PERFORMANCE MANAGEMENT

HOW TO MANAGE & COMPENSATE PEOPLE

TO MEET WORLD COMPETITION
BY
JOSEPH. H. BOYETT & HENRY. P. CONN

CHAPTER CONTENTS

1 THE BASIS FOR MAXIMUM PERFORMANCE MANAGEMENT

II HOW TO DETERMINE IF MAXIMUM PERFORMANCE

MANAGEMENT IS RIGHT FOR YOUR ORGANIZATION

III HOW TO DEFINE / COMMUNICATE VALUES / BUSINESS

STRATEGIES

IV HOW TO REORGANIZE FOR PERFORMANCE

V HOW TO DEVELOP PERFORMANCE MEASURES

VI HOW TO DEVELOP AN EFFECTIVE MIS

VII HOW TO SET PERFORMANCE GOALS & OBJECTIVES

VIII THE IMPACT OF CONSEQUENCES ON EMPLOYEE

BEHAVIOR

IX HOW TO USE POSITIVE CONSEQUENCES TO ENCOURAGE

PERFORMANCE

X PAY FOR PERFORMANCE

XI GAINSHARING: HOW TO INCREASE TEAM

PERFORMANCE

XII PAY FOR KNOWLEDGE: HOW TO INCREASE EMPLOYEE

FLEXIBILITY

XIII HOW TO DESIGN / INSTALL AN EMPLOYEE

INVOLVEMENT SYSTEM

XIV BEYOND MPM

XV CAREER MANAGEMENT
 THE BASIS FOR MAXIMUM PERFORMANCE MANAGEMENT

INTRODUCTION: -
• TODAY BUSINESS IS BECOMING COMPETITIVE
• SUCCESS OF BUSINESS DEPENDS UPON ITS PERFORMANCE
• PERFORMANCE OF BUSINESS HAS TO BE EXCELLENT, WHICH
DEPENDS UPON ITS PEOPLE
• SUCCESS OF BUSINESS DEPENDS UPON THE PERFORMANCE OF
ITS PEOPLE

BUSINESS BEFORE GLOBALIZATION:

• PEOPLE TREATED AS COMMODITIES
• CONTROL PROBLEMATIC BEHAVIOR
• COMMUNICATION ONE WAY
• INVOLVEMENT ONLY AT PHYSICAL
• COMPENSATION BASED ON SENIORITY

BUSINESS AFTER GLOBALIZATION:

• PEOPLE TREATED AS PARTNERS
• POSITIVE BEHAVIOR REWARDED
• COMMUNICATION TWO WAY
• INVOLVEMENT AT PHYSICAL & MENTAL LEVEL
• COMPENSATION BASED ON PERFORMANCE

TYPES OF PERFORMERS:
• EXCELLENT
• POOR
• AVERAGE

EXCELLENT PERFORMER:
• FEW IN NUMBER
• PRODUCE HIGH VOLUME & QUALITY WORK IN TIME & AT
ACCEPTABLE PRICE
• EASY TO MANAGE
• MINIMUM SUPERVISION & DIRECTION
• GENUINELY ENJOY THEIR WORK
AVERAGE PERFORMER:
• PERFORMANCE VARIES. SOMETIMES EXCELLENT, SOMETIMES
POOR
• PERFORMANCE BELOW CAPACITY
• CONSIDERABLE ROOM FOR IMPROVEMENT

POOR PERFORMER:
• OPPOSITE OF EXCELLENT PERFORMERS

ISSUE BEFORE MANAGEMENT:-

• RETAIN EXCELLENT PERFORMER
• DEAL WITH POOR PERFORMERS
• IMPROVE PERFORMANCE OF AVERAGE PERFORMERS

CHARACTERISTICS OF EXCELLENT PERFORMERS

• THEY HAVE THE FOLLOWING QUALITIES:
o KNOWLEDGE & SKILL
o INTERNAL MOTIVES
o ABILITIES
• KNOWLEDGE & SKILLS:
o CONSTANTLY UPGRADE THEIR K / S
o KNOW WHAT NEEDS TO BE DONE & HOW IT HAS TO BE
DONE
• INTERNAL MOTIVE:
o WORK PROVIDES PERSONAL SATISFACTION
o WORK HAS MEANING
• ABILITIES
o IT MATCHES WITH THAT OF THE JOB REQUIREMENT

CAN EXCELLENCE BE CREATED?

• YES
• FOLLOWING ARE THE WAYS:
o MATCHING OF THE JOB
o TRAINING
o RECRUITMENT
o MANAGING ENVIRONMENT

MATCHING OF JOB
• PROFILING OF THE PEOPLE WITH THAT OF THE JOB CAN BE DONE
• LIMITATION
o BUT JOBS UNDERGOES CHANGE, BECAUSE BUSINESS IS
DYNAMIC
 o TODAY’S MATCH WILL BE A MISMATCH TOMORROW

TRAINING:
• WE CAN TRAIN EMPLOYEES TO BE EXCELLENT PERFORMER
• TRAINING WILL BE EFFECTIVE ONLY IF:
o THERE IS FOLLOW UP
o IF APPLIED ON THE JOB
• LIMITATION:
o LEARNING VARIES FROM PEOPLE TO PEOPLE

RECRUITMENT
• ALL THE EXCELLENT PERFORMERS NEED NOT HAVE APPLIED
• SELECTION FROM POOL OF CANDIDATES WHO HAVE BEEN
SHORT-LISTED
• WE SELECT BEST FROM THE AVAILABLE LOT.
• IT IS A COMPROMISING SITUATION

CONTROLLING ENVIRONMENT:
• EXCELLENCE IS A FUNCTION OF K / S X M X A
• THESE ARE THE QUALITIES OF AN EXCELLENT PERFORMERS
• TO COMPENSATE THE THREE, WE ADDRESS THE ENVIRONMENT
IN WHICH THE EMPLOYEE WORKS
• THE FOLLOWING ARE THE THREE ENVIRONMENTAL FACTORS
WHICH HAS TO BE ADDRESSED:
o INFORMATION
o CONSEQUENCES
o INVOLVEMENT
• INFORMATION:
o KNOWLEDGE IS INFORMATION
o SHARE
 VALUES / STRATEGIES
 GOALS
 ACTIVITIES TO BE PERFORMED TO ACCOMPLISH THE
GOALS
 PROVIDE FEEDBACK
o IT COMPENSATES FOR THE WEAKNESS OF
K/S
• CONSEQUENCES:
o LINK PERFORMANCE TO REWARD & PUNISHMENT
o LINK PAY TO PERFORMANCE
o COMPENSATES FOR THE WEAKNESS OF INTERNAL MOTIVE
• INVOLVEMENT
o MAKE IT MANDATORY
 o TRAIN FOR SELF-MANAGED TEAM
o PROVIDE CROSS-FUNCTION TRAINING
o COMPENSATES FOR ABILITY
CONCLUSION:
• ABOVE THREE FACTORS HAVE TO BE ADDRESSED
SIMULTANEOUSLY
• THE FACTORS ARE INTERDEPENDENT ON EACH OTHER
• THEY ARE INEFFECTIVE IF IT OPERATES ALL BY ITSELF

HOW TO DETERMINE IF MPM IS RIGHT FOR YOUR ORGANIZATION?

• ASK THE FOLLOWING QUESTIONS TO THE CEO OF THE

ORGANIZATION:
o DOES HE ACCEPT THE RESPONSIBILITY FOR HIS
EMPLOYEES
o DOES HE HAVE CONFIDENCE IN HIS EMPLOYEES
o IS HE LOOKING OUT FOR IMMEDIATE SOLUTION OR IS HE
LOOKING OUT FOR A LONG TERM STRATEGY
o ARE EMPLOYEES RESPONSIBLE FOR THE PERFORMANCE OF
THE ORGANIZATION
o DOES HE HAVE GENUINE NEED FOR IMPROVEMENT
o IS HE WILLING TO ACT AS A COACH, A FACILITATOR FOR
HIS EMPLOYEES

CONCLUSIONS:
• TODAY’S GENERATION OF EMPLOYEES ARE QUALIFIED
• THEY ASK LOT OF QUESTIONS
• THEY WANT TO BE HEARD
• THEY ARE SELF-INTERESTED
• DEAL YOU NEED CREATIVE WAYS IN MANAGING YOUR
EMPLOYEES
 INFORMATION:
HOW TO DEFINE & COMMUNICATE VALUES & BUSINESS STRATEGIES
TO EMPLOYEES
INTRODUCTION:
• ALL EMPLOYEES ASPIRE TO EXCEL. THEY NEED DIRECTION
• DEFINE & COMMUNICATE ORGANIZATION’S VALUES &
STRATEGIES TO YOUR EMPLOYEES
• SENIORS OF THE ORGANIZATION ARE RESPONSIBLE FOR
SETTING THE VALUES

WHAT ARE VALUES?

• NORMATIVE PRESCRIPTION OF WHAT CONSTITUTES AN
ACCEPTABLE BEHAVIOR IN AN ORGANIZATION
• FEW IN NUMBERS
• ONCE SET, IT RARELY CHANGES
• CHANGE IN VALUES CAUSES GREAT TRAUMA IN THE
ORGANIZATION
• ESTABLISHES FUNDAMENTAL CHARACTER OF THE BUSINESS
• PROVIDES PURPOSE FOR DAY TO DAY ACTIVITIES
• IT MAKES YOU PROUD TO BE ASSOCIATED WITH SUCH
ORGANIZATION
• THE FOLLOWING ARE THE SEVEN DOMINANT VALUES OF
EXCELLENT ORGANIZATION:
o A BELIEF IN BEING THE BEST
o A BELIEF IN THE IMPORTANCE OF THE DETAILS OF
EXECUTION
o A BELIEF IN THE IMPORTANCE OF PEOPLE BEING
INDIVIDUALS
o A BELIEF IN SUPERIOR QUALITY & SERVICE
 o A BELIEF THAT MOST MEMBERS OF THE ORGANIZATION
ARE WILLING TO EXPERIMENT. SUCH ORGANIZATION
SUPPORTS FAILURE FOR THE FIRST TIME
o A BELIEF IN THE IMPORTANCE OF INFORMALITY TO
ENHANCE COMMUNICATION
o EXPLICIT BELIEF IN & RECOGNITION OF THE IMPORTANCE
OF ECONOMIC GROWTH & PROFITS

HOW TO DETERMINE YOUR ORGANIZATION’S VALUES:

INTRODUCTION:
• THE FOLLOWING EXERCISE HELPS TO DETERMINE THE VALUES:
•
VALUE EXERCISE 1: BEING THE BEST

• TAKE A BLANK SHEET

• DIVIDE THE SHEET INTO TWO COLUMNS
• ON THE LHS WRITE “TO ME BEING THE BEST MEANS” MEANS
ALWAYS DOING THESE THINGS
• ON THE RHS WRITE “TO ME BEING THE BEST MEANS NEVER
DOING THESE THINGS”
• BE SPECIFIC WHEN WRITING THE COLUMNS
• ONCE YOU HAVE MADE YOUR LIST, REVIEW WHAT YOU HAVE
WRITTEN & DO THE FOLLOWING:
o FROM THE “ALWAYS DO” COLUMN FOR EACH ITEM ASK
YOURSELF, “ IF IT WAS IMPOSSIBLE FOR US TO DO THIS,
WOULD I STILL WANT TO BE IN BUSINESS?”
o IF THE ANSWER IS “NO” CIRCLE THIS ITEM AS A POSSIBLE
VALUE
o FOR THE “NEVER DO” COLUMN FOR EACH ITEM ASK
YOURSELF,” IF WE DID THIS, WOULD I FEEL NOT JUST
DISAPPOINTED BUT REALLY GUILTY ABOUT HAVING DONE
IT?”
o IF YOU WOULD FEEL GUILTY, CIRCLE THIS ITEM AS A
POSSIBLE VALUE
 VALUE EXERCISE 2: IMITATING THE BEST

• PICK AN ORGANIZATION YOU HAVE WORKED FOR IN THE PAST.

• WHAT WAS IT ABOUT THIS ORGANIZATION THAT YOU MOST
ADMIRED?
• BE SPECIFIC WHILE PREPARING THE LIST
• WHEN YOU HAVE FINISHED YOUR LIST, ASK YOURSELF “WHICH
OF THESE QUALITIES SHOULD WE EMULATE”

VALUE EXERCISE 3: AVOIDING THE WORST

• REVERSE EXERCISE 2

VALUE EXERCISE 4: SOURCE OF PRIDE

METHOD 1:
• MOST OF US LOVE TALKING ABOUT WHAT WE DO
• IF YOU ARE ASKED
o WHAT DO ENJOY MOST ABOUT YOUR JOB
o WHAT MAKES YOUR JOB SO ATTRACTIVE
• JOT DOWN WHAT THE PERSON SAYS

METHOD 2:
• YOU ARE A SUCCESSFUL EXECUTIVE IN YOUR ORGANIZATION
• YOU HAVE BEEN ASKED TO SPEAK IN YOUR SCHOOL ABOUT
YOUR WORK, YOUR PROFESSION OR YOUR ORGANIZATION
• WHAT KEY POINTS WOULD YOU MAKE IN SUCH A SPEECH
• REVIEW YOUR NOTES. ASK YOURSELF WHICH OF THESE POINTS
ARE ENDURING

REALITY CHECKING
• ASK YOURSELF THE FOLLOWING QUESTIONS TO DO REALITY
CHECKING OF YOUR VALUES:
o HOW CONSISTENT IS THIS VALUE WITH WHAT IS OR HAS
BEEN REWARDED IN THIS ORGANIZATION?
o HOW COMMITTED AM I PERSONALLY TO THIS VALUE? IS
THIS VALUE SOMETHING I AM REALLY PREPARED TO LIVE
BY?
 • YOUR ANSWERS TO THESE QUESTIONS ARE A CHECK ON THE
REASONABLENESS OF THESE VALUES FOR THE ORGANIZATION
YOU ARE PART OF & FOR YOURSELF AT THIS TIME
• IF YOU ARE NOT COMMITTED, YOUR BEHAVIOR WILL NOT BE
CONSISTENT WITH THESE VALUES
• ASK YOURSELF, “IF IT WERE IMPOSSIBLE TO OPERATE THE
BUSINESS CONSISTENT WITH THESE VALUES FOR WHATEVER
REASON, WOULD I BE PREPARED TO TERMINATE MY
ASSOCIATION WITH THE ORGANIZATION & ACCEPT THE
FINANCIAL, SOCIAL, & PERSONAL SACRIFICE WHICH FOLLOWS
• IF YOUR ANSWER IS “NO” THEN YOU ARE NOT SUFFICIENTLY
COMMITTED TO THIS SET OF VALUES

HOW TO COMMUNICATE VALUES TO EMPLOYEES?

• WRITTEN COMMUNICATION
• FORMAL VERBAL COMMUNICATION
• INFORMAL VERBAL COMMUNICATION & DEMONSTRATION

HOW TO DEVELOP YOUR BUSINESS STRATEGY

INTRODUCTION:
• BUSINESSES ARE RUN ON VALUES.
• ALL O HAVE OBJECTIVES.
• BUT IN A COMPETITIVE ENVIRONMENT, IF AN O HAS TO GROW,
THEN IT SHOULD HAVE CERTAIN OBJECTIVES IF ACHIEVED WILL
GIVE AN ADVANTAGE TO IT, OVER ITS COMPETITORS ONE NEEDS
STRATEGY
• TO ACHIEVE THESE OBJECTIVES ONE NEEDS TO PLAN
STRATEGICALLY.
• STRATEGIES HAVE TO BE DEVELOPED. IT CONSISTS OF THE
FOLLOWING STEPS:
o DRIVING FORCE
 WHAT ARE WE GOOD AT
 STRATEGIES ARE BASED ON WHAT WE ARE GOOD AT
 IT ANSWERS THE QUESTION “WHAT IS OUR
BUSINESS”
 WE COULD BE GOOD AT THE FOLLOWING THINGS:
• PRODUCTS OFFERED TO CUSTOMERS
• SERVING CUSTOMERS
• TECHNOLOGY
• METHOD OF SALE
• NATURAL RESOURCES
o KNOWING OUR COMPETITORS STRENGTH & WEAKNESS
o KNOW THE FOLLOWING AREAS OF COMPETITION
  CAPACITY:
• VOLUME OR RANGE OF PRODUCTS
 RATE:
• EFFICIENCY
 ACCURACY / FITNESS FOR USE:
• PERCEIVED QUALITY
 UNIQUENESS / NOVELTY OF PRODUCT:
• UNIQUE CHARACTERISTICS OF THE PRODUCT
 TIMELINESS:
• MEETING PROMISES OF DELIVERY
 AVAILABILITY:
• PRODUCT AVAILABLE ON DEMAND
 COST:
• LESS THAN THAT OF COMPETITOR OR
ESTIMATED COST
 BENEFIT / VALUE:
• HIGHER PERCEIVED VALUE IRRESPECTIVE OF
RELATIVE COST.
 CUSTOMER SERVICE:
• CUSTOMER’S PERCEPTION OF CARE,
ATTENTION, RESPONSIVENESS, FRIENDLINESS,
CONCERN WITH PRODUCTS / SERVICE
OFFERED
o KNOW YOUR PEOPLE’S CAPABILITY. CAPABILITIES
DETERMINE HOW ONE OUTPERFORMS THE COMPETITOR
• THE CEO & HIS MANAGEMENT TEAM DETERMINE STRATEGIES.
THE TEAM SHOULD NOT BE MORE THAN 5 MEMBERS COMING
FROM VARIOUS FUNCTIONS
• VALUES INFLUENCES STRATEGIES.

HOW TO COMMUNICATE YOUR BUSINESS STRATEGY TO EMPLOYEES

• COMMUNICATE THE FOLLOWING TO YOUR EMPLOYEES:
o WHAT IS OUR STRENGTH [DRIVING FORCE]
o WHAT IS OUR COMPETITOR’S STRENGTH
o IN WHICH AREA OF COMPETITION WE ARE GOOD AT
o WHAT IS THE RANGE OF OUR CAPABILITY
• THE COMMUNICATION CAN THROUGH EITHER IN WRITING OR
ORAL
 HOW TO REORGANIZE FOR PERFORMANCE

INTRODUCTION:
• INSPITE OF COMMUNICATING THE VALUES / STRATEGIES TO THE
EMPLOYEES, YET THERE IS GAP IN OUR PERFORMANCE
• WHY IS THIS SO?
• BECAUSE VALUES / STRATEGIES DO NOT TELL US HOW TO GO
ABOUT IN OUR PERFORMANCE
• VALUES / STRATEGIES SHOULD SPECIFY WHAT TYPE BEHAVIOR
THE EMPLOYEE SHOULD DISPLAY.
• BY BEHAVIOR WE MEAN NOT ONLY INDIVIDUAL BEHAVIOR, BUT
ALSO BEHAVIOR THAT RESULTS IN ACHIEVING THE GOALS OF
THE ORGANIZATION

CHARACTERISTICS OF THE TERM BEHAVIOUR:

• IT IS WHAT PEOPLE SAY OR DO
• IT CAN BE OBSERVED [HEARD / SEEN] WHILE IT IS OCCURRING
• IT IS A SET OF HABITS.
• IT CAN BE CHANGED. HENCE THE FOCUS ON BEHAVIOUR.
• FOR EXAMPLE:
o EMPLOYEES CANNOT DIRECTLY MAKE THE COMPANY THE
“HIGHEST QUALITY PROVIDER” WHAT EMPLOYEES CAN DO,
HOWEVER IS CHECK THEIR OWN WORK TO ENSURE THAT
IT IS IN COMPLIANCE WITH QUALITY STANDARDS. MAKING
SUCH QUALITY CHECKS & PERHAPS KEEPING A QUALITY
CONTROL GRAPH IS A BEHAVIOR, WHICH CAN OBSERVED
WHILE IT IS OCCURRING & IT IS CONTROLLABLE BY THE
EMPLOYEE
o TO OPERATE A BUSINESS IN ACCORDANCE WITH BASIC
VALUES & TO ACHIEVE OBJECTIVES, YOU HAVE TO ENSURE
THAT EMPLOYEES CHANGE THEIR BEHAVIOR SO THAT IT IS
CONSISTENT WITH COMPANY’S VALUES / STRATEGIES
o SINCE THE ULTIMATE GOAL OF THE O SHOULD BE TO
ACHIEVE ITS STRATEGIC OBJECTIVES WE CANNOT IGNORE
THE GAP BETWEEN STRATEGIES & BEHAVIOURS. THIS IS
THE GAP WHICH SHOULD BE BRIDGED
THE IMPORTANCE OF MISSION & ACCOMPLISHMENTS

MISSION:
• STRATEGIC OBJECTIVES ARE TOO BROAD IN NATURE. IT
CONTAINS ONE OR MORE MISSIONS. IT SHOULD BE MADE MORE
CONCRETE, & MEANINGFUL WHICH THE EMPLOYEES CAN
UNDERSTAND
• QUESTIONS A MISSION STATEMENT SHOULD ANSWER:
o WHAT IS OUR BUSINESS?
o WHO IS THE CUSTOMER?
o WHAT DO CUSTOMER’S VALUE?
o WHAT SHOULD OUR BUSINESS BE?
• MISSION STATEMENT SHOULD
o BE REALISTIC
o BE SPECIFIC
o FIT THE MARKET ENVIRONMENT
o BE BASED ON DISTINCTIVE COMPETENCIES
o BE MOTIVATING

• ACCOMPLISHMENTS:
o IT TALKS ABOUT COMPETITIVE REQUIREMENTS TO
ACCOMPLISH THE MISSION
• BEHAVIOR:
o THE KEY CAPABILITIES REQUIRED TO ACHIEVE THESE
COMPETITIVE REQUIREMENTS

• VALUES
• STRATEGIES
• MISSION
• BEHAVIOR
• ACTUALLY THIS SHOULD BE THE TYPE OF O STRUCTURE
 HOW TO DESIGN A PERFORMANCE ORGANIZATION?

• TO DESIGN PERFORMANCE ORGANIZATION, WE START WITH THE

RESULTS WE WANT
• WE HAVE TWO CHOICES REGARDING O:
o ALONG PRODUCT / SERVICE LINES OR
o ALONG MARKET / CUSTOMER LINES

PRODUCT / SERVICE LINE ORGANIZATION

• IF WE ORGANIZE ALONG PRODUCT / SERVICE LINES WE WILL
CREATE ORGANIZATIONAL UNITS [DIVISIONS, DEPARTMENTS,
SECTIONS, ETC.] WHOSE PRIMARY MISSION WILL BE:
o TO PROVIDE IDENTIFIED PRODUCTS / SERVICES TO MEET
THE NEEDS OF CERTAIN MARKETS / CUSTOMERS SO THAT
EXISTING CUSTOMERS ARE RETAINED, & NEW CUSTOMERS
OR THESE PRODUCTS / SERVICES ARE OBTAINED WHILE
ACHIEVING OR EXCEEDING PROJECTED LEVELS OF
PROFITABILITY
• THE CRITICAL ACCOMPLISHMENTS ARE TO ACHIEVE THE
COMPETITIVE REQUIREMENTS FOR ITS PARTICULAR PRODUCT /
SERVICE LINE & ITS MARKETS / CUSTOMERS
• THE CRITICAL BEHAVIORS FOR A PRODUCT / SERVICE LINE
COMPONENTS ARE DEMONSTRATED BY KEY CAPABILITIES FOR
ACHIEVING THESE COMPETITIVE REQUIREMENTS

MARKET / CUSTOMER LINE ORGANIZATION:

• IF WE ORGANIZE ALONG MARKET / CUSTOMER LINES, WE WILL
CREATE ORGANIZATIONAL UNITS [DIVISIONS, DEPARTMENTS,
SECTIONS ETC.] WHOSE PRIMARY MISSION WILL BE:
o TO MEET THE NEEDS OF CERTAIN MARKETS / CUSTOMERS
BY PROVIDING & DEVELOPING A RANGE OF PRODUCTS /
SERVICES THEY DESIRE SO THAT EXISTING CUSTOMERS
ARE RETAINED & NEW CUSTOMERS OF THIS TYPE ARE
OBTAINED WHILE ACHIEVING OR EXCEEDING PROJECTED
LEVELS OF PROFITABILITY
o THE CRITICAL ACCOMPLISHMENTS FOR MARKET /
CUSTOMER LINE COMPONENT ARE TO ACHIEVE
COMPETITIVE REQUIREMENTS FOR THESE PARTICULAR
 MARKETS / CUSTOMERS & THE PRODUCTS / SERVICES
PROVIDED TO THEM

CHARACTERISTICS OF PERFORMANCE APPROACH

• DEPARTMENTS ACCORDING TO A SUB GROUPING OF PRODUCTS /
SERVICE OR MARKET / CUSTOMER
• WE THEN CONTINUE TO SUBDIVIDE THE COMPANY TO THE
EXTENT POSSIBLE ALONG PRODUCT / SERVICE OR MARKET /
CUSTOMER LINES SO THAT EVERY ORGANIZATIONAL
COMPONENT IS RESPONSIBLE FOR PROVIDING PRODUCT /
SERVICE OR MEETING THE NEEDS OF SPECIFIC MARKET /
CUSTOMERS

ARGUMENTS AGAINST PERFORMANCE APPROACH:

• WHAT ABOUT WORK THAT BY ITS NATURE REQUIRES A
FUNCTIONAL APPROACH TO ORGANIZATION?
• FOR EXAMPLE:
o WHAT ABOUT WORK THAT REQUIRES A FUNCTIONAL
APPROACH TO O
o WHAT ABOUT THE ECONOMICS OF OPERATION THAT
COMES FROM FULL UTILIZATION OF EQUIPMENT &
AVOIDANCE OF DUPLICATION WITH FUNCTIONAL
APPROACH
o WHAT ABOUT REGULATORY OR SECURITY REQUIREMENTS
THAT CAN BE MET THROUGH THE CONCENTRATION &
CONTROL THAT COMES FROM A FUNCTIONAL STRUCTURE

ARGUMENTS IN FAVOUR OF PERFORMANCE APPROACH

• REQUIREMENT OF SPECIALIST:
o WE NEED SPECIAL CAPABILITIES, NOT SPECIALIST. AND WE
NEED THESE CAPABILITIES TO MEET SPECIFIC COMPETITIVE
REQUIREMENTS THAT MIGHT CHANGE WHEN OUR
STRATEGY CHANGES
o TO PROVIDE THIS CAPABILITY WE COULD CHOOSE TO HIRE
A SPECIALIST IF THE WORK IS HIGHLY SPECIALIZED & A
CHANGE IN STRATEGY COULD MAKE PERFORMANCE OF
THE WORK UNNECESSARY THEN WE SHOULD CONTRACT
THE WORK WITH AN OUTSIDE SUPPLIER.
 o IN THE LONG RUN, CONTRACTING OUT WILL BE LESS
EXPENSIVE THAN HIRING SPECIALISTS & THE WORK
PRODUCT WILL BE MORE OBJECTIVE & POTENTIALLY OF
HIGHER QUALITY. TOO OFTEN WE HAVE SEEN HIGHLY
SPECIALIZED FUNCTIONS ORIGINALLY CREATED TO MEET A
SHORT TERM BUT STRATEGICALLY IMPORTANT, NEED THAT
NO LONGER IS REQUIRED. SUCH GROUPS CONTINUE TO
PERPETUATE THEIR EXISTENCE BY LOOKING FOR
SOMETHING TO DO.
o IF SPECIALIST MUST BE HIRED, IDEALLY THEY SHOULD BE
HIRED AS PART OF DEPARTMENT STAFF. THEN THE
OPPORTUNITY EXISTS TO BROADEN THEIR SPECIALTY SO
THAT IT CAN SERVE A NUMBER OF DIFFERENT FUNCTIONS
• FUNCTIONAL GROUPING TO ENSURE ECONOMY & FULL
UTILIZATION OF EXPENSIVE EQUIPMENT MAKE SENSE
o THE PURPOSE OF THE BUSINESS IS TO PRODUCE A
PRODUCT, PROVIDE A SERVICE & MEET CUSTOMER’S
NEED. THIS HAS TO BE DONE WITH GREATEST ECONOMY &
EFFICIENCY POSSIBLE. BUT WHAT DO WE GAIN FROM
ECONOMY & EFFICIENCY IF WE FAIL IN THE ULTIMATE
PURPOSE. THE CONCENTRATION OF RESOURCES RESULTS
IN LONG QUEUES & GROWING BACKLOGS AS WORK PILES
UP WAITING TO PASS THROUGH ONE CENTRAL POINT.
THUS ALL PROPOSALS FOR CENTRALIZATION SHOULD BE
EXAMINED WITH UTMOST CAUTION.
• REGULATORY REQUIREMENTS & SECURITY:
o IF YOU HAVE TO, YOU HAVE TO. OFTEN WELL-INTENDED
REGULATIONS ARE DETRIMENTAL TO PERFORMANCE. . WE
CAN ONLY HOPE THAT THE LOSS IN PERFORMANCE IS
MORE THAN MADE UP FOR BY THE HIGHER PURPOSES
SERVED BY THE REGULATIONS THEMSELVES. NEVER
ACCEPT A SINGLE INTERPRETATION OF WHAT THE
REQUIREMENTS REALLY ARE.
o WHETHER SECURITY IS OBTAINED BY CONCENTRATION OR
BY DISTRIBUTION. FOR EXAMPLE A BANK’S CASH BOX IS
OPENED WITH TWO KEYS. BOTH KEYS ARE WITH
DIFFERENT PEOPLE

CONCLUSION:
• EVEN IF YOU NEED STAFF FUNCTIONS SUGGEST HAVE THE
CONCEPT OF INTERNAL CUSTOMERS. THIS WILL ENABLE US TO
HAVE MISSION & ACCOMPLISHMENTS EVEN FOR THESE STAFF
FUNCTIONS
 ACHIEVING “ EMPLOYMENT SECURITY”
NOT JOB SECURITY
• UNIT EXISTS SOLELY FOR THE STRATEGIC PURPOSE OF
ACCOMPLISHING ITS MISSION.
• WHAT HAPPENS IF A PARTICULAR PRODUCT / SERVICE OR
MARKET / CUSTOMERS SERVED BY A COMPONENT IS NO LONGER
REQUIRED. IN SUCH AN EVENT THE FUNCTIONAL UNITS SERVING
INTERNAL NEEDS BECOMES OBSOLETE.
• IN PERFORMANCE ORGANIZATION, ALL ORGANIZATIONAL UNITS
ARE BY DEFINITION IMPERMANENT; IF SO, THEN ALL POSITIONS
WITHIN THESE ORGANIZATIONAL UNITS ARE IMPERMANENT.
• IN SUCH AN ORGANIZATION THERE IS NO JOB SECURITY PER SE,
ONLY EMPLOYMENT SECURITY. THE PERFORMANCE
ORGANIZATION MAKES EVERY EFFORT TO GUARANTEE
CONTINUED EMPLOYMENT, BUT NOT NECESSARILY IN A SPECIFIC
JOB OR JOB SPECIALTY. LONG-TERM EMPLOYMENT REQUIRES
THAT THE COMPANY COMMITS ITSELF EMPLOYEE DEVELOPMENT,
& THAT EMPLOYEES BE WILLING TO BE FLEXIBLE IN JOB
ASSIGNMENTS
• IT IS EXACTLY BECAUSE OF THIS IMPERMANENCE THAT THE
PERFORMANCE ORGANIZATION DISCOURAGES
OVERSPECIALIZATION, BUT ENCOURAGES COOPERATION &
TEAMWORK.
 HOW TO DEVELOP PERFORMANCE MEASURES

INTRODUCTION:
• FEEDBACK HAS TO BE PROVIDED TO EMPLOYEES ON THEIR
PERFORMANCE. OTHERWISE EMPLOYEES WILL NOT KNOW
WHETHER THEIR BEHAVIOR IS CONSISTENT WITH THE EXPECTED
BEHAVIOR
• WHAT GETS MEASURED GETS DONE. IF YOU CAN’T MEASURE,
YOU CAN’T MANAGE IT; & YOU WILL ALSO NOT KNOW IF IT
NEEDS IMPROVEMENT
• MEASURES PROVIDES DIRECTION, & CONFIRMATION

GUIDELINES FOR DEVELOPING MEASURES OF PERFORMANCE

• GUIDELINE 1:
o ALL MEASURES SHOULD BE ACCOMPLISHMENT BASED
o KEY ACCOMPLISHMENTS SHOULD FULFILL THE
COMPETITIVE REQUIREMENTS FOR THE PRODUCT /
SERVICE OFFERED OR MARKET / CUSTOMER SERVED
• GUIDELINE 2:
o DEVELOP GROUP / TEAM ORIENTED MEASURES
• GUIDELINE 3:
o WHEN DEVELOPING MEASURES, SEEK A LEVEL OF
PRECISION; IF MEASURE IS A SINGLE INDICATOR
o OTHERWISE USE A FAMILY OF MEASURES.
• GUIDELINE 4:
o MEASURES SHOULD BE REVIEWED, & CHANGED IF
NECESSARY WHEN STRATEGIES CHANGE

CONCLUSION:
• THERE ARE POSSIBLE TYPES OF MEASURES THAT CAN BE
DEVELOPED:
o COUNTS
 NUMBER OF TIMES
o RATIOS
 NUMBER OF TIMES AN ACCOMPLISHMENT IS
ACHIEVED, DIVIDED BY NUMBER OF TIMES
ACCOMPLISHMENT COULD HAVE BEEN ACHIEVED
o PERCENTAGES
 THE NUMBER OF TIMES THE ACCOMPLISHMENTS IS
ACHIEVED DIVIDED BY THE NUMBER OF TIMES IT
COULD HAVE BEEN ACHIEVED OUT OF 100
OPPORTUNITIES
o RUPEES
  THE RUPEE IMPACT OF ACHIEVING OR FAILING TO
ACHIEVE AN ACCOMPLISHMENT

HOW TO DEVELOP AN EFFECTIVE MIS

GUIDE TO AN EFFECTIVE MI &

PERFORMANCE FEEDBACK SYSTEM
• THE SCORECARD DATABASE
o IT IS BRINGING THE SCORES FOR EACH ORGANIZATIONAL
COMPONENT TOGETHER INTO A SINGLE LOCATION
o IT ELLS THE NAME OF THE MEASURE & THE SCORE FOR
THAT MEASURE
• SCORECARDS:
o IT IS THE BASIC REPORTS OF CURRENT SCORES ON THE
MEASURE OF PERFORMANCE
o USED TO PROVIDE FEEDBACK ON PERFORMANCE
o IT SHOULD CONTAIN THE FOLLOWING:
 LIST OF PERFORMANCE MEASURES WHICH HAS TO
BE MONITORED & CONTROLLED
 PERIOD OF THE SCORE. VIZ. WEEKLY, MONTHLY,
YEARLY
 THE GOALS SHOULD BE STATED
 IT SHOULD THE TREND IN PERFORMANCE OVER A
PERIOD OF TIME
• THE SCORECARD EXCEPTION SUMMARY
o EACH TIME SCORECARD IS PRODUCED, PREPARE
EXCEPTION SUMMARY
o IT IS A SEPARATE REPORT FOR EACH ORGANIZATIONAL
COMPONENT THAT HIGHLIGHTS POSITIVE & NEGATIVE
EXCEPTIONS
o THIS HELPS US TO FOCUS ON AREAS OF PERFORMANCE
THAT SHOULD BE OF GREATEST CONCERN
o POSITIVE EXCEPTIONS SHOULD BE REWARDED /
RECOGNIZED
o NEGATIVE EXCEPTIONS SIGNALS THE NEED FOR PROBLEM-
SOLVING
o IT SHOULD ALSO STATE THE NUMBER OF TIMES THE
EXCEPTIONS OCCURS
• GRAPHS ON PERFORMANCE
o PRODUCE GRAPHS ON PERFORMANCE FOR MEASURES YOU
ARE TRACKING
o IT HAS THE FOLLOWING ADVANTAGES:
 EASY TO READ & INTERPRET AT A GLANCE
 EASY TO SEE & ANALYZE THE TRENDS
  EASY TO COMPARE PERFORMANCE

HOW TO SET PERFORMANCE GOALS?

THE PURPOSE OF GOALS & THEIR IMPACT ON PERFORMANCE

• GOALS ARE IMPORTANT FOR THE FOLLOWING REASONS:
o GIVES MEANING TO THE ACTIVITIES ONE IS PERFORMING
o SERVES AS BENCHMARKS
o SPECIFIC GOALS RESULTS IN HIGHER LEVEL OF
PERFORMANCE THAN N GENERAL GOALS
o DIFFICULT GOALS RESULTS IN HIGHER PERFORMANCE
o PARTICIPATION IN GOAL SETTING INCREASES THE
ACCEPTANCE OF DIFFICULT GOALS

REQUIREMENT OF MEANINGFUL GOALS:

• GOALS SHOULD BE CHALLENGING
• IT SHOULD BE PERCEIVED AS ATTAINABLE
• MULTIPLE GOALS ESTABLISHES A RANGE OF PERFORMANCE

ASSUMPTIONS TO BE MADE WHILE SETTING GOALS:

• OBTAIN CONTINUOUS IMPROVEMENT IN LONG RUN
• LEVEL OF PERFORMANCE SHOULD BE EQUAL TO OR BETTER
THAN THE COMPETITOR IN THE LONG TERM
• CURRENT GOAL SHOULD BE BETTER THAN THE PREVIOUS GOAL
• THERE SHOULD BE NO DETERIORATION IN PERFORMANCE OVER
LONG TERM, NOR ARE CURRENT PERFORMANCE SHOULD BE
WORST THAN PREVIOUS ONE
• IF BETTER PERFORMANCE ON AN ACTIVITY HELPS US TO BE
COMPETITIVE THEN IT IS MORE IMPORTANT TO SET
CHALLENGING GOALS FOR THAT ACTIVITY

WHY MULTIPLE GOALS ARE NEEDED FOR EACH ACTIVITY:

• A SINGLE GOAL FOR EACH ACTIVITY IGNORES RANDOM
FLUCTUATIONS IN SCORES. FLUCTUATIONS DOES NOT INDICATE
SIGNIFICANT CHANGES IN PERFORMANCE
• THE CONCEPT OF MULTIPLE GOALS REQUIRES SETTING THREE
LEVELS OF GOALS FOR EACH PERFORMANCE ACTIVITIES:
o THE LONG TERM GOAL:
  PERIOD IS 1-2 YEARS
 THIS LEVEL INDICATES BETTER THAN CURRENT
PERFORMANCE
 THE MANAGEMENT USUALLY DICTATES IT.
CURRENTLY IT MAY NOT BE ATTAINABLE
o THE SHORT TERM GOAL:
 DESIRED LEVEL OF PERFORMANCE
 PERCEIVED AS ATTAINABLE WITH SOME EFFORT
WITHIN A PERIOD RANGING FROM 3-6 MONTHS
 AT THE END OF THE TERM THE SHORT GOALS ARE
REEVALUATED BASED UPON THE PERFORMANCE.
THE EXPECTATION IS THAT WHEN SHORT TERM GOAL
IS CONSISTENTLY MET, IT WILL BE MOVED CLOSER
TO THE LONG TERM GOAL
 SHORT TERM GOALS SHOULD CONFIRM TO THE
FOLLOWING CRITERIA:
• IT MUST BE LESS THAN OR EQUAL TO THE
LONG TERM GOAL
• IT CANNOT BE BETTER THAN THE BEST
PERFORMANCE EVER ACHIEVED
• IT IS BETTER THAN THE CURRENT AVERAGE OR
TYPICAL PERFORMANCE
 USUALLY SHORT TERM GOALS ARE NEGOTIATED
o MINIMUM OR STANDARD
 IT IS THE CUT OFF POINT FOR SIGNALING THE
EXISTENCE OF OR POTENTIAL FOR A PERFORMANCE
PROBLEM
 DURATION IS OF LONGER PERIOD OF TIME. AT THE
END OF THE PERIOD IT IS REVIEWED WITH THAT
INTENTION THAT IT WILL BE RAISED.
 IT HAS TO CONFIRM TO THE FOLLOWING CRITERIA:
• MUST BE LESS THAN OR EQUAL TO CURRENT
AVERAGE PERFORMANCE
• THEY CANNOT BE WORSE THAN THE WORST
PERFORMANCE FOR ANY PREVIOUS PERIOD
o THE PURPOSE OF THREE LEVELS OF GOALS IS TO SPECIFY
THE ULTIMATE LEVEL OF PERFORMANCE DESIRED BY THE
MANAGEMENT & TO DEFINE THE RANGE OF PERFORMANCE
 MPM

WHAT IS HAPPENING TO TODAY’S BUSINESS?

• ON WHAT IS THE SUCCESS OF BUSINESS DEPENDENT UPON?
• PERFORMANCE OF THE ORGANIZATION IS DEPENDENT UPON
WHAT FACTOR?
• IN TODAY’S ENVIRONMENT HOW SHOULD THE EMPLOYEES BE
TREATED?
• HOW MANY TYPES OF PERFORMERS ARE THERE?
• WHAT ARE THE \CHARACTERISTICS OF EXCELLENT
PERFORMERS?
• WHAT ARE THE CHARACTERISTICS OF AVERAGE PERFORMERS?
• WHAT ARE THE CHARACTERISTICS OF POOR PERFORMERS?
• STATE THE ISSUES BEFORE THE MANAGEMENT WITH RESPECT
PERFORMERS?
• IN PMS HOW DO YOU CREATE EXCELLENCE?
• CAN WE CREATE EXCELLENCE THROUGH MATCHING OF JOBS?
• CAN WE CREATE EXCELLENCE THROUGH RECRUITMENT?
• CAN WE CREATE EXCELLENCE THROUGH TRAINING?
• STATE THE FACTORS, WHICH WE ADDRESS IN WORK
ENVIRONMENT?
• STATE THE CHARACTERISTICS OF INFORMATION?
• STATE THE CHARACTERISTICS OF CONSEQUENCES?
• STATE THE CHARACTERISTICS OF INVOLVEMENT?
• CAN THESE FACTORS OPERATE INDEPENDENTLY?
• WHAT ARE THE QUESTIONS, WHICH SHOULD BE ASKED TO THE
CEO OF THE COMPANY BEFORE IMPLEMENTING MPM?
• STATE THE CHARACTERISTICS OF TODAY’S GENERATION?
• STATE THE CHARACTERISTICS OF VALUES?
• STATE THE SEVEN DOMINANT VALUES OF AN EXCELLENT
ORGANIZATION?
• HOW DO YOU DETERMINE BEING THE BEST AS A VALUE SYSTEM?
• HOW DO YOU DETERMINE IMITATING THE BEST AS A VALUE
SYSTEM?
• HOW DO YOU DETERMINE SOURCE OF PRIDE AS A VALUE
SYSTEM?
• HOW DO YOU TEST THE REALITY OF VALUES IN ORGANIZATION?
• HOW DO YOU COMMUNICATE VALUES TO YOUR EMPLOYEES?
• WHAT ARE THE STEPS IN STRATEGY FORMULATION?
• WHAT IS DRIVING FORCE?
• STATE THE AREAS OF COMPETITION?
• WHY IS THERE A GAP IN THE PERFORMANCE OF THE EMPLOYEES;
INSPITE COMMUNICATING TO THEM THE VALUES / STRATEGIES?
• STATE THE CHARACTERISTICS OF THE TERM BEHAVIOUR?
• WHAT IS MISSION?
• HOW DO YOU ACCOMPLISH MISSIONS?
• WHAT DO WE LOOK CRITICALLY IN THE BEHAVIOUR OF THE
EMPLOYEE?
• WHAT ARE THE ARGUMENTS AGAINST PM APPROACH?
• HOW WILL YOU DEFEND THE SAME?
• HOW CAN WE ACHIEVE EMPLOYMENT SECURITY AS AGAINST JOB
SECURITY IN PMS?
• HOW DO W DEVELOP MEASURES OF PERFORMANCE?
• WHAT ARE THE POSSIBLE TYPES OF MEASURES, WHICH CAN BE
DEVELOPED?
• HOW DO YOU DEVELOP EFFECTIVE MIS & PERFORMANCE
FEEDBACK SYSTEM?
• STATE THE PURPOSE & THEIR IMPACT ON PERFORMANCE?
• STATE THE REQUIREMENTS OF MEANINGFUL GOALS?
• STATE THE ASSUMPTIONS TO BE MADE WHILE SETTING GOALS?
• WHY SHOULD GOALS HAVE THREE LEVELS OF SETTING?
 CONSEQUENCES:
TYPES OF CONSEQUENCES:
• CONSEQUENCES HAS STRONG INFLUENCE ON BEHAVIOUR
• IN ORDER TO UNDERSTAND THE INFLUENCE OF CONSEQUENCES
ON BEHAVIOUR, IT IS IMPORTANT TO DISTINGUISH BETWEEN
TWO TYPES OF BEHAVIOUR:
o REFLEX
 THE PERSON HAS NO CONTROL OVER IT
 IT IS AUTOMATIC
o VOLUNTARY
 HAS CONTROL OVER IT
 IT IS NOT AUTOMATIC
 ALL WORK BEHAVIOUR IS VOLUNTARY. IT IS THIS
BEHAVIOUR WHICH CAN BE INFLUENCED BY
ARRANGING CONSEQUENCES
• CONSEQUENCES FOLLOW BEHAVIOUR. IT DETERMINES WHETHER
BEHAVIOUR WILL BE REPEATED OR NOT
• TWO TYPES OF CONSEQUENCES:
o REINFORCEMENT
 PROVIDING SOMETHING WHICH THE EMPLOYEE
WANTS AFTER THE BEHAVIOUR IS PERFORMED
 ALSO CALLED AS POSITIVE CONSEQUENCE
 ADVANTAGES:
• HAS LONG TERM EFFECT
• PRODUCES DESIRABLE SIDE EFFECTS SUCH AS
GREATER INVOLVEMENT, & PARTICIPATION,
INCREASED JOB-SATISFACTION
• INDICATOR TO THE EMPLOYEES WHAT
CONSTITUTES A GOOD / DESIRABLE BEHAVIOR
o PUNISHMENT
 PROVIDING SOMETHING, WHICH THE EMPLOYEE
DOES NOT WANT AFTER THE BEHAVIOUR, HAS
OCCURRED.
  ALSO CALLED AS NEGATIVE CONSEQUENCE
 DOES NOT HAVE LONG TERM EFFECT, UNLESS IT IS
SEVERE & CONSISTENTLY APPLIED
 HAS UNDESIRABLE RESULTS SUCH AS AVOIDANCE,
COMPLAINING, RESENTMENT
 IS AN INDICATOR WHAT THE EMPLOYEE SHOULD NOT
DO, & NOT WHAT THE EMPLOYEE SHOULD DO? IT IS
NOT LIKELY TO RESULT IN INCREASE IN DESIRED
BEHAVIOUR
• CONSEQUENCE IS REINFORCING OR PUNISHING DEPENDS
ENTIRELY ON ITS EFFECT ON THE BEHAVIOUR, & NOT WHAT IS
INTENDED BY THE MANAGER
• IT IS IMPORTANT TO KNOW WHAT MAKES SENSE TO THE
EMPLOYEE; I.E. HOW IS CONSEQUENCE PERCEIVED BY THE
EMPLOYEE
• IF IN THE EMPLOYEE’S VIEW THE CONSEQUENCE SATISFIES A
NEED OF THE EMPLOYEE THEN THE CONSEQUENCE IS
REINFORCING FOR THAT EMPLOYEE. AS A MANGER WE OFTEN
FAIL TO ALTER THE BEHAVIOUR OF THE EMPLOYEE BECAUSE WE
ASSUME THEY PERCEIVE CONSEQUENCES THE SAME WAY WE
DO. AS A RESULT, WE USE REWARDS THAT ARE NOT
REINFORCERS, & WE USE DISCIPLINE THAT IS NOT PUNISHING AT
LEAST FROM THE EMPLOYEES VIEWPOINT WHICH IS AFTER ALL
THE ONLY VIEW POINT WHICH MATTERS

HOW TO DETERMINE WHAT THE EMPLOYEE WANTS:

• ALL EMPLOYEES HAVE NEEDS, WHICH THEY TRY TO SATISFY AT
THEIR WORKPLACE. THE NEEDS WHICH THEY ATTEMPT TO MEET
IN WORKPLACE:
o NEED FOR PERSONAL & FINANCIAL SECURITY
o NEED TO BE ACCEPTED AS A PART OF THE WORKGROUP
o A NEED FOR A SENSE OF ACCOMPLISHMENT OR
ACHIEVEMENT
• THE POWER OF ANY GIVEN CONSEQUENCE TO INFLUENCE AN
EMPLOYEE’S BEHAVIOUR IS DEPENDENT UPON NUMBER OF
FACTORS SUCH AS:
o THE EMPLOYEE MUST A RELATIONSHIP BETWEEN THE
BEHAVIOUR & THE CONSEQUENCE
o THE CONSEQUENCE SHOULD SATISFY A NEED WHICH THE
EMPLOYEE HAS
o THE NEED THAT WILL BE SATISFIED BY THE CONSEQUENCE
MUST BE MORE IMPORTANT THAN A COMPETING NEED AT
THE TIME OF THE BEHAVIOUR
o THE EFFORT REQUIRED TO PERFORM THE DESIRED
BEHAVIOUR MUST BE PERCEIVED BY THE EMPLOYEE AS
 LESS THAN THE EFFORT REQUIRED TO PERFORM SOME
OTHER BEHAVIOUR THAT WOULD LEAD TO THE SAME
CONSEQUENCE
o THE EFFORT REQUIRED FROM THE EMPLOYEE TO PERFORM
THE DESIRED BEHAVIOUR MUST BE PERCEIVED AS LESS
THAN THE EFFORT REQUIRED FOR PERFORMING
DIFFERENT BEHAVIOURS THAT WOULD LEAD TO
DIFFERENT CONSEQUENCES SATISFYING THE SAME NEED
• IF YOU ARE PROVIDING CONSEQUENCES & THEY ARE NOT
WORKING ASK THE FOLLOWING QUESTIONS TO YOURSELF:
o DOES THE EMPLOYEE SEE THE CONNECTION BETWEEN THE
BEHAVIOUR & THE CONSEQUENCES
o DOES IT MATTER TO THE EMPLOYEE? DOES THE EMPLOYEE
BELIEVE THAT THE CONSEQUENCE WILL SATISFY A NEED
THAT IS IMPORTANT?
o S IT WORTH THE EFFORT TO OBTAIN THE CONSEQUENCE
BY PERFORMING THE BEHAVIOUR OR IS THERE ANY EASIER
WAY
• ANSWER TO THE ABOVE QUESTIONS INDICATES WHY THE
CONSEQUENCE DOES NOT WORK

A GUIDE TO USING CONSEQUENCES TO MANAGE PERFORMANCE:

• CONTINUALLY MONITOR THE IMPACT OF CONSEQUENCES ON
PERFORMANCE. NEVER ASSUME THAT ANY GIVEN CONSEQUENCE
WILL HAVE THE SAME IMPACT ON PERFORMANCE EACH TIME IT
IS USED. OVER TIME SOME CONSEQUENCE CAN LOSE THEIR
EFFECT. EMPLOYEE WANTS CHANGE, & A RESULT WHAT WAS
ONCE POSITIVE CONSEQUENCE COULD BECOME NEGATIVE &
VIVE VERSA. THE ONLY SURE WAY TO KNOW THE EFFECT OF THE
CONSEQUENCE IS TO OBSERVE ITS EFFECT ON THE BEHAVIOUR
• ALWAYS ARRANGE POSITIVE CONSEQUENCE FOR
ACCOMPLISHMENT WHAT WE ARE REALLY TRYING TO GAIN IS
ACCOMPLISHMENT [SOMETHING VALUABLE TO ORGANIZATION]
& NOT BEHAVIOUR [WHICH IS REALLY COST TO THE
ORGANIZATION]
• PROVIDE POSITIVE CONSEQUENCES FOR STEADY
IMPROVEMENTS TOWARDS THE GOAL
• NEVER PROVIDE NEGATIVE CONSEQUENCE FOR FAILURE TO
ATTAIN AN ACCOMPLISHMENT. THIS WILL MAKE THE EMPLOYEE
TO STOP ATTEMPTS TO DESIRABLE BEHAVIOUR
• EMPHASIZE POSITIVE CONSEQUENCE TO ENCOURAGE CORRECT
BEHAVIOUR RATHER THAN NEGATIVE CONSEQUENCES TO
DISCOURAGE INCORRECT BEHAVIOR
• NEGATIVE CONSEQUENCES TEACH PEOPLE WHAT NOT TO DO.
THEY DON’T TEACH WHAT THEY SHOULD DO. IF YOU HAVE TO
 USE NEGATIVE CONSEQUENCE TO CORRECT PROBLEM-
BEHAVIOR, TRY TO ENSURE THAT YOU ALSO PROVIDE POSITIVE
CONSEQUENCES FOR DESIRED BEHAVIOUR
• TIME THE DELIVERY OF THE CONSEQUENCE FOR MAXIMUM
IMPACT. THE SHORTER THE TIME BETWEEN THE OCCURRENCE
OF THE BEHAVIOUR & THE CONSEQUENCE THE MORE POWERFUL
THE CONSEQUENCE IS IN RESPECT TO ITS INFLUENCE ON
BEHAVIOUR
• ENSURE THAT THE CONSEQUENCES YOU ARRANGE ARE TRULY
CONTINGENT ON PERFORMANCE. MAKE RECOGNITION
CONTINGENT ON GOOD PERFORMANCE. TO BE NICE TO
EMPLOYEES, WE FUND BIRTHDAY PARTIES, COMPANY PICNICS &
HOLIDAY PARTIES. WE TREAT EMPLOYEES “OH SO NICE” & YET
THESE UNGRATEFUL PEOPLE DON’T PERFORM ANY BETTER. THE
PROBLEM WITH PARTIES’ PICNICS & SO ON IS THAT ARE NOT
CONTINGENT ON PERFORMANCE. EVERYONE CAN ATTEND
REGARDLESS OF HOW WELL OR POORLY THEY HAVE
PERFORMED. EVEN WHEN WE CREATE A FORMAL
PROGRAM TO RECOGNIZE GOOD PERFORMANCE, THE PROGRAM
FREQUENTLY BECOMES NONCONTINGENT OVER TIME. FOR
EXAMPLE THE “EMPLOYEE OF THE MONTH” AWARD ORIGINALLY
DESIGNED TO RECOGNIZE SUPERIOR PERFORMANCE
EVENTUALLY LOOSES ANY RELATIONSHIP TO PERFORMANCE. WE
DISCOVER ATUL HAS WON HE AWARD THREE TIMES IN A ROW.
SURE HE STILL HAS THE BEST PERFORMANCE, BUT WE DON’T
WANT TO BE ACCUSED OF PLAYING FAVOURITES. MAYBE WE
WILL PICK THE SECOND BEST THIS TIME. SOON FOR THE SAME
REASON WE ARE PICKING THE THIRD BEST & FOURTH BEST.
EVENTUALLY EVERYONE GETS THE AWARD, NOT BECAUSE THEY
HAVE EARNED IT, BUT BECAUSE IT IS THEIR TURN.

CONCLUSION:
• UNLESS THE EMPLOYEE SEES A DIRECT RELATIONSHIP BETWEEN
DAY-TO-DAY BEHAVIOUR, & OBTAINING CONSEQUENCE THAT
MATTERS, THAT CONSEQUENCE IS NOT TRULY CONTINGENT, &
THE BEHAVIOURS WE DESIRE CANNOT BE STRENGTHENED

HOW TO USE POSITIVE CONSEQUENCES

TO ENCOURAGE PERFORMANCE

WHEN & HOW OFTEN YOU SHOULD REINFORCE PERFORMANCE?

• WHEN GOALS ARE MET
• WHEN THERE IS STEADY PROGRESS TOWARDS MEETING GOALS
• WHEN YOU ARE WORKING ON PERFORMANCE PROBLEM &
OBSERVE THE CORRECT BEHAVIOUR
HOW OFTEN TO REINFORCE PERFORMANCE:
• CONTINUOUS BASIS
o PROVIDE REINFORCEMENT EVERY TIME THE GOAL IS
ACHIEVED
o WHEN THERE IS EVIDENCE OF STEADY PROGRESS TOWARD
THE GOAL
o OR WHEN YOU SEE CORRECT BEHAVIOUR
o ADVANTAGE:
 GET HIGH LEVEL OF PERFORMANCE QUICKLY
o DISADVANTAGE:
 REQUIRES LOT OF REINFORCERS
 LOT OF YOUR TIME TO DELIVER THE
REINFORCEMENT
 SO MUCH REINFORCEMENT THAT IT LOOSES ITS
EFFECT
• INTERMITTENT BASIS
o PROVIDED ONLY AFTER MULTIPLE INSTANCES OF
PERFORMANCE, OR AFTER A LAPSE OF TIME SINCE THE
PREVIOUS REINFORCEMENT
o THERE ARE FOUR TYPES OF INTERMITTENT
REINFORCEMENT
 VARIABLE RATIO
• REINFORCEMENT PROVIDED AFTER A VARIABLE
NUMBER OF INSTANCES
• IT IS MOST POWERFUL REINFORCER.
• IT POWER IS ATTRIBUTED TO THE
UNCERTAINTY ABOUT WHEN REINFORCEMENT
WILL BE GIVEN
 FIXED RATIO
• REINFORCEMENT PROVIDED AFTER GIVEN
NUMBER OF INSTANCES OF PERFORMANCE
 FIXED INTERVAL
• REINFORCEMENT IS PROVIDED AFTER A
SPECIFIED PERIOD OF TIME REGARDLESS OF
THE NUMBER OF INSTANCES OF PERFORMANCE
• PERFORMANCE PEAKS JUST PRIOR TO
REINFORCEMENT, & THEN DROPS
CONSIDERABLY AFTER REINFORCEMENT IS
PROVIDED
 VARIABLE INTERVAL
• PERFORMANCE REINFORCED AFTER VARYING
LENGTHS OF TIME
 • IF YOU WANT TO START REINFORCEMENT & YOU WANT PEOPLE
TO LEARN NEW BEHAVIOUR THEN REINFORCE PERFORMANCE
CONTINUOUSLY UNTIL A PATTERN OF PERFORMANCE IS
ESTABLISHED
• ONCE THE EMPLOYEES ARE ACCUSTOMED TO REINFORCEMENT,
& LEARNED NEW BEHAVIOUR, THEN GRADUALLY MOVE TO
INTERMITTENT SCHEDULE

HOW TO FIND POSITIVE REINFORCERS:

• PHYSICAL GESTURES FOR EXAMPLE: SMILE, HANDSHAKE
• VERBAL PRAISES
• A LETTER OF COMMENDATION
• ASKING A PERSON FOR THEIR ADVICE OR OPINION
• PROVIDING AWARD, PLAQUE, OR TROPHY
• OFFERING HELP
• PERSON’S PICTURE ON THE BULLETIN OR NOTICE BOARD
• AN ARTICLE ABOUT THE PERSON IN THE LOCAL NEWSPAPER
• LETTING HIM REPORT HIS RESULTS TO SENIORS
• INCREASING RESPONSIBILITY
• GIVING THE PERSON A CHOICE OF WORK ASSIGNMENTS
• PROVIDING STATUS SYMBOLS
• ETC
• ETC

HOW TO SELECT POSITIVE REINFORCERS:

• CONSIDER THE AGE, INTERESTS, VALUES, LIKES & DISLIKES OF
THOSE YOU WISH TO REINFORCE
• CONSIDER WHAT YOU WISH TO REINFORCE: BEHAVIOUR OR
RESULTS. REINFORCE SHOULD BE PROPORTIONAL TO THE VALUE
OF BEHAVIOUR OR RESULTS WHICH YOU ARE TRYING TO
REINFORCE.
• OBSERVE WHAT PEOPLE DO FREQUENTLY OR WHAT PEOPLE
TALK ABOUT FREQUENTLY TRY TO PICK UP ON THESE CUES
• ASK PEOPLE WHAT THEY LIKE OR WHAT WOULD BE APPROPRIATE
• LOOK FOR REINFORCERS, WHICH NATURALLY OCCUR AT
WORKPLACE. A MAJOR ADVANTAGE IS SUCH REINFORCERS ARE
READILY AVAILABLE & DON’T REQUIRE MONEY
• USE TRAIL & ERROR. FOR WE DO NOT KNOW F SOMETHING IS
REINFORCER UNTIL YOU OBSERVE ITS IMPACT ON BEHAVIOUR.
• CHOOSE REINFORCERS THAT READILY AVAILABLE
• CHOOSE REINFORCERS THAT CAN BE USED FREQUENTLY
WITHOUT LOSING THEIR APPEAL

HOW TO DELIVER POSITIVE REINFORCERS:

 • INDIVIDUALIZE NOT ONLY THE REINFORCER, BUT THE WORDS &
STYLES YOU USE IN DELIVERING THE REINFORCER
• PUT VARIETY IN REINFORCEMENT. NO ONE LIKES THINGS OVER &
OVER.
• CONSIDER WHETHER IT IS BETTER TO REINFORCE IN PUBLIC /
PRIVATE OR BOTH
• BE SPECIFIC.. EACH TIME YOU REINFORCE MAKE SURE YOU
DESCRIBE WHAT THEY DID OR WHAT THEY ACCOMPLISHED
• BE SINCERE. NEVER GIVE REINFORCEMENT UNLESS YOU REALLY
MEAN IT.
• PERSONALIZE YOUR MESSAGE. EXPRESS YOUR APPROVAL IN
TERMS OF HOW YOU FEEL. WHY DID YOU LIKE WHAT THEY DID?
WHAT DID IT MEAN TO YOU
• MAKE YOUR REINFORCEMENT PROPORTIONAL. THE WORDS &
STYLE YOU USE SHOULD MATCH THE SIGNIFICANCE OF THE
ACCOMPLISHMENT. DON’T MAKE A BIG DEAL OVER A MINOR
ACHIEVEMENT. NOR MINIMIZE THE IMPORTANCE OF WHAT HAS
BEEN DONE BY YOUR VOICE, MANNERISM, & STYLE OF DELIVERY
• DON’T MIX REINFORCEMENT WITH PUNISHMENT OR ASKING
MORE. DON’T PUNISH THE HIGH PERFORMERS BY IMMEDIATELY
ASKING FOR MORE
• BE CONSISTENT. DON’T JUST REINFORCE WHEN YOU FEEL LIKE
IT. BE CONSISTENT OVER TIME & ACROSS PEOPLE.

PAY FOR PERFORMANCE

TRADITIONAL APPROACH:
• PAY NOT LINKED TO PERFORMANCE
• PAY FUNCTION OF STATUS
• MARKET DEMAND & EQUITY IMPORTANT FACTORS
• PAY RISE EVERY YEAR IRRESPECTIVE OF PERFORMANCE
• INCREASE IN PRODUCTIVITY GAINS NOT SHARED

TYPES OF NON-TRADITIONAL PAY SYSTEMS:

• GAINSHARING
o EMPLOYEES & EMPLOYER SHARE PRODUCTIVITY GAINS AS
PER PREDETERMINED FORMULA
o EMPLOYEES ARE INVOLVED
• SMALL GROUP INCENTIVE
o SIMILAR TO GAINSHARING; BUT THE GAINS SHARED BY
SMALLER GROUP INSTEAD OF ENTIRE DEPARTMENT /
DIVISION
o IT IS MANAGEMENT DIRECTED
• INDIVIDUAL INCENTIVES
 o MAJOR PORTION OF THE COMPENSATION IS TIED TO
PERFORMANCE
o IT IS GETTING REPLACED BY TEAM INCENTIVE
• LUMPSUM PAYMENT / BONUS
o TWO TYPES:
 FIRST TYPE:
• YEARLY INCREMENT IS BEING REPLACED WITH
ONE-TIME PERFORMANCE BONUS
• BASIC SALARY CONTINUES TO REMAIN THE
SAME
o SECOND TYPE:
 LUMP-SUM PAID ACROSS THE BOARD, INSTEAD OF
ANNUAL AUTOMATIC PERCENTAGE INCREASE IN
BASE PAY
 RISE IN GIVEN BASIC SALARY
 DONE TO SLOW DOWN THE GROWTH IN BASIC
SALARY

• PAY FOR KNOWLEDGE:

o BASIC SALARY PROGRESSION IS TIED TO JOB KNOWLEDGE
o GREATER THE NUMBER OF SKILLS, HIGHER THE BASIC
SALARY
o HIGHER BASIC SALARY CONTINUES IRRESPECTIVE OF
CURRENTLY PERFORMING HIGHER SKILLED JOBS
o DONE TO REDUCE JOB-CLASSIFICATION, & ENCOURAGE
FLEXIBILITY
• PROFIT SHARING PLANS
o ANNUAL BONUS PAID BASED ON COMPANY- WIDE
PERFORMANCE

SERIOUS IMPLICATIONS OF PAY FOR PERFORMANCE:

• WHEN SUBSTANTIAL PORTION OF PAY TIED TO PERFORMANCE,
THAT PORTION BECOMES VARIABLE
• NATURE OF AUTHORITY RELATIONSHIP UNDERGOES CHANGE;
FOR PAY FOR PERFORMANCE TIED TO OBJECTIVE MEASURE,
RATHER THAN SUBJECTIVE RATING
• EMPLOYEES WILL DEMAND INCREASED SHARING OF
INFORMATION IN AREAS LIKE SALES, PROFITS, RETURN ON
ASSETS, CUSTOMERS, OPERATING COSTS, COMPETITORS,
MARKETING STRATEGIES, & CAPITAL EXPENDITURE. THIS MEANS
THE EMPLOYEES WILL HAVE TO BE TREATED AS PARTNERS
• CREATES PRESSURE FOR PERFORMANCE, & COST CONTAINMENT
WITHIN THE ORGANIZATION
GAINSHARING:
• A GOOD GAINSHARING FORMULA SHOULD MEET THE
FOLLOWING CRITERIA:
o FAIR TO THE COMPANY
 ENABLE THE COMPANY TO ACHIEVE ITS OBJECTIVES
 COMPANY SHOULD ALSO GET ITS FAIR SHARE IN THE
GAIN SHARING FORMULA
o FAIR TO THE EMPLOYEE
 EMPLOYEES SHOULD GET THEIR FAIR SHARE.
o UNDERSTANDABLE TO EMPLOYEES
 EMPLOYEES SHOULD BE ABLE TO PREDICT WHETHER
THEY WILL GET THE GAIN THIS PERIOD OR NOT
o EASY TO ADMINISTER
 THE FORMULA SHOULD BE EASY TO CALCULATE
o FLEXIBILITY
 IF GOALS CHANGES THE FORMULA SHOULD ALSO
UNDERGO A CHANGE
o USEFULNESS IN ISOLATING PROBLEM AREAS
 SINCE GAIN-SHARING IS LINKED TO REMOVING
BOTTLENECKS [PROBLEMS] THE TEAM MEMBERS
SHOULD BE ABLE TO ISOLATE THE PROBLEM AREA,
SO THAT THE TEAM CAN STUDY THE CAUSES OF LOW
PRODUCTIVITY
EXERCISE:
• CAN WE HAVE GAIN-SHARING FORMULA FOR SERVICE SECTOR?
• IF YES INVOLVE ONE FOR THE FOLLOWING EMPLOYEES WORKING
IN A BRANCH:
o BRANCH MANAGER
o CASHIER
o CLERK MAINTAINING ACCOUNTS OF ACCOUNT HOLDERS
RANGING FROM 101 TO 200
o PEON
o SECURITY GUARD

HOW TO DETERMINE IF GAIN-SHARING IS RIGHT FOR YOUR

ORGANIZATION?
• ANSWERS TO THE FOLLOWING QUESTIONS WILL INDICATE:
o COSTS ARE RISING FASTER THAN PRODUCTIVITY
o INDIRECT LABOUR COSTS ARE GROWING; & ONLY FEW
EMPLOYEES ARE COVERED BY GAIN-SHARING SCHEME
o BECAUSE OF CHANGE IN TECHNOLOGY / PROCESSES, YOU
WANT YOUR EMPLOYEES COOPERATE & WORK IN TEAMS
 o WANT YOUR EMPLOYEES TO BE INVOLVED IN IMPROVING
PRODUCTIVITY & REDUCING COSTS
o IF STANDARDS FOR INDIVIDUAL INCENTIVES HAVE BECOME
MORE DIFFICULT TO BE SET & KEEP UP TO DATE.
o IF PAY RATES ARE NOT TIED TO PERFORMANCE.
o IF INEQUITIES EXISTS IN COMPENSATION.
o IF EMPLOYEES ARE LESS FLEXIBLE

PAY FOR KNOWLEDGE:

• IT TIES BASIC SALARY TO KNOWLEDGE / SKILLS RATHER THAN
TO POSITION OR TO JOB ACTUALLY PERFORMED
• TWO FORMS OF PAY FOR KNOWLEDGE:
o INCREASED KNOWLEDGE BASED
 RANGE OF SKILLS EMPLOYEE POSSESS IN A SINGLE
SPECIALTY
 ALSO CALLED AS VERTICAL SYSTEMS, FOR PAY IS
TIED TO THE DEPTH OF KNOWLEDGE OR SKILL IN A
DEFINED JOB
o MULTI-SKILLED BASED
 NUMBER OF JOBS AN EMPLOYEE CAN PERFORM
THROUGHOUT THE ENTIRE ORGANIZATION

THE ADVANTAGES OF PAY FOR KNOWLEDGE:

• GREAT FLEXIBILITY
o BENEFICIAL IN HANDLING ABSENTEEISM, TURNOVER,
TEMPORARY INCREASE IN WORKLOAD
• LEANER STAFF
o OPTIMUM UTILIZATION OF EMPLOYEES
• IMPROVED PROBLEM-SOLVING
o EMPLOYEE IS AWARE OF THE ENTIRE PROCESSES
• IMPROVED COMMUNICATION
• EFFECTIVE TWO WAY COMMUNICATION
• SUPPORTS EMPLOYMENT SECURITY
o IN CASE A JOB AN INDIVIDUAL IS DOING BECOMES
OBSOLETE, THEN CAN BE TRANSFERRED TO ANOTHER JOB,
RATHER THAN ASKING HIM TO GO HOME
• IMPROVES JOB SATISFACTION
o ALLOWS EMPLOYEE TO USE VARIETY OF SKILLS TO WORK
ON THE WHOLE PROCESSES
o CAN CONTROL THE WORK ENVIRONMENT

DISADVANTAGES OF PAY FOR KNOWLEDGE:

• INCREASES COSTS IN THREE AREAS: LABOUR, TRAINING, &
ADMINISTRATION
USING PAY FOR KNOWLEDGE AS AN ADJUNCT TO GAIN SHARING:
• GAIN SHARING DOES NOT RECOGNIZE INDIVIDUAL’S
CONTRIBUTION. THIS IS THE NORMAL GRIEVANCE ONE
RECEIVES. PAY FOR KNOWLEDGE CORRECTS THIS INEQUITY.
SINCE IT LINKS BASIC PAY TO VARIETY OF SKILLS AN EMPLOYEE
BRINGS TO THE GROUP. THAT INDIVIDUAL IS INVALUABLE TO
THE COMPANY OR TO TEAM WHO CAN DO A VARIETY OF THINGS
IMPORTANT TO ACCOMPLISHMENT OF GOALS VERY WELL;
INSTEAD OF DOING ONE THING EXCEPTIONALLY WELL. IT IS
SUCH TYPE OF INDIVIDUAL IS REWARDED UNDER PAY FOR
KNOWLEDGE.
• GAINSHARING PLANS DISTRIBUTE THE AMOUNT AS A
PERCENTAGE OF PAY; THUS EMPLOYEES WITH A HIGHER BASIC
SALARY WILL RECEIVE HIGHER AMOUNT. AND PAY FOR
KNOWLEDGE BRINGS BASIC SALARY & SKILLS IN LINE. AS A
RESULT LARGE AMOUNTS OF GAINSHARING AMOUNT GOES TO
SUCH EMPLOYEES WITH A WIDER VARIETY OF SKILLS, & THAT IS
THE KEY TO FUTURE – FLEXIBILITY.
• INITIALLY WHEN GAINSHARING PLAN IS INTRODUCED THERE ARE
MANY OPPORTUNITIES FOR MAKING RELATIVELY SIMPLE
PERFORMANCE IMPROVEMENTS THAT WILL LEAD TO GAINS.
OVER TIME HOWEVER, PROBLEM SOLVING BECOMES MORE
DIFFICULT, FOR SIMPLE PROBLEMS HAVE ALREADY BEEN
SOLVED. ADDITIONAL GAINS REQUIRE GREATER
SOPHISTICATION, FLEXIBILITY, & THE ABILITY TO TACKLE SUCH
PROBLEMS. PAY FOR KNOWLEDGE SYSTEMS ENCOURAGE THE
DEVELOPMENT OF THIS FLEXIBILITY & BROADEN THE FOCUS
• GAINSHARING IS A COMPLETE APPROACH TO MANAGEMENT
THAT ENCOURAGES TEAMWORK, COOPERATION EMPLOYEE
INVOLVEMENT, EMPLOYEE COMMITMENT TO ORGANIZATION
GOALS. PAY FOR KNOWLEDGE EXTENDS THIS PHILOSOPHY BY
ENCOURAGING EMPLOYEES TO LEARN MORE ABOUT THE
BUSINESS & TO DEVELOP A WIDE RANGE OF SKILLS THAT CAN
BE USED TO SUPPORT ORGANIZATIONAL OBJECTIVES.

CONCLUSIONS:
• INITIALLY PAY FOR KNOWLEDGE WILL INCREASE THE PAYROLL
COST, IT IS IN THE LONG RUN THAT PAYS FOR KNOWLEDGE
STARTS PAYING DIVIDENDS.
• HENCE PAY FOR KNOWLEDGE SHOULD BE ADOPTED AFTER
GAINSHARING HAS BEEN INSTALLED & EMPLOYEES HAVE
BECOME ACCUSTOMED TO IT.
• GAINSHARING IS SHORT-TERM FOCUS, WHILE PAY FOR
KNOWLEDGE HAS LONG-TERM FOCUS.
• IN BUSINESS WE ALWAYS FOCUS ON LONG-TERM OBJECTIVES

CONSEQUENCES
• A CONSEQUENCE HAS AN EFFECT ON WHICH TWO ASPECTS OF
OUR BEHAVIOUR?
• HOW MANY TYPES OF BEHAVIOURS ARE THERE?
• A BEHAVIOUR WHEREIN WE HAVE NO CONTROL WHAT IS IT
CALLED AS?
• A BEHAVIOUR WHEREIN WE HAVE CONTROL, WHAT IS IT CALLED
AS?
• WHICH WORK BEHAVIOUR IS INFLUENCED BY CONSEQUENCES?
• WHAT FOLLOWS BEHAVIOUR?
• WHAT DOES CONSEQUENCE DETERMINE?
• HOW MANY TYPES OF CONSEQUENCES ARE THERE?
• EXPLAIN REINFORCEMENT?
• WHAT IS THE OTHER NAME FOR IT?
• EXPLAIN PUNISHMENT?
• WHAT IS THE OTHER NAME FOR IT?
• WHEN WILL PUNISHMENT HAVE A LONG-TERM EFFECT?
• WHAT TYPE OF BEHAVIOUR DOES AN EMPLOYEE LEARN FROM
PUNISHMENT?
• CONSEQUENCE WILL EFFECTIVE FROM WHOSE POINT OF VIEW?
• WHAT SHOULD CONSEQUENCE DO TO AN EMPLOYEE?
• STATE THE NEEDS OF EMPLOYEE AT WORKPLACE?
• WHAT SHOULD THE EMPLOYEE SEE BETWEEN BEHAVIOUR &
CONSEQUENCE?
• WHEN WILL BE CONSEQUENCE BE EFFECTIVE?
• IF THERE ARE TWO NEEDS OF AN EMPLOYEE, THEN ON WHICH
NEEDS WILL THE CONSEQUENCES HAVE AN EFFECT?
• DOES EFFORT HAVE ANY RELATIONSHIP WITH CONSEQUENCES?
• WHAT IS THE RELATIONSHIP BETWEEN EFFORT, BEHAVIOUR &
NEED IN CONSEQUENCES?
• WHY SHOULD CONSEQUENCES BE CONTINUOUSLY MONITORED?
• CONSEQUENCES SHOULD FOCUS ON BEHAVIOUR OR RESULTS?
• SHOULD WE PROVIDE POSITIVE CONSEQUENCES FOR
CONTINUOUS IMPROVEMENTS TOWARDS GOAL?
• SHOULD CONSEQUENCES BE PROVIDED FOR FAILURES?
• TO ENCOURAGE CORRECT BEHAVIOUR, WHAT TYPE OF
CONSEQUENCES SHOULD BE ADOPTED?
• WHAT DOES NEGATIVE CONSEQUENCE TEACH?
• IF YOU HAVE TO CORRECT A PROBLEMATIC BEHAVIOUR THE
TYPE OF CONSEQUENCES SHOULD ONE USE?
• WHAT IS THE RELATIONSHIP BETWEEN TIME & CONSEQUENCES?
• ON WHAT SHOULD CONSEQUENCES BE BASED UPON?
• HOW DO WE REINFORCE PERFORMANCE?
• WHAT IS THE ADVANTAGE OF CONTINUOUS REINFORCEMENT?
• WHAT ARE THE DISADVANTAGES OF CONTINUOUS
REINFORCEMENT?
• WHAT IS INTERMITTENT REINFORCEMENT?
• HOW MANY TYPES OF INTERMITTENT REINFORCEMENT ARE
THERE?
• WHY IS VARIABLE RATIO MOST POWERFUL REINFORCER?
• WHAT IS FIXED RATIO OF REINFORCEMENT?
• WHAT IS THE DISADVANTAGE OF FIXED INTERVAL
REINFORCEMENT?
• WHAT IS VARIABLE INTERVAL REINFORCEMENT?
• IF YOU WANT TO START REINFORCEMENT, WITH WHICH ONE
WOULD YOU BEGIN FIRST & WHY?
• NAME SOME OF THE FEW REIN FORCERS, WHICH YOU FIND AT
WORKPLACE?
• HOW DO YOU SELECT POSITIVE REINFORCES AT WORKPLACE?
• STATE THE TYPES OF NON-TRADITIONAL, WHICH EXISTS TODAY?
• EXPLAIN GAIN SHARING?
• EXPLAIN SMALL GROUP INCENTIVE?
• EXPLAIN INDIVIDUAL INCENTIVE?
• EXPLAIN THE TWO TYPES OF ANNUAL INCREMENT, WHICH ARE
GIVEN TO CONTROL GROWTH IN BASIC SALARY?
• EXPLAIN PAY FOR KNOWLEDGE?
• EXPLAIN PROFIT SHARING PLANS?
• STATE THE IMPLICATIONS FOR PAY FOR PERFORMANCE?
• STATE THE CHARACTERISTICS OF GAIN SHARING?
• HOW DO YOU DETERMINE IF GAIN SHARING IS RIGHT FOR YOU?
• STATE THE TWO TYPES OF PAY FOR KNOWLEDGE?
• STATE THE ADVANTAGES FOR PAY FOR KNOWLEDGE?
• STATE THE DISADVANTAGES FOR PAY FOR KNOWLEDGE?
• HOW TO USE PAY FOR KNOWLEDGE AS AN ADJUNCT TO GAIN
SHARING?
 HOW TO DESIGN & INSTALL AN EMPLOYEE INVOLVEMENT SYSTEM
INTRODUCTION:
• PEOPLE PERFORMING THE WORK HAVE THE BEST IDEAS ABOUT
HOW IT SHOULD BE PERFORMED.
• MOREOVER, PEOPLE DON’T RESIST THEIR OWN IDEAS.
• A SOLUTION TO A PROBLEM IS MUCH MORE LIKELY TO BE
DEVELOPED & SUCCESSFULLY IMPLEMENTED WHEN WE GET
EMPLOYEES INPUT

INVOLVEMENT TECHNIQUES:
• THEY ARE THREE TRADITIONAL TECHNIQUES:
o EMPLOYEE SURVEYS
o SUGGESTION SYSTEMS
o QUALITY CIRCLES

EMPLOYEE SURVEYS:
• DONE ANNUALLY OR BIANNUALLY
• CONSISTS OF WRITTEN QUESTIONNAIRES, WHICH IS
DISTRIBUTED TO ALL THE EMPLOYEES
• SOMETIMES THE QUESTIONNAIRE IS SUPPLEMENTED BY
INTERVIEW.
 • THE SURVEYS COLLECTS DATA CONCERNING EMPLOYEE
OPINIONS, ATTITUDES, JOB SATISFACTION, REACTION TO O’S
POLICY OR MANAGEMENT’S DECISION
• IT SERVES AS A GOOD FEEDBACK TO THE MANAGEMENT
• IT HAS THE FOLLOWING LIMITATIONS:
o RELATIVELY INFREQUENT
o FEEDBACK IS SHORT & CRYPTIC
o VALIDITY DEPENDS UPON ITS DESIGN. QUESTIONS MAY BE
POORLY WORDED, OR BIASED, OR VAGUE
o DEPENDS UPON THE WAY IT IS INTERPRETED.
MANAGEMENT MAY DISREGARD FINDINGS INCONSISTENT
WITH THEIR INTEREST
o FEEDBACK NOT PROVIDED TO EMPLOYEES.
• RESULT IT BECOMES A JOKE, OR AN OPPORTUNITY FOR THE
EMPLOYEES TO VENT THEIR FRUSTRATIONS

SUGGESTION SCHEME:
• SUGGESTIONS INVITED FROM THE EMPLOYEES ON COST
SAVINGS.
• IF SUGGESTION ACCEPTED, EMPLOYEE GETS SHARE OF THE
SAVINGS
• IT IS A WIN-WIN SITUATION. FOR BOTH PARTIES MONETARILY
BENEFIT
• IT HAS THE FOLLOWING LIMITATIONS:
o SUGGESTIONS ARE FEW
o WHEN SUGGESTIONS ARE SUBMITTED, THEY ARE VAGUE &
UNDEVELOPED, & THEY USUALLY CANNOT BE ACCEPTED.
IF THE IDEA IS BASICALLY IS GOOD, & MANAGEMENT
DECIDES TO DEVELOP IT FURTHER SO THAT IT CAN BE
IMPLEMENTED. IN SUCH SITUATION WHO GETS THE CREDIT
o SOMETIMES EMPLOYEES GIVE SUGGESTIONS PERTAINING
TO OTHER DEPARTMENTS
o EMPLOYEES ARE NOT RESPONSIBLE FOR IMPLEMENTING
THEIR SUGGESTIONS.
o SOMETIMES THE IMPLEMENTATION OF SUGGESTIONS
INVOLVES HEAVY EXPENDITURE
o OFTEN THERE IS A LENGTHY DELAY BETWEEN THE
SUBMISSION OF THE IDEA & ITS CONSIDERATION &
EVENTUAL ADOPTION. FEEDBACK TO THE EMPLOYEE
SUBMITTING THE SUGGESTION IS DELAYED & MEANWHILE
SOME OTHER EMPLOYEE MIGHT HAVE MADE A SIMILAR
SUGGESTION. IN SUCH SITUATION, THE ISSUE WHO GETS
THE CREDIT IF THE SUGGESTION IS IMPLEMENTED. OR THE
IDEA WAS ALREADY UNDER CONSIDERATION BY
MANAGEMENT. EVENTUALLY WITH DELAY & CONFUSION
 ABOUT WHO GETS THE CREDIT FOR THE IDEA, EMPLOYEE
BECOMES FRUSTRATED WITH THE WHOLE SYSTEM
• RESULT ALSO BECOMES A JOKE

QUALITY CIRCLE:
• EMPLOYEES PARTICIPATE IN THE IDENTIFICATION & RESOLUTION
OF PROBLEMS
• EMPLOYEES ARE TRAINED IN PROBLEM-SOLVING TECHNIQUE
• IT DID RESULT IN LOT OF SAVINGS FOR THE O
• IT HAD THE FOLLOWING LIMITATIONS:
o QUALITY CIRCLES WERE SUCCESSFUL IN SOFT ISSUES, BUT
FAILED IN HARD ISSUES
o THE MEETINGS WERE HELD DURING WORKING HOURS
o THOUGH LOT OF TIME WAS SPENT ON MEETINGS THE KIND
OF IMPROVEMENT IN QUALITY, COST REDUCTION, OR
CUSTOMER SERVICE WAS NOT AS PER EXPECTATION
o PROGRAM WAS ADMINISTERED BY STAFF FUNCTIONS LIKE
HR / QA
o LINE MANAGERS DID NOT SEE QUALITY CIRCLE AS PART OF
THEIR DAY TO DAY OPERATIONS
o IT WAS A VOLUNTARY PROGRAM. ALL EMPLOYEES DID NOT
PARTICIPATE.
• RESULT IT BECAME A GIMMICK OR LATEST MANAGEMENT FAD

LEARNING FROM INVOLVEMENT SYSTEM:

• VOLUNTARY PROGRAMS DO NOT WORK
• MANAGEMENT DIRECTION & PARTICIPATION IS MANDATORY
• INVOLVEMENT CANNOT BE PERIPHERAL TO RUNNING THE
BUSINESS
• EVERY EMPLOYEE MUST BE TRAINED IN PROBLEM-SOLVING
SKILLS; & NOT JUST FEW
• CROSS-FUNCTIONAL TEAMS & SPECIAL TASK FORCES SHOULD
ADDRESS CROSS-DEPARTMENTAL PROBLEMS

AN INVOLVEMENT SYSTEM THAT WORKS:

• CREATE WORK GROUP TEAMS
 • EMPLOYEES IN EACH DIVISION, DEPARTMENT, SHIFT & SO ON
ARE MEMBERS OF A WORK GROUP TEAM. THERE ARE TEAMS AT
THE SENIOR MANAGEMENT LEVEL, MIDDLE MANAGEMENT LEVEL,
SUPERVISORY LEVEL, & WORKER LEVELS
• MEMBERSHIP IS MANDATORY.
• THE MPM IS NOT A SPECIAL PROGRAM
• MPM TEAMS DIFFER FROM A TRADITIONAL O IN THREE WAYS:
o THEIR ACTIVITIES CENTER AROUND A REGULAR TEAM
MEETING THAT IS SIGNIFICANTLY DIFFERENT FROM
NORMAL STAFF MEETINGS
o THE MANAGER / SUPERVISOR’S ROLE UNDERGOES
CHANGE
o EMPLOYEE ASSUME RESPONSIBILITIES THAT WERE
TRADITIONALLY RESERVED FOR MANAGERS /
SUPERVISORS

TEAM MEETINGS
o INTRODUCTION:
 MEETINGS ARE NOT UNUSUAL IN ANY O
 MANAGERS TALK & PARTICIPANTS LISTEN
 IN THE MEETINGS THE FOLLOWING THINGS HAPPEN:
• UPPER LEVEL DECISIONS ARE ANNOUNCED
• O NEWS ARE REPORTED
• ORDERS ARE ISSUED
• MISTAKES ARE CRITICIZED
• POOR PERFORMANCE IS BERATED
 EMPLOYEES PARTICIPATION MEANS:
• TO ANSWER QUESTIONS
• TO REPORT ON THE STATUS OF PROJECTS /
ACTIVITIES
• AND OCCASIONALLY TO DEFEND THEMSELVES
FROM ATTACK
• SOMETIMES TO COMPLAIN, SOCIALIZE, POINT
FINGERS
• OR FREQUENTLY DUMP PROBLEMS ON HIGHER
UPS
 ONLY PROBLEMS ARE DISCUSSED, NO SOLUTIONS
ARE FOUND
 THE SAME PROBLEM CONTINUES TO SURFACE IN ALL
CONSECUTIVE MEETINGS, UNTIL IT IS FORGOTTEN,
SOME NEW PROBLEM TAKES ITS PLACE
MPM MEETING
• THEY HAVE BOTH SPECIFIC OBJECTIVES, & A SPECIFIC
STRUCTURE.
• THE OBJECTIVES OF MPM MEETINGS ARE:
o TO SHARE INFORMATION / IDEAS
o PASS DOWN INFORMATION ABOUT GOALS, CONCERNS, &
PRIORITIES OF HIGHER LEVELS
o TO MONITOR & PROVIDE FEEDBACK ON PERFORMANCE.
EACH TEAM HAS A CLEARLY DEFINED MISSION & MEASURE
OF PERFORMANCE IN CRITICAL AREAS. THE TEAM MEETING
IS MAJOR FOCAL POINT FOR REVIEWING GROUP
PERFORMANCE IN CRITICAL AREAS ON A REGULAR BASIS
o TO RECOGNIZE & REINFORCE GOOD PERFORMANCE
o TO GET EVERYONE’S INPUT & IDEAS FOR IMPROVING
PERFORMANCE. A PORTION OF EACH TEAM MEETING IS SET
ASIDE FOR PROBLEM IDENTIFICATION, ANALYSIS & THE
DEVELOPMENT OF ACTION PLANS TO SOLVE PROBLEMS
o TO ESTABLISH ACCOUNTABILITY FOR ACTION. STATUS OF
ACTION PLAN & TASK ASSIGNMENTS FROM PREVIOUS
MEETINGS ARE REVIEWED.
o THE AGENDA FOR MEETING THE ABOVE OBJECTIVES ARE:
 FOLLOW UP ITEMS
 THE LEADER OPENS EACH MEETING BY
RESPONDING TO QUESTIONS, IDEAS,
CONCERNS & OR
RECOMMENDATIONS FROM THE
PREVIOUS TEAM MEETINGS. USUALLY
THERE ARE ONE OR MORE ITEMS THAT
THE LEADER HAD AGREED TO DISCUSS
WITH HIGHER LEVELS, WHICH THE
LEADER REPORTS BACK TO THE TEAM
MEMBERS ON THE STATUS OF THOSE
ITEMS. AFTER THE LEADER IS FINISHED,
INDIVIDUAL TEAM MEMBERS WHO HAD
TASK ASSIGNMENTS FROM THE
PREVIOUS MEETINGS ARE CALLED UPON
TO REPORT ON THE STATUS OF THOSE
ASSIGNMENTS
• PERFORMANCE FEEDBACK:
 REVIEW GROUP PERFORMANCE ON KEY
INDICATORS FOR THE CURRENT PERIOD.
DONE IN GRAPHICAL FORMS. THE FOCUS
OF DISCUSSION IS ON POSITIVE &
NEGATIVE TRENDS IN PERFORMANCE
OVER TIME
• RECOGNITION & REINFORCEMENT:
 DONE FOR PERFORMANCE IMPROVEMENT
OR GOAL ATTAINMENT
 • PROBLEM-SOLVING & DEVELOPING OF ACTION
PLANS:
 TEAM IDENTIFIES ONE OR MORE
PROBLEMS THAT DESERVE ATTENTION.
THESE PROBLEMS USUALLY RELATE TO
PERFORMANCE ON THE KEY INDICATORS
BEING TRACKED BY THE GROUP.
PROBLEMS OF CROSS-FUNCTIONAL,
CROSS-DEPARTMENTAL, ARE REFERRED
BY THE TEAM TO A HIGHER LEVEL TEAMS
FOR RESOLUTION OR ASSIGNMENT TO A
SPECIAL CROSS-FUNCTIONAL TASK
FORCE
• NEWS / ANNOUNCEMENT & MEETING
CONCLUSIONS:
• THE FINAL SEGMENT OF THE TEAM MEETING IS DEVOTED TO
ANNOUNCEMENTS & GENERAL NEWS OF INTEREST TO TEAM
MEMBERS. THE MEETING IS CLOSED WITH A BRIEF RECAP OF THE
DECISIONS THAT WERE MADE BY THE TEAM CONCERNING
ACTION PLANS & TASK ASSIGNMENTS

ROLE CHANGE OF MANAGERS, SUPERVISORS, & EMPLOYEE:

• MANAGERS & SUPERVISORS
o PROVIDE STRUCTURE & INFORMATION
o FACILITATE MEETINGS
o TEACH / COACH / GUIDE
o MANAGE RELATIONSHIPS WITH EXTERNAL GROUPS TO
ENSURE THAT THE TEAM HAS EXTERNAL RESOURCES TO
SUPPORT THE ACCOMPLISHMENT OF ITS OBJECTIVES

• EMPLOYEES:
o INQUIRE
o LEARN
o PARTICIPATE ACTIVELY IN PROBLEM SOLVING & DECISION-
MAKING. ACTION PLANS ARE DEVELOPED THROUGH
GROUP CONSENSUS.
o ASSUME INCREASED RESPONSIBILITY FOR MONITORING &
CONTROLLING THEIR OWN BEHAVIOUR
o MONITOR RESULTS OF ACTION STEPS & TAKES FOLLOW-UP
ACTION AS DECIDED BY THE GROUP
 o RESPONSIBILITY FOR PERFORMANCE RESTS WITH THE
TEAM AS A WHOLE

BEYOND FUTURE:
INTRODUCTION:
• THE FUTURE MANAGEMENT PRACTICE IS “SELF-MANAGED TEAM”

SELF-MANAGED TEAMS:
• THEY ARE SEMI-AUTONOMOUS WORK TEAMS
• CONSISTS OF 5-15 MEMBERS
• EACH TEAM HAS NATURAL BOUNDARIES. THAT IS, EACH TEAM
PRODUCES A WHOLE PRODUCT, COMPLETES AN ENTIRE
PROCESS, OR PROVIDES COMPLETE SERVICE. IN SHORT EACH
TEAM IS A SMALL BUSINESS UNIT UNTO ITSELF
• THE OUTPUT OF ONE TEAM BECOMES THE INPUT OF ANOTHER
TEAM
• BEYOND THE TEAM THERE ARE NO MANAGERS, OR SUPERVISORS
IN THE TRADITIONAL SENSE. WE HAVE SUPPORT TEAM, OR
COORDINATORS
• IN PLANT THE SUPPORT TEAM CONSISTS OF PLANT MANAGER,
THE HR MANAGER, THE QA MANAGER, AN ACCOUNTANT, &
ENGINEERING MANAGER
• COORDINATORS ARE SIMILAR TO LINE SUPERVISORS WITH
TECHNICAL, BEHAVIORAL, & OPERATIONAL RESPONSIBILITIES.
THEY ACT IN AN ADVISORY RATHER THAN IN A DIRECTIVE
CAPACITY. THEY HELP THE TEAM WHEN REQUIRED TO DO SO BY
THE TEAM
• THE TEAM IS SELF-RUNNING, & SELF MANAGED. TEAM MEMBERS
AS A GROUP MAKE JOB ASSIGNMENTS, PRODUCTION DECISIONS,
HOLD THEIR OWN TEAM MEETINGS, SOLVE PROBLEMS,
IMPLEMENT SOLUTIONS, ORDER THEIR OWN SPARE PARTS &
SUPPLIES, PLAN & SCHEDULE THEIR OWN WORK, SELECT TEAM
MEMBERS, EVALUATE TEAM MEMBERS’ PERFORMANCE, & SO ON.
PRACTICALLY ALL FUNCTIONS TRADITIONALLY PERFORMED BY
MANAGERS, OR SUPERVISORS ARE PERFORMED BY THE TEAM
• WITHIN TEAMS THERE ARE NO JOB-DESCRIPTIONS, & FEW JOB
CLASSIFICATION. TEAM MEMBERS ARE CROSS TRAINED &
CAPABLE OF PERFORMING MOST IF NOT ALL THE JOBS REQUIRED
FOR TEAM PERFORMANCE, & THERE IS OFTEN PAY FOR
KNOWLEDGE SYSTEM TO ENCOURAGE THIS FLEXIBILITY
• THE TEAM ITSELF HAS WIDE DISCRETION TO DECIDE HOW TASKS
WILL BE PERFORMED, & WHO WILL BE RESPONSIBLE FOR
SPECIFIC TASKS

HOW THE WORK PLACE CHANGES WITH SELF MANAGED TEAMS

 • FREQUENT EXCHANGES OF VERBAL REWARDS [COMPLIMENTS,
THANK YOU’S PRAISE] AMONG TEAM MEMBERS FOR USEFUL OR
HELPFUL ACTION
• GROUP MEMBERS DISCIPLINE EACH OTHER. THERE IS A STRONG
PEER PRESSURE FOR EVERYONE TO CONTRIBUTE TO THE
PERFORMANCE OF THE GROUP
• EMPLOYEES AGREE TO ROTATE JOBS, SO THAT JOBS ARE
SHARED EQUALLY ON WEEKLY BASIS
• WORK PROBLEMS AMONG THEMSELVES
• EMPLOYEES REGULARLY DISCUSS PRODUCTION SCHEDULING,
PRODUCTION GOALS, PERFORMANCE LEVELS & SO ON. THEY
REFER THEIR ACTIVITIES AS “OUR BUSINESS”
• TEAM PERFORMANCE IS DISPLAYED THROUGH GRAPHS AT WORK
PLACE
• EMPLOYEES VOLUNTARILY SOUGHT OUT & ACQUIRED NEW
KNOWLEDGE OR SKILLS NEEDED TO SOLVE THE PROBLEMS, &
THIS THEY DO SO AT THEIR OWN TIME
• TEAM MEMBERS AT REGULAR INTERVALS SEEK FEEDBACK ON
THEIR WORK PERFORMANCE
• THE TEAM MEMBERS MANAGED ENTRY & EXIST FROM THEIR
TEAM
• NO SPECIFIC SET OF RULES GOVERNED ASSIGNMENT OF
EMPLOYEES TO TEAM, IT WAS JUST WORKED OUT AMONG
VARIOUS TEAMS

NEW ROLES OF SUPERVISORS & MANAGERS:

o PLAYS ENABLING ROLE
o IS RESPONSIBLE FOR:
 BUILDING TEAM COMPETENCE & SKILLS
• EDUCATES & COACHES THE TEAM MEMBERS
TO BE SELF-DIRECTED & SELF-CONTROLLING
• MAKE SURE THAT GOALS ARE CLEAR &
SHARED
• HELP TEAM TO DEVISE STRATEGIES FOR
WINNING & LEARN FROM SET BACKS
• AS THE TEAM MATURES, THE SUPERVISOR
DELEGATES MORE & MORE TO THEM,
COACHING THEM UNTIL HE FEELS CONFIDENT
THAT THEY WILL MAKE EFFECTIVE DECISIONS

 MANAGE LINKS WITH OTHER COMPONENTS OF

BUSINESS
 • MAKE SURE THAT THE TEAM RECEIVES THE
NECESSARY RESOURCES IT NEEDS TO
FUNCTION & IS INTEGRATED INTO OVERALL
BUSINESS STRATEGY
• IS A LINK IN THE COMMUNICATION CHAIN
o SHOULD HAVE EXCEPTIONAL INTERPERSONAL SKILLS, &
ABILITY TO ACQUIRE AUTHORITY AS RESULT OF TRUST &
RESPECT RATHER THAN OF POSITION
o PROVIDE TECHNICAL SUPPORT

HOW TO DETERMINE IF SMT ARE RIGHT FOR YOU?

• ANSWERS TO THE FOLLOWING QUESTIONS DETERMINES IF SMT
IS RIGHT FOR YOUR O:
o WILL SMT HELP YOU TO OBTAIN YOUR STRATEGIC
BUSINESS OBJECTIVES?
o DO THE ADVANTAGES OF SELF-MANAGED TEAMS
OUTWEIGH THE COSTS?
o CAN YOU BREAK THE WORK TO BE PERFORMED INTO
LOGICAL BUSINESS UNITS?
o CAN YOU HANDLE THE DISPLACEMENT OF MIDDLE
MANAGERS & SUPERVISORS IN A MANNER THAT IS
CONSISTENT WITH YOUR VALUES?
o ARE EMPLOYEES PREPARED TO ASSUME NEW ROLES IN
SMT?
o CAN YOUR EXISTING ADMINISTRATIVE PROCEDURES &
PRACTICES SUPPORT SMT?
 EMPLOYEE INVOLVEMENT
• WHO HAVE THE BEST IDEA ABOUT WORK?
• WHEN CAN WE DEVELOP & SUCCESSFULLY IMPLEMENT A
SOLUTION TO A PROBLEM?
• NAME THE THREE-EMPLOYEE INVOLVEMENT TECHNIQUE?
• WHAT DOES EMPLOYEE SURVEY COLLECT?
• STATE ANY ONE LIMITATION OF EMPLOYEE SURVEY?
• ON WHAT ARE SUGGESTION INVITED FROM EMPLOYEES?
• WHAT DO EMPLOYEE RECEIVES IF THEIR SUGGESTIONS ARE
ACCEPTED?
• STATE ANY ONE LIMITATIONS OF SUGGESTION SCHEME?
• WHAT I THE EMPLOYEE ROLE IN QUALITY CIRCLE?
• IN QUALITY CIRCLE FOR WHAT ARE THE EMPLOYEES ARE
TRAINED?
• IN WHICH ISSUES WERE QUALITY CIRCLE SUCCESSFUL?
• WHEN DO EMPLOYEES HOLD QUALITY CIRCLE MEETING?
• WHO ADMINISTERED QUALITY CIRCLE IN AN ORGANIZATION?
• WHICH INVOLVEMENT TECHNIQUE WORKS IN A COMPETITIVE
ENVIRONMENT?
• IN MPM MEETING WHAT DO EMPLOYEE’S ASSUME?
• IN TRADITIONAL TEAM MEETING WHO TALKS & WHO LISTENS?
• IN TRADITIONAL TEAM MEETING WHAT DO EMPLOYEE DO?
• IN TRADITIONAL TEAM MEETING WHAT IS DISCUSSED?
• IN MPM MEETING WHAT IS SHARED?
• IN MPM MEETING WHAT IS PASSED DOWN?
• WHAT IS THE FOCAL POINT FOR REVIEWING GROUP
PERFORMANCE IN CRITICAL AREA?
• HOW IS PERFORMANCE IMPROVED IN TEAM MEETING?
• WHICH PROBLEM DO THE TEAM MEMBERS TRACK?
• WHAT IS THE NEW ROLE OF MANAGERS / SUPERVISORS /
EMPLOYEE IF MEMBERS WORK AS TEAM
• ON WHO DOES THE RESPONSIBILITY FOR PERFORMANCE LIE
WHEN TEAMWORK IS INTRODUCED?
• WHAT IS GOING TO BE THE FUTURE MANAGEMENT PRACTICE?
• WHAT TYPE OF WORK TEAM IS SELF-MANAGEMENT TEAM?
• WHAT DOES EACH SELF-MANAGEMENT TEAM HAVE?
• WHO ARE THE MEMBERS IN SUPPORT TEAM?
• WHO ARE THE MEMBERS OF COORDINATING TEAM?
• IN WHAT CAPACITY DO THE SUPERVISORS WORK WHERE SELF-
MANAGEMENT TEAM IS IN OPERATION?
• STATE ANY TWO CHARACTERISTICS OF SELF-MANAGEMENT
TEAM?
 • WHY ARE THERE NO JOB DESCRIPTION & JOB CLASSIFICATION
WHERE SELF-MANAGEMENT TEAM EXIT?
• HOW IS FLEXIBILITY ENCOURAGED IN SELF-MANAGEMENT TEAM?
• HOW DO THE SELF-MANAGEMENT TEAM MEMBERS PERFORM
THEIR ACTIVITIES?
• WHICH COSTS GOES UP IF SELF-MANAGEMENT TEAM IS IN
OPERATION?

CAREER MANAGEMENT

WHY IS CAREER MANAGEMENT IMPORTANT?

• CM IS A PROCESS THROUGH WHICH EMPLOYEES:
o BECOME AWARE OF THEIR OWN INTERESTS, VALUES,
STRENGTHS, & WEAKNESS
o OBTAIN INFORMATION ABOUT JOB OPPORTUNITIES WITHIN
THE O
o IDENTIFY CAREER GOALS
o ESTABLISH ACTION PLANS TO ACHIEVE CAREER GOALS
• CM IS IMPORTANT FROM BOTH THE EMPLOYEES’ PERSPECTIVE &
THE O’S PERSPECTIVE
• FROM THE O POINT OF VIEW THE FAILURE TO MOTIVATE
EMPLOYEES TO PLAN THEIR CAREERS CAN RESULT IN
o SHORTAGES OF EMPLOYEES
o LOWER EMPLOYEE COMMITMENT
o MONEY SPENT ON T& D GOING DOWN THE DRAIN
• FROM THE EMPLOYEE’S PERSPECTIVE, LACK OF CM CAN RESULT
IN
o FRUSTRATION
o FEELING OF NOT BEING VALUED IN THE O
o CANNOT FIND SUITABLE EMPLOYMENT
• O NEEDS TO HELP EMPLOYEES MANAGE THEIR CAREERS TO
MAXIMIZE THEIR CAREER MOTIVATION
• CAREER MOTIVATION HAS THREE ASPECTS:
o CAREER RESILIENCE
 EXTENT TO WHICH EMPLOYEES ARE ABLE TO COPE
WITH SET BACKS
o CAREER INSIGHT
 KNOWING ABOUT THEIR INTERESTS / STRENGTHS /
WEAKNESS
 AND HOW IT RELATES TO THEIR CAREER GOALS
o CAREER IDENTITY
 DEFINING THEIR PERSONAL VALUES ACCORDING TO
THEIR WORK
• CAREER MOTIVATION CREATES VALUE FOR BOTH O &
INDIVIDUALS
o O’S VALUE:
 INNOVATION
 EMPLOYEES ADAPTING TO UNEXPECTED CHANGES
 COMMITMENT TO O
 PRIDE IN WORK
o EMPLOYEE’S VALUE:
 BE AWARE OF SKILL STRENGTH / WEAKNESS
 PARTICIPATE IN LEARNING ACTIVITIES
 COPE WITH LESS IDEAL WORKING CONDITION
 AVOID SKILL OBSOLESCENCE

• CM IS POSITIVELY INFLUENCED BY HOW MUCH O PROVIDE

OPPORTUNITIES FOR ACHIEVEMENT, ENCOURAGEMENT FOR
DEVELOPMENT, & INFORMATION ABOUT CAREER OPPORTUNITIES
• CM SYSTEMS HELP IDENTIFY THESE OPPORTUNITIES & PROVIDE
CAREER INFORMATION IN THE FOLLOWING WAYS:
o HOW CM CAN HELP O TO COPE WITH COMPETITIVE
CHALLENGES
 o THE POSITIVE OUTCOMES THAT CAN RESULT FROM CM

WHAT IS CAREER?
• SEQUENCE OF POSITIONS HELD WITHIN AN OCCUPATION
• MOBILITY WITHIN THE O
• DESCRIBES THE CHARACTERISTICS OF THE EMPLOYEE
• EACH EMPLOYEE’S CAREER CONSISTS OF DIFFERENT JOBS,
POSITIONS & EXPERIENCES

PROTEAN CAREER:
• A CAREER THAT FREQUENTLY CHANGES BASED ON BOTH
CHANGES IN THE ‘S INTERESTS, ABILITIES, & VALUES &
CHANGES IN THE WORK ENVIRONMENT

COMPARISON BETWEEN CAREER & PROTEAN CAREER

DIMENSION CAREER PROTEAN CAREER

GOAL PROMOTIONS PSYCHOLOGICAL

SUCCESS
PSYCHOLOGICAL SECURITY FOR EMPLOYABILITY FOR
CONTRACT LOYALTY FLEXIBILITY
RESPONSIBILITY FOR COMPANY EMPLOYEE
CAREER
PATTERN LINEAR & EXPERT SPIRAL & TRANSITORY
EXPERTISE KNOW HOW LEARN HOW
DEVELOPMENT HEAVY RELIANCE ON GREATER RELIANCE
FORMAL TRAINING ON RELATIONSHIPS &
JOB EXPERIENCES

A MODEL OF CAREER DEVELOPMENT

• A CAREER DEVELOPMENT [CD] IS THE PROCESS BY WHICH
EMPLOYEES PROGRESS THROUGH A SERIES OF STAGES, EACH
CHARACTERIZED BY A DIFFERENT SET OF DEVELOPMENTAL
TASKS, ACTIVITIES, & RELATIONSHIPS
• THE FOLLOWING ARE THE MODELS FOR CD:
o LIFE CYCLE MODEL
 WHILE MOVING FROM ONE STAGE TO ANOTHER,
THEY FACE CERTAIN DEVELOPMENTAL TASKS
o ORGANIZATION BASED MODEL
  EMPLOYEES HAVE TO LEARN TO PERFORM CERTAIN
ACTIVITIES WHILE MOVING FROM ONE STAGE TO
ANOTHER
o DIRECTIONAL PATTERN MODEL
 DESCRIBES THE FORM OR SHAPE OF THE CAREER
• THERE ARE FOUR CAREER STAGES
o EXPLORATION
o ESTABLISHMENT
o MAINTENANCE
o DISENGAGEMENT
• EACH CAREER STAGE IS CHARACTERIZED BY DEVELOPMENTAL
TASKS, ACTIVITIES, & RELATIONSHIPS
• EMPLOYEES CURRENT CAREER STAGE INFLUENCES THEIR
NEEDS, ATTITUDES & JOB BEHAVIOURS

CHARACTERISTI EXPLORATIO ESTABLISHME MAINTENANCE DISENGAGEME

CS N NT NT

DEVELOPMENTA IDENTIFY ADVANCEMEN HOLD ON TO RETIREMENT

L TASKS INTERESTS, T, GROWTH, ACCOMPLISHMEN PLANNING,
SKILLS, SECURITY, TS, UPDATE CHANGE
FIT DEVELOP LIFE- SKILLS BALANCE
BETWEEN STYLE BETWEEN
SELF & WORK & NON
WORK WORK
ACTIVITIES HELPING, MAKING TRAINING PHASING OUT
LEARNING INDEPENDENT SPONSORING OF WORK
FOLLOWING CONTRIBUTIO POLICY MAKING
DIRECTIONS NS
RELATIONSHIPS APPRENTICE COLLEAGUE MENTOR SPONSOR
TO OTHER
EMPLOYEES
AGE` LESS THAN 30 – 45 45 – 60 61 +
30
YEARS ON THE LESS THAN 2 – 10 10 + 20 +
JOB 2

CAREER MANAGEMENT SYSTEMS

• INCLUDES THE FOLLOWING COMPONENTS
o SELF-ASSESSMENT
  REFERS TO USE OF INFORMATION BY EMPLOYEES TO
DETERMINE THEIR CAREER INTEREST, VALUES,
APTITUDES & BEHAVIOURAL TENDENCIES
 THIS INFORMATION IS OBTAINED THROUGH VARIOUS
TESTS
o REALITY CHECK
 REFERS TO HOW THE O EVALUATES THEIR SKILLS &
KNOWLEDGE & WHERE THEY FIT INTO O’S PLAN
 THE EMPLOYEE’S MANAGERS PROVIDE THIS
INFORMATION. EG. PERFORMANCE APPRAISAL
o GOAL SETTING
 REFERS TO THE PROCESS OF EMPLOYEES
DEVELOPING SHORT / LONG TERM CAREER
OBJECTIVES
 THESE GOALS USUALLY RELATE TO
• DESIRED POSITIONS,
• LEVEL OF SKILL APPLICATION
• WORK-SETTING [MOVEMENT TO CORPORATE]
• SKILL ACQUISITION
o ACTION PLANNING
 INVOLVES EMPLOYEES DETERMINING HOW THEY
WILL ACHIEVE THEIR SHORT / LONG TERM CAREER
GOALS
 INVOLVES ENROLLING IN TRAINING COURSE,
ATTENDING SEMINARS, APPLYING FOR JOB OPENINGS

ROLES OF EMPLOYEES, HR MANAGERS, MANAGERS, & O IN CM:

• EMPLOYEE’S ROLE
o TAKING RESPONSIBILITY FOR OWN CAREER PLANNING
o TAKE INITIATIVE TO ASK FOR FEEDBACK REGARDING THEIR
STRENGTH / WEAKNESS
o IDENTIFY THEIR STAGE OF CD & DEVELOPMENTAL NEEDS
o GAIN EXPOSURE TO A RANGE OF LEARNING
OPPORTUNITIES
o INTERACT WITH EMPLOYEES FROM DIFFERENT WORK
GROUPS INSIDE & OUTSIDE THE O

• MANAGER’S ROLE
o TO HELP EMPLOYEES DEAL WITH CAREER ISSUES,
MANAGERS NEED TO BE EFFECTIVE IN FOUR ROLES:
 COACH
• RESPONSIBILITIES:
 PROBE PROBLEMS
 LISTEN
  CLARIFY CONCERNS
 DEFINE CONCERNS
 APPRAISER
• RESPONSIBILITIES
 GIVE FEEDBACK
 CLARIFY O’S STANDARD
 CLARIFY JOB RESPONSIBILITIES
 CLARIFY O’S NEEDS
 ADVISOR
• RESPONSIBILITIES
 GENERATE OPTIONS
 ASSIST IN GOAL SETTING
 PROVIDE RECOMMENDATIONS
 REFERRAL AGENTS
• RESPONSIBILITIES:
 LINK TO CAREER MANAGEMENT
RESOURCES
 FOLLOW UP ON CAREER MANAGEMENT
PLAN

• HR MANAGER’S ROLE
o PROVIDE INFORMATION ABOUT T& D OPPORTUNITIES
o PROVIDE SPECIALIZED TRAINING SUCH AS TESTING TO
DETERMINE EMPLOYEES’ VALUES, INTERESTS & SKILLS
o HELP EMPLOYEES FOR JOB SEARCHES
o OFFER CAREER COUNSELLING
• O’S ROLE:
o PROVIDE EMPLOYEES WITH RESOURCES NEEDED TO BE
SUCCESSFUL IN CAREER PLANNING
 SPECIAL CHALLENGES IN CM
PLATEAUING:
• IS A SERIOUS CONCERN FOR MANY MIDDLE AGE MANAGERS.
MANY MANAGERS MIGHT BE IN MAINTENANCE STAGE, WHEREIN
PLATEAUING IS OF PRIMARY CONCERN
• IT DEALS WITH FEELINGS & EMOTIONS OF AN EMPLOYEE
• ALSO MEANS THAT THE LIKELIHOOD OF THE EMPLOYEE
RECEIVING FUTURE JOB ASSIGNMENTS WITH INCREASED
RESPONSIBILITY IS LOW
• PLATEAUING IS NOT BAD. A PLATEAUED EMPLOYEE MAY NOT
DESIRE INCREASED RESPONSIBILITIES. JOB PERFORMANCE MAY
MEET THE MINIMUM ACCEPTABLE STANDARDS
• PLATEAUING BECOMES DYSFUNCTIONAL WHEN THE EMPLOYEE
FEELS STUCK IN A JOB THAT OFFERS NO POTENTIAL FOR
PERSONAL GROWTH. SUCH FRUSTRATION RESULTS IN A POOR
JOB ATTITUDE, INCREASED ABSENTEEISM & POOR
PERFORMANCE
• FOLLOWING ARE THE REASONS FOR PLATEAUING:
o LACK OF ABILITY
o LACK OF TRAINING
o LOW NEED FOR ACHIEVEMENT
o UNFAIR PAY DECISIONS OR CONFUSION WITH PAY RAISES
o CONFUSION ABOUT JOB RESPONSIBILITIES
o SLOW O’S GROWTH RESULTING IN REDUCED
DEVELOPMENT OPPORTUNITIES
• PLATEAUED EMPLOYEES SHOULD BE ENCOURAGED TO BECOME
INVOLVED IN DEVELOPMENTAL OPPORTUNITIES, INCLUDING
TRAINING COURSES, JOB EXCHANGES, & SHORT TERM
ASSIGNMENTS IN WHICH THEY EXAMINE THEIR EXPERTISE
OUTSIDE THEIR DEPARTMENT
• PLATEAUED EMPLOYEES MAY NEED CAREER COUNSELING TO
HELP THEM UNDERSTAND WHY THEY ARE PLATEAUED, & THE
OPTIONS FOR DEALING WITH THE PROBLEM
• EMPLOYEES SHOULD BE ENCOURAGED TO REALITY TEST THE
SOLUTIONS THEY BELIEVE WILL SOLVE THEIR PLATEAUING
THROUGH DISCUSSIONS WITH THEIR MANAGER, COWORKERS, &
HR MANAGERS THIS IS NECESSARY TO ENSURE THAT THEIR
SOLUTION IS REALISTIC GIVEN THE RESOURCES AVAILABLE IN
THE O.
• AT TIMES IT MAY BE IN THE BEST INTEREST OF THE EMPLOYEE IF
HE IS ENCOURAGED TO LEAVE THE O
SKILL OBSOLESCENCE
• OBSOLESCENCE IS REDUCTION IN AN EMPLOYEE’S COMPETENCE
RESULTING FROM LACK OF KNOWLEDGE OF NEW WORK
PROCESSES, TECHNIQUES & TECHNOLOGIES THAT HAVE
DEVELOPED SINCE THE EMPLOYEE COMPLETED HIS EDUCATION.
• OBSOLESCENCE NEEDS TO BE AVOIDED IF O IS TRYING TO
BECOME LEARNING O. IF EMPLOYEE’S SKILL BECOMES OBSOLETE
BOTH THE EMPLOYEE & THE O SUFFER. THE O’S CULTURE PLAYS
AN IMPORTANT ROLE IN ENCOURAGING DEVELOPING THEIR
SKILLS. FOLLOWING ARE THE FACTORS THAT ARE RELATED TO
UPDATING SKILLS:
o O’S CLIMATE
 EMPHASIS ON CONTINUOUS LEARNING
o MANAGER
 PROVIDE CHALLENGING WORK ASSIGNMENTS
 ENCOURAGE EMPLOYEES TO ACQUIRE NEW SKILLS
o PEER
 DISCUSS IDEAS & PROBLEMS
 SHARE INFORMATION
o REWARD SYSTEM
 SABBATICALS
 PAY FOR NEW IDEAS
 PAY FOR EMPLOYEE DEVELOPMENT
BALANCING WORK & LIFE:
• O NOW A DAYS ARE CONCERNED WITH SIMULTANEOUSLY
MEETING THE NEEDS OF BOTH WORK & FAMILY RESEARCH
SUGGESTS THAT DUAL CAREER FAMILIES, SINGLE-PARENT
FAMILIES, & FAMILIES WITH CHILDREN UNDER AGE FIVE ARE
LIKELY TO EXPERIENCE THE MOST WORK & FAMILY CONFLICTS
• BESIDES BALANCING WORK LIFE, O NOW A DAYS HAS PROVIDE
SUPPORT SERVICES TO EMPLOYEES TO DEAL WITH STRESSES &
STRAINS RELATED TO WORK & NON-WORK CONFLICTS
• EMPLOYEES WITH DEPENDENTS STRUGGLE WITH CHILD CARE &
ELDER CARE
• ALL EMPLOYEES STRUGGLE WITH ISSUES RELATED TO
PARTICIPATING IN NON-WORK ACTIVITIES THAT THEY
INCREASINGLY HAVE LESS TIME FOR DUE TO WORK DEMANDS
• TO ADDRESS THIS ISSUES, THE HR POLICIES HAVE TO BE RE-
LOOKED, & CHANGED ACCORDINGLY
TYPES OF WORK-LIFE CONFLICTS:
• OUTCOMES ARE:
o FRUSTRATION
o HEALTH RISK
o DECREASED PRODUCTIVITY
o TARDINESS
o TURNOVER
o POOR MENTAL HEALTH
• THREE TYPES OF WORK-FAMILY CONFLICT EXISTS:
o TIME-BASED
 OCCURS WHEN THE DEMANDS OF WORK & NON-
WORK INTERFERE WITH EACH OTHER
 EXAMPLE: TRAVEL, STAYING BACK ON OVERTIME
o STRAIN-BASED
 RESULTS FROM THE STRESS OF WORK & NON WORK
ROLES
 EXAMPLE: A NEW BORN BABY DEPRIVES PARENTS OF
SLEEP; RESULT IT IS DIFFICULT TO CONCENTRATE AT
WORK
o BEHAVIOR-BASED
 OCCURS WHEN EMPLOYEES BEHAVIOR IN WORK
ROLES IS NOT APPROPRIATE FOR THEIR BEHAVIOR IN
NON WORK ROLES
 EXAMPLE: WORK DEMANDS THAT MANAGERS BE
LOGICAL, IMPARTIAL, & AUTHORITARIAN. AT THE
SAME TIME THESE MANAGERS ARE EXPECTED TO BE
WARM, EMOTIONAL, & FRIENDLY IN THEIR
RELATIONSHIPS WITH THEIR FAMILY MEMBERS OR
FRIENDS
O POLICIES TO ACCOMMODATE WORK & NON WORK:
• COMMUNICATING INFORMATION ABOUT WORK & NON WORK
POLICIES & JOB DEMANDS
• FLEXIBILITY IN WORK ARRANGEMENTS & WORK SCHEDULES
• SUPPORT SERVICES
COPING WITH LOSS OF JOBS:
• O THAT LAY OFF EMPLOYEES CAN EXPERIENCE LOWERED JOB
COMMITMENT, DISTRUST OF MANAGEMENT & DIFFICULTIES
RECRUITING NEW EMPLOYEES
 • JOB LOSS ALSO CAUSES STRESS & DISRUPTS THE PERSONAL
LIVES OF LAID OFF EMPLOYEES
• BECAUSE OF THE POTENTIAL DAMAGING EFFECTS OF
DOWNSIZING, O SHOULD SEEK ALTERNATIVE WAYS TO REDUCE
HEADCOUNT & LOWER LABOUR COSTS
• JOB LOSS MAY BE INEVITABLE DUE TO MERGERS & ACQUISITION
• FROM CAREER MANAGEMENT POINT OF VIEW, O MUST TAKE
STEPS THAT REMAINING EMPLOYEES REMAIN PRODUCTIVE &
COMMITTED TO THE O
• TO REDUCE THE POTENTIAL NEGATIVE EFFECTS OF LAY OFF THE
FOLLOWING THINGS AN O SHOULD DO:
o ADVANCE WARNING & EXPLANATION FOR LAY OFF
o PSYCHOLOGICAL, FINANCIAL & CAREER COUNSELING
o ASSESSMENT OF SKILLS & INTEREST
o PROVIDE ASSISTANCE IN FINDING ALTERNATIVE JOBS
DEALING WITH OLDER EMPLOYEES:
• FOLLOWING ACTIONS AN O CAN TAKE:
o FLEXIBILITY IN SCHEDULING ALLOWS OLDER EMPLOYEES
TO TAKE CARE OF SICK SPOUSES, GO BACK TO UPGRADE K
/ S, WORK FEW HOURS,
o PROVIDE TRAINING TO AVOID OBSOLESCENCE & BE
PREPARED TO USE NEW TECHNOLOGY
o COUNSELING FOR FINDING NEW JOBS, & TRANSITION TO
LESS SECURE POSITIONS
PRE-RETIREMENT SOCIALIZATION:
• PROCESS OF HELPING EMPLOYEES PREPARE FOR EXIST FROM
WORK
• IT ENCOURAGES EMPLOYEES TO LEARN ABOUT RETIREMENT
LIFE, PLAN FOR ADEQUATE FINANCIAL, HOUSING, & HEALTH-
CARE RESOURCES & FORM ACCURATE EXPECTATIONS ABOUT
RETIREMENT
• MANY O ALSO USE ALTERNATIVE WORK ARRANGEMENTS TO
HELP EMPLOYEES MAKE THE TRANSITION INTO RETIREMENT
WHILE AT THE SAME TIME CONTINUING TO UTILIZE THEIR
TALENTS
• ALTHOUGH FORMAL PRERETIREMENT SOCIALIZATION PROGRAMS
ARE PRIMARILY FOR EMPLOYEES WHO ARE CONSIDERING
RETIREMENT, FINANCIAL PLANNING, ESTATE PLANNING &
PURCHASING INSURANCE NEEDS TO BE DONE MUCH EARLIER IN
THEIR CAREER TO ENSURE THAT EMPLOYEES WILL HAVE THE
FINANCIAL RESOURCES NECESSARY TO LIVE COMFORTABLY
DURING RETIREMENT
RETIREMENT:
 • INVOLVES LEAVING A JOB & WORK ROLE & MAKING A
TRANSITION INTO A LIFE WITHOUT WORK
• THE AGING WORK FORCE & THE USE OF EARLY RETIREMENT
PROGRAMS TO SHRINK O WORK FORCES HAVE THREE
IMPLICATIONS:
o O MUST MEET THE NEEDS OF OLDER EMPLOYEES
o O MUST TAKE STEPS TO PREPARE EMPLOYEES FOR
RETIREMENT
o O MUST BE CAREFUL THAT EARLY RETIREMENT PROGRAMS
DO NOT UNFAIRLY DISCRIMINATE AGAINST OLDER
EMPLOYEES

EARLY RETIREMENT PROGRAMS:

• OFFERS FINANCIAL BENEFITS TO LEAVE THE O
• THESE PROGRAMS ARE USUALLY PART OF THE O’S STRATEGY TO
REDUCE LABOUR COSTS WITHOUT HAVING TO LAY OFF THE
EMPLOYEES
• ELIGIBILITY FOR EARLY RETIREMENT IS USUALLY BASED ON AGE
[40 YEARS] & YEARS OF SERVICE [10 YEARS]
• EMPLOYEES ARE GIVEN COMPLETE INFORMATION ABOUT THE
PLAN & THEY RECEIVE A REASONABLE AMOUNT OF TIME TO
MAKE THEIR DECISIONS
• EMPLOYEES DECISIONS ARE CONSIDERED VOLUNTARY, IF THEY
REFUSE TO PARTICIPATE IN THE PLAN
• O ORGANIZES TRAINING PROGRAMS ON HOW SAVE THE
LUMPSUM AMOUNT SO THAT THEY GET MONTHLY INCOME
• THE LUMP SUM AMOUNT ALSO QUALIFIES UPTO FIVE LAKHS
INCOME TAX EXEMPTION
• THE LUMP SUM AMOUNT IS OVER & THE OTHER RETIREMENT
TERMINAL BENEFITS LIKE PF / GRATUITY / SUPERANNUATION
1.