Human Resources

This Document is designed to ensure that students have a brief insight about the Human Resources. The
document provides a brief outlook and is in no-way exhaustive. The students are encouraged to go through
the document carefully and then refer to external resources for better understanding of the issues.
Human Resources
William R. Tracey, in "The Human Resources Glossary," defines Human Resources as: "The people
that staff and operate an organization," as contrasted with the financial and material resources of an
organization.

A human resource is a single person or employee within your organization. Human resources
refer to all of the people you employ.

Human Resources is also the function in an organization that deals with the people and issues related
to people such as compensation and benefits, recruiting and hiring employees, onboarding employees,
performance management, training, and organization development and culture.

Human Resources staff is also responsible for advising senior staff about the impact on people (the
human resources) of their financial, planning, and performance decisions. Managers rarely discuss
the effect of their decisions on the people in the organizations. It is often predictable that decisions
are driven by more easily measurable processes such as finance and accounting.

Human Resources evolved from the term: personnel, as the functions of the field, moved beyond paying
employees and managing employee benefits.

HR Department

A human-resources department (HR department) of an organization performs human resource

management, overseeing various aspects of employment, such as compliance with labor law and
employment standards, administration of employee benefits, and some aspects of recruitment

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TABLE OF CONTENT
Beginner
Organisational Behaviour………………………………………………………………………………...5

Leadership………………………………………………………………………………………….....6
Early Trait Theory………………………………………………………………………………….6

Behavioral Theory………………………………………………………………………………….6
Contingency Theory………………………………………………………………………………..6

Fiedler’s Model…………………………………………………………………………………….6
Hersey and Blanchard’s Situational Leadership Theory…………………………………………...7
Path Goal Theory…………………………………………………………………………………..7

Vroom and Yetton’s Leader-Participation Model………………………………………………….8

Leader-Member Exchange (LMX) Theory………………………………………………………...8

Motivation………………………………………………………………………………………………...9
Maslow’s Theory……………………………………………………………………………………9

ERG Theory……………………………………………………………………………………….10
McGregor’s X-Y Theory………………………………………………………………………….10

Herzberg’s Two Factor Theory……………………………………………………………………11

McClelland’s Theory………………………………………………………………………………11

Goal Path Theory…………………………………………………………………………………..12

Adam’s Equity……………………………………………………………………………………..12
Expectancy Theory…………………………………………………………………………………13

Personality……………………………………………………………………………………………….14
Big 5………………………………………………………………………………………………...14

MBTI………………………………………………………………………………………………..14
Organization1……………………………………………………………………..……………………..15
Dimensions of organization………………………………………………………………………...15
Balanced scorecard approach to measure organization’s effectiveness…………………………….16
Different types of organizational structures………………………………………………………...17
Organization’s environment and its effect on organization’s structure…………………………….18
Different components of environment of an organization………………………………………….18
Framework for assessing the environment uncertainty……………………………………………..19

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 Impact of environment on organization’s structure……………………………………………….19
Organization lifecycle……………………………………………………………………………..20
Organization characteristics during different stages………………………………………………20
Organizational culture……………………………………………………………………………..21
Adaptive vs nonadaptive corporate cultures………………………………………………………21
Advanced
Human Resource Management………………………………………………………………………...22
Recruitment and Selection…………………………………………………………………………23
Recruitment Process………………………………………………………………………...23
Employee Orientation……………………………………………………………………………..24
Training……………………………………………………………………………………………24
Types of Training…..……………………………………………………………………….25
Performance Management…………………………………………………………………………26
Performance Appraisal………………………..…………………………………………….26
Methods of Appraisal……………………..………………………………………………...28
Errors………………………………………………………………………………………..31
Compensation and Pay…………………………………………………………………………….32
Compensation Process……………………………………………………………………….32
Payroll Management………………………………………………………………………………34
Job Analysis……………………………………………………………………………………….35
HR Analytics…………………………………………………………………………………........36

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ORGANIZATIONAL BEHAVIOUR

Individual Group and

Dynamics and Organisational
Leadership Dynamics

Leadership Motivation Personality Perception

Early Trait Maslow's

Theory Big 5
Theory

Herzberg's
Two Adam's
Contingeny Factor Theory of
Theories Theroy Inequity

McClelland's
Behaviour Theory
MBTI
Theory

ERG
Theory

Goal Path
Theory

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LEADERSHIP

Leadership is the process of guiding and directing the behavior of people in the work environment.
Early Trait Theories

• Identified leadership quality based on physical attributes (height, appearance, weight, etc.,),
personality characteristics, and abilities.
• There was no significant evidence to conclude that leaders can be distinguished from the followers
on these bases. These were neither strong nor uniform basis.

Behavioural Theories

• Theories proposing that specific behaviors differentiate leaders from non-leaders.

• It states that leadership is a skill set and can be taught to anyone, so we must identify the proper
behaviors to teach potential leaders.

Contingency Theory

• While trait and behavior theories do help us understand leadership, an important component is
missing: the environment in which the leader exists
• Contingency Theory adds this additional aspect to our understanding leadership effectiveness
studies.
• Three key contingency models for leadership: 1. Fiedler’ Model 2. Hersey and Blanchard’s
Situational Leadership Theory, and Path-Goal Theory. Let us study about these three theories in
detail

Fiedler’s Model

Effective group performance depends on the proper match between leadership style and the degree to
which the situation gives the leader control.
It assumes three Situational Factors-

o Leader-member relations: degree of confidence and trust in the leader

o Task structure: degree of structure in the jobs

o Position power: leader’s ability to hire, fire, and rewards

It states that for effective leadership one must change to a leader who fits the situation or change
the situational variables to fit the current leader.

APPLICATION

Fiedler’s Model has many applications in the organizational world:

• Can be used to assess the effectiveness of an individual in a particular role and look at he reasons for
one’s effectiveness or ineffectiveness.

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 • Can be used to predict whether a person who has worked well in one position in an organization
will be equally effective in another position having different situational variables when compared to
the existing position based on the contingencies that make one’s style effective.

• Can help in implementing changes in the roles and responsibilities that management might need to
make to bring effectiveness to the role of the person leading the same.

Hersey and Blanchard’s Situational Leadership Theory

• A model that focuses on follower “readiness”

o Followers can accept or reject the leader
o Effectiveness depends on the followers’ response to the leader’s actions
o “Readiness” is the extent to which people have the ability and willingness to accomplish a specific
task

Ability to follow Willingness to follow Leadership Behaviour

Unable Unwilling Give clear and specific directions
Unable Willing Display high task orientation
Able Unwilling Use a supportive and
participatory style
Able Willing Doesn’t need to do much

APPLICATION- The manager will not have only one style of leadership technique for every individual.
It will vary from person to person depending on his or her ability to follow orders and the willingness to
follow them. If a person does not have the ability to follow orders neither willing to follow, it means that
the person not only lacks the skill to do the task but has attitude problem. Thus, the leader might give very
specific instructions of how it is to be done and by when. The leader might have to micromanage the person.
But if the person is unable to follow the task but has the willingness to do it, means that there is no attitude
problem in the person. The leader should display high task orientation because in that case the person will
learn how to do the job in a structured manner.

On the other hand, if the person is able to do the job but is not willing to, it is very important for the leader
to understand why he is not willing to do it. He or she might get very supportive and understand the problems
and try solving them. But if the person is both able to follow and willing to follow, then he or she will
anyway do the task and thus not much leadership behavior is needed.

Path-Goal Theory
The theory states that:
• Leaders provide followers with information, support, and resources to help them achieve their goals
• Leaders help clarify the “path” to the worker’s goals
• Leaders can display multiple leadership types
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 • Four types of leaders:
• Directive: focuses on the work to be done
• Supportive: focuses on the well-being of the worker
• Participative: consults with employees in decision making
• Achievement-Oriented: sets challenging goals

APPLICATION

This theory was developed from expectancy theory to describe the way that leaders encourage and support
their followers in achieving the organizational goals that have been set for them by making the path clear
and easy. This theory emphasizes the relationship between leader’s style and subordinate characteristics
and the work-place setting. Subordinates get motivated when they think that they are capable of performing
their work and believe that their efforts will result in a certain outcome and the payoffs for doing their work
are worthwhile. In particular, leaders should be doing the following three tasks:

1. Clarify the path so that the subordinates know which way to go. This motivates the members of the
group by clarifying the path to personal rewards that result from attaining work goals. You have
thus `fixed' him on the job and made him see that his performance can lead to positive or negative
rewards. An ambiguous work environment increases stress, thus decreasing satisfaction and
productivity.

2. Once you have made the path-goal clear to the members and also told them about what the job
requires, the next step is to remove roadblocks that are stopping them from reaching there. Leaders
provide followers with the elements they think subordinates need to reach their goals. They also
help the followers through coaching and direction, removing obstacles and roadblocks to attaining
the goal, and making the work itself more personally satisfying

3. The third step is increasing the rewards along the route. Leader must offer the reward to the member
of the group who actually accomplishes the task. Your reward may as simple as praise or can also
lead to increase in the pay or promotion of the member to a higher position. Your judgment about the
desirability of the member to a higher position is crucial. Your judgment about the desirability of
the member's effort and the goal helps you to decide whether and what reward can be given.

Other Important Leadership Theories-

Vroom and Yetton’s Leader-Participation Model

• How a leader makes decisions is as important as what is decided

• Premise: Situational variables interact with leadership attributes to impact the behavior of
the leader.
o Leader behavior must adjust to the way tasks are structured in the organization.
o This is a normative model that tells leaders how participative to be in their decision
making of a decision tree.

Leader-Member Exchange (LMX) Theory

• In-Group
o Members are similar to leader
o In the leader’s inner circle of communication
o Receives more time and attention from leader
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 o Gives greater responsibility and rewards
• Out-Group
o Managed by formal rules and policies
o Receive less of the leader’s attention / fewer exchanges
o More likely to retaliate against the organization

APPLICATION

The In-group members are more likely to engage in organizational citizenship behavior, while out-group
members are more likely to retaliate against the organization. Thus, a good manager will always try to
“include” everyone in his team and give equal attention to all them. It is often seen in companies that a
manager forms a set of favorites ends up giving special treatment to them and thus the other employees
might feel demotivated and this might lead to a dip in their performances.

MOTIVATION

Motivation is the process of arousing and sustaining goal directed behavior. The following are the important
Motivation Theories

Maslow’s Hierarchy of Needs

• Maslow stated that people are motivated to achieve certain needs and that some needs take
precedence over others.
• Our most basic need is for physical survival, and this will be the first thing that motivates our
behavior. Once that level is fulfilled the next level up is what motivates us, and so on.

APPLICATION

Generally, a person at the beginning of their career will be very concerned with physiological needs such
as adequate wages and stable income and security needs such as benefits and a safe work environment.
Employees whose lowest level needs have not been met will make job decisions based on compensation,
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safety, or stability concerns.

Once these basic needs are met, the employee will want his “belongingness” (or social) needs met. This
means effective interpersonal relations are necessary. Managers can create an environment where staff
cooperation is rewarded. With these needs satisfied, an employee will want his higher-level needs of esteem
and self-actualization met. Esteem needs are tied to an employee’s image of himself and his desire for the
respect and recognition of others. Cross-training, job enrichment, and special assignments are popular
methods for making work more rewarding. With self-actualization, the employee will be interested in
growth and individual development. At this highest level, managers focus on promoting an environment
where an employee can meet his own self-actualization needs.

Thus, as an HR Manager, one should ensure that each and every need are catered to. An employee will
only stick to a company if all his needs get fulfilled. Or else he only will be motivated to work in the
organization till he feels saturated at his current workplace. But if the next level of needs is not fulfilled,
the employee may start looking for opportunities elsewhere.

ERG THEORY

Clayton Alderfer recategorized Maslow’s hierarchy of needs into three simpler and broader classes of needs:

• Existence needs- These include need for basic material necessities. In short, it includes an
individual’s physiological and physical safety needs.
• Relatedness needs- These include the aspiration individuals have for maintaining significant
interpersonal relationships (be it with family, peers or superiors), getting public fame and
recognition. Maslow’s social needs and external component of esteem needs fall under this class
of need.
• Growth needs- These include need for self-development and personal growth and advancement.
Maslow’s self-actualization needs and intrinsic component of esteem needs fall under this
category of need.

THEORY X and THEORY Y

• Theory X- A set of assumptions of how to manage individuals who are motivated by lower order
needs.
The assumptions about theory X is that people work as little as possible. They lack ambition, dislike
responsibility, and prefer to be led. These people are resistant to change and are often gullible and not very
bright.

• Theory Y- A set of assumptions of how to manage individuals who are motivated by higher order
needs.
The set of assumptions of theory Y is that people are not by nature passive or resistant to change. They are
self-directed to meet their objectives and will be committed to their objectives.

APPLICATION
McGregor's X-Y theory is a salutary and simple reminder of the natural rules for managing people,
which under the pressure of day-to-day business are all too easily forgotten.

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McGregor's ideas suggest that there are two fundamental approaches to managing people. Many managers
tend towards theory x, and generally get poor results. Enlightened managers use theory y, which produces
better performance and results, and allows people to grow and develop.

HERZBERG’S TWO FACTOR THEORY

The Two-factor theory states that there are certain factors in the workplace that cause job satisfaction, while
a separate set of factors cause dissatisfaction. It was developed by Frederick Herzberg, a psychologist, who
theorized that job satisfaction and job dissatisfaction act independently of each other Two-factor theory
distinguishes between:

• Motivators (e.g. challenging work, recognition, responsibility) that give positive satisfaction,
arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal
growth.
• Hygiene factors (e.g. status, job security, salary, fringe benefits, work conditions) that do not give
positive satisfaction, though dissatisfaction results from their absence. These are extrinsic to the
work itself, and include aspects such as company policies, supervisory practices, or wages/salary.
• An employee feels dissatisfied when the hygiene factors are not present in an organization. The
employee feels satisfied when the motivators are present in an organization.

APPLICATION

In an organization, factors like salary, working conditions, job security are must. If these factors are absent,
then the employee will be very dissatisfied with the organization. The existing employee will start looking
for other opportunities and no new employee would like to join if such mandatory factors are missing.
Essentially, hygiene factors are needed to ensure an employee is not dissatisfied. Motivation factors are
needed to motivate an employee to higher performance. Herzberg also further classified our actions and
how and why we do them, for example, if you perform a work- related action because you have to then
that is classed as movement, but if you perform a work-related action because you want to then that is
classed as motivation. Thus, as HR Managers, we must realize that not only the hygiene factors are
important, but motivation factors also play a huge role for an employee to be fully satisfied. Following things
can be kept in mind by the HR Managers while motivating the employees:

• Ensure hygiene factors are sufficient enough so employees don't become demotivated.
• Ensure work is rewarding and challenging to motivate employees to work harder.
• Continually develop employees to keep motivation high.
• Reward and Recognize high achieving employees.
• If possible rotate employee’s roles to keep Job interest high.
• Ensure employees have training resources to continually develop themselves.

McClelland’s Need Theory

David McClelland identified three learned or acquired needs (manifest needs), they were

• Need for Achievement,

• Need for Power, and
• Need for Affiliation
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The characteristics are as follows-

Dominant Motivator Characteristics of this person

Achievement • Has a strong need to set and accomplish challenging goals.
• Takes calculated risks to accomplish their goals.
• Likes to receive regular feedback on their progress and achievements.
• Often likes to work alone.
Affiliation • Wants to belong to the group.
• Wants to be liked and will often go along with whatever the rest of the
group wants to do.
• Favors collaboration over competition.
• Does not like high risk or uncertainty.
Power • Wants to control and influence others.
• Likes to win arguments.
• Enjoys competition and winning.
• Enjoys status and recognition.

APPLICATION
Apply McClelland's theory to cultivate self-motivated achievement
Create a workplace that rewards self-motivated achievers. Use feedback and motivational methods according
to David McClelland. Theory must be practical to be effective in the workplace.
Consider David McClelland motivation theory to refocus towards non-monetary incentives
Create a culture of employee recognition. When monetary motivation ceases so does the need to succeed.
Redirect finances away from economic incentives which produce little to no tangible results and implement a
needs-based employee recognition plan.
Create a fulfilling work setting using McClelland's achievement theory
Employees who actively participate in creating job duties are less likely to seek out other employment.
Encourage your staff to offer input on work assignments. Reduce staff turnover using McClelland
management theory as employees experience a stronger sense of satisfaction. McClelland motivational
theory encourages managers to provide staff with a wide range of opportunities to achieve work-related
goals.

GOAL PATH THEORY

• Goal setting involves establishing specific, measurable, achievable, realistic and time- targeted
(S.M.A.R.T.) goals
• It ensures that participants in a group with a common goal are clearly aware of what is expected
from them
• Setting goals helps people work towards their own objectives—most commonly with financial or
career-based goals.

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APPLICATION

Every organization/department should have a goal in mind. (Short time goal like- monthly target or long
term like Vision 2020). It is very important for these goals to be present because these will give the team to
a direction to work. Suppose the goal of the company is to be the top pharma company by 2018, this will
flow down to each department, and each department will have an S.M.A.R.T goal of themselves. The goal
of HR can be to attract the best talent from the industry and therefore they can change their hiring
techniques, rework on their Employee Value Proposition to achieve this Goal. Similarly, the marketing
team, sales team, R&D team, operations etc. all will have their own S.M.A.R.T goals.

ADAM’S THEORY OF INEQUITY

• Inequity is a situation in which a person perceives he or she is receiving less than he or she is giving,
or giving less than he or she is receiving.
• The belief is that people value fair treatment which causes them to be motivated to keep the fairness
maintained within the relationships of their co-workers and the organization. The structure of equity
in the workplace is based on the ratio of inputs to outcomes
APPLICATION

According to equity theory, an employee's perception of the fairness of his work's input and outcome
influences his motivation. Effective performance management systems enable a small-business manager to
clarify job responsibilities and expectations, develop an employee's capabilities, and align an employee's
behavior to the company's strategic goals and values. An employee typically feels satisfied with the
outcome of his effort, including his pay, when the compensation matches what he feels he puts into the job.
If an employee perceives that others get more for doing less, he typically becomes less motivated to work
hard. Managers create a productive work environment by communicating job requirements clearly and
establishing fair and consistent performance objectives for all employees.

EXPECTANCY THEORY

• The Expectancy Theory of Motivation explains the behavioral process of why individuals choose
one behavioral option over another. It also explains how they make decisions to achieve the end they
value.
• Vroom introduces three variables within the expectancy theory which are valence (V), expectancy
(E) and instrumentality (I). The three elements are important behind choosing one element over
another because they are clearly defined: effort- performance expectancy (E>P expectancy),
performance-outcome expectancy (P>O expectancy).
Three components of Expectancy theory: Expectancy, Instrumentality, and Valence

• Expectancy: Effort → Performance (E→P)

• Instrumentality: Performance → Outcome (P→O)

• Valence- V(R)- Valence: the value the individual places on the rewards based on their needs, goals,
values and Sources of Motivation.
APPLICATION

Intrinsic rewards motivate workers by appealing to their sense of contribution and self- importance - for
example: pride, feeling of accomplishment, public praise etc. Researchers found that intrinsic rewards are
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positively related to project success in terms of client satisfaction. On the other hand, extrinsic rewards are
external factors offered externally by others to the workers- for example: job security, financial bonuses,
time off, technical training flexible work schedule, promotions etc. Ineffective rewards offered by
organizations hinder better staff performances because employee’s goals are not being fulfilled. Monetary
rewards don’t have long term effects, as they are mixed with other money allowances and soon forgotten.
Failure of monetary rewards can be prevented by recognizing the money limitation and substituting it with
other more cost-effective forms of rewards. Hence before designing a Rewards system it is essential to take
into consideration if the employee holds value for the reward.

PERSONALITY

Personality is a relatively stable set of characteristics that influence an individual’s behavior.

The Big Five Personality Model

It is a personality test that lays the premise that five basic dimensions underlie all others and encompass
the significant variation in human personality. These dimensions are:

• Extraversion captures one’s comfort level with relationships.

• Agreeableness refers to an individual’s propensity to defer to others.
• Conscientiousness is a measure of one’s reliability.
• Emotional stability taps a person’s ability to withstand stress.
• Openness to experience addresses range of interests and fascination with novelty.

ASSUMPTIONS
An HR Manager can use The Big Five Personality model to recruit employees. Certain attributes are
generally preferred in certain roles. For instance, for a sales job an extraverted personality might be
preferred over an introverted personality. For a role which involves a lot of travel or relocation, a person
with high openness to experience might be preferred than a person with a low score on this. Companies
use The Big Five Model not only in recruitment but also to understand the general personality trait of an
individual which helps the manager to manage their employees in a more efficient way.

Myers-Briggs Type Indicator

The MBTI assessment is psychometric questionnaire that asks people how they feel or act in a given
situation.

• It classifies people in to one of sixteen personality types based on the following four dichotomies.
It assumes that people are either one or the other and that there is no in-between. Hence, the test
determines the type and not the strength of the preference of one extreme over the other.
1. Extraverted (E) versus Introverted (I)
2. Sensing (S) versus Intuitive (N)
3. Thinking (T) versus Feeling (F)
4. Judging (J) versus Perceiving (P)

APPLICATION
Some of the benefits of using MBTI in organizations:

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 1. Acknowledge and work with differences.
2. Actively understand those differences within a team.
3. Improve and embrace different forms of communication.
4. Encourage the strengths of each distinct personality type.

ORGANIZATION

Organizations are (1) social entities that (2) are goal-directed, (3) are designed as deliberately structured
and coordinated activity systems, and (4) are linked to the external environment.

DIMENSIONS OF ORGANIZATION

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BALANCED SCORECARD APPROACH TO MEASURE ORGANIZATION’S EFFECTIVENESS

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DIFFERENT TYPES OF ORGANIZATIONAL STRUCTURES

ORGANIZATION’S ENVIRONMENT AND ITS EFFECT ON ORGANIZATION’S STRUCTURE

Organizational environment is defined as all elements that exist outside the boundary of the organization
and have the potential to affect all or part of the organization.

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DIFFERENT COMPONENTS OF ENVIRONMENT OF AN ORGANIZATION

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FRAMEWORK FOR ASSESSING THE ENVIRONMENT UNCERTAINTY

IMPACT OF ENVIRONMENT ON ORGANIZATION’S STRUCTURE

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ORGANIZATION LIFECYCLE

ORGANIZATION CHARACTERISTICS DURING DIFFERENT STAGES

ORGANIZATIONAL CULTURE

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ADAPTIVE VS NONADAPTIVE CORPORATE CULTURES

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HUMAN RESOURCES MANAGEMENT
The process of acquiring, training, appraising, and compensating employees and of attending to their labour
relations, health and safety, and fairness concerns.

Recruitment Training and

and Selection Development
• Job Analysis • ADDIE Model
• Sourcing • Kirkpatrick Model
• Screening
• Lateral Hiring

Types of appraisals

Compensation and Performance • Balanced score Card

Benefits Management
•Compensation •Performance appraisals Methods of appraisal
Structure •Advantages
•Types of Benefits • Essay appraisal
•Aon Hewitt Total • Graphics Ratings
Rewards Framework Scale
• Ranking
• Fields Review
• BARS
• MBO
• Assessment centers
• 360-degree feedback
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Recruitment & Selection
Recruitment refers to the overall process of attracting, selecting and appointing suitable candidates to one or
more jobs within an organization, either permanent or temporary.
Sources of Recruitment:

External Sources

External Sources Internal Sources

Public employment agencies, Performance Appraisals

professional Institutes

Referrals Inventories

Advertisements, Assessment Job Posting

Centers

Trade Unions HRIS

Internet Recruitment Assessment Centers

Executive Search firms

Employment Exchanges

Headhunters

Walk-ins, unsolicited
resumes and applications

Recruitment Process

Screening and
Job Analysis Sourcing Lateral Hiring
Selection
Job Analysis
Job analysis is the process of gathering and analyzing information about the content and the human
requirements of jobs, as well as, the context in which jobs are performed. This process is used to determine
placement of jobs.
Sourcing
Sourcing is the use of one or more strategies to attract or identify candidates to fill job vacancies. It may
involve internal and/or external advertising, using appropriate media, such as local or national newspapers,
specialist recruitment media, professional publications, window advertisements, job centers, or in a variety
of ways via the internet.
Screening a and Selection.
Suitability for a job is typically assessed by looking for relevant skills, knowledge, aptitude, qualifications
and educational or job-related experience. These can be determined via: screening resumes, job applications;
interviews.

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Lateral Hiring
Lateral hiring refers to the hiring of someone into a position that is at the same organizational level or salary.
It could mean hiring someone from another, similar organization, possibly luring them with a better salary
and the promise of better career opportunities. Trends: Use of anonymous resumes, blind interviews to
reduce personal bias while conducting the interviews.

EMPLOYEE ORIENTATION
When you join any organization the first thing you would be having an orientation which would be organized
by an employer to give you some background details about the organization. Employee orientation would be
the first step to get you to acclimatize with the organization's culture.
What is employee orientation?
Employee orientation is a procedure for providing new employees with basic background information about
the firm.
In employee orientation employee will get to know about the basic knowledge about the firm, how they need
to do their job, organizational structure etc.
Ideally, employee orientation should help new employees start becoming emotionally attached to and
engaged in the firm.
The objectives behind employee orientation/Onboarding:
Make the employee feel welcome at the organization and part of the team.
Make sure the new employee has the basic information to function effectively [i.e. e-mail access, personal
policies and benefits, and expectations in terms of work behaviour]
Once the employee orientation process is finished the training process begins

TRAINING
In simple words, Training means giving new or current employees the skills that they need to perform their
jobs.
Training holds significant importance in any organization. Because it directly affects the efficiency of the
workforce. Managers also should understand the legal implications o their training related decisions.
Various Indian legislations and regulators mandate that employees are adequately trained.
For example, RBI frequently organizes the training programme for the employee in the area of risk
management, compliance etc. Company act,2013 has also made it mandatory for the directors on the board
of the firm are trained in governance-related topics.
Lack of efficient training process exposes employer the liability of negligent training.
Negligent training means a situation where an employer fails to train adequately, and the employee
subsequently harms the third party.

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THE TRAINING PROCESS:
The training process consists of five steps which are as follows.
ANALYZE the training need
DESIGN the overall training program.
DEVELOP the course
IMPLEMENT training
EVALUATE the course's effectiveness

TYPES of training:
Below mentioned are the types of training which are prevalent in the companies
[1] On the Job training: This means having a person learn a job by actually doing it.
The most familiar on the job training is THE COACHING or UNDERSTUDY METHOD where an
experienced worker or the trainee's supervisor trains the employee. and every manager is accountable for
developing his or her subordinates.
JOB ROTATION is when an employee moves from job to job on at planned intervals, this is also an
important OJT Technique

[2] Apprenticeship Training:

It is a structured process by which people become skilled workers through a combination of classroom
instruction and on-the-job-training

[3] Job instruction training:

It includes listing each job's basic tasks, along with key components, to provide step-by-step training for
employees.
[4] Programmed learning:
It is a systematic method for teaching job skills, involving presenting questions or facts, allowing the person
to respond, and giving the learner immediate feedback or the accuracy of his or her answers.
[5] Behaviour modelling:
A training technique in which trainees are the first shown good management techniques in the firm, are
asked to play roles in simulated situations and are then given feedback and praise by their supervisors.
There are also online tools like EPSS- Electric performance support systems, Video conference, LMS-
Learning portal [An employee website], Virtual classroom through which companies have tried to give
training with the help of technology.
We need to add analysis part of the training. It is there in the last year’s dossier. We need to find a copy of
word document of the last lecture for it.

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Evaluate the training program
The four levels of Kirkpatrick's evaluation model essentially measure:
• reaction of student - what they thought and felt about the training.
• learning - the resulting increase in knowledge or capability.
• behavior - extent of behavior and capability improvement and implementation/application.
• results - the effects on the business or environment resulting from the trainee's performance.

Performance Management
The continuous process of identifying, measuring, and developing the performance of individuals and teams
and aligning their performance with the organization’s goals.
Performance appraisal
Evaluating an employee’s current and/or past performance relative to his or her performance standards.
The process is of three steps in nature

Setting
standards

Actual
performance
assessment

Feedback and
improvement

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Performance Appraisal implies a rational assessment of the performance of an individual, based on pre-
determined standards. On the other hand, performance management alludes to the management of
performance of the manpower working in an organization. While Performance Appraisal is a yearly system
while if we talk about Performance Management, it is a continuous process that does not occur eventually.
The main purpose of Performance Appraisal is to secure information necessary for making objective and
correct decision an employee.
Process
The process of performance appraisal:
1. Establishing performance standards
2. Communicating the Standards
3. Measuring Performance
4. Comparing the actual with the standards
5. Discussing the appraisal
6. Taking Corrective Action
Limitations
1. Errors in Rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives
5. Lack of knowledge
Methods of appraisal
The logical task is to identify those appraisal practices that are
(a) most likely to achieve a particular objective
(b) least vulnerable to the obstacles
Essay appraisal
In its simplest form, this technique asks the rater to write a paragraph or more covering an individual's
strengths, weaknesses, potential, and so on. In most selection situations, particularly those involving
professional, sales, or managerial positions, essay appraisals from former employers, teachers, or associates
carry significant weight.

Graphic rating scale

This technique may not yield the depth of an essay appraisal, but it is more consistent and reliable.
Typically, a graphic scale assesses a person on the quality and quantity of his work (is he outstanding, above
average, average, or unsatisfactory?) and on a variety of other factors that vary with the job but usually
include personal traits like reliability and cooperation. It may also include specific performance items like
oral and written communication.
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Field review
The field review is one of several techniques for doing this. A member of the personnel or central
administrative staff meets with small groups of raters from each supervisory unit and goes over each
employee's rating with them to
(a) identify areas of inter-rater disagreement,
(b) help the group arrive at a consensus, and
(c) determine that each rater conceives the standards similarly.

BARS (behaviourally anchored rating scales)

In this system scales are devised based on aspects of the employees’ behavior. The superior is asked to rate
the performance of the employees on the basis of these scales.

Forced-choice rating
Like the field review, this technique was developed to reduce bias and establish objective standards of
comparison between individuals, but it does not involve the intervention of a third party.

Management by objectives
To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in
some organizations are being asked to set - or help set - their own performance goals. Within the past five or
six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell on
it here.
Ranking methods
For comparative purposes, particularly when it is necessary to compare people who work for different
supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is
necessary to recognize that comparisons involve an overall subjective judgment to which a host of additional
facts and impressions must somehow be added. There is no single form or way to do this.
The best approach appears to be a ranking technique involving pooled judgment.
The two most effective methods are alternation ranking and paired comparison ranking.

Alternation ranking
Ranking of employees from best to worst on a trait or traits is another method for evaluating employees.
Since it is usually easier to distinguish between the worst and the best employees than to rank them, an
alternation ranking method is most popular. Here subordinates to be rated are listed and the names of those
not well enough to rank are crossed. Then on a form, the employee who is highest on the characteristic being
measured and the one who is the lowest are indicated. Then chose the next highest and the next lowest,
alternating between highest and lowest until all the employees to be rated have been ranked.

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Paired-comparison ranking
This technique is probably just as accurate as alternation ranking and might be more so. But with large
numbers of employees it becomes extremely time consuming and cumbersome.
Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or more people
are asked to make independent rankings of the same work group and their lists are averaged), are among the
best available for generating valid order-of-merit rankings for salary administration purposes.

360-degree feedback
Many firms have expanded the idea of upward feedback into what the call 360-degree feedback. The
feedback is generally used for training and development, rather than for pay increases.

Most 360 Degree Feedback system contains several common features. Appropriate parties– peers,
supervisors, subordinates and customers, for instance – complete survey, questionnaires on an individual.
360-degree feedback is also known as the multi-rater feedback, whereby ratings are not given just by the
next manager up in the organizational hierarchy, but also by peers and subordinates. Appropriates customer
ratings are also included, along with the element of self-appraisal. Once gathered in, the assessment from the
various quarters are compared with one another and the results communicated to the manager concerned.

Another technique that is useful for coaching purposes is Management by objectives.

Advantages
Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or
exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance.
Employees are judged according to real outcomes, and not on their potential for success, or on someone's
subjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed easily. The MBO method
recognizes the fact that it is difficult to neatly dissect all the complex and varied elements that go to make up
employee performance. MBO advocates claim that the performance of employees cannot be broken up into
so many constituent parts, but to put all the parts together and the performance may be directly observed and
measured.

Disadvantages
This approach can lead to unrealistic expectations about what can and cannot be reasonably accomplished.
Supervisors and subordinates must have very good "reality checking" skills to use MBO appraisal methods.
They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing
and self-monitoring.

Variable objectives may cause employee confusion. It is also possible that fluid objectives may be distorted
to disguise or justify failures in performance.
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Benefits of Performance Appraisals
• Measures an employee’s performance.
• Helps in clarifying, defining, redefining priorities and objectives.
• Motivates the employee through achievement and feedback.
• Facilitates assessment and agreement of training needs.
• Helps in identification of personal strengths and weaknesses.
• Plays an important role in Personal career and succession planning.
• Clarifies team roles and facilitates team building.
• Plays major role in organizational training needs assessment and analysis.
• Improves understanding and relationship between the employee and the reporting manager and also helps
in resolving confusions and misunderstandings.
• Plays an important tool for communicating the organization’s philosophies, values, aims, strategies,
priorities, etc. among its employees.
• Helps in counselling and feedback.

Rating Errors in Performance Appraisals

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as 'rating errors'.
These errors can seriously affect assessment results. Some of the most common rating errors are:
Leniency or severity: - Leniency or severity on the part of the rater makes the assessment subjective.
Subjective assessment defeats the very purpose of performance appraisal. Ratings are lenient for the
following reasons:
a) The rater may feel that anyone under his or her jurisdiction who is rated unfavorably will reflect poorly on
his or her own worthiness.
b) He/ She may feel that a derogatory rating will be revealed to the rate to detriment the relations between
the rater and the ratee.
c) He/ She may rate leniently in order to win promotions for the subordinates and therefore, indirectly
increase his/her hold over him.
Central tendency: - This occurs when employees are incorrectly rated near the average or middle of the
scale. The attitude of the rater is to play safe.

Common errors
Halo error: - A halo error takes place when one aspect of an individual's performance influences the
evaluation of the entire performance of the individual. The halo error occurs when an employee who works
late constantly might be rated high on productivity and quality of output as well as on motivation.

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Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score are given
only to certain individuals or groups based on the rater's attitude towards them and not on actual outcomes
or behaviors; sex, age, race and friendship biases are examples of this type of error.
Primacy and Regency effects: - The rater's rating is heavily influenced either by behavior exhibited by the
ratee during his early stage of the review period (primacy) or by the outcomes, or behavior exhibited by the
ratee near the end of the review period (regency).
Performance dimension order: - Two or more dimensions on a performance instrument follow each other
and both describe or rotate to a similar quality. The rater rates the first dimensions accurately and then rates
the second dimension to the first because of the proximity
Spillover effect: - This refers lo allowing past performance appraisal rating lo unjustifiably influence current
ratings. Past ratings, good or bad, result in similar rating for current period although the demonstrated
behavior does not deserve the rating, good or bad.
Performance appraisal process is incomplete without the feedback given to the employee about his appraisal
and performance. It is the responsibility of the supervisor to provide a constructive feedback to each
employee under him, justifying his performance appraisal and suggesting scope for improvements. The aim
for feedback is to encourage individuals to understand the performance measures that are available for them
to use in order to assess themselves and create a plan for their own career development.
COMPENSATION AND PAY
COMPENSATION PROCESS

Total Rewards Strategy: The six elements of total rewards include programs, practices, elements and
dimensions that collectively define an organization's strategy to attract, motivate, retain and engage
employees. These elements represent the tool kit from which an organization chooses to offer and align a
value proposition that results in satisfied, engaged and productive employees who, in turn, create desired
business performance and results. A brief description of the six elements:

Compensation: Pay provided by an employer to its employees for services rendered (i.e., time, effort, skill).
This includes both fixed and variable pay tied to performance levels.
Benefits: Programs an employer uses to supplement the cash compensation employees receive. These
health, income protection, savings and retirement programs provide security for employees and their
families.

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Work-Life Effectiveness: A specific set of organizational practices, policies and programs, plus a
philosophy that actively supports efforts to help employees achieve success at both work and home.
Recognition: Either formal or informal programs that acknowledge or give special attention to employee
actions, efforts, behavior or performance and support business strategy by reinforcing behaviors (e.g.,
extraordinary accomplishments) that contribute to organizational success.
Performance management: The alignment of organizational, team and individual efforts toward the
achievement of business goals and organizational success. Performance management includes establishing
expectations, skill demonstration, assessment, feedback and continuous improvement.
Talent development: Provides the opportunity and tools for employees to advance their skills and
competencies in both their short- and long-term careers.
Components of compensation
Fixed Pay: The nondiscretionary compensation that does not vary according to performance or results
achieved. It usually is determined by the organization's pay philosophy and structure. Also, known as
guaranteed or committed pay. Subcomponents are basic salary, allowances, medical reimbursement, medical
insurances, coupons if any and retirals like PF and Gratuity.
Variable pay: Also referred to as ‘Pay at Risk’ – is part of the compensation package that has to be earned
usually by meeting and exceeding individual, team, organization performance criteria. Variable pay instils
the following:
1. Discretionary effort
2. Links reward to performance and promotes common interests
3. Shouldering more business risks – rewarding ‘upside’ and penalizing ‘downside’ of performance
Types:
1. Short term incentive plans (Typical time interval for payout- a year): Examples:
• Gain sharing or profit-sharing plans.
• Broad-based corporate incentive plans
• Commission plans.
2. Long term incentive plans. It aims to: a. Keeping employees ‘invested’ in the performance of the
organization
b. Retention
Benefits
Programs an employer uses to supplement the cash compensation that employees receive. Benefits
supplement compensation by providing employees with a level of security related specifically to health and
welfare, retirement and time off. Benefits programs may be categorized into income-protection programs
and paid time off programs.
Recognition
Acknowledges or gives special attention to employee efforts or positive performance. It meets an intrinsic
psychological need for appreciation and can support business strategy by reinforcing certain behaviors that

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contribute to organizational success. Awards can be cash or non-cash (e.g., verbal recognition, trophies,
certificates, plaques, dinners, tickets, etc.).
Compa Ratio
Compa Ratio, short for comparison ratio, is a comparison of the salary you are paying your employees
versus the market midpoint for similar positions at other companies. Compa ratio is a useful metric to have
when setting salary levels or negotiating raises, and it helps you avoid losing talent to other companies.
A commonly accepted range for compa-ratios is 80% to 120%, which in turn can be divided into five zones,
ie:
A broad definition of each zone is therefore:
80-87% – new, inexperienced, or unsatisfactorily-performing incumbents.
88-95% – those gaining experience but not yet fully competent in the job.
96-103% – fully competent performers performing the job as defined.
104-111% – those consistently performing the job at a leveL higher than what the job definition requires.
112-120% – those universally recognized as outstanding performers, both inside and outside the
organization.”
Payroll management
Payroll is a list of employees who get paid by the company. Payroll also refers to the total amount of money
employer pays to the employees. As a business function, it involves:
Developing organization pay policy including flexible benefits, leave encashment policy, etc.
Defining payslip components like basic, variable pay, HRA, and LTA
Gathering other payroll inputs (e.g., organization’s food vendor may supply information about the amount to
be recovered from the employees for meals consumed)
The actual calculation of gross salary, statutory as well as non-statutory deductions, and arriving at the net
pay
Releasing employee salary
Depositing dues like TDS, PF, etc. with appropriate authorities and filing returns.

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JOB ANALYSIS

Job Description
Job description includes basic job-related data that is useful to advertise a specific job and attract a pool of
talent. It includes information such as job title, job location, reporting to and of employees, job summary,
nature and objectives of a job, tasks and duties to be performed, working conditions, machines, tools and
equipment to be used by a prospective worker and hazards involved in it.
Purpose of Job Description
The main purpose of job description is to collect job-related data in order to advertise for a particular job. It
helps in attracting, targeting, recruiting and selecting the right candidate for the right job.
It is done to determine what needs to be delivered in a particular job. It clarifies what employees are
supposed to do if selected for that particular job opening.
It gives recruiting staff a clear view what kind of candidate is required by a particular department or division
to perform a specific task or job.
It also clarifies who will report to whom.
Job Specification
Also known as employee specifications, a job specification is a written statement of educational
qualifications, specific qualities, level of experience, physical, emotional, technical and communication
skills required to perform a job, responsibilities involved in a job and other unusual sensory demands. It also
includes general health, mental health, intelligence, aptitude, memory, judgment, leadership skills, emotional
ability, adaptability, flexibility, values and ethics, manners and creativity, etc.
Purpose of Job Specification
Described on the basis of job description, job specification helps candidates analyse whether are eligible to
apply for a particular job vacancy or not.
It helps recruiting team of an organization understand what level of qualifications, qualities and set of
characteristics should be present in a candidate to make him or her eligible for the job opening.

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Job Specification gives detailed information about any job including job responsibilities, desired technical
and physical skills, conversational ability and much more.
It helps in selecting the most appropriate candidate for a particular job.
Job description and job specification are two integral parts of job analysis. They define a job fully and guide
both employer and employee on how to go about the whole process of recruitment and selection. Both data
sets are extremely relevant for creating a right fit between job and talent, evaluate performance and analyse
training needs and measuring the worth of a particular job.
HR ANALYTICS
Human resource analytics (HR analytics) is an area in the field of analytics that refers to applying analytic
processes to the human resource department of an organization in the hope of improving employee
performance and therefore getting a better return on investment. HR analytics does not just deal with
gathering data on employee efficiency. Instead, it aims to provide insight into each process by gathering data
and then using it to make relevant decisions about how to improve these processes.
HR analytics enables HR professionals to make data-driven decisions to attract, manage, and retain
employees, which improves ROI. It helps leaders make decisions to create better work environments and
maximize employee productivity. It has a major impact on the bottom-line when used effectively.
HR professionals gather data points across the organization from sources like:
• Employee surveys
• Telemetric Data
• Attendance records
• Multi-rated reviews
• Salary and promotion history
• Employee work history
• Demographic data
• Personality/temperament data
• Recruitment process
• Employee databases

HR leaders must align HR data and initiatives to the organization’s strategic goals. For example, a tech
company may want to improve collaboration across departments to increase the number of innovative ideas
built into their software. HR initiatives like shared workspaces, company events, collaborative tools, and
employee challenges can be implemented to achieve this goal. To determine how successful initiatives are,
HR analytics can be utilized to examine correlations between initiatives and strategic goals.
Once data is gathered, HR analysts feed workforce data into sophisticated data models, algorithms, and tools
to gain actionable insights. These tools provide insights in the form of dashboards, visualizations, and
reports. An ongoing process should be put in place to ensure continued improvement:
• Benchmark analysis
• Data-gathering
• Data-cleansing
• Analysis
• Evaluate goals and KPIs
• Create action plan based on analysis (continuously test new ideas)
• Execute on plan

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 • Streamline process

Benefits of HR Analytics:
HR analytics will move from an operational partner to a more strategic center of excellence. Companies are
now realizing company success is built on people, and HR analytics can light the way from intangible
theory-based decisions to real ROI through the following:
• Better hiring practices
• Decreased retention
• Task automation
• Process improvement
• Improved employee experience
• More productive workforce
• Improved workforce planning through informed talent development

Roadblocks to HR Analytics
The road to actionable HR analytics is not always easy. There are several challenges organizations need to
overcome so they can reap the rewards:
• Finding people with the right skillset to gather, manage, and report on the data
• Data cleansing
• Data quality
• Too much data to parse or not knowing what data is most important
• Data privacy and compliance
• Proving its worth to executive leadership
• Tying actions and insight to ROI
• Identifying the best HR technologies to keep track of the data

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