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Human ResourceManagement

Functions
Acquisition
HRP Recruitment & Selection Socialisation

Functions
Development Training Management Development Career Development

Functions
Motivation
Job Satisfaction Performance Appraisal

Functions
Maintenance
Compensation Administration Grievance Redressal Safety & Security Labour Relations

Human Resource Planning (HRP)


Human Resource Planning is the process by which an organisation ensures that it has the right number and kinds of people

Human Resource Planning (HRP)


Purpose
Assess where the organisaton is ? Where it is going ? What implications these assessment have on future demand and supply ? Attempt to match supply and demand Making them compatiable with achievements of organisaton s future needs

Steps in HRP
1. Assessing current human resources Developing a profile & job analysis
a) Human Resource Inventory b) Job Analysis

Steps in HRP
2. Assessing where the organisation is going
a) Demand Forecasting

Steps in HRP
3. Implications of future demands 4. Implications of future supply
1. Internal supply
a) Increasing supply b) Decreasing supply

2. Estimated changes in external supply

5. Matching Demand and Supply

Special Case in HRP


Retrenchment
A.Out placement B.Layoffs C.Leaves of absence with out pay D.Loaning E.Work sharing F.Reduced work hours G.Early retirement H.Attrition

Job Analysis
Job analysis is the procedure for determining the duties & skill requirements of a job and the kind of person who should be hired for it.

Steps in Job analysis


1. 2. 3. 4. 5. 6. Select job for analysis Further information Process information Job description Job specification Uses of Job description & Specification

Job Analysis Methods


1. 2. 3. 4. 5. 6. Observation method Individual Interview method Group Interview method Structured questionnaire method Technical conference method Diary method

Purpose of Job Analysis


I. II. Job description Job specification

III. Job evaluation

Recruitment
Factors influencing recruiting efforts
a) b) c) d) size Efficiency of past recruiting efforts Working conditions Organisations in growth, stagnation,decline mode

Constraints
1. 2. 3. 4. 5. 6. 7. Image of the organisation Nature of the job to filled Hazardous, lacking prospects Internal organisational policies Trade union requirements Govt. influence on recruiting process Cost of recruitment

Sources
1. 2. 3. 4. Internal search Advertisements Employee referrals Employment agencies
1. Public agencies 2. Private agencies 3. Head hunters

Sources
5. 6. 7. 8. Temporary help services Schools, colleges & universities Professional organisations Casual or unsolicited applications

Selection
a) Correct acceptance b) Acceptance error c) Reject error d) Correct rejection

Discreet selection process


a) b) c) d) e) f) g) h) Initial screening Completion of application form Employment test Comprehensive interview Background investigation Physical examination Final employment decision Comprehensive approach

Key elements of successful predictors a) Reliability b) Validity


a) Content validity b) Construct validity c) Criterion related validity
a) Predictive validity b) Concurrent validity c) Cut scores

Selection Devices
I. II.
I. II.

Application forms Employment test


Written tests Performance simulation tests
i. ii. i. ii. Work sampling Assessment centers Graphology tests Polygraph tests

III. Other tests

Selection Devices
III. Interviews
a. b. c. d. e. f. g. Structure interviews Train interviewers Understand job Avoid other information Standardise evaluation forms Make notes Avoid short interviews

Selection Devices
IV. Realistic job previews V. Background investigation VI. Physical examination

Socialising the new employee


Organisational culture
a. Roles b. Values c. Norms

Socialisation process underlying assumptions a) b) c) d) Influences employee performance New employees suffer from anxiety Socialisation does not occur in a vacuum People adjust in similar ways

Socialisation Process
a) Pre-arrival stage b) Encounter stage c) Metamorphosis stage

Considerations in developing a Socialisation Process A. B. C. D. E. F. G. Formal Informal Individual Collective Fixed or varied time period Serial or disjunctive Investiture or divestiture

Training
Determining training needs
What are organisation s goals What are tasks to be completed to achieve these goals What behaviours are necessary for each incumbent to complete his assigned tasks What are the defeciencies

Signals

Productivity Rejection

Methods for determining training needs a) Observation and analysis of job performance b) Management and staff conferences & recommendations c) Analysis of job requirements d) Consideration of current and projected changes e) Surveys reports & inventories f) interviews

Formal employee training methods


a. On-the-job training
i. Appentice ship programmes ii. Job instruction training (JIT)
a. b. c. d. Preparing the trainees by telling about the job Presenting the instructions Having trainees try out the job Placing the workers into the job

Formal employee training methods


b. Off-the-job training
a. b. c. d. e. Class room lectures Films Simulation exercises Computer modeling Vestibule training

Formal employee training methods


c. Programmed instructions

Management development
Methods for developing managers I. On-the-job development
a. b. c. d. Coaching Under study assignment Job rotation Committee assignments

a.

Methods for developing managers Off-the-job development


a. b. c. d. Sensitivity training Transactional analysis Lecture courses Simulation exercises

Evaluating training effectiveness


A. Test-retest method B. Pre-post performance method C. Experimental-control group method

Areas of assessment
a. Trainee reaction b. Learning c. Behaviour d. Results

Final assessment on the basis of


Cost Change Impact

Career Development
Career stages
a. b. c. d. e. Exploration Establishment Mid-career Late career Decline

Effective organisational career development


a. b. c. d. e. f. g. h. Challenging initial jobs Dissemination of career option information Job posting Assessment centers Career counseling Career development workshops Periodic job changes Sabbaticals

Motivation: is the willingness to do something and is conditioned by this action s ability to satisfy some need for the individual. Unsatisfied > Tension > Drives > Search > Behaviour Goal Achievement > Need satisfaction > Reduction of tension

Maslow s Hierarchy of Needs


1. Physiological hunger, thirst, shelter, sex 2. Safety Protection from physical and emotional harm 3. Love affection, belongingness, acceptance, friendship 4. Esteem Internal factors : Self respect, autonomy External factors : status, recognition, attention 5. Self activation drive to become what one is capable of becoming, achieving one s potential.

Douglas McGregor s Theory X & Theory Y


Assumptions: Managers view of human nature is based on one of the two sets of assumptions about people.

Theory X
1. 2. 3. 4. Employees inherently dislike work and whenever possible, will attempt to avoid it. Since they dislike work, they have to coerced controlled or threatened to achieve desired goal. Employees will shirk responsibilities and seek formal direction. Most workers place security above all other factors associated with work and will display little ambition.

Theory Y
1. 2. 3. 4. Employees can view work as being as natural as rest or play. Employees will exercise self direction and self control, if they are committed to the objectives. Average person can learn to accept even seek responsibility Creativity that is ability to make good decisions is widely dispersed throughout the population.

Theory X arouses lower order needs. Theory Y arouses higher order needs.

Frederick Herzberg s Two factor Theory


Motivation Hygiene Theory
Intrinsic factors Achievement, recognition, the work itself, responsibility and advancement seem to be related to job satisfaction. Extrinsic Factors Company policy & administration, supervision, interpersonal relations and working condition seem to relate to dissatisfaction.

Satisfaction, No satisfaction Motivators

No Dissatisfaction, Dissatisfaction Hygiene Factors

McClelland s three needs motivation theory


According to David McClelland 3 major relevant motives or needs in work place 1. Need for achievement drive to excel, to achieve in relation to a set of standards, to strive to succeed 2. Need for affiliation - Desire for friendly & close interpersonal relationships. 3. Need for Power Need to make others behave in a way that they would not have behaved otherwise. Drive for Achievement ( nAch ) Drive for affiliation ( nAff ) Drive for Power ( nPow )

The characteristics of (nAch) closely align with Successful Entrepreneurship The Characteristics of (nAff) & (nPow) tend to be closely related to managerial success. McClelland gives evidence that best managers are high in their need for power and low in their need for affiliation.

Motivation Theory Expectancy Approach Victor H.Vroom.


The strength of the tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of the outcome to the individual.
Three variables are: 1. Attractiveness : Importance of the potential outcome/reward. 2. Performance/reward linkage : the degree to which the individual believes that performing at a particular level will lead to attainment of each job outcome. 3. Effort Performance linkage : the perceived probability by the individual that exerting a given amount of reward.

Motivation
Strength of drive towards an action

Valence
Strength of a person s preference to one outcome in relation to others.

Expectancy
Probability of getting it with certain actions Urge to perform depends on the attractiveness of the outcome or reward.

Valence X Expectancy = Motivation

Psychological Approach
a) b) c) d) Assumptions: Individuals have a unique mixture of ingredients that make up their personality. However one ingredient will be predominant (Personality type) There are four categories of personality types : Dominant : very strong, good decision makers, great leader Motivators- (Power, Authority, Control over results, freedom from restraint, wide scope of operations) Influencing : good talkers Motivators-(popularity, recognition, contact with people, freedom of expression, favourable relationships and social status) Steady : those who are extremely loyal to others, very predictable. Motivators-(stability, planned charge, conflict free environment, clear responsibilities, concrete results and job security) Careful : who is meticulous about details , who sets high standards for themselves. (precision work and high quality of work are motivators)

Working of the Expectancy Model


Valence
Strong Desire for Promotion Motivation
Increased drive

Expectancy
Moderate probability that certain actions will lead to promotion

Action
1. 2. Greater effort Training

Primary Outcome
1. 2. Promotion Higher Pay

Secondary Outcome
1. 2. 3. Higher Status Recognition from associates Purchasing products that family wants

Renewed drive : satisfaction


Tendency to continue To be motivated

Organisational Behaviour Modification Model or O.B. Model. B.F. Skinner.


Basic Assumption
Behaviour depends on its consequences. Behaviour modification is achieved through Operant conditioning which is a type of re-inforcement to modify behaviour by its consequences Law of effect The more favourable are the consequences of certain behaviour, the more will be the tendency to repeat the behaviour and vice versa.

Positive Re-inforcement
A favourable consequence that encourages repetition of a behaviour A behaviour is accompanied by a removal of an unfavourable consequence.

Negative Re-inforcement

Shaping
Occurs when re-inforcements are successively given, as one comesw closer to the desired behaviour.

Punishment : An unfavourable consequence that


accompanies behaviour and discourages repetition of the behaviour. Extinction: No significant consequence accompanying behaviour.

Schedules of Reinforcement
a) b) Continuous reinforcement
reinforcement accompanied by each correct behavior.

Partial reinforcement
a) b) c) d) There are four types of partial reinforcement Fixed interval eg: saloon Variable interval Fixed ratio Reinforcement after a certain number of correct response. Variable ratio Reinforcement after a variable number of correct response.

Performance Appraisal
Appraisal Process
1. Establishment of Performance standard through job analysis & job description. 2. Communicate performance expectations to employees 3. Measure actual performance 4. Compare actual with standards 5. Discuss appraisal with employee 6. Initiate corrective action.

Appraisal Methods
A. Absolute standards
i. Essay appraisal
narrative

ii. Critical Incident appraisal key factors/ critical incidents that makes difference. It is based on behaviour. iii. Check list
check list of behavioural descriptions and yes or no will be marked.

iv. Graphic Rating Scales


Performance factor Rating scales Quantity, Quality, dependability, Knowledge, co-operation Consistently unsatisfaction, occasionally unsatisfaction, consistently satisfaction, occasional satisfaction, consistently satisfaction

v. Forced Choice
rater has to choose between two or more statements, all of which may be favourable or un favorable. The appraiser's job is to identify which statement is most descriptive of the individual.

vi. BARS : Behaviourlly Anchored Rating Scales


These combines major elements from critical incidents and graphic rating scale approaches. The appraiser rates the employee based on items on a continuum but the points are actual behaviour. BARS specify definite, observable and measurable job behaviour.

B. Relative Standards
Individuals compared with others. 1. Group Order Ranking Requires the evaluator to place employees in a particular classification. Top 1/5th next 1/5th. 2. Individual Ranking
Ranking the employees in the order.

3. Paired Comparison
It ranks each individual in relation to all other on a one-oone basis.

C. Objectives
Employees are evaluated by how well they accomplish a specific set of objectives. MBO : Process of converting organisational objectives into personal objectives. Steps: 1) good setting 2) action planning 3) self control 4) periodic review

Factors that can distort appraisals


a. Leniency Error
Every evaluator has his own value system which act as a standard against which appraisals are made. Some mark high & others low.

b. Halo Error
Halo effect or error is a tendency to rate high or low on all factors. Due to the impression of a high or low rating on some specific factor.

c.

Similarity Error When evaluators rate other people in the same way that the evaluators perceive themselves, they are making a similiarity error. d. Low appraiser Motivation If the evaluator knows that poor appraisal could limit employee s future. The evaluator may be reluctant to give a realistic appraisal.

Central tendency Reluctance to make extreme ratings in either direction. Forcing information to match non-performance criteria all ready decided, nonperformance criteria. E.g. seniority.

Inflationary pressures
inflated ratings

In appropriate substitutes for performance


In case defining performance is difficult in appropriate substitutes may be used.

Attribution Theory Theory Y oriented manager high ratings Theory X oriented manager low ratings

Suggestions for improved P.A


A. Behaviourally based measures
Compared to personality & traits such as loyalty, courage, reliability. Those who get high scores need not be high performance.

B. Combine absolute & relative standards


absolute standards draw back, biased by positive leniency of evaluator. Relative standard draw back if number of individuals are small.

On going feed back


Continuous feed back rather than occasional review.

Multiple raters
The more numbers of raters probability of attaining more accurate information.

Selective rating
Raters make evaluations on only those areas on which they are in a good position to rate.

Trained Appraiser
Training appraisers make them more accurate raters.

Peer Evaluations
In case the manager doesn t have day to day information, he takes the help of peer evaluation

Post appraisal review


Have to follow up appraisal interview.

Rewards
Intrinsic rewards
Satisfaction from the job itself

Extrinsic rewards
Money, promotion & benefits

Financial Vs non financial rewards


Status conscious

Performance based Vs Membership based.


Commissions, pace work, pay plans, incentive systems, group bonuses.

Membership based rewards


Cost of living indices, profit shares, benefit and salary increases attributable to labour market conditions.

Qualities of effective Rewards


Importance
Reward should be important to person receiving them

Equitable distribution
Must be fairly distributed

Visibility
Rewards should be visible.

Flexibility Low cost

Criteria on which rewards can be distributed. 1. 2. 3. 4. 5. 6. Performance Effort Seniority Skills held Job difficulty Discretionary time.

Compensation Administration
Lowest cost pay structure that will attract motivate and retain competent employees and that also will be perceived as fair by these employees. Essence of compensation administration is job evaluation and establishment of pay structure.

Method of Job Evaluation


a) Ranking Method
A committee comprised of management and employee representative rank the job in order.

b) Classification Method
Based on skills, knowledge, responsibilities etc. Eg:- shop job, clerical job, sales job. Once the classification is made they are ranked in an overall order of importance.

c) Factor Comparison Method


Select key jobs as standards. Chose the factor in the key job, such as skill requirements, mental requirements, physical requirements, responsibility, working conditions. Base wage rate is fixed for the key job and divide it among different factors. This become the standard based on which other jobs are evaluated.

d) Point Method
This method breaks job down based on various identifiable criteria (skill, effort and responsibility.) and then allocates points to each of these criteria. Appropriate weights are given depending on the importance of each criterion.

Establishing Pay Structure


Wage Surveys Wage Curves

Factors Determining Pay rates


Legal Consideration Union Influence on Compensation Decision Competitive strategy, Corporate Policy Salary Compression Geography

Incentive Compensation Plan


on the basis of performance Individual incentive
Piece rate plans, time saving bonuses, commissions

Group Incentive Organisation wide incentives.

Executive compensation
a) Executive Salaries Supplemental Financial Compensation a) Deferred bonus b) Stock options (ESOP) Supplemental Non-financial compensation a) Perquisites b) Golden Parachute
Severance salary or guaranteed position in the newly created organisation

Disciplining the Employees


Types of discipline problems

Attendance problem On the job behaviours Dishonesty Out side activities Oral warning Written warning Suspension Demotion Pay cut Dismissal

o Disciplinary Actions
o o o o o o

Benefits & Services


Legally required benefits
1. 2. 3. 4. Social security Unemployment Compensation Workers compensation State disability laws
income supplement for short term illness

Voluntary benefits
1. Rest periods 2. Holidays 3. Vacations 4. Sick leave 5. Leave of absence 6. Pension programme 7. Capital accumulation plans 8. Insurance 1. Group life insurance 2. Health insurance 3. Health maintenance organisations (HMO) 4. Preferred provider organisations (PPO)

Services
1. Company sponsored social & recreational events 2. Counseling 3. Cultural activities 4. Credit unions 5. Housing 6. Other services

Safety & Health


Occupational Safety & Health Act OSHA Standards for enforcements a) Imminent danger: accident is about to occur b) Serious accidents: occurred should be reported with in 48 hrs c) Employee complaints d) Targeted inspections e) Random inspections

Causes of accidents
1. 2. Human Environmental

Preventive measures
a) b) c) d) e) Education Skill training Engineering Protection Regulation enforcement

Trends in health programs


Attending work related health problem Attending psychological problems
Alcoholism Drug abuse

Stress
Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint or demand, related to what he or she desires and which the out come is perceived to be both uncertain & important. Stress can be positive when situation offer an opportunity Stress can be negative when constraints of demands are placed on us

Causes of stress
Due to factors called stressors 1. Personal factors 2. Organisational factors Symptoms of stress 1. Physiological symptoms
Increased B.P. headaches, heart attack

2. Psychological symptoms
significant dissatisfaction with the job, tension, anxiety, irritation, boredom, procrastination.

3. Behavioural symptoms Productivity changes, absenteeism, turn over, increased smoking, alcohol consumption. Burn out
Organisational effect of stress. Chronic emotional stress with a) Emotional/physical exhaustion b) Lowered job productivity c) Over depersonalization

Reducing burnout
1. 2. 3. 4. Identification Prevention Mediation Remediation

Labour relations
1. 2. 3. 4. 5. 6. How unions constrain managerial powers Reduction in management s power Potential for strikes Fear of increased costs Threats to efficiency Loss of employee commitment Union review of HRM policies.

Goals for group representations


Why Unions ? 1. Wages & effort 2. Employment security
1. 2. 3. 4. Closed shop only union members as employees Union shop after probation employee will have to join union Right to work state compulsory membership forbidden. Maintenance of membership no compulsion to join but once joined , continue during lock in period.

5. Preferential shop
when a union member given preference over non union member.

6. Agency shop Agreement that requires non union member employees to pay union fees as condition of continuing employment. 7. Open shop
Technically no union

3. Grievance procedures 4. Union power

Collective bargaining
Refers to as the negotiation, administration and interpretation of a written agreement between two parties that covers a specific period of time. Collective bargaining objective
Agree upon an acceptable contract acceptable to management, union related to a) wages, b) hours, c) terms & conditions.

Collective bargaining process


1. Organising workers 2. RC election-representation certification 3. Preparation for negotiation
Collecting background information internally & externally

4. Negotiations 5. Contract administration

Trends in collective bargaining


1. 2. 3. 4. 5. Rejection of agreements Public employee militance Union avoidance Union busting Concessionary bargaining

Ethical issues related to human resources management

Sources of business ethics


1. Religion 2. Cultural experience 3. The legal system

Ethical dilemmas
A. Face to face ethics B. Corporate policy ethics C. Functional area ethics

H.R Ethical issues


* Cash & incentive plans
1. 2. 3. 4. Base salaries Annual incentive plans Long term incentive plans Executive perquisites

* Performance appraisal * Race, gender, age & disability * Job discrimination * Privacy issues * Safety & health * Employee responsibilities

Managing ethics
Top management Code of ethics Ethics committees Whistle blowing Ethics training programme Ethics & law

Global perspective of HRM


Main characteristics of International HRM More human resource activities Need for a broader perspective More involvement in employee personal lives Changes in emphasis as the work force mix of expatiates and locals vary Risk exposure More external influences

Managing international HR activities Basic steps


1. 2. 3. 4. 5. 6. 7. 8. HR Planning Recruitment & selection Training & development Performance management Remuneration Repatriation Employee relations Multicultural management