

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HRM/Prof. DEBASISH DUTTA

Compensation Defined
? Compensation refers to all forms of

financial returns and tangible services and benefits employees receive as part of an employment relationship.

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HRM/Prof. DEBASISH DUTTA

Wage and Salary
? Compensation

165

paid to a labour for the services offered is called wages and salary. ? Satisfactory and fair amount of salary eliminates most of labour disputes. ? Wages represents daily or hourly rates of pay, and salary refers to monthly rate of pay, irrespective of number of hours put in by the employee. ? Wages are generally for blue collar employee and salaries are for white collar employee. ? Wages and salaries are subject to increment annually. HRM/Prof. DEBASISH DUTTA

Incentives
? It refers to „payment by results?, incentives

are paid in addition to the wages and salaries. ? It is dependent upon:
? ? ? ?

Productivity Sales Profit Efforts in cost reduction

? Incentive programmes may be:
a) Individual incentive programmes – applicable to
166

specific employee performance b) Group incentive programmes – applicable to group HRM/Prof. DEBASISH DUTTA as a whole.

Fringe Benefits
? Fringe benefits includes employee benefits

such as: ? Provident fund ? Gratuity ? Medical care ? Hospitalization expenses ? Accident relief ? Health and group insurance ? Canteen ? Uniform ? Recreation etc.
167 HRM/Prof. DEBASISH DUTTA

Perquisites
? These are allowed to executives and

include company car, club membership, paid holidays, furnished house, stock option schemes and the like. ? Perquisites are offered to retain competent executives

168

HRM/Prof. DEBASISH DUTTA

Non Monetary Benefits
? These includes challenging job

responsibilities, recognition of merit, growth prospects, competent supervision, comfortable working condition, job sharing and flexi time.

169

HRM/Prof. DEBASISH DUTTA

Job Evaluation
? It is the process of studying and

170

assessing the relative values of jobs and rating them as per systematic plan in order to determine a relative worth of each job. ? The demand for proper wage structure has led to the development of job evaluation.
HRM/Prof. DEBASISH DUTTA

Job Evaluation Definition
? The systematic qualitative appraisal of

each job or position in an establishment either through assignment of points for job characteristics or through comparison of job factors (as mental efforts, experience and responsibility required) for the purpose of determining relative position of the job in the job hierarchy and for fixing wage rates.
171 HRM/Prof. DEBASISH DUTTA

(According to Webster?s

Dictionary)

Objective of Job Evaluation
? To create consistency in wage

172

policy ? To clarify the jobs for grievance redressal ? To systematize wage control mechanism ? To select employees ? To provide factual data for promotion, transfer, etc.
HRM/Prof. DEBASISH DUTTA

Method of

?Ranking Method ?Grading Method

?Point Rating Method

?In this method an Jobimpressionisticanalytic job Evaluationview of ?This is a semi is taken in which job method ?It is non-analytic method specification is examined ?This is a analytical method and the job is valued as a fairly closely but a detailed which requires not whole exhaustively. of job examination ?In this method, the a ?The method provides specification. committee judges each job framework into which jobs ?Factors like skills, effort, as abe fitted. places the can whole and responsibility best to set of job from etc. are the ?In this method every job in considered for each job. worst the company is allotted a ?A job hierarchy is than grade. created

173

HRM/Prof. DEBASISH DUTTA

Productivity Management

174

HRM/Prof. DEBASISH DUTTA

Productivity
? Productivity is an overall measure of the

175

ability to produce goods or service. ? More specifically, productivity is the measure of how specified resources are managed to accomplish timely objectives as stated in terms of quantity and quality. ? Productivity may also be defined as an index that measures output (goods and services) relative to the input (labour, materials,DUTTA energy, etc., used to produce the HRM/Prof. DEBASISH output).

Total Quality Management
? Total Quality Management (TQM) is

176

a management approach to long– term success through customer satisfaction. ? In a TQM effort, all members of an organization participate in improving processes, products, services and the culture in which they work.
HRM/Prof. DEBASISH DUTTA

Total Quality Management
? Total quality management or TQM is an

177

integrative philosophy of management for continuously improving the quality of products and processes. ? TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization. ? In other words, TQM capitalizes on the involvement of management, workforce, HRM/Prof. DEBASISH DUTTA suppliers, and even customers, in order to

Total Quality Management
? TQM practices
? Cross-functional product design ? Process management ? Supplier quality management ? Customer involvement ? Information and feedback ? Committed leadership ? Strategic planning ? Cross-functional training ? Employee involvement.
178 HRM/Prof. DEBASISH DUTTA

Total Quality Management
? Characteristics of TQM: ? Continuous process ? Quality management ? Customer focus ? Defect free approach ? People based management ? Reward ? Management by fact ? Techniques of quality ? Top management responsibility ? System approach ? Philosophy
179 HRM/Prof. DEBASISH DUTTA

Total Quality Management
? Need and importance of TQM ? TQM helps build Customer satisfaction ? TQM helps to face competition ? TQM helps in team building ? TQM creates highly motivated

180

employees ? TQM reduces rejection ? TQM helps to provide better facilities to employees HRM/Prof. DEBASISH DUTTA in growth of organization ? TQM helps

Kaizen
? Kaizen is system of continuous

181

improvement in quality, technology, processes, company culture, productivity, safety and leadership. ? Kaizen was created in Japan following World War II. The word Kaizen means "continuous improvement". It comes from the Japanese words "kai” which means "change" or "to correct" and HRM/Prof. DEBASISH DUTTA means "good". "zen” which

Kaizen
? Kaizen is a system that involves every employee - from

182

upper management to the lowest employee. ? Everyone is encouraged to come up with small improvement suggestions on a regular basis. ? This is not a once a month or once a year activity. It is continuous. ? Kaizen involves setting standards and then continually improving those standards. ? To support the higher standards Kaizen also involves providing the training, materials and supervision that is needed for employees to achieve the higher standards and maintain their ability to meet those standards on HRM/Prof. DEBASISH DUTTA an on-going basis.

Kaizen
? Five Foundation of Kaizen

?Teamwork
?Personal discipline

?Improved morale
?Quality circle

?Suggestions for

improvement
183 HRM/Prof. DEBASISH DUTTA

Kaizen

Elimination of waste

5 Framework S
Improved Morale

Standardizati on

Self-discipline

Quality Circle

Teamwork

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Improvement Suggestions

Kaizen
? 5s Frame work for Kaizen (for good

housekeeping):
?Seiri – tidiness

?Seiton – orderliness
?Seiso – cleanliness ?Seiketsu – standardized clean

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up ?Shitsuke - discipline

Quality Circle
? Quality Circles are groups of employees who

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voluntarily meet together on a regular basis to identify, define, analyze and solve work related problems. ? Usually the members of a particular team (quality circle) should be from the same work area or who do similar work so that the problems they select will be familiar to all of them. In addition, interdepartmental or cross functional quality circles may also be formed. ? An ideal size of quality circle is seven to eight members. But the number of members in a HRM/Prof. DEBASISH DUTTA quality circle can vary.

Quality Circle
? Voluntary groups of employees who

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work on similar tasks or share an area of responsibility ? They agree to meet on a regular basis to discuss & solve problems related to work. ? They operate on the principle that employee participation in decisionmaking and problem-solving improves the quality of work
HRM/Prof. DEBASISH DUTTA

Quality Circle
? Characteristics of Quality Circles

? It is group effort
? The participating members are

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volunteers ? The effort of members are directed to improve quality ? They meet frequently at company cost ? Their concern is to find ways and

Quality Circle
? Objectives of Quality Circles

?To develop, enhance and

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utilize human resources effectively ?To improve quality of products ?To improve supervisory skills ?To utilize innovative and creative skills

Industrial Relations

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Industrial Relations
? Industrial Relations is concerned with the

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relationship between management and workers and the role of regulatory mechanism in resolving any industrial dispute. ? Industrial relations is concerned with systems, rules and procedures used by unions and employers to determine the reward for effort and other conditions of employment, to protect the interest of the employed and the employers, and to HRM/Prof. DEBASISH DUTTA regulate the ways in which employers

Industrial Relations
? Industrial relations covers the

following areas:
1. Collective bargaining. 2. Role of management, unions, and

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government. 3. Machinery for resolution of industrial disputes. 4. Individual grievances, and disciplinary policy and practice. HRM/Prof. DEBASISH DUTTA 5. Labour legislations.

Industrial Relations
? Objective of industrial relations:

? To safeguard the interest of labor

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HRM/Prof. DEBASISH DUTTA

and management ? To avoid industrial conflict ? To raise productivity ? To establish and nurture growth of industrial democracy ? To eliminate strike lockouts gherao etc.

Collective Bargaining
? The phrase collective bargaining is

made up of two words:
? Collective, which implies group action

through its representatives ? Bargaining which suggests haggling or negotiating
? Therefore the phrase implies „collective

negotiation of a contract between the managements representatives on one side and those of the workers on the other?.
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Collective Bargaining
? „Collective bargaining is mode of fixing

the terms of employment by means of bargaining between an organized body of employees and an employer or an association of employers usually acting through organized agents. The essence of collective bargaining is a bargain between interested parties and not a decree from outside parties?
- R. F. Hoxie
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Collective Bargaining
? „Collective bargaining takes place

when a number of work people enter into a negotiation as a bargaining unit with an employer or a group of employers with the object to reaching an agreement on the conditions of the employment of work people?.
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- Richardson

Collective Bargaining
? Collective Bargaining therefore is a

process of negotiation and other related pressure tactics (like threats, counter-threats) adopted by the employers and the organized workers represented by their union in order to determine the terms and conditions of employment
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Collective Bargaining
? Collective Bargaining enable both parties to: ? Increase their economic strength ? Establish uniform conditions of employment ? Secure fair and prompt redressal of grievance ? Avoid interruptions in work ? Ensure fair rates of wages and working conditions ? Achieve efficient operation ? Promote stability and prosperity of the industry ? Avoid strikes, go slow etc. ? Maintains stable peace in the industry ? Fills up psychological and emotional gap between employer and employee.
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Settlement of Disputes
? Conciliation
? Conciliation may be described as “the

practice by which the services of a neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement or agreed solution. It is a process of rational and orderly discussion of differences between the parties to a dispute under the guidance of a conciliator.”
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Settlement of Disputes
? Arbitration ? Arbitration is a means of securing an award on

a conflict issue by reference to a third party. ? It is a process in which a dispute is submitted to an impartial outsider who makes decision which is usually binding on both parties. ? Arbitration is more judicial in character than conciliation and mediation. ? The award of the arbitrator rests on equity and justice. ? There is no scope for compromise as it exists in mediation and conciliation. ? The arbitrator?s award is binding.
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Settlement of Disputes
? Adjudication ? Adjudication involves intervention in

the dispute by a third party appointed by the government for the purpose of deciding the nature of final settlement. ? The Industrial Disputes Act, 1947 provides for a three-tier adjudication:
? Labour Courts ? Industrial Tribunal ? National Tribunals
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Grievance
? Grievance implies dissatisfaction or

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distress or suffering of grief caused unnecessarily or illegally. ? In people management grievance is a complain or representation made in writing as regard to a company related matter arising from employment or service condition or from condition involving unfair treatment by the employers or from violation any HRM/Prof. DEBASISH DUTTA agreement or standing instructions.

Grievance
? Therefore grievance can be defined

as a real or an imaginary feeling of personal injustice, which an employee has, concerning is employment relations. ? Prompt redressal of grievance is necessary for creating good labor management relations.
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Grievance Handling Procedure
1) Whenever any employee is aggrieved, he

2)

3)
4)

5)

should approach his immediate superior and inform him about his grievance. If not satisfied with immediate superior he should make appeal to the departmental head. In case he is not satisfied with department head he may resort to Bipartite Grievance Committee. If the committee?s decision is not unanimous it places the case before management. If the employee is not satisfied with the management he may appeal and the case is referred to arbitration.

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Retirement / Separation

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HRM/Prof. DEBASISH DUTTA

Superannuation
? Employee on completion of certain age

may retire automatically as per terms of contract of employment. ? In this case employee receives his benefits of retirement, which also may include pension from the service. ? In general the retirement is considered to 58 or sometimes it is 60.
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Voluntary Retirement Scheme
? It is a generous, tax-free severance

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payment to persuade the employees to voluntarily retire. ? voluntary retirement is accompanied by technological modernization that warrants the replacement of labor with capital. ? A common method used to dispense off the excess manpower and thus improve the performance of the organisation HRM/Prof. DEBASISH DUTTA

Voluntary Retirement Scheme
? Mainstream economists perceive

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voluntary retirement as a measure to shed the workforce whose marginal productivity is zero. ? Employers refer to VRS as 'golden handshake„. ? Trade unions call it 'voluntary retrenchment scheme„ ? For the government, it is 'unstated exit HRM/Prof. DEBASISH DUTTA means that an exit policy policy' which

Eligibility for VRS
? Company registered under Companies act ? ? ? ?

?
?
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1956. Public Sector Company. Any Authority established under a Central or State Act. Local authorities. Co-operative society. Universities. Notified Institute of management, such as: IIMs, IITs,

HRM/Prof. DEBASISH DUTTA

Eligibility for VRS
The employee of the company should have completed 10 years of service or should have completed 40 years in age. It applies to all the employees of the company except the Directors of the company. The scheme of voluntary retirement has to result in overall reduction in the existing strength of the employees of the company.
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Eligibility for VRS
The vacancy caused by voluntary retirement is not to be filled and the retiring employee should not be employed in another company or concern belonging to the same management. The amount received by the employee on VRS should not exceed three months salary for each completed year of service or salary at the time of retirement multiplied by the balance months of service remaining before the date of retirement, whichever is less. Tax is levied in case the amount exceeds Rs. 5,00,000 of each employee. It is to be noted that the employee must have not received benefit through any other voluntary HRM/Prof. DEBASISH DUTTA retirement scheme.

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VRS
? Companies can declare different schemes of

voluntary retirement for different classes of their employees provided the scheme is in accordance with the guidelines prescribed in the Income Tax rules. ? An employee can continue to hold the shares even after he opts for VRS. ? 'Salary' includes basic salary and also includes dearness allowance if terms of employment so provides but it excludes all other allowances and perquisites. ? The last salary drawn forms the basis for computing the amount for VRS.
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VRS
The terminal payments available to an employee who seeks voluntary retirement would be:
The balance in his Provident Fund Account payable as per the CPF regulation. Cash equivalent of accumulated earned leave as per the rules of the enterprise. Gratuity as per Gratuity Act or the gratuity scheme applicable to the employee. One-month?s/three months? notice pay (as per the conditions of service applicable to him).

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Resignation
? Resignation occurs when the employee

gives a notice of termination of of contract of employment. ? The period of notice a are different in different organization. ? During the period of notice the employee remains as before under the control of the employer.
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Discharge
? Discharge is permanent separation of an

employee from the pay role due to violation of company rules or unsatisfactory performance.

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HRM/Prof. DEBASISH DUTTA

Causes of Discharge
? Frequent causes: Inefficiency,

dishonesty, carelessness, drunkenness and violation of prescribed rules and regulations. ? Infrequent causes: Accidents, destructive negligence, un-cleanliness, physical unfitness etc. ? Other causes: Dishonesty, laziness, carelessness, lack of cooperation etc.
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Dismissal
? Dismissal is termination of employment with

or without notice. ? Reasons for dismissal: ? Refusal to obey reasonable instruction. ? Serious neglect of duties. ? Absence from work without permission. ? Activities in private life which may adversely affect the business of the employer. ? Dishonesty ? Violence
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Suspension
? An employee is suspended during an

investigation whenever there is a serious charge against him during the tenure of suspension. ? The employee get a small amount as allowances if employee is found guilty he is discharged or dismissed. ? The duration of suspension must be a reasonable period.
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Lay Off
? According to industrial dispute act 1947,

the failure refusal or inability of any employer on account of the shortage of coal, power, raw material etc. ? It can also be due to accumulation of stock because of recession .

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