FACULTY OF MANAGEMENT STUDIES, DELHI

HUMAN RESOURCE MANAGEMENT- TERM ASSIGNMENT

FOLDER ANALYSIS

BY-
ARJIT BHATIA- 309
KOMAL BOLE- 320
PRIYANSHA VERMA- 332
AVNI KAPOOR- 371
PALAK JAIN- 378

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 INDEX

SR. Topic Page No.

NO.

1 Performance Appraisal 3

2 Layoffs 5

3 Compensation 7

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 PERFORMANCE APPRAISAL

ARTICLE- PERFORMANCE APPRAISAL IS DRIVING YOUR TALENT AWAY, WORKFORCE

MAGAZINE

Performance appraisal is the process of obtaining, analysing and recording information

about the relative worth of an employee. The focus of the performance appraisal
is measuring and improving the actual performance of an employee and also the future
potential of the employee. Its aim is to measure what an employee does.
In 1950, the Performance Rating Act was passed, mandating annual reviews of all federal
employees. Over the years, both private and public sector organizations created various
tools to evaluate an employee and link bonuses and salaries to these assessments.
Nowadays, the traditional performance appraisal used, with a rating scale, is not linked to
any competency model or any professional development plan. In many companies, it is
observed that this approach to performance appraisal does more harm than good in
retaining high-performing employees. In a study conducted in 2013 by Kansas State
University’s Associate Professor, Satoris Culbertson and his colleagues, it was found that
high-performing employees were annoyed and clearly not happy with the negative
feedback in the annual performance appraisal.

Encouraging people in organizations to focus on the company’s strategic plan and their role
in execution of various plans that the company incorporates, is crucial. Management teams
should try to shift their focus from undivided attention on the job description to engaging

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their workforce. The employees need to understand the “Big Picture” strategy and this can
be achieved by connecting employees to the mission and overarching purpose of the
company. They should mull over the questions like: What does it mean to me? Where do I
fit in the picture? What am I doing specifically to make this company successful? Managers
need to give feedback to each team member regularly. It needs to be meaningful, tied to
measurable behaviour that is linked to achieving great results and is aligned with the
organization’s strategy.

Individual performance objectives should be based on goals that support the overall
direction of the organization and that is what the employees need to leverage talent for the
good of the company and their career.

The 360-degree feedback system

The 360 degrees Performance Appraisal method was first used in the 1940s. Analogous to
the multiple points on a compass, the 360 method or multi-source feedback is an appraisal
or performance assessment tool that incorporates feedback from all who observe and are
affected by the performance of a candidate.

This is one of the most common feedback system and was used in my past organisation-
Cybage Software. The company hosted two appraisals in a period of one financial year,
where one of the appraisal resulted in monetary benefits (salary hike, promotions) while the
other was a milestone or a mid-term evaluation of the employee’s performance.
Both the appraisals followed a 360-degree feedback system where, every employee had to
submit 4 forms online- Self, Peers, Manager and Organisation evaluation forms.
• In the self-assessment, the employee had to evaluate himself in terms of his key
learnings, achievements, strengths, weaknesses and expectations from the
organisation for his overall development. The employee also had to rate himself in
terms of his expertise in the areas of- technical, communication, aptitude, attitude,
knowledge, IQ and team building.
• In the peer appraisal form, the employee had to rank the top 10 performers in his
team and rate them individually for their skillsets.
• The manager appraisal form was treated with high confidentiality, where the
employee had to evaluate his/her manager on the basis of how helpful are they,
how often do they hold a meeting with the team and individually to resolve any
concerns, how happy are they with the manager and also provides a platform for
reporting any grievances with the manager. This feedback is only visible to the
manager’s manager so that, they can take into account the reports of the people
working under him.
• The organisation form is to understand the whether the organisation’s initiatives are
helping in the development of the employee. The employee can evaluate the
trainings he has undergone, the various opportunities provided by the organisation
and also communicate the employee’s expectations from the organisation or report
any kind of grievances or concerns.

Based on these feedbacks, an appraisal meeting is held with the manager to discuss the
overall achievements of the employee throughout the 6-months period, concerns and
expectations of the employee. The manager then dictates KRAs (Key improvement areas) to

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every employee to be worked upon in the following year. A meeting evaluation form is
floated, to analyse the satisfaction of the employee with the meeting.
This feedback helps better evaluate the employee from all perspectives and gives a relative
ranking of all the team members, based on which the salary hike and promotions are
awarded. Other factors taken into consideration are the designation and experience of the
employee as well as the hierarchy structure of the organisation.

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 LAYOFFS

Movie: Up in the Air (2009); George Clooney, Vera Farmiga, Anna Kendrick

The movie ‘Up in the Air’ is based on a novel by the same name. The movie, however, is an
apt representation of the novel. In the story, the protagonist, Ryan Bingham (George
Clooney) is a corporate downsizer, i.e. he helps other companies downsize their workforce,
for them, so that the officials of that particular organization do not have to personally fire
old, veteran employees, or simply do not have to go through the hassle of laying off at all.
For this purpose, he keeps travelling to different workplaces across the US.

Natalie Keener, a young and ambitious new hire, promotes a program designed to cut costs
by conducting layoffs via videoconferencing. Ryan raises concerns that the program could
be seen as detached and apathetic, arguing that Natalie knows nothing about the reality of
the firing process or how to handle upset people. He then plays the role of a fired employee
to demonstrate her inexperience. Ryan's boss assigns him to bring Natalie on his next round
of terminations to show her the ropes. While they are on their work trip, Natalie and Ryan
test firing people remotely. Later they find out that a woman he and Natalie fired during
their travels had killed herself. That prompted Natalie to quit her job. The company also put
the remote-layoff program on hold.

The movie also displays scenes where the laid-off people vent out their emotions and it
becomes difficult for the other person to handle and contain them, further highlighting the
sensitivity of the issue. This went on to prove how sensitive laying off can be and what
disaster can ensue if it is not handled with proper care and if proper techniques aren’t used.

Certain points were clear from the movie that can also be applied to real life situations and
corporate life. One of them was that different people react differently to similar situations.
You can not expect them to simply rect the way you have planned. As was evident when
Natalie was trying to lay-off an employee and they refused to accept it because it did not
seem real.
Second, since it is such a sensitive topic, it is a good idea to convey such information in-
person.
Another key takeaway is that a common consensus is required among both the parties for it
to be a mutually acceptable process

Layoffs, although difficult and highly avoided by most organizations, are sometimes
necessary for organizations in times of crisis. Recently something similar was seen in the
indian IT industry where massive bulk layoffs were done to reduce costs of the company. As
the tensions are already high in the organization during such times, the management has
proceed with a lot of sensitivity and caution. A situation which took a turn for the worse
happened in Tech Mahindra. An audio recording went popular in the web in which a HR
executive can be heard telling an employee to resign by 10 am the next day, failing which he
would be terminated and not even be given any pending dues. While there was no mention
of Tech Mahindra in the recording, the HR executive’s profile on LinkedIn showed she was

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working with the company. However, soon after the story broke out, the LinkedIn profile
was taken down. This led to high criticism of Tech Mahindra and eventually led the CEO,
Anand Mahindra, to release a public apology for the same.

While handling the situation the management should ensure some precautions and imply
strategies accordingly.

1. Remain objective. It can be easy to personalize a layoff, but it’s not productive.
Managers should remain objective when selecting positions to eliminate. They need
to be mindful of their words when speaking about the reduction. People are not
being cut—positions are cut, and people are affected.
2. Come to a consensus. Whatever the reasons for the layoff, the management team
needs to come to agreement and move forward as a team. Managers should avoid
casting blame or making sideline deals. The leadership team needs to develop a clear
message and present a united front.
3. Treat employees with respect. We’ve all heard lay-off horror stories—people who
arrive at work to find boxes on their desk and security standing nearby; people who
try to get into their office and realize the locks have been changed; or people who
were terminated via a form email. Managers should treat every individual with
respect and protect each person’s dignity. Even if the RIF affects many people,
managers should treat each person as if he or she is the only person being affected.
Each employee deserves a private meeting with a manager, a chance to ask
questions, and be informed of any transition support, verbally and in writing. Deliver
the news with kindness and compassion, remembering that the layoff has a
compounding effect on family.
Offer as much support as possible. Provide people with transition support. Here are some
examples: 1) Redeployment: Is there another area of the company or another location that
can absorb some of those affected? Can training be offered to fill a need in another area? 2)
Separation package: Even if the cutbacks are fiscally based, provide a separation package
that includes financial benefits, and career transition support.

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 COMPENSATION

Article: Demystifying Pay in India: How to Structure Compensation for Local Practices by
AON Radford (https://radford.aon.com/insights/articles/2018/demystifying-pay-in-india-
how-to-structure-compensation-for-local-practices)

Compensation planning in India is unique and complex. The acronyms like basic salaries,
HRA, LTA, conveyance, EPF and gratuity contribute to the complexity. These elements are
common features of compensation packages in India and are unique to India.
Communication about the comp packages to Indian employees and even professionals
outside India is challenging due to its distinctive features and complexity.

In the era of increasing globalisation, it becomes necessary for people who design these
packages in MNCs to know how these terms align to foreign markets to ensure accuracy in
cross border comparison of relative pay levels and clarity in how human capital
expenditures are structured in India.

In India the starting point is CTC i.e., Cost to Company which includes both monetary and
non-monetary costs incurred by the company before taxes for the employee. That is its
inclusive of fixed pay, variable cash component and benefits. However value of stocks
(ESOPS) is outside CTC typically.

Fixed pay also referred as the gross salary in India and basic salary elsewhere is often the
base for creation of pay ranges. Fixed comp and CTC are the most widely used external
competitive metrics. Fixed pay is so designed that employees’ and employers’ tax burden is
minimised by using the basket of allowances alongwith base salary. Rather than increasing
other compensation elements, in India packages are more targeted towards fixed pay and
then adding other various components.

While designing the fixed salary in India following components are used:

· Basic salary usually 40-50% of fixed pay.

· EPF contributions and Gratuity based on basic salary

· House rent allowance dependent on salary and living location.

· Leave travel allowance for holiday travel which has tax advantages for employee, subject
to certain restrictions.

· Conveyance allowance for travel between home and work.

· Medical Allowance

· Meal allowance in form of vouchers

· Special allowance for balance amount.

· Car Allowance available to employees at a certain job level

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 Moving on, other elements include variable cash incentives eg bonus available annually,
benefits and pre-requisites for retirement, medical, life insurance and disability, etc.
Moreover, stock awards are also provided but this is outside CTC generally.

Designing different compensation packages in India may seem difficult for reward
professionals new to the market. Moreover, its daunting to explain the same to senior
professionals outside India in multinational companies. However, by understanding each
component carefully and then structuring fair compensation packages would break down
the complexities.

Along with this the new tax laws that are in effect from April 1, 2018 make the task even
more critical and significant that one remains up-to-date on what each component of
compensation costs employees and employers in taxes.

This article shows the reality of the current workplace and is the application of the
theoretical knowledge that we have gained in the course. The concepts covered in the
course are as follows:

Compensation refers to a wide range of financial and non financial rewards to employees
for their services rendered to the organization. It is paid in the form of wages, salaries and
employee benefits such as paid vacations, insurance maternity leave, free travel facility,
retirement benefits etc., Monetary payments are a direct form of compensating the
employees and have a great impact in motivating employees.

The system of compensation should be so designed that it achieves the following

objectives.

· The capable employees are attracted towards the organization

· The employees are motivated for better performance

· The employees do not leave the employer frequently

The explanation in course for the terminologies used in the article:

Basic Salary: Salary is the amount received by the employee in lieu of the work done by
him/her for a certain period say a day, a week, a month, etc. It is the money an employee
receives from his/her employer by rendering his/her services

House Rent Allowance: Organizations either provide accommodations to its employees who
are from different state or country or they provide house rent allowances to its employees.
This is done to provide them social security and motivate them to work.

Conveyance: Organizations provide for cab facilities to their employees. Few organizations
also provide vehicles and petrol allowances to their employees to motivate them

Leave Travel Allowance: These allowances are provided to retain the best talent in the
organization. The employees are given allowances to visit any place they wish with their
families. The allowances are scaled as per the position of employee in the organization.

Medical Reimbursement: Organizations also look after the health conditions of their
employees. The employees are provided with medi-claims for them and their family

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members. These medi-claims include health-insurances and treatment bills
reimbursements.

Bonus: Bonus is paid to the employees during festive seasons to motivate them and provide
them the social security. The bonus amount usually amounts to one month’s salary of the
employee.

Special Allowance: Special allowance such as overtime, mobile allowances, meals,

commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are
provided to employees to provide them social security and motivate them which improve
the organizational productivity.

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