Human Resources Management: Text notes

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

Heraklion, August 2005

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

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TABLE OF CONTENTS
OVERVIEW............................................................................................................................................2 INTRODUCTION .....................................................................................................................................5 PERSONNEL SELECTION ........................................................................................................................5 PERSONNEL ORIENTATION, PLACEMENT AND SEPARATION ...................................................................7 Orientation......................................................................................................................................7 Placement........................................................................................................................................8 Separation.......................................................................................................................................8 JOB ANALYSIS AND DESIGN ..................................................................................................................9 Job analysis.....................................................................................................................................9 Application of job information analysis........................................................................................11 Job design .....................................................................................................................................12 JOB AND PERFORMANCE APPRAISAL ...................................................................................................14 Uses of performance appraisal .....................................................................................................14 Rater biases...................................................................................................................................15 Appraisal methods ........................................................................................................................16 Implications of the appraisal process ...........................................................................................20 TRAINING ...........................................................................................................................................20 Steps to human resources training................................................................................................21
Needs assessment................................................................................................................................ 21 Training objectives ................................................................................................................................ 21 Program content .................................................................................................................................... 21

Learning principles.......................................................................................................................21 Training approaches.....................................................................................................................22
Job Rotation ........................................................................................................................................... 23 Apprenticeships and coaching............................................................................................................. 23 Lecture and Video Presentations ........................................................................................................ 23 Vestibule Training.................................................................................................................................. 24 Role Playing and Behavior Modeling.................................................................................................. 24 Case Study............................................................................................................................................. 24 Simulation............................................................................................................................................... 24 Self-Study and Programmed Learning ............................................................................................... 25 Laboratory Training ............................................................................................................................... 25 Action Learning...................................................................................................................................... 25

Evaluation of Training..................................................................................................................25 CAREER PLANNING.............................................................................................................................26 Career counselling process...........................................................................................................28 Management support ....................................................................................................................28 Career Planning and HR department ...........................................................................................29 SECURITY, SAFETY AND HEALTH ........................................................................................................29 Financial Security.........................................................................................................................29 Social Security ..............................................................................................................................30 Implications for the HR department..............................................................................................30 Workers Compensation.................................................................................................................30 Enforcement ..................................................................................................................................31 Security, safety and health rules ...................................................................................................31 UNION RELATIONS ..............................................................................................................................31 The labour management system....................................................................................................32 Unions and human resources management ..................................................................................32 Common Provisions in Union-Management Agreements .............................................................32 The challenges to human resources management.........................................................................33 WAGES AND SALARIES .......................................................................................................................34 Objectives in compensation management .....................................................................................35 Guidelines for an effective compensation .....................................................................................35 Basic topics for the HR department ..............................................................................................36 PART II – GUIDELINES FOR THE EFFECTIVE MANAGEMENT OF PEOPLE ...................37 GUIDELINES FOR OVERCOMING ORGANIZATIONAL BARRIERS TO INNOVATION ...................................37 GUIDELINES FOR EFFECTIVE LEADERSHIP ...........................................................................................40 GUIDELINES FOR EFFECTIVE COMMUNICATION...................................................................................43

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

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

Personnel selection
The selection process is a series of specific steps used to decide which recruits should be hired. The process begins when recruits apply for employment and ends with the hiring decision. Though the final hiring decision is made by the immediate supervisor or manager in many cases the HRM department evaluates applicants in regard to their potential suitability through the use of valid procedures. The process may be seen as consisting of eight discrete steps, namely: 1. Preliminary reception of applications – this is the step that brings together the organization with the applicant. The applicant has the chance to learn about the organization and the organization has the chance to provide all the necessary information about the job. Often a preliminary interview may be granted as courtesy, which helps the organization to screen out obvious misfits. 2. Employment tests – these tests are devices that assess the match between applicants and job requirements. Tests may be standardized and based on paper and pencil or may be based on exercises that simulate real working conditions. For instance, an applicant for a secretarial position may be asked to take a test on office tasks, or an applicant for the accounting department may be asked to take a test in mathematics. For higher level positions, which often involve complex tasks testing of decision making procedures and skills may be necessary and such testing may be based on real-life working conditions and performance is assessed by more than one raters. Testing assumes that the device is valid, which in turn, implies that test scores relate significantly to potential job performance or to another job-relevant criterion. Thus
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Teaching notes based on: Werther, W. B. Jr. and Davis, K. Human Resources and Personnel Management, 5th ed., Boston, Massachusetts: Irwin – McGraw-Hill, 1996.

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

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

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

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

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

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

Separation
A separation is a decision that the individual and the organization should part. It may be initiated by the employer or the employee. Separation may take many forms: temporary leave of absence, attrition, layoff and termination. − A temporary leave of absence may be based on medical, family, educational, recreational or other reasons. The organization and the individual agree on the terms of the absence. − Attrition is the normal separation of people from an organization as a result of resignation, retirement, or death. It is initiated by the individual employee, not by the company. Resignation is the most frequent form of attrition. − Layoffs entail the separation of employees from an organization for economic or business reasons. Layoff duration may vary. Layoffs may last few weeks if its purpose is to adjust inventory levels or to allow a company to retool for a new product or service. When caused by a business cycle, layoffs may last 8

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

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

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

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

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

Application of job information analysis
Results of job information analysis contribute to the formation of: (1) job descriptions, (2) job specifications and (3) job performance standards. A job description is a written statement that explains the duties, working conditions and other aspects of a specified job. A job description may include a summary, a brief overview of duties and a brief description of the working conditions. For instance the job description of a job analyst position may include the following:
Summary: Collects and develops job analysis information through interviews, questionnaires, observation, or other means. Provides other personnel specialists with needed information. Job duties: (1) Designs job analysis schedules and questionnaires. Collects job information. (2) Interacts with workers, supervisors and peers. (3) Writes job descriptions and job specifications. (4) Reports safety hazards to area manager and safety departments. (4) Verifies all information through two sources. (5) Performs other duties as assigned by supervisors.

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

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

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Experience:

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

Communication:

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

Effort factors: Physical demands: Limited to those normally associated with clerical jobs: sitting, standing and walking. Mental demands: Extended visual attention is needed to observe jobs. Initiative and ingenuity are mandatory since job receives only general supervision. Judgment must be exercised on job features to be emphasized, jobs to be studied, and methods used to collect job data. Decision-making discretion is frequent. Analyzes and synthesizes large amounts of abstract information into job descriptions, job specifications, and job standards. Working conditions: Travels to company locations within the country up to four days per month.

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

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

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

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

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

Uses of performance appraisal
Performance improvement. Performance feedback allows the employee, the manager and personnel specialists to intervene with appropriate actions to improve. Compensation adjustments. Performance evaluations help decision makers determine who should receive pay raises. Many firms grant part or all of their pay increases and bonuses on the basis of merit, which is determined mostly through performance appraisals. Placement decisions. Promotions, transfers and demotions are (or should be) usually based on past or anticipated performance. Often promotions are a reward for past performance. Training and development needs. Poor performance may indicate a need for retraining. Likewise good performance may indicate untapped potential that should be developed. Career planning and development. Performance feedback guides career decisions about specific career paths one should investigate. 14

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

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

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

Appraisal methods
Methods may be either past or future oriented. Past oriented approaches have the advantage of dealing with performance that has already occurred and to some degree can be measured. The obvious disadvantage is that past performance cannot be changed. But, when their past performance is evaluated, employees can get feedback that may lead to reviewed efforts at improved performance. Future oriented appraisals focus on future performance goals. Past oriented approaches include the following: Rating scales. This is perhaps the oldest and most commonly used form of appraisal. It requires the rater to provide a subjective evaluation of an individual’s performance along a scale from low to high. Responses may be given numerical values to allow an average score to be computed and compared. This approach is prone to several disadvantages. The rater may be biased or several criteria be omitted to make the form applicable to a variety of jobs. Checklists. The checklist method requires the rater to select words or statements that describe the employee’s performance and characteristics. Often statements may be associated with weights, which results to a weighted checklist. For instance the statement “employee works overtime when asked” may be associated with a weight value of 5.5 while the statement “employee plans actions before beginning job” may receive a weight value of 4.0. The rater checks the statements and a total by summing up over all checked items is formed. Disadvantages include susceptibility to rater’s biases, use of personality criteria instead of performance criteria, misinterpretation of checklist items, and the use of improper weights by the HRM department. Forced choice method. This approach requires the rater to choose the most descriptive statement in each pair of statements about the employee being rated. Often both statements in the pair are positive or negative. For example:
1. Learns quickly ……………………. 2. Work is reliable ……………………. 3. Absent too often ………………….. Works hard. Performance is a good example for others. Usually tardy.

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The forced choice method has the advantage of reducing rater bias because some employees must be rated as superior to others. The approach is easy to administer and fits a wide variety of jobs. However, the selected statements may not be specifically job related. Thus this method may have limited usefulness in helping employees improve their performance. Practice has demonstrated that this approached is seldom liked by either the evaluator or the employee because it provides little useful feedback. Critical incident method. This approach requires the rater to record statements that describe extremely good or bad behavior related to job performance. The statements are called critical and are usually recorded by the supervisor during the evaluation period for each subordinate. An example of a positive statement may be: “reported broken rung on utility ladder and flagged ladder as unsafe” and an example of a negative statement could be “left hose across storeroom aisle.” The critical incident method is useful for giving employees job-related feedback. In addition, it reduces the recency bias if raters record incidents throughout the rating period. Accomplishment records. This approach is closely related to the critical incident method and it is mostly used by professionals. Accomplishment records are employee-produced listings of accomplishments such as publications, speeches, leadership roles, and other professionally related activities. Behaviorally anchored rating scales. These scales denote a family of evaluation approaches that identify and evaluate job-relevant behaviors. Specific named behaviors are used to give the rater reference points in making the evaluation. The scale may focus on expectation or on observation. An example of an expectation scale that ranges between 7 (to denote extremely outstanding performance) and 1 (to denote extremely poor performance) would be the following:
Extremely outstanding performance Good performance 6 You can expect this bartender to calm down arguments before they erupt into fights. Fairly good performance 5 You can expect this bartender to use discretion about whether to continue serving intoxicated customers who are with other patrons. Acceptable performance Fairly poor performance Poor performance 2 3 4 You can expect this bartender to stop serving drinks to those who are intoxicated and alone. You can expect this bartender to make idle conversation with customers who are alone. You can expect this bartender to check identification of 7 You can expect this bartender to help customers when needed.

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young customers on their first time in the bar. Extremely poor performance 1 You can expect this bartender to pick up customer’s drinks, finished or not, with little or no warning at closing time.

An example of an observation oriented scale may be:
1. You can expect this bartender to help customers in need: Almost never 1 2 3 4 Almost always 5

2. You can expect this bartender to calm down arguments before they erupt into fights: Almost never 1 2 3 4 Almost always 5

. . .
7. You can expect this bartender to pick up customer’s drinks finished or not, with little or no warning at closing time Almost never 1 2 3 4 Almost always 5

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

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

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

Guidelines for Effective Performance Evaluation Interviews: 1. Emphasize positive aspects of employee performance. 2. Tell each employee that the evaluation session is to improve performance, not to discipline. 3. Conduct the performance review session in private with minimum interruptions.

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

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

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Steps to human resources training
To receive the benefits of successful training, HR specialists and managers must assess the needs, objectives, content and learning principles associated with training. Once objectives are set, the specific content and learning principles are considered. Needs assessment Needs assessment diagnosis current problems and future challenges to be met through training. It must consider each person and the individual employee’s needs may be determined by the HR department, by supervisors, or by self – nomination. To pinpoint the range of training needs and define their content, the HR department uses different approaches to needs assessment. It may survey potential trainees to identify specific topics about which they want to learn more. This approach presumes that those surveyed know what training they need. Another HR-led approach is task identification. Trainers begin by evaluating the job description to identify the salient tasks the job requires. Then, once they have an understanding of those tasks, specific plans are developed to provide the necessary training so that job incumbents can perform the tasks. Trainers are also alert to other sources of information that may indicate a need for training. Production records, quality control reports, grievances, safety reports, absenteeism, turnover statistics and exit interviews of departing employees may reveal problems that should be addressed through training efforts. Training objectives Needs result in training objectives, which should state the desired behavior and the conditions under which it is to occur. These stated objectives then become standards against which individual performance and the program can be measured. If the objectives are not met, failure gives the HR department feedback on the training program and the participants. Program content The program’s content is shaped by the needs assessment and the learning objectives. The objective may be to teach specific skills, provide needed knowledge, or try to influence attitudes. Whatever its content, the program must meet the needs of the organization and the participants. If the company’s goals are not furthered, resources are wasted. Participants must view the content as relevant to their needs or their motivation to learn may be low.

Learning principles
Ideally, training is more effective when the training methods match the learning styles of the participants and the types of jobs needed by the organization. From studies of learning, however, researchers have sketched a broad picture of the learning process and have developed some tentative learning principles. 21

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

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

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Job Rotation To cross-train employees in a variety of jobs, some trainers move a trainee from job to job. Each move normally is preceded by job instruction training. Besides giving workers variety in their jobs, cross-training helps the organization when vacations, absences, downsizing, or resignations occur. Learner participation and high job transferability are the learning advantages of job rotation. Though rotation is most often associated with hourly employees, it can be used for jobs on many levels within the organization. Each of these programs seeks to give employees exposure to a variety of assignments. Among hourly employees, job rotation is an effective way to train workers and give management greater flexibility in making job assignments. Among managerial, technical, and professional employees, job rotation can provide a broader perspective, often developing these employees for potential career advancement. Apprenticeships and coaching Apprenticeships involve learning from a more experienced employee or employees, though it may be supplemented with off-the-job classroom training. Assistantships and internships are similar to apprenticeships because they use high levels of participation by the trainee and have high transferability to the job. Coaching is similar to apprenticeships because the coach attempts to provide a model for the trainee to copy. Most companies use coaching. It tends to be less formal than an apprenticeship program because there are few formal classroom sessions and because it is provided when needed rather than being part of a carefully planned program. Coaching is almost always handled by the supervisor or manager, not by the HR department. Sometimes a manager or another professional takes an interest and plays the role of mentor, giving both skills and career advice. Participation, feedback, and job transference are likely to be high in this form of learning. Assignments to task forces or committees may help develop people in much the same way that apprenticeships and coaching do. Through periodic staff meetings or work with task forces and committees, a manager develops interpersonal skills, learns to evaluate information, and gains experience in observing other potential models. Lecture and Video Presentations Lecture and other off-the-job techniques tend to rely more heavily on communications than on modeling. Lecturing is a popular approach because it offers relative economy. However, participation, feed back, transference, and repetition are often low. Feedback and participation can be improved when discussion is permitted along with the lecture process. Television, films, slides, and filmstrip presentations are similar to lectures. The growth of video presentations has been encouraged the use of satellite

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communications to bring courses into the work site, particularly in engineering and other technical fields. Vestibule Training To keep instruction from disrupting normal operations, some organizations use vestibule training. Separate areas or vestibules are set up with equipment similar to that used on the job. This arrangement allows transference, repetition, and participation. Meaningful organization of materials and feedback are also possible. Role Playing and Behavior Modeling Role playing is a device that forces trainees to assume different identities. For example, a male worker may assume the role of a female supervisor and a female supervisor may assume the role of a male worker. Then both may be given a typical work situation and told to respond as they would expect the other to do. Usually participants exaggerate each other's behavior. Ideally, they get to see themselves as others see them. The experience may create greater empathy and tolerance of individual differences and is therefore well suited to diversity training, which aims to create a work environment conducive to a diverse workforce. This technique is used to change attitudes, for example, to improve racial understanding. It also helps develop interpersonal skills. Although participation and feedback are present, the inclusion of other learning principles depends on the situation. Employees may learn a new behavior through modeling by observing a new behavior and then imitating it. Case Study By studying a case situation, trainees learn about real or hypothetical circumstances and the actions others take under those circumstances. Besides learning from the content of the case, a person can develop decision-making skills. When cases are meaningful and similar to work-related situations, there is some transference. There also is the advantage of participation through discussion of the case. Feedback and repetition, though, are usually lacking. Research indicates that this technique is most effective for developing problem-solving skills. Simulation Simulation exercises come in two forms. One involves a mechanical simulator that replicates the major features of the work situation. Driving simulators used in driver's education programs are an example. This training method is similar to vestibule training, except that the simulator more often provides instantaneous feedback on performance. Computer simulations are the other form. For training and development purposes, this method often comes in the form of games. Players make a decision, and the computer determines the outcome in the context of the conditions under which it was programmed. This technique is used most commonly to train managers, who otherwise might have to use trial and error to learn decision making.

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Self-Study and Programmed Learning Carefully planned instructional materials can be used to train and develop employees. These materials are particularly helpful when employees are dispersed geographically or when learning requires little interaction. Self-study techniques range from manuals to prerecorded cassettes or videotapes. Several learning principles are included in this type of training. Programmed learning materials are another form of self-study. Usually these are computer programs or printed booklets that contain a series of questions and answers. After reading and answering a question, the reader gets immediate feedback. If right, the learner proceeds; if wrong, the reader is directed to review the accompanying materials. Of course, computer programs with visual displays may be used instead of printed booklets. Programmed materials provide learner participation, repetition, relevance, and feedback, however. Illiteracy, whether in industrialized or developing nations, limits the feasibility of this approach, especially among entry-level employees. Laboratory Training Laboratory training is designed to enhance interpersonal skills. It too can be used to develop desired behaviors for future job responsibilities. Participants seek to improve their human relations skills by better understanding themselves and others. This involves sharing experiences and examining the feelings, behaviors, perceptions, and reactions that result. Usually a trained professional serves as a facilitator. The process relies on participation, feedback, and repetition. A popular form of laboratory training is sensitivity training, which seeks to increase a person's sensitivity to the feelings of others. Action Learning Action learning takes place in small groups that seek a solution to a real problem confronting the organization, aided by a facilitator who is either an outside consultant or a member of the firm's in-house staff. The group's focus on the problem becomes a learning vehicle as the members explore solutions, drawing on the facilitator to provide guidance in group, problem-solving, and other problem-related matters. Training and development needs emerge and are often self-evident when the group is stumped technically or procedurally. Action learning focuses on learning new behaviors, while lectures and video presentations target knowledge and role playing and sensitivity training addresses feelings.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Part II – Guidelines for the effective management of people*
Guidelines for overcoming organizational barriers to innovation
Innovation is a term that describes certain activities by which societies improve their productivity, standard of living and economic status. Basic to the progress of innovation are the tools, discoveries and techniques of science and technology. Obviously, innovation cannot be completely controlled or programmed since contributing actions and motivational forces do not lend themselves to detailed planning. But if innovation cannot be fully controlled, there are ways in which management can help it along. Factors shaping the direction and rate of the innovative process are listed below. A. Factors related to motivational influences: 1. Recognition of scientific opportunity for the timely acquisition of new fundamental knowledge. 2. Recognition of technical opportunity for the timely resolution of a product-, or process-related problem or need. 3. Recognition of need for solving the problem or meeting the need satisfied by the eventual innovation. B. Factors related to actions taken consciously by management. 1. Management venture decision by an organization to invest in some R&D activity. This activity need not be directly related to the resulting innovation. 2. Availability of funding (existence rather than extent) to conduct directly related effort that may influence management decisions 3. Direct management support by immediate supervisors within the performing organization in terms of taking a personal interest and facilitating the work performed. 4. Formal Market Analysis to determine economic feasibility through potential market estimates. C. Factors related to aspects of the effort itself. 1. Prior demonstration of technical feasibility to establish the practicability of further development or the utility of further research. 2. Extent of competing demands limiting time devoted to the development of the innovation.
From: Kontaratos, A. (1984). The Process of Management. Unpublished Manuscript. Washington, DC: The George Washington University.
*

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*

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

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

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

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

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

Performance driver measures
1. Access to business information to facilitate decision making 2. Adherence by the workforce to core values, such as cost consciousness 3. Average change in performance appraisal rating over time 4. Change in employee mind set 5. Climate surveys 6. Consistency and clarity of messages from top management and from HR 7. Customer complaints/praise 8. Customer satisfaction with hiring process 9. Degree of financial literacy among employees 10. Degree to which a "shared mind-set" exists 11. Diversity of race and gender by job category 12. Effectiveness of information sharing among departments 13. Effectiveness of performance appraisal processes for dealing with poor performers 49

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

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

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