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Human Resources Management: Text notes

Vassilis Moustakis
eHealth Laboratory
Foundation for Research and Technology – Hellas (FORTH)
Institute of Computer Science
Heraklion 71110, Greece
E-mail: moustaki@ics.forth.gr

Heraklion, August 2005


Overview
The text represents a Human Resources Management (HRM) manual and teaching
material. It is divided into three parts. Part I overviews HRM functions and tasks. Part
II includes guidelines for the management of people. The third part includes specific
measures related to HRM practices and outcomes.

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TABLE OF CONTENTS
OVERVIEW............................................................................................................................................2
INTRODUCTION .....................................................................................................................................5
PERSONNEL SELECTION ........................................................................................................................5
PERSONNEL ORIENTATION, PLACEMENT AND SEPARATION ...................................................................7
Orientation......................................................................................................................................7
Placement........................................................................................................................................8
Separation.......................................................................................................................................8
JOB ANALYSIS AND DESIGN ..................................................................................................................9
Job analysis.....................................................................................................................................9
Application of job information analysis........................................................................................11
Job design .....................................................................................................................................12
JOB AND PERFORMANCE APPRAISAL ...................................................................................................14
Uses of performance appraisal .....................................................................................................14
Rater biases...................................................................................................................................15
Appraisal methods ........................................................................................................................16
Implications of the appraisal process ...........................................................................................20
TRAINING ...........................................................................................................................................20
Steps to human resources training................................................................................................21
Needs assessment................................................................................................................................ 21
Training objectives ................................................................................................................................ 21
Program content .................................................................................................................................... 21
Learning principles.......................................................................................................................21
Training approaches.....................................................................................................................22
Job Rotation ........................................................................................................................................... 23
Apprenticeships and coaching............................................................................................................. 23
Lecture and Video Presentations ........................................................................................................ 23
Vestibule Training.................................................................................................................................. 24
Role Playing and Behavior Modeling.................................................................................................. 24
Case Study............................................................................................................................................. 24
Simulation............................................................................................................................................... 24
Self-Study and Programmed Learning ............................................................................................... 25
Laboratory Training ............................................................................................................................... 25
Action Learning...................................................................................................................................... 25
Evaluation of Training..................................................................................................................25
CAREER PLANNING.............................................................................................................................26
Career counselling process...........................................................................................................28
Management support ....................................................................................................................28
Career Planning and HR department ...........................................................................................29
SECURITY, SAFETY AND HEALTH ........................................................................................................29
Financial Security.........................................................................................................................29
Social Security ..............................................................................................................................30
Implications for the HR department..............................................................................................30
Workers Compensation.................................................................................................................30
Enforcement ..................................................................................................................................31
Security, safety and health rules ...................................................................................................31
UNION RELATIONS ..............................................................................................................................31
The labour management system....................................................................................................32
Unions and human resources management ..................................................................................32
Common Provisions in Union-Management Agreements .............................................................32
The challenges to human resources management.........................................................................33
WAGES AND SALARIES .......................................................................................................................34
Objectives in compensation management .....................................................................................35
Guidelines for an effective compensation .....................................................................................35
Basic topics for the HR department ..............................................................................................36
PART II – GUIDELINES FOR THE EFFECTIVE MANAGEMENT OF PEOPLE ...................37
GUIDELINES FOR OVERCOMING ORGANIZATIONAL BARRIERS TO INNOVATION ...................................37
GUIDELINES FOR EFFECTIVE LEADERSHIP ...........................................................................................40
GUIDELINES FOR EFFECTIVE COMMUNICATION...................................................................................43

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Barriers to Effective Communication............................................................................................43
Overcoming the Barriers ..............................................................................................................44
Communication Checklist .............................................................................................................44
PART III: HUMAN RESOURCE MANAGEMENT METRICS ......................................................................46
Metrics related to practice............................................................................................................46
Metrics related to outcomes..........................................................................................................46
Efficiency measures ......................................................................................................................47
Performance driver measures.......................................................................................................49

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Part I: Human Resource Management - Introduction
and brief overview*
Introduction
Human Resource Management, or HRM for short, captures all the activities that link
the organization with the people it employs. HRM encompasses a broad set of
activities, which aim towards personnel selection, personnel orientation, placement
and separation, job analysis and design, job and performance appraisal, training,
career planning, security safety and health, union relations and wages and salaries.
HRM functions are performed within the predetermined managerial context. Thus,
HRM does not include organizational strategic planning or management control
functions. However, HRM is shaped according to the strategic priorities of the
organization.
The text overviews the key HRM functions and provides brief insight about their
implementation in practice.

Personnel selection
The selection process is a series of specific steps used to decide which recruits should
be hired. The process begins when recruits apply for employment and ends with the
hiring decision. Though the final hiring decision is made by the immediate supervisor
or manager in many cases the HRM department evaluates applicants in regard to their
potential suitability through the use of valid procedures.
The process may be seen as consisting of eight discrete steps, namely:
1. Preliminary reception of applications – this is the step that brings together the
organization with the applicant. The applicant has the chance to learn about
the organization and the organization has the chance to provide all the
necessary information about the job. Often a preliminary interview may be
granted as courtesy, which helps the organization to screen out obvious misfits.
2. Employment tests – these tests are devices that assess the match between
applicants and job requirements. Tests may be standardized and based on
paper and pencil or may be based on exercises that simulate real working
conditions. For instance, an applicant for a secretarial position may be asked to
take a test on office tasks, or an applicant for the accounting department may
be asked to take a test in mathematics. For higher level positions, which often
involve complex tasks testing of decision making procedures and skills may
be necessary and such testing may be based on real-life working conditions
and performance is assessed by more than one raters. Testing assumes that the
device is valid, which in turn, implies that test scores relate significantly to
potential job performance or to another job-relevant criterion. Thus

*
Teaching notes based on: Werther, W. B. Jr. and Davis, K. Human Resources and Personnel
Management, 5th ed., Boston, Massachusetts: Irwin – McGraw-Hill, 1996.

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considerable caution should be exercised on test selection and use of test
results. Many tests have been validated on large populations, but testing
specialists should conduct their own studies to make sure that a particular test
is valid for its planned use. There exists a wide range of tests, including, but
not limited to: psychological tests, knowledge tests, performance tests, graphic
response tests, attitude tests, and medical tests.
3. Selection interview – this is a formal, in-depth conversation conducted to
evaluate an applicant’s acceptability. During the interview the organization
tries to learn about three issues: (a) can the applicant do the job? (b) Will the
applicant do the job? And, (c) how does the applicant compare with others
who are being considered for the job? Selection interviews are flexible and can
be adapted to unskilled, skilled, managerial and staff employees. In addition,
they facilitate a two-way exchange of information – the applicant learns about
the organization and the organization learns about the applicant. Interviewing
may take one of the following forms: (a) unstructured (it is based on few if
any planned questions and often questions are made up during the interview),
(b) structured (it is based on a predetermined checklist of questions and all
applicants are asked the same questions), (c) mixed (this is a combination
between structured and unstructured questions), (d) behavioral (the questions
are limited to hypothetical situations and the evaluation is based on the
solution given or approach taken by the applicant) and (e) stress (it includes a
series of harsh, rapid fire questions, which are intended to upset the applicant).
Interviews have some shortcomings with their most noticeable flaws being in
the areas of reliability and validity. Reliability relates to the interpretation of
results across interviewers – good reliability means that the interpretation of
the interview results does not vary from interviewer to interviewer; however, it
is common for different interviewers to form different opinions. Validity
relates to the type of questions asked during the interview process.
4. References and background checks – During this step the organization aims to
assess the reliability, job accomplishments, titles, educational background and
other facts that may be relevant about the applicant. Assessment involves
reviewing of applicant’s references and examination of applicant’s
background checks. References and background information should be
collected carefully, with due regard to potential legal and privacy
complications. Often companies omit a thorough investigation of this step to
avoid the potential legal implications. On the other hand, letters of reference
about an applicant may suffer in reliability and obscure reality.
5. Medical evaluation – when necessary the organization may ask qualified
applicants to undertake medical tests that are necessary to ascertain that the
applicant can handle the physical or mental stress of a job. Caution should be
exercised to limit medical testing to the tests that are directly linked with the

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position for which the applicant is considered; failing to do so may give rise to
serious legal complications from the part of the applicant.
6. Supervisory interview – the ultimate responsibility for a newly hired worker’s
success falls to the worker’s immediate supervisor. The HRM department
provides to the supervisor with a short-list of qualified; the immediate
supervisor interviews the qualified individuals to assess technical and
managerial abilities.
7. Realistic job preview – this step supplements the supervisory interview and
shows the applicant the job and the job setting before the hiring decision is
made.
8. Hiring decision – this step marks the end of the selection process, assuming
that the applicant accepts the job offer. Hiring may be decided by the
immediate supervisor alone, or the immediate supervisor may propose few
candidates for hiring. It is advisable to retain the files of qualified yet rejected
applicants for consideration in the future.

Personnel orientation, placement and separation


Once the selection process has been completed the organization should help the new
employee to fit in. Help may extend to existing employees who may be re-assigned to
new duties or may be involved in coaching of the new employee.

Orientation
Orientation captures all the activities the hiring organization may engage to fit in the
newly hired employee into the workplace. Essentially, orientation is a socialization
process via which an individual’s personality and organizational culture and values
are met. During orientation both the immediate supervisor and the HRM department
may be involved. The two of them should coordinate to see that the newly hired
employee is not:
− Overwhelmed with too much to absorb in a short time
− Overloaded with forms to complete
− Given only menial tasks that discourage job interest and company loyalty
− Asked to perform tasks with a high chance for failure
− Pushed into the job with a sketchy orientation under the mistaken belief that
‘trial by fire’ is the best orientation
− Forced to fill in the gaps between a broad orientation by the HRM department
and a narrow one by the supervisor.
Orientation relates with learning of the newly hired employee about the company. In
general learning can be achieved in three different ways: by trial and error, by
informal imitation and by formal coaching. Trial and error learning suffers from three

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disadvantages. Firstly, failures may be numerous before one gets the hang of things.
Secondly, confidence in own’s abilities is largely determined by past successes and
failures. Thirdly, one does not advantage of transferable experiences gained by others.
Imitation learning, in turn, suffers from the disadvantage that the immediate
supervisor used as the model may act incorrectly and the newly hired employee may
never realize the difference. Finally, learning by formal coaching rests on the ability
of the immediate supervisor to transmit the necessary background knowledge, to
simulate real world problems, to teach proven problem-solving techniques and to
provide opportunities for employee continuous self-appraisal.
Finally, a good orientation program should include built-in follow-up procedures to
ascertain that the newly hired employee has effectively become a ‘team-player.’

Placement
Placement is the assignment or reassignment of an employee to a new job. Most
placement decisions are made by line managers. There are three types of placement
decisions: promotions, transfers and demotions.
A promotion occurs when an employee is moved from a job to another position that is
higher in pay, responsibility or organizational level. Promotions may be based on
merit (they occur based on superior performance of the employee in the current
position) or based on seniority (for instance, the employee who has worked longer in
the organization get the promotion.)
Transfers and demotions are the other two major placement decisions available to the
organization. Transfers occur when the employee is moved from one job to another
position that is relatively equal in pay, responsibility, or organizational level.
Demotions occur when an employee is moved from one job to another position that is
lower in pay, responsibility or organizational level.

Separation
A separation is a decision that the individual and the organization should part. It may
be initiated by the employer or the employee. Separation may take many forms:
temporary leave of absence, attrition, layoff and termination.
− A temporary leave of absence may be based on medical, family, educational,
recreational or other reasons. The organization and the individual agree on the
terms of the absence.
− Attrition is the normal separation of people from an organization as a result of
resignation, retirement, or death. It is initiated by the individual employee, not
by the company. Resignation is the most frequent form of attrition.
− Layoffs entail the separation of employees from an organization for economic
or business reasons. Layoff duration may vary. Layoffs may last few weeks if
its purpose is to adjust inventory levels or to allow a company to retool for a
new product or service. When caused by a business cycle, layoffs may last

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many months or years. In cases of restructuring, such as downsizing or mergers
and acquisitions layoffs may become permanent.
− Termination is a broad term that encompasses permanent separation from the
company for any reason. Often this term implies that the employee is fired as
form of discipline. Associated with termination is severance pay, which is
money – often equal to a month’s salary – that is given to employees who are
permanently separated.

Job analysis and design


Knowledge about jobs and their requirements must be collected through a process
known as job analysis, in which information about job is systematically collected,
evaluated and organized. Job design involves the detailed specification of the
activities that the employee should perform as well as the skills and the experience he
[the employee] should display. Design follows analysis.

Job analysis
Collection of information kicks-off job analysis. Collection of job analysis
information encompasses three tasks, namely: (1) identification of jobs to be analyzed,
(2) development of a job analysis questionnaire, and (3) collection of job analysis
information.
Selection and identification of jobs to be analyzed may be based on company
organization chart or may be based on earlier job analysis. If prior job analysis results
do not exist the analyst may rely on payroll records. The objective is to select jobs
that are both representative and general enough to facilitate the conduct of job design
within the organization.
A checklist or questionnaire ensures that information is collected in a consistent
manner for all jobs. A job analysis questionnaire often includes the following sections:
1. Job analysis status – it links information collection with a prior (if any) effort
and gives the chance to the analyst to specify his or her name , the date that
analysis was conducted, previous revisions, etc.
2. Job identification – it captures the organizational placement of the job under
analysis: department, division, supervisor, job title, etc.
3. Job summary – a brief statement about the scope and objective of the job.
4. Duties – it captures the primary and secondary duties of the job. Duty
specification may be done according to a predetermined ontology (or
dictionary), e.g., medical, technical, administrative, etc. The time allocation to
each duty is also recorded. Finally, we record the measure of success with
respect to each duty.
5. Responsibility – what are the tasks for which the person who occupies the job
should be held responsible? Responsibility is differentiated between major and

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minor. For instance, materials usage may be a major responsibility while use
of tools may represent a minor responsibility.
6. Human / job specification characteristics – to describe the special skills that
may be necessary for a job and to capture experience, working conditions,
performance standards, etc. For instance, a job related to cleanness inspection
of empty [recycled] beer bottles will demand special visual skills. Other such
skills may include, but not limited to, the following: hearing, talking, sense of
smell, sense of taste, judgment, attention, arithmetic, etc. We mention the
experience that is necessary for the effective implementation of the job, the
working conditions, the health and safety features, the performance standards
(every effort should be made to quantify) and list any other miscellaneous
comments related with specification. This section should be used to uncover
the particular knowledge, skills, abilities, education, training, and other special
characteristics that jobholders should possess. Information about the job
environment also helps in understanding the job. Working conditions may
explain the need for particular skills, training, knowledge or even a particular
job design. Knowledge of hazards allows the HRM department to redesign the
job or protect workers through the use of standards and safety equipment.
Unique working conditions influence hiring, placement and compensation
decisions.
The above list is general enough and the analyst should revise it with due regard to
organization specifics.
Job information collection may be achieved via different means, namely:
1. Interviews. Face to face interviews are an effective way to collect job
information. The analyst has the job checklist as a guide, and interviews allow
the interviewer to explain unclear questions and probe into uncertain answers.
The analyst often talks with a limited number of workers first, and then
interviews with the immediate supervisors verify the information. Interviews
ensure a high level of accuracy though they are time consuming and costly.
2. Panel of experts. This is another expensive and time consuming method. A
panel that consists of senior organization members, supervisors is established
and the analyst interviews the group to collect the information. The interaction
between group members during the interviews adds insight and detail that the
analyst may not be able to get from individual interviews.
3. Mail questionnaires. This is a fast and less costly option. Questionnaires are
sent to jobholders and filled in. This approach allows many jobs to be studied
at once at once and little cost. However, accuracy may be lower because of
misunderstood questions, incomplete responses and unreturned questionnaires.
4. Employee log. An employee log or diary is another option. Workers
periodically summarize their tasks and activities in the log. If entries are made

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over the entire job cycle, the diary can be quite accurate. It may be the only
feasible way to collect job information if interviews, experts and
questionnaires are unlikely to capture a complex job.
5. Observation. Direct observation is slow, costly, and potentially less accurate
than other methods. Accuracy may be low because the analyst may miss
irregularly occurring activities.
6. Combinations. Since each method has pluses and minuses the analyst may
often rely on combination. However, combination may prove slower and
costlier than any method alone.

Application of job information analysis


Results of job information analysis contribute to the formation of: (1) job descriptions,
(2) job specifications and (3) job performance standards.
A job description is a written statement that explains the duties, working conditions
and other aspects of a specified job. A job description may include a summary, a brief
overview of duties and a brief description of the working conditions. For instance the
job description of a job analyst position may include the following:
Summary: Collects and develops job analysis information through interviews,
questionnaires, observation, or other means. Provides other personnel specialists with
needed information.

Job duties: (1) Designs job analysis schedules and questionnaires. Collects job
information. (2) Interacts with workers, supervisors and peers. (3) Writes job
descriptions and job specifications. (4) Reports safety hazards to area manager and
safety departments. (4) Verifies all information through two sources. (5) Performs
other duties as assigned by supervisors.

Working conditions: Works most of the time in well ventilated modern office. Data
collection often requires on-site work under every working condition found in the
company. Works standard from 08:00 until 17:00 hours except to collect second
shift data and when travelling (up to four days per month).

A job specification describes the job demands on the employees who do it and the
human skills that are required. It is a profile of the human characteristics needed by
the person performing the job. These requirements include experience, training,
education, and the ability to meet physical and mental demands. Thus, the difference
between a job description and a job specification is a matter of perspective. For
example the job specification that would correspond to the job specification of the Job
Analyst could be as follows:

Skill factors:

Education: University degree in Business Administration or equivalent.

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Experience: At least one year as job analyst trainee, recruiter, or other
assignment in personnel area.

Communication: Oral and written skills should evidence ability to capsulate job
data accurately. Must be able to communicate effectively with
diverse workforce include foreign born employees.

Effort factors:

Physical demands: Limited to those normally associated with clerical jobs: sitting,
standing and walking.

Mental demands: Extended visual attention is needed to observe jobs. Initiative


and ingenuity are mandatory since job receives only general
supervision. Judgment must be exercised on job features to be
emphasized, jobs to be studied, and methods used to collect job
data. Decision-making discretion is frequent. Analyzes and
synthesizes large amounts of abstract information into job
descriptions, job specifications, and job standards.

Working Travels to company locations within the country up to four days


conditions: per month.

Job performance standards serve two functions: (1) they become targets for employee
efforts and (2) standards are criteria against which job success is measured. Standards
are a key part of any organizational planning and control system.

Job design
A job is more than a collection of tasks recorded on a job analysis questionnaire and
summarized in a job description. While job description and job specification consider
individual jobs one at a time job designs adopts a system framework analysis and
views all jobs together. To do so, job design takes a re-consideration framework,
which couples organizational elements with environmental factors and behavioural
elements.
Organizational elements include the work flow, work practices and human factor
issues.
Environmental factors include employee abilities and availability and social and
cultural expectations.
Behavioural elements encompass worker needs such as autonomy, variety, task
identity, task significance and feedback.
Organizational elements, environmental factors and behavioural elements pose trade-
offs during job analysis and design. For instance, specialization contributes up to a

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certain point to productivity gain; however, when specialization passes a certain point,
e.g., it becomes overspecialization then contribution to productivity may be negative.
Job design or redesign is a critical element in organizational success. Techniques that
may enhance organizational and worker effectiveness may include job enrichment,
building of autonomous work teams, job rotation or job enlargement.
With job rotation employees are moved from job to job. The jobs themselves are not
actually changed only the workers are rotated. The organization benefits because
workers become competent in several jobs rather than only one. Knowing a variety of
jobs helps the worker’s self-image, provides personal growth and makes the worker
more valuable to the organization. However, one should note that job rotation does
not improve the jobs! The relationships between tasks, activities, and objectives
remain unchanged. Implementation of a job rotation plan should occur only if
necessary*.
Job enlargement (also known as horizontal loading) expands the number of related
tasks in a job. Job enrichment adds new sources of satisfaction to jobs such as
responsibility, autonomy and control. Job enrichment is also known as vertical
loading. Job enrichment sees jobs as consisting of three elements: plan , do and
control. Job enlargement adds more things to do. Job enrichment attempts to add more
planning and control responsibilities.
Autonomous work teams are groups of workers with such widely defined jobs that
their responsibilities often include duties normally reserved for supervisory staff or
managers. Such work teams often include three to fifteen members who are
extensively cross-trained to do each other’s jobs. Group members are given objectives
in production or service to be attained by the team. Then they collectively decide
among themselves how they will achieve the target performance. Assignments are
made within the group, often with members informally trading off among themselves
to relieve boredom and fatigue. Self-directed teams have been created for various
reasons. Some companies see these approaches as the best way to achieve high
productivity and quality while improving the quality of work life for employees.
Other organizations appreciate the reduction in supervisory overhead, although this
alone is seldom a motivating force behind the creation of such teams. Ultimately,
however, managers and HRM personnel must balance the needs of a good work life
with the bottom line or economic results. The goal should not be to produce happy
workers. Good HRM performance should only be seen as a means to an end. And, the
end is the long term value creation and success of the company.

*
Actually a good guide before any HRM technique is implemented is to ask oneself: will the benefits
from the application be at least equal to the costs of the application? This follows the basic principle
from economics according to which an investment is worthy if the incremental benefits are grater or
equal than the incremental costs.

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Job and performance appraisal
Performance appraisal is the process by which organizations evaluate individual job
performance. Effective conduct of appraisal activities ensure that employees, their
supervisors, the HRM department and ultimately the organization benefit by ensuring
that individual efforts contribute to the strategic focus of the organization. The
appraisal should create an accurate picture of an individual’s typical job performance.
Appraisals are not done just to uncover poor performance; acceptable and good results
also must be identified so that they can be reinforced. To achieve this goal appraisal
systems should be job related and practical, include standards, and use dependable
measures.
Job-related means that the system evaluates critical behaviour that contributes to job
success. If the evaluation is not job related it is invalid.
Practical means that the system is understood by evaluators and employees. A
complicated, impractical approach may cause resentment, confusion and non-use.
A standardized system within the organization is helpful because it allows the
establishment of uniform practices. A standardized system often has well-thought-out
performance standards and measures. Performance standards serve as the benchmarks
against which performance is measured and should correlate with the desired results
of work.
Performance measures are the means by which attainment of performance standards is
monitored. Measures may be objective or subjective. Objective performance measures
are indicators of job performance that are verifiable by others and are usually
quantitative. Subjective performance measures are ratings that are based on the
personal standards or opinions of those doing the evaluation and are not verifiable by
others.

Uses of performance appraisal


Performance improvement. Performance feedback allows the employee, the manager
and personnel specialists to intervene with appropriate actions to improve.
Compensation adjustments. Performance evaluations help decision makers determine
who should receive pay raises. Many firms grant part or all of their pay increases and
bonuses on the basis of merit, which is determined mostly through performance
appraisals.
Placement decisions. Promotions, transfers and demotions are (or should be) usually
based on past or anticipated performance. Often promotions are a reward for past
performance.
Training and development needs. Poor performance may indicate a need for retraining.
Likewise good performance may indicate untapped potential that should be developed.
Career planning and development. Performance feedback guides career decisions
about specific career paths one should investigate.

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Staffing process deficiencies. Good or bad performance implies strengths or
weaknesses in the HRM department’s staffing procedures.
Information inaccuracies. Poor performance may indicate errors in job analysis
information, human resource plans, or other parts of the personnel management
information system. Reliance on inaccurate information may have led to inappropriate
hiring, training or counseling decisions.
Job design errors. Poor performance may be a symptom of ill-conceived job designs.
Appraisal help diagnose these errors.
Equal employment opportunity. Accurate performance appraisals that actually
measure job-related performance ensure that internal placement decisions are not
discriminatory.
External challenges. Sometimes performance is influenced by factors outside the
work environment, such as family, financial, health, or other personal matters. If these
factors are uncovered through appraisals, the HRM department may be able to
provide assistance.
Feedback to human resources. Good or bad performance throughout the organization
indicates how well the human resource is functioning.

Rater biases
All appraisal methods are subject to rater bias. Although training in how to conduct
performance appraisals can reduce bias, bias often occurs when raters do not remain
emotionally unattached while they evaluate employee performance. The most
common rater biases include the following:
Halo effect. It occurs when the rater’s personal opinion of the employee influences the
measurement of performance. If a supervisor likes an employee that opinion may
distort estimates of the employee’s performance.
The error of central tendency. Some raters do not like to rate employees as effective
or ineffective and so they distort the ratings to make each employee appear average.
This distortion causes evaluators to avoid checking extremes, such as very poor or
excellent.
Leniency and strictness bias. The leniency bias results when raters tend to be easy in
evaluating the performance of employees. Such raters see all employee performance
as good and rate it favorably. The strictness bias is the opposite. Raters are too harsh
in their evaluations. Both leniency and strictness errors more commonly occur when
performance standards are vague.
Cross-cultural biases. Every rater holds expectations about human behavior that are
based on his or her culture. When people are expected to evaluate others from
different cultures they may apply their cultural expectations to someone who has a
different set of beliefs or behavior. With greater cultural diversity and the movement

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of employees across international borders, this potential source of bias becomes more
likely.
Personal prejudice. A rater’s dislike for a group of people may distort the ratings
those people receive. Whereas the halo bias affects one’s judgment of an individual,
prejudice affects one’s judgment of entire groups.
The ‘recency’ effect. Ratings may be strongly affected by the employee’s most recent
actions.

Appraisal methods
Methods may be either past or future oriented. Past oriented approaches have the
advantage of dealing with performance that has already occurred and to some degree
can be measured. The obvious disadvantage is that past performance cannot be
changed. But, when their past performance is evaluated, employees can get feedback
that may lead to reviewed efforts at improved performance. Future oriented appraisals
focus on future performance goals.
Past oriented approaches include the following:
Rating scales. This is perhaps the oldest and most commonly used form of appraisal.
It requires the rater to provide a subjective evaluation of an individual’s performance
along a scale from low to high. Responses may be given numerical values to allow an
average score to be computed and compared. This approach is prone to several
disadvantages. The rater may be biased or several criteria be omitted to make the form
applicable to a variety of jobs.
Checklists. The checklist method requires the rater to select words or statements that
describe the employee’s performance and characteristics. Often statements may be
associated with weights, which results to a weighted checklist. For instance the
statement “employee works overtime when asked” may be associated with a weight
value of 5.5 while the statement “employee plans actions before beginning job” may
receive a weight value of 4.0. The rater checks the statements and a total by summing
up over all checked items is formed. Disadvantages include susceptibility to rater’s
biases, use of personality criteria instead of performance criteria, misinterpretation of
checklist items, and the use of improper weights by the HRM department.
Forced choice method. This approach requires the rater to choose the most descriptive
statement in each pair of statements about the employee being rated. Often both
statements in the pair are positive or negative. For example:

1. Learns quickly ……………………. Works hard.

2. Work is reliable ……………………. Performance is a good example for others.

3. Absent too often ………………….. Usually tardy.

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The forced choice method has the advantage of reducing rater bias because some
employees must be rated as superior to others. The approach is easy to administer and
fits a wide variety of jobs. However, the selected statements may not be specifically
job related. Thus this method may have limited usefulness in helping employees
improve their performance. Practice has demonstrated that this approached is seldom
liked by either the evaluator or the employee because it provides little useful feedback.
Critical incident method. This approach requires the rater to record statements that
describe extremely good or bad behavior related to job performance. The statements
are called critical and are usually recorded by the supervisor during the evaluation
period for each subordinate. An example of a positive statement may be: “reported
broken rung on utility ladder and flagged ladder as unsafe” and an example of a
negative statement could be “left hose across storeroom aisle.” The critical incident
method is useful for giving employees job-related feedback. In addition, it reduces the
recency bias if raters record incidents throughout the rating period.
Accomplishment records. This approach is closely related to the critical incident
method and it is mostly used by professionals. Accomplishment records are
employee-produced listings of accomplishments such as publications, speeches,
leadership roles, and other professionally related activities.
Behaviorally anchored rating scales. These scales denote a family of evaluation
approaches that identify and evaluate job-relevant behaviors. Specific named
behaviors are used to give the rater reference points in making the evaluation. The
scale may focus on expectation or on observation. An example of an expectation scale
that ranges between 7 (to denote extremely outstanding performance) and 1 (to denote
extremely poor performance) would be the following:

Extremely 7 You can expect this bartender to help customers when


outstanding needed.
performance

Good performance 6 You can expect this bartender to calm down arguments
before they erupt into fights.

Fairly good 5 You can expect this bartender to use discretion about
performance whether to continue serving intoxicated customers who
are with other patrons.

Acceptable 4 You can expect this bartender to stop serving drinks to


performance those who are intoxicated and alone.

Fairly poor 3 You can expect this bartender to make idle conversation
performance with customers who are alone.

Poor performance 2 You can expect this bartender to check identification of

17
young customers on their first time in the bar.

Extremely poor 1 You can expect this bartender to pick up customer’s


performance drinks, finished or not, with little or no warning at closing
time.

An example of an observation oriented scale may be:

1. You can expect this bartender to help customers in need:

Almost never Almost always

1 2 3 4 5

2. You can expect this bartender to calm down arguments before they erupt into fights:

Almost never Almost always

1 2 3 4 5

.
.
.

7. You can expect this bartender to pick up customer’s drinks finished or not, with little
or no warning at closing time

Almost never Almost always

1 2 3 4 5

The expectation scale marks performance and the observation scale marks frequency.
The two when combined they yield a synthetic account of job performance appraisal.
Field review method. This is not a different approach. With this method a skilled
HRM staff member goes into the field to assist supervisors in rating appraisal. The
approach for rating job performance could be any from the above listed methods.
Performance tests and observations. This approach is based on test performance. It is
particularly useful when the company relies on pay-for-knowledge or pay-for-skills.
Appraisal is not based on direct job-related performance.
Comparative evaluation. These are a collection of different methods that compares
one individual’s performance with that of his coworkers. Implementation of
comparative evaluation may be based on ranking (employees are ranked from best to
worst), forced distribution (requires raters to sort employees into different
classifications), point allocation (requires the rater to allocate a fixed number of points

18
across employees) or pair-wise assessment (with respect to a certain task employees
are compared either one versus all or two at a time). Comparative evaluation is not
popular and certainly is not easy to implement.
Future oriented approaches include the following:
Self appraisals. Getting employees to conduct a self appraisal can be a useful
evaluation technique if the goal of evaluation is to further self development. When
employees evaluate themselves, defensive behavior is less likely to occur and self
improvement is thus more likely. The risk is that the employee will be too lenient or
too critical of his or her performance. Obviously, self appraisals can be used with any
evaluation approach, past or future oriented. The important dimension of this kind of
appraisals is the employee’s involvement in and commitment to the improvement
process.
Management by objectives. This approach is based on goals that are objectively
measurable and mutually agreed on by the employee and the manager. Since an
employee gets to participate in setting his or her goals, the expectation is that
employees will be motivated to achieve these goals. Objectives also help the
employee and supervisor discuss the specific development needs of the employee,
which can make future training and development efforts appear more relevant to the
employee. Additionally, biases are reduced to the extend that goal attainment can be
measured objectively.
Psychological appraisals. Some companies or organizations employ industrial
psychologists on a full time or retainer basis. When psychologists are used for
evaluations, they assess an individual’s future potential, not that individual’s past
performance. The appraisal normally consists of in depth interviews, psychological
tests, discussions with supervisors and a review of other evaluations. The estimate by
the psychologist may relate to a specific job opening for which the person is being
considered, or it may be a global assessment of the person’s future potential. This
method is slow and costly and it is usually reserved for executive level decisions.
Assessment centers. This is another method of evaluating future potential, but it
doesn’t rely on the conclusions of one psychologist. Assessment centers rely on
multiple types of evaluation and multiple raters. The process puts selected for the
evaluation employees through in – depth interviews, psychological tests, personal
background histories, peer ratings by other attendees, leaderless group discussions,
ratings by psychologists and managers and simulated work exercises to evaluate their
future potential. Assessment centers are both time-consuming and costly. Some critic
question whether the procedures used are objective and job related, especially since
rater biases may affect the subjective opinions of attendees. Nevertheless, assessment
centers have widespread use and researchers are finding ways to validate the process.

19
Implications of the appraisal process
A successful performance appraisal system requires more than a good technique. It
depends on a consistent approach for comparability of results, clear standards and
measures and bias free ratings.
Using multiple raters even peers, suggests multiple viewpoints, which may reduce
biases and offer a better evaluation. If nothing else, employees may feel the process is
fair, though being graded may still be uncomfortable. Nevertheless, successful
appraisal almost always depends on management involvement and support.

Guidelines for Effective Performance Evaluation Interviews:


1. Emphasize positive aspects of employee performance.
2. Tell each employee that the evaluation session is to improve performance,
not to discipline.
3. Conduct the performance review session in private with minimum
interruptions.
4. Review performance formally at least annually and more frequently for new
employees or those who are performing poorly.
5. Make criticisms specific, not general and vague.
6. Focus criticisms on performance, not personality characteristics.
7. Stay calm and do not argue with the person being evaluated.
8. Identify specific actions the employee can take to improve performance.
9. Emphasize the evaluator's willingness to assist the employee's efforts and to
improve performance.
10. End the evaluation sessions by stressing the positive aspects of the
employee's performance.

Training
Placing employees in jobs does not ensure their success. New employees are often
uncertain about their roles and responsibilities. Training and development efforts
enable employees to assume expanded duties and greater responsibilities.
Although training helps employees do their current jobs, the benefits of training may
extend throughout a person’s career and help develop that person for future
responsibilities.

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Steps to human resources training
To receive the benefits of successful training, HR specialists and managers must
assess the needs, objectives, content and learning principles associated with training.
Once objectives are set, the specific content and learning principles are considered.

Needs assessment
Needs assessment diagnosis current problems and future challenges to be met through
training. It must consider each person and the individual employee’s needs may be
determined by the HR department, by supervisors, or by self – nomination.
To pinpoint the range of training needs and define their content, the HR department
uses different approaches to needs assessment. It may survey potential trainees to
identify specific topics about which they want to learn more. This approach presumes
that those surveyed know what training they need.
Another HR-led approach is task identification. Trainers begin by evaluating the job
description to identify the salient tasks the job requires. Then, once they have an
understanding of those tasks, specific plans are developed to provide the necessary
training so that job incumbents can perform the tasks.
Trainers are also alert to other sources of information that may indicate a need for
training. Production records, quality control reports, grievances, safety reports,
absenteeism, turnover statistics and exit interviews of departing employees may
reveal problems that should be addressed through training efforts.

Training objectives
Needs result in training objectives, which should state the desired behavior and the
conditions under which it is to occur. These stated objectives then become standards
against which individual performance and the program can be measured. If the
objectives are not met, failure gives the HR department feedback on the training
program and the participants.

Program content
The program’s content is shaped by the needs assessment and the learning objectives.
The objective may be to teach specific skills, provide needed knowledge, or try to
influence attitudes. Whatever its content, the program must meet the needs of the
organization and the participants. If the company’s goals are not furthered, resources
are wasted. Participants must view the content as relevant to their needs or their
motivation to learn may be low.

Learning principles
Ideally, training is more effective when the training methods match the learning styles
of the participants and the types of jobs needed by the organization. From studies of
learning, however, researchers have sketched a broad picture of the learning process
and have developed some tentative learning principles.

21
Learning principles are guidelines to the ways in which people learn most effectively.
The more these principles are reflected in training, the more effective training is likely
to be. These principles are participation, repetition, relevance, transference, and
feedback. Research suggests that they apply equally to domestic and international
training situations.
Participation. Learning usually is quicker and longer-lasting when the learner
participates actively. Participation improves motivation and apparently engages more
senses that reinforce the learning process. As a result of participation, people learn
more quickly and retain that learning longer. For example, most people never forget
how to ride a bicycle because they actively participated in the learning process.
Repetition. Although seldom fun, repetition apparently etches a pattern into one's
memory. Studying for an examination, for example, involves the repetition of key
ideas so that they can be recalled during a test. Similarly, most people learn the
alphabet and the multiplication tables by means of repetition.
Relevance. Learning is helped when the material to be learned is meaningful. For
example, trainers usually explain the overall purpose of a job to trainees before
explaining specific tasks. This allows the worker to see the relevance of each task and
of following the correct procedures.
Transference. The more closely the demands of the training program match the
demands of the job, the faster a person learns to master the job. For example, pilots
usually are trained in flight simulators because the simulators very closely resemble
the cockpit and flight characteristics of the plane. The close match between the
simulator and the plane allows the trainee to quickly transfer the learning in the
simulator to actual flight conditions.
Feedback. Feedback gives learners information on their progress. With feedback,
motivated learners can adjust their behavior to achieve the quickest possible learning
curve; without it, they cannot gauge their progress and may become discouraged. Test
grades are feedback on the study habits of test takers, for example.

Training approaches
On-the-job training includes several steps. First, the trainee receives an overview of
the job, its purpose, and its desired outcomes, with an emphasis on the relevance of
the training. Then the trainer demonstrates the job to give the employee a model to
copy. Since the employee is shown the actions that the job requires, the training is
transferable to the job. Next the employee is allowed to mimic the trainer's example.
Demonstrations by the trainer and practice by the trainee are repeated until the job is
mastered. Repeated demonstrations and practice provide repetition and feedback.
Finally, the employee performs the job without supervision, although the trainer may
visit the employee to see if there are any lingering questions.

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Job Rotation
To cross-train employees in a variety of jobs, some trainers move a trainee from job to
job. Each move normally is preceded by job instruction training. Besides giving
workers variety in their jobs, cross-training helps the organization when vacations,
absences, downsizing, or resignations occur. Learner participation and high job
transferability are the learning advantages of job rotation. Though rotation is most
often associated with hourly employees, it can be used for jobs on many levels within
the organization.
Each of these programs seeks to give employees exposure to a variety of assignments.
Among hourly employees, job rotation is an effective way to train workers and give
management greater flexibility in making job assignments. Among managerial,
technical, and professional employees, job rotation can provide a broader perspective,
often developing these employees for potential career advancement.

Apprenticeships and coaching


Apprenticeships involve learning from a more experienced employee or employees,
though it may be supplemented with off-the-job classroom training. Assistantships
and internships are similar to apprenticeships because they use high levels of
participation by the trainee and have high transferability to the job.
Coaching is similar to apprenticeships because the coach attempts to provide a model
for the trainee to copy. Most companies use coaching. It tends to be less formal than
an apprenticeship program because there are few formal classroom sessions and
because it is provided when needed rather than being part of a carefully planned
program. Coaching is almost always handled by the supervisor or manager, not by the
HR department. Sometimes a manager or another professional takes an interest and
plays the role of mentor, giving both skills and career advice. Participation, feedback,
and job transference are likely to be high in this form of learning.
Assignments to task forces or committees may help develop people in much the same
way that apprenticeships and coaching do. Through periodic staff meetings or work
with task forces and committees, a manager develops interpersonal skills, learns to
evaluate information, and gains experience in observing other potential models.

Lecture and Video Presentations


Lecture and other off-the-job techniques tend to rely more heavily on communications
than on modeling. Lecturing is a popular approach because it offers relative economy.
However, participation, feed back, transference, and repetition are often low.
Feedback and participation can be improved when discussion is permitted along with
the lecture process.
Television, films, slides, and filmstrip presentations are similar to lectures. The
growth of video presentations has been encouraged the use of satellite

23
communications to bring courses into the work site, particularly in engineering and
other technical fields.

Vestibule Training
To keep instruction from disrupting normal operations, some organizations use
vestibule training. Separate areas or vestibules are set up with equipment similar to
that used on the job. This arrangement allows transference, repetition, and
participation. Meaningful organization of materials and feedback are also possible.

Role Playing and Behavior Modeling


Role playing is a device that forces trainees to assume different identities. For
example, a male worker may assume the role of a female supervisor and a female
supervisor may assume the role of a male worker. Then both may be given a typical
work situation and told to respond as they would expect the other to do. Usually
participants exaggerate each other's behavior. Ideally, they get to see themselves as
others see them. The experience may create greater empathy and tolerance of
individual differences and is therefore well suited to diversity training, which aims to
create a work environment conducive to a diverse workforce. This technique is used
to change attitudes, for example, to improve racial understanding. It also helps
develop interpersonal skills. Although participation and feedback are present, the
inclusion of other learning principles depends on the situation. Employees may learn a
new behavior through modeling by observing a new behavior and then imitating it.

Case Study
By studying a case situation, trainees learn about real or hypothetical circumstances
and the actions others take under those circumstances. Besides learning from the
content of the case, a person can develop decision-making skills. When cases are
meaningful and similar to work-related situations, there is some transference. There
also is the advantage of participation through discussion of the case. Feedback and
repetition, though, are usually lacking. Research indicates that this technique is most
effective for developing problem-solving skills.

Simulation
Simulation exercises come in two forms. One involves a mechanical simulator that
replicates the major features of the work situation. Driving simulators used in driver's
education programs are an example. This training method is similar to vestibule
training, except that the simulator more often provides instantaneous feedback on
performance.
Computer simulations are the other form. For training and development purposes, this
method often comes in the form of games. Players make a decision, and the computer
determines the outcome in the context of the conditions under which it was
programmed. This technique is used most commonly to train managers, who
otherwise might have to use trial and error to learn decision making.

24
Self-Study and Programmed Learning
Carefully planned instructional materials can be used to train and develop employees.
These materials are particularly helpful when employees are dispersed geographically
or when learning requires little interaction. Self-study techniques range from manuals
to prerecorded cassettes or videotapes. Several learning principles are included in this
type of training.
Programmed learning materials are another form of self-study. Usually these are
computer programs or printed booklets that contain a series of questions and answers.
After reading and answering a question, the reader gets immediate feedback. If right,
the learner proceeds; if wrong, the reader is directed to review the accompanying
materials. Of course, computer programs with visual displays may be used instead of
printed booklets. Programmed materials provide learner participation, repetition,
relevance, and feedback, however. Illiteracy, whether in industrialized or developing
nations, limits the feasibility of this approach, especially among entry-level
employees.

Laboratory Training
Laboratory training is designed to enhance interpersonal skills. It too can be used to
develop desired behaviors for future job responsibilities. Participants seek to improve
their human relations skills by better understanding themselves and others. This
involves sharing experiences and examining the feelings, behaviors, perceptions, and
reactions that result. Usually a trained professional serves as a facilitator. The process
relies on participation, feedback, and repetition. A popular form of laboratory training
is sensitivity training, which seeks to increase a person's sensitivity to the feelings of
others.

Action Learning
Action learning takes place in small groups that seek a solution to a real problem
confronting the organization, aided by a facilitator who is either an outside consultant
or a member of the firm's in-house staff. The group's focus on the problem becomes a
learning vehicle as the members explore solutions, drawing on the facilitator to
provide guidance in group, problem-solving, and other problem-related matters.
Training and development needs emerge and are often self-evident when the group is
stumped technically or procedurally. Action learning focuses on learning new
behaviors, while lectures and video presentations target knowledge and role playing
and sensitivity training addresses feelings.

Evaluation of Training
To verify a program's success, HR managers increasingly demand that training
activities be evaluated systematically. A lack of evaluation may be the most serious
flaw in most training efforts. Simply stated, HR professionals too seldom ask, Did the
program achieve the objectives established for it? They often assume it had value

25
because the content seemed important. Trainers may rely on the evaluations of the
trainees, who reported how enjoyable the experience was for them, rather than
evaluate the content themselves.
Effective criteria used to evaluate training focus on outcomes. Trainers are
particularly concerned about:
1. The reactions by trainees to the training content and process
2. The knowledge or learning acquired through the training experience
3. Changes in behavior that result from the training
4. Measurable result or improvements in the individuals or the organization, such
as lower turnover, fewer accidents, or less absenteeism

Career Planning
During the past 30 years, career planning programs have become an important and
vital activity in business and industry. Career planning is now an accepted human
resource strategy among training and development administrators, personnel officers,
and organizational consultants. The principal aim of such programs has been to help
employees analyze their abilities and interests to better match personnel needs for
growth and development with the needs of the organization. In addition, career
planning and development is a critical tool through which management can increase
productivity, improve employee attitudes toward work, and develop greater worker
satisfaction.
In the past, HR departments, especially in banks, and other organizations gave little
support to career planning. When promotable talent was scarce, employers usually
reacted with crash training programs or additional recruitment. HR planning and
career planning seldom occurred. Instead of seeking proactive solutions, organizations
and employees reacted to new developments. Historically, this limited role for the HR
department is understandable because career plans were seen as an individual matter.
Even when HR managers wanted their departments to provide assistance, they often
lacked the resources to become involved. As a result, only a few (mostly large)
organizations encouraged career planning by employees.
Today an increasing number of HR experts see career planning as a way to meet their
internal staffing needs. Although career planning assistance is generally reserved for
managerial, professional, and technical employees because of limited funds, ideally
all workers would have access to this advice. When employers encourage career
planning, employees are more likely to set career goals and work toward them. In turn,
these goals may motivate employees to pursue further education, training, and other
developmental activities; this gives the department a larger internal pool of qualified
applicants. But what do employees want? A study of one group of employees revealed
five factors of concern. Those factors were:

26
Career equity. Employees want equity in the promotion system with respect to
opportunities for career advancement.
Supervisory concern. Employees want their supervisors to play an active role in
career development and provide timely feedback on performance.
Awareness of opportunities. Employees want knowledge of opportunities for career
advancement.
Employment interest. Employees need different amounts of information and have
different degrees of interest in career advancement, depending on a variety of factors.
Career satisfaction. Employees, depending on their age and occupation, have different
levels of career satisfaction.
Effective career programs must consider these different perceptions and desires of
employees. What workers expect from the career programs developed by the HR
department varies with age, sex, occupation, education, and other factors. In short,
whatever approaches the HR department adopts, it must be flexible and proactive.
Flexibility in career development programs is paramount if the goals of improved
productivity, increased personal satisfaction, growth and ultimately increased
organizational effectiveness are to be achieved. In many cases, this will require the
modification of basic existing programs to address the specific needs of a particular
group of employees.
Nevertheless, the involvement of the HR department in career planning has grown in
recent years because of its benefits. Here is a partial list of those benefits:
Aligns strategy and internal staffing requirements. By assisting employees with career
planning, the HR department can better prepare them for anticipated job openings
identified in the HR plan, resulting in a better mix of the talents needed to support
company strategies.
Develops promotable employees. Career planning helps develop internal supplies of
promotable talent to meet openings caused by retirement, resignations, and growth.
Facilitates international placement. Global organizations use career planning to help
identify and prepare for placement across international borders.
Assists with workforce diversity. When they are given career planning assistance,
workers with diverse backgrounds can learn about the organization's expectations for
self-growth and development.
Lowers turnover. Increased attention and concern for individual careers may generate
more organizational loyalty and lower employee turnover.
Taps employee potential. Career planning encourages employees to tap more of their
potential abilities because they have specific career goals. Not only does this prepare
employees for future openings, it can lead to better performance among incumbents in
their current jobs.

27
Furthers personal growth. Career plans and goals motivate employees to grow and
develop.
Reduces hoarding. Career planning causes employees, managers, and the HR
department to become aware of employee qualifications, preventing selfish managers
from hoarding key subordinates.
Satisfies employee needs. With less hoarding and improved growth opportunities, an
individual's esteem needs, such as recognition and accomplishment, are more readily
satisfied.
Assist affirmative action plans. Career planning can help members of protected
groups prepare for more important jobs. This preparation can contribute to meeting
affirmative action timetables.
To realize these benefits, companies are supporting career planning in any way.

Career counselling process


Counselling about careers is a very sensitive and potentially explosive issue.
Employees may see only parts of some jobs that pay much better and think that they
are qualified. When the counsellor tries to explain the need for additional skills that
are not apparent, employees may feel that they are not being treated fairly. A typical
reaction is: if old Mary can do that job, certainly I can do it. Even if that reaction is
true, others who are even more qualified may be better choices. Or when the
counsellor points out the steps needed to become qualified for a job, the employee
may resist additional training or schooling. Finally, the mere presence of career
counsellors may be a trap. Employees may think that someone else is taking
responsibility for their career planning and development.

Management support
The HR department's efforts to encourage career development have little impact
unless they are supported by managers. Commitment by top management is crucial.
Without it, middle-level managers may show much less support of their subordinates'
careers. This commitment must go beyond mere permission. Top management must
lead through example by taking an active interest in the career plans of middle-level
managers. When executives show an active concern, other managers emulate that
behavior. Without broad-based support among all levels of management, others in the
organization are likely to ignore career development and place their attention
elsewhere.
Support for the career development of employees varies widely from company to
company. However between the leading companies, the development of successful
employees is considered a hallmark of the organization. This success could not exist
without long term support from the top management.

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Career Planning and HR department
Career planning and development are relatively new concepts in many HR
departments. In recent years, these departments have begun to recognize the need for
more proactive career-related efforts. As a result, some departments provide career
education, information, and counseling. However, the primary responsibility for
career planning and development rests with the individual employee.
The planning process enables employees to identify career goals and the paths to
those goals. Then, through developmental activities, the workers seek ways to
improve themselves and further their career goals. Even today, most developmental
activities are individual and voluntary. Individual efforts include good job
performance, favorable exposure, leveraging, and the building of alliances. The HR
department becomes involved by providing information and obtaining management
support to help make career planning a success for both the employees and the
organization.
Career planning does not guarantee success, but without it, employees are seldom
ready for the career opportunities that arise. As a result, their career progress may be
slowed and the HR department may be unable to fill openings internally.

Security, safety and health


Industrial nations decided long ago that the consequences of unregulated employment
relationships imposed burdens on society. For example, before workers' compensation
laws required payment for job-related injuries, the burden of job injuries fell on
society through government or charitable organizations. Today, employers must
compensate workers for on-the-job injuries and comply with laws aimed at furthering
societal objectives or face legal sanctions. The intent of these laws is to help
employees deal with hardships and protect them from future workplace hazards.
Although these mandate coverages are expensive, they are common in developed
nations.
The challenge for HR specialists becomes how to comply proactively with the least
cost to the employer and the greatest benefit for the employees.

Financial Security
Workers in developed nations are financially dependent on a paycheck. Anything that
keeps them from earning a paycheck threatens their financial security. Because
retirement, disability, layoffs, and injuries limit the earning power of many citizens,
government has intervened with social security, unemployment compensation, and
workers' compensation acts.

29
Social Security
Social security is more than a compulsory retirement plan, although it does provide an
income for life upon retirement. It covers workers and their families against disability,
death, survivor, and health insurance benefits.
Since social security results in payroll deductions, questions and complaints often end
up in the HR department.

Implications for the HR department


The implications of social security for the HR department are multiple. First,
specialists need to explain social security to workers. Some employees do not realize
that the employer must make these deductions by law. Other employees - especially
those with large families and low incomes, do not understand why social security is a
bigger deduction than income tax.
Specialists can reduce employee confusion and morale-lowering resentment by
explaining how social security works. This explanation is an especially important part
of any preretirement counseling program. The local Social Security Administration
office can often provide informative booklets for use in orientation and preretirement
counseling sessions. A second implication is to consider social security in designing
other benefits and services.

Workers Compensation
Another threat to the financial security of employees consists of work-related
accidents and illnesses. In the nineteenth century a worker could get compensation for
an industrial accident or illness only by suing the employer. With the cost of medical
treatment, the loss of income, and the loss of a wage earner, many workers and their
families found it financially impossible to bring such suits. The result was a severe
burden on society in general and on the affected workers and their families in
particular.
Once again, the problem became widespread and government acted, this time by
requiring workers compensation. Today every state has these laws, which are
designed to compensate employees at least partially under a wide range of situations,
such as:
− Medical expenses.
− Lost income due to total disabilities that prevent working. Such disabilities may
be temporary (sprains, burns, broken limbs) or permanent (loss of limbs,
blindness).
− Death benefits, including funeral allowances and survivor benefits.

30
Enforcement
Enforcement of safety and health rules must be consistent. Is management too harsh
when it fires a worker who refused to wear safety shoes? Probably not. If safety
policies allow one worker to violate the rules, others may do the same. If an accident
results, it is the employer that is fined by the law. By being firm - even if this means a
discharge - management quickly convinces employees that safety is important.
Sometimes just the threat of discipline will get employees to comply with safety
regulations. And a strong record of enforcing safety rules may persuade the
government to reduce penalties when citations are received.

Security, safety and health rules


To further societal objectives, legally required benefits and services are imposed by
government. The government seeks to provide workers with financial and physical
security.
Financial security is achieved partially through benefits such as social security,
unemployment compensation, extended medical coverage, and workers compensation.
Social security provides income at retirement or upon disability. It also provides the
family members of a deceased worker with a death benefit and a survivor's annuity
under certain conditions.
Unemployment compensation pays the worker a modest income to reduce the
hardships of losing a job. These payments go to employees who are involuntarily
separated from their work. Payments last until the worker finds suitable employment
or receives the maximum number of payments permitted by the state.
Extended benefits ensure that workers or their dependents will continue to receive
medical-related insurance coverage after their employment or dependent status
changes.
Workers compensation pays employees who are injured in the course of employment.
The payments are made to prevent the employee from having to sue to be
compensated for injuries. If an employee dies, benefits are paid to the survivors.
The success of a HR department's program depends heavily on top management's
support and commitment to employee safety and health.

Union relations
Unions do not mean the end of an organization's success or the end of sound human
resource practices. Whether a union is present or not, line managers and HR
professionals remain responsible for employee relations. Many successful companies
have one or more unions and continue to perform the HR activities.

31
Nevertheless, both managers and HR specialists must comply with new rules that
emerge from the union-management framework. Some changes are mandated by law;
others come from agreements between the union and management officials. Because
unions place constraints on an organization, some companies try to avoid unionization.

The labour management system


Unions remain a powerful political and economic force, particularly in highly
industrialized regions and in industries with a high percentage of unionized workers.
Electric utilities, telecommunicatons, manufacturing, trucking, aerospace, and
government are examples. Nevertheless, union-management relations continue to take
place within a well-defined system of laws and past practices that consists of three
principal actors: workers and their representatives (unions), managerial employees
(management), and government representatives in the legislative, judicial, and
executive branches (government). Each of these parties depends on the other.

Unions and human resources management


The presence of unions formalizes employee relations, often leading to greater
centralization of employee relations decisions by the HR department to ensure
uniformity of treatment among unionized workers. For example, privileges such as
overtime or vacation preferences are decided on the basis of a worker's seniority,
determined by length of employment. Management must still manage, and the union
does not assume the responsibilities of the HR department.
Unions are open social systems that pursue objectives and are influenced by the
external environment. The financial strength of the employer, gains of rival unions,
inflation and unemployment rates, government, and international competition
influence union objectives. Nevertheless, a core of widely agreed on objectives exists.

Common Provisions in Union-Management Agreements


Union recognition. Normally near the beginning of a contract, this clause states
management's acceptance of the union as the sole representative of designated
employees.
Union security. To ensure that the union maintains members as new employees are
hired and current employees quit, a union security clause commonly is demanded by
the union.
Wage rates. The amount of wages to be paid to workers (or classes of workers) is
specified in the wage clause.
Cost of living. Increasingly, unions are demanding and receiving automatic wage
increases for workers when price levels go up.
Insurance benefits. This section specifies which insurance benefits the employer
provides and how much the employer contributes toward those benefits. Frequently
included benefits are life, hospitalization, and surgical insurance.

32
Pension benefits. The amount of retirement income, years of service required,
penalties for early retirement, employer and employee contributions, and vesting
provisions.
Income maintenance. To provide workers with economic security, some contracts
give guarantees of minimum income or minimum work. Other income maintenance
provisions include severance pay and supplements to the state unemployment
insurance.
Time-off benefits. Vacations, holidays, rest breaks, wash-up periods, and leave-of-
absence provisions typically are specified in this clause.
Strike/lockouts. It is common to find clauses in which the union promises not to strike
for the duration of the contract in return for management's promise not to lock
employees out of work during a labor dispute.
Seniority clause. Unions seek contract terms that cause personnel decisions to be
made on the basis of seniority. Often senior workers are given preferential treatment
in job assignments, promotions, layoffs, vacation scheduling, overtime, and shift
preferences.
Management rights. Management must retain certain rights to do an effective job.
These may include the ability to require overtime work, decide on promotions into
management, design jobs, and select employees. This clause reserves to management
the right to make decisions that management thinks are necessary for the
organization's success.
Discipline. Prohibited employee actions, penalties, and disciplinary procedures are
either stated in the contract or included in the agreement by reference to the
documents that contain the information.
Dispute resolution. Disagreements between the union and management are resolved
through procedures specified in the contract.

The challenges to human resources management


Unions are at a crossroads. During recent years they have experienced a steady
decline in membership, political power, and prestige. Nevertheless, unions represent a
significant challenge to HR professionals and operating managers. At employers with
unions, compliance with labor laws, contract provisions, and past practices limit
managers' flexibility. Even when a union is not present, proactive employee relations
are needed to assure a productive workforce.
Whether unions will rebound and reclaim their role as a powerful actor in the
economic and political systems of developed nations is uncertain. It does seem certain,
however, that unions will seek innovative approaches to reverse these trends.
At the same time, many HR managers and union leaders perceive government
intervention as a potential threat to the traditional freedoms they have enjoyed. Their

33
common concern arises out of the fear that more government laws will control their
affairs.
To meet these challenges from increased union innovation and government intrusion
into the workplace, HR professionals need to be proactive. Organizationally, when
unions are present, the department is expanded by the addition of a labor relations
section. This section allows labor specialists to deal with critical areas such as
negotiations and contract administration, while HR professionals attend to their more
traditional roles.
Operationally the HR section seeks sound employee relations through effective
practices. The labor relations section has a complementary role. It wants to minimize
restrictions on management through diligent negotiations and fair administration of
the union contract.
Effective HR policies and practices provide the best stance for meeting the challenges
of a productive workforce, unions, and government involvement. More specifically,
HR specialists must carefully do the following:
− Design jobs that are personally satisfying to workers
− Develop plans that maximize individual opportunities and minimize the
possibility of layoffs
− Select workers who are qualified
− Establish fair, meaningful objective standards of individual performance
− Train workers and managers to enable them to achieve expected levels of
performance
− Evaluate and reward behavior on the basis of actual performance

Wages and salaries


Compensation is what employees receive in exchange for their contribution to the
organization. When managed correctly, it helps the organization achieve its objectives
and obtain, maintain, and retain a productive workforce. Without adequate
compensation, current employees are likely to leave and replacements will be difficult
to recruit.
The outcomes of pay dissatisfaction harm productivity and affect the quality of work
life. In severe cases, pay dissatisfaction may lower performance, cause strikes,
increase grievances, and lead to forms of physical or psychological withdrawal
ranging from absenteeism and turnover to increased visits to the dispensary and poor
mental health. Overpayment also can harm the organization and its people, reducing
the firm's competitiveness and causing anxiety, guilt, and discomfort among the
employees.

34
Objectives in compensation management
The objectives of compensation management are to help the organization achieve
strategic success while ensuring internal and external equity. Internal equity ensures
that more demanding positions or better qualified people within the organization are
paid more. External equity assures that jobs are fairly compensated in comparison
with similar jobs in the labor market. Sometimes these objectives conflict with one
another, and trade-offs must be made. Objectives such as:
Acquire qualified personnel. Compensation needs to be high enough to attract
applicants. Pay levels must respond to the supply and demand of workers in the labor
market since employers compete for workers. Premium wages are sometimes needed
to attract applicants already working for others.
Retain current employees. Employees may quit when compensation levels are not
competitive, resulting in higher turnover.
Ensure equity. Compensation management strives for internal and external equity.
Internal equity requires that pay be related to the relative worth of a job so that similar
jobs get similar pay. External equity means paying workers what comparable workers
are paid by other firms in the labor market.
Reward desired behavior. Pay should reinforce desired behaviors and act as an
incentive for those behaviors to occur in the future. Effective compensation plans
reward performance, loyalty, experience, responsibility, and other behaviors.
Control costs. A rational compensation system helps the organization obtain and
retain workers at a reasonable cost. Without effective compensation management,
workers could be overpaid or underpaid.
Comply with legal regulations. A sound wage and salary system considers the legal
challenges imposed by the government and ensures the employer's compliance.
Facilitate understanding. The compensation management system should be easily
understood by human resource specialists, operating managers, and employees.
Further administrative efficiency. Wage and salary programs should be designed to be
managed efficiently, making optimal use of the HRIS, although this objective should
be a secondary consideration compared with other objectives.

Guidelines for an effective compensation


Compensation objectives are not rules; they are guidelines. But the more the
objectives are followed, the more effective wage and salary administration will be. To
meet these objectives, the major phases of compensation management include the
following:
Phase 1. Evaluate every job, using job analysis information to ensure internal equity
based on each job's relative worth.

35
Phase 2. Conduct wage and salary surveys to determine external equity based on the
rates paid in the labor market.
Phase 3. Price each job to determine the rate of pay based on internal and external
equity.

Basic topics for the HR department


Employee compensation, when properly administered, can further corporate strategy
and be an effective tool to obtain, maintain, and retain a productive workforce. Since
compensation can signal which behaviors are most valued, it has the potential to
influence individual productivity strongly. If it is mismanaged, the results may be
high turnover, increased absenteeism, more grievances, increased job dissatisfaction,
poor productivity, and unfulfilled strategic plans.
For the pay component of compensation programs to be appropriate, wages and
salaries must be internally and externally equitable. The relative worth of jobs is
determined through job evaluation techniques. This ensures internal equity. Wage and
salary surveys then determine external equity. Once internal and external equity have
been determined, jobs are priced to determine their specific pay levels, which may be
grouped into rate ranges for easier administration.
The actual amount paid may be further influenced by challenges such as:
− strategic objectives
− prevailing wage rates
− union power
− compensation policies
− government constraints
− globalization of business,
− worker productivity

36
Part II – Guidelines for the effective management of
people*
Guidelines for overcoming organizational barriers to
innovation
Innovation is a term that describes certain activities by which societies improve their
productivity, standard of living and economic status. Basic to the progress of
innovation are the tools, discoveries and techniques of science and technology.
Obviously, innovation cannot be completely controlled or programmed since
contributing actions and motivational forces do not lend themselves to detailed
planning. But if innovation cannot be fully controlled, there are ways in which
management can help it along.
Factors shaping the direction and rate of the innovative process are listed below.
A. Factors related to motivational influences:
1. Recognition of scientific opportunity for the timely acquisition of new
fundamental knowledge.
2. Recognition of technical opportunity for the timely resolution of a product-, or
process-related problem or need.
3. Recognition of need for solving the problem or meeting the need satisfied by
the eventual innovation.
B. Factors related to actions taken consciously by management.
1. Management venture decision by an organization to invest in some R&D
activity. This activity need not be directly related to the resulting innovation.
2. Availability of funding (existence rather than extent) to conduct directly
related effort that may influence management decisions
3. Direct management support by immediate supervisors within the performing
organization in terms of taking a personal interest and facilitating the work
performed.
4. Formal Market Analysis to determine economic feasibility through potential
market estimates.
C. Factors related to aspects of the effort itself.
1. Prior demonstration of technical feasibility to establish the practicability of
further development or the utility of further research.
2. Extent of competing demands limiting time devoted to the development of the
innovation.

*
From: Kontaratos, A. (1984). The Process of Management. Unpublished Manuscript. Washington,
DC: The George Washington University.

37
3. Availability of a technological gatekeeper (individual) to identify scientific
and technical information of relevance to the interests and activities of the
researchers.
4. Availability of a technological entrepreneur (individual) to champion the
scientific or technical activity.
5. Patent/License Considerations regarding the existence of patent protection of
inventions or of licensing agreements.
C. Factors related to peer-group forces.
1. Technology interest group (or invisible college) controlling the exchange of
ideas and findings via personal meetings, letters, phone calls, etc., as distinct
from the formal (publication) channels of communication.
2. In-house colleagues collaborating or otherwise helping in the activity.
3. External direction of R&D personnel by persons outside the performing
organization suggesting objectives and approaches.
4. Competitive pressure exerted by rival persons or organization working in the
same technical area.
D. Factors related to unplanned or accidental circumstances.
1. Serendipity or unexpected scientific or technical results, emerging during the
effort and proving useful in the promotion of the innovation.
2. Technology confluence or merging of major channels of development, often
from diverse scientific fields, making possible new advances.
Practices that can help management to overcome organizational barriers to innovation
are suggested below.
1. Emphasize to supervision at all levels that receptivity and responsiveness to
the new ideas is a prime responsibility of a manager. Encourage
experimentation and conjecture.
2. Open formal and informal channels of communication so that ideas can flow
freely up and down the organization structure and horizontally among
functional areas. Assure that the content of communication relates to the
desired goals of problem-solving. Inform people at the working level of plans,
schedules and problems so that corporate goals are reasonably clear in their
minds (goal diffuseness reinforces status insecurity and vulnerability on
innovation). Promote accessibility to all levels of management (the more
hierarchical the structure of an organization the less the possibility of
communication necessary for diffusion).
3. Establish the requirement for ideas or creative contributions as part of the job.
Include this factor in the work assignment appraisal process.

38
4. Assign people to jobs according to their abilities and preferences (best work is
done when everyone shares the objectives, but each is relatively free to do his
share of the common task in his own preferred way).
5. Give praise and recognition to individuals responsible for contributions of an
innovative nature. Place emphasis on intrinsic reinforcements such as
promotion, salary increase or better fringe benefits.
6. Stimulate corporate vitality by encouraging participation in decision-making
of staff and by seeding the work environment with top talented technical
people. Recognize that a critical mass of equally talented peers must exist
before a climate conducive to innovation can be created.
7. Relieve creative individuals from trivial, routine or otherwise dull assignments.
8. Allow creative individuals sufficient time (free them from competing demands
long enough) to engage in communication, problem-solving or pursuit of
research input. Remember that for government work the size of the contract
effort appears to affect technical competence. A contract program greater than
60% of the total budget appears to represent an administrative burden which
impairs competence.
9. Encourage job mobility and variety within the organization to increase
creativity by broadening the range of functional experiences.
10. Take special care to insure adequate interaction of the technical staff with the
rest of the scientific community.
11. Assure organizational adaptability to the rapidly moving world of constant
change by creating functional entities designed especially to sense and resolve
internal problems before they become serious and external trends before they
become generally evident (concept of organizational self-renewal
characterized by variety, alternatives, choice and action through multiple foci
of power and initiative). Note in this regard that bureaucratic organizations are
intrinsically resistant to innovation because they are monocratic, stress
conformity rather than creativity and are conservative in orientation. .
12. Train promotable (technically competent, people-sensitive) individuals to
administrative skills before they assume their first supervisory role.
13. Avoid placing supervisors outside their area of experience or familiarity so
that they may remain able to evaluate ideas objectively.
14. Assure that decision-making authority on technical matters rests with
managers in daily contact with technical work and that decision-making
authority on policy matters rests with managers increasingly divorced from
technical work.

39
15. Define a second salary ladder (a form of parallel progression) for the truly
creative individual who has little interest and/or ability in the process of
management.

Guidelines for effective leadership


Team accomplishments depend to a large extent upon the managerial capabilities of
the assigned group supervisor. Some supervisors are known to invariably inspire
continuous top performance from their subordinates. These are universally recognized
as natural leaders. Others can barely extract an acceptable day's work from the people
under them.
There is, of course, no single simple prescription that can transform any manager into
an instant natural leader. The first step towards effective leadership, however, is to
recognize that a manager's main job is to get things done through people. Toward that
one objective all efforts should be bent.
Helpful techniques for getting things done through people, are listed below:
1. Know your subordinates and what is important to each. The continuous study
of “what makes them tick" is an indispensable prerequisite for motivating top
performance. Human aspirations and attitudes are important clues for the
executive, and they can be determined only by careful scrutiny of every person
under him. The skilled supervisor constantly hunts for the right approach with
each individual. Since people are heavily conditioned by their personal
situation, tactful drawing-out of subordinates can often supply invaluable
information for understanding them. Above all, however, develop the
sensitivity to recognize and the concern to resolve employee problems.
2. Give recognition to those who deserve it. Since self-esteem is a main drive for
most people, giving recognition to the contribution of others and to their role
within the organization is a useful starting point in getting them to put forth
their best efforts. Praise them in public but be sure that those you praise are
always the ones who really deserve it. This tends to raise morale, increase trust
and strengthen self-confidence. Never encourage "credit grabbing" and under
no circum- stances take for you credit that really belongs to someone else;
there is no surer way to end cooperation and support and to destroy initiative
and creativeness.
3. Set a high standard for your organization. People are eager to follow a good
example. Therefore, if you set and live up to a high standard by being
responsible in your own work and enthusiastic about the momentary job
requirements, then the people under you probably will be too.
4. Few things contribute more to building a hard- working, achievement-seeking
team than a considerate leader. Be calm and courteous toward your
subordinates. Consider the effects on them of any decisions you make. Take

40
into account their problems, both business and personal. Do all you can to
build up their self-respect and their pride in their work?
5. If you change plans erratically or if you oscillate wildly in reaction mood and
manner you are likely to frighten or bewilder your subordinates. Neither
pattern of behavior can win their confidence and cooperation. People follow
the leader whose course is steady and whose actions are forceful but
predictable.
6. Emphasize results, not rules. Judge your subordinates' actions by
accomplishments in terms of both successes achieved and satisfaction derived.
If an unorthodox solution works effectively and pleases the people who use it,
don't discount it just because it was not done "by the book" .
7. Listen carefully and objectively. The supervisor who knows his people, their
habits, worries, ambitions and touchy points comes to appreciate why they
behave as they do and what motives affect them. The best and fastest way to
acquire this knowledge is to encourage his sub- ordinates to talk freely,
without fear of ridicule or disapproval. Try to understand how others actually
feel on a given subject, regardless of what your personal views might be.
Never dominate a conversation or meeting if you expect to find out where
your people stand.
8. Give your subordinates a sense of direction. Competent employees seldom
enjoy working from day to day. They want to know where they are going,
what they are doing and why they are doing it in order to plan their time
intelligently and their work effectively. Therefore, give them enough
information about plans, conditions and events to help them see themselves
and their work in perspective. Also, when you make a request or suggestion,
be sure to explain the reasons for it.
9. Delegate responsibility for details to subordinates. If you insist on keeping
your hands in details you discourage your subordinates by competing with
them on an uneven basis. Moreover, by trying to do everything by yourself
you prevent subordinates from learning to make their own decisions. Sooner
or later, the capable ones will leave and the others will deliberately sit back
and let you do all the work. Remember that management of professional
people requires a large variety of responses to successfully meet the
corresponding variety of changes in work requirements. The richness of
responses "available to a manager, however, increases as a function of
authority delegated to subordinates. A successful manager has the courage to
risk errors by his subordinates, to anticipate and accept these errors and to use
them, not as an excuse for withholding authority, but as a training tool to
improve the quality of his team.
10. Show faith and trust in your team. People tend to perform according to what is
expected of them. If your subordinates know that you have enough confidence

41
in them to expect a first-rate job, which is what they will usually strive to give
you.
11. Ask subordinates for their counsel and help. Bring them actively into the
picture. Give them a sense of participation a feeling of belonging and help
them build up their self-confidence. What is just as important they may well
have good ideas which you may have to solicit in order to use?
12. Give a courteous hearing to new ideas. Many new ideas may sound
impractical, unrealistic or even erroneous, but it is important to hear them out
and not to act scornful, overcritical or impatient. There is no surer way to
discourage original thinking and innovative progress than by attacking or
ridiculing suggestions made. Be approachable and receptive to assure that new
ideas, which might well be the very ones you need, come timely and directly
to you. Try also to let people carry out their own ideas because they then have
a personal stake in proving that their ideas are workable.
13. Tell the originator of an idea what relevant action was taken and why. If his
idea is accepted he will be encouraged by seeing the results of his thinking put
into effect. If his idea is rejected he will accept the fact more readily and with
less disagreement if he is shown that the reasons for this rejection are
objective and sound. In addition, knowing exactly why his idea was
impractical will help the suggester analyze his next idea more extensively and
more clearly.
14. Give your subordinates a chance to take part in decisions. When people feel
that they have had a say in a particular decision, they are more apt to take a
personal interest and feel a personal responsibility for its success. If they agree
with the decision they will back it with vigor and enthusiasm. If they do not
agree they will still back it strongly because of the fact that their views were
given full and fair consideration.
15. Criticize or reprove in private. Reprimanding a subordinate in the presence of
others causes humiliation, invokes resentment, undermines morale, destroys
self-confidence and discourages the desire to do better in the 'future. If you
must criticize keep it on a man-to-man basis away from prying eyes and eager
ears. However, be careful not to become a quick-to-criticize, slow-to-praise
supervisor. Also try to defend your subordinates' actions in front of your
superiors.
16. Keep your criticism constructive. First, get all the facts, review them with
those concerned and reach an agreement regarding their correctness. Then, be
ready to suggest a constructive course of action for the future concentrating on
methods or results, not on personalities. Combine criticism with a bit of honest
praise, if at all possible.

42
17. When you are wrong admit it. No man is infallible and no sub-ordinate
expects his supervisor to be always correct. Consequently, you should not
expect to lose face when you admit that you are wrong or that you have
committed an error. On the contrary, you will gain confidence for your
fairness and honesty, an asset beyond price to a manager.
18. The type of leadership one exercises depends upon his personality, goals and
occupational history The more experienced a manager is, the more easily he
can function in any portion of the chart. An experienced manager will
consciously exercise different types of leadership as the situational needs of
his organization warrant.
19. Experts in human behavior claim that job satisfaction emanates from
emotional responses to such factors as security, a sense of participating in
something important, a feeling of personal growth and recognition. These
factors are all well served by the exciting work climate that effective
leadership can generate.

Guidelines for effective communication


The way one organizes and expresses his ideas determines how much he can
accomplish and how easily others can recognize and properly evaluate his
accomplishments. A well thought-out presentation can provide a basis for decision
making; anything less may invite criticism if management simply does not understand
it. Clear and logical arguments can make a program; misunderstanding of statements
and unsupported recommendations can break it. Thus, better communication is
essential for solid accomplishments that superiors and subordinates can recognize and
appreciate.

Barriers to Effective Communication


Effective communication is in many instances limited by obvious differences in
language and experience and by some not so obvious psychological predispositions.
To surmount these communication barriers) one must first recognize and understand
them.
As each branch of science becomes more specialized, it develops its own jargon
which becomes progressively less meaningful to the uninitiated. Successful
communication depends upon how much one can translate what he has to say into a
language intelligible to his listeners or readers.
Another barrier growing out of different background and experience is the occasional
conflict between purely scientific and user-oriented objectives. Program planners and
decision makers may impose specific practical demands in order to get the total job
done as they perceive it. A scientist working in the laboratory may fail to appreciate
the overall picture, strain for perfection, pursue subjectively desirable lines of inquiry
or set unilateral standards.

43
Perhaps the most devastating barrier to communication with management exists with
the conscious and subconscious mind of individuals on both sides. One tends to
communicate more freely and therefore, more effectively with those individuals who
he knows share his personal values and subjective convictions. He instinctively tends
to distrust those he thinks do not and as a result introduces varying degrees of
informational ambiguity as a precautionary measure against possible personal
criticism.

Overcoming the Barriers


First select - simplify - support. Secondly, be accurate - clear - specific. By
understanding and using these six basic principles that stand behind this deceptively
simple prescription, one can effectively communicate with others.
Clear communication starts with clear thinking. One must carefully choose the
statements he presents in order to control the complex process that will recreate his
ideas accurately in the mind of the reader or listener. This is essential if one expects to
influence decisions made at the other end of the communication channel.
The process of communication however, involves two elements: sending and
receiving. Consequently» effective communication depends upon delivery of the
message an4 upon feedback concerning the extent of understanding and accepting this
message. Unless this feedback loop is established early in the communication
process» there is no way of sensing the receiver's reaction and» therefore» evaluating
the effectiveness of one's communication so that he can strengthen his arguments
accordingly.
It is important to note that the measure of communication effectiveness is not how
much can be presented but how much the reader or listener will understand, absorb
and use. This demands discipline. When time and effort has been invested in
accumulating information and ideas, it comes natural to use them all. But if one really
cares about how well he can communicate, he must ruthlessly test each item, as well
as the entire presentation against two key questions:
− What objectives do I have? and
− What users do I have?

Communication Checklist
The following checklist indicates some of the most important subsets relating to the
above questions:
Objectives
A. To inform
1. Of what value is my message to the user?
2. How can I help him decide in acting now or later?

44
3. How much background must I include?
4. How much detail will he need?
5. How deep should I make my analysis?
6. How useful to him are my subjective evaluations?
7. How important to him is it to know existing uncertainties?
B. To persuade.
1. What specific arguments are necessary to influence action in the desired way?
2. What possible objections can arise and how can I handle them best?
3. To present myself, my accomplishments and my potential.
4. How can I be used better, now or later?
C. Users
The people
1. What is their education, background and experience?
2. What are their prejudices, commitments and values?
3. What exactly do they want from me?
D. The job
1. What are the job responsibilities of the users?
2. How can my information help them in doing a better job?
E. The message
1. What is the best format to save time?
2. What is the best statement, structure and synthesis to prevent uncertainty
misunderstanding or ambiguity?

45
Part III: Human Resource Management Metrics*
This part includes metrics, which, if implemented may assist the organization to
assess its status in HRM effectiveness and standing. May also assist the company to
set standards or to benchmark itself against other companies.

Metrics related to practice


Valuation is based on company records.
1. Number of qualified applicants per position
2. Percentage hired based on validated selection test
3. Percentage of job filled from within
4. Percentage in a formal HR plan including recruitment, development and
succession
5. Number of hours of training for new employees (less than one year)
6. Number of hours of training for experienced employees (working more than
one year)
7. Percentage of employees receiving a regular performance appraisal
8. Percentage of workforce whose merit increase or incentive pays is tied to
performance
9. Percentage of workforce who received performance feedback from multiple
sources
10. Target percentile for total compensation (market rate = 50%)
11. Percentage of workforce eligible for incentive pay
12. Percentage of difference in incentive pay between a low performing and a
high-performing employee
13. Percentage of the workforce routinely working in a self-managed cross-
functional, or project team
14. Percentage of HR budget spent on outsourced activities (e.g., recruiting,
benefits, payroll)
15. Number of employees per HR professional
16. Percentage of the eligible workforce covered by a union contract

Metrics related to outcomes


Valuation is done over a scale, e.g., from 1 to 5.

*
From: Becker, B. E., Huselid, M. A. and Ulrich D. (2001). The HR Scorecard – Linking people,
strategy and performance. Boston, Massachusetts: Harvard Business School Press.

46
1. Extent to which strategy is clearly articulated and well understood throughout
the firm
2. Extent to which the average employee understands how his or her job
contributes to the firm's success
3. Extent to which senior management sees employees as a source of value
creation versus a cost to be minimized
4. Extent to which the executive leadership is visionary
5. Extent to which the firm attempts to provide job security, even if confronted
with declining financial performance
6. Extent to which the firm’s decision making style can be described as
participative
7. Extent to which the firm’s HR professionals are generally perceived to be
administrative experts
8. Extent to which the firm’s HR professionals are generally perceived to be
employee champions
9. Extent to which the firm’s HR professionals are generally perceived to be
agents for change
10. Extent to which the firm’s HR professionals are generally perceived to be
business partners
11. Extent to which line managers generally believe that effective diversity
management is a business imperative
12. Extent to which top management shows a commitment to-and leadership in
knowledge sharing
13. Extent to which the firm has developed and communicated measures of
financial performance
14. Extent to which the firm has developed and communicated measures of
customer reactions
15. Extent to which the firm has developed and communicated measures of key
business processes
16. Extent to which the firm has developed and communicated measures of
learning and growth

Efficiency measures
1. Absenteeism rate by job category and job performance
2. Accident costs
3. Accident safety ratings

47
4. Average employee tenure (by performance level)
5. Average time for dispute resolution
6. Benefits costs as a percentage of payroll or revenue
7. Benefits costs/competitor's benefits costs ratio
8. Compliance with federal and state fair employment practices
9. Compliance with technical requirements of affirmative action
10. Comprehensiveness of safety monitoring
11. Cost of HR related litigation
12. Cost of injuries
13. Cost per grievance
14. Cost per hire
15. Cost per trainee hour
16. HR department budget as a percentage of sales
17. HR expense per employee
18. HR expense/total expense
19. Incidence of injuries
20. Interviews per offer ratio (selection ratio)
21. Lost time due to accidents
22. Measures of cycle time for key HR processes
23. Number of applicants per recruiting source (by quality)
24. Number of hires per recruiting source (by quality)
25. Number of course taught by subject
26. Number of recruiting advertising programs in place
27. Number of safety training and awareness activities
28. Number of stress related illnesses
29. Number of training days and programs per year
30. Offer-to-acceptance ratio
31. Percentage of and number of employees involved in training
32. Percentage of correct data in HR information system
33. Percentage of employee development plans completed
34. Percentage of employees with access to appropriate training and development
opportunities

48
35. Percentage of new material in training programs each year
36. Percentage of payroll spent on training
37. Percentage of performance appraisals completed on time
38. Response time per information request
39. Sick days per full-time equivalent per year
40. Speed of salary action processing
41. Time needed to orient new employees
42. Time to fill an open position
43. Total compensation expense per employee
44. Total HR investment/earnings
45. Total HR investment/revenues
46. Turnover by recruiting source
47. Turnover costs
48. Turnover rate per job category and job performance
49. Variable labor costs as percentage of variable revenue
50. Worker's compensation costs
51. Worker's compensation experience rating

Performance driver measures


1. Access to business information to facilitate decision making
2. Adherence by the workforce to core values, such as cost consciousness
3. Average change in performance appraisal rating over time
4. Change in employee mind set
5. Climate surveys
6. Consistency and clarity of messages from top management and from HR
7. Customer complaints/praise
8. Customer satisfaction with hiring process
9. Degree of financial literacy among employees
10. Degree to which a "shared mind-set" exists
11. Diversity of race and gender by job category
12. Effectiveness of information sharing among departments
13. Effectiveness of performance appraisal processes for dealing with poor
performers

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14. Employee commitment survey scores
15. Employee competency growth
16. Employee development advancement opportunities
17. Employee job involvement survey scores
18. Employee satisfaction with advancement opportunities, compensation, etc.
19. Employee turnover by performance level and controllability
20. Extent of cross-functional teamwork
21. Extent of organizational learning
22. Extent of understanding of the firm's competitive strategy and operational
goals
23. Extent to which employees have ready access to the information and
knowledge that they need
24. Extent to which required employee competencies are reflected in recruiting,
staffing, and performance management
25. Extent to which employees are clear about the firm's goals and objectives
26. Extent to which employees are clear about their own goals
27. Extent to which hiring, evaluation, and compensation practices seek out and
reward knowledge creation and sharing
28. Extent to which HR is helping to develop necessary leadership competencies
29. Extent to which HR does a thorough job of pre-acquisition soft asset due
diligence
30. Extent to which HR leadership is involved early in selection of potential
acquisition candidates
31. Extent to which HR measurement systems are seen as credible
32. Extent to which information is communicated effectively to employees
33. Extent to which the average employee can describe the firm's HR strategy
34. Extent to which the average employee can describe the firm's strategic intent
35. Extent to which the firm shares large amounts of relevant business information
widely and freely with employees
36. Extent to which the firm has turned its strategy into specific golas/objectives
that employees can act on in the short and long run
37. Extent to which top management shows commitment and leadership around
knowledge sharing issues throughout the firm
38. Percentage of employees making suggestions

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39. Percentage of suggestions made employees that are adopted
40. Percentage of female and minority promotions
41. Percentage of intern conversion to hires
42. Percentage of workforce that is promotable
43. Percentage of repatriate retention after one year
44. Percentage of employees with experience outside their current job
responsibility or function
45. Percentage of retention of high performing key employees
46. Percentage of consistent and equitable treatment of all employees
47. Percentage of newly hired applicants
48. Planned development opportunities accomplished
49. The ratio of HR employees to total employment
50. Requests for transfers per supervisor
51. Retention rates of critical human capital
52. Success rate of external hires
53. Survey results of becoming "the" employer of choice in selected critical
positions

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