World Class Human Resource Management: Advisor of GCG & Change Management

World Class
Human Resource Management
Hendra Kusnoto
Advisor of GCG & Change Management
PT ANTAM Tbk
Agenda
International HRM Challenges

Building a Top-Quality Workforce
Developing World Class HR Professional
Overview about HR Dept. Functions & Roles
• Strategic Role of International HRM
• HR Competency Profile
Challenges
• What HRM strategies are appropriate at different stages

of internationalization?
• How is the best employee mix (host-country and
expatriate) determined?
• Why do international assignments fail?
• How are returning employees re-integrated into the firm?
Managing an International
Subsidiary
• Ethnocentric Approach
– Top management and key positions filled by people from
home country
• Polycentric Approach
– International subsidiaries managed/staffed by personnel
from host country
• Geocentric Approach
– Nationality deliberately downplayed
– Firm searches worldwide or regionally to hire best people
to fill key positions
Advantages of Using Local Employees to Staff
International Subsidiaries
• Lower labor costs
• Demonstrates trust in local citizens
• Increases acceptance of firm by local community
• Firm recognized as part of local economy
• Represents local opinions in decision-making
Advantages of Using Expatriates to Staff
• Cultural similarity with parent company ensures transfer of
business practices
• Closer control /coordination of international subsidiaries
• Employees get multinational orientation
• Creates pool of internationally experienced executives
• Local talent may not yet add value
Disadvantages of Using Local Employees to
Staff International Subsidiaries
• Difficult to balance local demands/global priorities
• Leads to postponement of difficult local decisions (such as

layoffs)
• Difficulty recruiting qualified personnel
• Reduces amount of control by headquarters

Disadvantages of Using Expatriates to Staff
• Creates problems of adaptability to foreign
environment and culture
• Increases “foreignness” of subsidiary
• Involve high transfer, salary and added costs
• May result in personal and family problems
• May lower moral and motivation of local management
• Subject to local government restrictions
Why International
Assignments Fail
• Career blockage
• Culture shock
• Lack of pre-departure cross-cultural training
• Overemphasis on technical qualifications
• Getting rid of a troublesome employee
• Family problems
Selection of Employees for International
Assignments
• Emphasize cultural sensitivity as a selection criteria
• Establish a selection board of expatriates
• Require previous international experience
• Explore possibility of hiring foreign-born employees to serve
as “expatriates” at future date
• Screen candidates’ spouses and families
Compensation
• Provide expatriate with disposable income equivalent to

what s/he would get at home
• Provide explicit “add-on” incentive for accepting

international assignments
• Avoid having expatriates fill same jobs held by locals or

lower-ranking jobs
Dimensions to Culture
• Power distance
• Individualism
• Uncertainty avoidance
• Masculinity/femininity
• Long-term/short-term orientation
Upon Return
• Lack of Respect for Acquired Skills

• Loss of Status
• Poor Planning for Return Position
• Reverse Culture Shock
Agenda
International HRM Challenges

A Model for Competency-based
Human Resources Processes
Vision & Business Strategy
Organizational Team
Capabilities Capabilities
Competencies
Succession Interviewing
Stallers &
Planning Stoppers & Selection
Universal
Performance
Performance Dimensions Feedback
Management
Career
Learning Development
Key Components
Vision
Core Ideology
Captures what you stand for and why you exist.
Envisioned Future
Role is to guide and inspire those inside, Aspirations
not to differentiate.
Core Purpose BHAG Vivid

Core Values
Timeless guiding principles.
Reason for being. Clearly articulated, Description
Rarely if ever change.
Rarely if ever changes. lofty goal -- What the future looks
15+ years out. like when you’re successful.
Key Strategies
How will we achieve the BHAG within the context of our core ideology?
Source: “Building Your Company’s Vision”, by

James C. Collins and Jerry I. Porras; HBR
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
How Did We Get Here?
• Any relevant historical information

• Original assumptions that are no longer valid
Available Options
• State the alternative strategies

• List advantages & disadvantages of each
• State cost of each option
Recommendation
• Recommend one or more of the strategies

• Summarize the results if things go as proposed
• What to do next
• Identify action items
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Organizational Capabilities
• Identifying and developing the organizational core

capabilities plus the leadership competencies
needed to implement strategic plans.
• Aligns strategic vision with other human
resource/talent management systems; helps you
assess the extent and difficulty of the change
envisioned.
• Helps organizations plan and prepare to implement
new strategies; increases the chances of successful
implementation and change.
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Team Capabilities
• Key issues holding back the team, fuzzy goals,

inconsistent communications
• Team Effectiveness Model:

 Thrust  Task Skills
 Trust  Team Leader Fit
 Team Support
 Talent
from the
 Teaming skills Organization
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Interviewing and Selection
• Prepare recruiting and staffing tool with relevant

interview questions, follow up probes and look-
for competency
• Provides a step-by-step guide for creating
interview worksheets and protocols
• Prepare and evaluate information received during
face-to-face interviews

Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Feedback
• Prepare 360° assessment tool for providing

high-impact feedback to executives, managers
and technical professionals
• Customize questionnaires to fit individual
learners or groups—use some or all of the
competencies and stallers; select the questions
you like
• Detailed rater demographics questions are
optional
Feedback
• Add technical and functional competencies or

skills unique to your organization; organize
data in a variety of ways and view results in
both standard or highly customized reports
• Provides feedback to raters while they’re
rating to improve accuracy and balanced
scores
• Allows raters to provide narrative explanations
of their feedback—tied to a specific
competency or as a general comment

Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Career Development
• Comprehensive guide to developing

competencies for job/career success
• Use for personal development or in coaching
and mentoring
• Practical improvement suggestions used by HR
professionals and line managers in daily
interactions
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Learning
• Tools for developing individual learners, teams and

a learning organization
• Provides four individual learning exercises, a tips

deck and a manual with instructions/worksheets
• Help individuals become more “street smart” by

enhancing their ability to learn from experience
Learning
• Use the exercises individually, in sets; spaced over

time
• “Learning” development plan integrates with

competency development plan
• Learner strengthens own ability to learn from

experience—a prerequisite for competency
development
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Performance Management
• Comprehensive coverage of performance
management at all levels in the organization
• Use universal performance dimensions
• Comes with job improvement and career
development plans
Organizational Team
Competencies
Stallers &
Universal
Performance
Management
Career
Succession Planning
• Prepare few who are comfortable with and

adapt well to change
• Helps refine the competencies of high potentials
• Profiles present and needed approaches to

dealing with ambiguity and change
• Diagnoses and offers recommendations for the

development of skills in dealing with change
• Use paper and e-survey

Agenda

Strategic Role of International
HRM
Strategic role of international HRM are congruent with the firm’s:
– strategy (core competencies, local responsiveness)
– structure and processes (formal and informal)
– incentives and controls system (formal and informal)
– corporate culture (norms and value system)
Overview about HR Dept.
Functions & Roles
• The activities an organization carries out to use its human
resources effectively
• The process by which managers design the components of a

HRM system to be consistent with each other, with other
elements of organizational architecture, and with the
organization’s strategy and goals.
• Major tasks of HRM is to determine a firm’s policies for:

– HR strategy
– staffing
– management training and development
– performance evaluation
– compensation
– labor relations
HR Competency Model
Strategic Partner Leader
- understands culture analytical, strategic,
- knows mission creative thinking, and
knows business
Change systems
Consultant
O.D., marketing
& teaming
Technical Expert Employee

- Knowledge HR law Champion
& policies, work-life, - develop relationships
info. technology - promotes diversity
‘Newer’ HR Competencies
Organisation capabilities
– Talent Manager / Organizational Designer: Talent management -
talented individuals with the right competencies in critical roles;
organization design directed at embedding capability into
organization structure, processes, and policies.
– Culture and Change Steward: Appreciates, articulates, and helps

shape a company’s culture Clarity around external customer
expectations (identity or brand) and translation of these
expectations into internal employee and organization behaviors.
Helping make culture happen and turning what is known into what is
done.
– Strategy Architect: Playing an active part in overall strategy

formulation; facilitating the process of gaining strategic clarity and
linking the internal organization to external customer expectations;
making customer-driven business strategies real to employees
‘Newer’ HR Competencies
Systems and processes

– Operational Executor: Executing the operational aspects of managing
people and the organization, ensuring credibility through flawless
execution
– Business Ally: Contributing to the success of the business by
knowing the social context in which the business operates, how the
business makes money and how the parts of the business work
together for business success
Relationships
– Credible Activist: Credible (respected, admired, listened to) and
active (offers a point of view, takes a position, challenges
assumptions). “HR with an attitude.”
HR professionals who are credible but not activists are admired but
do not have much impact. Those who are activists but not credible
may have ideas but will not be listened to.
Agenda
Organization Development
• Defining organization’s vision and mission
Vision & Mission
Profit & vision are necessary to effectively

motivate a workforce
Mission Statements
•Enduring statement of purpose
•Distinguishes one firm from another
•Declares the firm’s reason for being
Importance of Mission
Benefits from a strong mission
Unanimity of Purpose
Resource Allocation
Mission
Organizational Climate
Focal point for work

structure
• Core competencies
Core Competency
• A bundle of skills that enables an organization to provide a
particular benefit to customers.
• It is not product or service specific. It contributes to the
development of a range of products and services. Examples:
– Sony- customer benefit is pocket ability and core
competence is miniaturization.
– Federal Express- benefit is on time parcel delivery and
core competence is logistics management.
– Rosecrans- benefit is freedom from addictive behavior
and core competence is adult and adolescent education.
– Carpenters Place- benefit is a changed lifestyle and the
core competency is customized client case management.
Why Are Core Competencies Important?
• They are the skill sets of organization possesses
that set it apart from its peers.
• They are what make organization unique.
• They are sources of competitive advantage.
• They are the building blocks to future
opportunities and earned income ventures.
Competency-based Strategy
Human Capital Strategy
•Manage organizations using a competency-based strategic design to attract (recruit), develop, and retain the best workforce.
Workforce Planning Recruiting / Accessions

• Optimize and align comparable • Establish recruiting and accession priorities
competencies • Implement improved recruiting, selection
• Retain essential competencies if and assessment methods, ultimately
downsizing is required reducing costs by getting it right the first
• Identify competency gaps between current time
between current skill sets and future
requirements Competencies Training & Development
• Analyze training gaps
Workforce Development • Build competency improvement
• Conduct gap analysis to assess current and curricula and “just-in-time” training
future required competencies content
• Target training dollars for employee
development Succession Planning
• Link employee development to
• Identify mission-critical positions and
organizational outcomes Promotion / Advancement prepare eligible employees for these
• Develop strategies to mitigate gaps
• Establish promotion criteria based on vacancies
between current and required competencies
successful demonstration of performance at • Prioritize training and development
a higher level of proficiency opportunities
Career Planning
• Justify training dollars for development Performance Management
opportunities System Development • Translate organization’s vision and goals
• Empowers employees to manage careers and • Produce readiness data in terms of into expected employee behavior
to direct self-improvement competencies • Establish rewards, recognition, NSPS
• Enables interactive detailing and assignments • Measure a command’s ability to Compensation
• Al to private sector certification / qualifications execute assigned missions • Enables mission-focused Performance
Appraisals
Fundamental Competencies
• Marketing-provides the customers and clients
• Operations/ production- provides the products
and/or services
• Human resources- provides the personnel
• Fund raising- provides supplementary income
• Administrative- provides essential support
• Accounting/ book keeping- provides financial
control
• Payroll- Provides paychecks
Developing Core Competencies
• Management commitment- developing core competencies
takes time
• Focus- define the competencies needed
• People with appropriate skills
– Train current personnel
– Recruit personnel with needed skills
• Integration of these skills
– Usually a function of management
• Institutionalize the activity through processes and
procedures
• Oganization value
Company Values
“What man actually needs is not a tensionless state but

rather the striving and struggling for a worthwhile goal,
a freely chosen task. What he needs is not the discharge
of tension at any cost, but the call of a potential
meaning waiting to be fulfilled by him "
(Victor Frankl, Man's Search for Meaning)
Values
• Definition: basic convictions that “a specific mode of conduct or
end-state of existence is personally or socially preferable to an
opposite or converse mode of conduct or end-state of existence.”
• Company Values:
- Something that is important to your company, ex. Intel
values risk taking, discipline, & results orientation
- Affects how employees do their work in the short term
(day-to-day) or long term
- Affects decision making processes, company decisions
and/or employee decisions
How to Define the Corporate Values?
• Culture of the Enterprise (Corporate Culture)
– a shared belief system that consists of the organization history,
beliefs, and value
– embodies the viewpoint and values of senior management
– represents a powerful, and usually persistent element
– The IS manager must understands the organization before he/she
can successfully compete for scarce corporate resources
• Organization structure
Organization Structure:
Design Contingencies
 The organization’s environment

 The technology the organization uses
 The organization’s strategy
Differentiation and Integration
• Managers of organizations have to create a structure
with the right levels of both differentiation and
integration to match the uncertainty of the environment
in which it operates.
• Differentiation measures the degree to which a function
or division develops orientations that allow its members
to manage the specific environmental force that each
function or division is dealing with.
• Integration measures the degree of coordination or
mutual adjustment between functions.
Differentiation and Integration
Insert Figure 16.3 here

Mechanistic and Organic Structures
• A mechanistic structure is an organizational structure
that is designed so that individuals and functions behave
in predictable ways and can be held accountable for their
actions.
• An organic structure is an organizational structure that is
designed so that individuals and functions can behave
flexibly and respond quickly to frequently changing and
unusual situations.
Mechanistic and Organic Structures
Mechanistic Structures Organic Structures
Tall, centralized hierarchy Flat, decentralized hierarchy
of authority of authority
Top-down communication Lateral communication and
and decision making decision making between people
in different departments
Great use of standardization: Great use of mutual adjustment:
many detailed rules and much face-to-face communication
standard operating procedures in task forces and teams
Clearly specified tasks and roles Deliberately ill-defined tasks and
and a defined division of labor roles and a loose division of labor
Types of Organizational Strategies
Cost-leadership strategy - aims to attract customers with
low prices that are made possible by low costs.
Differentiation strategy - aims to attract customers with
unique or distinctive goods and services.
Focused cost-leadership strategy - aims to attract one
kind of customer or group of customers with a low-cost
product.
Focused differentiation strategy - aims to attract one
kind of customer or group of customers with a
differentiated product.
• Develop job description

Job Analysis and Job Description
• Job Analysis
– The procedure used to determine the duties of particular
jobs and the kinds of people (in terms of skills and
experience) who should be hired for them.
• Job Specification
– The human qualifications in terms of traits, skills, and
experiences required to accomplish a job.
• Job Description
– A document that identifies a particular job, provides a
brief job summary, and lists specific responsibilities and
duties of the job.
G.Dessler, 2003
Job Description
• As main source of information
• To define minimum requirements of a job
• To focus on essential functions and specific knowledge,
experience skills needed to perform the job
Sections on Job Description
• Position Title
• Department
• Position Summary
• Essential Functions
• “Other” – Non-essential Functions
• Organizational Reporting
• Minimum Requirements
• Additional Desirable Qualifications
• Working Conditions
Position Title
Clearly define the position in as few words as
possible.
Job Summary
• Brief overview of the reason the position exists
• Written in broad terms identifying functions of job, but not
the specifics
• Easier to write after the essential functions are determined
• Think of as an essay question: “Describe the essence of the
job in 30 words or less
Minimum Requirements
• Education/Experience
– Identify what education and experience are minimally required to
successfully carry out the essential function of the job
– Remember to think in terms of the “position” not the “person”
• Licenses, Certifications, etc.
• Knowledge, Skills and Abilities:
- Identify specific KSAs needed to successfully perform the
essential functions of the job
- Only list the KSAs needed to achieve the desired results, not those
the ideal candidate might possess
- Use examples from the job to help define the KSAs concisely.
- Avoid using subjective modifiers, e.g., high level, which have a
different meaning for each individual.
• Additional Desirable Qualifications
- Qualifications in addition to the minimum requirements that would be
beneficial in successfully performing the job
Working Conditions
• Physical Demands
– Physical activities
– Lifting weight and exerting force
– Vision requirements
• Work Environment
– Exposure to extreme conditions, i.e. weather, chemicals
– Noise level
• Competency Model and it’s implications

Competency Model
• Competency model: integrated set of competencies required
for excellent performance
• Can be used:
• Generically (role or position description)
• For a specific position
• A third way…focus on a person (strengths,
weaknesses)
• Competency models focus on behavior: what people do that
adds value
• “The best succession planning system in the world cannot succeed unless
the selection, training and development, and appraisal systems all work
effectively too.”
What is a Competency Model?
• A competency model is a set of success factors, often called
competencies that include the key behaviors required for
excellent performance in a particular role.
• Excellent performers on-the-job demonstrate these behaviors
much more consistently than average or poor performers.
• These characteristics generally follow the 80-20 rule in that
they include the key behaviors that primarily drive excellent
performance.
• They are generally presented with a definition and key
behavioral indicators.
What is a Competency Model?
• The model is important because it provides a "road map" for

the range of behaviors that produce excellent performance. It
helps:
– Companies "raise the bar" of performance expectations;
– Teams and individuals align their behavior with key
organizational strategies; and
– Each employee understands how to achieve expected
performance standards
Competency Models
• Competency models often define a conceptual view of

leadership for the organization
– Apply to all parts of the organization
– Provide a common terminology for communicating
people capabilities across all parts of the organization
– Serve as the basis for the entire Human Resource system
– Define multiple proficiency levels
• Often with behavioral indicators
Competency Models Are Not Complete Job Models . .
COMPETENCIES
The knowledge
skills and
motivations
needed for this
role
OBJECTIVES RESPONSIBILITIES
•
Specific objectives that focus •
the role on what is important The core definition of a
in the short term particular job: purpose,
responsibilities,
performance measures
How Are Competency
Models Developed?
• Competency models are developed through a process of
clarifying the business strategy and determining how the
models would be used (hiring and selection, performance
management, training and development, and career
development).
• Data is gathered in structured interviews.
• Data is analyzed and used to develop straw man models of
success criteria.
• Then validation surveys are administered and models
refined based on feedback.
• Finally, models are finalized and translated into appropriate,
end-user tools and applications.
Example - List of Available Models
• Core
– Personal Attributes; Management Skills
• Career Level-Specific Leadership
– Executive Leader; General Manager; CFO; CIO; COO; Middle
Manager; Team Leader
• Topic-Related
– Change Leadership; Team Leadership; High Involvement
Work teams; Influence Skills; Interpersonal Skills; Facilitation
Skills; Team Leader; Culture Assessment
Example - List of Available Models
• Functional
– Human Resources; Finance; Marketing; Product
Management; Customer Service; Sales; Information Systems;
Engineering; Manufacturing; Environmental; Health, and
Safety; Sourcing; Consulting; Administrative Support
• While the database's models are generally organized by core,
leadership levels, or function, there is significant data available
on competency models and behaviors linked to specific
industry-segments.
Use of Competency Model
• Competency models can be organized as flexible tools that

can be used for:
– Employee orientation
– Employee development
– Performance management and coaching
– Career strategies
– Candidate interviews
– Team assessment
– Succession planning
Use of Competency Model
• Performance management is positioned as a process

comprised of steps that include planning, managing,
evaluating and rewarding performance. Often, the
competencies used in performance management are either a
subset of the total competency model, or the definition.
• In addition, the performance appraisal process includes
goals, expected results, and competencies. It is an ongoing
process that aligns and integrates the objectives of the
organization, business units, teams and individuals.
• Competencies specify precisely how individuals can align
their activities to the key strategies of the organization
Benefis Of Competency Model
• Help describe the ideal state needed for exceptional

performance in an organizational role
• A blueprint of the makeup of the type of person
needed for the role
• A template for making comparisons
• A diagnostic tool to evaluate performance
Benefits of Implementing a
Competency-Based Approach
• For the Company, competency-based practices:
– Reinforce corporate strategy, culture, and vision.
– Establish expectations for performance excellence, resulting in a systematic
approach to professional development, improved job satisfaction, and better
employee retention.
– Increase the effectiveness of training and professional development
programs by linking them to the success criteria (i.e., behavioral standards of
excellence).
– Provide data on development needs that emerge from group and/or
organizational composites that are an outcome of multi-rater assessments.
– Provide a common framework and language for discussing how to
implement and
– communicate key strategies.
– Provide a common understanding of the scope and requirements of a
specific role
– Provide common, organization-wide standards for career levels that enable
employees to move across business boundaries.
Benefits of Implementing a
Competency-Based Approach
• For Managers, competency-based practices:
– Identify performance criteria to improve the accuracy and ease of the hiring
and selection process.
– Provide more objective performance standards.
– Clarify standards of excellence for easier communication of performance
expectations to direct reports.
– Provide a clear foundation for dialogue to occur between the manager and
employee about performance, development, and career-related issues.
• For Employees, competency-based practices:
– Identify the success criteria (i.e., behavioral standards of performance
excellence) required to be successful in their role.
– Provide a more specific and objective assessment of their strengths and
specify targeted areas for professional development.
– Provide development tools and methods for enhancing their skills.
– Provide the basis for a more objective dialogue with their manager or team
about performance, development, and career related issues.
The Business Impact of
Competency-Based Systems
• Leadership programs or performance development interventions

are seen as important, but focused on "soft skills" that may not
affect business results.
• One of the most important developments in human resources is
the clarification of the "business value" of key programs.
• These kinds of impacts improve talent levels, save money, and
improve business performance
• Specific Improvements Related to Using Competency-Based
Systems
– 5-10% in rate of hiring successful candidates.
– 15-20% in retention of desired employees.
– 15-25% in morale as measured in employee surveys.
– 20% in goal completion by individuals and teams.
Limitations of Competency Models
• Usually not linked to work behaviors in the “traditional” job

analysis sense
– May be difficult to use as the basis for content validation
• Because they are very general, they often miss some key
aspects of particular jobs or groups of jobs, e.g. knowledge
and skills.
• Often come from pre-existing, “off-the-shelf” models
Functional Competencies
• Competencies associated with success in one part of the
organization, department, group of departments or job
family associated with high levels of job performance or job
success.
• Do not apply broadly across the organization or are of less
importance in other parts of the organization.
• Usually broad knowledge and skills.
Sample Competency Job Linkage
Job Title Customer Product & Financial Problem Sales Systems
Business Category Acumen Solving
Planning Knowledge
Customer Team Mastery Mastery Advanced Mastery Basic
Leader
Category Advanced Mastery Advanced Advanced Advanced
Development
Manager
Retail Basic Basic Basic Advanced Basic
Operations
Manager
Retail Planning N/A Basic Basic Basic Mastery
Associate
Sample General Competencies
• Problem Solving - Identifying and solving problems, using
and adjusting tactics as appropriate to the situation.
• Interpersonal Communication - Communicates effectively
both orally and in writing to ensure complete support and
understanding
Sample General Competency with Proficiency Levels
Problem Solving
Identifying problems and developing and implementing logical solutions consistent with business objectives.
Basic Advanced Mastery

Identifies and takes action to resolve Analyzes root causes of problems or issues Anticipates and/or solves complex, systemic
immediate issues or problems. and develops effective solutions. problems that impact organization
effectiveness and efficiency.
Indicators: Indicators: Indicators:

Identifies routine problems Proposes and implements effective Provides insights into the subtle
Is responsive to problems and solves solutions to problems without subsequent consequences of actions
routine ones with a sense of urgency adverse consequences elsewhere for either Analyzes highly complex problems
Identifies similarities between current company or the customer thoroughly to identify root causes and
and past situations and learns from the Initiates actions to avoid problems before determine holistic, sustainable solutions
experience they happen Applies knowledge of the operations of
Is able to see the logical link between Marshals resources to address problems other departments and functions at
similar problems and develops effectively and efficiently company to address problems in own area
solutions that will solve both Logically breaks down problems into Thinks about the long term implications of
Relies on existing methods to solve their component parts problems and their solutions
problems Solves multiple problems, analyzing Challenges assumptions to solve some of
Seeks the input of others in solving multiple causes and devising effective the most difficult problems
problems solutions
Brings problems to the attention of Demonstrates creativity in solving
others and begins resolution challenges and leveraging team members’
Accepts responsibility for problems strengths to develop innovative solutions
and takes ownership of problem Addresses areas of team conflict before
solution they become barriers to success
In conflict situations, remains Brings competing interests to a common
objective and sees both sides of the ground
issues
Sample Competency Dictionary Page
Product and Category Knowledge
Understanding of the tire industry, categories, brands, portfolio of products and related consumer insights.
Advanced Mastery
Basic Manages portfolio of products and brands, Provides significant value to company and the
Uses fundamental understanding of applying knowledge of category specific insights customer through extensive knowledge of the
products, brands and categories in day-to- to business situations. tire industry, categories, brands and products.
day work.
Indicators: Indicators: Indicators:
Understands the unique features, attributes Understands and can evaluate differences in Develops innovative programs and insights
and performance characteristics of each of product quality, brand positioning, and brand based upon deep knowledge of the categories,
the brands and product categories and category strategies brands and products
Understands brand equity and the concepts Understands how brands are differentiated Provides strategic insights to shape how the
of brand management in the industry Assesses product opportunities and evaluates customer defines the category and influences
Translates product features into customer the impact of new product and brand offerings the strategic choices they make to win in our
benefits, including advertising, support, etc. Communicates the role each brand plays in the categories
Positions the company portfolio effectively portfolio and category and how strategies and Leverages the role of each category, product
against competitor’s products using tactics can be developed to capitalize on this and brand to meet or exceed portfolio
knowledge of the comparative features and Provides broad, total category perspectives expectations
benefits of each Understands the relationship of product Understands where the category is going and
Explains where the components of products quality, price points and value proposition to how that impacts decisions for the future
come from and how they related to product the consumer Sees the impact of the competition’s
quality Provides actionable insights about the corporate mission, strategy and objectives on
Understands the impact of raw material company position in the marketplace relative to both company and customer operations
markets on products (pricing, seasonality, our competition Demonstrates substantial knowledge and
volatility, etc.) Understands category dynamics understanding of the auto industry policies,
Understands the reasons why consumers Understands the unique role of each brand social issues and trends
buy and how they use particular products in and product in the brand portfolio and how Identifies areas for gaining significant and
our portfolio each meets unmet consumer needs substantial competitive advantage
Agenda
Employee Relations
• What is Employee Relations?
• Analysis of Employee Relations: Content and History
• The Employment Relationship in Employee Relations
• Challenges to the ‘System’ - Crisis and De-regulation
3/30/2012 Hendra Kusnoto 93

What is Employee Relations?
• Concern for organization, leadership and control from
employer and employee perspectives
• How we are managed, how we would like to be managed,

how and why conflicts arise and how these can be resolved at
work
Why are Employee Relations worth
studying?
• For many people work is central in terms of time,
money, identity, status, social relations
• Most of us experience work as employees – we have
an employment relationship – between ourselves and
those who employ us, and an employment status
• However many different interests at work
(‘stakeholders’) – owners, shareholders, managers,
employees, customers – all exert pressure on
employment relationship
Why are Employee Relations worth
studying?
• For employers – the ‘labour question’ a central one
• Need labour to produce output
• Need to ensure labour does what employers want
• Need for control – of labour costs and activities - and need
for welfare
• Tension – control vs commitment
Analysis of Employee Relations:
Content and History
• Industrial Relations, Employee Relations and Employment
Relations
• IR traditionally concerned with ‘the institutions of job
regulation’ (Flanders and Clegg 1954) and the generation of
employment rules
• Led to a focus on trade unions and collective bargaining – CB
‘fulcrum’ of industrial relations
• Not unique to Britain – see US, and Western Europe
• ‘High point of traditional IR’ in Britain 1970s – collectivist,
concern with reform of collective bargaining – 55% of the
workforce were trade union members, 75% covered by
collective agreements
Historical Perspectives
Event-driven: Structure-driven:
• Government change • Economic trends

• Technological change • Political trends
• Demographic change • Changes to social
• Management change institutions
• Changes in ownership
and organisation
Unique events and Regular, patterned,

conditions - linear repetitive - circular
Historical Perspectives
• In practice history reveals patterns of both change and
continuity
• Change may be abrupt but may still be affected by path-
dependency
• Short-term and long-term change
• Significance in employee relations for how history is
experienced, how it shapes the present – often casts a long
shadow
• History in culture – stories, rituals, rules
• Employee relations today the outcome of past struggles –
defeats, victories
• Importance of history in custom & practice
Traditional and New(er) Concerns
• Traditional focus on ‘actors’ - managers, employees,

government, unions
• Until recently looked at men, unions, manufacturing, manual
work
• Today, increasing interest in ‘new’ actors – customers,
families, other interest groups - and in service sector, women
and complexity of employment arrangements
• Widening focus has broadened scope of employee relations
concerns
Traditional Concerns of IR
• Theoretical origins of industrial relations/employee relations

focused on order and stability within a developed ‘system’
• Influence of US writers, particularly Dunlop (1958)
• Such a ‘system’ in Britain and other western economies based

on collective bargaining – seen as democratic and most
effective form of regulation
• Copied by many other countries
• Outputs of the system – earnings, productivity and minimising

of conflict
The Industrial Relations
‘System’
• Dunlop pioneering work in 1950s developed from ‘social

systems’ thinking of Talcott Parsons
• IR system a sub-set of economic system and largely self-
contained and self-regulating
• Focus was national systems, so different countries developed
own systems guided by governments
• Criticisms that concern with stability and ‘order’ ignored very
real conflicts that could arise within systems
John Dunlop and an Industrial
Relations System
CONTEXTS ACTORS PROCESSES OUTCOMES
Employers Comp. Regulation Pay and

Social Managers Collective Conditions
Legal Trade Unions Bargaining Inc Productivity
Political Employees Legal Reg. Conflict
Customers Customer Less Conflict
Logical Shareholders*
Feedback
Shared Ideology
The Employment Relationship
in Employee Relations
• It follows that the ‘employment relationship’ is a central

feature of work but it is dynamic and often ‘contested terrain’
• It is also complex – has many dimensions and levels –
economic, legal, social, psychological and political
• Shaped by historical experiences
• Employment relationship now seen as core to the study of
employee relations
• Many employment relationships, many employee relations
The Employment Relationship
Parties to
Relationship
Operatio Substance
n Employment
•Individual:
Relationship
• Level reward, job,
career
•
Process Structure •Collective:
joint
• Style • Formal rules agreements
•Informal
(Kessler and Undy
understanding 1997)
s
Challenges to the ‘System’ -
Crisis and
De-regulation
• Post 1979 ‘Thatcherism’
• Public policy – lack of support for old ‘adversarial’ IR system,
trade unions, failure of collective bargaining
• Moves to regulate IR through legal means – restrictive labour
law to ‘curb the power of trade unions
• Re-establishment of managerial prerogative
• Re-regulation of industrial relations against a backdrop of high
unemployment and weakened TU bargaining power
Is Talk of a System Still Useful?
• Can we still talk about ‘national systems’?

• Often more diversity within as between countries
(Marchington 1995)
• Argued that if we can still talk about a ‘system’ it is now
organisation-based – see work of Purcell (1989)
• Greater diversity in employee relations as managers have
sought to re-regulate employment and employment
relationships
Changing Focus – Managerial
agenda
• Today management-employee relations in Britain more

about involvement, engagement, participation and
partnership rather than collective bargaining and conflict
resolution
• Employee involvement and high performance work

systems, employee engagement
• The role of management choice in shaping employee

relations and employee relations strategy
Employment Relations and HRM
• HRM and the ‘individualisation’ of employment relations

• Focus on the individual worker and relationship with
management
• Mainstream HRM – concern with involvement and
commitment and relationship to business performance (Guest
et al. 2000)
• Business-model of HR dominant
• But concern over the costs of both business model and of de-
regulation and individualisation and how the employment
relationship is regulated – New Labour
• Also concerns that limited evidence for more involved and
engaged workers
And Now….
• Increased concern with both individual and collective

aspects of employment
• Re-focusing on how the employment relationship is
regulated – see work of Work Foundation (Coats, Edwards
2006) and of EU ‘flexicurity’ agenda. See also Sisson (2005)
• Theoretically, this marks a return to a focus on power and
authority relations in employment
Agenda
Recruitment & Selection
• Effective recruitment
• Process and step
• Selection techniques and tools.
Recruitment
• To mobilize the community to achieve the goals of
the organisation
The Recruitment Process
Identified there is Develop a Identify the Key
a need for a new Position Selection Criteria
position Description
Initial Interview - Paper Selection - Create the

screening short listing Advertisement
Psychometric Assessment
Second / Technical
Testing Centres /
Interview
Simulations
New Employee Offer Reference

Checking
Developing Performance Tests
• Perform a job analysis

• Identify the tasks that are to be tested
• Develop the testing procedures
– consider: time required, difficulty, resources available, how
employee will score it, is the task representative of the job
• Score the test results
– set standards and rules
• Train judges
(Gatewood and Feild, 1998)

Types Of Abilities To Be Developed In
Training Assessors
• Understanding the behavioural dimensions
• Observing the behaviour of participants
• Categorising participant behaviour as to appropriate dimensions
• Judging the quality of participant behaviour
• Determining the rating of participants on each behavioural dimension
across the exercises
• Determining the overall evaluation of participants across all behavioural
dimensions
“selection decisions are most accurate when “behavioural consistency”

is the major characteristic of the selection program” (Wernimont and Campbell,
1968 cited in Gatewood & Field, 1998; p. 589)
Selection Tools and
Techniques Options
• Application
– CV
– Application Form
• Biodata
• Psychological Testing
• Work samples
• Simulations (a group = Assessment Centre)
• Interview
• Realistic Job Preview
• Reference Checking
Psychological Testing
• Ability:
– mental: cognitive abilities of applicant
– physical: muscular strength, cardiovascular endurance, movement quality
– mechanical ability
– clerical ability
• Personality
– refers to the unique organisation of characteristics that define the
individual (includes thoughts, feelings and behaviours)
– identify job tasks and then identify traits that are linked to the tasks
– Measurement Methods:
• Self report Questionnaires: Neo PI-R, California Personality Inventory,
MBTI
• Projective
• Interest Inventories: test interest, still have to assess capability to actually do it
Criteria For A Good Test:
• Clear instructions for administration, scoring and

interpretation
• Economy – time, cost, resources
• Technical criteria:
– Reliability
– Validity (including generalisability)
– Norms and standardisation
Reference Checking
• How:
– In person, Mail / Email, telephone, letters of reference
• Why use them:
– Verify information provided
– To predict job success
– Uncover background information that may not have been provided
earlier or identified by the selection techniques used
• Often serves more as a basis for negative selection
• Issues:
– Duty of care to prepare accurate references
– Defamation and discrimination

Standard Recruitment Process
The objective of Standard Recruitment Processis to create a
positive candidate experience from initial application through
completion of probationary period (and beyond)
– Roles
– Key Questions
– Hiring Profile & Selection Criteria
– Job Posting
– Recruitment Channels
– Interview & Evaluation
– Essential Elements of a Successful
Recruitment Process
Developing Selection Criteria
Here is an example of a set of Selection Criteria for the position of

Administrative Assistant:
• Knowledge of office management techniques.

• Ability to practice effective communication techniques both orally and in
writing including ability to coordinate a variety of resources in gathering
information and independently answering inquiries.
• Knowledge of effective supervisory practices and ability to plan and
supervise the work of others, if applicable.
• Ability to analyze and interpret policy and procedural guidelines and to
resolve problems and questions, independently.
• Ability to establish and maintain effective working relationships with
associates, officials, the press and the general public.
• Skill in organizing work flow and coordinating activities.
Use Behavioral Interview Questions
(S-A-R Model)
Making Final Selection
Offering the Position to the Top Candidate
• Select top candidate

• Conduct at least two employment references
• Request Salary Calculation & set pay rate
• Create a customized Offer Letter (or make a verbal offer)
• Offer position. If necessary, provide candidate with time to decide (1-3
days)
• Candidate accepts offer (typically on the phone)
• Invite candidate in to go over Offer Letter and complete any necessary
hiring paperwork (drug screen, background check)
• Wait for Clear to Hire from HR Representative (if applicable)
• Submit e-PAF to create uID#
Essential Elements of a Successful
Recruitment Process
• Bring a sense of urgency to the recruitment process. Top candidates have

a limited “shelf life”
• Clearly define employeer expectations for the position
• Set a target fill date, “first cut” application review date, and schedule
interview time block well in advance
• Conduct thorough telephone prescreening interviews prior to scheduling
personal interviews
• Conduct structured peer interviews utilizing behavioral based questions
• Manage candidate expectations regarding compensation, expected start
date, etc. throughout the recruitment process
Agenda
• The importance of good performance management
• The principle of performance management
• Performance evaluation cycle
The Importance Of Good
• Tailor-made - culture/mission compatible

• Defines performance success
• Clarifies accountabilities
• Systematic reviews against criteria
• PRP system
• Integrated approach to motivation & commitment
Underlying Principles
1. Clear objectives  effective performance

2. Communication is good (2-way)
3. Involvement  commitment
4. Everyone’s work should relate to the organisation’s work
5. People need feedback
6. Responsibility and autonomy enrich jobs
Framework of Performance Management
Mission & Value Statements
Objectives
Performance Agreement
Continuous Performance Management
Performance Review
Development Performance Rating

& Training
Performance Related
Pay
Cycle
…an integrated process of defining, assessing, and

reinforcing employee work behaviours and
outcomes.
 
Agree goals Reward

Appraise performance
Performance Appraisal
…systematic approach to evaluating performance

with a view to pay, promotion, development,
and motivation.
* Informal – daily
* Formal – dedicated period
Purpose of Conducting
Performance Appraisals
• The interview between the supervisor and
employee is where performance is reinforced or
remedies are provided.
– The supervisor describes what he or she has observed
and discusses this appraisal with the employee.
– Together they agree on areas for improvement and
development.
Purpose of Conducting Performance Appraisals
• Supervisors often dread conducting appraisal interviews.
– Pointing out another person’s shortcomings can be unpleasant at
best. To overcome these feelings, if helps to focus on the benefits of
appraising employees.
• The purpose of holding an appraisal interview is to communicate
information about the employee’s performance.
• An interview is an appropriate setting because if sets aside time to focus
on and discuss the appraisal in private.
• It is a two-way communication with the supervisor and employee
working together to devise ways to improve performance.
Objectives of Performance Appraisal
Evaluative Developmental
* Compensation * Feedback
* Staffing decisions * Direction for future
* Evaluate selection * Identify T & D needs
Benefits of Appraisal
Benefits to Managers:
• Opportunity to hear employees hopes, fears etc.
• Chance to clarify and reinforce priorities
• Mechanism for measuring change in employees
Performance
• Recognise achievement motivation
• Overlap/ambiguities
Benefits of Appraisal
Benefits to Company:
• Improved performance
• Succession planning
• HRP – competence analysis
• Link employee performance to business objectives
• Communication
Benefits to Employee:
• Feedback give/take
• Discuss career options
• Training & development
• See “ big picture”
Time Requirements
• At least one per year

• Must be completed by March 15th
– Send to Human Resources
– Give copy to employee
• Evaluation period is for the prior calendar year
• Mid-year change of supervision
– Prior to Oct. 1st – new supervisor conducts the eval
– After Oct. 1st – previous supervisor conducts the eval
Supervisor Responsibilities
• Complete training on performance review and recognition
• Establish departmental goals and objectives
• Seek input from employees
• Provide employees with clear expectations, consistent measures,
and achievable standards of performance
• Support and provide resources
• Engage in ongoing performance review
• Identify performance deficiencies and provide assistance and
support for correction
• Assist employees in identifying and participating in career
development and training programs
• Recognize outstanding performance
• Conduct an evaluation for each assigned employee
Employee Responsibilities
• Provide input to their supervisor in the development of

individual goals that contribute to departmental goals and
the University’s mission
• Meet expectations and achieve performance standards
• Discuss concerns and/or questions about any part of their
job description or performance review with their supervisor
• Identify and participate in career development and training
opportunities
The Performance Evaluation Process
Step 1
Preparing for the Meeting
• Involve the employee

– Agree on a time and place well in advance
– Ask the employee to prepare their ideas and objectives in writing
– Consider asking for a self-evaluation
• Gather data
– Talk to the employee’s co-workers
– Job description
– Past performance data
– Training records
SMART Objectives
Specific
Measurable
Achievable
Results-focused
Time-bound
Objectives – Continued
• In order to write S.M.A.R.T. objectives,

management has to divide the objective into two
components:
– The general title of the objective
– The standards
• Standards are the specific measures by which the objective is
defined, and by which it is measured.
• Standards, whenever possible, should be measures of results
rather than behaviors.
Performance Standards
• Every objective must have an associated standard

• They are the criteria against which the results of an employee’s work are
assessed
• Can evaluate two areas:
– Results – the outcome of the employee’s actions
– Behavior – actions the employee performs
• There are two types of standards:
– Numeric or quantifiable
– Descriptive or qualitative
Numeric Performance
Standards
• Provide a quantifiable objective measure about which no (or very
little) interpretation is required
• Examples:
– Reduce expenses by 10%
– No more than one complaint per month about services
Descriptive Performance Standards

• Are difficult to measure
• Communicate general expectations
• Open to interpretation
• Examples:
– Responsibly manage the budget
– Provide courteous service to customers
Performance Planning Form
In addition to documenting performance

on Key Responsibilities, use the PM form
to plan for career and competency
development.
Step 2
Conducting the Evaluation Meeting
• Put the employee at ease
• State the purpose of the discussion and the advantages of the evaluation
system
• Build on the employee’s strengths
• Listen to the employee
• Compare performance to standards
• Assign performance ratings
• Develop an overall rating
• Agree on mutual objectives for the next year
• No surprises
• Close the discussion
• Avoid evaluator error
Step 3
Following Up
• Evaluate employees in their environment

• Communicate positive feedback regularly
• Coaching is the key
Systematically Appraising Performance

• For appraisals to deliver their potential benefits, they must
be as fair and accurate as possible.
– Supervisors should be systematic in appraising performance.
Performance EvaluationForm
Improvement/Action Plan is created

here.
Observe and Measure
Individual Performance
• Through the control process, the supervisor should

continuously gather information about each employee’s
performance.
– This is an ongoing process, not something the supervisor saves to do
when filling out appraisal forms.
Observe and Measure Individual Performance
• Performance appraisals should focus on behavior
and results.
– Focusing on behavior means the appraisal should
describe specific actions or patterns of behaving.
– Focusing on results means describing the extent to which
the employee has satisfied the objective for which he or
she is responsible.
• Sometimes a supervisor needs to appraise personal

characteristics, for example, an employee’s dependability or
attitude.
– While such ratings are necessarily subjective, the supervisor can try
to base them on observations about behavior and results.
Performance Ratings
• Use the Staff Performance Evaluation and Planning Record

(different form for probationary employees)
• The criteria are:
– Citizenship
– Objectives
• Each criteria is evaluated on a 0-4 scale, weighted based on
importance (not on amount of time spent), and results
added together to get a total score.
Performance Ratings (cont.)
Performance Ratings (cont.)
Evaluator Error
• Varying standards
• Recency/Primacy
• Bias
• Evaluation patterns
• Halo/Horns effects
• Contrast error
Reinforce Performance
• In areas where the employee falls short of the standards, he or she
needs to know how to improve.
– An effective way to help the employee is for the supervisor and
employee to work together in solving performance problems.
– To move beyond discussing symptoms to uncover the underlying
problems, the supervisor can ask which of the following kinds of
causes led to the poor performance:
• (1) Inadequate skills.
– The supervisor should see that the employee gets the
necessary training.
• (2) Lack of effort.
– The supervisor may need to apply the principles of
motivation.
Reinforce Performance
• (3) External Additions.
– If the problem is something beyond the control of the
supervisor and employee, such as a poor economy or lack of
cooperation from another department, the appraisal
standards and ratings should be adjusted so that they are fair
to the employee.
• (4) Personal problems.
– The supervisor should handle the situation as described in
Chapter 14.
• To keep employees motivated and informed, the

supervisor needs to tell them when they are doing
something right, not just when they are making a
mistake.
– Reinforce good performance by pointing out to employees the
areas in which their performance is good.
Avoiding Discrimination in
• The Equal Employment Opportunity Commission (EEOC) is the
government agency charged with enforcing federal laws against
discrimination.
– The EEOC has published the Uniform Guidelines of Employee
Selection Procedures, which include guidelines for designing and
implementing performance appraisals.
– In general, the behaviors or characteristics measured by a
performance appraisal should be related to the job and to
succeeding on the job.
• The supervisor and others responsible for the content of performance
appraisals should make sure that what they measure is still relevant to a
particular job.
– Ratings of performance should not be discriminatory.
• That is, they should not be based on the employee’s race, sex, or
other protected category, but on whether the employee meets
standards of performance.
Bias in Appraising Performance
• Performance appraisals should be free of bias, but this is impossible.
– There are several identifiable biases in the performance appraisals
by supervisors.
• Harshness Bias: Rating employees more severely than their
performance merits.
• Leniency Bias: Rating employees more favorably than their
performance merits.
• Harshness bias tends to frustrate and discourage workers who resent the
unfair assessments of their performance.
• At the other extreme is the leniency bias, where supervisors rate their
employees more favorably than the performance merits.
– Employees who receive favorable ratings may see it as an advantage.
• However, it cheats them and the department of the benefits of
truly developing and coaching employees.
• There are also supervisors who tend to select ratings that are related to the
structuring of answers on the questionnaire.
– A tendency may be to select ratings in the middle of the scale, which is
called central tendency.
• This type of bias misses important opportunities to praise or correct
employees.
• Proximity bias, or assigning similar scores to items that are near each other
on a questionnaire, can result in misleading appraisals.
– If the supervisor is uncertain about specific questions or wants to adjust
a low score, he or she may resort to making random choices.
– This should be avoided by trying to apply objective criteria.
• Personal preferences of the supervisor will bias performance appraisals

also.
– There is a tendency to judge others more positively when they are
like oneself.
– There is also a tendency to place most weight on the events that
have occurred most recently.
• This is called recency syndrome.
• The supervisor should be careful to consider events and
behaviors that occurred throughout the entire period covered by
the review.
• Similarity Bias: The tendency to judge others more positively when they
are like oneself.
• The halo effect refers to the tendency to generalize one positive or
negative aspect of a person to the person’s entire performance, resulting
in either a higher or lower rating than the employee deserves.
• Finally, the supervisor’s prejudices about various types of people can
unfairly influence a performance appraisal.
– The supervisor must remember that each employee is an individual, not just
a representative of a group.
– This is especially important in light of the EEOC guidelines discussed earlier in
the chapter.
Agenda
People Development
• Strategic role of people development functions
Strategic Role Of People
Development Functions
• Strategic Contribution: managing culture, facilitating "fast change,”
strategic decision making and creating “market-driven connectivity”
together account for 43% of HR’s total impact on business performance
• Personal Credibility: credible to their HR counterparts and their business
line managers and having effective relationships with key people both
inside and outside the business. Also a need to promise and deliver
results and establish a reliable track record and have effective written
and verbal communication skills.
• HR Delivery: Delivery of both traditional and operational HR in respect of
People and Organisation Development, Structure and HR Measurement,
Staffing, Performance Management and Reward.
• Business Knowledge: Be a key player in the organization understanding
the business and industry including applied understanding of the
organisation’s value chain and value proposition
• HR Technology : Be able to leverage technology for HR practices and use
e-HR/web-based channels to deliver value.
Strategic Role Of People Development
Functions
Strategic Role Of People Development Functions
1. The ability to anticipate the institutions’ future needs given the

institutional environment and competitive strategy.
2. The ability to articulate the institution’s strategic intent and to
translate it into appropriate people systems.
3. The ability to analyze the institution’s resource processes and
design work systems in support of these processes.
4. The ability to demonstrate the value added to the institutions’
outputs by the people systems.
5. The ability to diagnose and prepare appropriate organizational
interventions – the consulting role
Strategic Role Of People
Development Functions
6. The ability to provide feedback and guidance to subordinates.

7. The ability to provide leadership for the attainment of individual
and group goals.
8. The ability to transfer knowledge and capabilities to line managers
and senior management.
9. The ability to work as a team member.
10. To act as a role model in the process of aligning people systems with
the institutional mission.
11. To possess narrow, functional HR expertise (e.g. compensation,
employee relations etc.).
Agenda
• Training needs analysis

Training Need Analysis
Training Need Analysis is the process of
identifying performance requirements and
the "gap" between what performance is
required and what presently exists.
The Bigger Picture
Organisational
Performance
Employee
Performance
• Clearly defining the
problem or opportunity Employee Skills,
Knowledge And Attitudes
• A formal procedure used
to analyze defined needs
to determine their Employee Education,
causes and identify Experience And Training
appropriate solutions.
What is Problem and
Performance Analysis?
 What is the problem?
 Is it a training problem?
 What skills and knowledge should be included in the
training program?
 Who needs to be trained?
If Training Is The Answer….

• Formal training
• Self study
• Technology based
• Job related/workplace
approaches
Training Need Analysis (TNA)
TNA is a tool to
Existing identify the gap Required
• Skills • Skills
• Knowledge • Knowledge
• Attitudes • Attitudes
TNA (Step 1): Future performance
What Are The Goals For The Future Performance Of Our
Organisation?
• Profit?
• Growth?
• Customer Base?
• New Products or others?
Existing Future
performance performance
TNA (Step 2): Challenges
What are we concerned about? What’re the

challenges today?
What challenges we are likely to face in the

future?
Existing Future
challenges challenges
TNA (Step 3): Employee performance
In what way our employees should start performing

differently to help us meet the challenges and take us
to the goals?
Existing Future
performance Performance
TNA (Step 4): New Skills, knowledge and Attitudes
In order for our employees to perform

differently, what kind of
new Skills, Knowledge and Attitudes they need
to have?
Existing Required
•Skills • Skills
•Knowledge • Knowledge
•Attitudes • Attitudes
TNA (Step 5): Training needs
Now that we know what kind of new Skills,

knowledge and Attitudes are required for our
employees, how can we bridge the gap?
Existing Required
•Skills • Skills
•Knowledge • Knowledge
•Attitudes • Attitudes
Agenda
• Competencies gap assesment
Competencies Gap Assesment
How To Assess Functional Competencies

Objectives
Preparation for conducting a
functional KSA/ competency
assessment for employeer employees.
What is Competencies Assessment?
Competencies assessment is the processes of
assessing observable and measurable competencies:
• Skills
• Knowledge
• Abilities
• Key Behaviors
That Are Necessary To Perform The Job.

How To Assess Functional Competencies
• Step 1: Identify each competency
• Step 2: Define expectations (use profile)
• Step 3: Gather documentation & write assessment
• Step 4: Determine level – C, J or A
• Step 5: Determine overall level

Step 1 – Identify Competencies
Competency titles listed in
• Consider what is required for each position.
the competency profile • Use the prepared competency profile for
ideas.
Competency Contributing Journey Advanced
Safety and Health Performs tasks and duties safely to avoid danger Identifies and resolves potential safety Regularly assesses safety conditions;
Compliance to self and others. Identifies and informs problems and unsafe work practices. identifies, communicates, and
supervisor of potential safety problems. Warns Demonstrates to employees and others, safe implements accident prevention and
others of potential hazards. Uses appropriate ways to perform job tasks or the use corrective measures in work related
protective equipment following established of equipment. Informs supervisor of unusual activities Enforces appropriate
protocols. Incorporates accident prevention safety concerns and makes recommendations post-emergency procedures.
and corrective measures in work related for resolution Anticipates safety issues
activities. Follows appropriate post-emergency Determines appropriate protective equipment and takes proactive steps to
procedures. based on established standards. Regularly maximize safe operations and
assesses site and shop operations for safety measure the effectiveness of action.
Client/Customer Promptly and attentively responds to customer Identifies options, develops solutions, and Identifies and resolves trends and
Service requests within established parameters and time takes action when responding to customer work issues that impact service
frames requests. delivery to groups or individual
Performs work in the least disruptive manner Satisfies individual customer requests while customers.
possible to customers. Demonstrates courteous balancing multiple priorities. Assesses or Makes recommendations to improve
actions and follows the organization’s checks with customer to ensure solution meets service delivery based on customer
established protocol for customer service. request. feedback.
Develops effective working relationships with Makes recommendations to
internal/external customers (vendors, streamline processes/procedures,
subcontractors, etc.) that further the work remove barriers,and link resources
unit’s goals. for efficient and effective customer
Reviews customer requests and seeks service.
clarification as needed. Develops creative, alternative
solutions to respond to complex
service needs.
Step 1 – Identify Competencies
List competency title here.

Step 2 – Define Expectations
 Consider employeer expectations for the position, not the current
position occupant.
 Use the prepared competency profile for language to describe
expectations.
Language for Language for Language for

Contributing Journey Advanced
Expectations Expectations Expectations
Attention to Follows instructions through Ensures all work meets and/or Checks and re-checks work of
Detail standard work-orders for assigned exceeds applicable codes and others considering accuracy
tasks. Performs routine or standards. Checks and re- with respect to standards and
repetitious tasks completely and checks work prior to, during, codes. Considers options and
accurately. Checks work for and after completion. Ensures details that are not obvious.
mistakes before completion of tasks. that all parts of a project/task Troubleshoots total systems.
Compares finished work to what is are completed. Uses Integrates highest quality
expected. Seeks approval of appropriate record keeping control standards into work.
supervisor based upon complexity of methods.
task completed.
Step 2 – Define Expectations
 Add or change language to make employeer description relevant to

the position.
Description of
Description: This position ensures all work meets and/or exceeds
desired
applicable carpentry codes and standards. Checks and re-checks
competency
work prior to, during, and after completion. Ensures that all parts
demonstration
of a project/task are completed. Uses appropriate record keeping
– Attention to
methods.
Detail (Journey
Level)
Step 3 – Gather Documentation
and Write Assessment
• Write an assessment of the current occupant of the position.
• Describe occupant’s competencies in a way that addresses the
requirements found in the competency profile.
Competency Description: This position ensures all work meets and/or exceeds
Requirement applicable carpentry codes and standards. Checks and re-checks work
prior to, during, and after completion. Ensures that all parts of a
project/task are completed. Uses appropriate record keeping
methods.
Assessment of
Occupant Jim Smith is responsible for quality control for his own work as well as
the work of all other carpenters due to his extensive knowledge of
standards and building codes. Within the scope of finish carpentry,
Jim considers details that are not obvious and exhibits superior levels
of craftsmanship.
Step 3 – Gather Documentation
and Write Assessment
Place competency requirements

and assessment of position
occupant here.
Step 4 – Determine Level
• Review employeer assessment of the occupant to

determine if competencies are demonstrated at the
Contributing, Journey or Advanced level.
In the example, Description: This position ensures all work meets

the position and/or exceeds applicable carpentry codes and
standards. Checks and re-checks work prior to,
requires
during, and after completion. Ensures that all parts of
competencies to
a project/task are completed. Uses appropriate
be demonstrated record keeping methods.
at the Journey
level. Jim Smith is responsible for quality control for his
Jim Smith is own work as well as the work of all other carpenters
actually due to his extensive knowledge of standards and
performing at the building codes. Within the scope of finish carpentry,
Jim considers details that are not obvious and exhibits
Advanced level. superior levels of craftsmanship.
Step 4 – Determine Level
Indicate
demonstrated
competency level.
Step 5 - Determine Overall Level
• Place competencies in priority order.

• Overall level = majority of individual Functional KSAs/
Competencies
• Exception - if one or more Functional KSAs/Competencies is more
critical to the organization, may carry more “weight” in overall
assessment. Explain and justify in “Comments” section.
• Indicate the date when one or more competency descriptions
and or assessments were added, reviewed, or changed.
Step 5 – Determine Overall Level
List overall
List competencies competency rating.
In priority order.
List date of latest
change.
List date competency

added or reviewed.
List date of latest
change. List date of latest
change.
Competency Profile Example:
Facility Maintenance Technician, Building Trades
Knowledge – Performs a limited variety of Performs a variety of recurring Routinely and consistently performs
Technical recurring and related and non-recurring tasks/functions. widely varying and broad, functionally
tasks/functions using easily These tasks/functions may involve diverse facility maintenance assignments
understood related or varying processes to requiring in-depth analysis and problem
steps/processes/functions/applicati test, renovate, overhaul, replace, solving regarding the most complex, non-
ons to perform corrective and and perform preventive routine building systems, using advanced
preventive maintenance or maintenance on standard building skills related to assigned trade area.
construction of facilities. Provides systems. Provides technical Serves as a technical expert within the
technical assistance to others by assistance to others by work unit. Guides, directs and coaches
troubleshooting simple facilities troubleshooting standard facilities others regarding application and
maintenance issues and maintenance issues and interpretation of technical issues. Applies
determining their cause. More determining their cause. Mentors and interprets technical knowledge to
complex issues are typically other technicians. resolve unique or highly complex
referred to a higher level situations. Analyzes and researches
technician. Skilled at operating appropriate solutions. Has a thorough and
basic tools and equipment of extensive understanding of programs,
assigned trade(s). concepts and practices in the most
complex building systems trades area as
well as a general understanding of one or
more different trades areas
Attention to Detail Follows instructions through Ensures all work meets and/or Checks and re-checks work of others
standard work-orders for assigned exceeds applicable codes and considering accuracy with respect to
tasks. Performs routine or standards. Checks and re-checks standards and codes. Considers options
repetitious tasks completely and work prior to, during, and after and details that are not obvious.
accurately. Checks work for completion. Ensures that all parts Troubleshoots total systems. Integrates
mistakes before completion of of a project/task are completed. highest quality control standards into
tasks. Compares finished work to Uses appropriate record keeping work.
what is expected. Seeks approval methods.
of supervisor based upon
complexity of task completed.
Agenda (con’t)
• Building a Top-Quality Workforce (High Potential Development )

Building a Top-Quality Workforce
• Why is human resource important to business success?

• What are key human resources issues in today’s economy?
• What are the challenges and opportunities that the human
resource function faces?
• What is involved in human resource planning?
• What are the core human resource responsibilities?
• What is key federal legislation that impacts human resources?
Recruitment: Finding the Right People
(Internal)
Internal Recruiting – transferring or promoting employees

within the company
• Boosts Morale
• Proven Track Record
• Lower Recruiting Costs

Recruitment: Finding the Right People
(External)
External Recruiting – looking for employees outside
the firm
 Employment Websites
 Newspaper Ads
 Trade Associations
 Employment Centers
 Colleges/Universities
Selection: Making the Right Choice
Application
Interviews
Testing
References and Background Checks

Structured Interviews
• Ensure that interviews better predict performance, experts

recommend a structured interview process:
 Develop a list of questions prior to interview
 Focus questions on behaviors and experiences
• The most effective interview questions are behavioral:
 Describe a situation
 Presented with hypothetical situation
Training and Development:
Honing the Competitive Edge
 Increase innovation
 Increase technology adoption
 Increase productivity
 Increase motivation
 Decrease liability
Training and Development: Orientation
• Effective orientations are the first step in the
development process
• Introduce employees to the company culture
• Strong orientation programs reduce employee

turnover
Training and Development: On-the-Job Training
• On-the-Job Training – popular and low cost; employees

simply begin working under the guidance of experienced
employees
• Apprenticeships – training programs where beginners

serve as an assistant prior to working
Training and Development: Other Training
• Off-the-Job Training – training that takes place away from the job
setting
 Vestibule Training
 Classroom
 Job Simulations
• Computer-Based Training – standardized presentations using

video, audio and broadband technology
• Management Development – programs to assist current and
potential executives develop leadership skills
Evaluation: Assessing Employee Performance
• Formal feedback
• Compare actual to expected results
• May impact compensations, incentives, promotions,
transfers and terminations
Evaluation should be a feedback PROCESS

• Managers should be trained
• Employees should be informed of the process
• HR should create an evaluation tool that ties into the
company’s objectives
High Potential Development
Global Accountability
Holistic Leadership/Org. Ecology Organizational

Stewardship
Connecting the Dots Systems thinking
Reaching Outside of the Box:

Taking Risks Creative Thinking
Becoming Comfortable
Flexibility/Adaptability
with Unpredictability Controlled
Becoming Other Accountability
Customer Service
Oriented
Dealing with
Interpersonal Effectiveness
Others
Dealing
with Personal Mastery Technical Skills
Self
Competencies To Be Developed
• Organizational Stewardship
• System Thinking
• Creative Thinking
• Flexibility/Adaptability
• Customer Service
• Interpersonal Effectiveness
• Personal Mastery
• Technical Skills
Organizational Stewardship
• Committed to the mission

and vision of the
organization, shows a
concern for co-workers and
customers, uses resources
wisely, & supports others
in their work.
Systems Thinking
• Able to see the relationship

of the part to the whole, to
know how one‟s actions
affect others, grasps the
“big picture”, & encourages
teamwork.
Creative Thinking
• Thinks “out of the box,” open

to see alternative solutions,
challenges assumptions,
encourages & supports new
ideas, & takes appropriate
risks.
Flexibility/Adaptability
• Demonstrates resilience,
remains calm in high-
pressure situations, accepts
new assignments and
challenges, & responds
productively to change.
Customer Service
• Committed to
exceeding the
customer‟s needs,
understands the
customer‟s perspective,
& uses customer
feedback to improve
individual performance.
Interpersonal Effectiveness
• Communicates clearly, listens

actively,anticipates customer
needs, contributes within
group projects, & coaches
others in their learning and
development.
Personal Mastery
• Assumes responsibility to
assess one‟s strengths and
needs, plans continued
growth and learning,
balances competing
priorities and demands, &
actively seeks feedback from
others.
Technical Skills
• Displays skills and abilities

to perform assigned tasks,
including basic literacy and
computer skills, &
participates in measuring
outcomes of work.
The 6 Tools
• Core Competency Development

• Continuous Assessment
• Performance Management
• Coaching and Mentoring
• Performance Based Interviewing
• Continuous Learning Opportunities
Core Competency Development
• Provide all employees with skills for their lives

• Create leaders at all levels in the organization
• Long term commitment
Continuous Assessment
• Self-assessment through new learning

technologies
• 360, 180 or other assessment on core
competencies
• Continuous feedback through coaching and
mentoring
• Develop the organization to meet its

mission
• Measure individual and organizational
performance
• Link education to business outcomes
• Setting Clear Expectations – Establishing
Measures that are compatible with
organizational goals, and focusing on the
“critical few”
Coaching and Mentoring
• Instills organizational values and norms

• Creates a climate for learning
• Establishes trust and common goals
• Translates setbacks into learning opportunities
• Can be done by anyone at any time
Performance-Based Interviewing
• Past behavior is the best predictor of future behavior

• Analyze & identify the essential qualities for high
performance & develop behavioral questions
• Interview all candidates seeking specific examples of
past performance
• Verify information
• Select best match of job requirements and past
experience
Continuous Learning Opportunities
• Increased access to learning opportunities

• Core curriculum on the competencies
• Learning through real work
• Just-in-time, rather than just-in-case
• Builds a culture of continuous learning
Agenda (con’t)
• Talent Management
• Career Management
Talent Management
Talent Management can be integrated into the
recruitment process and HR initiatives to drive
performance and align with the companies
objectives.
Individual
Succession Assesment
Planning
Assessment &
Development
EVP & Centres
Surveys Hudson
Talent Management
Leadership
Graduate Development &
Recruitment Coaching
Performance Competency
Management Modeling
Assessment Suite
• Standardized global methodology supports pan-
national projects
• One of the worlds largest talent management
consultancies
• 400 experienced professionals across the globe
• Dedicated R&D Centers with highly skilled technical
experts
• Comprehensive talent management and assessment
including:
- Job & Competency Profiling
- Psychological Assessment
- Behavioural Assessment
- Assessment and Development Centers
- Competency Based Interviewing
- Employee Assessment Surveys
Hudson Global HR Insight
In March/April 2009 Hudson conducted a global survey across
30 countries with HR leaders exploring how HR priorities and
challenges have changed during the global economic downturn.
Key Findings:
• There has been a clear shift from talent attraction to talent
engagement, organizational development and people
development.
• 79% of North American companies reported that their HR strategy

incorporates downsizing. Internal talent assessment is a key focus
for 52% of these organizations
• Employees with the most potential will take care of the high
impact roles and high value specialists to fulfill their complex jobs.
A key question is: Do companies know where their high potentials
are and what roles they can fit?
The Importance Of Career
Source : Hudson / Vlerick Hipo Research Study
Retention Factors
Career
Rewarding hipo's
Company culture
Impact / Change
Respect from others
Salary
3.6 3.7 3.8 3.9 4 4.1 4.2 4.3
Degree of importance
Projection within 5 years
Career
Rewarding hipo's
Impact / Change
Company Culture
Respect from others
Salary
3,6 3,7 3,8 3,9 4 4,1 4,2 4,3
Degree of importance
Increasing “Fit” To Drive
Performance & Retention
“Could Do” “Can Do”

(With training & (Or has already
experience) done )
Abilities Knowledge
& Aptitudes & Skills
Personality Preferences
& Work Style & Values
“How They‟ll Do It” “Want To Do”

(How they (Has interest or
approach work) motivation to do)
Talent Assessment
• An important part of employeer overall talent management strategy is the

development of the process organizations will use to evaluate performance and
potential, and to identify future leaders, successors, and/or high potential
employees.
• An effective talent assessment process should be:

– Consistent across employeer organization’s business units
– Aligned to employeer organization’s business needs and future leadership
needs
– A multi-level process that involves several data points
– Well-defined and understood across the organization
• Assessment is often equated and confused with evaluation, but the two concepts
are different. Assessment is used to determine what a person knows or can do,
while evaluation is used to determine the worth or value of a course or program.
Assessment data effects employee advancement, success and development (Herman &
Knuth, 1991).
What Types of Assessment?
How can organizations assess existing staff to track high potentials

and ensure new hires meet the future needs of the business?
Assessment:
• Online Psychometric Assessments
• Leadership/Management Assessment Batteries
• Assessment and Development Centers
• 360 degree feedback surveys and business assessments
• Competency model profiling, behavioral based interviews,
multi-rater assessment tools
Assessment Benchmarking
Identify
Define
incumbent
performance
sample
standards
Identify Each employee

Gather performance
appropriate completes
data for each employee
assessments assessment(s)
Match employees
performance data with
their assessment data
Statistically analyze data
to determine which
assessment(s) scale(s)
predict on-the-job
Develop recommendations
performance
and plans regarding future
assessment and selection
Assessment/Development Centers?
What is an assessment/development center?
An assessment/development center is a process designed to identify an
individual’s strengths, weaknesses, and potential in a current or future role.
The assessment process is characterized by:

– Multiple participants rated by multiple assessors on several varied
exercises
– Many of these exercises are designed to assess competencies
– Data integration: a structured evaluation of the participant in which
assessors present objective evidence and reach a consensus decision
The outcome of an assessment/development center are:

– Written reports detailing a participant’s competencies as they relate to
job requirements
– One-to-one sessions examining the reports
Why Assessment Centers?
• Combine multiple assessment and business simulation methodologies to

achieve the best possible predictor of future performance
• Offers comprehensive secondary evaluation of preferred candidate
strengths and weaknesses
• Are the most powerful tool to predict the profile employee want to hire –
save money over time
• Measure performance and potential therefore strengthening the
leadership pipeline – allowing organizations to develop training
strategies to further develop and grow talent
• Hiring managers can be involved and refresh their own
assessment/coaching skills
• Offer broad range of competencies, individually or in group
• Provide wealth of information available to feedback to all involved
• Offers great opportunity to seal psychological contract
Assessment Centers Drive
Performance
Competencies Questions
Do they have the required

Technical Skills technical skills?
Do they have the

Trainable
Discipline Understanding experience and

understanding
Knowledge & Experience necessary?
Capability Can they demonstrate the

behaviours necessary for
Demonstrated competencies high performance?
Attributes Do they have

development
Behaviours that infer potential potential?
Untrainable
Drivers
Will aspects of the role

Motivational Fit motivate them?
Does the role meet

Career Fit their current career
objectives?
…and Tools To Assess Each Area
Resume Screening
Technical Skills Technical Tests
Discipline Understanding Preferential

Trainable
Knowledge & Experience Interviewing
Capability Behavioural
Demonstrated competencies Interviewing
Attributes
Psych Assessment
Behaviours that infer potential
Untrainable
Motivational Fit Behavioural Interview
Career Fit Preferential Interview

Assessment Centers
Advantage Disadvantage
• Most powerful tool to predict • Time investment required
profile employee hire – saves
money over time from candidate – though they
• Hiring managers can be get more in-depth feedback
involved and refresh their own in return and can also make
assessment/coaching skills an informed decision
• Performance and potential • Relatively expensive in short
• Broad range of competences, term – though saves money
individually or in group
in the long run
• Wealth of information
available to feedback to all
involved
• Offers great opportunity to
seal psychological contract
Case Study
Talent Management Assesses Future Leaders
Results
• Hudson provided comprehensive reports about the candidates’ aptitude for
performing effectively in future leadership roles. Our guidance for the client
throughout the process provided the company with useful information about
tailoring their development efforts to ensure their high-potential employees can
continue to progress throughout their careers.
• Candidates – many of whom had never been through an assessment program
before – came away with a better understanding of their strengths, weaknesses
and opportunities for personal development. Even those who did not make it
into the leadership program found the experience valuable.
• The client was highly satisfied.
Summary
• Identifying talent is going to become more vital with the

predicted skills shortage and therefore more science
must be added to the selection process
• Although it may look like an additional cost, adding
science to selection can save thousands in the future
• It is important to identify the right solution for
employeer organization and the types of roles employee
hire
• Whatever employee do, always start with the right
competencies for each role and build from there
• Always remember, high potential is developed through a
solid understanding of competency and behavior
Agenda (con’t)
• Talent Management
• Career Management
Introduction
• Career development is important for companies to create and

sustain a continuous learning environment
• The biggest challenge companies face is how to balance
advancing current employees’ careers with simultaneously
attracting and acquiring employees with new skills
• The growing use of teams is influencing the concept of careers
– e.g., project careers
Introduction
• Changes in the concept of career affect:

– employees’ motivation to attend training programs
– the outcomes they expect to gain from attendance
– their choice of programs
– how and what they need to know
What Is Career Management?
• Career management is the process through which employees:

– Become aware of their own interests, values, strengths, and
weaknesses
– Obtain information about job opportunities within the
company
– Identify career goals
– Establish action plans to achieve career goals
Why Is Career Management Important?
• From the company’s perspective, the failure to motivate

employees to plan their careers can result in:
– a shortage of employees to fill open positions
– lower employee commitment
– inappropriate use of monies allocated for training and
development programs
Why Is Career Management Important?
• From the employees’ perspective, lack of career management

can result in:
– frustration
– feelings of not being valued by the company
– being unable to find suitable employment should a job
change be necessary due to mergers, acquisitions,
restructuring, or downsizing
Career Management and Career Motivation
• Career motivation refers to:
– Employees’ energy to invest in their careers
– Their awareness of the direction they want their careers to
take
– The ability to maintain energy and direction despite barriers
they may encounter
• Career motivation has three aspects:
– Career resilience
– Career insight
– Career identity
Career Management and Career Motivation
• Career resilience – the extent to which employees are able to
cope with problems that affect their work
• Career insight involves:
– how much employees know about their interests, skill
strengths, and weaknesses
– the awareness of how these perceptions relate to their
career goals
• Career identity – the degree to which employees define their
personal values according to their work
The Value of Career Motivation
Components of Career Motivation
Career Resilience Company Value

• Innovation
• Employees adapting to unexpected changes
• Commitment to company
• Pride in work
Career Insight Employee Value

• Be aware of skill strengths and weaknesses
• Participate in learning activities
• Cope with less than ideal working conditions
• Avoid skill obsolescence
Career Identity
What Is A Career?
• Traditional Career
– Sequence of positions held within an occupation
– Context of mobility is within an organization
– Characteristic of the employee
• Adjustable Career
– Frequently changing based on changes in the person and
changes in the work environment
– Employees take major responsibility for managing their
careers
– Based on self-direction with the goal of psychological
success in one’s work
Comparison of Traditional Career
and Protean Career:
Dimension Traditional Career Protean Career
Goal Promotions Psychological success
Salary increase
Psychological contract Security for commitment Employability for flexibility
Mobility Vertical Lateral
Responsibility for Company Employee

Management
Pattern Linear and expert Spiral and transitory
Expertise Know how Learn how
Development Heavy reliance on formal Greater reliance on relationships

training and job experiences
Different Generations of Employees Have
Different Career Needs and Interests…
Generation X
Millennium
(mid-20s to
(0 to early 20s)
early 40s)
Baby Boomers Traditionalists

(mid-40s to (late 50s to
mid-50s) early 80s)
A Model of Career Development
• Career development is the process by which employees

progress through a series of stages
• Each stage is characterized by a different set of developmental
tasks, activities, and relationships
• There are four career stages:
– Exploration
– Establishment
– Maintenance
– Disengagement
A Model of Career Development
Exploration Establishment Maintenance Disengagement
Developmental Identify interests, Advancement, Hold on to Retirement
tasks skills, fit between growth, security, accomplishments, planning,
self and work develop life update skills change balance
style between work
and non-work
Activities Helping Making Training Phasing out of
Learning independent Sponsoring work
Following contributions Policy making
directions
Relationships Apprentice Colleague Mentor Sponsor
to other
employees
Typical age Less than 30 30 – 45 45 – 60 61+
Years on job Less than 2 years 2 – 10 years More than 10 More than 10
years years
The Career Management Process
Self- Reality Action

Goal Setting
Assessment Check Planning
Components of the Career Management
Process
• Self-assessment
– Use of information by employees to determine their career
interests, values, aptitudes, and behavioral tendencies
– Often involves psychological tests
• Reality check
– Information employees receive about how the company
evaluates their skills and knowledge and where they fit into
company plans
Components of the Career Management
Process
• Goal setting
– The process of employees developing short- and long-term
career objectives
– Usually discussed with the manager and written into a
development plan
• Action planning
– Employees determining how they will achieve their short-
and long-term career goals
Design factors of Effective Career Management
Systems
1. System is positioned as a response to a business need or supports a
business strategy
2. Employees and managers participate in development of the system
3. Employees are encouraged to take active roles in career
management
4. Evaluation is ongoing and used to improve the system
5. Business units can customize the system for their own purposes
Design factors of Effective Career Management
Systems
6. Employees need access to career information sources

7. Senior management supports the career system
8. Career management is linked to other human resource practices
such as training, recruiting systems, and performance management
9. System creates a large, diverse talent pool
10. Information about career plans and talent is accessible to all
managers
Elements of Career Management Websites
User Access Website Features
Self-assessment tools Jobs database
Training resources Employee profile database
Job data Matching engine
Salary information Tools and services –
Assessment, online
Career management advice Training programs, development
resources
Shared Responsibility:
Roles in Career Management
Employees
Manager Company
HR Manager
Managers’ Role in Career
Management
Roles Responsibilities
Coach Probe problems, interests, values, needs
Listen
Clarify concerns
Define concerns
Appraiser Give feedback
Clarify company standards
Clarify job responsibilities
Clarify company needs
Advisor Generate options, experiences, and relationships
Assist in goal setting
Provide recommendations
Referral agent Link to career management resources
Follow up on career management plan
Company’s Role in Career Management
• Companies are responsible for providing employees with the

resources needed to be successful in career planning:
– Career workshops
– Information on career and job opportunities
– Career planning workbooks
– Career counseling
– Career paths
HR Manager’s Role in Career Management
• Provide information or advice about training and
development opportunities
• Provide specialized services such as testing to determine
employees’ values, interests, and skills
• Help prepare employees for job searches
• Offer counseling on career-related problems
Employees’ Role in Career Management
• Take the initiative to ask for feedback from managers and

peers regarding their skill strengths and weaknesses
• Identify their stage of career development and development
needs
• Seek challenges by gaining exposure to a range of learning
opportunities
• Interact with employees from different work groups inside
and outside the company
• Create visibility through good performance
Evaluating Career Management Systems
• Career management systems need to be evaluated to ensure

that they are meeting the needs of employees and the
business
• Two types of outcomes can be used to evaluate:
– Reactions of the customers (employees and managers)
who use the career management system
– Results of the career management system
• Evaluation of a career management system should be based
on its objectives
Agenda (con’t)
• Succession planning
Definition of Succession Planning
“Succession planning is a means of identifying critical
management positions starting at manager and supervisor
levels and extending up to the highest position in the
organization.”
William J. Rothwell
(Effective Succession Planning, 2001)
Succession planning should not and must not stand alone. It must be
paired with succession management which creates a more dynamic
environment.
Succession Planning Policy
• Identifying those employees who have the right skills to meet the
challenges facing the organization
• Evaluate the quality and “readiness” of named successors
• Define development requirements and implement development plan
• Review performance and development with key management staff
• Make recommendations
• Monitor and evaluate progress and results
Succession Planning and
Management
• A deliberate and systematic effort by an organization to:
– ensure leadership continuity in key positions
– retain and develop future intellectual and knowledge capital
– encourage individual advancement
– Integrated into the HR System
– Succession Planning is managed to ensure success
• Should also address the needs for critical backups and

individual development in any job category
Succession Planning Components
Leadership Support
Gain Buy-in from Senior 3. Identify High Potential
2. HR Audit Management
Successors
Identify Top Leadership Experience,
Develop a Pool of High Education, and Job Experience Establish nomination criteria.
Potential Candidates
Experience, Education, Manager/Mentor
Monitor and Evaluate Progress and Results Recommendation
Make Adjustments
Integrated Leadership
Development 4. Identify Successor
1. Replacement Developmental Needs
Planning Identify skills gap, set goals, create
development plan
Identify Readiness of
Successors for Key Positions
5. Create Development Determine measurable goals and
Opportunities outcomes
Review Performance and
Development with Key Developmental Activities/Projects
Management Staff
Mentoring/Coaching
Create a Leadership Succession Plan
Establishing a Succession Plan
• Understand the critical position being vacated - what

are the requirements of the job
• Benchmark the job against future job requirements
• Determine what the ideal candidate will look like
• Evaluate potential replacements
• Determine their performance and potential readiness
level
• Establish a Development Plan and Goals
• Implement development plan
• Provide Coaching and Feedback
• Track and Monitor the plan
Steps in Succession Planning Process
1. Gain Buy-in from Senior Management
2. Identify succession planning purpose and goals.
3. Assess the organizations current and future business strategy and top
leadership replacement needs.
4. Identify and analyze key positions.
5. Assess candidates against job and competency requirements.
6. Identify development strategies.
7. Define succession planning process and procedures.
8. Communicate and implement succession planning.
9. Collect information from employees regarding their career interests and
expertise.
10. Assess employee competencies.
11. Create individual development plans.
12. Select people to potential fill positions.
13. Develop, select, and schedule training and development programs.
14. Monitor progress.
15. Measure and evaluate outcomes.
Agenda
• Setting up professional development plan and objective

Personal Development Plan
• A tool that will assist employee in realizing and achieving
employeer career goals.
• A tool that outlines knowledge and skills that will benefit

the employee and the organization.
• Though no one can go back and make a brand new start,

anyone can start from now and make a brand new
ending.
Defining Goals/Objectives
• Broad, long-term aims that define a desired result associated
with identified strategic issues.
• Targets for achievement through interventions.
• The purpose toward which an endeavor is directed
• Something worked toward or striven for

The Purpose Of This Development Plan
• Identify employeer passion(s)

• Draft a personal mission statement
• Define specific goals/objectives as it relates to employeer career
development
• Create a measurable action plan to accomplish employeer
goals/objectives
Personal Mission Statement
• Develop a statement or several statements that describe success
for employee professionally and personally.
• This may not be a quantifiable destination or goal, but rather a

description of employeer personal and professional purpose or
“reason for being” as employee would like it to be.
“5 Star” PDP
(1) Career Goals
(2) Skills &

(5) Timelines
Competencies
(4) Developmental
Activities (3) Assessment
(1) Career Goals
• Reflect one‟s dreams or aspirations in the work place.
• Long Term (5 yrs)
• Short Term (1-2 yrs)

(2) Skills and Competencies
Competency: ability to perform a task.
1) Identify Job Competencies

(experts or job descriptions)
2) HPDM Core Competencies

(3) Assessments
Assess where employee now, compared to where

he/shewant to be
• 360 feedback assessments

•Myers Briggs
•Strong Campbell Interest Inventory
•Self Assessment
(4) Developmental Activities
Formal Classroom activities

Informal – observation
Hands On –
Details
Projects
Mentor or Coach
Experience!!
(5) Timelines
• Keeps employee on track toward his/hergoal
• Take Responsibility and commit to the dates
• Establish „check points‟ along the way to make sure

employee are still on course
Objectives Worksheet (Example)
Objectives Worksheet
Goal Short- Long- Objective Action Step
Term Term
State how employee Identify whether Specify at least 3 steps Specify the performance or
will explore an aspect the goal is short- employee will take to achieve data-based measure by
of employeer career term or long term. the goal. which employee will
field, or move forward accomplish it.
toward employeer
career goal.
Build new account X X 1. Prioritize account sales. Plan a sales penetration
sales/develop new strategy to allocate 20% of
business 2. Acquire two new accounts sales calls to new accounts.
each month.
Take courses to refresh
3. Meet or exceed sales goals. telephone sales,
presentation skills and
written communication
skills.
Read books on problem-

solving capabilities.
Create an Action Plan
• Develop some specific steps to acquire the capabilities

employee need to move toward the achievement of
employeer mission, goals and objectives.
Short-Term Action Plan (Example)
Short-Term Goals
Action Step Time Frame Notes
Specify the performance or data- Specify the short-term date by Write notes to self.
based measure by which which employee will accomplish
employee will accomplish it listed the objective listed on
on employeer Objectives employeer Objectives
Worksheet. Worksheet.
Read one business book or listen Quarterly. Consider reading 365 Sales Tips
to one business audio tape on for Winning Business or Tough
problem-solving capabilities in Calls: Selling Strategies to Win
selling. over employeer Most Difficult
Customers
Long-Term Action Plan (Example)
Long-Term Goals
Action Step Time Frame Notes

Specify the performance or Specify the long-term date by Write notes to self.
data-based measure by which which employee will accomplish
employee will accomplish it the objective listed on
listed on employeer Objectives employeer Objectives
Worksheet. Worksheet.
Plan a sales penetration September 2006 Consider holding regularly-

strategy to allocate 20% of scheduled meetings with
sales calls to new accounts. decision makers to position self
as a consultant, to solve
problems, not as a sales
person.
Objectives
• Brief review of the career banding concept, key terms,
and a review of management’s responsibilities
• Demonstration of the process of writing a competency
assessment
Career Banding Refresher
• A new human resources system that affects the way we
classify jobs and the way we pay, promote, evaluate and
develop employees
• Consolidation of classification titles into bands
• Pay based on current market rates
• Management flexibility and responsibility in granting
promotions, setting pay, and promoting career growth
Banded Classes
Operations and Skilled Trades Job Family
Banded Classes Banded Classes
Facility Facility Facility Vehicle/

Maintenance Maintenance Maintenance Equipment
Tech- Tech- Supervisor Operator
Mechanical Building
Vehicle/ Vehicle/ Transportation

Equipment Equipment Supervisor
Repair Tech Repair Super.
Agenda (con’t)
Compensation and Benefits
• Compensation and benefit strategy and philoshophy
• Designing compensation and benefit system
• Salary structure and employee grading system
• Job evaluation
• Salary survey and review
Managing Your HR Career
Compensation
• The HRM function that deals with reward individuals receive in exchange
for performing tasks
– The major cost of doing business for many organizations
– The chief reason why most individuals seek employment
• Financial compensation is either direct or indirect
– Direct compensation consists of wages, salaries, bonuses, or
commissions
– Indirect compensation includes all financial rewards not included in
direct compensation, such as insurance, vacation, and childcare
services (benefits)
• Non-financial rewards, such as praise, self-esteem, and recognition,
affect employee:
– Motivation
– Productivity
– Satisfaction
Objective of Compensation
• The objective of compensation is to create a system of rewards
that is equitable to both the employer and the employee
– The desired outcome is an employee who is attracted to the work and
motivated to do a good job
• Compensation Decisions:
Pay for a position is set relative to three groups:
– Group A: employees working on similar jobs in other
organizations
– Group B: employees working on different jobs within the
organization
– Group C: employees working on the same job within the
organization
Compensation Policy Issues
• Pay for performance
• Pay for seniority
• The pay cycle
• Salary increases and promotions
• Overtime and shift pay
• Probationary pay
• Paid and unpaid leaves
• Paid holidays
• Salary compression
Compensation Policy Issues (cont’d)
• Salary compression
– A salary inequity problem, generally caused by inflation, resulting in
longer-term employees in a position earning less than workers
entering the firm today.
• Geographic costs of living differences
Equity and Its Impact on Pay Rates
• The equity theory of motivation
– States that if a person perceives an inequity, the person will be
motivated to reduce or eliminate the tension and perceived inequity
• Methods to Address Equity Issues

- Salary surveys: to monitor and maintain external equity.
- Job analysis and job evaluation: to maintain internal equity,
- Performance appraisal and incentive pay: to maintain individual equity.
- Communications, grievance mechanisms, and employees’ participation:
to help ensure that employees view the pay process as transparent and fair.
(procedural equity).
Compensation Decisions:
• The decision to examine pay relative to group A is called the

pay-level decision
– Be competitive in the marketplace
– Use the pay survey to help with decisions
• The pay decision relative to group B is the pay-structure

decision
– Use job evaluations to set a value for each job relative to all other jobs
• The pay decision relative to group C is individual pay

determination
Corporate Policies, Competitive Strategy,
and Compensation
• Aligned reward strategy

– The employer’s basic task is to create a bundle of
rewards—a total reward package—specifically aimed
at eliciting the employee behaviors the firm needs to
support and achieve its competitive strategy.
– The HR or compensation manager will write the
policies in conjunction with top management, in a
manner such that the policies are consistent with the
firm’s strategic aims.
Strategy and Pay
• Pay is a reward for behavior

• How and what employee pay should support what
employee want to reward
• Pay also needs to reflect who employee are as an
organization
• Pay should reflect the situation that employeer
company is in
Employee Get What Employee Pay For
• Internal focus vs. external focus

• Focus on products vs focus on services
• Focus on fairness vs. focus on competitiveness
• Focus on risks vs. focus on no errors
Employee Pay What Employee Have
• Small fish in big pond or big fish in a small pond?

• One of a kind, or one of many?
• Organized or “un” organized?
• Lay offs or full employment?
Pay with what?
• Money • Employment security
• Bonuses • Advancement opportunities
• Premium pay, shift pay • Organizational support
• Ownership • Work environment
• Title
• Cash recognition
• Organizational affiliation
• Benefits
• Work variety
• Perks • Work challenge
• Career advancement • Autonomy
• Training • Work meaningfulness
• Personal growth • Feedback
Pay with what?
• Direct Financial
– Money
– Bonuses
– Premium pay, shift pay
– Ownership
– Cash recognition
• Indirect Financial
– Benefits
– Non cash recognition
– Perquisites
Pay with what?
• Affiliation
– Organizational support
– Work environment
– Organization citizenship
– Title
• Work content
– Variety
– Challenge
– Autonomy
– Meaningfulness
– Feedback
Pay with what?
• Career
– Advancement
– Personal Growth
– Training
– Employment security
Balance
• The compensation philosophy and the kind of
company will lead employee to answers on how to
balance each of these compensation vehicles
• employee may “underpay” in one area, but “over”
pay in another
Examples
• Large government • Small, start up, dot-

contractor com
– Largest employer in the – Highly competitive
area market for talent
– Non union – Other companies raid
– Most of work done under employees
contract with – Non-union
government
Base Pay
• Base pay should be considered the price employee
pay for membership to the club
• It ensures employee that the employee
– will show up at work
– that employee may call them at night or weekends with
business questions
– that employee can send them out of town and disrupt their
personal life
• Must be within 5% of market to be competitive
• Most companies highlight the 50th percentile
• Some companies will target the 75th percentile
• Lately, companies are targeting the 60th percentile
Incentive Pay
• The price employee pay to get employees focused on what is

important to the company.
– Addresses motivation and reward for achieving a pre set goal
– Should be related to critical areas that the employee can impact
– “line of sight” should be direct
– Should consist of no more than 3-5 goals
– Simple and measurable is best
Incentive Pay
• Balanced Scorecard Approach
– Financial
– Operational
– Customer
– Learning and growth
• Multiple levels of organization

– Corporate
– Division
– Business unit
– Individual
Incentive Pay Targets
• Top Executives 50-100% of base
• VPs and Directors 30-50% of base
• Mid-Management 20-30% of base
• Supervisors 10-20% of base
• Others 0-10% of base
• Needs to be at least 5% of base to have an impact.

Long Term Pay
• The price employee pay to retain employees

– Addresses long term security
– Should tie individual to the company’s future
– Should be tied to the growth of the company over time
– Spans multiple years (3-5 or longer)
• Stock options for public companies
• Phantom stock for public and private companies
• Long term incentive plans for public and private companies
• Traditionally tied to value of the company, or some long
term goal (achieving $X in gross revenues)
Long Term Pay
Level Grant value* Est. Future value*
Executive 60-100% 30%
Director 50-70% 25%
Manager 30-50% 20%
* As a percent of base
The Balance
Pay Starting Market Mature Declining

Component Growth
Base Low Mod High High
Incentive Low Mod High Mod
Long term High High Mod Low
Perquisites Low Mod Mod High
Benefits Low Low Mod High

The Balance
• Large company • Small, start-up, dot-

com
– Base: high
– Incentive: low – Base: mod
– Long term: low – Incentive: mod
– Perquisites: low – Long term: high
– Benefits: high – Perquisites: low
– Benefits: low
Consequences of More
• More of one thing does not solve problem
• Balance of rewards is important
• Key words
– Meaningful
– Relevant
– Timely
– Valuable
• Examples
Preparing for the Job Evaluation
• Identifying the need for the job evaluation
– Employee feedback, high turnover, etc.
• Getting the cooperation of employees

– They may fear having their pay reduced
• Choosing an evaluation committee.

– Should include employees who actually perform the job
• Performing the actual evaluation.

What is Job Evaluation ?
l Job Evaluation is the process for assessing the market

value of positions.
l Job Evaluation is a method (market evaluation) to

determine the relative pay level of different jobs.
l Job Evaluation is a formal methodology for assigning

wage rates and pay grades by position.
Job Evaluation Benefits
• Systematic measure of job worth
• Determines position pay level
• Defines organization pay equity
• Translates job worth into pay rate

Job Evaluation Methods: Ranking
• Ranking each job relative to all other jobs, usually based on some
overall factor (i.e. job difficulty).
• Steps in job ranking:
– Obtain job information.
– Select and group jobs.
• Production workers vs. clerical workers
– Select compensable factors.
• Common to use just one factor (job difficulty)
– Rank jobs.
– Combine ratings. (Average raters rankings)
• Most effective in small companies
Job Evaluation Methods:
Job Classification
• Raters categorize jobs into groups or classes of jobs that
are of roughly the same value for pay purposes.
– Classes contain similar jobs.
– Grades are jobs that are similar in difficulty but otherwise
different.
– Jobs are classed by the amount or level of compensable factors
they contain.
• Skills, effort required, working conditions, level of responsibility,
etc.
Example of A Grade Level Definition
This is a summary chart of the key grade level criteria for the GS-7 level of
clerical and assistance work. Do not use this chart alone for classification
purposes; additional grade level criteria are in the Web-based chart.
Source: http://www.opm.gov/fedclass. gscler.pdf. August 29, 2001. Figure 11–3

Job Evaluation Methods: Point Method
• A quantitative technique that involves:

– Identifying the degree to which each compensable factors are
present in the job.
• Example: 5 degrees of “responsibility”
– Awarding points for each degree of each factor.
• Each responsibility degree would equal a certain number of points
– Calculating a total point value for the job by adding up the
corresponding points for each factor.
Job Evaluation Process
Position Description Statement
Job Responsibilities, KSA's and Qualifications

Position Evaluation
Job content and/or Market pay rate analysis

Job Value $
Pay rate & grade assignment
Position Evaluation Goals
l To establish an objective and sequential pay grade

structure based on job market value.
l To determine competitive pay rates by position.
l To ensure development of a pay structure that provides

for internal equity.
l To comply with Equal Pay Act and FLSA rules.

Salary Survey
Questions to Ask:
1. What are our company’s key success factors?

What must our company do to be successful in fulfilling its mission or
achieving its desired competitive position?
2. What are the employee behaviors or actions necessary to successfully

implement this competitive strategy?
3. What compensation programs should we use to reinforce those

behaviors? What should be the purpose of each program in reinforcing
each desired behavior?
4. What measurable requirements should each compensation program meet

to be deemed successful in fulfilling its purpose?
5. How well do our current compensation programs match these

requirements?
Source: Jack Dolmat-Connell, “Developing a Reward Strategy that Delivers Shareholder and
Employee Value,” Compensation and Benefits Review, March–April 1999, p. 51.
Table 11–1
Pay Factors:
1. Financial Resources
2. Appropriate Market Rate
3. Internal Pay Alignment
4. Required Competencies
Compensation: Show Me the Money
• Compensation
• Wages
• Salary
• Benefits
Performance Pay Options
Commission: payment as a percentage of sales
Bonuses: lump sum payments, typically to reward

strong performance from individual employees
Profit Sharing: reward employees with a share of
the company profits above and beyond
predetermined goals
Stock Options: the right to buy shares of
company stock at some future date
Pay for Knowledge: awarding bonuses and pay
increases in exchange for increases in knowledge
Compensation: Show Me the Money
Compensation is based on the following factors:
 Competition
 Contribution
 Ability to Pay
 Cost of Living
 Legislation
Benefits:
From Birthday Cakes to Death Benefits
Legally Mandated Benefits Optional Benefits

• Social Security • Paid Vacation & Holidays
• Medicare Contributions • Paid Sick Days
• Unemployment Payments • Health Insurance
• Workers’ Compensation • Retirement Programs
• Federal Family and Medical • Product Discounts
Leave • Tuition Reimbursement
Benefits: Cafeteria-Style
• Providing employees a set dollar amount per person

that they spend on company benefits.
• Allows employees to tailor their benefits to their

individual needs.
Benefits: Flexible Scheduling
• Flextime – provides workers freedom in terms of when

they start and finish their workday
• Compressed Workweek – allowing employees to work
full-time number of hours in less than the standard
workweek
• Telecommuting – working remotely from home by
leveraging technology
Establishing Pay Rates
• Step 1. The salary survey
– Aimed at determining prevailing wage rates.
• A good salary survey provides specific wage rates for specific jobs.
– Formal written questionnaire surveys are the most comprehensive,
but telephone surveys and newspaper ads are also sources of
information.
• Benchmark job: A job that is used to anchor the employer’s pay scale
and around which other jobs are arranged in order of relative worth.
Sources for Salary Surveys
• Consulting firms and professional associations

– They conducts three annual surveys:
• Area wage surveys
• Industry wage surveys
• Professional, administrative, technical, and clerical (PATC) surveys.
Some Pay Data Web Sites
*An alliance between recruiters Korn/Ferry International and the Wall Street Journal.
Table 11–2
Establishing Pay Rates (cont’d)
• Step 2. Job evaluation
– A systematic comparison done in order to determine the worth of
one job relative to another.
• Compensable factor
– A fundamental, compensable element of a job, such as skills, effort,
responsibility, and working conditions.
• Equal Pay Act focuses on these four elements
• Hay consulting firm focuses on know-how, problem solving and
accountability
Determinants of Pay
Structures and Rates
• Job Evaluation
Scope and Level of Job Responsibility
Skill and Ability
Supervision
Qualifications
• Determines Pay Rate/Range for Position

Market Pay Rate and Range
• Specific Occupation by Geographic Area Market Pay Rate and

Range
Specific Occupation by Industry
Higher Education Institutions
Evergreen Compensation Factors
Major Compensation Factors Include:
• Scope of Responsibility- appraises the position’s breath and depth of either
administrative or managerial influence
• Supervision - appraises the number (head count & FTE) and responsibility level of
the employees
• Accountability - appraises the position's accountability for the allocations of
resources and program results
• Communication skills – is the appraisal of the position’s requirement for
proficiency in interpersonal, oral and written skills
• Professional Capability Requirements - appraises minimum Knowledge, Skill &
Ability (KSA’s); education; experience and training necessary to perform the job .
• Creative Professional Performance- Appraises the position’s primary duties
involvement with work activities requiring problem solving, invention,
imagination, originality or talent in a recognized professional field.
Draft Exempt Salary Structure Model
10% between salary level Midpoints w 30% salary
range at each level
Salary Min Midpoint Max
Level
SL 1 $23,490 $27,000 $30,510
SL 2 $25,839 $29,700 $33,561
SL 3 $28,423 $32,670 $36,917
SL 4 $31,265 $35,937 $40,609
SL 5 $34,392 $39,531 $44,670
SL 6 $37,831 $43,484 $49,137
SL 7 $41,615 $47,833 $54,051
SL 8 $45,775 $52,616 $59,456
SL 9 $50,354 $57,878 $65,402
SL 10 $55,389 $63,666 $71,943
SL 11 $60,928 $70,032 $79,136
SL 12 $67,021 $77,036 $87,051
SL 13 $73,723 $84,739 $95,755
SL 14 $81,095 $93,214 $105,424
SL 15 $89,205 $102,535 $115,967
Market Pricing Benchmarks-1
Salary Structure
Executive GM Managerv Superintendent Supervisor Technician
• Step 3. Group Similar Jobs into Pay Grades
– A pay grade is comprised of jobs of approximately equal
difficulty or importance as established by job evaluation.
• Point method: the pay grade consists of jobs falling within a
range of points.
• Ranking method: the grade consists of all jobs that fall within two
or three ranks.
• Classification method: automatically categorizes jobs into classes
or grades.
• Step 4. Price Each Pay Grade
— Wage Curve
– Shows the pay rates currently paid for jobs in each pay
grade, relative to the points or rankings assigned to each
job or grade by the job evaluation.
– Shows the relationships between the value of the job as
determined by one of the job evaluation methods and
the current average pay rates for employeer grades.
Plotting a Wage Curve
Figure 11–4
• Step 5. Fine-tune pay rates
– Developing pay ranges
• Flexibility in meeting external job market rates
• Easier for employees to move into higher pay grades
• Allows for rewarding performance differences and seniority
– Correcting out-of-line rates
• Raising underpaid jobs to the minimum of the rate range for their pay
grade.
• Freezing rates or cutting pay rates for overpaid (“red circle”) jobs to
maximum in the pay range for their pay grade.
Pricing Managerial and Professional Jobs
• Compensating managers
– Base pay: fixed salary, guaranteed bonuses.
– Short-term incentives: cash or stock bonuses
– Long-term incentives: stock options
• The right to purchase stock at a specific price for a specific period
• Excellent retention tool
– Executive benefits and perks: retirement plans, life insurance, and
health insurance without a deductible or coinsurance.
Pricing Managerial and Professional Jobs
• What Really Determines Executive Pay?
– CEO pay is set by the board of directors taking into account
factors such as the business strategy, corporate trends, and
where they want to be in a short and long term.
• Traditional wisdom is that the company size determines top
managers’ salaries
– Firms pay CEOs based on the complexity of the jobs they filled.
– Boards are reducing the relative importance of base salary
while boosting the emphasis on performance-based pay.
Compensating Professional Employees
• Employers can use job evaluation for professional jobs.

• Compensable factors focus on problem solving, creativity,
job scope, and technical knowledge and expertise.
• Firms use the point method and factor comparison methods,
although job classification seems most popular.
• Professional jobs are market-priced to establish the values
for benchmark jobs.
Other Compensation Trends
• Broadbanding
– Consolidating salary grades and ranges into just a few
wide levels or “bands,” each of which contains a
relatively wide range of jobs and salary levels.
• Wide bands provide for more flexibility in assigning workers to
different job grades.
• Lack of permanence in job responsibilities can be unsettling to
new employees.
Strategic Compensation
• Strategic compensation
– Using the compensation plan to support the company’s strategic aims.
– Focuses employees’ attention on the values of winning, execution, and
speed, and on being better, faster, and more competitive
• IBM’s strategic compensation plan:

– The marketplace rules.
• Switched from a previous single salary structure to different salary structures and
merit budgets
– Fewer jobs, evaluated differently, in broadbands.
• 3 compensable factors: skills, leadership requirements & scope/impact
– Managers manage.
• Managers get a budget and are advised to pay “stars” more
– Big stakes for stakeholders.
Comparable Worth
• Comparable worth
– Refers to the requirement to pay men and women equal wages
for jobs that are of comparable (rather than strictly equal) value
to the employer.
– Seeks to address the issue that women have jobs that are
dissimilar to those of men and those jobs often consistently
valued less than men’s jobs.
– County of Washington vs. Gunther
• Oregon prison matrons
– Mens’ jobs were classified as having 5% more content but were
paid 35% more than women
– Cost Washington County over 500 million dollars
– What are some reasons women may make less than men in the
workplace?
Performance Related Pay
The principle of paying people according to
their contribution appeals to a sense of
fairness in all of us however…
…there is an absence of evidence that PRP

schemes improve productivity despite absorbing
significant amounts of management time and
creating employee discontent.
Pfeffer (1999)HBR
• Pay is usually adjusted upward through four types of
increases:
– A general, across-the-board increase for all employees
– Merit increases based on some indicator of job performance
– A cost-of-living adjustment (COLA) based on the consumer price
index (CPI)
– Seniority
Variable Pay: Incentive Compensation
• Variable pay is any compensation plan that:
– Emphasizes a shared focus on organizational success
– Opens incentives to nontraditional groups
– Operates outside the base pay increase system
• Included in the calculations of variable pay are:

– Individual incentive awards
– Individual recognition awards
– Group and team awards
– Scheduled lump-sum awards
• To implement successful variable pay systems, companies
must based their plans on:
– Clear goals
– Unambiguous measurements
– Visible linkage to employees' efforts
• Key design factors include:

– Support by management
– Acceptance by employees
– Supportive organizational culture
– Timing
Variable Pay: Incentive Compensation
• Total compensation includes:
– Base pay
– Variable pay
– Indirect pay
• Variable pay helps manage labor costs, but does
not guarantee equitable treatment of employees
– Financial insecurity is built into the system
– As a result, productivity may actually decline
• Paying employees on the basis of output is usually
referred to as an incentive
Merit Incentives
• Advocates claim merit pay is the most valid type
of pay increase
– Awards are directly linked to performance
– Rewarding the best performers with the largest
pay is claimed to be a powerful motivator
• This premise has two flawed assumptions:

– Competence and incompetence are distributed
in roughly the same percentages in a work group
– Every supervisor is a competent evaluator
Gain-sharing Incentive Plans
• Gain-sharing plans are companywide group incentive

plans that use a financial formula to:
– Distribute organization-wide gains, and
– Unite diverse organizational elements in the common pursuit
of improved organizational effectiveness
• Through cash bonuses, these systems share the benefits

of:
– Improved productivity
– Reduced costs
– Improved quality
Profit-Sharing Plans
• Profit-sharing plans distribute a fixed percentage of
total profit to employees in cash or deferred bonuses
– Profit sharing is not dominant in other industrialized countries
• Profit-sharing plans are typically found in three

combinations:
– Cash or current distribution plans
– Deferred plans
– A combination of both
Ownership
• An employee ownership plan (ESOP):
– Is similar to profit sharing and is intended to increase worker
commitment and performance
– Is a qualified, defined contribution benefit plan that invests
primarily in the stock of the company
– The employer makes yearly contributions that accumulate to
produce a benefit that is not predefined
• An ESOP is a variation of a stock bonus or stock

bonus/money purchase plan that invests primarily in
employer stock.
Stock Options
• A stock option is the right to:
– Purchase a specific number of shares of a firm’s stock
– At a predetermined price
– During a specified period of time
• Stock options allow employees to share in the growing
value of a company without risking money until they
exercise the options to buy the shares
– In many cases, the gain is substantially greater
than a person’s annual compensation
– Stock options are not taxed until the option is exercised and/or
the stock is sold .
Benefits of Stock Ownership for Executives
• Voting rights or Right to Participate on Board;

• Dividend Rights if Board authorizes;
• Sale or Liquidation Participant;
• Equity Growth Potential Realized during Exit Under Buy-
Sell Agreement;
• Capital Gains Tax Break on Gain Recognized When Sell;
• Subjective Benefits of Feeling Like Owner;
• Work With Owners, not For Owners.
Disadvantages of Stock Ownership
• Can Realize Phantom Taxable Income Without Receiving
Any Cash;
• Potential Additional Personal Liability Exposure For
Uninsured Risks;
• Need For Additional Contribution;
• Opportunity Cost Of Taking Stock In Lieu Of Other Form
Of Compensation.
Types of Compensation Plans
Stock Rights & Options Equivalency Plans
1) Incentive stock option 1) Appreciation right,
2) Nonqualified stock 2) Phantom stock plans,
option, 3) Stock equivalency plans.
3) Bonus stock,
4) Restricted stock
Thank
You!
hendra.kusnoto@antam.com
Hendra.koesnoto@yahoo.co.id
HP: 0815 1902 8097

World Class Human Resource Management: Advisor of GCG & Change Management

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World Class

Human Resource Management

International HRM Challenges

• What HRM strategies are appropriate at different stages

• Leads to postponement of difficult local decisions (such as

• Difficulty recruiting qualified personnel

• Reduces amount of control by headquarters

• Provide expatriate with disposable income equivalent to

• Provide explicit “add-on” incentive for accepting

• Avoid having expatriates fill same jobs held by locals or

• Lack of Respect for Acquired Skills

International HRM Challenges

Core Purpose BHAG Vivid

Source: “Building Your Company’s Vision”, by

• Any relevant historical information

• State the alternative strategies

• Recommend one or more of the strategies

• Identifying and developing the organizational core

• Key issues holding back the team, fuzzy goals,

• Team Effectiveness Model:

• Prepare recruiting and staffing tool with relevant

Vision & Business Strategy

• Prepare 360° assessment tool for providing

• Add technical and functional competencies or

Vision & Business Strategy

• Comprehensive guide to developing

• Tools for developing individual learners, teams and

• Provides four individual learning exercises, a tips

• Help individuals become more “street smart” by

• Use the exercises individually, in sets; spaced over

• “Learning” development plan integrates with

• Learner strengthens own ability to learn from

• Prepare few who are comfortable with and

• Helps refine the competencies of high potentials

• Profiles present and needed approaches to

• Diagnoses and offers recommendations for the

• Use paper and e-survey

Developing World Class HR Professional

• The process by which managers design the components of a

• Major tasks of HRM is to determine a firm’s policies for:

Technical Expert Employee

– Culture and Change Steward: Appreciates, articulates, and helps

– Strategy Architect: Playing an active part in overall strategy

Systems and processes

Profit & vision are necessary to effectively

Focal point for work

Workforce Planning Recruiting / Accessions

“What man actually needs is not a tensionless state but

 The organization’s environment

Insert Figure 16.3 here

• Develop job description

• Competency Model and it’s implications

• The model is important because it provides a "road map" for

• Competency models often define a conceptual view of

• Competency models can be organized as flexible tools that

• Performance management is positioned as a process

• Help describe the ideal state needed for exceptional

• Leadership programs or performance development interventions

• Usually not linked to work behaviors in the “traditional” job

Basic Advanced Mastery

Indicators: Indicators: Indicators:

3/30/2012 Hendra Kusnoto 93

• How we are managed, how we would like to be managed,