Human Resource Management

IMG 12 – 2018. Session 7-9

TRAINING AND DEVELOPMENT

TRAINING NEED
• Enculturation ANALYSIS • Content
• Method (Action
• Task analysis Learning; Programmed
• Competency analysis Learning)
• Performance Analysis • Environment
• Reinforcement
• Transfer

ORIENTATION TRAINING
Evaluation of Training

Learning

Reaction Results

Behaviour
Change Management
The ADDIE Framework
PERFORMANCE MANAGEMENT
&
PERFORMANCE APPRAISAL
 What is performance?
The process of executing a task or function

What are the determinants of performance?

Declarative Procedural Motivation

Knowledge Knowledge
Facts Cognitive skills Choice to perform
Principles Psychomotor skills Level of effort
Goals Physical skills Persistence of effort
Interpersonal skills

Performance = Declarative Knowledge X Procedural Knowledge X Motivation

Performance Management and Performance Appraisal

Performance Management Performance Appraisal

Focus on integrating individual, Focus on individual objectives
team, and organizational
objectives
PERFORMANCE
MANAGEMENT Continuous review Annual review
Participative Top-down
May not be linked to pay Linked to pay
PERFORMANCE
APPRAISAL Future-focused Past-focused
Objectives of Performance Management & Appraisal

Evaluative Developmental

Mello, 2002
 Strategic Choices in PMS Mello, 2002

Link with
training or WHY Reward, Development
compensation

WHO Supervisor, peer, customer, subordinate, self

Flexible
/Standardized
WHAT • Absolute. Relative; Traits. Behaviours. Results

Individual /Team WHEN Annual. Periodic

Forced ranking. Paired Comparison. Rating scale – BARS,

HOW BOS, Critical Incident, Weighted Checklist. Objective-based.
Assessment Centre.
Methods of Performance Appraisal
Rating by Superiors Rating by Self
• Electronic Performance Monitoring
• Forced Distribution
• Self-Rating
• Paired Comparison
• Assessment Centres Rating by Others
• Narrative Form • Customer Satisfaction Score
• Critical Incidents
• 360 degree feedback
• Weighted Checklist
• Behaviourally Anchored Rating Scale
Question: How would you
• Behavioural Observation Scale
decide which method to use?
• Management by Objectives
Critical Incidents for a Chef
Critical examples of the
employee’ s behaviour,
either outstanding or
problematic, during the
performance period
Behaviourally Anchored Rating Scale for a
Grocery Checker
Examples of different
behaviours at work
ranked according to
their desirability
Behavioural Observation Scale for a Punch
Press Operator
The frequency with
which an employee
displays an optimal
behaviour
Weighted Checklist for a Line Manager
Behaviours are
rated according to
their importance for
the job

South Western, 2005

MBO Appraisal
Self- and Superior evaluation
of an employee on goals set
with mutual consent
Performance-Potential Matrix
 GIVING EFFECTIVE FEEDBACK
• Prepare the person beforehand
• Support negative feedback with hard data - ‘you entered 5 minutes late today’
• Focus on specific, controllable behaviour, rather than general behaviours – avoid
‘always’ and ‘never’
• Keep comments impersonal – ‘the voice sounded sarcastic’ or ‘the word that was
used has rude connotations’ instead of ‘You are rude’
• Ensure that the recipient has full understanding of the feedback – end with ‘what do
you think?’
• Keep feedback goal-oriented – recipient’s goals, not yours!
• Keep feedback well-timed – not too delayed, but not in the heat of the moment!
• Supplement criticism with suggestions
• Supplement negative feedback with positive feedback – make a sandwich
• Seek feedback from others. It builds the Feedback Culture
The extrinsic and intrinsic rewards employees receive for doing their jobs

Compensation Management
Components of compensation
Total Compensation

Extrinsic Compensation Intrinsic Compensation

Core (Base Adjustments Benefits Benefits

Pay) • Dearness (mandatory) (Discretionary)
• Wage or Allowance • Leave • Health & life
hourly pay • Variable • Provident insurance
• Salary (Incentives) Fund • Retirement plans
• Seniority • Accommodation
• Merit Pay
Steps in Designing Compensation

Assign Determine
Choose Select Weights to Assign
degrees of
Benchmark Compensabl Factors monetary
complexity
Jobs e Factors value
(% to points) for factors
 What are the Drivers of Compensation
Decisions? - 1
Equity Theory Theory of Justice External Forces

Labour Laws for

minimum
compensation, etc.

Workers’ Union
Demands
What are the Drivers of Compensation
Decisions? - 2
FIRM STRATEGY
Internal Consistency
Clearly shows relative value of jobs
Jobs needing greater qualifications,
with greater responsibilities and
more complex duties fetch greater
pay
Market Competitiveness
Reflects the environmental
conditions, industry benchmarks
and long-term prospects
Reflects the firm’s strategy and
financial capabilities
Individual Contributions
Reflects the performance level
of the employee
Reflects the employee’s
credentials

Techniques: Techniques: Techniques:

Job analysis Strategic Analysis Performance incentives
Job Evaluation Compensation Surveys Grade pay, Pay range
 SENIORITY-BASED PAY
Premise: Human Capital Theory
Pay gets determined by duration
spent in the organization
Types of Pay Structures
When to use
 Building trust &
transparency
 Facilitating retention
When to use
 To encourage productivity
 To encourage goal-oriented
strategic behaviour
PERFORMANCE-BASED PAY
Rewarding employees for
demonstrating successful job
performance or meeting job
objectives
Types
Individual Incentive Plans –
piecework, MBO, behavioural
encouragement, referral
plans
Group Incentive Plans – Team
based incentive, Gain-sharing
plans
Company-wide Incentive
Plans – Profit sharing, stock
options
PERSON-BASED PAY
Rewarding employees for
acquiring job-related
competencies, knowledge, and
skills, rather than for
demonstrating successful job
performance
Competency based Pay
Pay for Knowledge – Post-
PhD Increment
Skill-based pay – Post-
certification increment
 When to use
 Continuous upgrading of
skills is needed
 There is need to improve
product/service quality
 To build leaner
organizations
When should we use with discretion ?
SENIORITY-BASED PAY PERFORMANCE-BASED PAY PERSON-BASED PAY

• When changing • Unstable market • Training is expensive

entrenched firm culture conditions • No scope for using
or work processes • Performance skills
• When assessment is subjective • Cost-leadership
processes/technology strategy
are changing rapidly
The Psychology of Compensation
• Informed decisions tend to be realistic, tend to lead to satisfied
employees
• Willingness to work for higher performance components signal high
involvement and confidence
• Willingness for ESOPs signal intention to stay and grow
• Preference for fringe benefits vary with demographic profiles
• Fringe benefits tend to be undervalued
 Knowledge and growth
Are there different kinds of Person/perf. Based pay
compensation seekers?
Self- Powered
Innovators
Flexible pay
Traditional pay Added benefits
Dislikes risk and soft benefits Traditionalists
Stalled
Survivors

Employee
Characteristics

Traditional Pay
Accomplished Demanding
Contributors Disconnects
Team incentives, traditional pay

Maverick
Morphers
Perf. Bonus/stock options
 Executive Wage
Gap
Gender Based Wage
Gap
376 times approx.
1.25 times approx.
(18 – 30 %)

REASONS:
Wage Gap ? FACTS:
(1) CEO
performance
(1) Gender bias curve is heavily
(2) Less negotiation skewed
(3) Career gaps (2) CEO pay curve is
(4) Difference in heavily skewed
work hazards (3) CEO
(5) Flexibility in
work conditions
Compensating Executives performance and
pay curves do
not match
Chief Concerns
• Accountability – Stock Options
• Stability – Stock Options
• Long-term security – Golden Parachutes, Platinum Parachutes
• Performance – Clawback Provisions

Positions
Agency Theory Tournament Theory Social Comparison Theory

Getting the Executive to Lucrative compensations to Benchmarking with CEO pay

assume ownership of the keep executives motivated elsewhere to create sense of
firm’s long-term interests to rise equity