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HRM 7th Sem.

Before Mid

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Human Resource Management


Before studying the Human Resource Management please re-call your memory for these terms:

Human Resource Management


The process of acquiring, training, appraising and compensating people with in any organization is called Human Resource Management.

Functions of Human Resource Management:


Acquiring People Training People Appraising People Compensating People

Acquiring People: Selecting the most suitable person to perform various job activities is called acquiring people. Training People: Teaching employees various skills required to perform the job activities is called training people. Appraising People: To evaluate the performance of people and to give them feedback is called appraising people.

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Compensating People: Providing financial and non financial benefits to the employees against their services or contribution for the organization is called compensating people.

Importance of Studying HRM


We can understand the importance of HRM by studying these two approaches. Resources Approach Mistakes Approaches

Resources Approach: Every organization consists of three important ingredients/factors including Financial Resources Physical Resources Human Resources Where human are considered to be the most important resource as they (Human) are going to manage physical and financial resources as well, so studying about HRM practices contribute/develop the managers knowledge about how to manage the human resources more effectively.

Mistakes Approach: The basic knowledge about the HRM functions may provide the managers an insight/understanding about managing people more effectively and they should be able to avoid various mistakes while: Selecting the right person for the job Designing and conducting the training programs Evaluating the performance of employees and providing them with feed back Designing various compensation plans for the members of organization

Role of HR Department
We can understand the role of HR department by studying the following terms: Line Management Staff Management

Line Management:

The relationship between two parties where one party has the right to make and impose the decisions and the other party has to follow them, creating a supervisor-subordinate relationship. Line manager is that person who has line function Line Management/Line Function: the function of giving order to others Line Authority:

Staff Management:

The relationship between two parties where one party may suggest the other party about various aspects creating an advisory relationship Staff Manager: the person who has the advice function is called staff manager. Staff Function/ Staff Management: the function of giving advice to others Staff authority:

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Employees Advocacy:
The rule of HR Department with in an org. where they suggest the other department and employees regarding: Recruitment and selection procedures that may help in selecting the right person for the job Designing training programs to develop the employees to fulfill future requirements Making evaluations and feedback to keep organization on right track Designing compensation plans to retain the employees within the organization Managing employees relations through negotiations and dispute settlements

Strategic HRM

Strategy:
Long-term action plan based on a critical evaluation of internal and external factors to create competitive advantages. Long term plan SWOT analysis i. Internal SWOT: Strength and Weakness ii. External SWOT: Opportunity and Threats Competitive Advantages

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Strategic HRM
Aligning/matching the HR functions with the overall strategy of organization by considering all the legal and ethical issues.

High Performance Work System


Designing various policies and characteristics that are helpful in integrating various departments of organization to improve its collective performance through an efficient use of HR.

Proficiencies Required for HR Managers


Business proficiency ( skills/ state of being efficient) Leadership proficiency Learning proficiency HR proficiency

1.

Business Proficiency:

An insight/ understanding about internal and external environment of the business that may be helpful for the manager s to design various policies for the organization

2.

Leadership Proficiency:

The managers should be aware about the basic techniques that how to provide others with guidelines and to motivate them to follow those guidelines. Indentify future directions for others

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Providing guidelines to follow those directions Motivating other employees to achieve their targets by following the directions

3.

Learning Proficiency:

Managers should continuously monitor their external environment to identify various changes to keep themselves updated about most recent trends. This will be helpful in adopting the changes which are desired by the firm and to ignore various characteristics/changes which are not beneficial for the organization.

4.

HR Proficiency:

The managers must have the knowledge about the basic HR functions including: Acquiring People Training People Appraising People Compensating People

Acquiring People

1. Employment Planning/HR Planning/ Personnel Planning:


The procedure of determining the human requirement of the organization that what kind of individuals/people is required and how to hire them. In this step it will be decided that how many people (quantity) and having which type of skills ( quality) are required for the organization.

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Methods of Employment Forecasting:


Trend Analysis:To determine the quantity of individuals by identifying past employment trends of the organization to forecast the future, based on past trends.

According to this graph when we analyze the organization we see that in 2009 we hired 5 people but in 2010 we hired 10 people and in 2011 we hired 15 people. So according to this trend we have to hire 20 people for the year 2012.

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Ratio Analysis:-

To identify the numbers of individuals required by determining the ratio b/w outputs and human inputs.

Organizations keep data tables like this one in their records and then on the base of these tables they decide their requirements.

Expert Analysis/Assessment:To determine the quantity of individuals required by the firm by obtaining opinion of experts who have been performing similar kind of job for a longer period of time. It is a subjective approach which is not easily justifiably as the opinion depends upon the personal judgment of that expert. If the organization has no past trends then trend analysis is not useable, if organization has no eligibility to find ratios then ratio analysis is not useable, and on this situation the organization will use expert analysis method by hiring to an expert.

Job Analysis/Position Analysis


The procedure to determine duties and responsibilities associated with a job and to identify the skill requirements to be possessed by human/individuals to perform those duties. Duties and responsibilities Skill Requirements Job: it is a set of activities performed for return/salary American people use word Position in place of word Job. Duties and Responsibilities/ Job Description A list of duties/responsibilities and work activities to be performed by an individual (incumbent) who is performing/assigned with that job. Incumbent means job holder. Skills Requirements/Job specifications A list of human requirements and skills to be possessed by the incumbent to perform its duties and responsibilities. For example education, experience, personality type, etc.

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Job Analysis Information


(i) Work Activities Human Behavior/ Personality Machinery/Tools/Equipment Performance Standards Job Content/Physical Environment Skill Requirements/Job Specifications

(ii)

(iii)

(iv)

(v)

(vi)

Work Activities Information regarding the activities and operations to be performed by the incumbent/individual who is responsible to perform that job. It may include the routinely and occasionally activities. For example for a student attending a lecture is a routinely activity and to give presentation is occasionally activity. Human Behavior/ Personality The information regarding the specific type of personality traits or the behavioral traits required to perform the mentioned activities, like confidence, trust worthy, etc. Machinery/Tools/Equipment The information regarding helping material and equipments that may facilitate the job performance and that are to be used by the job holder. For example, white board, multimedia etc. for a teacher. Performance Standards Information regarding the specific standards that should be observed by the job holder and that may be used during performance evaluation of employees. For example to report to college for lecture at 8:00 AM, or to produce various units. When we make specific to work activities that how to perform those activities, then this specification becomes performance standards. Like for a student the work activity is to study but when we make it specific that he will study during 9:00 am to 10:00 am, then it will become a performance standard. Job Content/Physical environment The information regarding the physical working conditions and specific objects like temperature, noise, pollution, office or field work, working within minus temperature etc. Skill requirements/ Job specifications The information regarding the specific qualifications and skills required by/in a human to perform a job like knowledge, expertise etc.

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Uses of Job Analysis Information


(i) (ii) (iii) (iv) (v) (vi) Recruitment and selection Designing training contents Conducting performance evaluation Compensation plans Discovering and assigning unassigned duties Resolving legal/ethical issues and disputes

(i)

Recruitment and selection:


The job analysis information provides with a detailed overview of job which is helpful in selecting the right person for the job.

(ii)

Designing training contents


The information is helpful in designing training programs for the employees by identifying various deficiencies in employees working capacity.

(iii)

Performance evaluation
The information regarding performance standards is helpful in comparing with actual performance with those standards to evaluate the employees accordingly.

(iv)

Designing compensation plans


Employees compensation packages may be designed according to their nature of job and work activities.

(v)

Discovering and analyzing un-assigned duties


Job analysis may be helpful in identifying various activities which are un-assigned so the managers may assign those duties to an existing employee or they may hire a new person.

(vi)

Resolving legal/ ethical issues/ Disputes


While deciding about solution to various problems or work related issues, job analysis information may be helpful for the managers in dissolving disputes, legal issues or ethical issues. For example an employee comes to manager and complains that I am performing this duty from 2 years, and this new employee is disturbing me now in performing this duty. The manager has job description which is the solution of this problem. He will remove their problem according to their work boundary.

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Process of conducting Job Analysis


Step 1. Identifying information requirements Step 2. Collecting Relevant information Step 3. Select representative jobs Step 4. Collecting the job analysis information Step 5. Verify the information Step 6. Write down job description and job specifications

Step 1. Identifying information requirements:


Deciding about that what information is required to conduct the job analysis and considering various realities including: What methods should be used What time it will take Who will conduct the job analysis How the collected information may be analyzed and used

Step 2. Collecting Relevant information


Collecting the relevant information regarding the specific job which is under the process of analysis including: Organizational chart: The organization wide distribution of work activities and authorities in the form of a diagram/graphical representation.

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Process Chart: The graphical representation of various processes within organization that how input are converted in to output.

Step 3. Select representative jobs


The process of selecting and identifying the subject matter experts who are under the process of job performance and who may provide the relevant information regarding that job. Selection of subject matter experts Sampling In this step we will inquire only from those people who are being selected for process. For example we are conducting analysis for students then we will inquire only from students not from gate keeper or sweeper etc.

Step 4. Collecting the job analysis information


Actually collecting the job analysis information from selected representatives using any method which has already been decided this information may include Work activities Human behavior Job contents etc

Step 5. Verify the information


The process of authenticating the information by asking its validity from colleagues or supervisor of that job.

Step 6. Documentation
To write down all the information in a logical and comprehensive manners preparing to important documents to the organization

Job Description= list of duties Job specification= list of qualifications/human requirements

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Job Guidelines while Conducting the Job Analysis


(1) Select the subject matter experts by considering the individuals who have been performing the duty for a longer period of time (2) Select more than one person to collect the information to avoid concealment or misrepresentation (3) Collect data from individuals working under similar job title with various departments of organization because of differences in (i) Time requirements (ii) Level of responsibility (iii) Decision making authority (iv) etc (4) use the most appropriate method and tools which are easily understandable by the jo holder (5) Select with the rapport, create the rapport ( ) with the jobholder to make them at ease so they may provide detailed information about the job without hesitation.

Methods of Collecting Job Analysis Information


Interview Questionnaire Observation Participants Diary Multiple Methods

i.

Interview:
Direct interaction b/w parties to discuss various issues under consideration Direct interaction Parties Issues under consideration/evaluation/selection/job analysis/interview

Types of Interview:
a. Structured b. Un-structured c. Semi-structured Interviews are costly and time taking.

ii.

Questionnaire:
A structured set of questions designed to obtain information from a number of respondents/ employees regarding specific issues. Structured Large number of respondents Information regarding specific issue

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Second most widely used method less costly and time taking. Used when information is required from a large number of employees/respondents.

iii.

Observation:
Directly monitoring the employees while performing their job obligations during specific time period/during a cycle time. Cycle time: observation is valid if an employees is being observed during Cycle time that is the time it takes to complete a job/ an activity/ a process from it starts till it ends. Reactivity Issue: There may be the specific problem in terms of biasness in individuals behavior due to observation from other parties that may be called as re-activity problem.

iv.

Participant Diary/Log:
Employees are provided with a note book or a digital assistant to record each and every activity performed during their job obligations throughout cycle time. This information is collected by the supervisors after completion of job and it is used to prepare job description and specifications after due verifications and authentications.

v.

Multiple Methods:
Using a combination of more than one method to collect information regarding job.

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Job Description
(How to write a job description) 1. 2. 3. 4. 5. 6. 7. 8. 9. Job identification Job summary Duties and responsibilities Performance and standards Working relationship/professional relationships Authority of jobholder Job context/physical conditions Helping material ( machines, tools, equipments) Human requirements.

1. Job identification:
All the information that helps in introducing a specific job and that is used to distinguish one job from the others.

2. Job Summary:
The assistant HR Manager is responsible to assist the HR Manager in performing HR activities/personnel activities, recruitment and selection, training and development, performance evaluation, management, compensation management and managing human relations.

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This is called the heart of job description and it contains a detailed list of work activities and operations that are to be performed by the job holder during its professional obligations including routine or occasional activities.

4. Performance Standards
The details about specific measures of performance or the standards that are to be maintained by the job holder as part of his duty. For example to meet with other employees to identify various issues at least five persons per day. (At least five persons per day is a standard)

5. Working Relationships
The details about various other parties that are to be contacted by the job holder as part of its job duty including supervisors, colleagues, subordinates or any other third party.

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6. Authority of Job Holder


The details about limitation or work boundary within which a person can make decisions and he is authorized to impose its decisions.

7. Physical Conditions/Work environment/ Job context/Working conditions


It includes all the information regarding the facilities and supports that are available to the employees for a smooth performance of its job.

8. Helping Material/Machines
The information regarding specific tools, machines or equipments that are to be used within job

9. Human Requirements
A list of skills and experience, qualifications and abilities and expertise that are required for the specific job activities/obligations.

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Job Specifications/Human Requirements


(How to identify job specifications/human requirements?)

1. Specifications based on Judgment:


The method to identify human requirements for a job by taking opinion of experts and to list down human criteria based on their judgments.

2. Specifications based on Systematic Analysis:


The method to determine the human requirements by identifies various behavioral traits and to analyze which traits are positively related to performance that may serve as better predictor of work activities. Step (i) identify various skill requirements or behavioral dimensions. Step (ii) Conduct the work sample test to identify predictors of job. Step (iii) Select the most significant predictors as specifications for that job. For example:

Other Job Related Terms


Job Definition:
The procedure to clarify the roles, responsibilities and procedures that are to be used by the job holder to perform its work activities to minimize role ambiguity and role conflicts. (i) Role Ambiguity (ii) Role Conflict For example two assistants for vouching (book keeping and record keeping). Define role to minimize role conflict.

Job Placement (placement):


The procedure to assign specific responsibilities to an employee according to its area of specialization or the convenience of job performance.

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Job Enlargement:
Assigning additional same level duties to an employee other than its formal job descriptions.

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Job Rotation:
Continuously and systematically moving an employee from one job place to another to enhance its understanding about the job and to assess its capabilities regarding various work activities.

Job Enrichment:
All the procedures or arrangements used to develop employees capabilities or to increase their contribution for the organization may be termed as job enrichment. For example increase the spam of control - Assigning decision making authority - Job rotation to enhance understanding etc.

De-Jobbing:
(To do job informal)

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Recruitment and Selection Process


Definition: The procedure to attract suitable candidates to fill out the vacant positions available with the organization. (The people who will come to apply for job will, called candidates.)

Effectiveness of Recruitment:
The effectiveness of recruitment efforts is measured in terms of:

Quantity:
What number of applicants applied for the specific job position announced by the organization? The higher the number of applicants, the recruitment will be considered more effective.

Quality:
What is the number of eligible candidates who are fulfilling minimum job criteria and who possess the required skills, expertise and abilities that are included with in job specifications?

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Issues in Recruitment effectiveness


(1) (2) (3) (4) (5) (6) Strategic Recruitment Recruitment method Non recruitment issues Image of firm Pre-screening Legal/Ethical Issues The firm should consider that its recruitments efforts are according to the overall strategy of the organization, so that the firm may be able to maintain competitor advantage through efficient use of human resources.

(1) Strategic Recruitment:

(2) Recruitment Method:


The organization must prefer to use the most appropriate method that can bring a large number of suitable candidates and that is convenient for the candidate to apply for the job. For example online recruiting, personal recruiting, distance recruiting.

(3) Non-Recruitment Issues:


The organization should consider various perspectives with issues that are not directly related with the overall recruitment procedure yet they may affect the effectiveness of overall recruitment efforts. For example conveyance, facility, sitting arrangement.

(4) Image of Firm:


The managers should consider creating a positive image of the firm related to its HR policies and practices so a number of candidates may be motivated to apply for the job.

(5) Pre-Screening (Short Listing):


The organization may go through the bio-data of candidates to apply for the job to determine eligible candidates as well as to identify the candidates who are interested to join the organization in the future.

(6) Ethical/Legal Issues:


The organization should consider all the legal restrictions as well as various ethical considerations while dealing with and attracting applications for the job.

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Sources of Candidates
(1) Internal Sources (2) External Sources To identify the sources from where the organization may attract the suitable candidates to apply for the available job positions.

(1) Internal Sources:


To attract the suitable candidates to apply for the job from within the organization, among existing employees or inviting the individuals who have already been working with the organization.

Advantages of Internal Sources


(i) (ii) (iii) (iv) (v) The organization knows about the strengths and weaknesses of employee. The employee knows about the policies and procedures within organization. No formal orientation programs are required if the current employees are re-selected by the organization. No training programmers are required as the employees have already been working with the firm. It helps in increasing the motivation and commitment of employees if they are reselected within organization.

Dis-Advantages of hiring internal candidates/ sources


(i) It may reduce the motivation and morale of employees who are rejected from promotion or reselection. (ii) The organization may lose creativity and innovation if they are not attracting fresh brains from outside. (iii) Inbreeds, inbreeding problem: the employees who have been working with the organization for a long period of time may violate various organization resources due to their excessive information about the organization. (iv) Pre-selection Bias: there may be chances of pre-selection bias that a specific employee is selected even before the format screening procedures as the organization knows about its employees.

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1. Job Posting:
Posting a job on the notice board of the organization along with its brief description and specifications to encourage the employees to apply for those positions. It may include: (i) Posting job on notice board (ii) Sending an official email or memo to employees (iii) Publishing the availability of job on official website

2. Re-hiring:
Re-selection of the employees whose terms and services with the organization have been expired for another period of time. It includes: (i) Renewal of contract after its maturity (ii) Reassignment of projects after they are completed

3. Succession Planning:
The procedure to identify the future human requirements of the organization and to select and develop current employees to fulfill future requirements.

Procedure of Succession Planning


Step (i) Step (ii) to Step (iii) Fulfill future requirements. to develop the selected employees for future through various techniques including increasing decision making authority etc. to identify the future human requirements that what positions may be available/vacant with the organization. to select the most suitable employees who are considered to be the appropriate choice

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(2)
1. 2. 3. 4. 5. 6. 7. Advertising Employment Agency On demand Recruiting Services Temp Agency Referrals Walk-ins College Recruiting

External Sources

1. Advertising:
The procedure and practices that are used / adopted by an organization to convey the outsiders about availability of positions within organization along with a brief description and specification about the job. (i) Selection of Media: ( print, electronic, personal advertisement) The organization should prefer to select the most appropriate channel to convey the information to the outsiders that may include personal communication, communication through print resources or electronic resources. (ii) Construction of Ad/Advertisement: The organization should be careful while designing advertisement for the job positions following a four step procedure called AIDA plan. a. Attention b. Interest c. Desire d. Action a. Attention: Anything which can attract our attention for example any model, actor etc. b. Interest: Attractive salary, bonus, other facilities etc c. Desire: When we will feel interest then there will be a desire for getting that job. d. Action: When we will feel a desire for getting a job then we will take an action in the form of applying for that job.

AIDA Plan
The organizations should try to /consider attracting external candidates by constructuring the most suitable advertisements that may create the interest of candidates and they would desire to apply for the job and this desire may be converted into action by providing the necessary contact details, (telephone, office address, email etc.)

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2. Employment agency:

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Various organization either public or private that provide specialized recruitment services to the organizations to facilitate them during the recruitment and selection procedure and to help them hiring the most suitable person for the job. Employment agencies are preferred by the organization if: (i) The organization does not have occupy the human resource department (ii) The HR department is not very much effective in hiring the suitable candidates (iii) It is time and cost effective to consult the employee agency (iv) The organization failed to conduct recruitment procedures in past

3. On demand recruitment services:


The outsourcing agency that provide recruitment specialists to the other organizations to perform all the recruitment and selection procedure as per the requirement of the organization using organizational resources and good well

4. Temp Agency:
The outsourcing agency that provides other organizations with temporary workers to work for various projects and assignments as a member of the hiring organization. For example a security guard of a security company is working in a bank.

5. Referrals:
The candidate who are recommended by existing/current employees of the organization or various authentic resources with the basic assumption that good people know good people.

6. Walk-in:
The individuals who tends to show their interest for the organization by applying personally or electronically even if there are vacant positions within organization or otherwise.

7. College Recruiting:
Attracting and inviting suitable candidates among the graduation classes of a college or university to find out fresh graduates to fill vacant positions within organization. (i) College Recruitment: College recruitment may be done through: a) On Campus Visit: The setup where the representatives of the organizations tend to visit the university campus to attract suitable candidates among students. (In this type the representatives comes to university) b) On site visit: The setup where students are invited to Visit Companys office or plant/factory to attract them to apply for various positions within organization. c) Internships: The specific setup where students are provided with an opportunity to secure the organization and to perform actual job duties for a limited period of time to attract them for the permanent employment.

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Tests of investigations
Test: taking the sample of an individuals behavior to predict its future performance.

Tests of investigations
Test: taking the sample of an individuals behavior to predict its future performance.

Type of tests
1. 2. 3. 4. 5. Tests of intellectual abilities Tests of physical abilities Work sample tests Tests of personality Achievement tests

1. Tests of intellectual ability/cognitive ability /intelligence tests/IQ tests


To identify the intellectual abilities of an individual by considering various dimensions like thinking, reasoning, and problem solving. Dimensions of intellectual ability i. Arithmetic (numbers aptitude, ability to deal with numbers. ii. Verbal/ verbal comprehensive/language ability A person can be as more affected as more his speech will be good iii. Reasoning/analytical reasoning Ability to use logic to solve the problems iv. Memory: ability to retain and re-call the information.

2. Test of physical abilities/motor abilities


To identify capacity of an individual to perform various tasks that involves strength stamina and coordination between various parts of body. Dimensions of physical abilities. i. Strength: measure of strongness (a person can lift how much weight and can work in how much temperature.) ii. Stamina: how repeatedly/continuously a person can perform various tasks. iii. Co-ordination: whether various parts of body assist each other while performing physical activities/tasks.

3. Work sample test/miniature:


the type of test where the candidate is required to perform the actual job task using the real time equipment and softwares. For example operating a machine, designing software, web designing etc.

4. Tests of personality/ test of interests:


the type of test conducted to indentify the specific personality traits possessed by an individual or to find out its interest and hobbies to determine whether that person is suitable for the organization and

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for the job. (Person job fit). For examples MAPS, inkblot tests, sentence completion, clouded picture tests etc.

5. Achievement test:
the type of test that is conducted to identify what an individual has learnt from its past job experience. For example midterm exams, final exams etc.

Investigation and references process


The process of verifying the information provided by a candidate to determine its accuracy and to find out various facts that are concealed by that individual during application procedures.

Purpose:
To verify the provided information To identify the concealment of facts and information To determine some harmful information for the organization

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Recruitment and selection process


Interview
Definition:
Direct interaction between parties to discuss various issues under consideration Direct interaction Parties Issues under consideration

Selection Interview:
Direct interaction between an employee and candidate to determine the suitability of that individual for job/organization

Issues while conducting the interview:


Factors that affect the usefulness of interview:

i.

First impression BIAS (SNAP judgment)


The interviewer should consider evaluating a candidate based on its overall behavior and knowledge about the contents of the job instead of making assessment regarding the candidates based on snap judgment or first impression.

ii.

Non-verbal behavior: (Impressions Management)


The interviewer must be vigilant (careful) about the non verbal communication including body language, gestures, eye contents, that may affect its performance in the interview and that may create false impression of the candidate regarding its job performance.

iii.

Job understanding:
The interviewers must be appointed who can be considered as subject matter experts and who are familiar about the requirements of the job, understand the duties and responsibilities and know about the human specifications required to perform the job activities.

iv.

Contrast Errors/Candidate Order Error:


The interviewer should consider the overall performance of a candidate instead of under acting or over acting that person because of the specific order in which the candidate appears in front of the panel and by making comparison of the candidates with each other.

v.

Personal Characteristics Bias:


The interviewer must consider the job related knowledge and other behavioral characteristics of individual instead of selecting or rejecting candidate based on their personal characteristics including age, gender, color, etc.

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Interviewers Behavior:

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vi.

The interviewer should not facilitate the candidates by providing them positive impressions or hints regarding the interview contents/questions or by adopting a behavior that is too much strict or lenient.

Types of Interviews
1. Based on construct
i. Structured interviews ii. Unstructured interviews iii. Semi-structured interviews

2. Based on contents
i. ii. iii. iv. i. ii. iii. iv. v. vi. Situational interviews Behavioral interviews Stress interviews Job related interviews Individual interviews Panel interviews Group discussion Mess interviews Sequential interviews Other types

3. Based on settings

1. Based on Construct:
Classification of an interview o the bases of the structure, or construct whether the type and number of questions have already been decided or otherwise.

i.

Structured interviews/Directional Interviews:


The type of interview where the questions are already decided and the interviewer is directed to ask the same questions accordingly.

ii.

Un-structured/Non directional interviews:


The type of interviews that follow the format of a general conversation and interviewers are not specifically directed to ask pre-decided questions.

iii.

Semi structured interviews:


It is a combination of directional and non directional interview structure where a limited amount of questions are pre-decided while the interviewer has the right to ask the question according to situation.

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2. Based on contents:
The classification of an interview on the basis of the type of questions that are included with in an interview (that should be asked from the candidates) is as following:

i.

Situational Interview (What you will do?)


Situational Interview is a type of interview in which questions are asked regarding the assumed situations that how a candidate may response to that specific condition? For example how you can make a sales presentation more effective by considering various points of interest.

ii.

Behavioral interview: (How you did?)


Behavioral interview is a type of interview in which questions are asked regarding the actual behavior of a candidate that how he responded to that specific condition in past. For example how you delivered your last sales presentation more effectively considering various points of interest.

iii.

Stress based interview:


A type of interview in which candidates are made un-easy through a series of harsh and negatively coded questions to assess to stress tolerance ability of the candidate and their ability to deal with the problematic situation. For example why you left your previous job? Why should we select you?

iv.

Job related interview:


The type of interview in which a series of questions is asked from the candidate related to its previous job or the area of specialization from which the candidate belongs. For example asking to an accountant about adjusting entries, asking a marketing officer about new product development etc.

3. Based on Settings:
The classification of an interview on the bases of style of administration and physical settings in which the interview is being conducted.

i.

Individual interview:
The setting in which a single interviewer is going to conduct the interviewer for individual candidates.

ii.

Panel interview:
The interview in which a group of the interviewers is appointed to conduct the interview for individual candidates. The panel may comprise of: H.R. Personnel Experts/Externals Supervisor/Dept. Head

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iii.

Group Discussion:
The settings where a group of candidates is assigned with a specific topic to discuss with each other and they are being evaluated by the interviewer on the bases of their contribution and the quality of arguments.

iv.

Mass Interview:
The settings where a panel of interviewers is appointed to conduct the interview for more than one job candidates at the same time. Mass interview is the combination of panel and group interview.

v.

Sequential Interview:
The settings where a candidate has to go through a series of interviews based on: a. Time intervals (for example one interview is today, 2nd is after 3 days and so on.) b. Level of Organization (for example first supervisor will take interview, then manager, then head of department etc.)

vi.

Other Types:
a. b. c. d. Computerized interviews Online Interviews Distance Interviews Web-based interviews (with the help of web-cam)

Employment Selection
The process of hiring the right person for the job after careful planning and recruitment and after applying the most appropriate screening techniques including tests, investigations and interviews.

Why Selection is Important? i. Performance:


The performance of an individual employee depends upon other employees performance and contribution, so the organization must be careful in selecting the right person for the job who can contribute towards other members.

ii.

Effectiveness/Achievement of Goals:
The organization has to achieve its targets through an effective use of its human resources so the individuals must be selected who have capabilities and skill to drive the organization towards the right direction.

iii.

Time and Cost:


Selection of the employees is the process that requires a considerable amount of time and monitory resources so the organization must be careful to make the use of time and cost as an investment rather than making wastage of these resources.

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Negligent Hiring
If the organization fails to select the right person for the job and it becomes harmful for the organization, the specific condition may be called as negligent hiring. Negligent hiring may include: i. Mistakes while employment planning ii. Errors while recruiting the candidates iii. Designing and conducting in-appropriate screening tools (tests, investigations, interviews,)

Training People
Employee Orientation:
All the procedures that are adopted to make an employee aware about the organization, its policies and various other perspectives regarding the job. Why orientation is important/provided? i. To welcome to the employees to the organization. ii. To make the employees at ease so they can start the socialization process. iii. To make them aware about the organization. iv. To provide information about the history/past, present condition and future vision of the organization. v. To inform about the facilities that can be enjoyed by an employee being the member of the organization. vi. To provide awareness regarding rules, regulations and procedures that should be followed/observed. vii. To make them aware about the specific code of conduct or behaviors that is expected from the employee.

Contents of Orientation Program


Orientation kit/Employee Hand Book:
The published material containing all the introductory information regarding the organization that is considered to be necessary for an employee. The orientation kit may include the information regarding: i. The Organization: The information regarding the past, present position and future vision of the organization. ii. Department Information: The details about the specific department and the job activities that are joined by the employee.

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iii. Policies and Procedures/ Rules and Regulations: The specific characteristics or procedures that should be followed by an employee to perform its work activities. iv. Code of Conduct: The information/detail regarding the specific behaviors that are expected from the employee. v. Facilities/Supports: What specific facility may be enjoyed by the employee as a member of organization for example Wi-Fi, transportation, Library etc? vi. HR. Information: The details regarding the HR functions including training/development, performance evaluation and employee compensation. vii. Safety and Security Measures/Precautions: The detail regarding the precautions and safety measures that should be observed by an employee.

Training
Teaching employees various skills required to perform their job activities and to develop them according to the requirements of organization.

Coaching:
The training program that is designed to enhance professional skills of an employee and to develop its capacity to perform job related tasks. For example making adjusting entries for an account officer, new product development training for a marketing executive etc.

Consoling:
The training program that is designed to enhance personal skills of an employee and to develop its capacity to solve/resolve individual conflicts and emotional problems.

Learning Guidelines for Training Program:


i. ii. iii. iv. v. Provide an overview of the training contents to the employee. Arrange the information I am logical and comprehensive manner. Provide practical examples regarding the contents of training. Use familiar terms and concepts and easily understandable language for the audience. Use audio visual aids, and other helping material that may facilitate the learning.

Skills Transfer Guidelines:


i. ii. iii. iv. Increase the similarity between the training environment and actual job environment. Provide time to practice Explain each part of the machine and each step of process that is under consideration Explain various critical job factors that should be remembered by the employee. For example do not use brake at once.

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v. Explain precautionary measures that should be considered while performing job. For example do not smoke while driving.

Motivation Guidelines:
How to keep employee motivational to the job? i. Explain the perceived training need to the employee to make them motivated towards the training program. ii. Follow the learning by doing technique and involve the employees in to the actual activities of the job. iii. The trainer should provide the employees with positive reinforcement, timely feedback and prompt/immigrate suggestions regarding their job activities. iv. The trainer should consider the learning capacity of the trainees and allow them to learn the job according to their own pace/speed of learning. v. The trainer should observe the schedule of the training program and the training should be provided during the early hours of the days as the learning tendency/curve decreases throughout the working day.

Training and Development Process

1. Training Need Assessment:


The process of identifying various performance deficiencies or various needs for improvement and to determine whether these deficiencies can be overcome through training or there may be other solutions like provision of resources, job rotation etc. (Deficiency: difference b/w performance and standards is called deficiency.)

a. Task Analysis/Training need assessment for new employees:


Evaluating the need for training program for new employees of the organization by dividing its job into various tasks to determine which tasks are known to the employees and which activities is unknown, that require training.

b. Performance Analysis/Training Need Assessment for Current Employees


The training needs assessment for current employees of the organization in which their actual performance is compared with the standards to identify various performance

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deficiencies and to determine whether this efficiency can be removed through training or there may be other solution. Process of Performance Analysis Step 1: compare the actual performance with the standards Step 2: Identify various performance deficiencies Step 3: Design training objectives to remove the deficiency or taking other corrective actions

2. Instructional Design
The process of deciding about the specific materials, information and contents that should be convey to the employees, as well as making decisions regarding the methods that should be used to convey the training information. Contents of Instructional Design: Making decisions regarding the specific information that is useful for the employees and that should be convey them including all the materials, workbooks, exercises, assignments or practical exposure/experience. For example course contents of a student.

Methods
The specific techniques or physical settings that should be used to convey the training information to the employees and managing the training contents accordingly. 1. On the Job Training (OJT) 2. Off the Job Training

1. On the Job Training/OJT


Training employees to learn various job related skills in the actual job environment while performing their actual job duty. Importance /Benefits/Advantages of OJT /why organizations use OJT? i. No extra facilities are required ii. In-expensive in terms of time and monitory cost iii. It follows the principal of learning by producing iv. It provides with an immigrate feedback and re-enforcement and corrective action can be applied accordingly

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Methods of OJT
i. ii. iii. iv. v. vi. Coaching Rotations Special Assignment/Action Learning Job instructions Training Informal learning Apprenticeship On the job training method where an individual is assigned to a supervisor or a subject matter expert to learn various job related skills by taking guidelines and directions and by consulting in case of various problems.

i. Coaching:

ii. Job Rotation


A systematic movement of any employee from one job location to the other location to increase its insights about the organization and to enhance its understanding regarding various operations and procedures.

iii. Special Assignment/Action Learning


On the job training approach where an employee is assigned with independent projects and assignments to work full time by generating all the necessary resources and information and by resolving various problems and issues accordingly. This method involves an active participation of the employee to learn various job related skills through self participation.

iv. Job Instructions Training


On the job training method where an employee is provided with a written description of step by step procedure to perform the job activities along with various pre-cautions and safety measures. The employee tends to follow the job instructions/guidelines by consulting the instructions manual and to perform the job by considering its safety requirements.

v. Informal Learning
On job learning where individuals tend to learn various job activities using informal setups from their colleagues, supervisors or sub-ordinates other then than organization. The organization may encourage the informal learning within the organization by providing facilities and support.

vi. Apprenticeship
On the job training technique where an individual is assigned to an expert/craft man to learn various job related skills by dedicating its time and efforts to achieve the training objectives.

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2. Off the Job Training


The training techniques where an employee tends to learn various job activities using off the job equipments and facilities other than the actual job location. Methods of Off the Job Training i. Lectures/Seminars/Conferences and Workshops ii. Case Study Method iii. Management Games iv. Simulations v. Computer Based Training

i.

Lectures/Seminars/Conferences and workshops:


Off the job training setup where an expert or a group of experts tend to elaborate there area of expertise with a group of audiences that is immediately followed by a question-answer session or group discussions. It may be arranged either on small, medium or large scale and it may follow the specific setup that is combination of theoretical knowledge and practical experience.

ii.

Case Study Method:


Off the job training method in which employees are provided with a written description of past job related incidents and events to identify problems, to analyze the issues and to provide with a various solutions that may be helpful in developing their skills.

iii.

Management Games
Off the job training exercises in which an individual employee or a group of employees tend to compete with each other regarding various job related practices and to enhance their skills. a. Role Playing Exercises: Off the job training exercise that include specific set of activities assigned to an individual to develop its capabilities for example role of investor b. Behavior Modeling Exercises: Various training exercises that are designed to modify the behavior of an employee according to the requirements of the organization by following various re-enforcements.

iv.

Simulations
Off the job training equipments that are exactly similar to the actual job environment designed to train the employees for various jobs that are risky in terms of monitory resources, physical resources or loss of life, for example to jump from a plane, flying etc.

v.

Computer Based Trainings:

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3. Validation of training Program


The process to find out accuracy of training program, its contents and methods to ensure its validity and reliability. The validation can be done through: i. Consultation through Experts: By taking an opinion of the subject matter specialists who have been performing similar type of duty for a longer period of time. ii. Representative Audience: Presenting the training program to a small group of representative audience to take their advice and to find out various errors/bugs and deficiencies. Audience should be considered only those people who could understand the topic and have the ability of giving their opinion.

4. Implementation of Training Program


Actually presenting the training program to a group of employees for which it was designed by managing various issues including: i. Availability of trainer ii. Arrangement of location iii. Providing resources and equipments iv. Problem solving and facilitations v. Time management vi. Etc

5. Evaluation of Training Program


All the procedures that are designed to measure the success of a training program after its implementation and to identify whether the training was effective in achieving its objectives or not?

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Training Effects to Measure


These factors will be seen after the training and on the base of these factors any training will be considered successful or negligent. i. Reactivity ii. Learning iii. Behavior iv. Results

i.

Reactivity:
The response of employees towards training contents and methods assuming that a positive word of mouth is the predictor of success of training program.

ii.

Learning:
If the employee acquires new knowledge, skills and abilities due to the implementation of training program, it may be considered success of that training.

iii.

Behavior:
If an employees on the job behavior has been changed positively after the implementation of training program, that training may be considered successful.

iv.

Results:
If there is a positive improvement in the operational output of an employee and its productivity has been increased the training may be considered to be successful/effective.

Negligent Training
If the managers failed to train their employees according to the requirements and training was unable to achieve its objectives and it may be harmful for the organization, its members and other stakeholders, this training will be called negligent training. Negligent training may include: i. Wrongful need assessment ii. In-appropriate contents and methods iii. Errors while validating the training program iv. Any other relevant mistakes.

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Appraising People
1. Performance Appraisal 2. Performance Management

1. Performance Appraisal
All the procedures that are designed to compare the actual performance of an employee with the performance standards and to provide with feedback along with suggestions and reenforcements. Process of Performance Appraisal i. Setting standards ii. Compare actual performance with the standards iii. Providing feedback along with suggestions and re-enforcements.

2. Performance Management System


The process of managing the performance of the employees according to the requirements of the organization integrating/ combining goal setting, performance evaluation and future development in to a single common system to achieve organizational strategic objectives.

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Why performance appraisal is important? OR Importance of performance appraisal i. It provides the employer an exact idea about the actual performance of an employee with in organization ii. It is an integral/importan part of overall performance management system. iii. Most of the employers make their rewards and promotion decisions on the actual performance of the employees. iv. It helps an employer to suggest future develompent for an employee according to its performance. v. An employer may provide the employee with suggestions and re-inforcements for its improvement.

Issues in Performance Appraisal


i. ii. iii. iv. v. Strategic Appraisal Quality and quantity Supervisors Role Realistic Appraisal Feedback

i.

Strategic Appraisal:
The management should ensure that an employees performance is contributing towards achievement of its overall strategy to determine various performance improvements that are beneficial for the organization.

ii.

Quantity and Quality:


The management should be aware of an employees operational output in terms of quantity as well as considering the quality of its output.

iii.

Supervisors Role:
The management should consider involving the immediate supervisor in to the process of an employees evaluation to make it more reasonable as the supervisor has an exact idea about an employees performance and its expertise.

iv.

Realistic Appraisal:
The management should be neutral while evaluating the performance of an employee and they should convey the actual situations of an employees performance including various efficiencies and deficiencies.

v.

Feedback:
The organization should consider providing timely feedback to the employee along with suggestions and re-enforcements to make improvements accordingly.

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Appraisal Interview

Satisfactory:
For example to for being passed in exams of a semester there is required 1CGPA but for being promoted in next semester 2CGPA is required. Now if a student gets more than 2CGPA, his performance is satisfactory and promotable, but if a student gets less than 2CGPA but more than 1CGPA, his performance is satisfactory but not promotable.

Un-Satisfactory:
For example an employee does not show satisfactory performance, and then management will decide about his performance. If his mistakes are correctable, then they will give him suggestions for improvement, and if his mistakes are not correctable, then management will ask him bye bye.

Who should do Appraisal?


/Parties or Types of Performance Appraisal i. ii. iii. iv. v. vi. Supervisor Self Rating Peer Appraisal Subordinate Feedback Rating Committee 360 Degree Feedback

i.

Supervisor:
The type of evaluation where an employee is being evaluated by its immediate supervisor or the senior authorities considering that the supervisor has an exact idea about an employees performance, skills, efficiencies and various other aspects. The supervisors evaluations are most vilely used and considered effective than other methods. Self Rating: 25-40% bias The type of evaluation where an individual employee tends to rate its own performance y using the given criteria as directed by the organization. The self ratings may prove to be biased as the individuals tend to rate themselves higher than their actual performance.

ii.

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iii.

Peer Appraisal: (Logrolling)


The type of performance evaluation where an individual is being rated by its co-workers, colleagues or team members. The peer appraisal may be based in term of Log Rolling that is making collaborations and alliances by the group members to rate each other higher than their actual performance. Subordinate Feedback/Upward Feedback: (only for development purpose) If an employee is being evaluated by its subordinates or the individuals who are working under its command, it is considered to be an upward feedback that is designed for the purpose of development instead of just an evaluation.

iv.

v.

Rating Committee/Appraisal Committee/Panel Evaluation:


If a panel of experts is appointed to evaluate the performance of employees considering that it may be neutral and un-biased as compared with other methods. The evaluation panel may include the HR Personnel, supervisors, experts or any other third parties.

vi.

360 Degree Feedback:


The type of evaluation where an employee is evaluated by supervisor, colleagues, subordinates or any other third parties outside the organization. The 360 degree feedback is usually designed for the purpose of suggesting improvements instead of just evaluation.

Appraisal Problems
i. ii. iii. iv. v. vi. vii. viii. Problems because of which appraisal becomes useless are as following. Un-Clear Standards Halo Effect Recency Effect Outside/Third party Influence Leniency Strictness Central Tendency Biasness

i.

Un-clear Standards:
If the standards and targets are not cleared to the employees it may crate various ambiguities for both the employer and the employees.

ii.

Halo Effect:
If an employer tends to evaluate various individuals on the bases of a few dominant characteristics of its behavior instead of considering its overall personality and performance.

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iii.

Recency Effect:
Tendency of an evaluator to rate the employees on the basis of considering its overall performance throughout the evaluation period.

iv.

Outside/Third Party influence:


Tendency of an evaluator to rate the employees under the influence of outside parties to make evaluation either positive or negative

v.

Leniency:
Tendency of an individual to rate various employees higher than their actual performance may be called as leniency effect.

vi.

Strictness:
Tendency to rate the employees below than their actual performance may be considered as the strictness effect.

vii.

Central Tendency:
Tendency of an employer to evaluate the employees on average basis without considering their actual performance including all the achievements and drawbacks.

viii.

Biasness:
If an employee is being evaluated under the influence of personal demographic characteristics it may be considered as Bias. The personal characteristics may inc lude age, gender, social class, religion, race, etc. For example ( chorro yaar apna aadmi hy.)

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How to avoid from Appraisal Problems


/ Solution of the Appraisal Problems
i. ii. iii. iv. v. Clarifying the standards Train the supervisor Use the appropriate method Rating Committee Dairy Keeping/ Record Keeping

Appraisal Method
The specific proceeds or techniques used by the organization to evaluate the performance of their employees and to provide them feedback accordingly. It includes two important decisions. i. What to measure? ii. How to measure?

Performance Dimensions
The decision regarding specific indicators or characteristics of the job that may be used as the base for performance evaluation for example quality, job knowledge, time etc. The performance dimensions may be categorized in to four different types. i. General Dimensions ii. Specific Dimensions iii. Competencies iv. Goal Achievement

i.

General Dimensions/Generic Dimensions:


The performance indicators that are general in nature and they may exist within any kind of job activities. For example quality, quantity, job knowledge etc.

ii.

Specific Dimensions:
The type of indicators that are not common and that may exist for certain kind of job or designation. For example marks for students, vouching for an accountant, sales plan for a marketing officer etc.

iii.

Competencies:
The type of performance indicators through certain employees are evaluated on the bases of certain job related skills including conflict management skills, customer relation management skills, using software etc.

iv.

Goal Achievement:
The performance indicator that include the specific qualitative targets that should be achieved by an employee during the course of its job. For example meeting 10 customers per hour, attending 30 calls per day etc.

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Methods for Employees Evaluation

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Decision regarding specific methods that should be used for an employees evaluation and to provide with feedback. i. Graphic Rating Scale ii. Alternative Ranking Method iii. Forced Distribution Method iv. Paired Comparison v. Critical Incidents Method vi. Narrative Forms vii. Management by Objectives(MBO) viii. Behavioral Anchored Rating Scale (BARS)

i.

Graphic Rating Scale


The evaluation method where certain performance dimensions are identified and assigned with a specific rating scale to evaluate the employee on each dimension using the given rating scale a) Indentify a range of performance dimensions b) Assign an appropriate rating scale to each dimensions c) Evaluate the employee using the given rating scale on each dimension

Performance Dimenssions Quality Quantity Job Knowledge Target

Poor Below 50% 50-75%

Good

Excellent -

75-100% Above Expectation

ii.

Alternative Ranking Method


The evaluation method where employees are ranked according to their order of performance by assigning the top position to the best performance than the next best and so on. Students Marks A 88 B 82 C 80 D 76 E 73

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iii. Forced Distribution Method

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The evaluation criteria where an employee is evaluated according to the specific distributions designed and implemented by the organization. Students Marks Ranking A 88 Above 20% B 82 C 80 Above 60% D 76 E 73 Poor 20%

iv.

Paired Comparison Method


The evaluations method in which performance of group members is compared with each other by identifying a range of performance dimensions and rating each employee against the performance indicators. Quality Time Job Knowledge Targets Total Ranking A 3 1 B C D

+ + -

+ + -

+ + +

1 2 2

3 2 2

v.

Critical Incidents Method


The evaluation method where the supervisor tends to keep record of all the good and bad examples of the job focusing on various incidents that are not routine matters to discuss these examples with the employees along with suggestions after the due time.

vi.

Narrative Forms
Evaluating the performance of an employee and providing with feedback using the specifically designed or descriptive documents that include both the performance evaluation as well as the recommendation.

vii.

Management by Objectives(MBO)
A systematic procedure designed by the organization to identify individual departmental and organizational objectives and to evaluate the performance of an employee against the objective. Step 1: Identify organizational objectives Step 2: Determine department/group objectives Step 3: Clarify individual Objectives Step 4: Evaluation Step 5: Feed back

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viii.

Behavioral Anchored Rating Scale (BARS)


The evaluation method where a range of various behaviors is identified that may be adopted to perform the job activity and these behaviors are assigned with specific ratings according to their accuracy, to rate the employees as per the behavior adopted by them. Step 1: Identify a range of various behaviors to perform the job tasks Step 2: Assign ratings to each behavior as per the importance/accuracy of that behavior Step 3: Rate employee according to the specific behaviors adopted to perform the job activity

Compensating People
All kinds of financial and non-financial benefits offered to an employee in exchange of its services for the organization. The employee compensation may include: i. Direct Financial Payments ii. In-Direct Payments iii. Benefits in Kind iv. Non-Financial

i.

Direct Financial Payments:


The cash payments directly made to an employee as take home cash arrangements, for example salary, commission, cash rewards, etc.

ii.

In-direct Payments:
All the payments made to third party for whom the benefit is enjoyed by the employee like insurance, medical treatment fee, etc.

iii.

Benefits in kind:
All the tangibles or facilities offered to an employee to facilitate its job performance and to encourage its contribution, for example computer, tools and equipments etc.

iv.

Non Financial Benefits:


All kinds of non-monitory offers made to an employee like appreciation, respect, recognition, certification, etc.

Compensation Package/Compensation Plan:


A combination of all the direct and indirect payments and various other benefits offered to an employee according to its nature of job or the specific designation held by that individual.

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Ingredients of Compensation Package


i. ii. iii. iv. v. vi. vii. Basic pay/basic wages/basic salary Increments/pay raises Allowances Bonus and incentives Benefits/Fringe benefits/Perquisites/Perqus/Perks Pay for performance/Merit Pay Commission

i.

Basic Pay/Basic Wages/Basic Salary:


The cash amount offered to an employee according to its specific pay grade or its contribution for the organization.

ii.

Increments/Pay Raises:
The permanent increase in basic pay of an employee that becomes a part of its salary arrangement for the next compensation period. Increments may be offered either on the bases of superior performance or on the bases of duration of time with in a specific organizations. a. Increments based on performance/merit raise b. Increments based on seniority

iii.

Allowances:
The additional cash amount offered to an employee to adjust individual differences or to encourage an employee on the bases of certain characteristics. For example entertainment allowance, traveling allowance, senior post allowance etc.

iv.

Bonuses and incentives:


The additional cash payments or other benefits to an individual to recognize its contribution for the organization, or to encourage the employee for future performance. Bonuses are generally past oriented and offered after the job has accomplished, while incentives are offered to encourage future performance before the task has accomplished.

v.

Benefits/Fringe Benefits:
The facilitation or support offered to an employee in terms of tangible and non tangible benefits including member ship of professional organization or sight fitness centers and residence etc.

vi.

Pay for Performance/Merit Pay/PFP:


The additional payment or facilitation offered to an employee to recognize its superior performance and to encourage that individual/employee for future.

vii.

Commission:
A percentage of sales amount offered to an individual who has contributed its efforts in making that sale possible.

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Factors Affecting Pay Rates Decisions


There are some factors which have their impact on the decisions of company regarding pay rates for its employees. i. Legal Issues ii. Labor Unions iii. Companys Policy iv. Equity

i.

Legal Issues:
It includes all the binding and restrictions imposed by the federal or provisional authority governing the pay rates or various other facilities. For example including minimum wage rate, overtime pay, paid leave, old age benefits etc. For example any company cannot pay to its employees less than Rs. 9000 in Pakistan because of restriction of the government.

ii.

Labor Unions
The compensation decisions may also be effected by the groups of employees within organization that are formally designed to protect the rights of employees. The labor union may affect the compensation decision through collective bargaining or using various other techniques like protest, strike, lock outs, etc

iii.

Company Policy:
The organization may design various policy matters or strategies to compensate their workers according to their nature of job, skills, or contribution for the organization. The companys policy may include decision regarding various allowances, benefits or commission based pay plans etc.

iv.

Equity Issues:
Various factors that are introduced by the competitors or the other organization may also force the management to design competitive pay plan that is adjustment in pay rate according to the compensation offered by the other firm. The equity issue is important to retain the employee within the organization and to reduce employees turnover.

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Employee Incentives
Various ingredients that are offered to an employee as compensation to motivate them for future performance and to recognize their efforts for the organization. Employee incentives may be categorized in to two types. i. Individual incentives ii. Group/organizational incentives

i.

Individual Incentives:
a) Piece work c) Merit Pay/Raise b) d) Commission Recognition

(a) Piece Work:


The cash amount offered to an employee on each unit contributed by that individual. For example an organization says to his employee that you will be given Rs. 5 per each unit which you will produce.

(b) Commission:
Additional cash amount offered to the sales person against each unit sold by that individual.

(c) Merit Pay/Pay for Performance (PFP):


The additional cash amount or rewards offered to an employee to recognize its contribution and superior performance within organization.

(d) Recognition based Awards:


The rewards or various other compensations offered to an employee to recognize its services for the organization.

ii.

Group/Organizational Incentives
a. Employee stock ownership program c. Gain sharing Plan b. d. Profit sharing Plan At-Risk Pay Plan

a. Employee Stock Ownership Program:


Various arrangements that are design to offer ownership of the firm by purchasing its stock or shares.

b. Profit Sharing Plan (PSP):


Various arrangements where a company intends to share a percentage of its profit with the employee in recognition of their efforts.

c. Gain Sharing Plan (GSP):


The arrangements where various cost saving techniques are applied and in the result generated gain is shared with the employees who implemented the cost saving techniques.

d. At-Risk Pay Plan:


The arrangement where the organization keeps some part of salary of an employee because of any project based on that employee and on the ending of that project company returns that reserved amount with also extra amount to that employee. This is called at risk pay plan. For example the organization invests on a project on the base of any person who has capability of performing for that project. After the starting of that project if that person leaves to that company then this project will be in deficit for that company, so for this security purpose company keep a part of salary in reserve.

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