QUANTUM

UNIVERSITY
ROORKEE
ASSIGNMENT-2

Subject-Human Resource Management

Subject Code-MB4109
Program/Branch/Year:-MBA 1st Sem

Q1: What is the difference between Base compensation and supplementary compensation

Q2: Explain the following terms:

a. MBO
b. 360 degree Appraisal
c. Behavioural Anchored rating scale
d. Potential Appraisal

Q3: What do you understand by Global HR practices

Q4: What is the impact of HRM practices on organisational Performance

Q1:- What is the difference between base
compensation and supplementary compensation
Ans:- Base Compensation involves monetary benefits (in cash)
to employees in the form of wages and salaries. The term
‘wage’ is used to denote remuneration to the workers doing
physical or manual work. Wages may be based on hourly,
daily, weekly or monthly basis. But if we talk about ‘Salary’, it
is usually defined as a mean to compensate the office
employees, foreman managers and professional and technical
staff. It is generally paid on monthly or yearly basis. Wages
may be based on the number of units produced (i.e. piece
wage rate system) or the time spent on job. But salary is
always paid on the basis of time spent on the job. Both wages
and salary constitutes a significant portion of the cost of
business.
Basically, Base or primary compensation means the wage or
salary, allowances and other benefits paid in cash to
employees. It is the fixed sum of money paid as compensation
to the employees every month or year.
Components of Base Compensation:
1) Basic pay- It depends on the pay scale or salary scale of the
job. It is determined by demand for and supply of labour. For
example: pay scale of rs.10,000-rs.500 means that an
employee will get a basic pay of rs.10,000 per month and with
the increment of rs.500 annually.
2) Dearness Allowance(DA)- It is paid to the employees to
compensate them against inflation.
3) House Rent Allowance(HRA)-It is paid partly to meet the
expenditure incurred by an employee on his housing
accomodations.
4) City Compensatory Allowance(CCA)- It is paid to them to
compensate for higher cost of living in cities and it differs from
city to city.
5)Transport Allowance- It is paid to the employees to partly
meet their expenditure on transport to and from there
workplace.
6) other allowances- Some organisations also pay uniform,
food and entertainment allowances to their employees.

Supplementary compensation is also known as a fringe benefit as well as

hidden payroll. Supplementary, therefore, compensation denotes benefits over
and above their wages/salaries. Now days the organizations use supplementary
compensation over and above the base compensation. It helps in satisfying the
employees as well as retaining them for long time. It can be given in form of
various services like housing, medical, educational facility. Supplementary
compensation is also called fringe benefit as well as hidden payroll. The basic
purpose of fringe benefit is to maintain efficient human resources in the
organization and to motivate the employees.
These are the two main types of compensation.
Supplementary compensation is again divided into following types:
1) Protection against hazards supplementary compensation helps in protecting
against the hazards of illness, injury, old age, death, permanent disability.
2) Employee services: some big organizations provide housing, low-cost loan,
food, medical, and day care centre for children, educational facilities to their
employees for their services.
3) Payment for time not worked: the employees are also paid for the time they
are not working like wash up time, lunch period, vacations, holidays, sick leave
etc.
4) Legal payments: payment under this category involves unemployment; layoff
compensation, old age benefits etc.

Q2:- Explain following term

a. MBO:- Management by objectives (MBO) is strategic
management model that aims to improve the performance of an
organization by clearly defining objectives that are agreed to by
both management and employees. It is a process where the
goals of the organization are defined and conveyed by the
management to the members of the organisation with the
intention to achieve each objective. An important step in the
MBO approach is the monitoring and evaluation of the
performance and progress of each employee against the
 established objectives. Ideally, if the employees themselves
are involved in setting goals and deciding their course of
action, they are more likely to fulfill their obligations.
b. 360 degree appraisal:- A 360 degree appraisal is a type of
employee performance review in which subordinates, co-
workers, and managers all anonymously rate the employee.
This information is then incorporated into that person's
performance review. A 360-degree appraisal is a method of
performance review. In this method, different parties, from employers
to team members, analyse an employee’s performance anonymously
and provide one-on-one feedback later

c. Behavioural Anchored rating scale:- Behaviourally anchored rating

scale is a measuring system which rates employees or trainees
according to their performance and specific behavioural patterns. BARS
is designed to bring the benefits of both quantitative and qualitative data
to employee appraisal process as it mechanism combines the benefits of
narratives, critical incidents and quantified ratings. BARS is designed to
bring the benefits of both qualitative and quantitative data to the
employee appraisal process by comparing an individual’s performance
against specific examples of behaviour which are then categorized and
appointed a numerical value used as the basis for rating performance.
d. Potential Appraisal:- The potential appraisal refers to the
appraisal involving identification of the hidden talents and skills
of a person. The person might or might not be aware of them.
Potential appraisal is a future-oriented appraisal whose main
objective is to identify and evaluate the potential of the
employees to assume higher positions and responsibilities in the
organizational hierarchy .Many organizations consider and use
potential appraisal as a part of the performance appraisal
processes. Potential appraising is different from appraising
performance
.
 Q3: What do you understand by Global HR
practices
Ans. Human resources, also known as HR, is an
organizational department tasked with handling the needs of
employees. The department's functions include
compensation, recruitment, employee motivation, policy
administration, performance management, employee safety,
and training. The human resources department is an
essential tool that organizations use to gain a competitive
advantage. The human part of an organization's resources is
its most crucial asset. HR is not only limited to ensuring the
welfare of employees but also helps the organization realize
optimum productivity by having a team of committed
employees. Owing to increasing globalization, most
businesses are expanding their operations beyond their
country of origin. This development affects the scope of
human resources beyond that of a department responsible
for overseeing a small or local company. This brings in
the global human resource management concept, also
known as global HR. The department has similar
responsibilities to human resources, such as training,
development, recruiting, and hiring. Global HR handles other
duties, including dealing with different cultures and labor laws
in various geographical locations. Global human resource
management strives to establish a local appeal in the host
region while preserving an international feel.
As with human resource management for local companies, global
HR includes five major functions. However, with global human
resource management, these functions exhibit slight variations.

● Recruitment and hiring. The recruitment process involves

finding a qualified applicant who suits the position stated. The
process necessitates the understanding of the job description
and interviewing. This is then followed by hiring the best
interviewee. At the global level, there is a need to comprehend
the roles for that particular position and the skills needed for
 every region. Since education levels vary from country to
country, the differences should be considered when
determining applicants' qualifications.
● Training. Upon selection, the successful candidates must be
trained to understand how the organization runs its
operations. When the organization is multinational, it is
prudent to create resources that can be used across all
locations. This uniformity eases communication and allows
resources to be shared across all branches. Standard training
procedures also help cut costs as the same resources can be
passed to other branches.
● Developing and administration. Developing in global HR
involves offering the employees additional training to equip
them with more skills. Global businesses usually send their
employees to other countries to learn additional skills deemed
valuable for their careers. Such development can also make the
employees prosper in different countries. Administration at the
global level involves enacting policies that help bring the best
out of the workplace. Such policies can include compensation
plans and observing working hours. Human resource
administration in global business has to remain professional,
taking into account local employment laws and cultural
perspectives.
● Salary and benefits. Compensation is among the most crucial
parts of human resources operations. Companies have to
comply with local regulations concerning salaries and benefits
at the global level. Examples include the issue of minimum
wages and policies on benefits such as maternity or paternity
leave, sick days, or vacation. Rewarding employees for their
work is the goal of an HR department. Therefore, these goals
should be attained based on local standards in global HR.
● Legal and personnel relations. The last function of international
human resource management is to ensure that all the human
resource management practices comply with the laws of each
country. This includes addressing taxes, labor laws, religious
practices, cultural practices, and holidays to avoid legal trouble
or reputational damage.

Q4: What is the impact of HRM practices on

organisational Performance
Ans:- Human resource is considered the most important asset of
an organization, but very few organizations are able to fully
harness its potential. Human resource management (HRM) is
defined as composed of policies, practices and systems which
influence employees’ behaviour, attitude and performance. Paying
special attention to the HRM is an important requirement for every
organization. HRM practices and processes are part of the
management of the human resource in the organization. There are
several HRM practices which have potential to improve and
sustain the organizational performance.
Human resource is considered the most important asset of an
organization, but very few organizations are able to fully harness
its potential. Human resource management (HRM) is defined as
composed of policies, practices and systems which influence
employees’ behaviour, attitude and performance. Paying special
attention to the HRM is an important requirement for every
organization. HRM practices and processes are part of the
management of the human resource in the organization. There are
several HRM practices which have potential to improve and
sustain the organizational performance.
HRM practices can play three major roles, namely (i) building of
critical organizational capabilities, (ii) enhancing employees’
satisfaction, and (iii) improving customer and stakeholder
satisfaction. Proper HRM practices do make a difference in the
working efficiency of the organization. They enhance internal
capabilities of the organization to deal with current challenges
being faced or future challenges to be faced by the organization.
Positive HRM practices also promote the well-being of the
employees of the organization. The commitment and motivation
built through good HRM practices can lead to hard work and can
have a very big influence on the performance of the organization.
Organizations with right HRM practices can create a sustainable
and lasting capability of the organization to manage internal
performance and face external challenges. HRM practices in the
organization are to be developed so that the organization can
function smoothly and effectively. The practices are to meet the
operational requirement of the organization. The practices are also
to satisfy the statutory and regulatory requirements. The practices
are to be developed in such a manner that by implementing them,
not only the quality of work life improves in the organization, but
also the internal organizational processes improve dramatically.
HRM practices have a continuing and significant influence on the
working output of the employees. The good HRM practices in the
organization are able to cope with the challenges faced by the
organization such as an increasing number of employees,
encountering new working environments, cultures, preparing
employees foe change, restructuring and the pervasive and often
deleterious effects of the technology. Further HRM practices are
not to be static. The practices are to be continuously revised to
meet effectively the challenges thrown by the changing
environment in the organization. HRM practices leads to
enhancement in the employees’ commitment which in turn has a
positive influence on the organizational performance. The
relationship between HRM practices and the organizational
performance has been validated in various studies and surveys.
Some studies have also developed a framework for assessing the
impact.
SUBMITED TO : DEEPAK SINGHAL
SUBMITED BY : NANDINI AGRAWAL