About the Author

Prof Dr.C.Karthikeyan, is a professor, and an alumnus of IIM-A, and currently Director for
leading B-Schools with 24 years of HR experience. He received his doctorate in HR area, and
leads as a Director for the leading B-School in Kerala. He is also a leading specialist in
Insititutional development and strategist for quality accreditations.
He is a research guide for 5 different universities in India, and had been a consultant to many
Industiies in the area of stratiegic alliances and Strategic HR. 5 Ph.Ds are in progress under his
able guidance and one person Is already awarded with Ph.D under his guidance.
He has received honours and awards for his contribution to the growth of institutions under his
leadership and had been leading as an example in terms of strengthening the institutional quality.
He has been awarded as Best Performer for his academic contribtutions as well as star performer
certificates which show cased his efficiency levels.
He has various publications in International journals and is also a reviewer, editor and board
member for various journals of repute.

1
 PREFACE
This book prepares students of management who specializes in HRM, or HR related subjects,
HR practitioners, Researchers in HR, and includes the dynamic concepts of newer HR paradigms
happening across the world, and also caters to the syllabus for BBA and MBA of all the leading
Indian Universitities specifically to Anna University, Bharathiar University, Kerala University,
Calicut University, and other Indian Universities
This concepts in this book will prepare all HR professionals who are evolving into a higher level
professionals who can use this book for their challenging and rewarding career. The readers can
apply these concepts in their day to day HR functions to have effective practical advancements in
their career.
Who will benefit from this Book
All students and practitioners of HR management and practioners of HR at various levels in any
kind of organization will benefit form learning to manage Human Resources. This includes all
the students, faculties in colleges and universities, and those who already have HRM and want
to become more effective and other professionals who want an improved understanding of
managing human resource. This book also fits to the non-business organization like the non-
government organizations (NGOs), Government Organisations, Health Care Administrative HR
Professionals, and non-profit enterprises. The HR functions though occasionally are dynamic as
well intriguing, the basics remain the same related the Human nature. The dynamics of HR are
now more glocalised in nature as the culture and work practices are almost multicultural and
multinational in nature, and hence updating of newer and practically evolving HR practices are
required for the HR managers, and this Advances in HRM will definitely fit in. The dynamism
in the newer paradigms will soon become the secondary skill for the practicing as well as
budding HR practioners.
Organisation of the Book
The concepts about HR management is classified according to the functions and applications that
are now applied in contemporary HR organizations across the world.
There are some of the new topics in this book like;
There are new and expanded features in this book like;
Learning Assistance;
The dynamics and newer paradigms, that has led to the advances in HRM and its associated
model on the inside of the book cover gives an overview of the book content.
Each chapter begins with learning objectives and concludes with a summary, key ideas, and
concepts for review, and discussion questions. The purpose of the new section
“Exercises/Action Steps” is to elicit readers’ involvement.

2
 Acknowledgements
After completing almost two and half decades with interaction with different kind of human
beings, by virtue of travelling across the country and working in various kinds of organizations
with various work cultures, I first of all thank the almighty for having blessed me in giving those
coveted learning trails in life, as life itself is a journey of experiences and so is this book coined
and not simply meant for reading for examination.
I am indebted to so many persons that a complete acknowledgement would become
encyclopedic.
Many scholars, writers, and managers are acknowledged through references in the text. Many
HR leaders with whom I worked have contributed by their contributions and leading by example.
Thousands of employees in various states in various capacities have honoured me with their
ideas and cooperating with me to experiment and train during their tenure with me as a employee
as well as colleagues in the executive training classes and lectures of mine. To all the HR
executives with whom I had the privilege to work as Director /or Heading a Project was very
vital for contributing ideas to formulate it as a book.
Many colleagues, scholars, managers, students of Ph.D, M.B.A, and other executive training had
sharpened me and my thinking to contribute those as ideas and later into a book. I am indebted
to my wife, son, father and mother in law, sisters, brothers, cousins and other friends who had
been consistent in inspiring me to write.
To the reviewers and the publishers who reviewed and made many valuable suggestions in many
important ways whom I could not name here, and their contributions have been important for this
edition.
I wish to thank the ………..publishers and finally, to my radhi and rajieth.
Karthikeyan Chellappan

3
 TABLE OF CONTENTS

Chapter 1 - GROWTH AND DEVELOPMENTS OF HRM TO HUMAN

RESOURCE CAPITAL

Human resource management

HRM Core Functions

Earlier Theoretical Developments

HR Evolving as a Specialised Discipline of Study

Human Resource Management aligning with Business function (Modern Era)

HRM Developing into a career

Virtual Human Resources (E-HR)

E-Recruiting

HRIS (Human Resource Information System)

Evolving Professional HR associations

Human relations movement

Mayo's Contribution to Human Relations

The Revolutionary Contributions to Modern HRM practices

The Human Problems of an Industrialized Civilization and Its Addressing

Humanistic theories of self-actualization

Society for Human Resource Management

The Evolution of Collective bargaining towards HRM

Gary Becker and his Contributions with Human Capital to HRM

4
Dave Ulrich and his contributions to HRM to Human Capital

Leadership Concepts and its Contributions to H-Resoruces to H-Capital

B.F Skinner and his Contributions to HR to Human Capital

Ontological-phenomenological model

Developments in culture Studies and Its Contribution:

Passive/defensive cultures and its Contributions to HRM

CHAPTER 2 - LABOUR LEGISLATIONS AND ITS CONTRIBUTIONS TO

GROWTH OF HR

Individual labour law

Trade unions

Workplace participation

Collective action

International labour law

International Labour Organization

Work in multiple countries

Inter-National labour laws

Strategies that Contributed to HR to Human Capital

Human resource management of expatriate employees

Flexpatriates and Other Arrangements

Mergers and acquisitions

CHAPTER 3 - EVOLUTION OF DIFFERENT PROFESSIONAL MOVEMENTS

FROM HR TO HUMAN CAPITAL

Bradford Factor

Disability rights legislation

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Competency-based management;

Connecting CBM to Organizational Execution

E-HRM

HRHIS

Job analysis

Functional job analysis (FJA)

The Fleishman Job Analysis System (F-JAS)

Knowledge, skills, abilities and other characteristics (KSAOs)

Job Analysis at the Speed of Reality (JASR

CHAPTER 4- STRATEGIC HUMAN RESOURCE PLANNING

Tools and Technologies of SHRP

Theories of Strategic Human resource Management

Resource dependency theory

Applicant tracking system

Human Resources Manager Skills and Qualification

Developing HR Policies

Formulation

Financial Impact

Human resource accounting

Replacement cost approach

Model on human resource accounting

Human Resource Audit

6
Valuation of human resource management

HRIS software

Crowd sourcing

CHAPTER 5- STRATEGIC HUMAN RESOURCE PLANNING AND

IMPLEMENTATION

Tools and Technologies of SHRP

Theories of Strategic Human resource Management

Resource dependency theory

Competencies and Talent Management

Current Application of Talent Management

Workforce Analytics Approach

Talent management system

Enterprise systems integration

Tools and Technologies of S HRP

CHAPTER -6- Training and development

Benefits of Training & Development

Strategic sourcing

Sourcing optimization

Resource dependence theory

Succession analysis

FACTORS AFFECTING HR DEMAND FORECASTING

JOINT-VENTURE, MERGERS, ACQUISITIONS AND EXPANSIONS

e Recruitment and Job Portals

7
Employee Selection

Applicant tracking system

Candidate submittal

Personality–job fit theory

Induction Programme

Employee exit management

TPI-theory

On boarding

Jones' model (1986)

Training and development

Observational learning

Job Mentoring

Computer-Based Training (CBT)

Leadership development

Executive education

Personal development

CHAPTER 7-PSYCHOLOGY AND ITS CONTRIBUTIONS

Self-awareness

Developmental stages

The social world

Reflected appraisals

Social context and self-evaluation

Human Potential approach to Skills

8
Human Potential Movement (HPM)

Knowledge management

CHAPTER 1

GROWTH AND DEVELOPMENTS OF HRM TO HUMAN RESOURCE CAPITAL

Human resource management

Human resource management (HRM or simply HR) is the management of human resources in
organizations to maximize employee performance in service of an employer's strategic
objectives. HR is primarily concerned with the management of people within organizations,
focusing on policies and on systems. HR departments in organizations typically undertake a
number of activities, including employee benefits design, employee recruitment, "training and
development", performance appraisal, and rewarding (e.g., managing pay and benefit systems).
HR also deals with organizational change including industrial relations, like the balancing of
organizational practices with requirements arising from collective bargaining, and governmental

9
regulations changing from time to time. According to R. Buettner, HRM covers the following
core areas:

➢ job design and analysis,

➢ workforce planning,
➢ recruitment and selection,
➢ training and development,
➢ performance management,
➢ compensation (remuneration), and
➢ legal issues.

How it started

Human Resoruces is an outcome of the human relations movement of the early 20th century, The
beginning was initiated by researchers who were documenting ways of creating business value
through the strategic management and was initially was lead by transactional work, such as
payroll and benefits administration. When globalization began, with the process of company
consolidation with technological advancements, the further research on strategic initiatives like
mergers, acquisitions, talent management, succession planning, industrial relations, diversity and
Inclusiveness gained its prominence.

Human Resources usually focus on maximizing employee productivity, the HR professionals

manage the human capital of an organization, by implementing policies and processes.

HRM specialists mainly focus on recruiting, training, employee relations or benefits. The
Recruiting specialists involves in finding and hiring top talent, while Training and development
professionals ensure employees training and also concentrate on continuous development
through training programs.

Performance evaluations, reward programs, employee relations deals with compensation

structures, family leave programs, discounts and other benefits that employees can avail. The
Human Resources Generalists could work in all areas or be labor relations representatives
working with unionized employees.

Human resource management core functions

According to Mondy and Mondy, human resource management has five core functions which
are:

➢ Staffing

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 ➢ Human resource development
➢ Compensation and benefits
➢ Safety and health
➢ Employee and labor relations

Human resources management activities

A Human Resources Manager has several functions in a company:

➢ Determine needs of the staff.

➢ Determine to use temporary staff or hire employees to fill these needs.
➢ Recruit and train the best employees.
➢ Supervise the work.
➢ Harmonize relationship between company and workers.
➢ Manage employee relations, unions and collective bargaining.
➢ Prepare employee records and personal policies.

➢ Ensure high performance.

➢ Manage employee payroll, benefits and compensation.

➢ Ensure equal opportunities.

➢ Deal with discrimination.
➢ Deal with performance issues.
➢ Ensure that human resources practices conform to various regulations.
➢ Push the employee's motivation.
➢ Focus on individual who posses energy and capabilities to ensure the job done through
people to achieve results.

Earlier Theoretical Developments in Human Resources

The Human Resources field evolved first in 18th century Europe from a simple idea by Robert
Owen and Charles Babbage during the industrial revolution. They realised that people were
crucial to the success of an organization and expressed that the wellbeing of employees led to
perfect work. Without healthy workers, the organization would not survive. HR later emerged as
a specific field in the early 20th century, influenced by Frederick Winslow Taylor (1856-1915).
Taylor explored what he termed "scientific management" others later referred to "Taylorism",
striving to improve economic efficiency in manufacturing jobs. He eventually keyed in on one of
the principal inputs into the manufacturing process—labor—sparking inquiry into workforce
productivity. Later England C S Myers, inspired by unexpected problems among soldiers which
had alarmed generals and politicians in the First World War, set up a National Institute of
Industrial Psychology, which led to the human relations movement, Elton Mayo and others
through the Hawthorne studies (1924-1932) found how stimuli, unrelated to financial
compensation and working conditions, could yield more productive workers. Later the
advancements came from the work by Abraham Maslow (1908-1970), Kurt Lewin (1890-1947),
Max Weber (1864-1920), Frederick Herzberg (1923-2000), and David McClelland (1917-1998),
forming the basis for studies in industrial and organizational psychology, organizational behavior

11
and organizational theory, was interpreted in such a way as to further claims of legitimacy for an
applied discipline.

HR Evolving as a Specialised Discipline of Study

The strategic workforce management, changes in the business landscape (à la Andrew Carnegie,
John Rockefeller) and in public policy (à la Sidney and Beatrice Webb, Franklin D. Roosevelt
and the New Deal) transformed the employer-employee relationship, and the discipline was
formalized as "industrial and labor relations".

The year 1913, saw the growth of the Chartered Institute of Personnel and Development, came
up in England as the Welfare Workers' Association, then changed as the Institute of Industrial
Welfare Workers, and again the next decade to Institute of Labour Management .

Likewise in the United States, the world's first institution of higher education dedicated to
workplace studies as the School of Industrial and Labor Relations, evolved at at Cornell
University in 1945. In 1948, the Society for Human Resource Management (SHRM) was
founded as the American Society for Personnel Administration (ASPA). The then Soviet Union,
exercised "HR Department" equivalent in the Bolshevik Party, its Orgburo, demonstrated the
effectiveness and influence of human-resource policies and practices.

The later 20th century saw the decline in union membership while workforce
management continued to expand its influence within organizations. In the USA, the phrase
"industrial and labor relations" came into use to refer specifically to issues concerning collective
representation, and many companies began referring to the proto-HR profession as "personnel
administration”.

Existing HR practices has a trace to the 1950s in the areas of talent developmnet and
talent retention, and in the 20th century, advances in transportation and communications greatly
facilitated workforce mobility and collaboration and the corporations began viewing employees
as assets rather than as cogs in a machine.

"Human resources management" thus became a separate funcitonal component in an

organisation and even the ASPA changed its name as “ Society for Human Resource
Management (SHRM) in 1998. "Human capital management" is sometimes used synonymously
with HR, although human capital typically refers to a more narrow view of human resources; i.e.,
the knowledge the individuals embody and can contribute to an organization. Likewise, other
terms sometimes used to describe the field include "organizational management", "manpower
management", "talent management", "personnel management", and simply "people
management".

Human Resource Management aligning with Business function (Modern Era)

Dave Ulrich lists the functions of HR to aligning the HR functions to business strategy, re-
engineering organization processes, listening and responding to employees, and managing
transformation and change.

12
At the macro-level, HR oversees organizational leadership and culture. HR also ensures
compliance with employment and labor laws, which differ by geography, and often oversees
health, safety, and security. Consequently, HR, usually through representatives, engages in
lobbying efforts with governmental agencies to further its priorities.

To look at Human Resource Management more specifically, it has four basic functions: staffing,
training and development, motivation and maintenance. Staffing is the recruitment and selection
of potential employees, done through interviewing, applications, networking, etc. Training and
development is the next step in a continuous process of training and developing competent and
adapted employees. Motivation is key to keeping employees highly productive. This function can
include employee benefits, performance appraisals and rewards. The last function of
maintenance involves keeping the employees' commitment and loyalty to the organization.The
discipline may also engage in mobility management, especially pertaining to expatriates; and it is
frequently involved in the merger and acquisition process. HR is generally viewed as a support
function to the business, helping to minimize costs and reduce risk.

HRM developing into a Career

The Chief HR Officer or HR Director is the highest ranking HR executive in most companies
and typically reports directly to the Chief Executive Officer and works with the Board of
Directors on CEO succession. Within companies, HR positions generally fall into one of two
categories: generalist and specialist. Generalists support employees directly with their questions,
grievances, and work on a range of projects within the organization. They "may handle all
aspects of human resources work, and thus require an extensive range of knowledge. The
responsibilities of human resources generalists can vary widely, depending on their employer's
needs." Specialists, conversely, work in a specific HR function. Some practitioners will spend an
entire career as either a generalist or a specialist while others will obtain experiences from each
and choose a path later.

Virtual Human Resources (E-HR)

Informatio Technology with its significant impact on human resources practices is changing HR
into a more technology based profession, and utilizing technology makes information more
accessible to the whole organization, eliminates time doing administrative tasks, allows
businesses to function globally and cuts costs. Information technology has improved HR
practices in the following areas:

E-Recruiting

Recruiting is done by using information technology unlike past where recruiters had relied on
printing in publications and word of mouth to fill open positions. HR professionals were not able
to post a job in more than one location and did not have access to millions of people, causing the
lead time of new hires to be drawn out and tiresome. With the use of e-recruiting tools, HR
professionals can post jobs and track applicants for thousands of jobs in various locations all in
one place. Interview feedback, background and drug tests, and onboarding can all be viewed
online. This helps the HR professionals keep track of all of their open jobs and applicants in a

13
way that is faster and easier than before. E-recruiting also helps eliminate limitations of
geographic location. Jobs can be posted and seen by anyone with internet access. In addition to
recruiting portals, HR professionals have a social media presence that allows them to attract
employees through the World Wide Web. On social media they can build the company's brand
by posting news about the company and photos of fun company events.

Human Resources Information Systems (HRIS)

Human resources professionals generally process a considerable amount of paperwork on a daily

basis. This paperwork could be anything from a department transfer request to an employee's
confidential tax form. In addition to processing this paperwork, it has to be on file for a
considerable period of time. The use of Human Resources Information Systems (HRIS) has
made it possible for companies to store and retrieve files in an electronic format for people
within the organization to access when needed. This eliminates thousands of files and frees up
space within the office. Another benefit of HRIS is that it allows for information to be accessed
in a timelier manner. Instead of HR professionals having to dig through files to gain information,
it is accessible in seconds via the HRIS. Having all of the information in one place allows
professionals to analyze data quicker and across multiple locations, as the information is in a
centralized location. Examples of some Human Resources Information Systems are PeopleSoft,
MyTime, SAP, Timeco, and JobsNavigator.

Training

Technology helps human resources professionals to train new staff members and gives
employees the ability to access onboarding and training programs from anywhere. This
eliminates the need for trainers to meet with new hires face to face when completing necessary
paperwork to start. Training in virtual classrooms makes it possible for the HR professionals to
train a large number of employees quickly and to assess their progress through computerized
testing programs. Some employers even incorporate an instructor with virtual training so that
new hires are receiving the most vital training. Employees can take control of their own learning
and development by engaging in training at a time and place of their choosing, helping them
manage their work-life balance. Managers are able to track the training through the internet as
well, which helps to reduce redundancy in training and training costs. Skype, virtual chat rooms,
and interactive training sites are all resources that enable a more technological approach to
training to enhance the experience for the new hire.

Evolving Professional HR associations

There are a number of professional associations, some of which offer training and certification.
The Society for Human Resource Management, which is based in the United States, is the largest
professional association dedicated to HR, with over 250,000 members in 140 countries. It offers
a suite of Professional in Human Resources (PHR) certifications through its HR Certification
Institute. The Chartered Institute of Personnel and Development, based in England, is the oldest
professional HR association,with its predecessor institution being founded in 1918.Several
associations also serve niches within HR. The Institute of Recruiters (IOR) is a recruitment
professional association, offering members education, support and training. WorldatWork

14
focuses on "total rewards" (i.e., compensation, benefits, work life, performance, recognition, and
career development), offering several certifications and training programs dealing with
remuneration and work-life balance. Other niche associations include the American Society for
Training & Development and Recognition Professionals International.A largely academic
organization that is relevant to HR is the Academy of Management that has an HR division. This
division is concerned with finding ways to improve the effectiveness of HR. The Academy
publishes several journals devoted in part to research on HR, including Academy of Management
Journal and Academy of Management Review, and it hosts an annual meeting.

Human relations movement

Human relations movement refers to the researchers of organizational development who study
the behaviour of people in groups, in particular workplace groups and other related concepts in
fields such as industrial and organizational psychology. It originated in the 1930s' Hawthorne
studies, which examined the effects of social relations, motivation and employee satisfaction on
factory productivity. The movement viewed workers in terms of their psychology and fit with
companies, rather than as interchangeable parts, and it resulted in the creation of the discipline of
human resource management.

Mayo's work

Elton Mayo stressed the following:

➢ The power of natural groups, in which social aspects take precedence over functional
organizational structures.
➢ The need for reciprocal communication, in which communication is two way, from
worker to chief executive, as well as vice versa.
➢ The development of high quality leadership to communicate goals and to ensure effective
and coherent decision making.
➢ It has become a concern of many companies to improve the job-oriented interpersonal
skills of employees. The teaching of these skills to employees is referred to as "soft and
skills" training. Companies need their employees to be able to successfully communicate
and convey information, to be able to interpret others' emotions, to be open to others'
feelings, and to be able to solve conflicts and arrive at resolutions. By acquiring these
skills, the employees, those in management positions, and the customer can maintain
more compatible relationships.

Mayo's Contribution to Human Relations

Mayo's work is considered to be the counterpoint of Taylorism and scientific management.

Taylorism, founded by F. W. Taylor, sought to apply science to the management of employees in
the workplace in order to gain economic efficiency through labour productivity. Elton Mayo's

15
work has been widely attributed to the discovery of the 'social person', allowing for workers to be
seen as individuals rather than merely robots designed to work for unethical and unrealistic
productivity expectations. However, this theory has been contested, as Mayo's purported role in
the human relations movement has been questioned. Taylorism attempted to justify scientific
management as a holistic philosophy, rather than a set of principles, while the human relations
movement worked parallel to the notion of scientific management. The aim was to address the
social welfare needs of workers and elicit their co-operation as a workforce. The widely
perceived view of human relations is said to be one that completely contradicts the traditional
views of Taylorism, while the scientific management tries to apply science to the workforce.

The definition of human relations states that the Organisation should treat workers as
individuals, with individual needs. In doing so, employees are supposed to gain an identity,
stability within their job and job satisfaction, which in turn make them more willing to co-
operate and contribute their efforts towards accomplishing organisational goals.

The human relations movement supports the primacy of organizations to be attributed to

natural human groupings, communication and leadership. However, the conventional depiction
of the human relations 'school' of management, rising out of the ashes of scientific management
is argued to be a rhetorical distortion of events. Firstly, it has been argued that Elton Mayo's
actual role in the human relations movement is controversial and although he is attributed to be
the founder of this movement, some academics believe that the concept of human relations was
used well before the Hawthorne investigations, which sparked the human relations movement.
Bruce and Nyland (2011) suggest that many academics preceded Mayo in identifying a concept
similar to that of the human relations movement even going as far to suggest that the output and
information collected by the Hawthorne investigations was identified well before Mayo by
Taylor.[3] In addition, Wren and Greenwood (1998) argue that Taylor made important
contributions to what inspires human motivation, even though his ultimate findings were
somewhat different from the human relations movement. Another name which has been
attributed to pre-existing human relations ideas is that of Henry S. Dennison. The one time
president of the Taylor Society has been linked to both Taylorist principles as well human
relation ideals thus creating a nexus between Taylorism and human relation thought. Dennison
demonstrated an activist concern both with the rationale and character of workers, and with the
control and management undertaken by managers of the business enterprise. In order to assess
the validity of human relations as a benchmark for rights within the workplace, the contribution
of Taylorism in comparison to human relations must be established. Taylorism and scientific
management entailed to be a "complete mental revolution" and as Taylor explained, Taylorism
sought to encourage managers and labourers to "take their eyes off of the division of the surplus
as the important matter, and together turn their attention toward increasing the size of the
surplus." This notion of management appealed to the employer as it addressed organisational
problems, inefficiencies and adverse employer-employee relations. Scientific management aimed
to use science and qualitative data in the selection of employees and facilitate the use of
employee databases and performance reviews. Firstly, scientific management aimed to reduce
inefficiency through studying the time and motions in work tasks. The object of time studies was
to determine how fast a job should and could be done. Secondly, Taylor purported to introduce
specific quantitative goals to individual employees in order to provide challenging time restraints
and thus increasing productivity. Most importantly, Taylor sought to increase productivity

16
through organization of behaviour.The theoretical goals of human relations were no different
from those of Taylorism. In essence, both view points sought to make the workplace a more
efficient and worker-friendly place. Although some more specific goals and outcomes of each
movement were different, each, broadly speaking, aimed to advance the workplace and create a
coherent group of individuals, while still maintaining a hierarchical system with managers in
control. The notion of Taylorism was supportive of improvement in pay and conditions in
workplaces under the proviso that workers were paid in accordance to their output. However,
human relations claimed to eliminate such calls entirely suggesting radical and maybe even
unrealistic ideas.

The Revolutionary Contributions to Modern HRM practices

Elton Mayo

George Elton Mayo (26 December 1880 – 7 September 1949) was an Australian born
psychologist,[1][2][3] industrial researcher, and organizational theorist.[4][5] Mayo was formally
trained at the University of Adelaide, acquiring a Bachelor of Arts Degree graduating with First
Class Honours, majoring in philosophy and psychology,[4] and was later awarded an honorary
Master of Arts Degree from the University of Queensland (UQ).While in Queensland, Mayo
served on the University's war committee and pioneered research into the psychoanalytic
treatment of shell-shock. As a psychologist Mayo often helped soldiers returning from World
War I recover from the stresses of war and with a Brisbane physician, pioneered the
psychoanalytic treatment of shell-shock and conducted psycho-pathological tests. He was a
lecturer in psychology and mental philosophy at the UQ between 1911 and 1922, when he sailed
to the United States. In 1926 he was appointed to the Harvard Business School (HBS) as a
professor of industrial research. In Philadelphia he conducted research at a textile plant in order
to develop a method to reduce the very high rate of turnover in the plant. Mayo's association with
the Hawthorne studies as well as his research and work in Australia led to his enjoying a public
acclaim granted to few social scientists of his day.Mayo has been credited with making
significant contributions to a number of disciplines, including business management, industrial
sociology, philosophy, and social psychology. His field research in industry had a significant
impact on industrial and organizational psychology. According to Trahair, Mayo "is known for
having established the scientific study of what today is called organizational behavior when he
gave close attention to the human, social, and political problems of industrial civilization."
(p. 15). Mayo's work helped to lay the foundation for the human relations movement. He
emphasized that alongside the formal organization of an industrial workplace there exists an
informal organizational structure as well. Mayo recognized the "inadequacies of existing
scientific management approaches" to industrial organizations, and underlined the importance of
relationships among people who work for such organizations. His ideas on group relations were
advanced in his 1933 book The Human Problems of an Industrialized Civilization, which was
based partly on his Hawthorne research.

Early life and education

Mayo was the eldest son of George Gibbes Mayo, a draftsman and later a civil engineer, and his
wife Henrietta Mary, née Donaldson. His grandfather George Mayo (1807–1894) was a well-

17
known South Australian medical practitioner. Elton attended several schools in Australia
(Queen's School, St Peter's College, Adelaide, and University of Adelaide) and after 1901
attended medical school in Edinburgh and London, neither of which he completed. In 1903 he
went to West Africa, and upon returning to London, began writing articles for magazines and
teaching English at the Working Men's College. He returned to Adelaide in 1905 to a partnership
in the printing firm of J. H. Sherring & Co., but in 1907 he went back to the university to study
philosophy and psychology under Sir William Mitchell. He won the Roby Fletcher prize in
psychology and graduated with honours (B.A., 1910; M.A., 1926[10]) and was named the David
Murray research scholar in scientific studies. In 1911 he became foundation lecturer in mental
and moral philosophy at the new University of Queensland and in 1919–23 held the first chair of
philosophy there. He moved on to the University of Pennsylvania, but spent the second half of
his career at Harvard Business School (1926–1947), where he was professor of industrial
research.Two influences on his career from his time at the University of Queensland were
Mayo's friendship with the social anthropologist Bronislaw Malinowski and his work with shell-
shock cases returning from the First World War. Malinowski first met Mayo on his way to and
from the Trobriand Islands; they became close friends and were regularly in touch until
Malinowski's death in 1942. The work with shell-shock soldiers provided a focus for Mayo's
interests in clinical psychology and developed his skills in psychotherapy. In this he was strongly
influenced by the work on hysteria and obsession of the French psychiatrist, Pierre Janet, who
became a critic of Sigmund Freud. For the rest of his working life, Mayo was an active
psychotherapist and this practical experience was an important influence on his theoretical and
methodological work in America.

Research

One of Mayo's (1924) earliest research efforts involved workers at a Philadelphia textile mill.
The mill had been experiencing a high rate of turnover. Mayo believed that the repetitive work in
the spinning department gave rise to mental abnormalities in the workers. He found that the
introduction of rest periods helped reduce turnover. The research helped make Mayo more
widely known in the U.S. Mayo helped to lay the foundation for the human relations movement,
and was known for his industrial research including the Hawthorne Studies and his book The
Human Problems of an Industrialized Civilization (1933). The research he conducted under the
rubric of the Hawthorne Studies in the late 1920s and early 1930s, underlining the importance of
groups in affecting the behaviour of individuals at work.Elton Mayo laid the ground rules for
interviewing, the principles of which have been subsequently repeated in numerous 'how to'
books on leadership, coaching and mentoring over the last half century.

Hawthorne studies

Fritz J. Roethlisberger, Mayo's graduate assistant, and William J. Dickson, head of the
Department of Employee Relations at Western Electric, conducted the bulk of the practical
research, with Mayo rarely visiting the Hawthorne plant in Cicero, Illinois. Mayo's team carried
out a number of "experiments" to look at ways of improving productivity. The research involved
manipulating length of rest and lunch periods and piecework payment plans. Mayo concluded
that productivity partly depended on the informal social patterns of interaction in the work
group.Mayo, in communicating to business leaders, advanced the idea that managers who

18
understand the nature of informal ties among workers can make decisions for management's
benefit.[4] Mayo concluded that people's work performance is dependent on both social
relationships and job content. He suggested a tension between workers' "logic of sentiment" and
managers' "logic of cost and efficiency" which could lead to conflict within
organizations.Parsons, however, showed that the Hawthorne studies, which were not really
experiments, were too confounded to enable researchers to draw firm conclusions.[13] The
qualitative aspects of the research suggested that norms of co-operation among workers were
related to productivity.

The Human Problems of an Industrialized Civilization and Its Addressing

Abraham Maslow

Abraham Harold Maslow (April 1, 1908 – June 8, 1970) was an American psychologist who
was best known for creating Maslow's hierarchy of needs, a theory of psychological health
predicated on fulfilling innate human needs in priority, culminating in self-actualization. Maslow
was a psychology professor at Alliant International University, Brandeis University, Brooklyn
College, New School for Social Research, and Columbia University. He stressed the importance
of focusing on the positive qualities in people, as opposed to treating them as a "bag of
symptoms." A Review of General Psychology survey, published in 2002, ranked Maslow as the
tenth most cited psychologist of the 20th century.

Born and raised in Brooklyn, New York, Maslow was the oldest of seven children and was
classed as "mentally unstable" by a psychologist. His parents were first generation Jewish
immigrants from Russia who fled from Czarist persecution in the early 20th century. They had
decided to live in New York City and in a multiethnic, working-class neighborhood. His parents
were poor and not intellectually oriented, but they valued education. It was a tough time for
Maslow, as he experienced anti-Semitism from his teachers and from other children around the
neighborhood. He had various encounters with anti-Semitic gangs who would chase and throw
rocks at him. Maslow and other young people at the time with his background were struggling to
overcome such acts of racism and ethnic prejudice in the attempt to establish an idealistic world
based on widespread education and monetary justice. The tension outside his home was also felt
within it, he rarely got along with his mother, and eventually developed a strong revulsion to her.
He is quoted as saying, "What I had reacted to was not only her physical appearance, but also her
values and world view, her stinginess, her total selfishness, her lack of love for anyone else in the
world , even her own husband and children ,her narcissism, her Negro prejudice, her exploitation
of everyone, her assumption that anyone was wrong who disagreed with her, her lack of friends,
her sloppiness and dirtiness..." He also grew up with few friends other than his cousin Will, and
as a result "...[He] grew up in libraries and among books." It was here that he developed his love
for reading and learning. He went to Boys High School, one of the top high schools in Brooklyn.
Here, he served as the officer to many academic clubs, and became editor of the Latin Magazine.
He also edited Principia, the school's Physics paper, for a year. He developed other strengths as
well:As a young boy, Maslow believed physical strength to be the single most defining
characteristic of a true male; hence, he exercised often and took up weight lifting in hopes of
being transformed into a more muscular, tough-looking guy, however, he was unable to achieve
this due to his humble-looking and chaste figure as well as his studiousness.

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College and university

Maslow attended the City College of New York after high school. In 1926 he began taking legal
studies classes at night in addition to his undergraduate course load. He hated it and almost
immediately dropped out. In 1927 he transferred to Cornell, but he left after just one semester
due to poor grades and high costs. He later graduated from City College and went to graduate
school at the University of Wisconsin to study psychology. In 1928, he married his first cousin
Bertha, who was still in high school at the time. The pair had met in Brooklyn years earlier.
Maslow's psychology training at UW was decidedly experimental-behaviorist. At Wisconsin he
pursued a line of research which included investigating primate dominance behavior and
sexuality. Maslow's early experience with behaviorism would leave him with a strong positivist
mindset. Upon the recommendation of Professor Hulsey Cason, Maslow wrote his master's thesis
on "learning, retention, and reproduction of verbal material". Maslow regarded the research as
embarrassingly trivial, but he completed his thesis the summer of 1931 and was awarded his
master's degree in psychology. He was so ashamed of the thesis that he removed it from the
psychology library and tore out its catalog listing. However, Professor Carson admired the
research enough to urge Maslow to submit it for publication. Maslow's thesis was published as
two articles in 1934.

Academic career

He continued his research at Columbia University, on similar themes. There he found another
mentor in Alfred Adler, one of Sigmund Freud's early colleagues. From 1937 to 1951, Maslow
was on the faculty of Brooklyn College. His family life and his experiences influenced his
psychological ideas. After World War II, Maslow began to question the way psychologists had
come to their conclusions, and though he did not completely disagree, he had his own ideas on
how to understand the human mind. He called his new discipline humanistic psychology.
Maslow was already a 33-year-old father and had two children when the United States entered
World War II in 1941. He was thus ineligible for the military. However, the horrors of war
instead inspired a vision of peace in him and this led to his groundbreaking psychological studies
of self-actualizing people. These studies began with his two mentors, anthropologist Ruth
Benedict and Gestalt psychologist Max Wertheimer, whom he admired both professionally and
personally. These two were so accomplished in both realms, and such "wonderful human beings"
as well, that Maslow began taking notes about them and their behavior. This would be the basis
of his lifelong research and thinking about mental health and human potential. He wrote
extensively on the subject, borrowing ideas from other psychologists but adding significantly to
them, especially the concepts of a hierarchy of needs, metaneeds, metamotivation, self-
actualizing persons, and peak experiences. Maslow was a professor at Brandeis University from
1951 to 1969, and then became a resident fellow of the Laughlin Institute in California. In 1967,
Maslow had an almost fatal heart attack, and knew his time was limited. Maslow considered
himself to be a psychological pioneer. He gave future psychologists a push by bringing to light
different paths to ponder. He built the framework that later allowed other psychologists to add in
more information. Maslow long believed that leadership should be non-intervening. Consistent
with this approach, he rejected a nomination in 1963 to be president of the Association for

20
Humanistic Psychology because he felt that the organization should develop an intellectual
movement without a leader.

Legacy

Later in life, Maslow was concerned with questions such as, "Why don't more people self-
actualize if their basic needs are met? How can we humanistically understand the problem of
evil?" In the spring of 1961, Maslow and Tony Sutich founded the Journal of Humanistic
Psychology, with Miles Vich as editor until 1971. The journal printed its first issue in early 1961
and continues to publish academic papers. Maslow attended the Association for Humanistic
Psychology’s founding meeting in 1963 where he declined nomination as its president, arguing
that the new organization should develop an intellectual movement without a leader which
resulted in useful strategy during the field’s early years. In 1967, Maslow was named Humanist
of the Year by the American Humanist Association.

Humanistic theories of self-actualization

Humanistic psychologists believe that every person has a strong desire to realize his or her full
potential, to reach a level of "self-actualization". The main point of that new movement, that
reached its peak in 1960s, was to emphasize the positive potential of human beings. Maslow
positioned his work as a vital complement to that of Freud:It is as if Freud supplied us the sick
half of psychology and we must now fill it out with the healthy half. However, Maslow was
highly critical of Freud, since humanistic psychologists did not recognize spirituality as a
navigation for our behaviours. To prove that humans are not blindly reacting to situations, but
trying to accomplish something greater, Maslow studied mentally healthy individuals instead of
people with serious psychological issues. He focused on self-actualizing people. Self-actualizing
people indicate a coherent personality syndrome and represent optimal psychological health and
functioning. This informed his theory that a person enjoys "peak experiences", high points in life
when the individual is in harmony with himself and his surroundings. In Maslow's view, self-
actualized people can have many peak experiences throughout a day while others have those
experiences less frequently.

Qualities of self-actualizing people accroding to Maslow

Maslow realized that all the individuals, those he studied had similar personality traits. All were
"reality centered," able to differentiate what was fraudulent from what was genuine. They were
also "problem centered," meaning that they treated life's difficulties as problems that demanded
solutions. These individuals also were comfortable being alone and had healthy personal
relationships. They had only a few close friends and family rather than a large number of shallow
relationships.

According to Maslow Self-actualising people are:

➢ Self-actualizing people tend to focus on problems outside themselves.

➢ Have a clear sense of what is true and what is false.
➢ They are spontaneous and creative; and are not bound too strictly by social conventions.

21
 ➢ They had a better insight of reality,
➢ They deeply accepted themselves, others and the world, and also had faced many
problems and were known to be impulsive people.
➢ These self-actualized individuals were very independent and private when it came to their
environment and culture,
➢ They especially treasure their very own individual development on "potentialities and
inner resources".

According to Maslow, self-actualizing people share the following qualities:

➢ Truth: honest, reality, beauty, pure, clean and unadulterated completeness

➢ Goodness: rightness, desirability, uprightness, benevolence, honesty
➢ Beauty: rightness, form, aliveness, simplicity, richness, wholeness, perfection,
completion,
➢ Wholeness: unity, integration, tendency to oneness, interconnectedness, simplicity,
organization, structure, order, not dissociated, synergy
➢ Dichotomy: transcendence: acceptance, resolution, integration, polarities, opposites,
contradictions
➢ Aliveness: process, not-deadness, spontaneity, self-regulation, full-functioning
➢ Unique: idiosyncrasy, individuality, non comparability, novelty
➢ Perfection: nothing superfluous, nothing lacking, everything in its right place, just-
rightness, suitability, justice
➢ Necessity: inevitability: it must be just that way, not changed in any slightest way
➢ Completion: ending, justice, fulfillment
➢ Justice: fairness, suitability, disinterestedness, non partiality,
➢ Order: lawfulness, rightness, perfectly arranged
➢ Simplicity: nakedness, abstract, essential skeletal, bluntness
➢ Richness: differentiation, complexity, intricacy, totality
➢ Effortlessness: ease; lack of strain, striving, or difficulty
➢ Playfulness: fun, joy, amusement
➢ Self-sufficiency: autonomy, independence, self-determining.

Dynamics of self-actualization

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Figure:1 Hierarchy of needs

An interpretation of Maslow's hierarchy of needs, represented as a pyramid with the more basic
needs at the bottomMain article: Maslow's hierarchy of needs

According to Maslow's theory, when a human being ascends the levels of the hierarchy having
fulfilled the needs in the hierarchy, one may eventually achieve self-actualization. Late in life,
Maslow came to conclude that self-actualization was not an automatic outcome of satisfying the
other human needs

Human needs as identified by Maslow:

➢ At the bottom of the hierarchy are the "Basic needs or Physiological needs" of a human
being: food, water, sleep and sex.
➢ The next level is "Safety Needs: Security, Order, and Stability". These two steps are
important to the physical survival of the person. Once individuals have basic nutrition,
shelter and safety, they attempt to accomplish more.
➢ The third level of need is "Love and Belonging", which are psychological needs; when
individuals have taken care of themselves physically, they are ready to share themselves
with others, such as with family and friends.
➢ The fourth level is achieved when individuals feel comfortable with what they have
accomplished. This is the "Esteem" level, the need to be competent and recognized, such
as through status and level of success.
➢ Then there is the "Cognitive" level, where individuals intellectually stimulate themselves
and explore.
➢ After that is the "Aesthetic" level, which is the need for harmony, order and beauty.

23
 ➢ At the top of the pyramid, "Need for Self-actualization" occurs when individuals reach a
state of harmony and understanding because they are engaged in achieving their full
potential. Once a person has reached the self-actualization state they focus on themselves
and try to build their own image. They may look at this in terms of feelings such as self-
confidence or by accomplishing a set goal.

The first four levels are known as Deficit needs or D-needs. This means that if you do not have
enough of one of those four needs, you will have the feeling that you need to get it. But when
you do get them, then you feel content. These needs alone are not motivating. Maslow wrote that
there are certain conditions that must be fulfilled in order for the basic needs to be satisfied. For
example, freedom of speech, freedom to express oneself, and freedom to seek new information
are a few of the prerequisites. Any blockages of these freedoms could prevent the satisfaction of
the basic needs. Maslow's Hierarchy of Needs has been subject to internet memes over the past
few years, specifically looking at the modern integration of technology in our lives and
humorously suggesting that Wi-Fi was among the most basic of human needs.

Peak experiences

Beyond the routine of needs fulfillment, Maslow envisioned moments of extraordinary

experience, known as Peak experiences, which are profound moments of love, understanding,
happiness, or rapture, during which a person feels more whole, alive, self-sufficient and yet a
part of the world, more aware of truth, justice, harmony, goodness, and so on. Self-actualizing
people have many such peak experiences. In other words, these “peak experiences” or states of
flow are the reflections of the realization of one’s human potential and represent the height of
personality development.

Meta-motivation

Maslow used the term metamotivation to describe self-actualized people who are driven by
innate forces beyond their basic needs, so that they may explore and reach their full human
potential.

B-values

Maslow identified a manner of thought he called "Being-cognition" (or "B-cognition"), which is

holistic and accepting, as opposed to the evaluative "Deficiency-cognition" (or "D-cognition"),
and values maslow called as "Being-values". He listed the B-values as:

➢ Wholeness (unity; integration; tendency to one-ness; interconnectedness; simplicity;

organization; structure; dichotomy-transcendence; order);
➢ Perfection (necessity; just-right-ness; just-so-ness; inevitability; suitability; justice;
completeness; "oughtness");
➢ Completion (ending; finality; justice; "it's finished"; fulfillment; finis and telos; destiny;
fate);

24
 ➢ Justice (fairness; orderliness; lawfulness; "oughtness");
➢ Aliveness (process; non-deadness; spontaneity; self-regulation; full-functioning);
➢ Richness (differentiation, complexity; intricacy);
➢ Simplicity (honesty; nakedness; essentiality; abstract, essential, skeletal structure);
➢ Beauty (rightness; form; aliveness; simplicity; richness; wholeness; perfection;
completion; uniqueness; honesty);
➢ Goodness (rightness; desirability; oughtness; justice; benevolence; honesty);
➢ Uniqueness (idiosyncrasy; individuality; non-comparability; novelty);
➢ Effortlessness (ease; lack of strain, striving or difficulty; grace; perfect, beautiful
functioning);
➢ Playfulness (fun; joy; amusement; gaiety; humor; exuberance; effortlessness);
➢ Truth (honesty; reality; nakedness; simplicity; richness; oughtness; beauty; pure, clean
and unadulterated; completeness; essentiality).
➢ Self-sufficiency (autonomy; independence; not-needing-other-than-itself-in-order-to-be-
itself; self-determining; environment-transcendence; separateness; living by its own
laws).

Humanistic psychology

Humanistic psychology gave rise to several different therapies, guided by the idea that people
possess the inner resources for growth and healing and that the point of therapy is to help remove
obstacles to individuals' achieving them. The most famous of these was client-centered therapy
developed by Carl Rogers.The basic principles behind humanistic psychology are simple:

➢ Someone's present functioning is their most significant aspect. As a result

humanists emphasize the here and now instead of examining the past or
attempting to predict the future.
➢ To be mentally healthy, individuals must take personal responsibility for their
actions, regardless of whether the actions are positive or negative.
➢ Each person, simply by being, is inherently worthy. While any given action may
be negative, these actions do not cancel out the value of a person.
➢ The ultimate goal of living is to attain personal growth and understanding. Only
through constant self-improvement and self-understanding can an individual ever
be truly happy.

Humanistic psychology theory suits people who see the positive side of humanity and believe in
free will. This theory clearly contrasts with Freud's theory of biological determinism. Another
significant strength is that humanistic psychology theory is compatible with other schools of
thought. Maslow's Hierarchy is also applicable to other topics, such as finance, economics, or
even in history or criminology. Humanist psychology, also coined positive psychology, is
criticized for its lack of empirical validation and therefore its lack of usefulness in treating
specific problems. It may also fail to help or diagnose people who have severe mental disorders.

Psychology of religion and transpersonal psychology

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Maslow's influence extended beyond psychology. His work on peak experiences was relevant to
religious studies, founding with Stanislav Grof, Viktor Frankl, James Fadiman, Anthony Sutich,
Miles Vich and Michael Murphy, a new school called by himself "the fourth force in
psychology" the transpersonal psychology, with applicability in many different areas, one of
them being the work on management in transpersonal business studies. Maslow's Hierarchy is
used in higher education for advising students and student retention as well as a key concept in
student development. Maslow himself found it difficult to accept religious experience as valid
unless placed in a positivistic framework.

Positive psychology

Maslow called his work positive psychology. His work has enjoyed a revival of interest and
influence among leaders of the positive psychology movement such as Martin Seligman. This
movement focuses only on a higher human nature. Positive psychology spends its research
looking at the positive side of things and how they go right rather than the pessimistic side.

Maslow's hammer

He is also known for Maslow's hammer, popularly phrased as "if all you have is a hammer,
everything looks like a nail" from his book The Psychology of Science, published in 1966.

Criticism

Maslow's ideas have been criticized for their lack of scientific rigor. He was criticized as too soft
scientifically by American empiricists. In 2006, author and former philosophy professor
Christina Hoff Sommers and practicing psychiatrist Sally Satel asserted that, due to lack of
empirical support, Maslow's ideas have fallen out of fashion and are "no longer taken seriously
in the world of academic psychology." Positive psychology spends much of its research looking
for how things go right rather than the more pessimistic view point, how things go wrong.
Furthermore, the Hierarchy of Needs has been accused of having a cultural bias—mainly
reflecting Western values and ideologies. From the perspective of many cultural psychologists,
this concept is considered relative to each culture and society and cannot be universally applied.
Maslow's concept of self-actualizing people was united with Piaget's developmental theory to the
process of initiation in 1993.

Kurt Lewin and his Contributions to Force Field Analysis;

Kurt Zadek Lewin (September 9, 1890 – February 12, 1947) was a German-American
psychologist, known as one of the modern pioneers of social, organizational, and applied
psychology in the United States. Kurt Lewin, exiled from the land of his birth, made a new life
for himself. In this new life, Lewin defined himself and his contributions within three lenses of
analysis; applied research, action research, and group communication were his major offerings to
the field of communication. Lewin is often recognized as the "founder of social psychology" and
was one of the first to study group dynamics and organizational development. A Review of

26
General Psychology survey, published in 2002, ranked Lewin as the 18th most cited
psychologist of the 20th century.

Early Life and Education

In 1890, he was born into a Jewish family in Mogilno, County of Mogilno, Province of Posen,
Prussia (modern Poland). It was a small village of about 5,000 people, about 150 of which were
Jewish. Lewin received an orthodox Jewish education at home. He was one of four children born
into a middle-class family. His father owned a small general store, and the family lived in an
apartment above the store. His father, Leopold, owned a farm jointly with his brother Max;
however, the farm was legally owned by a Christian because Jews were unable to own farms at
the time. The family moved to Berlin in 1905, so Lewin and his brothers could receive a better
education. From 1905 to 1908, Lewin studied at the Kaiserin Augusta Gymnasium, where he
received a classical humanistic education. In 1909, he entered the University of Freiburg to study
medicine, but transferred to University of Munich to study biology. He became involved with the
socialist movement and women's rights around this time. In April 1910, he transferred to the
Royal Friedrich-Wilhelms University of Berlin, where he was still a medical student. By the
Easter semester of 1911, his interests had shifted toward philosophy. By the summer of 1911, the
majority of his courses were in psychology. While at the University of Berlin, Lewin took 14
courses with Carl Stumpf. He served in the German army when World War I began. Due to a
war wound, he returned to the University of Berlin to complete his Ph.D., with Carl Stumpf
(1848–1936) the supervisor of his doctoral thesis. Lewin had written a dissertation proposal
asking Stumpf to be his supervisor, which Stumpf had accepted. Even though Lewin worked
under Stumpf to complete his dissertation, the relationship between them did not involve much
communication. Lewin studied associations, will, and intention for his dissertation, but he did
not discuss it with Stumpf until his final doctoral examination.

Kurt lewin’s Force field analysis

Force field analysis provides a framework for looking at the factors (forces) that influence a
situation, originally social situations. It looks at forces that are either driving movement toward a
goal (helping forces) or blocking movement toward a goal (hindering forces). The principle,
developed by Kurt Lewin, is a significant contribution to the fields of social science, psychology,
social psychology, organizational development, process management, and change
management.[12] His theory was expanded by John R. P. French who related it to organizational
and industrial settings.

Action research

Lewin, then a professor at MIT, first coined the term “action research” in about 1944, and it
appears in his 1946 paper “Action Research and Minority Problems”.[13] In that paper, he
described action research as “a comparative research on the conditions and effects of various
forms of social action and research leading to social action” that uses “a spiral of steps, each of
which is composed of a circle of planning, action, and fact-finding about the result of the action”
(this is sometimes referred to as the Lewinian spiral).

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Leadership climates

Lewin often characterized organizational management styles and cultures in terms of leadership
climates defined by ] (1) authoritarian, (2) democratic and (3) laissez-faire work environments.
He is often mixed up with McGregor with his work environments, but McGregor adapted them
directly to leadership-theory. Authoritarian environments are characterized where the leader
determines policy with techniques and steps for work tasks dictated by the leader in the division
of labor. The leader is not necessarily hostile but is aloof from participation in work and
commonly offers personal praise and criticism for the work done. Democratic climates are
characterized where policy is determined through collective processes with decisions assisted by
the leader. Before accomplishing tasks, perspectives are gained from group discussion and
technical advice from a leader. Members are given choices and collectively decide the division
of labor. Praise and criticism in such an environment are objective, fact minded and given by a
group member without necessarily having participated extensively in the actual work. Laissez-
faire environments give freedom to the group for policy determination without any participation
from the leader. The leader remains uninvolved in work decisions unless asked, does not
participate in the division of labor, and very infrequently gives praise. (Miner 2005: 39-40)

Change process

An early model of change developed by Lewin described change as a three-stage process. The
first stage he called "unfreezing". It involved overcoming inertia and dismantling the existing
"mind set". It must be part of surviving. Defense mechanisms have to be bypassed. In the second
stage the change occurs. This is typically a period of confusion and transition. We are aware that
the old ways are being challenged but we do not have a clear picture as to what we are replacing
them with yet. The third and final stage he called "freezing". The new mindset is crystallizing
and one's comfort level is returning to previous levels. This is often misquoted as "refreezing"
(see Lewin,1947).

Lewin's equation

The Lewin's equation, B = ƒ(P, E), is a psychological equation of behavior developed by Kurt
Lewin. It states that behavior is a function of the person in their environment. The equation is the
psychologist's most well known formula in social psychology, of which Lewin was a modern
pioneer. When first presented in Lewin's book Principles of Topological Psychology, published
in 1936, it contradicted most popular theories in that it gave importance to a person's momentary
situation in understanding his or her behavior, rather than relying entirely on the past.

Group dynamics

In a 1947 article, Lewin coined the term 'group dynamics'. He described this notion as the way
that groups and individuals act and react to changing circumstances. This field emerged as a
concept dedicated to the advancement of knowledge regarding the nature of groups, their laws,
establishment, development, and interactions with other groups, individuals and institutions.
During the early years of research on group processes, many psychologists rejected the reality of
group phenomena. Critics shared the opinion that groups did not exist as scientifically valid

28
entities. It had been said by skeptics that the actions of groups were nothing more than those of
its members considered separately. Lewin applied his interactionism formula B = ƒ(P, E), to
explain group phenomena, where a member's personal characteristics (P) interact with the
environmental factors of the group, (E) its members, and the situation to elicit behaviour (B).
Given his background in Gestalt Psychology, Lewin justified group existence using the dictum
"The whole is greater than the sum of its parts". He theorized that when a group is established it
becomes a unified system with supervening qualities that cannot be understood by evaluating
members individually. This notion - that a group is composed of more than the sum of its
individual members - quickly gained support from sociologists and psychologists who
understood the significance of this emerging field. Many pioneers noted that the majority of
group phenomena could be explained according to Lewin's equation and insight and opposing
views were hushed. The study of group dynamics remains relevant in today's society where a
vast number of professions (e.g., business and industry, clinical/counseling psychology, sports
and recreation) rely on its mechanisms to thrive. The most notable of Lewin’s contributions was
his development of Group Communication and Group Dynamics as major facets of the
communication discipline. Lewin and his associated researchers shifted from the pre-existing
trend of individualist psychology and then expanded their work to incorporate a macro lens
where they focused on the “social psychology of small group communication” (Rogers 1994).
Lewin is associated with “founding research and training in group dynamics and for establishing
the participative management style in organizations” .He managed to carve out this niche for
himself from his various experiments. In his Berlin research, Lewin utilized “group discussions
to advance his theory in research.” In doing so, there was certainly the complication of not
knowing exactly who to attribute epiphanies to as an idea collectively came into fruition. In
addition to group discussions, he became increasingly interested in group membership. He was
curious as to how perspectives of an individual in relation to the group were solidified or
weakened. He even tried to come up with the way identity was constructed from standpoint and
perspectives. These were the beginnings of what ended up developing into “groupthink”. Lewin
started to become quite interested in how ideas were created and then perpetuated by the
mentality of a group. Not included in this chapter is how important this became in looking at
group dynamics across disciplines – including studying John F Kennedy and the way he tried to
interact with his advisors in order to prevent groupthink from occurring.

Max Weber and His Contributions to HRM

Karl Emil Maximilian "Max" Weber (21 April 1864 – 14 June 1920) was a German
sociologist, philosopher, jurist, and political economist whose ideas profoundly influenced social
theory and social research.

Max Weber's Bureaucratic Model (Legal-Rational Model)

Weber wrote that the modern bureaucracy in both the public and private sector relies on the
following principles. "First, it is based on the general principle of precisely defined and
organized across-the-board competencies of the various offices. These competencies are
underpinned by rules, laws, or administrative regulations." For Weber, this means “a rigid
division of labor is established which clearly identifies the regular tasks and duties of the
particular bureaucratic system.

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 1. There are firmly established chains of command, and the duties and capacity to coerce
others to comply is described by regulation.
2. Regular and continuous execution of the assigned duties is undertaken by hiring people
with particular qualifications which are certified.

Weber notes that these three aspects "constitute the essence of bureaucratic administration...in
the public sector. In the private sector, these three aspects constitute the essence of a bureaucratic
management of a private company."

Main Principles (Characteristics):

➢ Specialized roles.
➢ Recruitment based on merit (e.g. tested through open competition).
➢ Uniform principles of placement, promotion, and transfer in an administrative system.
➢ Careerism with systematic salary structure.
➢ Hierarchy, responsibility and accountability.
➢ Subjection of official conduct to strict rules of discipline and control.
➢ Supremacy of abstract rules.
➢ Impersonal authority. (e.g. Office bearer does not bring the office with him).
➢ Political neutrality.

Merits of Bureaucracy

➢ Real bureaucracy will be less optimal and effective than his ideal type model.
➢ Weber's principles can degenerate, more so, when it is utilized to analyze the
individual level in the organization.
➢ When implemented in a group setting in an organization, some form of efficiency
and effectiveness can be achieved, especially with regards to better output.
➢ Especially true when the Bureaucratic model emphasizes qualification (merits),
➢ Specialization of job-scope (labour),
➢ Hierarchy of power,
➢ Rules and discipline are in place.

Demerits of Bureaucracy:

➢ Competencies, efficiency and effectiveness can be unclear and contradictory

especially when dealing with oversimplified matters.
➢ Dehumanized bureaucracy, inflexible in distributing the job-scope, with every
worker having to specialize from day one without rotating tasks for fear of
decreasing output, tasks are often routine and can contribute to boredom.
➢ Employees can sometimes feel that they are not part of the organization's work
vision and missions.
➢ Consequently, they do not have any sense of belonging in the long term.
➢ Tends to invite exploitation and underestimate the potential of the employees, as
creativity of the workers is brushed aside in favour of strict adherence to rules,
regulations and procedures.

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Rationalisation

Many scholars have described rationalisation and the question of individual freedom in an
increasingly rational society, as the main theme of Weber's work. This theme was situated in the
larger context of the relationship between psychological motivations, cultural values and beliefs
(primarily, religion) and the structure of the society (usually determined by the economy). By
rationalisation, Weber understood first, the individual cost-benefit calculation, second, the wider,
bureaucratic organisation of the organisations and finally, in the more general sense as the
opposite of understanding the reality through mystery and magic (disenchantment).The fate of
our times is characterised by rationalisation and intellectualisation and, above all, by the
"disenchantment of the world"

Weber began his studies of the subject in The Protestant Ethic and the Spirit of Capitalism, in
which he argued that the redefinition of the connection between work and piety in Protestantism
and especially in ascetic Protestant denominations, particularly Calvinism, shifted human effort
towards rational efforts aimed at achieving economic gain. In Protestant religion, Christian piety
towards God was expressed through one's secular vocation (secularisation of calling). The
rational roots of this doctrine, he argued, soon grew incompatible with and larger than the
religious and so the latter were eventually discarded. Weber continued his investigation into this
matter in later works, notably in his studies on bureaucracy and on the classification of legitimate
authority into three types – Rational-legal, traditional and charismatic – of which the rational-
legal (through bureaucracy) is the dominant one in the modern world. In these works Weber
described what he saw as society's movement towards rationalisation. Similarly, rationalisation
could be seen in the economy, with the development of highly rational and calculating
capitalism. Weber also saw rationalisation as one of the main factors setting the European West
apart from the rest of the world. Rationalisation relied on deep changes in ethics, religion,
psychology and culture; changes that first took place in the Western civilisation. What Weber
depicted was not only the secularisation of Western culture, but also and especially the
development of modern societies from the viewpoint of rationalisation. The new structures of
society were marked by the differentiation of the two functionally intermeshing systems that had
taken shape around the organisational cores of the capitalist enterprise and the bureaucratic state
apparatus. Weber understood this process as the institutionalisation of purposive-rational
economic and administrative action. To the degree that everyday life was affected by this
cultural and societal rationalisation, traditional forms of life – which in the early modern period
were differentiated primarily according to one's trade – were dissolved.Features of rationalisation
include increasing knowledge, growing impersonality and enhanced control of social and
material life. Weber was ambivalent towards rationalisation; while admitting it was responsible
for many advances, in particular, freeing humans from traditional, restrictive and illogical social
guidelines, he also criticised it for dehumanising individuals as "cogs in the machine" and
curtailing their freedom, trapping them in the bureaucratic iron cage of rationality and
bureaucracy. Related to rationalisation is the process of disenchantment, in which the world is
becoming more explained and less mystical, moving from polytheistic religions to monotheistic
ones and finally to the Godless science of modernity. Those processes affect all of society,
removing "sublime values... from public life" and making art less creative. In a dystopian
critique of rationalisation, Weber notes that modern society is a product of an individualistic
drive of the Reformation, yet at the same time, the society created in this process is less and less

31
welcoming of individualism. How is it at all possible to salvage any remnants of "individual"
freedom of movement in any sense given this all-powerful trend?

Politics and government

In political sociology, one of Weber's most influential contributions is his "Politics as a

Vocation" (Politik als Beruf) essay. Therein, Weber unveils the definition of the state as that
entity that possesses a monopoly on the legitimate use of physical force., Weber wrote that
politics is the sharing of state's power between various groups, and political leaders are those
who wield this power. A politician must not be a man of the "true Christian ethic", understood by
Weber as being the ethic of the Sermon on the Mount, that is to say, the injunction to turn the
other cheek. An adherent of such an ethic ought rather to be understood to be a saint, for it is
only saints, according to Weber, that can appropriately follow it. The political realm is no realm
for saints; a politician ought to marry the ethic of attitude and the ethic of responsibility
("Verantwortungsethik vs Gesinnungsethik"]) and must possess both a passion for his vocation
and the capacity to distance himself from the subject of his exertions (the governed). Weber
distinguished three ideal types of political leadership (alternatively referred to as three types of
domination, legitimisation or authority): charismatic domination (familial and religious),

1. traditional domination (patriarchs, patrimonialism, feudalism) and

2. legal domination (modern law and state, bureaucracy). In his view, every historical
relation between rulers and ruled contained such elements and they can be analysed on
the basis of this tripartite distinction. He notes that the instability of charismatic authority
forces it to "routinise" into a more structured form of authority.[75] In a pure type of
traditional rule, sufficient resistance to a ruler can lead to a "traditional revolution". The
move towards a rational-legal structure of authority, utilising a bureaucratic structure, is
inevitable in the end. Thus this theory can be sometimes viewed as part of the social
evolutionism theory. This ties to his broader concept of rationalisation by suggesting the
inevitability of a move in this direction. Bureaucratic administration means
fundamentally domination through knowledge.

Weber described many ideal types of public administration and government in his masterpiece
Economy and Society (1922). His critical study of the bureaucratisation of society became one of
the most enduring parts of his work. It was Weber who began the studies of bureaucracy and
whose works led to the popularisation of this term. Many aspects of modern public
administration go back to him and a classic, hierarchically organised civil service of the
Continental type is called "Weberian civil service". As the most efficient and rational way of
organising, bureaucratisation for Weber was the key part of the rational-legal authority and
furthermore, he saw it as the key process in the ongoing rationalisation of the Western society.
Weber listed several preconditions for the emergence of the bureaucracy: The growth in space
and population being administered, the growth in complexity of the administrative tasks being
carried out and the existence of a monetary economy – these resulted in a need for a more
efficient administrative system. Development of communication and transportation technologies
made more efficient administration possible (and popularly requested) and democratisation and
rationalisation of culture resulted in demands that the new system treat everybody equally.
Weber's ideal bureaucracy is characterised by hierarchical organisation, by delineated lines of

32
authority in a fixed area of activity, by action taken (and recorded) on the basis of written rules,
by bureaucratic officials needing expert training, by rules being implemented neutrally and by
career advancement depending on technical qualifications judged by organisations, not by
individuals. The decisive reason for the advance of the bureaucratic organisation has always been
its purely technical superiority over any other form of organisation.While recognising
bureaucracy as the most efficient form of organisation and even indispensable for the modern
state, Weber also saw it as a threat to individual freedoms and the ongoing bureaucratisation as
leading to a "polar night of icy darkness", in which increasing rationalisation of human life traps
individuals in the aforementioned "iron cage" of bureaucratic, rule-based, rational control. In
order to counteract bureaucrats, the system needs entrepreneurs and politicians.

Social stratification

Weber also formulated a three-component theory of stratification, with social class, social status
and political party as conceptually distinct elements. The three-component theory of stratification
is in contrast to Karl Marx simpler theory of social class which ties all social stratification to
what people own. In Weber's theory, issues of honor and prestige are important. This distinction
is most clearly described in Weber's essay "Classes, Staende, Parties" which was first published
in his book Economy and Society. The three components of Weber's theory are:

➢ Social Class which is based on economically determined relationship to the market

(owner, renter, employee etc.).
➢ Status (or in German Stand) which is based on non-economic qualities like honour,
prestige and religion.
➢ Party which refers to affiliations in the political domain.

All three dimensions have consequences for what Weber called "life chances" (opportunities to
improve one's life). Weber scholars recognize that it is important to maintain a sharp distinction
between the terms "status" and "class," even though they tend to be used interchangeably in
popular usage.

Frederick Herzberg

Frederick Irving Herzberg (April 18, 1923 – January 19, 2000) was an American psychologist
who became one of the most influential names in business management. He is most famous for
introducing job enrichment and the Motivator-Hygiene theory. His 1968 publication "One More
Time, How Do You Motivate Employees?" had sold 1.2 million reprints by 1987 and was the
most requested article from the Harvard Business Review.

Personal life

Herzberg was born in 1923 in Lynn, Massachusetts, to Gertrude and Lewis Herzberg, who were
Lithuanian immigrants. He enrolled at the City College of New York in 1939. He did not finish
his studies as he enlisted in the army. In 1944 he married Shirley Bedell.He finally finished his
studies and graduated from the City College of New York in 1946. He then decided to move to

33
the University of Pittsburgh where he earned a master's degree in science and public health. He
completed a Ph.D. at Pittsburgh that focused on electric shock therapy.

Motivator-Hygiene Theory

Herzberg proposed the motivator-hygiene theory, also known as the two-factor theory of job
satisfaction. According to his theory, people are influenced by two sets of factors.The idea is that
hygiene factors will not motivate, but if they are not there, they can lower motivation. These
factors could be anything from clean toilets and comfortable chairs, to a reasonable level of pay
and job security.Motivational factors will not necessarily lower motivation, but can be
responsible for increasing motivation. These factors could involve job recognition, potential for
promotion or even the work in itself.

David McClelland

David Clarence McClelland (May 20, 1917 – March 27, 1998) was an American psychologist,
noted for his work on motivation Need Theory. He published a number of works during the
1950s and the 1990s and developed new scoring systems for the Thematic Apperception Test
(TAT) and its descendants.[1] McClelland is credited with developing the Achievement
Motivation Theory commonly referred to as need achievement or n-achievement theory.[2] A
Review of General Psychology survey, published in 2002, ranked McClelland as the 15th most
cited psychologist of the 20th century.

Life and career

McClelland, born in Mt. Vernon, New York, was awarded a Bachelor of Arts from Wesleyan
University in 1938, an MA from the University of Missouri in 1939, and a PhD in experimental
psychology from Yale University in 1941. He taught at Connecticut College and Wesleyan
University before joining the faculty at Harvard University in 1956, where he worked for 30
years, serving as chairman of the Department of Psychology and Social Relations. In 1987, [4] he
moved to Boston University, where he was awarded the American Psychological Association
Award for Distinguished Scientific Contributions.The major themes of David McClelland’s
work were on personality and the application of that knowledge to helping people make their
lives better. One theme was the development of the expectancy-value theory of human
motivation. A second theme was the development of tests and operant methods, such as the
Thematic Apperception Test, Behavioral Event Interview, and the Test of Thematic Analysis. A
third theme was the development of job-competency studies, and a fourth theme was the
application of this research to helping people and their social systems, whether that was through
motivation and competency development, organization and community development, and
changing behavior to battle stress and addiction. David McClelland believed in applying the
results from the research and testing to see if they helped people. He was instrumental in starting
14 research and consulting companies, the largest was McBer and Company (1965-1989), which

34
later was sold to Yankelovich, Skelly & White in 1983 and even later to Saatchi and Saatchi
(1985). The Hay Group, also purchased by Saatchi and Saatchi, and McBer bought themselves
back from S&S in 1989 and operated as the worldwide consultancy called The Hay Group until
they were acquired by Korn Ferry in 2016.

Expectancy Value Theory of Motivation

McClelland claimed that motivation is “a recurrent concern for a goal state or condition as
measured in fantasy, which drives, directs and selects the behavior of the individual”
(McClelland, 1985). Basing his work on the work of Henry Murray, he focused on three
particular motives: the Need for Achievement (N Ach); the Need for Affiliation (N Aff); and the
Need for Power (N Pow). The work in the 1940s through the late 1960s focused on the
Achievement Motive and its impact on development of economies and entrepreneurship
(McClelland and Winter, 1969; Miron and McClelland, 1979). He shifted his work in the 1960s
to focus on the power motive, first addressing issues of addiction and alcoholism (McClelland,
Davis, Kalin and Wanner, 1972), then to leadership effectiveness (McClelland and Boyatzis,
1982; McClelland and Burnham, 1976), and later to community development (McClelland,
Rhinesmith and Kristensen, 1975). The work on leadership and management helped to create a
behavioral level of a person’s capability, which McClelland called “competencies (McClelland,
1973; McClelland, 1998; Boyatzis, 1982; Spencer and Spencer, 1993; Goleman, 1998). This
work was one of the foundational works helping to create the competency movement in human
resources. He also led efforts to show how important competencies were relative to knowledge
and traditional personality traits in the desired outcomes of higher education (Winter,
McClelland and Stewart, 1981). His work on power extended into research on the body’s natural
healing process (McClelland, 1979).In an exception from the typical focus of a psychologist,
McClelland also examined cultural and country-wide effects of motives and related them to large
scale trends in society, such as economic development, job creation, the provocation of wars and
health. McClelland’s work on motivation was cited as the most useful approach to motivation in
a study by the former accounting firm Touche Ross & Company (Miller, 1981).

Job Competencies

McClelland et al (1958) conceptualized a broad array of capabilities. Reviving his earlier

personality theory (McClelland, 1951), McClelland and his colleagues at McBer and Company
intensified competency research on management, leadership and professional jobs in the early
1970s (i.e., skills, self-image, traits, and motives, see Boyatzis, 1982; Spencer and Spencer,
1993; Goleman, 1998). The definition of a job competency required that the person’s intent be
understood, not merely that the person’s behavior be observed. They used operant methods like
audiotaped Critical Incident Interviews, which they called Behavioral event Interviews, and
videotaped simulations with inductive research designs comparing effective with ineffective or
even less effective performers. This approach was focused on the “person,” rather than the tasks
or job.The research results developed a picture of how a superior performer in a job thinks, feels,
and acts in his/her work setting. This became a model for how to help anyone in a job, or

35
aspiring to one, develop their capability. It became, over the coming decades, the norm for
training design, selection and promotion practices, career development and even higher
education in developing people for such jobs.

Helping People Change

David McClelland believed that if you know how an outstanding performer thinks and acts, you
could teach people how to think and act that way. The early projects addressed entrepreneurial
development and training in achievement thinking and behavior for small business owners in
India, Tunisia, Iran, Poland, Malawi and the US.“Understanding human motivation ought to be a
good thing. It should help us to find out what we really want so that we can avoid chasing
rainbows that are not for us. It should open up opportunities for self-development if we apply
motivational principles to pursuing our goals in life”.

The Concept of Labor relations and its Contribution to HRM

Labor relations is the study and practice of managing unionized employment situations. In
academia, labour relations is frequently a sub-area within industrial relations, though scholars
from many disciplines--including economics, sociology, history, law, and political science--also
study labor unions and labor movements. In practice, labor relations is frequently a subarea
within human resource management. Courses in labor relations typically cover labor history,
labor law, union organizing, bargaining, contract administration, and important contemporary
topics. In the United States, labor relations in the private sector is regulated by the National
Labor Relations Act. Public sector labor relations is regulated by the Civil Service Reform Act of
1978 and various pieces of state legislation. In other countries, labor relations might be regulated
by law or tradition.An important professional association for U.S. labor relations scholars and
practitioners is the Labor and Employment Relations Association.

The Entry of National Labor Relations Act

The National Labor Relations Act of 1935 also known as the Wagner Act after New York
Senator Robert F. Wagner[1]) is a foundational statute of United States labor law which
guarantees basic rights of private sector employees to organize into trade unions, engage in
collective bargaining for better terms and conditions at work, and take collective action including
strike if necessary. The act also created the National Labor Relations Board, which conducts
elections that can require employers to engage in collective bargaining with labor unions (also
known as trade unions). The Act does not apply to workers who are covered by the Railway
Labor Act, agricultural employees, domestic employees, supervisors, federal, state or local
government workers, independent contractors and some close relatives of individual employers.
Under section 1 (29 U.S.C. § 151) of the Act, the key principles and policy findings on which the
Act was based are explained. The Act aims to correct the "inequality of bargaining power
between employees who do not possess full freedom of association or actual liberty of contract

36
and employers who are organized in the corporate or other forms of ownership association". To
achieve this, the central idea is the promotion of collective bargaining between independent trade
unions, on behalf of the workforce, and the employer.

“ encouraging the practice and procedure of collective bargaining and by protecting the
exercise by workers of full freedom of association, self-organization, and designation of
representatives of their own choosing, for the purpose of negotiating the terms and
conditions of their employment or other mutual aid or protection. ”

The Act aims to protect employees as a group, and so is not based on a formal or legal
relationship between an employer and employee.

The Concept of Unfair labor practices

These are;

➢ "To interfere with, restrain, or coerce employees in the exercise of the rights guaranteed
in section 7". This includes freedom of association, mutual aid or protection, self-
organization, to form, join, or assist labor organizations, to bargain collectively for wages
and working conditions through representatives of their own choosing, and to engage in
other protected concerted activities with or without a union.
➢ "To dominate or interfere with the formation or administration of any labor organization
or contribute financial or other support to it"
➢ "To discrimination in regard to hire or tenure of employment or any term or condition of
employment to encourage or discourage membership in any labor organization"
➢ Discriminating against employees who file charges or testify.
➢ Refusing to bargain collectively with the representative of the employer's employees.

The Contributions of Chartered Institute of Personnel and Development

The Chartered Institute of Personnel and Development (CIPD) is a professional association

for human resource management professionals. It is headquartered in Wimbledon, London,
England. The organisation was founded in 1913 it is the worlds oldest association in its field and
has over 135,000 members (2nd largest in the world) internationally working across private,
public and voluntary sectors. Peter Cheese was announced in June 2012 as CIPD's new CEO in
July 2012.In the United Kingdom factory inspectors were appointed for the first time in 1893. In
1896 to look after its women and child workers Rowntree's appointed their first inspector - a Mrs
E M Wood. Edward Cadbury of Cadbury Brothers in 1909 called together employers to discuss
industrial welfare work and as a result 25 employers formed an association with Mrs Wood of
Rountree's as Secretary. The work of 'welfare workers' came to public attention during a trade
show in 1912 at Olympia in London. The forerunner of the CIPD, the Welfare Workers'

37
Association (WWA) was formed at an employers' conference in York on 6 June 1913. The
meeting was chaired by Seebohm Rowntree. Alongside his company, Rowntree's around fifty
other companies were present including; Boots, Cadbury and Chivers and Sons.[4] Thirty-four of
the employers present[5] decided that the WWA be founded as...an association of employers
interested in industrial betterment and of welfare workers engaged by them. The outbreak of
World War I in 1914 led to many women and children taking up the work of men, particularly in
the larger munition factories where the appointment of welfare officers was made compulsory by
legislation and was monitored by the Health of Munition Workers Committee. This led to the
rapid expansion of female welfare workers. There were concerns about the training of welfare
staff, and in 1917, at a gathering in Leeds of the seven welfare associations formed during the
period it was agreed that they merge by forming the Central Association of Welfare Workers
which to accommodate the regional associations established the beginnings of a local branch
structure. The Association's position was also enhanced during the war years by nationally
driven encouragement of workers to join trade unions to reduce the occurrence of industrial
strife. Another development which increased the numbers of company staff dealing with labour
and welfare matters occurred with the inclusion of managers, mainly men, from the North-
western Area Industrial Association to assist with discipline, dismissal and industrial relations in
increasingly unionised organisations.[5] In 1918, to avoid confusion as to its purpose the
Association changed its name to the Central Association of Welfare Workers (Industrial)
(CAWWI). Another important event which had a recurring impact on the activities of the
CAWWI occurred in 1918 when the Rev. Robert Hyde founded the Boys’ Welfare Association
soon after renamed the Industrial Welfare Society (IWS) with six employers who were
concerned with the welfare of boys employed or apprenticed in the shipbuilding industry. From
the outset there was a strained relationship between the two bodies which continued right
through the inter-war period until resolved in 1946. Though both organisations were concerned
with 'welfare at work' the CAWWI developed as an institution for practitioners and the IWS was
established as a membership body for employers and there was strong disagreement on how best
to bring about improvements in workplace conditions and workers' welfare. The IWS later
became the Industrial Society and is now known as the Work Foundation.

The post-World War I period

In November 1919, following merger with welfare associations for men the Central Association
of Welfare Workers (Industrial) was renamed the Welfare Workers' Institute and now had a
membership of 700.[5] However, the next five years saw a reduction in membership to 250
coinciding with the rapid collapse in industrial output as the government sought to reduce the
national debt.

The latter part of 20th century

Directly after the Second World War the incoming Labour government instigated a policy of
industry nationalisation and launched the National Health Service, further increasing the role of
personnel professions in handling public sector recruitment, retention, payroll, training, and
industrial relations issues. The enlightened practices of large American corporations, some of
which had adopted the ideas of human relations thinkers, such as Elton Mayo, and the Civil
Service in the field of personnel management were being taken up by the larger UK companies.

38
Both influences were reflected in a further change of name in 1946 to the Institute of Personnel
Management (IPM). The 1950s were marked by government efforts to improve productivity both
through introducing more modern management practices and increase labour supply through
encouraging migration of people from the British Commonwealth also known as the Windrush
generation. In 1955, responding to these changes, the IPM sought to increase the professional
standards and standing of its members by introducing an externaly moderated examination
scheme, and restricting entry to full membership to fully qualified or practising personnel
officers over age 35 with several years' experience. Membership in 1956 stood at 3,979. During
the 1960s, 1970s and 1980s influences on the UK workplace ranged from a series of
technological revolutions, economic pressures from entry into the Common Market and impact
of globalisation, deregulation of the financial services industry (the Big Bang). Government
intervention in industrial relations and the growth of health and safety, equality, collective and
recruitment and employment legislation encouraged new specialisms to develop in the function.
In some companies a shift was seen from reactive personnel management processes towards
what became known as strategic human resource management practices, or in shorthand HRM.
All these factors also influenced a steady increase in membership, which in 1987 was 31,400.
The IPM underwent a period of contemplation during which it considered whether; to shift
towards an HRM approach as its counterpart in the US the Society for Human Resource
Management had already done, or to maintain its focus on the more traditional personnel
management practices where the majority of its members still operated, or find a third way
reflecting a more UK-focussed approach. In 1994, a merger took place between the IPM and the
Institute of Training and Development (ITD). The new organisation which had 70,000 members
was named the Institute of Personnel and Development (IPD), sought to represent the range of
professionals engaged in one or more elements of people management.

Cornell University School of Industrial and Labor Relations

The New York State School of Industrial and Labor Relations (ILR) is an industrial relations
school located on the campus of Cornell University, in Ithaca, New York, United States. ILR is
composed of six academic departments which include Economics, Human Resource
Management, International and Comparative Labor, Labor Relations, Organizational Behavior;
and Social Statistics. In 2015, the School accepted 13.8% of its first-year applicants.

Established by the New York State Legislature in 1945, the school is a statutory or contract
college to the State University of New York (SUNY) system and receives funding from the State
of New York. It was the world's first school for college-level study in workplace issues and
remains one of the leading institutions for industrial relations. In addition to undergraduate
programs, the school offers professional and doctoral degree programs, as well as post-graduate,
executive level, continuing education.

Society for Human Resource Management

The Society for Human Resource Management (SHRM) is a professional human resources
membership association headquartered in Alexandria, Virginia. The largest association in its
field, SHRM promotes the role of HR as a profession and provides education, certification, and
networking to its members, while lobbying Congress on issues pertinent to labor management.

39
History

Founded in 1948 as the American Society for Personnel Administration (ASPA), the
organization operated on a volunteer basis until 1964, when it established headquarters in Berea,
Ohio, and began hiring staff members. In 1984, the headquarters was moved to Alexandria, Va.,
and in 1989, the organization changed its name to the Society for Human Resource Management.
SHRM was ranked the eighth largest association in the United States based on revenue. The
association has more than 575 chapters in the United States and around the world, which provide
certification and networking opportunities for members. In April 2014, SHRM opened an office
in Sacramento, California. SHRM has over 450 staff members and over 275,000 members in 140
countries.[4] SHRM has subsidiary offices in China, India and United Arab Emirates. The current
President and Chief Executive Officer is Henry G. (Hank) Jackson.

Research

SHRM's Survey Research Center produces original research on emerging workplace issues and
their implications for the HR professional and business leaders. Among its research surveys are
the annual Employee Benefits Survey and Employee Job Satisfaction and Engagement Survey
and the monthly Leading Indicators of National Employment (LINE) report. In addition to
producing surveys in house, SHRM conducts Customized Research Services for organizations.

Lobbying activity

SHRM is involved in lobbying governmental bodies regarding workplace law and industry
practice. For example, in April 2008, SHRM announced in a press release that its representatives
had appeared before the US Senate to petition for changes in the administration of the Family
and Medical Leave Act. Additionally, the organization announced in the November 2003 issue
of its HR Magazine that it had submitted a position paper to the Equal Employment Opportunity
Commission suggesting factors the agency should consider when determining how to amend the
definition of the term "job applicant" for the purposes of record keeping required by companies
in order to comply with affirmative action and anti-discrimination laws. In 2003, SHRM
conducted an e-mail survey of its members intended to gauge the effectiveness of the Equal
Employment Opportunity Commission (EEOC), and provide feedback on how the commission
could improve its operations. It presented the results of this survey to the EEOC at a meeting on
September 8, 2003. In November 2006, the Office of Disability Employment Policy (ODEP) of
the U.S. Department of Labor established an alliance with SHRM to encourage and promote the
employment of people with disabilities.

The Evolution of Collective bargaining towards HRM

Collective bargaining is a process of negotiation between employees and a group of employers

aimed at agreements to regulate working salaries. The interests of the employees are commonly

40
presented by representatives of a trade union to which the employees belong. The collective
agreements reached by these negotiations usually set out wage scales, working hours, training,
health and safety, overtime, grievance mechanisms, and rights to participate in workplace or
company affairs. The union may negotiate with a single employer (who is typically representing
a company's shareholders) or may negotiate with a group of businesses, depending on the
country, to reach an industry wide agreement. A collective agreement functions as a labor
contract between an employer and one or more unions. Collective bargaining consists of the
process of negotiation between representatives of a union and employers (generally represented
by management, or, in some countries such as Austria, Sweden and the Netherlands, by an
employers' organization) in respect of the terms and conditions of employment of employees,
such as wages, hours of work, working conditions, grievance procedures, and about the rights
and responsibilities of trade unions. The parties often refer to the result of the negotiation as a
collective bargaining agreement (CBA) or as a collective employment agreement (CEA).

The term "collective bargaining" was first used in 1891 by Beatrice Webb, a founder of the field
of industrial relations in Britain. It refers to the sort of collective negotiations and agreements
that had existed since the rise of trade unions during the 18th century.

In the United States, the National Labor Relations Act of 1935 made it illegal for any employer
to deny union rights to an employee. The issue of unionizing government employees in a Public-
sector trade union was much more controversial until the 1950s. In 1962 President John F
Kennedy issued an executive order granting Federal employees the right to unionize.

International protection

The right to collectively bargain is recognized through international human rights conventions.
Article 23 of the Universal Declaration of Human Rights identifies the ability to organize trade
unions as a fundamental human right.[4] Item 2(a) of the International Labour Organization's
Declaration on Fundamental Principles and Rights at Work defines the "freedom of association
and the effective recognition of the right to collective bargaining" as an essential right of
workers. The Freedom of Association and Protection of the Right to Organize Convention, 1948
(C087) and several other conventions specifically protect collective bargaining through the
creation of international labour standards that discourages countries from violating worker's
rights to associate and collectively bargain. In June 2007 the Supreme Court of Canada
extensively reviewed the rationale for regarding collective bargaining as a human right. In the
case of Facilities Subsector Bargaining Association v. British Columbia, the Court made the
following observations:

The right to bargain collectively with an employer enhances the human dignity, liberty and
autonomy of workers by giving them the opportunity to influence the establishment of workplace
rules and thereby gain some control over a major aspect of their lives, namely their work...
Collective bargaining is not simply an instrument for pursuing external ends…rather [it] is
intrinsically valuable as an experience in self-government... Collective bargaining permits
workers to achieve a form of workplace democracy and to ensure the rule of law in the
workplace. Workers gain a voice to influence the establishment of rules that control a major
aspect of their lives.

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Continuous bargaining is a method of collective bargaining which retains a permanent, rolling
negotiation between management and a permanent committee of union representatives.

Gary Becker and his Contributions with Human Capital to HRM

Human capital is a term popularized by Gary Becker, an economist from the University of
Chicago, and Jacob Mincer that refers to the stock of knowledge, habits, social and personality
attributes, including creativity, embodied in the ability to perform labor so as to produce
economic value.

Alternatively, human capital is a collection of resources;

➢ Knowledge,
➢ Talents,
➢ Skills,
➢ Abilities,
➢ Experience,
➢ Intelligence,
➢ Training,
➢ Judgment, and wisdom possessed individually and collectively by individuals in a
population.

These resources are the total capacity of the people that represents a form of wealth which can be
directed to accomplish the goals of the nation or state or a portion thereof. It is an aggregate
economic view of the human being acting within economies, which is an attempt to capture the
social, biological, cultural and psychological complexity as they interact in explicit and/or
economic transactions. Many theories explicitly connect investment in human capital
development to education, and the role of human capital in economic development, productivity
growth, and innovation has frequently been cited as a justification for government subsidies for
education and job skills training. "Human capital" has been and continues to be criticized in
numerous ways. Michael Spence offers signaling theory as an alternative to human capital.
Pierre Bourdieu offers a nuanced conceptual alternative to human capital that includes cultural
capital, social capital, economic capital, and symbolic capital. These critiques, and other debates,
suggest that "human capital" is a reified concept without sufficient explanatory power. Just as
land became recognized as natural capital and an asset in itself, human factors of production
were raised from this simple mechanistic analysis to human capital.

In modern technical financial analysis, the term "balanced growth" refers to the goal of equal
growth of both aggregate human capabilities and physical assets that produce goods and
services.The assumption that labour or workforces could be easily modelled in aggregate began
to be challenged in 1950s when the tertiary sector, which demanded creativity, begun to produce
more than the secondary sector was producing at the time in the most developed countries in the
world. Accordingly, much more attention was paid to factors that led to success versus failure
where human management was concerned. The role of leadership, talent, even celebrity was
explored.Today, most theories attempt to break down human capital into one or more
components for analysis – usually called "intangibles". Most commonly, social capital, the sum

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of social bonds and relationships, has come to be recognized, along with many synonyms such as
goodwill or brand value or social cohesion or social resilience and related concepts like celebrity
or fame, as distinct from the talent that an individual (such as an athlete has uniquely) has
developed that cannot be passed on to others regardless of effort, and those aspects that can be
transferred or taught: instructional capital. Less commonly, some analyses conflate good
instructions for health with health itself, or good knowledge management habits or systems with
the instructions they compile and manage, or the "intellectual capital" of teams – a reflection of
their social and instructional capacities, with some assumptions about their individual uniqueness
in the context in which they work. In general these analyses acknowledge that individual trained
bodies, teachable ideas or skills, and social influence or persuasion power, are
different.Management accounting is often concerned with questions of how to model human
beings as a capital asset. However it is broken down or defined, human capital is vitally
important for an organization's success (Crook et al., 2011); human capital increases through
education and experience. Human capital is also important for the success of cities and regions: a
2012 study examined how the production of university degrees and R&D activities of
educational institutions are related to the human capital of metropolitan areas in which they are
located. In 2010, the OECD (the Organization of Economic Co-operation and Development)
encouraged the governments of advanced economies to embrace policies to increase innovation
and knowledge in products and services as an economical path to continued prosperity.
International policies also often address human capital flight, which is the loss of talented or
trained persons from a country that invested in them, to another country which benefits from
their arrival without investing in them.Studies of structural unemployment have increasingly
focused on a mismatch between the stock of job-specific human capital and the needs of
employers. In other words, there is increasingly a recognition that human capital may be specific
to particular jobs or tasks and not general and readily transferable. Recent work has attempted to
improve the linkages between education and the needs of the labor market by linking labor
market data to education loan pricing.

Background

Adam Smith defined four types of fixed capital (which is characterized as that which affords a
revenue or profit without circulating or changing masters). The four types were:

1. Useful machines, instruments of the trade;

2. Buildings as the means of procuring revenue;
3. Improvements of land;
4. The acquired and useful abilities of all the inhabitants or members of the society.

Smith defined human capital as follows:

“Fourthly, of the acquired and useful abilities of all the inhabitants or members of the society.
The acquisition of such talents, by the maintenance of the acquirer during his education, study, or
apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in
his person. Those talents, as they make a part of his fortune, so do they likewise that of the

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society to which he belongs. The improved dexterity of a workman may be considered in the
same light as a machine or instrument of trade which facilitates and abridges labor, and which,
though it costs a certain expense, repays that expense with a profit.”. Therefore, Smith argued,
the productive power of labor are both dependent on the division of labor: The greatest
improvement in the productive powers of labour, and the greater part of the skill, dexterity, and
judgement with which it is any where directed, or applied, seem to have been the effects of the
division of labour.There is a complex relationship between the division of labor and human
capital.

Etymology

Arthur Lewis is said to have begun the field of development economics and consequently the
idea of human capital when he wrote in 1954 "Economic Development with Unlimited Supplies
of Labour." The term "human capital" was not used due to its negative undertones until it was
first discussed by Arthur Cecil Pigou:The use of the term in the modern neoclassical economic
literature dates back to Jacob Mincer's article "Investment in Human Capital and Personal
Income Distribution" in the Journal of Political Economy in 1958.[16] Then Theodore Schultz
who is also contributed to the development of the subject matter. The best-known application of
the idea of "human capital" in economics is that of Mincer and Gary Becker of the "Chicago
School" of economics. Becker's book entitled Human Capital, published in 1964, became a
standard reference for many years. In this view, human capital is similar to "physical means of
production", e.g., factories and machines: one can invest in human capital (via education,
training, medical treatment) and one's outputs depend partly on the rate of return on the human
capital one owns. Thus, human capital is a means of production, into which additional
investment yields additional output. Human capital is substitutable, but not transferable like land,
labor, or fixed capital.Some contemporary growth theories see human capital as an important
economic growth factor. Further research shows the relevance of education for the economic
welfare of people.

Competence and capital

The introduction is explained and justified by the unique characteristics of competence

(often used only knowledge). Unlike physical labor (and the other factors of production),
competence is:

• Expandable and self-generating with use: as doctors get more experience, their
competence base will increase, as will their endowment of human capital. The economics
of scarcity is replaced by the economics of self-generation.
• Transportable and shareable: competence, especially knowledge, can be moved and
shared. This transfer does not prevent its use by the original holder. However, the transfer
of knowledge may reduce its scarcity-value to its original possessor.

Competence, ability, skills or knowledge? Often the term "knowledge" is used. "Competence"
is broader and includes cognitive ability ("intelligence") and further abilities like motoric and
artistic abilities. "Skill" stands for narrow, domain-specific ability. The broader terms
"competence" and "ability" are interchangeable. Knowledge equity (= knowledge capital –

44
knowledge liability) plus emotional equity (= emotional capital – emotional liability) equals
goodwill or immaterial/intangible value of the company. Intangible value of the company
(goodwill) plus (material) equity equals the total value of the company.

Importance

The concept of Human capital has relatively more importance in labour-surplus countries. These
countries are naturally endowed with more of labour due to high birth rate under the given
climatic conditions. The surplus labour in these countries is the human resource available in
more abundance than the tangible capital resource. This human resource can be transformed into
Human capital with effective inputs of education, health and moral values. The transformation of
raw human resource into highly productive human resource with these inputs is the process of
human capital formation. The problem of scarcity of tangible capital in the labour surplus
countries can be resolved by accelerating the rate of human capital formation with both private
and public investment in education and health sectors of their National economies. The tangible
financial capital is an effective instrument of promoting economic growth of the nation. The
intangible human capital, on the other hand, is an instrument of promoting comprehensive
development of the nation because human capital is directly related to human development, and
when there is human development, the qualitative and quantitative progress of the nation is
inevitable. This importance of human capital is explicit in the changed approach of United
Nations towards comparative evaluation of economic development of different nations in the
World economy. United Nations publishes Human Development Report on human development
in different nations with the objective of evaluating the rate of human capital formation in these
nations. The statistical indicator of estimating Human Development in each nation is Human
Development Index (HDI).

It is the combination of "Life Expectancy Index", "Education Index" and "Income Index". The
Life expectancy index reveals the standard of health of the population in the country; education
index reveals the educational standard and the literacy ratio of the population; and the income
index reveals the standard of living of the population. If all these indices have the rising trend
over a long period of time, it is reflected into rising trend in HDI. The Human Capital is
developed by health, education and quality of Standard of living. Therefore, the components of
HDI viz, Life Expectancy Index, Education Index and Income Index are directly related to
Human Capital formation within the nation. HDI is indicator of positive correlation between
human capital formation and economic development. If HDI increases, there is higher rate of
human capital formation in response to higher standard of education and health. Similarly, if

45
HDI increases, per capita income of the nation also increases. Implicitly, HDI reveals that higher
the human capital formation due to good standard of health and education, higher is the per
capita income of the nation. This process of human development is the strong foundation of a
continuous process of economic development of the nation for a long period of time. This
significance of the concept of Human capital in generating long-term economic development of
the nation cannot be neglected. It is expected that the Macroeconomic policies of all the nations
are focussed towards promotion of human development and subsequently economic
development. Human Capital is the backbone of Human Development and economic
development in every nation. Mahroum (2007) suggested that at the macro-level, human capital
management is about three key capacities, the capacity to develop talent, the capacity to deploy
talent, and the capacity to draw talent from elsewhere. Collectively, these three capacities form
the backbone of any country's human capital competitiveness. Recent U.S. research shows that
geographic regions that invest in the human capital and economic advancement of immigrants
who are already living in their jurisdictions help boost their short- and long-term economic
growth.[24] There is also strong evidence that organizations that possess and cultivate their human
capital outperform other organizations lacking human capital (Crook, Todd, Combs, Woehr, and
Ketchen, 2011).

Cumulative growth

Human capital is distinctly different from the tangible monetary capital due to the extraordinary
characteristic of human capital to grow cumulatively over a long period of time. The growth of
tangible monetary capital is not always linear due to the shocks of business cycles. During the
period of prosperity, monetary capital grows at relatively higher rate while during the period of
recession and depression, there is deceleration of monetary capital. On the other hand, human
capital has uniformly rising rate of growth over a long period of time because the foundation of
this human capital is laid down by the educational and health inputs. The current generation is
qualitatively developed by the effective inputs of education and health. The future generation is
more benefited by the advanced research in the field of education and health, undertaken by the
current generation. Therefore, the educational and health inputs create more productive impacts
upon the future generation and the future generation becomes superior to the current generation.
In other words, the productive capacity of future generation increases more than that of current
generation. Therefore, rate of human capital formation in the future generation happens to be
more than the rate of human capital formation in the current generation. This is the cumulative
growth of human capital formation generated by superior quality of manpower in the succeeding
generation as compared to the preceding generation.

Human capital is central to debates about welfare, education, health care, and retirement. In
2004, "human capital" (German: Humankapital) was named the German Un-Word of the Year
by a jury of linguistic scholars, who considered the term inappropriate and inhumane, as
individuals would be degraded and their abilities classified according to economically relevant
quantities. "Human capital" is often confused with human development. The UN suggests
"Human development denotes both the process of widening people's choices and improving their
well-being". The UN Human Development indices suggest that human capital is merely a means
to the end of human development: "Theories of human capital formation and human resource

46
development view human beings as means to increased income and wealth rather than as ends.
These theories are concerned with human beings as inputs to increasing production".

Mobility between nations

Educated individuals often migrate from poor countries to rich countries seeking opportunity.
This movement has positive effects for both countries: capital-rich countries gain an influx in
labor, and labor rich countries receive capital when migrants remit money home. The loss of
labor in the old country also increases the wage rate for those who do not emigrate, while the
additional labor lowers wages in the new country. When workers migrate, their early care and
education generally benefit the country where they move to work. And, when they have health
problems or retire, their care and retirement pension will typically be paid in the new
country.African nations have invoked this argument with respect to slavery, other colonized
peoples have invoked it with respect to the "brain drain" or "human capital flight" which occurs
when the most talented individuals (those with the most individual capital) depart for education
or opportunity to the colonizing country (historically, Britain and France and the U.S.). Even in
Canada and other developed nations, the loss of human capital is considered a problem that can
only be offset by further draws on the human capital of poorer nations via immigration. The
economic impact of immigration to Canada is generally considered to be positive.During the late
19th and early 20th centuries, human capital in the United States became considerably more
valuable as the need for skilled labor came with newfound technological advancement. The 20th
century is often revered as the "human capital century" by scholars such as Claudia Goldin.
During this period a new mass movement toward secondary education paved the way for a
transition to mass higher education. New techniques and processes required further education
than the norm of primary schooling, which thus led to the creation of more formalized schooling
across the nation. These advances produced a need for more skilled labor, which caused the
wages of occupations that required more education to considerably diverge from the wages of
ones that required less. This divergence created incentives for individuals to postpone entering
the labor market in order to obtain more education. The “high school movement” had changed
the educational system for youth in America. With minor state involvements, the high school
movement started at the grass-roots level, particularly the communities with the most
homogeneous populations. As a year in high school added more than ten percent to an
individual’s income, post-elementary school enrollment and graduation rates increased
significantly during the 20th century. The U.S. system of education was characterized for much
of the 20th century by publicly funded mass secondary education that was open and forgiving, [
academic yet practical, secular,gender neutral, and funded by small, fiscally independent
districts. This early insight into the need for education allowed for a significant jump in US
productivity and economic prosperity, when compared to other world leaders at the time. It is
suggested by several economists, that there is a positive correlation between high school
enrollment rates and GDP per capita. Less developed countries have not established a set of
institutions favoring equality and role of education for the masses and therefore have been
incapable of investing in human capital stock necessary for technological growth.

The rights and freedom of individuals to travel and opportunity, despite some historical
exceptions such as the Soviet bloc and its "Iron Curtain", seem to consistently transcend the
countries in which they are educated. One must also remember that the ability to have mobility

47
with regards to where people want to move and work is a part of their human capital. Being able
to move from one area to the next is an ability and a benefit of having human capital. To restrict
people from doing so would be to inherently lower their human capital.This debate resembles, in
form, that regarding natural capital.

Intangibility and portability

Human capital is an intangible asset – it is not owned by the firm that employs it and is generally
not fungible. Specifically, individuals arrive at 9am and leave at 5pm (in the conventional office
model) taking most of their knowledge and relationships with them.Human capital when viewed
from a time perspective consumes time in one of key activities:

1. Knowledge (activities involving one employee),

2. Collaboration (activities involving more than 1 employee),
3. Processes (activities specifically focused on the knowledge and collaborative activities
generated by organizational structure – such as silo impacts, internal politics, etc.) and
4. Absence (annual leave, sick leave, holidays, etc.).

Despite the lack of formal ownership, firms can and do gain from high levels of training, in part
because it creates a corporate culture or vocabulary teams use to create cohesion.In recent
economic writings the concept of firm-specific human capital, which includes those social
relationships, individual instincts, and instructional details that are of value within one firm (but
not in general), appears by way of explaining some labour mobility issues and such phenomena
as golden handcuffs. Workers can be more valuable where they are simply for having acquired
this knowledge, these skills and these instincts. Accordingly, the firm gains for their
unwillingness to leave and market talents elsewhere.

Risk

When human capital is assessed by activity based costing via time allocations it becomes
possible to assess human capital risk. Human capital risks can be identified if HR processes in
organizations are studied in detail. Human capital risk occurs when the organization operates
below attainable operational excellence levels. For example, if a firm could reasonably reduce
errors and rework (the Process component of human capital) from 10,000 hours per annum to
2,000 hours with attainable technology, the difference of 8,000 hours is human capital risk.
When wage costs are applied to this difference (the 8,000 hours) it becomes possible to
financially value human capital risk within an organizational perspective.

Risk accumulates in four primary categories:

1. Absence activities (activities related to employees not showing up for work such as sick
leave, industrial action, etc.). Unavoidable absence is referred to as Statutory Absence.
All other categories of absence are termed "Controllable Absence";
2. Collaborative activities are related to the expenditure of time between more than one
employee within an organizational context. Examples include: meetings, phone calls,
instructor led training, etc.;

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 3. Knowledge Activities are related to time expenditures by a single person and include
finding/retrieving information, research, email, messaging, blogging, information
analysis, etc.; and
4. Process activities are knowledge and collaborative activities that result due to
organizational context such as errors/rework, manual data transformation, stress, politics,
etc.

Corporate finance

In Corporate finance, human capital is one of the three primary components of Intellectual
capital (which in addition to tangible assets comprise the entire value of a company). Human
Capital is the value that the employees of a business provide through the application of skills,
know-how and expertise. It is an organization’s combined human capability for solving business
problems. Human Capital is inherent in people and cannot be owned by an organization.
Therefore, Human Capital leaves an organization when people leave. Human Capital also
encompasses how effectively an organization uses its people resources as measured by creativity
and innovation. A company’s reputation as an employer affects the Human Capital it draws.

Dave Ulrich and his contributions to HRM to Human Capital

David Olson Ulrich (born 1953) is a university professor, author, speaker, management coach,
and management consultant. Ulrich is a professor of business at the Ross School of Business,
University of Michigan and co-founder of The RBL Group. He has written numerous books
covering topics in human resources and leadership. Ulrich is currently on the Board of Directors
for Herman Miller, a Fellow in the National Academy of Human Resources, and is on the Board
of Trustees of Southern Virginia University.

Dave Ulrich has been ranked the Management Educator & Guru by BusinessWeek,
selected by Fast Company as one of the 10 most innovative and creative leaders, and named the
most influential thinker in HR of the decade by HR magazine.

Research and career

Dave Ulrich’s professional focus has addressed questions on how organizations add value to
customers and investors through both leadership and strategic human resource practices. In the
human resource area, he and his colleagues have worked to redefine and upgrade HR. With his
colleagues Wayne Brockbank and Jon Younger, Ulrich has articulated how the modern HR
organization can be organized into shared services, centers of expertise, and business partners.
He has also co-directed research on over 40,000 respondents about the competencies required for
successful HR professionals; in addition, he has helped shape thinking on how to transform HR
practices so that they are aligned to customer needs and integrated around organization
capabilities.In the leadership area, Norm Smallwood and Ulrich have worked to focus on the
outcomes of effective leadership;] they have also shown how leadership will increase customer
share by creating a leadership brand within the company. Their work also illustrates that
investing in leadership will increase shareholder value. Their work also synthesizes the thicket of

49
leadership competency models into a unified view of leadership. Their current work attempts to
look at leadership through the eyes and expectations of investors.

Leadership Concepts and its Contributions to H-Resoruces to H-Capital

Leadership is both a research area and a practical skill encompassing the ability of an individual
or organization to "lead" or guide other individuals, teams, or entire organizations. The literature
debates various viewpoints: contrasting Eastern and Western approaches to leadership, and also
(within the West) US vs. European approaches. US academic environments define leadership as
"a process of social influence in which a person can enlist the aid and support of others in the
accomplishment of a common task". Leadership seen from a European and non-academic
perspective encompasses a view of a leader who can be moved not only by communitarian goals
but also by the search for personal power. According to this view ;

"Leadership is a holistic spectrum that can arise from:

➢ higher levels of physical power, need to display power and control others, force
superiority, ability to generate fear, or group-member's need for a powerful group
protector (Primal Leadership),
➢ superior mental energies, superior motivational forces, perceivable in
communication and behaviors, lack of fear, courage, determination
(Psychoenergetic Leadership),
➢ higher abilities in managing the overall picture (Macro-Leadership),
➢ higher abilities in specialized tasks (Micro-Leadership),
➢ higher ability in managing the execution of a task (Project Leadership), and
➢ higher level of values, wisdom, and spirituality (Spiritual Leadership), where any
Leader derives its Leadership from a unique mix of one or more of the former
factors".Studies of leadership have produced theories involving traits, situational
interaction, function, behavior, power, vision and values, charisma, and
intelligence, among others.

Theories

The search for the characteristics or traits of leaders has continued for centuries. Philosophical
writings from Plato's Republic[7] to Plutarch's Lives have explored the question "What qualities
distinguish an individual as a leader?" Underlying this search was the early recognition of the
importance of leadership and the assumption that leadership is rooted in the characteristics that
certain individuals possess. This idea that leadership is based on individual attributes is known as
the "trait theory of leadership".A number of works in the 19th century – when the traditional
authority of monarchs, lords and bishops had begun to wane – explored the trait theory at length:
note especially the writings of Thomas Carlyle and of Francis Galton, whose works have
prompted decades of research. In Heroes and Hero Worship (1841), Carlyle identified the
talents, skills, and physical characteristics of men who rose to power. Galton's Hereditary Genius
(1869) examined leadership qualities in the families of powerful men. After showing that the

50
numbers of eminent relatives dropped off when his focus moved from first-degree to second-
degree relatives, Galton concluded that leadership was inherited. In other words, leaders were
born, not developed. Both of these notable works lent great initial support for the notion that
leadership is rooted in characteristics of a leader.Cecil Rhodes (1853–1902) believed that public-
spirited leadership could be nurtured by identifying young people with "moral force of character
and instincts to lead", and educating them in contexts (such as the collegiate environment of the
University of Oxford) which further developed such characteristics. International networks of
such leaders could help to promote international understanding and help "render war
impossible". This vision of leadership underlay the creation of the Rhodes Scholarships, which
have helped to shape notions of leadership since their creation in 1903.

Rise of alternative theories

In the late 1940s and early 1950s, however, a series of qualitative reviews of these studies (e.g.,
Bird, 1940;] Stogdill, 1948; Mann, 1959 prompted researchers to take a drastically different view
of the driving forces behind leadership. In reviewing the extant literature, Stogdill and Mann
found that while some traits were common across a number of studies, the overall evidence
suggested that persons who are leaders in one situation may not necessarily be leaders in other
situations. Subsequently, leadership was no longer characterized as an enduring individual trait,
as situational approaches (see alternative leadership theories below) posited that individuals can
be effective in certain situations, but not others. The focus then shifted away from traits of
leaders to an investigation of the leader behaviors that were effective. This approach dominated
much of the leadership theory and research for the next few decades

Reemergence of trait theory

New methods and measurements were developed after these influential reviews that would
ultimately reestablish trait theory as a viable approach to the study of leadership. For example,
improvements in researchers' use of the round robin research design methodology allowed
researchers to see that individuals can and do emerge as leaders across a variety of situations and
tasks. Additionally, during the 1980s statistical advances allowed researchers to conduct meta-
analyses, in which they could quantitatively analyze and summarize the findings from a wide
array of studies. This advent allowed trait theorists to create a comprehensive picture of previous
leadership research rather than rely on the qualitative reviews of the past. Equipped with new
methods, leadership researchers revealed the following:While the trait theory of leadership has
certainly regained popularity, its reemergence has not been accompanied by a corresponding
increase in sophisticated conceptual frameworks. Specifically, Zaccaro (2007) noted that trait
theories still:

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 ➢ Focus on a small set of individual attributes such as Big Five personality traits, to the
neglect of cognitive abilities, motives, values, social skills, expertise, and problem-
solving skills.
➢ Fail to consider patterns or integrations of multiple attributes.
➢ Do not distinguish between those leader attributes that are generally not malleable over
time and those that are shaped by, and bound to, situational influences.
➢ Do not consider how stable leader attributes account for the behavioral diversity
necessary for effective leadership.

Attribute pattern approach

Considering the criticisms of the trait theory outlined above, several researchers have begun to
adopt a different perspective of leader individual differences—the leader attribute pattern
approach. In contrast to the traditional approach, the leader attribute pattern approach is based on
theorists' arguments that the influence of individual characteristics on outcomes is best
understood by considering the person as an integrated totality rather than a summation of
individual variables. In other words, the leader attribute pattern approach argues that integrated
constellations or combinations of individual differences may explain substantial variance in both
leader emergence and leader effectiveness beyond that explained by single attributes, or by
additive combinations of multiple attributes..

Behavioral and style theories

In response to the early criticisms of the trait approach, theorists began to research leadership as
a set of behaviors, evaluating the behavior of successful leaders, determining a behavior
taxonomy, and identifying broad leadership styles. David McClelland, for example, posited that
leadership takes a strong personality with a well-developed positive ego. To lead, self-confidence
and high self-esteem are useful, perhaps even essential.

Kurt Lewin, Ronald Lipitt, and Ralph White developed in 1939 the seminal work on the
influence of leadership styles and performance. The researchers evaluated the performance of
groups of eleven-year-old boys under different types of work climate. In each, the leader
exercised his influence regarding the type of group decision making, praise and criticism
(feedback), and the management of the group tasks (project management) according to three
styles: authoritarian, democratic, and laissez-faire. The managerial grid model is also based on a
behavioral theory. The model was developed by Robert Blake and Jane Mouton in 1964 and
suggests five different leadership styles, based on the leaders' concern for people and their
concern for goal achievement.

B.F Skinner and his Contributions to HR to Human Capital

Positive reinforcement

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B.F. Skinner is the father of behavior modification and developed the concept of positive
reinforcement. Positive reinforcement occurs when a positive stimulus is presented in response
to a behavior, increasing the likelihood of that behavior in the future. The following is an
example of how positive reinforcement can be used in a business setting. Assume praise is a
positive reinforcer for a particular employee. This employee does not show up to work on time
every day. The manager of this employee decides to praise the employee for showing up on time
every day the employee actually shows up to work on time. As a result, the employee comes to
work on time more often because the employee likes to be praised. In this example, praise (the
stimulus) is a positive reinforcer for this employee because the employee arrives at work on time
(the behavior) more frequently after being praised for showing up to work on time.The use of
positive reinforcement is a successful and growing technique used by leaders to motivate and
attain desired behaviors from subordinates. Organizations such as Frito-Lay, 3M, Goodrich,
Michigan Bell, and Emery Air Freight have all used reinforcement to increase productivity.
Empirical research covering the last 20 years suggests that reinforcement theory has a 17 percent
increase in performance. Additionally, many reinforcement techniques such as the use of praise
are inexpensive, providing higher performance for lower costs.

Situational and contingency theories

Situational theory also appeared as a reaction to the trait theory of leadership. Social scientists
argued that history was more than the result of intervention of great men as Carlyle suggested.
Herbert Spencer (1884) (and Karl Marx) said that the times produce the person and not the other
way around. This theory assumes that different situations call for different characteristics;
according to this group of theories, no single optimal psychographic profile of a leader exists.
According to the theory, "what an individual actually does when acting as a leader is in large part
dependent upon characteristics of the situation in which he functions." Some theorists started to
synthesize the trait and situational approaches. Building upon the research of Lewin et al.,
academics began to normalize the descriptive models of leadership climates, defining three
leadership styles and identifying which situations each style works better in. The authoritarian
leadership style, for example, is approved in periods of crisis but fails to win the "hearts and
minds" of followers in day-to-day management; the democratic leadership style is more adequate
in situations that require consensus building; finally, the laissez-faire leadership style is
appreciated for the degree of freedom it provides, but as the leaders do not "take charge", they
can be perceived as a failure in protracted or thorny organizational problems. Thus, theorists
defined the style of leadership as contingent to the situation, which is sometimes classified as
contingency theory. Four contingency leadership theories appear more prominently in recent
years: Fiedler contingency model, Vroom-Yetton decision model, the path-goal theory, and the
Hersey-Blanchard situational theory.

The Fiedler contingency model bases the leader's effectiveness on what Fred Fiedler called
situational contingency. This results from the interaction of leadership style and situational
favorability (later called situational control). The theory defined two types of leader: those who
tend to accomplish the task by developing good relationships with the group (relationship-
oriented), and those who have as their prime concern carrying out the task itself (task-oriented).
According to Fiedler, there is no ideal leader. Both task-oriented and relationship-oriented
leaders can be effective if their leadership orientation fits the situation. When there is a good

53
leader-member relation, a highly structured task, and high leader position power, the situation is
considered a "favorable situation". Fiedler found that task-oriented leaders are more effective in
extremely favorable or unfavorable situations, whereas relationship-oriented leaders perform best
in situations with intermediate favorability.Victor Vroom, in collaboration with Phillip Yetton
(1973)] and later with Arthur Jago (1988), developed a taxonomy for describing leadership
situations, which was used in a normative decision model where leadership styles were
connected to situational variables, defining which approach was more suitable to which situation.
This approach was novel because it supported the idea that the same manager could rely on
different group decision making approaches depending on the attributes of each situation. This
model was later referred to as situational contingency theory. The path-goal theory of leadership
was developed by Robert House (1971) and was based on the expectancy theory of Victor
Vroom. According to House, the essence of the theory is "the meta proposition that leaders, to be
effective, engage in behaviors that complement subordinates' environments and abilities in a
manner that compensates for deficiencies and is instrumental to subordinate satisfaction and
individual and work unit performance". The theory identifies four leader behaviors, achievement-
oriented, directive, participative, and supportive, that are contingent to the environment factors
and follower characteristics. In contrast to the Fiedler contingency model, the path-goal model
states that the four leadership behaviors are fluid, and that leaders can adopt any of the four
depending on what the situation demands. The path-goal model can be classified both as a
contingency theory, as it depends on the circumstances, and as a transactional leadership theory,
as the theory emphasizes the reciprocity behavior between the leader and the followers.The
situational leadership model proposed by Hersey and Blanchard suggests four leadership-styles
and four levels of follower-development. For effectiveness, the model posits that the leadership-
style must match the appropriate level of follower-development. In this model, leadership
behavior becomes a function not only of the characteristics of the leader, but of the
characteristics of followers as well.

Functional theory

Functional leadership theory (Hackman & Walton, 1986; McGrath, 1962; Adair, 1988; Kouzes
& Posner, 1995) is a particularly useful theory for addressing specific leader behaviors expected
to contribute to organizational or unit effectiveness. This theory argues that the leader's main job
is to see that whatever is necessary to group needs is taken care of; thus, a leader can be said to
have done their job well when they have contributed to group effectiveness and cohesion
(Fleishman et al., 1991; Hackman & Wageman, 2005; Hackman & Walton, 1986). While
functional leadership theory has most often been applied to team leadership (Zaccaro, Rittman,
& Marks, 2001), it has also been effectively applied to broader organizational leadership as well
(Zaccaro, 2001). In summarizing literature on functional leadership (see Kozlowski et al. (1996),
Zaccaro et al. (2001), Hackman and Walton (1986), Hackman & Wageman (2005), Morgeson
(2005)), Klein, Zeigert, Knight, and Xiao (2006) observed five broad functions a leader performs
when promoting organization's effectiveness. These functions include environmental monitoring,
organizing subordinate activities, teaching and coaching subordinates, motivating others, and

54
intervening actively in the group's work.A variety of leadership behaviors are expected to
facilitate these functions. In initial work identifying leader behavior, Fleishman (1953) observed
that subordinates perceived their supervisors' behavior in terms of two broad categories referred
to as consideration and initiating structure. Consideration includes behavior involved in fostering
effective relationships. Examples of such behavior would include showing concern for a
subordinate or acting in a supportive manner towards others. Initiating structure involves the
actions of the leader focused specifically on task accomplishment. This could include role
clarification, setting performance standards, and holding subordinates accountable to those
standards.

Integrated psychological theory

The Integrated Psychological theory of leadership is an attempt to integrate the strengths of the
older theories (i.e. traits, behavioral/styles, situational and functional) while addressing their
limitations, largely by introducing a new element – the need for leaders to develop their
leadership presence, attitude toward others and behavioral flexibility by practicing psychological
mastery. It also offers a foundation for leaders wanting to apply the philosophies of servant
leadership and authentic leadership. Integrated Psychological theory began to attract attention
after the publication of James Scouller's Three Levels of Leadership model (2011). Scouller
argued that the older theories offer only limited assistance in developing a person's ability to lead
effectively.

He pointed out, for example, that:

➢ Traits theories, which tend to reinforce the idea that leaders are born not made, might
help us select leaders, but they are less useful for developing leaders.
➢ An ideal style (e.g. Blake & Mouton's team style) would not suit all circumstances.
➢ Most of the situational/contingency and functional theories assume that leaders can
change their behavior to meet differing circumstances or widen their behavioral range at
will, when in practice many find it hard to do so because of unconscious beliefs, fears or
ingrained habits. Thus, he argued, leaders need to work on their inner psychology.
➢ None of the old theories successfully address the challenge of developing "leadership
presence"; that certain "something" in leaders that commands attention, inspires people,
wins their trust and makes followers want to work with them.

Scouller therefore proposed the Three Levels of Leadership model, which was later categorized
as an "Integrated Psychological" theory on the Businessballs education website. In essence, his
model aims to summarize what leaders have to do, not only to bring leadership to their group or
organization, but also to develop themselves technically and psychologically as leaders.

The three levels in his model are Public, Private and Personal leadership:

• The first two – public and private leadership – are "outer" or behavioral levels. These are
the behaviors that address what Scouller called "the four dimensions of leadership".

55
 • These dimensions are:
• (1) a shared, motivating group purpose;
• (2) action, progress and results;
• (3) collective unity or team spirit;
• (4) individual selection and motivation. Public leadership focuses on the 34 behaviors
involved in influencing two or more people simultaneously. Private leadership covers the
14 behaviors needed to influence individuals one to one.
• The third – personal leadership – is an "inner" level and concerns a person's growth
toward greater leadership presence, knowhow and skill. Working on one's personal
leadership has three aspects:
• (1) Technical knowhow and skill
• (2) Developing the right attitude toward other people – which is the basis of servant
leadership
• (3) Psychological self-mastery – the foundation for authentic leadership.

Scouller argued that self-mastery is the key to growing one's leadership presence, building
trusting relationships with followers and dissolving one's limiting beliefs and habits, thereby
enabling behavioral flexibility as circumstances change, while staying connected to one's core
values (that is, while remaining authentic). To support leaders' development, he introduced a new
model of the human psyche and outlined the principles and techniques of self-mastery, which
include the practice of mindfulness meditation.

Transactional and transformational theories and its Contributions to HR

Bernard Bass and colleagues developed the idea of two different types of leadership,
transactional that involves exchange of labor for rewards and transformational which is based on
concern for employees, intellectual stimulation, and providing a group vision. The transactional
leader (Burns, 1978)] is given power to perform certain tasks and reward or punish for the team's
performance. It gives the opportunity to the manager to lead the group and the group agrees to
follow his lead to accomplish a predetermined goal in exchange for something else. Power is
given to the leader to evaluate, correct, and train subordinates when productivity is not up to the
desired level, and reward effectiveness when expected outcome is reached.

Leader–member exchange theory

Another theory that addresses a specific aspect of the leadership process is the leader–member
exchange (LMX) theory, which evolved from an earlier theory called the vertical dyad linkage
(VDL) model. Both of these models focus on the interaction between leaders and individual
followers. Similar to the transactional approach, this interaction is viewed as a fair exchange
whereby the leader provides certain benefits such as task guidance, advice, support, and/or
significant rewards and the followers reciprocate by giving the leader respect, cooperation,
commitment to the task and good performance. However, LMX recognizes that leaders and
individual followers will vary in the type of exchange that develops between them. LMX
theorizes that the type of exchanges between the leader and specific followers can lead to the
creation of in-groups and out-groups. In-group members are said to have high-quality exchanges
with the leader, while out-group members have low-quality exchanges with the leader.

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In-group members

In-group members are perceived by the leader as being more experienced, competent, and
willing to assume responsibility than other followers. The leader begins to rely on these
individuals to help with especially challenging tasks. If the follower responds well, the leader
rewards him/her with extra coaching, favorable job assignments, and developmental experiences.
If the follower shows high commitment and effort followed by additional rewards, both parties
develop mutual trust, influence, and support of one another. Research shows the in-group
members usually receive higher performance evaluations from the leader, higher satisfaction,
and faster promotions than out-group members. In-group members are also likely to build
stronger bonds with their leaders by sharing the same social backgrounds and interests.

Out-group members

Out-group members often receive less time and more distant exchanges than their in-group
counterparts. With out-group members, leaders expect no more than adequate job performance,
good attendance, reasonable respect, and adherence to the job description in exchange for a fair
wage and standard benefits. The leader spends less time with out-group members, they have
fewer developmental experiences, and the leader tends to emphasize his/her formal authority to
obtain compliance to leader requests. Research shows that out-group members are less satisfied
with their job and organization, receive lower performance evaluations from the leader, see their
leader as less fair, and are more likely to file grievances or leave the organization.

Emotions

Leadership can be perceived as a particularly emotion-laden process, with emotions entwined

with the social influence process.[55] In an organization, the leader's mood has some effects on
his/her group. These effects can be described in three levels: The mood of individual group
members. Group members with leaders in a positive mood experience more positive mood than
do group members with leaders in a negative mood. The leaders transmit their moods to other
group members through the mechanism of emotional contagion.[56] Mood contagion may be one
of the psychological mechanisms by which charismatic leaders influence followers. The affective
tone of the group. Group affective tone represents the consistent or homogeneous affective
reactions within a group. Group affective tone is an aggregate of the moods of the individual
members of the group and refers to mood at the group level of analysis. Groups with leaders in a
positive mood have a more positive affective tone than do groups with leaders in a negative
mood. Group processes like coordination, effort expenditure, and task strategy. Public
expressions of mood impact how group members think and act. When people experience and
express mood, they send signals to others. Leaders signal their goals, intentions, and attitudes
through their expressions of moods. For example, expressions of positive moods by leaders
signal that leaders deem progress toward goals to be good. The group members respond to those
signals cognitively and behaviorally in ways that are reflected in the group processes.

In research about client service, it was found that expressions of positive mood by the leader
improve the performance of the group, although in other sectors there were other findings.
Beyond the leader's mood, her/his behavior is a source for employee positive and negative

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emotions at work. The leader creates situations and events that lead to emotional response.
Certain leader behaviors displayed during interactions with their employees are the sources of
these affective events. Leaders shape workplace affective events. Examples – feedback giving,
allocating tasks, resource distribution. Since employee behavior and productivity are directly
affected by their emotional states, it is imperative to consider employee emotional responses to
organizational leaders. Emotional intelligence, the ability to understand and manage moods and
emotions in the self and others, contributes to effective leadership within organizations.

Neo-emergent theory

The neo-emergent leadership theory (from the Oxford school of leadership) sees leadership as
created through the emergence of information by the leader or other stakeholders, not through
the true actions of the leader himself. In other words, the reproduction of information or stories
form the basis of the perception of leadership by the majority. It is well known that the naval
hero Lord Nelson often wrote his own versions of battles he was involved in, so that when he
arrived home in England he would receive a true hero's welcome. In modern society, the press,
blogs and other sources report their own views of leaders, which may be based on reality, but
may also be based on a political command, a payment, or an inherent interest of the author,
media, or leader. Therefore, one can argue that the perception of all leaders is created and in fact
does not reflect their true leadership qualities at all.

Leadership Styles

A leadership style is a leader's style of providing direction, implementing plans, and motivating
people. It is the result of the philosophy, personality, and experience of the leader. Rhetoric
specialists have also developed models for understanding leadership. Different situations call for
different leadership styles. In an emergency when there is little time to converge on an agreement
and where a designated authority has significantly more experience or expertise than the rest of
the team, an autocratic leadership style may be most effective; however, in a highly motivated
and aligned team with a homogeneous level of expertise, a more democratic or Laissez-faire
style may be more effective. The style adopted should be the one that most effectively achieves
the objectives of the group while balancing the interests of its individual members.

Autocratic or authoritarian

Under the autocratic leadership style, all decision-making powers are centralized in the leader, as
with dictators.Leaders do not entertain any suggestions or initiatives from subordinates. The
autocratic management has been successful as it provides strong motivation to the manager. It
permits quick decision-making, as only one person decides for the whole group and keeps each
decision to him/herself until he/she feels it needs to be shared with the rest of the group.[62]

Participative or democratic

The democratic leadership style consists of the leader sharing the decision-making abilities with
group members by promoting the interests of the group members and by practicing social
equality. This has also been called shared leadership.

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Laissez-faire or Free-rein

In Laissez-faire or free-rein leadership, decision-making is passed on to the sub-ordinates. The

sub-ordinates are given complete right and power to make decisions to establish goals and work
out the problems or hurdles.

Task-oriented and relationship-oriented

Task-oriented leadership is a style in which the leader is focused on the tasks that need to be
performed in order to meet a certain production goal. Task-oriented leaders are generally more
concerned with producing a step-by-step solution for given problem or goal, strictly making sure
these deadlines are met, results and reaching target outcomes. Relationship-oriented leadership is
a contrasting style in which the leader is more focused on the relationships amongst the group
and is generally more concerned with the overall well-being and satisfaction of group members.
Relationship-oriented leaders emphasize communication within the group, shows trust and
confidence in group members, and shows appreciation for work done.Task-oriented leaders are
typically less concerned with the idea of catering to group members, and more concerned with
acquiring a certain solution to meet a production goal. For this reason, they typically are able to
make sure that deadlines are met, yet their group members' well-being may suffer. Relationship-
oriented leaders are focused on developing the team and the relationships in it. The positives to
having this kind of environment are that team members are more motivated and have support,
however, the emphasis on relations as opposed to getting a job done might make productivity
suffer.

Performance

In the past, some researchers have argued that the actual influence of leaders on organizational
outcomes is overrated and romanticized as a result of biased attributions about leaders (Meindl &
Ehrlich, 1987). Despite these assertions, however, it is largely recognized and accepted by
practitioners and researchers that leadership is important, and research supports the notion that
leaders do contribute to key organizational outcomes (Day & Lord, 1988; Kaiser, Hogan, &
Craig, 2008). To facilitate successful performance it is important to understand and accurately
measure leadership performance.Job performance generally refers to behavior that is expected to
contribute to organizational success (Campbell, 1990). Campbell identified a number of specific
types of performance dimensions; leadership was one of the dimensions that he identified. There
is no consistent, overall definition of leadership performance (Yukl, 2006). Many distinct
conceptualizations are often lumped together under the umbrella of leadership performance,
including outcomes such as leader effectiveness, leader advancement, and leader emergence
(Kaiser et al., 2008). For instance, leadership performance may be used to refer to the career
success of the individual leader, performance of the group or organization, or even leader
emergence. Each of these measures can be considered conceptually distinct. While these aspects
may be related, they are different outcomes and their inclusion should depend on the applied or

59
research focus.A toxic leader is someone who has responsibility over a group of people or an
organization, and who abuses the leader–follower relationship by leaving the group or
organization in a worse-off condition than when he/she joined it.Most theories in the 20th
century argued that great leaders were born, not made. Current studies have indicated that
leadership is much more complex and cannot be boiled down to a few key traits of an individual.
Years of observation and study have indicated that one such trait or a set of traits does not make
an extraordinary leader. What scholars have been able to arrive at is that leadership traits of an
individual do not change from situation to situation; such traits include intelligence,
assertiveness, or physical attractiveness. However, each key trait may be applied to situations
differently, depending on the circumstances. The following summarizes the main leadership
traits found in research by Jon P. Howell, business professor at New Mexico State University
and author of the book Snapshots of Great Leadership.

Determination and drive include traits such as initiative, energy, assertiveness, perseverance and
sometimes dominance. People with these traits often tend to wholeheartedly pursue their goals,
work long hours, are ambitious, and often are very competitive with others. Cognitive capacity
includes intelligence, analytical and verbal ability, behavioral flexibility, and good judgment.
Individuals with these traits are able to formulate solutions to difficult problems, work well
under stress or deadlines, adapt to changing situations, and create well-thought-out plans for the
future. Howell provides examples of Steve Jobs and Abraham Lincoln as encompassing the traits
of determination and drive as well as possessing cognitive capacity, demonstrated by their ability
to adapt to their continuously changing environments. Self-confidence encompasses the traits of
high self-esteem, assertiveness, emotional stability, and self-assurance. Individuals that are self-
confident do not doubt themselves or their abilities and decisions; they also have the ability to
project this self-confidence onto others, building their trust and commitment. Integrity is
demonstrated in individuals who are truthful, trustworthy, principled, consistent, dependable,
loyal, and not deceptive. Leaders with integrity often share these values with their followers, as
this trait is mainly an ethics issue. It is often said that these leaders keep their word and are
honest and open with their cohorts. Sociability describes individuals who are friendly,
extroverted, tactful, flexible, and interpersonally competent. Such a trait enables leaders to be
accepted well by the public, use diplomatic measures to solve issues, as well as hold the ability
to adapt their social persona to the situation at hand. According to Howell, Mother Teresa is an
exceptional example that embodies integrity, assertiveness, and social abilities in her diplomatic
dealings with the leaders of the world. Few great leaders encompass all of the traits listed above,
but many have the ability to apply a number of them to succeed as front-runners of their
organization or situation.

Ontological-phenomenological model

One of the more recent definitions of leadership comes from Werner Erhard, Michael C. Jensen,
Steve Zaffron, and Kari Granger who describe leadership as “an exercise in language that results
in the realization of a future that wasn’t going to happen anyway, which future fulfills (or
contributes to fulfilling) the concerns of the relevant parties...”. This definition ensures that
leadership is talking about the future and includes the fundamental concerns of the relevant
parties. This differs from relating to the relevant parties as “followers” and calling up an image
of a single leader with others following. Rather, a future that fulfills on the fundamental concerns

60
of the relevant parties indicates the future that wasn’t going to happen is not the “idea of the
leader”, but rather is what emerges from digging deep to find the underlying concerns of those
who are impacted by the leadership.

Contexts

An organization that is established as an instrument or means for achieving defined objectives

has been referred to as a formal organization. Its design specifies how goals are subdivided and
reflected in subdivisions of the organization. Divisions, departments, sections, positions, jobs,
and tasks make up this work structure. Thus, the formal organization is expected to behave
impersonally in regard to relationships with clients or with its members. According to Weber's
definition, entry and subsequent advancement is by merit or seniority. Employees receive a
salary and enjoy a degree of tenure that safeguards them from the arbitrary influence of superiors
or of powerful clients. The higher one's position in the hierarchy, the greater one's presumed
expertise in adjudicating problems that may arise in the course of the work carried out at lower
levels of the organization. It is this bureaucratic structure that forms the basis for the appointment
of heads or chiefs of administrative subdivisions in the organization and endows them with the
authority attached to their position. In contrast to the appointed head or chief of an administrative
unit, a leader emerges within the context of the informal organization that underlies the formal
structure. The informal organization expresses the personal objectives and goals of the individual
membership. Their objectives and goals may or may not coincide with those of the formal
organization. The informal organization represents an extension of the social structures that
generally characterize human life — the spontaneous emergence of groups and organizations as
ends in themselves.In prehistoric times, humanity was preoccupied with personal security,
maintenance, protection, and survival. Now humanity spends a major portion of waking hours
working for organizations. The need to identify with a community that provides security,
protection, maintenance, and a feeling of belonging has continued unchanged from prehistoric
times. This need is met by the informal organization and its emergent, or unofficial, leaders.
Leaders emerge from within the structure of the informal organization. Their personal qualities,
the demands of the situation, or a combination of these and other factors attract followers who
accept their leadership within one or several overlay structures. Instead of the authority of
position held by an appointed head or chief, the emergent leader wields influence or power.
Influence is the ability of a person to gain co-operation from others by means of persuasion or
control over rewards. Power is a stronger form of influence because it reflects a person's ability
to enforce action through the control of a means of punishment. A leader is a person who
influences a group of people towards a specific result. It is not dependent on title or formal
authority. (Elevos, paraphrased from Leaders, Bennis, and Leadership Presence, Halpern &
Lubar.) Ogbonnia (2007) defines an effective leader "as an individual with the capacity to
consistently succeed in a given condition and be viewed as meeting the expectations of an
organization or society." Leaders are recognized by their capacity for caring for others, clear
communication, and a commitment to persist. An individual who is appointed to a managerial
position has the right to command and enforce obedience by virtue of the authority of their
position. However, she or he must possess adequate personal attributes to match this authority,
because authority is only potentially available to him/her. In the absence of sufficient personal
competence, a manager may be confronted by an emergent leader who can challenge her/his role
in the organization and reduce it to that of a figurehead. However, only authority of position has

61
the backing of formal sanctions. It follows that whoever wields personal influence and power can
legitimize this only by gaining a formal position in the hierarchy, with commensurate authority.
Leadership can be defined as one's ability to get others to willingly follow. Every organization
needs leaders at every level.

Self-leadership

Self-leadership is a process that occurs within an individual, rather than an external act. It is an
expression of who we are as people.

Mark van Vugt and Anjana Ahuja in Naturally Selected: The Evolutionary Science of Leadership
present evidence of leadership in nonhuman animals, from ants and bees to baboons and
chimpanzees. They suggest that leadership has a long evolutionary history and that the same
mechanisms underpinning leadership in humans can be found in other social species, too.[77]
Richard Wrangham and Dale Peterson, in Demonic Males: Apes and the Origins of Human
Violence, present evidence that only humans and chimpanzees, among all the animals living on
Earth, share a similar tendency for a cluster of behaviors: violence, territoriality, and competition
for uniting behind the one chief male of the land.[78] This position is contentious. Many animals
beyond apes are territorial, compete, exhibit violence, and have a social structure controlled by a
dominant male (lions, wolves, etc.), suggesting Wrangham and Peterson's evidence is not
empirical. However, we must examine other species as well, including elephants (which are
matriarchal and follow an alpha female), meerkats (who are likewise matriarchal), and many
others. By comparison, bonobos, the second-closest species-relatives of humans, do not unite
behind the chief male of the land. The bonobos show deference to an alpha or top-ranking female
that, with the support of her coalition of other females, can prove as strong as the strongest male.
Thus, if leadership amounts to getting the greatest number of followers, then among the bonobos,
a female almost always exerts the strongest and most effective leadership. However, not all
scientists agree on the allegedly peaceful nature of the bonobo or its reputation as a "hippie
chimp".Sanskrit literature identifies ten types of leaders. Defining characteristics of the ten types
of leaders are explained with examples from history and mythology. Aristocratic thinkers have
postulated that leadership depends on one's "blue blood" or genes. Monarchy takes an extreme
view of the same idea, and may prop up its assertions against the claims of mere aristocrats by
invoking divine sanction (see the divine right of kings). Contrariwise, more democratically
inclined theorists have pointed to examples of meritocratic leaders, such as the Napoleonic
marshals profiting from careers open to talent.In the autocratic/paternalistic strain of thought,
traditionalists recall the role of leadership of the Roman pater familias. Feminist thinking, on the
other hand, may object to such models as patriarchal and posit against them emotionally attuned,
responsive, and consensual empathetic guidance, which is sometimes associated with
matriarchies.Comparable to the Roman tradition, the views of Confucianism on "right living"
relate very much to the ideal of the (male) scholar-leader and his benevolent rule, buttressed by a
tradition of filial piety.Leadership is a matter of intelligence, trustworthiness, humaneness,
courage, and discipline ... Reliance on intelligence alone results in rebelliousness. Exercise of
humaneness alone results in weakness. Fixation on trust results in folly. Dependence on the
strength of courage results in violence. Excessive discipline and sternness in command result in
cruelty. When one has all five virtues together, each appropriate to its function, then one can be a
leader. — Sun Tzu[81]Machiavelli's The Prince, written in the early 16th century, provided a

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manual for rulers ("princes" or "tyrants" in Machiavelli's terminology) to gain and keep power.In
the 19th century the elaboration of anarchist thought called the whole concept of leadership into
question. (Note that the Oxford English Dictionary traces the word "leadership" in English only
as far back as the 19th century.) One response to this denial of élitism came with Leninism,
which demanded an élite group of disciplined cadres to act as the vanguard of a socialist
revolution, bringing into existence the dictatorship of the proletariat.Other historical views of
leadership have addressed the seeming contrasts between secular and religious leadership. The
doctrines of Caesaro-papism have recurred and had their detractors over several centuries.
Christian thinking on leadership has often emphasized stewardship of divinely provided
resources—human and material—and their deployment in accordance with a Divine plan.
Compare servant leadership. For a more general take on leadership in politics, compare the
concept of the statesperson.

Myths

Leadership, although largely talked about, has been described as one of the least understood
concepts across all cultures and civilizations. Over the years, many researchers have stressed the
prevalence of this misunderstanding, stating that the existence of several flawed assumptions, or
myths, concerning leadership often interferes with individuals' conception of what leadership is
all about (Gardner, 1965; Bennis, 1975).

Leadership is innate

According to some, leadership is determined by distinctive dispositional characteristics present at

birth (e.g., extraversion; intelligence; ingenuity). However, according to Forsyth (2009) there is
evidence to show that leadership also develops through hard work and careful observation.[85]
Thus, effective leadership can result from nature (i.e., innate talents) as well as nurture (i.e.,
acquired skills).

Leadership is possessing power over others

Although leadership is certainly a form of power, it is not demarcated by power over people –
rather, it is a power with people that exists as a reciprocal relationship between a leader and
his/her followers (Forsyth, 2009).[85] Despite popular belief, the use of manipulation, coercion,
and domination to influence others is not a requirement for leadership. In actuality, individuals
who seek group consent and strive to act in the best interests of others can also become effective
leaders (e.g., class president; court judge).

Leaders are positively influential

The validity of the assertion that groups flourish when guided by effective leaders can be
illustrated using several examples. For instance, according to Baumeister et al. (1988), the
bystander effect (failure to respond or offer assistance) that tends to develop within groups faced
with an emergency is significantly reduced in groups guided by a leader. Moreover, it has been
documented that group performance, creativity, and efficiency[ all tend to climb in businesses
with designated managers or CEOs. However, the difference leaders make is not always positive

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in nature. Leaders sometimes focus on fulfilling their own agendas at the expense of others,
including his/her own followers (e.g., Pol Pot; Josef Stalin). Leaders who focus on personal gain
by employing stringent and manipulative leadership styles often make a difference, but usually
do so through negative means.

Leaders entirely control group outcomes

In Western cultures it is generally assumed that group leaders make all the difference when it
comes to group influence and overall goal-attainment. Although common, this romanticized
view of leadership (i.e., the tendency to overestimate the degree of control leaders have over
their groups and their groups' outcomes) ignores the existence of many other factors that
influence group dynamics.[91] For example, group cohesion, communication patterns among
members, individual personality traits, group context, the nature or orientation of the work, as
well as behavioral norms and established standards influence group functionality in varying
capacities. For this reason, it is unwarranted to assume that all leaders are in complete control of
their groups' achievements.

All groups have a designated leader

Despite preconceived notions, not all groups need have a designated leader. Groups that are
primarily composed of women, are limited in size, are free from stressful decision-making, or
only exist for a short period of time (e.g., student work groups; pub quiz/trivia teams) often
undergo a diffusion of responsibility, where leadership tasks and roles are shared amongst
members (Schmid Mast, 2002; Berdahl & Anderson, 2007; Guastello, 2007).

Group members resist leaders

Although research has indicated that group members' dependence on group leaders can lead to
reduced self-reliance and overall group strength, most people actually prefer to be led than to be
without a leader (Berkowitz, 1953). This "need for a leader" becomes especially strong in
troubled groups that are experiencing some sort of conflict. Group members tend to be more
contented and productive when they have a leader to guide them. Although individuals filling
leadership roles can be a direct source of resentment for followers, most people appreciate the
contributions that leaders make to their groups and consequently welcome the guidance of a
leader (Stewart & Manz, 1995).

Action-oriented environments

In most cases these teams are tasked to operate in remote and changeable environments with
limited support or backup (action environments). Leadership of people in these environments
requires a different set of skills to that of front line management. These leaders must effectively
operate remotely and negotiate the needs of the individual, team, and task within a changeable
environment. This has been termed action oriented leadership. Some examples of demonstrations
of action oriented leadership include extinguishing a rural fire, locating a missing person, leading

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a team on an outdoor expedition, or rescuing a person from a potentially hazardous environment.
Other examples include modern technology deployments of small/medium-sized IT teams into
client plant sites. Leadership of these teams requires hands on experience and a lead-by-example
attitude to empower team members to make well thought out and concise decisions independent
of executive management and/or home base decision makers. Zachary Hansen was an early
adopter of Scrum/Kanban branch development methodologies during the mid 90's to alleviate the
dependency that field teams had on trunk based development. This method of just-in-time action
oriented development and deployment allowed remote plant sites to deploy up-to-date software
patches frequently and without dependency on core team deployment schedules satisfying the
clients need to rapidly patch production environment bugs as needed.

Terms fallacies in Leaders thinking are:

• Unrealistic optimism fallacy: Believing they are so smart that they can do whatever they
want
• Egocentrism fallacy: Believing they are the only ones who matter, that the people who
work for them don't count
• Omniscience fallacy: Believing they know everything and seeing no limits to their
knowledge
• Omnipotence fallacy: Believing they are all powerful and therefore entitled to do what
they want
• Invulnerability fallacy: Believing they can get away with doing what they want because
they are too clever to get caught; even if they are caught, believing they will go
unpunished because of their importance.

Organizational culture

Organizational culture encompasses values and behaviors that "contribute to the unique social
and psychological environment of an organization." According to Needle (2004), organizational
culture represents the collective values, beliefs and principles of organizational members and is a
product of such factors as history, product, market, technology, strategy, type of employees,
management style, and national culture; culture includes the organization's vision, values, norms,
systems, symbols, language, assumptions, beliefs, and habits.

Business executive Bernard L. Rosauer (2013) developed what he refers to as an actionable

definition of organizational culture: "Organizational culture is an emergence – an extremely
complex incalculable state that results from the combination of a few simple ingredients. In
"Three Bell Curves: Business Culture Decoded" Rosauer outlines the three manageable
ingredients he says guides the culture of any business. Ingredient #1 - Employee (focus on
engagement) #2 The Work (focus on eliminating waste increasing value) waste #3 The Customer
(focus on likelihood of referral). The purpose of the Three Bell Curves methodology is to bring
leadership, their employees, the work and the customer together for focus without distraction,
leading to an improvement in culture and brand. Reliance of the research and findings of Sirota
Survey Intelligence, who has been gathering employee data worldwide since 1972, the Lean
Enterprise Institute,] Cambridge, MA, and Fred Reichheld/Bain/Satmetrix research relating to
NetPromoterScore. Ravasi and Schultz (2006) wrote that organizational culture is a set of shared

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assumptions that guide what happens in organizations by defining appropriate behavior for
various situations. It is also the pattern of such collective behaviors and assumptions that are
taught to new organizational members as a way of perceiving and, even, thinking and feeling.
Thus, organizational culture affects the way people and groups interact with each other, with
clients, and with stakeholders. In addition, organizational culture may affect how much
employees identify with an organization. Schein (1992), Deal and Kennedy (2000), and Kotter
(1992) advanced the idea that organizations often have very differing cultures as well as
subcultures. Although a company may have its "own unique culture", in larger organizations
there are sometimes co-existing or conflicting subcultures because each subculture is linked to a
different management team.Organizational culture refers to culture in any type of organization
including that of schools, universities, not-for-profit groups, government agencies, or business
entities. In business, terms such as corporate culture and company culture are sometimes used
to refer to a similar concept. The term corporate culture became widely known in the business
world in the late 1980s and early 1990s. Corporate culture was already used by managers,
sociologists, and organizational theorists by the beginning of the 80s. The related idea of
organizational climate emerged in the 1960s and 70s, and the terms are now somewhat
overlapping. If organizational culture is seen as something that characterizes an organization, it
can be manipulated and altered depending on leadership and members. Culture as root metaphor
sees the organization as its culture, created through communication and symbols, or competing
metaphors. Culture is basic, with personal experience producing a variety of perspectives. The
organizational communication perspective on culture views culture in three different ways:

• Traditionalism: views culture through objective things such as stories, rituals, and
symbols
• Interpretivism: views culture through a network of shared meanings (organization
members sharing subjective meanings)
• Critical-interpretivism: views culture through a network of shared meanings as well as
the power struggles created by a similar network of competing meanings

Contributions of Studies on Strong and weak Cultures

Strong culture is said to exist where staff respond to stimulus because of their alignment to
organizational values. In such environments, strong cultures help firms operate like well-oiled
machines, engaging in outstanding execution with only minor adjustments to existing procedures
as needed.Conversely, there is weak culture where there is little alignment with organizational
values, and control must be exercised through extensive procedures and bureaucracy.Research
shows that organizations that foster strong cultures have clear values that give employees a
reason to embrace the culture. A "strong" culture may be especially beneficial to firms operating
in the service sector since members of these organizations are responsible for delivering the
service and for evaluations important constituents make about firms. Organizations may derive
the following benefits from developing strong and productive cultures:

➢ Better aligning the company towards achieving its vision, mission, and goals
➢ High employee motivation and loyalty
➢ Increased team cohesiveness among the company's various departments and divisions
➢ Promoting consistency and encouraging coordination and control within the company

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 ➢ Shaping employee behavior at work, enabling the organization to be more efficient

Where culture is strong, people do things because they believe it is the right thing to do, and
there is a risk of another phenomenon, groupthink. "Groupthink" was described by Irving Janis.
He defined it as "a quick and easy way to refer to a mode of thinking that people engage when
they are deeply involved in a cohesive in-group, when the members' strivings for unanimity
override their motivation to realistically appraise alternatives of action." (Irving Janis, 1972, p. 9)
This is a state in which even if they have different ideas, they do not challenge organizational
thinking, and therefore there is a reduced capacity for innovative thoughts. This could occur, for
example, where there is heavy reliance on a central charismatic figure in the organization, or
where there is an evangelical belief in the organization's values, or also in groups where a
friendly climate is at the base of their identity (avoidance of conflict). In fact, groupthink is very
common and happens all the time, in almost every group. Members that are defiant are often
turned down or seen as a negative influence by the rest of the group because they bring conflict.

The Idea of Developing Healthy Culture

Organizations should strive for what is considered a "healthy" organizational culture in order to
increase productivity, growth, efficiency and reduce counterproductive behavior and turnover of
employees. A variety of characteristics describe a healthy culture, including:

➢ Acceptance and appreciation for diversity.

➢ Regard for and fair treatment of each employee as well as respect for each employee's
contribution to the company.
➢ Employee pride and enthusiasm for the organization and the work performed.
➢ Equal opportunity for each employee to realize their full potential within the company.
➢ Strong communication with all employees regarding policies and company issues.
➢ Strong company leaders with a strong sense of direction and purpose.
➢ Ability to compete in industry innovation and customer service, as well as price.
➢ Lower than average turnover rates (perpetuated by a healthy culture).
➢ Investment in learning, training, and employee knowledge.

Additionally, performance oriented cultures have been shown to possess statistically better
financial growth. Such cultures possess high employee involvement, strong internal
communications and an acceptance and encouragement of a healthy level of risk-taking in order
to achieve innovation. Additionally, organizational cultures that explicitly emphasize factors
related to the demands placed on them by industry technology and growth will be better
performers in their industries.

According to Kotter and Heskett (1992), organizations with adaptive cultures perform much
better than organizations with unadaptive cultures. An adaptive culture translates into
organizational success; it is characterized by managers paying close attention to all of their
constituencies, especially customers, initiating change when needed, and taking risks. An
unadaptive culture can significantly reduce a firm's effectiveness, disabling the firm from
pursuing all its competitive/operational options.

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Developments in culture Studies and Its Contribution:

There are many different types of communication that contribute in creating an organizational
culture: Metaphors such as comparing an organization to a machine or a family reveal
employees' shared meanings of experiences at the organization.

➢ Stories can provide examples for employees of how to or not to act in certain situations.
➢ Rites and ceremonies combine stories, metaphors, and symbols into one. Several different
kinds of rites affect organizational culture:

➢ Rites of passage: employees move into new roles

➢ Rites of degradation: employees have power taken away from them
➢ Rites of enhancement: public recognition for an employee's accomplishments
➢ Rites of renewal: improve existing social structures
➢ Rites of conflict reduction: resolve arguments between certain members or groups
➢ Rites of integration: reawaken feelings of membership in the organization

➢ Reflexive comments are explanations, justifications, and criticisms of our own actions.
This includes:

➢ Plans: comments about anticipated actions

➢ Commentaries: comments about action in the present
➢ Accounts: comments about an action or event that has already occurred

➢ Such comments reveal interpretive meanings held by the speaker as well as the
social rules they follow.

Identifying and Averting Negative Organisation Culture

Bullying is seen to be prevalent in organisations where employees and managers feel that they
have the support, or at least implicitly the blessing, of senior managers to carry on their abusive
and bullying behaviour. Furthermore, new managers will quickly come to view this form of
behaviour as acceptable and normal if they see others get away with it and are even rewarded for
it. When bullying happens at the highest levels, the effects may be far reaching. That people may
be bullied irrespective of their organisational status or rank, including senior managers, indicates
the possibility of a negative ripple effect, where bullying may be cascaded downwards as the
targeted supervisors might offload their own aggression on their subordinates. In such situations,
a bullying scenario in the boardroom may actually threaten the productivity of the entire
organisation.

Culture of fear

Ashforth discussed potentially destructive sides of leadership and identified what he referred to
as petty tyrants, i.e. leaders who exercise a tyrannical style of management, resulting in a climate
of fear in the workplace. Partial or intermittent negative reinforcement can create an effective
climate of fear and doubt. When employees get the sense that bullies "get away with it", a

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climate of fear may be the result. Several studies have confirmed a relationship between
bullying, on the one hand, and an autocratic leadership and an authoritarian way of settling
conflicts or dealing with disagreements, on the other. An authoritarian style of leadership may
create a climate of fear, where there is little or no room for dialogue and where complaining may
be considered futile. In a study of public-sector union members, approximately one in five
workers reported having considered leaving the workplace as a result of witnessing bullying
taking place. Rayner explained these figures by pointing to the presence of a climate of fear in
which employees considered reporting to be unsafe, where bullies had "got away with it"
previously despite management knowing of the presence of bullying.[22]

Tribal culture

David Logan and coauthors have proposed in their book Tribal Leadership that organizational
cultures change in stages, based on an analysis of human groups and tribal cultures.

They identify five basic stages:

➢ Life sucks (a subsystem severed from other functional systems like tribes, gangs
and prison—2 percent of population);

➢ My life sucks (I am stuck in the Dumb Motor Vehicle line and can't believe I have to
spend my time in this lost triangle of ineffectiveness—25 percent of population);
➢ I'm great (and you're not, I am detached from you and will dominate you regardless of
your intent—48 percent of population);
➢ We are great, but other groups suck (citing Zappo's and an attitude of unification around
more than individual competence—22 percent of population) and
➢ Life is great (citing Desmond Tutu's hearing on truth and values as the basis of
reconciliation—3 percent of population).

This model of organizational culture provides a map and context for leading an organization
through the five stages.

Personal culture

Organizational culture is taught to the person as culture is taught by his/her parents thus
changing and modeling his/her personal culture. Indeed, employees and people applying for a
job are advised to match their "personality to a company's culture" and fit to it. Some researchers
even suggested and have made case studies research on personality changing.

National culture

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Corporate culture is used to control, coordinate, and integrate company subsidiaries. However
differences in national cultures exist contributing to differences in the views on management.
Differences between national cultures are deep rooted values of the respective cultures, and these
cultural values can shape how people expect companies to be run, and how relationships between
leaders and followers should be, resulting in differences between the employer and the employee
regarding expectations. (Geert Hofstede, 1991) Perhaps equally foundational, observing the vast
differences in national copyright (and taxation, etc.) laws suggests deep rooted differences in
cultural attitudes and assumptions about property rights and sometimes about the desired root
function, place, or purpose of corporations relative to the population.

Research suggests that numerous outcomes have been associated either directly or indirectly
with organizational culture. A healthy and robust organizational culture may provide various
benefits, including the following:

➢ Competitive edge derived from innovation and customer service

➢ Consistent, efficient employee performance
➢ Team cohesiveness
➢ High employee morale
➢ Strong company alignment towards goal achievement

Culture of Change or Change Culture

When an organization does not possess a healthy culture or requires some kind of organizational
culture change, the change process can be daunting. One major reason why such change is
difficult is that organizational cultures, and the organizational structures in which they are
embedded, often reflect the "imprint" of earlier periods in a persistent way and exhibit
remarkable levels of inertia. Culture change may be necessary to reduce employee turnover,
influence employee behavior, make improvements to the company, refocus the company
objectives and/or rescale the organization, provide better customer service, and/or achieve
specific company goals and results. Culture change is affected by a number of elements,
including the external environment and industry competitors, change in industry standards,
technology changes, the size and nature of the workforce, and the organization's history and
management.There are a number of methodologies specifically dedicated to organizational
culture change such as Peter Senge's Fifth Discipline. There are also a variety of psychological
approaches that have been developed into a system for specific outcomes such as the Fifth
Discipline's "learning organization" or Directive Communication's "corporate culture evolution."
Ideas and strategies, on the other hand, seem to vary according to particular influences that affect
culture.Burman and Evans (2008) argue that it is 'leadership' that affects culture rather than
'management', and describe the difference. When one wants to change an aspect of the culture of
an organization one has to keep in consideration that this is a long term project. Corporate
culture is something that is very hard to change and employees need time to get used to the new
way of organizing. For companies with a very strong and specific culture it will be even harder
to change.Prior to a cultural change initiative, a needs assessment is needed to identify and
understand the current organizational culture. This can be done through employee surveys,

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interviews, focus groups, observation, customer surveys where appropriate, and other internal
research, to further identify areas that require change. The company must then assess and clearly
identify the new, desired culture, and then design a change process.Cummings & Worley (2004,
p. 491 – 492) give the following six guidelines for cultural change, these changes are in line with
the eight distinct stages mentioned by Kotter (1995, p. 2):

➢ Formulate a clear strategic vision (stage 1, 2, and 3). In order to make a cultural change
effective a clear vision of the firm's new strategy, shared values and behaviors is needed.
This vision provides the intention and direction for the culture change (Cummings &
Worley, 2004, p. 490).
➢ Display top-management commitment (stage 4). It is very important to keep in mind that
culture change must be managed from the top of the organization, as willingness to
change of the senior management is an important indicator (Cummings & Worley, 2004,
page 490). The top of the organization should be very much in favor of the change in
order to actually implement the change in the rest of the organization. De Caluwé &
Vermaak (2004, p 9) provide a framework with five different ways of thinking about
change.
➢ Model culture change at the highest level (stage 5). In order to show that the management
team is in favor of the change, the change has to be notable at first at this level. The
behavior of the management needs to symbolize the kinds of values and behaviors that
should be realized in the rest of the company. It is important that the management shows
the strengths of the current culture as well; it must be made clear that the current
organizational culture does not need radical changes, but just a few adjustments. (See for
more: Deal & Kennedy, 1982;[10] Sathe, 1983; Schall; 1983; Weick, 1985; DiTomaso,
1987). This process may also include creating committees, employee task forces, value
managers, or similar. Change agents are key in the process and key communicators of the
new values. They should possess courage, flexibility, excellent interpersonal skills,
knowledge of the company, and patience. As McCune (May 1999) puts it, these
individuals should be catalysts, not dictators.
➢ The fourth step is to modify the organization to support organizational change. This
includes identifying what current systems, policies, procedures and rules need to be
changed in order to align with the new values and desired culture. This may include a
change to accountability systems, compensation, benefits and reward structures, and
recruitment and retention programs to better align with the new values and to send a clear
message to employees that the old system and culture are in the past.
➢ Select and socialize newcomers and terminate deviants (stage 7 & 8 of Kotter, 1995,
p. 2). A way to implement a culture is to connect it to organizational membership, people
can be selected and terminated in terms of their fit with the new culture (Cummings &
Worley, 2004, p. 491). Encouraging employee motivation and loyalty to the company is
key and will also result in a healthy culture. The company and change managers should
be able to articulate the connections between the desired behavior and how it will affect
and improve the company's success, to further encourage buy-in in the change process.
Training should be provided to all employees to understand the new processes,
expectations and systems.
➢ Develop ethical and legal sensitivity. Changes in culture can lead to tensions between
organizational and individual interests, which can result in ethical and legal problems for

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 practitioners. This is particularly relevant for changes in employee integrity, control,
equitable treatment and job security (Cummings & Worley, 2004, p. 491). It is also
beneficial, as part of the change process, to include an evaluation process, conducted
periodically to monitor the change progress and identify areas that need further
development. This step will also identify obstacles of change and resistant employees,
and acknowledge and reward employee improvement, which will encourage continued
change and evolvement. It may also be helpful and necessary to incorporate new change
managers to refresh the process. Outside consultants may also be useful in facilitating the
change process and providing employee training. Change of culture in organizations is
very important and inevitable. Cultural innovation[32] is bound to be more difficult than
cultural maintenance because it entails introducing something new and substantially
different from what prevails in existing cultures. People often resist changes, hence it is
the duty of management to convince people that likely gain will outweigh the losses.
Besides institutionalization, deification is another process that tends to occur in strongly
developed organizational cultures. The organization itself may come to be regarded as
precious in itself, as a source of pride, and in some sense unique. The organization's
members begin to feel a strong bond with it that transcends material returns, and they
begin to identify with it. The organization turns into a sort of clan.

Mergers and cultural leadership

One of the biggest obstacles in the way of the merging of two organizations is organizational
culture. Each organization has its own unique culture and most often, when brought together,
these cultures clash. When mergers fail employees point to issues such as identity,
communication problems, human resources problems, ego clashes, and inter-group conflicts,
which all fall under the category of "cultural differences".One way to combat such difficulties is
through cultural leadership. Organizational leaders must also be cultural leaders and help
facilitate the change from the two old cultures into the one new culture. This is done through
cultural innovation followed by cultural maintenance.

• Cultural innovation includes:

o Creating a new culture: recognizing past cultural differences and setting realistic
expectations for change
o Changing the culture: weakening and replacing the old cultures
➢ Cultural maintenance includes:
o Integrating the new culture: reconciling the differences between the old cultures
and the new one
o Embodying the new culture: Establishing, affirming, and keeping the new culture

Corporate subcultures

Corporate culture is the total sum of the values, customs, traditions, and meanings that make a
company unique. Corporate culture is often called "the character of an organization", since it

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embodies the vision of the company's founders. The values of a corporate culture influence the
ethical standards within a corporation, as well as managerial behavior. Senior management may
try to determine a corporate culture. They may wish to impose corporate values and standards of
behavior that specifically reflect the objectives of the organization. In addition, there will also be
an extant internal culture within the workforce. Work-groups within the organization have their
own behavioral quirks and interactions which, to an extent, affect the whole system. Roger
Harrison's four-culture typology, and adapted by Charles Handy, suggests that unlike
organizational culture, corporate culture can be 'imported'. For example, computer technicians
will have expertise, language and behaviors gained independently of the organization, but their
presence can influence the culture of the organization as a whole.

Legal aspects

Corporate culture can legally be found to be a cause of injuries and a reason for fining companies
in the US, e.g., when the US Department of Labor Mine Safety and Health Administration levied
a fine of more than 10.8 million US dollars on Performance Coal Co. following the Upper Big
Branch Mine disaster in April 2010. This was the largest fine in the history of this U.S.
government agency.

Several methods have been used to classify organizational culture. While there is no single
"type" of organizational culture and organizational cultures vary widely from one organization to
the next, commonalities do exist and some researchers have developed models to describe
different indicators of organizational cultures. Some are described below:

Hofstede Contribution in Culture and to HRM

Hofstede (1980) looked for differences between over 160 000 IBM employees in 50 different
countries and three regions of the world, in an attempt to find aspects of culture that might
influence business behavior. He suggested things about cultural differences existing in regions
and nations, and the importance of international awareness and multiculturalism for their own
cultural introspection. Cultural differences reflect differences in thinking and social action, and
even in "mental programs", a term Hofstede uses for predictable behavior. Hofstede relates
culture to ethnic and regional groups, but also organizations, professional, family, social and
subcultural groups, national political systems and legislation, etc.Hofstede suggests the need for
changing "mental programs" with changing behavior first, which will lead to value change.
Though certain groups like Jews and Gypsies have maintained their identity through centuries,
their values show adaptation to the dominant cultural environment.Hofstede demonstrated that
there are national and regional cultural groupings that affect the behavior of organizations and
identified four dimensions of culture (later five) in his study of national cultures:

➢ Power distance (Mauk Mulder, 1977) ; Different societies find different solutions
regarding social inequality. Although invisible, inside organizations power inequality of
the "boss-subordinate relationships" is functional and according to Hofstede reflects the
way inequality is addressed in the society. "According to Mulder's Power Distance

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 Reduction theory subordinates will try to reduce the power distance between themselves
and their bosses and bosses will try to maintain or enlarge it", but there is also a degree to
which a society expects there to be differences in the levels of power. A high score
suggests that there is an expectation that some individuals wield larger amounts of power
than others. A low score reflects the view that all people should have equal rights.
➢ Uncertainty avoidance is the way of coping with uncertainty about the future. Society
copes with it with technology, law and religion (though different societies have different
ways of addressing it), and according to Hofstede organizations deal with it with
technology, law and rituals, or in two ways – rational and non-rational, with rituals being
the non-rational. Hofstede listed some of the rituals as the memos and reports, some parts
of the accounting system, a large part of the planning and control systems, and the
nomination of experts.
➢ Individualism vs. collectivism ; disharmony of interests on personal and collective goals
(Parsons and Shils, 1951). Hofstede raises the idea that society's expectations of
Individualism/Collectivism will be reflected by the employee inside the organization.
Collectivist societies will have more emotional dependence on members in their
organizations; when in equilibrium an organization is expected to show responsibility to
members. Extreme individualism is seen in the US. In fact, collectivism in the US is seen
as "bad". Other cultures and societies than the US will therefore seek to resolve social
and organizational problems in ways different from American ways. Hofstede says that a
capitalist market economy fosters individualism and competition, and depends on it, but
individualism is also related to the development of the middle class. Some people and
cultures might have both high individualism and high collectivism. For example,
someone who highly values duty to his or her group does not necessarily give a low
priority to personal freedom and self-sufficiency.
➢ Masculinity vs. femininity – reflects whether a certain society is predominantly male or
female in terms of cultural values, gender roles and power relations.
➢ Long- Versus Short-Term Orientation; which he describes as "The long-term
orientation dimension can be interpreted as dealing with society's search for virtue.
Societies with a short-term orientation generally have a strong concern with establishing
the absolute Truth. They are normative in their thinking. They exhibit great respect for
traditions, a relatively small propensity to save for the future, and a focus on achieving
quick results. In societies with a long-term orientation, people believe that truth depends
very much on situation, context and time. They show an ability to adapt traditions to
changed conditions, a strong propensity to save and invest, thriftiness, and perseverance
in achieving results." These dimensions refer to the effect of national cultures on
management, and can be used to adapt policies to local needs. In a follow up study,
another model[36] is suggested for organizational culture.

Advanced Models on Culture Change

O'Reilly, Chatman, and Caldwell contributions

Two common models and their associated measurement tools have been developed by O'Reilly
et al. and Denison.O'Reilly, Chatman & Caldwell (1991) developed a model based on the belief
that cultures can be distinguished by values that are reinforced within organizations. Their

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Organizational Cultural Profile (OCP) is a self reporting tool which makes distinctions according
eight categories – Innovation, Supportiveness, Stability, Respect for People, Outcome
Orientation, Attention to Detail, Team Orientation, and Aggressiveness. The model is also suited
to measure how organizational culture affects organizational performance, as it measures most
efficient persons suited to an organization and as such organizations can be termed as having
good organizational culture. Employee values are measured against organizational values to
predict employee intentions to stay, and turnover.[38] This is done through an instrument like
Organizational Culture Profile (OCP) to measure employee commitment.

Daniel Denison Contributions

Daniel Denison's model (1990) asserts that organizational culture can be described by four
general dimensions – Mission, Adaptability, Involvement and Consistency. Each of these general
dimensions is further described by the following three sub-dimensions:

➢ Mission – Strategic Direction and Intent, Goals and Objectives and Vision
➢ Adaptability – Creating Change, Customer Focus and Organizational Learning
➢ Involvement – Empowerment, Team Orientation and Capability Development
➢ Consistency – Core Values, Agreement, Coordination/Integration

Denison's model also allows cultures to be described broadly as externally or internally focused
as well as flexible versus stable. The model has been typically used to diagnose cultural
problems in organizations.

Deal and Kennedy Contributions

Deal and Kennedy (1982) defined organizational culture as the way things get done around here.
Deal and Kennedy created a model of culture that is based on 4 different types of organizations.
They each focus on how quickly the organization receives feedback, the way members are
rewarded, and the level of risks taken:

1. Work-hard, play-hard culture: This has rapid feedback/reward and low risk resulting
in: Stress coming from quantity of work rather than uncertainty. High-speed action
leading to high-speed recreation. Examples: Restaurants, software companies.]
2. Tough-guy macho culture: This has rapid feedback/reward and high risk, resulting in
the following: Stress coming from high risk and potential loss/gain of reward. Focus on
the present rather than the longer-term future. Examples: police, surgeons, sports.
3. Process culture: This has slow feedback/reward and low risk, resulting in the following:
Low stress, plodding work, comfort and security. Stress that comes from internal politics
and stupidity of the system. Development of bureaucracies and other ways of maintaining
the status quo. Focus on security of the past and of the future. Examples: banks, insurance
companies.
4. Bet-the-company culture: This has slow feedback/reward and high risk, resulting in the
following: Stress coming from high risk and delay before knowing if actions have paid
off. The long view is taken, but then much work is put into making sure things happen as
planned. Examples: aircraft manufacturers, oil companies.

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Edgar Schein

According to Schein (1992), culture is the most difficult organizational attribute to change,
outlasting organizational products, services, founders and leadership and all other physical
attributes of the organization. His organizational model illuminates culture from the standpoint
of the observer, described at three levels: artifacts, espoused values and basic underlying
assumptions.At the first and most cursory level of Schein's model is organizational attributes that
can be seen, felt and heard by the uninitiated observer – collectively known as artifacts. Included
are the facilities, offices, furnishings, visible awards and recognition, the way that its members
dress, how each person visibly interacts with each other and with organizational outsiders, and
even company slogans, mission statements and other operational creeds.Artifacts comprise the
physical components of the organization that relay cultural meaning. Daniel Denison (1990)
describes artifacts as the tangible aspects of culture shared by members of an organization.
Verbal, behavioral and physical artifacts are the surface manifestations of organizational
culture.Rituals, the collective interpersonal behavior and values as demonstrated by that
behavior, constitute the fabric of an organization's culture. The contents of myths, stories, and
sagas reveal the history of an organization and influence how people understand what their
organization values and believes. Language, stories, and myths are examples of verbal artifacts
and are represented in rituals and ceremonies. Technology and art exhibited by members of an
organization are examples of physical artifacts.The next level deals with the professed culture of
an organization's members – the values. Shared values are individuals' preferences regarding
certain aspects of the organization's culture (e.g. loyalty, customer service). At this level, local
and personal values are widely expressed within the organization. Basic beliefs and assumptions
include individuals' impressions about the trustworthiness and supportiveness of an organization,
and are often deeply ingrained within the organization's culture. Organizational behavior at this
level usually can be studied by interviewing the organization's membership and using
questionnaires to gather attitudes about organizational membership.At the third and deepest
level, the organization's tacit assumptions are found. These are the elements of culture that are
unseen and not cognitively identified in everyday interactions between organizational members.
Additionally, these are the elements of culture which are often taboo to discuss inside the
organization. Many of these 'unspoken rules' exist without the conscious knowledge of the
membership. Those with sufficient experience to understand this deepest level of organizational
culture usually become acclimatized to its attributes over time, thus reinforcing the invisibility of
their existence. Surveys and casual interviews with organizational members cannot draw out
these attributes—rather much more in-depth means is required to first identify then understand
organizational culture at this level. Notably, culture at this level is the underlying and driving
element often missed by organizational behaviorists.Using Schein's model, understanding
paradoxical organizational behaviors becomes more apparent. For instance, an organization can
profess highly aesthetic and moral standards at the second level of Schein's model while
simultaneously displaying curiously opposing behavior at the third and deepest level of culture.
Superficially, organizational rewards can imply one organizational norm but at the deepest level
imply something completely different. This insight offers an understanding of the difficulty that
organizational newcomers have in assimilating organizational culture and why it takes time to
become acclimatized. It also explains why organizational change agents usually fail to achieve

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their goals: underlying tacit cultural norms are generally not understood before would-be change
agents begin their actions. Merely understanding culture at the deepest level may be insufficient
to institute cultural change because the dynamics of interpersonal relationships (often under
threatening conditions) are added to the dynamics of organizational culture while attempts are
made to institute desired change.

Bernard L. Rosauer and his contributions to Culture

Business executive and long time observer of thousands of companies succeed and fail defined
organizational culture as "An Emergence, an extremely complex and often incalculable outcome
resulting from the mixture of three simple ingredients;

➢ 1.The worker
➢ 2.The Work
➢ 3.The Customer.

He furthermore outlines in his paper "Three Bell Curves: Business Culture Decoded" a
methodology for improvement. The methodology, he says 'must remain simple if corporations
are going to be able to work on it day in and day out, from project to project, problem to
problem, success to success'.

Gerry Johnson and his contributions to Culture

Gerry Johnson (1988) described a cultural web, identifying a number of elements that can be
used to describe or influence organizational culture:

➢ The paradigm: What the organization is about, what it does, its mission, its values.
➢ Control systems: The processes in place to monitor what is going on. Role cultures
would have vast rule-books. There would be more reliance on individualism in a power
culture.
➢ Organizational structures: Reporting lines, hierarchies, and the way that work flows
through the business.
➢ Power structures: Who makes the decisions, how widely spread is power, and on what
is power based?
➢ Symbols: These include organizational logos and designs, but also extend to symbols of
power such as parking spaces and executive washrooms.
➢ Rituals and routines: Management meetings, board reports and so on may become more
habitual than necessary.
➢ Stories and myths: build up about people and events, and convey a message about what
is valued within the organization.

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These elements may overlap. Power structures may depend on control systems, which may
exploit the very rituals that generate stories which may not be true.

Edgar Schein and his contributions

According to Schein (1992), the two main reasons why cultures develop in organizations is due
to external adaptation and internal integration. External adaptation reflects an evolutionary
approach to organizational culture and suggests that cultures develop and persist because they
help an organization to survive and flourish. If the culture is valuable, then it holds the potential
for generating sustained competitive advantages. Additionally, internal integration is an
important function since social structures are required for organizations to exist. Organizational
practices are learned through socialization at the workplace. Work environments reinforce
culture on a daily basis by encouraging employees to exercise cultural values. Organizational
culture is shaped by multiple factors, including the following:

➢ External environment
➢ Industry
➢ Size and nature of the organization's workforce
➢ Technologies the organization uses
➢ The organization's history and ownership

Stanley G. Harris’s Contribution to Cultural Schemata

Schemata (plural of schema) are knowledge structures a person forms from past experiences,
allowing the person to respond to similar events more efficiently in the future by guiding the
processing of information. A person's schemata are created through interaction with others, and
thus inherently involve communication.

Stanley G. Harris (1994) argues that five categories of in-organization schemata are necessary
for organizational culture:

➢ Self-in-organization schemata: a person's concept of oneself within the context of the

organization, including her/his personality, roles, and behavior.
➢ Person-in-organization schemata: a person's memories, impressions, and expectations
of other individuals within the organization.
➢ Organization schemata: a subset of person schemata, a person's generalized perspective
on others as a whole in the organization.
➢ Object/concept-in-organization schemata: knowledge an individual has of organization
aspects other than of other persons.
➢ Event-in-organization schemata: a person's knowledge of social events within an
organization.

All of these categories together represent a person's knowledge of an organization.

Organizational culture is created when the schematas (schematic structures) of differing
individuals across and within an organization come to resemble each other (when any one
person's schemata come to resemble another person's schemata because of mutual organizational

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involvement), primarily done through organizational communication, as individuals directly or
indirectly share knowledge and meanings.

Charles Handy and his Contributions to HR

Charles Handy (1976), popularized Roger Harrison (1972) with linking organizational structure
to organizational culture. The described four types of culture are:

➢ Power culture: concentrates power among a small group or a central figure and its
control is radiating from its center like a web. Power cultures need only a few rules and
little bureaucracy but swift in decisions can ensue.
➢ Role culture: authorities are delegated as such within a highly defined structure. These
organizations form hierarchical bureaucracies, where power derives from the personal
position and rarely from an expert power. Control is made by procedures (which are
highly valued), strict roles descriptions and authority definitions. These organizations
have consistent systems and are very predictable. This culture is often represented by a
"Roman Building" having pillars. These pillars represent the functional departments.
➢ Task culture: teams are formed to solve particular problems. Power is derived from the
team with the expertise to execute against a task. This culture uses a small team
approach, where people are highly skilled and specialized in their own area of expertise.
Additionally, these cultures often feature the multiple reporting lines seen in a matrix
structure.
➢ Person culture: formed where all individuals believe themselves superior to the
organization. It can become difficult for such organizations to continue to operate, since
the concept of an organization suggests that a group of like-minded individuals pursue
organizational goals. However some professional partnerships operate well as person
cultures, because each partner brings a particular expertise and clientele to the firm.

Kim Cameron and Robert Quinn contributions on Culture

Kim Cameron and Robert Quinn (1999) conducted research on organizational effectiveness and
success. Based on the Competing Values Framework, they developed the Organizational Culture
Assessment Instrument that distinguishes four culture types.Competing values produce polarities
like flexibility vs. stability and internal vs. external focus – these two polarities were found to be
most important in defining organizational success. The polarities construct a quadrant with four
types of culture:

➢ Clan culture (internal focus and flexible) – A friendly workplace where leaders act like
father figures.
➢ Adhocracy culture (external focus and flexible) – A dynamic workplace with leaders that
stimulate innovation.
➢ Market culture (external focus and controlled) – A competitive workplace with leaders
like hard drivers
➢ Hierarchy culture (internal focus and controlled) – A structured and formalized
workplace where leaders act like coordinators.

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Cameron and Quinn designated six characteristics of organizational culture that can be assessed
with the Organizational Culture Assessment Instrument (OCAI).Clan cultures are most strongly
associated with positive employee attitudes and product and service quality. Market cultures are
most strongly related with innovation and financial effectiveness criteria. The primary belief in
market cultures that clear goals and contingent rewards motivate employees to aggressively
perform and meet stakeholders' expectations; a core belief in clan cultures is that the
organization's trust in and commitment to employees facilitates open communication and
employee involvement. These differing results suggest that it is important for executive leaders
to consider the match between strategic initiatives and organizational culture when determining
how to embed a culture that produces competitive advantage. By assessing the current
organizational culture as well as the preferred situation, the gap and direction to change can be
made visible as a first step to changing organizational culture.

Robert A. Cooke’s Contribution to Culture

Robert A. Cooke defines culture as the behaviors that members believe are required to fit in and
meet expectations within their organization. The Organizational Culture Inventory measures
twelve behavioral norms that are grouped into three general types of cultures:

➢ Constructive cultures, in which members are encouraged to interact with people and
approach tasks in ways that help them meet their higher-order satisfaction needs.
➢ Passive/defensive cultures, in which members believe they must interact with people in
ways that will not threaten their own security.
➢ Aggressive/defensive cultures, in which members are expected to approach tasks in
forceful ways to protect their status and security.

Constructive cultures

In constructive cultures, people are encouraged to be in communication with their co-workers,

and work as teams, rather than only as individuals. In positions where people do a complex job,
rather than something simple like a mechanical task, this culture is efficient.

➢ Achievement oriented culture: completing a task successfully, typically by effort,

courage, or skill (pursue a standard of excellence) (explore alternatives before acting) –
Based on the need to attain high-quality results on challenging projects, the belief that
outcomes are linked to one's effort rather than chance and the tendency to personally set
challenging yet realistic goals. People high in this style think ahead and plan, explore
alternatives before acting and learn from their mistakes.

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 ➢ Self-actualizing culture : realization or fulfillment of one's talents and potentialities –
considered as a drive or need present in everyone (think in unique and independent ways)
(do even simple tasks well) – Based on needs for personal growth, self-fulfillment and
the realization of one's potential. People with this style demonstrate a strong desire to
learn and experience things, creative yet realistic thinking and a balanced concern for
people and tasks.
➢ Humanistic-encouraging culture: help others to grow and develop (resolve conflicts
constructively) – Reflects an interest in the growth and development of people, a high
positive regard for them and sensitivity to their needs. People high in this style devote
energy to coaching and counselling others, are thoughtful and considerate and provide
people with support and encouragement.
➢ Affiliative Culture: treat people as more valuable than things (cooperate with others) –
Reflects an interest in developing and sustaining pleasant relationships. People high in
this style share their thoughts and feelings, are friendly and cooperative and make others
feel a part of things.

Organizations with constructive cultures encourage members to work to their full potential,
resulting in high levels of motivation, satisfaction, teamwork, service quality, and sales growth.
Constructive norms are evident in environments where quality is valued over quantity, creativity
is valued over conformity, cooperation is believed to lead to better results than competition, and
effectiveness is judged at the system level rather than the component level. These types of
cultural norms are consistent with (and supportive of) the objectives behind empowerment, total
quality management, transformational leadership, continuous improvement, re-engineering, and
learning organizations.

Passive/defensive cultures and its Contributions to HRM

Norms that reflect expectations for members to interact with people in ways that will not threaten
their own security are in the Passive/Defensive Cluster.

The four Passive/Defensive cultural norms are:

➢ Approval
➢ Conventional
➢ Dependent
➢ Avoidance

In organizations with Passive/Defensive cultures, members feel pressured to think and behave in
ways that are inconsistent with the way they believe they should in order to be effective. People
are expected to please others (particularly superiors) and avoid interpersonal conflict. Rules,
procedures, and orders are more important than personal beliefs, ideas, and judgment.
Passive/Defensive cultures experience a lot of unresolved conflict and turnover, and
organizational members report lower levels of motivation and satisfaction.

Aggressive/defensive cultures and Its Contributions to HR

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This style is characterized with more emphasis on task than people. Because of the very nature of
this style, people tend to focus on their own individual needs at the expense of the success of the
group. The aggressive/defensive style is very stressful, and people using this style tend to make
decisions based on status as opposed to expertise.[45]

➢ Oppositional – This cultural norm is based on the idea that a need for security that takes
the form of being very critical and cynical at times. People who use this style are more
likely to question others work; however, asking those tough question often leads to a
better product. Nonetheless, those who use this style may be overly-critical toward
others, using irrelevant or trivial flaws to put others down.
➢ Power – This cultural norm is based on the idea that there is a need for prestige and
influence. Those who use this style often equate their own self-worth with controlling
others. Those who use this style have a tendency to dictate others opposing to guiding
others' actions.
➢ Competitive – This cultural norm is based on the idea of a need to protect one's status.
Those who use this style protect their own status by comparing themselves to other
individuals and outperforming them. Those who use this style are seekers of appraisal
and recognition from others.
➢ Perfectionistic – This cultural norm is based on the need to attain flawless results. Those
who often use this style equate their self-worth with the attainment of extremely high
standards. Those who often use this style are always focused on details and place
excessive demands on themselves and others.

Organizations with aggressive/defensive cultures encourage or require members to appear

competent, controlled, and superior. Members who seek assistance, admit shortcomings, or
concede their position are viewed as incompetent or weak. These organizations emphasize
finding errors, weeding out "mistakes" and encouraging members to compete against each other
rather than competitors. The short-term gains associated with these strategies are often at the
expense of long-term growth.

Adam Grant’s contribution to culture

Adam Grant, author of the book Give and Take, distinguishes organizational cultures into giver,
taker and matcher cultures according to their norms of reciprocity. In a giver culture, employees
operate by "helping others, sharing knowledge, offering mentoring, and making connections
without expecting anything in return", whereas in a taker culture "the norm is to get as much as
possible from others while contributing less in return" and winners are those who take the most
and are able to build their power at the expense of others. The majority of organizations are mid-
way, with a matcher culture, in which the norm is to match giving with taking, and favours are
mostly traded in closed loops. In a study by Harvard researchers on units of the US intelligence
system, a giver culture turned out to be the strongest predictor of group effectiveness. As Grant
points out, Robert H. Frank argues that "many organizations are essentially winner-take-all
markets, dominated by zero-sum competitions for rewards and promotions". In particular, when
leaders implement forced ranking systems to reward individual performance, the organisational
culture tends to change, with a giver culture giving way to a taker or matcher culture. Also
awarding the highest-performing individual within each team encourages a taker culture.

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Stephen McGuire’s contribution to culture

Stephen McGuire (2003) defined and validated a model of organizational culture that predicts
revenue from new sources. An Entrepreneurial Organizational Culture (EOC) is a system of
shared values, beliefs and norms of members of an organization, including valuing creativity and
tolerance of creative people, believing that innovating and seizing market opportunities are
appropriate behaviors to deal with problems of survival and prosperity, environmental
uncertainty, and competitors' threats, and expecting organizational members to behave
accordingly.

Elements

People and empowerment focused

➢ Value creation through innovation and change

➢ Attention to the basics
➢ Hands-on management
➢ Doing the right thing
➢ Freedom to grow and to fail
➢ Commitment and personal responsibility
➢ Emphasis on the future
➢ Labour law

CHAPTER 1 ENDS

CHAPTER 2

LABOUR LEGISLATIONS AND ITS CONTRIBUTIONS TO GROWTH OF HR

Labour law (also labor law or employment law, see spelling differences) mediates the
relationship between workers (employees), employers, trade unions and the government.
Collective labour law relates to the tripartite relationship between employee, employer and
union. Individual labour law concerns employees' rights at work and through the contract for
work. Employment standards are social norms (in some cases also technical standards) for the
minimum socially acceptable conditions under which employees or contractors are allowed to
work. Government agencies (such as the former US Employment Standards Administration)
enforce labour law (legislative, regulatory, or judicial).

History

Labour law arose in parallel with the Industrial Revolution as the relationship between worker
and employer changed from small-scale production studios to large-scale factories. Workers
sought better conditions and the right to join (or avoid joining) a labour union, while employers
sought a more predictable, flexible and less costly workforce. The state of labour law at any one
time is therefore both the product of, and a component of struggles between various social
forces.As England was the first country to industrialise, it was also the first to face the often

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appalling consequences of industrial revolution in a less regulated economic framework. Over
the course of the late 18th and early to mid-19th century the foundation for modern labour law
was slowly laid, as some of the more egregious aspects of working conditions were steadily
ameliorated through legislation. This was largely achieved through the concerted pressure from
social reformers, notably Anthony Ashley-Cooper, 7th Earl of Shaftesbury, and others.

Child labour

A serious outbreak of fever in 1784 in cotton mills near Manchester drew widespread public
opinion against the use of children in dangerous conditions. A local inquiry presided over by Dr
Thomas Percival, was instituted by the justices of the peace for Lancashire, and the resulting
report recommended the limitation of children's working hours.[1] In 1802, the first major piece
of labour legislation was passed − the Health and Morals of Apprentices Act. This was the first,
albeit modest, step towards the protection of labour. The act limited working hours to twelve a
day and abolished night work. It required the provision of a basic level of education for all
apprentices, as well as adequate sleeping accommodation and clothing.The rapid industrialisation
of manufacturing at the turn of the 19th century led to a rapid increase in child employment, and
public opinion was steadily made aware of the terrible conditions these children were forced to
endure. The Factory Act of 1819 was the outcome of the efforts of the industrialist Robert Owen
and prohibited child labour under nine years of age and limited the working day to twelve. A
great milestone in labour law was reached with the Factory Act of 1833, which limited the
employment of children under eighteen years of age, prohibited all night work and, crucially,
provided for inspectors to enforce the law. Pivotal in the campaigning for and the securing of this
legislation were Michael Sadler and the Earl of Shaftesbury. This act was an important step
forward, in that it mandated skilled inspection of workplaces and a rigorous enforcement of the
law by an independent governmental body.A lengthy campaign to limit the working day to ten
hours was led by Shaftesbury, and included support from the Anglican Church.[2] Many
committees were formed in support of the cause and some previously established groups lent
their support as well.[3] The campaign finally led to the passage of the Factory Act of 1847,
which restricted the working hours of women and children in British factories to effectively 10
hours per day.

Working

Men leaving the pit, before the start of World War I. The average life expectancy of a Liverpool
mineworker was 30 years in 1900.

These early efforts were principally aimed at limiting child labour. From the mid-19th century,
attention was first paid to the plight of working conditions for the workforce in general. In 1850,
systematic reporting of fatal accidents was made compulsory, and basic safeguards for health,
life and limb in the mines were put in place from 1855. Further regulations, relating to
ventilation, fencing of disused shafts, signalling standards, and proper gauges and valves for
steam-boilers and related machinery were also set down.A series of further Acts, in 1860 and
1872 extended the legal provisions and strengthened safety provisions. Steady development of
the coal industry, increasing association among miners, and increased scientific knowledge
paved the way for the Coal Mines Act of 1872, which extended the legislation to similar

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industries. The same Act included the first comprehensive code of regulation to govern legal
safeguards for health, life and limb. The presence of a more certified and competent management
and increased levels of inspection were also provided for.By the end of the century, a
comprehensive set of regulations was in place in England that affected all industries. A similar
system (with certain national differences) was implemented in other industrializing countries in
the latter part of the 19th century and the early 20th century.

Individual labour law

Employment terms

The basic feature of labour law in almost every country is that the rights and obligations of the
worker and the employer are mediated through a contract of employment between the two. This
has been the case since the collapse of feudalism. Many contract terms and conditions are
covered by legislation or common law. In the US for example, the majority of state laws allow
for employment to be "at will", meaning the employer can terminate an employee from a
position for any reason, so long as the reason is not explicitly prohibited,[a] and, conversely, an
employee may quit at any time, for any reason (or for no reason), and is not required to give
notice.One example of employment terms in many countries[5] is the duty to provide written
particulars of employment with the essentialia negotii (Latin for "essential terms") to an
employee. This aims to allow the employee to know concretely what to expect and what is
expected. It covers items including compensation, holiday and illness rights, notice in the event
of dismissal and job description.The contract is subject to various legal provisions. An employer
may not legally offer a contract that pays the worker less than a minimum wage. An employee
may not agree to a contract that allows an employer to dismiss them for illegal reasons.

Minimum wage

Many jurisdictions define the minimum amount that a worker can be paid per hour. Australia,
Belgium, Brazil, Canada, China, France, Greece, Hungary, India, Ireland, Japan,South Korea,
Luxembourg, the Netherlands, New Zealand, Paraguay, Portugal, Poland, Romania,
Spain,Taiwan, the United Kingdom, the United States, Vietnam, Germany (in 2015[6]) and others
have laws of this kind. The minimum wage is set usually higher than the lowest wage as
determined by the forces of supply and demand in a free market and therefore acts as a price
floor. Each country sets its own minimum wage laws and regulations, and while a majority of
industrialised countries has a minimum wage, many developing countries do not.

Minimum wages are regulated and stipulated in some countries that lack explicit laws. In
Sweden minimum wages are negotiated between the labour market parties (unions and employer
organisations) through collective agreements that also cover non-union workers and non-
organised employers.National minimum wage laws were first introduced in the United States in
1938,[7] Brazil in 1940[8] India in 1948,France in 1950[9] and in the United Kingdom in 1998. In
the European Union, 18 out of 28 member states have national minimum wages as of 2011.

Living wage

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The living wage is higher than the minimum wage and is designed that a full-time worker would
be able to support themselves and a small family at that wage.

Hours

The maximum number of hours worked per day or other time interval are set by law in many
countries. Such laws also control whether workers who work longer hours must be paid
additional compensation.Before the Industrial Revolution, the workday varied between 11 and
14 hours. With the growth of industrialism and the introduction of machinery, longer hours
became far more common, reaching as high as 16 hours per day.The eight-hour movement led to
the first law on the length of a working day, passed in 1833 in England. It limited miners to 12
hours and children to 8 hours. The 10-hour day was established in 1848, and shorter hours with
the same pay were gradually accepted thereafter. The 1802 Factory Act was the first labour law
in the UK.Germany was the next European country to pass labour laws; Chancellor Otto von
Bismarck's main goal was to undermine the Social Democratic Party of Germany. In 1878,
Bismarck instituted a variety of anti-socialist measures, but despite this, socialists continued
gaining seats in the Reichstag. To appease the working class, he enacted a variety of paternalistic
social reforms, which became the first type of social security. In 1883 the Health Insurance Act
was passed, which entitled workers to health insurance; the worker paid two-thirds and the
employer one-third of the premiums. Accident insurance was provided in 1884, while old age
pensions and disability insurance followed in 1889. Other laws restricted the employment of
women and children. These efforts, however, were not entirely successful; the working class
largely remained unreconciled with Bismarck's conservative government.In France, the first
labour law was voted in 1841. It limited under-age miners' hours. In the Third Republic labour
law was first effectively enforced, in particular after Waldeck-Rousseau 1884 law legalising
trade unions. With the Matignon Accords, the Popular Front (1936–38) enacted the laws
mandating 12 days each year of paid vacations for workers and the law limiting the standard
workweek to 40 hours.

Health and safety

Other labour laws involve safety concerning workers. The earliest English factory law was
passed in 1802 and dealt with the safety and health of child textile workers.

Discrimination

Such laws prohibited discrimination against employees as morally unacceptable and illegal, in
particular racial discrimination or gender discrimination.

Dismissal

Convention no. 158 of the International Labour Organization states that an employee "can't be
fired without any legitimate motive" and "before offering him the possibility to defend himself".
Thus, on April 28, 2006, after the unofficial repeal of the French First Employment Contract, the
Longjumeau (Essonne) conseil des prud'hommes (labour law court) judged the New
Employment Contract contrary to international law and therefore "illegitimate" and "without any

86
juridical value". The court considered that the two-years period of "fire at will" (without any
legal motive) was "unreasonable", and contrary to convention.[13][14]

Child labour

Two girls wearing banners in Yiddish and English with the slogan "Abolish child slavery!!" at
the 1909 International Workers' Day parade in New York City.Child labour was not seen as a
problem throughout most of history, only disputed with the beginning of universal schooling and
the concepts of labourers' and children's rights. Use of child labour was commonplace, often in
factories. In England and Scotland in 1788, about two-thirds of persons working in water-
powered textile factories were children.[15] Child labour can be factory work, mining or
quarrying, agriculture, helping in the parents' business, operating a small business (such as
selling food), or doing odd jobs. Children work as guides for tourists, sometimes combined with
bringing in business for shops and restaurants (where they may also work). Other children do
jobs such as assembling boxes or polishing shoes. However, rather than in factories and
sweatshops, most child labour in the twenty-first century occurs in the informal sector, "selling
on the street, at work in agriculture or hidden away in houses — far from the reach of official
inspectors and from media scrutiny."

Collective labour law

Collective labour law concerns the relationship between employer, employee and trade unions.
Trade unions (also "labor unions" in the US) are organisations which generally aim to promote
the interests of their members.

Trade unions

Trade unions are organized groups of workers who engage in collective bargaining with
employers. Some countries require unions and/or employers to follow particular procedures in
pursuit of their goals. For example, some countries require that unions poll the membership to
approve a strike or to approve using members' dues for political projects. Laws may govern the
circumstances and procedures under which unions are formed. They may guarantee the right to
join a union (banning employer discrimination), or remain silent in this respect. Some legal
codes allow unions to obligate their members, such as the requirement to comply with a majority
decision in a strike vote. Some restrict this, such as "right to work" legislation in parts of the
United States.

Workplace participation

A legally binding right for workers as a group to participate in workplace management is

acknowledged in some form in most developed countries. In a majority of EU member states (for
example, Germany, Sweden, and France) the workforce has a right to elect directors on the board
of large corporations. This is usually called "codetermination" and currently most countries allow
for the election of one third of the board, though the workforce can have the right to elect
anywhere from a single director, to just under a half in Germany. However, German company
law uses a split board system, in which a "supervisory board" appoints an "executive board".

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Under the Mitbestimmunggesetz 1976, shareholders and employees elect the supervisory board
in equal numbers, but the head of the supervisory board with a casting vote is a shareholder
representative. The first statutes to introduce board level codetermination were in Britain,
however most of these measures, except in universities, were removed in 1948 and 1979. The
oldest surviving statute is found in the United States, in the Massachusetts Laws on
manufacturing corporations, introduced in 1919, however this was always voluntary.In the
United Kingdom, similar proposals were drawn up, and a command paper produced named the
Bullock Report (Industrial democracy) was released in 1977 by the James Callaghan Labour
Party government. Unions would have directly elected half of the board. An "independent"
element would also be added. However, the proposal was not enacted. The European
Commission offered proposals for worker participation in the "fifth company law directive",
which was also not implemented.In Sweden, participation is regulated through the "Law on
board representation". The law covers all private companies with 25 or more employees. In these
companies, workers (usually through unions) have a right to appoint two board members and two
substitutes. If the company has more than 1,000 employees, this rises to three members and three
substitutes. It is common practice to allocate them among the major union coalitions.

Information and consultation

Workplace statutes in many countries require that employers consult their workers on various
issues.

Collective bargaining

Collective action

Strikers gathering in Tyldesley, Greater Manchester in the 1926 General Strike in the U.K.Strike
action is the worker tactic most associated with industrial disputes. In most countries, strikes are
legal under a circumscribed set of conditions. Among them may be that:

➢ The strike is decided on by a prescribed democratic process (wildcat strikes are illegal).
➢ Sympathy strikes, against a company by which workers are not directly employed, may
be prohibited.
➢ General strikes may be forbidden for example, among public safety workers, to maintain
public order.

A boycott is a refusal to buy, sell, or otherwise trade with an individual or business. Other tactics
include go-slow, sabotage, work-to-rule, sit-in or en-masse not reporting to work.[17] Some
labour law explicitly bans such activity, none explicitly allows it.

Picketing

Picketing is often used by workers during strikes. They may congregate near the business they
are striking against to make their presence felt, increase worker participation and dissuade (or
prevent) strike breakers from entering the workplace. In many countries, this activity is restricted
by law, by more general law restricting demonstrations, or by injunctions on particular pickets.

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For example, labour law may restrict secondary picketing (picketing a business connected with
the company not directly with the dispute, such as a supplier), or flying pickets (mobile strikers
who travel to join a picket). Laws may prohibit obstructing others from conducting lawful
business; outlaw obstructive pickets allow court orders to restrict picketing locations or behaving
in particular ways (shouting abuse, for example).

International labour law

The labour movement has long been concerned that economic globalisation would weaken
worker bargaining power, as their employers could hire workers abroad to avoid domestic labour
standards. Karl Marx said:The extension of the principle of free trade, which induces between
nations such a competition that the interest of the workman is liable to be lost sight of and
sacrificed in the fierce international race between capitalists, demands that such organizations
[unions] should be still further extended and made international. The International Labour
Organization and the World Trade Organization have been a primary focus among international
bodies for regulating labour markets. Conflicts arise when people work in more than one
country. EU law has a growing body of workplace rules.

International Labour Organization

Following World War One, the Treaty of Versailles contained the first constitution of a new
International Labour Organization (ILO) founded on the principle that "labour is not a
commodity", and for the reason that "peace can be established only if it is based upon social
justice".ILO's primary role has been to coordinate international labour law by issuing
Conventions. ILO members can voluntarily adopt and ratify the Conventions. For instance, the
first Hours of Work (Industry) Convention, 1919 required a maximum of a 48-hour week, and
has been ratified by 52 out of 185 member states. The UK ultimately refused to ratify the
Convention, as did many current EU members, although the Working Time Directive adopts its
principles, subject to individual opt-out.[c] ILO's constitution comes from the 1944 Declaration of
Philadelphia and under the 1998 Declaration on Fundamental Principles and Rights at Work
classified eight conventions[d] as core.These require freedom to join a union, bargain collectively
and take action (Conventions No. 87 and 98), abolition of forced labour (29 and 105), abolition
of labour by children before the end of compulsory school (138 and 182), and no discrimination
at work (No. 100 and 111). Member compliance with the core Conventions is obligatory, even if
the country has not ratified the Convention in question. To ensure compliance, the ILO is limited
to gathering evidence and reporting on member states' progress, relying on publicity to create
pressure to reform. Global reports on core standards are produced yearly, while individual
reports on countries who have ratified other Conventions are compiled on a bi-annual or less
frequent basis.

World Trade Organization

As one of the only international organisations with real enforcement power through trade
sanctions, the WTO has been the target for calls by labour lawyers to incorporate global
standards of the International Labour Organization.Because the ILO's enforcement mechanisms
are weak,[citation needed] incorporating labour standards in the World Trade Organization's (WTO)

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operation has been proposed. WTO oversees, primarily, the General Agreement on Tariffs and
Trade treaty aimed at reducing customs, tariffs and other barriers to import and export of goods,
services and capital between its 157 member countries. Unlike for the ILO, contravening WTO
rules as recognized by the dispute settlement procedures opens a country to retaliation through
trade sanctions. This could include reinstatement of targeted tariffs against the offender.

Proponents have called for a "social clause" to be inserted into the GATT agreements, for
example, by amending Article XX, which provides an exception that allows imposition of
sanctions for breaches of human rights. An explicit reference to core labour standards could
allow comparable action where a WTO member state breaches ILO standards. Opponents argue
that such an approach could undermine labour rights, because industries, and therefore
workforces could be harmed with no guarantee of reform. Furthermore, it was argued in the 1996
Singapore Ministerial Declaration 1996 that "the comparative advantage of countries,
particularly low-age developing countries, must in no way be put into question."] Some countries
want to take advantage of low wages and fewer rules as a comparative advantage to boost their
economies. Another contested point is whether business moves production from high wage to
low wage countries, given potential differences in worker productivity.] Since GATT, most trade
agreements have been bilateral. Some of these protect core labour standards. Moreover, in
domestic tariff regulations, some countries give preference to countries that respect core labour
rights, for example under the EC Tariff Preference Regulation, articles 7 and 8.

Work in multiple countries

Conflicts of laws (or private international law) issues arise where workers work in multiple
jurisdictions. If a US worker performs part of her job in Brazil, China and Denmark (a
"peripatetic" worker) an employer may seek to characterise the employment contract as governed
by the law of the country where labour rights are least favourable to the worker, or seek to argue
that the most favourable system of labour rights does not apply. For example, in a UK labour law
case, Ravat v Halliburton Manufacturing and Services Ltd[23] Ravat was from the UK but was
employed in Libya by a German company that was part of Halliburton. He was dismissed by a
supervisor based in Egypt. He was told he would be hired under UK law terms and conditions,
and this was arranged by a staffing department in Aberdeen. Under the UK Employment Rights
Act 1996 he would have a right to claim unfair dismissal, but the Act left open the question of
the statute's territorial scope. The UK Supreme Court held that the principle would be that an
expatriate worker, would be subject to UK rules if the worker could show a "close connection" to
the UK, which was found in Rabat's case. This fits within the general framework in the EU.
Under EU Rome I Regulation article 8, workers have employment rights of the country where
they habitually work. They may have a claim in another country if they can establish a close
connection to it. The Regulation emphasises that the rules should be applied with the purpose of
protecting the worker. It is also necessary that a court has jurisdiction to hear a claim. Under the
Brussels I Regulation article 19, this requires the worker habitually works in the place where the
claim is brought, or is engaged there.

EU law

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The European Union has extensive labour laws that officially exclude (according to the Treaty
on the Functioning of the European Union) matters around direct wage regulation (e.g. setting a
minimum wage), fairness of dismissals and collective bargaining. A series of Directives regulate
almost all other issues, for instance the Working Time Directive guarantees 28 days of paid
holiday, the Equality Framework Directive prohibits all forms of discrimination and the
Collective Redundancies Directive requires that proper notice is given and consultation takes
place on decisions about economic dismissals.However, the European Court of Justice has
recently extended the Treaties provisions via case law. Trade unions have sought to organise
across borders in the same way that multinational corporations have organised production
globally. Unions have sought to take collective action and strikes internationally. However, this
coordination was challenged in the European Union in two controversial decisions. In Laval Ltd
v Swedish Builders Union[27] a group of Latvian workers were sent to a construction site in
Sweden. The local union took industrial action to make Laval Ltd sign up to the local collective
bargaining agreement. Under the Posted Workers Directive, article 3 lays down minimum
standards for foreign workers so that workers receive at least the minimum rights that they would
have in their home country in case their place of work has lower minimum rights. Article 3(7)
says that this "shall not prevent application of terms and conditions of employment which are
more favourable to workers". Most people thought this meant that more favourable conditions
could be given than the minimum (e.g., in Latvian law) by the host state's legislation or a
collective agreement. However the European Court of Justice (ECJ) said that only the local state
could raise standards beyond its minimum for foreign workers. Any attempt by the host state, or
a collective agreement (unless the collective agreement is declared universal under article 3(8))
would infringe the business' freedom under TFEU article 56. This decision was implicitly
reversed by the European Union legislature in the Rome I Regulation, which makes clear in
recital 34 that the host state may allow more favourable standards. However, in The Rosella, the
ECJ held that a blockade by the International Transport Workers Federation against a business
that was using an Estonian flag of convenience (i.e., saying it was operating under Estonian law
to avoid labour standards of Finland) infringed the business' right of free establishment under
TFEU article 49. The ECJ said that it recognised the workers' "right to strike" in accordance with
ILO Convention 87, but said that its use must be proportionately to the right of the business'
establishment.

Inter National labour laws

In Canadian law, "labour law" refers to matters connected with unionised workplaces, while
"employment law" deals with non-unionised employees.

China

In the People's Republic of China the basic labour laws are the Labour Law of People's Republic
of China (promulgated on 5 July 1994) and the Law of the People's Republic of China on
Employment Contracts (adopted at the 28th Session of the Standing Committee of the 10th
National People's Congress on June 29, 2007, effective from January 1, 2008). The
administrative regulations enacted by the State Council, the ministerial rules and the judicial
explanations of the Supreme People's Court stipulate detailed rules concerning various aspects of

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employment. The government-controlled All China Federation of Trade Unions is the sole legal
labour union. Strikes are formally legal, but in practice are discouraged.

France

In France, the first labour laws were Waldeck Rousseau's laws passed in 1884. Between 1936
and 1938 the Popular Front enacted a law mandating 12 days (2 weeks) each year of paid
vacation for workers, and a law limited the work week to 40 hours, excluding overtime. The
Grenelle accords negotiated on May 25 and 26th in the middle of the May 1968 crisis, reduced
the working week to 44 hours and created trade union sections in each enterprise.[28] The
minimum wage was increased by 25%.[29] In 2000, Lionel Jospin's government enacted the 35-
hour workweek, reduced from 39 hours. Five years later, conservative prime minister Dominique
de Villepin enacted the New Employment Contract (CNE). Addressing the demands of
employers asking for more flexibility in French labour laws, the CNE sparked criticism from
trade unions and opponents claiming it favoured contingent work. In 2006, he then attempted to
pass the First Employment Contract (CPE) through a vote by emergency procedure, but that was
met by students and unions' protests. President Jacques Chirac finally had no choice but to repeal
it.

India

Over fifty national and many more state-level laws govern work in India. So for instance, a
permanent worker can be terminated only for proven misconduct or habitual absence. In the
Uttam Nakate case, the Bombay High Court held that dismissing an employee for repeated
sleeping on the factory floor was illegal – the decision was overturned by the Supreme Court of
India two decades later. In 2008, the World Bank criticised the complexity, lack of
modernisation and flexibility in Indian regulations.

Iran

Iran has not ratified the two basic Conventions of the International Labour Organization on
freedom of association and collective bargaining and one abolishing child labour.

Mexico

Mexican labour law reflects the historic interrelation between the state and the Confederation of
Mexican Workers. The confederation is officially aligned with the Institutional Revolutionary
Party (the Institutional Revolutionary Party, or PRI). While the law promises workers the right to
strike and to organize, in practice it is difficult or impossible for independent unions to organize.

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Sweden

In Sweden many workplace issues such as working hours, minimum wage and right to overtime
compensation are regulated through collective bargaining agreements in accordance with the
Swedish model of self-regulation, i.e. regulation by the labour market parties themselves in
contrast to state regulation (labour laws).

Switzerland

The labor law of Switzerland covers all standards governing the employment of some kind. The
regulation of the employment by private employers is largely harmonized at the federal level,
while public-sector employment still prevails a variety of cantonal laws. In particular, the civil
standardization is distributed to a variety of laws. Of greater importance, particularly the new
Federal Constitution of 1999, the Code of Obligations , the Labour Code as well as in the public
sector, the Federal Personnel Act.

United Kingdom

The Factory Acts (first one in 1802, then 1833) and the 1823 Master and Servant Act were the
first laws regulating labour relations in the United Kingdom. Most employment law before 1960
was based upon the Law of Contract. Since then there has been a significant expansion primarily
due to the "equality movement" and the European Union. Laws are either Acts of Parliament
called Statutes, Statutory Regulations (made by a Secretary of State under an Act of Parliament)
or Case Law (developed by various courts).The first significant expansion was the Equal Pay Act
of 1970. This act was introduced to bring about pay equality for women in the workplace. Since
1997, changes in UK employment law include enhanced maternity and paternity rights,[ the
introduction of a National Minimum Wage and the Working Time Regulations, which covers
working time, rest breaks and the right to paid annual leave. Discrimination law has been
tightened, with protection from discrimination now available on the grounds of age, religion or
belief and sexual orientation as well as gender, race and disability.

United States

The Fair Labor Standards Act of 1938 set the maximum standard work week to 44 hours. In
1950 this was reduced to 40 hours. A green card entitles immigrants to work, without
requirement a separate work permit. Despite the 40-hour standard maximum work week, some
lines of work require more than 40 hours. For example, farm workers may work over 72 hours a
week, followed by at least 24 hours off Exceptions to the break period exist for certain
harvesting employees, such as those involved in harvesting grapes, tree fruits and
cotton.\Professionals, clerical (administrative assistants), technical, and mechanical employees
cannot be terminated for refusing to work more than 72 hours in a work week. These ceilings,
combined with a competitive job market, often motivate American workers to work more hours.
American workers on average take the fewest days off of any developed country. The Fifth and
Fourteenth Amendments of the United States Constitution limit the power of the federal and state

93
governments to discriminate. The private sector is not directly constrained by the Constitution,
but several laws, particularly the Civil Rights Act of 1964, limit the private sector discrimination
against certain groups. The Fifth Amendment[43] has an explicit requirement that the Federal
Government not deprive individuals of "life, liberty, or property", without due process of law
and an implicit guarantee that each person receive equal protection of the law. The Fourteenth
Amendment[43] explicitly prohibits states from violating an individual's rights of due process and
equal protection. Equal protection limits the State and Federal governments' power to
discriminate in their employment practices by treating employees, former employees, or job
applicants unequally because of membership in a group, like a race, religion or sex. Due process
protection requires that employees have a fair procedural process before they are terminated if
the termination is related to a "liberty", like the right to free speech, or a property interest.

The National Labor Relations Act, enacted in 1935 as part of the New Deal legislation,
guarantees workers the right to form unions and engage in collective bargaining.The Age
Discrimination in Employment Act of 1967 prohibits employment discrimination based on age
with respect to employees 40 years of age or older.Title VII of the Civil Rights Act is the
principal federal statute with regard to employment discrimination, prohibiting unlawful
employment discrimination by public and private employers, labour organizations, training
programmes and employment agencies based on race or colour, religion, sex and national origin.
Retaliation is also prohibited by Title VII against any person for opposing any practice forbidden
by statute, or for making a charge, testifying, assisting, or participating in a proceeding under the
statute. The Civil Rights Act of 1991 expanded the damages available to Title VII cases and
granted Title VII plaintiffs the right to jury trial.

Halakhah (Jewish religious law)

The beginnings of halakhic labour law are in the Bible, in which two commandments refer to this
subject: The law against delayed wages (Lev. 19:13; Deut. 24:14-15) and the worker's right to
eat the employer's crops (Deut. 23:25-26). The Talmudic law - in which labour law is called
"laws of worker hiring" - elaborates on many more aspects of employment relations, mainly in
Tractate Baba Metzi'a. In some issues the Talamud, following the Tosefta, refers the parties to
the customary law: "All is as the custom of the region [postulates]". Modern halakhic labour law
developed very slowly. Rabbi Israel Meir Hacohen (the Hafetz Hayim) interprets the worker's
right for timely payment in a tendency that clearly favours the employee over the employer, but
does not refer to new questions of employment relations. Only in the 1920s we find the first
halakhic authority to tackle the questions of trade unions (that could easily be anchored in
Talmudic law) and the right of strike (which is quite problematic in terms of Talmudic law).
Rabbis A.I Kook and B.M.H. Uziel tend to corporatist settling of labour conflicts, while Rabbi
Moshe Feinstein clearly adopts the liberal democratic collective bargaining model. Since the
1940s the halakhic literature on labour law was enriched by books and articles that referred to
growing range of questions and basically adopted the liberal democratic approach.

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Strategies that Contributed to HR to Human Capital

Collective agreement

A collective agreement or collective bargaining agreement (CBA) is a special type of

commercial agreement, usually as one negotiated "collectively" between management (on behalf
of the company) and trades unions (on behalf of employees). The collective agreement regulates
the terms and conditions of employees in their workplace, their duties and the duties of the
employer. It is usually the result of a process of collective bargaining between an employer (or a
number of employers) and a trade union representing workers.In Finland, there is universal
validity of collective labour agreements. This means that a collective agreement in an economic
sector becomes a universally applicable legal minimum for any individual’s employment
contract, union member or not. For this condition to apply, half of the workforce in that sector
needs to be union members, thus supporting the agreement.Workers are not forced to join a
union in a specific workplace. Nevertheless, with 70 % average unionization, most economic
sectors are under a collective labour agreement. An agreement does not prohibit higher wages
and better benefits, but establishes a legal minimum, similarly to a minimum wage. Furthermore,
a Comprehensive Income Policy Agreement is often, but not always reached, which includes all
trade unions, employer’s unions and the Finnish government.

Germany

Collective agreements in Germany are legally binding, and this is accepted by the population,
and it causes no alarm.[2] Whereas in the UK there was (and arguably still is) a "them and us"
attitude in industrial relations, the situation is very different in post-war Germany and in some
other Northern European countries. In Germany, there is a much greater spirit of cooperation
between the two sides of industry. For over 50 years, German workers by law have had
representation on company boards. Together, management and workers are considered "social
partners", a term that gives rise to bemusement in the UK.

United Kingdom

At common law, Ford v A.U.E.F. [1969],[5] the courts once held that collective agreements were
not binding. Then, the Industrial Relations Act 1971, introduced by Robert Carr (Employment
Minister in Edward Heath's cabinet), provided that collective agreements were binding unless a
written contact clause in writing declared otherwise. After the demise of the Heath government,
the law was reversed to reflect the tradition in British industrial relations policy of legal
abstentionism from workplace disputes.The law is now contained in the Trade Union and Labour
Relations (Consolidation) Act 1992 s.179, whereby In the United Kingdom, collective
agreements are conclusively deemed to be not legally binding. This presumption may be rebutted
when the agreement is in writing and contains an explicit provision asserting that it should be
legally enforceable.Although the collective agreement itself is not enforceable, many of the
terms negotiated will relate to pay, conditions, holidays, pensions and so on. These terms will be
incorporated into an employee's contract of employment (whether or not the employee is a union
member); and the contract of employment is, of course, enforceable. If the new terms are
unacceptable to any individuals, they can object to his employer; but if the majority of workers

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have acquiesced, the company will be able to sack the complainants, normally with impunity.The
British law reflects the historic adversarial nature of UK industrial relations. Also, there is a
background fear by employees that if their trade union sued for breach of a collective agreement,
the union could become bankrupt, leaving employees without representation in collective
bargaining. This unfortunate situation may be slowly changing, partly through EU influences.
Japanese and Chinese firms that have UK factories (particularly in the motor industry) try to
imbue their workers with the company ethic. This approach has been adopted by indigenous UK
firms such as Tesco.

Lobbying

Lobbying (also lobby) is the act of attempting to influence decisions made by officials in a
government, most often legislators or members of regulatory agencies. Lobbying is done by
many types of people, associations and organized groups, including individuals in the private
sector, corporations, fellow legislators or government officials, or advocacy groups (interest
groups). Lobbyists may be among a legislator's constituencies, meaning a voter or block of
voters within his or her electoral district, or not; they may engage in lobbying as a business, or
not. Professional lobbyists are people whose business is trying to influence legislation on behalf
of a group or individual who hires them. Individuals and nonprofit organizations can also lobby
as an act of volunteering or as a small part of their normal job (for instance, a CEO meeting with
a representative about a project important to his/her company, or an activist meeting with his/her
legislator in an unpaid capacity). Governments often define and regulate organized group
lobbying that has become influential.The ethics and morality of lobbying are dual-edged.
Lobbying is often spoken of with contempt, when the implication is that people with inordinate
socioeconomic power are corrupting the law (twisting it away from fairness) in order to serve
their own interests. When people who have a duty to act on behalf of others, such as elected
officials with a duty to serve their constituents' interests or more broadly the public good, can
benefit by shaping the law to serve the interests of some private parties, a conflict of interest
exists. Many critiques of lobbying point to the potential for conflicts of interest to lead to agent
misdirection or the intentional failure of an agent with a duty to serve an employer, client, or
constituent to perform those duties. The failure of government officials to serve the public
interest as a consequence of lobbying by special interests who provide benefits to the official is
an example of agent misdirection.In contrast, another side of lobbying is making sure that others'
interests are duly defended against others' corruption, or even simply making sure that minority
interests are fairly defended against mere tyranny of the majority. For example, a medical
association may lobby a legislature about increasing the restrictions in smoking prevention laws,
and tobacco companies lobby to reduce them: the first regarding smoking as injurious to health
and the second arguing it is part of the freedom of choice.

Lobbying by country

Over the past twenty years lobbying in Australia has grown from a small industry of a few
hundred employees to a multibillion-dollar per year industry. Lobbying has become a political
fact of life and is now endemic in local, state, and federal government. It is not just the local
councillors and state and federal politicians being lobbied. What was once the preserve of big
multinational companies and at a more local level, property developers, has morphed into an

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industry that would employ more than 10,000 people and represent every facet of human
endeavour. In Australia, lobbyists are expected to organise a pass to obtain access to the federal
parliament. The Parliamentary Pass must be signed by two parliamentarians. It is administered
by the Department of Parliamentary Services (DPS) and has the enforcement of the Criminal
Code Act 1995. The Pass is valid for two years.However, the Parliamentary Pass is not
absolutely necessary, as some lobbyists are simply signed in on the day of their visit as guests of
Senators or Members Moreover, there are some advocacy groups in Australia that can lobby
without passesFor example, in 1995, following the lobbying done by The Affiliated Residential
Park Residents Association Incorporated (ARPRA) and other interested tenant organizations, the
Government created new legislation to provide residential park residents with improved
protection. The Residential Parks Act of 1996 became the operating tool for the conduct of
residents and park owners alike. In 1998, following further lobbying for the legislative review
and revision of the 1996 Act, the Residential Parks Act of 1998 became law.When lobbyists visit
most federal government departments, they must also sign a register.[

Developments and Trends in expatriation

In the 19th and early 20th centuries, many Americans, numbering perhaps in the thousands, were
drawn to European cultural centers, especially Munich and Paris. The author Henry James, for
instance, adopted England as his home, while Ernest Hemingway lived in Paris.

Global markets at the end of the 20th century created a different type of expatriate where
commuter and short-term assignments are becoming more common and often used by
organizations to supplement traditional expatriation.[5]

Where the initiative for expatriation does not come from employers but originates from
individuals, management researchers describe this as self-initiated expatriation (SIE).[6][7] There
is also the different phenomenon[8] of expatriate executives who are appointed by local
companies in distant countries rather than being posted there by foreign multinational
corporations. Some local companies in emerging markets, for example, have recently hired a
number of Western managers. The continuing shift in expatriates has often been difficult to
measure and available figures often include economic migrants. According to UN statistics, more
than 232 million people, that is 3.2% of the world population, live outside of their home country
in 2013. In terms of influx of expatriates, among the most popular expatriate destinations are for
several years Germany, Belgium, France, Spain and Russia in Europe, Canada and the USA in
North America, the UAE, Kuwait and Oman, Singapore and Hong Kong in Asia, Australia and
New Zealand, as well as South Africa which is the most popular expat destination in Africa.

In Dubai the population is predominantly composed of foreign passport holders, primarily

migrants from countries such as India, Pakistan, Bangladesh and the Philippines and expatriates
from the Western world, with only 20% of the population made up of citizens. Singapore has a
large number of expatriates as well, and almost 40% of the inhabitants of this metropolitan city
are foreign-born workers, professionals or students. Expatriates generally qualify for and enjoy
access to a wide range of financial advantages, ranging from a wide variety of financial products,

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investing offshore or tax benefits either in their home country or the place of residence.
Controversy sometimes arises over why some people, particularly Westerners, are called
expatriates while others are termed immigrants."The Journal of Global Mobility: The home of
expatriate management research" was launched in 2013 and specialize in expatriate research.

Human resource management of expatriate employees

The increase in global mobility requires additional attention from human resource departments.
The salary of internationally assigned personnel often consists of standard salary and monetary
benefits such as cost of living and/or hardship/Quality-of-Living allowances supported by non-
monetary incentives such as health care, education expenses, and housing. Some companies will
completely cover the cost of expatriate children's education, even at relatively expensive
international schools, while other, usually smaller companies, encourage families to find local
schooling options. There are three approaches used by organizations to decide what benefits to
give their expat. These approaches are destination based, balance sheet approach, or the
international headquarters approach. Given that one of the primary reasons for early repatriation
is attributed to a spouse or other family member's inability to adjust,[22] international corporations
often have a company-wide policy and coaching system that includes spouses at an earlier stage
in the decision-making process. Research has shown that while the mal adjustment of an
expatriate spouse can have negative consequences for the expatriate the spouse can also function
as a positive resource supporting the expatriate (Lauring & Selmer, 2010).

Advantages of using expatriate employees

There are several advantages of using expatriate employees to staff international company
subsidiaries. Advantages include permitting closer control and coordination of international
subsidiaries and providing a broader global perspective. Employers may also want to exercise
greater corporate control upon the management and daily functions of subsidiary employees, so
expatriates provide the extra supervision. Furthermore, expatriates may provide better expertise
in other foreign markets of existing subsidiaries. Expats have increased understanding of the
companies global operations and can help the local employees identify and meet company
objectives. Expatriates also play a critical role in the training and development of new
management. Essentially, expatriates serve as the means through which strategic control of the
subsidiary is accomplished.

Disadvantages of using expatriate employees

Disadvantages of employing an expatriate include high transfer costs, the possibility of

encountering local government restrictions, and possibly creating a problem of adaptability to
foreign environments.[25] Additionally, other problems associated with using expatriates include
the inability to make the international adjustment, and the sheer cost of relocating an employee
and his entire family abroad. The cost of training, compensating, and relocating an expatriate
along with the expat's family is very high. In addition to increased salary, the cost of living and
education for the expat's children in pricy international schools is also covered.Perhaps the
greatest disadvantage of using expatriates is the possibility of expatriate failure. Expatriate
failure occurs when an expatriate returns to her home country prior to finishing her international

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assignment, or if the expatriate resigns from her job before completing the assignment. Despite
adjustment training, there is no guarantee how well an expatriate will adapt and socialize in the
new country. In fact, one study found that 69% of multinational corporation executives indicated
an expatriate failure rate of 20 to 40%.

Predictors of Adjustment

Family Consideration

The strongest predictor of expatriate adjustment is about their partner's extent to adjust. If the
partner is not working, he or she often needs more time to adjust to a new environment since
their social network are mainly remains in the parent country. The partner may have given up
their career in order to support expatriate's move, this action may cause problems around their
self-worth and identity. For children, they may lose friends which leads them feel insecure in the
new environment and get stressed. After moving, expatriates are often face the challenge of a
new job and longer working hours. According to the 2012 Global Relocation Trends Survey
Report, 88% spouses or partners resist to relocate. What's more, the most common reasons for
assignment refusal are family concerns and partner's career.

Individual Factors

During the process of selecting and training appropriate expatriate, numerous individual factors
related to adjustment have been studied. Personal skills, previously international experience, and
family situation are the most three important factors influence the expatriates' adjustment.[28]

Job and Organizational Factors

An oversea assignment involves getting a new job or role in the organization when the employee
moves to a foreign location. One important organizational factor about adjustment is the level of
the individual in the organization. It affects the method that expatriate deal with the effect of
having a new job. Another organizational factor is the organizational supports that offers to
expatriates. Furthermore, the assistance from the company is related to job satisfaction level as
well.

Alternative forms of expatriation

In recent years, much effort has been directed at understanding the growing group of self-
initiated expatriates - often referred to as SIEs. Being a SIE in general refers to expatriates who
are hired individually on a contractual basis and are thus not transferred overseas by a parent
organization (Andresen, Bergdolt, & Margenfeld, 2012).[29] In other words, SIEs take jobs in a

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foreign country, often with no planned time period, and with the legal employment decision
made by a new work contract partner (Inkson & Myers, 2003). Hence, SIEs independently cross
both country and organizational boundaries to seek work in a new organization which recruits
them directly. Selmer and Lauring (2010) define SIEs with regard to three specific
characteristics, namely that they had acquired their current job independently (self-initiated), that
their current job was a steady position (regular job) and that their nationality was different than
that of the host country (expatriate). A corporate interest is driven by SIEs being accessible from
the host country and being relatively inexpensive not requiring an expatriate compensation
package. Moreover, the pool of headquarter nationals willing to expatriate has been argued to be
shrinking mostly due to dual career issues (Tharenou, 2013).

Short-Term Assignments

The definition of short-term assignments can vary depending on the job or the industry.
However, a typical short term assignment can last anywhere from three months up to a year.[27]
These short-term assignments usually do not require the expatriate family to move. These short-
term assignments include tasks such as project work, skill/ technology transfer, or problem
solving tasks. Short-term assignments also tend to be temporary employment for these
expatiates. The parent company also tends to take care of the employee's salary, pension, and
aspects of social security as oppose to the subsidiaries.[27]

Commuter Assignments

These types of assignments tend to involve employees that live in one country, but travel to
another country for work. These type of workers on average travel between the host and the
home country on a weekly or biweekly bases. Theses assignments typical require a worker to
spend a majority of the work week in the country of work. Once the work week is finished, these
workers tend to return to their home country on the weekend.

International Business Travelers

International business travelers are employees who tend to take a plethora of short international
business trips to a variety of locations around the globe. These types of assignments tend to be
much more structured then other types of expatirate assignments.[27] However, there is no regular
rhythm to international business travel and as a result can place excess stress on the expatriate
family. Some common reasons that businesses use international business travelers are for
knowledge transfer, negotiations, meetings, conferences, etc. An average international business
traveler's trip can vary depending on the company, but they usually last around three weeks.

Flexpatriates and Other Arrangements

Flexpatriate is a term used to describe employees who work at a domestically- based job for a
parent company, but who also travel and work at alternative locations. These workers could
spend an extended amount of time working at the parent company and then be required to work

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at a subsidiary. Virtual work is when a worker engages in company activities with workers in
subsidiaries. Virtual work also includes any domestic job with substantial international
responsibilities and these assignments do not require an employee to relocate. These jobs do not
require excessive travel and allow for employees to work from an office or at home.

Mergers and acquisitions

Mergers and acquisitions (M&A) are transactions in which the ownership of companies, other
business organizations or their operating units are transferred or combined. As an aspect of
strategic management, M&A can allow enterprises to grow, shrink, change the nature of their
business or improve their competitive position. From a legal point of view, a merger is a legal
consolidation of two entities into one entity, whereas an acquisition occurs when one entity
takes ownership of another entity's stock, equity interests or assets. From a commercial and
economic point of view, both types of transactions generally result in the consolidation of assets
and liabilities under one entity, and the distinction between a "merger" and an "acquisition" is
less clear. A transaction legally structured as a merger may have the effect of placing one party's
business under the indirect ownership of the other party's shareholders, while a transaction
legally structured as an acquisition may give each party's shareholders partial ownership and
control of the combined enterprise. A deal may be euphemistically called a "merger of equals"
if both CEOs agree that joining together is in the best interest of both of their companies, while
when the deal is unfriendly (that is, when the management of the target company opposes the
deal) it may be regarded as an "acquisition".

Acquisition

CHAPTER 3

EVOLUTION OF DIFFERENT PROFESSIONAL MOVEMENTS FROM HR TO

HUMAN CAPITAL

Bradford Factor

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The Bradford Factor or Bradford Formula is used in human resource management as a means
of measuring worker absenteeism. The theory is that short, frequent, and unplanned absences are
more disruptive than longer absences. According to the Chartered Institute of Personnel and
Development the term was first coined due to its supposed connection with research undertaken
by the Bradford University School of Management in the 1980s. It was developed as a way of
highlighting the disproportionate level of disruption on an organisation's performance that can be
caused by short-term absence compared to single instances of prolonged absence.

It was originally designed for use as part of the overall investigation and management of
absenteeism. In contrast, if used as part of a very limited approach to address absence or by
setting unrealistically low trigger scores it was considered short-sighted, unlikely to be
successful and could lead to staff disaffection and grievances. The use of the Bradford Factor
often provokes heated debate.

Calculation

The Bradford Factor is calculated as follows:

where:

• B is the Bradford Factor score

• S is the total number of spells (instances) of absence of an individual over a set period
• D is the total number of days of absence of that individual over the same set period[2]

The 'set period' is typically set as a rolling 52 week period.

For example, this is how 10 days absence could be shown:

• 01 instance of absence with a duration of ten days (1 x 1 x 10) = 10 points

• 03 instances of absence; one of one, one of three and one of six days (3 x 3 x 10) = 90
points
• 05 instances of absence; each of two days (5 x 5 x 10) = 250 points
• 10 instances of absence; each of one day (10 x 10 x 10) = 1000 points

A score above 450 is generally categorised as "recommended dismissal" whilst a score between
250 and 499 is categorised as "final written warning".

In May 2001, HM Prison Service began using the Bradford Formula to identify staff with high
absenteeism due to illness.[3] The Bradford Formula is used to calculate an "attendance score".[4]

Disability rights legislation

The British Disability Discrimination Act 1995 and 2005 (DDA), (replaced by the Equality Act
2010) creates a duty on employers to tailor their actions to the individual circumstances of
disabled employees. As certain disabilities may lead to a greater likelihood of short-duration

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absences or to a higher total of days of absence, caution is needed in taking action as a
consequence of the data generated from the application of the Bradford Factor. The DDA allows
disabled employees to request 'reasonable adjustments' in situations where they are
disadvantaged by generic processes. Failure to provide these reasonable adjustments, or to
adequately justify why they cannot be provided, may leave the employer open to civil action for
breach of the DDA in an Employment Tribunal. Reasonable adjustments in the case of the
Bradford Factor might include recording Disability-Related Absence separately from Sickness
Absence, or individually tailoring targets. Reasonable adjustments may also be requested by
disabled employees for relief from any negative consequences of application of the Bradford
Factor, such as disciplinary action or reduced salary awards.

Competency-based management;

Competency-based human resources planning serves as a link between human resources

management and the overall strategic plan of an organization. Competencies are defined as
observable abilities, skills, knowledge, motivations or traits defined in terms of the behaviours
needed for successful job performance.

Competency-based management supports the integration of human resources planning with

business planning by allowing organizations to assess the current human resource capacity based
on their competencies against the capacity needed to achieve the vision, mission and business
goals of the organization. Targeted human resource strategies, plans and programs to address
gaps (e.g., hiring and staffing; learning; career development; succession management; etc.) are
then designed, developed and implemented to close the gaps.

While competencies are not new to most organizations, what is new is their increased application
across varied human resource functions (i.e., recruitment/selection; learning and development,
performance management, career development and succession planning, human resource
planning). Organizations are looking for new ways to acquire, manage and retain the precious
talent needed to achieve their business goals.

Properly designed, competencies translate the strategic vision and goals for the organization into
behaviours or actions employees must display for the organization to be successful.
Competency-based Management (CBM) standardizes and integrates all HR activities based on
competencies that support organizational goals.

Connecting CBM to Organizational Execution

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Fig 1 : Competency Based Management : Graphical Representation : Ref: Google

CBM solutions typically provide input into and drive all aspects of employee career
development. This allows organizations to improve productivity in most areas of human capital
management human resources. CBM is typically referred to as "strategic" in that it attempts to
link organizational planning to job execution.

➢ Strategic human resource planning

➢ Competency architecture
➢ Competency dictionary
➢ Competency-based recruitment
➢ Competency-based learning
➢ Competency-based performance management
➢ Competency-based career development

The role of CBM is to shape and guide employee behaviour from "hire to retire". CBM helps
Talent acquisition, Performance Management and Learning Management Systems to be more
effective by assessing employees' skills and competencies. CBM also facilitates gap discovery
and suggests learning methods (on the job, literature or formal courses) to help improve
employee effectiveness.

Competitive market

The so-called war for talent has driven a marked increase of attention and investment in the
talent management space as new vendors continue to enter to support an ever-growing demand
for strategic human resources applications. Many of these competitors have entered via the
software as a service (SaaS) delivery model, affording small and medium business (SMB) new
less-costly options. Competency-based management systems define the job to be done and the
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consequent required skills to perform said job. The outputs of CBM systems are parameters
input into production talent management systems.

E-HRM

E-HRM is the (planning, implementation and) application of information technology for both
networking and supporting at least two individual or collective actors in their shared performing
of HR activities. E-HRM is not the same as HRIS (Human resource information system) which
refers to ICT systems used within HR departments. Nor is it the same as V-HRM or Virtual
HRM - which is defined by Lepak and Snell as "...a network-based structure built on
partnerships and typically mediated by information technologies to help the organization acquire,
develop, and deploy intellectual capital." E-HRM is in essence the devolution of HR functions to
management and employees. They access these functions typically via intranet or other web-
technology channels. The empowerment of managers and employees to perform certain chosen
HR functions relieves the HR department of these tasks, allowing HR staff to focus less on the
operational and more on the strategic elements of HR, and allowing organisations to lower HR
department staffing levels as the administrative burden is lightened. It is anticipated that, as E-
HRM develops and becomes more entrenched in business culture, these changes will become
more apparent, but they have yet to be manifested to a significant degree. A 2007 CIPD survey
states that "The initial research indicates that much-commented-on development such as shared
services, outsourcing and e-HR have had relatively little impact on costs or staff numbers".

Types

There are three types of E-HRM.

These are described respectively as:

➢ Operational
➢ Relational
➢ Transformational

Operational E-HRM is concerned with administrative functions - payroll and employee

personal data for example. Relational E-HRM is concerned with supporting business processes
by means of training, recruitment, performance management and so forth. Transformational E-
HRM is concerned with strategic HR activities such as knowledge management, strategic re-
orientation.[2] An organisation may choose to pursue E-HRM policies from any number of these
tiers to achieve their HR goals.

Goals

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E-HRM is seen as offering the potential to improve services to HR department clients (both
employees and management), improve efficiency and cost effectiveness within the HR
department, and allow HR to become a strategic partner in achieving organizational goals.
Traditionally HR goals have been broken into three categories: maintaining cost effectiveness,
the enhancement of service for internal customers, and addressing the tactics of the business.
With e-HRM there is a fourth goal added to the three categories and that is the improvement of
global orientation of human resource management. HR functions that e-HRM assist with are the
transactional and transformational goals. Transactional goals help reduce costs and
transformational goals help the allocation of time improvement for HR professionals so that they
may address more strategic issues. To add to this operational benefits have become an outcome
of the implementation of e-HRM.

The process of payroll is an example of this, with HR being able to have more transactions with
fewer problems. E-HRM has increased efficiency and helped businesses reduce their HR staff
through reducing costs and increasing the overall speed of different processes. E-HRM also has
relational impacts for a business; enabling a company’s employees and managers with the ability
to access HR information and increase the connectivity of all parts of the company and outside
organizations. This connectivity allows for communication on a geographic level to share
information and create virtual teams. And finally e-HRM creates standardization, and with
standardized procedures this can ensure that an organization remains compliant with HR
requirements, thus also ensuring more precise decision-making.

HRHIS

A “Human Resource for Health Information System” (“HRHIS”) — also known within the
health care sector as “human resource information system” (“HRIS”) — is a system for
collecting, processing, managing and disseminating data and information on human resource for
health (HRH). Depending on the level of development of a country's health care system and the
organization of its workforce, an HRHIS can be computerized or paper-based, and including
information on numbers and distribution of health workers and track their career information. It
is usually an integral part of a comprehensive health management information system, and may
be used to monitor and assess the performance of the overall health system.

The HRHIS provided import/output mechanisms for data at different levels, such as national,
regional, district or facility level. It was designed to provide flexibility to:

➢ Capture and store health personnel's data and history by organizational unit, cadre, and
other characteristics;
➢ Add any number of datasets or elements required by any sector (such as the central health
ministry, local governments, civil services or private providers);
➢ Update organizational unit details according to users' requirements (e.g. allowing
additional regions, districts and health facilities to be added dynamically without entering
into system codes);
➢ Generate web-enabled reports in different formats (general and aggregated), including
graphical reporting.

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Since human resource information/data are personal and confidential, the HRHIS system was
developed with high security measures for protecting the data entered. Security measures include
a login mechanism such that only authorized personnel can use the system, and also a Users
Administration functionality which allows the system administrator to limit users' access to
certain functions.

Job analysis

Job analysis (also known as work analysis) is a family of procedures to identify the content of a
job in terms of activities involved and attributes or job requirements needed to perform the
activities. Job analysis provides information to organizations which helps to determine which
employees are best fit for specific jobs. Through job analysis, the analyst needs to understand
what the important tasks of the job are, how they are carried out, and the necessary human
qualities needed to complete the job successfully. The process of job analysis involves the
analyst describing the duties of the incumbent, then the nature and conditions of work, and
finally some basic qualifications. After this, the job analyst has completed a form called a job
psychograph, which displays the mental requirements of the job. The measure of a sound job
analysis is a valid task list. This list contains the functional or duty areas of a position, the related
tasks, and the basic training recommendations. Subject matter experts (incumbents) and
supervisors for the position being analyzed need to validate this final list in order to validate the
job analysis. Job analysis is crucial for first, helping individuals develop their careers, and also
for helping organizations develop their employees in order to maximize talent. The outcomes of
job analysis are key influences in designing learning, developing performance interventions, and
improving processes. The application of job analysis techniques makes the implicit assumption
that information about a job as it presently exists may be used to develop programs to recruit,
select, train, and appraise people for the job as it will exist in the future. Job analysts are
typically industrial-organizational (I-O) psychologists or human resource officers who have been
trained by, and are acting under the supervision of an I-O psychologist. One of the first I-O
psychologists to introduce job analysis was Morris Viteles. In 1922, he used job analysis in order
to select employees for a trolley car company. Viteles' techniques could then be applied to any
other area of employment using the same process.[6] Job analysis was also conceptualized by two
of the founders of I-O psychology, Frederick Winslow Taylor and Lillian Moller Gilbreth in the
early 20th century.[1] Since then, experts have presented many different systems to accomplish
job analysis that have become increasingly detailed over the decades. However, evidence shows
that the root purpose of job analysis, understanding the behavioral requirements of work, has not
changed in over 85 years. One of the main purposes of conducting job analysis is to prepare job
descriptions and job specifications which in turn helps hire the right quality of workforce into an
organization. The general purpose of job analysis is to document the requirements of a job and
the work performed. Job and task analysis is performed as a basis for later improvements,
including: definition of a job domain; description of a job; development of performance
appraisals, personnel selection, selection systems, promotion criteria, training needs assessment,
legal defense of selection processes, and compensation plans. The human performance
improvement industry uses job analysis to make sure training and development activities are
focused and effective. In the fields of human resources (HR) and industrial psychology, job

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analysis is often used to gather information for use in personnel selection, training, classification,
and/or compensation.

Industrial psychologists use job analysis to determine the physical requirements of a job
to determine whether an individual who has suffered some diminished capacity is capable of
performing the job with, or without, some accommodation. Edwin Flieshman, Ph.D. is credited
with determining the underlying factors of human physical fitness. Professionals developing
certification exams use job analysis (often called something slightly different, such as "task
analysis" or "work analysis") to determine the elements of the domain which must be sampled in
order to create a content valid exam. When a job analysis is conducted for the purpose of valuing
the job (i.e., determining the appropriate compensation for incumbents) this is called "job
evaluation."

Job analysis aims to answer questions such as:

➢ Why does the job exist?

➢ What physical and mental activities does the worker undertake?
➢ When is the job to be performed?
➢ Where is the job to be performed?
➢ How does the worker do the job?
➢ What qualifications are needed to perform the job?

Procedures

As stated before, the purpose of job analysis is to combine the task demands of a job with our
knowledge of human attributes and produce a theory of behavior for the job in question. There
are two ways to approach building that theory, meaning there are two different approaches to job
analysis.

Task-oriented

Task-oriented procedures focus on the actual activities involved in performing work. This
procedure takes into consideration work duties, responsibilities, and functions. The job analyst
then develops task statements which clearly state the tasks that are performed with great detail.
After creating task statements, job analysts rate the tasks on scales indicating importance,
difficulty, frequency, and consequences of error. Based on these ratings, a greater sense of
understanding of a job can be attained. Task analysis, such as cognitively oriented task analysis
(COTA), are techniques used to describe job expertise. For example, the job analysts may tour
the job site and observe workers performing their jobs. During the tour the analyst may collect

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materials that directly or indirectly indicate required skills (duty statements, instructions, safety
manuals, quality charts, etc.).

Functional job analysis (FJA) is a classic example of a task-oriented technique. Developed by

Fine and Cronshaw in 1944, work elements are scored in terms of relatedness to data (0–6),
people (0–8), and things (0–6), with lower scores representing greater complexity. Incumbents,
considered subject matter experts (SMEs), are relied upon, usually in a panel, to report elements
of their work to the job analyst. Using incumbent reports, the analyst uses Fine's terminology to
compile statements reflecting the work being performed in terms of data, people, and things. The
Dictionary of Occupational Titles uses elements of the FJA in defining jobs.

Worker-oriented

Worker-oriented procedures aim to examine the human attributes needed to perform the job
successfully. These human attributes have been commonly classified into four categories:
knowledge, skills, abilities, and other characteristics (KSAO). Knowledge is the information
people need in order to perform the job. Skills are the proficiencies needed to perform each task.
Abilities are the attributes that are relatively stable over time. Other characteristics are all other
attributes, usually personality factors. The KSAOs required for a job are inferred from the most
frequently-occurring, important tasks. In a worker-oriented job analysis, the skills are inferred
from tasks and the skills are rated directly in terms of importance of frequency. This often results
in data that immediately imply the important KSAOs. However, it can be hard for SMEs to rate
skills directly.

The Fleishman Job Analysis System (F-JAS) developed by Edwin A. Fleishman represents a
worker-oriented approach. Fleishman factor-analyzed large data sets to discover a common,
minimum set of KSAOs across different jobs. His system of 73 specific scales measure three
broad areas: Cognitive (Verbal Abilities; Idea Generation & Reasoning Abilities; Quantitative
Abilities; Memory; Perceptual Abilities; Spatial Abilities; and Attentiveness), Psychomotor (Fine
Manipulative Abilities; Control Movement Abilities; and Reaction Time and Speed Abilities),
and Physical (Physical Strength Abilities; Endurance; Flexibility, Balance, and Coordination;
Visual Abilities; and Auditory and Speech Abilities).

JobScan is a measurement instrument which defines the personality dynamics within a

specific type of job. By collecting PDP ProScan Survey results of actual performers and results
of job dynamics analysis surveys completed by knowledgeable people related to a specific job,
JobScan provides a suggested ideal job model for that position. Although it does not evaluate the
intellect or experience necessary to accomplish a task, it does deal with the personality of the
type of work itself.

Example[edit] For the job of a snow-cat operator at a ski slope, a work or task-oriented
job analysis might include this statement: Operates Bombardier Sno-cat, usually at night, to
smooth out snow rutted by skiers and snowboard riders and new snow that has fallen. On the
other hand, a worker-oriented job analysis might include this statement: Evaluates terrain, snow
depth, and snow condition and chooses the correct setting for the depth of the snow cat, as well
as the number of passes necessary on a given ski slope. Job analysis methods have evolved using

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both task-oriented and worker-oriented approaches. Since the end result of both approaches is a
statement of KSAOs, neither can be considered the "correct" way to conduct job analysis.
Because worker-oriented job analyses tend to provide more generalized human behavior and
behavior patterns and are less tied to the technological parts of a job, they produce data more
useful for developing training programs and giving feed back to employees in the form of
performance appraisal information. Also, the volatility that exists in the typical workplace of
today can make specific task statements less valuable in isolation. For these reasons, employers
are significantly more likely to use worker-oriented approaches to job analysis today than they
were in the past.

Knowledge, skills, abilities and other characteristics (KSAOs)

Regardless of which approach to job analysis is taken, the next step in the process is to identify
the attributes—the KSAOs that an incumbent needs for either performing the tasks at hand or
executing the human behaviors described in the job analysis.

➢ Knowledge: "A collection of discrete but related facts and information about a particular
domain...acquired through formal education or training, or accumulated through specific
experiences."
➢ Skill: "A practiced act".
➢ Ability: "The stable capacity to engage in a specific behavior"
➢ Other characteristics: "Personality variables, interests, training, and experiences"

Finally, once the appropriate KSAOs are identified, tests and other assessment techniques can be
chosen to measure those KSAOs. Over the years, experts have presented several different
systems and methods to accomplish job analysis. Many forms of systems are no longer in use,
but those systems that still exist have become increasingly detailed over the decades with a
greater concentration on tasks and less concentration on human attributes. That trend, however,
has reversed in recent years for the better. Newer methods and systems have brought I-O
psychology back to an examination of the behavioral aspects of work. There are several ways to
conduct a job analysis, including: interviews with incumbents and supervisors, work methods of
analysis can be laborious and time consuming, and there is always a tendency on the part of
management to over analyze some jobs and under analyze some others. These traditional job
analysis methods include: one-on-one interviewing; behavioral event interviews; phone
interviews; surveys; work assessments; Developing a Curriculum (DACUM); job analysis
worksheets; observations and procedural review. Job analysis at the speed of reality. Amherst,
Mass.: HRD Press. All of these methods can be used to gather information for job analysis. The
DACUM process developed in the late 1960s has been viewed as the fastest method used, but it
can still can take two or three days to obtain a validated task list.

➢ Observation: This was the first method of job analysis used by I-O psychologists. The
process involves simply watching incumbents perform their jobs and taking notes.

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 Sometimes they ask questions while watching, and commonly they even perform job
tasks themselves. Near the end of World War II, Morris Viteles studied the job of
navigator on a submarine. He attempted to steer the submarine toward Bermuda. After
multiple misses by over 100 miles in one direction or another, one officer suggested that
Viteles raise the periscope, look for clouds, and steer toward them since clouds tend to
form above or near land masses. The vessel reached Bermuda shortly after that
suggestion. The more jobs one seriously observes, the better one's understanding
becomes of both the jobs in question and work in general.
➢ Interviews: It is essential to supplement observation by talking with incumbents. These
interviews are most effective when structured with a specific set of questions based on
observations, other analyses of the types of jobs in question, or prior discussions with
human resources representatives, trainers, or managers knowledgeable about jobs.
➢ Critical incidents and work diaries: The critical incident technique asks subject matter
experts to identify critical aspects of behavior or performance in a particular job that led
to success or failure. For example, the supervisor of an electric utility repairman might
report that in a very time-pressing project, the repairman failed to check a blueprint and
as a result cut a line, causing a massive power loss. In fact, this is what happened in Los
Angeles in September 2005 when half the city lost power over a period of 12 hours. The
second method, a work diary, asks workers and/or supervisors to keep a log of activities
over a prescribed period of time. They may be asked to simply write down what they
were doing at 15 minutes after the hour for each hour of the work day. Or, they may list
everything they have done up to a break.
➢ Questionnaires and surveys: Expert incumbents or supervisors often respond to
questionnaires or surveys as a part of job analysis. These questionnaires include task
statements in the form of worker behaviors. Subject matter experts are asked to rate each
statement form their experience on a number of different dimensions like importance to
overall job success, frequency performance and whether the task must be performed on
the first day of work or can be learned gradually on the job. Questionnaires also ask
incumbents to rate the importance of KSAOs for performing tasks, and may ask the
subject matter experts to rate work context. Unlike the results of observations and
interviews, the questionnaire responses can be statistically analyzed to provide a more
objective record of the components of the job. To a greater and greater extent, these
questionnaires and surveys are being administered online to incumbents.
➢ Position Analysis Questionnaire: The Position Analysis Questionnaire (PAQ) is a well-
known job analysis instrument. Although it is labeled a questionnaire, the PAQ is
actually designed to be completed by a trained job analyst who interviews the SMEs
(e.g., job incumbents and their supervisors).[2] The PAQ was designed to measure job
component validity of attributes presented in aptitude tests. Job component validity is the
relationship between test scores and skills required for good job performance. There are
195 behavior-related statements in the PAQ divided into six major sections: information
input, mental process, work output, relationships with others, job context, and other job
characteristics.
➢ Checklists: Checklists are also used as a job analysis method, specifically with areas like
the Air Force. In the checklist method, the incumbent checks the tasks he or she performs
from a list of task statements that describe the job. The checklist is preceded by some sort
of job analysis and is usually followed by the development of work activity compilations

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 or job descriptions. The scope of task statements listed depends upon the judgment of the
checklist constructor.

Decide how to use the information since this will determine the data to collect and how to collect
it. Some data collection techniques such as interviewing the employee and asking what the job
entails are good for writing job descriptions and selecting employees for the job. Other
techniques like the position analysis questionnaire do not provide qualitative information for job
descriptions. Rather, they provide numerical ratings for each job and can be used to compare
jobs for compensation purposes.

Review appropriate background information like organization charts, process charts, and job
descriptions. Organization charts show the organization-wide work division, how the job in
question relates to other jobs, and where the job fits in the overall organization. The chart should
show the title of each position and, through connecting lines, show reports to whom and with
whom the job incumbent communicates. A process chart provides a more detailed picture of the
work flow. In its simplest, most organic form, a process chart shows the flow of inputs to and
outputs from the job being analyzed. Finally, the existing job description (if there is one) usually
provides a starting point for building the revised job description.

➢ Select representative positions. This is because there may be too many similar jobs to
analyze. For example, it is usually unnecessary to analyze jobs of 200 assembly workers
when a sample of 10 jobs will be sufficient.
➢ Actually analyze the job by collecting data on job activities, necessary employee
behaviors and actions, working conditions, and human traits and abilities required to
perform the job. For this step, one or more than one methods of job analysis may be
needed
➢ Verify the job analysis information with the worker performing the job and with his or
her immediate supervisor. This will help confirm that the information is factually correct
and complete. This review can also help gain the employee's acceptance of the job
analysis data and conclusions by giving that person a chance to review and modify
descriptions of the job activities.
➢ Develop a job description and job specification. These are two tangible products of the
job analysis process. The job description is a written statement that describes the
activities and responsibilities of the job as well as its important features such as working
conditions and safety hazards. The job specification summarizes the personal qualities,
traits, skills, and background required for completing a certain job. These two may be
completely separate or in the same document.

Recruitment and selection: Job analysis provides information about what the job entails and what
human characteristics are required in order to perform these activities. This information, in the
form of job descriptions and specifications, helps management officials decide what sort of
people they need to recruit and hire and select.

➢ Compensation: Job analysis information is crucial for estimating the value of each job
and its appropriate compensation. Compensation (salary and bonus) usually depends on
the job's required skill and education level, safety hazards, degree of responsibility, etc. --

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 all factors which can be assessed through job analysis. Also, many employers group jobs
into classes. Job analysis provides the information to determine the relative worth of each
job and its appropriate class.
➢ Performance appraisal: A performance appraisal compares each employee's actual
performance with his or her performance standards. Managers use job analysis to
determine the job's specific activities and performance standards.
➢ Training: The job description should show the activities and skills, and therefore
training, that the job requires
➢ Discovering unassigned duties: Job Analysis can also help reveal unassigned duties. For
example, a company's production manager says an employee is responsible for ten duties,
such as production scheduling and raw material purchasing. Missing, however, is any
reference to managing raw material inventories. On further study, it is revealed that none
of the other manufacturing employees are responsible for inventory management, either.
From review of other jobs like these, it is clear that someone should be managing raw
material inventories. Therefore, an essential unassigned duty has been revealed.
➢ EEO compliance: Job analysis plays a large role in EEO compliance. United States
Federal Agencies' Uniform Guidelines on Employee Selection stipulate that job analysis
is a necessary step in validating all major personnel activities. For example, employers
must be able to show that their selection criteria and job performance are actually related.
Doing this requires knowing what the job entails, which in turn requires job analysis.
➢ Additional purposes: In addition to the 6 purposes above, Ash and Levine[19] listed
determining KSAOs needed for promotion, determining workplace hazards to make jobs
safer, job classification, job description, designing the content of jobs, and strategic
human resource planning.

Job Analysis at the Speed of Reality (JASR)

The Job Analysis at the Speed of Reality (JASR) method for job analysis is a reliable, proven
method to quickly create validated task lists. The end product, which can be used for many
purposes, is the basis for many potential training opportunities. This method is a tested process
that helps analysts complete a job analysis of a typical job with a group of subject matter experts
and managers in two to three hours then deliver a validated task list. Job incumbents should
know their jobs better than anyone else. They can provide accurate, timely content information
about the job.

1. JASR participants want to spend a minimum amount of time providing job data during a
session and business leadership wants to minimize disruption to business operations.
2. Since JASR participants do not spend as much time thinking about training as training
professionals do, they do not require much orientation to the process.
3. JASR uses the quickest methods and best possible technology to complete the job
analysis.[3]

Systems

For many years, the U.S. Department of Labor published the Dictionary of Occupational Titles
(DOT), which was a comprehensive description of over 20,000 jobs. However, the Department

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replaced the DOT with O*NET online database, which includes all occupations from the DOT
plus an additional 3,500. This makes O*NET very useful for job analysis.[21]

The O*NET[22] (an online resource which has replaced the Dictionary of Occupational Titles)
lists job requirements for a variety of jobs and is often considered basic, generic, or initial job
analysis data. Everyone can use this database at no cost and is continually updated by observing
workers from each occupation. O*NET also has a Career Exploration Tool which is an
assessment to help workers and students who are searching for new careers. Data available from
O*NET includes physical requirements, educational level, and some mental requirements. Task-
based statements describing the work performed are derived from the functional job analysis
technique. O*NET also provides links to salary data at the US national, state and city level for
each job.

O*NET was designed with several features in mind, including:

• The inclusion of multiple descriptors and content domains to capture the range of ways
that work can be described
• The development of cross-job descriptors in order to enable comparisons between various
jobs
• The use of a taxonomic approach to occupational classification to enable full coverage
within a content domain

Using these principles, a content model was developed that identified six content domains and
specific categories within each domain. These six domains and categories within them include:

➢ Worker characteristics: enduring individual attributes that influence the capacities

workers can develop - abilities, occupational values and interests, and work styles
➢ Worker requirements: general attributes developed through education and experience,
thus are more amenable to change than worker characteristics - knowledge skills and
education
➢ Occupational requirements: descriptors of the work itself rather than the worker -
Generalized work activities, work context, and organizational context
➢ Experience requirements: types and quantities of experience required for specific
occupations - worker experience in other jobs, related training, on-the-job training, and
certification requirements
➢ Individual occupation characteristics: reflects labor demand, supply, and other labor
market information
➢ Occupation-specific requirements: information unique to a particular job - occupation-
specific skills and knowledge, tasks and duties, and equipment used .

Over the past years, the concept of job analysis has been changing dramatically. One observer
put it: "The modern world is on the verge of another huge leap in creativity and productivity, but
the job is not going to be part of tomorrow's economic reality. There still is and will always be an
enormous amount of work to do, but it is not going to be contained in the familiar envelopes we
call jobs. In fact, many organizations are today well along the path toward being "de-jobbed.".

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 Jobs and job descriptions, until recently, tended to follow their prescriptions and to be fairly
detailed and specific. By the mid-1900s writers were reacting to what they viewed as
"dehumanizing" aspects of pigeonholing workings into highly repetitive and specialized jobs;
many proposed solutions like job enlargement, job rotation, and job enrichment. Job
enlargement means assigning workers additional same-level tasks, thus increasing the number of
activities they perform. Job rotation means systematically moving workers from one job to
another. Psychologist Frederick Herzberg argued that the best way to motivate workers is to
build opportunities for challenge and achievement into their jobs through job enrichment. Job
enrichment means re-designing jobs in a way that increases the opportunities for the worker to
experience feelings of responsibility, achievement, growth and recognition. Whether enriched,
specialized or enlarged, workers still generally have specific jobs to do, and these jobs have
required job descriptions. In many firms today, however, jobs are becoming more amorphous
and difficult to define. In other words, the trend is toward dejobbing.

Dejobbing, broadening the responsibilities of the company's jobs, and encouraging employees to
not limit themselves to what's on their job descriptions, is a result of the changes taking place in
business today. Organizations need to grapple with trends like rapid product and technological
changes, and a shift to a service economy. This has increased the need for firms to be responsive,
flexible, and generally more competitive. In turn,the organizational methods managers use to
accomplish this have helped weaken the meaning of a job as a well-defined and clearly
delineated set of responsibilities. Here are some methods that have contributed to this weakening
of JOB's meaning:

• Flatter organizations: Instead of traditional pyramid-shaped organizations with seven or

more management layers, flat organizations with only three or four levels are becoming
more prevalent
• Work teams: Managers increasingly organize tasks around teams and processes rather
than around specialized functions. In an organization like this, employees' jobs change
daily and there is an intentional effort to avoid having employees view their jobs as a
specific set of responsibilities. An example of this in action in information technology is
the Scrum methodology in software development, which specifically states that within
the Scrum process, the only recognised title for team members is "team member" -
although in practice many IT organizations ignore this aspect of Scrum as it is perceived
as "too radical" for them to cope with.
• The Boundaryless Organization: In a boundaryless organization, the widespread use of
teams and similar structural mechanisms reduces and makes more permeable the
boundaries that typically separate departments and hierarchical levels. These
organizations foster responsiveness by encouraging employees to rid themselves of the
'it's not my job' attitudes that typically create walls between one employee's area and
another's. Instead, the focus is on defining the project or task at hand in terms of the
overall best interests of the organization, therefore further reducing the idea of a job as a
clearly defined set of duties.[18]

Most firms today continue to use job analysis and rely on jobs as traditionally defined. More
firms are moving toward new organizational configurations built around jobs that are broad and

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could change daily. Also, modern job analysis and job design techniques could help companies
implement high-performance strategies.

CHAPTER 4

STRATEGIC HUMAN RESOURCE PLANNING

Strategic human resource planning

Human resources planning is a process that identifies current and future human resources
needs for an organization to achieve its goals. Human resources planning should serve as a link
between human resources management and the overall strategic plan of an organization. Aging
worker populations in most western countries and growing demands for qualified workers in
developing economies have underscored the importance of effective Human Resources Planning.
As defined by Bulla and Scott, human resource planning is ‘the process for ensuring that the
human resource requirements of an organization are identified and plans are made for satisfying
those requirements’. Reilly defined workforce planning as: ‘A process in which an organization
attempts to estimate the demand for labour and evaluate the size, nature and sources of supply
which will be required to meet the demand.’ Human resource planning includes creating an
employer brand, retention strategy, absence management strategy, flexibility strategy, talent
management strategy, recruitment and selection strategy.

Best practices

Fig 2: Best Practices Model: Graphical Presentation: Ref ; Google

The planning processes of most best practice organizations not only define what will be
accomplished within a given time-frame, but also the numbers and types of human resources that
will be needed to achieve the defined business goals (e.g., number of human resources; the

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required competencies; when the resources will be needed; etc.). Competency-based
management supports the integration of human resources planning with business planning by
allowing organizations to assess the current human resource capacity based on their
competencies against the capacity needed to achieve the vision, mission and business goals of
the organization. Targeted human resource strategies, plans and programs to address gaps (e.g.,
hiring / staffing; learning; career development; succession management; etc.) are then designed,
developed and implemented to close the gaps. These strategies and programs are monitored and
evaluated on a regular basis to ensure that they are moving the organizations in the desired
direction, including closing employee competency gaps, and corrections are made as needed.
This Strategic HR Planning and evaluation cycle is depicted in the diagram below. Human
resource planning is the ongoing process of systematic planning to achieve the best use of an
organisation's most valuable asset - its human resources. The objective of human resource (HR)
planning is to ensure the best fit between employees and jobs, while avoiding workforce
shortages or spares. The three key elements of the HR planning process are forecasting labour
demand, analysing present labour supply, and balancing projected labour demand and supply.

Implementation Stages

1. Assessing the current HR capacity

Develop a skills catalog for your employees so that you have a clear understanding of what your
staff currently holds. This employee catalog should include everything from volunteer activities
to certifications, of all degrees not just topics pertaining to their particular position. These
catalogs can be assessed to deem whether or not an employee is ready to add more responsibility,
or to forecast the employee's future development plans.

2. Forecasting HR requirements[edit]

• This step includes projecting what the HR needs for the future will be based on the
strategic goals of the organization. Keep in mind you will need to also accommodate for
external challenges that can affect your organization.
• Some questions to ask during this stage include:

➢ Which jobs will need to be filled in the upcoming period?

➢ What skill sets will people need?
➢ How many staff will be required to meet the strategic goals of our organization?
➢ Is the economy affecting our work and ability to appeal to new employees?
➢ How is our community evolving or expected to change in the upcoming period?

3. Gap analysis[edit]

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 • During this step you will observe where your organization is currently, and where you
want to be in the future. You will identify things such as, the employee count, and the
skills evaluation and compare it to what will be needed to achieve your future goal.
During this phase you should also review your current HR practices and identify what
you are doing that is useful and what you can add, that will help you achieve your goal.
• Questions to answer in this stage include:

➢ What new jobs will we need?

➢ What new skills will we need?
➢ Do our present employees have the necessary skills?
➢ Are employees currently aligned to their strengths?
➢ Are current HR practices adequate to meet our future goal?

4. Developing HR strategies to support the strategies of the organization.[edit]

➢ There are 5 HR strategies that you can follow to meet your organizational goals.
o Restructuring Strategies
▪ This includes reducing staff, regrouping tasks to create well-designed jobs,
and reorganizing work groups to perform more efficiently.
o Training and development strategies
▪ This includes providing the current staff with training and development
opportunities to encompass new roles in the organization
o Recruitment Strategies
▪ This includes recruiting new hires that already have the skills the
organization will need in the future.
o Outsourcing strategies
▪ This includes outreaching to external individuals or organizations to
complete certain tasks.
o Collaboration Strategies.
▪ This includes collaborating with other organizations to learn from how
others do things, allow employees to gain skills and knowledge not
previously available in their own organization.

Tools and Technologies of SHRP

Human resources uses various tools and technologies to achieve its goals, especially when it
comes to strategic planning. These technologies include but are not limited to social media,
policies and management information systems.

• Technologies of SHRP:
o Social Media
▪ Social Media is used as a tool in Human Resources and business in
general. This discipline deals with selecting appropriate Social Media sites
and formats from the myriad options available and leveraging the same to
create value for the organization. This requires an in-depth understanding
of the key benefits and pitfalls of Social Media and managing these

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 effectively in the organization’s context. This discipline emphasizes
harnessing social media for effective Human Resource Management,
which includes recruitment, collaboration and engagement. It also
explores the non financial impact as well as the approaches for measuring
the return on investment in Social Media.[3] Common social media outlets
used in the HR field are LinkedIn, Facebook and Google Plus.
o Management Information Systems (MIS)
▪ MIS are computerized information-processing systems designed to
support the activities of company or organizational management. They go
by various names all with varying functions, in the HR field these tools are
commonly referred to as Human Resource Information Systems
(HRIS).Some of these software include Zenefits, Halogen Talent Space,
Bamboo HR, ClearCompany HRM and many more. These programs assist
professionals in records management, benefit administration and inquiries,
hiring and team placement, coaching and training, attendance and payroll
management. [4]

Tools of SHRP

Policy

Policies are set in place to assist in SHRP. These policies are targeted not only for selecting and
training employees but also how they should conduct themselves in and outside the workplace
and various other aspects of being employed at a workplace. For example, within several
companies exist Social Media policy which outlines how an employee should conduct
themselves on personal accounts as a representative of their workplace.

• Common Policies in HR
▪ Equal Employment Opportunity policies
o Employee classifications
o Workdays, paydays, and pay advances
o Overtime compensation
o Meal periods and break periods
o Payroll deductions
o Vacation policies
o Holidays
o Sick days and personal leave (for bereavement, jury duty,
voting, etc.)
o Performance evaluations and salary increases
o Performance improvement
o Termination policies

Behavioral Science

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Behavioral Science is the scientific study of Human behavior. This applied science is used as a
tool in SHRP to help understand and manage human resources. This tool is particularly useful in
organizational development and understanding/establishing organizational culture.

Theories of Strategic Human resource Management

Strategic Human Resource Management is "critical importance of human resources to strategy,

organizational capability to adapt to change and the goals of the organization". In other words
this is a strategy that intends to adapt the goals of an organization and is built off of other
theories such as the contingency theory as well as institutional theory which fit under the
umbrella of organizational theory. These theories look at the universalistic, contingency and
configurational perspectives to see the effect of human resource practices in organizations. The
universalistic perspective says that there are better human resource practices than others and
those should be adopted within organization while contingency says that human resource
practices need to align with other organization practices or the organizations mission, and
configurational perspective is based on how to combine multiple aspects of human resource
practices with effectiveness or performance. This can also be viewed as how human resource
practices fit vertically or horizontally in an organization. This theory also involves looking at the
value of human capital as well as social capitol both in and outside of organizations and how this
affects human resource practices. Human capitol being knowledge and skills of individuals
working for the organization and social capitol is based on the character and value of
relationships in and out of the organization. "Colbert suggests that SHRM should focus on the
interactions and processes of the organization’s social system—the intentions, choices and
actions of people in the system and on HR systems as a coherent whole."

Resource dependency theory

Resource dependence theory which is the theory that organizations are not self sustaining there
they must depend on outside resources to stay functioning. "Resources and dependence could
help to explain how HR practices evolve from the interaction between nonprofits and their
environment, how they deploy employee skills, behaviors and how HR systems are managed."

International Implications

The current definition of strategic human resource planning is defined as a process that identifies
current and future human resources needs for an organization to achieve its goals. It further
explains that aging worker populations in most western countries and growing demands for
qualified workers in developing economies have underscored the importance of effective Human
Resources Planning. When it comes to identifying best practices, forecasting labor demand,
analyzing present labor supply, and balancing projected labor demand and supply as the three
key elements of strategic human resource planning. By leaving out sufficient information in
regards to the current worldwide phenomena known as globalization, the wikipedia article

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disregards Kanter’s first frontier of strategic human resource management, which is increasing
organizational flexibility. As shown by Tung, In the past three decades or so,
globalization/regionalization, migration and reverse migration (also referred to as "brain
circulation"), the ascendancy of emerging markets, the demand for people with a global mindset,
and the worldwide war for talent have brought about fundamental changes to the nature,
magnitude, and raison d'etre for human resource management (HRM) in a global context. More
information is needed that provides a global perspective to strategic human resource planning to
ensure that business can attract the best foreign employees as well as adaptation strategies to
allow foreign companies smooth assimilation should they decide to invest here. Festing offers a
superb comparison of such perspectives that adds to our understanding of the effects of
globalization and localization on comparative strategic human resource management by
providing an encompassing overview of the existing research paradigms.

Applicant tracking system

An applicant tracking system (ATS) is a software application that enables the electronic
handling of recruitment needs. An ATS can be implemented or accessed online on an enterprise
or small business level, depending on the needs of the company and there is also free and open
source ATS software available. An ATS is very similar to customer relationship management
(CRM) systems, but are designed for recruitment tracking purposes. In many cases they filter
applications automatically based on given criteria such as keywords, skills, former employers,
years of experience and schools attended. This has caused many to adapt resume optimization
techniques similar to those used in search engine optimization when creating and formatting their
résumé. Almost all recruitment agencies and most major corporations with an in-house
recruitment function use some form of applicant tracking system to handle job postings,
applicants, resumes, interviews.[4] A dedicated ATS is not uncommon for recruitment specific
needs. On the enterprise level it may be offered as a module or functional addition to a human
resources suite or Human Resource Information System (HRIS). The ATS is expanding into
small and medium enterprises through open source or software as a service offerings (SaaS).The
principal function of an ATS is to provide a central location and database for a company's
recruitment efforts. ATSs are built to better assist management of resumes and applicant
information. Data is either collected from internal applications via the ATS front-end, located on
the company website or is extracted from applicants on job boards. The majority of job and
resume boards (Monster.com, Hotjobs, CareerBuilder, Indeed.com) have partnerships with ATS
software providers to provide parsing support and ease of data migration from one system to
another. Recent enhancements include use of artificial intelligence (AI) tools and natural
language processing (NLP) to facilitate intelligent guided semantic search capabilities offered
through cloud based platforms that allow companies to score and sort resumes with better
alignment to the job requirements and descriptions. With the advent of ATS, resume
optimization techniques and online tools are now used by applicants to increase their chances of
landing an interview call.

Benefits

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Functionality of an ATS is not limited to data mining and collection; ATS applications in the
recruitment industry include the ability to automate the recruitment process via a defined
workflow.Another benefit of an applicant tracking system is analyzing and coordinating
recruitment efforts - managing the conceptual structure known as human capital. A corporate
career site or company specific job board module may be offered, allowing companies to provide
opportunities to internal candidates prior to external recruitment efforts. Candidates may be
identified via pre-existing data or through information garnered through other means. This data is
typically stored for search and retrieval processes. Some systems have expanded offerings that
include off-site encrypted resume and data storage, which are often legally required by equal
opportunity employment laws.Applicant tracking systems may also be referred to as talent
acquisition and management products (TAMP) and are often provided via an application service
provider or software as a service (SaaS) model. The level of service and cost can vary greatly
across providers. In the UK and Ireland, Applicant Tracking Systems which are specifically for
Agency Recruiters are often referred to as Recruitment Software and this is a term used mainly
in the recruitment agency industry (representative bodies include the REC in the UK and the
NRF in Ireland). Although proprietary systems dominate the ATS space, there are open-source
alternatives.As the data held within recruitment software is predominantly personal data, it is
often tightly controlled by data protection legislation, preventing the data from being held
offshore, which frequently places a legal restriction on the use of SaaS offerings.

Human resource management software

The Human Resources Manager

Human resource (HR) managers are involved with recruitment, training, career development,
compensation and benefits, employee relations, industrial relations, employment law,
compliance, disciplinary and grievance issues, redundancies etc.
Human Resources Manager Job Description Sample
Human Resources Manager Job Responsibilities:
Maintains and enhances the organization's human resources by planning, implementing, and
evaluating employee relations and human resources policies, programs, and practices.
Human Resources Manager Job Duties:

• Maintains the work structure by updating job requirements and job descriptions for all
positions.
• Maintains organization staff by establishing a recruiting, testing, and interviewing program;
counseling managers on candidate selection; conducting and analyzing exit interviews;
recommending changes.
• Prepares employees for assignments by establishing and conducting orientation and training
programs.

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 Maintains a pay plan by conducting periodic pay surveys; scheduling and conducting
job evaluations; preparing pay budgets; monitoring and scheduling individual pay actions;
recommending, planning, and implementing pay structure revisions.

• Ensures planning, monitoring, and appraisal of employee work results by training managers
to coach and discipline employees; scheduling management conferences with employees;
hearing and resolving employee grievances; counseling employees and supervisors.
• Maintains employee benefits programs and informs employees of benefits by studying and
assessing benefit needs and trends; recommending benefit programs to management;
directing the processing of benefit claims; obtaining and evaluating benefit contract bids;
awarding benefit contracts; designing and conducting educational programs on benefit
programs.
• Ensures legal compliance by monitoring and implementing applicable human resource
federal and state requirements; conducting investigations; maintaining records; representing
the organization at hearings.
• Maintains management guidelines by preparing, updating, and recommending human
resource policies and procedures.
• Maintains historical human resource records by designing a filing and retrieval system;
keeping past and current records.
• Maintains professional and technical knowledge by attending educational workshops;
reviewing professional publications; establishing personal networks; participating in
professional societies.
• Completes human resource operational requirements by scheduling and assigning
employees; following up on work results.
• Maintains human resource staff by recruiting, selecting, orienting, and training employees.
• Maintains human resource staff job results by counseling and disciplining employees;
planning, monitoring, and appraising job results.
• Contributes to team effort by accomplishing related results as needed.

Human Resources Manager Skills and Qualifications:

Hiring, Human Resources Management, Benefits Administration, Performance Management,
Communication Processes, Compensation and Wage Structure, Supports Diversity, Classifying
Employees, Employment Law, Laws Against Sexual Harassment, Organization

Human resource policies

Human resource policies are continuing guidelines on the approach the organization intends to
adopt in managing its people.[1] It represents specific guidelines to HR managers various matters
concerning employments. It states the intend of the organization about different aspects of
Human Resource management such as recruitment, promotion, compensation, training,
selections etc.[2] They define the conception and value of the organization on how people and
things should be treated. Therefore, it serves as a reference point when human resources
management practices are being developed or when decisions are being made about people. A

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good HR policy could provide generalized guidance on the approach adopted by the
organization,and therefore its employees, concerning various aspects of employments. A
procedure spells out precisely what action should be taken in line with the policy. However, each
company has a different set of circumstances, and so develops an individual set of human
resource policies.[3]

The establishment of policies can help an organization demonstrate, both internally and
externally, that it meets requirements for diversity, ethics and training as well as its commitments
in relation to regulation and corporate governance of its employees. For example, in order to
dismiss an employee in accordance with employment law requirements, amongst other
considerations, it will normally be necessary to meet provisions within employment contracts
and collective bargaining agreements.[4] The establishment of an HR Policy which sets out
obligations, standards of behavior and document disciplinary procedures, is now the standard
approach to meeting these obligations. They provide frameworks within which consistent
decisions are made and promote equity in the way in which people are treated. HR policies can
also be very effective at supporting and building the desired organizational culture.[6]For
example, recruitment and retention policies might outline the way the organization values a
flexible workforce, compensation policies might support this by offering a 48/52 pay option
where employees can take an extra four weeks holidays per year and receive less pay across the
year.

In actuality, policies and procedures serves a number of purposes :

They provide clear communication between the organization and their employees regarding their
condition of employment.

➢ They form a basis for treating all employees fairly and equally.
➢ They are a set of guidelines for supervisors and managers.
➢ They create a basis for developing the employees handbook.
➢ They establish a basis for regularly reviewing possible changes affecting employees.
➢ They form a context for supervisor training programs and employee orientation
programs.

Developing HR Policies

In developing HR Policies, there should be clear and consistent statements of the organization's
policies regarding to all conditions of employment and procedures for their equal and fair
implementation. In order to fulfill this objective, policies and procedures should be:

➢ Clear and specific, but provide enough flexibility to meet the changing conditions.
➢ Comply with all appropriate law and regulation.
➢ Agree with one another and reflect an overall true and fair view approach to all
employees.

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The HR policies are developed by making decisions and taking actions on the day-to-day
problems of the organization. The Process on developing HR policies involved the assessment of
the following factors:

➢ Identify the purpose and objectives which the organization wish to attain regarding to its
Human Resources department.
➢ Analysis of all the factors under which the organization's HR policy will be operating.
➢ Examining the possible alternatives in each area which the HR policy statement is
necessary.
➢ Implementation of the policy through the development of a procedure to support the
policy.
➢ Communication of the policy and procedures adapted to the entire organization.
➢ Auditing the policy so as to reveal the necessary areas requiring change.
➢ Continuous revaluation and revision of policy to meet the current needs of the
organization.

Formulation

Human Resource Management consists of deliberate organizational activities designed to

improve employee productivity and administration through such means as recruitment,
compensation, performance, evaluation, training, record keeping and compliance. HR policies
should be developed for key HR management functions covering eight commonly accepted
responsibilities:

➢ Compensation and Benefits.

➢ Employee and Labor Relations.
➢ Employment Practices & Placement.
➢ Workplace Diversity.
➢ Health, Safety and Security.
➢ Human Resources Information Systems.
➢ Human Resource Research.
➢ Training and Development.

The following steps should be taken when formulating or revising policies:

➢ Gain understanding of the corporate culture and its shared values

➢ Analyse existing policies: both written and unwritten existing policies.
➢ Analyse external influences: HR policies are subject to the influence of many legislation,
regulations and authorities, thus the codes of practice issued by the professional
institutions, should also be consulted.
➢ Assess any areas where new policies are needed or existing policies are inadequate.
➢ Check with managers, preferably starting at the top, on their views about HR policies and
where they think could be improved.

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 ➢ Seek the view of employees about the HR policies, especially to the extend for which
they are inherently fair and equitable and are implemented fairly and consistently.
➢ Seek the view of the union's representatives.

➢ Analyse the information retained in the previous steps and prepare the draft policies.
➢ Consult, discuss and agree policies with management and union representatives.

In order to write the first draft of the policies as step 7 have stated, the following content should
be included:

➢ Policy name
➢ Effective date of the policy and the date of any revisions
➢ Approval status - At this stage the status should be 'DRAFT'
➢ References - list other policies or documents related to this policy
➢ Purpose of the policy - what is it intended to promote or achieve
➢ Main policy statement
➢ Definition of any key concepts or terms mentioned in the policy need to be defined

➢ Eligibility or scope - Any stakeholders are covered by the policy

➢ How to deal with potential exceptions
➢ Positions in the organizations responsible for implementing and monitoring the policy
➢ Procedures for carrying out the policy - preferably written in numbered steps

Types of Policies

HR policies could be classified on the basis of sources or description.

On the Basis of Source

On the basis of their source, policies could be classified into

➢ Originated Policies - These are the policies usually established by the senior managers in
order to guide their subordinates.
➢ Implicit Policies - These are the policies which are not formally expressed, they are
inferred from the behavior of managers, which are also known as the implied policies.
➢ Imposed Policies - Policies are sometimes imposed on the business by external agencies
such as government, trade associations and trade unions.
➢ Appealed Policies - Appealed policies arise because the particular case is not covered by
the earlier policies. In order to know how to handle some situations, subordinates may
request or appeal for the formulation of specific policies.

On the Basis of Description

On the basis of description, policies maybe general or specific.

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 ➢ General Policies - These policies do not related to any specific issue in particular.
General policies are formulated by the top management, this kind of policies are called
'general' because they do not related to any specific issue in particular.
➢ Specific Policies - These policies are related to specific issues like staffing,
compensation, collective bargaining etc. Specific policies must confirm to the board
pattern laid down by the general policies.

Advantages of HR policies

The following advantages could be achieved by the set up of HR policies:

➢ It helps the managers at various levels of decision making to take decisions without the
consulting their superiors. Subordinates are more willing to accept responsibility because
policies indicate what is expected of them and they can quote a written policy to justify
their action.
➢ It ensures long term welfare of employees and makes for good employee relationship as
favoritism and discrimination are reduced. Well-established policies ensure uniform and
consistent treatment of all employees throughout the organization.
➢ It lays down the guidelines pursued in the organization and thereby minimizes the
personal bias of managers.
➢ It ensure prompt action for taking decisions because the policies serve as standards to be
followed. they prevent the wastage of time and energy involved in repeated analyses for
solving problems of a similar nature.
➢ It establishes consistency in the application of the policies over a period of time so that
each one in the organization gets a fair and just treatment. Employees know what action
to expect in circumstances covered by the policies. Policies set patterns of behavior and
permit employees to work more confidently.

Factors influencing HR policies

The following factors will influence the HR policy of an organization:

Laws of the country

The various laws and legislation pertaining to labour have to be taken into consideration. Policies
should be conformity with the laws of the country otherwise they are bound to cause problems
for the organization.

Social Values and Customs

Social Values and customs have to be respected , otherwise the employees may be offended.
Thus, the values and customs of all communities should be taken into accounts while framing
policies.

Management Philosophy and Values

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Management Philosophy and values influence its action on matters concerning the employees.
Therefore, without a clear broad philosophy and set values, it would be difficult for the
employees to understand management.

Financial Impact

HR Policies cost money, which will reflect in the price of the product. Thus, the prices set the
absolute limit to organization's HR policies.

A HRIS, which is also known as a human resource information system or human resource
management system (HRMS), is basically an intersection of human resources and
information technology through HR software. This allows HR activities and processes to
occur electronically.

A HRIS generally should provide the capability to more effectively plan, control and manage
HR costs; achieve improved efficiency and quality in HR decision making; and improve
employee and managerial productivity and effectiveness.

A HRIS offers HR, payroll, benefits, training, recruiting and compliance solutions

Most are flexibly designed with integrated databases, a comprehensive array of features, and
powerful reporting functions and analysis capabilities that you need to manage your workforce.
This can give back hours of the HR administrator’s day previously spent attending to routine
employee requests.

A HRIS also facilitates communication processes and saves paper by providing an easily-
accessible, centralized location for company policies, announcements, and links to external
URL’s. Employee activities such as time-off requests and W-4 form changes can be automated,
resulting in faster approvals and less paperwork.

An affordable Human Resource Information System (HRIS), for example Sage HRMS’s e-
capabilities, allows companies to manage their workforce through two powerful main
components: HR & Payroll. In addition to these essential software solutions, HRIS offers other
options to help companies understand and fully utilize their workforce’s collective skills, talents,
and experiences.

Some of the most popular modules are:

➢ Organization charts (Create professional looking, dynamic organization charts)

➢ Employee self service (Employees can update personal information and view benefits
elections, absence transactions, time-off balances and payroll information)
➢ Benefits Administration (Save paper and postage, take weeks off the benefits open
enrollment period, reduce administration time, and improve data accuracy)
➢ Track training for employees

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Selecting the right HRIS is important. Your company will need to make sure that they can
customize the system to meet its specific and unique needs and that it is a system that will grow
with your company.

Human resource accounting

Human resource accounting is the process of identifying and reporting investments made in the
human resources of an organization that are presently unaccounted for in the conventional
accounting practices. It is an extension of standard accounting principles. Measuring the value of
human resources can assist organizations in accurately documenting their assets.

➢ To furnish cost value information for making proper and effective management decisions
about acquiring, allocating, developing, and maintaining human resources in order to
achieve cost effective organizational objectives.
➢ To monitor effectively the use of human resources by the management.
➢ To have an analysis of the Human Asset, i.e. whether such assets are conserved, depleted,
or appreciated.
➢ To aid in the development of management principles and proper decision making for the
future, by classifying financial consequences of various practices.

Methods

Approaches to human resource accounting (HRA) were first developed in 1691. The next
approach was developed from 1691-1960, and the third phase was post-1960. There are two
approaches to HRA. Under the cost approach, also called the "human resource cost accounting
method" or model, there is an acquisition cost model and a replacement cost model. Under the
value approach, there is a present value of future earnings method, a discounted future wage
model, and a competitive bidding model under.

Cost approach

This approach is also called an acquisition cost model. This method measures the organization’s
investment in employees using the five parameters: recruiting, acquisition, formal training and
familiarization, informal training and informal familiarization, and experience and development.
This model suggests that instead of charging the costs to profit and loss statement (p&l)
accounting, it should be capitalized in the balance sheet. The process of giving a status of asset to
the expenditure item is called capitalization. In human resource management, it is necessary to
amortize the capitalized amount over a period of time. So, here one will take the age of the
employee at the time of recruitment and at the time of retirement. Out of these, a few employees

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may leave the organization before attaining the superannuation. This method is the only method
of Human Resource Accounting that is based on sound accounting principals and policies.

Limitations

The valuation method is based on the false assumption that the dollar is stable.

• Since the assets cannot be sold there are no independent checks of valuation.
• This method measures only the costs to the organization, but ignores completely any
measure of the value of the employee to the organization.
• It is too tedious to gather the related information regarding the human values.
• it may be possible that the employee is already fully trained and there is no need to
employ any development, training, recruitment cost.It will create difficulty for a company
to find out CTC according to acquisition model.

Replacement cost approach

This approach measures the cost of replacing an employee. According to Likert (1985)
replacement cost includes recruitment, selection, compensation, and training cost (including the
income foregone during the training period). The data derived from this method could be useful
in deciding whether to dismiss or replace the staff.

Limitations

Substitution of replacement cost method for historical cost method does little more than update
the valuation, at the expense of importing considerably more subjectivity into the measure. This
method may also lead to an upwardly biased estimate because an inefficient firm may incur a
greater cost to replace an employee (Cascio 3-4).

Present value of future earnings

Lev and Schwartz (1971) proposed an economic valuation of employees based on the present
value of future earnings, adjusted for the probability of employees’ death/separation/retirement.
This method helps in determining what an employee’s future contribution is worth today

Limitations

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The measure is an objective one because it uses widely based statistics such as census income
return and mortality tables.

• The measure assigns more weight to averages than to the value of any specific group or
individual (Cascio 4-5).

Value to the organization

Hekimian and Jones (1967) proposed that when an organization had several divisions seeking the
same employee, the employee should be allocated to the highest bidder and the bid price
incorporated into that division’s investment base. For example, a value of a professional athlete’s
service is often determined by how much money a particular team, acting in an open competitive
market, is willing to pay him or her.

Limitations

The soundness of the valuation depends wholly on the information, judgment, and impartiality of
the bidder (Cascio 5).

Expense model

According to Mirvis and Mac (1976), this model focuses on attaching dollar estimates to the
behavioral outcomes produced by working in an organization. Criteria such as absenteeism,
turnover, and job performance are measured using traditional organizational tools, and then costs
are estimated for each criterion. For example, in costing labor turnover, dollar figures are
attached to separation costs, replacement costs, and training costs.

Model on human resource accounting

This model prescribes the human resource accounting approach for two categories of employees:

• Employees, who are at strategic, key decision-making positions such as MD, CEO (Top
Executives)
• Employees, who execute the decision taken by Top Executives

Model arrives value of human resources as sum of below-mentioned three parts:

1. Real capital cost part

2. Present value of future salary/wages payments
3. Performance evaluation part

Limitations

1. Calculation process is lengthy and cumbersome.

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2. Lev and Schwartz valuation principles have been used at one point of time, so this model
contains a weakness from the Lev and Schwartz model. 3. Other limitations

Ravindra Tiwari has prescribed another approach to value human resources at the time of annual
appraisal exercise, which suggests valuation of human resources on different appraisal
parameters.

Limitations

Human Resource Accounting is the accounting methods, systems, and techniques, which coupled
with special knowledge and ability, assist personnel management in the valuation of personnel in
their knowledge, ability and motivation in the same organization as well as from organization to
organization. It means that some employees become a liability instead of becoming a human
resource. HRA facilitates decision making about the personnel i.e. either to keep or to dispense
with their services or to provide mega-training. There are many limitations that make the
management reluctant to introduce HRA. Some of the attributes are:

1. There are no clear cut and specific procedures or guidelines for finding costs and value of
human resources of an organization. The systems that are being adopted have certain
drawbacks.
2. The period of existence of human resources is uncertain and hence valuing them under
uncertainty in the future seems to be unrealistic.
3. The much needed empirical evidence is yet to be found to support the hypothesis that
HRA as a tool of management facilitates better and effective management of human
resources.
4. Since human resources are incapable of being owned, retained, and utilized, unlike
physical assets, this poses a problem to treat them as assets in the strict sense.
5. There is a constant fear of opposition from the trade unions as placing a value on
employees would make them claim rewards and compensations based on such valuations.
6. In spite of all its significance and necessity, Tax Laws don’t recognize human beings as
assets.
7. There is no universally accepted method of the valuation of human resources.

List & Explain the Methods of HR Accounting

The purpose of human resource (HR) accounting is to assign a dollar value to either individual
employees at a company or the company's workforce as a whole. Because trained and productive
employees are valuable to an organization, they are sometimes referred to as human capital.
Because there is no definitive way to calculate the value of an employee, HR accounting uses
several different methods.

Standard Cost

The standard cost method of human resource accounting involves determining the total cost of
recruiting and hiring each employee, as well as the cost of any training or development.
According to the standard cost method, the economic value of an employee is the total of these

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expenditures, and the annual economic value of the entire workforce is equal to the total amount
of money spent on recruiting, hiring, training and developing all employees during the year.

Replacement Cost

The replacement cost method of HR accounting values an employee in terms of the amount it
would cost the company to replace him. This method holds that the economic worth of a worker
is equal to the estimated cost of recruiting, hiring and training a replacement, or of finding an
employee with a similar set of skills and talents.

Opportunity Cost

The opportunity cost method of human resource accounting, also referred to as the competitive
bidding model, assigns value to an employee based on what each department would be willing to
pay him. This method envisions a fictitious situation in which a company suddenly finds labor
and talent scarce and individual divisions or departments within the company must bid on
existing employees.

Economic Value

The economic value model of human resource accounting involves estimating the total inflow of
cash that will be produced by an employee over the course of his service to the company.
Subtract the total cost of hiring, training, developing and paying an employee from the estimate
of the cash he will generate for the company, and you have arrived at his net worth according to
the economic value method of HR accounting.

A Human Resources Audit is a comprehensive method (or means) to review current human
resources policies, procedures, documentation and systems to identify needs for improvement
and enhancement of the HR function as well as to assess compliance with ever-changing rules
and regulations.
Human Resource Audit
A periodic HR audit can qualify its effectiveness within an organization. HR audits may
accomplish a variety of objectives, such as ensuring legal compliance; helping maintain or
improve a competitive advantage; establishing efficient documentation and technology practices;
and identifying strengths and weaknesses in training, communications and other employment
practices.

Objectives of the Human Resource Audit

➢ To review the performance of the Human Resource Department and its relative activities
in order to assess the effectiveness on the implementation of the various policies to
realize the Organizational goals.

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 ➢ To identify the gaps, lapses, irregularities, short-comings, in the implementation of the
Policies, procedures, practices, directives, of the Human Resource Department and to
suggest remedial actions.
➢ To know the factors which are detrimental to the non-implementation or wrong
implementation of the planned Programmes and activities.
➢ To suggest measures and corrective steps to rectify the mistakes, shortcomings if any, for
future guidance, and advise for effective performance of the work of the Human
Resource Department.
➢ To evaluate the Personnel staff and employees with reference to the Performance
Appraisal Reports and suggest suitable recommendations for improving the efficiency of
the employees.
➢ To evaluate the job chart of the Human Resource Managers, Executives, Administrative
Officers, Executive Officers, Recruitment Officers, whether they have implemented the
directives and guidelines for effective Management of the Human resources in their
respective Departments.

Human Resource Audit and its Contributions to better HR practices and realisation as
Human Capital
Several benefits associated with Human Resource audit are listed below. An audit reminds
member of HR department and others its contribution, creating a more professional image of the
department among manager and specialist. The audit helps clarify the department’s role and
leads to greater uniformity, especially in the geographically scattered and decentralized HR
function of large organisations. Perhaps most important, it finds problems and ensures
compliance with a variety of laws and strategic plans in an organization.

➢ Identifies the contribution of Human Resource department to the organization

➢ Improves the professional image of the Human Resource department.
➢ Encourages greater responsibility and professionalism among member of the Human
Resource department.
➢ Clarifies the HR department’s duties and responsibilities.
➢ Stimulates uniformity of HR policies and practices.
➢ Finds critical HR problems.
➢ Ensures timely compliance with legal requirements.
➢ Reduces human resource cost through more effective Human Resource procedure.
➢ Creates increased acceptance of needed change in the Human Resource department.
➢ Requires thorough review of Human Resourcedepartment’s information system.

Besides ensuring compliance, the audit can improve the department’s image and contribution to
the company. Operating managers may have more respect for the department when an audit team
seeks their view. If the comments of manager are acted on, the department will be seen as being
more responsive to their needs. And since it is service department, these actions may improve its
contribution to organizational objectives.

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AUDITING PROCESS : Essential steps in Human Resource Auditing
Though the process would vary from organization to organization, generally it involves the
following steps:
1) Briefing and orientation:
This is a preparatory meeting of key staff members to:

➢ discuss particular issues considered to be significant,

➢ chart out audit procedures, and
➢ develop plans and programme of audit.

2) Scanning material information:

This involves scrutiny of all available information pertaining to the personnel, personnel
handbooks and manuals, guides, appraisal forms, material on recruitment, computer capabilities
and all such other information considered material.

3) Surveying employees:
Surveying employees involves interview with key managers, functional executives, top
functionaries in the organisation, and even employees’ representatives, if necessary. The purpose
is to pinpoint issues of concern, present strengths, anticipated needs and managerial philosophies
on human resources.
4) Conducting interviews:
What questions to ask? The direction which audit must follow is based on issues developed
through the scanning of information gathered for the purpose. However, the audit efforts will get
impetus if clarity is obtained as to the key factors of human resource management selected for
audit and the related questions that need to be examined. The following model depicts the
various key factors on which information needs during human resource audit need to be
focussed. It is developed from the interview guide used in an electronics company. It covers a
wide range of topics of profound interest relating to human resource management practices in the
organisation.

Fig 3: Key Factors for Interview: Graphic Representation : Ref: Google

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These questions may be developed by the interviewer/audit team on the following aspects as
indicated against each topic.
The process of the interview and the sequence of questions is often as important as their content.
Another effective method is the ‘focus interview’. A focus interview involves meetings between
a trained interviewer and selected members of the organisation. Here the interviewer asks a
variety of questions planned and prepared in the same fashion as the interview questionnaire
explained earlier.

5) Synthesizing:
The data thus gathered is synthesized to present the

• current situation
• priorities
• staff pattern, and
• issues identified.

Similarly, future needs are identified and appropriate criteria developed for spotlighting the
human resource priorities and specific recommendations made.

6) Reporting:
Just as the planning meetings of briefing and orientation, the results of the audit are discussed
within several rounds with the managers and staff specialists. In the process, the issues that get
crystallized are brought to the notice of the management in a formal report. Follow-ups are
necessary after an audit to see if the action plan used to solve problems found this the audit
worked or not.
In conclusion, human resource audit is an important approach to human resource planning. It is
practical because if correctly conducted, it should increase the effectiveness of the design and
implementation of human resource policies, planning and programmes. A periodic and
systematic audit helps human resource planners develop and update employment and programme
plans.
Audit Reports
The audit report is a comprehensive description of HR activities that includes both
commendations for effective practices and recommendations for improving practices that are less
effective. A recognition of both good and bad practices is more balanced and encourages wider
acceptance of the report. An audit report contains several sections. One part is for line managers,
another is for managers of specific HR functions, and the final part is for the HR managers. For
line managers, the report summarises their HR objectives, responsibilities and duties. Examples
of duties include interviewing applicants, training employees, evaluating performance,
motivating workers, and satisfying employee needs. The report also identifies people’s problems.
Violations of policies and employee relations laws are highlighted. Poor management practices
are revealed in the report along with the recommendations. The specialists who handle
employment, training, compensation, and other activities also need feedback. The audit report
they receive isolates areas of good and poor performance within their functions. For example,
one audit team observed that many jobs did not have qualified replacements. This information
was given to the manager of training and development along with the recommendation for more
programs to develop promising supervisors and managers. The report may also provide other

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feedback such as attitudes of operating managers about the HR specialists’ efforts.

The HR manager’s report contains all the information given to both operating mangers and staff
specialists. In addition, the manager gets feedback about:

➢ Attitudes of operating managers and employees about the department’s benefits and
services.
➢ A review of the departments’ objectives and plans to achieve them.
➢ HR problems and their implications.
➢ Recommendations for needed changes and the priority for their implementation.

With the information contained in the audit report, the HR manager can take a broad view of the
function. Instead of solving problems in a random manner, the manager can focus on those
which have the greatest potential for improving the department’s contribution to the
organisation. Perhaps the most important, the audit serves as the map for future efforts and a
reference point for future audits. With knowledge of the department’s current performance, the
manager can make long term plans to upgrade crucial activities. These plans identify new goals
for the department, which serve as standards for future audit teams. Human Resource
Accounting is the process of assigning, budgeting, and reporting the cost of human resources
incurred in an organization, including wages and salaries and training expenses.
Human Resource Accounting is the activity of knowing the cost invested for employees towards
their recruitment, training them, payment of salaries & other benefits paid and in return knowing
their contribution to organisation towards it's profitability.
The American Accounting Association’s Committee on Human Resource Accounting (1973)
has defined Human Resource Accounting as “the process of identifying and measuring data
about human resources and communicating this information to interested parties”. HRA, thus,
not only involves measurement of all the costs/ investments associated with the recruitment,
placement, training and development of employees, but also the quantification of the economic
value of the people in an organisation.
Flamholtz (1971) too has offered a similar definition for HRA. They define HRA as “the
measurement and reporting of the cost and value of people in organizational resources”.
CONCEPT OF HUMAN RESOURCE ACCOUNTING
Human Resource Accounting (HRA) is a new branch of accounting. It is based on the traditional
concept that all expenditure of human capital formation is treated as a charge against the revenue
of the period as it does not create any physical asset. But now a day this concept has changed and
the cost incurred on any asset (as human resources) should be capitalised as it yields benefits
measurable in monetary terms. Human Resource Accounting means accounting for people as the
organisational resources. It is the measurement of the cost and value of people to organisations.
It involves measuring costs incurred by private firms and public sectors to recruit, select, hire,
train and develop employees and judge their economic value to the organisation.
According to Likert (1971), HRA serves the following purposes in an organisation:

• It furnishes cost/value information for making management decisions about acquiring,

allocating, developing, and maintaining human resources in order to attain cost-
effectiveness;
• It allows management personnel to monitor effectively the use of human resources;

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 • It provides a sound and effective basis of human asset control, that is, whether the asset is
appreciated, depleted or conserved;
• It helps in the development of management principles by classifying the financial
consequences of various practices.

Meaning
Human resource accounting is an attempt to identify and report investments made in the
human resources of an organisation that are not presently accounted for under conventional
accounting practice. Basically, it is an information system that tells the management what
changes overtime are occurring to the human resources of the business, and of the cost and
value of the human factor to the organisation. The system may serve both the internal and
external users, providing management (internal users) with relevant data on which to base
recruiting, training and other development decisions and supplying investors, lenders and
other external users of financial statement with information concerning the investment in and
utilisation of human resources in the organisation.
Accounting is a man-made art and its principles and procedures have been evolved over a
long period to aid business in reporting for the management and public. Of the four factors of
production, viz., man, money, material and land, the last three of them are amenable to
conventional accounting, but the first one, i.e., the human resource has not been subject to
such accounting. Over the last two decades the idea of accounting for human resources is
gaining active consideration.
Much of the work on accounting for human resources focused primarily on development or
validation of HRA concepts. The traditional practice of treating all expenditure on human
capital formation as an immediate charge against income is not consistent with the treatment
accorded to comparable outlays in physical capital. The American Accounting Association
strongly critised the practice of assigning a Zero value to an asset and stated that ‘Costs
should be capitalised when they are incurred in order to yield future benefits and when such
benefits can be measured.’
Management of any concern continuously strives hard for obtaining maximum efficiency. In
order to measure the effectiveness of any firm the normal method is to examine financial
statements. These statements include balance sheets in which physical assets such as cash
accounts receivables, inventory and plant are recorded. These statements normally do not
mention the productive capacity of the workers or goodwill of the company.

HRA is the art of valuing, recording and presenting systematically the work of human
resources in the books of accounts of an organisation. Thus, it is primarily an information
system, which informs the management about the changes that are taking place in the human
resource of an organisation.
DEFINITIONS
“Human Resource Accounting is the process of identifying and measuring data about human
resources and communicating this information to interested parties.” - American Accounting
Society Committee on HRA

“Human Resource Accounting is an attempt to identify and report investments made in human
resources of an organisation that are presently not accounted for in conventional accounting

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practice. Basically it is an information system that tells the management what changes over time
are occurring to the human resource in the business.” - Woodruff
“A term used to describe a variety of proposals that seek to report and emphasize the importance
of human resources – knowledgeable, trained and loyal employees in a company earning process
and total assets.” - Davidson and Roman L Weel
“Human resource accounting is the measurement of the cost and value of the people for the
organisation.” - Eric Flamholtz of university of California, Los Angeles
Objectives of HR Accounting
The objective of HRA is not merely the recognition of the value of all resources used by the
organisation, but it also includes the management of human resource which will ultimately
enhance the quantity and quality of goods and services. The main objectives of HR Accounting
system are as follows:

➢ To furnish cost value information for making proper and effective management decisions
about acquiring, allocating, developing and maintaining human resources in order to
achieve cost effective organisational objectives.
➢ To monitor effectively the use of human resources by the management.
➢ To have an analysis of the human assets i.e. whether such assets are conserved, depleted
or appreciated.
➢ To aid in the development of management principles. and proper decision making for the
future by classifying financial consequences of various practices.
➢ In all, it facilitates valuation of human resources recording the valuation in the books of
account and disclosure of the information in the financial statement.
➢ It helps the organisation in decision making in the following areas:

Direct Recruitment vs. promotion, transfer vs. retention, retrenchment vs. retention, impact on
budgetary controls of human relations and organisational behaviour, decision on reallocation of
plants closing down existing units and developing overseas subsidiaries etc.
Advantages of HR Accounting
Human Resource Planning anticipates not only the required kind and number of employees but
also determines the action plan. The major benefits of HR accounting are:

• It checks the corporate plan of the organisation. The corporate plan aiming for expansion,
diversification, changes in technological growth etc. has to be worked out with the
availability of human resources for such placements or key positions. If such manpower
is not likely to be available, HR accounting suggests modification of the entire corporate
plan.
• It offsets uncertainty and change, as it enables the organisation to have the right person
for the right job at the right time and place.
• It provides scope for advancement and development of employees by effective training
and development.
• It helps individual employee to aspire for promotion and better benefits.
• It aims to see that the human involvement in the organisation is not wasted and brings
high returns to the organisation.
• It helps to take steps to improve employee contribution in the form of increased
productivity.

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 • It provides different methods of testing to be used, interview techniques to be adopted in
the selection process based on the level of skill, qualifications and experience of future
human resources.
• It can foresee the change in value, aptitude and attitude of human resources and
accordingly change the techniques of interpersonal management.

INDIA
As far as the statutory requirements go, the Companies Act, 1956 does not demand furnishing of
HRA related information in the financial statements of the companies. The Institute of Chartered
Accountants of India too, has not been able to bring any definitive standard or measurement in
the reporting of human resources costs. While qualitative pronouncements regarding the
importance of Human Resources is often made by the chairmen, in the AGM, quantitative
information about their contribution is rarely recorded or communicated. There are a few
organizations, however, that do recognize the value of their human resources, and furnish the
related information in their annual reports. In India, some of these companies are : Infosys,
Bharat Heavy Electricals Ltd (BHEL); the Steel Authority of India Ltd. (SAIL), the Minerals and
Metals Trading Corporation of India Ltd. (MMTC), the Southern Petrochemicals Industries
Corporation of India (SPIC), the Associated Cement Companies Ltd, Madras Refineries Ltd. ,
the Hindustan Zinc Ltd. , Engineers India Ltd, the Oil and Natural Gas Commission, Oil India
Ltd., the Cement Corporation of India Ltd. etc.

Valuation of human resource management

1. Historical Cost Approach
This approach was developed by William C. Pyle (and assisted by R. Lee Brummet & Eric G.
Flamholtz) and R.G. Barry corporation, a leisure footwear manufacturer based on Columbus,
Ohio (USA) in 1967. In this approach, actual cost incurred on recruiting, hiring, training and
development the human resources of the organisation are capitalised and amortised over the
expected useful life of the human resources. Thus a proper recording of the expenditure made on
hiring, selecting, training and developing the employees is maintained and a proportion of it is
written off to the income of the next few years during which human resources will provide
service. If the human assets are liquidated prematurely the whole of the amount not written off is
charged to the income of the year in which such liquidation takes place. If the useful life is
recongnised to be longer than originally expected, revisions are effected in the amortisation
schedule. The historical cost of human resources is very similar to the book value of the other
physical assets. When an employee is recruited by a firm, he is employed with the obvious
expectation that the returns from him will far exceed the cost involved in selecting, developing
and training in the same manner as the value of fixed assets is increased by making additions to
them. Such additional costs incurred in training and developing is also capitalised and are
amortised over the remaining life. The unexpired value is investment in human assets. This
method is simple to understand and easy to work out. It meets the traditional accounting concept
of matching cost with revenue. It can provide a basis of evaluating a company’s return on its
investment in human resources.
2. Replacement Cost Approach – This approach was first suggested by Rensis Likert, and was
developed by Eric G. Flamholtz on the basis of concept of replacement cost. Human resources of
an organisation are to be valued on the assumption that a new similar organisation has to be
created from scratch and what would be the cost to the firm if the existing resources were
required to be replaced with other persons of equivalent talents and experience. It takes into
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consideration all cost involved in recruiting, hiring, training and developing the replacement to
the present level of proficiency and familiarity with the organisation. This approach is more
realistic as it incorporates the current value of company’s human resources in its financial
statements prepared at the end of the year. It is more representative and logical. But it suffers
from the following limitations:

➢ This method is at variance with the conventional accounting practice of valuing

assets.
➢ There may be no similar replacement for a similar certain existing asset. It is really
difficult to find identical replacement of the existing human resource in actual
practice.
➢ The determination of a replacement value is affected by the subjective considerations
to a marked extent and therefore, the value is likely to differ from man to man.

3. Opportunity Cost
This method was first advocated by Hc Kiman and Jones for a company with several divisional
heads bidding for the services of various people they need among themselves and then include
the bid price in the investment cost. Opportunity cost is the value of an asset when there is an
alternative use of it. There is no opportunity cost for those employees that are not scarce and also
those at the top will not be available for auction. As such, only scarce people should comprise
the value of human resources.

This method can work for some of the people at shop floor and middle order management.
Moreover, the authors of this approach believe that a bidding process such as this is a promising
approach towards more optional allocation or personnel and a quantitative base for planning,
evaluating and developing human assets of the firm. But this approach suffers from the following
limitations:

➢ It has specifically excluded from its preview the employees scarce or not being ‘bid’
by the other departments. This is likely to result in lowering the morale and
productivity of the employees who are not covered by the competitive process.
➢ The total valuation of human resources on the competitive bid price may be
misleading or inaccurate. It may be due to the reason that a person may be an expert
for one department and not so for the other department. He may be valuable person
for the department in which he is working and thus command a high value but may
have a lower price in the bid by the other department.
➢ Under this method, valuation on the basis of opportunity cost is restricted to
alternative use within the organisation. In real life such alternative use may not be
identifiable on account of the constraints in an organisational environment.

An HRIS, the abbreviation for Human Resources Information System, is a system that lets you
keep track of all your employees and information about them. It is usually done in a database or,
more often, in a series of inter-related databases.

HRIS systems include the employee name and contact information and all or some of the
following:

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 ➢ department,
➢ job title,
➢ grade,
➢ salary,
➢ salary history,
➢ position history,
➢ supervisor,
➢ training completed,
➢ special qualifications,
➢ ethnicity,
➢ date of birth,
➢ disabilities,
➢ veterans status,
➢ visa status,
➢ benefits selected,
➢ and more

Improvements in Technology relating to microcomputers and software have also had a major
impact on the use of information for managing human resources. Traditionally computers had
been used in human resources only for compensation and benefits-for example, administering
payroll. However, new advances in microchips have made it possible to store large quantities of
data on personnel computers and to perform statistical analyses that were once only possible with
large mainframe computers. A Human Resource Information System (HRIS) is a system used to
acquire, store, manipulate, analyze, retrieve, and distribute information related to the company’s
human resources. From the manager’s perspective, an HRIS can be used to support strategic
decision making, to avoid litigation, to evaluate programs or policies, or to support daily
operating concerns. A human resource Information system can be as large or as small as is
necessary and may contain one or two modules or upto twenty or so. Hundreds of HRIS software
packages are being marketed for both mainframe and microcomputers. A great many decisions
need to be made in the course of adopting and implementing an HRIS. The specific needs of the
organization should dictate the type of human resource Information system chosen. Any project
as potentially expensive, complex, and time consuming as the addition or upgrading of an HRIS
requires careful analysis and planning. In adopting a HRIS following issues need to be
addressed:
➢ Careful need assessment.
➢ What type and size of HRIS should be adopted.
➢ Whether to develop software or buy and use off the shelf software.
➢ Should the HRIS be implemented in total or in stages.

A computerized HRIS is an information system that makes use of computer and monitors control
and influences the movement of human being from the time they indicate their intention to join
an organization till they separate from it after joining . It consists of the following sub-system.

• Recruitment Information: It includes the placement data bank advertisement module,

general requirement and training requirement data.

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 • Personnel Information: It includes employee information such as transfer monitoring
and increment and promotion details.
• Manpower Planning Information: It seeks to provide information that could assist
human resource mobilization, career planning, succession planning and input for skill
development.
• Training Information: It provides information for designing course material, arrange for
need base training and cost analysis of training etc.
• Health Information System: This subsystem provides information for maintenance of
health related activities of the employees.
• Appraisal Information: It deals with the performance appraisal and merit rating
information which serves as input for promotion, increment and secession and career
planning etc.
• Payroll System: It consists of information concerning wages, salaries incentives,
allowance, perquisite deduction for provident fund etc. Data on compensation pattern of
competitor is also included in it.
• Personnel Statistics System: It is a bank of historic and current data used for various
type of analyst.

In adopting a HRIS following issues need to be addressed:

• Careful need assessment

• What type and size of HRIS should be adopted
• Whether to develop software or buy and use off the shelf software
• Should the HRIS be implemented in total or in stages.

A computerized HRIS is an information system that makes use of computer and monitors control
and influences the movement of human being from the time they indicate their intention to join
an organization till they separate from it after joining . It consists of the following sub-system.

• Recruitment Information: It includes the placement data bank advertisement module,

general requirement and training requirement data.
• Personnel Information: It includes employee information such as transfer monitoring
and increment and promotion details.
• Manpower Planning Information: It seeks to provide information that could assist
human resource mobilization, career planning, succession planning and input for skill
development.
• Training Information: It provides information for designing course material, arrange for
need base training and cost analysis of training etc.
• Health Information System: This subsystem provides information for maintenance of
health related activities of the employees.
• Appraisal Information: It deals with the performance appraisal and merit rating
information which serves as input for promotion, increment and secession and career
planning etc.
• Payroll System: It consists of information concerning wages, salaries incentives,
allowance, perquisite deduction for provident fund etc. Data on compensation pattern of
competitor is also included in it.

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 • Personnel Statistics System: It is a bank of historic and current data used for various
type of analyst.

Uses of HRIS
Human resource information system refers to the system of gathering, classifying, processing,
recording and dismantling the information required for efficient and effective management of
human resource in an organization. Need for such a system arises due to several factor.

➢ Organizations that employ a very large number of people, it becomes necessary to

develop employee database for taking personnel issues.
➢ In a geographically dispersed company every office requires timely and accurate
information for manpower management. If information is stored in a multiple location
cost and inaccuracy will increase.
➢ Modern day compensation package is complex consisting of many allowance and
deductions etc. A centrally available data can become useful for taking timely decisions.
➢ Organizations have to comply with several laws of the land. A computerized information
system would store and retrieve data quickly and correctly enabling the organization to
comply with statutory requirements.
➢ With the help of computerization personnel information system, employer record and file
can be integrated and retrieved for cross-referencing and forecasting. The system should
be oriented towards decision making rather than towards record keeping.
➢ Necessary flexibility for adaptation to changes taking place in the environment can be
built into mechanized information system.

In the field of human resource management, information system has been limited to payroll
preparation, job status and work history report of new hires, termination and insurance payment.
Gradually however progressive companies have started computerized information system in the
area of collective bargaining, employee manual, training, performance appraisal etc. With
sophisticated software, computer based information system can be used in almost all the
functions of human resource management. A sound HRIS can offer the following advantages:

➢ Clear definitions of goal.

➢ Reduction in the amount and cost of stored human resource data.
➢ Availability of timely and accurate information about human assets.
➢ Development of performance standard for the human resource division
➢ More meaningful career planning and counselling at all levels.
➢ Individual development through linkage between performance reward and job training.
➢ High capability to quickly and effectively solve problems.
➢ Implementation of training programmes based on knowledge of organizational needs.
➢ Ability to respond to ever changing statutory and other environment
➢ Status for the human resource functions due to its capability for strategic planning with
the total organization.

HRIS software:

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 • Abra Suite: for human resources and payroll management
• ABS (Atlas Business Solutions): General Information, Wages information, emergency
information, Reminders, Evaluators, Notes customer information, Documents and photos,
Separation information.
• CORT: HRMS: applicant tracking, Attendance tracking and calendars, Wage
information, Skills tracking, Reports-to information, Status tracking, Job history tracking,
Cost center tracking, Reviews and tracking, Mass update and change tools etc.
• HRSOFT: Identify and track senior managers, Assess management skills and talents,
Generate a wide range of reports, resumes, employee profiles, replacement tables and
succession analysis reports, Identify individuals for promotion, skills shortages,
unexpected vacancy, Discover talent deep, Competency Management, career
development, align succession plans etc.
• Human Resource MicroSystems: sophisticated data collection and reporting, flexible
spending accounts, compensation, employment history, time off, EEO, qualifications,
Applicant/Requisition Tracking, Position Control/Succession Planning, Training
Administration, Organization Charts, HRIS-Pro Net (employee/managerial self-service),
HR Automation (eNotification and eScheduler), and Performance Pro (performance
management)
• ORACLE- HRMS: Oracle iRecruitment, Oracle Self-Service Human Resources,
Payroll, HR Intelligence, Oracle Learning Management, Oracle Time and Labor
• PEOPLESOFT: Enterprise eRecruit, Enterprise Resume Processing, Enterprise Services
Procurement, Workforce Planning, Warehouse
• SAP HR: Human Capital Management (HCM) for Business, All-in-One: Rapid HR,
• SPECTRUM HR: iVantage® and HRVantage®. iVantage is a Web-based HRIS product
designed for organizations with up to 10,000 employees.
• VANTAGE: HRA: 'Point-and-Click' report writing, internal Messaging System for
leaving reminders to yourself, to someone else or to everyone using HRA - very useful
for Benefit Applications, Disciplinary Actions, Special Events, Employee Summary
Screen for Basic, Leave (Absenteeism) and Salary/Position History, skills & training
module, Leave Tracking Module.

Why Implement a Human Resource Information Software (HRIS) System?

Running a business will generate a lot of information, both related to the business and related to
your employees. You need to be able to harness and secure this information in a system for a
couple of different reasons. First, you don't want confidential information about your
organization or employees getting into the wrong hands. Additionally, a human resource
information software (HRIS) system is a wise choice because it will reduce the amount of paper
generated, organize your data, streamline processes, and help your company's bottom line.
So, why is HR information important? Your employees are your biggest asset-having a system in
which to contain their private personnel information, safely and securely is critical. You have
worked hard to become an employer of choice-don't ruin that credibility by mishandling
confidential information.

Making a Business Case for the HRIS System

The HRIS system is an investment to an organization. An HRIS system is more than just a
storage and organizational tool to contain confidential information about your organization's

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employees. The HRIS system needs to be viewed from a financial perspective. For instance, an
HR manager or department usually has to justify their expenditures and if HR's functions are not
tracked properly, you could be losing money. These include:

➢ Providing benefits for ineligible employees or their dependents.

➢ Cost of training new employees.
➢ Documenting why people leave the organization because the cost of terminations is high,
and if you can track why people leave, then changes can ensue.
➢ Not properly recording vacation or sick leave taken. Time and attendance creates a loss
of productivity, so having a way to track it to ensure there is not abuse of the system or
employees taking time they don't have will help to reduce the risk of losing productivity
and, ultimately, revenue.
➢ Reduce potential legal expenses in an employee dispute. Accurate and complete records
can help build your case or diffuse a situation before it even gets in the courts.

Other justifications for a HRIS system can include savings in paper and supply costs and savings
in time spent on human resource tasks. By implementing an effective HRIS system, the
organization is well on their way to increasing confidentiality of their employees' information.

Critical Analysis

Although almost all HR managers understand the importance of HRIS, the general perception is
that the organization can do without its implantation. Hence only large companies have started
using HRIS to complement its HR activities. But HRIS would be very critical for organizations
in the near future. This is because of a number of reasons.

➢ Large amount of data and information to be processed.

➢ Project based work environment.
➢ Employee empowerment.
➢ Increase of knowledge workers & associated information.
➢ Learning organization

The primary reason for delay in HRIS implementation in organizations is because of the fear
psychosis created by "technology" and "IT" in the minds of senior management. They may not
be very tech savvy and fear being left out. But trends are changing for the better as more and
more organizations realize the importance of IT and technology. Major HRIS providers are
concentrating on the small and middle range organizations as well as large organizations for their
products. They are also coming up with very specific software modules, which would cater to
any of their HR needs. SAP and Peoplesoft provide HR modules within their business
intelligence software. Hence HRIS would soon be an integral part of HR activities in all
organization.

Outsourcing
According to Dictionary.com, to outsource means to to purchase goods or subcontract services
from an outside supplier or source or to contract out jobs and services. For example, a small
business that outsources bookkeeping to an accounting firm abroad. According to the Wikipedia

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Outsourcing means “transfer or delegation to an external service provider the operation and day-
to-day management of a business process”. It is used by every organization in one way or the
other. The functions being outsourced by the business are basically considered non core to the
business itself. "The contracting or subcontracting of noncore activities to free up cash,
personnel, time, and facilities for activities in which a company holds competitive advantage.
Companies having strengths in other areas may contract out data processing, legal,
manufacturing, marketing, payroll accounting, or other aspects of their businesses to concentrate
on what they do best and thus reduce average unit cost. Outsourcing is often an integral part of
downsizing or reengineering. Also called contracting out."
For instance, a car company requires a variety of screws and bolts. Rather than manufacturing
screws and bolts themselves, the company might outsource their production to some other
company or firms that specialize in making screws and bolts. Such outside companies or firms
that provide the outsourcing services are referred to as “third-party providers”, or as they are
more commonly called, “service providers”. For businesses, outsourcing means saving money,
lots of it. It is a fact that labor in other parts of the world cost significantly less than those in
developed countries. Professional fees take up a big chunk of a company's budget. Labor in
countries such as India and the Philippines are 50% to 70% cheaper than labor found locally so
you can just imagine the amount of money that can be saved when companies hire individuals
from other parts of the globe. To save money is the goal of any company. In the age of
globalization, the best way to save money is to take advantage of the benefits that outsourcing
brings. Even though outsourcing exists ever since work specialization, but in the recent past,
companies have started employing the outsourcing model for functions, like payroll, billing and
data entry. These functions can be carried out more efficiently and cost-effectively, by the
companies that acquire specialized tools and facilities and specially trained personnel for such
functions.

Outsourcing has taken many forms in recent times. Like the past organizations still hire service
providers to handle diverse business functions. But now many organizations prefer to outsource
whole operations to another company or firm. These outsourcing companies are most commonly
known as Business Process Outsourcing (BPO) and Information Technology Outsourcing
(ITO). These are also the most common form of outsourcing.
A Business process outsourcing usually includes Call Center Outsourcing, Human Resources
Outsourcing (HRO), Finance and Accounting Outsourcing, and Claims Processing Outsourcing.
Fundamentally these deals comprise of contracts that can extend for a number of years and cost
the client company hundreds of millions of dollars. Often, the employees of the client firm who
used to perform their work internally are transferred to the service provider and become their
employees. IBM, EDS, CSC, HP, ACS, Accenture, etc are some of the leading outsourcing
service providers in the Information Technology Outsourcing and Business Process Outsourcing
fields.
The success of an outsourcing company depends on mainly three factors. Firstly a proper
executive-level support from the client’s organization for the outsourcing mission. Secondly,
there should be frequent communication between the client organizations (that is hiring services)
and the service providing firm or company. And last but certainly not the least a lot depends on
the client's ability to manage and handle its service providers.
India stands top among few countries that provide business process outsourcing to the developed
nations like United States. But in recent times, India is losing its sheen compared with the

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Philippines in outsourcing industry. United States-based companies are giving outsourcing to the
Philippines because of its culture, accident similarities and strong positive perception towards
BDO career. with the United States. Indian IT major IBM is planning to grow its BPO for
customers support services in the Philippines.

Crowd sourcing
It is the practice of obtaining needed services, ideas, or content by soliciting contributions from a
large group of people and especially from the online community rather than from traditional
employees or suppliers. Simply mean to outsource some task to people external to a company or
organization, usually via the world-wide web.
Some examples of crowd sourcing:

• Possibly the earliest example of crowd sourcing is the collection of words for the Oxford
English Dictionary (OED). In 1858, a group called the Philological Society contracted
with over 800 volunteer readers to collect words from all available books and document
their usages. Subsequently, the group solicited broader public input and received over six
million submissions over the 70 years of the project.
• In the year 1936, worlds largest car maker Toyota held a contest for seeking a new logo
design. The winning design from over 26,000 entries remained the company's corporate
logo until 1989.
• Wikipedia is a project based on the crowdsourcing model, Wikipedia online
encyclopedia launched as a collaboratively written and edited online encyclopedia in
January 2001. Free registration enabled anyone to submit or edit an entry. The
multilingual site now hosts several million entries in English alone.

Wikipedia's 14 million articles (3.1 million in English) have been written collaboratively by
volunteers around the world, and almost all of its articles can be edited by anyone with access to
the site. If you read an article and notice something wrong or if you have more information on
the subject, you can hop on and edit the article or provide more in-depth explanations. This way
the information is continuously verified and enriched by different people who share the same
interest. Crowd sourcing, also known as crowd funding, is a noteworthy development that has
tremendously helped the growth of collaborative software ventures. Unlike traditional fund
raising campaigns, crowd sourcing utilizes the vast networking capabilities of the internet to find
perfectly matched individual donors for projects. The donors do not necessarily receive
individual credit or have a greater share of influence over the direction of the project; instead, the
focus is on the project itself, and the benefits of its outcome. There are a significant number of
websites dedicated to fostering crowd sourcing, with an encouraging rate of success. Nearly
57% of surveyed employers use crowdsourcing for recruitment purposes: TimesJobs.com
survey
A recently concluded TimesJobs.com survey has revealed that nearly 57% of the surveyed
employers use crowd sourcing for recruitment purposes.
Though not a new concept, crowd sourcing has recently gained momentum as an efficient
recruitment tool in the new age recruitment model Recruitment 4.0,which emphasizes on
technology and networking advancements. Industry experts agree that the method of finding and
seeking jobs has evolved. Recruitment 1.0 and 2.0 essentially focused on the active job seeker

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and traditional ways of hiring, recruitment 3.0 progressed to social media. Recruitment 4.0 goes
a step further and focuses on making the most out of the information technology and networking
opportunities available online and offline.
According to organizations that have used crowd sourcing for one or more HR functions, more
than 60% have been highly satisfied with the results, revealed the TimesJobs.com study. Among
the key benefits, over 60% of the surveyed employers count efficiency and cost-effectiveness as
the biggest benefit of crowdsourcing. According to Chetan Indap, CEO & Founder,
OnContract.com: ""Crowd sourcing exploits the 'productive potential of the millions'. Many
western countries were outsourcing their work to India and China due to cheap labour.
The level of employee participation in crowd sourced tasks is quite encouraging, stated nearly
55% of the surveyed organizations in TimesJobs.com survey. Industry experts stated that going
by the encouraging employee involvement in the crowd sourcing process, the use of technique in
the times to come will only increase. Sharing insight with Twinset (research and knowledge arm
of TimesJobs.com) on the challenges of crowd sourcing, the respondents added that while they
find crowd sourcing effective for many HR functions, there are certain limitations which make
the process unsuitable for some processes/tasks.

CHAPTER 5
STRATEGIC HUMAN RESOURCE PLANNING AND IMPLEMENTATION
Human resources planning is a process that identifies current and future human resources
needs for an organization to achieve its goals. Human resources planning should serve as a link
between human resources management and the overall strategic plan of an organization.

Strategic human resource planning

Human resources planning is a process that identifies current and future human resources
needs for an organization to achieve its goals. Human resources planning should serve as a link
between human resources management and the overall strategic plan of an organization. Aging
worker populations in most western countries and growing demands for qualified workers in
developing economies have underscored the importance of effective Human Resources Planning.

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As defined by Bulla and Scott, human resource planning is ‘the process for ensuring that the
human resource requirements of an organization are identified and plans are made for satisfying
those requirements’.[1] Reilly defined workforce planning as: ‘A process in which an
organization attempts to estimate the demand for labour and evaluate the size, nature and sources
of supply which will be required to meet the demand.’[2] Human resource planning includes
creating an employer brand, retention strategy, absence management strategy, flexibility strategy,
talent management strategy, recruitment and selection strategy.

Fig : 4: Gap Analysis: Graphical Representation : Ref; Google

The planning processes of most best practice organizations not only define what will be
accomplished within a given time-frame, but also the numbers and types of human resources that
will be needed to achieve the defined business goals (e.g., number of human resources; the
required competencies; when the resources will be needed; etc.). Competency-based
management supports the integration of human resources planning with business planning by
allowing organizations to assess the current human resource capacity based on their
competencies against the capacity needed to achieve the vision, mission and business goals of
the organization. Targeted human resource strategies, plans and programs to address gaps (e.g.,
hiring / staffing; learning; career development; succession management; etc.) are then designed,
developed and implemented to close the gaps.

These strategies and programs are monitored and evaluated on a regular basis to ensure that they
are moving the organizations in the desired direction, including closing employee competency
gaps, and corrections are made as needed. This Strategic HR Planning and evaluation cycle is
depicted in the diagram below. Human resource planning is the ongoing process of systematic
planning to achieve the best use of an organisation's most valuable asset - its human resources.
The objective of human resource (HR) planning is to ensure the best fit between employees and
jobs, while avoiding workforce shortages or spares. The three key elements of the HR planning

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process are forecasting labour demand, analysing present labour supply, and balancing projected
labour demand and supply.

Implementation Stages

1. Assessing the current HR capacity

Develop a skills catalog for your employees so that you have a clear understanding of what your
staff currently holds. This employee catalog should include everything from volunteer activities
to certifications, of all degrees not just topics pertaining to their particular position. These
catalogs can be assessed to deem whether or not an employee is ready to add more responsibility,
or to forecast the employee's future development plans.

2. Forecasting HR requirements

This step includes projecting what the HR needs for the future will be based on the strategic
goals of the organization. Keep in mind you will need to also accommodate for external
challenges that can affect your organization.

➢ Some questions to ask during this stage include:

o Which jobs will need to be filled in the upcoming period?
o What skill sets will people need?
o How many staff will be required to meet the strategic goals of our organization?
o Is the economy affecting our work and ability to appeal to new employees?
o How is our community evolving or expected to change in the upcoming period?

3. Gap analysis

• During this step you will observe where your organization is currently, and where you
want to be in the future. You will identify things such as, the employee count, and the
skills evaluation and compare it to what will be needed to achieve your future goal.
During this phase you should also review your current HR practices and identify what
you are doing that is useful and what you can add, that will help you achieve your goal.
• Questions to answer in this stage include:

➢ What new jobs will we need?

➢ What new skills will we need?
➢ Do our present employees have the necessary skills?
➢ Are employees currently aligned to their strengths?
➢ Are current HR practices adequate to meet our future goal?

4. Developing HR strategies to support the strategies of the organization.

• There are 5 HR strategies that you can follow to meet your organizational goals.

➢ Restructuring Strategies

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 ▪ This includes reducing staff, regrouping tasks to create well-designed jobs,
and reorganizing work groups to perform more efficiently.

➢ Training and development strategies

▪ This includes providing the current staff with training and development
opportunities to encompass new roles in the organization

➢ Recruitment Strategies

▪ This includes recruiting new hires that already have the skills the
organization will need in the future.

➢ Outsourcing strategies

▪ This includes outreaching to external individuals or organizations to

complete certain tasks.

➢ Collaboration Strategies.

▪ This includes collaborating with other organizations to learn from how

others do things, allow employees to gain skills and knowledge not
previously available in their own organization.

Tools and Technologies of SHRP

Human resources uses various tools and technologies to achieve its goals, especially when it
comes to strategic planning. These technologies include but are not limited to social media,
policies and management information systems.

➢ Technologies of SHRP:

o Social Media
▪ Social Media is used as a tool in Human Resources and business in
general. This discipline deals with selecting appropriate Social Media sites
and formats from the myriad options available and leveraging the same to
create value for the organization. This requires an in-depth understanding
of the key benefits and pitfalls of Social Media and managing these
effectively in the organization’s context. This discipline emphasizes
harnessing social media for effective Human Resource Management,
which includes recruitment, collaboration and engagement. It also
explores the non financial impact as well as the approaches for measuring
the return on investment in Social Media.[3] Common social media outlets
used in the HR field are LinkedIn, Facebook and Google Plus.
o Management Information Systems (MIS)

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 ▪ MIS are computerized information-processing systems designed to
support the activities of company or organizational management. They go
by various names all with varying functions, in the HR field these tools are
commonly referred to as Human Resource Information Systems
(HRIS).Some of these software include Zenefits, Halogen Talent Space,
Bamboo HR, ClearCompany HRM and many more. These programs assist
professionals in records management, benefit administration and inquiries,
hiring and team placement, coaching and training, attendance and payroll
management. [4]
• Tools of SHRP

Policy

Policies are set in place to assist in SHRP. These policies are targeted not only for selecting and
training employees but also how they should conduct themselves in and outside the workplace
and various other aspects of being employed at a workplace. For example, within several
companies exist Social Media policy which outlines how an employee should conduct
themselves on personal accounts as a representative of their workplace.

Common Policies in HR

➢ Equal Employment Opportunity policies

➢ Employee classifications
➢ Workdays, paydays, and pay advances
➢ Overtime compensation
➢ Meal periods and break periods
➢ Payroll deductions
➢ Vacation policies
➢ Holidays
➢ Sick days and personal leave (for bereavement, jury duty,
voting, etc.)
➢ Performance evaluations and salary increases
➢ Performance improvement
➢ Termination policies
➢ Behavioral Science

Behavioral Science is the scientific study of Human behavior. This applied science is used as a
tool in SHRP to help understand and manage human resources. This tool is particularly useful in
organizational development and understanding/establishing organizational culture.

Theories of Strategic Human resource Management

Strategic Human Resource Management is "critical importance of human resources to strategy,

organizational capability to adapt to change and the goals of the organization". In other words
this is a strategy that intends to adapt the goals of an organization and is built off of other
theories such as the contingency theory as well as institutional theory which fit under the

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umbrella of organizational theory. These theories look at the universalistic, contingency and
configurational perspectives to see the effect of human resource practices in organizations. The
universalistic perspective says that there are better human resource practices than others and
those should be adopted within organization while contingency says that human resource
practices need to align with other organization practices or the organizations mission, and
configurational perspective is based on how to combine multiple aspects of human resource
practices with effectiveness or performance. This can also be viewed as how human resource
practices fit vertically or horizontally in an organization. This theory also involves looking at the
value of human capital as well as social capitol both in and outside of organizations and how this
affects human resource practices. Human capitol being knowledge and skills of individuals
working for the organization and social capitol is based on the character and value of
relationships in and out of the organization. "Colbert suggests that SHRM should focus on the
interactions and processes of the organization’s social system—the intentions, choices and
actions of people in the system and on HR systems as a coherent whole."

Resource dependency theory

Resource dependence theory which is the theory that organizations are not self sustaining there
they must depend on outside resources to stay functioning. "Resources and dependence could
help to explain how HR practices evolve from the interaction between nonprofits and their
environment, how they deploy employee skills, behaviors and how HR systems are managed."

International Implications: The current definition of strategic human resource planning is

defined as a process that identifies current and future human resources needs for an organization
to achieve its goals. It further explains that aging worker populations in most western countries
and growing demands for qualified workers in developing economies have underscored the
importance of effective Human Resources Planning.

Workforce planning

Workforce Planning is a continual process used to align the needs and priorities of the
organization with those of its workforce to ensure it can meet its legislative, regulatory, service
and production requirements and organizational objectives. Workforce Planning enables
evidence based workforce development strategies.[1]

Workforce Planning Definitions

Workforce Planning is a core function of human resource management and it is related to the
systematic identification and analysis of what an organization is going to need in terms of the
size, type, experience, knowledge, skills and quality of workforce to achieve its objectives.[2] It is
a process used to generate business intelligence to inform the organization of the current,
transition and future impact of the external and internal environment on the organization
enabling it to be resilient to current structural and cultural changes to better position itself for the
future. Strategic Workforce Planning: usually covers a three to five year forecast period, aligned
to business needs and outcomes. It focuses on identifying the workforce implications, current,
transition and future of business strategic objects and includes scenario planning.

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Operational Workforce Planning: usually covers the next 12–18 months and should align with
the timeframe of the business planning cycle. It is the process and systems applied to gathering,
analyzing and reporting on workforce planning strategy.

Workforce Analytics Approach

An analytical approach is important as it provides a fact based method of understanding

workforce behaviors. This analysis typically includes reviewing employee recruitment,
promotion and turnover patterns. The analysis also uncovers the hidden causes of overtime,
absenteeism, and low productivity.

Steps in Workforce Planning

There are fundamental activities that make up a Workforce Plan:

Getting Started
Establishing the team, building the business case; linking corporate, business, finance and
workforce strategy; establishing communication plan to engage stakeholders; segmenting
the workforce against strategic priorities; reviewing existing data; identifying information
gaps; identifying future focused business scenarios.
Environment Scan
Environment Scanning is a form of business intelligence. In the context of Workforce
Planning it is used to identify the set of facts or circumstances that surround a workforce
situation or event.
Current Workforce Profile
Current State is a profile of the demand and supply factors both internally and externally
of the workforce the organization has today.
➢ Transition Workforce Profile
Demand and supply factors for the transition from current to future workforce.
➢ Future Workforce View
Future View is determining the organization’s needs considering the emerging trends and
issues identified during the Environment Scanning.
➢ Analysis and Targeted Future
Once critical elements are identified through quantitative and qualitative analysis, the
future targets that are the best fit in terms of business strategy and is achievable given the
surrounding factors (internal/external, supply/demand) are determined.

➢ Risk Assessment and Risk Mitigation

The process is about determining appropriate actions to manage risk assessment and
identify risk mitigation strategies to deliver the targeted future.
Action plan to embed strategic workforce planning into business planning process.
Monitor and measure impact of strategic workforce planning on business outcomes.

➢ Talent management

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 Talent management refers to the anticipation of required human capital for an organization
and the planning to meet those needs.[1] The field increased in popularity after McKinsey's
1997 research[2] and the 2001 book on The War for Talent.[3] Talent management in this
context does not refer to the management of entertainers.

Talent management is the science of using strategic human resource planning to improve
business value and to make it possible for companies and organizations to reach their goals.
Everything done to recruit, retain, develop, reward and make people perform forms a part of
talent management as well as strategic workforce planning. A talent-management strategy needs
to link to business strategy to make sense. The term was coined by McKinsey & Company
following a 1997 study.[2] It was later the title of a book by Ed Michaels, Helen Handfield-Jones,
and Beth Axelrod however the connection between human resource development and
organizational effectiveness has been established since the 1970s. The profession that supports
talent management became increasingly formalized in the early 2000s. While some authors
defined the field as including nearly everything associated with human resources,[5] the NTMN
defined the boundaries of the field through surveys of those in corporate talent management
departments in 2009–2011. Those surveys indicated that activities within talent management
included succession planning, assessment, development and high potential management.
Activities such as performance management and talent acquisition (recruiting) were less
frequently included in the remit of corporate talent management practitioners. Compensation was
not a function associated with talent management. The issue with many companies today is that
their organizations put tremendous effort into attracting employees to their company, but spend
little time into retaining and developing talent]. A talent management system must be worked
into the business strategy and implemented in daily processes throughout the company as a
whole. It cannot be left solely to the human resources department to attract and retain employees,
but rather must be practiced at all levels of the organization. The business strategy must include
responsibilities for line managers to develop the skills of their immediate subordinates. Divisions
within the company should be openly sharing information with other departments in order for
employees to gain knowledge of the overall organizational objectives. The talent management
strategy may be supported by technology such as HRIS (HR Information Systems) or HRMS
(HR Management Systems).

Talent Management

Talent management implies that companies are strategic and deliberate in how they source,
attract, select, train, develop, retain, promote, and move employees through the organization.
Research done on the value of talent management consistently uncovers benefits in these critical
economic areas: revenue, customer satisfaction, quality, productivity, cost, cycle time, and
market capitalization. The mindset of this more personal human resources approach seeks not
only to hire the most qualified and valuable employees but also to put a strong emphasis on
retention.

Evaluations

From a talent management standpoint, employee evaluations concern two major areas of
measurement: performance and potential. Current employee performance within a specific job

156
has always been a standard evaluation measurement tool of the profitability of an employee.
However, talent management also seeks to focus on an employee’s potential, meaning an
employee’s future performance, if given the proper development of skills and increased
responsibility.

Competencies and Talent Management

This term "talent management" is usually associated with competency-based management.

Talent management decisions are often driven by a set of organizational core competencies as
well as position-specific competencies. The competency set may include knowledge, skills,
experience, and personal traits (demonstrated through defined behaviors). Older competency
models might also contain attributes that rarely predict success (e.g. education, tenure, and
diversity factors that are illegal to consider in relation to job performance in many countries, and
unethical within organizations). New techniques involve creating a competency architecture for
the organization that includes a competency dictionary to hold the competencies in order to build
job descriptions.

Talent marketplace

A talent marketplace is an employee training and development strategy that is set in place within
an organization. It is found to be most beneficial for companies where the most productive
employees can pick and choose the projects and assignments that are ideal for the specific
employee. An ideal setting is where productivity is employee-centric and tasks are described as
“judgement-based work,” for example, in a law firm. The point of activating a talent marketplace
within a department is to harness and link individuals’ particular skills (project management or
extensive knowledge in a particular field) with the task at hand. Examples of companies that
implement the talent marketplace strategy are American Express and IBM.

Current Applications of Talent Management

In adverse economic conditions, many companies feel the need to cut expenses. This should be
the ideal environment to execute a talent management system as a means of optimizing the
performance of each employee and the organization. Selection offers are large return on
investments. Job analysis and assessment validation help enhance the predictive power of
selection tools. However, within many companies the concept of human capital management has
just begun to develop. With more companies in the process of deepening their global footprints,
more questions have been asked about new strategies and products, but very few on the kind of
leadership structure that will bring them success in their globalization process.[10] “In fact, only 5
percent of organizations say they have a clear talent management strategy and operational
programs in place today.”

Workforce planning

Workforce Planning is a continual process used to align the needs and priorities of the
organization with those of its workforce to ensure it can meet its legislative, regulatory, service

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and production requirements and organizational objectives. Workforce Planning enables
evidence based workforce development strategies.

Workforce Planning Definitions

Workforce Planning is a core function of human resource management and it is related to the
systematic identification and analysis of what an organization is going to need in terms of the
size, type, experience, knowledge, skills and quality of workforce to achieve its objectives. It is a
process used to generate business intelligence to inform the organization of the current, transition
and future impact of the external and internal environment on the organization enabling it to be
resilient to current structural and cultural changes to better position itself for the future. Strategic
Workforce Planning: usually covers a three to five year forecast period, aligned to business
needs and outcomes. It focuses on identifying the workforce implications, current, transition and
future of business strategic objects and includes scenario planning.Operational Workforce
Planning: usually covers the next 12–18 months and should align with the timeframe of the
business planning cycle. It is the process and systems applied to gathering, analyzing and
reporting on workforce planning strategy.

Workforce Analytics Approach

An analytical approach is important as it provides a fact based method of understanding

workforce behaviors. This analysis typically includes reviewing employee recruitment,
promotion and turnover patterns. The analysis also uncovers the hidden causes of overtime,
absenteeism, and low productivity.

Steps in Workforce Planning

There are fundamental activities that make up a Workforce Plan:

➢ Getting Started
Establishing the team, building the business case; linking corporate, business, finance and
workforce strategy; establishing communication plan to engage stakeholders; segmenting
the workforce against strategic priorities; reviewing existing data; identifying information
gaps; identifying future focused business scenarios.
➢ Environment Scan
Environment Scanning is a form of business intelligence. In the context of Workforce
Planning it is used to identify the set of facts or circumstances that surround a workforce
situation or event.
➢ Current Workforce Profile
Current State is a profile of the demand and supply factors both internally and externally
of the workforce the organization has today.
➢ Transition Workforce Profile
demand and supply factors for the transition from current to future workforce.
➢ Future Workforce View
Future View is determining the organization’s needs considering the emerging trends and
issues identified during the Environment Scanning.

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 ➢ Analysis and Targeted Future
Once critical elements are identified through quantitative and qualitative analysis, the
future targets that are the best fit in terms of business strategy and is achievable given the
surrounding factors (internal/external, supply/demand) are determined.
➢ Risk Assessment and Risk Mitigation
The process is about determining appropriate actions to manage risk assessment and
identify risk mitigation strategies to deliver the targeted future.
Action plan to embed strategic workforce planning into business planning process.
Monitor and measure impact of strategic workforce planning on business outcomes.

Job analysis

In situations where multiple new jobs are created and recruited for the first time or vacancies are
there or the nature of a job has substantially changed, a job analysis might be undertaken to
document the knowledge, skills, abilities and other characteristics (KSAOs) required or sought
for the job. From these the relevant information is captured in such documents as job
descriptions and job specifications. Often, a company already has job descriptions for existing
positions. Where already drawn up, these documents may require review and updating to reflect
current requirements. Prior to the recruitment stage, a person specification should be finalized to
provide recruiters with the project's requirements and objectives.[5]

Sourcing

Sourcing is the use of one or more strategies to attract or identify candidates to fill job vacancies.
It may involve internal and/or external recruitment advertising, using appropriate media, such as
job portals,local or national newspapers, specialist recruitment media, professional publications,
window advertisements, job centers, or in a variety of ways via the internet.Alternatively,
employers may use recruitment consultancies or agencies to find otherwise scarce candidates—
who, in many cases, may be content in their current positions and are not actively looking to
move. This initial research for candidates—also called name generation—produces contact
information for potential candidates, whom the recruiter can then discreetly contact and screen.[5]

Screening and selection

Various psychological tests can assess a variety of KSAOs, including literacy. Assessments are
also available to measure physical ability. Recruiters and agencies may use applicant tracking
systems to filter candidates, along with software tools for psychometric testing and performance-
based assessment.[6] In many countries, employers are legally mandated to ensure their screening
and selection processes meet equal opportunity and ethical standards. In order to significantly
improve the candidate evaluation and selection process, Buettner proposed a recruitment
framework for searching online social networks. Employers are likely to recognize the value of
candidates who encompass soft skills such as interpersonal or team leadership. Many companies,
including multinational organizations and those that recruit from a range of nationalities, are also
often concerned about whether candidate fits the prevailing company culture.

Disabled candidates

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The word disability carries few positive connotations for most employers. Research has shown
that employer biases tend to improve through first-hand experience and exposure with proper
supports for the employee and the employer making the hiring decisions. As for most companies,
money and job stability are two of the contributing factors to the productivity of a disabled
employee, which in return equates to the growth and success of a business. Hiring disabled
workers produce more advantages than disadvantages.[10] There is no difference in the daily
production of a disabled worker.[1] Given their situation, they are more likely to adapt to their
environmental surroundings and acquaint themselves with equipment, enabling them to solve
problems and overcome adversity as with other employees. The U.S. IRS grants companies
Disabled Access Credit when they meet eligibility criteria.

Approaches

Internal recruitment (not to be confused with internal recruiters!) refers to the process of a
candidate being selected from the existing workforce to take up a new job in the same
organization, perhaps as a promotion, or to provide career development opportunity, or to meet a
specific or urgent organizational need. Advantages include the organization's familiarity with the
employee and their competencies insofar as they are revealed in their current job, and their
willingness to trust said employee. It can be quicker and have a lower cost to hire someone
internally. An employee referral program is a system where existing employees recommend
prospective candidates for the job offered, and in some organizations if the suggested candidate
is hired, the employee receives a cash bonus. Niche firms tend to focus on building ongoing
relationships with their candidates, as the same candidates may be placed many times throughout
their careers. Online resources have developed to help find niche recruiters.[14] Niche firms also
develop knowledge on specific employment trends within their industry of focus (e.g., the energy
industry) and are able to identify demographic shifts such as aging and its impact on the industry.
Social recruiting is the use of social media for recruiting including sites like Facebook and
Twitter or career-oriented social networking sites such as LinkedIn and XING.[3][16][17] It is a
rapidly growing sourcing technique, especially with middle-aged people. On Google+, the
fastest-growing age group is 45–54. On Twitter, the expanding generation is people from ages
55–64. Mobile recruiting is a recruitment strategy that uses mobile technology to attract, engage
and convert candidates. Mobile recruiting is often cited as a growing opportunity for recruiters to
connect with candidates more efficiently with "over 89% of job seekers saying their mobile
device will be an important tool and resource for their job search." Some recruiters work by
accepting payments from job seekers, and in return helps them to find a job. This is illegal in
some countries, such as in the United Kingdom, in which recruiters must not charge candidates
for their services (although websites such as LinkedIn may charge for ancillary job-search-
related services). Such recruiters often refer to themselves as "personal marketers" and "job
application services" rather than as recruiters.

Talent management system

A talent management system (TMS) is an integrated software suite that addresses the “four
pillars” of talent management: recruitment; performance management; learning and
development; and compensation management.[1]

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Whereas traditional HRMS and enterprise resource planning (ERP) systems focus primarily on
transaction processing and the administration of basic human resources processes such as
personnel administration, payroll, time management, etc., talent management systems focus on
providing strategic assistance to organizations in the accomplishment of long-term enterprise
goals with respect to talent, or human capital. Talent management systems may also be referred
to as or paired with an applicant tracking system (ATS) in either standalone application or as a
suite of products. According to Bersin, talent management may be defined as the implementation
of integrated strategies or systems designed to improve processes for recruiting, developing, and
retaining people with the required skills and aptitude to meet current and future organizational
needs.

Functional modules and their market worth

TMS solutions typically offer one or many disparate or integrated modules which provide
business functionality in areas of human capital management / human resources typically
referred to as "strategic".

➢ performance management
➢ goal management
➢ compensation management
➢ talent acquisition / recruiting
➢ Learning management systems
➢ career development
➢ succession planning

The role of talent acquisition and performance management has increased many folds compared
to learning management systems in the talent management market. Many companies which were
earlier working on only one of these domains have moved to developing integrated talent
management systems.

Delivery methods

Many organizations struggle with HR data silos, disconnected technologies, and manual
processes, the future of talent management is embodied in solutions designed from the ground up
to provide business-centric functionality on a unified talent management platform. Talent
management system recently have been at the forefront of growth in the software as a service
(SaaS) delivery market following earlier iterations in the standard HR systems space via
application service provider (ASP) delivery models. Traditional delivery via on-premises license
sales still exist, but are much less prevalent in the competitive space[3]

Enterprise systems integration

Vendors of TMS software (Levensaler & Laurano 2009) typically claim varying degrees of
integration with other enterprise software vendors, and in particular with leading vendors of
HRMS systems. The accuracy of these claims is often a question of interpretation, as the degree
to which each vendor integrates with 3rd party systems varies considerably depending on

161
circumstances and both the vendor and the third party solution. In some cases, third party
vendors offer certification for such scenarios, in order to offer some basis of comparison.[4][5]

Competitive market

The so-called war for talent has driven a marked increase of attention and investment in the
talent management space as new vendors continue to enter to support an ever-growing demand
for strategic human resources applications. Many of these competitors have entered via the
software as a service (SaaS) delivery model, affording small and medium businesses (SMB) new
less-costly options. The 2014 Gartner Magic Quadrants for Talent Management Suites compare
the major players of this market each year, and ranked Cornerstone OnDemand, Oracle, and
Success Factors as the space leaders, with IBM and Halogen Software, among others in the
Visionaries category.

Retention rate

The term "retention rate" is used in a variety of fields, including marketing, investing, education,
in the workplace and in clinical trials. Maintaining retention in each of these fields often results
in a positive outcome for the overall organization or school, or pharmacological study. In
marketing, retention rate is used to count customers and track customer activity irrespective of
the number of transactions (or dollar value of those transactions) made by each customer. [1]

"Retention rate is the ratio of the number of retained customers to the number at risk. In
contractual situations, it makes sense to talk about the number of customers currently under
contract and the percentage retained when the contract period runs out." This term should not be
confused with growth (decline) in customer counts. Retention refers only to existing customers
in contractual situations. "In non-contractual situations (such as catalog sales), it makes less
sense to talk about the current number of customers, but instead to count the number of
customers of a specified recency." In a survey of nearly 200 senior marketing managers, 63
percent responded that they found the "retention rate" metric very useful.[2]

Purpose

The purpose of the "retention rate" metric in a marketing atmosphere is to monitor firm
performance in attracting and retaining customers. "Only recently have most marketers worried
about developing metrics that focus on individual customers. In order to begin to think about
managing individual customer relationships, the firm must first be able to count its customers.
Although consistency in counting customers is probably more important than formulating a
precise definition, a definition is needed nonetheless. In particular, we think the definition of and
the counting of customers will be different in contractual versus non-contractual situations." [2] In
the workplace arena, the purpose of the retention rate is to assist organizations with deciding
when to take action in order to keep employees happy and motivated.[3] According to a survey by
CNN Money, the top 100 best companies to work for had less than a 3% turnover rate during a
12-month period. Retention rate may also refer to colleges. According to the FAFSA, the
retention rate is the percentage of a school’s first-time, first-year undergraduate students who

162
continue at that school the next year. For example, a student who studies full-time in the fall
semester and keeps on studying in the program in the next fall semester is counted in this rate.

Construction

"Retention applies to contractual situations in which customers are either retained or not.
Customers either renew their magazine subscriptions or let them run out. Customers maintain a
current account with a bank until they close it. Renters pay rent until they move out. These are
examples of pure customer retention situations where customers are either retained or considered
lost for good. In these situations, firms pay close attention to retention rates."

Workplace

Retention in the workplace refers to “the percentage of employees who were employed at the
beginning of a period, and remain with the company at the end of the period”.[6] For example, in
January, 2010, Company A had 500 employees. After one year, 200 of the 500 employees were
still working for the company. The retention rate is 200/500 = 40%.

Forecasting HR requirements

This step includes projecting what the HR needs for the future will be based on the strategic
goals of the organization. Keep in mind you will need to also accommodate for external
challenges that can affect your organization.

• Some questions to ask during this stage include:

o Which jobs will need to be filled in the upcoming period?
o What skill sets will people need?
o How many staff will be required to meet the strategic goals of our organization?
o Is the economy affecting our work and ability to appeal to new employees?
o How is our community evolving or expected to change in the upcoming period?

Gap analysis

During this step you will observe where your organization is currently, and where you want
to be in the future. You will identify things such as, the employee count, and the skills
evaluation and compare it to what will be needed to achieve your future goal. During this
phase you should also review your current HR practices and identify what you are doing that
is useful and what you can add, that will help you achieve your goal.

• Questions to answer in this stage include:

➢ What new jobs will we need?

➢ What new skills will we need?
➢ Do our present employees have the necessary skills?

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 ➢ Are employees currently aligned to their strengths?
➢ Are current HR practices adequate to meet our future goal?

4. Developing HR strategies to support the strategies of the organization.

• There are 5 HR strategies that you can follow to meet your organizational goals.

➢ Restructuring Strategies

▪ This includes reducing staff, regrouping tasks to create well-designed jobs,

and reorganizing work groups to perform more efficiently.

➢ Training and development strategies

▪ This includes providing the current staff with training and development
opportunities to encompass new roles in the organization

➢ Recruitment Strategies

▪ This includes recruiting new hires that already have the skills the
organization will need in the future.

➢ Outsourcing strategies

▪ This includes outreaching to external individuals or organizations to

complete certain tasks.

➢ Collaboration Strategies.

▪ This includes collaborating with other organizations to learn from how

others do things, allow employees to gain skills and knowledge not
previously available in their own organization.

Tools and Technologies of SHRP

Human resources uses various tools and technologies to achieve its goals, especially when it
comes to strategic planning. These technologies include but are not limited to social media,
policies and management information systems.

➢ Technologies of SHRP:

o Social Media
▪ Social Media is used as a tool in Human Resources and business in
general. This discipline deals with selecting appropriate Social Media sites
and formats from the myriad options available and leveraging the same to
create value for the organization. This requires an in-depth understanding

164
 of the key benefits and pitfalls of Social Media and managing these
effectively in the organization’s context. This discipline emphasizes
harnessing social media for effective Human Resource Management,
which includes recruitment, collaboration and engagement. It also
explores the non financial impact as well as the approaches for measuring
the return on investment in Social Media.[3] Common social media outlets
used in the HR field are LinkedIn, Facebook and Google Plus.
o Management Information Systems (MIS)
▪ MIS are computerized information-processing systems designed to
support the activities of company or organizational management. They go
by various names all with varying functions, in the HR field these tools are
commonly referred to as Human Resource Information Systems
(HRIS).Some of these software include Zenefits, Halogen Talent Space,
Bamboo HR, ClearCompany HRM and many more. These programs assist
professionals in records management, benefit administration and inquiries,
hiring and team placement, coaching and training, attendance and payroll
management. [4]
• Tools of SHRP
o Policy
▪ Policies are set in place to assist in SHRP. These policies are targeted not
only for selecting and training employees but also how they should
conduct themselves in and outside the workplace and various other aspects
of being employed at a workplace. For example, within several companies
exist Social Media policy which outlines how an employee should conduct
themselves on personal accounts as a representative of their workplace.
▪ Common Policies in HR
▪ Equal Employment Opportunity policies
▪ Employee classifications
▪ Workdays, paydays, and pay advances
▪ Overtime compensation
▪ Meal periods and break periods
▪ Payroll deductions
▪ Vacation policies
▪ Holidays
▪ Sick days and personal leave (for bereavement, jury duty,
voting, etc.)
▪ Performance evaluations and salary increases
▪ Performance improvement
▪ Termination policies[5]
o Behavioral Science
▪ Behavioral Science is the scientific study of Human behavior. This applied
science is used as a tool in SHRP to help understand and manage human
resources. This tool is particularly useful in organizational development
and understanding/establishing organizational culture.[4]

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CHAPTER -6

Training and development

Training and development is a function of human resource management concerned with

organizational activity aimed at bettering the performance of individuals and groups in
organizational settings. Training and development can also be described as ‘an educational
process which involves the sharpening of skills, concepts, changing of attitude and gaining more
knowledge to enhance the performance of employees[1] It has been known by several names,
including "Human Resource Development", "Human Capital Development" and "Learning and
Development". The name of the discipline has been debated, with the Chartered Institute of
Personnel and Development in 2000 arguing that "human resource development" is too evocative
of the master-slave relationship between employer and employee for those who refer to their
employees as "partners" or "associates" to feel comfortable with. Eventually, the CIPD settled
upon "learning and development", although that was itself not free from problems, "learning"
being an over-general and ambiguous name, and most organizations referring to it as "training
and development".

Practice

Training and development encompasses three main activities: training, education, and
development.

• Training: This activity is both focused upon, and evaluated against, the job that an
individual currently holds.[5]
• Education: This activity focuses upon the jobs that an individual may potentially hold in
the future, and is evaluated against those jobs.[5]
• Development: This activity focuses upon the activities that the organization employing
the individual, or that the individual is part of, may partake in the future, and is almost
impossible to evaluate.[5]

The "stakeholders" in training and development are categorized into several classes. The
sponsors of training and development are senior managers. The clients of training and
development are business planners. Line managers are responsible for coaching, resources, and
performance. The participants are those who actually undergo the processes. The facilitators are
Human Resource Management staff. And the providers are specialists in the field. Each of these
groups has its own agenda and motivations, which sometimes conflict with the agendas and
motivations of the others. The conflicts that are the best part of career consequences are those
that take place between employees and their bosses. The number one reason people leave their
jobs is conflict with their bosses. And yet, as author, workplace relationship authority, and
executive coach, Dr. John Hoover[7] points out, "Tempting as it is, nobody ever enhanced his or
her career by making the boss look stupid." Training an employee to get along well with
authority and with people who entertain diverse points of view is one of the best guarantees of
long-term success. Talent, knowledge, and skill alone won't compensate for a sour relationship
with a superior, peer, or customer. Typical roles in the field include executive and
supervisory/management development, new-employee orientation, professional-skills training,

166
technical/job training, customer-service training, sales-and-marketing training, and health-and-
safety training. Job titles may include vice-president of organizational effectiveness, training
manager or director, management development specialist, blended-learning designer, training-
needs analyst, chief learning officer, and individual career-development advisor. Talent
development is the process of changing an organization, its employees, its stakeholders, and
groups of people within it, using planned and unplanned learning, in order to achieve and
maintain a competitive advantage for the organization. Rothwell notes that the name may well be
a term in search of a meaning, like so much in management, and suggests that it be thought of as
selective attention paid to the top 10% of employees, either by potential or performance. While
talent development is reserved for the top management it is becoming increasingly clear that
career development is necessary for the retention of any employee, no matter what their level in
the company. Research has shown that some type of career path is necessary for job satisfaction
and hence job retention. Perhaps organizations need to include this area in their overview of
employee satisfaction. The term talent development is becoming increasingly popular in several
organizations, as companies are now moving from the traditional term training and development.
Talent development encompasses a variety of components such as training, career development,
career management, and organizational development, and training and development. It is
expected that during the 21st century more companies will begin to use more integrated terms
such as talent development.

Benefits of Training & Development

Training is crucial for organizational development and its success which is indeed fruitful to both
employers and employees of an organization. Here are some important benefits of training and
development.

➢ Increased productivity
➢ Less supervision
➢ Job satisfaction
➢ Skills Development

Recruitment

Recruitment (hiring) is a core function of human resource management.[1] Recruitment refers to

the overall process of attracting, selecting and appointing suitable candidates for jobs (either
permanent or temporary) within an organization.[2] Recruitment can also refer to processes
involved in choosing individuals for unpaid positions, such as voluntary roles or unpaid trainee
roles. Managers, human resource generalists and recruitment specialists may be tasked with
carrying out recruitment, but in some cases public-sector employment agencies, commercial
recruitment agencies, or specialist search consultancies are used to undertake parts of the
process. Internet-based technologies to support all aspects of recruitment have become
widespread.

Process

Job analysis

167
In situations where multiple new jobs are created and recruited for the first time or vacancies are
there or the nature of a job has substantially changed, a job analysis might be undertaken to
document the knowledge, skills, abilities and other characteristics (KSAOs) required or sought
for the job. From these the relevant information is captured in such documents as job
descriptions and job specifications. Often, a company already has job descriptions for existing
positions. Where already drawn up, these documents may require review and updating to reflect
current requirements. Prior to the recruitment stage, a person specification should be finalized to
provide recruiters with the project's requirements and objectives.

Sourcing

Sourcing is the use of one or more strategies to attract or identify candidates to fill job vacancies.
It may involve internal and/or external recruitment advertising, using appropriate media, such as
job portals, local or national newspapers, specialist recruitment media, professional publications,
window advertisements, job centers, or in a variety of ways via the internet. Alternatively,
employers may use recruitment consultancies or agencies to find otherwise scarce candidates—
who, in many cases, may be content in their current positions and are not actively looking to
move. This initial research for candidates—also called name generation—produces contact
information for potential candidates, whom the recruiter can then discreetly contact and screen.

Screening and selection

Various psychological tests can assess a variety of KSAOs, including literacy. Assessments are
also available to measure physical ability. Recruiters and agencies may use applicant tracking
systems to filter candidates, along with software tools for psychometric testing and performance-
based assessment.[6] In many countries, employers are legally mandated to ensure their screening
and selection processes meet equal opportunity and ethical standards. In order to significantly
improve the candidate evaluation and selection process, Buettner proposed a recruitment
framework for searching online social networks. Employers are likely to recognize the value of
candidates who encompass soft skills such as interpersonal or team leadership.[7] Many
companies, including multinational organizations and those that recruit from a range of
nationalities, are also often concerned about whether candidate fits the prevailing company
culture.

Disabled candidates

The word disability carries few positive connotations for most employers. Research has shown
that employer biases tend to improve through first-hand experience and exposure with proper
supports for the employee[9] and the employer making the hiring decisions. As for most
companies, money and job stability are two of the contributing factors to the productivity of a
disabled employee, which in return equates to the growth and success of a business. Hiring
disabled workers produce more advantages than disadvantages. There is no difference in the
daily production of a disabled worker.[1] Given their situation, they are more likely to adapt to
their environmental surroundings and acquaint themselves with equipment, enabling them to
solve problems and overcome adversity as with other employees. The U.S. IRS grants companies
Disabled Access Credit when they meet eligibility criteria.

168
Approaches

Internal recruitment (not to be confused with internal recruiters!) refers to the process of a
candidate being selected from the existing workforce to take up a new job in the same
organization, perhaps as a promotion, or to provide career development opportunity, or to meet a
specific or urgent organizational need. Advantages include the organization's familiarity with the
employee and their competencies insofar as they are revealed in their current job, and their
willingness to trust said employee. It can be quicker and have a lower cost to hire someone
internally. An employee referral program is a system where existing employees recommend
prospective candidates for the job offered, and in some organizations if the suggested candidate
is hired, the employee receives a cash bonus. Niche firms tend to focus on building ongoing
relationships with their candidates, as the same candidates may be placed many times throughout
their careers. Online resources have developed to help find niche recruiters. Niche firms also
develop knowledge on specific employment trends within their industry of focus (e.g., the energy
industry) and are able to identify demographic shifts such as aging and its impact on the industry.
Social recruiting is the use of social media for recruiting including sites like Facebook and
Twitter or career-oriented social networking sites such as LinkedIn and XING. It is a rapidly
growing sourcing technique, especially with middle-aged people. On Google+, the fastest-
growing age group is 45–54. On Twitter, the expanding generation is people from ages 55–64.
Mobile recruiting is a recruitment strategy that uses mobile technology to attract, engage and
convert candidates. Mobile recruiting is often cited as a growing opportunity for recruiters to
connect with candidates more efficiently with "over 89% of job seekers saying their mobile
device will be an important tool and resource for their job search." Some recruiters work by
accepting payments from job seekers, and in return helps them to find a job. This is illegal in
some countries, such as in the United Kingdom, in which recruiters must not charge candidates
for their services (although websites such as LinkedIn may charge for ancillary job-search-
related services). Such recruiters often refer to themselves as "personal marketers" and "job
application services" rather than as recruiters.

Strategic sourcing

Strategic sourcing is an institutional procurement process that continuously improves and re-
evaluates the purchasing activities of a company. In the services industry, strategic sourcing
refers to a service solution, sometimes called a Strategic Partnership, that is specifically
customized to meet the client's individual needs. In a production environment, it is often
considered one component of supply chain management. The term "strategic sourcing" was
popularized through work with a variety of blue chip companies by a number of consulting firms
in the late 80s and early 90s. This methodology has become the norm for procurement
departments in large, sophisticated companies.

The steps in a strategic sourcing process were defined, in 1994, as:

➢ Assessment of a company's current spending (what is bought, where, at what prices?).

➢ Assessment of the supply market (who offers what?).
➢ Total cost analyses (how much does it cost to provide those goods or services?).
➢ Identification of suitable suppliers.

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 ➢ Development of a sourcing strategy (where to purchase, considering demand and supply
situations, while minimizing risk and costs).
➢ Negotiation with suppliers (products, service levels, prices, geographical coverage,
Payment Terms, etc.).
➢ Implementation of new supply structure.
➢ Track results and restart assessment (Continuous cycle)

A slimmed down strategic sourcing process was defined, in 2012, as:[2]

➢ Data collection and spend analysis

➢ Market Research
➢ The RFx process (also known as go-to-market)
➢ Negotiations

➢ Contracting
➢ Implementation and continuous improvement

Note that while the modernized process combines the market assessment and cost analyses steps
of the older model into a single "market research" step, and the supplier identification and
sourcing strategy development steps into a single "go-to-market" step, negotiation has split into
"negotiation" and "contracting". This is due to the heightened importance of market intelligence
in modern strategic sourcing, and its ability to deliver value by improving both pricing and
contract terms when leveraged against the identified suppliers. Note also that, while both
descriptions of the sourcing process are accurate to some extent, there is no standard set of steps
and procedures. As strategic sourcing is put in place and practiced over time, many large,
sophisticated organizations will modify the process to better meet their individual corporate
needs.

Outsourcing a business practice to another company may also be incorporated into a sourcing
strategy for services. This may involve the transfer of staff and assets to the outsource company.
Due to the strategic and complex nature of outsourcing, many organizations such as Procter &
Gamble, Microsoft and McDonald's have created what is referred to as Vested Outsourcing
agreements to help create highly collaborative win-win business relationships. Researchers at the
University of Tennessee provide guidance on how to create Vested Outsourcing agreements in
their book Vested Outsourcing: Five Rules that will Transform Outsourcing.

Sourcing plan

The sourcing plan is the result of all planning efforts on strategic sourcing. Into this planning all
sourcing events are organized and detailed with all tactical and operational information such as,
the sourcing team responsible for each event, when is supposed to begin and end each RFX steps
(RFI, RFP, RFQ), the requirement, specifications of all services or materials and
negotiations/cost goals. The objective of sourcing plan is to manage time and quality of all
sourcing events in the strategic sourcing program.

Sourcing optimization

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Operations research is a discipline of applying advanced techniques to help make better
decisions. Optimization, in turn, utilizes mathematical algorithms to rapidly solve a business
problem by evaluating all possible outcomes (or many outcomes) and selecting those ones that
yield the best solution.When applied to sourcing and supply chain operations, optimization helps
the sourcing professional simultaneously evaluate thousands of different procurement inputs.
This evaluation can take into consideration the global market, specific current supply chain
conditions, and individual supplier conditions, and offers alternatives to address the buyer’s
sourcing goals.

Cooperative sourcing

Cooperative sourcing is a collaboration or negotiation of different companies, which have similar

business processes. To save costs, the competitor with the best production function cans in
source the business process of the other competitors. This is especially common in IT-oriented
industries due to low to no variable costs, e.g. banking. Since all of the negotiating parties can be
outsourcers or insurers the main challenge in this collaboration is to find a stable coalition and
the company with the best production function. This is difficult since the real production costs
are hard to estimate and negotiators might be tempted to portray their real cost much higher than
they actually are in order to demand higher fees for in sourcing. High switching costs, costs for
searching potential cooperative sources, and negotiating often result in inefficient solutions.

Collaboration

Collaboration is the process of two or more people or organizations working together to realize
mutual goals.[1] Collaboration is very similar to, but more closely aligned than, cooperation, and
both are an opposite of competition. Most collaboration requires leadership, although the form of
leadership can be social within a decentralized and egalitarian group. Teams that work
collaboratively can obtain greater resources, recognition and reward when facing competition for
finite resources. Structured methods of collaboration encourage introspection of behavior and
communication. These methods specifically aim to increase the success of teams as they engage
in collaborative problem solving. Forms, rubrics, charts and graphs are useful in these situations
to objectively document personal traits with the goal of improving performance in current and
future projects. Collaboration is also present in opposing goals exhibiting the notion of
adversarial collaboration, though this is not a common case for using the word.

Classical examples of collaboration

Trade originated with the start of communication in prehistoric times. Trading was the main
facility of prehistoric people, who bartered goods and services from each other when there was
no such thing as the modern day currency. Peter Watson dates the history of long-distance
commerce from circa 150,000 years ago.[7] Trade exists for many reasons. Due to specialisation
and division of labor, most people concentrate on a small aspect of production, trading for other
products. Trade exists between regions because different regions have a comparative advantage
in the production of some tradable commodity, or because different regions' size allows for the
benefits of mass production. As such, trade at market prices between locations benefits both
locations.

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Community organization

The members of an intentional community typically hold a common social, political or spiritual
vision. They also share responsibilities and resources. Intentional communities include
cohousing, residential land trusts, ecovillages, communes, kibbutzim, ashrams, and housing
cooperatives. Typically, new members of an intentional community are selected by the
community's existing membership, rather than by real-estate agents or land owners (if the land is
not owned by the community).

Hutterite, Austria (16th century)

Housing units are built and assigned to individual families but belong to the colony and
there is very little personal property. Meals are taken by the entire colony in a common
long room.
Oneida Community, Oneida, New York (1848)
The Oneida Community practiced Communalism (in the sense of communal property and
possessions) and Mutual Criticism, where every member of the community was subject
to criticism by committee or the community as a whole, during a general meeting. The
goal was to eliminate bad character traits.
Early Kibbutz settlements founded near Jerusalem (1890)
A Kibbutz is an Israeli collective community. The movement combines socialism and
Zionism in a form of practical Labor Zionism, founded at a time when independent
farming was not practical or perhaps more correctly—not practicable. Forced by
necessity into communal life, and inspired by their own ideology, the kibbutz members
developed a pure communal mode of living that attracted interest from the entire world.
While the kibbutzim lasted for several generations as utopian communities, most of
today's kibbutzim are scarcely different from the capitalist enterprises and regular towns
to which the kibbutzim were originally supposed to be alternatives.

Collaboration under capitalism

Ayn Rand utterly rejected the notion that one should live an isolated life. She recognized that a
crucial way we “develop ourselves” and pursue our rational self-interest is by building strong
relationships with other people, whether in business, friendship, romance, or any other kind of
life-serving relationship. Rand wrote hundreds of pages about the virtues and benefits of
collaborating with others to mutual advantage. She also recognized that, as participants in
capitalism, “we’re all connected” through the voluntary division of labor in the free market,
where value is exchanged always for value. In presenting her theory of rational egoism, Rand
explained why acting in one’s self-interests often entails “looking out” for others to protect the
innocent from injustice, to aid our friends and allies, and to protect and support our friends and
loved ones.[8]

Game theory

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Game theory is a branch of applied mathematics and economics that looks at situations where
multiple players make decisions in an attempt to maximize their returns. The first documented
discussion of it is a letter written by James Waldegrave, 1st Earl Waldegrave in 1713. Antoine
Augustin Cournot's Researches into the Mathematical Principles of the Theory of Wealth in 1838
provided the first general theory. It was not until 1928 that this became a recognized, unique
field when John von Neumann published a series of papers. Von Neumann's work in game
theory culminated in the 1944 book The Theory of Games and Economic Behavior by von
Neumann and Oskar Morgenstern.

Military-industrial complex

The term military-industrial complex refers to a close and symbiotic relationship among a
nation's armed forces, its private industry, and associated political and commercial interests. In
such a system, the military is dependent on industry to supply material and other support, while
the defense industry depends on government for revenue.

Skunk Works
Skunk Works is a term used in engineering and technical fields to describe a group within an
organization given a high degree of autonomy and unhampered by bureaucracy, tasked with
working on advanced or secret projects. Founded at Lockheed Martin in 1943, the team
developed highly innovative aircraft in short time frames, even beating its first deadline by 37
days. Creator of the organization, Kelly Johnson is said to have been an 'organizing genius' and
had fourteen basic operating rules.

Resource dependence theory

Resource dependence theory (RDT) is the study of how the external resources of organizations
affect the behavior of the organization. The procurement of external resources is an important
tenet of both the strategic and tactical management of any company. Nevertheless, a theory of
the consequences of this importance was not formalized until the 1970s, with the publication of
The External Control of Organizations: A Resource Dependence Perspective (Pfeffer and
Salancik 1978). Resource dependence theory has implications regarding the optimal divisional
structure of organizations, recruitment of board members and employees, production strategies,
contract structure, external organizational links, and many other aspects of organizational
strategy.

The basic argument of resource dependence theory can be summarized as follows:

• Organizations depend on resources.

• These resources ultimately originate from an organization's environment.
• The environment, to a considerable extent, contains other organizations.
• The resources one organization needs are thus often in the hand of other organizations.
• Resources are a basis of power.
• Legally independent organizations can therefore depend on each other.
• Power and resource dependence are directly linked:

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 Organization A's power over organization B is equal to organization B's dependence on
organization A's resources.

• Power is thus relational, situational and potentially mutual.

Organizations depend on multidimensional resources: labor, capital, raw material, etc.

Organizations may not be able to come out with countervailing initiatives for all these multiple
resources. Hence organization should move through the principle of criticality and principle of
scarcity. Critical resources are those the organization must have to function. For example, a
burger outlet can't function without bread. An organization may adopt various countervailing
strategies—it may associate with more suppliers, or integrate vertically or horizontally.

Resource dependence concerns more than the external organizations that provide, distribute,
finance, and compete with a firm. Although executive decisions have more individual weight
than non-executive decisions, in aggregate the latter have greater organizational impact.
Managers throughout the organization understand their success is tied to customer demand.
Managers' careers thrive when customer demand expands. Thus customers are the ultimate
resource on which companies depend. Although this seems obvious in terms of revenue, it is
actually organizational incentives that make management see customers as a resource.

Resource dependence theory effects on nonprofit sector have been studied and debated in recent
times. Scholars have argued that Resource dependence theory is one of the main reasons
nonprofit organizations have become more commercialized in recent times. With less
government grants and resources being used for social services, contract competition between
private and nonprofit sector has increased and led to nonprofit organizations using marketization
techniques used mainly in the private sector to compete for resources to maintain their
organizations livelihood. Scholars have argued that the marketization of the nonprofit sector will
lead to a decrease of quality in services provided by nonprofit organizations.[1]

Recently, resource dependence theory has been under scrutiny in several review and meta-
analytic studies: Hillman et al. (2009); Davis and Cobb (2010); Drees & Heugens (2013); Sharif
& Yeoh (2014). Which all indicate and discuss the importance of this theory in explaining the
actions of organizations, by forming interlocks, alliances, joint ventures, and mergers and
acquisitions, in striving to overcome dependencies and improve an organizational autonomy and
legitimacy. While resource dependence theory is one of many theories of organizational studies
that characterize organizational behavior, it is not a theory that explains an organization's
performance per se. But still in many ways, resource dependence theory predictions are similar
to those of transaction cost economics, but it also shares some aspects with institutional
theory[Nienhuser, 2008].

Human Resource supply forecasting is the process of estimating availability of human resource
followed after demand for testing of human resource. For forecasting supply of human resource
we need to consider internal and external supply. Internal supply of human resource available by
way of transfers, promotions, retired employees & recall of laid-off employees, etc. Source of
external supply of human resource is availability of labour force in the market and new
recruitment.

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external supply of human resource depends on some factors mentioned below.

• Supply and demand of jobs.

• literacy rate of nation.
• rate of population
• industry and expected growth rate and levels
• technological development.
• compensation system based on education, experience, skill and age.

The most important techniques for forecasting of human resource supply are Succession analysis
and Markov analysis.

Succession analysis
Once a company has forecast the demand for labour, it needs an indication of the firm's labour
supply. Determining the internal labour supply calls for a detailed analysis of how many people
are currently in various job categories or have specific skills within the organization. The planner
then modifies this analysis to reflect changes expected in the near future as a result of
retirements, promotions, transfers, voluntary turnover, and terminations.
Demand forecasting helps in determining the number and type of personnel/human resources
required in future. The next step in human resource planning is forecasting supply of human
resources. The purpose of supply forecasting is to determine the size and quality of present and
potential human resources available from within and outside the organisation to meet the future
demand of human resources. Supply forecast is the estimate of the number and kind of potential
personnel that could be available to the organisation.

Fig 5: Estimating Staff Requirements: Graphical Representation : Source: Google

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The above figure illustrates that internal supply forecasting can be estimated based on the
following:

(a) Current Staffing Level

(b) Projected Outflows This Year
(c) Projected Inflows This Year
Markov Analysis—transition probability matrix is developed to determine the probabilities of
job incumbents remaining in their jobs for the forecasting period.
The technique is named after Russian mathematician Andrei Andreyevich Markov, A
transition matrix, or Markov matrix, can be used to model the internal flow of human
resources. These matrices simply show as probabilities the average rate of historical movement
from one job to another. Figure 2-12 presents a very simple transition matrix. For a line worker,
for example, there is a 20% probability of being gone in 12 months, a 0% probability of
promotion to manager, a 15% probability of promotion to supervisor, and a 65% probability of
being a line worker this time next year. Such transition matrices form the bases for computer
simulations of the internal flow of people through a large organization over time.
Recruitment
Recruitment & Selection
Recruitment and Selection are interchangeable words used frequently by many and Recruitment
is most commonly used word than the word selection. But there is difference between these two
terms. Recruitment is a activity to find people who like to join organization. In other words it is
the process of inviting candidates for applying to job through various modes in which
organisation asks for. selection takes place only after inviting candidates. There is no doubt to
say that human resource/Manpower/employees are pillars and key assets for any organization.
Hence recruitment is the only way to raise manpower needed for organization. Recruitment
happens before selection process of candidates. Candidates who are identified right qualified
person will be invited to the selection process which involves different kinds of tests for knowing
knowledge, skills and attitude that are required for performing would be given job. Simply mean
recruitment is a process of calling candidates by way of giving notification in the newspapers,
advertisements, publishing on websites and contacting drop consultancies, et cetera. Ultimately
without the recruitment, there is scope for selection process. All the candidates who are invited
in the recruitment, may not be selected because candidates have to go through selection process
for proving their talent.
Simple meanings of recruitment:
Recruitment is the process of discovering competent employee out of available candidates in
the market who are suitable to job and according to organisation requirements.
Recruitment is the process of attracting prospective employees and stimulating them for
applying job in an organization. Recruiting refers to the process of attracting potential job
applicants from the available labor force. Every organization must be able to attract a sufficient
number of the job candidates who have the abilities and aptitudes needed to help the organization
to achieve its objectives. An effective employee selection procedure is limited by the
effectiveness of recruiting process. Outstanding job candidates cannot be selected if they are not
included in the applicant pool. The recruitment process also interacts with other personnel
functions, especially performance evaluation compensation training and development and
employee relations. Recruiting is typically a human resource function.
RECRUITMENT PROCEDURE:

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Before going to recruitment, careful study is needed about jobs which are to be kept under
recruitment. Careful study is nothing but doing Job analysis which is otherwise called as
collection of every information about the job so as to figure out exact candidate needed to
perform said job.
HR manager needs careful attention and should be diligent while going for recruitment of human
resource, since it grabs attention of prospective employees at large. However it is not so easy to
find out skilled people. Hence various tests in selection process helps to identify potential
candidate needed for an organisation. Coming to procedure for recruitment, it depends on nature
and size of organisation. But concept of recruitment is one and same. Recruitment does in
various modes which are basically categorised into two out of that first one is internal
recruitment and external recruitment, which are elaborately explained in detailed below.
Whatever the mode of recruitment preferred by an organisation, it should be clear in what an
organisation needs and easily understandable by prospective employees at large so as to avoid
frivolous and unsolicited applications which will consume lot of time for an organisation to
identify them. Hence organisation should be clear and thoroughly check before posting
recruitment.

Fig: 6: Basics of Recruitment Notification Modes: Graphic Representation: Source:

Google

Basic contents of Recruitment notification;

➢ It contains brief about an organisation which is recruiting.

➢ Contains number of posts/jobs lying vacant in an organisation.
➢ Contains number of jobs in reserved category. (especially in government organisation
jobs are allotted to reserved category).

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 ➢ Contains information about gender needed for the jobs. (For example: Male or female)
➢ Contains information about educational qualification needed to qualify for applying to
job.
➢ Contains information about work experience needed. (points from 2 to 6 are nothing but
called as Job specifications, it is a statement that describes about specifications needed by
a candidate to have qualified for a applying said job)

➢ It contains most important information that is, Job description, which is the statement of
information about duties and responsibilities of the job.
➢ Contains information about salary particulars, employee benefits and other allowances to
be provided.
➢ Selection tests which must be passed by candidates so as to have job.
➢ Terms and conditions if any.

U.S.A.
The Equal Employment Opportunity Commission (EEOC), is charged with enforcing federal law
against discrimination based on

• Race.
• Color.
• National origin.
• Sex.
• Age (between 40 and 70).
• Disability.
• Veteran status.
• Handicap.
• Religion.

Title VII of the Civil Rights Act of 1964 prohibits employment practices that discriminate on the
basis of sex. The law covers employers with fifteen or more employees, and prohibits sex-based
discrimination in hiring, advancement, or any other terms or conditions of employment. The law
also includes discrimination based on maternity, pregnancy and sexual orientation.
India
According to the Indian Constitution, Article 15(1) prevents the state from discriminating against
a citizen based on religion, race, caste, sex, descent, place of birth, or residence, [Article 16]
Equality of opportunity in matters of public employment. Article 16(1) There shall be equality of
opportunity for all citizens in matters relating to employment or appointment to any office under
the State. Article 16(2) states that no discrimination on these grounds can be shown by the state
in government recruitment. Article 16(4) allows the state to make provisions for reservation in
appointments or posts in favour of any backward classes which is not adequately represented in
government services.

Facts [+]

The HR Employment Manager directs the organization's recruitment, screening, interviewing,

selection, and placement activities. They manage employment functions and staff members. In

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addition, they extend job offers and establish starting salaries, arrange advertising or employment
agency services, and produce affirmative action or college recruiting programs.

The HR Recruiter screens and interviews potential employees on behalf of the organization.
They conduct pre-employment tests and reference checks as well as provide training and
guidance to hiring managers on policies, process, and regulatory issues. Additionally, they may
place employment advertisements and analyze reports and trends. According to the book "Job
Search Basics, Third Edition" by Michael Farr, the most available jobs are with medium and
small organizations versus larger companies. Companies with less than 250 employees account
for 71% of the job market. Companies with 250 to 999 employees account for 16 percent.
Companies with more than 1,000 employees account for the remaining 13 percent.
In planning recruiting activities, an organization needs to know how many applicants must be
recruited. Since some applicants may not be satisfactory an others may not accept the job offers,
and organization must recruit more applicants than it expects to hire. Now we will discuss the
different sources of recruitment that are available to organization:

Recruitment sources
Internal Recruitment External Recruitment
Promotions College recruitment
Transfers Competitors and other firms
Employee Referrals Employment agencies
Former Employees Labour unions
Retrenched Employees Executive search firms
Professional associations
Internet recruitment
Media sources

Basically organizations are available by the two main sources of recruitment which are: Internal
vs. External Recruiting

Advantages and disadvantages are associated with promoting from within the organization
(internal recruitment) and hiring from outside the organization (external recruitment) to fill
openings. Promotion from within generally is thought to be a positive force in rewarding good
work, and some organizations use it well indeed. However, if followed exclusively, it has the
major disadvantage of perpetuating old ways of operating. In addition, there are equal
employment concerns with using internal recruiting if protected-class members are not already
represented adequately in the organization.

Recruiting Advantages Disadvantages

Source

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 • Morale of promotee • Inbreeding
• Better assessment of abilities • Possible morale problems of
Internal • Lower cost for some jobs those not promoted
Recruitment • Motivator for good • "Political" infighting for
performance promotions
• Causes a succession of • Need for management-
promotions development program
• Have to hire only at entry
level

• New "blood" brings new • May not select someone who

perspectives will "fit" the job or
External • Cheaper and faster than organization
Recruitment training professionals • May cause morale problems
• No group of political for internal candidates not
supporters in organization selected
already • Longer "adjustment" or
• May bring new industry orientation time
insights

surprisingly, 88% of American respondents seemed not to mind if prospective employers

checked their profiles on social media (including Facebook and Twitter) as part of a recruitment
process. Job applicants are often told to keep their social media pages hidden from potential
employers, but apparently most Americans expect their online lives to add weight to hiring
decisions. Just over a half (50.3%) felt that it would not make a difference to their view of an
organization if their social media profiles were looked at during the recruitment process and
29.7% said that it would have a positive impact on the their view of that company. According to
a recent survey of 1,275 employers in the U.S. conducted by Manpower, Inc., the top ten most
difficult jobs to fill by employers are: sales reps, engineers, nurses, technicians, accountants,
administrative assistants, drivers, call center operators, machinists, and management/executives.
According to the U.S. Department of Labor, overall employment of human resources, training,
and labor relations managers and specialists is expected to grow faster than the average for all
occupations through 2014. In addition to openings due to growth, many job openings will arise
from the need to replace workers who transfer to other occupations or leave the labor force.
Promotion and Transfer

Many organizations choose to fill vacancies through promotions or transfers from within
whenever possible. Although most often successful, promotions from within have some
drawbacks as well. The person’s performance on one job may not be a good predictor of
performance on another, because different skills may be required on the new job. For example,
not every good worker makes a good supervisor. In most supervisory jobs, an ability to
accomplish the work through others requires skills in influencing and dealing with people that
may not have been a factor in nonsupervisory jobs.

It is clear that people in organizations with fewer levels may have less frequent chances for

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promotion. Also, in most organizations, promotions may not be an effective way to speed the
movement of protected-class individuals up through the organization if that is an organizational
concern.
2. Job posting
An organization can also use the policy of job posting as a internal recruitment source. In the job
posting system the organization notifies its present employees about job openings through the
use of bulletin boards, company publications, or personal letters. The purpose of the job posting
is to communicate that the job opening exists. An effective job posting system involves the
following guidelines:

Job posting should be prominent. Clear job specification should be communicated so that
applicants assess themselves either they are eligible to apply or not. Once the decision is made,
all applicants should be informed about the decision. Job posting systems generally work quite
well.

3. Contacts and Employee Referrals

At least 65% recruiters in India use employee referral programmes to get quality talent: Survey
ET Bureau | 20 Oct, 2015. At least 65 per cent of recruiters are using their employee referral
programmes to get talent people in India, according to a recruitment trends survey conducted by
LinkedIn, shared with Economic Times. The India Recruiting Trends 2016 study was conducted
among 298 Indian recruiters or talent acquisition decision makers who work in a corporate HR
department and have some authority in their company's recruitment solutions budget. These
individuals focus exclusively on recruiting, manage a recruiting team, or are HR generalists.
Indian recruiters were also the most confident about measuring the quality of their hires (54 per
cent) as opposed to recruiters in markets like China (20 per cent) and Australia (19 per cent).
Nearly 39 per cent agreed that quality of hire was the most valuable performance metric, 55 per
cent said employee referral programmes were the top source of quality hires, 37 per cent either
shared or contributed to employer branding with other functions, and 36 per cent said employee
retention was top priority.

Employee referrals are more trustworthy and help hire good quality skills in the system.Experts
have claimed that employee referral schemes have helped them enhance the retention levels and
mitigate recruitment costs.

Many firms have found that their employees can assist in the recruitment process. Employees
may actively solicit applications from their friends and associates. Before going outside to recruit
employees, many organizations ask present employees to encourage friends or relatives to apply
for the job openings. Contacts and referrals from the present employees are valuable sources of
recruits. Employee referrals are relatively inexpensive and usually produce quick responses.
However some organizations are concerned about problems that result from hiring friends of
employees for example, the practice of hiring friends and relatives favoritisms, cliques etc.
4. Recruiting Former Employees and Applicants
Former employees and former applicants are also good internal sources for recruitment. In both
cases, there is a time-saving advantage, because something is already known about the potential
employee.
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FORMER EMPLOYEES
Former employees are considered an internal source in the sense that they have ties to the
company. Some retired employees may be willing to come back to work on a part-time basis or
may recommend someone who would be interested in working for the company. Sometimes
people who have left the company to raise a family or complete a college education are willing
to come back to work after accomplishing those personal goals. Individuals who left for other
jobs might be willing to return for a higher rate of pay. Job sharing and flextime programs may
be useful in luring back retirees or others who previously worked for the organization. The main
advantage in hiring former employees is that their performance is known. Some managers are
not willing to take back a former employee. However, these managers may change their attitudes
toward high-performing former employees as the employment market becomes more
competitive. In any case, the decision should depend on the reasons the employee left in the first
place. If there were problems with the supervisor or company, it is unlikely that matters have
improved in the employee’s absence. Concerns that employers have in rehiring former
employees include vindictiveness or fear of morale problems among those who stayed.
FORMER APPLICANTS AND PREVIOUS “WALK-INS”
Another potential source of applicants can be found in the organizational files. Although not
entirely an internal source, those who have previously applied for jobs can be recontacted by
mail, a quick and inexpensive way to fill an unexpected opening.

Applicants who have just “walked in” and applied may be considered also. These previous walk-
ins are likely to be more suitable for filling unskilled and semiskilled jobs, but some professional
openings can be filled by turning to such applications. One firm that needed two cost accountants
immediately contacted qualified previous applicants and was able to hire two individuals who
were disenchanted with their current jobs at other companies.

EXTERNAL RECRUITMENT SOURCES

A broad variety of methods are available for external recruiting. An organization should are fully
assess the kinds of positions it wants to fill and select the recruiting methods that are likely to
reduce the best results.
There are some employee needs that a firm must fill through external recruitment. Among them
are: filling entry-level jobs, acquiring skills not possessed by current employees, and obtaining
employees with different backgrounds to provide new ideas. Nearly 75% of job-seekers still use
newspapers to look for employment, according to a report released by the Conference Board.
The survey of five-thousand households found nearly sixty percent of job-seekers use the
Internet to look for employment. The Western U.S. is the only area of the country where the
Internet topped newspapers among those seeking jobs.

1. College Recruiting
At the college or university level, the recruitment of graduating students is a large-scale
operation for many organizations. Most colleges and universities maintain placement offices in
which employers and applicants can meet. However, college recruiting presents some interesting
and unique problems. The major determinants affecting an employer’s selection of colleges at
which to conduct interviews are:

Placement season 2014 broke a two-year spell of sluggish hiring with many companies recruiting
aggressively.

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Ten of India's biggest recruiters hired a total of 774 MBAs from 21 top B-schools ET surveyed
for the purpose of this study. Only 567 graduates were picked by the top ten recruiters the
previous year.

• Current position requirements

• Experiences with placement offices and previous graduates
• Organizational budget constraints
• Cost of available talent (typical salaries)
• Market competition
• College reputation

College recruiting can be expensive; therefore, an organization should determine if the positions
it is trying to fill really require persons with college degrees. A great many positions do not; yet
many employers insist on filling them with college graduates. The result may be employees who
must be paid more and who are likely to leave if the jobs are not sufficiently challenging. To
reduce some of the costs associated with college recruiting, some employers and college or
university placement services are developing programs using video interviews. With these
systems, students can be interviewed by interviewers hundreds of miles away. There are
advantages for both the companies and students. The firms save travel costs and still get the
value of seeing and hearing students. For students, the system provides a means of discussing
their credentials and job openings without having to miss classes.
March, 2012: Indian information technology companies are pampering college placement
officers by taking them on domestic and foreign trips as they seek to hire the best talent from
Indian campuses ahead of competition. Over the years Cognizant has been taking placement
officers to cities like Bangkok and Dubai while others have been holding their offsites within
their campuses. Infosys has also joined the race this year, although with a modest start in
domestic locations.
Indian IT firms depend on campus recruits for a bulk of their hiring every year, making job

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offers to thousands of students every year. In this financial year for instance, Infosys is hiring
over 20,000 students from campus while TCS is hiring over 30,000.
2. Competitors and other Firms
Competitors and other firms in the industry or geographic area may be the most important source
of recruits for positions in which recent experience is highly desired.
3. Employment Agencies
Every state in any country like every state in the United States has its own state-sponsored
employment agency. These agencies operate branch offices in many cities throughout the state
and do not charge fees to applicants or employers.
Private employment agencies also are found in most cities. For a fee collected from either the
employee or the employer, usually the employer, these agencies do some preliminary screening
for an organization and put the organization in touch with applicants. Private employment
agencies differ considerably in the level of service, costs, policies, and types of applicants they
provide. Employers can reduce the range of possible problems from these sources by giving a
precise definition of the position to be filled.

India
Aspiring Minds strives to help institutions and companies from choosing the ‘right’ individual
rather than the ‘best’ individual.
Mar, 2012, NEW DELHI: Employability measurement company Aspiring Minds plans to set up
30 facilities over the next year, which will help job seekers to connect with potential recruiters
nationally. The facilities will work as employment exchanges and the company will invest up to
Rs 20 crore with the help of the local institutes in this effort.
4. Labor Unions
Labor unions are a source of certain types of workers. In some industries, such as construction,
unions have traditionally supplied workers to employers. A labor pool is generally available
through a union, and workers can be dispatched to particular jobs to meet the needs of the
employers. In some instances, the union can control or influence recruiting and staffing needs.
An organization with a strong union may have less flexibility than a nonunion company in
deciding who will be hired and where that person will be placed. Unions also can work to an
employer’s advantage through cooperative staffing programs, as they do in the building and
printing industries.

5. Executive Search Firms

Executive search (informally headhunting) is the process of recruiting individuals to fill senior
executive positions in organizations especially like chief executive officers or managing
directors. Executive search may be performed by an organization's board of directors, or by an
outside executive search firm hired by the organization. Some executive search firms are
regional, while others are global. Many specialize in a particular sector. When corporate entities
elect to use an outside Executive Search Firm, it is usually because they lack the internal
research resources, networks, or evaluative skills to properly recruit for themselves. Using an
outside firm also allows the corporate entity the freedom of recruiting from competitors without
doing so directly, and the ability to choose among candidates that would not be available through
internal or passive sourcing methodologies. An executive search firms representatives often visit
the clients offices and interview the company's management. This enables them to gain a clear
understanding of the company's goals and the job qualifications required- After obtaining this
information, they contact and interview potential candidates, check references, and refer the best-
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qualified person to the client for the selection decision. Search firms maintain databases of
resumes for this process. Other sources used include networking contacts, files from previous
searches, specialized directories, personal calls, previous clients, colleagues, and unsolicited
resumes. The search firms task is to present candidates that are eminently qualified to do the job
and it is the company's decision whom to hire.

Leading Executive Search firms in India

ABC Consultants: Chairman’s High Circle (CHC) is the executive search arm of ABC
Consultants.
ACCORD GROUP INDIA is a boutique retained executive search firm specializing in CXO
(Chief executive officer) and specialist searches.
Egon Zehnder International was founded in 1964.
EMA Partners International is a 25 year old global search firm , with offices located in most
major markets around the globe.
Spencer Stuart is one of the world’s leading executive search consulting firms. The company
operates out of 53 offices in 29 countries.Founded in 1956.
Executive Access was established in 1988, and is focused on Asia Pacific region. The company
is headquartered in Hong Kong, and has its India office in Mumbai.

Gilbert Tweed Associates Pvt. Ltd., a leading executive search practice in India is an
international partner of Gilbert Tweed International Inc., New York. The company has three
offices in India i.e. New Delhi, Mumbai, and Bangalore.
Companies in India are pumping up hiring at senior management levels again, as a nearly 35%
improvement in executive search firms' business in the previous quarter indicates.
Competitions at campus
Many companies are now realising interviews alone are not enough to gauge candidates.
Competitions at campus by companies have become a good source today to identify best talented
candidate. Many companies like Philips, Godrej, HCL Technologies are conducting
Competitions for business management students to identify best talent and who exactly fits to
their organisation. Philips company has launched "Blueprint" Case study competition that asks
students to identify growth areas for the company and propose business plan. Godrej industries
had launched a competition called "LOUD" (Live out your dream event) for business school
students to make presentation about their dream projects and present a case for why the company
should fund it. Through this competition Godrej senior managers picked seven winners. this
company is also conducting campus recruitment based on case studies are anxious to solve and
to show their analytical ability. HCL Technologies had launched a contest that asks business
schools for suggestions on running tomorrow's enterprise or driving change through
Management innovations. Competitions can help students develop the skills they would later
need and the hard work needed to get success, which is the reason behind competitions at
campus.

Internet Recruiting
[Using the Internet for job-hunting reduces time spent unemployed by an average of 25%.]
Organizations first started using computers as a recruiting tool by advertising jobs on a “bulletin
board service” from which prospective applicants would contact the company. Then some
companies began to take e-mail applications. Now some employers are not only posting jobs and

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accepting resumes and cover letters on-line but also are conducting employment interviews on-
line. Advantages for such Internet recruiting by employers include:

• Reaching more applicants

• Having lower costs and faster response time frames
• Tapping an applicant pool conversant with the Net

Internet job boards are rapidly gaining market share of all advertised jobs. According to
HRAdvice.com, the biggest concerns when recruiting on the Internet include not enough time to
review resumes, too many resumes, too many unqualified applicants due to the ease of
application process, and potential exposure to discrimination charges due to adverse impact.
According to online recruiting commentator Peter Weddle, nearly two-thirds of all companies
under-utilize their corporate web sites for recruiting. Weddle suggests the following recruiting
website improvements: take full advantage of virtually unlimited web space, communicate your
company's image as an employer, attract both active and passive job seekers, and provide a high-
quality web experience.
According to TopJobSites.com, the top three general job websites by traffic ranking are
Monster.com, CareerBuilder.com and HotJobs.com. TopJobSites.com reviews and ranks job
and career websites based on a three month window of traffic volume. In addition to general job
sites, the site compiles rankings for college sites, executive sites, niche sites, diversity sites, and
international sites.
Employers often begin the Internet search process by establishing an organization website and
listing jobs on it. Alternatively, companies with a web page that specializes in posting job
listings (an Internet job service)—much like the electronic bulletin board of days gone by—can
be used by job seekers. Finally, online employment agencies can be used to post jobs and find
applicants on the Net. Based on the results of one survey, Figure shows the percentage of
applicants who indicated they planned to use various recruiting resources.

Recruiting Sources opts by Applicants

Fig: 7: Preferences of Candidates: Graphic Represenation: Source: Google

One advantage of Internet recruiting is that it may improve the chances of contacting “passive
job seekers”—those people who are not actively seeking work. Listing at popular job-search
Internet sites is a good way to attract such browsing high-tech workers. Indeed, recent surveys
show that about 37% of companies now use the Net for recruiting, and the rate is increasing
rapidly.

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Media Sources
Media sources such as newspapers, magazines, television, radio, and billboards are widely used.
Almost all newspapers carry “Help Wanted” sections, and so do many magazines. For example,
The Wall Street Journal is a major source used to recruit managerial and professional employees
nationally or regionally. Whatever medium is used, it should be tied to the relevant labor market
and provide sufficient information on the company and the job.
Newspapers are convenient because there is a short lead time for placing an ad, usually two or
three days at most. For positions that must be filled quickly, newspapers may be a good source.
However, there can be a great deal of “wasted circulation” with newspaper advertising because
most newspapers do not aim to reach any specialized employee markets. Some applicants are
only marginally suitable, primarily because employers who compose the ads do not describe the
jobs and the necessary qualifications very well. Many employers have found that it is not cost
efficient to schedule newspaper ads on days other than Sunday, the only day many job seekers
read them.
In addition to newspapers, other media sources include general magazines, television and radio,
and billboards. These sources are usually not suitable for frequent use but may be used for one-
time campaigns aimed at quickly finding specially skilled workers.

Nearly 75% of job-seekers still use newspapers to look for employment, according to a report
released by the Conference Board. The survey of 5000 households found nearly 60% of job-
seekers use the Internet to look for employment. The Western U.S. is the only area of the country
where the Internet topped newspapers among those seeking jobs.
CONSIDERATIONS IN USING MEDIA SOURCES When using recruitment advertisements
in the media, employers should ask five key questions:

• What do we want to accomplish?

• Who are the people we want to reach?
• What should the advertising message convey?
• How should the message be presented?
• In which medium should it run?

Figure on the next page shows information a good recruiting advertisement should include.
Notice that desired qualifications, details on the job and application process, and an overview of
the organization are all important.

What to Include in an Effective Recruiting Ad

INFORMATION ON THE CANDIDATE

• Years of experience
• Three to five key characteristics of the successful candidate

INFORMATION ON THE JOB AND PROCESS OF APPLICATION

• Job title and responsibilities

• Location of job
• Starting pay range
• Closing date for application

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 • Whether to submit a resume and cover letter
• Whether calls are invited or not
• Where to mail application or resume

Forecasting human resource demand is the process of estimating the future human resource
requirement of right quality and right number. As discussed earlier, potential human resource
requirement is to be estimated keeping in view the organisation's plans over a given period of
time. Analysis of employment trends; replacement needs of employees due to death,
resignations, retirement termination; productivity of employees; growth and expansion of
organisation; absenteeism and labour turnover are the relevant factors for human resourced
forecasting. Demand forecasting is affected by a number of external and internal factors. Job
analysis and forecasting about the quality of potential human resource facilitates demand
forecasting. So, existing job design must be thoroughly evaluated taking into consideration the
future capabilities of the present employees.

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FACTORS AFFECTING HR DEMAND FORECASTING
Human Resource Demand Forecasting depends on several factors, some of which are given
below.

• Employment trends;
• Replacement needs;
• Productivity;

• Absenteeism; and
• Expansion and growth.

There are number of techniques of estimating/forecasting human resources demand:

(a) Managerial Judgement

(b) Work Study Technique
(c) Ratio-trend Analysis (d) Econometric Models
(e) Delphi Model
(f) Other Techniques
(a) Managerial Judgement: Managerial judgement technique is very common technique of
demand forecasting. This approach is applied by small as well as large scale organisations. This
technique involves two types of approaches i.e. 'bottom-up approach' and 'top-down approach'.
Under the 'bottom-up approach', line mangers send their departmental requirement of human
resources to top management. Top management ultimately forecasts the human resource
requirement for the overall organisation on the basis of proposals of departmental heads. Under
the Top-down approach', top management forecasts the human resource requirement for the
entire organisation and various departments. This information is supplied to various departmental
heads for their review and approval. However, a combination of both the approaches i.e.
'Participative Approach' should be applied for demand forecasting. Under this approach, top
management and departmental heads meet and decide about the future human resource
requirement. So, demand of human resources can be forecasted with unanimity under this
approach.
(b) Work-Study Technique: This technique is also known as 'work-load analysis'. This
technique is suitable where the estimated work-load is easily measureable. Under this method,
estimated total production and activities for a specific future period are predicted. This
information is translated into number of man-hours required to produce per units taking into
consideration the capability of the workforce. Past-experience of the management can help in
translating the work-loads into number of man-hours required. Thus, demand of human resources
is forecasted on the basis of estimated total production and contribution of each employee in
producing each unit items. The following example gives clear idea about this technique. Let us
assume that the estimated production of an organisation is 3.00.000 units. The standard man-
hours required to produce each unit are 2 hours. The past experiences show that the work ability
of each employee in man-hours is 1500 hours per annum. The work-load and demand of human
resources can be calculated as under:

• Estimated total annual production = 300000 units

• Standard man-hours needed to produce each unit = 2 hrs
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 • Estimated man-hours needed to meet estimated annual production (i x ii) = 600000 hrs
• Work ability/contribution per employee in terms of man-hour = 1500 units
• Estimated no. of workers needed (iii / iv) = 600000/1500 = 400 units

The above example clearly shows that 400 workers are needed for the year. Further, absenteeism
rate, rate of labour turnover, resignations, deaths, machine break-down, strikes, power-failure
etc. should also be taken into consideration while estimating future demand of human resources/
manpower.
(c) Ratio-Trend Analysis: Demand for manpower/human resources is also estimated on the
basis of ratio of production level and number of workers available. This ratio will be used to
estimate demand of human resources. The following example will help in clearly understanding
this technique.
Estimated production for next year = 1,40,000 units
Estimated no. of workers needed
(on the basis of ratio-trend of 1: 200) will be = 700
(d) Econometrics Models: These models are based on mathematical and statistical techniques
for estimating future demand. Under these models relationship is established between the
dependent variable to be predicted (e.g. manpower/human resources) and the independent
variables (e.g., sales, total production, work-load, etc.). Using these models, estimated demand of
human resources can be predicted.
(e) Delphi Technique: Delphi technique is also very important technique used for estimating
demand of human resources. This technique takes into consideration human resources
requirements given by a group of experts i.e. mangers. The human resource experts collect the
manpower needs, summarises the various responses and prepare a report. This process is
continued until all experts agree on estimated human resources requirement.
(f) Other Techniques: The other techniques of Human Resources demand forecasting are
specified as under:
(a) Following the techniques of demand forecasting of human resources used by other similar
organisations
(b) Organisation-cum-succession-charts
(c) Estimation based on techniques of production
(d) Estimates based on historical records
(e) Statistical techniques e.g. co-relation and regression analysis.
Factors influencing in creating jobs
According to the World Development Report 2013, at a time when the world is struggling to
emerge from the global crisis, some 200 million people including 75 million under the age of 25
are unemployed.

There are now 30 million more people without jobs around the world than before the global
financial crisis began, the head of the International Labour Organization said in remarks
published on 12th oct-2012.
Observation on manufacturing bodies and companies how they see the initiative as a job-creator
The government’s renewed push to the Make in India initiative has resulted in investment
pledges of over $222 billion that will help boost manufacturing and job creation.
“The opportunities available in Make in India in the ESDM (electronics system design and
manufacturing) sector are such that it can create 28 million jobs, contributing 12 per cent to the

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GDP. Make in India will also see deployment of next generation machine tools and industry 4.0
should also help the sector in being globally competitive. Additionally, government’s initiative
of creating skilled manpower at the block level through training centres for various sectors will
give a new impetus to Make in India. Other initiatives like the MoU between Airbus and
Mahindra and entry of Taiwanese electronics majors Foxconn and Wistron into India are major
boosts to local manufacturing and value addition and in our plans to be a major manufacturing
hub.”
With Make in India, it is expected that the employment scenario to get a boost in the years to
come. There is already a positive response to the initiative. it is estimated that another 7-8 lakh
temporary jobs to be created. It would also add 8-13 per cent to the current job pool as
investment into manufacturing and related sectors. Refocusing on India’s traditional occupations
would also add to this and should potentially create 10 million jobs a year.
The key drivers are foreign direct investment in identified 25 sectors of the economy, which
should lead to additional workforce demand.
Majorly, there will be a huge requirement for entry-level jobs (semi-skilled and skilled). It is
estimated that a rise in the number of young workforce (15-29 age groups) from the current 153
million to 158 million by 2025. There will also be an increase in niche high-technology
opportunities demanding specialist skills – in design and engineering, project planning,
execution, erection, commissioning, operations and maintenance, transmission and distribution,
trading and regulatory, renewable energy and manufacturing.
FOREIGN INVESTMENT
Year 2012: Government of India has given nod to foreign direct investment in retail sector.
United States giant retail store like Walmart is on the way to step in to retail sector for
establishing supermarkets in India, subsequently it may create approximately 4 million direct
jobs and almost 5 to 6 million indirect jobs including contractual employment within a span of
10 years, making it the largest sector in organized employment. With the opening of same to
retail stores by way of FDI the employment opportunities may be created are especially, at the
entry level, will rise. Profiles such as sales, supply chain executives, security personnel,
attendants, in-shop supervisors, floor managers and warehouse supervisors.
Massive Indian investments create jobs in US
2012:Indian companies operating in 40 United states have invested over $820 million in
manufacturing facilities in America, creating thousands of jobs, revealed a survey. The 2012
India Business Forum (IBF) survey "Indian Roots, American Soil: Adding Value to US
Economy and Society", released by the Confederation of Indian Industry (CII) at a reception on
Capitol Hill Wednesday, highlights the significant economic and social impact made by Indian
companies on American communities.

Key findings:
70 percent of surveyed companies have increased the number of employees since 2005, despite
the US economic downturn; More than 34 percent of the surveyed companies have established
manufacturing facilities in the US, investing more than $820 million in those facilities; Since
2005, the surveyed companies have collectively conducted 72 mergers and acquisitions in the
US, saving, creating and sustaining thousands of jobs;
Indian Information Technology companies supported nearly 2.8 lakh jobs in America in the year
2011 by way of foreign direct investment through acquisitions of IT companies. India invested
nearly $ 5 billion in foreign direct investment.

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Indira Gandhi International airport is one of the largest employer: Study
NEW DELHI: Delhi airport is one of the biggest employers in the world providing jobs to more
than five lakh people, a study by the National Council of Applied Economic Research (NCAER)
has found. "The airport provides direct employment to about 5.16 lakh people, 18 per cent more
than next best Hartsfield- Jackson Atlanta International airport in the US.
"The employment at Delhi airport is 0.11 per cent of national employment and 8.47 per cent of
jobs in the state," said the first of its kind study in India to assess the impact of IGI Airport on
employment and economic development of Delhi and the country. If indirect jobs generated due
to the operationalisation of Terminal 3 of the Delhi airport were added, the total employment
comes to 15.77 lakh which is 0.34 per cent of national employment and 25.9 per cent of Delhi's
jobs, the study found.
JOINT-VENTURE, MERGERS, ACQUISITIONS AND EXPANSIONS

Joint-Venture: it is a type of business where mostly two companies agree to enter into contract
for a specific period of time, maybe for some years, for the purpose of sharing technology,
sharing knowledge or to support each other in concern business to launch a specific product for a
specific purpose and unique when compared to its competitors. For example companies like
Sony belongs to Japan and Ericsson belongs to Europe, both had entered into a joint venture to
step into cellular phone manufacturing industry by sharing their technologies. A joint-venture is
a win-win situation where both companies will get benefits out of literally sharing their
technologies with each other. in the India there are major joint-venture business like Maruti
Suzuki, hero Honda ( recently joint-venture between two companies got lapsed and Honda
started selling bikes on its own name in India and same as with Hero Moto Corp started selling
its own bike) and TVS Suzuki. Aforesaid all joint venture businesses had created and have been
creating thousands of employment in the auto Mobile industry especially in bike manufacturing
segments. creation of jobs by these businesses in the form of joint ventures are directly
proportional to the expansion of the businesses, more the business expands more number of jobs
will be created.
INDIA: Uttar Pradesh state was the top employment generator among big states in eight years
ended 2013, creating jobs at over double the national average rate, according to the Sixth
Economic Census released in the month of July,2014.
The number of employed in the country rose 34.35% in eight years to 12.77 crore. "That means
that it had grown at an annual rate of over 4% when the population is growing at 2%.
The census does not include employment in agriculture, public administration, defence and
compulsory social security services activities. The employment growth would have been lower if
these sectors were included.
In Uttar Pradesh, the number of employed rose over 75% during the same period. It was fourth
overall in job creation, behind Manipur, Assam and Sikkim. Gujarat was placed ninth.
Maharashtra was the biggest employer, accounting for 11.26% jobs in the country, followed by
Uttar Pradesh, West Bengal, Tamil Nadu and Gujarat.

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Fig:8: Source :Google

E-commerce may create up to 50,000 jobs

India, May-2014: As foreign and domestic e-retail majors such as Amazon and Flipkart expand
their businesses aggressively, hiring activities are expected to grow by over 30% in the sector
and may help create up to 50,000 jobs in the ensuing years. According to leading human
resources consultancy Randstad India, the hiring in this space is likely to rise by 20-30% in next
few years on the back of entry of domestic online start-ups and e-commerce MNCs into Indian
marketplace, as also because of setting up of back-office operations for various global
businesses.
Another HR firm Unison International says that hiring has been rather slow in the e-commerce
space over last couple of years, but recruitment may grow rapidly now by 33% over the previous
year as various retail brands are also bringing in their business online.As per findings of Jigsaw
Academy, the e-commerce industry may create 15,000-50,000 jobs in the next three years for
data analysts professionals alone. As per experts, e-commerce firms would be looking to hire
across different levels of hierarchy and functions as this sector is in an investment phase.Hiring
will continue aggressively for delivery staff, digital marketing professionals, and for sales,
operations, IT and data analytics across levels.
Merger of Tech Mahindra, Satyam may hire 10,000 new staff
BANGALORE: India's Tech Mahindra Ltd and Satyam Computer Services Ltd, which are in the
process of a merger, aim to hire up to 10,000 staff for the combined entity in 2012/13 to meet an
expected rise in demand for technology services.
LONDON: EDF Energy is an energy generation company by different natural resources in
United Kingdom had created 32,000 jobs in the country due to its expansion which could be

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contribution for development of the UK economy, a report commissioned by atomic plant
developer.

NTPC expansion, recruits more than 1000

National Thermal Power Corporation Limited [NTPC], one of India's largest public sector units
recruit more 10,000 engineering trainees every year for the purpose of expansion of the
company.
Sundaram BNP Paribas Fund Services to recruit 100 people
Sep - 2012, CHENNAI: As part of its expansion plans, Sundaram BNP Paribas Fund
Services recruit 100 people across its delivery centres. Sundaram BNP Paribas Fund Services is
a 51:49 per cent joint venture between Chennai-based Sundaram Finance Ltd and BNP Paribas
Securities Services,100 per cent subsidiary of BNP Paribas.
Expansion of banks in India create jobs.
Indian banks are facing serious shortfall of staff due to the expansion of its branches and added
with retirement of existing employees. large-scale of recruitment has been going in the banking
sector due to expansion of its branches to various places in India to provide better banking
services. In addition to this many foreign banks have identified India is the potential market for
the banking sector led to step foreign banks into the country creating thousands of jobs.
Reliance life insurance company plans to hire about 1000 employees for its new distribution
channel life plaza may have 200 branches across the country by March 2013.

RETIREMENT OF EMPLOYEES
Retirement of employees is unavoidable and it cannot be stopped by any organisation. Any
employee who ever joins in any organisation at attainment of a certain age of superannuation he
must retire from his job. Therefore employee holding a job after his retirement will be vacant and
must be filled by a new employee by way of recruitment. According to the economics
Times.com in the year 2011, India's largest bank State bank of India had hired over 25,000
people due to the mass retirement of its employees. For the year 2013 by march State bank of
India to hide and 10,000 employees due to continuing retirements of its employees. According
to the data released by the Reserve Bank of India, the banking industry has added 42,000 jobs in
the financial year 2012 by way of direct recruitment due to the retirements. Example: State
Bank of India the country's largest lender, plans to recruit about 7,200 people even as nearly
8,100 members of its staff are due to retire during the 2014 - 2015 fiscal, as it
seeks to increase its dependence on technology for a number of routine tasks.
As on 22-2-2013, Indian The Income Tax department has as many as 16,696 posts lying vacant
but they are manned by existing employees by holding additional charge so that work is not
affected, Parliament was informed today. Vacancies arise on account of retirement/VRS,
promotion, deputation and officers proceeding on leave, among others. Group C category has
15,002 vacancies, followed by 1,137 in Group A and 557 in Group 8.

POLITICAL DECISIONS
2012: United States President Obama proposed to introduce legislation called "Bring Jobs Home
Act" which aims to bring back jobs to America which were outsourced by American companies
other countries such as India. Therefore implementation of this law may raise rate of
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employment offers in United States as outsourced jobs will be returned back, this law is strongly
supported by Democratic lawmakers and supported by AFL-CIO (The American Federation of
Labor and Congress of Industrial Organizations), the largest federation of trade unions in the US.
if this law get passed, it will not provide any tax benefits for companies that move jobs overseas
and provide tax incentives for companies moving jobs back to the United States.The most
immediate impact of reduced offshoring would benefit US-based Information Iechnology
companies such as Accenture and IBM, which have significant onshore presence as compared to
their Indian rivals, which have a growing but significantly smaller percentage of employees in
US. "The primary aim of this proposed legislation (Bring Jobs Home Act) is to create incentives
to bring back manufacturing jobs to the United States as millions of manufacturing jobs have
been lost in the last 10 years.
SECURITY ISSUES
Every system needs security for its safety, smooth running and ultimately for its success. Any
system will fail if its security is compromised, hence uncompromised security system will ensure
success of any system. Naturally increase in security issues will raise desperate need for
professionals in security. More the threats, more the need for professionals who can repel
security threats. Information technology became important organ in body of communication
system, banking system, financial sector and in each and every area. e-defense in IT sector has
become major challenge for the Indian government. The government of India estimated demand
for the year 2015, nearly 4.7 lakh professionals needed in cyber security due to increase in
various nature of cyber attacks in the information technology sector.

EMERGING TECHNOLOGIES
Days of using simple mobile phone is fading, today use of smart phones has become essential for
most of people in making their tasks easy and handy without any delay. market for smartphone
applications became emerging markets around the world especially applications
with productivity and help in handling their daily work. Example, days of opening Microsoft
office documents on your computer system has gone, office application in smart phones have
the capability to open and edit any Microsoft Office documents and use for the purpose. There
are thousands of smartphone applications created and readily available to make many of our
daily tasks easy to handle in Palm, this smart phone applications sector has created nearly
2,00,000 smartphone applications developer jobs for IT employees around the world. Year
2013: Taiwan-based electronic chip manufacturing companies started recruiting thousands of
technical staff for production of electronic chips for electronic gadgets, as there is exponential
growth in usage of smart phones, tablets and computerised equipment by the younger
generation.
GAMES AND CULTURAL ACTIVITIES

It takes an army - or two armies - of people to put on the World Cup every four years. The South
Africa tourism agency expected over 450,000 tourists over the span of six weeks before and
during the tournament, creating a huge number of jobs in the tourism industry. The increase in
tourism alone created thousands of jobs in hotels, restaurants and other tourism-related areas and
as many as 80,000 additional jobs related directly to the 2010 World Cup. A majority of these
jobs are given to local residents as construction, media, transportation, officiating, technology,
and a wealth of other jobs are being resourced out of the host countries. Many FIFA officials,
however, are also employed and working towards each World Cup. Check the FIFA website for
2014 World Cup job opportunities, especially for positions with FIFA.
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Brazilian president: 2014 World Cup to generate 730,000 jobs
RIO DE JANEIRO, March 15 (Xinhua) -- President Dilma Rousseff said Tuesday the 2014
FIFA World Cup, to be hosted by Brazil, will generate 730,000 new jobs in the country. "The
Cup will contribute to our development project, generating jobs and increasing workers' income.
We estimate that 330,000 new formal jobs and 400,000 temporary posts will be generated,"
Rousseff said in her weekly column, published by several dailies in Brazil.
GENEVA: Nearly 75 million youths across the world will stay unemployed in 2012, said a
report released today by the International Labour Organisation (ILO). This accounts for 12.7 per
cent of the global youth labour force aged 15 to 24. The number is an increase of four million
since 2007, said Xinhua, citing the "Global Employment Trends for Youth 2012" report. The
crisis-linked withdrawal from the labour market is particularly strong in developed economies,
with an 18 per cent youth unemployment rate being projected for this year, the report said. It
said the rate would even be higher if one takes into account the 6.4 million youth worldwide who
have either given up searching for a job or have decided to prolong their studies due to the
extremely adverse conditions in the labour market.
The rate is not expected to come down until at least 2016, the report said.
WORKFORCE AVAILABILITY
countries like India and China are very good example for the availability of abundant workforce
at less cost compared to the other countries. Many Japanese firms like Samsung, Sony and
Panasonic etc. in electronics segment had moved its manufacturing units to China due to
availability of workforce at less cost with the aim of cost minimizing. similarly India stood top in
availability of potential workforce in the IT sector which influenced foreign companies example
companies belonging to United States like IBM, Microsoft and Oracle. etc to come and
establish in India and also the key reason is not only the availability of large workforce but at
low-cost compared to foreign workforce. Wells Fargo & Co , the fourth-largest US bank by
assets, had planned to create jobs in India and Philippines by moving its business with objective
to cut down its costs by employing host countries (India and Philippines) nationals as they're
available at less cost compared to home country (United States) nationals.
TOURISM
India: With millions of foreign tourists visiting the country annually, the Union Government of
India has decided to provide jobs to 1 lakh youths through tourism industry during the 2012
financial year. During 2011-12, the ministry had generated employment for 33,000 youths in the
country. This policy is in conformity with the resolution passed by the heads of Nations of 20
developed countries, recognising tourism will be a vehicle for job creation, poverty reduction
and leads to economic growth.
e Recruitment and Job Portals
The buzzword and the latest trends in recruitment is the “E-Recruitment”. Also known as
“Online recruitment”, it is the use of technology or the web based tools to assist the
recruitment processes. The tool can be either a job website like naukri.com, the organisation’s
corporate web site or its own intranet. Many big and small organizations are using Internet as a
source of recruitment. They advertise job vacancies through worldwide web. The job seekers
send their applications or curriculum vitae (CV) through an e-mail using the Internet.
Alternatively job seekers place their CV’s in worldwide web, which can be drawn by prospective
employees depending upon their requirements.

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The internet penetration in India is increasing and has tremendous potential. According to a
study by NASSCOM – “Jobs is among the top reasons why new users will come on to the
internet, besides e-mail.” There are more than 18 million resume’s floating online across the
world.
The two kinds of e-recruitment that an organisation can use is –

Job portals – i.e. posting the position with the job description and the job specification on the
job portal and also searching for the suitable resumes posted on the site corresponding to the
opening in the organisation. Creating a complete online recruitment/application section in the
companies own website. - Companies have added an application system to its website, where the
‘passive’ job seekers can submit their resumes into the database of the organisation for
consideration in future, as and when the roles become available.
Resume Scanners: Resume scanner is one major benefit provided by the job portals to the
organisations. It enables the employees to screen and filter the resumes through pre-defined
criteria’s and requirements (skills, qualifications, experience, payroll etc.) of the job.
Job sites provide a 24*7 access to the database of the resumes to the employees facilitating the
just-in-time hiring by the organisations. Also, the jobs can be posted on the site almost
immediately and is also cheaper than advertising in the employment newspapers. Sometimes
companies can get valuable references through the “passers-by” applicants. Online recruitment
helps the organisations to automate the recruitment process, save their time and costs on
recruitments.
Internet job boards are rapidly gaining market share of all advertised jobs. According to
HRAdvice.com, the biggest concerns when recruiting on the Internet include not enough time to
review resumes, too many resumes, too many unqualified applicants due to the ease of
application process, and potential exposure to discrimination charges due to adverse impact.
Faced with the expected wave of retiring baby boom employees, organizations are looking to
entice retirees and seniors back into their organizations as employees or as consultants. Several
new websites have emerged to address these organizational needs. According to
TopJobSites.com, the top three general job websites by traffic ranking are Monster.com,
CareerBuilder.com and HotJobs.com. TopJobSites.com reviews and ranks job and career
websites based on a three month window of traffic volume. In addition to general job sites, the
site compiles rankings for college sites, executive sites, niche sites, diversity sites, and
international sites.
According to online recruiting commentator Peter Weddle, nearly two-thirds of all companies
under-utilize their corporate web sites for recruiting. Weddle suggests the following recruiting
website improvements: take full advantage of virtually unlimited web space, communicate your
company's image as an employer, attract both active and passive job seekers, and provide a high-
quality web experience.
Paper resume could be thing of the past
WASHINGTON: Two young Indian-American entrepreneurs are attempting to make the
traditional paper resume a thing of the past by connecting the job seeker and the employer
through video resumes.
The Palo Alto Mayor, Yiaway Yeh, and several other top corporate leaders of the city - which is
known as the heart of the Silicon Valley -- lined up last Thursday in its downtown to inaugurate
the new office of GetHired.Com, which currently has just 14 employees.

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GetHired.com is the first job board to embed video capabilities directly into its social recruiting
platform so that job seekers can record and submit personal, dynamic responses to an employer's
most pressing pre-screening questions at the start of the hiring process. As a result, employers
are able to quickly find top candidates with good communication skills who are a culturally fit
for their organisation, he notes.

"GetHired.com combines the visibility of a job board with the functionality of an applicant
tracking system - allowing employers to find and pre-screen candidates using audio and video,
conduct interviews in real-time and manage the entire on boarding process," he said.
Online recruitment techniques

• Giving a detailed job description and job specifications in the job postings to attract
candidates with the right skill sets and qualifications at the first stage.
• E-recruitment should be incorporated into the overall recruitment strategy of the
organisation.
• A well defined and structured applicant tracking system should be integrated and the
system should have a back-end support.
• Along with the back-office support a comprehensive website to receive and process job
applications (through direct or online advertising) should be developed.

Therefore, to conclude, it can be said that e-recruitment is the “Evolving face of recruitment.”

Today’s job seekers rely more heavily on social networking and referrals to find a job.
surprisingly, 88% of American respondents seemed not to mind if prospective employers
checked their profiles on social media (including Facebook and Twitter) as part of a recruitment
process. More recuiting organizations likely to turn to social media in 2012.by mid-2012,
organizations expect to be using social media to source 82% of the types of jobs inquired about,
including finance and administration roles, front office and for IT Jobs.
Use social media in your job search
BOSTON: The widespread use of social media - including more playful sites like Facebook and
Twitter, as well as the business-focused LinkedIn - is becoming a powerful force in many job
searches, says Harvard Business Review. "More and more people are finding jobs via Twitter,
Facebook, and other social media sites. These media aren't changing how we look for jobs, they
are simply rebooting the traditional habits of successful job hunters and making them easier.
To boost your job search:

1. Build a better network. You used to pester people for their business cards at conferences and
mixers. Twitter offers a better alternative. Lots of recruiters, hiring managers, and industry
leaders hang out on Twitter, swapping job leads and industry updates.

2. Share evidence of your good work. Rather than dragging your portfolio to an interview, high-
traffic sites such as YouTube and Pinterest can help you showcase your work. Recruiters
increasingly prowl the web to look for the best candidates."
India has the world's youngest internet population with 75 per cent of all users under the age of
35 years, said research firm comScore Friday. Segment-wise usage has also revealed that 95 per
cent of the total online users use social networking sites compared to 82 per cent of the world's
online users leveraging social networks.
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Advantages & Disadvantages Of E-Recruitment
There are many benefits – both to the employers and the job seekers but the e-recruitment is not
free from a few shortcomings. Some of the advantages and the disadvantages of e-recruitment
are as follows:
Advantages of E-Recruitment are:

• Lower costs to the organisation. Also, posting jobs online is cheaper than advertising in
the newspapers.
• No intermediaries.
• Reduction in the time for recruitment (over 65 percent of the hiring time).
• Facilitates the recruitment of right type of people with the required skills.
• Improved efficiency of recruitment process.
• Gives a 24*7 access to an online collection of resumes.
• Online recruitment helps the organisations to weed out the unqualified candidates in an
automated way.
• Recruitment websites also provide valuable data and information regarding the
compensation offered by the competitors etc. which helps the HR managers to take
various HR decisions like promotions, salary trends in industry etc.

Disadvantages of E-Recruitment
Apart from the various benefits, e-recruitment has its own share of shortcomings and
disadvantages. Some of them are:

• Screening and checking the skill mapping and authenticity of million of resumes is a
problem and time consuming exercise for organisations.
• There is low Internet penetration and no access and lack of awareness of internet in many
locations across India.
• Organisations cannot be dependant solely and totally on the online recruitment methods.
• In India, the employers and the employees still prefer a face-to-face interaction rather
than sending e-mails.
The recruiting aspect there are number of websites for recruiting of employees in
companies some of the popular and important web sites in

Employee Selection
Employee Selection is the process of interviewing and evaluating the candidates for a specific
job and selecting an individual for employment based on certain criteria (qualifications, skills
and Experience). Employee selection can range from a very simple process to a very complicated
process depending on the firm hiring and the position. Certain employment laws such as anti-
discrimination laws must be obeyed during employee selection.

Employee Selection is the process of putting right men on right job. It is a procedure of
matching organizational requirements with the skills and qualifications of people.
Employee Selection is the process of choosing individuals who have relevant qualifications to

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fill jobs in an organization. Without qualified employees, an organization is in a poorer position
to succeed.
Selection is much more than just choosing the best available person. Selecting the appropriate set
of knowledge, skills, and abilities (KSAs)—which come packaged in a human being—is an
attempt to get a “fit” between what the applicant can and wants to do, and what the organization
needs. The task is made more difficult because it is not always possible to tell exactly what the
applicant really can and wants to do. Fit between the applicant and the organization affects both
the employer’s willingness to make a job offer and an applicant’s willingness to accept a job.
Fitting a person to the right job is called placement. Good selection and placement decisions are
an important part of successful HR management. Some would argue that these decisions are the
most important part. Productivity improvement for an employer may come from changes in
incentive pay plans, improved training, or better job design; but unless the employer has the
necessary people with the appropriate KSAs in place, those changes may not have much impact.
The very best training will not enable someone with little aptitude for a certain job to do that job
well and enjoy it.

The HR Recruiter screens and interviews potential employees on behalf of the organization.
They conduct pre-employment tests and reference checks as well as provide training and
guidance to hiring managers on policies, process, and regulatory issues. Additionally, they may
place employment advertisements and analyze reports and trends.
Purpose
The purpose of selection is to pick up the most suitable candidate who would meet the
requirements of the job in an organisation best, to find out which job applicant will be successful,
if hired. To meet this goal, the company obtains and assesses information about the applicants in
terms of age, qualifications, skills, experience, etc. the needs of the job are matched with the
profile of candidates. The most suitable person is then picked up after eliminating the unsuitable
applicants through successive stages of selection process. How well an employee is matched to a
job is very important because it is directly affects the amount and quality of employee’s work.
Any mismatched in this regard can cost an organisation a great deal of money, time and trouble,
especially, in terms of training and operating costs. In course of time, the employee may find the
job distasteful and leave in frustration. He may even circulate ‘hot news’ and juicy bits of
negative information about the company, causing incalculable harm to the company in the long
run. Effective election, therefore, demands constant monitoring of the ‘fit’ between people the
job.

The HR Employment Manager directs the organization's recruitment, screening, interviewing,

selection, and placement activities. They manage employment functions and staff members. In
addition, they extend job offers and establish starting salaries, arrange advertising or employment
agency services, and produce affirmative action or college recruiting programs.
Most hiring managers believe passionate employees are high achievers. Assessing a potential
candidate's passion is more of an art than a science. Some feel those that pursue a job opening
with vigor are passionate. Some think speed-talkers or speed-thinkers are passionate. Others
gauge passion by looking at high school or college activities such as sports, band, and debate
team participation.
The Myers-Briggs Type Indicator (MBTI) assessment is a psychometric questionnaire designed
to measure psychological preferences in how people perceive the world and make decisions. The
Myers-Briggs personality assessment has been identifying introverts, extroverts and other
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personality types since 1943. Based on the theories of psychologist Carl Jung, the Myers-Briggs
questionnaire has been gauging personalities through attitude, style and cultural changes
occurring during the past 60 years. Many consider it an essential tool for hiring and career
development. The indicator is frequently used in the areas of pedagogy, career counseling, team
building, group dynamics, professional development, marketing, family business, leadership
training, executive coaching, life coaching, personal development, marriage counseling, and
workers' compensation claims.
Siemens India: It uses extensive psychometric instruments to evaluate short-listed candidates.
The company uses occupational personality questionnaire to understand the candidate’s personal
attributes and occupational testing to measure competencies.
LG Electronics India: LG Electronics uses 3 psychometric tests to measure a person’s ability as
a team player, to check personality types and to find a person’s responsiveness and assertiveness.
Arthur Anderson: while evaluating candidates, the company conducts critical behaviour
interviewing which evaluates the suitability of the candidate for the position, largely based on his
past experience and credentials

PepsiCo India: The Company uses India as a global recruitment resource. To select
professionals for global careers with it, the company uses a competency- based interviewing
technique that looks at the candidate’s abilities in terms of strategizing, lateral thinking, problem
solving, managing the environment. This apart, Pepsi insists that to succeed in a global posting,
these individuals possess strong functional knowledge and come from a cosmopolitan
background.Source: Business Today, April 7-21 2004, pg 129.
Ways to find a job in a tough market
Getting a new job may be tough in a glum economic environment, but that should not deter you
from looking. Following some easy, yet often ignored, steps should help you sail through.
Map your Competency
"Individuals should identify the skill sets they are good at and should look for industries where
they fit in," says Sunil Goel, director of executive search firm GlobalHunt. Perry Madan,
executive director at EWS Search, adds: "When times are hard, people should think out of the
box and concentrate on the skill sets rather than limiting themselves to their industry."
List your Options
Make a list of companies you wish to work for and identify their structures and hiring cycles.
"One could make two separate lists - of companies that are most desired and companies that are
not high on priority, but can work as a platform for getting another posting elsewhere," says
Goel.
Go Glocal
A lot of MNCs are ramping up operations across the country, and not just the metros. "Tier II,
tier III cities and rural markets have plenty of opportunities and a lot of companies within the
F&B and education space have ambitious plans for such areas. One should not hesitate in
exploring such opportunities," says Madan.
Meet People
Get active on social networking websites and job portals, and meet people if possible. "It is
always better to meet people rather than mailing or calling them, as face value has a greater
recall ," says Goel.
The Selection Process
You would recall that selection process involves rejection of unsuitable or less suitable

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applicants. This may be done at any of the successive hurdles which an applicant must cross.
These hurdles act as screens designed to eliminate an unqualified applicant at any point in the
process. This technique is known as the ‘successive hurdles technique’. Figure 1 gives these
hurdles. Yoder calls these hurdles ‘go, no-go’ gauges. Those who qualify a hurdle go to the next
one; those who do not qualify are dropped out. Not all selection processes, however, include
these hurdles. The complexity of the process usually increases with the level and responsibility
of the position to be filled. Moreover, these hurdles need not necessarily be placed in the same
order. Their arrangement may differ from organisation to organization.
In the year 2000 B.C. the Chinese and Greeks used employee screening techniques and
apprenticeship programs. Pre-employment screening tests have been around since 1919. There
are over 50 different types of pre-employment tests and over 1,000 screening test products
available on the market. Popular tests include: skills testing, behavioral and personality
assessment, aptitude testing, achievement assessment, polygraph tests, drug and alcohol tests,
intelligence tests, and handwriting analysis.
The HR Employment Manager directs the organization's recruitment, screening, interviewing,
selection, and placement activities. They manage employment functions and staff members. In
addition, they extend job offers and establish starting salaries, arrange advertising or employment
agency services, and produce affirmative action or college recruiting programs.
The HR Recruiter screens and interviews potential employees on behalf of the organization.
They conduct pre-employment tests and reference checks as well as provide training and
guidance to hiring managers on policies, process, and regulatory issues. Additionally, they may
place employment advertisements and analyze reports and trends.

Initial Screening or Preliminary Interview

This is a sorting process in which prospective applicants are given the necessary information
about the nature of the job and also, necessary information is elicited from the candidates about
their education, experience, skill, salary expected, etc. If the candidate is found to be suitable, he
is selected for further process and, if not, he is eliminated. This is a crude screening and can be
done across the counter in the organization’s employment offices. This is done by a junior
executive in the personnel department. Due care should be taken so that suitable candidates are
not turned down in a hurry. Since this provides personal contact for an individual with the
company, the interviewer should be courteous, kind, receptive and informal. When a candidate is
found suitable, an application form is given to him to fill in and submit.
Application Scrutiny
You might have seen that sometimes applications are asked on a plain sheet. This is done where
no application forms are designed. The applicant is asked to give details about age, marital
status, educational qualifications, work experience and references. Different types of application
forms may be used by the same organization for different types of employees, e.g., one for
managers, the other for supervisors and a third for other employees. Some forms are simple,
general and easily answerable, while others may require elaborate, complex and detailed
information. Reference to nationality, race, caste, religion and place of birth has been regarded as
evidence of discriminatory attitudes and should be avoided. An application form should be
designed to serve as a highly effective preliminary screening device, particularly, when
applications arc received in direct response to an advertisement and without any preliminary
interview.
The application can be used in two ways: (i) to find out on the basis of information contained

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therein as to the chances of success of the candidate in the job for which he is applying, and (ii)
to provide a starting point for the interview.
It is often possible to reject candidates on the basis of scrutiny of the applications as they are
found to be lacking in educational standards, experience or some other relevant eligibility and
traits.
GetHired.com is the first job board to embed video capabilities directly into its social recruiting
platform so that job seekers can record and submit personal, dynamic responses to an employer's
most pressing pre-screening questions at the start of the hiring process.

As a result, employers are able to quickly find top candidates with good communication skills
who are a culturally fit for their organisation, he notes.
"GetHired.com combines the visibility of a job board with the functionality of an applicant
tracking system - allowing employers to find and pre-screen candidates using audio and video,
conduct interviews in real-time and manage the entire on boarding process," he said.
SELECTION TESTS A test is a sample of an aspect of an individual’s behavior, performance
or attitude. It can also be a systematic procedure for comparing the behavior of two or
more persons.
Purpose of Tests: The basic assumption underlying the use of tests in personnel selection is that
individuals are different in their job-related abilities and skills and that these skills can be
adequately and accurately measured.
Tests seek to eliminate the possibility of prejudice on the part of the interviewer or supervisor.
Potential ability only will govern selection decisions.
The other major advantage is that the tests may uncover qualifications and talents that would not
be detected by interviews or by listing of education and job experience.
Types of Tests: The various tests used in selection can be put in to four categories:
a) Achievement or Intelligence Tests,
b) Aptitude or Potential Ability Tests,
c) Personality Tests, and (d) Interest Tests.
These tests and what they measure are described below.
a) Achievement or Intelligence Tests
These are also called ‘proficiency tests’. These measure the skill or knowledge which is
acquired as a result of a training programme and on the job experience. These measure what the
applicant can do. These are of two types:
Test for Measuring job Knowledge: These are known as ‘Trade Tests’. These
are administered to determine knowledge of typing, shorthand and in operating calculators,
adding machines, dictating and transcribing machines or simple mechanical equipment. These
are primarily oral tests consisting of a series of questions which are believed to be satisfactorily
answered only by those who know and thoroughly understand the trade or occupation. Oral tests
may be supplemented by written, picture or performance types.
Work Sample Tests: These measure the proficiency with which equipment can be handled by
the candidate. This is done by giving him a piece of work to judge how efficiently he does it.
For example, a typing test would provide the material to be typed and note the time taken and
mistakes committed.
b) Aptitude or Potential Ability Tests
These tests measure the latent ability of a candidate to learn a new job or skill. Through these
tests you can detect peculiarity or defects in a person’s sensory or intellectual capacity. These

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focus attention on particular types of talent such as learning, reasoning and mechanical or
musical aptitude. ’Instruments’ used are variously described as tests of ‘intelligence’, ‘mental
ability’, ‘mental alertness’, or simply as ‘personnel tests’.
These are of three types:
i) Mental Tests: These measure the overall intellectual ability or the intelligence quotient
(I.Q.) of a person and enable us to know whether he has the mental capacity to deal with
new problems. These determine an employee’s fluency in language, memory, interaction,
reasoning, speed of perception, and spatial visualisation.
ii) Mechanical Aptitude Tests: These measure the capacity of a person to learn
a particular type of mechanical work. These are useful when apprentices, machinists,
mechanics, maintenance workers, and mechanical technicians are to be selected.
iii) Psychomotor or Skill Tests: These measure a person’s ability to do a specific job.
These are administered to determine mental dexterity or motor ability and similar
attributes involving muscular movement, control and coordination. These are primarily
used in the selection of workers who have to perform semi-skilled and repetitive jobs,
like assembly work, packing, testing, inspection and so on.
c) Personality Tests
These discover clues to an individual’s value system, his emotional reactions, maturity and his
characteristic mood. The tests help in assessing a person’s motivation, his ability to adjust
himself to the stresses of everyday life and his capacity for interpersonal relations and for
projecting an impressive image of himself. They are expressed in terms of the relative
significance of such traits of a person as self-confidence, ambition, tact, emotional control,
optimism, decisiveness, sociability, conformity, objectivity, patience, fear, distrust, initiative,
judgement, dominance, impulsiveness, sympathy, integrity, and stability. These tests are given
to predict potential performance and success for supervisory or managerial jobs. The
personality tests are basically of three types:

i) Objective Tests: These measure neurotic tendencies, self-sufficiency,

dominance, submission and self-confidence.
ii) Projective Tests: In these tests, a candidate is asked to project his own interpretation
onto certain standard stimuli. The way in which he responds to these stimuli depends on
his own values, motives and personality.
iii) Situation Tests: These measure an applicant’s reaction when he is placed in a peculiar
situation, his ability to undergo stress and his demonstration of ingenuity under pressure.
These tests usually relate to a leaderless group situation, in which some problems are
posed to a group and its members are asked to reach some conclusions without the help of
a leader.
d) Interest Tests
These tests are designed to discover a person’s areas of interest and to identify the kind of work
that will satisfy him. The interest tests are used for vocational guidance, and are assessed in the
form of answers to a well-prepared questionnaire.

Limitations of Selection Tests: From the basic description of tests described above, one should
not conclude that a hundred per cent prediction of an individual’s on-the job success can be made
through these tests. These tests, at best, reveal that candidates who have scored above the

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predetermined cut-off points are likely to be more successful than those who have scored below
the cut-off point.
Tests are useful when the number of applicants is large. Moreover, tests will serve no useful
purpose if they are not properly constructed or selected or administered. Precautions in using
Selection Tests: Test results can help in selecting the best candidates if the following precautions
are taken:
➢ Norms should be developed as a source of reference on all tests used in selection and on
a representative sample of people on a given job in the same organization. This is
necessary even though ‘standard’ tests are available now under each of the above
categories. Norms developed where should not be blindly used because companies differ
in their requirements, culture, organization structure and philosophy.
➢ Some ‘Warm up’ should be provided to candidates either by giving samples of test,
and/or answering queries before the test begins.
➢ Tests should first be validated for a given organization and then administered
for selection of personnel to the organization.
➢ Each test used should be assigned a weightage in the selection.
➢ Test scoring, administration and interpretation should be done by persons having
technical competence and training in testing.
INTERVIEW
Personal interview is the most universally used tool in employee selection process.
Women do better than men in job interviews
WASHINGTON: Women, although typically more stressed about interviewing, perform better
than their male counterparts in job interviews because they handle stress better than guys, say
researchers. That is the finding of new research by three University of Western Ontario
researchers who looked at how men and women handled the stresses of job interviews. More >>
The following are examples of the most commonly asked illegal job interview questions. Are
you married? Do you have children? How old are you? Did you graduate from high school or
college? Have you ever been arrested? How much do you weigh? What country are you
from? What is your native language? Are you handicapped?

Example: 29 questions asked in Amazon interviews

➢ If your direct manager was instructing you to do something you disagreed with, how
would you handle it?
➢ Describe what Human Resource means to you.
➢ What is the angle between the hour hand and minute hand in an analog clock?
➢ What is the worst mistake you ever made?
➢ Describe what Human Resource means to you.
➢ Do you know our CEO? How do you pronounce his name?
➢ Here's a string with numbers from 1-250 in random order, but it's missing one number.
How will you find the missed number?
➢ What would you do if somehow you misdirected 10,000 units of something?
➢ Are you willing to work on your feet for ten hours, four days a week?
➢ Do you think you'll reach a point where you storm off the floor and never return?
➢ Would you tell on a employee for stealing?

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 ➢ How would you solve problems if you were from Mars?
➢ How do you persuade people?
➢ Describe what happens in your browser as soon as you hit enter after writing a URL in
the address bar.
➢ Tell the story of the last time you had to apologize to someone.
➢ Walk me through how Amazon Kindle books would be priced.
➢ What would you do if you saw someone being unsafe at work?
➢ How would you improve Amazon's website?
➢ You have 30 people working under you with 2 working indirect. Each employee can do
150 units/hour. Each work day has two 15 min breaks and one 30 min lunch. In a 5 day
work week, how many total units can you complete?
➢ What is the most difficult situation you have ever faced in your life? How did you handle
it?
➢ How would you tell a customer what Wi-Fi is?
➢ You are Amazon and Samsung offers you 10,000 Samsung Galaxy S3s at a 34%
discount. Is that a good deal?Design an online payment system.
➢ Design an online payment system.

➢ Give me an example of a time when you were 75% of the way through a project, and you
had to pivot strategy -- how were you able to make that into a success story?
➢ Should we sell private label cleaning products?
➢ What would you do if you found out that your closest friend at work was stealing?
➢ Which Amazon leadership principle do you resonate most with?

Meaning and Purpose:

Interview is the process of interaction between two parties who are interviewer/interviewers and
interviewee. Interviewer is a person/employer who does interview to candidates seeking job.
Interviewee is a person who gets interviewed by the interviewer/interviewers. The very purpose
of calling the candidates for interview is to see candidates face-to-face and to know his or her
attitude, behaviour, communication skills, personal/family details, work experience, interests and
hobbies, subject knowledge. Sometimes interview might be platform to negotiate salary and
other benefits offered to candidate if got selected. In stage of an interview, candidate may not be
stressed on questions related to various related subjects because the candidate has been already
passed through those tests and proved, hence called for interview. The most common interview
mistake that job candidates make is talking too much during the interview, according to a recent
survey of recruiters conducted by executive search firm Korn/Ferry International. Other common
mistakes cited by recruiters include lack of knowledge about the company or position, over-
inflated ego and appearing overly confident.
Types of Interview
Informal Interview: This is may take place anywhere. The employer or a manager in the
personnal department, may ask a few questions, like name, place of birth, previous experience,
etc. It is not planned and is used widely when the labour market is tight and you need workers
very badly. A friend or a relative of the employer may take a candidate to the house of the
employer or manager where this type of interview may be conducted.

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Formal Interview: This held in a more formal atmosphere in the employment office by the
employment officer with the help of well-structured questions. The time and place of the
interview are stipulated by the employment office.
Planned Interview: This is a formal interview carefully planned. The interviewer has a plan of
action worked out in relation to time to be devoted to each candidate, type of information to be
sought, information to be given, the modality of interview and so on. He may use the plan with
some amount of flexibility.
Patterned Interview: This is also a planned interview but planned to a higher degree of
accuracy, precision and exactitude. A list of questions and areas are carefully prepared. The
interviewer goes down the list of questions, asking them one after another.
Non-directive Interview: This is designed to let the interviewee speak his mind freely. The
interviewer is a careful and patient listener, prodding whenever the candidate is silent. The idea
is to give the candidate complete freedom to ‘sell’ himself without encumbrances of the
interviewer’s questions.
Depth Interview: This is designed to intensively examine the candidate’s background and
thinking and to go into considerable detail on a particular subject to special interest to the
candidate. The theory behind it is that if the candidate is found good in his area of special
interest, the chances are high that if given a job he would take serious interest in it.
Stress Interview: This is designed to test the candidate and his conduct and behavior by putting
him under conditions of stress and strain. This is very useful to test the behavior of individuals
under disagreeable and trying situations.
Group Interview: This is designed to see how the candidates react to and against each other. All
the candidates may be brought together in the office and they may be interviewed. The
candidates may, alternatively, be given a topic for discussion and be observed as to who will
lead the discussion, how they will participate in the discussion, how each will make his
presentation and how they will react to each other’s views and presentation.
Panel Interview: This is done by members of the interview board or a selection committee.
This is done usually for supervisory and managerial positions. It pools the collective judgement
and wisdom of members of the panel. The candidate may be asked to meet the panel
individually for a fairly lengthy interview.
Sample interview questions
To know more about various types of interview questions may be put for inexperienced and
freshers, click side heading of Sample interview questions. This website consisting questions of
interview questions, may be helpful for yourself to prepare and have an idea, before facing an
interview for the first time.
A panel job interview is considered the most stressful for job candidates as they face multiple
interviewers who take turns asking questions. Panel interviews are more time efficient and allow
decision makers to obtain the same information for making a hiring decision. Panel interviews
require proper planning in order to avoid duplicate questions and to establish a rapport during the
interview.

Behavioral (experience-based or patterned behavioral) interviews are past-oriented in

that they ask respondents to relate what they did in past jobs or life situations that are
relevant to the particular job relevant knowledge, skills, and abilities required for success
The idea is that past behavior is the best predictor of future performance in similar
situations. By asking questions about how job applicants have handled situations in the
past that are similar to those they will face on the job, employers can gauge how they
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 might perform in future situations. Behavioral job interviewing was developed in the
1970s. Nearly 30% of all organizations use behavioral interviewing to some degree.

Eighty-five percent of all job failures are due to lack of appropriate work habits or behavioral
issues rather than lack of technical skills. Most HR experts believe that "behavior-based" job
interview techniques provide indicators of a future success. Asking a job candidate how they did
something, in addition to what they did, can reveal key aspects of their personalities.
Structured job interview
Structured job interview techniques rely on pre-established questions and answers based on job
descriptions and requirements. Job candidate responses to questions are rated against the pre-
established answers, producing comparable interviews across all candidates. Structured job
interviewing also keeps job interviews on track in terms of time and subject matter.

Interview Rating: Important aspects of personality can be categorized under the following
seven main headings:

• Physical Make-up: Health, physique, age, appearance, bearing, speech.

• Attainments: Education, occupational training and experience.
• Intelligence: Basic and ‘effective’.
• Special Aptitudes: Written and oral fluency of expression, numeracy, organizational
ability, administrative skill.
• Interests: Intellectual, practical, physically active, social, artistic
• Disposition: Self-reliance, nature, motivation, acceptability.
• Circumstances: Domestic, social background and experience, future prospects.
This is called ‘The Seven Point Plan’. The importance of each of these points will vary from
organization to organization and from job to job. Hence, these should be assigned weight-age
according to their degree of importance for the job. On the basis of information gathered
through an interview, each candidate should be rated in respect of each point given above as: (i)
outstanding, (ii) good, (iii) above average, (iv) below average or (v) unsatisfactory. Marks
should be allotted to each of these, and the score for each point is arrived at by multiplying it by
weights and the total of all these will determine the final position of a candidate at the interview.
➢ PHYSICAL EXAMINATION
➢ Applicant who get over one or more of the preliminary hurdles are sent for a physical
examination either to the organization’s physician or to a medical officer approved for
the purpose.

Purposes: A physical examination serves the following purposes:

➢ It gives an indication regarding fitness of a candidate for the job concerned.
➢ It discovers existing disabilities and obtains a record thereof, which may be
➢ helpful later in deciding the campany’s responsibility in the event of a workman’s
compensation claim.
➢ It helps in preventing employment of those suffering from some type of contagious
diseases.
➢ It helps in placing those who are otherwise employable but whose physical handicaps
may necessitate assignment only to specified jobs.
➢ Physical examination covers the following:
➢ The applicant’s medical history.
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 ➢ His physical measurements—height, weight, etc.
➢ General examination—skin, musculature and joints.
➢ Specia1 senses—visual and auditory activity.
➢ Clinical examination—eyes, ears, nose, throat and teeth.
➢ Examination of chest and lungs.
➢ Check-up of blood pressure and heart.
➢ Pathological tests of urine, blood etc.
➢ X-ray examination of chest and other parts of the body.
➢ Neuro-psychiatric examination, particularly when medical history or a physician’s
observations indicate an adjustment problem.
➢ You would realize that the importance of these characteristics varies from job to job and,
therefore, different weightages have to be given to each far an overall evaluation.

REFERENCE CHECKS

The applicant is asked to mention in his application the names and addresses of three such
persons who usually know him well. These may be his previous employers, friends, or
professional colleagues. They are approached by mail or telephone and requested ta furnish their
frank opinion, without incurring any liability, about the candidate either on specified points or in
general. They are assured that all information supplied would be kept confidential. Yet, often
either no response is received or it is generally a favorable response.

According to a Society for Human Resource Management survey of human resources

professionals, employee referral programs (ERPs) were found to be one of the most cost-
effective recruiting methods available. Eight of ten survey respondents said that ERPs are more
cost-effective than job search firms. Seven of ten said they are more cost-effective than other
recruiting practices.
BACK GROUND VERIFICATION

The background screening process involves carrying out checks at different levels, from
education, employment, address check and criminal record to reference checks, checks against
global regulatory and compliance databases, identity checks, drug testing, and resume validation.
The companies entered into employee background verification services in 2010 because of fake
documents, degrees from fake universities or unrecognised colleges are the major educational
discrepancies. For example, at entry level, candidates may only have their last/highest
educational qualification, current address, drug and criminal checks conducted; while for
candidates at relatively senior levels, checks such as more than one educational qualification,
addresses for five to seven years, drug tests, criminal checks, regulatory and compliance database
checks and employment checks are conducted. Presumption that out of 10 resumes 4 or having
fake information regarding the job experience and academic qualifications. Due to this recruiters
are now employing specialised agencies which have newly come-up for background verification
of candidates, this is because of raise in number of fresh graduates seeking employment and
employees those who want shift their career with increase in salary

Five ways to conduct informal employee checks

Background and reference checks have become the golden rule of hiring in large companies due
to instances of fraud or inflated cvs, but come with heavy costs. ET shares how one can save

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through informal background checks.
Scan social networks
Social networking sites like Facebook, LinkedIn, Twitter or Orkut can be a happy hunting
ground to find out about a candidate's details. "Facebook and LinkedIn are two forums which
give real feedback about a candidate, since the references they give will always hold them in
good stead," says HR firm Aspire Human Capital CEO Amit Bhatia.
Job-seekers asked for Facebook passwords
SEATTLE: When Justin Bassett interviewed for a new job, he expected the usual questions
about experience and references. So he was astonished when the interviewer asked for something
else: his Facebook username and password.

Bassett, a New York City statistician, had just finished answering a few character questions
when the interviewer turned to her computer to search for his Facebook page. But she couldn't
see his private profile. She turned back and asked him to hand over his login information.Bassett
refused and withdrew his application, saying he didn't want to work for a company that would
seek personal information. But as the job market steadily improves, other job candidates are
confronting the same question from prospective employers, and some of them cannot afford to
say no. In their efforts to vet applicants, some companies and government agencies are going
beyond merely glancing at a person's social networking profiles and instead asking to log in as
the user to have a look around.
"It's akin to requiring someone's house keys," said Orin Kerr, a George Washington University
law professor who calls it "an egregious privacy violation." Questions have been raised about the
legality of the practice, which is also the focus of proposed legislation in Illinois and Maryland
that would forbid public agencies from asking for access to social networks.
Use your connections
Try and leverage your own business network and contacts to find out more about a candidate.
"The network will always give rational feedback on a candidate. One can also tap business
contacts in the same company where the prospective candidate is currently employed to get as
much details," says Ma Foi Randstad MD & CEO E Balaji.
Just run a search
Sometimes, an internet search about a candidate can throw up information that can help you form
an opinion about a candidate. This is more so for middle and senior managers. These days,
several professionals are affiliated with professional organisations. "A call, email or visit to such
affiliate organisations will provide details and help to verify qualifications and work experience,"
says Reshmi Ghosh, an HR consultant.
Devote time
HR experts suggest spending as much time on undertaking a background check as on
interviewing a candidate.
PLACEMENT Sometimes a particular person is selected for a given jab. Often more than one
person may be selected for the jobs of similar nature. In the second case, individual employees
have to be put under individual supervisors with the approval of the latter. In the first case also
his approval is also necessary but it should be done early in the selection process.
A proper placement reduces employee turnover, absenteeism and accident rates and improves
morale. ADP Screening and Selection Services conducted nearly five million employee
background checks last year. Forty-nine percent of the education, employment, and credential
verifications had inconsistencies between what the applicants provided and what the source

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reported. Six percent of the information differences were received with negative remarks from
the source inregard to the applicant.

Hunting talent via business games

Companies are introducing different selection methods for finding talented graduates. Cosmetics
major L'Oreal has been producing a series of business games and the case studies over the past
few years are discovering talented management graduates, example 'Brandstorm' is its flagship
game for marketing students, the game is targeted at under-25 age first-year marketing students.
Regarding case studies, L'Oreal is sending three case studies to the management institutes on its
banks and students are expected to make presentations based on

Recruitment

Recruitment (hiring) is a core function of human resource management.[1] Recruitment refers to

the overall process of attracting, selecting and appointing suitable candidates for jobs (either
permanent or temporary) within an organization.[2] Recruitment can also refer to processes
involved in choosing individuals for unpaid positions, such as voluntary roles or unpaid trainee
roles. Managers, human resource generalists and recruitment specialists may be tasked with
carrying out recruitment, but in some cases public-sector employment agencies, commercial
recruitment agencies, or specialist search consultancies are used to undertake parts of the
process. Internet-based technologies to support all aspects of recruitment have become
widespread.

Job analysis

In situations where multiple new jobs are created and recruited for the first time or vacancies are
there or the nature of a job has substantially changed, a job analysis might be undertaken to
document the knowledge, skills, abilities and other characteristics (KSAOs) required or sought
for the job. From these the relevant information is captured in such documents as job
descriptions and job specifications. Often, a company already has job descriptions for existing
positions. Where already drawn up, these documents may require review and updating to reflect
current requirements. Prior to the recruitment stage, a person specification should be finalized to
provide recruiters with the project's requirements and objectives.

Sourcing

Sourcing is the use of one or more strategies to attract or identify candidates to fill job vacancies.
It may involve internal and/or external recruitment advertising, using appropriate media, such as
job portals,local or national newspapers, specialist recruitment media, professional publications,
window advertisements, job centers, or in a variety of ways via the internet. Alternatively,
employers may use recruitment consultancies or agencies to find otherwise scarce candidates—
who, in many cases, may be content in their current positions and are not actively looking to
move. This initial research for candidates—also called name generation—produces contact
information for potential candidates, whom the recruiter can then discreetly contact and screen.

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Screening and selection

Various psychological tests can assess a variety of KSAOs, including literacy. Assessments are
also available to measure physical ability. Recruiters and agencies may use applicant tracking
systems to filter candidates, along with software tools for psychometric testing and performance-
based assessment.[6] In many countries, employers are legally mandated to ensure their screening
and selection processes meet equal opportunity and ethical standards. In order to significantly
improve the candidate evaluation and selection process, Buettner proposed a recruitment
framework for searching online social networks. Employers are likely to recognize the value of
candidates who encompass soft skills such as interpersonal or team leadership.[7] Many
companies, including multinational organizations and those that recruit from a range of
nationalities, are also often concerned about whether candidate fits the prevailing company
culture.

Disabled candidates

The word disability carries few positive connotations for most employers. Research has shown
that employer biases tend to improve through first-hand experience and exposure with proper
supports for the employee[9] and the employer making the hiring decisions. As for most
companies, money and job stability are two of the contributing factors to the productivity of a
disabled employee, which in return equates to the growth and success of a business. Hiring
disabled workers produce more advantages than disadvantages. There is no difference in the
daily production of a disabled worker.[1] Given their situation, they are more likely to adapt to
their environmental surroundings and acquaint themselves with equipment, enabling them to
solve problems and overcome adversity as with other employees. The U.S. IRS grants companies
Disabled Access Credit when they meet eligibility criteria.

Approaches

Internal recruitment (not to be confused with internal recruiters!) refers to the process of a
candidate being selected from the existing workforce to take up a new job in the same
organization, perhaps as a promotion, or to provide career development opportunity, or to meet a
specific or urgent organizational need. Advantages include the organization's familiarity with the
employee and their competencies insofar as they are revealed in their current job, and their
willingness to trust said employee. It can be quicker and have a lower cost to hire someone
internally. An employee referral program is a system where existing employees recommend
prospective candidates for the job offered, and in some organizations if the suggested candidate
is hired, the employee receives a cash bonus. Niche firms tend to focus on building ongoing
relationships with their candidates, as the same candidates may be placed many times throughout
their careers. Online resources have developed to help find niche recruiters. Niche firms also
develop knowledge on specific employment trends within their industry of focus (e.g., the energy
industry) and are able to identify demographic shifts such as aging and its impact on the industry.
Social recruiting is the use of social media for recruiting including sites like Facebook and
Twitter or career-oriented social networking sites such as LinkedIn and XING. It is a rapidly

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growing sourcing technique, especially with middle-aged people. On Google+, the fastest-
growing age group is 45–54. On Twitter, the expanding generation is people from ages 55–
64.Mobile recruiting is a recruitment strategy that uses mobile technology to attract, engage and
convert candidates. Mobile recruiting is often cited as a growing opportunity for recruiters to
connect with candidates more efficiently with "over 89% of job seekers saying their mobile
device will be an important tool and resource for their job search." Some recruiters work by
accepting payments from job seekers, and in return help them to find a job. This is illegal in
some countries, such as in the United Kingdom, in which recruiters must not charge candidates
for their services (although websites such as LinkedIn may charge for ancillary job-search-
related services). Such recruiters often refer to themselves as "personal marketers" and "job
application services" rather than as recruiters.

Applicant tracking system

An applicant tracking system (ATS) is a software application that enables the electronic
handling of recruitment needs. An ATS can be implemented or accessed online on an enterprise
or small business level, depending on the needs of the company and there is also free and open
source ATS software available. An ATS is very similar to customer relationship management
(CRM) systems, [1] but are designed for recruitment tracking purposes. In many cases they filter
applications automatically based on given criteria such as keywords, skills, former employers,
years of experience and schools attended.[2] This has caused many to adapt resume optimization
techniques similar to those used in search engine optimization when creating and formatting their
résumé.

Principle

Almost all recruitment agencies and most major corporations with an in-house recruitment
function use some form of applicant tracking system to handle job postings, applicants, resumes,
interviews. A dedicated ATS is not uncommon for recruitment specific needs. On the enterprise
level it may be offered as a module or functional addition to a human resources suite or Human
Resource Information System (HRIS). The ATS is expanding into small and medium enterprises
through open source or software as a service offerings (SaaS).The principal function of an ATS
is to provide a central location and database for a company's recruitment efforts. ATSs are built
to better assist management of resumes and applicant information. Data is either collected from
internal applications via the ATS front-end, located on the company website or is extracted from
applicants on job boards. The majority of job and resume boards (Monster.com, Hotjobs,
CareerBuilder, Indeed.com) have partnerships with ATS software providers to provide parsing
support and ease of data migration from one system to another. Recent enhancements include use
of artificial intelligence (AI) tools and natural language processing (NLP) to facilitate intelligent
guided semantic search capabilities offered through cloud based platforms that allow companies
to score and sort resumes with better alignment to the job requirements and descriptions. With
the advent of ATS, resume optimization techniques and online tools are now used by applicants
to increase their chances of landing an interview call.

Benefits

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Functionality of an ATS is not limited to data mining and collection; ATS applications in the
recruitment industry include the ability to automate the recruitment process via a defined
workflow.Another benefit of an applicant tracking system is analyzing and coordinating
recruitment efforts - managing the conceptual structure known as human capital. A corporate
career site or company specific job board module may be offered, allowing companies to provide
opportunities to internal candidates prior to external recruitment efforts. Candidates may be
identified via pre-existing data or through information garnered through other means. This data is
typically stored for search and retrieval processes. Some systems have expanded offerings that
include off-site encrypted resume and data storage, which are often legally required by equal
opportunity employment laws.

Applicant tracking systems may also be referred to as talent acquisition and management
products (TAMP) and are often provided via an application service provider or software as a
service (SaaS) model.[7] The level of service and cost can vary greatly across providers. In the
UK and Ireland, Applicant Tracking Systems which are specifically for Agency Recruiters are
often referred to as Recruitment Software and this is a term used mainly in the recruitment
agency industry (representative bodies include the REC in the UK and the NRF in Ireland).
Although proprietary systems dominate the ATS space, there are open-source alternatives.As the
data held within recruitment software is predominantly personal data, it is often tightly controlled
by data protection legislation, preventing the data from being held offshore, which frequently
places a legal restriction on the use of SaaS offerings.

Candidate submittal

Candidate Submittal is an alternative recruitment process offered by companies whereby the

candidate submittal agency provides coaching for the job seeker with respect to his or her job
application. The job seeker usually sources their own prospective job opportunity, before
applying for it through the candidate submittal agency, which is usually run by ex-recruitment
professionals or other industry veterans. The candidate submittal service will often vet, edit or
enhance the job seekers application before passing it on to the employer. The service will then
act on behalf of the job seeker in the negotiations and would also may help prepare the job seeker
for an interview process or other pre-interview engagement. They would also provide any
relevant feedback to the job seeker with regards to his or her application. If the job seeker is
hired , the candidate submittal agency may refund a portion of the sign-on fee back to the job
seeker, usually in recognition of the fact that the candidate has completed some of the
recruitment process themselves by sourcing their own jobs.

The Market

Companies will generally employ a number of different methods to fill their recruitment needs
including employee referral, company websites, recruitment agencies and job boards. Generally,
it's found that around 27.1% of recruitment is done through employee referral - making it the
largest source of company recruitment,[1] with standard recruitment making up around 5.2% of
overall recruitment.The future of the recruitment industry is generally considered by industry
analysts to be in 'Career Networks', that can provide employee's with the backup necessary to

214
optimize their job searching process - including having access to a 'career coach', utilizing niche
recruitment channels, building a profile and receiving positive feedback.

Candidate Submittal vs Agency Recruitment

Candidate Submittal came about because the standard recruitment model was perceived by some
in the recruitment industry as being wasteful and providing poor value to both employers and job
seekers. It was argued by these individuals that the standard recruitment model was never meant
to be an extension of a company HR department, nor was it designed to accommodate the market
share which it currently holds in the recruitment industry and to become the de facto standard for
general mass-recruitment needs. They argued that the recruiter in a standard agency is cast both
as a 'career coach' by the job seeker and as an 'industry specialist' by the employer. Whereas in
fact the recruiter is ill-suited to fulfill either of these rules.Candidate Submittal agencies aim to
re-cast the role of a recruiter into more of a background setting. Using a candidate submittal
service, the client will receive feedback and advice with regards to their application. They will
not however be interviewed or matched to a position by the candidate submittal agency.A
candidate submittal service will usually offer a substantial discount over standard agency
recruitment. Also, because it aims to compensate job seekers for the time they spend sourcing
their own opportunities. It means that job seekers are less inclined to leave this job matching
process to a recruiter who may or may not be suitably qualified to determine whether a certain
candidate fits a certain position. Also since candidate submittal effectively removes the middle
man in the recruitment process ( the recruiter ). It can serve to speed up the process in general
and provide more meaningful feedback to the job seeker.

Criticisms

While candidate submittal can help to cut down on recruitment costs for an employer and help to
make the job hunting process more efficient, it does require the candidates to spend time
sourcing their own employment opportunities, a job that would typically be left to the recruiter to
complete.However it should also be noted that most job seekers only use recruitment agencies as
one source of job finding and will typically use the Internet or company job sites to source their
own opportunities anyway.

Candidate submittal

Candidate Submittal is an alternative recruitment process offered by companies whereby the

candidate submittal agency provides coaching for the job seeker with respect to his or her job
application.The job seeker usually sources their own prospective job opportunity, before
applying for it through the candidate submittal agency, which is usually run by ex-recruitment
professionals or other industry veterans. The candidate submittal service will often vet, edit or
enhance the job seekers application before passing it on to the employer. The service will then
act on behalf of the job seeker in the negotiations and would also may help prepare the job seeker
for an interview process or other pre-interview engagement. They would also provide any
relevant feedback to the job seeker with regards to his or her application. If the job seeker is
hired, the candidate submittal agency may refund a portion of the sign-on fee back to the job

215
seeker, usually in recognition of the fact that the candidate has completed some of the
recruitment process themselves by sourcing their own jobs.

The Market

Companies will generally employ a number of different methods to fill their recruitment needs
including employee referral, company websites, recruitment agencies and job boards. Generally,
it's found that around 27.1% of recruitment is done through employee referral - making it the
largest source of company recruitment,[1] with standard recruitment making up around 5.2% of
overall recruitment.The future of the recruitment industry is generally considered by industry
analysts to be in 'Career Networks',[2] that can provide employee's with the backup necessary to
optimize their job searching process - including having access to a 'career coach', utilizing niche
recruitment channels, building a profile and receiving positive feedback.

Candidate Submittal vs Agency Recruitment

Candidate Submittal came about because the standard recruitment model was perceived by some
in the recruitment industry as being wasteful and providing poor value to both employers and job
seekers. It was argued by these individuals that the standard recruitment model was never meant
to be an extension of a company HR department, nor was it designed to accommodate the market
share which it currently holds in the recruitment industry and to become the de facto standard for
general mass-recruitment needs. They argued that the recruiter in a standard agency is cast both
as a 'career coach' by the job seeker and as an 'industry specialist' by the employer. Whereas in
fact the recruiter is ill-suited to fulfill either of these rules.Candidate Submittal agencies aim to
re-cast the role of a recruiter into more of a background setting. Using a candidate submittal
service, the client will receive feedback and advice with regards to their application. They will
not however be interviewed or matched to a position by the candidate submittal agency.A
candidate submittal service will usually offer a substantial discount over standard agency
recruitment. Also, because it aims to compensate job seekers for the time they spend sourcing
their own opportunities. It means that job seekers are less inclined to leave this job matching
process to a recruiter who may or may not be suitably qualified to determine whether a certain
candidate fits a certain position. Also since candidate submittal effectively removes the middle
man in the recruitment process ( the recruiter ). It can serve to speed up the process in general
and provide more meaningful feedback to the job seeker.

Criticisms

While candidate submittal can help to cut down on recruitment costs for an employer and help to
make the job hunting process more efficient, it does require the candidates to spend time
sourcing their own employment opportunities, a job that would typically be left to the recruiter to
complete.However it should also be noted that most job seekers only use recruitment agencies as
one source of job finding and will typically use the Internet or company job sites to source their
own opportunities anyway.

Personality–job fit theory

216
The personality–job fit theory postulates that a person's personality traits will reveal insight as
to adaptability within an organization. The degree of confluence between a person and the
organization is expressed as their Person-Organization (P-O) fit. This is also referred to as a
person–environment fit. A common measure of the P-O fit is workplace efficacy; the rate at
which workers are able to complete tasks. These tasks are mitigated by workplace environs- for
example, a worker who works more efficiently as an individual than in a team will have a higher
P-O fit for a workplace that stresses individual tasks (such as accountancy).[1] By matching the
right personality with the right job, company workers can achieve a better synergy and avoid
pitfalls such as high turnover and low job satisfaction. Employees are more likely to stay
committed to organizations if the fit is 'good'.In practice, P-O fit would be used to gauge
integration with organizational competencies. The Individual is assessed on these competencies,
which reveals efficacy, motivation, influence, and co-worker respect. Competencies can be
assessed using various tools like psychological tests, assessment centres competency based
interview, situational analysis, etc.If the Individual displays a high P-O fit, we can say that the
Individual would most likely be able to adjust to the company environment and work culture,
and would be able to perform at an optimum level.Buettner proposed a framework for
recommender systems searching online social networks for future employees that covers the
whole P-O fit. The framework show how the candidate's personality traits and the organization's
culture traits can be automatically extracted from online social networks.

Induction Programme

An induction programme is the process used within many businesses to welcome new
employees to the company and prepare them for their new role.Induction training should,
according to TPI-theory, include development of theoretical and practical skills, but also meet
interaction needs that exist among the new employees. An Induction Programme can also include
the safety training delivered to contractors before they are permitted to enter a site or begin their
work. It is usually focused on the particular safety issues of an organisation but will often include
much of the general company information delivered to employees.

Benefits

An induction programme is an important process for bringing staff into an organisation. It

provides an introduction to the working environment and the set-up of the employee within the
organisation. The process will cover the employer and employee rights and the terms and
conditions of employment. As a priority the induction programme must cover any legal and
compliance requirements for working at the company and pay attention to the health and safety
of the new employee.An induction programme is part of an organisations knowledge
management process and is intended to enable the new starter to become a useful, integrated
member of the team, rather than being "thrown in at the deep end" without understanding how to

217
do their job, or how their role fits in with the rest of the company.Good induction programmes
can increase productivity and reduce short-term turnover of staff. These programs can also play a
critical role under the socialization to the organization in terms of performance, attitudes and
organizational commitment.[2] In addition well designed induction programmes can significantly
increase the speed to competency of new employees thus meaning they are more productive in a
shorter period of time.

A typical induction programme

A typical induction programme will include at least some of the following:

➢ any legal requirements (for example in the, some Health and Safety training is obligatory)
➢ any regulatory requirements (for example in the banking sector certain forms need to be
completed)
➢ introduction to terms and conditions (for example, holiday entitlement, how to make
expense claims, etc.)
➢ a basic introduction to the company, and how the particular department fits in
➢ a guided tour of the building
➢ completion of government requirements (for example in submission of a P45 or P60)
➢ set-up of payroll details
➢ introductions to key members of staff
➢ specific job-role training

Best practice

In order to fully benefit the company and employee, the induction programme should be planned
in advance. The timetable should be prepared, detailing the induction activities for a set period of
time (ideally at least a week) for the new employee, including a named member of staff who will
be responsible for each activity. This plan should be circulated to everyone involved in the
induction process, including the new starter. If possible it should be sent to the new starter in
advance, if not co-created with the new starter. .It is also considered best practice to assign a
buddy to every new starter. If possible this should be a person who the new starter will not be
working with directly, but who can undertake some of the tasks on the induction programme, as
well as generally make the new employee feel welcome. (For example, by ensuring they are
included in any lunchtime social activities.)

On boarding

On boarding, also known as organizational socialization, refers to the mechanism through

which new employees acquire the necessary knowledge, skills, and behaviors to become
effective organizational members and insiders.[1] Tactics used in this process include formal
meetings, lectures, videos, printed materials, or computer-based orientations to introduce
newcomers to their new jobs and organizations. Research has demonstrated that these
socialization techniques lead to positive outcomes for new employees such as higher job
satisfaction, better job performance, greater organizational commitment, and reduction in
occupational stress and intent to quit. These outcomes are particularly important to an

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organization looking to retain a competitive advantage in an increasingly mobile and globalized
workforce. In the United States, for example, up to 25% of workers are organizational
newcomers engaged in an onboarding process. The term Induction is used instead in regions
such as Australia, New Zealand parts of Europe and Canada.

Antecedents of success

On boarding is a multifaceted operation influenced by a number of factors pertaining to both the

individual newcomer and the organization. Researchers have separated these factors into three
broad categories: new employee characteristics, new employee behaviors, and organizational
efforts.[7] New employee characteristics are individual differences across incoming workers,
ranging from personality traits to previous work experiences. New employee behaviors refer to
the specific actions carried out by newcomers as they take an active role in the socialization
process. Finally, organizational efforts help facilitate the process of acclimating a new worker to
an establishment through activities such as orientation or mentoring programs.

New employee characteristics

Research has shown evidence that employees with certain personality traits and experiences
adjust to an organization more quickly. These are a proactive personality, the "Big Five",
curiosity, and greater experience levels."Proactive personality" refers to the tendency to take
charge of situations and achieve control over one's environment. This type of personality
predisposes some workers to engage in behaviors such as information seeking that accelerate the
socialization process, thus helping them to adapt more efficiently and become high-functioning
organizational members.[1] Empirical evidence also demonstrates that a proactive personality is
related to increased levels of job satisfaction and performance. The Big Five personality traits—
openness, conscientiousness, extraversion, agreeableness, and neuroticism—have been linked to
on boarding success, as well. Specifically, new employees who are proactive or particularly open
to experience are more likely to seek out information, feedback, acceptance, and relationships
with co-workers. They also exhibit higher levels of adjustment and tend to frame events more
positively. Curiosity also plays a substantial role in the newcomer adaptation process and is
defined as the "desire to acquire knowledge" that energizes individual exploration of an
organization's culture and norms.[11] Individuals with a curious disposition tend to frame
challenges in a positive light and eagerly seek out information to help them make sense of their
new organizational surroundings and responsibilities, leading to a smoother on boarding
experience. Employee experience levels also affect the on boarding process such that more
experienced members of the workforce tend to adapt to a new organization differently from, for
example, a new college graduate starting his or her first job. This is because seasoned employees
can draw from past experiences to help them adjust to their new work settings and therefore may
be less affected by specific socialization efforts because they have (a) a better understanding of
their own needs and requirements at work (2002). and (b) are more familiar with what is
acceptable in the work context. Additionally, veteran workers may have used their past
experiences to seek out organizations in which they will be a better fit, giving them an immediate
advantage in adapting to their new jobs.

New employee behaviors

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Certain behaviors enacted by incoming employees, such as building relationships and seeking
information and feedback, can help facilitate the onboarding process. Newcomers can also
quicken the speed of their adjustment by demonstrating behaviors that assist them in clarifying
expectations, learning organizational values and norms, and gaining social acceptance.
Information seeking occurs when new employees ask questions of their co-workers and superiors
in an effort to learn about their new job and the company's norms, expectations, procedures, and
policies. Miller and Jablin (1991) developed a typology of information sought after by new hires.
These include referent information, understanding what is required to function on the job (role
clarity); appraisal information, understanding how effectively the newcomer is able to function
in relation to job role requirements (self-efficacy); and finally, relational information,
information about the quality of relationships with current organizational employees (social
acceptance). By actively seeking information, employees can effectively reduce uncertainties
about their new jobs and organizations and make sense of their new working environments.[17]
Newcomers can also passively seek information via monitoring their surroundings or by simply
viewing the company website or handbook. Research has shown that information seeking by
incoming employees is associated with social integration, higher levels of organizational
commitment, job performance, and job satisfaction in both individualistic and collectivist
cultures. Feedback seeking is similar to information seeking, but it is focused on a new
employee's particular behaviors rather than on general information about the job or company.
Specifically, feedback seeking refers to new employee efforts to gauge how to behave in their
new organization. A new employee may ask co-workers or superiors for feedback on how well
he or she is performing certain job tasks or whether certain behaviors are appropriate in the
social and political context of the organization. In seeking constructive criticism about their
actions, new employees learn what kinds of behaviors are expected, accepted, or frowned upon
within the company or work group, and when they incorporate this feedback and adjust their
behavior accordingly, they begin to blend seamlessly into the organization.[19] Instances of
feedback inquiry vary across cultural contexts such that individuals high in self-assertiveness and
cultures low in power distance report more feedback seeking than newcomers in cultures where
self-assertiveness is low and power distance is high. Also called networking, relationship
building involves an employee's efforts to develop camaraderie with co-workers and even
supervisors. This can be achieved informally through simply talking to their new peers during a
coffee break or through more formal means such as taking part in pre-arranged company events.
Research has shown relationship building to be a key part of the onboarding process, leading to
outcomes such as greater job satisfaction and better job performance,[2] as well as decreased
stress.

Organization socialization efforts

Organizations also invest a great amount of time and resources into the training and orientation
of new company hires. Organizations differ in the variety of socialization activities they offer in
order to integrate productive new workers. Possible activities include their socialization tactics,
formal orientation programs, recruitment strategies, and mentorship opportunities.

Socialization tactics

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Socialization tactics, or orientation tactics, are designed based on an organization's needs, values,
and structural policies. Some organizations favor a more systematic approach to socialization,
while others follow a more "sink or swim" approach in which new employees are challenged to
figure out existing norms and company expectations without guidance.

Van Maanen and Schein model (1979)

John Van Maanen and Edgar H. Schein have identified at least six major tactical dimensions that
characterize and represent all of the ways in which organizations may differ in their approaches
to socialization.

Collective versus Individual socialization: Collective socialization refers to the process of

taking a group of recruits who are facing a given boundary passage and putting them through the
same set of experiences together. Examples of this include: basic training/boot camp for a
military organization, pledging for fraternities/sororities, education in graduate schools, and so
forth. Socialization in the Individual mode allows newcomers to accumulate unique experiences
separate from other newcomers. Examples of this process include: Apprenticeship programs,
specific internships, "on-the-job" training, etc.
Formal vs. Informal socialization: Formal socialization refers to those tactics in which
newcomers are more or less segregated from others and trained on the job. These processes can
be witnessed with such socialization programs as police academies, internships, and
apprenticeships. Informal socialization processes, on the other hand, involve little separation
between newcomers and the existing employees, nor is there any effort made to distinguish the
newcomer’s role specifically. Informal tactics provides a non-interventional environment for
recruits to learn their new roles via trial and error. Examples of informal socialization include on-
the-job training assignments, apprenticeship programs with no clearly defined role, and more
generally, any situation in which a newcomer is placed into a work group with no recruit role.[21]
Sequential vs. Random socialization: Sequential socialization refers to the degree to which an
organization or occupation specifies discrete and identifiable steps for the newcomers to know
what phases they need to go through. Random socialization occurs when the sequences of steps
leading to the targeted role are unknown, and the entire progression is quite ambiguous. In other
words, while there are numerous steps or stages leading to specific organizational roles, there is
necessarily no specific order in which the steps should be taken.
Fixed vs. Variable socialization: This dimension refers to the extent to which the steps have a
timetable developed by the organization and communicated to the recruit in order to convey
when the socialization process is complete. Fixed socialization provides a recruit with the exact
knowledge of the time it will take complete a given passage. For instance, some management
trainees can be put on " fast tracks" where they are required to accept new rotational assignment
on an annual basis despite their own preferences. Variable socialization processes gives a
newcomer no specific timetable, but a few clues as to when to expect a given boundary passage.
This type of socialization is commonly associated upwardly mobile careers within business
organizations because of several uncontrolled factors such as the state of the economy or
turnover rates which determine whether any given newcomer will be promoted to a higher level
or not.

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Serial vs. Disjunctive socialization: A serial socialization process refers to experienced
members of the organization grooming the newcomers who are about to occupy similar positions
within the organization. These experience members essentially serve as role models for the
inexperienced newcomers. A prime example of serial socialization would be a rookie police
officer getting assigned patrol duties with an experienced veteran who has been in law
enforcement for a lengthy period of time. Disjunctive socialization, in contrast, refers to when
newcomers are not following the guidelines of their predecessors, and there are no role models to
inform new recruits on how to fulfill their duties.
Investiture vs. Divestiture socialization: This tactic refers to the degree to which a socialization
process either affirms or disaffirms the identity of the newly entering recruit. Investiture
socialization processes sanction and document for newcomers the viability and efficacy of the
personal characteristics that they bring to the organization. When organizations use this
socialization process it prefers that the recruit remains the exact way that he or she naturally
behaves and the organization merely makes use of the skills, values, and attitudes that the recruit
is believed to have in their possession. Divestiture socialization, on the other hand, is a process
that organizations use to reject and remove the certain personal characteristics of a recruit. Many
occupations and organizations require newcomers to sever previous ties, and forget old habits in
order to create a new self-image based upon new assumptions. Thus, tactics influence the
socialization process by defining the type of information newcomers receive, the source of this
information, and the ease of obtaining it.

Jones' model (1986):

Building upon the work of Van Maanen and Schein, Jones (1986) proposed that the previous six
dimensions could be reduced to two categories: institutionalized and individualized socialization.
Companies that use institutionalized socialization tactics implement structured step-by-step
programs, enter into an orchestrated orientation as a group, and receive help from an assigned
role model or mentor. Examples of organizations using institutionalized tactics include the
military, in which new recruits undergo extensive training and socialization activities through a
participative cohort, as well as incoming freshmen at universities, who may attend orientation
weekends before beginning classes. On the opposite end of the spectrum, other organizations use
individualized socialization tactics in which the new employee immediately starts working on his
or her new position and figures out company norms, values, and expectations along the way. In
this orientation system, individuals must play a more proactive role in seeking out information
and initiating work relationships.

Formal orientations: Regardless of the socialization tactics utilized, formal orientation

programs can facilitate understanding of company culture, and introduces new employees to
their work roles and the organizational social environment. Formal orientation programs may
consist of lectures, videotapes, and written material, while other organizations may rely on more

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usual approaches. More recent approaches such as computer-based orientations and Internets
have been used by organizations to standardize training programs across branch locations. A
review of the literature indicates that orientation programs are successful in communicating the
company's goals, history, and power structure.

Recruitment events: Recruitment events play a key role in identifying which prospective
employees are a good fit with an organization. Recruiting events allow employees to gather
initial information about an organization's expectations and company culture. By providing a
realistic job preview of what life inside the organization is like, companies can weed out
potential employees who are clearly a misfit to an organization and individuals can identify
which employment agencies are the most suitable match for their own personal values, goals,
and expectations. Research has shown that new employees who receive a great amount of
accurate information about the job and the company tend to adjust better. Organizations can also
provide realistic job previews by offering internship opportunities.

Mentorship: Mentorship has demonstrated importance in the socialization of new employees.

Ostroff and Kozlowski (1993) discovered that newcomers with mentors become more
knowledgeable about the organization than did newcomers without mentors. Mentors can help
newcomers better manage their expectations and feel comfortable with their new environment
through advice-giving and social support. Chatman (1991) found that newcomers are more likely
to have internalized the key values of their organization's culture if they had spent time with an
assigned mentor and attended company social events. Literature has also suggested the
importance of demographic matching between organizational mentors and protégés. Enscher &
Murphy (1997) examined the effects of similarity (race and gender) on the amount of contact and
quality of mentor relationships. Results indicate that liking, satisfaction, and contact were higher
in conditions of perceived mentor-protégé similarity. But what often separates rapid on-boarders
from their slower counterparts is not the availability of a mentor but the presence of a "buddy,"
someone of whom the newcomer can comfortably ask questions that are either trivial ("How do I
order office supplies?") or politically sensitive ("Whose opinion really matters here?"). Like
mentors, buddies can be people who are officially assigned by a manager or who simply emerge
informally (a nearby co-worker, for instance) as an easily accessible resource and confidant.
Furthermore, buddies can help establish relationships with co-workers in ways that can't always
be facilitated by a newcomer's manager or mentor.

Employee adjustment: In order to increase the success of an on boarding program, it is

important for an organization to monitor how well their new hires are adjusting to their new

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roles, responsibilities, peers, supervisors, and the organization at large. Researchers have noted
that role clarity, self-efficacy, social acceptance, and knowledge of organizational culture are
particularly good indicators of well-adjusted new employees who have benefitted from an
effective on boarding system.

Role clarity: Role clarity describes a new employee's understanding of his or her job
responsibilities and organizational role. One of the goals of an on boarding process is to aid
newcomers in reducing ambiguity and uncertainty so that it is easier for them to get their jobs
done correctly and efficiently. Because there often is a disconnect between the chief
responsibilities listed in a job description and the specific, repeatable tasks that employees must
complete to be successful in their roles, it's vital that managers are trained to discuss exactly
what they expect from their employees. A poor on boarding program, for example, may produce
employees who exhibit sub-par productivity because they are unsure of their exact roles and
responsibilities. On the other hand, a strong onboarding program would produce employees who
are especially productive because they know exactly what is expected of them in their job tasks
and their organizational role. Given this information, it is easy to see why an organization would
benefit substantially from increasing role clarity for a new employee. Not only does role clarity
imply greater productivity, but it has also been linked to both job satisfaction and organizational
commitment.

Self-efficacy: Self-efficacy is the degree to which new employees feel capable of successfully
completing their assigned job tasks and fulfilling their responsibilities. It makes logical sense that
employees who feel as though they can get the job done would fare better than those who feel
overwhelmed in their new positions, and unsurprisingly, researchers have found that job
satisfaction, organizational commitment, and turnover are all correlated with feelings of self-
efficacy.

Social acceptance: Social acceptance gives new employees the support needed to be successful.
While role clarity and self-efficacy are important to a newcomer's ability to meet the
requirements of a job, the feeling of "fitting in" can do a lot for one's perception of the work
environment and has been demonstrated to increase commitment to an organization and decrease
turnover.[3] If an employee feels well received by his or her peers, a personal investment in the
organization develops, and leaving becomes less likely.

Knowledge of organizational culture: Knowledge of organizational culture refers to how well

a new employee understands a company's values, goals, roles, norms, and overall organizational
environment. For example, some organizations may have very strict, yet unspoken, rules of how
interactions with superiors should be conducted or whether overtime hours are the norm and an
expectation. Knowledge of one's organizational culture is important for the newcomer looking to
adapt to a new company, as it allows for social acceptance and aids in completing work tasks in a
way that meets company standards. Overall, knowledge of organizational culture has been linked
to increased satisfaction and commitment, as well as decreased turnover.

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Outcomes: Historically, organizations have overlooked the influence of business practices in
shaping enduring work attitudes and thus have continually underestimated their impact on
financial success.[34] Employees' job attitudes are particularly important from an organization's
perspective because of their link to employee engagement and performance on the job. Employee
engagement attitudes, such as satisfaction with one's job and organizational commitment or
loyalty, have important implications for an employee's work performance and intentions to stay
with or quit an organization. This translates into strong monetary gains for organizations as
research has demonstrated that individuals who are highly satisfied with their jobs and who
exhibit high organizational commitment are likely to perform better and remain in an
organization, whereas individuals who have developed negative attitudes (are highly dissatisfied
and unattached to their jobs) are characterized by low performance and high turnover rates.[34][35]
Unengaged employees are very costly to organizations in terms of slowed performance and
rehiring expenses. Since, attitudinal formations begin from the initial point of contact with an
organization, practitioners would be wise to take advantage of positive attitudinal development
during socialization periods in order to ensure a strong, productive, and dedicated workforce.

Limits and criticisms of on boarding theory: Although the outcomes of organizational

socialization have been positively associated with the process of uncertainty reduction, they may
not necessarily be desirable to all organizations. Jones (1986) as well as Allen and Meyer (1990)
found that socialization tactics were related to commitment, but they were negatively correlated
to role clarity. Because formal socialization tactics insulate the newcomer from their full
responsibilities while "learning the ropes", there is a potential for role confusion once expected to
fully enter the organization. In some cases though, organizations may even desire a certain level
of person-organizational misfit in order to achieve outcomes via innovative behaviors.
Depending on the culture of the organization, it may be more desirable to increase ambiguity
despite the potentially negative connection with organizational commitment.Additionally,
socialization researchers have had major concerns over the length of time that it takes
newcomers to adjust. There has been great difficulty determining the role that time plays, but
once the length of the adjustment is determined, organizations can make appropriate
recommendations regarding what matters most in various stages of the adjustment process.
Further criticisms include the use of special orientation sessions to educate newcomers about the
organization and strengthen their organizational commitment. While these sessions have been
found to be often formal and ritualistic, several studies have found them unpleasant or traumatic.
Orientation sessions are a frequently used socialization tactic, however, employees have not
found them to be helpful, nor has any research provided any evidence for their benefits.

Executive on boarding: Executive on boarding is the application of general on boarding

principles to helping new executives become productive members of an organization. Practically,
executive on boarding involves acquiring, accommodating, assimilating and accelerating new
executives. Proponents emphasize the importance of making the most of the "honeymoon" stage
of a hire, a period which has been described by various sources as either the first 90 to 100 days
or the first full year. Effective onboarding of new executives can be one of the most important
contributions any hiring manager, direct supervisor or human resources professional can make to
long-term organizational success, because executive onboarding done right can improve
productivity and executive retention, and build shared corporate culture. A study of 20,000
searches revealed that 40 percent of executives hired at the senior level are pushed out, fail, or

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quit within 18 months. On boarding may be especially valuable for externally recruited
executives transitioning into complex roles, because it may be difficult for those individuals to
uncover personal, organizational, and role risks in complicated situations when they don't have
formal on boarding assistance. On boarding is also an essential tool for executives promoted into
new roles and/or transferred from one business unit to another. It is often valuable to have new
executives start some on boarding activities in the "Fuzzy Front End" even before their first day.
This is one of ten steps executives can follow to accelerate their own boarding. Position yourself
for success:

➢ Choose how to engage the context and culture.

➢ Embrace and leverage the Fuzzy Front End before day one.
➢ Take control of day one: Make a powerful first impression.
➢ Drive action by activating and directing ongoing communication.
➢ Embed a strong burning imperative.
➢ Exploit key milestones to drive team performance.
➢ Over-invest in early wins to build team confidence.
➢ Secure adept people in the right roles and deal with the inevitable resistance.

Recommendations for practitioners: Some suggest that practitioners should seek to design an
on boarding strategy that takes individual newcomer characteristics into consideration and
encourages proactive behaviors, such as information seeking, that help facilitate the development
of role clarity, self-efficacy, social acceptance, and knowledge of organizational culture.
Research has consistently shown that doing so produces valuable outcomes such as high job
satisfaction (the extent to which one enjoys the nature of his or her work), organizational
commitment (the connection one feels to an organization), and job performance in employees, as
well as lower turnover rates and decreased intent to quit. In terms of structure, empirical
evidence indicates that formal institutionalized socialization is the most effective on boarding
method. New employees who complete these kinds of programs tend to experience more
positive job attitudes and lower levels of turnover in comparison to those who undergo
individualized tactics. Some evidence suggests that in-person on boarding techniques are more
effective than virtual ones. Though it may initially appear to be less expensive for a company to
use a standard computer-based orientation program to introduce their new employees to the
organization, research has demonstrated that employees learn more about their roles and
company culture through face-to-face orientation.

Background

Although probation periods for new teachers had only been dropped in 1992, the Teaching and
Higher Education Act 1998 introduced arrangements by which the Secretary of State for
Education could bring about regulations requiring new teachers to serve a period of induction.
The following year, the then secretary of state, David Blunkett introduced an induction period
under The Education (Induction Arrangements for School Teachers) (England) Regulations
1999.[2] These regulations made it a requirement that all teachers complete an induction period
equivalent to one year upon qualification as a teacher.

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Requirements: Under current regulations, teachers wishing to work in maintained state schools
must satisfactorily complete a period of induction. During this period, a newly qualified teacher
is entitled to additional support and subject to regular observation and assessment to ensure that
he or she is meeting the required induction standards.

Standards: Having achieved Qualified Teacher Status (QTS), teachers are expected to continue
to meet the standards required for that qualification. In addition, they must meet the 6 criteria set
out in the induction standards:

➢ Seek and use opportunities to work collaboratively with colleagues to raise standards by
sharing effective practice in the school.
➢ Show a commitment to their professional development by
o identifying areas in which they need to improve their professional knowledge,
understanding and practice in order to teach more effectively in their current post,
and
o With support, taking steps to address these needs.
➢ Plan effectively to meet the needs of pupils in their classes with special educational
needs, with or without statements and in consultation with the SENCO contribute to the
preparation, implementation, monitoring and review of Individual Education Plans or the
equivalent.
➢ Liaise effectively with parents or careers on pupils’ progress and achievements.
➢ Work effectively as part of a team and, as appropriate to the post in which they are
completing induction, liaise with, deploy, and guide the work of other adults who support
pupils’ learning.
➢ Secure a standard of behavior that enables pupils to learn, and act to pre empty and deal
with inappropriate behavior in the context of the behavior policy of the school.

Support

In order to support newly qualified teachers in meeting the standards, a number of entitlements
are guaranteed by regulations:

➢ a reduced timetable (of no more than 90% of other equivalent teachers)

➢ support from an induction tutor
➢ a named induction contact at a local education authority or other body

Assessment

In addition, all teachers undergoing a programme of induction are subject to assessment

processes, including:

➢ regular observations every 6–8 weeks

➢ a termly review meeting

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 ➢ a decision at the end of the induction period to ascertain whether the required standards
have been met.

Restrictions

Induction can only be completed in a restricted range of school types. Similarly, teachers who
have not completed, and are not completing, induction can only be employed in such school
types under special circumstances

Completing induction

Induction can only be completed in eligible schools in the United Kingdom, Guernsey, Jersey,
Isle of Man, Gibraltar or at Service Children's Education (SCE) schools in Cyprus and Germany.
Eligible schools are maintained schools, non-maintained special schools, independent schools
(with support from either a local education authority or The Independent Schools' Council
Teacher Induction Panel, or a sixth form college under certain circumstances.

Teachers not completing induction

Teachers who have not completed a period of induction are limited in the work they can carry
out in eligible schools.Where a teacher is employed in an eligible school for at least one term, he
or she must be offered, and must undertake, a programme of induction lasting throughout that
period.Teachers who have not completed a period of induction can only work in eligible schools
for periods of less than one term during a restricted time-frame. This time-frame begins on the
first day that such employment begins, and expires no later than four terms from that date
(approximately 16 months). Teachers who have reached this point may seek an extension to this
period from the relevant local education authority.Teachers who have not completed a period of
induction are eligible to work in independent schools

Time limits

As stated in the statutory guidance on induction for newly qualified teachers in England, there is
no set time limit for starting or completing an induction period. The previous ruling that an NQT
needed to complete the induction period within 5 years was abolished in September 2008.

Employee exit management

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Employee exit management is the process used within many businesses to terminate employees
contracts in a professional manner. It applies to employees who have resigned and those that
have been terminated by the company.When an employee is terminated there are a number of
considerations that an organization needs to make in order to cleanly end the relationship
between the company and the employee. The company as a legal entity has a responsibility to the
employee which may extend beyond the period of employment and this is the primary focus of
the exit procedure. As part of computer security, the process will also ensure that access
privileges are revoked when a person leaves, and may also cover other issues such as the
recovery of equipment, keys and credit cards to ensure that security integrity is maintained.

Termination of Contract

Employees may terminate their contract by resigning or an employer may terminate the contract
by dismissing an employee.

Short term Employment

Short term employment is when an employee is hired for less than one year. These will normally
end automatically once the end date is reached. However, the employer may wish to end the
contract earlier or extend the contract.

Temporary Contract

A temporary contract is usually around 3 months long. Employers may recruit temporary
employees during busy periods such as Christmas. At the end of the temporary contract the
employer may wish to offer you a permanent position or extend the temporary contract.
Temporary contract will also automatically end once the end date is reached.

Contractor basis

Employees maybe hired on a contractor basis for the completing of a certain task. Once the task
is completed or the event takes place the contract ends.this type of contract employees falls under
seasonal works.

Dismissal

Dismissal is when you end the contract of an employee. This must be done in a fair way. There
are different types of dismissal:

Fair dismissal- Based on the reason and the process of dismissal

1. Unfair dismissal- Based on the reason and the process of dismissal

2. Constructive dismissal- This is when a serious breach of

contract has been carried out and therefore the employee must resign in response to the
employer’s conduct.

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 1. Wrongful dismissal- This is where you break the terms of an employee’s contract in the
dismissal process, e.g. dismissing someone without giving them proper notice.

If the employer dismisses you from 6 April 2009 onwards, they should follow the procedures
which are laid out in the Aces Code of Practice on disciplinary and grievance procedures. The
procedure should have the following steps:

1. Letter- The employer should send you a formal letter explaining the situation.
2. Meeting- The letter should be followed by a meeting to discuss everything face to face.
3. Verdict- The employer should then write to you expressing their final decision.
4. Appeal- You then have the right to appeal against your employer’s decision

For Conduct or Performance Reasons

An employer may dismiss you if you are unable to complete the job to the required standard or
you have the capability to complete to a high standard but for some reason or another you are
unable to. There is no specific process by law an employer must follow in order to dismiss an
individual however it must be carried out fairly. Misconduct includes persistent lateness or
unauthorized absence. It is based on serious misconduct or gross misconduct. Serious
misconduct includes poor performance for which the employee should be provided with a formal
warning which states that not improving could lead to dismissal. Gross misconduct includes
theft, physical violence, serious insubordination and gross negligence for which the employee
may be dismissed immediately.

Due to Illness

An employee maybe dismissed due to medical reasons. The employer must pay for the employee
whilst dismissed for a period not exceeding 20 weeks. The employer may wish to provide the
employee with alternative work for the period of time, which is suited to your medical needs.

Redundancy

Redundancy is when you dismiss an employee because you no longer need anyone to do their
job.

Liquidation and Administration

Both company Liquidation and Administration can lead to the end of the company. Company
administration intention is to help the company repay its debts and avoid insolvency. Liquidation
is when the company is forced to sell all of its assets before the company vanishes as a whole.
This will result in the employees being made redundant.[8] You’ll normally be entitled to
statutory redundancy pay if you’re an employee and you’ve been working for your current
employer for 2 years or more.

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You’ll get:

1. Half a week's pay for each full year you were under 22
2. One week’s pay for each full year you were 22 or older, but under 41
3. One and half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years and weekly pay is capped at £475. The maximum amount
of statutory redundancy pay is £14,250.

Resignation

A resignation can be carried out verbally or in writing, it is a clear statement of you are leaving
the job.

Forced Resignation

If you are being dismissed, a company will often offer you a compromise or settlement
agreement whereby they will pay you a certain amount of money in return for which you forego
the opportunity to bring any claims against them. Where the employer's action breached a
fundamental term of your contract and you resigned in direct response soon afterwards then this
may be constructive unfair dismissal and you will be entitled to bring a claim for compensation.

Retirement

The period of a person's life during which he/she is no longer working, or the commencement of
that period.

Why do people retire?

There are various reasons why someone retires such as health issues - the employee may not be
able to work or be medically fit to work due to ill health. Another reason is the nature of work
for example employees whose jobs are physically demanding might retire earlier than others.
Employees may have personal demands such as caring for someone and therefore retire earlier to
fulfil responsibilities outside of work. Another key reason is community interests, employees
may want more time for volunteer work, sports, hobbies, family and travel.

TPI-theory

The theory of TPI is an attempt to reconcile theoretical understanding of organizational

socialization such as the process of integration. TPI-theory refers that new employees need to
develop theoretical (T) and practical (P) skills towards the performance of the new job, but also
satisfy needs of (I) interaction that exist among the new employees.[2] These three conditions
must be fulfilled to become integrated to the organization. This theory is important to approach
an understanding of integration and socialization effects.

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Onboarding

Onboarding, also known as organizational socialization, refers to the mechanism through

which new employees acquire the necessary knowledge, skills, and behaviors to become
effective organizational members and insiders.[1] Tactics used in this process include formal
meetings, lectures, videos, printed materials, or computer-based orientations to introduce
newcomers to their new jobs and organizations. Research has demonstrated that these
socialization techniques lead to positive outcomes for new employees such as higher job
satisfaction, better job performance, greater organizational commitment, and reduction in
occupational stress and intent to quit.[2][3][4] These outcomes are particularly important to an
organization looking to retain a competitive advantage in an increasingly mobile and globalized
workforce. In the United States, for example, up to 25% of workers are organizational
newcomers engaged in an onboarding process.[5] The term Induction is used instead in regions
such as Australia, New Zealand parts of Europe and Canada.[6]

Antecedents of success

Onboarding is a multifaceted operation influenced by a number of factors pertaining to both the

individual newcomer and the organization. Researchers have separated these factors into three
broad categories: new employee characteristics, new employee behaviors, and organizational
efforts.[7] New employee characteristics are individual differences across incoming workers,
ranging from personality traits to previous work experiences. New employee behaviors refer to
the specific actions carried out by newcomers as they take an active role in the socialization
process. Finally, organizational efforts help facilitate the process of acclimating a new worker to
an establishment through activities such as orientation or mentoring programs.

New employee characteristics

Research has shown evidence that employees with certain personality traits and experiences
adjust to an organization more quickly. These are a proactive personality, the "Big Five",
curiosity, and greater experience levels."Proactive personality" refers to the tendency to take
charge of situations and achieve control over one's environment. This type of personality
predisposes some workers to engage in behaviors such as information seeking that accelerate the
socialization process, thus helping them to adapt more efficiently and become high-functioning
organizational members.[1] Empirical evidence also demonstrates that a proactive personality is
related to increased levels of job satisfaction and performance. The Big Five personality traits—
openness, conscientiousness, extraversion, agreeableness, and neuroticism—have been linked to
onboarding success, as well. Specifically, new employees who are proactive or particularly open
to experience are more likely to seek out information, feedback, acceptance, and relationships
with co-workers. They also exhibit higher levels of adjustment and tend to frame events more
positively. Curiosity also plays a substantial role in the newcomer adaptation process and is
defined as the "desire to acquire knowledge" that energizes individual exploration of an
organization's culture and norms.[11] Individuals with a curious disposition tend to frame
challenges in a positive light and eagerly seek out information to help them make sense of their

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new organizational surroundings and responsibilities, leading to a smoother onboarding
experience. Employee experience levels also affect the onboarding process such that more
experienced members of the workforce tend to adapt to a new organization differently from, for
example, a new college graduate starting his or her first job. This is because seasoned employees
can draw from past experiences to help them adjust to their new work settings and therefore may
be less affected by specific socialization efforts because they have (a) a better understanding of
their own needs and requirements at work (2002). and (b) are more familiar with what is
acceptable in the work context. Additionally, veteran workers may have used their past
experiences to seek out organizations in which they will be a better fit, giving them an immediate
advantage in adapting to their new jobs.

New employee behaviors

Certain behaviors enacted by incoming employees, such as building relationships and seeking
information and feedback, can help facilitate the onboarding process. Newcomers can also
quicken the speed of their adjustment by demonstrating behaviors that assist them in clarifying
expectations, learning organizational values and norms, and gaining social acceptance.
Information seeking occurs when new employees ask questions of their co-workers and superiors
in an effort to learn about their new job and the company's norms, expectations, procedures, and
policies. Miller and Jablin (1991) developed a typology of information sought after by new hires.
These include referent information, understanding what is required to function on the job (role
clarity); appraisal information, understanding how effectively the newcomer is able to function
in relation to job role requirements (self-efficacy); and finally, relational information,
information about the quality of relationships with current organizational employees (social
acceptance). By actively seeking information, employees can effectively reduce uncertainties
about their new jobs and organizations and make sense of their new working environments.
Newcomers can also passively seek information via monitoring their surroundings or by simply
viewing the company website or handbook.[1] Research has shown that information seeking by
incoming employees is associated with social integration, higher levels of organizational
commitment, job performance, and job satisfaction in both individualistic and collectivist
cultures. Feedback seeking is similar to information seeking, but it is focused on a new
employee's particular behaviors rather than on general information about the job or company.
Specifically, feedback seeking refers to new employee efforts to gauge how to behave in their
new organization. A new employee may ask co-workers or superiors for feedback on how well
he or she is performing certain job tasks or whether certain behaviors are appropriate in the
social and political context of the organization. In seeking constructive criticism about their
actions, new employees learn what kinds of behaviors are expected, accepted, or frowned upon
within the company or work group, and when they incorporate this feedback and adjust their
behavior accordingly, they begin to blend seamlessly into the organization.[19] Instances of
feedback inquiry vary across cultural contexts such that individuals high in self-assertiveness and
cultures low in power distance report more feedback seeking than newcomers in cultures where
self-assertiveness is low and power distance is high. Also called networking, relationship
building involves an employee's efforts to develop camaraderie with co-workers and even
supervisors. This can be achieved informally through simply talking to their new peers during a
coffee break or through more formal means such as taking part in pre-arranged company events.
Research has shown relationship building to be a key part of the onboarding process, leading to

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outcomes such as greater job satisfaction and better job performance,[2] as well as decreased
stress.

Organization socialization efforts

Organizations also invest a great amount of time and resources into the training and orientation
of new company hires. Organizations differ in the variety of socialization activities they offer in
order to integrate productive new workers. Possible activities include their socialization tactics,
formal orientation programs, recruitment strategies, and mentorship opportunities.Socialization
tactics, or orientation tactics, are designed based on an organization's needs, values, and
structural policies. Some organizations favor a more systematic approach to socialization, while
others follow a more "sink or swim" approach in which new employees are challenged to figure
out existing norms and company expectations without guidance.

Van Maanen and Schein model (1979)

John Van Maanen and Edgar H. Schein have identified at least six major tactical dimensions that
characterize and represent all of the ways in which organizations may differ in their approaches
to socialization.

Collective versus Individual socialization

Collective socialization refers to the process of taking a group of recruits who are facing a given
boundary passage and putting them through the same set of experiences together. Examples of
this include: basic training/boot camp for a military organization, pledging for
fraternities/sororities, education in graduate schools, and so forth. Socialization in the Individual
mode allows newcomers to accumulate unique experiences separate from other newcomers.
Examples of this process include: Apprenticeship programs, specific internships, "on-the-job"
training, etc.[21]

Formal vs. Informal socialization

Formal socialization refers to those tactics in which newcomers are more or less segregated from
others and trained on the job. These processes can be witnessed with such socialization programs
as police academies, internships, and apprenticeships. Informal socialization processes, on the
other hand, involve little separation between newcomers and the existing employees, nor is there
any effort made to distinguish the newcomer’s role specifically. Informal tactics provides a non-
interventional environment for recruits to learn their new roles via trial and error. Examples of
informal socialization include on-the-job training assignments, apprenticeship programs with no
clearly defined role, and more generally, any situation in which a newcomer is placed into a
work group with no recruit role.

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Sequential vs. Random socialization

Sequential socialization refers to the degree to which an organization or occupation specifies

discrete and identifiable steps for the newcomers to know what phases they need to go through.
Random socialization occurs when the sequences of steps leading to the targeted role are
unknown, and the entire progression is quite ambiguous. In other words, while there are
numerous steps or stages leading to specific organizational roles, there is necessarily no specific
order in which the steps should be taken.

Fixed vs. Variable socialization

This dimension refers to the extent to which the steps have a timetable developed by the
organization and communicated to the recruit in order to convey when the socialization process
is complete. Fixed socialization provides a recruit with the exact knowledge of the time it will
take complete a given passage. For instance, some management trainees can be put on " fast
tracks" where they are required to accept new rotational assignment on an annual basis despite
their own preferences. Variable socialization processes gives a newcomer no specific timetable,
but a few clues as to when to expect a given boundary passage. This type of socialization is
commonly associated upwardly mobile careers within business organizations because of several
uncontrolled factors such as the state of the economy or turnover rates which determine whether
any given newcomer will be promoted to a higher level or not.

Serial vs. Disjunctive socialization

A serial socialization process refers to experienced members of the organization grooming the
newcomers who are about to occupy similar positions within the organization. These experience
members essentially serve as role models for the inexperienced newcomers. A prime example of
serial socialization would be a rookie police officer getting assigned patrol duties with an
experienced veteran who has been in law enforcement for a lengthy period of time. Disjunctive
socialization, in contrast, refers to when newcomers are not following the guidelines of their
predecessors, and there are no role models to inform new recruits on how to fulfill their duties.

Investiture vs. Divestiture socialization

This tactic refers to the degree to which a socialization process either affirms or disaffirms the
identity of the newly entering recruit. Investiture socialization processes sanction and document
for newcomers the viability and efficacy of the personal characteristics that they bring to the
organization. When organizations use this socialization process it prefers that the recruit remains
the exact way that he or she naturally behaves and the organization merely makes use of the
skills, values, and attitudes that the recruit is believed to have in their possession. Divestiture
socialization, on the other hand, is a process that organizations use to reject and remove the
certain personal characteristics of a recruit. Many occupations and organizations require
newcomers to sever previous ties, and forget old habits in order to create a new self-image based
upon new assumptions. Thus, tactics influence the socialization process by defining the type of
information newcomers receive, the source of this information, and the ease of obtaining it.

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Jones' model (1986)

Building upon the work of Van Maanen and Schein, Jones (1986) proposed that the previous six
dimensions could be reduced to two categories: institutionalized and individualized socialization.
Companies that use institutionalized socialization tactics implement structured step-by-step
programs, enter into an orchestrated orientation as a group, and receive help from an assigned
role model or mentor. Examples of organizations using institutionalized tactics include the
military, in which new recruits undergo extensive training and socialization activities through a
participative cohort, as well as incoming freshmen at universities, who may attend orientation
weekends before beginning classes.On the opposite end of the spectrum, other organizations use
individualized socialization tactics in which the new employee immediately starts working on his
or her new position and figures out company norms, values, and expectations along the way. In
this orientation system, individuals must play a more proactive role in seeking out information
and initiating work relationships.

Formal orientations

Regardless of the socialization tactics utilized, formal orientation programs can facilitate
understanding of company culture, and introduces new employees to their work roles and the
organizational social environment. Formal orientation programs may consist of lectures,
videotapes, and written material, while other organizations may rely on more usual approaches.
More recent approaches such as computer-based orientations and Internets have been used by
organizations to standardize training programs across branch locations. A review of the literature
indicates that orientation programs are successful in communicating the company's goals,
history, and power structure.

Recruitment events

Recruitment events play a key role in identifying which prospective employees are a good fit
with an organization. Recruiting events allow employees to gather initial information about an
organization's expectations and company culture. By providing a realistic job preview of what
life inside the organization is like, companies can weed out potential employees who are clearly
a misfit to an organization and individuals can identify which employment agencies are the most
suitable match for their own personal values, goals, and expectations. Research has shown that
new employees who receive a great amount of accurate information about the job and the
company tend to adjust better. Organizations can also provide realistic job previews by offering
internship opportunities.

Mentorship

Mentorship has demonstrated importance in the socialization of new employees. Ostroff and
Kozlowski (1993) discovered that newcomers with mentors become more knowledgeable about
the organization than did newcomers without mentors. Mentors can help newcomers better
manage their expectations and feel comfortable with their new environment through advice-

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giving and social support.[26] Chatman (1991) found that newcomers are more likely to have
internalized the key values of their organization's culture if they had spent time with an assigned
mentor and attended company social events. Literature has also suggested the importance of
demographic matching between organizational mentors and protégés. Enscher & Murphy (1997)
examined the effects of similarity (race and gender) on the amount of contact and quality of
mentor relationships. Results indicate that liking, satisfaction, and contact were higher in
conditions of perceived mentor-protégé similarity. But what often separates rapid on-boarders
from their slower counterparts is not the availability of a mentor but the presence of a "buddy,"
someone of whom the newcomer can comfortably ask questions that are either trivial ("How do I
order office supplies?") or politically sensitive ("Whose opinion really matters here?"). Like
mentors, buddies can be people who are officially assigned by a manager or who simply emerge
informally (a nearby co-worker, for instance) as an easily accessible resource and confidant.
Furthermore, buddies can help establish relationships with co-workers in ways that can't always
be facilitated by a newcomer's manager or mentor.

Employee adjustment

In order to increase the success of an onboarding program, it is important for an organization to

monitor how well their new hires are adjusting to their new roles, responsibilities, peers,
supervisors, and the organization at large. Researchers have noted that role clarity, self-efficacy,
social acceptance, and knowledge of organizational culture are particularly good indicators of
well-adjusted new employees who have benefitted from an effective onboarding system.

Role clarity

Role clarity describes a new employee's understanding of his or her job responsibilities and
organizational role. One of the goals of an onboarding process is to aid newcomers in reducing
ambiguity and uncertainty so that it is easier for them to get their jobs done correctly and
efficiently. Because there often is a disconnect between the chief responsibilities listed in a job
description and the specific, repeatable tasks that employees must complete to be successful in
their roles, it's vital that managers are trained to discuss exactly what they expect from their
employees. A poor onboarding program, for example, may produce employees who exhibit sub-
par productivity because they are unsure of their exact roles and responsibilities. On the other
hand, a strong onboarding program would produce employees who are especially productive
because they know exactly what is expected of them in their job tasks and their organizational
role. Given this information, it is easy to see why an organization would benefit substantially
from increasing role clarity for a new employee. Not only does role clarity imply greater
productivity, but it has also been linked to both job satisfaction and organizational commitment.

Self-efficacy

Self-efficacy is the degree to which new employees feel capable of successfully completing their
assigned job tasks and fulfilling their responsibilities. It makes logical sense that employees who
feel as though they can get the job done would fare better than those who feel overwhelmed in
their new positions, and unsurprisingly, researchers have found that job satisfaction,
organizational commitment, and turnover are all correlated with feelings of self-efficacy.

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Social acceptance

Social acceptance gives new employees the support needed to be successful. While role clarity
and self-efficacy are important to a newcomer's ability to meet the requirements of a job, the
feeling of "fitting in" can do a lot for one's perception of the work environment and has been
demonstrated to increase commitment to an organization and decrease turnover.[3] If an
employee feels well received by his or her peers, a personal investment in the organization
develops, and leaving becomes less likely.

Knowledge of organizational culture

Knowledge of organizational culture refers to how well a new employee understands a

company's values, goals, roles, norms, and overall organizational environment. For example,
some organizations may have very strict, yet unspoken, rules of how interactions with superiors
should be conducted or whether overtime hours are the norm and an expectation. Knowledge of
one's organizational culture is important for the newcomer looking to adapt to a new company,
as it allows for social acceptance and aids in completing work tasks in a way that meets company
standards. Overall, knowledge of organizational culture has been linked to increased satisfaction
and commitment, as well as decreased turnover.

Outcomes

Historically, organizations have overlooked the influence of business practices in shaping

enduring work attitudes and thus have continually underestimated their impact on financial
success.[34] Employees' job attitudes are particularly important from an organization's perspective
because of their link to employee engagement and performance on the job. Employee
engagement attitudes, such as satisfaction with one's job and organizational commitment or
loyalty, have important implications for an employee's work performance and intentions to stay
with or quit an organization. This translates into strong monetary gains for organizations as
research has demonstrated that individuals who are highly satisfied with their jobs and who
exhibit high organizational commitment are likely to perform better and remain in an
organization, whereas individuals who have developed negative attitudes (are highly dissatisfied
and unattached to their jobs) are characterized by low performance and high turnover rates.
Unengaged employees are very costly to organizations in terms of slowed performance and
rehiring expenses. Since, attitudinal formations begin from the initial point of contact with an
organization, practitioners would be wise to take advantage of positive attitudinal development
during socialization periods in order to ensure a strong, productive, and dedicated workforce.

Limits and criticisms of on boarding theory

Although the outcomes of organizational socialization have been positively associated with the
process of uncertainty reduction, they may not necessarily be desirable to all organizations. Jones
(1986) as well as Allen and Meyer (1990) found that socialization tactics were related to
commitment, but they were negatively correlated to role clarity. Because formal socialization

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tactics insulate the newcomer from their full responsibilities while "learning the ropes", there is a
potential for role confusion once expected to fully enter the organization. In some cases though,
organizations may even desire a certain level of person-organizational misfit in order to achieve
outcomes via innovative behaviors. Depending on the culture of the organization, it may be more
desirable to increase ambiguity despite the potentially negative connection with organizational
commitment. Additionally, socialization researchers have had major concerns over the length of
time that it takes newcomers to adjust. There has been great difficulty determining the role that
time plays, but once the length of the adjustment is determined, organizations can make
appropriate recommendations regarding what matters most in various stages of the adjustment
process. Further criticisms include the use of special orientation sessions to educate newcomers
about the organization and strengthen their organizational commitment. While these sessions
have been found to be often formal and ritualistic, several studies have found them unpleasant or
traumatic. Orientation sessions are a frequently used socialization tactic, however, employees
have not found them to be helpful, nor has any research provided any evidence for their benefits.

Executive on boarding

Executive on boarding is the application of general on boarding principles to helping new

executives become productive members of an organization. Practically, executive on boarding
involves acquiring, accommodating, assimilating and accelerating new executives.[43] Proponents
emphasize the importance of making the most of the "honeymoon" stage of a hire, a period
which has been described by various sources as either the first 90 to 100 days or the first full
year. Effective on boarding of new executives can be one of the most important contributions
any hiring manager, direct supervisor or human resources professional can make to long-term
organizational success, because executive on boarding done right can improve productivity and
executive retention, and build shared corporate culture. A study of 20,000 searches revealed that
40 percent of executives hired at the senior level are pushed out, fail, or quit within 18 months.
On boarding may be especially valuable for externally recruited executives transitioning into
complex roles, because it may be difficult for those individuals to uncover personal,
organizational, and role risks in complicated situations when they don't have formal on boarding
assistance. On boarding is also an essential tool for executives promoted into new roles and/or
transferred from one business unit to another. It is often valuable to have new executives start
some onboarding activities in the "Fuzzy Front End" even before their first day. This is one of
ten steps executives can follow to accelerate their on boarding. Position yourself for success

➢ Choose how to engage the context and culture

➢ Embrace and leverage the Fuzzy Front End before day one
➢ Take control of day one: Make a powerful first impression
➢ Drive action by activating and directing ongoing communication
➢ Embed a strong burning imperative
➢ Exploit key milestones to drive team performance
➢ Over-invest in early wins to build team confidence
➢ Secure adept people in the right roles and deal with the inevitable resistance
➢ Evolve people, plans, and practices to capitalize on changing circumstances.

Recommendations for practitioners

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Some suggest that practitioners should seek to design an on boarding strategy that takes
individual newcomer characteristics into consideration and encourages proactive behaviors, such
as information seeking, that help facilitate the development of role clarity, self-efficacy, social
acceptance, and knowledge of organizational culture. Research has consistently shown that doing
so produces valuable outcomes such as high job satisfaction (the extent to which one enjoys the
nature of his or her work), organizational commitment (the connection one feels to an
organization), and job performance in employees, as well as lower turnover rates and decreased
intent to quit. In terms of structure, empirical evidence indicates that formal institutionalized
socialization is the most effective onboarding method.] New employees who complete these
kinds of programs tend to experience more positive job attitudes and lower levels of turnover in
comparison to those who undergo individualized tactics. Some evidence suggests that in-person
onboarding techniques are more effective than virtual ones. Though it may initially appear to be
less expensive for a company to use a standard computer-based orientation program to introduce
their new employees to the organization, research has demonstrated that employees learn more
about their roles and company culture through face-to-face orientation.

Training and development

Training and development is a function of human resource management concerned with

organizational activity aimed at bettering the performance of individuals and groups in
organizational settings. Training and development can also be described as ‘an educational
process which involves the sharpening of skills, concepts, changing of attitude and gaining more
knowledge to enhance the performance of employees. . It has been known by several names,
including "Human Resource Development", "Human Capital Development" and "Learning and
Development".

History

The name of the discipline has been debated, with the Chartered Institute of Personnel and
Development in 2000 arguing that "human resource development" is too evocative of the master-
slave relationship between employer and employee for those who refer to their employees as
"partners" or "associates" to feel comfortable with. Eventually, the CIPD settled upon "learning
and development", although that was itself not free from problems, "learning" being an over-
general and ambiguous name, and most organizations referring to it as "training and
development".

Practice

Training and development encompasses three main activities: training, education, and
development.

Training: This activity is both focused upon, and evaluated against, the job that an individual
currently holds.

Education: This activity focuses upon the jobs that an individual may potentially hold in the
future, and is evaluated against those jobs.

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 Development: This activity focuses upon the activities that the organization employing the
individual, or that the individual is part of, may partake in the future, and is almost impossible to
evaluate. The "stakeholders" in training and development are categorized into several classes.
The sponsors of training and development are senior managers. The clients of training and
development are business planners. Line managers are responsible for coaching, resources, and
performance. The participants are those who actually undergo the processes. The facilitators are
Human Resource Management staff. And the providers are specialists in the field. Each of these
groups has its own agenda and motivations, which sometimes conflict with the agendas and
motivations of the others. The conflicts that are the best part of career consequences are those
that take place between employees and their bosses. The number one reason people leave their
jobs is conflict with their bosses. And yet, as author, workplace relationship authority, and
executive coach, Dr. John Hoover points out, "Tempting as it is, nobody ever enhanced his or her
career by making the boss look stupid." Training an employee to get along well with authority
and with people who entertain diverse points of view is one of the best guarantees of long-term
success. Talent, knowledge, and skill alone won't compensate for a sour relationship with a
superior, peer, or customer. Typical roles in the field include executive and
supervisory/management development, new-employee orientation, professional-skills training,
technical/job training, customer-service training, sales-and-marketing training, and health-and-
safety training. Job titles may include vice-president of organizational effectiveness, training
manager or director, management development specialist, blended-learning designer, training-
needs analyst, chief learning officer, and individual career-development advisor.Talent
development is the process of changing an organization, its employees, its stakeholders, and
groups of people within it, using planned and unplanned learning, in order to achieve and
maintain a competitive advantage for the organization. Rothwell notes that the name may well be
a term in search of a meaning, like so much in management, and suggests that it be thought of as
selective attention paid to the top 10% of employees, either by potential or performance. While
talent development is reserved for the top management it is becoming increasingly clear that
career development is necessary for the retention of any employee, no matter what their level in
the company. Research has shown that some type of career path is necessary for job satisfaction
and hence job retention. Perhaps organizations need to include this area in their overview of
employee satisfaction. The term talent development is becoming increasingly popular in several
organizations, as companies are now moving from the traditional term training and development.
Talent development encompasses a variety of components such as training, career development,
career management, and organizational development, and training and development. It is
expected that during the 21st century more companies will begin to use more integrated terms
such as talent development.

Benefits of Training & Development

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Training is crucial for organizational development and its success which is indeed fruitful to both
employers and employees of an organization. Here are some important benefits of training and
development

Increased productivity

• Less supervision
• Job satisfaction
• Skills Development

On-the-job training

On-the-job training (OJT) is a form of training taking place in a normal working situation. On-
the-job training, sometimes called direct instruction, is one of the earliest forms of training
(observational learning is probably the earliest). It is a one-on-one training located at the job site,
where someone who knows how to do a task shows another how to perform it. In antiquity, the
work performed by most people did not rely on abstract thinking or academic education. Parents
or community members, who knew the skills necessary for survival, passed their knowledge on
to the children through direct instruction. On the Job Training is still widely used today. It is a
frequently used method of training because it requires only a person who knows how to do the
task, and the tools the person uses to do the task. It may not be the most effective or the most
efficient method at times, but it is normally the easiest to arrange and manage. Because the
training takes place on the job, it can be highly realistic and no transfer of learning is required. It
is often inexpensive because no special equipment is needed other than what is normally used on
the job. One drawback is that OJT takes the trainer and materials out of production for the
duration of the training time. In addition, due to safety or other production factors, it is
prohibitive in some environment. Even many researches show the importance of the On the Job
Training.

A large majority of employee learning is accomplished through on-the-job training. Well

designed OJT training programs are well planned and resourced, staff managers with competent
coaching ability, and define the criterion for performance standards.

Direct instruction

Direct instruction (DI) is a general term for the explicit teaching of a skill-set using lectures or
demonstrations of the material to students. A particular subset of direct instruction, denoted by
capitalization as Direct Instruction, refers to a specific example of the approach, that was
developed by Siegfried Engelmann and Wesley C. Becker. DI teaches by passive learning, in
contrast to exploratory models such as inquiry-based learning, discovery learning or active
learning. DI includes tutorials, participatory laboratory classes, discussion, recitation, seminars,
workshops, observation, active learning, practica or internships.

DI relies on a systematic curriculum design, delivered by implementation of a prescribed

behavioral script. On the premise that all students can learn and all teachers successfully teach if

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given effective training in specific techniques, teachers may be evaluated based on measurable
student learning.

In some special education programs, direct instruction is used in resource rooms, when teachers
assist with homework completion and academic remediation.[1]

Engelmann's Direct Instruction method and DISTAR

The term Direct Instruction (DI) also applies to a pedagogical model developed by Siegfried
Engelmann in 1964 at the University of Illinois Institute for Research on Exceptional Children.[2]

History

DISTAR was a specific direct instruction model also developed by Siegfried Engelmann and
Wesley C. Becker. Engelmann and Becker sought to identify teaching methods that would
accelerate the progress of historically disadvantaged elementary school students. DI was an
attempt to merge rule learning with the principles of applied behavior analysis. DISTAR, an
acronym for Direct Instruction System for Teaching Arithmetic and Reading, a trademarked
program of SRA/McGraw-Hill, gained prominence during Project Follow Through, the largest
educational study ever conducted in America. DI was one of the approaches studied in the
program.

Features of DI include:

• Explicit, systematic instruction based on scripted lesson plans.

• Ability grouping. Students are grouped and re-grouped based on their rate of progress
through the program.
• Emphasis on pace and efficiency of instruction. DI programs are meant to accelerate
student progress; therefore, lessons are designed to bring students to mastery as quickly
as possible.
• Frequent assessment. Curriculum-based assessments help place students in ability groups
and identify students who require additional intervention.
• Embedded professional development/coaching. DI programs may be implemented as
stand-alone interventions or as part of a schoolwide reform effort. In both instances, the
program developers recommend careful monitoring and coaching of the program in order
to ensure a high fidelity of implementation.

Direct Instruction has been effectively delivered through peers to students with learning
disabilities. Peer delivery offers teachers new ways to use the curriculum. The approach has also
been examined as a model to assist students in a resource room with homework completion,
bolster executive functioning skills and improve teacher efficiency.

Success for All

Another popular direct instruction approach is the Success for All program, which uses scripted
teaching to instruct elementary children in phonics intensive reading instruction program. What

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the teacher says is carefully scripted in the program. The program was designed by Johns
Hopkins University professor Robert Slavin in the mid 1980s for failing schools in Baltimore.
The program requires a dedicated 90 minutes of reading instruction each day in which the
teacher must follow a pre-ordained lesson plan that has every minute filled with scripted
instruction and specific activities designed to teach reading to every child in the class. Jonathan
Kozol criticized the program in his book, The Shame of the Nation, for being excessively
dogmatic, utilitarian, and authoritarian.[6]

Effectiveness

Debates about the efficacy of DI have raged since before the final results of Project Follow
Through were published; however, there is substantial empirical research supporting its
effectiveness. A meta-analysis published by Adams & Engelmann (1996), a chief architect of the
DI program, finds a "mean effect size average per study...(as) more than .75, which confirms that
the overall effect is substantial."In some special education programs it is used in a resource room
with small groups of students. Some research has shown benefit with this model. Direct
Instruction is widely and successfully used with students from every population segment (with
regard to poverty, culture, and race). In Project Follow Through, the DI model was ranked first in
achievement for poor students, students who were not poor, urban students, rural students,
African American students, Hispanic students, and Native American students. Today, many of
the Bureau of Indian Affair's highest-performing schools use Direct Instruction materials. The
Baltimore Curriculum Project has many schools with Free and Reduced Lunch Rates above 75%
serving student populations that are more than 90% African American. These schools have
shown strong achievement gains using Direct Instruction. Meta-analysis of 85 single-subject
design studies comparing direct instruction to other teaching strategies found the effects to be
substantial for students with learning disabilities;[9] however, when qualified by IQ and reading
levels strategy instruction (SI) had better effects for the high IQ group. For the low-IQ
discrepancy groups higher effect sizes were yielded for a Combined DI and SI Model when
compared to all competing models. With the exception of handwriting DI's effects were all above
.8 (i.e., reading and mathematics). John Hattie's Visible Learning: A Synthesis of Over 800
Meta-Analyses Relating to Achievement (2009) summarizes the results of four meta-analyses
that examined Direct Instruction. These analyses incorporated 304 studies of over 42,000
students. Across all of these students, the average effect size was .59 and was significantly larger
than those of any other curriculum Hattie studied.Direct Instruction is recognized as one of two
effective models of comprehensive school reform and, in many cases, can be integrated into a
tiered model system to address students will developing problems.[10] The findings from Project
Follow Through, conducted in a variety of selected communities throughout the United States,
suggested that Direct Instruction is the most effective model for teaching academic skills and for
affective outcomes (e.g., self-esteem of children). Recent large-scale studies (1997–2003), such
as the Baltimore Curriculum Project, show that it is possible to help schools that are in the lowest
twenty percent with respect to academic achievement steadily improve until they are performing
well above average. In some cases, school achievement improved from the 16th percentile to
above the 90th percentile. Currently, Direct Instruction is one of the few curricula that have been
scientifically validated to be effective for use in the Response to Intervention model, which has
been proposed as an alternative method of diagnosing learning disabilities in schools.

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Criticism of DI

One three-year study of methods of teaching reading showed that highly scripted, teacher-
directed methods of teaching reading were not as effective as traditional methods that allowed a
more flexible approach.[11] Urban teachers in particular expressed great concern over the DI's
lack of sensitivity to issues of poverty, culture and race. The former president of the National
Science Teachers Association (NSTA), Anne Tweed, questioned whether direct instruction was
the most effective science teaching strategy. In the December 15, 2004 NSTA Reports she
concluded that "direct instruction alone cannot replace the in-depth experience with science
concepts that inquiry-based strategies provide." Some critics also see DI as a betrayal of the
humanistic, egalitarian foundations of public education, or as a "canned" or "teacher proof"
curriculum deliverable via unskilled teachers.

Observational learning

Observational learning is learning that occurs through observing the behavior of others. It is a
form of social learning which takes various forms, based on various processes. In humans, this
form of learning seems to not need reinforcement to occur, but instead, requires a social model
such as a parent, sibling, friend, or teacher. Particularly in childhood, a model is someone of
authority or higher status. In animals, observational learning is often based on classical
conditioning, in which an instinctive behavior is elicited by observing the behavior of another
(e.g. mobbing in birds), but other processes may be involved as well.

Human observational learning

Many behaviors that a learner observes, remembers, and imitates are actions that models display,
even though the model may not intentionally try to instill a particular behavior, A child may
learn to swear, smack, smoke, and deem other inappropriate behavior acceptable through poor
modeling. Bandura claims that children continually learn desirable and undesirable behavior
through observational learning. Observational learning suggests that an individual's environment,
cognition, and behavior all integrate and ultimately determine how the individual functions.
Through observational learning, individual behaviors can spread across a culture through a
process called diffusion chain. This basically occurs when an individual first learns a behavior by
observing another individual and that individual serves as a model through whom other
individuals learn the behavior, and so on. Culture plays a role in whether observational learning
is the dominant learning style in a person or community. Some cultures expect children to
actively participate in their communities and are therefore exposed to different trades and roles
on a daily basis.[4] This exposure allows children to observe and learn the different skills and
practices that are valued in their communities. Albert Bandura, who is known for the classic
Bobo doll experiment, identified this basic form of learning in 1961. The importance of
observational learning consists of helping individuals, especially children, acquire new responses
by observing others' behavior. Albert Bandura states that people’s behavior could be determined
by their environment. Observational learning occurs through observing negative and positive
behaviors. Bandura believes in reciprocal determinism in which the environment can influence
people’s behavior and vice versa. For instance, the Bobo doll experiment shows that model, in a
determined environment, affects children’s behavior. In this experiment Bandura demonstrates

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that one group of children placed in an aggressive environment would act the same way. While
the control group and the other group of children placed in a passive role model environment
hardly shows any type of aggression. In communities where children's primary mode of learning
is through observation, the children are rarely separated from adult activities. This incorporation
into the adult world at an early age allows children to use observational learning skills in
multiple spheres of life. This learning through observation requires keen attentive abilities.
Culturally, they learn that their participation and contributions are valued in their communities.
This teaches children that it is their duty, as members of the community, to observe others'
contributions so they gradually become involved and participate further in the community.

Bandura's social cognitive learning theory states that there are four stages involved in
observational learning:

Attention: Observers cannot learn unless they pay attention to what's happening around them.
This process is influenced by characteristics of the model, such as how much one likes or
identifies with the model, and by characteristics of the observer, such as the observer's
expectations or level of emotional arousal.

1. Retention/Memory: Observers must not only recognize the observed behavior but also
remember it at some later time. This process depends on the observer's ability to code or
structure the information in an easily remembered form or to mentally or physically
rehearse the model's actions.
2. Initiation/Motor: Observers must be physically and/intellectually capable of producing
the act. In many cases the observer possesses the necessary responses. But sometimes,
reproducing the model's actions may involve skills the observer has not yet acquired. It is
one thing to carefully watch a circus juggler, but it is quite another to go home and repeat
those acts.
3. Motivation: Coaches also give pep talks, recognizing the importance of motivational
processes to learning.

Bandura clearly distinguishes between learning and performance. Unless motivated, a person
does not produce learned behavior. This motivation can come from external reinforcement, such
as the experimenter's promise of reward in some of Bandura's studies, or the bribe of a parent. Or
it can come to vicarious reinforcement, based on the observation that models are rewarded. High-
status models can affect performance through motivation. For example, girls aged 11 to 14
performed better on a motor performance task when they thought it was demonstrated by a high-
status cheerleader than by a low-status model. Some have even added a step of encoding a
behavior between attention and retention.

Observational learning leads to a change in an individual's behavior along three dimensions:

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 1. An individual thinks about a situation in a different way and may have incentive to react
on it.
2. The change is a result of a person's direct experiences as opposed to being in-born.
3. For the most part, the change an individual has made is permanent.[10]

Effect on behavior

According to Bandura's social cognitive learning theory, observational learning can affect
behavior in many ways, with both positive and negative consequences. It can teach completely
new behaviors, for one. It can also increase or decrease the frequency of behaviors that have
previously been learned. Observational learning can even encourage behaviors that were
previously forbidden (for example, the violent behavior towards the Bobo doll that children
imitated in Albert Bandura's study). Observational learning can also influence behaviors that are
similar to, but not identical to, the ones being modeled. For example, seeing a model excel at
playing the piano may motivate an observer to play the saxophone.

Age difference

Albert Bandura stressed that developing children learn from different social models, meaning
that no two children are exposed to exactly the same modeling influence. From infancy to
adolescence, they are exposed to various social models. A 2013 study found that a toddlers'
previous social familiarity with a model was not always necessary for learning and that they
were also able to learn from observing a stranger demonstrating or modeling a new action to
another stranger. It was once believed that babies could not imitate actions until the latter half of
the first year. However a number of studies now report that infants as young as seven days can
imitate simple facial expressions. By the latter half of their first year, 9-month-old babies can
imitate actions hours after they first see them. As they continue to develop, toddlers around age
two can acquire important personal and social skills by imitating a social model. Deferred is an
important developmental milestone in a two-year-old, in which children not only construct
symbolic representations, but can also remember information.[12] Unlike toddlers, children of
elementary school age are less likely to rely on imagination to represent an experience. Instead,
they can verbally describe the model's behavior.[13] Since this form of learning does not need
reinforcement, it is more likely to occur regularly. As age increases, age-related observational
learning motor skills may decrease in athletes and golfers.[14] Younger and skilled golfers have
higher observational learning compared to older golfers and less skilled golfers.

Observational causal learning

Humans use observational causal learning to watch what other people’s actions and use that
information to find out how something works and how we can do it ourselves. A study of 25-

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month-old infants found that they can learn causal relations from observing human interventions.
They also learn by observing normal actions not created by intentional human action.

Comparisons with imitation

Observational learning is presumed to have occurred when an organism copies an improbable

action or action outcome that it has observed and the matching behavior cannot be explained by
an alternative mechanism. Psychologists have been particularly interested in the form of
observational learning known as imitation and in how to distinguish imitation from other
processes. To successfully make this distinction, one must separate the degree to which
behavioral similarity results from:

➢ predisposed behavior,
➢ increased motivation resulting from the presence of another animal,
➢ attention drawn to a place or object,
➢ learning about the way the environment works, as distinguished from what we
think of as
➢ Imitation (the copying of the demonstrated behavior) .

Observational learning differs from imitative learning in that it does not require a
duplication of the behavior exhibited by the model. For example, the learner may observe an
unwanted behavior and the subsequent consequences, and thus learn to refrain from that
behavior.

For example, Riopelle, A.J. (1960) found that monkeys did better with observational
learning if they saw the "tutor" monkey make a mistake before making the right choice. Heyes
(1993) distinguished imitation and non-imitative social learning in the following way: imitation
occurs when animals learn about behavior from observing nonspecific’s, whereas non-imitative
social learning occurs when animals learn about the environment from observing others. Not all
imitation and learning through observing is the same, and they often differ in the degree to which
they take on an active or passive form.

John Dewey describes an important distinction between two different forms of imitation:
imitation as an end in itself and imitation with a purpose. Imitation as an end is more akin to
mimicry, in which a person copies another’s act to repeat that action again. This kind of imitation
is often observed in animals. Imitation with a purpose utilizes the imitative act as a means to
accomplish something more significant. Whereas the more passive form of imitation as an end
has been documented in some European American communities, the other kind of more active,
purposeful imitation has been documented in other communities around the world.Observation
may take on a more active form in children’s learning in multiple Indigenous American
communities. Ethnographic anthropological studies in Yucatec Mayan and Quechua Peruvian
communities provide evidence that the home or community-centered economic systems of these
cultures allow children to witness first-hand, activities that are meaningful to their own
livelihoods and the overall well-being of the community. These children have the opportunity to
observe activities that are relevant within the context of that community, which gives them a
reason to sharpen their attention to the practical knowledge they are exposed to. This does not

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mean that they have to observe the activities even though they are present. The children often
make an active decision to stay in attendance while a community activity is taking place to
observe and learn. This decision underscores the significance of this learning style in many
indigenous American communities. It goes far beyond learning mundane tasks through rote
imitation; it is central to children’s gradual transformation into informed members of their
communities’ unique practices. There was also a study, done with children that concluded that
Imitated behavior can be recalled and used in another situation or the same.

Apprenticeship

Apprenticeship can involve both observational learning and modelling. Apprentices gain their
skills in part through working with masters in their profession and through observing and
evaluating the work of their fellow apprentices. Examples include renaissance inventor/painter
Leonardo da Vinci and Michelangelo, before succeeding in their profession they were
apprentices.

Learning without imitation

Michael Tomasello described various ways of observational learning without the process of
imitation in animals (ethology): Exposure- Individuals learn about their environment with a close
proximity to other individuals that have more experience. For example, a young dolphin learning
the location of a plethora of fish by staying near its mother.

• Stimulus enhancement - Individuals become interested in an object from watching others

interact with it.[24] Increased interest in an object may result in object manipulation,
which facilitates new object-related behaviors by trial-and-error learning. For example, a
young killer whale might become interested in playing with a sea lion pup after watching
other whales toss the sea lion pup around. After playing with the pup, the killer whale
may develop foraging behaviors appropriate to such prey. In this case, the killer whale
did not learn to prey on sea lions by observing other whales do so, but rather the killer
whale became intrigued after observing other whales play with the pup. After the killer
whale became interested, then its interactions with the sea lion resulted in behaviors that
provoked future foraging efforts.
• Goal emulation-Individuals are enticed by the end result of an observed behavior and
attempt the same outcome but with a different method. For example, Haggerty (1909)
devised an experiment in which a monkey climbed up the side of a cage, stuck its arm
into a wooden chute, and pulled a rope in the chute to release food. Another monkey was
provided an opportunity to obtain the food after watching a monkey go through this
process on four separate occasions. The monkey performed a different method and finally
succeeded after trial and error.

Peer model influences:

Observational learning is very beneficial when there are positive, reinforcing peer models
involved. Although individuals go through four different stages for observational learning:
attention; retention ; production; and motivation, this does not simply mean that when an

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individual's attention is captured that it automatically sets the process in that exact order. One of
the most important ongoing stages for observational learning, especially among children, is
motivation and positive reinforcement.

Performance is enhanced when children are positively instructed on how they can improve a
situation and where children actively participate alongside a more skilled person. Examples of
this are scaffolding and guided participation. Scaffolding refers to an expert responding
contingently to a novice so the novice gradually increases their understanding of a problem.
Guided participation refers to an expert actively engaging in a situation with a novice so the
novice participates with or observes the adult to understand how to resolve a problem.

Cultural variation

Cultural variation can be seen in the extent of information learned or absorbed by children
through the use of observation and more specifically the use of observation without verbal
requests for further information. For example, children from Mexican heritage families tend to
learn and make better use of information observed during classroom demonstration then children
of European heritage. Children of European heritage experience the type of learning that
separates them from their family and community activities. They instead participate in lessons
and other exercises in special settings such as school. Cultural backgrounds differ from each
other in which children display certain characteristics in regards to learning an activity. Another
example is seen in the immersion, of children in some Indigenous communities of the Americas,
into the adult world and the effects it has on observational learning and the ability to complete
multiple tasks simultaneously. This might be due to children in these communities having the
opportunity to see a task being completed by their elders or peers and then trying to emulate the
task. In doing so they learn to value observation and the skill-building it affords them because of
the value it holds within their community.[5] This type of observation is not passive, but reflects
the child's intent to participate or learn within a community. Observational learning can be seen
taking place in many domains of Indigenous communities. The classroom setting is one
significant example, and it functions differently for these communities in comparison to what is
commonly present in Western schooling. The emphasis of keen observation in favor of
supporting participation in ongoing activities strives to aid children to learn the important tools
and ways of their community). Engaging in shared endeavors - with both the experienced and
inexperienced - allows for the experienced to understand what the inexperienced need in order to
grow in regards to the assessment of observational learning. The involvement of the
inexperienced, or the children in this matter, can either be furthered by the children’s learning or
advancing into the activity performed by the assessment of observational learning. For the
Indigenous communities to rely on observational learning is a way allowing for their children to
be a part of ongoing activities in the community (Tharp, 2006).

Although learning in the IAC is not always the central focus when participating in an activity
studies have shown that attention in intentional observation differs from accidental observation.
Intentional participation is “keen observation and listening in anticipation of, or in the process of
engaging in endeavors”. This means that when they have the intention of participating in an
event, their attention is more focused on the details, compared to when they are accidentally
observing. Observational learning can be an active process in many Indigenous American

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communities. The learner must take initiative to attend to activities going on around them.
Children in these communities also take initiative to contribute their knowledge in ways that will
benefit their community. For example, in many Indigenous American cultures, children perform
household chores without being instructed to do so by adults. Instead, they observe a need for
their contributions and take initiative to accomplish the tasks based on observations of others
having done them. The learner's intrinsic motivations play an important role in the child's
understanding and construction of meaning in these educational experiences. The independence
and responsibility associated with observational learning in many Indigenous American
communities are significant reasons why this method of learning can involve more than just
watching and imitating. A learner must be actively engaged with their demonstrations and
experiences in order to fully comprehend and apply the knowledge they obtain.

1. Technology-Based Learning

Common methods of learning via technology include:

• Basic PC-based programs

• Interactive multimedia - using a PC-based CD-ROM
• Interactive video - using a computer in conjunction with a VCR
• Web-based training programs

The forms of training with technology are almost unlimited. A trainer also gets more of the
learner''s involvement than in any other environment and trainees have the benefit of learning at
their own pace.

Example: In the trucking industry one can imagine interactive multimedia training on tractor-
trailers followed by a proficiency test to see how well the employee knows the truck.

2. Simulators

Simulators are used to imitate real work experiences.

Most simulators are very expensive but for certain jobs, like learning to fly a 747, they are
indispensable. Astronauts also train extensively using simulators to imitate the challenges and
micro-gravity experienced on a space mission. The military also uses video games (similar to the
"shoot-em-up" ones your 14-year old plays) to train soldiers.

Example: Truck drivers could use simulators to practice responding to dangerous driving
situations.

3. On-The-Job Training

Jumping right into work from day one can sometimes be the most effective type of training.

Here are a few examples of on-the-job training:

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 ➢ Read the manual - a rather boring, but thorough way of gaining knowledge of about a
task.
➢ A combination of observation, explanation and practice.
➢ Trainers go through the job description to explain duties and answer questions.
➢ Use the intranet so trainees can post questions concerning their jobs and experts within
the company can answer them.

On-the-job training gives employees motivation to start the job. Some reports indicate that
people learn more efficiently if they learn hands-on, rather than listening to an instructor.
However, this method might not be for everyone, as it could be very stressful.

Example: New trucking employees could ride with experienced drivers. They could ask
questions about truck weigh stations, proper highway speeds, picking up hitchhikers, or any
other issues that may arise.

4. Coaching/Mentoring

Coaching/mentoring gives employees a chance to receive training one-on-one from an

experienced professional. This usually takes place after another more formal process has taken
place to expand on what trainees have already learned.

Here are three examples of coaching/mentoring:

➢ Hire professional coaches for managers (see our HR.com article on Understanding
Executive Coaching)
➢ Set up a formal mentoring program between senior and junior managers
➢ Implement less formal coaching/mentoring to encourage the more experienced
employees to coach the less experienced.

Coaching/mentoring gives trainees the chance to ask questions and receive thorough and honest
answers - something they might not receive in a classroom with a group of people. Example:
Again, truck drivers could gain valuable knowledge from more experienced drivers using this
method.

5. Lectures

Lectures usually take place in a classroom-format. It seems the only advantage to a lecture is the
ability to get a huge amount of information to a lot of people in a short amount of time. It has
been said to be the least effective of all training methods. In many cases, lectures contain no
form of interaction from the trainer to the trainee and can be quite boring. Studies show that
people only retain 20 percent of what they are taught in a lecture.

Example: Truck drivers could receive lectures on issues such as company policies and safety.

6. Group Discussions & Tutorials

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These most likely take place in a classroom where a group of people discuss issues. For
example, if an unfamiliar program is to be implemented, a group discussion on the new program
would allow employees to ask questions and provide ideas on how the program would work best.
A better form of training than lectures, it allows all trainees to discuss issues concerning the new
program. It also enables every attendee to voice different ideas and bounce them off one another.
Example: Truck drivers could have group discussions and tutorials on safety issues they face on
the road. This is a good way to gain feedback and suggestions from other drivers.

7. Role Playing

Role playing allows employees to act out issues that could occur in the workplace. Key skills
often touched upon are negotiating and teamwork.

A role play could take place between two people simulating an issue that could arise in the
workplace. This could occur with a group of people split into pairs, or whereby two people role
play in front of the classroom. Role playing can be effective in connecting theory and practice,
but may not be popular with people who don´t feel comfortable performing in front of a group of
people. Example: Truck drivers could role play an issue such as a large line-up of trucks is
found at the weighing station and one driver tells another that he might as well go ahead and skip
the whole thing. Or role play a driver who gets pulled over by a police officer and doesn´t agree
with the speeding charge.

8. Management Games

Management games simulate real-life issues faced in the workplace. They attract all types of
trainees including active, practical and reflective employees. Some examples of management
games could include:

➢ Computer simulations of business situations that managers ´play´.

➢ Board games that simulate a business situation.
➢ Games surrounding thought and creativity - to help managers find creative ways to solve
problems in the workplace, or to implement innovative ideas.

Example: In a trucking business, managers could create games that teach truckers the impact of
late deliveries, poor customer service or unsafe driving.

9. Outdoor Training

A nice break from regular classroom or computer-based training, the usual purpose of outdoor
training is to develop teamwork skills.

Some examples include:

➢ Wilderness or adventure training - participants live outdoors and engage in activities like
whitewater rafting, sailing, and mountain climbing.

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 ➢ Low-impact programming - equipment can include simple props or a permanently
installed "low ropes" course.

➢ High-impact programming - Could include navigating a 40-foot "high ropes" course, rock
climbing, or rappelling.

Outgoing and active participants may get the most out of this form of training. One risk trainers
might encounter is distraction, or people who don´t like outdoor activities. Example: As truck
drivers are often on the road alone, they could participate in a nature-training course along with
depot personnel to build esprit de corps.

10. Films & Videos

Films and videos can be used on their own or in conjunction with other training methods. To be
truly effective, training films and videos should be geared towards a specific objective. Only if
they are produced effectively, will they keep the trainees attention. They are also effective in
stimulating discussion on specific issues after the film or video is finished.

Films and videos are good training tools, but have some of the same disadvantages as a lecture -
i.e., no interaction from the trainees. A few risks to think about - showing a film or video from an
outside source may not touch on issues directly affecting a specific company. Trainees may find
the information very interesting but irrelevant to their position in the company. Some trainers
like to show videos as a break from another training method, i.e. as a break from a lecture instead
of a coffee break. This is not a good idea for two reasons. One: after a long lecture, trainees will
usually want a break from any training material, so a training film wouldn´t be too popular. Two:
using films and videos solely for the purpose of a break could get expensive. Example: Videos
for truckers could show the proper way to interact with customers or illustrate preventive
maintenance techniques.

11. Case Studies

Case studies provide trainees with a chance to analyze and discuss real workplace issues. They
develop analytical and problem-solving skills, and provide practical illustrations of principle or
theory. They can also build a strong sense of teamwork as teams struggle together to make sense
of a case. All types of issues could be covered - i.e. how to handle a new product launch.
Example: Truck drivers could use case studies to learn what issues have been faced in the
trucking industry in the past and what they could do if a similar situation were to occur.

12. Planned Reading

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Basically planned reading is pre-stage preparation to more formal methods of training. Some
trainees need to grasp specific issues before heading into the classroom or the team-building
session.

Planned reading will provide employees with a better idea of what the issues are, giving them a
chance to think of any questions beforehand. Example: Here we may be stretching if we think
that truckers are going to read through a lot of material the training department sends them.

Conclusion

Many avenues exist to train employees. The key is to match the training method to the situation.
Assess each training method implemented in the organization and get feedback from trainees to
see if they learned anything. Then take the results from the most popular and most effective
methods to design a specific training program. There are several different types of training
methods used to acclimate an employee to a new job or even to a new position within his current
organization. In this lesson, we'll discuss several different methods, including on-the-job
training, job rotation and job mentoring.

Training Methods

In this lesson, we will study several training methods managers use to teach an employee a new
job or task in the organization. The training methods include on-the-job training, job rotation and
job mentoring. Each method has advantages and disadvantages. Let's look at how Cookie, a
training manager at Sweets Candy Factory, uses the training methods to train new and current
employees.

On-the-Job Training

On-the-job training allows employees to learn by actually performing a specific job or task. The
employee will perform the job and learn as he goes. On-the-job training can be structured by
using hands-on application supported by classroom-type instruction. It can also be unstructured
using only hands-on application.

Cookie hired a new candy wrapper named Patti. Patti had no experience working in a candy
factory. In fact, Patti had no experience working on an assembly line either. Cookie used
unstructured on-the-job training to teach Patti how to do her job. This method works well for the
job of candy wrapping. As the candies move along the assembly line, Patti learned how to wrap
each candy while working alongside a more experienced candy wrapper. The more experienced
candy wrapper showed Patti exactly how to wrap candies, how to time the assembly line and
how to detect irregularly shaped candies. If Patti made a mistake, the trainer would be able to
correct it immediately.

➢ The advantages of this method are:

➢ Immediate feedback on performance

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 ➢ Swift remediation if task is not performed to standard
➢ The disadvantages of this method are:
➢ Can slow down production for the trainer
➢ Can disrupt the workflow

Job Rotation

Job rotation teaches current employees how to do various jobs over time. The employee will
rotate around to different jobs within the organization, performing various different tasks
unrelated to his original job. Cookie uses job rotation for tasks that require a specific skill set,
like chocolate mixing. By learning different facets of the candy making process, the employees
develop more skills. This method is useful when employees call out sick or take vacations.
Cookie temporarily moved Melvin, an experienced candy cutter, over to the mixing department
to learn how to mix chocolate. Melvin worked alongside an experienced chocolate mixer to learn
the job. With Melvin well trained in mixology, Cookie knew that if necessary, she could quickly
and easily move him from candy cutting to chocolate mixing without disrupting the factory's
output.

The advantages of this method are:

➢ Reduces employee boredom

➢ Increases skills
➢ Opens new opportunities to employees
➢ Hones in on employee interests
➢ The disadvantages of this method are:
➢ Employee may not be satisfied with the new rotation
➢ Employee morale may decrease if employee is moved for a long period of time
➢ Can disrupt the workflow as employee learns new task or job

Job Mentoring

Job mentoring involves providing an employee with an experienced coach to oversee his or her
learning experience. The mentor or coach provides advice and instruction, but is not performing
the job with the employee as in on-the-job training. The trainee employee learns the job firsthand
and may consult the mentor or coach at any time for assistance. Cookie uses this method for
high-level positions, like management trainee programs. This method works well for employees
who have already acclimated to the company and have been moved up or promoted through the
ranks. When Coco, the marketing manager, notified Cookie that she would be moving out of
state in a month, Cookie assigned Coco to begin mentoring Ruth, the current marketing
coordinator, for Coco's position. This meant that Ruth would shadow or watch Coco as she

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performed her job. Ruth would take on some of Coco's responsibilities during the transition.
Eventually, Ruth would perform all tasks of the job. Coco would be on hand to offer advice as
needed.

The advantages to this method are:

➢ One-on-one training is often personalized

➢ Mentor is available to offer advice
➢ Mentee experiences growth within the company
➢ The disadvantages to this method are:
➢ Mentor-mentee pairing may not be a good fit
➢ Workflow may be disrupted due to one-on-one training

Lesson Summary:

In summary, there are several different types of training methods used to acclimate an employee
to a new job or even to a new position within his current organization. These methods include:
on-the-job training, job rotation and job mentoring. Each method has advantages and
disadvantages. On-the-job training allows employees to learn by actually performing a specific
job or task. On-the-job training can be structured, using hands-on application supported by
classroom-type instruction, and it can be unstructured, using only hands-on application. This
method is good for new employees learning a new job or task. The advantages to on-the-job
training are that the employee receives immediate feedback and remediation. However, it can
disrupt workflow and decrease productivity. Job rotation teaches current employees how to do
various jobs over time. This method works well for tasks that require a specific job skill. Once
employees have learned different tasks or jobs by rotating through the organization, it is easy to
fill gaps due to absences or vacations. The advantages of job rotation are that employees do not
become bored by repeatedly performing a single task, but it can create lower morale if the
employee finds himself in a rotation that he does not enjoy. Job mentoring involves providing an
employee with an experienced coach to oversee the employee's learning experience. This method
is good for high-level positions. As more tenured employees leave the company or are promoted,
they serve as mentors or coaches to upcoming employees filling their position. The advantage of
this method is the one-on-one nature of the training. However, the mentor-mentee pairing must
be a good fit.

Learning Outcome

After watching this video, you will be able to describe the advantages and disadvantages of
mentoring, on-the-job training and job rotation, which are all methods of training employees.

The Most Effective Training Techniques

There are numerous methods and materials available to help you prepare and equip employees to
better do their jobs. Indeed, with so many choices out there, it can be daunting to determine

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which methods to use and when to use them. And using several methods for each training
session may actually be the most effective way to help employees learn and retain information.
In this article, we take a close look at each of the myriad techniques, and examine their
advantages and disadvantages. We also explain how you can combine the various methods into
an effective blended learning approach.

Overall Considerations

Before considering specific training techniques, ask yourself these questions:

➢ What are your training goals for this session?

o New skills
o New techniques for old skills
o Better workplace behavior
o A safer workplace
o A fair and equal workplace free of discrimination and harassment
➢ Who is being trained?
o New employees
o Seasoned employees
o Upper management
➢ What is your training budget?
➢ How much time has been allocated for training within your organization?
➢ What training resources and materials do you have at your disposal?

Your answers to these questions begin the narrowing process for your training choices. Now let’s
examine those training methods, their pros and cons, and where they best fit in a training
program.

The Choices

Even with the many technological advances in the training industry, traditional formats remain
viable and effective.

Classroom or Instructor-Led Training

Instructor-led training remains one of the most popular training techniques for trainers. There are
many types including:

➢ Blackboard or whiteboard. This may be the most “old-fashioned” method, but it can still
be effective, especially if you invite trainees to write on the board or ask for feedback that
you write on the board.

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 ➢ Overhead projector. This method is increasingly being replaced with PowerPoint
presentations, which are less manually demanding, but overheads do allow you to write
on them and customize presentations easily on the spot.
➢ Video portion. Lectures can be broken up with video portions that explain sections of the
training topic or that present case studies for discussion.
➢ PowerPoint Presentation. Presentation software is used to create customized group
training sessions that are led by an instructor. Training materials are provided on
CDROM and displayed on a large screen for any number of trainees. Employees can also
use the programs individually, which allows for easy make-up sessions for employees
who miss the group session. This method is one of the most popular lecture methods and
can be combined with handouts and other interactive methods. [See page 37 for
PowerPoint presentation tips.]
➢ Storytelling. Stories can be used as examples of right and wrong ways to perform skills
with the outcome of each way described. This method is most effective with debriefing
questions, such as:
o How does this story relate to training?
o How did the main character’s choices make you feel?
o What assumptions did you make throughout the story? Were they correct?
o What would you have done differently?
o This technique makes communication easier since it is nonthreatening with no
one right answer. It is cost effective, especially if trainers have their own stories to
tell. Stories can also make sessions more personal if they involve people trainees
know. You can also find many training stories online.
➢ Advantages
➢ Instructor-led classroom training is an efficient method for presenting a large body of
material to large or small groups of employees.
➢ It is a personal, face-to-face type of training as opposed to computer-based training and
other methods we will discuss later.
➢ It ensures that everyone gets the same information at the same time.
➢ t is cost-effective, especially when not outsourced to guest speakers.
➢ Storytelling grabs people’s attention.

Disadvantages

➢ Sometimes it is not interactive.

➢ Too much of the success of the training depends on the effectiveness of the lecturer.
➢ Scheduling classroom sessions for large numbers of trainees can be difficult—especially
when trainees are at multiple locations.

You can use lectures effectively by making sure your audience is engaged throughout the
session. Here are several ways to achieve this:

➢ Train your trainers in the art and science of public speaking.

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 ➢ Give your trainers the materials they need.
➢ Use with interactive methods.

Interactive Methods

There are many ways that you can break up training sessions and keep trainees attentive and
involved, including:

• Quizzes. For long, complicated training, stop periodically to administer brief quizzes on
information presented to that point. You can also begin sessions with a prequiz and let
participants know there will also be a follow-up quiz. Trainees will stay engaged in order
to improve their prequiz scores on the final quiz. Further motivate participants by
offering awards to the highest scorers or the most improved scores.
• Small group discussions. Break the participants down into small groups and give them
case studies or work situations to discuss or solve. This is a good way for knowledgeable
veteran employees to pass on their experience to newer employees.
• Case studies. Adults tend to bring a problem-oriented way of thinking to workplace
training. Case studies are an excellent way to capitalize on this type of adult learning. By
analyzing real job-related situations, employees can learn how to handle similar
situations. They can also see how various elements of a job work together to create
problems as well as solutions.
• Active summaries. Create small groups and have them choose a leader. Ask them to
summarize the lecture’s major points and have each team leader present the summaries to
the class. Read aloud a prewritten summary and compare this with participants’
impressions.
• Q & A sessions. Informal question-and-answer sessions are most effective with small
groups and for updating skills rather than teaching new skills. For example, some
changes in departmental procedure might easily be handled by a short explanation by the
supervisor, followed by a question-and-answer period and a discussion period.
• Question cards. During the lecture, ask participants to write questions on the subject
matter. Collect them and conduct a quiz/review session.
• Role-playing. By assuming roles and acting out situations that might occur in the
workplace, employees learn how to handle various situations before they face them on
the job. Role-playing is an excellent training technique for many interpersonal skills, such
as customer service, interviewing, and supervising.
• Participant control. Create a subject menu of what will be covered. Ask participants to
review it and pick items they want to know more about. Call on a participant to identify
his or her choice. Cover that topic and move on to the next participant.
• Demonstrations. Whenever possible, bring tools or equipment that are part of the
training topic and demonstrate the steps being taught or the processes being adopted.
• Other activities.

➢ Create a personal action plan

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 ➢ Raise arguments to issues in the lecture
➢ Paraphrase important or complex points in the lecture

Advantages

➢ Interactive sessions keep trainees engaged in the training, which makes them more
receptive to the new information.
➢ They make training more fun and enjoyable.
➢ They provide ways for veteran employees to pass on knowledge and experience to newer
employees.
➢ They can provide in-session feedback to trainers on how well trainees are learning.

Disadvantages

➢ Interactive sessions can take longer because activities, such as taking quizzes or breaking
into small groups, are time-consuming.
➢ Some methods, such as participant control, can be less structured, and trainers will need
to make sure that all necessary information is covered.

Hands-On Training

Experiential, or hands-on, training, offers several more effective techniques for teaching
employees, including:

➢ Cross-training. This method allows employees to experience other jobs, which not only
enhances employee skills but also gives companies the benefit of having employees who
can perform more than one job. Cross-training also gives employees a better appreciation
of what co-workers do and how their own jobs fit in with the work of others to achieve
company goals.
➢ Demonstrations. Demonstrations are attention-grabbers. They are an excellent way to
teach employees to use new equipment or to teach the steps in a new process. They are
also effective in teaching safety skills. Combined with the opportunity for questions and
answers, this is a powerful, engaging form of training.
➢ Coaching. The goal of job coaching is to improve an employee’s performance. Coaching
focuses on the individual needs of an employee and is generally less formal than other
kinds of training. There are usually no set training sessions. A manager, supervisor, or
veteran employee serves as the coach. He or she gets together with the employee being
coached when time allows and works with this employee to:
o Answer questions
o Suggest more effective strategies
o Correct errors

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 o Guide toward goals
o Give support and encouragement
o Provide knowledgeable feedback
➢ Apprenticeships. Apprenticeships give employers the opportunity to shape
inexperienced workers to fit existing and future jobs. These programs give young
workers the opportunity to learn a trade or profession and earn a modest income.
Apprenticeship combines supervised training on the job with classroom instruction in a
formal, structured program that can last for a year or more.
➢ Drills. Drilling is a good way for employees to practice skills. Evacuation drills are
effective when training emergency preparedness, for example.

Advantages

➢ Hands-on training methods are effective for training in new procedures and new
equipment.
➢ They are immediately applicable to trainees’ jobs.
➢ They allow trainers to immediately determine whether a trainee has learned the new skill
or procedure.

Disadvantages

➢ They are not good for large groups if you do not have enough equipment or machines for
everyone to use.
➢ Personal coaching can be disruptive to the coach’s productivity.
➢ Apprenticeship can be expensive for companies paying for employees who are being
trained on the job and are not yet as productive as regular employees.

Computer-Based Training (CBT)

Computer-based training is becoming increasingly prevalent as technology becomes more

widespread and easy to use. Though traditional forms of training are not likely to be replaced
completely by technological solutions, they will most likely be enhanced by them. Human
interaction will always remain a key component of workplace training. Nonetheless, it is a good
idea to look more closely at what training technologies have to offer and how they might be used
to supplement existing training programs or used when developing new ones. Computer-based
training formats vary from the simplest text-only programs to highly sophisticated multimedia
programs to virtual reality. Consider the following types:

➢ Text-only. The simplest computer-based training programs offer self-paced training in a

text-only format. These programs are similar to print-based, individualized training
modules with the addition, in most cases, of interactive features. While simple in format,
these programs can be highly effective and present complicated information and concepts
in a comprehensible and easily accessible way.

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 ➢ CD-ROM. A wide variety of off-the-shelf training programs covering a broad range of
workplace topics are available on CD-ROM. Programs can also be created by training
consultants for the specific needs of the particular organization or individual departments.
➢ Multimedia. These training materials are an advanced form of computer-based training.
They are much more sophisticated than the original text-only programs. In addition to
text, they provide stimulating graphics, audio, animation, and/or video. Multimedia tends
to be more provocative and challenging and, therefore, more stimulating to the adult
mind. Although costs are higher than text-only software, the benefits in terms of
employee learning may well be worth it. Multimedia training materials are typically
found in DVD format.
➢ Virtual reality. Virtual reality is three-dimensional and interactive, immersing the
trainee in a learning experience. Most virtual reality training programs take the form of
simulation, which is a highly effective form of training. It is hands-on experience without
the risks of actual performance. Flight simulators, for example, have been used
successfully for years to train airline and military pilots in critical flying skills, as well as
to prepare them for emergency situations in a safe and forgiving environment.

Advantages

➢ Computer-based training programs are easy to use.

➢ They can often be customized or custom designed.
➢ They are good for helping employees develop and practice new skills.
➢ They are useful for refresher training. They are applicable to self-directed learning.
➢ They can be cost-effective because the same equipment and program can be used by large
numbers of employees.
➢ They are flexible because trainees can learn at their own pace and at a time that’s
convenient for them. Computer-based programs are available 24 hours a day, 7 days a
week. No matter which shift an employee works, training is always available.
➢ Some programs are interactive, requiring trainees to answer questions, make choices, and
experience the consequences of those choices. This interaction generally results in greater
comprehension and retention.
➢ They are uniform, which makes it possible to standardize training.
➢ They are measurable. When computers are used for training, it is possible to track what
each employee has learned right on the computer. Most programs have post-tests to
determine whether the employee has understood the training. Test scores give trainers
statistics for training evaluations.

Disadvantages

➢ These programs require trainees to be computer literate.

➢ They require trainees to have computer access.
➢ There is little or no interaction with a trainer; if trainees have questions, there’s no one to
ask.

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 ➢ These programs are not effective at teaching “soft-skills,” such as customer service, sales,
or sensitivity training.
➢ They are not the best choice for new or one-time training. Trainers need live interaction
to ensure new skills or concepts are being communicated. Trainees need to be able to ask
questions and receive feedback.
➢ Some poorly designed programs are “boring” and result in trainees having a poor
retention rate of the material as well as a low finish rate.

Online or E-Learning

In addition to computer-based training, many companies with employees in a variety of locations

across the country are relying on other technologies to deliver training. According to the ASTD
“State of the Industry” report, companies are using a record level of e-learning, and ASTD
predicts that number will continue to rise. This method is becoming more and more popular as
access to the Web becomes more widely available. Some examples include:

➢ Web-based training. This method puts computer-based training modules onto the Web,
which companies can then make available to their employees either on the company’s
intranet or on a section of the vendor’s website that is set up for your company. There are
many courses available on the Internet in many different topic areas. These courses
provide a hands-on, interactive way for employees to work through training presentations
that are similar to CD-ROM or PowerPoint, on their own. Training materials are
standardized because all trainees will use the same program. Materials are also easy to
update, so your training is always in step with your industry. Web-based training
programs are also often linked with software (a learning management system, or LMS)
that makes trainees’ progress trackable, which makes recordkeeping very easy for the
training administrator.
➢ Tele- or videoconferencing. These methods allow the trainer to be in one location and
trainees to be scattered in several locations. Participants are networked into the central
location and can usually ask questions of the trainer via the telephone or by a webchat
feature. Lectures and demonstrations can be effective using this method.
➢ Audioconferencing. This method is similar to videoconferencing but involves audio
only. Participants dial in at the scheduled meeting time and hear speakers present their
training. Question and answer sessions are frequently held at the end of sessions in which
participants can email questions or call in and talk to a presenter.
➢ Web meetings, or webinars. This method contains audio and visual components.
Participants dial in to receive live audio training and also follow visual material that
appears on their computer screens. These presentations are similar to CD-ROM or
PowerPoint presentations and sometimes offer minimal online interactivity. Q & A
sessions may also be held at the end of sessions.
➢ Online colleges and universities. This method is also known as distance learning, and
many schools now offer certificates or degrees through online programs that require only
minimal on-campus residency.

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 ➢ Collaborative document preparation. This method requires participants to be linked on
the same network. It can be used with coaches and trainees to teach writing reports and
technical documents.
➢ E-mail. You can use e-mail to promote or enhance training. Send reminders for
upcoming training. Solicit follow-up questions for trainers and/or managers. Conduct
training evaluations through e-mail forms.

Advantages

➢ Online or e-learning programs are effective for training across multiple locations.
➢ They save the company money on travel expenses.
➢ They can be a less expensive way to get training from expert industry professionals and
consultants from outside the company.
➢ They are useful for refresher training.
➢ They are good for self-directed learning.
➢ They can be easy to update with new company policies or procedures, federal
regulations, and compliance issues.
➢ They offer trainers a growing array of choices for matching training programs to
employee knowledge and skill levels.

Disadvantages

➢ These programs require trainees to be computer literate.

➢ They are usually generic and not customized to your company’s needs.
➢ Some employees may not like the impersonal nature of this training.

➢ Employees may be too intimidated by the technology or the remoteness of the trainer to
ask questions.
➢ Lack of computer terminals or insufficient online time may restrict or preclude access to
training.
➢ Inadequate or outdated hardware devices (e.g., sound cards, graphics accelerators, and
local area networks) can cause programs to malfunction.
➢ Your company’s Internet servers may not have enough bandwidth to receive the
materials.

➢ Self-instruction offers limited opportunities to receive context-specific expert advice or

timely response to questions

How to Use a Blended Learning Approach

Blended learning is a commonsense concept that results in great learning success. The blended
learning approach is simply acknowledging that one size doesn’t fit all when it comes to training.

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In a nutshell, blended learning means using more than one training method to train on one
subject. Here are several good reasons to use a blended learning approach:

➢ A University of Tennessee study showed that a blended learning program reduced both
the time and the cost of training by more than 50 percent.
➢ The same study showed a 10 percent improved result in learning outcomes compared
with traditional training.
➢ Learning experts believe that a big advantage of blended learning is that it more closely
replicates how people actually learn on the job, through experience and interaction with
co-workers.

This approach works well because the variety of approaches keeps trainers and trainees engaged
in training. Blended learning simply makes a lot of sense. Consider the many factors that affect
training:

➢ Subject matter
➢ Audience make-up
➢ Types of learners
➢ Budget considerations
➢ Space constraints
➢ Compliance issues

Any or all of these considerations affect your choices for training and may even necessitate that
you use a blended learning approach. Chances are you already use this method perhaps without
even realizing it. Have you ever:

• Used a PowerPoint training session and incorporated written quizzes, small group
discussions, and role plays at various points in the training?
• Broken a complex subject into parts and used a different training method to teach each
section or step?
• Used a live trainer with hands-on demonstrations for initial training and a CD-ROM or
online course for refresher training?

If you have done any of the above methods, you are already using a blended learning approach.
Here’s how to plan a blended learning training program.

Once you’ve identified training needs, answer these questions about each situation:

➢ What are the training conditions?

➢ Do you have a classroom? How many people will it hold?
➢ How many computers do you have access to?
➢ What resources are available?
➢ What are the characteristics of the training content? Is it soft or hard?

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 ➢ Who is your target audience?
➢ What are its demographics?
➢ How many languages do you need to accommodate? Which ones?
➢ How many employees need this training?
➢ How quickly do you need to accomplish this training?

Your answers will direct you to the optimal delivery method. However time consuming this
process may seem, blended learning offers trainees a well-planned session that is custom-
designed for them, the subject, and the learning environment. In the long run, blended learning
saves time and money since this training process is an efficient use of resources to help
employees develop sufficient levels of knowledge retention.

NO TIME TO PREPARE OR DELIVER TRAINING?

Corporate Wellness Training

Study after study has shown it, and it appears the results are sinking in: Corporate wellness
training does much more than improve employee health and morale - it leads to increased
productivity, decreased health care costs, and a more attractive bottom line.
Customer Service Training
Effective customer service training is critical to your organization's success. Without your
customers, you wouldn't be in business. Whether you present a customer service training
workshop or meet with employees one-on-one, here are some important customer service
training tips to pass along.
Employee Orientation Training
While all employees are exposed to workplace hazards, none are more at risk than your new
hires. Employee orientation training basics include showing new workers how to perform their
jobs safely and efficiently. But leading companies know that it is important to go much further
than that.
Employee Wellness Training
Employee wellness training encourages workers to adopt or maintain healthy lifestyles - or at
least take the first steps toward learning about healthy alternatives. There are additional benefits
too, such as increased productivity, fewer workers' compensation claims, better attendance, and
improved
Importance of Employee Training
The importance of training your employees - both new and experienced - cannot be
overemphasized. Manager and supervisor training and development is equally important as
orienting new employees in order to promote workplace safety, productivity, and satisfaction.
Online Employee Training

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A growing number of employers are turning to online employee training for a hands-on,
interactive way for employees to learn. More economical in both time and money than
conventional training, this form of training has become more and more popular as Internet
technology has improved.
Spanish Worker Training
The Spanish-speaking or Hispanic workforce increased 36 percent times faster than other ethnic
groups between 1996 and 2006 and will make up more than 15 percent of the U.S. workforce by
2050. Spanish worker training about safety will help reduce injuries and fatalities for these
workers. It takes serious effort to create a training program that actually sticks after your
employees have gone through it and started their jobs. The thing is, if you’re using boring old
lectures to convey important information, you may be putting your organization at risk. Whether
your company operates heavy machinery, works with others’ money, sells products for babies or
children, or otherwise has an easily identifiable risk associated with the work – which most
companies do – you want to make sure your rules and procedures stay with your workers over
the long term. How, you’re wondering? Use the right training methods. Stuffy training
methodologies that rely on rote learning often won’t do the trick. The many workers aren’t
scholars, and traditional classroom learning needs a serious tune-up in order to reach them.
That’s why you need to adopt training methodologies and tools that reach your learners where
they’re at, taking into account their specific needs, their learning styles and the goals of the
training. This often involves software coupled with a more hands-on, on-the-job approach. Read
on to learn more about how you can train your employees, deliver material, use classroom-style
training effectively, and more.

Employee Training Methods

There are several employee training methods in the workplace today. Which employee training
methods end up working for you will depend on your own personal style, the structure of your
workplace, how many employees you need to onboard, what you’re teaching, what your
employees need to learn, their individual learning styles, whether you’re teaching brand-new
employees or helping older ones brush up on material or add to their preexisting knowledge base,
and more. Although it can sound confusing to take all these factors into account, all you really
need to do is consider the current types of training methods in human resource management
available to you and choose the one that seems to fit your needs the best. Although there are
many types of training available, let’s go over a few of the most common. Classroom-style
training is still one of the most effective training methods for new employees. However, you
have to be careful to approach it correctly, as many employees won’t respond well to being
handed a book and expected to learn. You have to interact and engage learners, and make the
knowledge stick by using real-world examples and drawing clear applications to your
organization. If you can do all this, your training program will likely be very successful. Often it
helps to use software, which responds readily to the needs of various learners, can go at different
paces, and adapts to a variety of training situations. Other effective business training methods
include 1:1 training, which matches one learner with one instructor to show them the ropes. If
you can spare the resources, this can be an excellent way to quickly familiarize a new employee
with their job-to-be. Methods for employee training in the workplace also include job
shadowing, which is similar to 1:1 training in that the trainee will follow an experienced worker

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around to learn their job. However, they are supposed to play the role of a “shadow,” meaning
that there is less interaction between the experienced worker and the new employee, as the latter
just watches and learns and sometimes asks questions. This is a better way to get a feel for what
an actual day, or week, or more, will look like for that new employee. Self-training, which relies
on the new employee conducting research to learn what they need to know for the job, is also an
employee training methods learning style. Other types of training methods in training and
development include bulk training, where you train large numbers of employees at once, and
automated training, such as we offer here at Lesson. Automated training can help you reach large
numbers of employees all at once, or it can allow you to train individual employees as they come
on board quickly and easily, so that you don’t have to waste time waiting for a large enough
batch of employees to justify a classroom series or other group training approach. By using
tailored software, you reach employees immediately, giving them the skills they need to become
valuable employees right away.

When you’re looking for effective communication methods in the workplace, types of training
methods really matter. If you’re confused or indecisive about which types of training
methodologies for adults might be effective in your organization, feel free to review the training
methods pdf here to give you some ideas and get you going in the right direction. Be sure to
determine which method is for you, then you can get your employees where they need to be
more quickly.

Training Delivery Methods

Once you know what you want to teach the employees you’re onboarding and have decided on a
training method, you’ve still got to figure out how to get it to them. This can be a tough prospect,
especially since many companies aren’t even working with a solid training delivery methods
definition. In essence, a training delivery method is the way you get information to your
employees. There are lots of ways to do this.

Oftentimes, organizations decide to mesh a little job shadowing with a little 1:1 training with a
bit of book learning and maybe a training program on the side, but this might not be the best
approach. Especially not if you’re looking to streamline your training delivery methods in order
to routinize your onboarding process and keep costs down in the long run. Instead, choose one or
a few complementary types of training and stick to those, using them each time. For everything
your trainees must learn outside the classroom (such as on the floor or in the field), build a
routine training program around that. For everything inside the classroom, choose a training
delivery method that keeps all the information together where it is easily accessible to learners
day after day. At Lesson.ly, we believe firmly in the power of software to build solid training
programs that meet learners where they’re at, stay organized, remain customizable and flexible,
and work for you year after year.

Lots of companies are still stuck in the past, handing out disorganized Word documents to their
employees and hoping the learning sticks. Often, however, it won’t, especially when that
employee has a hard time finding the loose sheet of paper or sorting through the messy binder to
locate it. Such mysteries don’t encourage learning, so avoid them with a highly streamlined,

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effective software training program dedicated to encouraging employee growth and building the
work environment you dream of.

Traditional Training Methods

Classroom style training is still used across industries to bring new employees up to speed, but it
is changing. Traditional pen-and-paper approaches are becoming less effective (though they still
have their place!), while software programs are rising in usefulness and prevalence. However, it
is too simplistic to say the one is replacing the other. Rather, they now work well in tandem in
many companies.

Training software has many advantages over traditional classroom-style training. Although this
list is not exhaustive, here are several:

➢ It is more efficient, requiring fewer resources in the form of training personnel.

➢ It is more effective, teaching in a way that allows learners to retain information for
longer.
➢ It is often easier to use, because employees can use the software in the way that suits
them best, rather than making do with the trainer’s teaching style.
➢ It has increased tracking capabilities, allowing managers or trainers to see where each
student is at and provide additional help where needed.
➢ It is more cost-effective because training programs can be reused for years on many
different employees.

When considering the traditional training methods advantages and disadvantages, you must also
take into account the fact that many new employees in the digital age expect to be trained using
software and online resources. Their high school and college years, as well as continuing
education in many fields, has taught them that digital resources are among the most efficient,
easiest to learn from, and most worth paying attention to. That means many of your younger
employees will already have a bias toward software learning over more traditional training
methods that make it worth your while to use it.

Effective Training Methods

When you’re in charge of training employees, whether one at a time or dozens or even hundreds,
you want to make sure you use the right methods. Training is a tried-and-true process that dates
back to the invention of apprenticeship, but these days it’s become much more high-tech.
Although many training methods work, when you are training employees for a team
environment, software is often one of the most effective training methods. There are many
reasons for this, including:

➢ Software keeps all employees on the same page at all times, on all sorts of topics.
➢ You can train a full team of employees while still respecting their different learning styles
and allowing them to go at their own paces, within reason.

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 ➢ Management has unprecedented tracking abilities, allowing them to stay up-to-date on
their employee’s progress, offer help when necessary, make plans for improvement or
enrichment, and more.
➢ Real-time tracking of a student’s learning is easier and more cost-effective than ever
before.
➢ You can combine software training with other types of training, such as 1:1 training, job
shadowing or more traditional classroom methods.

• Software is highly customizable, both for management before they distribute materials, and for
learners as they use it.

Other effective training methods work well when they’re paired with software training, to ensure
that learners receive the full breadth of necessary knowledge. You may even be wondering what
training methods are effective in training executives, but good news: even with top-level
employees, software training is highly effective.

Selecting Training Methods

When selecting training methods, there are lots of factors to consider. You may wish to use a
training delivery methods comparison or a training delivery methods matrix to compare different
methods and see which will best meet your needs. It’s a good idea to write down the types of
factors you’ll be working with before you choose your method, answering as many of the
following questions as you can:

➢ How many people will we be training?

➢ What are their learning needs/backgrounds?
➢ What do they need to learn?
➢ What environments do we have available for training?
➢ Will software be useful?
➢ How often do we train?
➢ Who does the training?
➢ Do we need on-the-job training?

Of course, it’s good to use different cost effective training methods to fulfill different training
needs. For example, if you need your training to be basic, repeatable and testable, software is
probably a good way to go. If you are training on complex topics that require strategic planning
and lots of discussion, an in-person environment is probably better. These training
methodologies examples are just a few of the many out there, but use these models as ways to
think about how to choose your ideal training methods, and you will do fine.

Other Training Methods

If you really want to think outside the box in your training programs, consider models from other
industries or even other animals! Dog training methods, for instance, include approaches such as
crate training methods that can really shed light. While we’re not advising you crate train your
employees, the idea behind crate training is making a safe place for an animal and teaching him

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or her that they can use that place whenever they want. This isn’t a bad idea for employees,
especially new additions who might feel overwhelmed, underprepared or otherwise afraid. When
the training begins, point out there “safety zone” right away, so they’ve always got somewhere to
retire and get a breather. Or you could consider types of exercise training methods. These types
of physical training methods can offer a lot of insight into how competitive athletes hone their
bodies and minds to such high levels. Consider types of training methods in sport, such as
repetition, intervals (hard material, easy material, hard material, easy material) and friendly
competition to really get into the spirit of learning.

The purpose of training and development can be explained as follows.

Improving quality of work force:–

Training and development help companies to improve the quality of work done by their
employees. Training programs concentrate on specific areas. There by improving the quality
of work in that area.

Enhance employee growth:-

Every employee who takes development program becomes better at his job. Training provides
perfection and required practice, therefore employee’s area able to develop them professionally.

Prevents obsolescence:

Through training and development the employee is up to date with new technology and the fear
of being thrown out of the job is reduced.

Assisting new comer:

Training and development programs greatly help new employees to get accustomed to new
methods of working, new technology, the work culture of the company etc.

Bridging the gap between planning and implementation:

Plans made by companies expect people to achieve certain targets within certain time limit with
certain quality for this employee performance has to be accurate and perfect. Training helps in
achieving accuracy and perfection.

Health and safety measures:

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Training and development program clearly identifies and teaches employees about the different
risk involved in their job, the different problems that can arise and how to prevent
such problems. This helps to improve the health and safety measures in the company.

9 Reasons Your Employees Are Resisting Your Training

Many employees do not have a positive attitude toward training. Whether that is due to fear of
change or lack of engagement – it is a real issue. If you are hesitant to invest in your training
program because your employees are resisting, discover the nine reasons for their resistance,
then address them one by one.

1. Inability to see the relevance. One reason that your employees may be resisting your
training program is because they are unable to see how it relates to them or what the
outcome will be. When employees don’t feel as if the provided training is beneficial to their
job performance, overall success or daily lives, they become disinterested and resist. It is
hard for your trainees to put into perspective what the training can do for them, so they tend
to take a “just get it done” mentality.
2. Fear of losing control. This comes into play especially for seasoned employees who are
required to continue training mid-career. Your tenured employees don’t want to give up
control or feel like they are being forced to do something they don’t want to do. Employees
will resist training when they fear a loss of control over their success.
3. The job market is fluid. The time when an employee started a job with one company and
finished his career there is long gone. These days, if an employee isn’t getting what they
want or need from their employer, they have many opportunities to change jobs. We all have
shorter attention spans and limited tolerance, which means employers have to give them a
reason to stay or employees will find something else. If your training is not up to par, they
will move on.
4. Fear of change. If your employees do not embrace change, they may not see the value of
ongoing training.
5. Feeling undervalued by their employer. If your employees don’t feel as though they are
appreciated, they will likely not take training seriously. Once an employee feels
underappreciated, they begin to focus on the bare minimum expectations and fall short in
ongoing training opportunities.
6. Generational differences. Generational differences can play a large part in training
resistance. If you are trying to train a baby boomer who has been with the company for
years, you may find resistance due to their level of experience. When an employee feels they
are highly experienced and overqualified, they may resist training simply because they feel
they already know everything they need to know. Likewise, Millennials and Gen Xers can
find anything they need to know on the internet or from other sources, and may resist simply
because they feel they can find a better way.
7. Punishment aspect. Sometimes your employees may consider training requirements as a
sort of punishment. When your employees view training opportunities as punishment, rather
than the benefit it can be, they are sure to resist and think negatively about it.

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8. Lack of input or voice. If your employees feel ignored or like their input isn’t valuable to
the training program, they will oppose it. Everyone likes to feel as though their input is
valued, and when they don’t feel that way they will be less engaged and less motivated to be
trained.
9. Intruding on their free time. Employees will undoubtedly refuse to participate in training
sessions if they feel you aren’t respecting their time outside of the office. Training should
not normally be required outside of work hours.

Don’t fear investing in your training program simply because your employees are resistant. If
you address the top nine reasons for their opposition to training, you can create a more positive
view of training and garner all-around success of your program and your employees.

Executive development

Executive development is the whole of activities aimed at developing the skills and
competencies of those that (will) have executive positions in organisations. While "executive"
and "manager" and "leader" are often used interchangeably, "executive" is commonly used to
signify the top 5% to 10% of the organization. Similarly, "development" and "training" and
"education" are often used as synonyms, however "development" is generally seen as the most
encompassing of the three in terms of activities that build skills and competencies. While it is
typical to find organizations that have dedicated corporate training & development people and
processes, it is not always the case that an organization will have a dedicated executive
development set of activities. In some organizations (typically large multi-nationals), there is a
separate executive development team, in other organizations executive development is handled
as one of many activities by the larger corporate training group, and in yet other scenarios there
is no executive development activity to speak of. In contrast to other corporate training &
development activities, which have as their core purpose to build tactical skills for employees,
executive development plays a different role for the organization. Indeed some executive
development is conducted for the purpose of building tactical skills (sometimes referred to as
"hard skills" such as business fundamentals- finance, marketing, operations and also "soft skills"
such as communication and team building), yet executive development is also used to evaluate
future potential future executives as well as a mechanism for the CEO and the executive team to
cascade their strategies, goals, and even elements of the culture to the rest of the management
team and ultimately the organization. In the best of cases, executive development not only helps
an organization execute its key strategies, it can also help provide input to the strategy creation
process. In this way, executive development is much more strategic than typical corporate
training & development which is used for most employees of an organization.

Philosophies and Practices

There is a wide range of practices in the field of executive development today. On one hand,
there are organizations that have for many years, if not decades, had very thorough executive
development functions that conduct a wide variety of high profile and highly regarded set of
activities (GE's Ortonville is the classic example). On the other end of the spectrum, there are
some organizations that have curtailed many of the executive development activities and
spending in the wake of the economic crisis of 2008/2009. As one looks across different

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companies, and against the backdrop of different periods, there exists a wide variety of executive
development activity. Also, the main philosophy of executive development is quite different
depending on the organization. For some, the development process has and continues to play a
very strategic role in the organization- it is with and through executive development activities
that organizational strategies are formed, communicated, and reinforced with senior
management. In other organizations, development of executives is seen as an inherently positive
activity, which, akin to insurance, is probably better to have than not. In organizations where
development has not had an opportunity to prove its value, it may be seen as a waste of time and
rarely something that the organization commits its leaders' precious time toward.

Reporting & Structure

Most often the executive development function reports into the head of Talent Management, the
head of HR, or into the Chief Learning Officer (CLO). In rare cases, it reports into an operating
executive (i.e. COO). Executive development can be very effective under any reporting structure
– what is key is executive level sponsorship and access to senior line leaders who can help
ensure development is aligned with and supports the company's strategy. Most often, the head of
executive development will have additional resources working alongside him/her. These may be
in the form of direct reports, and/or HR business partners and shared resources in the Talent
Management function. While the majority of executive development professionals are the more
senior talent management professionals in the organization (based on expertise, education such
as graduate degree, and tenure), in some cases and perhaps more frequently organizations are
putting “outsiders” in charge of executive development who have not spent the bulk of their
career in Talent Management or Human Resources (some examples include CBS Corporation
and the U.S. Navy). Among the reasons for this are to bring a fresh perspective into the role and
to bring strategy and operational expertise into the function. On the supplier side, there exists a
rich ecosystem of development professionals; essentially any part of the executive development
process can be procured from an outside firm or set of individual consultants and coaches.

Primary Activities

Executive Development activities generally fall into two broad categories: Assessment and
Development as outlined below.

Assessment Capability Requirements – Provide input into the organization’s strategy

formulation process by identifying what is required of executives from a capability perspective

• Capability Assessment – Measure existing capabilities against required capabilities

• Gap Analysis – Identify gap between requirements and current assessment, with an eye
toward what capabilities can be “built” (development) vs. “bought” external hiring

DevelopmentSegment executive population– Create groupings of executives, by level,

geography, business unit, or other affiliation (C-suite track, high potential’s, critical roles etc.)

• Architect – Create development activities and experiences for the different segmentations

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 • Deliver – Coordinate across the ecosystem of internal and external partners to deliver
development experiences and manage execution of executive development initiatives,
etc.
• Measure & Refine – Conduct post activity ROI (typically Kirkpatrick Level I-IV), make
course corrections, summarize and report results

Some of the adjacent Talent Management activities that executive development may have
involvement with include the succession planning process (typically not CEO or CEO -1, but
below), executive onboarding (ideally both external hiring and internal changes), structuring on
the job developmental assignments, and working with alumni of development programs, and
alumni of the organization.

Developmental Options

Executive development professionals have a wide variety of activities they can choose to deploy
including in order of most commonly found:

• OTJ (On the job) stretch assignments, line and staff roles, rotational assignments
• Executive coaching
• Mentoring
• Custom workshops and activities
• Action learning
• Business school open enrollment courses
• Online courses and resources

Best Practices

The following are a set of best practices most often found in organizations that have long
standing development activities which are highly regarded in and outside of the organization.

• Articulate a clear and compelling vision – Leaders have many competing priorities, and
need a compelling set of reasons to support development activities. The development
team needs to build a compelling case and consistent themes across its development
strategy.
• Build support across key sponsors - Executive development professionals need to have a
deep set of contacts both inside of the organization and across many functions and
outside with thought leaders and experts. Many organizations have found that Advisory
Boards, which seek to create a formal process of soliciting the input from stakeholders as
highly effective. Relationships with internal executives, who are increasingly used as
“faculty” to delivery development, are important to nurture. A strong professional
network is the “currency” of the development professional.
• Ground development in business challenges – When in doubt, development that is rooted
in solving current and significant business challenges will always prevail over
development that is designed to round out a leader or a group of professionals.
• Shorten the timeline – Especially in light of budget cutbacks that are all too common in
organizations today, it is important that development is focused on solving current

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 operating cycle issues and challenges. Development plans that span many quarters risk
never being fully implemented.
• Market successes – Successful development professionals, like any other professionals in
the organization, are quite good at highlighting their impact for the organization and
making sure to create "buzz" for their work and activities. Whether through formal ROI
studies or informal anecdotal reviews that is circulated to strategic individuals, it is key to
promote success.

Executive Development 2.0

Below are key factors that are impacting the field of executive development:

• Time frame – The speed with which organizations need to revise strategies, launch new
products and services, expand their global footprint, etc. continues to accelerate; more
rapid means of enabling the organization and its leaders to make these changes are
required from the development function.
• Share of mind – Executives are incredibly taxed with an increasing set of responsibilities;
mid-level management has been reduced and the number of stakeholders (community,
environment, government, etc.) has increased, all putting incredible pressure on leaders.
Development that is not of immediate value risks elimination.
• Budget – The current economic situation has put great pressure on all expenses across the
organization, executive development is no exception. Centralized development budgets
are all targets, while certain activities such as executive coaching that may be paid out of
a business unit budget may be more insulated from cutbacks.
• "Bottom line" HR – As many organizations have become more results oriented and
quantitative for all support functions, there is increased pressure for HR and all of its
components to "raise its game" and prove in business terms its impact.

These factors are creating a new operating context for executive development professionals. In
response to this new environment, The Institute of Executive Development has articulated a
vision of what Executive Development 2.0 will look like:

➢ The purpose of the function is to drive the organizational strategy (not solely build skills)
➢ The content will be based on current business imperatives
➢ The timeline is focused on the immediate 12 months, not longer
➢ The format will include more on the job and action learning (vs. formal workshops and
programs)
➢ The audience will include stakeholders such as customers and partners
➢ The budget will be measured more in terms of investment of executive's time (vs. funds)

While executive development continues to become enriched by many approaches, one approach,
adult development and its subfield Positive Adult Development is beginning to create
opportunities for what has been essentially reserved for academic research to become an
increasing part of executive practices.

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Leadership development

Leadership development expands the capacity of individuals to perform in leadership roles

within organizations. Leadership roles are those that facilitate execution of a company’s strategy
through: building alignment, winning mindshare and growing the capabilities of others.
Leadership roles may be formal, with the corresponding authority to make decisions and take
responsibility, or they may be informal roles with little official authority (e.g., a member of a
team who influences team engagement, purpose and direction; a lateral peer who must listen and
negotiate through influence.

Developing individual leaders

Traditionally, leadership development has focused on developing the leadership abilities and
attitudes of individuals. Different personal traits and characteristics can help or hinder a person's
leadership effectiveness and require formalized programs for developing leadership
competencies Classroom-style training and associated reading is effective in helping leaders to
know more about what is involved in leading well. However, knowing what to do and doing
what one knows are two very different outcomes; management expert Henry Mintzberg is one
person to highlight this dilemma. It is estimated[. that as little as 15% of learning from traditional
classroom-style training results in sustained behavioral change within workplaces. The success
of leadership development efforts has been linked to three variables:

individual learner characteristics

1. the quality and nature of the leadership development program

2. genuine support for behavioral change from the leader's supervisor

Military officer-training academies, such as the Royal Military Academy Sandhurst, go to great
lengths to accept only candidates who show the highest potential to lead well. Personal
characteristics that are associated with successful leadership development include leader
motivation to learn, a high achievement drive and personality traits such as openness to
experience, an internal focus of control, and self-monitoring.In order to develop individual
leaders, supervisors or superiors must conduct an individual assessment. Development is also
more likely to occur when the design of the development program:

• Integrates a range of developmental experiences over a set period of time (e.g. 6–12
months). These experiences may include 360 degree feedback, experiential classroom
style programs, business school style coursework, executive coaching, reflective
journaling, mentoring and more.
• Involves goal-setting, following an assessment of key developmental needs and then an
evaluation of the achievement of goals after a given time period

Among key concepts in leadership development one may find:

• Experiential learning: positioning the individual in the focus of the learning process,
going through the four stages of experiential learning as formulated by David A. Kolb: 1.

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 concrete experience 2. observation and reflection 3. forming abstract concept 4. testing in
new situations.
• Self efficacy: the right training and coaching should bring about 'Self efficacy' in the
trainee, as Albert Bandura formulated: a person's belief about his capabilities to produce
effects
• Visioning: Developing the ability to formulate a clear image of the aspired future of an
organization unit.
• Attitude: attitude plays a major role in being a leader.

Developing leadership at a collective level

Leadership can also be developed by strengthening the connection between, and alignment of,
the efforts of individual leaders and the systems through which they influence organizational
operations. This has led to a differentiation between leader development and leadership
development. Leadership development can build on the development of individuals (including
followers) to become leaders. In addition, it also needs to focus on the interpersonal linkages
between the individuals in the team.In the belief that the most important resource that an
organization possesses is the people that comprise the organization, some organizations address
the development of these resources (even including the leadership). In contrast, the concept of
"employeeship" recognizes that what it takes to be a good leader is not too dissimilar to what it
takes to be a good employee. Therefore, bringing the notional leader together with the team to
explore these similarities (rather than focusing on the differences) brings positive results. This
approach has been particularly successful in Sweden where the power distance between manager
and team is small.

Succession planning

The development of "high potentials" to effectively take over the current leadership when their
time comes to exit their positions is known as succession planning. This type of leadership
development usually requires the extensive transfer of an individual between departments. In
many multinationals, it usually requires international transfer and experience to build a future
leader.Succession planning requires a sharp focus on organization's future and vision, in order to
align leadership development with the future the firm aspires to create. Thus successive
leadership development is based not only on knowledge and history but also on a dream. For
such a plan to be successful, a screening of future leadership should be based not only on "what
we know and have" but also on "what we aspire to become”. Persons involved in succession
planning should be current leadership representing the vision and HR executives having to
translate it all into a program. According to Meir Jacob and Amit Cohen (1995) three critical
dimensions should be considered: 1. Skills and knowledge 2. Role perception and degree of
acceptance of leading role 3. Self-efficacy (Albert Bandura). These three dimensions should be a
basis of any leadership succession programme.

Executive education

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Executive education (Exec. Ed) refers to academic programs at graduate-level business schools
worldwide for executives, business leaders and functional managers. These programs are
generally non-credit and non-degree-granting, but sometimes lead to certificates. Estimates by
Business Week magazine suggest that executive education in the United States is approximately
an $800 million annual business with approximately 80 percent provided by university-based
business schools. Key players in university-based executive education span elite universities, as
well as many regional and mid-sized universities and business schools around the
world.Customized programs, which are tailored for and offered to executives of a single
company, represent the fastest growing segment of the market.[2] Customized programs help
organizations increase management capability by combining the science of business and
performance management into specialized programs that enable executives to develop new
knowledge, skills and attitudes. Knowledge translates into the capability an organization applies
to the products and services it brings to the marketplace. Research shows that a firm with a
clearly articulated and understood business and capability strategy will have a higher market-to-
book value than a firm that does not. Open enrollment programs also are available as part of
university-based executive education offerings, which occur throughout the year on selected
dates, and are available to participants from different companies and organizations. Shorter
executive education programs tend to focus on specific roles or industries, or on improving
specific leadership skills, such as persuasion, negotiation, teambuilding or communication.Some
executive education providers offer more comprehensive management training options, such as
the modular "Advanced Management Program" (AMP) offered independently by several
business schools, including Harvard Business School, Columbia Business School, MIT Sloan
School of Management, IMD, INSEAD, IESE, London Business School, Duke University's
Fuqua School of Business, and the University of Pennsylvania's Wharton School.

University-based executive education programs, and customized programs in particular, include

serious engagement among executives, senior business faculty and researchers who are on the
leading edge of business thought and management theory development. It has been noted that
“executive education is the toughest classroom there is” (besides other academic fields such as
the hard sciences or engineering) because time-pressed and demanding executives challenge
each other in the classroom as much or more as their professors. The programs are credited with
offering unique networking and personal career development opportunities for participants, as
well as opportunities for universities to build stronger alumni networks that also benefit younger,
traditional MBA program graduates through networking, internships and job opportunities. Not
all observers of university-based executive education are positive. There is some debate about
the nature of business school education as a form of professional development. Some believe that
university-based executive education has caused some business schools to "lose track of their
professional mission." This argument is made by Rakesh Khurana among others. The genesis of
executive education can be traced to Frederick Taylor and his 1911 treatise Principles of
Scientific Management. This book described how the application of the scientific method to the
management of workers could improve productivity. Taylor's ideas, also known as "Taylorism"
would become the standard for businesses worldwide. On the heels of Taylorism came The
Alfred P. Sloan School of Management, which in 1914 began offering Course XV, Engineering
Administration, at the Massachusetts Institute of Technology. At that time, the concept of
providing business training in the academic environment was gaining popularity, thus MIT
created a program “specially designed to train men to be competent managers of businesses that

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have much to do with engineering problems.” Harvard also began offering short five-week
selections of standard MBA material in the late 1920s. In 1930 Course XV at MIT became an
independent department and was named the Department of Business and Engineering
Administration. In 1931 an innovative program for executive development was initiated with the
backing of several industrialists. This one-year program — offering graduate study in the
fundamentals of management and decision-making — was aimed at young managers who were
nominated by their employers and was highly competitive. In 1938 the program received full
funding by the Alfred P. Sloan Foundation and was formally named the MIT Sloan Fellowship
Program for Executive Development at MIT. Executive Education in the United States
developed critical mass after World War II. The Servicemen’s Readjustment Act of 1944 —
commonly known as the GI Bill of Rights — allowed veterans to take advantage of education
benefits. Many studied business in college, a privilege previously only enjoyed by the wealthy.[8]
Subsequent executive education programs, including the 13-week Advanced Management
Program at Harvard University and the four-week Institute for Management at Northwestern
University’s School of Commerce (now the Kellogg School of Management), developed in
response to the need to rapidly train line executives for general management in the post World
War II era.

By the late 1970s nearly 20 business schools in the United States were offering some form of
executive education. The science of business also was developing at a rapid pace as faculty, such
as Michael Porter (Harvard ) and C. K. Prahalad (University of Michigan), published academic
papers that changed the way people thought and acted within companies.Prahalad[9] is most
notably remembered for developing the concepts of “core competencies” and “strategic intent”.
These and other respected academic business thinkers — Don Hambrick, Ram Charan, David
Ulrich, Michael Hammer, Gary Hamel and many others — are the true pioneers of executive
education and the ongoing effort to facilitate wealth creation and other new concepts aimed at
making stronger businesses while improving the welfare of the world.Throughout the 1970s
university-based executive education continued to evolve as an industry. Several on-campus
residential facilities were constructed at several universities, demonstrating the value of a
standalone facility dedicated to executive education programs. This spurred the development of
such facilities at schools nationwide and the subsequent expansion of short open enrollment
programs. The industry’s exclusive professional association, The International University
Consortium for Executive Education, also came into existence during this period. UNICON
began sponsoring a tradeshow in the 1970s for companies interested in learning about university-
based executive education and an annual conference for members. UNICON has since grown
into a consortium of nearly 100 universities with executive education programs around the globe.
It sponsors three annual conferences that allow members to share best practices, conducts
research into topics of concern and provides benchmarking data for members. Executive
education further developed in the 1980s and 1990s as the increasing pace and scope of global
business demanded higher levels of education among employees. The dot-com boom further
changed the scope of the business landscape by favoring employees and organizations that were
quick to adapt to change. As longstanding business concepts became obsolete, continual training
was necessary – but earning a degree was not.In a 1999 survey of 63 programs, the University of
Michigan Business School topped the list. By the next survey in 2001, the number of programs
had doubled to 121, with a doubling of revenues to $800M.[13] Shortly after the survey,

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Executive education growth was dramatically impacted by travel restrictions and economic
impact of the September 11 attacks.

Current situation

The participation of many of the most prestigious universities around the world has enhanced the
value of university-based executive education. Ongoing business challenges and opportunities –
a dynamic economy, developing technologies, new business models and globalization – has
made the emphasis on learning new concepts throughout ones career a necessity.Despite the
growing popularity of university-based executive education around the world, the global
economic recession has slowed the industry’s growth during the past few years. According to a
2011 study conducted by the Manchester Business School in partnership with Dubai
International Academic City and Dubai Knowledge Village, the global economic downturn has
had a negative impact on learning and development spending within the Middle East. More than
half the respondents noted that spending on executive education had been “significantly”
affected, while other organizations agreed that spending had been “somewhat” affected. A return
to higher participation appears to be coming as the economy shows more signs of improvement.
A substantial portion of the organizations surveyed by Manchester Business School said they
anticipate executive education spending to moderately increase during the next three years.The
situation is similar in other parts of the world according to a late 2010 state of the industry survey
conducted by UNICON,[15] which found that many prestigious universities with executive
education programs around the world expect notably higher enrollment during 2011. Sixty-five
percent of UNICON survey participants predicted increased participation in their open
enrollment programs this year. Additionally, 78 percent of schools projected an increase in
customized executive education programs during 2011. Nearly half of the schools surveyed
indicated an increase in their number of programming days, now offering up to 39 weeks in open
enrollment programs and an average of 49 weeks in custom programs. Slightly more than half
also reported increasing the number of days that educational programs for executives are offered.

Rankings

Executive education rankings are carried out annually by the Financial Times and by Bloomberg
BusinessWeek. Ranking may be based on aims achieved, % of women, average rank, country,
course design, fac. diversity, facilities, faculty, follow-up, food, growth, intl. location, intl.
participants, revenues, participants, partner schools, preparation, skills, teaching, and other
criteria.

Personal development

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 ➢ Personal development covers activities that improve awareness and identity, develop
talents and potential, build human capital and facilitate employability, enhance quality of
life and contribute to the realization of dreams and aspirations. Not limited to self-help,
the concept involves formal and informal activities for developing others in roles such as
teacher, guide, counselor, manager, life coach or mentor. When personal development
takes place in the context of institutions, it refers to the methods, programs, tools,
techniques, and assessment systems that support human development at the individual
level in organizations. Personal development may include the following activities:
➢ improving self-awareness
➢ improving self-knowledge
➢ improving skills or learning new ones
➢ building or renewing identity/self-esteem
➢ developing strengths or talents
➢ improving wealth
➢ spiritual development
➢ identifying or improving potential
➢ building employability or (alternatively) human capital
➢ enhancing lifestyle or the quality of life
➢ improving health
➢ fulfilling aspirations
➢ initiating a life enterprise or (alternatively) personal autonomy
➢ defining and executing personal development plans (PDPs)
➢ improving social abilities

Personal development can also include developing other people. This may take place through
rôles such as those of a teacher or mentor, either through a personal competency (such as the
skill of certain managers in developing the potential of employees) or through a professional
service (such as providing training, assessment or coaching).

Beyond improving oneself and developing others, "personal development" labels a field of
practice and research. As a field of practice it includes personal development methods, learning
programs, assessment systems, tools and techniques. As a field of research, personal
development topics increasingly appear in scientific journals, higher education reviews,
management journals and business books. Any sort of development—whether economic,
political, biological, organizational or personal—requires a framework if one wishes to know
whether change has actually occurred. In the case of personal development, an individual often
functions as the primary judge of improvement or of regression, but validation of objective
improvement requires assessment using standard criteria. Personal-development frameworks
may include goals or benchmarks that define the end-points, strategies or plans for reaching
goals, measurement and assessment of progress, levels or stages that define milestones along a
development path, and a feedback system to provide information on changes.

Personal development as an industry has several business relationship formats of operating. The
main ways are business-to-consumer and business-to-business. However, there are two newer
ways increasing in prevalence: consumer-to-business and consumer-to-consumer.

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The business-to-consumer market involves selling books, courses and techniques to individuals,
such as:

• newly invented offerings such as:

o fitness
o beauty enhancement
o weight loss
• Traditional practices such as:
o yoga
o martial arts
o meditation

Some programs are delivered online and many include tools sold with a program, such as
motivational books for self-help, recipes for weight-loss or technical manuals for yoga and
martial-arts programs. A partial list of personal development offerings on the business-to-
individual market might include:

• books
• motivational speaking
• e-Learning programs
• workshops
• individual counseling
• life coaching
• Time Management

Business-to-business market

The business-to-business market also involves programs – in this case ones sold to companies
and to governments to assess potential, to improve effectiveness, to manage work-life balance or
to prepare some entity for a new role in an organization. The goals of these programs are defined
with the institution or by the institution and the results are assessed. With the acceptance of
personal development as a legitimate field in higher education, universities and business schools
also contract programs to external specialist firms or to individuals.

A partial list of business-to-business programs might include:

• marketing and market development

• time management
• courses and assessment systems for higher education organizations for their students
• management services to employees in organizations through:
o training
o training and development programs
o personal-development tools
o self-assessment
o feedback
o business coaching

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 o mentoring

Some consulting firms specialize in personal development but as of 2009 generalist firms
operating in the fields of human resources, recruitment and organizational strategy have entered
what they perceive as a growing market,[4] not to mention smaller firms and self-employed
professionals who provide consulting, training and coaching. Additionally, the International
Association Personal Development Professionals, an international trade group launched in 2013
to support professionals in the self-help industry.

Origins

Major religions – such as the Abrahamic and Indian religions – as well as New Age philosophies
have used practices such as prayer, music, dance, singing, chanting, poetry, writing, sports and
martial arts. These practices have various functions, such as health or aesthetic satisfaction, but
they may also link to "final goals" of personal development such as discovering the meaning of
life or living the good life (compare philosophy).Michel Foucault describes in Care of the Self[
the techniques of epimelia used in ancient Greece and Rome, which included dieting, exercise,
sexual abstinence, contemplation, prayer and confession—some of which also became important
practices within different branches of Christianity.In yoga, a discipline originating in India,
possibly over 3000 years ago, personal-development techniques include meditation, rhythmic
breathing, stretching and postures."Yi"Wushu and T'ai chi ch'uan utilise traditional Chinese
techniques, including breathing and energy exercises, meditation, martial arts, as well as
practices linked to traditional Chinese medicine, such as dieting, massage and acupuncture. In
Islam, which arose almost 1500 years ago in the Middle East, personal-development techniques
include ritual prayer, recitation of the Qur'an, pilgrimage, fasting and tazkiyah (purification of the
soul. Two individual ancient philosophers stand out as major sources of what has become
personal development in the 21st century, representing a Western tradition and an East Asian
tradition. Elsewhere anonymous founders of schools of self-development appear endemic – note
the traditions of the Indian sub-continent in this regard.

The Greek philosopher Aristotle (384 BCE – 322 BCE) influenced theories of personal
development in the West. In his Nicomachean Ethics, Aristotle defined personal development as
a category of phronesis or practical wisdom, where the practice of virtues (arête) leads to
eudaimonia,[7] commonly translated as "happiness" but more accurately understood as "human
flourishing" or "living well".[8] Aristotle continues to influence the Western concept of personal
development to this day, particularly in the economics of human development[9] and in positive
psychology.In Chinese tradition, Confucius (around 551 BCE – 479 BCE) founded an ongoing
philosophy. His ideas continue to influence family values, education and management in China
and East Asia. In his Great Learning Confucius wrote:The ancients who wished to illustrate
illustrious virtue throughout the kingdom, first ordered well their own states. Wishing to order
well their states, they first regulated their families. Wishing to regulate their families, they first
cultivated their persons. Wishing to cultivate their persons, they first rectified their hearts.
Wishing to rectify their hearts, they first sought to be sincere in their thoughts. Wishing to be
sincere in their thoughts, they first extended to the utmost their knowledge. Such extension of
knowledge lay in the investigation of things.

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CHAPTER 7

PSYCHOLOGY AND ITS CONTRIBUTIONS

Contexts

Psychology became linked to personal development starting with Alfred Adler (1870–1937) and
Carl Jung (1875–1961).Adler refused to limit psychology to analysis, making the important point
that aspirations look forward and do not limit themselves to unconscious drives or to childhood
experiences. He also originated the concepts of lifestyle (1929—he defined "lifestyle" as an
individual's characteristic approach to life, in facing problems) and of self imagea concept that
influenced management under the heading of work-life balance. Carl Gustav Jung made
contributions to personal development with his concept of individuation, which he saw as the
drive of the individual to achieve the wholeness and balance of the Self. Daniel Levinson (1920–
1994) developed Jung's early concept of "life stages" and included a sociological perspective.
Levinson proposed that personal development come under the influence—throughout life—of
aspirations, which he called "the Dream": Whatever the nature of his Dream, a young man has
the developmental task of giving it greater definition and finding ways to live it out. It makes a
great difference in his growth whether his initial life structure is consonant with and infused by
the Dream, or opposed to it. If the Dream remains unconnected to his life it may simply die, and
with it his sense of aliveness and purpose. Research on success in reaching goals, as undertaken
by Albert Bandura (born 1925), suggested that self-efficacy best explains why people with the
same level of knowledge and skills get very different results. According to Bandura self-
confidence functions as a powerful predictor of success because:[17]

1. it makes you expect to succeed

2. it allows you take risks and set challenging goals
3. it helps you keep trying if at first you don't succeed
4. it helps you control emotions and fears when the going gets rough

In 1998 Martin Seligman won election to a one-year term as President of the American
Psychological Association and proposed a new focus: on healthy individuals rather than on
pathology (he created the "positive psychology" current). We have discovered that there is a set
of human strengths that are the most likely buffers against mental illness: courage, optimism,
interpersonal skill, work ethic, hope, honesty and perseverance. Much of the task of prevention
will be to create a science of human strength whose mission will be to foster these virtues in
young people.

Higher education

➢ Personal development has been at the heart of education in the West in the form of the
Greek philosophers and in the East with Confucius. Some people emphasize personal

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 development as a part of higher education. Wilhelm von Humboldt, who founded the
University of Berlin (since 1949: Humboldt University of Berlin) in 1810, made a
statement interpretable as referring to personal development: … if there is one thing more
than another which absolutely requires free activity on the part of the individual, it is
precisely education, whose object it is to develop the individual. During the 1960s a large
increase in the number of students on American campuses led to research on the personal
development needs of undergraduate students. Arthur Chickering defined seven vectors
of personal development for young adults during their undergraduate years:
➢ developing competence
➢ managing emotions
➢ achieving autonomy and interdependence
➢ developing mature interpersonal relationships
➢ establishing identity
➢ developing purpose
➢ developing integrity

In the UK, personal development took a central place in university policy in 1997 when the
Dearing Report declared that universities should go beyond academic teaching to provide
students with personal development. In 2001 a Quality Assessment Agency for UK universities
produced guidelines for universities to enhance personal development as:

* a structured and supported process undertaken by an individual to reflect upon their own
learning, performance and / or achievement and to plan for their personal, educational and career
development;
* objectives related explicitly to student development; to improve the capacity of students to
understand what and how they are learning, and to review, plan and take responsibility for their
own learning

In the 1990s, business schools began to set up specific personal-development programs for
leadership and career orientation and in 1998 the European Foundation for Management
Development set up the EQUIS accreditation system which specified that personal development
must form part of the learning process through internships, working on team projects and going
abroad for work or exchange programs. The first personal development certification required for
business school graduation originated in 2002 as a partnership between Metizo,] a personal-
development consulting firm, and the Euromed Management School in Marseilles: students must
not only complete assignments but also demonstrate self-awareness and achievement of
personal-development competencies. As an academic department personal development has
become a specific discipline, usually associated with business schools. As an area of research,
personal development draws on links to other academic disciplines:

• education for questions of learning and assessment

• psychology for motivation and personality
• sociology for identity and social networks
• economics for human capital and economic value
• philosophy for ethics and self-reflection

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The workplace

Abraham Maslow (1908–1970), proposed a hierarchy of needs with self actualization at the top,
defined as: … the desire to become more and more what one is, to become everything that one is
capable of becoming. Since Maslow himself believed that only a small minority of people self-
actualize—he estimated one percent[28]—his hierarchy of needs had the consequence that
organizations came to regard self-actualization or personal development as occurring at the top
of the organizational pyramid, while job security and good working conditions would fulfill the
needs of the mass of employees. As organizations and labor markets became more global,
responsibility for development shifted from the company to the individual. In 1999 management
thinker Peter Drucker wrote in the Harvard Business Review:We live in an age of unprecedented
opportunity: if you've got ambition and smarts, you can rise to the top of your chosen profession,
regardless of where you started out. But with opportunity comes responsibility. Companies today
aren't managing their employees' careers; knowledge workers must, effectively, be their own
chief executive officers. It's up to you to carve out your place, to know when to change course,
and to keep yourself engaged and productive during a work life that may span some 50 years.
Management professors Sumantra Ghoshal of the London Business School and Christopher
Bartlett of the Harvard Business School wrote in 1997 that companies must manage people
individually and establish a new work contract. On the one hand the company must allegedly
recognize that personal development creates economic value: "market performance flows not
from the omnipotent wisdom of top managers but from the initiative, creativity and skills of all
employees". On the other hand, employees should recognize that their work includes personal
development and "... embrace the invigorating force of continuous learning and personal
development".

The 1997 publication of Ghoshal's and Bartlett's Individualized Corporation corresponded to a

change in career development from a system of predefined paths defined by companies, to a
strategy defined by the individual and matched to the needs of organizations in an open
landscape of possibilities.[ Another contribution to the study of career development came with
the recognition that women's careers show specific personal needs and different development
paths from men. The 2007 study of women's careers by Sylvia Ann Hewlett Off-Ramps and On-
Ramps[31] had a major impact on the way companies view careers. Further work on the career as
a personal development process came from study by Herminia Ibarra in her Working Identity on
the relationship with career change and identity change, indicating that priorities of work and
lifestyle continually develop through life. Personal development programs in companies fall into
two categories: the provision of employee benefits and the fostering of development strategies.

Employee benefits have the purpose of improving satisfaction, motivation and loyalty. Employee
surveys may help organizations find out personal-development needs, preferences and problems,
and they use the results to design benefits programs. Typical programs in this category include:

➢ work-life balance
➢ time management
➢ stress management
➢ health programs
➢ counseling

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Many such programs resemble programs that some employees might conceivably pay for
themselves outside work: yoga, sports, martial arts, money-management, positive psychology,
NLP, etc. As an investment, personal development programs have the goal of increasing human
capital or improving productivity, innovation or quality. Proponents actually see such programs
not as a cost but as an investment with results linked to an organization's strategic development
goals. Employees gain access to these investment-oriented programs by selection according to
the value and future potential of the employee, usually defined in a talent management
architecture including populations such as new hires, perceived high-potential employees,
perceived key employees, sales staff, research staff and perceived future leaders. Organizations
may also offer other (non-investment-oriented) programs to many or even all employees. Typical
programs focus on career-development, personal effectiveness, teamwork, and competency-
development. Personal development also forms an element in management tools such as personal
development planning, assessing one's level of ability using a competency grid, or getting
feedback from a 360 questionnaire filled in by colleagues at different levels in the organization.

Criticism

Scholars have targeted self-help claims as misleading and incorrect. In 2005, Steve Salerno
portrayed the American self-help movement—he uses the acronym SHAM: The Self-Help and
Actualization Movement—not only as ineffective in achieving its goals, but also as socially
harmful. 'Salerno says that 80 percent of self-help and motivational customers are repeat
customers and they keep coming back whether the program worked for them or not'. Others
similarly point out that with self-help books 'supply increases the demand...The more people read
them, the more they think they need them...more like an addiction than an alliance' Self-help
writers have been described as working 'in the area of the ideological, the imagined, the
narrativized....although a veneer of scientism permeates the[ir] work, there is also an underlying
armature of moralizing'.

Self-awareness

Self-awareness is the capacity for introspection and the ability to recognize oneself as an
individual separate from the environment and other individuals.[1] It is not to be confused with
consciousness in the sense of qualia. While consciousness is a term given to being aware of
one’s environment and body and lifestyle, self-awareness is the recognition of that awareness.

Neurobiological basis

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There are questions regarding what part of the brain allows us to be self-aware and how we are
biologically programmed to be self-aware. V.S. Ramachandran has speculated that mirror
neurons may provide the neurological basis of human self-awareness. In an essay written for the
Edge Foundation in 2009 Ramachandran gave the following explanation of his theory: "... I also
speculated that these neurons can not only help simulate other people's behavior but can be
turned 'inward'—as it were—to create second-order representations or meta-representations of
your own earlier brain processes. This could be the neural basis of introspection, and of the
reciprocity of self awareness and other awareness. There is obviously a chicken-or-egg question
here as to which evolved first, but... The main point is that the two co-evolved, mutually
enriching each other to create the mature representation of self that characterizes modern
humans."

Studies have been done mainly on primates to test if self-awareness is present. Apes, monkeys,
elephants, and dolphins have been studied most frequently. The most relevant studies to this day
that represent self-awareness in animals have been done on chimpanzees, dolphins, and magpies.
Self-awareness in animals is tested through mirror self recognition. Animals who show mirror
self recognition go through four stages 1) social response, 2) physical mirror inspection, 3)
repetitive mirror testing behavior, and 4) the mark test; which involves the animals
spontaneously touching a mark on their body which would have been difficult to see without the
mirror. The ‘Red Spot Technique’ created and experimented by Gordon Gallup studies self-
awareness in animals (primates). Toivanen says on a study done on perceptual self-awareness,
"The attribution of self-perception to animals is based on a distinction between the experiential
awareness of the soul and the intellectual understanding of its essence, a distinction
postulated."[7] In this technique, a red odorless spot is placed on an anesthetized primate’s
forehead. The spot is placed on the forehead so that it can only be seen through a mirror. Once
the individual awakens, independent movements toward the spot after seeing their reflection in a
mirror are observed. During the Red Spot Technique, after looking in the mirror, chimpanzees
used their fingers to touch the red dot that was on their forehead and after touching the red dot
they would even smell their fingertips.[8] "Animals that can recognize themselves in mirrors can
conceive of themselves," says Gallup. Another prime example are elephants. Three elephants
were exposed to large mirrors where experimenters studied the reaction when they saw their
reflection. These elephants were given the "litmus mark test" in order to see whether they were
aware of what they were looking at. This visible mark was applied on the elephants and the
researchers reported a large progress with self-awareness. The elephants shared this success rate
with other animals such as monkeys and dolphins. Chimpanzees and other apes – species which
have been studied extensively – compare the most to humans with the most convincing findings
and straightforward evidence in the relativity of self-awareness in animals so far. Dolphins were
put to a similar test and achieved the same results. Diana Reiss, a psycho-biologist at the New
York Aquarium discovered that bottlenose dolphins can recognize themselves in mirrors.
Researchers also used the mark test or mirror test to study the magpie’s self-awareness. As a
majority of birds are blind below the beak, Prior and colleagues marked the birds’ neck with
three different colors: red, yellow and a black imitation, as magpies are originally black. When
placed in front of a mirror, the birds with the red and yellow spots began scratching at their
necks, signaling the understanding of something different being on their bodies. During one trial
with a mirror and a mark, three out of the five magpies showed a minimum of one example of
self-directed behavior. The magpies explored the mirror by moving toward it and looking behind

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it. One of the magpies, Harvey, during several trials would pick up objects and do some wing-
flapping, all in front of the mirror with the objects in his beak. This represents a sense of self-
awareness; knowing what is going on within him and in the present. The authors suggest that
self-recognition in birds and mammals may be a case of convergent evolution, where similar
evolutionary pressures result in similar behaviors or traits, although they arrive at them via
different routes. A few slight occurrences of behavior towards the magpie's own body happened
in the trial with the black mark and the mirror. It is an assumption in this study that the black
mark may have been slightly visible on the black feathers. Prior and Colleagues, stated "This is
an indirect support for the interpretation that the behavior towards the mark region was elicited
by seeing the own body in the mirror in conjunction with an unusual spot on the body."

The behaviors of the magpies clearly contrasted with no mirror present. In the no-mirror trials, a
non-reflective gray plate of the same size and in the same position as the mirror was swapped in.
There were not any mark directed self-behaviors when the mark was present, in color, or in
black. Prior and Colleagues, data quantitatively matches the findings in chimpanzees. In
summary of the mark test, the results show that magpies understand that a mirror image
represents their own body; magpies show to have self-awareness. Just as Swiss cleaning robots
perform behaviors that effectively cleans a room without being aware of it or having any
program to detect debris, an organism can be effectively altruistic without being self-aware,
aware of any distinction between egoism and altruism, or aware of qualia in others. This by
simple reactions to specific situations which happens to benefit other individuals in the
organism's natural environment. If self-awareness led to a necessity of an emotional empathy
mechanism for altruism and egoism being default in its absence, that would have precluded
evolution from a state without self-awareness to a self-aware state in all social animals. The
ability of the theory of evolution to explain self-awareness can be rescued by abandoning the
hypothesis of self-awareness being a basis for cruelty.

Psychology

Self-awareness has been called "arguably the most fundamental issue in psychology, from both a
developmental and an evolutionary perspective." Self-awareness theory, developed by Duval and
Wicklund in their 1972 landmark book A theory of objective self awareness, states that when we
focus our attention on ourselves, we evaluate and compare our current behavior to our internal
standards and values. This elicits a state of objective self-awareness. We become self-conscious
as objective evaluators of ourselves. However self-awareness is not to be confused with self-
consciousness. Various emotional states are intensified by self-awareness. However, some
people may seek to increase their self-awareness through these outlets. People are more likely to
align their behavior with their standards when made self-aware. People will be negatively
affected if they don't live up to their personal standards. Various environmental cues and
situations induce awareness of the self, such as mirrors, an audience, or being videotaped or
recorded. These cues also increase accuracy of personal memory. In one of Demetriou's neo-
Piagetian theories of cognitive development, self-awareness develops systematically from birth
through the life span and it is a major factor for the development of general inferential processes.
Moreover, a series of recent studies showed that self-awareness about cognitive processes
participates in general intelligence on a par with processing efficiency functions, such as working
memory, processing speed, and reasoning. Albert Bandura's theory of self-efficacy builds on our

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varying degrees of self-awareness. It is "the belief in one’s capabilities to organize and execute
the courses of action required to manage prospective situations." A person’s belief in their ability
to succeed sets the stage to how they think, behave and feel. Someone with a strong self-efficacy,
for example, views challenges as mere tasks that must be overcome, and are not easily
discouraged by setbacks. They are aware of their flaws and abilities and choose to utilize these
qualities to the best of their ability. Someone with a weak sense of self-efficacy evades
challenges and quickly feels discouraged by setbacks. They may not be aware of these negative
reactions, and therefore do not always change their attitude. This concept is central to Bandura’s
social cognitive theory, "which emphasizes the role of observational learning, social experience,
and reciprocal determinism in the development of personality."

Developmental stages

Individuals become conscious of themselves through the development of self-awareness. This

particular type of self-development pertains to becoming conscious of one's own body and
mental state of mind including thoughts, actions, ideas, feelings and interactions with others.
"Self-awareness does not occur suddenly through one particular behavior: it develops gradually
through a succession of different behaviors all of which relate to the self." The monitoring of
one's mental states is called metacognition and it is considered to be an indicator that there is
some concept of the self.[25] It is developed through an early sense of non-self components using
sensory and memory sources. In developing self–awareness through self-exploration and social
experiences one can broaden his social world and become more familiar with the self. According
to Emory University’s Philippe Rochat, there are five levels of self-awareness which unfold in
early development and six potential prospects ranging from "Level 0" (having no self-awareness)
advancing complexity to "Level 5" (explicit self-awareness). Level 0: Confusion. At this level
the individual has a degree of zero self-awareness. This person is unaware of any mirror
reflection or the mirror itself. They perceive the mirror as an extension of their environment.
Level 0 can also be displayed when an adult frightens himself in a mirror mistaking his own
reflection as another person just for a second.

➢ Level 1: Differentiation. The individual realizes the mirror is able to reflect things. They
see that what is in the mirror is different from what is surrounding them. At this level
they can differentiate between their own movement in the mirror and the movement of
the surrounding environment.
➢ Level 2: Situation. At this point an individual can link the movements on the mirror to
what is perceived within their own body. This is the first hint of self-exploration on a
projected surface where what is visualized on the mirror is special to the self.
➢ Level 3: Identification. The individual finds out that recognition takes effect. They can
now see that what’s in the mirror is not another person but it is actually themselves. It is
seen when a child refers to them self while looking in the mirror instead of referring to
the mirror while referring to themselves. They have now identified self.
➢ Level 4: Permanence. Once an individual reaches this level they can identify the self
beyond the present mirror imagery. They are able to identify the self in previous pictures
looking different or younger. A "permanent self" is now experienced.
➢ Level 5: Self-consciousness or "meta" self-awareness. At this level not only is the self
seen from a first person view but its realized that it’s also seen from a third person’s

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 view. They begin to understand they can be in the mind of others. For instance, how they
are seen from a public standpoint.

Infancy and early childhood

By the time an average toddler reaches 18 months they will discover themselves and recognize
their own reflection in the mirror. By the age of 24 months the toddler will observe and relate
their own actions to those actions of other people and the surrounding environment. There are
multiple experiments that show a child’s self-awareness. In what has come to be known as The
Shopping Cart Task, "Children were asked to push a shopping cart to their mothers but in
attempting to do so they had to step on the mat and in consequence, their body weight prevented
the cart from moving".Around school age a child’s awareness of personal memory transitions
into a sense of one's own self. At this stage, a child begins to develop interests along with likes
and dislikes. This transition enables the awareness of an individual’s past, present, and future to
grow as conscious experiences are remembered more often. As a child’s self-awareness increases
they tend to separate and become their own person. Their cognitive and social development
allows "the taking of another's perspective and the accepting of inconsistencies." By adolescence,
a coherent and integrated self-perception normally emerges. This very personal emerging
perspective continues to direct and advance an individual’s self-awareness throughout their adult
life.

Adolescence

One becomes conscious of their emotions during adolescence. Most children are aware of
emotions such as shame, guilt, pride and embarrassment by the age of two, but do not fully
understand how those emotions affect their life. By age 13, children become more in touch with
these emotions and begin to apply them to their own lives. A study entitled "The Construction of
the Self" found that many adolescents display happiness and self-confidence around friends, but
hopelessness and anger around parents due to the fear of being a disappointment. Teenagers were
also shown to feel intelligent and creative around teachers, and shy, uncomfortable and nervous
around people they were not familiar with.

Self-knowledge is a component of the self, or more accurately, the self-concept. It is the

knowledge of one's self and one's properties and the desire to seek such knowledge that guide the
development of the self-concept. Self-knowledge informs us of our mental representations of
ourselves, which contain attributes that we uniquely pair with ourselves, and theories on whether
these attributes are stable, or dynamic.

The self-concept is thought to have three primary aspects:

• The cognitive self

• The affective self
• The executive self

The affective and executive selves are also known as the felt and active selves respectively, as
they refer to the emotional and behavioral components of the self-concept. Self-knowledge is

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linked to the cognitive self in that its motives guide our search to gain greater clarity and
assurance that our own self-concept is an accurate representation of our true self; for this reason
the cognitive self is also referred to as the known self. The cognitive self is made up of
everything we know (or think we know about ourselves). This implies physiological properties
such as hair color, race, and height etc.; and psychological properties like beliefs, values, and
dislikes to name but a few.

Self-enhancement refers to the fact that people seem motivated to experience positive emotional
states and to avoid experiencing negative emotional states. People are motivated to feel good
about themselves in order to maximize their feelings of self-worth, thus enhancing their self-
esteem.
The emphasis on feelings differs slightly from how other theories have previously defined self-
enhancement needs, for example the Contingencies of Self-Worth Model.[17]
Other theorists have taken the term to mean that people are motivated to think about themselves
in highly favorable terms, rather than feel they are "good".In many situations and cultures,
feelings of self-worth are promoted by thinking of oneself as highly capable or better than one's
peers. However, in some situations and cultures, feelings of self-worth are promoted by thinking
of oneself as average or even worse than others. In both cases, thoughts about the self still serve
to enhance feelings of self-worth. The universal need is not a need to think about oneself in any
specific way, rather a need to maximize one's feelings of self-worth. This is the meaning of the
self enhancement motive with respect to self-knowledge.

In Western societies, feelings of self-worth are in fact promoted by thinking of oneself in

favorable terms.

• In this case, self-enhancement needs lead people to seek information about themselves in
such a way that they are likely to conclude that they truly possess what they see as a
positive defining quality.

See "Self-verification theory" section.

Accuracy needs influence the way in which people search for self-knowledge. People frequently
wish to know the truth about themselves without regard as to whether they learn something
positive or negative.[20] There are three considerations which underlie this need:[21]

• Occasionally people simply want to reduce any uncertainty. They may want to know for
the sheer intrinsic pleasure of knowing what they are truly like.
• Some people believe they have a moral obligation to know what they are really like. This
view holds particularly strong in theology and philosophy, particularly existentialism.
• Knowing what one is really like can sometimes help an individual to achieve their goals.
The basic fundamental goal to any living thing is survival, therefore accurate self-
knowledge can be adaptive to survival.[22] Accurate self-knowledge can also be
instrumental in maximizing feelings of self-worth.[23] Success is one of the number of
things that make people feel good about themselves, and knowing what we are like can
make successes more likely, so self-knowledge can again be adaptive. This is because
self-enhancement needs can be met by knowing that one can not do something

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 particularly well, thus protecting the person from pursuing a dead-end dream that is likely
to end in failure.

Many theorists believe that we have a motive to protect the self-concept (and thus our self-
knowledge) from change.[24][25] This motive to have consistency leads people to look for and
welcome information that is consistent with what they believe to be true about themselves;
likewise, they will avoid and reject information which presents inconsistencies with their beliefs.
This phenomenon is also known as self-verification theory. Not everyone has been shown to
pursue a self-consistency motive;[26] but it has played an important role in various other
influential theories, such as cognitive dissonance theory.[27]

Self-verification theory

This theory was put forward by William Swann of the University of Texas at Austin in 1983 to
put a name to the aforementioned phenomena. The theory states that once a person develops an
idea about what they are like, they will strive to verify the accompanying self-views.

Two considerations are thought to drive the search for self-verifying feedback:

• We feel more comfortable and secure when we believe that others see us in the same way
that we see ourselves. Actively seeking self-verifying feedback helps people avoid
finding out that they are wrong about their self-views.
• Self-verification theory assumes that social interactions will proceed more smoothly and
profitably when other people view us the same way as we view ourselves. This provides a
second reason to selectively seek self-verifying feedback.

These factors of self-verification theory create controversy when persons suffering from low-
self-esteem are taken into consideration. People who hold negative self-views about themselves
selectively seek negative feedback in order to verify their self-views. This is in stark contrast to
self-enhancement motives that suggest people are driven by the desire to feel good about
themselves.

Sources

There are three sources of information available to an individual through which to search for
knowledge about the self:

• The physical world

• The social world
• The psychological world

The physical world

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The physical world is generally a highly visible, and quite easily measurable source of
information about one's self. Information one may be able to obtain from the physical world may
include:

• Weight - by weighing oneself.

• Strength - by measuring how much one can lift.
• Height - by measuring oneself.

Limitations

Many attributes are not measurable in the physical world, such as kindness, cleverness and
sincerity.

• Even when attributes can be assessed with reference to the physical world, the knowledge
that we gain is not necessarily the knowledge we are seeking. Every measure is simply a
relative measure to the level of that attribute in, say, the general population or another
specific individual.
o This means that any measurement only merits meaning when it is expressed in
respect to the measurements of others.
o Most of our personal identities are therefore sealed in comparative terms from the
social world.

The social world

The comparative nature of self-views means that people rely heavily on the social world when
seeking information about their selves. Two particular processes are important:

Social comparison

People compare attributes with others and draw inferences about what they themselves are like.
However, the conclusions a person ultimately draws depend on whom in particular they compare
themselves with. The need for accurate self-knowledge was originally thought to guide the social
comparison process, and researchers assumed that comparing with others who are similar to us in
the important ways is more informative.

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Complications of the social comparison theory: People are also known to compare themselves
with people who are slightly better off than they themselves are (known as an upward
comparison); and with people who are slightly worse off or disadvantaged (known as a
downward comparison). There is also substantial evidence that the need for accurate self-
knowledge is neither the only, nor most important factor that guides the social comparison
process, the need to feel good about ourselves affects the social comparison process.

Reflected appraisals

Reflected appraisals occur when a person observes how others respond to them. The process
was first explained by the sociologist Charles H. Cooley in 1902 as part of his discussion of the
"looking-glass self", which describes how we see ourselves reflected in other peoples' eyes. He
argued that a person's feelings towards themselves are socially determined via a three-step
process:

"A self-idea of this sort seems to have three principled elements: the imagination of our
appearance to the other person; the imagination of his judgment of that appearance; and some
sort of self-feeling, such as pride or mortification. The comparison with a looking-glass hardly
suggests the second element, the imagined judgment which is quite essential. The thing that
moves us to pride or shame is not the mere mechanical reflection of ourselves, but an imputed
sentiment, the imagined effect of this reflection upon another's mind." (Cooley, 1902, p.153)

In simplified terms, Cooley's three stages are

We imagine how we appear in the eyes of another person.

1. We then imagine how that person is evaluating us.

2. The imagined evaluation leads us to feel good or bad, in accordance with the judgement
we have conjured.

Note that this model is of a phenomenological nature.

In 1963, John W. Kinch adapted Cooley's model to explain how a person's thoughts about
themselves develop rather than their feelings.

Kinch's three stages were:

1. Actual appraisals - what other people actually think of us.

2. Perceived appraisals - our perception of these appraisals.
3. Self-appraisals - our ideas about what we are like based on the perceived appraisals.

This model is also of a phenomenological approach. Arguments against the reflected appraisal
models. Research has only revealed limited support for the models and various arguments raise
their heads:

• People are not generally good at knowing what an individual thinks about them.

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 o Felson believes this is due to communication barriers and imposed social norms
which place limits on the information people receive from others. This is
especially true when the feedback would be negative; people rarely give one
another negative feedback, so people rarely conclude that another person dislikes
them or is evaluating them negatively.
• Despite being largely unaware of how one person in particular is evaluating them, people
are better at knowing what other people on the whole think.[37]
o The reflected appraisal model assumes that actual appraisals determine perceived
appraisals. Although this may in fact occur, the influence of a common third
variable could also produce an association between the two.

The sequence of reflected appraisals may accurately characterize patterns in early childhood due
to the large amount of feedback infants receive from their parents, yet it appears to be less
relevant later in life. This is because people are not passive, as the model assumes. People
actively and selectively process information from the social world. Once a person's ideas about
themselves take shape, these also influence the manner in which new information is gathered and
interpreted, and thus the cycle continues.

The psychological world

The psychological world describes our "inner world". There are three processes that influence
how people acquire knowledge about themselves:

• Introspection
• Self-perception processes
• Causal attributions

Introspection involves looking inwards and directly consulting our attitudes, feelings and
thoughts for meaning. Consulting one's own thoughts and feelings can sometimes result in
meaningful self-knowledge. The accuracy of introspection, however, has been called into
question since the 1970's. Generally, introspection relies on people's explanatory theories of the
self and their world, the accuracy of which is not necessarily related to the form of self-
knowledge that they are attempting to assess.

Comparing sources of introspection. People believe that spontaneous forms of thought provide
more meaningful self-insight than more deliberate forms of thinking. Morewedge,

Giblin, and Norton (2014) found that the more spontaneous a kind of thought, the more
spontaneous a particular thought, and the more spontaneous thought a particular thought was
perceived to be, the more insight into the self it was attributed. In addition, the more meaning the
thought was attributed, the more the particular thought influenced their judgment and decision
making. People asked to let their mind wander until they randomly thought of a person to whom
they were attracted to, for example, reported that the person they identified provided them with
more self-insight than people asked to simply think of a person to whom they were attracted to.
Moreover, the greater self-insight attributed to the person identified by the (former) random
thought process than by the latter deliberate thought process led those people in the random

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condition to report feeling more attracted to the person they identified. Whether introspection
always fosters self-insight is not entirely clear. Thinking too much about why we feel the way we
do about something can sometimes confuse us and undermine true self-knowledge. Participants
in an introspection condition are less accurate when predicting their own future behavior than
controls and are less satisfied with their choices and decisions. Wilson's work is based on the
assumption that people are not always aware of why they feel the way they do.

Bem's self-perception theory makes a similar assumption. The theory is concerned with how
people explain their behavior. It argues that people don't always know why they do what they do.
When this occurs, they infer the causes of their behavior by analyzing their behavior in the
context in which it occurred. Outside observers of the behavior would reach a similar conclusion
as the individual performing it. The individuals then draw logical conclusions about why they
behaved as they did."Individuals come to "know" their own attitudes, emotions, and other
internal states partially by inferring them from observations of their own overt behavior and/or
the circumstances in which this behavior occurs. Thus, to the extent that internal cues are weak,
ambiguous, or uninterruptable, the individual is functionally in the same position as an outside
observer, an observer who must necessarily rely upon those same external cues to infer the
individual's inner states." (Bem, 1972, p.2)The theory has been applied to a wide range of
phenomena. Under particular conditions, people have been shown to infer their attitudes,
emotions, and motives, in the same manner described by the theory. Similar to introspection, but
with an important difference: with introspection we directly examine our attitudes, feelings and
motives. With self-perception processes we indirectly infer our attitudes, feelings, and motives
by analyzing our behavior. Causal attributions are an important source of self-knowledge,
especially when people make attributions for positive and negative events. The key elements in
self-perception theory are explanations people give for their actions, these explanations are
known as causal attributions. Causal attributions provide answers to "Why?" questions by
attributing a person's behavior (including our own) to a cause. People also gain self-knowledge
by making attributions for other people's behavior; for example "If nobody wants to spend time
with me it must be because I'm boring".

Activation

Individuals think of themselves in many different ways, yet only some of these ideas are active at
any one given time. The idea that is specifically active at a given time is known as the Current
Self-Representation. Other theorists have referred to the same thing in several different ways:

• The phenomenal self

• Spontaneous self-concept
• Self-identifications
• Aspects of the working self-concept

The current self-representation influences information processing, emotion, and behavior and is
influenced by both personal and situational factors. Self-concept, or how people usually think of
themselves is the most important personal factor that influences current self-representation. This
is especially true for attributes that are important and self-defining. Self-concept is also known as
the self-schema, made of innumerable smaller self-schemas that are "chronically accessible".

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Self-esteem affects the way people feel about themselves. People with high self-esteem are more
likely to be thinking of themselves in positive terms at a given time than people suffering low
self-esteem. Mood state influences the accessibility of positive and negative self-views. When
we are happy we tend to think more about our positive qualities and attributes, whereas when we
are sad our negative qualities and attributes become more accessible. This link is particularly
strong for people suffering low self-esteem. People can deliberately activate particular self-
views. We select appropriate images of ourselves depending on what role we wish to play in a
given situation. One particular goal that influences activation of self-views is the desire to feel
good. How a person thinks of themselves depends largely on the social role they are playing.
Social roles influence our personal identities. People tend to think of themselves in ways that
distinguish them from their social surroundings. The more distinctive the attribute, the more
likely it will be used to describe oneself.

Distinctiveness also influences the salience of group identities.

Self-categorization theory proposes that whether people are thinking about themselves in
terms of either their social groups or various personal identities depends partly on the
social context.

• Group identities are more salient in the intergroup contexts.

Group size

The size of the group affects the salience of group-identities. Minority groups are more
distinctive, so group identity should be more salient among minority group members than
majority group members.

Group status

Group status interacts with group size to affect the salience of social identities.

Social context and self-evaluation

The social environment has an influence on the way people evaluate themselves as a result of
social-comparison processes.

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The contrast effect

People regard themselves as at the opposite end of the spectrum of a given trait to the people in
their company.[60] However, this effect has come under criticism as to whether it is a primary
effect, as it seems to share space with the assimilation effect, which states that people evaluate
themselves more positively when they are in the company of others who are exemplary on some
dimension.

• Whether the assimilation or contrast effect prevails depends on the psychological

closeness, with people feeling psychologically disconnected with their social
surroundings being more likely to show contrast effects. Assimilation effects occur when
the subject feels psychologically connected to their social surroundings. Imagining how
one appears to others has an effect on how one thinks about oneself. Recent events can
cue particular views of the self, either as a direct result of failure, or via mood.

The extent of the effect depends on personal variables. For example people with high
self-esteem do not show this effect, and sometimes do the opposite.

Memory for prior events influence how people think about themselves

Fazio et al. found that selective memory for prior events can temporarily activate self-
representations which, once activated, guide our behavior.

Deficiencies

Deficiency in knowledge of the present self.

➢ Giving reasons but not feelings disrupts self-insight.

➢ Deficiency of knowledge of the past self.
➢ Knowledge from the present overinforms the knowledge of the past.
➢ False theories shape autobiographical memory.
➢ Deficiency of knowledge of the future self.
➢ Knowledge of the present overinforms predictions of future knowledge.
➢ Affective forecasting can be affected by durability bias.

Skill

A skill is learning to carry out a task with pre-determined results often within a given amount of
time, energy, or both. Skills can often be divided into domain general and domain-specific
skills. For example, in the domain of work, some general skills would include time management,
teamwork and leadership, self-motivation and others, whereas domain-specific skills would be
useful only for a certain job. Skill usually requires certain environmental stimuli and situations to
assess the level of skill being shown and used.People need a broad range of skills in order to
contribute to a modern economy. A joint ASTD and U.S. Department of Labor study showed
that through technology, the workplace is changing, and identified 16 basic skills that employees
must have to be able to change with it.[3]

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Labor skills

Skilled workers have long had historical import (see Division of labor) as electricians, masons,
carpenters, blacksmiths, bakers, brewers, coopers, printers and other occupations that are
economically productive. Skilled workers were often politically active through their craft guilds.

Life skills

Life skills are problem-solving behaviors that are used appropriately and responsibly in the
management of personal affairs. They are a set of human skills, acquired via learning (teaching)
or direct experience, that are used to handle problems and questions commonly encountered in
daily human life. The subject varies greatly depending on societal norms and community
expectations.

People skills

According to the Portland Business Journal, people skills are described as:[5]

➢ understanding ourselves and moderating our responses

➢ talking effectively and empathizing accurately
➢ building relationships of trust, respect and productive interactions.

A British definition is “the ability to communicate effectively with people in a friendly way,
especially in business.” The term is not listed yet in major US dictionaries. The term people
skills is used to include both psychological skills and social skills, but is less inclusive than life
skills.

Social skills

Social skill is any skill facilitating interaction and communication with others. Social rules and
relations are created, communicated, and changed in verbal and nonverbal ways. The process of
learning such skills is called socialization.

Soft skills

Soft skills is a sociological term relating to a person's "EQ" (Emotional Intelligence Quotient),
the cluster of personality traits, social graces, communication, language, personal habits,
friendliness, and optimism that characterize relationships with other people. Soft skills
complement hard skills (part of a person's IQ), which are the occupational requirements of a job
and many other activities.

Hard skills

Hard skills are any skills relating to a specific task or situation. These skills are easily
quantifiable unlike soft skills which are related to one's personality.

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Mastering skills

Mastery pertains to perfecting a particular skill set. To reach mastery, authors Malcolm Gladwell
and Robert Greene claim that 10,000 hours of work will have to be put into training.

Human Potential approach to Skills

Human Potential approach to skills regards the contribution of skills to Personal Development in
a broad perspective. This approach derives primarily from the "Person Centered Approach"
developed by Carl Rogers, American psychologist and among the founders of the humanistic
approach (or client-centered approach) to human development. The aim of a Human Potential
approach to skills development is to support the process of becoming fully functioning
individuals, developing personal potential in any field (sports, arts, relations, science, and
others), including emotional skills. According to Rogers this process "involves the stretching and
growing of becoming more and more of one's potentialities. It involves the courage to be. It
means launching oneself fully into the stream of life". (Rogers 1961).

Economic analysis

In economics, wealth (in a commonly applied accounting sense) (sometimes savings) is the net
worth of a person, household, or nation, that is, the value of all assets owned net of all liabilities
owed at a point in time. For national wealth as measured in the national accounts, the net
liabilities are those owed to the rest of the world.[16] The term may also be used more broadly as
referring to the productive capacity of a society or as a contrast to poverty.[17] Analytical
emphasis may be on its determinants or distribution.[18]

Economic terminology distinguishes between wealth and income. Wealth or savings is a stock
variable, that is, measurable at a date in time, for example the value of an orchard on December
31 minus debt owed on the orchard. For a given amount of wealth, say at the beginning of the
year, income from that wealth, as measurable over say a year is a flow variable. What marks the
income as a flow is its measurement per unit of time, such as the value of apples yielded from the
orchard per year.In macroeconomic theory the 'wealth effect' may refer to the increase in
aggregate consumption from an increase in national wealth. One measure of it is the wealth
elasticity of demand. It is the percentage change in the amount demanded of consumption for
each one-percent change in wealth.Wealth may be measured in nominal or real values, that is in
money value as of a given date or adjusted to net out price changes. The assets include those that
are tangible (land and capital) and financial (money, bonds, etc.). Measurable wealth typically
excludes intangible or nonmarketable assets such as human capital and social capital. In
economics, 'wealth' corresponds to the accounting term 'net worth'. But analysis may adapt
typical accounting conventions for economic purposes in social accounting (such as in national
accounts). An example of the latter is generational accounting of social security systems to
include the present value projected future outlays considered to be liabilities.[19] Macroeconomic
questions include whether the issuance of government bonds affects investment and consumption
through the wealth effect. Environmental assets are not usually counted in measuring wealth, in
part due to the difficulty of valuation for a non-market good. Environmental or green accounting
is a method of social accounting for formulating and deriving such measures on the argument

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that an educated valuation is superior to a value of zero (as the implied valuation of
environmental assets).

Sociological treatments

Social class is not identical to wealth, but the two concepts are related (particularly in Marxist
theory), leading to the combined concept of Socioeconomic status. Wealth refers to value of
everything a person or family owns. This includes tangible items such as jewelry, housing, cars,
and other personal property. Financial assets such as stocks and bonds, which can be traded for
cash, also contribute to wealth. Wealth is measured as “net assets,” minus how much debt one
owes. Wealth is a restrictive agent for people of different classes because some hobbies can only
be participated in by the affluent, such as world travel.

Partly as a result of different economic conditions of life, members of different social classes
often have different value systems and view the world in different ways. As such, there exist
different "conceptions of social reality, different aspirations and hopes and fears, different
conceptions of the desirable."[22] The way the various social classes in society view wealth vary
and these diverse characteristics are a fundamental dividing line among the classes. According to
Richard H Ropers, the concentration of wealth in the United States is inequitably distributed. In
1996, the United States federal government reported that the net worth of the top 1 percent of
people in the United States was approximately equal to that of the bottom 90 percent. Cross-
nationally, the United States has greater wealth inequality than other developed nations.[citation
needed]

Upper class encompasses the top end of the income spectrum relative members of society as a
whole. Since they have more wealth and privacy, the upper class has more personal autonomy
than the rest of the population. Upper class values include higher education, and the wealthiest
people the accumulation and maintenance of wealth, the maintenance of social networks and the
power that accompanies such networks. Children of the upper class are typically schooled on
how to manage this power and channel this privilege in different forms. It is in large part by
accessing various edifices of information, associates, procedures and auspices that the upper
class are able to maintain their wealth and pass it to future generations. Usually, people of the
upper class participate as partisans in elections and have more political power than those of
lower classes due to their abundance of resources and influence. Middle class encompasses the
individuals who fall in between the upper and lower class relative to their financial situation.
Generally, the population of America associates themselves as middle class. Lifestyle is a means
for which individuals or families decide what to consume with their money and their way of
living. The middle class places a greater emphasis on income: unlike the upper class, the middle
class measures success and potential in the form of money [relative pennies] rather than
influence and power. The middle class views wealth as something for emergencies and it is seen
as more of a cushion. This class comprises people that were raised with families that typically
owned their own home, planned ahead and stressed the importance of education and
achievement. They earn a significant amount of income and also have significant amounts of
consumption. However, there is very limited savings (deferred consumption) or investments,
besides retirement pensions and home ownership. They have been socialized to accumulate

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wealth through structured, institutionalized arrangements. Without this set structure, asset
accumulation would likely not occur.

Lower class members feel more restrictive in their options due to their lack of wealth. This could
lead to complications in solving their personal dilemmas, as predicted by the Class Structure
Hypothesis. There are many societal standards and designs intentional sabotage and
shortcomings to explain the persistent state of yearning and want the lower classes generally
experience with their lower quality and quantity of assets. Typical causes are persistent
unethical/harmful mentalities and criminal tendencies: misguidedly similar to the upper class in
some cases.

Human Potential Movement

The Human Potential Movement (HPM) arose out of the counterculture milieu of the 1960s
and formed around the concept of cultivating extraordinary potential that its advocates believe to
lie largely untapped in all people. The movement took as its premise the belief that through the
development of "human potential", humans can experience an exceptional quality of life filled
with happiness, creativity, and fulfillment. As a corollary, those who begin to unleash this
assumed potential often find themselves directing their actions within society towards assisting
others to release their potential. Adherents believe that the net effect of individuals cultivating
their potential will bring about positive social change at large.The emergence of HPM is linked
to humanistic psychology. The movement is strongly influenced by Abraham Maslow's theory of
self-actualization as the supreme expression of a human's life.In the middle of the 1960s, George
Leonard did research across the United States on the subject of human potential for the magazine
Look. In his research, he interviewed 37 psychiatrists, brain researchers, and philosophers on the
subject of human potential. He found that "Not one of them said we were using more than 10%
of our capacity”, which should not be misconstrued as an endorsement of the ten percent of the
brain myth but which is a more general claim. During the course of this research, Leonard met
Michael Murphy, the founder of the nascent Esalen Institute that at the time was running
educational programs for adults on the topic of "human potentialities". Leonard and Murphy
became close friends and together put forth the idea that there should be a human potential
movement.

Social influence

As Elizabeth Puttick writes in the Encyclopedia of New Religions:

"The human potential movement (HPM) originated in the 1960s as a counter-cultural

rebellion against mainstream psychology and organised religion. It is not in itself a
religion, new or otherwise, but a psychological philosophy and framework, including a
set of values that have made it one of the most significant and influential forces in
modern Western society."[3]

Authors and essayists

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Abraham Maslow published his concept of a hierarchy of needs in a paper in 1943. He argued
that as people's basic survival needs are met, so their desire to grow in mental and emotional
dimensions increases. He also coined the term 'met motivation' to describe the motivation of
people who go beyond the scope of the basic needs and strive for constant betterment. Michael
and Dick Price founded the Esalen Institute in 1962, primarily as a center for the study and
development of human potential, and some people continue to regard Esalen as the geographical
center of the movement today.

In 1964, Virginia Satir became Esalen's first Director of Training, which required her to oversee
the Human Potential Development Program. At the time, Satir was well established as an author,
trainer and consultant.[4] Twenty years later, Satir actively encouraged therapists to shift their
focus to relationship education to help clients discover "more joy, more reality, more
connectedness, more accomplishment and more opportunities for people to grow." Aldous
Huxley gave lectures on the "Human Potential" at Esalen in the early 1960s. His writings and
lectures on the mystical dimensions of psychedelics and on what he called "the perennial
philosophy" were foundational. Moreover, his call for an institution that could teach the
'nonverbal humanities' and the development of the 'human potentialities' functioned as the
working mission statement of early Esalen. Christopher Lasch notes the impact of the human
potential movement via the therapeutic sector: "The new therapies spawned by the human
potential movement, according to Peter Marin, teach that "the individual will is all powerful and
totally determines one's fate"; thus they intensify the "isolation of the self".George Leonard, a
magazine writer and editor who conducted research for an article on human potential, became an
important early influence on Esalen. Leonard claims that he coined the phrase "Human Potential
Movement" during a brainstorming session with Michael Murphy, and popularized it in his 1972
book The Transformation: A Guide to the Inevitable Changes in Mankind. Leonard worked
closely with the Esalen Institute afterwards, and in 2005 served as its president.

Knowledge management

Knowledge management (KM) is the process of capturing, developing, sharing, and effectively
using organizational knowledge. It refers to a multi-disciplinary approach to achieving
organizational objectives by making the best use of knowledge. An established discipline since
1991, KM includes courses taught in the fields of business administration, information systems,
management, library, and information sciences. Other fields may contribute to KM research,
including information and media, computer science, public health, and public policy. Several
Universities offer dedicated Master of Science degrees in Knowledge Management.Many large
companies, public institutions, and non-profit organisations have resources dedicated to internal
KM efforts, often as a part of their business strategy, information technology, or human resource
management departments.[6] Several consulting companies provide advice regarding KM to these
organisations. Knowledge management efforts typically focus on organisational objectives such
as improved performance, competitive advantage, innovation, the sharing of lessons learned,
integration, and continuous improvement of the organisation. These efforts overlap with
organisational learning and may be distinguished from that by a greater focus on the
management of knowledge as a strategic asset and a focus on encouraging the sharing of
knowledge. KM is an enabler of organisational learning. Knowledge management efforts have a
long history, including on-the-job discussions, formal apprenticeship, discussion forums,

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corporate libraries, professional training, and mentoring programs. With increased use of
computers in the second half of the 20th century, specific adaptations of technologies such as
knowledge bases, expert systems, knowledge repositories, group decision support systems,
intranets, and computer-supported cooperative work have been introduced to further enhance
such efforts. In 1999, the term personal knowledge management was introduced; it refers to the
management of knowledge at the individual level. In the enterprise, early collections of case
studies recognized the importance of knowledge management dimensions of strategy, process,
and measurement. Key lessons learned include people and the cultural norms which influence
their behaviors are the most critical resources for successful knowledge creation, dissemination,
and application; cognitive, social, and organizational learning processes are essential to the
success of a knowledge management strategy; and measurement, benchmarking, and incentives
are essential to accelerate the learning process and to drive cultural change. In short, knowledge
management programs can yield impressive benefits to individuals and organizations if they are
purposeful, concrete, and action-orientated.

Research

KM emerged as a scientific discipline in the earlier 1990s. It was initially supported solely by
practitioners, when Skandia hired Leif Edvinsson of Sweden as the world's first Chief
Knowledge Officer (CKO). Hubert Saint-Onge (formerly of CIBC, Canada), started
investigating KM long before that. The objective of CKOs is to manage and maximize the
intangible assets of their organizations. Gradually, CKOs became interested in practical and
theoretical aspects of KM, and the new research field was formed. Discussion of the KM idea
has been taken up by academics, such as Ikujiro Nonaka (Hitotsubashi University), Hirotaka
Takeuchi (Hitotsubashi University), Thomas H. Davenport (Babson College) and Baruch Lev
(New York University).[3][17] In 2001, Thomas A. Stewart, former editor at Fortune magazine
and subsequently the editor of Harvard Business Review, published a cover story highlighting
the importance of intellectual capital in organisations. Since its establishment, the KM discipline
has been gradually moving towards academic maturity.[2] First, there is a trend toward higher
cooperation among academics; particularly, there has been a drop in single-authored
publications. Second, the role of practitioners has changed. Their contribution to academic
research has been dramatically declining from 30% of overall contributions up to 2002, to only
10% by 2009. A broad range of thoughts on the KM discipline exist; approaches vary by author
and school. As the discipline matures, academic debates have increased regarding both the
theory and practice of KM, to include the following perspectives:

• Techno-centric with a focus on technology, ideally those that enhance knowledge

sharing and creation. Organisational with a focus on how an organisation can be
designed to facilitate knowledge processes best. Ecological with a focus on the
interaction of people, identity, knowledge, and environmental factors as a complex
adaptive system akin to a natural ecosystem.

Regardless of the school of thought, core components of KM roughly include people/culture,

processes/structure and technology. The details depend on the perspective. Different KM schools
of thought include perspectives from which KM can be viewed and explained, to include:

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 • community of practice
• social network analysis
• intellectual capital
• information theory
• complexity science
• constructivism

The practical relevance of academic research in KM has been questionedwith action research
suggested as having more relevanceand the need to translate the findings presented in academic
journals to a practice.

Different frameworks for distinguishing between different 'types of' knowledge exist.[10] One
proposed framework for categorizing the dimensions of knowledge distinguishes between tacit
knowledge and explicit knowledge. Tacit knowledge represents internalized knowledge that an
individual may not be consciously aware of, such as how he or she accomplishes particular tasks.
At the opposite end of the spectrum, explicit knowledge represents knowledge that the individual
holds consciously in mental focus, in a form that can easily be communicated to others.

Fig : 8: The Knowledge Spiral as described by Nonaka & Takeuchi.

Ikujiro Nonaka proposed a model (SECI for Socialization, Externalization, Combination,

Internalization) which considers a spiraling knowledge process interaction between explicit
knowledge and tacit knowledge. In this model, knowledge follows a cycle in which implicit
knowledge is 'extracted' to become explicit knowledge, and explicit knowledge is 're-
internalized' into implicit knowledge. Similarly, Hayes and Walsham (2003) describe content
and relational perspectives of knowledge and knowledge management as two fundamentally
different epistemological perspectives. The content perspective suggest that knowledge is easily
stored; because it may be codified, while the relational perspective recognizes the contextual and
relational aspects of knowledge which can make knowledge difficult to share outside of the
specific location where the knowledge is developed. Early research suggested that a successful
KM effort needs to convert internalized tacit knowledge into explicit knowledge to share it, and
the same effort must permit individuals to internalize and make personally meaningful any
codified knowledge retrieved from the KM effort. Subsequent research into KM suggested that a
distinction between tacit knowledge and explicit knowledge represented an oversimplification
and that the notion of explicit knowledge is self-contradictory. Specifically, for knowledge to be
made explicit, it must be translated into information (i.e., symbols outside of our heads). More

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recently, together with Georg von Krogh and Sven Voelpel, Nonaka returned to his earlier work
in an attempt to move the debate about knowledge conversion forward. A second proposed
framework for categorizing the dimensions of knowledge distinguishes between embedded
knowledge of a system outside of a human individual (e.g., an information system may have
knowledge embedded into its design) and embodied knowledge representing a learned capability
of a human body's nervous and endocrine systems. A third proposed framework for categorizing
the dimensions of knowledge distinguishes between the exploratory creation of "new
knowledge" (i.e., innovation) vs. the transfer or exploitation of "established knowledge" within a
group, organisation, or community. Collaborative environments such as communities of practice
or the use of social computing tools can be used for both knowledge creation and transfer.
Knowledge may be accessed at three stages: before, during, or after KM-related activities.
Organisations have tried knowledge capture incentives, including making content submission
mandatory and incorporating rewards into performance measurement plans. Considerable
controversy exists over whether incentives work or not in this field and no consensus has
emerged. One strategy to KM involves actively managing knowledge (push strategy). In such an
instance, individuals strive to explicitly encode their knowledge into a shared knowledge
repository, such as a database, as well as retrieving knowledge they need that other individuals
have provided to the repository. This is commonly known as the Codification approach to KM.
Another strategy to KM involves individuals making knowledge requests of experts associated
with a particular subject on an ad hoc basis (pull strategy). In such an instance, expert
individual(s) can provide their insights to the particular person or people needing this. This is
commonly known as the Personalisation approach to KM.Hansen et al. propose a simple
framework, distinguishing two opposing KM strategies: codification and personalization.
Codification focuses on collecting and storing codified knowledge in previously designed
electronic databases to make it accessible to the organisation. Codification can therefore refer to
both tacit and explicit knowledge. In contrast, the personalization strategy aims at encouraging
individuals to share their knowledge directly. Information technology plays a less important role,
as it is only supposed to facilitate communication and knowledge sharing among members of an
organization.

Other knowledge management strategies and instruments for companies include: Knowledge
Sharing (fostering a culture that encourages the sharing of information, based on the concept that
knowledge is not irrevocable and should be shared and updated to remain relevant)

➢ Storytelling (as a means of transferring tacit knowledge)

➢ Cross-project learning
➢ After action reviews
➢ Knowledge mapping (a map of knowledge repositories within a company accessible by
all)
➢ Communities of practice
➢ Expert directories (to enable knowledge seeker to reach to the experts)
➢ Expert Systems (knowledge seeker responds to one or more specific questions to reach
knowledge in a repository)
➢ Best practice transfer

➢ Knowledge fairs

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 ➢ Competence management (systematic evaluation and planning of competences of
individual organisation members)
➢ Proximity & architecture (the physical situation of employees can be either conducive or
obstructive to knowledge sharing)
➢ Master-apprentice relationship
➢ Collaborative software technologies (wikis, shared bookmarking, blogs, social software,
etc.)
➢ Knowledge repositories (databases, bookmarking engines, etc.)
➢ Measuring and reporting intellectual capital (a way of making explicit knowledge for
companies)
➢ Knowledge brokers (some organisational members take on responsibility for a specific
"field" and act as first reference on whom to talk about a specific subject)
➢ Inter-project knowledge transfer

➢ There are a number of claims as to the motivation leading organisations to undertake a

KM effort. Typical considerations driving a KM effort include: Making available
increased knowledge content in the development and provision of products and services
➢ Achieving shorter new product development cycles
➢ Facilitating and managing innovation and organisational learning
➢ Leveraging the expertise of people across the organisation
➢ Increasing network connectivity between internal and external individuals
➢ Managing business environments and allowing employees to obtain relevant insights and
ideas appropriate to their work
➢ Solving intractable or wicked problems
➢ Managing intellectual capital and intellectual assets in the workforce (such as the
expertise and know-how possessed by key individuals or stored in repositories)

Debate exists whether KM is more than a passing fad, though increasing amount of research in
this field may help to answer this question, as well as create consensus on what elements of KM
help determine the success or failure of such efforts.[47] Knowledge sharing remains a
challenging issue for knowledge management, while there is no clear agreement barriers may
include time issues for knowledge works, the level of trust, lack of effective support technologies
and culture.

KM technologies

Knowledge management (KM) technology can be divided into the following general categories:

➢ Groupware
o Groupware refers to technologies that facilitate collaboration and sharing of
organizational information. One of the earliest very successful products in this
category was Lotus Notes. Notes provided tools for threaded discussions, sharing
of documents, organization wide uniform email, etc.
➢ Workflow
o Workflow tools allow the representation of processes associated with the creation,
use, and maintenance of organizational knowledge. For example the process to

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 create and utilize forms and documents within an organization. For example, a
workflow system can do things such as send notifications to appropriate
supervisors when a new document has been produced and is waiting their
approval.
➢ Content/Document Management
o Content/Document Management systems are systems designed to automate the
process of creating web content and/or documents within an organization. The
various roles required such as editors, graphic designers, writers, and producers
can be explicitly modeled along with the various tasks in the process and
validation criteria for moving from one step to another. All this information can
be used to automate and control the process. Commercial vendors of these tools
started to start either as tools to primarily support documents (e.g., Documentum)
or as tools designed to support web content (e.g., Interwoven) but as the Internet
grew these functions merged and most vendors now perform both functions,
management of web content and of documents. As Internet standards became
adopted within most organization Intranets and Extranets the distinction between
the two essentially went away.
➢ Enterprise Portals
o Enterprise Portals are web sites that aggregate information across the entire
organization or for groups within the organization such as project teams.
➢ eLearning
o eLearning technology enables organizations to create customized training and
education software. This can include lesson plans, monitoring progress against
learning goals, online classes, etc. eLearning technology enables organizations to
significantly reduce the cost of training and educating their members. As with
most KM technology in the business world this was most useful for companies
that employ knowledge workers; highly trained staff with areas of deep expertise
such as the staff of a consulting firm. Such firms spend a significant amount on
the continuing education of their employees and even have their own internal full-
time schools and internal education staff.
➢ Scheduling and planning
o Scheduling and planning tools automate the creation and maintenance of an
organization's schedule: scheduling meetings,notifying people of a meeting, etc.
An example of a well known scheduling tool is Microsoft Outlook. The planning
aspect can integrate with project management tools such as Microsoft Project.
Some of the earliest successful uses of KM technology in the business world were
the development of the follwing types of tools: online versions of corporate
"yellow pages" with listing of contact info, relevant knowledge, and work
history.[21]
➢ Telepresence
o Telepresence technology enables individuals to have virtual meetings rather than
having to be in the same place. Videoconferencing is the most obvious example.

These categories are neither rigidly defined nor exhaustive. Workflow for example is a
significant aspect of a content or document management system and most content and document
management systems have tools for developing enterprise portals. One of the most important

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trends in KM technology was the adoption of Internet standards. Original KM technology
products such as Lotus Notes defined their own proprietary formats for email, documents, forms,
etc. The explosive growth of the Internet drove most vendors to abandon proprietary formats and
adopt Internet formats such as HTML, HTTP, and XML. In addition, open source and freeware
tools for the creation of blogs and wikis now enable capabilities that used to require expensive
commercial tools to be available for little or no cost. One of the most important ongoing
developments in KM technology is adoption of tools that enable organizations to work at the
semantic level. Many of these tools are being developed as part of the Semantic Web. One, for
example, is the Stanford Protege Ontology Editor.

Conceptual framework

A conceptual framework is an analytical tool with several variations and contexts. It is used to
make conceptual distinctions and organize ideas. Strong conceptual frameworks capture
something real and do this in a way that is easy to remember and apply. Isaiah Berlin used the
metaphor of a "Fox" and a "Hedgehog" to make conceptual distinctions in how important
philosophers and authors view the world.[1] Berlin describes hedgehogs as those who use a single
idea or organizing principle to view the world (examples given include Dante, Pascal,
Dostoevsky, Plato, Ibsen and Hegel). Foxes, on the other hand, incorporate a type of pluralism
and view the world through multiple, sometimes conflicting, lenses (examples include Goethe,
Joyce, Shakespeare, Aristotle, Herodotus, Molière, Anderson, Balzac). Economists use the
conceptual framework of "supply" and "demand" to distinguish between the behavior and
incentive systems of firms and consumers. Like many conceptual frameworks, supply and
demand can be presented through visual or graphical representations (see Demand curve). The
use of the term conceptual framework crosses both scale (large and small theories) and contexts
(social science, marketing, applied science, art etc.). Its explicit definition and application can
therefore vary. Conceptual frameworks are particularly useful as organizing devices in empirical
research. One set of scholars has applied the notion of conceptual framework to deductive,
empirical research at the micro- or individual study level. They employ American football plays
as a useful metaphor to clarify the meaning of conceptual framework (used in the context of a
deductive empirical study).

Likewise, conceptual frameworks are abstract representations, connected to the research

project's goal that direct the collection and analysis of data (on the plane of observation – the
ground). Critically, a football play is a "plan of action" tied to a particular, timely, purpose,
usually summarized as long or short yardage.[14] Shields and Rangarajan argue that it is this tie to
"purpose" that make American football plays such a good metaphor. They define a conceptual
framework as "the way ideas are organized to achieve a research project's purpose." Like
football plays conceptual frameworks are connected to a research purpose. Explanation is the
most common type of research purpose employed in empirical research. The formal hypothesis is

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the framework associated with explanation. Explanatory research usually focuses on "why" or
"what caused" a phenomenon to occur. Formal hypotheses posit possible explanations (answers
to the why question) that are tested by collecting data and assessing the evidence (usually
quantitative using statistical tests). For example, Kai Huang wanted to determine what factors
contributed to residential fires in U.S. cities. Three factors were posited to influence residential
fires. These factors (environment, population and building characteristics) became the
hypotheses or conceptual framework he used to achieve his purpose – explain factors that
influenced home fires in U.S. cities..

Types

Several types of conceptual frameworks have been identified, and line up with a research
purpose in the following ways:

➢ Working hypothesis – Exploration or Exploratory research

➢ Descriptive categories – Description or Descriptive research
➢ Practical ideal type – Analysis (Gauging)
➢ Models of operations research – Decision making
➢ Formal hypothesis – Explanation and Prediction

Note that Shields and Rangarajan (2013) do not claim that the above are the only framework-
purpose pairing. Nor do they claim the system is applicable to inductive forms of empirical
research. Rather, the conceptual framework-research purpose pairings they propose are useful
and provide new scholars a point of departure to develop their own research design. Frameworks
have also been used to explain conflict theory and the balance necessary to reach what amounts
to resolution. Within these conflict frameworks, visible and invisible variables function under
concepts of relevance. Boundaries form and within these boundaries, tensions regarding laws and
chaos (or freedom) are mitigated. These frameworks often function like cells, with sub-
frameworks, stasis, evolution and revolution. Anomalies may exist without adequate "lenses" or
"filters" to see them and may become visible only when the tools exist to define them.

CHAPTER-7

KNOWLEDGE MANAGEMENT AND HR TO HUMAN CAPITAL

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Tacit knowledge

Tacit knowledge (as opposed to formal, codified or explicit knowledge) is the kind of
knowledge that is difficult to transfer to another person by means of writing it down or
verbalizing it. For example, that London is in the United Kingdom is a piece of explicit
knowledge that can be written down, transmitted, and understood by a recipient. However, the
ability to speak a language, knead dough, play a musical instrument, or design and use complex
equipment requires all sorts of knowledge that is not always known explicitly, even by expert
practitioners, and which is difficult or impossible to explicitly transfer to other users. The term
“tacit knowing” or “tacit knowledge” was first introduced into philosophy by Michael Polanyi in
1958 in his magnum opus Personal Knowledge. He famously summarizes the idea in his later
work The Tacit Dimension with the assertion that “we can know more than we can tell.”.[1] He
states not only that there is knowledge that cannot be adequately articulated by verbal means, but
also that all knowledge is rooted in tacit knowledge in the strong sense of that term.

Tacit knowledge can be defined as skills, ideas and experiences that people have in their minds
and are, therefore, difficult to access because it is often not codified and may not necessarily be
easily expressed (Chugh, 2015). With tacit knowledge, people are not often aware of the
knowledge they possess or how it can be valuable to others. Effective transfer of tacit knowledge
generally requires extensive personal contact, regular interaction and trust. This kind of
knowledge can only be revealed through practice in a particular context and transmitted through
social networks. To some extent it is "captured" when the knowledge holder joins a network or a
community of practice. Some examples of daily activities and tacit knowledge are: riding a bike,
playing the piano, driving a car, hitting a nail with a hammer. and putting together pieces of a
complex jigsaw puzzle, interpreting a complex statistical equation (Chugh, 2015). The formal
knowledge of how to ride a bicycle is that in order to balance, if the bike falls to the left, one
steers to the left. To turn right the rider first steers to the left, and then when the bike falls right,
the rider steers to the right. You may know explicitly how turning of the handle bars or steering
wheel change the direction of a bike or car, but you cannot simultaneously focus on this and at
the same time orient yourself in traffic. Similarly, you may know explicitly how to hold the
handle of a hammer, but you cannot simultaneously focus on the handle and hit the nail correctly
with the hammer. The master pianist can perform brilliantly, but if he begins to concentrate on
the movements of his fingers instead of the music, he will not be able to play as a master.
Knowing the explicit knowledge, however, is no help in riding a bicycle, doesn’t help in
performing well in the tasks since few people are aware of it when performing and few riders are
in fact aware of this.

Tacit knowledge is not easily shared. Although it is that which is used by all people, it is not
necessarily able to be easily articulated. It consists of beliefs, ideals, values, schemata and mental
models which are deeply ingrained in us and which we often take for granted. While difficult to
articulate, this cognitive dimension of tacit knowledge shapes the way we perceive the world. In
the field of knowledge management, the concept of tacit knowledge refers to a knowledge
possessed only by an individual and difficult to communicate to others via words and symbols.
Therefore, an individual can acquire tacit knowledge without language. Apprentices, for
example, work with their mentors and learn craftsmanship not through language but by
observation, imitation, and practice.

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The key to acquiring tacit knowledge is experience. Without some form of shared experience, it
is extremely difficult for people to share each other's thinking processes. .

Tacit knowledge has been described as “know-how” – as opposed to “know-that” (facts). This
distinction is usually taken to date back to a paper by Gilbert Ryle, given to the Aristotelian
society in London in 1945. In this paper Ryle argues against the (intellectualist) position that all
knowledge is knowledge of propositions ("know-that"), and the view that some knowledge can
only be defined as "know-how" has therefore, in some contexts, come to be called "anti-
intellectualist". There are further distinctions: “know-why” (science), or “know-who”
(networking) Tacit knowledge involves learning and skill but not in a way that can be written
down. On this account knowing-how or embodied knowledge is characteristic of the expert, who
acts, makes judgments, and so forth without explicitly reflecting on the principles or rules
involved. The expert works without having a theory of his or her work; he or she just performs
skillfully without deliberation or focused attention Embodied knowledge represents a learned
capability of a human body’s nervous and endocrine systems (Sensky 2002). Tacit knowledge
vs. explicit knowledge: Although it is possible to distinguish conceptually between explicit and
tacit knowledge, they are not separate and discrete in practice. The interaction between these two
modes of knowing is vital for the creation of new knowledge. A related point in the area of
"tacit knowledge" is that in many cases, despite the existence of good library indexing systems
and search engines, the way specific knowledge may be described is not obvious unless one
already has the knowledge.

Differences with explicit knowledge

Tacit knowledge can be distinguished from explicit knowledge in three major areas:
Modifiability and mechanism of transferring knowledge: while explicit knowledge can be
codified (an example of that is 'can you write it down' or 'put it into words' or 'draw a picture'),
and easily transferred without the knowing subject, tacit knowledge is intuitive and unarticulated
knowledge that cannot be communicated, understood or used without the ‘knowing subject’.
Unlike the transfer of explicit knowledge, the transfer of tacit knowledge requires close
interaction and the buildup of shared understanding and trust among them.

Main methods for the acquisition and accumulation: Explicit knowledge can be generated
through logical deduction and acquired through practical experience in the relevant context. In
contrast, tacit knowledge can only be acquired through practical experience in the relevant
context.

Potential of aggregation and modes of appropriation: Explicit knowledge can be aggregated

at a single location, stored in objective forms and appropriated without the participation of the
knowing subject. Tacit knowledge in contrast, is personal contextual. It is distributive, and
cannot easily be aggregated. The realization of its full potential requires the close involvement
and cooperation of the knowing subject. The process of transforming tacit knowledge into
explicit or specifiable knowledge is known as codification, articulation, or specification. The
tacit aspects of knowledge are those that cannot be codified, but can only be transmitted via
training or gained through personal experience. There is a view against the distinction, where it

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is believed that all propositional knowledge (knowledge that) is ultimately reducible to practical
knowledge (knowledge how).

Transmission models

A chief practice of technological development is the codification of tacit knowledge into explicit
programmed operations so that processes previously requiring skilled employees can be
automated for greater efficiency and consistency at lower cost. Such codification involves
mechanically replicating the performance of persons who possess relevant tacit knowledge; in
doing so, however, the ability of the skilled practitioner to innovate and adapt to unforeseen
circumstances based on the tacit "feel" of the situation is often lost. The technical remedy is to
attempt to substitute brute-force methods capitalizing on the computing power of a system, such
as those that enable a supercomputer programmed to "play" chess against a grandmaster whose
tacit knowledge of the game is broad and deep.The conflicts demonstrated in the previous two
paragraphs are reflected in Ikujiro Nonaka's model of organizational knowledge creation, in
which he proposes that tacit knowledge can be converted to explicit knowledge. In that model
tacit knowledge is presented variously as uncodifiable ("tacit aspects of knowledge are those that
cannot be codified") and codifiable ("transforming tacit knowledge into explicit knowledge is
known as codification"). This ambiguity is common in the knowledge management
literature.Nonaka's view may be contrasted with Polanyi's original view of "tacit knowing."
Polanyi believed that while declarative knowledge may be needed for acquiring skills, it is
unnecessary for using those skills once the novice becomes an expert. And indeed, it does seem
to be the case that, as Polanyi argued, when we acquire a skill we acquire a corresponding
understanding that defies articulation.

Knowledge management

Knowledge management is the dynamic process of creating new knowledge, identifying sources
of this new knowledge and the elicitation and distribution of this knowledge. The identification
of tacit knowledge sources and the creation of knowledge through tacit to tacit knowledge
sharing and tacit to explicit knowledge sharing are fundamental to this process. According to
Parsaye, there are three major approaches to the capture of tacit knowledge from groups and
individuals. They are: Interviewing experts.

• Learning by being told.

• Learning by observation.

Interviewing experts can be done in the form of structured interviewing or by recording

organizational stories. Structured interviewing of experts in a particular subject, is the most
commonly used technique to capture pertinent, tacit knowledge. An example of a structured
interview would be an exit interview. Learning by being told can be done by interviewing or by
task analysis. Either way, an expert teaches the novice the processes of a task. Task analysis is

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the process of determining the actual task or policy, by breaking it down and analyzing what
needs to be done to complete the task. Learning by observation can be done by presenting the
expert with a sample problem, scenario, or case study and then observing the process used to
solve it. Some other techniques for capturing tacit knowledge are;

• Action learning
• All of these approaches should be recorded, in order to transfer the tacit knowledge into
reusable explicit knowledge.

Professor Ikujiro Nonaka has proposed the SECI (Socialization, Externalization, Combination,
Internalization) model, one of the most widely cited theories in knowledge management, to
present the spiraling knowledge processes of interaction between explicit knowledge and tacit
knowledge (Nonaka & Takeuchi 1995).

Explicit knowledge is knowledge that can be readily articulated, codified, accessed and
verbalized. It can be easily transmitted to others. Most forms of explicit knowledge can be stored
in certain media. The information contained in encyclopedias and textbooks are good examples
of explicit knowledge. The most common forms of explicit knowledge are manuals, documents,
procedures, and how-to videos. Knowledge also can be audio-visual. Works of art and product
design can be seen as other forms of explicit knowledge where human skills, motives and
knowledge are externalized.

Descriptive knowledge

Descriptive knowledge, also declarative knowledge or propositional knowledge, is the type

of knowledge that is, by its very nature, expressed in declarative sentences or indicative
propositions. This distinguishes descriptive knowledge from what is commonly known as
"know-how", or procedural knowledge (the knowledge of how, and especially how best, to
perform some task), and "knowing of", or knowledge by acquaintance (the knowledge of
something's existence). The difference between knowledge and beliefs is as follows: A belief is
an internal thought or memory which exists in one's mind. Most people accept that for a belief to
be knowledge it must be, at least, true and justified. The Gettier problem in philosophy is the
question of whether there are any other requirements before a belief can be accepted as
knowledge.

The article epistemology discusses the opinion of philosophers on how one can tell which beliefs
constitute actual knowledge.

➢ Acquiring knowledge
➢ People have used many methods to try to gain knowledge.

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 ➢ By participation.
➢ By acquisition.
➢ By reason and logic (perhaps in cooperation with others, using logical argument).
➢ By mathematical proof.
➢ By the scientific method.
➢ By the trial and error method.
➢ By applying an algorithm.
➢ By learning from experience.
➢ By intuition (getting them from the subconscious).
➢ By an argument from authority, which could be from religious, literary, political,
philosophical or scientific authorities.

➢ By listening to the testimony of witnesses.

➢ By observing the world in its "natural state"; seeing how the world operates without
performing any experiments.
➢ By acquiring knowledge that is embedded in one's language, culture, or traditions.
➢ By dialogical enquiry (conversation). See Gadamer, Bohm, Habermas, Freire, on
dialogue, learning and knowledge acquisition/negotiation: http://www.infed.org/biblio/b-
dialog.htm
➢ By some claimed form of enlightenment following a period of meditation. (For example,
the Buddhist enlightenment known as bodhi)
➢ By some claimed form of divine illumination, prayer or revelation from a divine agency.

Types of knowledge

Knowledge can be classified upon a priori knowledge, which is obtained without

needing to observe the world, and a posteriori or empirical knowledge, which is only obtained
after observing the world or interacting with it in some way.Often knowledge is gained by
combining or extending other knowledge in various ways. Isaac Newton famously wrote: "If I
have seen further... it is by standing on the shoulders of giants".Inferential knowledge is based on
reasoning from facts or from other inferential knowledge such as a theory. Such knowledge may
or may not be verifiable by observation or testing. The distinction between factual knowledge
and inferential knowledge has been explored by the discipline of general semantics.

Knowledge in various disciplines

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There are many different disciplines that generate beliefs that can be regarded as knowledge.
They include science (which generates scientific theories), law (which generates verdicts),
history (which generates historical narratives), and mathematics (which generates
proofs).Scientists attempt to gain knowledge through the scientific method. In this method,
scientists start by finding a phenomenon of interest, which generates questions. A scientist then
picks a question of interest, and based on previous knowledge, develops a hypothesis. The
scientist then designs a controlled experiment which will allow him to test the hypothesis against
the real world. He then makes predictions about the outcome of the test, based on the hypothesis.
At this point, the scientist carries out the experiment and compares his predictions with his
observations. Assuming that there were no flaws in the experiment, if the observations match the
predictions, this is evidence in favour of the hypothesis. If they do not match, then the hypothesis
has been falsified. A hypothesis that has been shown to accurately and reliably predict and
characterize some physical phenomenon, and has been sufficiently tested, may become a
scientific theory. Scientific theories are widely regarded as knowledge, and they are always
subject to further revision or review should new data come to light. To use scientific theories,
they must be applied to the specific situation in hand. For example, a civil engineer might use the
theory of statics (a branch of physics) to determine whether a bridge will hold up. This is one
case where new knowledge is generated from scientific knowledge by specializing it to an
individual instance. The nature of human reasoning dictates that even a sound piece of scientific
work might be regarded as incorrect by the scientific community at large. This is exemplified by
Dan Shechtman's discovery in solid states for which he was criticised for some time. The
scientific method is essentially the application of the inductive approach to investigation. This
approach is entirely appropriate for exploration of the causal world of nature (physics, chemistry,
etc.) but not valid for the teleological social sciences, which includes history. There are no
constants in human relations. only unmeasurable and inconstant subjective valuations. Electrons
always behave the same way under the same conditions, but humans do not—different people
seem to react differently and the same person seems to or might react differently at different
moments in time. Thus, it appears that only spurious inferences can be drawn from repeated
observations of human behavior. It might be observed that most humans prefer wealth to poverty
or life to death, but it might be invalid to infer any universal law of human behavior from
this.Historians often generate different interpretations of the same event, even when reading the
same primary sources, and these interpretations are always subject to revision by other
historians. This is because, as a social scientist, the historian must constantly make subjective
judgements of relevance in trying to interpret historical events.

Situated knowledge

Situated knowledge is knowledge specific to a particular situation. Imagine two very similar
breeds of mushroom, which grow on either side of a mountain, one nutritious, one poisonous.
Relying on knowledge from one side of an ecological boundary, after crossing to the other, may
lead to starving rather than eating perfectly healthy food near at hand, or to poisoning oneself by
mistake. Some methods of generating knowledge, such as trial and error, or learning from

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experience, tend to create highly situational knowledge. One of the main benefits of the scientific
method is that the theories it generates are much less situational than knowledge gained by other
methods. Situational knowledge is often embedded in language, culture, or traditions. Critics of
cultural imperialism argue that the rise of a global monoculture causes a loss of local knowledge.

Issues

What constitutes knowledge, certainty and truth are controversial issues. These issues are
debated by philosophers, social scientists, and historians. Ludwig Wittgenstein wrote "On
Certainty" – aphorisms on these concepts – exploring relationships between knowledge and
certainty. A thread of his concern has become an entire field, the philosophy of action. A number
of problems exist, that arise when defining knowledge or truth, including issues with objectivity,
adequacy and limits to justification. Beliefs are also very problematic not least because they are
either true or false, and therefore cannot be adequately described by conventional logic. An
action likewise can be taken or not, but there is the troubling idea of an "event" is, an action
taken by nobody, or nobody whom one can blame.

Non-scientific methods

Several groups, most notably the postmodernists and social constructivists, hold that science
does not actually tell us about the physical world in which they live. They hold that the world
cannot be understood by science, but rather by religious revelations, mystical experience, or
literary deconstructionism.

Practical limits for obtaining knowledge

What we hold to be knowledge is often derived by a combination of reason from either

traditional, authoritative, or scientific sources. Many times such knowledge is not verifiable;
sometimes the process of testing is prohibitively dangerous or expensive. For instance, some
physics theories about the nature of the universe, such as string-theory, require the construction
of testing equipment currently beyond our technology. Since such theories are in principle
subject to verification or refutation, they are scientific; since they are not proven experimentally,
they are not considered certain knowledge. Rather, in such cases we have certain knowledge only
of the theory, but not of what the theory describes."Of the three ways in which men think that
they acquire knowledge of things—authority, reasoning, and experience—only the last is
effective and able to bring peace to the intellect." (Roger Bacon, English alchemist, astrologer,
philosopher and a major progenitor of modern science.

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Sustaining employee motivation during tough times

For motivation to be sustainable in the long run, it should spring from within each member of an
organization or a team. Motivation is manageable. It is a quality of management and not a
strategy. Gary Hamel, the well known author and first in the rankings of the Wall Street Journal
for the thinker of 2010, says that the key to a company’s long-term success lies in its quality of
management rather than its strategies or products. Undoubtedly, motivation constitutes a high
priority area of management.

o How and Why are people Motivated?

• In motivating employees for achieving company goals, they should be
convinced that it is attainable and that it would benefit them personally.
• Mathew Kelly, through The Dream Manager portrays the realities of how and
why employees are motivated. This masterpiece, though a work of fiction that
nevertheless would count among all time greats in literature on leadership, brings
to real life how a company plagued with a problem of high labor turnover and
losing profits turned around within months of hiring a “dream manager” who
worked devotedly to help workers achieve their personal life goals. It presents an
altogether revolutionary concept of what management and leadership is, and
emphasizes the ability to recognize the dreams of those that we lead as a critical
role of leadership to inspire and motivate them to ultimately help us achieve our
own goals.
o Basic Requirements for Motivating and Sustaining It:
• Enlightened leadership has a big role to play in motivating and sustaining it. A
leader should have a good track record for being genuine (one that never stays
after normal hours cannot motivate others to work overtime.)
• An ethical leader would not seek cheap popularity from the team players by
criticizing the top management.
• Since motivation has to ultimately spring from within the employees and not
from you, have a company policy to screen and hire self-motivated people
wherever possible.
• A new leader has to work harder to win the confidence of the team players. He
or she should be sensitive to changing options and priorities, and responsive to
new ideas, and capable of assessing situations and individuals quickly and
realistically.
• Explain how a new project would benefit them; but guard against weaving fairy
tales that show through.
• Devise an action plan and encourage employee feedbacks, constructive criticism
and alternative suggestions.
• Show appreciation for suggestions however trivial; and reward ones that
contribute to improvements.
• Show sincerity of purpose. Be responsive to their needs and eager to resolve
them. Give them your ear first to get them to give their ears to you.
• Once a project gets underway, be on the constant alert for constraints,
bottlenecks, signs of frustrations, and slackening or lack of interest among
participants. Take immediate remedial action.

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 • When things go wrong, ascertain the reasons thereto calmly by talking to those
concerned in a genuine troubleshooting and understanding attitude. Avoid
subjecting anybody to humiliation. If this reveals any square pegs in round holes,
switch tasks/positions and transfer them to activities more suited to their
respective skills and temperaments. They will be grateful for having helped them
to “discover themselves” and giving them a new confidence, a renewed sense of
purpose and an opportunity to mend, to be useful and shine. (Nobody wants to be
a drag on the team and attract the contempt and humiliation of others.)
• Control burnouts and fatigue – manage workload, work balance and keep
focused on results and priorities.
• While making it plain to all very firmly that there is no room for whiners and
wiggle room for the lazy, a tactical leader would try to show the carrot first before
showing the stick.
• Instill a sense of purpose and pride in belonging to a winning team. Organizing
unofficial get-togethers, trips, sporting events that would help further strengthen
existing bonds and understandings. Make use of these unofficial occasions to
conduct games whereby you could slyly arrange (to look as if by chance) to make
some players to present items according to their varying talents. This would help
some earlier unknown and lost characters to gain immediate recognition,
admiration and acceptance among their teammates. It is good for building up self-
confidence, enhancing morale and team spirit while keeping up and sustaining the
motivational levels.

Sustaining Motivation under Stressful Conditions:

➢ There are two types of stress that affect employees for attainment of goals.
Stresses and constraints caused by external market conditions, especially during
prolonged periods of economic downturn:
• At times of falling markets, employees are easily de-motivated through fears of
possible pay cuts, redundancies and layoffs. Take them to your confidence and
invite suggestions for improvisations, if not for mere survival. Many firms survive
such bad periods through different strategies including diversification and
replacement of unprofitable ventures with new ones with better market
sustainability even at reduced profit margins.
• While excessive stress can retard motivation, some reasonable level of stress
helps inspire extra hard work, and even some creativity and innovation to survive
first, before achieving objectives. Too little stress also works against motivation
by making employees take things easy, lose interest and move to comfort zones
and stay put.
• A leader who is constantly in the fire-fighting mode cannot sustain motivation
especially during stressful periods.

(ii) Stresses caused by limitations in individual skills and aptitudes for different types of work
• The nature of stress differs among individuals (for example one may have a phobia for doing
presentations whereas another may thrive on it.) For better motivation, it is the level of perceived
stress within individuals that need to be managed, and not the events or the situations.

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Motivational Exercises & Team Building Ideas:
The Helium Stick Team Building Activity is a fun way a team can learn how to get motivated as
a team rather than as individuals. Team building and employee motivation should happen as a
regular or periodical feature just like a sports team having regular training and practices.
Continuous motivation is maximized by a leader conducting debriefing and feedback sessions to
link and relate what is learned through games and metaphors to the actual activities at the real
workplace. These exercises help enhance camaraderie, team spirit, better understanding, and
communications amongst the team members with the emphasis on keeping focused on goals,
objectives, members’ skills and available resources. Dr. Gardener, a great thinker with a high
rating from the Wall Street Journal, in his Frames of Mind – The Theory of Multiple
Intelligences advocates such motivation building training programs to be incorporated with data,
visual images and stories to reach out to people with different approaches.
Interventions for team building exercises may be followed by about 30 minute interviews with
each player to find out how they feel about one another, how they react to mistakes by others as
against their own, how they cooperate with one another in others’ difficulties etc. You may
frame your own questions to suit the situation and obtain such vital feedback information from
all players to have the motivational levels under constant check. One good question to ask is
whether they would leave the organization if offered a similar or higher pay elsewhere. The
answer we get, perhaps with a little more probing, would sum up to what extent the firm has or
has not succeeded in motivating and sustaining motivation as regards its employees.

How to Develop a Compensation Plan

A compensation plan should be an incentive for the employee to fulfill company's goals. It
should also benefit the employer. Therefore, a compensation plan is typically a win-win for all
parties involved. If you are looking for steps to develop a compensation plan, consider the
following recommendations

Determine your company's vision and how your compensation and benefits package
can reflect this. Your compensation plan should be designed to further the future of the
company and its goals. Look at the company's short term and long term goals. Is the goal
to raise profits now or grow the company by accessing new markets over several years?
Determine how this vision will be achieved. The compensation plan should then reflect
these actions and drive employees to complete them.[1]

• For example, if you are an employee-orientated business that wants to nurture

staff in order to keep them for many years, then your compensation plan should
reflect this. A strong retirement plan with a generous matching system would
entice employees to stay.
• In addition, base pay can be set at certain levels to further company goals. For
example, if you wanted to attract the best talent, you could pay above-market pay
to your employees. Set incentives plans in line with company goals. Your
incentive plans (bonuses) should also be awarded in such a way that they drive the
company's goals. Bonuses should be awarded to those employees that contribute

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 to the company's growth and strategy in direct ways. For example, a salesman
could be measured not on how they increase sales, but on how they increase
profit. That is, how well they can create new business without spending a lot of
the company's money to get it. Offering this incentive over a purely sales-based
incentive plan will help in increasing profitability.
• The same is true for customer attraction and retention. Rewarding employees for
keeping customers will result in them working to do so. Similarly, providing
incentive to find new customers will achieve that end. Figure out how incentives
will be paid. You have several options when it comes to providing incentives.
You can pay them in cash or in stock shares. You can provide then at different
tiers based on achievement and other factors, or you can tie them directly to a
performance metric like sales generated. Deciding which type of incentives to use
will depend on your company's goals and culture.
• For example, if you want to give employees more "ownership" in the company
and motivate long-term work, paying them in stock shares might further these
goals.
• Alternately, if you have short-term goals to achieve, paying employees frequent, cash-
based bonuses can help keep them focused and working hard on immediate goals. Make
sure your compensation complies with federal and state laws. In all aspects of your
compensation plan, you should make sure to adhere to state and federal laws and
regulations. These include overtime compensation laws, required benefits like health
insurance and worker's compensation, independent contractor regulations, minimum
wage laws, and any other state or federal laws relevant to compensation and/or the
company's specific industry. Your best option here is to hire legal counsel when
designing employee compensation to make sure that you are adhering to all required laws
and regulations

Fit your compensation into your budget. Recognize that your compensation plan needs
to fit into your budget, especially if you are a start-up business. Even if your business is
doing well currently, your compensation plan needs to stay consistent, even during the
off years. At the same time, you don't want to offer a meager compensation plan if profits
are high, simply because profit may not be high one year. Work with the company's CFO
(if there is one) to figure out a responsible compensation budget.

• With your compensation budget cleared, start outlaying money to various

positions by starting with the most critical or essential positions first.
• This way, you can make sure these employees are well-compensated before
taking care of less critical roles. Research market rates for each position.
Research within your industry to figure out the market pay rate for each position.
This information can be found through websites that track salaries, like Glassdoor
or Payscale, or through the Bureau of Labor Statistics (BLS). When looking
through for salary figures, determine a range to use. For example, you can use the
median (50th percentile) or a range, like 25th to 75th percentile. This range or
middle-point will serve as the basis for determining your own pay ranges. Adjust
pay based on work quality and/or expectations. After you have a market

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 "standard" compensation rate or range, you need to gauge the employee's results
and experience to the standard to adjust their pay accordingly. If any employee is
not providing great results for the company or is inexperienced for their position,
you could adjust pay down from the 50th percentile rate. The opposite goes for
exceptional employees or those who are more experienced than others in their
position.
• For example, imagine that you determine the market pay for a revenue analyst in
your industry is $50,000. Your entry-level marketing analysts are still learning
their craft and have little experience, so you could adjust their pay down, maybe
to $40,000 or $45,000.
• Higher pay relative to the market can also be used to attract high-level talent.
Set incentive levels. Your incentives like bonuses and benefit packages should also be set
according to the market. Just like with base compensation, there are generally market rates for
incentive pay. For example, salespeople in a certain industry may typically earn a standard 5
percent of sales that they close as a bonus. You can adjust the percentage up or down to fit with
your company's structure and goals.

Revise pay levels regularly. The job market changes constantly, with some jobs becoming more
competitive or valuable, or less so, over time. Make an effort to revisit your compensation levels
every few years to make sure that you remain competitive in attracting new talent. You can also
use information from other industries to gauge your pay levels for certain employees. Research
the options. There are many benefits that you can include in your compensation plan in addition
to bonuses and other merit-based incentives. Examples include required benefits, like worker's
compensation and health insurance, along with optional benefits, like various other types of
insurance (health, life, or disability), vacation time, sick days, and stock options. Again, study
which benefits are commonly offered to this type of employee in your industry. Revise benefit
offerings according to your company goals. For example, a company with great benefits like paid
time off, long maternity leave, and good stock options might help a company retain employees
more easily

Offer a compensation plan that includes a mix of benefits. Include both short and long term
options in your compensation plan. Ideally, your plan should have benefits that reward
employees in the short run, such as bonuses and commissions. It should also have long term
benefits, such as healthy retirement plans. Provide a health plan and possibly a dental plan, if it's
in the budget. You may also want to include a flexible spending benefit.

Consider opportunities to excel with tuition reimbursement or promotions and pay raises.
Provide family orientated benefits, such as an onsite childcare or daycare reimbursement.

Only include benefits you can afford. If your business does not do well or temporarily goes
through hard times, you will likely have to pull expenses from your benefits, and this may cause
resentment among your staff. It is always easier to add a benefit then take one away. So be
realistic when designing your benefits offerings. You can always increase benefits over time to
reward loyal employees.

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Be clear when putting your benefits plan into your company policy book. You may want to
involve your lawyer to ensure that nothing is left vague. When hiring new employees, you may
want to go over your benefits plan so that if there are any questions, the new employee can have
you address them immediately.

The same is true for all incentive plans. These must be clearly stated in writing

Hourly Wage: Employees classified as non-exempt receive what employers usually call wages,
which are calculated on an hourly basis and require overtime payment for work in excess of 40
hours per week. Overtime is one and a half times the hourly rate. Employees who have a
collective bargaining agreement with management -- often called a labor union contract -- have
wages set by contract terms for a certain period. For example, a sample labor union contract may
require employers to pay master plumbers, licensed plumbers and apprentice plumbers hourly
wages of $19.75, $17.95 and $15.50, respectively, pursuant to the terms of a collective
bargaining agreement.

Annual Salary: Although there are salaried employees who are classified as non-exempt and,
therefore, entitled to overtime pay, the term “salary” generally refers to an annual salary the
employee receives or a method of employee compensation that does not require overtime pay.
For instance, the reference to a “salaried employee” is generally used to describe a worker who
does not receive overtime pay. An example of an employee compensation plan for salary levels
is one based on a salary scale that considers education, years of professional experience,
credentials and qualifications such as job competency and functional expertise. Salary levels
such as the wage tables published annually by the U.S. Office of Personnel Management contain
annual wages, as well as increases based on step and grade promotions for federal government
employees paid according the General Services and Senior Executive Service wage scales.

Retirement Savings

A sample compensation scenario gives employees the opportunity to participate in the employer-
sponsored 401k plan. Employees designate pre-tax contributions to be deducted from each
paycheck. For employees who contribute 5 percent of their gross salary or wages, the company
matches 50 percent of the employee’s contribution. In other words, the employer’s matching
contributions equal 2.5 percent of the employee’s gross salary. Vesting refers to the amount of
time before which the employer’s contribution is fully available to the employee. Vesting periods
range anywhere from one to five years. A five-year vesting period means that for the first year
after the employer makes its contribution to the employee’s 401k plan, 20 percent of the money
actually belongs to the employee. In the second year, 40 percent belongs to the employee, and in
subsequent years, 60, 80 and 100 percent of the employer’s contributions become vested and
available to the employee. If the employee leaves his job before completing five years, he
forfeits the appropriate portion of the non-vested employer’s contributions.

Raises, Bonuses and Incentives

The employer's performance management system is usually what drives a compensation plan's
salary increases. Employees receive annual raises based on performance ranking and ratings. For

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example, an outstanding performance appraisal could result in a 5 percent salary increase.
Sample employee bonus and incentive plans include cash incentives based on a percentage of the
employee's gross salary or an employee's share based on a discretionary pool of funds designated
for distribution to employees whose performance contributed to business success. Many
executive bonuses and incentives are tied to improvement of the bottom line or even increases in
the value of shares for publicly held companies.

CHAPTER -10

THE GROWTH OF COMPENSATIONS AND BENEFITS TO HUMAN CAPITAL

Group Health Benefits

A total compensation plan may include group health-care benefits. Many employers pay a
sizeable portion of the total monthly premium, leaving a portion of the premium to be deducted
from the employee’s pay. Premiums for employer-sponsored health care plans are deducted from
pre-tax income, which are gross earnings. Group health coverage may include supplemental
coverage for dental and vision care as well. Some employers pay the total cost for short-term
disability insurance and offer coverage for long-term disability insurance as part of an
employee’s total compensation. Compensation is a systematic approach to providing monetary
value to employees in exchange for work performed. Compensation may achieve several
purposes assisting in recruitment, job performance, and job satisfaction.

Compensation is a tool used by management for a variety of purposes to further the existance of
the company. Compensation may be adjusted according the the business needs, goals, and
available resources.

Compensation may be used to:

➢ Recruit and retain qualified employees.

➢ Increase or maintain morale/satisfaction.
➢ Reward and encourage peak performance.
➢ Achieve internal and external equity.
➢ Meduce turnover and encourage company loyalty.

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 ➢ Modify (through negotiations) practices of unions.

Recruitment and retention of qualified employees is a common goal shared by many employers.
To some extent, the availability and cost of qualified applicants for open positions is determined
by market factors beyond the control of the employer. While an employer may set compensation
levels for new hires and advertize those salary ranges, it does so in the context of other
employers seeking to hire from the same applicant pool.
Morale and job satisfaction are affected by compensation. Often there is a balance (equity) that
must be reached between the monetary value the employer is willing to pay and the sentiments of
worth felt be the employee. In an attempt to save money, employers may opt to freeze salaries or
salary levels at the expence of satisfaction and morale. Conversely, an employer wishing to
reduce employee turnover may seek to increase salaries and salary levels.
Compensation may also be used as a reward for exceptional job performance. Examples of such
plans include: bonuses, commissions, stock, and profit sharing, gain sharing.

Components of a compensation system

Compensation will be perceived by employees as fair if based on systematic components.

Various compensation systems have developed to determine the value of positions. These
systems utilize many similar components including job descriptions, salary ranges/structures,
and written procedures.

The components of a compensation system include

• Job Descriptions A critical component of both compensation and selection systems, job
descriptions define in writing the responsibilities, requirements, functions, duties,
location, environment, conditions, and other aspects of jobs. Descriptions may be
developed for jobs individually or for entire job families.

• Job Analysis The process of analyzing jobs from which job descriptions are developed.
Job analysis techniques include the use of interviews, questionnaires, and observation.

• Job Evaluation A system for comparing jobs for the purpose of determining appropriate
compensation levels for individual jobs or job elements. There are four main techniques:
Ranking, Classification, Factor Comparison, and Point Method.

• Pay Structures Useful for standardizing compensation practices. Most pay structures
include several grades with each grade containing a minimum salary/wage and either step
increments or grade range. Step increments are common with union positions where the
pay for each job is pre-determined through collective bargaining.

• Salary Surveys Collections of salary and market data. May include average salaries,
inflation indicators, cost of living indicators, salary budget averages. Companies may
purchase results of surveys conducted by survey vendors or may conduct their own salary
surveys. When purchasing the results of salary surveys conducted by other vendors, note
that surveys may be conducted within a specific industry or across industries as well as

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 within one geographical region or across different geographical regions. Know which
industry or geographic location the salary results pertain to before comparing the results
to your company.

• Policies and Regulations

Different types of compensation include:

➢ Base Pay
➢ Commissions
➢ Overtime Pay
➢ Bonuses, Profit Sharing, Merit Pay
➢ Stock Options
➢ Travel/Meal/Housing Allowance
➢ Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...

What are regulations affecting compensation?

• FLSA

Compensation Plans

Develop a program outline.

• Set an objective for the program.

• Establish target dates for implementation and completion.
• Determine a budget.

Designate an individual to oversee designing the compensation program.

• Determine whether this position will be permanent or temporary.

• Determine who will oversee the program once it is established.
• Determine the cost of going outside versus looking inside.
• Determine the cost of a consultant's review.

Develop a compensation philosophy.

• Form a compensation committee (presumably consisting of officers or at least including

one officer of the company).
• Decide what, if any, differences should exist in pay structures for executives, professional
employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based
versus noncontingent pay).

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 • Determine whether the company should set salaries at, above, or below market.
• Decide the extent to which employee benefits should replace or supplement cash
compensation.

Conduct a job analysis of all positions.

• Conduct a general task analysis by major departments. What tasks must be accomplished
by whom?
• Get input from senior vice presidents of marketing, finance, sales, administration,
production, and other appropriate departments to determine the organizational structure
and primary functions of each.
• Interview department managers and key employees, as necessary, to determine their
specific job functions.
• Decide which job classifications should be exempt and which should be nonexempt.
• Develop model job descriptions for exempt and nonexempt positions and distribute the
models to incumbents for review and comment; adjust job descriptions if necessary.
• Develop a final draft of job descriptions.
• Meet with department managers, as necessary, to review job descriptions.
• Finalize and document all job descriptions.

Evaluate jobs.

• Rank the jobs within each senior vice president's and manager's department, and then
rank jobs between and among departments.
• Verify ranking by comparing it to industry market data concerning the ranking, and
adjust if necessary.
• Prepare a matrix organizational review.
• On the basis of required tasks and forecasted business plans, develop a matrix of jobs
crossing lines and departments.
• Compare the matrix with data from both the company structure and the industrywide
market.
• Prepare flow charts of all ranks for each department for ease of interpretation and
assessment.
• Present data and charts to the compensation committee for review and adjustment.

Determine grades.

• Establish the number of levels - senior, junior, intermediate, and beginner - for each job
family and assign a grade to each level.
• Determine the number of pay grades, or monetary range of a position at a particular level,
within each department.

Establish grade pricing and salary range.

• Establish benchmark (key) jobs.

• Review the market price of benchmark jobs within the industry.

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 • Establish a trend line in accordance with company philosophy (i.e., where the company
wants to be in relation to salary ranges in the industry).

Determine an appropriate salary structure.

• Determine the difference between each salary step.

• Determine a minimum and a maximum percent spread.
• Slot the remaining jobs.
• Review job descriptions.
• Verify the purpose, necessity, or other reasons for maintaining a position.
• Meet with the compensation committee for review, adjustments, and approval.

Develop a salary administration policy.

• Develop and document the general company policy.

• Develop and document specific policies for selected groups.
• Develop and document a strategy for merit raises and other pay increases, such as cost-
of-living adjustments, bonuses, annual reviews, and promotions.
• Develop and document procedures to justify the policy (e.g., performance appraisal
forms, a merit raise schedule).
• Meet with the compensation committee for review, adjustments, and approval.

Obtain top executives' approval of the basic salary program.

➢ Develop and present cost impact studies that project the expense of bringing the present
staff up to the proposed levels.
➢ Present data to the compensation committee for review, adjustment, and approval.
➢ Present data to the executive operating committee (senior managers and officers) for
review and approval.

Communicate the final program to employees and managers.

• Present the plan to the compensation committee for feedback, adjustments, review, and
approval.
• Make a presentation to executive staff managers for approval or change, and incorporate
necessary changes.
• Develop a plan for communicating the new program to employees, using slide shows or
movies, literature, handouts, etc.
• Make presentations to managers and employees. Implement the program.
• Design and develop detailed systems, procedures, and forms.
• Work with HR information systems staff to establish effective implementation
procedures, to develop appropriate data input forms, and to create effective monitoring
reports for senior managers.
• Have the necessary forms printed.
• Develop and determine format specifications for all reports.
• Execute test runs on the human resources information system.

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 • Execute the program.

Monitor the program.

• Monitor feedback from managers.

• Make changes where necessary.
• Find flaws or problems in the program and adjust or modify where necessary.

EMPLOYEE COMPENSATION

Compensation is a primary motivator for employees. People look for jobs that not only suit their
creativity and talents, but compensate them—both in terms of salary and other benefits—
accordingly. Compensation is also one of the fastest changing fields in Human Resources, as
companies continue to investigate various ways of rewarding employees for performance.

DETERMINING WAGES AND SALARIES

It is important for small business owners to understand the difference between wages and
salaries. A wage is based on hours worked. Employees who receive a wage are often called
"non-exempt." A salary is an amount paid for a particular job, regardless of hours worked, and
these employees are called "exempt." The difference between the two is carefully defined by the
type of position and the kinds of tasks that employees perform. In general, exempt employees
include executives, administrative and professional employees, and others as defined by the Fair
Labor Standards Act of 1938. These groups are not covered by minimum wage provisions. Non-
exempt employees are covered by minimum wage as well as other provisions. It is important to
pay careful attention to these definitions when determining whether an individual is to receive a
wage or a salary. Improper classification of a position can not only pose legal problems, but
often results in employee dissatisfaction, especially if the employee believes that execution of the
responsibilities and duties of the position warrant greater compensation than is currently
awarded. When setting the level of an employee's monetary compensation, several factors must
be considered. First and foremost, wages must be set high enough to motivate and attract good
employees. They must also be equitable—that is, the wage must accurately reflect the value of
the labor performed. In order to determine salaries or wages that are both equitable for
employees and sustainable for companies, businesses must first make certain that they
understand the responsibilities and requirements of the position under review. The next step is to
review prevailing rates and classifications for similar jobs. This process requires research of the
competitive rate for a particular job within a given geographical area. Wage surveys can be
helpful in defining wage and salary structures, but these should be undertaken by a professional
(when possible) to achieve the most accurate results. In addition, professional wage surveys can
sometimes be found through local employment bureaus or in the pages of trade publications. Job

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analysis not only helps to set wages and salaries, but ties into several other Human Resource
functions such as hiring, training, and performance appraisal. As the job is defined, a wage can
be determined and the needs for hiring and training can be evaluated. The evaluation criteria for
performance appraisal can also be constructed as the specific responsibilities of a position are
defined.

Other factors to consider when settling on a salary for a position include:

➢ Availability of people capable of fulfilling the obligations and responsibilities of the job
➢ Level of demand elsewhere in the community and/or industry for prospective employees
➢ Cost of living in the area
➢ Attractiveness of the community in which the company operates
➢ Compensation levels already in existence elsewhere in the company

COMPENSATION LAWS

There are many federal, state, and local employment and tax laws that impact compensation.
These laws define certain aspects of pay, influence how much pay a person may receive, and
shape general benefits plans.

The Fair Labor Standards Act (FLSA) is probably the most important piece of compensation
legislation. Small business owners should be thoroughly familiar with it. This act contains five
major compensation laws governing minimum wage, overtime pay, equal pay, recordkeeping
requirement, and child labor, and it has been amended on several occasions over the years. Most
of the regulations set out in the FLSA impact non-exempt employees, but this is not true across
the board.

The Equal Pay Act of 1963 is an amendment to FLSA, which prohibits differences in
compensation based on sex for men and women in the same workplace whose jobs are similar. It
does not prohibit seniority systems, merit systems, or systems that pay for performance, and it
does not consider exempt or non-exempt status.

In addition, the United States government has passed several other laws that have had an impact,
in one way or another, on compensation issues. These include the Consumer Credit Protection
Act of 1968 , which deals with wage garnishments; the Employee Retirement Income Security Act
of 1974 (ERISA ), which regulates pension programs; the Old Age, Survivors, Disability and
Health Insurance Program (OASDHI), which forms the basis for most benefits programs; and
implementation of unemployment insurance, equal employment, worker's comp, Social Security,
Medicare, and Medicaid programs and laws.

TRADITIONAL COMPENSATION

For the most part, traditional methods of compensation involve set pay levels (wage or salary)
with regular increases. Increases can be given for a variety of reasons, but are typically given for

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promotions, merit increases, or cost of living increases. The Hay Group points out that there is
less distinction today between merit increases and cost of living increases: "Because of the low
levels (3 to 4 percent) of salary budget funding, most merit raises are perceived as little more
than cost of living increases. Employees have come to expect them." This "base pay" system is
one that most people are familiar with. Often, it includes a set salary or wage, a set schedule for
merit increases, and a set benefits package.

BENEFITS

Benefits are an important part of an employee's total compensation package. Benefits packages
became popular after World War II, when wage controls made it more difficult to give
competitive salaries. Benefits were added to monetary compensation to attract, retain, and
motivate employees, and they still perform that function today. They are not cash rewards, but
they do have monetary value (for example, spiraling health care costs make health benefits
particularly essential to today's families). Many of these benefits are nontaxable to the employee
and deductible by the employer. Many benefits are not required by law, but are nonetheless
common in total compensation packages. These include health insurance, accidental death and
dismemberment insurance, some form of retirement plan (including profit-sharing, stock option
programs, 401(k) and employee stock ownership plans), vacation and holiday pay, and sick
leave. Companies may also offer various services, such as day care, to employees, either free or
at a reduced cost. It is also common to provide employees with discounted services or products
offered by the company itself. In addition, there are also certain benefits that are required by
either state or federal law. Federal law, for example, requires the employer to pay into Social
Security, and unemployment insurance is mandated under OASDHI. State laws govern worker's
compensation.

CHANGES IN COMPENSATION SYSTEMS

As businesses change their focus, their approach to compensation must change as well.
Traditional compensation methods may hold a company back from adequately rewarding its best
workers. When compensation is tied to a base salary and a position, there is little flexibility in
the reward system. Some new compensation systems, on the other hand, focus on reward for
skills and performance, with the work force sharing in company profit or loss. One core belief of
new compensation policies is that as employees become employee owners, they are likely to
work harder to ensure the success of the company. Indeed, programs that promote employee
ownership—and thus employee responsibility and emotional investment—are becoming
increasingly popular. Examples of these types of programs include gain sharing, in which
employees earn bonuses by finding ways to save the company money; pay for knowledge, in
which compensation is based on job knowledge and skill rather than on position (and in which
employees can increase base pay by learning a variety of jobs); and incentive plans such as
employee stock options plans (ESOPs).

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PAY FOR PERFORMANCE Probably the most popular of the newer concepts in
compensation is the easiest to understand—compensation based on performance. These
programs, sometimes referred to as variable pay programs, generally offer compensation
incentives based on employee performance or on the performance of a team. Pay for
performance rewards high performance and does not reward mediocre or low performance, and
is the definition of the "merit" system.

In a true merit based system, there are a few conditions which must be satisfied for it to be
meaningful:

➢ Employees must have control over their performance. If employees are overly dependent
on the actions and output of other employees or processes, they may have little control
over their own performance.
➢ Differences in performance must mean something to the business. If there is little
difference between a high performer and a mediocre one, merit pay won't work.
➢ Performance must be measured regularly and reliably. A clear system of performance
appraisal, with defined criteria that are understood by the employee and regularly
scheduled meetings must be in place.

ADMINISTERING COMPENSATION PROGRAMS

Compensation programs and policies must be communicated clearly and thoroughly to

employees. Employees naturally want to have a clear understanding of what they can reasonably
expect in terms of compensation (both in terms of monetary compensation and benefits) and
performance appraisal. To ensure that this takes place, consultants urge business owners to detail
all aspects of their compensation programs in writing. Taking this step not only helps reassure
employees, but also provides the owner with additional legal protection from unfair labor
practices accusations.

Compensation and benefits

Compensation and benefits (abbreviated “C&B”) is a sub-discipline of human resources,

focused on employee compensation and benefits policy-making. It is known in the United
Kingdom as “total reward” and as “remuneration” in Australia and New Zealand.

The basic components of employee compensation and benefits

Employee compensation and benefits are divided into four basic categories:

➢ Guaranteed pay – a fixed monetary (cash) reward paid by an employer to an

employee. The most common form of guaranteed pay is base salary.
➢ Variable pay – a non-fixed monetary (cash) reward paid by an employer to an
employee that is contingent on discretion, performance, or results achieved. The
most common forms of variable pay are bonuses and incentives.
➢ Benefits – programs an employer uses to supplement employees’ compensation,
such as paid time off, medical insurance, company car, and more.

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 ➢ Equity-based compensation – stock or pseudo stock programs an employer uses
to provide actual or perceived ownership in the company which ties an
employee's compensation to the long-term success of the company. The most
common examples are stock options.

➢ Guaranteed pay

Guaranteed pay is a fixed monetary (cash) reward. The basic element of guaranteed pay is base
salary which is paid on an hourly, daily, weekly, bi-weekly or monthly rate. Base salary is
typically used by employees for ongoing consumption. Many countries dictate the minimum
base salary defining a minimum wage. Employees' individual skills and level of experience leave
room for differentiating income levels within a job-based pay structure.In addition to base salary,
there are other pay elements which are paid based solely on employee/employer relations, such
as salary and seniority allowance.

➢ Variable pay

Variable pay is a non-fixed monetary (cash) reward that is contingent on discretion,

performance, or results achieved. There are different types of variable pay plans, such as bonus
schemes, sales incentives (commission), overtime pay, and more.An example where this type of
plan is prevalent is how the real estate industry compensates real estate agents. A common
variable pay plan might be the sales person receives 50% of every dollar they bring in up to a
level of revenue at which they then bump up to 85% for every dollar they bring in going forward.
Typically, this type of plan is based on an annual period of time requiring a "resetting" each year
back to the starting point of 50%. Sometimes this type of plan is administered so the sales person
never resets or falls down to a lower level. It also includes Performance Linked Incentive which
is variable and may range from 130% to 0% as per performance of the individual as per his
KRA.

➢ Benefits

There is a wide variety of benefits offered to employees such as Paid Time-Off (PTO), various
types of insurance (such as life, medical, dental, and disability), participation in a retirement plan
(such as pension or 401(k)), or access to a company car, among others. Some benefits are
mandatory which are regulated by the government while others are voluntarily offered to fulfill
the need of a specific employee population. Benefit plans are typically not provided in cash but
form the basis of an employees' pay package along with base salary and bonus.In the United
States, "qualified" employee benefit plans must be offered to all employees, while "non-
qualified" benefit plans may be offered to a select group such as executives or other highly-paid
employees. When implementing a benefit plan, HR Departments must ensure compliance with
federal and state regulations. Many states and countries dictate different minimum benefits such
as minimum paid time-off, employer’s pension contribution, sick pay, among others.

➢ Equity-based compensation

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Equity based compensation is an employer compensation plan using the employer’s shares as
employee compensation. The most common form is stock options, yet employers use additional
vehicles such as restricted stock, restricted stock units (RSU), employee stock purchase plan
(ESPP), and stock appreciation rights (SAR).

➢ External equity

External equity refers to the similarity of the practices of other organization of the same sector. If
perceived like this, it can be said that the program is considered competitive or externally
equitable. Usually, these comparisons are done in external labor markets where the wages vary.
There are various factors that contribute to create these differences, for example, geographical
location, education and work experience.

➢ Internal equity

Internal equity is employees' perception of their duties, compensation, and work conditions as
compared with those of other employees in similar positions in the same organization. As this
comparison is always made within the company, problems with internal equity can result in
conflict among employees, mistrust, low morale, anger and even the adoption of legal actions.
Workers can make the evaluation of internal equity regarding two main points. On the one hand,
procedural justice is the person’s perceived fairness of the process (assigned tasks) and
procedures used to make decisions about him/her. On the other hand, distributive justice refers to
the perceived fairness in the distribution of outcomes (salaries). The classic objectives of equity
based compensation plans are retention, attraction of new hires and aligning employees’ and
shareholders’ interests with the long-term success of the company.

➢ Organizational place

In most companies, compensation & benefits (C&B) design and administration falls under the
umbrella of human-resources.HR organizations in large companies are typically divided into
three sub-divisions: HR business partners (HRBPs), HR centers of excellence, and HR shared
services. C&B is an HR center of excellence, like staffing and organizational development (OD).

➢ Main influencers

Employee compensation and benefits main influencers can be divided into two: internal
(company) and external influencers. The most important internal influencers are the business
objectives, labor unions, internal equity (the idea of compensating employees in similar jobs and
similar performance in a similar way), organizational culture and structure. The most important
external influencers are the state of the economy, inflation, unemployment rate, the relevant
labor market, labor law, tax law, and the relevant industry habits and trends.

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Bonus plans benefits

Bonus plans are variable pay plans. They have three classic objectives:
1. Adjust labor cost to financial results – the basic idea is to create a bonus plan where the
company is paying more bonuses in ‘good times’ and less (or no) bonuses in ‘bad times’. By
having bonus plan budget adjusted according to financial results, the company’s labor cost is
automatically reduced when the company isn’t doing so well, while good company performance
drives higher bonuses to employees.
2. Drive employee performance – the basic idea is that if an employee knows that his/her bonus
depend on the occurrence of a specific event (or paid according to performance, or if a certain
goal is achieved), then the employee will do whatever he/she can to secure this event (or improve
their performance, or achieve the desired goal). In other words, the bonus is creating an incentive
to improve business performance (as defined through the bonus plan).
3. Employee retention – retention is not a primary objective of bonus plans, yet bonuses are
thought to bring value with employee retention as well, for three reasons: a) a well designed
bonus plan is paying more money to better performers; a competitor offering a competing job-
offer to these top performers is likely to face a higher hurdle, given that these employees are
already paid higher due to the bonus plan. b) if the bonus is paid annually, employee is less
inclined to leave the company before bonus payout; often the reason for leaving (e.g. dispute
with the manager, competing job offer) 'goes away' by the time the bonus is paid. the bonus plan
'buy' more time for the company to retain the employee. c) employees paid more are more
satisfied with their job (all other things being equal) thus less inclined to leave their employer.
The concept saying bonus plans can improve employee performance is based on the work of
Frederic Skinner, perhaps the most influential psychologist of the 20th century. Using the
concept of Operant Conditioning, Skinner claimed that an organism (animal, human being) is
shaping his/her voluntary behavior based on its extrinsic environmental consequences – i.e.
reinforcement or punishment. This concept captured the hearts of many, and indeed most bonus
plans nowadays are designed based on it, yet since the late 1940s a growing body of empirical
evidence has suggested that these if-then rewards do not work in a variety of settings common to
the modern workplace. The failings of the bonus plan often relate to rewarding the wrong
behaviour. For example, managers who keep to the status quo, fire valuable (expensive)
employees, and engage in immoral business practices can achieve better short-term financial
outcomes (and therefore a bonus) than a manager who is attempting to innovate his or her way to
higher profits. When bonus plans are poorly thought out, they have the potential to damage
employee performance and cause regulatory headaches. However, despite their failings,
employees (and many employers) still view an effective bonus plan as the single greatest
motivator in the workplace.

Reward management

Reward management is concerned with the formulation and implementation of strategies and
policies that aim to reward people fairly, equitably and consistently in accordance with their
value to the organization. Reward management consists of analysing and controlling employee
remuneration, compensation and all of the other benefits for the employees. Reward management
aims to create and efficiently operate a reward structure for an organisation. Reward structure
usually consists of pay policy and practices, salary and payroll administration, total reward,

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minimum wage, executive pay and team reward. Reward management is a popular management
topic. Reward management was developed on the basis of psychologists' behavioral research.
Psychologists started studying behavior in the early 1900s; one of the first psychologists to study
behavior was Sigmund Freud and his work was called the Psychoanalytic Theory. Many other
behavioral psychologists improved and added onto his work. With the improvements in the
behavioral research and theories, psychologists started looking at how people reacted to rewards
and what motivated them to do what they were doing, and as a result of this, psychologists
started creating motivational theories, which is very closely affiliated with reward management.
Defining motivation as "the degree to which an individual wants and choose to engage in certain
specific behaviours", to which Vroom (quoted in Mitchell, 1982) adds that performance = ability
x motivation. To have an efficient Reward System then, is mandatory that employees know
exactly what their task is, have the skills to do it, have the necessary motivation and work in an
environment allowing the transformation of intended actions into an actual behaviour. From the
company point of view instead, an effective performance appraisal has to be present, in order to
let motivation be a major contributor to the rewarded performance.

Objective

Reward management deals with processes, policies and strategies which are required to
guarantee that the contribution of employees to the business is recognized by all means.
Objective of reward management is to reward employees fairly, equitably and consistently in
correlation to the value of these individuals to the organization. Reward system exists in order to
motivate employees to work towards achieving strategic goals which are set by entities. Reward
management is not only concerned with pay and employee benefits. It is equally concerned with
non-financial rewards such as recognition, training, development and increased job
responsibility. Kerr (1995) brings to attention how Reward Management is an easily
understandable concept in theory, but how its practical application results often difficult. The
author, in fact, points up how frequently the company creates a Reward System hoping to reward
a specific behavior, but ending up rewarding another one. The example made is the one of a
company giving an annual merit increase to all its employees, differentiating just between an
"outstanding" (+5%), "above average" (+4%) and "negligent" (+3%) workers. Because the
difference between the percentage increasing was so slight, what the company obtained from the
employees was indifference to the extra percentage point for a superlative job or the loss of one
point for an irresponsible behavior. In the following table other common management errors are
summarized.

Types of rewards

Rewards serve many purposes in organizations. They serve to build a better employment deal,
hold on to good employees and to reduce turnover. The principal goal is to increase people's
willingness to work in one’s company, to enhance their productivity. Most people assimilate
"rewards", with salary raise or bonuses, but this is only one kind of reward, extrinsic reward.
Studies proves that salespeople prefer pay raises because they feel frustrated by their inability to
obtain other rewards, but this behavior can be modified by applying a complete reward strategy.

There are two kinds of rewards:

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• Extrinsic rewards: concrete rewards that employee receive.
o Bonuses: Usually annually, Bonuses motivates the employee to put in all
endeavours and efforts during the year to achieve more than a satisfactory
appraisal that increases the chance of earning several salaries as lump sum. The
scheme of bonuses varies within organizations; some organizations ensure fixed
bonuses which eliminate the element of asymmetric information, conversely,
other organizations deal with bonuses in terms of performance which is subjective
and may develop some sort of bias which may discourage employees and create
setback. Therefore, managers must be extra cautious and unbiased.
o Salary raise: Is achieved after hard work and effort of employees, attaining and
acquiring new skills or academic certificates and as appreciation for employees
duty (yearly increments) in an organization. This type of reward is beneficial for
the reason that it motivates employees in developing their skills and competence
which is also an investment for the organization due to increased productivity and
performance. This type of reward offers long-term satisfaction to employees.
Nevertheless, managers must also be fair and equal with employees serving the
organization and eliminate the possibility of adverse selection where some
employees can be treated superior or inferior to others.
o Gifts: Are considered short-term. Mainly presented as a token of appreciation for
an achievement or obtaining an organizations desired goal. Any employee would
appreciate a tangible matter that boosts their self-esteem for the reason of
recognition and appreciation from the management. This type of reward basically
provides a clear vision of the employee’s correct path and motivates employee
into stabilising or increasing their efforts to achieve higher returns and
attainments.
o Promotion: Quite similar to the former type of reward. Promotions tend to effect
the long-term satisfaction of employees. This can be done by elevating the
employee to a higher stage and offering a title with increased accountability and
responsibility due to employee efforts, behaviour and period serving a specific
organization. This type of reward is vital for the main reason of redundancy and
routine. The employee is motivated in this type of reward to contribute all his
efforts in order to gain managements trust and acquire their delegation and
responsibility. The issue revolved around promotion is adverse selection and
managers must be fair and reasonable in promoting their employees.
o Other kinds of tangible rewards
• Intrinsic rewards: tend to give personal satisfaction to individual[9]
o Information / feedback: Also a significant type of reward that successful and
effective managers never neglect. This type of rewards offers guidance to
employees whether positive (remain on track) or negative (guidance to the correct
path). This also creates a bond and adds value to the relationship of managers and
employees.
o Recognition: Is recognizing an employee’s performance by verbal appreciation.
This type of reward may take the presence of being formal for example meeting
or informal such as a "pat on the back" to boost employees self-esteem and
happiness which will result in additional contributing efforts.

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 o Trust/empowerment: in any society or organization, trust is a vital aspect between
living individuals in order to add value to any relationship. This form of reliance
is essential in order to complete tasks successfully. Also, takes place in
empowerment when managers delegate tasks to employees. This adds importance
to an employee where his decisions and actions are reflected. Therefore, this
reward may benefit organizations for the idea of two minds better than one.

Intrinsic rewards makes the employee feel better in the organization, while Extrinsic rewards
focus on the performance and activities of the employee in order to attain a certain outcome. The
principal difficulty is to find a balance between employees' performance (extrinsic) and
happiness (intrinsic). The reward also needs to be according to the employee’s personality. For
instance, a sports fan will be really happy to get some tickets for the next big match. However a
mother who passes all her time with her children, may not use them and therefore they will be
wasted. When rewarding one, the manager needs to choose if he wants to rewards an Individual,
a Team or a whole Organization. One will choose the reward scope in harmony with the work
that has been achieved.

• Individual
o Base pay, incentives, benefits
o Rewards attendance, performance, competence
• Team: team bonus, rewards group cooperation
• Organization: profit-sharing, shares, gain-sharing

Motivation theories

An interpretation of Maslow's hierarchy of needs, represented as a pyramid with the more basic
needs at the bottom.Motivational theories are split into two groups as process and content
theories. Content theories endeavor to name and analyze the factors which motivate people to

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perform better and more efficiently while process theories concentrate on how different types of
personal traits interfere and impact the human behavior. Content theories are highly related with
extrinsic rewards, things that are concrete like bonuses and will help improve employees'
physiological circumstances whereas process theories are concerned with intrinsic rewards, such
as recognition and respect, which will help boost employees confidence in the work place and
improve job satisfaction.A famous content theory would be Maslow's Hierarchy of Needs, and a
famous process theory would be the equity theory. Theories of motivation provide a theoretical
basis for reward management though some of the best known ones have emerged from the
psychology discipline. Perhaps the first and best known of these comes from the work of
Abraham Maslow. Maslow’s Hierarchy of Needs describes a pyramid comprising a series of
layers from at the base the most fundamental physiological needs such as food, water, shelter and
sex, rising to the apex where self-actualisation needs included morality and creativity. Maslow
saw these levels of needs being fulfilled one at a time in sequence from bottom to top.
Employment and the resources it brings are classed under ‘safety needs’ (level 2) while the
workplace may also contribute to a sense of ‘belonging’ (level 3) and recognition at work can
satisfy the need for ‘self-esteem’ (level 4).Frederick Herzberg’s motivator-hygiene theory, first
published in 1959, argues that an employee’s job satisfaction or dissatisfaction is influenced by
two distinct sets of factors and also that satisfaction and dissatisfaction were not at opposite ends
of the same continuum but instead needed to be measured separately. The two sets of factors are
motivator factors and hygiene factors. According to Herzberg, real motivation comes from the
work itself, from completing tasks, while the role of reward is to prevent dissatisfaction arising.
Expectancy Theory is the theory which posits that we select our behaviour based on the
desirability of expected outcomes of the action. It was most prominently used in a work context
by Victor Vroom who sought to establish the relationship between performance, motivation and
ability and expressed it as a multiplicative one – where performance equals motivation x ability.
There are a lot of attractions for this kind of approach, particularly for employers who can target
their motivation effort and anticipate a definable mathematical return for them. As this is a
cognitive process theory it relies on the way employees perceive rewards These three theories
plus variants of them have been used in countless research studies and continue to inform the
practice of reward management up to the present day.

Job evaluation

Job evaluation is closely related to reward management. It is important to understand and

identify a job's order of importance. Job evaluation is the process in which jobs are
systematically assessed to one another within an organization in order to define the worth and
value of the job, to ensure the principle of equal pay for equal work. In the United Kingdom, it is
now illegal to discriminate workers' pay levels and benefits, employment terms and conditions
and promotion opportunities. Job evaluation is one method that can be adopted by companies in
order to make sure that discrimination is eliminated and that the work performed is rewarded
with fair pay scales. This system carries crucial importance for managers to decide which
rewards should be handed out by what amount and to whom. Job evaluation provides the basis
for grading, pay structure, grading jobs in the structure and managing job and pay relativities. It
has been said that fairness and objectivity are the core principles using an assessment of the
nature and size of the job each is employed to carry out. There are many different methods of job
evaluation which can be used, but the three simplest methods are ranking, classification and

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factor comparison.[22] However, there are more complex variations of methods such as the point
method which uses scales to measure job factors. This method does not rank employees against
one another but looks at the job as a whole. A disadvantage of these methods of job evaluation
are that they are very static and it would be very difficult to perform a job evaluation quickly if it
was needed.An advisory company named ACAS stated that there were five main reasons why
employers look at performing a job evaluation. These include: When deciding on a pay scale:
Making sure that the current system is fair and equal for employees, Deciding on benefits such as
bonuses, Comparing pay against other companies and reviewing all jobs after a major company
pay change. Employees need to feel that they are being paid a fair wage compared to the same
job with the competition. If this is true it may help reduce staff turnover which is very beneficial
for employers as it reduces the cost of hiring new staff.Research regarding job evaluation has
mainly been conducted using qualitative data collection methods such as interviews, large scale
surveys and basic experimental methods. Therefore, there is a large gap for research on job
evaluation collecting quantitative data for a more statistical analysis. A comparison between
public and private sectors and the methods of job evaluation is another area that should be
considered for further research.However, is job evaluation enough? Steinburg (1999) stated that
very few organisations take into account that job evaluation should also look at emotional labour
that may be used by employees.

Performance appraisal

Performance appraisal is the method in which an employee’s job performance is evaluated and
reviewed.[25] This compares employee work behaviour with the organisations pre-set standards to
provide feedback on job performance. Performance appraisals are a form of motivation through
either positive or negative reinforcement, depending on outcome. Typically this information is
gained through interview and questionnaire functions annually, executed among management of
larger organisations primarily, as a method of motivation to gain full potential of staff. The goal
of which is to align and manage all organisational resources "to achieve highest possible
performance" by improving your current staff through encouragement, setting targets and
improving on past mistakes.[27] Edward Lawler of the University of Southern California unveiled
research showing that 93% percent of companies use annual appraisal Performance appraisal was
set up in the first place, as a justification for the pay of an employee. If his performance was seen
as insufficient, his pay would be cut down. However, if it was seen of a higher quality, he could
receive a pay rise. Performance appraisals have been described as a "flawed system", One must
ask, can an entire year’s work be reviewed at one point in time? It has been argued that the time,
money and energy needed is not comparable to its effectiveness.] There are various appraisal
methods. Some of these include « rank and yank » by which an organisation ranks its employees
against each other and terminates the employment of the employee who finishes at bottom place.
That corresponds to the yanking. Then there is the critical incident technique by which the
organisation collects information and observes human behaviour that have a strong impact either
positive or negative on an activity or procedure. Each employee is different and can bring in
something special to the organization. Each employee has a specific job to fulfil. Performance
appraisals are needed in order to understand how every employee can produce the best
performance.

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 • Improve performance: performance improvement is the notion of measuring the
productivity of a certain procedure, and then finding solutions in order for the
productivity to rise, the capability of the employees and their effectiveness.

Increase motivation: Performance appraisal is used as a motivation tool. An employee's

efficiency can be proven if the targets he was set, have been achieved. The employee will be
motivated to do even better and his performance will rise in the near future.

Identify training/development needs: The fundamental step of training and development is

establishing the organisational needs for the employees at this time and in the near future. A few
questions may be asked in the process: What can an employee learn in order to be more
productive? In which field is training most necessary? And finally who should benefit from the
training most?

The effectiveness of an employee is the key factor for the employer, because the profit the
company or organisation makes depends on the employees' productiveness.The training and
development needs should begin with an assessment of the company as it lies currently, how it
operates and what each employee is best at. This assessment will enable the training to be based
on certain factors which seem most important. Knowledge of the organisation's strategic plan
and its needs for the future must help the training to bring the company up a step on the ladder.
In using a performance appraisal, an organisation can build an employee profile of poor
performances which allows a reduced risk of legal implications for redundancies. Seeing
additional benefit, as the company can decide who is worthy of promotion or bonus’. Manage
careers: career management . Managing your career efficiently involves a list of various factors
which need to be referred to as often as possible: taking into account the goals you have giving
yourself all along your professional career, allowing yourself to have a comfortable lifestyle and
by feeling some level of personal accomplishment when you look back at to what you have done.
These three factors are key to a productive career.

Reward system

Primary rewards are those necessary for the survival of a species, and include homeostatic (e.g.,
palatable food) and reproductive (e.g., sexual contact) rewards. Intrinsic rewards are
unconditioned rewards that are attractive and motivate behavior because they are inherently
pleasurable. Extrinsic rewards, such as money, are conditioned rewards that are attractive and
motivate behavior, but are not pleasurable.[5] Extrinsic rewards derive their motivational value as
a result of a learned association (i.e., conditioning) with intrinsic rewards.[5] Rewards are
generally considered more desirable than punishment in modifying behavior.

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Definition

In neuroscience, the reward system is a collection of brain structures that are responsible for
reward-related cognition, including positive reinforcement and both "wanting" (i.e., desire) and
"liking" (i.e., pleasure) as defined in the incentive salience model.

Anatomy of the reward system

Brain structures that compose the reward system are primarily within the cortico–basal ganglia–
thalamic loop; the basal ganglia portion of the loop drives activity within the reward system.
Most of the pathways that connect structures within the reward system are glutamatergic
interneurons, GABAergic medium spiny neurons, and dopaminergic projection neurons,
although other types of projection neurons contribute (e.g., orexinergic projection neurons). The
reward system includes the ventral tegmental area, ventral striatum (primarily the nucleus
accumbens, but also the olfactory tubercle), dorsal striatum (i.e., caudate nucleus and putamen),
substantia nigra (i.e., the pars compacta and pars reticulata), prefrontal cortex, anterior cingulate
cortex, insular cortex, hippocampus, hypothalamus (particularly, the orexinergic nucleus in the
lateral hypothalamus), thalamus (multiple nuclei), sub thalamic nucleus, globus pallidus (both
external and internal), ventral palladium, par brachial nucleus, amygdala, and the remainder of
the extended amygdale. Among the pathways that connect the structures in the corticoid–basal
ganglia–thalamic loop, the group of neurons known as the mesolimbic dopamine pathway, which
connect the ventral tegmental area (VTA) to the nucleus accumbens (NAcc), along with the
associated GABAergic D1-type medium spiny neurons in the nucleus accumbens shell, is a
critical component of the reward system that is directly involved in the immediate perception of
the motivational component of a reward (i.e., "wanting"). Most of the dopamine pathways (i.e.,
neurons that use the neurotransmitter dopamine to transmit a signal to other structures) that
originate in the VTA are part of the reward system;[8] in these pathways, dopamine acts on D1-
like receptors or D2-like receptors to either stimulate (D1-like) or inhibit (D2-like) the
production of cAMP. The GABAergic medium spiny neurons of the striatum are all components
of the reward system as well. The glutamatergic projection nuclei in the subthalamic nucleus,
prefrontal cortex, hippocampus, thalamus, and amygdala connect to other parts of the reward
system via glutamate pathways. The medial forebrain bundle, which is composed of monoamine
neurons that project from several distinct nuclei, is also part of the reward system.

Pleasure centers

Pleasure is a component of reward, but not all rewards are pleasurable (e.g., money does not
elicit pleasure).[5] Stimuli that are naturally pleasurable, and therefore attractive, are known as
intrinsic rewards, whereas stimuli that are attractive and motivate approach behavior, but not
inherently pleasurable, are termed extrinsic rewards.[5] Extrinsic rewards are rewarding as a
result of a learned association with an intrinsic reward.[5] In other words, extrinsic rewards
function as motivational magnets that elicit "wanting", but not "liking" reactions once they have
been acquired. The hedonic hotspots or pleasure centers – i.e., brain structures that mediate
pleasure or "liking" reactions from intrinsic rewards – within the reward system that have been
identified as of May 2015 are contained in subcompartments within the nucleus accumbens shell,

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ventral pallidum, and parabrachial nucleus of the pons;[12][13] the insular cortex and orbitofrontal
cortex likely contain hedonic hotspots as well.

Animals vs. humans

Based on data from Kent Berridge, the liking and disliking reaction involving taste shows
similarities among human newborns, orangutans, and rats. Most neuroscience studies have
shown that dopamine alterations change the level of likeliness toward a reward, which is called
the hedonic impact. This is changed by how hard the reward is worked for. Experimenter
Berridge modified testing a bit when working with reactions by recording the facial expressions
of liking and disliking. Berridge discovered that blocking dopamine systems did not seem to
change the positive reaction to something sweet. In other words, the hedonic impact remained
the same even with this change. It is believed that dopamine is the brain's main pleasure
neurotransmitter but, with these results, that did not seem to be the case. Even with more intense
dopamine alterations, the data seemed to remain the same. This is when Berridge came up with
the incentive salience hypothesis to explain why the dopamine seems to only sometimes control
pleasure when in fact that does seem to happen at all. This hypothesis dealt with the wanting
aspect of rewards. Scientists can use this study done by Berridge to further explain the reasoning
of getting such strong urges when addicted to drugs. Some addicts respond to certain stimuli
involving neural changes caused by drugs. This sensitization in the brain is similar to the effect
of dopamine because wanting and liking reactions occur. Human and animal brains and
behaviors experience similar changes regarding reward systems because they both are so
prominent.[16]

James Olds and Peter Milner were researchers who found the reward system in 1954. They
discovered, while trying to teach rats how to solve problems and run mazes, stimulation of
certain regions of the brain. Where the stimulation was found seemed to give pleasure to the
animals. They tried the same thing with humans and the results were similar.In a fundamental
discovery made in 1954, researchers James Olds and Peter Milner found that low-voltage
electrical stimulation of certain regions of the brain of the rat acted as a reward in teaching the
animals to run mazes and solve problems. It seemed that stimulation of those parts of the brain
gave the animals pleasure, and in later work humans reported pleasurable sensations from such
stimulation. When rats were tested in Skinner boxes where they could stimulate the reward
system by pressing a lever, the rats pressed for hours.[18] Research in the next two decades
established that dopamine is one of the main chemicals aiding neural signaling in these regions,
and dopamine was suggested to be the brain's “pleasure chemical”. Ivan Pavlov was a
psychologist who used the reward system to study classical conditioning. Pavlov used the reward
system by rewarding dogs with food after they had heard a bell or another stimulus. Pavlov was
rewarding the dogs so that the dogs associated food, the reward, with the bell, the stimulus. [20]
Edward L. Thorndike used the reward system to study operant conditioning. He began by putting
cats in a puzzle box and placing food outside of the box so that the cat wanted to escape. The
cats worked to get out of the puzzle box to get to the food. Although the cats ate the food after
they escaped the box, Thorndike learned that the cats attempted to escape the box without the

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reward of food. Thorndike used the rewards of food and freedom to stimulate the reward system
of the cats. Thorndike used this to see how the cats learned to escape the box.

Motivation

Motivation is a theoretical construct used to explain behavior. It represents the reasons for
people's actions, desires, and needs. Motivation can also be defined as one's direction to
behavior, or what causes a person to want to repeat a behavior and vice versa.[1] A motive is what
prompts the person to act in a certain way, or at least develop an inclination for specific
behavior.[2] According to Maehr and Meyer, "Motivation is a word that is part of the popular
culture as few other psychological concepts are."

Types of theories and models

Motivation theories can be classified on a number of bases.Natural vs. Rational based on whether
the underlying theory of human Cognition is based on natural forces (drives, needs, desires) or
some kind of rationality (instrumentality, meaningfulness, self-identity).Content vs. Process
based on whether the focus is on the content ("what") motivates vs process ("how") motivation
takes place.

Psychological theories and models

Motivation can be conceived of as a cycle in which thoughts influence behaviors, behaviors

drive performance, performance affects thoughts, and the cycle begins again. Each stage of the
cycle is composed of many dimensions including attitudes, beliefs, intentions, effort, and
withdrawal which can all affect the motivation that an individual experiences.The ideal way that
human beings are rational and human behavior is guided by reason is an old one. However,
recent research (on Satisficing for example) has significantly undermined the idea of homo
economicus or of perfect rationality in favour of a more bounded rationality. The field of
behavioural economics is particularly concerned with the limits of rationality in economic
agents. Motivation can be divided into two different theories known as Intrinsic (internal)
motivation and Extrinsic (external) motivation. Intrinsic motivation has been studied since the
early 1970s. Intrinsic motivation is the self-desire to seek out new things and new challenges, to
analyze one's capacity, to observe and to gain knowledge.[5] It is driven by an interest or
enjoyment in the task itself, and exists within the individual rather than relying on external
pressures or a desire for reward. The phenomenon of intrinsic motivation was first acknowledged
within experimental studies of animal behavior. In these studies, it was evident that the
organisms would engage in playful and curiosity driven behaviors in the absence of reward.
Intrinsic motivation is a natural motivational tendency and is a critical element in cognitive,
social, and physical development. Students who are intrinsically motivated are more likely to
engage in the task willingly as well as work to improve their skills, which will increase their
capabilities. Students are likely to be intrinsically motivated if they:

• attribute their educational results to factors under their own control, also known as
autonomy or locus of control

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 • believe they have the skills to be effective agents in reaching their desired goals, also
known as self-efficacy beliefs
• are interested in mastering a topic, not just in achieving good grades

An example of intrinsic motivation is when an employee becomes an IT professional because he

or she wants to learn about how computer users interact with computer networks. The employee
has the intrinsic motivation to gain more knowledge.Traditionally, researchers thought of
motivations to use computer systems to be primarily driven by extrinsic purposes; however,
many modern systems have their use driven primarily by intrinsic motivations.[9] Examples of
such systems used primarily to fulfil users’ intrinsic motivations, include on-line gaming, virtual
worlds, online shopping, learning/education, online dating, digital music repositories, social
networking, online pornography, gamified systems, and general ramifications. Even traditional
management information systems (e.g., ERP, CRM) are being ‘gamified’ such that both extrinsic
and intrinsic motivations must increasingly be considered.

Advantages: Intrinsic motivation can be long-lasting and self-sustaining. Efforts to build this
kind of motivation are also typically efforts at promoting student learning. Such efforts often
focus on the subject rather than rewards or punishments.

Disadvantages: Efforts at fostering intrinsic motivation can be slow to affect behavior and can
require special and lengthy preparation. Students are individuals, so a variety of approaches may
be needed to motivate different students. It is often helpful to know what interests one’s students
in order to connect these interests with the subject matter. This requires getting to know one’s
students. Also, it helps if the instructor is interested in the subject.

Extrinsic motivation refers to the performance of an activity in order to attain a desired outcome
and it is the opposite of intrinsic motivation.[5] Extrinsic motivation comes from influences
outside of the individual. In extrinsic motivation, the harder question to answer is where do
people get the motivation to carry out and continue to push with persistence. Usually extrinsic
motivation is used to attain outcomes that a person wouldn't get from intrinsic motivation.[11]
Common extrinsic motivations are rewards (for example money or grades) for showing the
desired behavior, and the threat of punishment following misbehavior. Competition is an
extrinsic motivator because it encourages the performer to win and to beat others, not simply to
enjoy the intrinsic rewards of the activity. A cheering crowd and the desire to win a trophy are
also extrinsic incentives. Social psychological research has indicated that extrinsic rewards can
lead to overjustification and a subsequent reduction in intrinsic motivation. In one study
demonstrating this effect, children who expected to be (and were) rewarded with a ribbon and a
gold star for drawing pictures spent less time playing with the drawing materials in subsequent
observations than children who were assigned to an unexpected reward condition. However,
another study showed that third graders who were rewarded with a book showed more reading
behavior in the future, implying that some rewards do not undermine intrinsic motivation. [14]
While the provision of extrinsic rewards might reduce the desirability of an activity, the use of
extrinsic constraints, such as the threat of punishment, against performing an activity has actually
been found to increase one's intrinsic interest in that activity. In one study, when children were
given mild threats against playing with an attractive toy, it was found that the threat actually

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served to increase the child's interest in the toy, which was previously undesirable to the child in
the absence of threat.

While many theories on motivation have a mentalistic perspective, behaviorists focus only on
observable behavior and theories founded on experimental evidence. In the view of behaviorism,
motivation is understood as a question about what factors cause, prevent, or withhold various
behaviors, while the question of, for instance, conscious motives would be ignored. Where others
would speculate about such things as values, drives, or needs, that may not be observed directly,
behaviorists are interested in the observable variables that affect the type, intensity, frequency
and duration of observable behavior. Through the basic research of such scientists as Pavlov,
Watson and Skinner, several basic mechanisms that govern behavior have been identified. The
most important of these are classical conditioning and operant conditioning.

In classical (or respondent) conditioning, behavior is understood as responses triggered by

certain environmental or physical stimuli. They can be unconditioned, such as in-born reflexes,
or learned through the pairing of an unconditioned stimulus with a different stimulus, which then
becomes a conditioned stimulus. In relation to motivation, classical conditioning might be seen
as one explanation as to why an individual performs certain responses and behaviors in certain
situations. For instance, a dentist might wonder why a patient does not seem motivated to show
up for an appointment, with the explanation being that the patient has associated the dentist
(conditioned stimulus) with the pain (unconditioned stimulus) that elicits a fear response
(conditioned response), leading to the patient being reluctant to visit the dentist.

In operant conditioning, the type and frequency of behavior is determined mainly by its
consequences. If a certain behavior, in the presence of a certain stimulus, is followed by a
desirable consequence (a reinforcer), the emitted behavior will increase in frequency in the
future, in the presence of the stimulus that preceded the behavior (or a similar one). Conversely,
if the behavior is followed by something undesirable (a punisher), the behavior is less likely to
occur in the present of the stimulus. In a similar manner, removal of a stimulus directly following
the behavior might either increase or decrease the frequency of that behavior in the future
(negative reinforcement or punishment). For instance, a student that gained praise and a good
grade after turning in a paper, might seem more motivated in writing papers in the future
(positive reinforcement); if the same student put in a lot of work on a task without getting any
praise for it, he or she might seem less motivated to do school work in the future (negative
punishment). If a student starts to cause trouble in class gets punished with something he or she
dislikes, such as detention (positive punishment), that behavior would decrease in the future. The
student might seem more motivated to behave in class, presumably in order to avoid further
detention (negative reinforcement).The strength of reinforcement or punishment is dependent on
schedule and timing. A reinforcer or punisher affects the future frequency of a behavior most
strongly if it occurs within seconds of the behavior. A behavior that is reinforced intermittently,
at unpredictable intervals, will be more robust and persistent, compared to one that is reinforced
every time the behavior is performed. For example, if the misbehaving student in the above
example was punished a week after the troublesome behavior, that might not affect future
behavior. Instead, whatever behavior the student was performing just prior to the punishment
would instead decrease. In addition to these basic principles, antecedent factors also affect
behavior. Behavior is punished or reinforced in the context of whatever stimuli were present just

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before the behavior was performed, which means that a particular behavior might not be affected
in every context, just because it was punished or reinforced in a particular one. A lack of praise
for school-related behavior might, for instance, not decrease sports-related behavior usually
reinforced by praise. The various mechanisms of operant conditioning may be used to understand
the motivation for various behaviors by examining what happens just after the behavior (the
consequence), in what context the behavior is performed or not performed (the antecedent), and
under what circumstances (motivating operators).

Motivating operations, MOs, relate to the field of motivation in that they help improve
understanding aspects of behavior that are not covered by operant conditioning. In operant
conditioning, the function of the reinforcer is to influence future behavior. The presence of a
stimulus believed to function as a reinforcer does not according to this terminology explain the
current behavior of an organism – only previous instances of reinforcement of that behavior (in
the same or similar situations) do. Through the behavior-altering effect of MOs, it is possible to
affect current behavior of an individual, giving another piece of the puzzle of
motivation.Motivating operations are factors that affect learned behavior in a certain context.
MOs have two effects: a value-altering effect, which increases or decreases the efficiency of a
reinforcer, and a behavior-altering effect, which modifies learned behavior that has previously
been punished or reinforced by a particular stimulus. When a motivating operation causes an
increase in the effectiveness of a reinforcer, or amplifies a learned behavior in some way (such as
increasing frequency, intensity, duration or speed of the behavior), it functions as an establishing
operation, EO. A common example of this would be food deprivation, which functions as an
EO in relation to food: the food-deprived organism will perform behaviors previously related to
the acquisition of food more intensely, frequently, longer, or faster in the presence of food, and
those behaviors would be especially strongly reinforced.[16] For instance, a fast-food worker
earning minimal wage, forced to work more than one job to make ends meet, would be highly
motivated by a pay raise, because of the current deprivation of money (a conditioned establishing
operation). The worker would work hard to try to achieve the raise, and getting the raise would
function as an especially strong reinforcer of work behavior.

Conversely, a motivating operation that causes a decrease in the effectiveness of a reinforcer, or

diminishes a learned behavior related to the reinforcer, functions as an abolishing operation,
AO. Again using the example of food, satiation of food prior to the presentation of a food
stimulus would produce a decrease on food-related behaviors, and diminish or completely
abolish the reinforcing effect of acquiring and ingesting the food.[16] Consider the board of a
large investment bank, concerned with a too small profit margin, deciding to give the CEO a new
incentive package in order to motivate him to increase firm profits. If the CEO already has a lot
of money, the incentive package might not be a very good way to motivate him, because he
would be satiated on money. Getting even more money wouldn't be a strong reinforcer for profit-
increasing behavior, and wouldn't elicit increased intensity, frequency or duration of profit-
increasing behavior.Motivation lies at the core of many behaviorist approaches to psychological
treatment. A person with autism-spectrum disorder is seen as lacking motivation to perform
socially relevant behaviors – social stimuli are not as reinforcing for people with autism
compared to other people. Depression is understood as a lack of reinforcement (especially
positive reinforcement) leading to extinction of behavior in the depressed individual. A patient
with specific phobia is not motivated to seek out the phobic stimulus because it acts as a

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punisher, and is over-motivated to avoid it (negative reinforcement). In accordance, therapies
have been designed to address these problems, such as EIBI and CBT for major depression and
specific phobia.Incentive theory is a specific theory of motivation, derived partly from
behaviorist principles of reinforcement, which concerns an incentive or motive to do something.
The most common incentive would be a reward. Rewards can be tangible or intangible, and is
presented generally after the occurrence of the action or behavior that one is trying to correct or
cause to happen again. This is done by associating positive meaning to the behavior and or
action. Studies show that if the person receives the reward immediately, the effect is greater, and
decreases as delay lengthens.[18] Repetitive action-reward combination can cause the action to
become a habit.[18] Motivation comes from two sources: oneself, and other people. (Refer to
Intrinsic and Extrinsic motivation for more information). "Reinforcers and reinforcement
principles of behavior differ from the hypothetical construct of reward." A reinforcer is anything
that follows an action, with the intentions that the action will now occur more frequently. From
this perspective, the concept of distinguishing between intrinsic and extrinsic forces is irrelevant.
Incentive theory in psychology treats motivation and behavior of the individual as they are
influenced by beliefs, such as engaging in activities that are expected to be profitable. Incentive
theory is promoted by behavioral psychologists, such as B.F. Skinner. Incentive theory is
especially supported by Skinner in his philosophy of Radical behaviorism, meaning that a
person's actions always has social ramifications: and if actions are positively received people are
more likely to act in this manner, or if negatively received people are less likely to act in this
manner.

Incentive theory distinguishes itself from other motivation theories, such as drive theory, in the
direction of the motivation. In incentive theory, stimuli "attract", a person towards them, and
push them towards the stimulus. In terms of behaviorism, incentive theory involves positive
reinforcement: the reinforcing stimulus has been conditioned to make the person happier. As
opposed to in drive theory, which involves negative reinforcement: a stimulus has been
associated with the removal of the punishment—the lack of homeostasis in the body. For
example, a person has come to know that if they eat when hungry, it will eliminate that negative
feeling of hunger, or if they drink when thirsty, it will eliminate that negative feeling of thirst.[18]

Push and pull

Push motivations are those where people push themselves towards their goals or to achieve
something, such as the desire for escape, rest and relaxation, prestige, health and fitness,
adventure, and social interaction.[19] However, with push motivation it's also easy to get
discouraged when there are obstacles present in the path of achievement. Push motivation acts as
a willpower and people's willpower is only as strong as the desire behind the willpower.[20]
Additionally, a study has been conducted on social networking and its push and pull effects. One
thing that is mentioned is "Regret and dissatisfaction correspond to push factors because regret
and dissatisfaction are the negative factors that compel users to leave their current service

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provider."[21] So from reading this, we now know that Push motivations can also be a negative
force. In this case, that negative force is regret and dissatisfaction.

Pull motivation is the opposite of push. It is a type of motivation that is much stronger. "Some of
the factors are those that emerge as a result of the attractiveness of a destination as it is perceived
by those with the propensity to travel. They include both tangible resources, such as beaches,
recreation facilities, and cultural attractions, and traveler's perceptions and expectation, such as
novelty, benefit expectation, and marketing image."[19] Pull motivation can be seen as the desire
to achieve a goal so badly that it seems that the goal is pulling us toward it. That is why pull
motivation is stronger than push motivation. It is easier to be drawn to something rather than to
push yourself for something you desire. It can also be an alternative force when compared to
negative force. From the same study as previously mentioned, "Regret and dissatisfaction with
an existing SNS service provider may trigger a heightened interest toward switching service
providers, but such a motive will likely to translate into reality in the presence of good
alternative. Therefore, alternative attractiveness can moderate the effects of regret and
dissatisfaction with switching intention"[21] And so, pull motivation can be an attracting desire
when negative influences come into the picture.

The self-control aspect of motivation is increasingly considered to be a subset of emotional

intelligence; it is suggested that although a person may be classed as highly intelligent (as
measured by many traditional intelligence tests), they may remain unmotivated to pursue
intellectual endeavours. Vroom's "expectancy theory" provides an account of when people may
decide to exert self-control in pursuit of a particular goal.

A drive or desire can be described as a deficiency or need that activates behavior that is aimed at
a goal or an incentive.[23] These drives are thought to originate within the individual and may not
require external stimuli to encourage the behavior. Basic drives could be sparked by deficiencies
such as hunger, which motivates a person to seek food whereas more subtle drives might be the
desire for praise and approval, which motivates a person to behave in a manner pleasing to
others. Another basic drive is the sexual drive which like food motivates us because it is essential
to our survival.[24] The desire for sex is wired deep into the brain of all human beings as glands
secrete hormones that travel through the blood to the brain and stimulates the onset of sexual
desire. The hormone involved in the initial onset of sexual desire is called
Dehydroepiandrosterone (DHEA). The hormonal basis of both men and women's sex drives is
testosterone. Men naturally have more testosterone than women do and so are more likely than
woman to think about sex, There are countless amount of drives society obtains, it is primarily
the reason why people have a willingness to act in a particular way; that being generally a desire
or interest in something. Drive theory grows out of the concept that people have certain
biological drives, such as hunger and thirst. As time passes the strength of the drive increases if it
is not satisfied (in this case by eating). Upon satisfying a drive the drive's strength is reduced.
Created by Clark Hull and further developed by Kenneth Spence, the theory became well known
in the 1940s and 1950s. Many of the motivational theories that arose during the 1950s and 1960s
were either based on Hull's original theory or were focused on providing alternatives to the
drive-reduction theory, including Abraham Maslow's hierarchy of needs, which emerged as an
alternative to Hull's approach. Drive theory has some intuitive or folk validity. For instance when
preparing food, the drive model appears to be compatible with sensations of rising hunger as the

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food is prepared, and, after the food has been consumed, a decrease in subjective hunger.[26]
There are several problems, however, that leave the validity of drive reduction open for
debate.Suggested by Leon Festinger, cognitive dissonance occurs when an individual
experiences some degree of discomfort resulting from an inconsistency between two cognitions:
their views on the world around them, and their own personal feelings and actions. For example,
a consumer may seek to reassure themselves regarding a purchase, feeling that another decision
may have been preferable. Their feeling that another purchase would have been preferable is
inconsistent with their action of purchasing the item. The difference between their feelings and
beliefs causes dissonance, so they seek to reassure themselves. While not a theory of motivation,
per se, the theory of cognitive dissonance proposes that people have a motivational drive to
reduce dissonance. The cognitive miser perspective makes people want to justify things in a
simple way in order to reduce the effort they put into cognition. They do this by changing their
attitudes, beliefs, or actions, rather than facing the inconsistencies, because dissonance is a
mental strain. Dissonance is also reduced by justifying, blaming, and denying. It is one of the
most influential and extensively studied theories in social psychology. The content theory was
one of the earliest theories of motivation. Content theories can also be referred to needs theories,
because the theory focuses on the importance of what motivates us (needs). In other words, they
try to identify what our "needs" are and how they relate to motivation to fulfill those needs.
Another definition could be defined by Pritchard and Ashwood, is the process used to allocate
energy to maximize the satisfaction of needs.

Content theory of human motivation includes both Abraham Maslow's hierarchy of needs and
Herzberg's two-factor theory. Maslow's theory is one of the most widely discussed theories of
motivation. Abraham Maslow believed that man is inherently good and argued that individuals
possess a constantly growing inner drive that has great potential. The needs hierarchy system,
devised by Maslow(1954), which is a commonly used scheme for classifying human motives.
The American motivation psychologist Abraham H. Maslow developed the hierarchy of needs
consisting of five hierarchic classes. According to Maslow, people are motivated by unsatisfied
needs. The needs, listed from basic (lowest-earliest) to most complex (highest-latest) are as
follows:

➢ Physiology (hunger, thirst, sleep, etc.)

➢ Safety/Security/Shelter/Health
➢ Social/Love/Friendship
➢ Self-esteem/Recognition/Achievement
➢ Self actualization/achievement of full potential/can never be fully accomplished

The basic requirements build upon the first step in the pyramid: physiology. If there are deficits
on this level, all behavior will be oriented to satisfy this deficit. Essentially, if you have not slept
or eaten adequately, you won't be interested in your self-esteem desires. Subsequently we have
the second level, which awakens a need for security. After securing those two levels, the motives
shift to the social sphere, the third level. Psychological requirements comprise the fourth level,
while the top of the hierarchy consists of self-realization and self-actualization.

Maslow's hierarchy of needs theory can be summarized as follows:

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 • Human beings have wants and desires which influence their behavior. Only unsatisfied
needs influence behavior, satisfied needs do not.
• Needs are arranged in order of importance to human life, from the basic to the complex.
• The person advances to the next level of needs only after the lower level need is at least
minimally satisfied.
• The further the progress up the hierarchy, the more individuality, humanness and
psychological health a person will show.

Herzberg's two-factor theory

Frederick Herzberg's two-factor theory concludes that certain factors in the workplace result in
job satisfaction, but if absent, they don't lead to dissatisfaction but no satisfaction. The factors
that motivate people can change over their lifetime, but "respect for me as a person" is one of the
top motivating factors at any stage of life.

He distinguished between:

• Motivators (e.g. challenging work, recognition, responsibility) which give positive

satisfaction, and
• Hygiene factors (e.g. status, job security, salary and fringe benefits) that do not motivate
if present, but, if absent, result in demotivation.

Herzberg concluded that job satisfaction and dissatisfaction were the products of two separate
factors: motivating factors (satisfiers) and hygiene factors (dissatisfiers). Some motivating
factors (satisfiers) were: Achievement, recognition, work itself, responsibility, advancement, and
growth. Some hygiene factors (dissatisfiers) were: company policy, supervision, working
conditions, interpersonal relations, salary, status, job security, and personal life.. The name
hygiene factors is used because, like hygiene, the presence will not improve health, but absence
can cause health deterioration.
Herzberg's theory has found application in such occupational fields as information systems and
in studies of user satisfaction such as computer user satisfaction.

Alderfer, expanding on Maslow's hierarchy of needs, created the ERG theory. This theory posits
that there are three groups of core needs — existence, relatedness, and growth, hence the label:
ERG theory. The existence group is concerned with providing our basic material existence
requirements. They include the items that Maslow considered to be physiological and safety
needs. The second group of needs is those of relatedness- the desire we have for maintaining
important personal relationships. These social and status desires require interaction with others if
they are to be satisfied, and they align with Maslow's social need and the external component of

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Maslow's esteem classification. Finally, Alderfer isolates growth needs as an intrinsic desire for
personal development. Maslow's categories are broken down into many different parts and there
are a lot of needs. The ERG categories are more broad and covers more than just certain areas.
As a person grows, the existence, relatedness, and growth for all desires continue to grow. All
these needs should be fulfilled to greater wholeness as a human being. These include the intrinsic
component from Maslow's esteem category and the characteristics included under self-
actualization. Since the early 1970s Edward L. Deci and Richard M. Ryan have conducted
research that eventually led to the proposition of the self-determination theory (SDT). This
theory focuses on the degree to which an individual’s behaviour is self-motivated and self-
determined. SDT identifies three innate needs that, if satisfied, allow optimal function and
growth: competence, relatedness, and autonomy. These three psychological needs motivate the
self to initiate specific behaviour and mental nutriments that are essential for psychological
health and well-being. When these needs are satisfied, there are positive consequences, such as
well-being and growth, leading people to be motivated, productive and happy. When they are
thwarted, people's motivation, productivity and happiness plummet. There are three essential
elements to the theory:

Humans are inherently proactive with their potential and mastering their inner forces (such as
drive and emotions).

• Humans have an inherent tendency towards growth, development and integrated

functioning.
• Optimal development and actions are inherent in humans but they do not happen
automatically.

The latest approach in developing a broad, integrative theory of motivation is temporal

motivation theory. Introduced in a 2006 Academy of Management Review article, it synthesizes
into a single formulation the primary aspects of several other major motivational theories,
including Incentive Theory, Drive Theory, Need Theory, Self-Efficacy and Goal Setting. It
simplifies the field of motivation and allows findings from one theory to be translated into terms
of another. Another journal article that helped to develop the Temporal Motivation Theory, "The
Nature of Procrastination, " received American Psychological Association's George A. Miller
award for outstanding contribution to general science.

Achievement motivation is an integrative perspective based on the premise that performance

motivation results from the way broad components of personality are directed towards
performance. As a result, it includes a range of dimensions that are relevant to success at work
but which are not conventionally regarded as being part of performance motivation. The
emphasis on performance seeks to integrate formerly separate approaches as need for
achievement with, for example, social motives like dominance. Personality is intimately tied to
performance and achievement motivation, including such characteristics as tolerance for risk,
fear of failure, and others. Achievement motivation can be measured by The Achievement
Motivation Inventory, which is based on this theory and assesses three factors (in 17 separated
scales) relevant to vocational and professional success. This motivation has repeatedly been
linked with adaptive motivational patterns, including working hard, a willingness to pick
learning tasks with much difficulty, and contributing success to effort. Achievement motivation

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was studied intensively by David C. McClelland, John W. Atkinson and their colleagues since
the early 1950s. This type of motivation is a drive that is developed from an emotional state. One
may feel the drive to achieve by striving for success and avoiding failure. In achievement
motivation, one would hope that they excel in what they do and not think much about the failures
or the negatives. Their research showed that business managers who were successful
demonstrated a high need to achieve no matter the culture. There are three major characteristics
of people who have a great need to achieve according to McClelland’s research.

1. They would prefer a work environment in which they are able to assume responsibility
for solving problems.
2. They would take calculated risk and establish moderate, attainable goals.
3. They want to hear continuous recognition, as well as feedback, in order for them to know
how well they are doing.
4. The Cognitive Theory of motivation are derived from two basic theories which are the
Goal-Setting Theory and the Expectancy Theory. The Goal-Setting Theory states the
importance of setting a goal or which direction to aim for that goal in motivating an
individual. As for the Expectancy Theory of Motivation states why and how people
chooses to act in a certain way over another. Cognitive theory defines motivation in terms
of how an individual reacts to different situations by examining and the process of
thoughts to respond instead of an inner built set of instructions to react to different
situations.

Goal-setting theory is based on the notion that individuals sometimes have a drive to reach a
clearly defined end state. Often, this end state is a reward in itself. A goal's efficiency is affected
by three features: proximity, difficulty and specificity. One common goal setting methodology
incorporates the SMART criteria, in which goals are: specific, measurable, attainable/achievable,
relevant, and time-bound. An ideal goal should present a situation where the time between the
initiation of behavior and the end state is close. This explains why some children are more
motivated to learn how to ride a bike than to master algebra. A goal should be moderate, not too
hard or too easy to complete. In both cases, most people are not optimally motivated, as many
want a challenge (which assumes some kind of insecurity of success). At the same time people
want to feel that there is a substantial probability that they will succeed. Specificity concerns the
description of the goal in their class. The goal should be objectively defined and intelligible for
the individual. A classic example of a poorly specified goal is to get the highest possible grade.
Most children have no idea how much effort they need to reach that goal.

Expectancy theory was proposed by Victor H. Vroom in 1964, the Expectancy Theory explains
the behavior process in which an individual selects a behavior option over another, and why/how
this decision is made in relation to their goal.

There's also an equation for this theory which goes as follows: M=E*I*V or Motivation =
Expectancy*instrumentality*valence. M(Motivation) is the amount an individual will be
motivated by the condition or environment they placed themselves in. Which is based from the
following hence the equation. "E(Expectancy) is the person's perception that effort will result in
performance. In other words, it's the person assessment of how well and what kind of effort will
relate in better performance. I(Instrumentality) is the person's perception that performance will

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be rewarded or punished. V(Valence) is the perceived amount of the reward or punishment that
will result from the performance." Social-cognitive models of behavior change include the
constructs of motivation and volition. Motivation is seen as a process that leads to the forming of
behavioral intentions. Volition is seen as a process that leads from intention to actual behavior.
In other words, motivation and volition refer to goal setting and goal pursuit, respectively. Both
processes require self-regulatory efforts. Several self-regulatory constructs are needed to operate
in orchestration to attain goals. An example of such a motivational and volitional construct is
perceived self-efficacy. Self-efficacy is supposed to facilitate the forming of behavioral
intentions, the development of action plans, and the initiation of action. It can support the
translation of intentions into action.

John W. Atkinson, David Birch and their colleagues developed the theory of "Dynamics of
Action" to mathematically model change in behavior as a consequence of the interaction of
motivation and associated tendencies toward specific actions.[54][55] The theory posits that change
in behavior occurs when the tendency for a new, unexpressed behavior becomes dominant over
the tendency currently motivating action. In the theory, the strength of tendencies rises and falls
as a consequence of internal and external stimuli (sources of instigation), inhibitory factors, and
consummatory in factors such as performing an action. In this theory, there are three causes
responsible for behavior and change in behavior:

1. Instigation (Ts) - increases tendency when an activity has intrinsic ability to satisfy;
2. Inhibition (Taf) - decreases tendency when there are obstacles to performing an activity;
and
3. Consummation - decreases a tendency as it is performed.
4. Psychologists David C. McClelland and John W. Atkinson argued that motivation should
be unconscious. They refined measures of motivation by means of content analysis of
imaginative thought using, for example, the Thematic Apperception Test.'

Starting from studies involving more than 6,000 people, Professor Steven Reiss has proposed a
theory that found 16 basic desires that guide nearly all human behavior. Intrinsic motivation is
the tendency to find challenges, to push to find out for more, explore, and learn as much as
possible. It is about reaching the most possible potential as a human being. The 16 basic desires
that motivate our actions and define our personalities are:

➢ Acceptance, the need for approval

➢ Curiosity, the need to learn
➢ Eating, the need for food
➢ Family, the need to raise children
➢ Honor, the need to be loyal to the traditional values of one's clan/ethnic group
➢ Idealism, the need for social justice
➢ Independence, the need for individuality

➢ Order, the need for organized, stable, predictable environments

➢ Physical activity, the need for exercise
➢ Power, the need for influence of will
➢ Romance, the need for sex and for beauty

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 ➢ Saving, the need to collect
➢ Social contact, the need for friends (peer relationships)
➢ Social status, the need for social standing/importance
➢ Tranquility, the need to be safe
➢ Vengeance, the need to strike back and to compete

Attribution theory is a theory developed by psychologist, Fritz Heider that describes the
processes by which individuals explain the causes of their behavior and events. A form of
attribution theory developed by psychologist, Bernard Weiner describes an individual’s beliefs
about how the causes of success or failure affect their emotions and motivations. Bernard
Weiner’s theory can be defined into two perspectives: intrapersonal or interpersonal. The
intrapersonal perspective includes self-directed thoughts and emotions that are attributed to the
self. The interpersonal perspective includes beliefs about the responsibility of others and other
directed affects of emotions; the individual would place the blame on another individual.
Individuals formulate explanatory attributions to understand the events they experience and to
seek reasons for their failures. When individuals seek positive feedback from their failures, they
use the feedback as motivation to show improved performances. For example, using the
intrapersonal perspective, a student who failed a test may attribute their failure for not studying
enough and would use their emotion of shame or embarrassment as motivation to study harder
for the next test. A student who blames their test failure on the teacher would be using the
interpersonal perspective, and would use their feeling of disappointment as motivation to rely on
a different study source other than the teacher for the next test.

Approach motivation can be defined as when a certain behavior or reaction to a

situation/environment is rewarded or results in a positive/desirable outcome. In contrast,
avoidance motivation can be defined as when a certain behavior or reaction to a
situation/environment is punished or results in a negative/undesirable outcome. Research
suggests that, all else being equal, avoidance motivations tend to be more powerful than
approach motivations. Because people expect losses to have more powerful emotional
consequences than equal-size gains, they will take more risks to avoid a loss than to achieve a
gain.

Practical applications

The control of motivation is only understood to a limited extent. There are many different
approaches of motivation training, but many of these are considered pseudoscientific by critics.
To understand how to control motivation it is first necessary to understand why many people
lack motivation.

The job characteristics Model (JCM), as designed by Hackman[65] and Oldham attempts to use
job design to improve employee motivation. They show that any job can be described in terms of
five key job characteristics: Skill Variety - the degree to which the job requires the use of
different skills and talents

➢ Task Identity - the degree to which the job has contributed to a clearly
identifiable larger project

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 ➢ Task Significance - the degree to which the job affects the lives or work of
other people
➢ Autonomy - the degree to which the worker has independence, freedom and
discretion in carrying out the job
➢ Task Feedback - the degree to which the worker is provided with clear,
specific, detailed, actionable information about the effectiveness of his or
her job performance

The JCM links the core job dimensions listed above to critical psychological states which results
in desired personal and work outcomes. This forms the basis of this 'employee growth-need
strength." The core dimensions listed above can be combined into a single predictive index,
called the Motivating Potential Score.

The motivating potential score (MPS) can be calculated, using the core dimensions discussed
above, as follows:

Jobs high in motivating potential must be high on both Autonomy and Feedback, and also must
be high on at least one of the three factors that lead to experienced meaningfulness. If a job has a
high MPS, the job characteristics model predicts motivation, performance and job satisfaction
will be positively affected and the likelihood of negative outcomes, such as absenteeism and
turnover, will be reduced. Employee recognition is not only about gifts and points. It's about
changing the corporate culture in order to meet goals and initiatives and most importantly to
connect employees to the company's core values and beliefs. Strategic employee recognition is
seen as the most important program not only to improve employee retention and motivation but
also to positively influence the financial situation. The difference between the traditional
approach (gifts and points) and strategic recognition is the ability to serve as a serious business
influencer that can advance a company’s strategic objectives in a measurable way. "The vast
majority of companies want to be innovative, coming up with new products, business models and
better ways of doing things. However, innovation is not so easy to achieve. A CEO cannot just
order it, and so it will be. You have to carefully manage an organization so that, over time,
innovations will emerge."

Some authors, especially in the transhumanist movement, have suggested the use of "smart
drugs", also known as nootropics, as "motivation-enhancers". These drugs work in various ways
to affect neurotransmitters in the brain. It is generally widely accepted that these drugs enhance
cognitive functions, but not without potential side effects.[71] The effects of many of these drugs
on the brain are emphatically not well understood, and their legal status often makes open
experimentation difficult.

Motivation is of particular interest to educational psychologists because of the crucial role it

plays in student learning. However, the specific kind of motivation that is studied in the
specialized setting of education differs qualitatively from the more general forms of motivation
studied by psychologists in other fields.

Motivation in education can have several effects on how students learn and how they behave
towards subject matter.

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It can:

➢ Direct behavior toward particular goals

➢ Lead to increased effort and energy
➢ Increase initiation of, and persistence in, activities
➢ Enhance cognitive processing
➢ Determine what consequences are reinforcing
➢ Lead to improved performance.

Because students are not always internally motivated, they sometimes need situated motivation,
which is found in environmental conditions that the teacher creates. If teachers decided to
extrinsically reward productive student behaviors, they may find it difficult to extricate
themselves from that path. Consequently, student dependency on extrinsic rewards represents
one of the greatest detractors from their use in the classroom. The majority of new student
orientation leaders at colleges and universities recognize that distinctive needs of students should
be considered in regard to orientation information provided at the beginning of the higher
education experience. Research done by Whyte in 1986 raised the awareness of counselors and
educators in this regard. In 2007, the National Orientation Directors Association reprinted
Cassandra B. Whyte's research report allowing readers to ascertain improvements made in
addressing specific needs of students over a quarter of a century later to help with academic
success. Generally, motivation is conceptualized as either intrinsic or extrinsic. Classically, these
categories are regarded as distinct.[75] Today, these concepts are less likely to be used as distinct
categories, but instead as two ideal types that define a continuum:

Intrinsic motivation occurs when people are internally motivated to do something because it
either brings them pleasure, they think it is important, or they feel that what they are learning is
significant. It has been shown that intrinsic motivation for education drops from grades 3-9
though the exact cause cannot be ascertained. Also, in younger students it has been shown that
contextualizing material that would otherwise be presented in an abstract manner increases the
intrinsic motivation of these students. Extrinsic motivation comes into play when a student is
compelled to do something or act a certain way because of factors external to him or her (like
money or good grades).

Cassandra B. Whyte researched and reported about the importance of locus of control and
academic achievement. Students tending toward a more internal locus of control are more
academically successful, thus encouraging curriculum and activity development with
consideration of motivation theories. Academic motivation orientation may also be tied with
one's ability to detect and process errors. Fisher, Nanayakkara, and Marshall conducted
neuroscience research on children's motivation orientation, neurological indicators of error
monitoring (the process of detecting an error), and academic achievement. Their research
suggests that students with high intrinsic motivation attribute performance to personal control
and that their error-monitoring system is more strongly engaged by performance errors. They
also found that motivation orientation and academic achievement were related to the strength in
which their error-monitoring system was engaged. Motivation has been found to be an important
element in the concept of Andragogy (what motivates the adult learner), and in treating Autism
Spectrum Disorders, as in Pivotal Response Therapy.

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Doyle and Moeyn have noted that traditional methods tended to use anxiety as negative
motivation (e.g. use of bad grades by teachers) as a method of getting students to work.
However, they have found that progressive approaches with focus on positive motivation over
punishment has produced greater effectiveness with learning, since anxiety interferes with
performance of complex tasks.

Indigenous education and learning

For many indigenous students (such as Native American children), motivation may be derived
from social organization; an important factor educators should account for in addition to
variations in Sociolinguistics and Cognition. While poor academic performance among Native
American students is often attributed to low levels of motivation, Top-down classroom
organization is often found to be ineffective for children of many cultures who depend on a sense
of community, purpose, and competence in order to engage. Horizontally-structured,
community-based learning strategies often provide a more structurally supportive environment
for motivating indigenous children, who tend to be driven by "social/affective emphasis,
harmony, holistic perspectives, expressive creativity, and nonverbal communication." This drive
is also traceable to a cultural tradition of community-wide expectations of participation in the
activities and goals of the greater group, rather than individualized aspirations of success or
triumph. Also, in some indigenous communities, young children can often portray a sense of
community-based motivation through their parent-like interactions with siblings. Furthermore, it
is commonplace for children to assist and demonstrate for their younger counterparts without
being prompted by authority figures. Observation techniques and integration methods are
demonstrated in such examples as weaving in Chiapas, Mexico, where it is commonplace for
children to learn from "a more skilled other" within the community. The child's real
responsibility within the Mayan community can be seen in, for example, weaving
apprenticeships; often, when the "more skilled other" is tasked with multiple obligations, an
older child will step in and guide the learner. Sibling guidance is supported from early youth,
where learning through play encourages horizontally-structured environments through alternative
educational models such as "Intent Community Participation." Research also suggests that that
formal Westernized schooling can actually reshape the traditionally collaborative nature of social
life in indigenous communities. This research is supported cross-culturally, with variations in
motivation and learning often reported higher between indigenous groups and their national
Westernized counterparts than between indigenous groups across international continental
divides. Also, in some Indigenous communities in the Americas, motivation is a driving force for
learning. Children are incorporated and welcomed to participate in daily activities and thus feel
motivated to participate due to them seeking a sense of belonging in their families and
communities. Children’s participation is encouraged and their learning is supported by their
community and family, furthering their motivation. Children are also trusted to be active
contributors. Their active participation allows them to learn and gain skills that are valuable and
useful in their communities.

As children transition from early childhood to middle childhood, their motivation to participate
changes. In both the Indigenous communities of Quechua people and Rioja in Peru, children
often experience a transition in which they become more included into their family’s and
community’s endeavors. This changes their position and role in their families to more

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responsible ones and leads to an increase in their eagerness to participate and belong. As children
go through this transition, they often develop a sense of identity within their family and
community. The transition from childhood to adolescence can be seen in the amount of work
children partake in as this changes over time. For example, Yucatec Mayan children's play time
decreases from childhood to adolescence and as the child gets older, is replaced for time spent
working. In childhood the work is initiated by others whereas in adolescence it is self initiated.
The shift in initiation and the change in time spent working versus playing shows the children’s
motivation to participate in order to learn. This transition between childhood and adolescence
increases motivation because children gain social responsibility within their families. In some
Mexican communities of Indigenous-heritage, the contributions that children make within their
community is essential to being social beings, establishes their developing roles, and also helps
with developing their relationship with their family and community.

As children gain more roles and responsibilities within their families, their eagerness to
participate also increases. For example, Young Mayan children of San Pedro, Guatemala learn to
work in the fields and family run businesses because they are motivated to contribute to their
family. Many San Pedro women learned to weave by watching their mothers sew when they
were children, sometimes earning their own wool through doing small tasks such as watching
young children of busy mothers. Eager to learn and contribute, these young girls helped other
members of their community in order to help their mothers with their weaving businesses or
through other tasks such as helping carry water while young boys helped with tasks such as
carrying firewood alongside their fathers. Children’s motivation to learn is not solely influenced
on their desire to belong but also their eagerness to see their community succeed. Children from
Navajo communities were shown to have higher levels of social concern than Anglo American
children in their schools. By having high levels of social concern the indigenous children are
showing concern for not only their learning but also their peers’, which serves as an example of
their instilled sense of responsibility for their community. They wish to succeed as a united
group rather than just themselves. In order to be knowledgeable contributors, children must be
aware of their surroundings and community’s goals. Children’s learning in Indigenous-heritage
communities is mainly based upon observing and helping out others in their community.
Through this type of participation within their community, they gain purpose and motivation for
the activity that they are doing within their community and become active participants because
they know they are doing it for their community.

Self-determination is the ability to make choices and exercise a high degree of control, such as
what the student does and how they do it (Deci et al., 1991; Reeve, Hamm, & Nix, 2003; Ryan &
Deci, 2002). Self-determination can be supported by providing opportunities for students to be
challenged, such as leadership opportunities, providing appropriate feedback and fostering,
establishing and maintaining good relationships between teachers and students. These strategies
can increase students' interest, competence, creativity and desire to be challenged and ensure that
students are intrinsically motivated to study. On the other hand, students who lack self-
determination are more likely to feel their success is out of their control. Such students lose
motivation to study, which causes a state of "helpless learning". Students who feel helpless
readily believe they will fail and therefore cease to try. Over time, a vicious circle of low
achievement develops.

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Physical activity is body movement that works your muscles and requires more energy than
resting. According to a blog by the American Intercontinental University, college students should
make time for exercise to maintain and increase motivation. AIU states that regular exercise has
impeccable effects on the brain. With consistent running routines, there are more complex
connections between neurons, meaning the brain is able to access its brain cells more flexibly.
By performing well physically, motivation will be present in education because of how well the
brain is performing. After exercising, the brain can have more desire to obtain knowledge and
better retain the information. In addition, exercise can relieve stress. Exercising can ease anxiety
and relieve negative effects of stress on the body. Without stress factors, individuals can perform
better and more efficiently, since their minds will have a more positive outlook. This positive
mood will help keep students motivated and more open and willing to succeed academically.
Lastly, exercise increases focus and concentration that could also help students maintain their
motivation and focus on their studies. AIU claims that exercise may have improved the students’
ability to participate and retain information during the class after they had exercised. Being able
to retain information and being willing to participate keeps students motivated and performing
well academically. At lower levels of Maslow's hierarchy of needs, such as physiological needs,
money is a motivator, however it tends to have a motivating effect on staff that lasts only for a
short period (in accordance with Herzberg's two-factor model of motivation). At higher levels of
the hierarchy, praise, respect, recognition, empowerment and a sense of belonging are far more
powerful motivators than money, as both Abraham Maslow's theory of motivation and Douglas
McGregor's theory X and theory Y (pertaining to the theory of leadership) demonstrate.

According to Maslow, people are motivated by unsatisfied needs. The lower level needs such
as Physiological and Safety needs will have to be satisfied before higher level needs are to be
addressed. We can relate Maslow's Hierarchy of Needs theory with employee motivation. For
example, if a manager is trying to motivate his employees by satisfying their needs; according to
Maslow, he should try to satisfy the lower level needs before he tries to satisfy the upper level
needs or the employees will not be motivated. Also he has to remember that not everyone will be
satisfied by the same needs. A good manager will try to figure out which levels of needs are
active for a certain individual or employee.

Maslow has money at the lowest level of the hierarchy and shows other needs are better
motivators to staff. McGregor places money in his Theory X category and feels it is a poor
motivator. Praise and recognition are placed in the Theory Y category and are considered
stronger motivators than money.

• Motivated employees always look for better ways to do a job.

• Motivated employees are more quality oriented.
• Motivated workers are more productive.

The average workplace is about midway between the extremes of high threat and high
opportunity. Motivation by threat is a dead-end strategy, and naturally staff are more attracted to
the opportunity side of the motivation curve than the threat side. Motivation is a powerful tool in
the work environment that can lead to employees working at their most efficient levels of
production. Nonetheless, Steinmetz also discusses three common character types of subordinates:
ascendant, indifferent, and ambivalent who all react and interact uniquely, and must be treated,

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managed, and motivated accordingly. An effective leader must understand how to manage all
characters, and more importantly the manager must utilize avenues that allow room for
employees to work, grow, and find answers independently. The assumptions of Maslow and
Herzberg were challenged by a classic study at Vauxhall Motors' UK manufacturing plant. This
introduced the concept of orientation to work and distinguished three main orientations:
instrumental (where work is a means to an end), bureaucratic (where work is a source of status,
security and immediate reward) and solidaristic (which prioritizes group loyalty).

Other theories which expanded and extended those of Maslow and Herzberg included Kurt
Lewin's Force Field Theory, Edwin Locke's Goal Theory and Victor Vroom's Expectancy theory.
These tend to stress cultural differences and the fact that individuals tend to be motivated by
different factors at different times. According to the system of scientific management developed
by Frederick Winslow Taylor, a worker's motivation is solely determined by pay, and therefore
management need not consider psychological or social aspects of work. In essence, scientific
management bases human motivation wholly on extrinsic rewards and discards the idea of
intrinsic rewards. In contrast, David McClelland believed that workers could not be motivated by
the mere need for money—in fact, extrinsic motivation (e.g., money) could extinguish intrinsic
motivation such as achievement motivation, though money could be used as an indicator of
success for various motives, e.g., keeping score. In keeping with this view, his consulting firm,
McBer & Company, had as its first motto "To make everyone productive, happy, and free." For
McClelland, satisfaction lay in aligning a person's life with their fundamental motivations.

Elton Mayo found that the social contacts a worker has at the workplace are very important and
that boredom and repetitiveness of tasks lead to reduced motivation. Mayo believed that workers
could be motivated by acknowledging their social needs and making them feel important. As a
result, employees were given freedom to make decisions on the job and greater attention was
paid to informal work groups. Mayo named the model the Hawthorne effect. His model has been
judged as placing undue reliance on social contacts within work situations for motivating
employees. William Ouchi introduced Theory Z, a hybrid management approach consisting of
both Japanese and American philosophies and cultures.[107] Its Japanese segment is much like the
clan culture where organizations focus on a standardized structure with heavy emphasis on
socialization of its members. All underlying goals are consistent across the organization. Its
American segment retains formality and authority amongst members and the organization.
Ultimately, Theory Z promotes common structure and commitment to the organization, as well
as constant improvement of work efficacy.

In Essentials of Organizational Behavior, Robbins and Judge examine recognition programs as

motivators, and identify five principles that contribute to the success of an employee incentive
program:[108]

➢ Recognition of employees' individual differences, and clear identification of behavior

deemed worthy of recognition
➢ Allowing employees to participate
➢ Linking rewards to performance
➢ Rewarding of nominators
➢ Visibility of the recognition process

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Motivational models are central to game design, because without motivation, a player will not be
interested in progressing further within a game.[109] Several models for gameplay motivations
have been proposed, including Richard Bartle's. Jon Radoff has proposed a four-quadrant model
of gameplay motivation that includes cooperation, competition, immersion and achievement.[110]
The motivational structure of games is central to the gamification trend, which seeks to apply
game-based motivation to business applications.[111] In the end, game designers must know the
needs and desires of their customers for their companies to flourish.

There have been various studies on the connection between motivation and games. One
particular study was on Taiwanese adolescents and their drive of addiction to games. Two
studies by the same people were conducted. The first study revealed that addicted players
showed higher intrinsic than extrinsic motivation and more intrinsic motivation than the non-
addicted players.[112] It can then be said that addicted players, according to the studies findings,
are more internally motivated to play games. They enjoy the reward of playing. There are studies
that also show that motivation gives these players more to look for in the future such as long-
lasting experience that they may keep later on in life.[113]

CHAPTER -11

CAREER MANAGEMENT

Career management

Career management is the combination of structured planning and the active management
choice of one's own professional career. The outcome of successful career management should
include personal fulfillment, work/life balance, goal achievement and financial security. A
career includes all types of employment ranging from semi-skilled through skilled, and semi
professional to professional. Careers have often been restricted to an employment commitment to
a single trade skill, profession or business firm for the entire working life of a person. In recent

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years, however, a career now includes changes or modifications in employment during the
foreseeable future.

The following classification system with minor variations is widely used:

1. Development of overall goals and objectives,

2. Development of a strategy (a general means to accomplish the selected goals/objectives),
3. Development of the specific means (policies, rules, procedures and activities) to
implement the strategy, and
4. Systematic evaluation of the progress toward the achievement of the selected
goals/objectives to modify the strategy, if necessary.

Goals or objectives development

The career management process begins with setting goals/objectives. A relatively specific
goal/objective must be formulated. This task may be quite difficult when the individual lacks
knowledge of career opportunities and/or is not fully aware of their talents and abilities.
However, the entire career management process is based on the establishment of defined
goals/objectives whether specific or general in nature. Utilizing career assessments may be a
critical step in identifying opportunities and career paths that most resonate with someone.
Career assessments can range from quick and informal to more indepth. Regardless of the ones
you use, you will need to evaluate them. Most assessments found today for free (although good)
do not offer an in-depth evaluation. The time horizon for the achievement of the selected goals or
objectives - short term, medium term or long term - will have a major influence on their
formulation.

➢ Short-term goals (one or two years) are usually specific and limited in scope. Short-
term goals are easier to formulate. Make sure they are achievable and relate to your
longer term career goals.
➢ Intermediate goals (3 to 20 years) tend to be less specific and more open ended than
short-term goals. Both intermediate and long-term goals are more difficult to formulate
than short-term goals because there are so many unknowns about the future.
➢ Long-term goals (Over 20 years), of course, are the most fluid of all. Lack of life
experience and knowledge about potential opportunities and pitfalls make the formulation
of long-term goals/objectives very difficult. Long-range goals/objectives, however, may
be easily modified as additional information is received without a great loss of career
efforts because of experience/knowledge transfer from one career to another.
➢ Making career choices and decisions – the traditional focus of careers interventions.
The changed nature of work means that individuals may now have to revisit this process
more frequently now and in the future, more than in the past.
➢ Managing the organizational career – concerns the career management tasks of
individuals within the workplace, such as decision-making, life-stage transitions, dealing
with stress etc.

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 ➢ Managing 'boundary less' careers – refers to skills needed by workers whose
employment is beyond the boundaries of a single organization, a workstyle common
among, for example, artists and designers.
➢ Taking control of one's personal development – as employers take less responsibility,
employees need to take control of their own development in order to maintain and
enhance their employability.

Career planning is a subset of career management. Career planning applies the concepts of
Strategic planning and Marketing to taking charge of one's professional future. Career is an
ongoing process and so it needs to be assessed on continuous basis. This process of re-assessing
individual learning and development over a period of time is called Career Planning.

Importance of career planning

It is important to come up with your career planning as it gives you the much needed direction
and makes it clear there where you see yourself in future. It makes you aware of your strength
and weaknesses and the skills and knowledge that are required to achieve your goals in future. A
large proportion of our life is spent in achieving our career goals, thus it is very important to
make sure that right steps were taken and correct planning was done in the early years of your
life. There are very few lucky ones who are born with a clear mind and who knows what they
want to do and where they see themselves in life ahead. But majority of us are not sure what we
want from life and so it in very important to plan out things. Thus career planning is what gives
your career and in some way your life, true meaning and purpose.

Process of career planning

The process of career planning is also known as career development stages and career
development model. These steps help you in planning your career and deciding about your
future.

Self-assessment

Self-assessment is a process that helps you in assessing your skills, your potential, your strengths
and your ability to fulfill your aims. As the name of the step suggest, you assess yourself and
then, based on your analyses and keeping your strengths and weaknesses in mind, you draft your
future plan. By drafting your future plan we mean that executing this step helps you to finalize
the profession and career path you want to choose. Make sure that you choose and finalize more
than one career, keep one or two careers in case you decide to roll back. In case the career you
chose does not satisfies you or later in time you come to know that this was not meant for you
then in that case you must have a backup plan.

➢ Self-development

Once you have self-analyzed yourself, the second step that awaits your attention is to fill the
loopholes you have identified in the above step. By this we mean that in this step you have to see
that what are the qualities and skills that are required by you to help you achieve your aims and

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goals. For instance you might decide that you need training or a particular course in a field in
order to make you perfect for the profession you have chosen. It could be that you are interested
in painting but you are not much aware of the trends or the knowledge that is required for this
field. Or there can be a case where you are interested and much aware about a profession like
teaching but you do not yet know that what is the niche level that is meant for you like and the
subjects you can carry off pretty well.

➢ A thorough research self-development

Once you have listed the careers that are favorable in your case and the skills and improvements
that are required by you in order to achieve excellence the third step requires you to do an
intensive research and see that what that are findings related to career options and the skills that
are required to make you champion in that. You research will be looking into following
questions:

➢ What is the scope of the career you have chosen?

➢ Will that career pay you off in the future?
➢ Is there room for expansion in that career field?
➢ Come up with action form

Once you have researched the feasibility of the factors that you have finalized in above steps, the
next step is to show some action and translate your plans on a piece of page. This step requires
you to make plan as in how you are going to achieve and fulfill the steps you have decided
above. The best way to come with an action plan is to come up with small goals for oneself.
Once these small goals are achieved, we can see that how much close we are to our main aim and
major goal. This small step acts as a path way to the main aim.

• Action

Once you are done with small goals and the main aim, the next step remains to start
implementing your plans. Keep a very close track of your activities to make sure that you are on
the right track and that by following this path you are surely going to achieve you goal!

Mentorship

Mentorship is a relationship in which a more experienced or more knowledgeable person helps

to guide a less experienced or less knowledgeable person. The mentor may be older or younger
than the person being mentored, but he must have a certain area of expertise. It is a learning and
development partnership between someone with vast experience and someone who wants to
learn.[1] Mentorship experience and relationship structure affect the "amount of psychosocial
support, career guidance, role modeling, and communication that occurs in the mentoring
relationships in which the protégés and mentors engaged." The person in receipt of mentorship
may be referred to as a protégé (male), a protégée (female), an apprentice or, in the 2000s, a
mentee."Mentoring" is a process that always involves communication and is relationship-based,
but its precise definition is elusive,[3] with more than 50 definitions currently in use.[4] One
definition of the many that have been proposed, is. Mentoring is a process for the informal

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transmission of knowledge, social capital, and the psychosocial support perceived by the
recipient as relevant to work, career, or professional development; mentoring entails informal
communication, usually face-to-face and during a sustained period of time, between a person
who is perceived to have greater relevant knowledge, wisdom, or experience (the mentor) and a
person who is perceived to have less (the protégé)". Mentoring in Europe has existed since at
least Ancient Greek times. Since the 1970s it has spread in the United States mainly in training
contexts,[6] with important historical links to the movement advancing workplace equity for
women and minorities,[7] and it has been described as "an innovation in American management".

The roots of the practice are lost in antiquity. The word itself was inspired by the character of
Mentor in Homer's Odyssey. Though the actual Mentor in the story is a somewhat ineffective old
man, the goddess Athena takes on his appearance in order to guide young Telemachus in his time
of difficulty.Historically significant systems of mentorship include the guru–disciple tradition
practiced in Hinduism and Buddhism, Elders, the discipleship system practiced by Rabbinical
Judaism and the Christian church, and apprenticing under the medieval guild system.In the
United States, advocates for workplace equity in the second half of the twentieth century
popularized the term “mentor” and concept of career mentorship as part of a larger social capital
lexicon—which also includes terms such as glass ceiling, bamboo ceiling,[10] networking, role
model, and gatekeeper—serving to identify and address the problems barring non-dominant
groups from professional success. Mainstream business literature subsequently adopted the terms
and concepts, promoting them as pathways to success for all career climbers. In 1970 these terms
were not in the general American vocabulary; by the mid-1990s they had become part of
everyday speech.

Mentoring techniques

The focus of mentoring is to develop the whole person and so the techniques are broad and
require wisdom in order to be used appropriately. A 1995 study of mentoring techniques most
commonly used in business[12] found that the five most commonly used techniques among
mentors were:

1. Accompanying: making a commitment in a caring way, which involves taking part in the
learning process side-by-side with the learner.
2. Sowing: mentors are often confronted with the difficulty of preparing the learner before
he or she is ready to change. Sowing is necessary when you know that what you say may
not be understood or even acceptable to learners at first but will make sense and have
value to the mentee when the situation requires it.
3. Catalyzing: when change reaches a critical level of pressure, learning can escalate. Here
the mentor chooses to plunge the learner right into change, provoking a different way of
thinking, a change in identity or a re-ordering of values.
4. Showing: this is making something understandable, or using your own example to
demonstrate a skill or activity. You show what you are talking about, you show by your
own behavior.
5. Harvesting: here the mentor focuses on "picking the ripe fruit": it is usually used to
create awareness of what was learned by experience and to draw conclusions. The key
questions here are: "What have you learned?", "How useful is it?".

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Different techniques may be used by mentors according to the situation and the mindset of the
mentee, and the techniques used in modern organizations can be found in ancient education
systems, from the Socratic technique of harvesting to the accompaniment method of learning
used in the apprenticeship of itinerant cathedral builders during the Middle Ages.[12] Leadership
authors Jim Kouzes and Barry Z. Posner[13] advise mentors to look for "teachable moments" in
order to "expand or realize the potentialities of the people in the organizations they lead" and
underline that personal credibility is as essential to quality mentoring as skill.Multiple mentors:
A new and upcoming trend is having multiple mentors.[14] This can be helpful because we can all
learn from each other. Having more than one mentor will widen the knowledge of the person
being mentored. There are different mentors who may have different strengths.Profession or
trade mentor: This is someone who is currently in the trade/profession you are entering. They
know the trends, important changes and new practices that you should know to stay at the top of
your career. A mentor like this would be someone you can discuss ideas regarding the field, and
also be introduced to key and important people that you should know.Industry mentor: This is
someone who doesn't just focus on the profession. This mentor will be able to give insight on the
industry as a whole. Whether it be research, development or key changes in the industry, you
need to know.Organization mentor: Politics in the organizations are constantly changing. It is
important to be knowledgeable about the values, strategies and products that are within your
company, but also when these things are changing. An organization mentor can clarify missions
and strategies, and give clarity when needed.Work process mentor: This mentor can speed
quickly over the bumps, and cut through the unnecessary work. This mentor can explain the 'ins
and outs' of projects, day to day tasks, and eliminate unnecessary things that may be currently
going on in your work day. This mentor can help to get things done quickly and
efficiently.Technology mentor: This is an up-and-coming, incredibly important position.
Technology has been rapidly improving, and becoming more a part of day to day transactions
within companies. In order to perform your best, you must know how to get things done on the
newest technology. A technology mentor will help with technical breakdowns, advise on systems
that may work better than what you're currently using, and coach you through new technology
and how to best use it and implement it into your daily life.These mentors are only examples.
There can be many more different types of mentors. Look around your workplace, your life, and
see who is an expert that you can learn something from.[1]

There are two broad types of mentoring relationships: formal and informal. Formal mentoring
relationships are set up by an administrative unit or office in a company or organization, which
solicits and recruits qualified individuals who are willing to mentor, provides training to the
mentors, and then helps to match the mentors up with a person in need of mentoring. While
formal mentoring systems contain numerous structural and guidance elements, they still typically
allow the mentor and mentee to have an active role in choosing who they want to work with.
Formal mentoring programs which simply assign mentors to mentees without giving these
individuals a say have not performed well. Even though a mentor and a mentee may seem
perfectly matched "on paper", in practice, they may have different working or learning styles. As
such, giving the mentor and the mentee the opportunity to help select who they want to work
with is a widely-used approach. Informal mentoring occurs without the use of structured
recruitment, mentor training and matching services. Informal mentoring arrangements can
develop naturally from business networking situations in which a more experienced individual
meets a new employee, and the two strike up a rapport.In addition to these broad types, there are

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also peer, situational and supervisory mentoring relationships. These tend to fall under the
categories of formal and informal mentoring relationships. Informal relationships develop on
their own between partners. Formal mentoring, on the other hand, refers to a structured process
supported by the organization and addressed to target populations. Youth mentoring programs
assist at-risk children or youth who lack role models and sponsors. In business, formal mentoring
is part of talent management strategies which are used to groom key employees, newly hired
graduates, high potential-employees and future leaders. The matching of mentor and mentee is
often done by a mentoring coordinator, often with the help of a computerized database registry.
The use of the database helps to match up mentees with mentors who have the type of experience
and qualifications they are seeking.There are formal mentoring programs that are values-
oriented, while social mentoring and other types focus specifically on career development. Some
mentorship programs provide both social and vocational support. In well-designed formal
mentoring programs, there are program goals, schedules, training (for both mentors and
protégés), and evaluation. In 2004 Metizo created the first mentoring certification for companies
and business schools in order to guarantee the integrity and effectiveness of formal mentoring.
Certification is attributed jointly by the organization and an external expert. There are many
kinds of mentoring relationships from school or community-based relationships to e-mentoring
relationships. These mentoring relationships vary and can be influenced by the type of mentoring
relationship that is in effect. That is whether it has come about as a formal or informal
relationship. Also there are several models have been used to describe and examine the sub-
relationships that can emerge. For example, Buell describes how mentoring relationships can
develop under a cloning model, nurturing model, friendship model and apprenticeship model.
The cloning model is about the mentor trying to "produce a duplicate copy of him or her self."
The nurturing model takes more of a "parent figure, creating a safe, open environment in which
mentee can both learn and try things for him-or herself." The friendship model are more peers
"rather than being involved in a hierarchical relationship." Lastly, the apprenticeship is about less
"personal or social aspects... and the professional relationship is the sole focus".In the sub-groups
of formal and informal mentoring relationships: peer mentoring relationships are relationships
where individuals are at the same skill training, similar positions and stages of career. However,
one person may be more knowledgeable in a certain aspect or another, but they can help each
other to progress in their work. A lot of time, peer relationships provide a lot of support, empathy
and advice because the situations are quite similar.

Situational mentoring: Short-term relationships in which a person mentors for a specific

purpose. This could be a company bringing an expert in regarding social media, or internet
safety. This expert can mentor employees to make them more knowledgeable about a specific
topic or skill.

Supervisory mentoring: This kind of mentoring has'go to' people who are supervisors. These
are people who have answers to many questions, and can advise to take the best plan of action.
This can be a conflict of interest relationship because many supervisors do not feel comfortable
also being a mentor.[17]

Mentoring circles: Participants from all levels of the organization propose and own a topic.
They then meet in groups to discuss the topic, which motivates them to grow and become more
knowledgeable. Flash mentoring is ideal for job shadowing, reverse mentoring, and more.

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Flash mentoring: Creates a low-pressure environment for mentoring that focuses on single
meetings rather than a traditional, long-term mentoring relationship.[18]

Meta-analysis of 112 individual research studies found mentoring has significant behavioral,
attitudinal, health-related, relational, motivational, and career benefits.[19] Especially in the
workplace, there are many benefits to developing a mentorship program for new and current
employees.

Career development: Setting up a career development mentoring program for employees

enables an organization to help junior employees to learn the skills and behaviours from senior
employees that the junior employees need to advance to higher-responsibility positions. This
type of mentoring program can help to align organizational goals with employees' personal
career goals (of progressing within the organization). It gives employees the ability to advance
professionally and learn more about their work. This collaboration also gives employees a
feeling of engagement with the organization, which can lead to better retention rates and
increased employee satisfaction.

High potential mentoring: The most talented employees in organizations tend to be difficult to
retain, as they are usually seeking greater challenges and responsibilities, and they are likely to
leave for a different organization if they do not feel that they are being given the opportunity to
develop. Top talent, whether in an innovation or management role, have incredible potential to
make great things happen for an organization. Creating a mentoring program for high-potential
employees that gives them one-on-one guidance from senior leaders can help to build the
engagement of these talented employees, give them the opportunity to develop, and increase
their retention in the organization.

Diversity mentoring: One of the top ways to innovate is by bringing in new ideas from senior
employees and leaders from underrepresented groups (e.g., women, ethnic minorities, etc.). Who
is an underrepresented group depends on the industry sector and country. In many Western
countries, women and ethnic minorities are significantly underrepresented in executive positions
and boards of directors. In some traditionally gender segregated occupations, such as education
and nursing, however, women may be the dominant gender in the workforce. Mentors from
underrepresented groups can empower employees from underrepresented groups to increase their
confidence to take on higher-responsibility tasks and prepare for leadership roles. By developing
employees from diverse groups, this can give the organization access to new ideas, new ways of
looking at problems, and new perspectives. This also brings cultural awareness and intercultural
dialogue into the workplace.

Reverse mentoring: While mentoring typically involves a more experienced, typically older
employee or leader providing guidance to a younger employee, the opposite approach can also
be used. In the 2000s, with the rise of digital innovations, Internet applications and social media,
in some cases, new, young employees are more familiar with these technologies than senior
employees in the organizations. The younger generations can help the older generations to
expand and grow towards current trends. Everyone has something to bring to the table, this
creates a "two way street" within companies where younger employees can see the larger picture,
and senior employees can learn from young employees.

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Knowledge transfer mentoring: Employees must have a certain set of skills in order to
accomplish the tasks at hand. Mentoring is a great approach to help employees get organized,
and give them access to an expert that can give feedback, and help answer questions that they
may not know where to find answers to. Mentorship provides critical benefits to individuals as
well as organizations. Although the importance of mentorship to an individual’s career
advancement is virtually universal, in the United States it historically has been most apparent in
relation to the advancement of women and minorities in the workplace—because, until recent
decades, American men in dominant ethnic groups had reaped the benefits of mentorship without
consciously identifying it as an advancement strategy in the modern sense. American women and
minorities, in contrast, more pointedly identified and pursued mentorship in the second half of
the twentieth century as they sought to achieve the professional success they had long been
denied. In a 1958 study, Margaret Cussler showed that, for each female executive she
interviewed who did not own her own company, “something—or someone—gave her a push up
the ladder while others halted on a lower rung.” Cussler concluded that the relationship between
the “sponsor and protégé” (the vocabulary of “mentorship” was not yet in common use) was the
“magic formula” for success.[21] By the late 1970s, numerous publications had established the
centrality of mentorship to business success for everyone and particularly for women trying to
break into the male-dominated business world. These publications noted the many specific
benefits provided by mentorship, which included insider information, education, guidance, moral
support, inspiration, sponsorship, an example to follow, protection, promotion, the ability to
“bypass the hierarchy,” the projection of the superior’s “reflected power,” access to otherwise
invisible opportunities, and tutelage in corporate politics. This literature also showed the value of
these benefits. A Harvard Business Review survey of 1,250 top executives published in 1979, for
example, showed that most had been mentored or sponsored and that those who received such
assistance reported higher income, a better education, a quicker path to achievement, and more
job satisfaction than those who did not.[22] The literature particularly emphasized the necessity of
mentoring for businesswomen’s success.[7] For example, although women made up less than one
percent of the executives in the Harvard Business Review survey, all of these women reported
being mentored.[22] In subsequent decades, as mentoring became a widely valued phenomenon in
the United States, women and minorities in particular continued to develop mentoring
relationships consciously as they sought professional advancement.

Contemporary research and practice in the US

Research in the 1970s, partly in response to a study by Daniel Levinson,[23] led some women and
African Americans to question whether the classic "white male" model was available or
customary for people who are newcomers in traditionally white male organizations. In 1978
Edgar Schein described multiple roles for successful mentors. Two of Schein's students, Davis
and Garrison, undertook to study successful leaders of both genders and at least two races. Their
research presented evidence for the roles of: cheerleader, coach, confidant, counsellor, developer
of talent, "griot" (oral historian for the organization or profession), guardian, guru, inspiration,
master, "opener of doors", patron, role model, pioneer, "seminal source", "successful leader", and
teacher.[25] They described multiple mentoring practices which have since been given the name
of "mosaic mentoring" to distinguish this kind of mentoring from the single mentor
approach.Mosaic mentoring is based on the concept that almost everyone can perform one or
another function well for someone else — and also can learn along one of these lines from

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someone else. The model is seen as useful for people who are "non-traditional" in a traditional
setting, such as people of color and women in a traditionally white male organization. The idea
has been well received in medical education literature. There are also mosaic mentoring
programs in various faith-based organizations.

Corporate mentorship programs

Corporate mentoring programs are used by mid to large organizations to further the development
and retention of employees. Mentoring programs may be formal or informal and serve a variety
of specific objectives including acclimation of new employees, skills development, employee
retention and diversity enhancement.Formal mentoring programs offer employees the
opportunity to participate in an organized mentoring program. Participants join as a mentor,
protégé or both by completing a mentoring profile. Mentoring profiles are completed as written
forms on paper or computer or filled out via an online form as part of an online mentoring
system. Protégés are matched with a mentor by a program administrator or a mentoring
committee, or may self-select a mentor depending on the program format.Informal mentoring
takes places in organizations that develop a culture of mentoring but do not have formal
mentoring in place. These companies may provide some tools and resources and encourage
managers to accept mentoring requests from more junior members of the organization. A study
of 1,162 employees found that "satisfaction with a mentoring relationship had a stronger impact
on attitudes than the presence of a mentor, whether the relationship was formal or informal, or
the design of a formal mentoring program." So even when a mentoring relationship is
established, the actual relationship is more important than the presence of a relationship.

New-hire mentoring programs are set up to help new employees acclimate more quickly into the
organization. In new-hire mentoring programs, newcomers to the organization (protégés) are
paired with more experienced people (mentors) in order to obtain information, good examples,
and advice as they advance. It has been claimed that new employees who are paired with a
mentor are twice as likely to remain in their job than those who do not receive mentorship. These
mentoring relationships provide substance for career growth, and benefit both the mentor and the
protégé. For example, the mentor gets to show leadership by giving back and perhaps being
refreshed about their own work. The organization receives an employee that is being gradually
introduced and shaped by the organization's culture and operation because they have been under
the mentorship of an experienced member. The person being mentored networks, becomes
integrated easier in an organization, gets experience and advice along the way.[30] It has been said
that "joining a mentor's network and developing one's own is central to advancement" and this is
possibly why those mentored tend to do well in their organizations. In the organizational setting,
mentoring usually "requires unequal knowledge",[5] but the process of mentorship can differ.
Bullis describes the mentoring process in the forms of phase models. Initially, the "mentee
proves himself or herself worthy of the mentor's time and energy". Then cultivation occurs which
includes the actual "coaching...a strong interpersonal bond between mentor and mentee
develops". Next, under the phase of separation "the mentee experiences more autonomy".
Ultimately, there is more of equality in the relationship, termed by Bullis as Redefinition.

High-potential mentoring programs are used to groom up-and-coming employees deemed to

have the potential to move up into leadership roles. Here the employee (protégé) is paired with a

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senior level leader (or leaders) for a series of career-coaching interactions. These programs tend
to be smaller than more general mentoring programs and mentees must be selected to
participate.A similar method of high-potential mentoring is to place the employee in a series of
jobs in disparate areas of an organization, all for small periods of time, in anticipation of learning
the organization's structure, culture, and methods. A mentor does not have to be a manager or
supervisor to facilitate the process.

Matching mentors and mentees

Mentees are matched with mentors by a designated mentoring committee or mentoring

administrator usually consisting of senior members of the Training, Learning and Development
and Human Resources departments. The matching committee reviews the mentoring profiles and
makes matches based on areas for development, mentor strengths, overall experience, skill set,
location and objectives for the mentorship.

Matching through Self-Match Technology

Mentoring technology can be used to facilitate matches allowing mentees to search and select a
mentor based on their own development needs and interests. This mentee-driven methodology
increases the speed in which matches are created and reduces the amount of administrative time
required to manage the program.[32] The quality of matches increases as well with self-match
programs because the greater the involvement of the mentee in the selection of their mentor, the
better the outcome of the mentorship.[33] There are a variety of online mentoring technology
programs available that can be utilized to facilitate this mentee-driven matching process.

Speed Mentoring

Speed mentoring closely follows the procedures of speed dating. Mentors and mentees are
introduced to each other in short sessions, allowing each person to meet multiple potential
matches in a very short timeframe. Speed mentoring occur as a one-time event in order for
people "to meet potential mentors to see if there is a fit for a longer term engagement."[34]

Mentorship in education

In many secondary and post-secondary schools, mentorship programs are offered to support
students in program completion, confidence building and transitioning to further education or the
workforce. There are also peer mentoring programs designed specifically to bring under-
represented populations into science and engineering. The Internet has brought university alumni
closer to graduating students. Graduate university alumni are engaging with current students in
career mentorship through interview questions and answers. The students with the best answers
receive professional recommendations from industry experts build a more credible CV.

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Blended mentoring

The blended mentoring is a mix of on-site and online events, projected to give to career
counselling and development services the opportunity to adopt mentoring in their ordinary
practice.

Reverse mentoring

In the reverse mentoring situation, the mentee has less overall experience (typically as a result of
age) than the mentor (who is typically older), but the mentee has more knowledge in a particular
area, and as such, reverses the typical constellation. Examples are when young internet or mobile
savvy Millennial Generation teens train executives in using their high end Smart Phones. They in
turn sometimes offer insight in business processes.

Business mentoring

The concept of mentoring has entered the business domain as well. This is different from being
an apprentice, a business mentor provides guidance to a business owner or an entrepreneur on the
entrepreneur's business.. An apprentice learns a trade by working on the job with the "employer".

A 2012 literature review by EPS-PEAKS investigated the practice of business mentoring, with a
focus on the Middle-East and North Africa region.[35] The review found strong evidence to
suggest that business mentoring can have real benefits for entrepreneurs, but highlights some key
factors that need to be taken into account when designing mentoring programmes for this to be
the case, such as the need to balance a formal and informal approach and to appropriately match

Mentors matter.

They probably matter more than most other influences in your professional life. Everyone needs
career help, regardless of age or experience. Having a mentor (or a few) and learning how to
mentor someone else are crucial parts of becoming a well-rounded professional.

Countless times, mentors have helped make a significant different in my career, and I know I’m
not alone in saying that.

But it wasn’t until I became a mentor that I understood its value for someone else. It’s
“networking” taken a step further. It’s two people investing in their mutual success.

Sydney Owen and Aaron Strout led a great discussion at SXSW called Road Rules for
Mentorship (What’s Appropriate and What’s Not). They’ve been in a mentoring relationship for
several years.

In some ways, they’re an ideal example of what successful mentorship looks like. Throughout
the discussion, several key things stuck out as crucial to the success of this type of relationship.

Think about the following points and suggestions as you work on developing your own

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mentor/protégé relationship.

Establish the nature of the relationship

Discuss whether you should make the mentoring relationship “official,” so the mentor knows
you’ll be looking to him or her for guidance and the protégé understands it’s appropriate to seek
advice on a continued basis. Understand this means there will be a link between the two people
professionally, and be sure both sides are on board.

Discuss what both sides need/want out of the relationship

Both people should have a clear understanding of each person’s expectations. That way, they’ll
able to honor the arrangement. Be honest about how much time and energy each is ready to
invest in the relationship, and how each expects to learn from the other.

Create some kind of schedule

Decide how often it makes sense to meet or chat and the type of time commitment. Agree on
what type of communication makes the most sense for your mentoring goals, and then stick to it.

Make it easy for your mentor to help you

Protégés should be prepared with a specific request, topic of discussion, or question when
seeking advice. Everyone is busy, so focusing on a single purpose or outcome helps the mentor
focus on giving the best guidance possible with each interaction. Be prepared with background
information, and clearly explain what sort of help you’re seeking.

Bring something to the table

Protégés probably get more value out of this type of relationship, but something should be in it
for the mentor, too. Associating with each other’s personal or professional brands isn’t
something to take lightly. Be the kind of young professional that experienced pros can be proud
of, and show them you’re ready to grow and learn. People want to help people they think are
going places.

Knowledge works both ways

A great mentor will help you see around corners. They’ll draw from experience to help anticipate
things the protégé might not be aware of, including harmful situations. They’ll warn a protégé of
issues in enough time to correct behavior. But someone with less overall professional experience
can be just as helpful. Explaining or researching new technologies or offering a fresh perspective
can be equally valuable. Don’t be afraid to engage in some “reverse mentoring” from time to
time.

Adhere to the professional/friend dividing line

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This is particularly important when two people are professional colleagues, because sometimes
the tendency to share work frustrations could become a problem. As people get closer, they’ll
often become more comfortable confiding in each other, so use good judgment to know what
type of discussion is appropriate. If a friendship develops, or has already developed, it’s OK as
long as both parties are comfortable with the situation. If the relationship becomes solely a
friendship, be willing to recognize the change and adjust accordingly. This doesn’t mean you
can’t go have a beer and talk to your mentor, but just be aware of how the relationship may or
may not be changing.

Be willing to recognize when you’ve grown apart

This is always a tough issue when two people have a genuine interest in each other’s future.
Realize, though, that the relationship won’t always be a good fit. You need to be comfortable
with bringing up those feelings and understand when both sides aren’t getting the same value.
Change is normal. If you’re ready to “leave the nest,” be willing to say so. (Read the story of my
experience with this particular point with an important mentor, Ari Adler.)

Everyone wants to feel like they’ve got people in their corner, supporting their professional
growth.

Be that type of person for someone else. Have that type of person in your life.

It really does make a difference.

Mentoring is a relationship between two people – the "mentor" and the "mentee." As a mentor,
you pass on valuable skills, knowledge and insights to your mentee to help them develop their
career.

Performance appraisal

A performance appraisal (PA), also referred to as a performance review, performance

evaluation,[1] (career) development discussion,[2] or employee appraisal[3] is a method by
which the job performance of an employee is documented and evaluated. Performance appraisals
are a part of career development and consist of regular reviews of employee performance within
organizations.

A performance appraisal is a systematic and periodic process that assesses an individual

employee's job performance and productivity in relation to certain pre-established criteria and
organizational objectives.[4][5] Other aspects of individual employees are considered as well, such
as organizational citizenship behavior, accomplishments, potential for future improvement,
strengths and weaknesses, etc. To collect PA data, there are three main methods: objective
production, personnel, and judgmental evaluation. Judgmental evaluations are the most
commonly used with a large variety of evaluation methods.[1] Historically, PA has been
conducted annually (long-cycle appraisals); however, many companies are moving towards
shorter cycles (every six months, every quarter), and some have been moving into short-cycle

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(weekly, bi-weekly) PA.[8][9] The interview could function as "providing feedback to employees,
counseling and developing employees, and conveying and discussing compensation, job status,
or disciplinary decisions".[8] PA is often included in performance management systems. PA helps
the subordinate answer two key questions: first, "What are your expectations of me?" second,
"How am I doing to meet your expectations?" Performance management systems are employed
"to manage and align" all of an organization's resources in order to achieve highest possible
performance.[1] "How performance is managed in an organization determines to a large extent
the success or failure of the organization. Therefore, improving PA for everyone should be
among the highest priorities of contemporary organizations".Some applications of PA are
compensation, performance improvement, promotions, termination, test validation, and more.[12]
While there are many potential benefits of PA, there are also some potential drawbacks. For
example, PA can help facilitate management-employee communication; however, PA may result
in legal issues if not executed appropriately, as many employees tend to be unsatisfied with the
PA process.[1][13][14] PAs created in and determined as useful in the United States are not
necessarily able to be transferable cross-culturally.

Applications of results

A central reason for the utilization of performance appraisals (PAs) is performance improvement
("initially at the level of the individual employee, and ultimately at the level of the
organization").[12] Other fundamental reasons include "as a basis for employment decisions (e.g.
promotions, terminations, transfers), as criteria in research (e.g. test validation), to aid with
communication (e.g. allowing employees to know how they are doing and organizational
expectations), to establish personal objectives for training" programs, for transmission of
objective feedback for personal development, "as a means of documentation to aid in keeping
track of decisions and legal requirements"[12] and in wage and salary administration.[1]
Additionally, PAs can aid in the formulation of job criteria and selection of individuals "who are
best suited to perform the required organizational tasks".[4] A PA can be part of guiding and
monitoring employee career development.[16] PAs can also be used to aid in work motivation
through the use of reward systems.[4]

Potential benefits

There are a number of potential benefits of organizational performance management conducting

formal performance appraisals (PAs). There has been a general consensus in the belief that PAs
lead to positive implications of organizations.[17] Furthermore, PAs can benefit an organization’s
effectiveness.[16] One way is PAs can often lead to giving individual workers feedback about
their job performance.[13] From this may spawn several potential benefits such as the individual
workers becoming more productive.

Other potential benefits include:

• Facilitation of communication: communication in organizations is considered an essential

function of worker motivation.[13] It has been proposed that feedback from PAs aid in
minimizing employees’ perceptions of uncertainty.[16] Fundamentally, feedback and
management-employee communication can serve as a guide in job performance.[13]

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 • Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or
issues may distract employees from their work, and trust issues may be among these
distracting factors.[19] Such factors that consume psychological energy can lower job
performance and cause workers to lose sight of organizational goals.[13] Properly
constructed and utilized PAs have the ability to lower distracting factors and encourage
trust within the organization.[20]
• Goal setting and desired performance reinforcement: organizations find it efficient to
match individual worker’s goals and performance with organizational goals.[13] PAs
provide room for discussion in the collaboration of these individual and organizational
goals.[21] Collaboration can also be advantageous by resulting in employee acceptance
and satisfaction of appraisal results.[22]
• Performance improvement: well constructed PAs can be valuable tools for
communication with employees as pertaining to how their job performance stands with
organizational expectations.[16] "At the organizational level, numerous studies have
reported positive relationships between human resource management (HRM)
practices"[13] and performance improvement at both the individual and organizational
levels.
• Determination of training needs: “Employee training and development are crucial
components in helping an organization achieve strategic initiatives”.[13][23] It has been
argued that for PAs to truly be effective, post-appraisal opportunities for training and
development in problem areas, as determined by the appraisal, must be offered.[24] PAs
can especially be instrumental for identifying training needs of new employees.[7] Finally,
PAs can help in the establishment and supervision of employees’ career goals.[16]

Potential complications

Despite all the potential advantages of formal performance appraisals (PAs), there are also
potential drawbacks. It has been noted that determining the relationship between individual job
performance and organizational performance can be a difficult task.[23] Generally, there are two
overarching problems from which several complications spawn. One of the problems with
formal PAs is there can be detrimental effects to the organization(s) involved if the appraisals are
not used appropriately. The second problem with formal PAs is they can be ineffective if the PA
system does not correspond with the organizational culture and system.[13]

Complications stemming from these are:

• Detrimental to quality improvement: it has been proposed that the use of PA systems in
organizations adversely affect organizations’ pursuits of quality performance.[25] It is
believed by some scholars and practitioners that the use of PAs is more than unnecessary
if there is total quality management.[21]
• Subjective evaluations: Traditional performance appraisals are often based upon a
manager's or supervisor's perceptions of an employee's performance and employees are
evaluated subjectively rather than objectively. Therefore the review may be influenced by
many non-performance factors such as employee 'likeability', personal prejudices, ease of
management, and/or previous mistakes or successes. Reviews should instead be based on
data-supported, measurable behaviors and results within the performers control.[26]

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 • Negative perceptions: "Quite often, individuals have negative perceptions of PAs".[17]
Receiving and/or the anticipation of receiving a PA can be uncomfortable and
distressful[16] and potentially cause "tension between supervisors and subordinates".[18] If
the person being appraised does not trust their employer, appraiser or believe that they
will benefit from the process it may become a "tick box" exercise.[27]
• Errors: Performance appraisals should provide accurate and relevant ratings of an
employee’s performance as compared to pre-established criteria/goals (i.e. organizational
expectations).[28] Nevertheless, supervisors will sometimes rate employees more
favorably than that of their true performance in order to please the employees and avoid
conflict.[13] "Inflated ratings are a common malady associated with formal" PA.[29]
• Legal issues: when PAs are not carried out appropriately, legal issues could result that
place the organization at risk.[18] PAs are used in organizational disciplinary programs[16]
as well as for promotional decisions within the organization.[13] The improper application
and utilization of PAs can affect employees negatively and lead to legal action against the
organization.
• Performance goals: performance goals and PA systems are often used in association.
Negative outcomes concerning the organizations can result when goals are overly
challenging or overemphasized to the extent of affecting ethics, legal requirements, or
quality.[30] Moreover, challenging performance goals can impede an employees’ abilities
to acquire necessary knowledge and skills.[19] Especially in the early stages of training, it
would be more beneficial to instruct employees on outcome goals than on performance
goals.[13]
• Derail merit pay or performance-based pay: some researchers contend that the deficit in
merit pay and performance-based pay is linked to the fundamental issues stemming from
PA systems.[24]

Improvements

Although performance appraisals can be so easily biased, there are certain steps that can be taken
to improve the evaluations and reduce the margin of errors through the following:

• Training - Creating an awareness and acceptance in the people conducting the

appraisals that within a group of workers, they will find a wide range in difference
of skills and abilities.

• Providing Feedback to Raters - Trained raters provide managers who evaluated

their subordinates with feedback, including information on ratings from other
managers. This reduces leniency errors.

• Subordinate Participation - By allowing employee participation in the evaluation

process, there is employee-supervisor reciprocity in the discussion for any
discrepancies between self ratings and supervisor ratings, thus, increasing job
satisfaction and motivation.[31]

Opposition

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Not everyone is in favor of formal performance appraisal systems. Many employees, especially
those most affected by such ratings are not very enthusiastic about them. There are many critics
of these appraisals including labor unions and managers.

Labor Unions

Labor unions represent 11% (7% in the private sector) of the work force in the United States. In
some cases they may require that seniority be taken as one of the main criteria for promotion.
However, length of job experience may not always be a reliable indication of the ability to
perform a higher level job. That is why some employers give senior people the first opportunity
for promotion, but the employer may seek to further qualify the employee for that promotion
because of their abilities (not solely because of length of service). Performance appraisals may
provide a basis for assessment of employee merit as a component of these decisions.[32][33][34]

Managers

Managers who have had unsatisfactory experiences with inadequate or poorly designed appraisal
programs may be skeptical about their usefulness.

• Some managers may not like to play the role of a judge and be responsible for the future
of their subordinates.
• They may be uncomfortable about providing negative feedback to the employees.
• This tendency can lead them to inflate their assessments of the workers’ job performance,
giving higher ratings than deserved.

Conduct

Human resource management (HRM) conducts performance management. Performance

management systems consist of the activities and/or processes embraced by an organization in
anticipation of improving employee performance, and therefore, organizational performance.[35]
Consequently, performance management is conducted at the organizational level and the
individual level. At the organizational level, performance management oversees organizational
performance and compares present performance with organizational performance goals.[24] The
achievement of these organizational performance goals depends on the performance of the
individual organizational members.[24] Therefore, measuring individual employee performance
can prove to be a valuable performance management process for the purposes of HRM and for
the organization.[24] Many researchers would argue that "performance appraisal is one of the
most important processes in Human Resource Management".[14]

The performance management process begins with leadership within the organization creating a
performance management policy.[24] Primarily, management governs performance by influencing
employee performance input (e.g. training programs) and by providing feedback via output (i.e.
performance assessment and appraisal).[36] "The ultimate objective of a performance
management process is to align individual performance with organizational performance".[37] A
very common and central process of performance management systems is performance appraisal

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(PA).[24] The PA process should be able to inform employees about the "organization's goals,
priorities, and expectations and how well they are contributing to them".[37]

When they are conducted

Performance appraisals (PAs) are conducted at least annually,[38] and annual employee
performance reviews appear to be the standard in most American organizations.[8] However, "it
has been acknowledged that appraisals conducted more frequently (more than once a year) may
have positive implications for both the organization and employee."[13] It is suggested that
regular performance feedback provided to employees may quell any unexpected and/or
surprising feedback to year-end discussions.[14] In a recent research study concerning the
timeliness of PAs, "one of the respondents even suggested that the performance review should be
done formally and more frequently, perhaps once a month, and recorded twice a year." Other
researchers propose that the purpose of PAs and the frequency of their feedback are contingent
upon the nature of the job and characteristics of the employee. [39] For example, employees of
routine jobs where performance maintenance is the goal would benefit sufficiently from annual
PA feedback. On the other hand, employees of more discretionary and non-routine jobs, where
goal-setting is appropriate and there is room for development, would benefit from more frequent
PA feedback. Non formal performance appraisals may be done more often, to prevent the
element of surprise from the formal appraisal.

Methods of collecting data

There are three main methods used to collect performance appraisal (PA) data: objective
production, personnel, and judgmental evaluation. Judgmental evaluations are the most
commonly used with a large variety of evaluation methods.[6]

Objective production

The objective production method consists of direct, but limited, measures such as sales figures,
production numbers, the electronic performance monitoring of data entry workers, etc.[6] The
measures used to appraise performance would depend on the job and its duties. Although these
measures deal with unambiguous criteria, they are usually incomplete because of criterion
contamination and criterion deficiency. Criterion contamination refers to the part of the actual
criteria that is unrelated to the conceptual criteria.[6] In other words, the variability in
performance can be due to factors outside of the employee’s control. Criterion deficiency refers
to the part of the conceptual criteria that is not measured by the actual criteria.[6] In other words,
the quantity of production does not necessarily indicate the quality of the products. Both types of
criterion inadequacies result in reduced validity of the measure.[6] Regardless of the fact that
objective production data is not a complete reflection upon job performance, such data is
relevant to job performance.

Happy-productive worker hypothesis

The happy-productive worker hypothesis states that the happiest workers are the most productive
performers, and the most productive performers are the happiest workers.[41] Yet, after decades

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of research, the relationship between job satisfaction and job performance produces only a weak
positive correlation. Published in 2001 by Psychological Bulletin, a meta-analysis of 312
research studies produced an uncorrected correlation of 0.18.[42] This correlation is much weaker
than what the happy-productive worker hypothesis would predict.

Personnel

The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents).
Most organizations consider unexcused absences to be indicators of poor job performance, even
with all other factors being equal;[41] however, this is subject to criterion deficiency. The quantity
of an employee’s absences does not reflect how dedicated he/she may be to the job and its duties.
Especially for blue-collar jobs, accidents can often be a useful indicator of poor job
performance,[6] but this is also subject to criterion contamination because situational factors also
contribute to accidents. Once again, both types of criterion inadequacies result in reduced
validity of the measure.[6] Although excessive absenteeism and/or accidents often indicate poor
job performance rather than good performance, such personnel data is not a comprehensive
reflection of an employee’s performance.[6]

Judgmental evaluation

Judgmental evaluation appears to be a collection of methods, and as such, could be considered a

methodology. A common approach to obtaining PAs is by means of raters.[1] Because the raters
are human, some error will always be present in the data. The most common types of error are
leniency errors, central tendency errors, and errors resulting from the halo effect.[1] Halo effect is
characterized by the tendency to rate a person who is exceptionally strong in one area higher than
deserved in other areas. It is the opposite of the Horns effect, where a person is rated as lower
than deserved in other areas due to an extreme deficiency in a single discipline. [43] These errors
arise predominantly from social cognition and the theory in that how we judge and evaluate other
individuals in various contexts is associated with how we "acquire, process, and categorize
information".An essential piece of this method is rater training. Rater training is the "process of
educating raters to make more accurate assessments of performance, typically achieved by
reducing the frequency of halo, leniency, and central-tendency errors".[1] Rater training also
helps the raters "develop a common frame of reference for evaluation" of individual
performance.[44] Many researchers and survey respondents support the ambition of effectual rater
training.[14] However, it is noted that such training is expensive, time consuming, and only truly
functional for behavioral assessments. Another piece to keep in mind is the effects of rater
motivation on judgmental evaluations. It is not uncommon for rating inflation to occur due to
rater motivation (i.e. "organizationally induced pressures that compel raters to evaluate ratees
positively").[1] Typically, raters are motivated to give higher ratings because of the lack of
organizational sanction concerning accurate/inaccurate appraisals, the rater's desire to guarantee
promotions, salary increases, etc., the rater's inclination to avoid negative reactions from
subordinates, and the observation that higher ratings of the ratees reflect favorably upon the rater.

The main methods used in judgmental performance appraisal are: Graphic Rating Scale: graphic
rating scales (see scale (social sciences)) are the most commonly used system in PA.[1] On
several different factors, subordinates are judged on 'how much' of that factor or trait they

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possess. Typically, the raters use a 5- or 7-point scale; however, there are as many as 20-point
scales.[1]

• Employee-Comparison Methods: rather than subordinates being judged against pre-

established criteria, they are compared with one another. This method eliminates central
tendency and leniency errors but still allows for halo effect errors to occur.[1] The rank-
order method has raters ranking subordinates from "best" to "worst", but how truly good
or bad one is on a performance dimension would be unknown.[1] The paired-comparison
method requires the rater to select the two "best" subordinates out of a group on each
dimension then rank individuals according to the number of times each subordinate was
selected as one of the "best".[1] The forced-distribution method is good for large groups of
ratees. The raters evaluate each subordinate on one or more dimensions and then place
(or "force-fit", if you will) each subordinate in a 5 to 7 category normal distribution.[1]
The method of top-grading can be applied to the forced distribution method.[45] This
method identifies the 10% lowest performing subordinates, as according to the forced
distribution, and dismisses them leaving the 90% higher performing subordinates.
• Behavioral Checklists and Scales: behaviors are more definite than traits. The critical
incidents method (or critical incident technique) concerns "specific behaviors indicative
of good or bad job performance".[1] Supervisors record behaviors of what they judge to be
job performance relevant, and they keep a running tally of good and bad behaviors. A
discussion on performance may then follow. The behaviorally anchored rating scales
(BARS) combine the critical incidents method with rating scale methods by rating
performance on a scale but with the scale points being anchored by behavioral
incidents.[1] Note that BARS are job specific. In the behavioral observation scale (BOS)
approach to performance appraisal, employees are also evaluated in the terms of critical
incidents. In that respect, it is similar to BARS. However, the BOS appraisal rate
subordinates on the frequency of the critical incidents as they are observed to occur over
a given period. The ratings are assigned on a five-point scale. The behavioral incidents
for the rating scale are developed in the same way as for BARS through identification by
supervisors or other subject matter experts. Similarly, BOS techniques meet equal
employment opportunity because they are related to actual behavior required for
successful job performance.[46]

Peer and self assessments[edit]

While assessment can be performed along reporting relationships (usually top-down), net
assessment can include peer and self-assessment. Peer assessment is when assessment is
performed by colleagues along both horizontal (similar function) and vertical (different function)
relationship. Self-assessments are when individuals evaluate themselves.[1] There are three
common methods of peer assessments. Peer nomination involves each group member
nominating who he/she believes to be the "best" on a certain dimension of performance. Peer
ratings has each group member rate each other on a set of performance dimensions. Peer ranking
requires each group member rank all fellow members from "best" to "worst" on one or more
dimensions of performance.

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 • Self-assessments: for self-assessments, individuals assess and evaluate their own
behavior and job performance.[1]
• Peer assessments: members of a group evaluate and appraise the performance of their
fellow group members.[1] There it is common for a graphic rating scale to be used for
self-assessments. Positive leniency tends to be a problem with self-assessments.[6] Peer
assessments from multiple members of a group are often called crowd-based performance
reviews, and solve many problems with peer assessments from only one member.[47]
• 360-degree feedback: 360-degree feedback is multiple evaluations of employees which
often include assessments from superior(s), peers, and one’s self.[1]
• Negotiated performance appraisal: The negotiated performance appraisal (NPA) is an
emerging approach for improving communication between supervisors and subordinates
and for increasing employee productivity, and may also be adapted to an alternate
mediation model for supervisor-subordinate conflicts. A facilitator meets separately with
the supervisor and with the subordinate to prepare three lists. What employees do well,
where the employee has improved in recently, and areas where the employee still needs
to improve. Because the subordinate will present his or her lists first during the joint
session, this reduces defensive behaviors. Furthermore, the subordinate comes to the joint
session not only prepared to share areas of needed improvement, but also brings concrete
ideas as to how these improvements can be made. The NPA also focuses very strongly on
what employees are doing well, and involves a minimum of twenty minutes of praise
when discussing what the employee does well. The role of the facilitator is that of a
coach in the pre-caucuses, and in the joint sessions the supervisor and subordinate mostly
speak to each other with little facilitator interference. In general, optimal PA process
involves a combination of multiple assessment modalities. One common recommendation
is that assessment flows from self-assessment, to peer-assessment, to management
assessment - in that order. Starting with self-assessment facilitates avoidance of conflict.
Peer feedback ensures peer accountability, which may yield better results than
accountability to management. Management assessment comes last for need of
recognition by authority and avoidance of conflict in case of disagreements. It is
generally recommended that PA is done in shorter cycles to avoid high-stakes
discussions, as is usually the case in long-cycle appraisals.

Normalization of performance appraisal

Normalization is the process of review of the ratings each group as a whole to ensure the ratings
are as per the recommended norms and the percentages are generally decided by management.

Organizational citizenship behavior

Also referred to as contextual behavior, prosocial behavior, and extra-role behavior,

organizational citizenship behavior (OCB) consists of employee behavior that contributes to the
welfare of the organization but is beyond the scope of the employee’s job duties.[6] These extra-
role behaviors may help or hinder the attainment of organizational goals. Research supports five
dimensions of OCB: altruism, conscientiousness, courtesy, sportsmanship, and civic virtue.[50]
Researchers have found that the OCB dimensions of altruism and civic virtue can have just as
much of an impact on manager’s subjective evaluations of employees’ performances as

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employees’ objective productivity levels.[51] The degree to which OCB can influence judgments
of job performance is relatively high. Controversy exists as to whether OCB should be formally
considered as a part of performance appraisal (PA).

Interviews

The performance appraisal (PA) interview is typically the final step of the appraisal process.[1]
The interview is held between the subordinate and supervisor. The PA interview can be
considered of great significance to an organization’s PA system.[8] It is most advantageous when
both the superior and subordinate participate in the interview discussion and establish goals
together.[1] Three factors consistently contribute to effective PA interviews: the supervisor’s
knowledge of the subordinate’s job and performance in it, the supervisor’s support of the
subordinate, and a welcoming of the subordinate’s participation.[8]

Employee reactions

Numerous researchers have reported that many employees are not satisfied with their
performance appraisal (PA) systems.[14] Studies have shown that subjectivity as well as appraiser
bias is often a problem perceived by as many as half of employees.[14] Appraiser bias, however,
appears to be perceived as more of a problem in government and public sector organizations.[14]
Also, according to some studies, employees wished to see changes in the PA system by making
"the system more objective, improving the feedback process, and increasing the frequency of
review."[14] In light of traditional PA operation defects, "organizations are now increasingly
incorporating practices that may improve the system. These changes are particularly concerned
with areas such as elimination of subjectivity and bias, training of appraisers, improvement of the
feedback process and the performance review discussion."[14]

According to a meta-analysis of 27 field studies, general employee participation in his/her own

appraisal process was positively correlated with employee reactions to the PA system.[22] More
specifically, employee participation in the appraisal process was most strongly related to
employee satisfaction with the PA system.[22] Concerning the reliability of employee reaction
measures, researchers have found employee reaction scales to be sound with few concerns
through using a confirmatory factor analysis that is representative of employee reaction scales.
Researchers suggest that the study of employees' reactions to PA is important because of two
main reasons: employee reactions symbolizes a criterion of interest to practitioners of PAs and
employee reactions have been associated through theory to determinants of appraisal acceptance
and success.[52] Researchers translate these reasons into the context of the scientist-practitioner
gap or the "lack of alignment between research and practice." Schultz & Schultz notes that
opposition to performance appraisals generally don't receive positive ratings from anyone
involved. "So employees that will be directly affected by the Performance Appraisals are less
than enthusiastic about participating in them". When an employee knows that their work
performance has been less than perfect it’s nerve-racking to be evaluated. Most workers just
don't appreciate constructive criticism or any criticism. Employees tend to be hostile knowing
they could be given bad news on their performance.

Legal implications

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There are federal laws addressing fair employment practices, and this also concerns performance
appraisal (PA). Discrimination can occur within predictions of performance and evaluations of
job behaviors.[1] The revision of many court cases has revealed the involvement of alleged
discrimination which was often linked to the assessment of the employee’s job performance.[54]
Some of the laws which protect individuals against discrimination are "the Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act
(ADEA), and the Americans with Disabilities Act (ADA)."[1] Lawsuits may also results from
charges of an employer’s negligence, defamation, and/or misrepresentation.[1] A few appraisal
criteria to keep in mind for a legally sound PA is to keep the content of the appraisal objective,
job-related, behavior-based, within the control of the ratee, and related to specific functions
rather than a global assessment.[54] Some appraisal procedure suggestions for a legally sound PA
is to standardize operations, communicate formally with employees, provide information of
performance deficits and give opportunities to employees to correct those deficits, give
employees access to appraisal results, provide written instructions for the training of raters, and
use multiple, diverse and unbiased raters.[54] These are valuable but not exhaustive lists of
recommendations for PAs. The Employment Opportunity Commission (EEOC) guidelines apply
to any selection procedure that is used for making employment decisions, not only for hiring, but
also for promotion, demotion, transfer, layoff, discharge, or early retirement. Therefore,
employment appraisal procedures must be validated like tests or any other selection device.
Employers who base their personnel decisions on the results of a well-designed performance
review program that includes formal appraisal interviews are much more likely to be successful
in defending themselves against claims of discrimination.

Cross-cultural implications

Performance appraisal (PA) systems, and the premises of which they were based, that have been
formed and regarded as effective in the United States may not have the transferability for
effectual utilization in other countries or cultures, and vice versa.[15] Performance "appraisal is
thought to be deeply rooted in the norms, values, and beliefs of a society".[56] "Appraisal reflects
attitudes towards motivation and performance (self) and relationships (e.g. peers, subordinates,
supervisors, organization), all of which vary from one country to the next".[57] Therefore,
appraisal should be in conjunction with cultural norms, values, and beliefs in order to be
operative.[58] The deep-seated norms, values and beliefs in different cultures affect employee
motivation and perception of organizational equity and justice. In effect, a PA system created
and considered effectual in one country may not be an appropriate assessment in another cultural
region. For example, some countries and cultures value the trait of assertiveness and personal
accomplishment while others instead place more merit on cooperation and interpersonal
connection. Countries scoring high on assertiveness consider PA to be a way of assuring equity
among employees so that higher performing employees receive greater rewards or higher
salaries.[57] Countries scoring low on assertiveness but higher in interpersonal relations may not
like the social separation and pay inequity of higher/lower performing employees; employees
from this more cooperative rather than individualistic culture place more concern on
interpersonal relationships with other employees rather than on individual interests.[57] High
assertive countries value performance feedback for self-management and effectiveness purposes
while countries low in assertiveness view performance feedback as "threatening and
obtrusive".[57][59] In this case, the PA of the high assertive countries would likely not be

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beneficial for countries scoring lower in assertiveness to employ. However, countries scoring
lower in assertiveness could employ PA for purposes of improving long-term communication
development within the organization such as clarifying job objectives, guide training and
development plans, and lessen the gap between job performance and organizational expectations.

Developments in information technology

Computers have been playing an increasing role in PA for some time (Sulsky & Keown, 1998).
There are two main aspects to this. The first is in relation to the electronic monitoring of
performance, which affords the ability to record a huge amount of data on multiple dimensions
of work performance (Stanton, 2000). Not only does it facilitate a more continuous and detailed
collection of performance data in some jobs, e.g. call centres, but it has the capacity to do so in a
non-obvious, covert manner. The second aspect is in mediating the feedback process, by
recording and aggregating performance ratings and written observations and making the
information available on-line; many software packages are available for this. The use of IT in
these ways undoubtedly helps in making the appraisal process more manageable, especially
where multiple rating sources are involved, but it also raises many questions about appraisees'
reactions and possible effects on PA outcomes. Mostly, the evidence so far is positive.[46]

Rater errors

Mistakes made by raters is a major source of problems in performance appraisal. There is no

simple way to completely eliminate these errors, but making raters aware of them through
training is helpful. Rater errors are based on the feelings and it has consequences at the time of
appraisal.

Varying standards

• Problem: When a manager appraises (evaluates) his or her employees and the
manager uses different standards and expectations for employees who are
performing similar jobs.[citation needed]
• Example: A professor does not grade the exams of all students in the same
standards, sometimes it depends on the affection that the professor has towards
others. This affection will make professor give students higher or lower grades.
• Solution: The rater must use the same standards and weights for every employee.
The manager should be able to show coherent arguments in order to explain the
difference. Therefore, it would be easier to know if it is done, because the
employee has done a good performance, or if it because the manager perception is
distorted.

Recency effects

• Problem: When the manager, according only to the last performance, that has
been quite good, rates higher.
• Example: When a professor gives the course grade based just in the performance
of the student, only in the last week.

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 • Solution: In order to avoid that, the manager should use some methods as
documenting both in positive and negative aspects.

Primacy effects

• Problem: When the person who evaluates gives more weight according to
information the manager has received first.
• Example: It could be a silly example. When we are watching a TV quiz and
conquest have to remember a list of things, they only remember the first ones.
This is apply also in remembering human performance.
• Solution: performance. When manager has to take some decision, is better not to
do it according to what he or she remembers. It is better to be based on real
actions that have happened and are recorded.

Central Tendency

• Problem: When the manager evaluates every employee within a narrow range, as
the average because he or she is dismissing the differences in the performance
that employees have done.
• Example: When a professor because the average of the class tends to grade
harder. Therefore, if the performance of the class average is quite high, the
professor will evaluate them more highly. On the contrary, if the average of the
class is lower, he or she would appraise lower.

Leniency

• Problem: Rating of all employees are at the high end of the scale.
• Example: When the professor tends to grade harder, because the average of the
class.

Strictness

• Problem: When a manager uses only the lower part of the scale to rate employees.
• Example: When the professor tends to grade lower, because the average of the
class.
• Solution: try to focus more on the individual performance of every employee
regardless the average results.

Rater Bias[63]

• Problem: Rater’s when the manager rates according to his or her values and
prejudices which at the same time distort (distorsionar) the rating. Those
differentiations can be made due to the ethnic group, gender, age, religion, sex,
appearance...
• Example: Sometimes happen that a manager treats someone different, because he
or she thinks that the employee is homosexual.

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 • Solution: If then, the examination is done by higher-level managers, this kind of
appraising can be corrected, because they are supposed to be more partial.

Halo effect

• Problem: When a manager rates an employee high on all items because of one
characteristic that he or she likes.
• Example: If a worker has few absence but the supervisor has a good relationship
with that employee, the supervisor might give to the employee a high rating in all
other areas of work, in order to balance the rating. Sometimes it happens due to
the emotional dependability based on the good relationship they have.
• Solution: Training raters to recognize the problem and differentiating the person
with the performance they do.

Horns effect

• Problem: This is the opposite to the Halo effect and Horns effect occurs when a
manager rates an employee low on all items because of one characteristic that he
or she dislikes.
• Example: If a worker does a good performance and in some resting times he or
she loves telling jokes, but his or her supervisor hates jokes, the supervisor might
give to the employee a lower rating in all other areas of work, because they do not
have that conexion. Sometimes it happens when they do not have a close
relationship and manager do not like the person her/him-self.
• Solution: Is the same as in the Halo Effect. Training raters to recognize the
problem and differentiating the person with the performance they do.

Contrast

• Problem: The tendency to rate people relative to other people rather than to the
individual performance he or her is doing.
• Example: At school, if you are sat down where all the chatty people are and you
are silent but you do not pay attention and you do not do your homework, because
you are drawing; when teacher gets angry with the group, you might be excluded
of the bad behavior they have just because you are silent; but not because you are
doing a good performance. Therefore, according to the group, you are not that
chatty, but you are either doing the proper performance. However the rater will
only get the idea that your behavior is not as bad as other, thus, you will be rate
higher.
• Solution: The rating should reflect the task requirement performance, not
according to other people attitude.

Similar-to-Me / Different-from-Me

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 • Problem: Sometimes, ratters are influenced by some of the characteristics that
people show. Depending if those characteristics are similar or different to ratters'
one, they would be evaluated differently.
• Example: A manager with higher education degree might give subordinates with
higher education degree a higher appraisal than those with only bachelor’s
degrees.
• Solution: Try to focus on the performance the employee is doing regardless the
common characteristic that you have

Sampling

• Problem: When the rater evaluates the performance of an employee relying only
on a small percentage of the amount of work done.
• Example: An employee has to do 100 reports. Then, the manager take five of
them to check how has the work been made, and the manager finds mistakes in
those five reports. Therefore the manager will appraised the work of the employee
as a "poor" one, without having into account the other 95 reports that the manager
has not seen, that have been made correctly.
• Solution: To follow the entire track of the performance, not just a little part of it.

We have been looking one by one the possible solutions to each of the situations, which are also
complicated to put into practice, thus here we have a general solution that could be apply to all
the possible rating errors. It is difficult to minimized rater errors, since we are humans and we
are not objective. Moreover, sometimes, we are not aware of our behavior of having preferences
towards people but there are some tools in order to have a more objective information as using
available technology to track performances and record it which enables manager to have some
objective information about the process.

Consultant Marcus Buckingham and executive Ashley Goodall, reporting on a large-scale

Deloitte performance management survey on Harvard Business Review, went as far as to say
that, contrary to the assumptions underlying performance rating, the rating mainly measured the
unique rating tendencies of the rater and thus reveals more about the rater than about the person
who is rated. They referred to this as the idiosyncratic rater effect. In view of this effect, they
advocate a radically different approach to performance management. In their scenario, 360-
degree feedback and similar time-intensive exercises are replaced by team leaders' "performance
snapshots"that focus on what they would do with each team member rather than what they think
of that individual, and yearly appraisals of past performance are replaced by weekly check-ins
among team leader and team member, preferably initiated by the team member, that focus on

Job performance

Job performance assesses whether a person performs a job well. Job performance, studied
academically as part of industrial and organizational psychology (the branch of psychology that
deals with the workplace), also forms a part of human resources management. Performance is an
important criterion for organizational outcomes and success.John P. Campbell describes job
performance as an individual-level variable, or something a single person does. This

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differentiates it from more encompassing constructs such as organizational performance or
national performance, which are higher-level variables.]

There are several key features to Campbell's conceptualization of job performance which help
clarify what job performance means.

Outcomes

First, Campbell defines performance as behavior. It is something done by the employee. This
concept differentiates performance from outcomes. Outcomes are the result of an individual's
performance, but they are also the result of other influences. In other words, there are more
factors that determine outcomes than just an employee's behaviors and actions.Campbell allows
for exceptions when defining performance as behavior. For instance, he clarifies that
performance does not have to be directly observable actions of an individual. It can consist of
mental productions such as answers or decisions. However, performance needs to be under the
individual's control, regardless of whether the performance of interest is mental or
behavioral.The difference between individual controlled action and outcomes is best conveyed
through an example. On a sales job, a favorable outcome is a certain level of revenue generated
through the sale of something (merchandise, some service, insurance). Revenue can be generated
or not, depending on the behavior of employees. When the employee performs this sales job
well, he is able to move more merchandise. However, certain factors other than employees'
behavior influence revenue generated. For example, sales might slump due to economic
conditions, changes in customer preferences, production bottlenecks, etc. In these conditions,
employee performance can be adequate, yet sales can still be low. The first is performance and
the second is the effectiveness of that performance. These two can be decoupled because
performance is not the same as effectiveness. Another closely related construct is productivity.[4]
This can be thought of as a comparison of the amount of effectiveness that results from a certain
level of cost associated with that effectiveness. In other words, effectiveness is the ratio of
outputs to inputs—those inputs being effort, monetary costs, resources, etc.Utility is another
related construct which is defined as the value of a particular level of performance, effectiveness,
or productivity. Utilities of performance, effectiveness, and productivity are value judgments.

Organizational goal relevance

Another key feature of job performance is that it has to be goal relevant. Performance must be
directed toward organizational goals that are relevant to the job or role. Therefore, performance
does not include activities where effort is expended toward achieving peripheral goals. For
example, the effort put toward the goal of getting to work in the shortest amount of time is not
performance (except where it is concerned with avoiding lateness).

Multidimensionality

Despite the emphasis on defining and predicting job performance, it is not a single unified
construct. There are vastly many jobs each with different performance standards. Therefore, job
performance is conceptualized as a multidimensional construct consisting of more than one kind
of behavior. Campbell (1990) proposed an eight factor model of performance based on factor

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analytic research that attempts to capture dimensions of job performance existent (to a greater or
lesser extent) across all jobs.

1. The first factor is task specific behaviors which include those behaviors that an
individual undertakes as part of a job. They are the core substantive tasks that delineate
one job from another.
2. On the other hand, non-task specific behaviors, the second factor, are those behaviors
which an individual is required to undertake which do not pertain only to a particular job.
Returning to the sales person, an example of a task specific behavior would be showing a
product to a potential customer. A non-task specific behavior of a sales person might be
training new staff members.
3. Written and oral communication tasks refer to activities where the incumbent is
evaluated, not on the content of a message necessarily, but on the adeptness with which
they deliver the communication. Employees need to make formal and informal oral and
written presentations to various audiences in many different jobs in the work force.
4. An individual's performance can also be assessed in terms of effort, either day to day, or
when there are extraordinary circumstances. This factor reflects the degree to which
people commit themselves to job tasks.
5. The performance domain might also include an aspect of personal discipline. Individuals
would be expected to be in good standing with the law, not abuse alcohol, etc.
6. In jobs where people work closely or are highly interdependent, performance may
include the degree to which a person helps out the groups and his or her colleagues.
This might include acting as a good role model, coaching, giving advice or helping
maintain group goals.
7. Many jobs also have a supervisory or leadership component. The individual will be
relied upon to undertake many of the things delineated under the previous factor and in
addition will be responsible for meting out rewards and punishments. These aspects of
performance happen in a face to face manner.
8. Managerial and administrative performance entails those aspects of a job which serve the
group or organization but do not involve direct supervision. A managerial task would be
setting an organizational goal or responding to external stimuli to assist a group in
achieving its goals. In addition a manager might be responsible for monitoring group and
individual progress towards goals and monitoring organizational resources.

Another taxonomy of job performance was proposed and developed for the US Navy by Murphy
(1994). This model is significantly broader and breaks performance into only four dimensions.

1. Task-oriented behaviors are similar to task-specific behaviors in Campbell's model. This

dimension includes any major tasks relevant to someone's job.
2. Interpersonally oriented behaviors are represented by any interaction the focal employee
has with other employees. These can be task related or non-task related. This dimension
diverges from Campbell's taxonomy because it included behaviors (small talk,
socializing, etc.) that are not targeting an organization's goal.
3. Down-time behaviors are behaviors that employees engage in during their free time either
at work or off-site. Down-time behaviors that occur off-site are only considered job

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 performance when they subsequently affect job performance (for example, outside
behaviors that cause absenteeism).
4. Destructive/hazardous behaviors

In addition to these models dividing performance into dimensions, others have identified
different types of behaviors making up performance.

Types

Another way to divide up performance is in terms of task and contextual (citizenship and
counterproductive) behaviors.[5] Whereas task performance describes obligatory behaviors,
contextual behaviors are behaviors that do not fulfill specific aspects of the job's required role.
Citizenship behaviors are defined as behaviors which contribute to the goals of the organization
through their effect on the social and psychological conditions.[6] Counterproductive behaviors,
on the other hand, are intentional actions by employees which circumvent the aims of the
organization.[7]

Determinants

A meta-analysis of selection methods in personnel psychology found that general mental ability
was the best overall predictor of job performance and training performance.[8]

Campbell (1990) also suggested determinants of performance components. Individual

differences on performance are a function of four main determinants: declarative knowledge,
procedural knowledge and skill, and motivation.Declarative knowledge refers to knowledge
about facts, principles, objects, etc. It represents the knowledge of a given task's requirements.
For instance, declarative knowledge includes knowledge of principles, facts, ideas, etc.If
declarative knowledge is knowing what to do, procedural knowledge and skill is knowing how to
do it. For example, procedural knowledge and skill includes cognitive skill, perceptual skill,
interpersonal skill, etc.The third predictor of performance is motivation, which refers to "a
combined effect from three choice behaviors—choice to expend effort, choice of level of effort
to expend, and choice to persist in the expenditure of that level of effort" (Campbell, 1990). It
reflects the direction, intensity, and persistence of volitional behaviors.[9] Campbell (1990)
emphasized that the only way to discuss motivation as a direct determinant of behavior is as one
or more of these choices. (See also Work motivation.)Campbell (1990) also mentioned several
performance parameters that may have important implications for the job performance setting
and should be investigated by industrial and organizational psychologists.The first one is the
distinction between speed and accuracy. This distinction is similar to the one between quantity
and quality.[10] Important questions that should be considered include: which is most valued by
the organization, maximized speed, maximized accuracy, or some balance between the two?
What kind of trade offs should an employee makes? The latter question is important because
speed and accuracy for the same task may be independent of one another.The second distinction
is between typical and maximum performance. Sackett, Zedeck, and Fogli[11] did a study on
supermarket cashiers and found that there was a substantial difference between scores reflecting
their typical performance and scores reflecting their maximum performance. This study
suggested the distinction between typical and maximum performance. Regular work situations

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reflect varying levels of motivation which result in typical performance. Special circumstances
generate maximum employee motivation which results in maximum performance.Additionally,
the impact of organizational justice perceptions on performance is believed to stem from Equity
Theory. This would suggest that when people perceive injustice they seek to restore justice. One
way that employees restore justice is by altering their level of performance. Procedural justice
affects performance as a result of its impact on employee attitudes. Distributive justice affects
performance when efficiency and productivity are involved.[12] Improving justice perceptions
improves productivity and performance.[13]

Detrimental impact of bullying

Bullying results in a loss of productivity. In one study a moderate negative correlation was found
between self-rated performance and bullying, with the “currently bullied” on average reporting a
decrease of productivity of approximately 7% compared with those who were neither bullied nor
had witnessed bullying taking place.

Core self-evaluations

Job performance is a consistent and important outcome of core self-evaluations

(CSE).[15][16][17][18] The concept of core self-evaluations was first examined by Judge, Locke, and
Durham (1997) as a dispositional predictor of job satisfaction,[19] and involves four personality
dimensions; locus of control, neuroticism, self-efficacy, and self-esteem. The way in which
people appraise themselves using core self-evaluations has the ability to predict positive work
outcomes, specifically, job satisfaction and job performance. The most popular theory relating
the CSE trait to job performance argues that people with high CSE will be more motivated to
perform well because they are confident they have the ability to do so.[15] Motivation is generally
the most accepted mediator of the core self-evaluations and job performance relationship.[16]
These relationships have inspired increasing amounts of research on core self-evaluations and
suggest valuable implications about the importance this trait may have for organizations.

Role conflict

Role conflict can have many different effects on the work-life of an individual as well as their
family-life. In a study in Taiwan, it was found that those suffering from role conflict also
suffered greatly in their work performance, mainly in the form of lack of motivation. Those with
role conflict did not do more than the bare minimum requirements at work. There was also a
decline in the ability to assign tasks. Having multiple roles will often lead to job dissatisfaction.
While there are many de-motivational effects of role conflict on work, there is also a positive.
Those undergoing role conflict often had an increase in work creativity. Due to multiple roles,
there is an increase in flexibility, different sources of information, and these people have many
different perspectives to bring to the table. Experiencing role conflict within the work place may
also lead to workplace bullying. When companies undergo organizational change workers often
experience either a loss or a gain in areas of a workers job, thus changing the expectations of the
worker. Change is often very stressful for workers. Workers who might have lost a degree of
power may feel like they lost their authority and begin to lash out at other employees by being

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verbally abusive, purposefully withholding work related items, or sometimes even physically to
withhold their status.

Emotional intelligence

Research of emotional intelligence (EI) and job performance shows mixed results: a positive
relation has been found in some of the studies, in others there was no relation or an inconsistent
one. This led researchers Cote and Miners (2006)[22] to offer a compensatory model between EI
and IQ, that posits that the association between EI and job performance becomes more positive
as cognitive intelligence decreases, an idea first proposed in the context of academic
performance (Petrides, Frederickson, & Furnham, 2004). The results of the former study
supported the compensatory model: employees with low IQ get higher task performance and
organizational citizenship behavior directed at the organization, the higher their EI.A meta-
analytic review by Joseph and Newman] also revealed that both Ability EI and Trait EI tend to
predict job performance much better in jobs that require a high degree of emotional labor (where
'emotional labor' was defined as jobs that require the effective display of positive emotion). In
contrast, EI shows little relationship to job performance in jobs that do not require emotional
labor. In other words, emotional intelligence tends to predict job performance for emotional jobs
only.A more recent study suggests that EI is not necessarily a universally positive trait.[24] They
found a negative correlation between EI and managerial work demands; while under low levels
of managerial work demands, they found a negative relationship between EI and teamwork
effectiveness. An explanation for this may suggest gender differences in EI, as women tend to
score higher levels than men.[23] This furthers the idea that job context plays a role in the
relationships between EI, teamwork effectiveness, and job performance.

Another study assessed a possible link between EI and entrepreneurial behaviors and success.[25]
In accordance with much of the other findings regarding EI and job performance, they found that
levels of EI only predicted a small amount of entrepreneurial behavior.

Career development

Career Development is the lifelong process of managing learning, work, leisure, and transitions
in order to move toward a personally determined and evolving preferred future.In educational
development, career development provides a person, often a student, focus for selecting a career
or subject(s) to undertake in the future. Often educational institutions provide career counsellors
to assist students with their educational development.In organizational development (or OD), the
study of career development looks at:how individuals manage their careers within and between
organizations and,

• how organizations structure the career progress of their members, it can also be tied into
succession planning within most of the organizations.In today's world, more employers
are looking for ways to facilitate career development and encourage their employees to
drive their own careers.

In personal development, career development is:

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 • " ... the total constellation of psychological, sociological, educational, physical,
economic, and chance factors that combine to influence the nature and significance of
work in the total lifespan of any given individual." [1]

• The evolution or development of a career - informed by (1) Experience within a specific

field of interest (with career, job, or task specific skills as by-product) (2) Success at each
stage of development, (3) educational attainment commensurate with each incremental
stage, (4) Communications (the capacity to analytically reflect your suitability for a given
job via cover letter, resume, and/or the interview process), and (5) understanding of
career development as a navigable process. (Angelo J. Rivera)
• "... the lifelong psychological and behavioral processes as well as contextual influences
shaping one’s career over the life span. As such, career development involves the
person’s creation of a career pattern, decision-making style, integration of life roles,
values expression, and life-role self concepts." [2]

Succession planning

Succession planning is a process for identifying and developing internal people with the
potential to fill key business leadership positions in the company. Succession planning increases
the availability of experienced and capable employees that are prepared to assume these roles as
they become available. Taken narrowly, "replacement planning" for key roles is the heart of
succession planning. Effective succession or talent-pool management concerns itself with
building a series of feeder groups up and down the entire leadership pipeline or progression
(Charan, Drotter, Noel, 2001). In contrast, replacement planning is focused narrowly on
identifying specific back-up candidates for given senior management positions. For the most part
position-driven replacement planning (often referred to as the "truck scenario") is a forecast,
which research indicates does not have substantial impact on outcomes.Fundamental to the
succession-management process is an underlying philosophy that argues that top talent in the
corporation must be managed for the greater good of the enterprise. Merck and other companies
argue that a "talent mindset" must be part of the leadership culture for these practices to be
effective. Succession planning is a process whereby an organization ensures that employees are
recruited and developed to fill each key role within the company. Through your succession
planning process, you recruit superior employees, develop their knowledge, skills, and abilities,
and prepare them for advancement or promotion into ever more challenging roles. Actively
pursuing succession planning ensures that employees are constantly developed to fill each
needed role. As your organization expands, loses key employees, provides promotional
opportunities, and increases sales, your succession planning guarantees that you have employees
on hand ready and waiting to fill new roles.According to a 2006 Canadian Federation of
Independent Business survey, slightly more than one third of independent business owners plan
to exit their business within the next 5 years and within the next 10 years two-thirds of owners
plan to exit their business. The survey also found that small and medium-sized enterprises are not
adequately prepared for their business succession: only 10% of owners have a formal, written
succession plan; 38% have an informal, unwritten plan; and the remaining 52% do not have any
succession plan at all. The results are backed by a 2004 CIBC survey which suggests that
succession planning is increasingly becoming a critical issue. By 2010, CIBC estimates that $1.2
trillion in business assets are poised to change hands.[ Research indicates many succession-

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planning initiatives fall short of their intent (Corporate Leadership Council, 1998[). "Bench
strength," as it is commonly called, remains a stubborn problem in many if not most companies.
Studies indicate that companies that report the greatest gains from succession planning feature
high ownership by the CEO and high degrees of engagement among the larger leadership
teamCompanies that are well known for their succession planning and executive talent
development practices include: GE, Honeywell, IBM, Marriott, Microsoft, Pepsi and Procter &
Gamble.

Research[indicates that clear objectives are critical to establishing effective succession planning.
These objectives tend to be core to many or most companies that have well-established practices:

• Identify those with the potential to assume greater responsibility in the organization
• Provide critical development experiences to those that can move into key roles
• Engage the leadership in supporting the development of high-potential leaders
• Build a data base that can be used to make better staffing decisions for key jobs

In other companies these additional objectives may be embedded in the succession process:

• Improve employee commitment and retention

• Meet the career development expectations of existing employees
• Counter the increasing difficulty and costs of recruiting employees externally

Business Exit Planning

With the global proliferation of Small and Mid-sized Enterprises (SME’s), issues of business
succession and continuity have become increasingly common. When the owner of a business
becomes incapacitated or passes away, it is often necessary to shut down an otherwise healthy
business. Or in many instances, successors inherit a healthy business, which is forced into
bankruptcy because of lack of available liquidity to pay inheritance taxes and other taxes. Proper
planning helps avoid many of the problems associated with succession and transfer of ownership.

Business Exit Planning is a body of knowledge which began developing in the United States
towards the end of the 20th century and is now spreading globally. A Business Exit Planning
exercise begins with the shareholder(s) of a company defining their objectives with respect to an
eventual exit, and then executing their plan, as the following definition suggests:

Business Exit Planning is the process of explicitly defining exit-related objectives for the
owner(s) of a business, followed by the design of a comprehensive strategy and road map that
take into account all personal, business, financial, legal, and taxation aspects of achieving those
objectives, usually in the context of planning the leadership succession and continuity of a
business. Objectives may include maximizing (or setting a goal for) proceeds, minimizing risk,
closing a Transaction quickly, or selecting an investor that will ensure that the business prospers.
The strategy should also take into account contingencies such as illness or death. All personal
and business aspects should be taken into consideration. This is also a good time to plan an
efficient transfer from the point of view of possibly applicable estate taxes, capital gains taxes, or
other taxes.Sale of a business is not the only form of exit. Forms of exit may also include Initial

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Public Offering, Management Buyout, passing on the firm to next-of-kin, or even bankruptcy.
Bringing on board financial strategic or financial partners may also be considered a form of exit,
to the extent that it may help ensure succession and survival of the business.In developed
countries, the so-called “baby boomer” demographic wave is now reaching the stage where
serious consideration needs to be given to exit. Hence, the importance of Business Exit Planning
is expected to further increase in the coming years.

Field of succession management

There is a substantial body of literature on the subject of succession planning. The first book that
addressed the topic fully was "Executive Continuity" by Walter Mahler. Mahler was responsible
in the 1970s for helping to shape the General Electric succession process which became the gold
standard of corporate practice. Mahler, who was heavily influenced by Peter Drucker, wrote
three other books on the subject of succession, all of which are out of print. His colleagues, Steve
Drotter and Greg Kesler, as well as others, expanded on Mahler's work in their writings. "The
Leadership Pipeline: How to Build the Leadership Powered Company," by Charan, Drotter and
Noel is noteworthy. A new edited collection of materials, edited by Marshall Goldsmith,
describes many contemporary examples in large companies. Most large corporations assign a
process owner for talent and succession management. Resourcing of the work varies widely from
numbers of highly dedicated internal consultants to limited professional support embedded in the
roles of human resources generalists. Often these staff resources are separate from external
staffing or recruiting functions. Some companies today seek to integrate internal and external
staffing. Others are more inclined to integrate succession management with the performance
management process in order simplify the work for line managers.

Family business

Arieu proposed a model in order to classify family firms into four scenarios: political, openness,
foreign management and natural succession.POLITICAL SCENARIO: This is the case of a
company linked to a large family, where it is expected that through inheritance, the property was
spray quickly, possibly faster than the growth of own business, resulting in a dividend per head
lower and lower. Identifying suitable members in the family can incorporate to address and
possibly distinguish who may occupy the general direction afterwards. However, the existence of
many members in the family can turn into conflicts of power, making it necessary to establish
agreements and occasionally reorganize the business in terms of those individuals who, because
of the obvious professional and human qualities can be recognized as leaders. In many cases this
may mean separate reorganization to create new companies and business units.OPENESS: When
members of the next generations are numerous and among them is not possible to identify a
person who possesses the characteristics necessary to assume leadership positions with expertise
in family business, we have a scenario that we call Open, since the strategy more suitable for this
type of organization is to shift some capital to others who can provide not only management
skills but also liquidity for family members. This will succeed in securing the future of the
business, creating more value for society and retention of jobs for their employees, not to please
the family, getting money and avoid future complications.FOREIGN MANAGEMENT: This
scenario occurs when family members who control the business are not many, and yet, not
having any of its members with a natural profile of leadership succession when they choose to

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appoint a non-family CEO .NATURAL SUCCESSION: Families seeking to preserve its legacy
business are the most favorable conditions in the presence of a stage of natural succession. This
is the case of a company controlled by a few families, few heirs who in turn have identified
among them a worthy successor, a strong name also is associated with the adequacy enough to
drive its growth, the ability to run the organization, understanding market and commitment
which means only a part of the family patrimony is also a source of value to society, other
shareholders, customers, suppliers and even their own employees (stakeholders).this will help in
improved succession planning.

The role of advisors

A Prior preparation needs to be done for the replacement of a CEO in family firms. The role of
advisors is important as they help with the transition of leadership between the current generation
leaders and the successors. Advisors help family owned businesses establish their own leadership
skills. This process is relatively long if the successors want to be accepted by all employees.
They need to take higher managing position gradually to be respected. During this process, the
successors are asked to develop different skills such as leadership. This is where the role of
advisors fully exemplifies its importance. It is when the managing position is shared between the
first generation leader, the second and the advisors. An advisor helps with communication
because emotional factors between family members can badly affect the company. The advisors
help manage everything during a predetermined period of time and make the succession process
less painful and eventful for everybody. In these cases, an interim leadership is usually what is
best for the company. The employees can get accustomed to changes while getting to know the
future CEO.[5][6]

Process and practices

Companies devise elaborate models to characterize their succession and development practices.
Most reflect a cyclical series of activities that include these fundamentals:

• Identify key roles for succession or replacement planning

• Define the competencies and motivational profile required to undertake those roles
• Assess people against these criteria - with a future orientation
• Identify pools of talent that could potentially fill and perform highly in key roles
• Develop employees to be ready for advancement into key roles - primarily through the
right set of experiences.

In many companies, over the past several years, the emphasis has shifted from planning job
assignments to development, with much greater focus on managing key experiences that are
critical to growing global business leaders. North American companies tend to be more active in
this regard, followed by European and Latin American countries.PepsiCo, IBM and Nike are
current examples of the so-called "game planning" approach to succession and talent
management. In these and other companies annual reviews are supplemented with an ongoing
series of discussions among senior leaders about who is ready to assume larger roles. Vacancies
are anticipated and slates of names are prepared based on highest potential and readiness for job
moves. Organization realignments are viewed as critical windows of opportunity to create

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development moves that will serve the greater good of the enterprise.Assessment is a key
practice in effective succession planning. There is no widely accepted formula for evaluating the
future potential of leaders, but there are many tools and approaches that continue to be used
today, ranging from personality and cognitive testing to team-based interviewing and simulations
and other assessment center methods. Elliott Jaques and others have argued for the importance of
focusing assessments narrowly on critical differentiators of future performance. Jaques
developed a persuasive case for measuring candidates' ability to manage complexity, formulating
a robust operational definition of business intelligence.[7] The Cognitive Process Profile (CPP)
psychometric is an example of a tool used in succession planning to measure candidates' ability
to manage complexity according to Jaques' definition.Companies struggle to find practices that
are effective and practical. It is clear leaders who rely on instinct and gut to make promotion
decisions are often not effective. Research indicates that the most valid practices for assessment
are those that involve multiple methods and especially multiple raters[8] "Calibration meetings,"
composed of senior leaders can be quite effective judging a slate of potential senior leaders with
the right tools and facilitation.With organisations facing increasing complexity and uncertainty in
their operating environments some suggest a move away from competence based approaches.[9]
In a future that is increasingly hard to predict leaders will need to see opportunity in volatility,
spot patterns in complexity, find creative solutions to problems, keep in mind long term strategic
goals for the organisation and wider society, and hold onto uncertainty until the optimum time to
make a decision.

Professionals in the field, including academics, consultants and corporate practitioners, have
many strongly held views on the topic. Best practice is a slippery concept in this field. There are
many thought pieces on the subject that readers may find valuable such as "Debunking 10 Top
Talent Management Myths", Talent Management Magazine, Doris Sims, December 2009.
Research-based writing is more difficult to find. The Corporate Leadership Council, The Best
Practice Institute (BPI) and the Center for Creative Leadership, as well as the Human Resources
Planning Society are sources of some effective research-based materials.Over the years,
organizations have changed their approach to succession planning. What used to be a rigid,
confidential process of hand-picking executives to be company successors is now becoming a
more fluid, transparent practice that identifies high-potential leaders and incorporates
development programs preparing them for top positions.[10] Today, corporations consider
succession planning a part of a holistic strategy called “talent management”. According to the
company PEMCO, “talent management is defined as the activities and processes throughout the
employee life cycle: recruiting and hiring, onboarding, training, professional development,
performance management, workforce planning, leadership development, career development,
cross-functional work assignments, succession planning, and the employee exit process”.[11]
When managing internal talent, companies must “know whether the right people, are moving at
the right pace into the right jobs at the right time”.[12] An effective succession planning strategy,
coupled with solid career development programs, will help paint a more promising future for
employees.

Organizational citizenship behavior

In industrial and organizational psychology, organizational citizenship behavior or

organisational citizenship behaviour (OCB) is a person's voluntary commitment within an

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organization or company that is not part of his or her contractual tasks.Organizational citizenship
behavior has been studied since the late 1970s. Over the past three decades, interest in these
behaviors has increased substantially. Organizational behavior has been linked to overall
organizational effectiveness, thus these types of employee behaviors have important
consequences in the workplace.

Definition and origin of the construct

Dennis Organ is generally considered the father of OCB. Organ expanded upon Katz's (1964)
original work.[1] Organ (1988) defines OCB as “individual behavior that is discretionary, not
directly or explicitly recognized by the formal reward system, and that in the aggregate promotes
the effective functioning of the organization".[2]:4 Organ’s definition of OCB includes three
critical aspects that are central to this construct. First, OCBs are thought of as discretionary
behaviors, which are not part of the job description, and are performed by the employee as a
result of personal choice. Second, OCBs go above and beyond that which is an enforceable
requirement of the job description. Finally, OCBs contribute positively to overall organizational
effectiveness.

At the same time, Organ's (1988) definition of OCB has generated a great deal of criticism. The
very nature of the construct makes it difficult to operationally define. Critics started questioning
whether or not OCBs, as defined by Organ, were discretionary in nature. Organ (1997), in
response to criticisms, notes that since his original definition, jobs have moved away from a
clearly defined set of tasks and responsibilities and have evolved into much more ambiguous
roles. Without a defined role, it quickly becomes difficult to define what is discretionary.

Similar constructs

OCB has often been compared to contextual performance. Similarly to OCB, this concept
emerged in response to the realization that only looking at job specific work behaviors ignored a
significant portion of the job domain. Originally, experts in this field focused only on activities
that directly supported the output of the organization. As the job market became more
aggressive, it became necessary for employees to go above and beyond that which is formally
required by the job description in order to remain competitive. Contextual performance is
defined as non-task related work behaviors and activities that contribute to the social and
psychological aspects of the organization (Borman & Motowidlo, 1993).Contextual performance
consists of four elements: persistence of enthusiasm, assistance to others, rule and proscribed
procedure following, and openly defending the organizations objectives (Borman & Motowidlo,
1993). OCB and contextual performance share their defining attributes as they both consist of
behaviors other than those needed to perform the routine functions of the job. Both also require
that these behaviors contribute to the overall success of the organization. Additionally, they also
agree on the theme that these behaviors are discretionary and each employee chooses the amount
and degree to which they will perform them. However, while contextual performance and OCB
share a good part of their content domain, there are some important differences between the two
constructs. One of the main requirements of OCBs is that they are not formally rewarded, which
is not the case for contextual performance. Organ (1997) contends that OCBs may at some point
encourage some sort of reward, but that these rewards would be indirect and uncertain. Also,

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contextual performance does not require that the behavior be extra-role, only that it be non-task.
The differences between contextual performance and OCB are slight and easy to miss, however,
they do exist.

Prosocial organizational behavior

OCB has also been compared to prosocial organizational behavior (POB). POB is defined as
behavior within an organization that is aimed at improving the welfare of another person (Brief
& Motowidlo, 1986). The important distinction here is that this type of behavior, unlike OCB,
can be unrelated to the organization. Thus, someone exhibiting prosocial behavior could be
helping a coworker with personal matter.

Extra-role behavior

Extra-role behavior (ERB), first defined by Van Dyne, Cummings and Mclean-Parks (1995, as
cited in Organ, Podsakoff, & MacKenzie, 2006), is another construct similar to OCB. ERB is
defined as “behavior that attempts to benefit the organization and that goes beyond existing role
expectations” (Organ et al., 2006, p. 33). While similar in many aspects, there do exist some
important differences between OCB and ERB. Two interesting concepts are a part of ERB that
are not included in OCB: whistle blowing and principled organizational dissent. Whistle blowing
involves the reporting of one employee by another so that unethical and or illegal practices are
brought to the attention of authorities (Near & Miceli, 1987, as cited in Organ et al., 2006).
Principled organizational dissent is when employees protest the organization because of some
kind of injustice (Graham, 1986, as cited in Organ et al., 2006). Both of these ideas contribute to
ERB in the sense that their purpose is to further the good of the organization[citation needed] and that
they are not included in the formal job description. This again, is a construct very similar to
OCB.

Altruism and general compliance

Smith, Organ, and Near (1983) first proposed that OCB is composed of altruism and general
compliance. These two dimensions serve to improve organizational effectiveness in different
ways. Altruism in the workplace consists essentially of helping behaviors. These behaviors can
both be directed within or outside of the organization. There is no direct link, or one-to-one
relationship, between every instance of helping behavior and a specific gain for the organization.
The idea is that over time, the compilation of employees helping behavior will eventually be
advantageous for the organization (Organ et al., 2006).General compliance behavior serves to
benefit the organization in several ways. Low rates of absenteeism and rule following help to
keep the organization running efficiently. A compliant employee does not engage in behaviors
such as taking excessive breaks or using work time for personal matters. When these types of
behaviors are minimized the workforce is naturally more productive.Later, Organ (1988)
deconstructed the dimension of general compliance and added additional dimensions of OCB.
This deconstruction resulted in a five-factor model consisting of altruism, courtesy,
conscientiousness, civic virtue, and sportsmanship. The definition of altruism remained much as
it was, defined by discretionary behaviors that have the effect of helping a specific work
colleague with an organizationally relevant task or problem. Conscientiousness consists of

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behaviors that go well beyond the minimum role requirements of the organization (Law, Wong,
& Chen, 2005). These behaviors indicate that employees accept and adhere to the rules,
regulations, and procedures of the organization.Civic virtue is characterized by behaviors that
indicate the employee’s deep concerns and active interest in the life of the organization (Law et
al., 2005). This dimension also encompasses positive involvement in the concerns of the
organization (Organ et al., 2006). Examples of civic virtue can be seen in daily affairs such as
attending meetings and keeping up with what is going on with the organization in general. Civic
virtue can also be demonstrated on a larger scale by defending the organization’s policies and
practices when they are challenged by an outside source.Courtesy has been defined as
discretionary behaviors that aim at preventing work-related conflicts with others (Law et al.,
2005). This dimension is a form of helping behavior, but one that works to prevent problems
from arising. It also includes the word’s literal definition of being polite and considerate of
others (Organ et al., 2006). Examples of courteous behaviors are asking fellow employees if they
would like a cup of coffee while you are getting one for yourself, making extra copies of the
meeting agenda for your teammates, and giving a colleague ample notice when you alter
something that will affect them.Finally, sportsmanship has been defined as a willingness on the
part of the employee that signifies the employee’s tolerance of less-than-ideal organizational
circumstances without complaining and blowing problems out of proportion. Organ et al. (2006)
further define sportsmanship as an employee’s “ability to roll with the punches” even if they do
not like or agree with the changes that are occurring within the organization. By reducing the
amount of complaints from employees that administrators have to deal with, sportsmanship
conserves time and energy.It has been proven empirically that the factors listed above are the
most robust and distinct factors in assessing OCB. However, in a meta-analysis of the OCB
literature, LePine, Erez, and Johnson (2002) found that these five dimensions are very highly
correlated and do not have much differentiation among antecedents, indicating some overlap in
the dimensions.

Behaviors directed at the individual and the organization

A different way of organizing the OCB construct was proposed by Williams and Anderson
(1991). They divided up the dimensions of OCB into two different types of OCB based on whom
the behaviors were directed at. Organizational citizenship behavior – individuals (OCBI) include
behaviors that are aimed at other individuals in the workplace while organizational citizenship
behavior-organizational (OCBO) include behaviors directed at the organization as a whole.
Altruism and courtesy are actions aimed at other employees and thus fall under the umbrella of
OCBIs. Conscientiousness, civic virtue, and sportsmanship are behaviors intended for the benefit
of the organization and can subsequently be considered OCBOs.

Gender differences

Research on gender-role stereotypes has gone on for decades. It is widely accepted that certain
behaviors are considered more feminine and certain behaviors are considered more masculine.
Feminine behaviors have been characterized as interpersonal in orientation and focused on a
concern for others. Masculine behaviors, on the other hand, are typically more aggressive and
independent (Spence & Helmreich, 1980). In line with these ideas, the OCB dimensions of
altruism, courtesy, civic virtue and sportsmanship can be divided by gender role. Altruism and

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courtesy, previously mentioned as OCBIs, are considered in-role behavior for women, while
civic virtue and sportsmanship, previously mentioned as OCBOs, are regarded as more in-role
for men. The dimension of conscientiousness, which includes attention to detail and adherence to
organizational rules, is excluded, as this dimension does not seem to adhere to any particular
gender norm (Kidder & Parks, 2001).

Counterproductive work behavior

Counterproductive work behavior (CWB) is defined as “intentional employee behavior that is

harmful to the legitimate interests of an organization” (Dalal, 2005). When considering the
definitions of OCB and CWB, it seems logical to assume that these constructs are opposites; one
harms the organization and the other helps. Individuals might further assume that by engaging in
one of these types of behaviors, an individual will not tend to engage in the other. However, a
recent meta-analysis, Dalal (2005), found that this is not the case. The results of this analysis
indicate that these constructs only shared a little to moderate negative correlation and
furthermore showed differences in magnitude and pattern of relationships between various
antecedents and the two constructs. These results indicate that CWB and OCB are two separate
constructs and should be conceptualized as thus.

Antecedents

Early research regarding the antecedents of OCB focused on employee attitudes, dispositions,
and leader supportiveness. More recently, many different variables have been examined in the
effort to determine the antecedents of OCB. Commonly studied antecedents of OCB are job
satisfaction, perceptions of organizational justice, organizational commitment, personality
characteristics, task characteristics, and leadership behavior. These antecedents have been
analyzed at both the overall and individual OCB levels.One of the most intuitive antecedents of
OCB is job satisfaction. Organ and Ryan (1995) conducted a meta-analysis of 28 studies and
found a modest relationship between job satisfaction and OCB. This relationship was stronger
than the relationship between job satisfaction and in-role performance. Other attitudinal
measures, perceived fairness, organizational commitment, and leader supportiveness are found to
correlate with OCB at about the same rate as satisfaction (Organ & Ryan, 1995).In terms of
personality characteristics, conscientiousness, agreeableness, and positive and negative
affectivity garner the most support as antecedents of OCB (Podsakoff, MacKenzie, Paine, &
Bachrach, 2000). Conscientiousness, in particular, has been found to have a strong relationship
with the general compliance component of OCB (Organ et al., 2006). However, it has also been
reported that personality measures are weaker predictors of OCB when compared to attitudinal
predictors (Organ & Ryan, 1995).Task characteristics such as feedback, routinization, and
intrinsic satisfaction are found to be significantly related to altruism, courtesy, conscientiousness,
sportsmanship, and civic virtue. Positive relationships were found between both task feedback
and intrinsic satisfaction and OCB, while a negative relationship was found between task
routinization and OCB. Even though task characteristics have been found to predict OCB, some
debate exists as to whether this is a direct effect or a relationship mediated by job satisfaction
(Todd & Kent, 2006).Leadership behaviors have also been found to be an important predictor of
OCB. These behaviors fall into four categories: transformational leadership behavior,
transactional leadership behavior, behaviors having to do with the path-goal theory of leadership,

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and behaviors having to do with the leader-member exchange theory. Transformational
leadership behaviors, including articulating a vision, providing an appropriate model, fostering
the acceptance of group goals, high performance expectations, and intellectual stimulation, have
significant positive relationships with Organ’s dimensions of OCB. Two types of behaviors
representative of transactional leadership style, contingent reward behavior and non-contingent
punishment behavior, have significant relationships with Organ’s dimensions of OCB.
Additionally, both the supportive leadership and leader role clarification aspects of the path-goal
theory of leadership are positively related to OCB. Podsakoff et al. (2000) found that leader-
member exchange was positively related to altruism and an overall composite measure of OCB.

Consequences

During the early 1990s, scholars gained real momentum in the area of OCB with regard to
empirical research. Empirical research regarding the consequences of OCBs has focused on two
main areas: organizational performance and success and managerial evaluations of performance
and reward allocation.

Organizational performance and success

Multiple studies and meta-analyses have been conducted to look at the relationship between
OCBs and organizational performance and success. Podsakoff and MacKenzie (1994, as cited in
Organ et al., 2006) looked at an insurance agency and found that the OCBs civic virtue and
sportsmanship were both significantly related to indices of sales performance. Podsakoff,
Ahearne, and MacKenzie (1997, as cited in Organ et al., 2006) examined paper mill workers and
found that helping behavior was significantly related to product quality. MacKenzie, Podsakoff,
and Ahearne (1996, as cited in Organ et al., 2006) found that civic virtue and helping behavior
were significantly related to the percent of team quota sales. Walz and Niehoff (2000, as cited in
Organ et al., 2006) examined 30 different restaurants and found that helping behavior was
significantly related to operating efficiency, customer satisfaction, and quality of performance.
Researchers found that helping behavior was also negatively correlated with wasted food. Koys
(2001, as cited in Organ et al., 2006) used a combination of OCB dimensions to form a
composite measure of OCB. Results from this study indicated that the composite measure of
OCB was positively correlated with restaurant profits.More recently, Podsakoff, Blume,
Whiting, and Podsakoff (2009) found that OCBs were positively related to unit-level
performance and customer satisfaction. Nielsen, Hrivnak, and Shaw (2009), in their meta-
analytic review of the existing group literature, examined the relationship between OCBs and
performance at the group level. These researchers found a positive and significant relationship
between overall OCB and performance at the group level. In addition, Nielsen et al. (2009) found
that similar patterns of relationships existed for each dimension of OCB: civic virtue,
sportsmanship, altruism, conscientiousness, and courtesy.

Managerial evaluations and reward allocations

With regard to the relationship between OBs and managerial evaluations, Podsakoff and
colleagues (2000) found, in a summary of empirical evidence, that OCBs uniquely accounted for
42.9% of the variance in managerial performance evaluations. Results from this study also

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indicated that altruism or helping was significantly related to performance evaluations in eight
out of the ten studies it was included in; sportsmanship was significantly related to performance
evaluations in five out of the eight studies it was included in; conscientiousness was significantly
related to performance evaluations in all three of the studies it was included in; and civic virtue
was significantly related to performance evaluations in six out of the eight studies it was
included in.More recently, Podsakoff et al. (2009) found that OCBs have a positive relationship
with performance ratings and reward allocations. Podsakoff, Whiting, Podsakoff, and Mishra
(2010) examined the effects of job candidates’ tendency to exhibit OCBs on selection decisions
made in the context of a job interview. These researchers found that candidates whose interview
responses indicated a tendency to engage in helping others, challenge the status quo by voicing
their opinions, and support and defend an organization were generally viewed as more
competent, received higher overall evaluations, and received higher recommended starting
salaries than those who did not.Research has also looked at the relationship between task-
performance, CWB, and OCB with overall managerial evaluations. Interestingly, when
compared with task-performance and CWB, OCB is found to contribute least to overall
managerial evaluations (Rotundo & Sackett, 2002). This somewhat inconsistent pattern of results
across the OCB literature with regard to antecedents exemplifies the need for more research in
this area.

Measures

Researchers have developed a variety of measures for OCB. However before being able to
measure a construct it must be defined. As discussed earlier, this is not a cut and dried task.
Thus, the conceptual definitions of OCB used by researches differ from study to study.Bateman
and Organ’s (1983) study was one of the first to tackle the measurement of OCB. Their
definition of OCB “includes any of those gestures (often taken for granted) that lubricate the
social machinery of the organization but that do not directly inhere in the usual notion of task
performance” (Bateman & Organ, 1983, p. 588). Based on this definition, they constructed a 30-
item OCB scale that measured cooperation, altruism, compliance, punctuality, housecleaning,
protecting company property, conscientiously following company rules, and dependability. The
scale asked each participant to rate their agreement or disagreement with each of the 30 items
using a 7-point scale that ranged from negative 3 to positive 3.Another important early study was
Smith et al. (1983), which took a slightly more complicated measurement approach by
developing a scale in stages. In order to develop their 16-item scale, these researchers
interviewed managers in manufacturing organizations and asked them to “identify instances of
helpful, but not absolutely required behavior” (Smith et al., 1983, p. 656). The researchers
created a 20-item scale based on the interviews in addition to the scale items used in the Bateman
and Organ (1983) study mentioned previously. The third step involved administering the scale to
a group of 67 students who had managerial experience. The students were asked to complete the
scale while thinking of someone who currently, or had in the past, worked for them. Students
then described the person’s work behavior and their responses to the scale items. After factor
analysis, four items were dropped resulting in the 16-item scale. It is with this scale that the
authors found results indicating the first two distinct dimensions of OCB: altruism and
generalized compliance. Examples of items in Smith et al.’s (1983) scale include:

• Helps others who have been absent.

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 • Gives advance notice if unable to come to work.
• Assists supervisor with his or her work.
• Attend functions not required but that help company image.

In 1990, Podsakoff, MacKenzie, Moorman, and Fetter conducted an important study using the
five dimensions of OCB: altruism, conscientiousness, sportsmanship, courtesy, and civic virtue.
These researchers developed a 24-item scale by having 10 of their colleagues sort each of the 24
items into one of the five OCB dimensions or an “other” category if they felt the item did not fit
any of the five defined conceptual dimensions. Participants were asked to indicate their level of
agreement using a 7-point scale ranging from “strongly disagree” to “strongly agree.” This five-
factor structure has served as the building block for a substantial amount of OCB research.
Examples of items in Podsakoff et al.’s (1990) scale include:

• Obeys company rules and regulations even when no one is watching.

• Attends meetings that are not mandatory, but are considered important.
• Mindful of how his/her behavior affects other people’s jobs.
• Willingly helps others who have work related problems.

Feedback

Feedback occurs when outputs of a system are routed back as inputs as part of a chain of cause-
and-effect that forms a circuit or loop.[2] The system can then be said to feed back into itself. The
notion of cause-and-effect has to be handled carefully when applied to feedback systems:

"Simple causal reasoning about a feedback system is difficult because the first system
influences the second and second system influences the first, leading to a circular
argument. This makes reasoning based upon cause and effect tricky, and it is necessary to
analyze the system as a whole." [3]

Self-regulating mechanisms have existed since antiquity, and the idea of feedback had started to
enter economic theory in Britain by the eighteenth century, but it wasn't at that time recognized
as a universal abstraction and so didn't have a name. The verb phrase "to feed back", in the sense
of returning to an earlier position in a mechanical process, was in use in the US by the
1860s,[5][6] and in 1909, Nobel laureate Karl Ferdinand Braun used the term "feed-back" as a
noun to refer to (undesired) coupling between components of an electronic circuit. By the end of
1912, researchers using early electronic amplifiers (audions) had discovered that deliberately
coupling part of the output signal back to the input circuit would boost the amplification (through
regeneration), but would also cause the audion to howl or sing. This action of feeding back of the
signal from output to input gave rise to the use of the term "feedback" as a distinct word by 1920.
Over the years there has been some dispute as to the best definition of feedback. According to
Ashby (1956), mathematicians and theorists interested in the principles of feedback mechanisms
prefer the definition of circularity of action, which keeps the theory simple and consistent. For
those with more practical aims, feedback should be a deliberate effect via some more tangible
connection.

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 "[Practical experimenters] object to the mathematician's definition, pointing out that this
would force them to say that feedback was present in the ordinary pendulum ... between
its position and its momentum—a 'feedback' that, from the practical point of view, is
somewhat mystical. To this the mathematician retorts that if feedback is to be considered
present only when there is an actual wire or nerve to represent it, then the theory becomes
chaotic and riddled with irrelevancies."

Focusing on uses in management theory, Ramaprasad (1983) defines feedback generally as

"...information about the gap between the actual level and the reference level of a system
parameter" that is used to "alter the gap in some way." He emphasizes that the information by
itself is not feedback unless translated into action.

Types

Maintaining a desired system performance despite disturbance using negative feedback to reduce
system error.

There are two types of feedback: positive feedback and negative feedback.

As an example of negative feedback, the diagram might represent a cruise control system in a
car, for example, that matches a target speed such as the speed limit. The controlled system is the
car; its input includes the combined torque from the engine and from the changing slope of the
road (the disturbance). The car's speed (status) is measured by a speedometer. The error signal is
the departure of the speed as measured by the speedometer from the target speed (set point). This
measured error is interpreted by the controller to adjust the accelerator, commanding the fuel
flow to the engine (the effector). The resulting change in engine torque, the feedback, combines
with the torque exerted by the changing road grade to reduce the error in speed, minimizing the
road disturbance.The terms "positive" and "negative" were first applied to feedback prior to
WWII. The idea of positive feedback was already current in the 1920s with the introduction of
the regenerative circuit.[10] Friis and Jensen (1924) described regeneration in a set of electronic
amplifiers as a case where the "feed-back" action is positive in contrast to negative feed-back
action, which they mention only in passing.[11] Harold Stephen Black's classic 1934 paper first
details the use of negative feedback in electronic amplifiers. According to Black:"Positive feed-
back increases the gain of the amplifier, negative feed-back reduces it."

According to Mindell (2002) confusion in the terms arose shortly after this:

"...Friis and Jensen had made the same distinction Black used between 'positive feed-
back' and 'negative feed-back', based not on the sign of the feedback itself but rather on

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 its effect on the amplifier’s gain. In contrast, Nyquist and Bode, when they built on
Black’s work, referred to negative feedback as that with the sign reversed. Black had
trouble convincing others of the utility of his invention in part because confusion existed
over basic matters of definition."

Even prior to the terms being applied, James Clerk Maxwell had described several kinds of
"component motions" associated with the centrifugal governors used in steam engines,
distinguishing between those that lead to a continual increase in a disturbance or the amplitude
of an oscillation, and those that lead to a decrease of the same.

Terminology

The terms positive and negative feedback are defined in different ways within different
disciplines.

1. the altering of the gap between reference and actual values of a parameter, based on
whether the gap is widening (positive) or narrowing (negative).[9]
2. the valence of the action or effect that alters the gap, based on whether it has a happy
(positive) or unhappy (negative) emotional connotation to the recipient or observer.[14]

The two definitions may cause confusion, such as when an incentive (reward) is used to boost
poor performance (narrow a gap). Referring to definition 1, some authors use alternative terms,
replacing positive/negative with self-reinforcing/self-correcting,[15] reinforcing/balancing,[16]
discrepancy-enhancing/discrepancy-reducing[17] or regenerative/degenerative[18] respectively.
And for definition 2, some authors advocate describing the action or effect as positive/negative
reinforcement or punishment rather than feedback.[9][19] Yet even within a single discipline an
example of feedback can be called either positive or negative, depending on how values are
measured or referenced. This confusion may arise because feedback can be used for either
informational or motivational purposes, and often has both a qualitative and a quantitative
component. As Connellan and Zemke (1993) put it:"Quantitative feedback tells us how much
and how many. Qualitative feedback tells us how good, bad or indifferent."

Limitations of negative and positive feedback

While simple systems can sometimes be described as one or the other type, many systems with
feedback loops cannot be so easily designated as simply positive or negative, and this is
especially true when multiple loops are present.

"When there are only two parts joined so that each affects the other, the properties of the
feedback give important and useful information about the properties of the whole. But
when the parts rise to even as few as four, if every one affects the other three, then twenty
circuits can be traced through them; and knowing the properties of all the twenty circuits
does not give complete information about the system."[1](p54)

Other types of feedback

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In general, feedback systems can have many signals fed back and the feedback loop frequently
contain mixtures of positive and negative feedback where positive and negative feedback can
dominate at different frequencies or different points in the state space of a system.The term
bipolar feedback has been coined to refer to biological systems where positive and negative
feedback systems can interact, the output of one affecting the input of another, and vice versa.
Some systems with feedback can have very complex behaviors such as chaotic behaviors in non-
linear systems, while others have much more predictable behaviors, such as those that are used to
make and design digital systems.Feedback is used extensively in digital systems. For example,
binary counters and similar devices employ feedback where the current state and inputs are used
to calculate a new state which is then fed back and clocked back into the device to update it.

Applications

In biological systems such as organisms, ecosystems, or the biosphere, most parameters must
stay under control within a narrow range around a certain optimal level under certain
environmental conditions. The deviation of the optimal value of the controlled parameter can
result from the changes in internal and external environments. A change of some of the
environmental conditions may also require change of that range to change for the system to
function. The value of the parameter to maintain is recorded by a reception system and conveyed
to a regulation module via an information channel. An example of this is Insulin oscillations.

Biological systems contain many types of regulatory circuits, both positive and negative. As in
other contexts, positive and negative do not imply that the feedback causes good or bad effects.
A negative feedback loop is one that tends to slow down a process, whereas the positive
feedback loop tends to accelerate it. The mirror neurons are part of a social feedback system,
when an observed action is "mirrored" by the brain—like a self-performed action.Feedback is
also central to the operations of genes and gene regulatory networks. Repressor (see Lac
repressor) and activator proteins are used to create genetic operons, which were identified by
Francois Jacob and Jacques Monod in 1961 as feedback loops. These feedback loops may be
positive (as in the case of the coupling between a sugar molecule and the proteins that import
sugar into a bacterial cell), or negative (as is often the case in metabolic consumption).On a
larger scale, feedback can have a stabilizing effect on animal populations even when profoundly
affected by external changes, although time lags in feedback response can give rise to predator-
prey cycles. In zymology, feedback serves as regulation of activity of an enzyme by its direct
product(s) or downstream metabolite(s) in the metabolic pathway (see Allosteric regulation).The
hypothalamic–pituitary–adrenal axis is largely controlled by positive and negative feedback,
much of which is still unknown.In psychology, the body receives a stimulus from the
environment or internally that causes the release of hormones. Release of hormones then may
cause more of those hormones to be released, causing a positive feedback loop. This cycle is also
found in certain behaviour. For example, "shame loops" occur in people who blush easily. When
they realize that they are blushing, they become even more embarrassed, which leads to further
blushing, and so on.

Climate science

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The climate system is characterized by strong positive and negative feedback loops between
processes that affect the state of the atmosphere, ocean, and land. A simple example is the ice-
albedo positive feedback loop whereby melting snow exposes more dark ground (of lower
albedo), which in turn absorbs heat and causes more snow to melt.

Control theory

Feedback is extensively used in control theory, using a variety of methods including state space
(controls), full state feedback (also known as pole placement), and so forth. Note that in the
context of control theory, "feedback" is traditionally assumed to specify "negative feedback".[25]

The most common general-purpose controller using a control-loop feedback mechanism is a

proportional-integral-derivative (PID) controller. Heuristically, the terms of a PID controller can
be interpreted as corresponding to time: the proportional term depends on the present error, the
integral term on the accumulation of past errors, and the derivative term is a prediction of future
error, based on current rate of change.

Mechanical engineering

In ancient times, the float valve was used to regulate the flow of water in Greek and Roman
water clocks; similar float valves are used to regulate fuel in a carburettor and also used to
regulate tank water level in the flush toilet.

The Dutch inventor Cornelius Drebbel (1572-1633) built thermostats (c1620) to control the
temperature of chicken incubators and chemical furnaces. In 1745, the windmill was improved
by blacksmith Edmund Lee, who added a fantail to keep the face of the windmill pointing into
the wind. In 1787, Thomas Mead regulated the rotation speed of a windmill by using a
centrifugal pendulum to adjust the distance between the bedstone and the runner stone (i.e., to
adjust the load).The use of the centrifugal governor by James Watt in 1788 to regulate the speed
of his steam engine was one factor leading to the Industrial Revolution. Steam engines also use
float valves and pressure release valves as mechanical regulation devices. A mathematical
analysis of Watt's governor was done by James Clerk Maxwell in 1868. The Great Eastern was
one of the largest steamships of its time and employed a steam powered rudder with feedback
mechanism designed in 1866 by John McFarlane Gray. Joseph Farcot coined the word servo in
1873 to describe steam-powered steering systems. Hydraulic servos were later used to position
guns. Elmer Ambrose Sperry of the Sperry Corporation designed the first autopilot in 1912.
Nicolas Minorsky published a theoretical analysis of automatic ship steering in 1922 and
described the PID controller. Internal combustion engines of the late 20th century employed
mechanical feedback mechanisms such as the vacuum timing advance but mechanical feedback
was replaced by electronic engine management systems once small, robust and powerful single-
chip microcontrollers became affordable.

Electronic engineering

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The simplest form of a feedback amplifier can be represented by the ideal block diagram made
up of unilateral elements.The use of feedback is widespread in the design of electronic
amplifiers, oscillators, and stateful logic circuit elements such as flip-flops and counters.
Electronic feedback systems are also very commonly used to control mechanical, thermal and
other physical processes.If the signal is inverted on its way round the control loop, the system is
said to have negative feedback;[29] otherwise, the feedback is said to be positive. Negative
feedback is often deliberately introduced to increase the stability and accuracy of a system by
correcting or reducing the influence of unwanted changes. This scheme can fail if the input
changes faster than the system can respond to it. When this happens, the lag in arrival of the
correcting signal can result in over-correction, causing the output to oscillate or "hunt". While
often an unwanted consequence of system behaviour, this effect is used deliberately in electronic
oscillators.Harry Nyquist contributed the Nyquist plot for assessing the stability of feedback
systems. An easier assessment, but less general, is based upon gain margin and phase margin
using Bode plots (contributed by Hendrik Bode). Design to ensure stability often involves
frequency compensation, one method of compensation being pole splitting.Electronic feedback
loops are used to control the output of electronic devices, such as amplifiers. A feedback loop is
created when all or some portion of the output is fed back to the input. A device is said to be
operating open loop if no output feedback is being employed and closed loop if feedback is being
used.[31]

When two or more amplifiers are cross-coupled using positive feedback, complex behaviors can
be created. These multivibrators are widely used and include:

• astable circuits, which act as oscillators

• monostable circuits, which can be pushed into a state, and will return to the stable
state after some time
• bistable circuits, which have two stable states that the circuit can be switched
between

Negative feedback

A Negative feedback occurs when the fed-back output signal has a relative phase of 180° with
respect to the input signal (upside down). This situation is sometimes referred to as being out of
phase, but that term also is used to indicate other phase separations, as in "90° out of phase".
Negative feedback can be used to correct output errors or to desensitize a system to unwanted
fluctuations. In feedback amplifiers, this correction is generally for waveform distortion
reduction or to establish a specified gain level. A general expression for the gain of a negative
feedback amplifier is the asymptotic gain model.

Positive feedback

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Positive feedback occurs when the fed-back signal is in phase with the input signal. Under
certain gain conditions, positive feedback reinforces the input signal to the point where the
output of the device oscillates between its maximum and minimum possible states. Positive
feedback may also introduce hysteresis into a circuit. This can cause the circuit to ignore small
signals and respond only to large ones. It is sometimes used to eliminate noise from a digital
signal. Under some circumstances, positive feedback may cause a device to latch, i.e., to reach a
condition in which the output is locked to its maximum or minimum state. This fact is very
widely used in digital electronics to make bistable circuits for volatile storage of information.The
loud squeals that sometimes occurs in audio systems, PA systems, and rock music are known as
audio feedback. If a microphone is in front of a loudspeaker that it is connected to, sound that the
microphone picks up comes out of the speaker, and is picked up by the microphone and re-
amplified. If the loop gain is sufficient, howling or squealing at the maximum power of the
amplifier is possible.

Oscillator

A popular op-amp relaxation oscillator.

An electronic oscillator is an electronic circuit that produces a periodic, oscillating electronic

signal, often a sine wave or a square wave.[33][34] Oscillators convert direct current (DC) from a
power supply to an alternating current signal. They are widely used in many electronic devices.
Common examples of signals generated by oscillators include signals broadcast by radio and
television transmitters, clock signals that regulate computers and quartz clocks, and the sounds
produced by electronic beepers and video games. Oscillators are often characterized by the
frequency of their output signal:

• A low-frequency oscillator (LFO) is an electronic oscillator that generates a frequency

below ≈20 Hz. This term is typically used in the field of audio synthesizers, to distinguish
it from an audio frequency oscillator.
• An audio oscillator produces frequencies in the audio range, about 16 Hz to 20 kHz.[34]
• An RF oscillator produces signals in the radio frequency (RF) range of about 100 kHz to
100 GHz.[34]

Oscillators designed to produce a high-power AC output from a DC supply are usually called
inverters.There are two main types of electronic oscillator: the linear or harmonic oscillator and
the nonlinear or relaxation oscillator.

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Latches and flip-flops

An SR latch, constructed from a pair of cross-coupled NOR gates.

A 4-bit ring counter using D-type flip flops

A latch or a flip-flop is a circuit that has two stable states and can be used to store state
information. They typically constructed using feedback that crosses over between two arms of
the circuit, to provide the circuit with a state. The circuit can be made to change state by signals
applied to one or more control inputs and will have one or two outputs. It is the basic storage
element in sequential logic. Latches and flip-flops are fundamental building blocks of digital
electronics systems used in computers, communications, and many other types of systems.atches
and flip-flops are used as data storage elements. Such data storage can be used for storage of
state, and such a circuit is described as sequential logic. When used in a finite-state machine, the
output and next state depend not only on its current input, but also on its current state (and hence,
previous inputs). It can also be used for counting of pulses, and for synchronizing variably-timed
input signals to some reference timing signal.Flip-flops can be either simple (transparent or
opaque) or clocked (synchronous or edge-triggered). Although the term flip-flop has historically
referred generically to both simple and clocked circuits, in modern usage it is common to reserve
the term flip-flop exclusively for discussing clocked circuits; the simple ones are commonly
called latches. Using this terminology, a latch is level-sensitive, whereas a flip-flop is edge-
sensitive. That is, when a latch is enabled it becomes transparent, while a flip flop's output only
changes on a single type (positive going or negative going) of clock edge.

Software

Feedback loops provide generic mechanisms for controlling the running, maintenance, and
evolution of software and computing systems.[38] Feedback-loops are important models in the
engineering of adaptive software, as they define the behaviour of the interactions among the
control elements over the adaptation process, to guarantee system properties at run-time.
Feedback loops and foundations of control theory have been successfully applied to computing
systems.[39] In particular, they have been applied to the development of products such as IBM's
Universal Database server and IBM Tivoli. From a software perspective, the autonomic (MAPE,

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monitor analyze plan execute) loop proposed by researchers of IBM is another valuable
contribution to the application of feedback loops to the control of dynamic properties and the
design and evolution of autonomic software systems.

User interface design

Feedback is an also useful design principle for designing user interfaces.

Video feedback

Video feedback is the video equivalent of acoustic feedback. It involves a loop between a video
camera input and a video output, e.g., a television screen or monitor. Aiming the camera at the
display produces a complex video image based on the feedback.[42]

Social sciences

Economics and finance

The stock market is an example of a system prone to oscillatory "hunting", governed by positive
and negative feedback resulting from cognitive and emotional factors among market participants.
For example,When stocks are rising (a bull market), the belief that further rises are probable
gives investors an incentive to buy (positive feedback—reinforcing the rise, see also stock
market bubble); but the increased price of the shares, and the knowledge that there must be a
peak after which the market falls, ends up deterring buyers (negative feedback—stabilizing the
rise).

• Once the market begins to fall regularly (a bear market), some investors may expect
further losing days and refrain from buying (positive feedback—reinforcing the fall), but
others may buy because stocks become more and more of a bargain (negative feedback—
stabilizing the fall).

George Soros used the word reflexivity, to describe feedback in the financial markets and
developed an investment theory based on this principle.The conventional economic equilibrium
model of supply and demand supports only ideal linear negative feedback and was heavily
criticized by Paul Ormerod in his book The Death of Economics, which, in turn, was criticized
by traditional economists. This book was part of a change of perspective as economists started to
recognise that chaos theory applied to nonlinear feedback systems including financial markets.

360-degree feedback

In human resources or industrial psychology, 360-degree feedback, also known as multi-rater

feedback, multi source feedback, or multi source assessment, is a process utilized by
organizations to solicit information from a variety of workplace sources on an employee's work-
related behavior and/or performance. Most often, information solicited in a 360-degree feedback
process will include feedback from an employee's subordinates, peers (colleagues), and
supervisor(s), as well as a self-evaluation by the employee him or herself. Such feedback can

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also include, when relevant, feedback from external sources who interact with the employee,
such as customers and suppliers or other interested stakeholders. 360-degree feedback is so
named because it solicits feedback regarding an employee's behavior from a variety of points of
view (subordinate, lateral, and supervisory). It therefore may be contrasted with "downward
feedback" (traditional feedback on work behavior and performance delivered to subordinates by
supervisory or management employees only; see traditional performance appraisal), or "upward
feedback" delivered to supervisory or management employees by subordinates only.

Organizations have most commonly utilized 360-degree feedback for developmental purposes,
providing it to employees to assist them in developing work skills and behaviors. However,
organizations are increasingly using 360-degree feedback in performance evaluations and
employment decisions (e.g., pay; promotions). When 360-degree feedback is used for
performance evaluation purposes, it is sometimes called a "360-degree review."There is a great
deal of debate as to whether 360-degree feedback should be used exclusively for development
purposes[1] or for evaluation purposes as well.[2] This is due primarily to feedback providers'
subjectivity and motivations, inter-rater variations, and whether feedback providers have the
ability to fairly evaluate attainment of work and organizational objectives. While these issues
exist when 360-degree feedback is used for development, they are more prominent when
employers use them for performance evaluation purposes, as they can unfairly influence
employment decisions, and even lead to legal liability.

The German military first began gathering feedback from multiple sources in order to evaluate
performance during World War II.[3] Others also explored the use of multi-rater feedback during
this time period via the concept of T-groups.One of the earliest recorded uses of surveys to
gather information about employees occurred in the 1950s at Esso Research and Engineering
Company.[4] From there, the idea of 360 degree feedback gained momentum, and by the 1990s
most human resources and organizational development professionals understood the concept.
The problem was that collecting and collating the feedback demanded a paper-based effort
including either complex manual calculations or lengthy delays. The first led to despair on the
part of practitioners; the second to a gradual erosion of commitment by recipients.However, due
to the rise of the Internet and the ability to conduct evaluations online with surveys, multi-rater
feedback use steadily increased in popularity.[5] Outsourcing of human resources functions also
has created a strong market for 360-degree feedback products from consultants. This has led to a
proliferation of 360-degree feedback tools on the market.Today, studies suggest that over one-
third of U.S. companies use some type of multi-source feedback.[7] Others claim that this
estimate is closer to 90% of all Fortune 500 firms. In recent years, this has become encouraged
as Internet-based services have become standard in corporate development, with a growing menu
of useful features (e.g., multi languages, comparative reporting, and aggregate reporting).
However, issues abound regarding such systems validity and reliability, particularly when used
in performance appraisals.

Many 360-degree feedback tools are not customized to the needs of the organizations in which
they are used.[6] 360-degree feedback is not equally useful in all types of organizations and with
all types of jobs. Additionally, using 360-degree feedback tools for appraisal purposes has
increasingly come under fire as performance criteria may not be valid and job based, employees
may not be adequately trained to evaluate a co-worker's performance, and feedback providers

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can manipulate these systems.[10] Employee manipulation of feedback ratings has been reported
in some companies who have utilized 360-degree feedback for performance evaluation including
GE (Welch 2001), IBM (Linman 2011), and Amazon (Kantor and Streitfeld 2015).

The U.S. military has criticized its own use of 360-degree feedback programs in employment
decisions because of problems with validity and reliability.[11] Other branches of the U.S.
government have questioned 360-degree feedback reviews as well.[12] Still, these organizations
continue to use multi-rater feedback in their development processes.

Accuracy

A study on the patterns of rater accuracy shows that the length of time that a rater has known the
individual being evaluated has the most significant effect on the accuracy of a 360-degree
review. The study shows that subjects in the group "known for one to three years" are the most
accurate, followed by those "known for less than one year," followed by those "known for three
to five years" and the least accurate being those "known for more than five years." The study
concludes that the most accurate ratings come from those who have known the individual being
reviewed long enough to get past the first impression, but not so long that they begin to
generalize favorably. It has been suggested that multi-rater assessments often generate
conflicting opinions and that there may be no way to determine whose feedback is accurate. [14]
Studies have also indicated that self-ratings are generally significantly higher than the ratings
given from others.] The motivations and biases of feedback providers must be taken into account.

Results

Several studies[16] indicate that the use of 360-degree feedback helps to improve employee
performance because it helps the evaluated see different perspectives of their performance. In a
5-year study,[17] no improvement in overall rater scores was found between the 1st and 2nd year,
but higher scores were noted between 2nd and 3rd and 3rd and 4th years. Reilly et al. (1996)
found that performance increased between the 1st and 2nd administrations, and sustained this
improvement 2 years later. Additional studies show that 360-degree feedback may be predictive
of future performance. Some authors maintain, however, that there are too many lurking
variables related to 360-degree evaluations to reliably generalize their effectiveness.[19] Bracken
et al. (2001b) and Bracken and Timmreck (2001) focus on process features that are likely to also
have major effects on creating behavior change. Greguras and Robie (1998) tracked how the
number of raters used in each particular category (direct report, peer, manager) affects the
reliability of the feedback. Their research showed that direct reports are the least reliable and,
therefore, more participation is required to produce a reliable result. Multiple pieces of
research[20] have demonstrated that the scale of responses can have a major effect on the results,
and some response scales are better than others. Goldsmith and Underhill (2001) report the
powerful influence of the evaluated individual following up with raters to discuss their results,
which cannot be done when feedback is anonymous. Other potentially powerful factors affecting
behavior change include how raters are selected, manager approval, instrument quality, rater
training and orientation, participant training, supervisor training, coaching, integration with HR
systems, and accountability. Some researchers claim that the use of multi-rater assessment does
not improve company performance. One 2001 study found that 360 degree feedback was

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associated with a 10.6 percent decrease in market value, and concludes that "there is no data
showing that [360-degree feedback] actually improves productivity, increases retention,
decreases grievances, or is superior to forced ranking and standard performance appraisal
systems." One group of studies proposed four paradoxes that explain why 360 evaluations do not
elicit accurate data: (1) the Paradox of Roles, in which an evaluator is conflicted by being both
peer and the judge; (2) the Paradox of Group Performance, which admits that the vast majority of
work done in a corporate setting is done in groups, not individually; (3) the Measurement
Paradox, which shows that qualitative, or in-person techniques are much more effective than
mere ratings in facilitating change; and (4) the Paradox of Rewards, which shows that
individuals evaluating their peers care more about the rewards associated with finishing the task
than the actual content of the evaluation itself. Additional studies[24] found no correlation
between an employee's multi-rater assessment scores and his or her top-down performance
appraisal scores (provided by the person's supervisor). They advise that although multi-rater
feedback can be effectively used for appraisal, care needs to be taken in its implementation or
results will be compromised.[25] This research suggests that 360-degree feedback and
performance appraisals get at different outcomes. Therefore, traditional performance appraisals
as well as 360-degree feedback should be used in evaluating overall performance.

Competency-based performance management

Performance management is about achieving results in a manner that is consistent with

organizational expectations. Integrating competencies within the performance management
process supports the provision of feedback to employees not only on “what” they have
accomplished (i.e., performance goals), but also “how” the work was performed, using
competencies for providing feedback. Assessing competencies as a part of performance
management is an important means of assisting employees in understanding performance
expectations and enhancing competencies. Multi-source feedback, while not an HR application
per se, is a method that is often used in performance management to assess and provide
employees with feedback on “how” they performed their work (i.e., their demonstration of the
competencies).

Best Practices

Performance Management

Performance management programs are set up to provide feedback to employees on how

effectively they are performing in their jobs. Such programs normally include a set of goals or
objectives the employee must accomplish within the review period as well as the standards or
criteria for determining whether the defined goals have been accomplished.

Effective performance management include the following features:

• Linking individual goals to the corporate and work unit business plans and goals;
• Focusing on results, behaviours (competencies) as well as process improvement;
• Regular reviews and updating of performance plans to address changing demands;

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 • Training for both managers and employees on how to effectively give and receive
feedback, including providing feedback to employees who experience challenges in
performing to the standards required in their jobs / roles;
• Training for managers on how to provide performance evaluations that are valid, fair and
unbiased.

Integrating Competencies in the Performance Management Process

Competencies can be integrated into the regular Performance Management (PM) process in one
of two ways:

• By defining the competencies needed to perform each Performance Goal / Objective

In this case, the manager and employee identify the key competencies required to achieve each
performance goal / objective (typically 1 to 3 competencies per goal / objective). At the end of
the performance cycle, the employee’s performance is evaluated in relation to the performance
goals / objectives as well as the key competencies associated with each goal. Using this
approach, the competencies included in the employee’s performance plan may or may not
completely coincide with the standard competency profile for the employee’s role / job. The
advantage of using this method is that the competencies being assessed are entirely consistent
with the employee’s performance goals for the performance review cycle. The disadvantage is
that not all competencies within the competency profile for the employee’s role / job will
necessarily be assessed within the cycle.

• By integrating the competencies for the employee’s job into the PM process

In this case, the performance plan includes the performance goals / objectives for the review
period as well as the complete set of competencies from the competency profile for the
employee’s role / job. The performance goals / objectives address “what” must be accomplished
during the review period, and the competencies measure “how” the employee conducted
him/herself to accomplish their work. The advantage of this method is that all competencies
defined in the competency profile for the employee’s role / job are evaluated. The disadvantage
is that due the specific nature of the performance goals / objectives, key competencies for the
effective performance during the review cycle, but not included in the competency profile, will
not be assessed.

In both cases, feedback provided on the employee’s competencies typically feeds into the
development of a learning or action plan to address gaps in performance and development within
or beyond the employee’s current role / job.

Multi-source / 360 Degree / Upward Feedback

In Multi-source, 360 Degree and Upward feedback, the behavioural indicators for the
competencies needed within the target role / job are used as the standard for assessing the
performance of the employee. In Multi-source / 360 feedback, different stakeholder groups
provide ratings, including the employee, their supervisor, as well as others with whom the

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employee interacts (e.g., peers, team members, clients both within and outside the organization,
reporting employees; etc.). In Upward Feedback, all employees reporting directly and / or
indirectly to the supervisor provide feedback on the supervisor’s performance.

The results are compiled and a report is provided to the employee. The report includes the results
for all competencies, highlighting both the competencies that are strong as well as those rated
lowest by the different stakeholder groups. In almost all cases, individual ratings from others
(except for the employee’s supervisor) are combined in such a way (e.g., averaged ratings) as to
protect the anonymity of the individuals providing the feedback. The report is set up to show
similarities and differences in ratings across the different stakeholder groups. The results of the
process are normally used to develop learning and action plans for improvement (see section on
Learning and Development). They can also feed into broader assessment programs (e.g.,
management assessment centres; development programs) to support employee career
development and / or succession management within the organization.

Upward and Multi-source / 360 Degree Feedback programs must be managed well in order to
protect those providing, as well as those receiving, feedback. The Society for Industrial /
Organizational Psychology has published guidelines for the effective development and
implementation of Multi-source Feedback.

Implementation Stages

The following implementation stages are suggested for mid to large organizations implementing
competencies within Performance Management on a corporate-wide basis

Stage 1

Determine policy for integrating competencies within the Performance Management process

• Design a Performance Management process consistent with the policy (as required)
• Design communications and training program to support implementation
• Pilot the process
• Revise and finalize ready for full implementation

Stage 2

Communicate and implement the Performance Management process

• Review and evaluate the process during the first cycle of implementation (e.g., first year)
and make revisions, as required.

Promotion (rank)

Promotion in the military: Louis C. Menetrey, United States Army, promoted to lieutenant
general in 1982.

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Promotion in the military: United States Army, enlisted promotion 1972

A promotion is the advancement of an employee's rank or position in an organizational

hierarchy system. Promotion may be an employee's reward for good performance, i.e., positive
appraisal. Before a company promotes an employee to a particular position it ensures that the
person is able to handle the added responsibilities by screening the employee with interviews and
tests and giving them training or on-the-job experience. A promotion can involve advancement
in terms of designation, salary and benefits, and in some organizations the type of job activities
may change a great deal. The opposite of a promotion is a demotion.

Elements

A promotion can involve advancement in terms of designation, salary and benefits, and in some
organizations the type of job activities may change a great deal. In many companies and public
service organizations, more senior positions have a different title: an analyst who is promoted
becomes a "principal analyst"; an economist becomes a "senior economist"; or an associate
professor becomes a "full professor". The amount of salary increase associated with a promotion
varies a great deal between industries and sectors, and depending on the what parts of the
hierarchical ladder an employee is moving between. In some industries or sectors, there may be
only a modest increase in salary for a promotions; in other fields, a promotion may substantially
increase an employee's salary.

The same is true with benefits and other privileges; in some industries, the promotion only
changes the title and salary, and there are no additional benefits or privileges (beyond the
psycho-social benefits that may accrue to the individual). In some not-for-profit organizations,
the values of the organization or the tightness of funding may result in there being only modest
salary increases associated with a promotion. In other industries, especially in private sector
companies, a promotion to senior management may carry a number of benefits, such as stock
options, a reserved parking space, a corner office with a secretary, and bonus pay for good
performance. The degree to which job activities change varies between industries and sectors. In
some fields, even after an employee is promoted, they continue to do similar work. For example,
a policy analyst in the federal government who is promoted to the post of senior policy analyst
will continue to do similar tasks such as writing briefing notes and carrying out policy research.
The differences may be in the complexity of the files that the individual is assigned to or in the
sensitivity of the issues that they are asked to deal with. In other fields, when an employee is
promoted, their work changes substantially. For example, whereas a staff engineer in a civil
engineering firm will spend their time doing engineering inspections and working with
blueprints, a senior engineer may spend most of their day in meetings with senior managers and
reading financial reports. In symphony orchestras, when a musician such as a violinist is
promoted to the position of concertmaster, their duties change substantially. As a violin player,
the individual played the music as part of the violin section. As a concertmaster, the individual
plays solo parts, decides on the bowings and interpretation of the music, and leads the violins
during performances. Different organizations grant the hiring and promoting managers different
levels of discretion to award promotions. In some parts of the private sector, the senior
management has a very high level of discretion to award promotions, and they can promote

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employees without going through much procedures or formalities such as testing, screening, and
interviewing. In the public sector and in academia, there are usually many more checks and
balances in place to prevent favoritism or bias. In many Western public service bodies, when a
manager wants to promote an employee, they must follow a number of steps, such as advertising
the position, accepting applications from qualified candidates, screening and interviewing
candidates, and then documenting why they chose a particular candidate. In academia, a similar
approach is used, with the added safeguard of including several layers of committee review of
the proposed promotion using committees which include members of other faculty and experts
from other universities.

Demotion

A demotion is a compulsory reduction in an employee's rank or job title within the

organizational hierarchy of a company, public service department, or other body. A demotion
may also lead to the loss of other privileges associated with a more senior rank and/or a
reduction in salary or benefits. An employee may be demoted for violating the rules of the
organization by a behavior such as excessive lateness, misconduct, or negligence. In some cases,
an employee may be demoted as an alternative to being laid off, if the employee has poor job
performance or if the company is facing a financial crisis. A move to a position at the same rank
or level elsewhere in the organization is called a lateral move or deployment. A voluntary move
to a lower level is also a deployment as it is not a compulsory reduction in level. Demotion is
often misinterpreted simply as the opposite of a promotion, however it is only one means of
undergoing a reduction in work level.

Types

Within the continuum of disciplinary options available within most organizations, a demotion
falls in the middle range of severity. Minor violations of rules, or the first violation of a rule will
typically result in a verbal or written warning or a suspension without pay. At the other extreme,
for severe violations of the rules, such as embezzlement or sabotage, an employee will typically
be fired and/or the company will file criminal or civil charges. In sports leagues, when teams are
transferred between divisions, the worst-ranked teams in the higher division are relegated (or
demoted) to the lower division.

Ranking

A ranking is a relationship between a set of items such that, for any two items, the first is either
'ranked higher than', 'ranked lower than' or 'ranked equal to' the second.[1] In mathematics, this is
known as a weak order or total preorder of objects. It is not necessarily a total order of objects
because two different objects can have the same ranking. The rankings themselves are totally
ordered. For example, materials are totally preordered by hardness, while degrees of hardness are
totally ordered.By reducing detailed measures to a sequence of ordinal numbers, rankings make
it possible to evaluate complex information according to certain criteria. Thus, for example, an
Internet search engine may rank the pages it finds according to an estimation of their relevance,
making it possible for the user quickly to select the pages they are likely to want to see.Analysis
of data obtained by ranking commonly requires non-parametric statistics.

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Strategies for assigning rankings

It is not always possible to assign rankings uniquely. For example, in a race or competition two
(or more) entrants might tie for a place in the ranking. When computing an ordinal measurement,
two (or more) of the quantities being ranked might measure equal. In these cases, one of the
strategies shown below for assigning the rankings may be adopted.

A common shorthand way to distinguish these ranking strategies is by the ranking numbers that
would be produced for four items, with the first item ranked ahead of the second and third
(which compare equal) which are both ranked ahead of the fourth. These names are also shown
below.

Standard competition ranking ("1224" ranking

In competition ranking, items that compare equal receive the same ranking number, and then a
gap is left in the ranking numbers. The number of ranking numbers that are left out in this gap is
one less than the number of items that compared equal. Equivalently, each item's ranking number
is 1 plus the number of items ranked above it. This ranking strategy is frequently adopted for
competitions, as it means that if two (or more) competitors tie for a position in the ranking, the
position of all those ranked below them is unaffected (i.e., a competitor only comes second if
exactly one person scores better than them, third if exactly two people score better than them,
fourth if exactly three people score better than them, etc.).

Thus if A ranks ahead of B and C (which compare equal) which are both ranked ahead of D, then
A gets ranking number 1 ("first"), B gets ranking number 2 ("joint second"), C also gets ranking
number 2 ("joint second") and D gets ranking number 4 ("fourth").

Modified competition ranking ("1334" ranking

Sometimes, competition ranking is done by leaving the gaps in the ranking numbers before the
sets of equal-ranking items (rather than after them as in standard competition ranking).[where?] The
number of ranking numbers that are left out in this gap remains one less than the number of items
that compared equal. Equivalently, each item's ranking number is equal to the number of items
ranked equal to it or above it. This ranking ensures that a competitor only comes second if they
score higher than all but one of their opponents, third if they score higher than all but two of their
opponents, etc.

Thus if A ranks ahead of B and C (which compare equal) which are both ranked head of D, then
A gets ranking number 1 ("first"), B gets ranking number 3 ("joint third"), C also gets ranking
number 3 ("joint third") and D gets ranking number 4 ("fourth"). In this case, nobody would get
ranking number 2 ("second") and that would be left as a gap.

Dense ranking ("1223" ranking)

In dense ranking, items that compare equal receive the same ranking number, and the next
item(s) receive the immediately following ranking number. Equivalently, each item's ranking

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number is 1 plus the number of items ranked above it that are distinct with respect to the ranking
order.

Thus if A ranks ahead of B and C (which compare equal) which are both ranked ahead of D, then
A gets ranking number 1 ("first"), B gets ranking number 2 ("joint second"), C also gets ranking
number 2 ("joint second") and D gets ranking number 3 ("third").

Ordinal ranking ("1234" ranking

In ordinal ranking, all items receive distinct ordinal numbers, including items that compare
equal. The assignment of distinct ordinal numbers to items that compare equal can be done at
random, or arbitrarily, but it is generally preferable to use a system that is arbitrary but
consistent, as this gives stable results if the ranking is done multiple times. An example of an
arbitrary but consistent system would be to incorporate other attributes into the ranking order
(such as alphabetical ordering of the competitor's name) to ensure that no two items exactly
match.With this strategy, if A ranks ahead of B and C (which compare equal) which are both
ranked ahead of D, then A gets ranking number 1 ("first") and D gets ranking number 4
("fourth"), and either B gets ranking number 2 ("second") and C gets ranking number 3 ("third")
or C gets ranking number 2 ("second") and B gets ranking number 3 ("third").In computer data
processing, ordinal ranking is also referred to as "row numbering"....

Fractional ranking ("1 2.5 2.5 4" ranking

Items that compare equal receive the same ranking number, which is the mean of what they
would have under ordinal rankings. Equivalently, the ranking number of 1 plus the number of
items ranked above it plus half the number of items equal to it. This strategy has the property that
the sum of the ranking numbers is the same as under ordinal ranking. For this reason, it is used in
computing Borda counts and in statistical tests (see below).Thus if A ranks ahead of B and C
(which compare equal) which are both ranked ahead of D, then A gets ranking number 1
("first"), B and C each get ranking number 2.5 (average of "joint second/third") and D gets
ranking number 4 ("fourth").

Here is an example: Suppose you have the data set 1.0, 1.0, 2.0, 3.0, 3.0, 4.0, 5.0, 5.0, 5.0.

The ordinal ranks are 1, 2, 3, 4, 5, 6, 7, 8, 9.

For v = 1.0, the fractional rank is the average of the ordinal ranks: (1 + 2) / 2 = 1.5. In a similar
manner, for v = 5.0, the fractional rank is (7 + 8 + 9) / 3 = 8.0.

Thus the fractional ranks are: 1.5, 1.5, 3.0, 4.5, 4.5, 6.0, 8.0, 8.0, 8.0

Ranking in statistics[edit]

In statistics, "ranking" refers to the data transformation in which numerical or ordinal values are
replaced by their rank when the data are sorted. For example, the numerical data 3.4, 5.1, 2.6, 7.3
are observed, the ranks of these data items would be 2, 3, 1 and 4 respectively. For example, the

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ordinal data hot, cold, warm would be replaced by 3, 1, 2. In these examples, the ranks are
assigned to values in ascending order. (In some other cases, descending ranks are used.) Ranks
are related to the indexed list of order statistics, which consists of the original dataset rearranged
into ascending order.

Some kinds of statistical tests employ calculations based on ranks. Examples include:

• Friedman test
• Kruskal–Wallis test
• Rank products
• Spearman's rank correlation coefficient
• Wilcoxon rank-sum test
• Wilcoxon signed-rank test

The distribution of values in decreasing order of rank is often of interest when values vary
widely in scale; this is the rank-size distribution (or rank-frequency distribution), for example for
city sizes or word frequencies. These often follow a power law.

Some ranks can have non-integer values for tied data values. For example, when there is an even
number of copies of the same data value, the above described fractional statistical rank of the
tied data ends in ½.

Rank function in Excel[edit]

Microsoft Excel provides two ranking functions, the Rank.EQ function which assigns
competition ranks ("1224") and the Rank.AVG function which assigns fractional ranks ("1 2.5
2.5 4") as described above.

Hierarchy

A hierarchy (from the Greek ἱεραρχία hierarchia, "rule of a high priest", from ἱεράρχης
hierarkhes, "leader of sacred rites") is an arrangement of items (objects, names, values,
categories, etc.) in which the items are represented as being "above," "below," or "at the same
level as" one another.A hierarchy can link entities either directly or indirectly, and either
vertically or diagonally. The only direct links in a hierarchy, insofar as they are hierarchical, are
to one's immediate superior or to one of one's subordinates, although a system that is largely
hierarchical can also incorporate alternative hierarchies. Indirect hierarchical links can extend
"vertically" upwards or downwards via multiple links in the same direction, following a path. All
parts of the hierarchy which are not linked vertically to one another nevertheless can be
"horizontally" linked through a path by traveling up the hierarchy to find a common direct or
indirect superior, and then down again. This is akin to two co-workers or colleagues; each
reports to a common superior, but they have the same relative amount of authority.
Organizational forms exist that are both alternative and complementary to hierarchy. Heterarchy
is one such form.

Nomenclature

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Hierarchies have their own special vocabulary. These terms are easiest to understand when a
hierarchy is diagrammed (see below).In an organizational context, the following terms are often
used related to hierarchies:[1][2]

• Object: one entity (e.g., a person, department or concept or element of arrangement or

member of a set)
• System: the entire set of objects that are being arranged hierarchically (e.g., an
administration)
• Dimension: another word for "system" from on-line analytical processing (e.g. cubes)
• Member: an (element or object) in a (system or dimension) at any (level or rank)
• Rank: the relative value, worth, complexity, power, importance, authority, level etc. of
an object
• Level: a set of objects with the same rank OR importance
• Ordering: the arrangement of the (ranks or levels)
• Hierarchy: the arrangement of a particular set of (ranks or levels) i.e. multiple
hierarchies are possible per (dimension or system)
• Collection: all of the objects at one level
• Superior: a higher level or an object ranked at a higher level (parent or ancestor)
• Subordinate: a lower level or an object ranked at a lower level (child or descendent)
• Hierarch, the top level of the hierarchy, usually consisting of one object or member of a
dimension
• Peer: an object with the same rank (and therefore at the same level)
• Neighbour: the adjacent level/ranking (the immediate superior and immediate inferior)
• Interaction: the relationship between an object and its direct superior or subordinate (i.e.
a superior/inferior pair)
o a direct interaction occurs when one object is on a level exactly one higher or one
lower than the other (i.e., on a tree, the two objects have a line between them)
• Distance: the minimum number of connections between two objects, i.e., one less than
the number of objects that need to be "crossed" to trace a path from one object to another
• Span: a qualitative description of the width of a level when diagrammed, i.e., the number
of subordinates an object has

In a mathematical context (in graph theory), the general terminology used is different.

Most hierarchies use a more specific vocabulary pertaining to their subject, but the idea behind
them is the same. For example, with data structures, objects are known as nodes, superiors are
called parents and subordinates are called children. In a business setting, a superior is a
supervisor/boss and a peer is a colleague.

Degree of branching

Degree of branching refers to the number of direct subordinates or children an object has (in
graph theory, equivalent to the number of other vertices connected to via outgoing arcs, in a
directed graph) a node has). Hierarchies can be categorized based on the "maximum degree", the
highest degree present in the system as a whole. Categorization in this way yields two broad
classes: linear and branching.

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In a linear hierarchy, the maximum degree is 1.[1] In other words, all of the objects can be
visualized in a lineup, and each object (excluding the top and bottom ones) has exactly one direct
subordinate and one direct superior. Note that this is referring to the objects and not the levels;
every hierarchy has this property with respect to levels, but normally each level can have an
infinite number of objects. An example of a linear hierarchy is the hierarchy of life.In a
'branching hierarchy', one or more objects has a degree of 2 or more (and therefore the
maximum degree is 2 or higher).[1] For many people, the word "hierarchy" automatically evokes
an image of a branching hierarchy.[1] Branching hierarchies are present within numerous
systems, including organizations and classification schemes. The broad category of branching
hierarchies can be further subdivided based on the degree.A 'flat hierarchy' is a branching
hierarchy in which the maximum degree approaches infinity, i.e., that has a wide span. [2] Most
often, systems intuitively regarded as hierarchical have at most a moderate span. Therefore, a flat
hierarchy is often not viewed as a hierarchy at all. For example, diamonds and graphite are flat
hierarchies of numerous carbon atoms which can be further decomposed into subatomic
particles.An 'overlapping hierarchy' is a branching hierarchy in which at least one object has
two parent objects.[1] For example, a graduate student can have two co-supervisors to whom the
student reports directly and equally, and who have the same level of authority within the
university hierarchy (i.e., they have the same position or tenure status.

History of the term

Possibly the first use of the English word "hierarchy" cited by the Oxford English Dictionary
was in 1880, when it was used in reference to the three orders of three angels as depicted by
Pseudo-Dionysius the Areopagite (5th–6th centuries). Pseudo-Dionysius used the related Greek
word (hierarchia) both in reference to the celestial hierarchy and the ecclesiastical hierarchy.[3]
The Greek term "ἱεραρχία" means "rule by priests" (from "ἱεράρχης" – ierarches, meaning
"president of sacred rites, high-priest"[4] and that from "ἱερεύς" – iereus, "priest"[5] + "ἀρχή" –
arche, amongst others "first place or power, rule"[6]), and Dionysius is credited with first use of it
as an abstract noun. Since hierarchical churches, such as the Roman Catholic (see Catholic
Church hierarchy) and Eastern Orthodox churches, had tables of organization that were
"hierarchical" in the modern sense of the word (traditionally with God as the pinnacle or head of
the hierarchy), the term came to refer to similar organizational methods in secular settings.

Visualization

Maslow's hierarchy of human needs. This is an example of a hierarchy visualized with a triangle
diagram.

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A hierarchy is typically depicted as a pyramid, where the height of a level represents that level's
status and width of a level represents the quantity of items at that level relative to the whole. For
example, the few Directors of a company could be at the apex, and the base could be thousands
of people who have no subordinates.These pyramids are typically diagrammed with a tree or
triangle diagram (but note that not all triangle/pyramid diagrams are hierarchical, for example,
the 1992 USDA food guide pyramid), both of which serve to emphasize the size differences
between the levels. An example of a triangle diagram appears to the right. An organizational
chart is the diagram of a hierarchy within an organization, and is depicted in tree form
below.More recently, as computers have allowed the storage and navigation of ever larger data
sets, various methods have been developed to represent hierarchies in a manner that makes more
efficient use of the available space on a computer's screen. Examples include fractal maps,
TreeMaps and Radial Trees.

Visual hierarchy

In the design field, mainly graphic design, successful layouts and formatting of the content on
documents are heavily dependent on the rules of visual hierarchy. Visual hierarchy is also
important for proper organization of files on computers.An example of visually representing
hierarchy is through the Nest structure. The Nest structure represents hierarchical relationships
by using layers of information. The child element is within the parent element, such as in a Venn
diagram. This structure of representing hierarchy is most effective in representing simple
relationships. For example, when directing someone to open a file on a computer desktop, one
may first direct them towards the main folder, then the subfolders within the main folder. They
will keep opening files within the folders until the designated file is located.For more
complicated hierarchies, the stair structure represents hierarchical relationships through the use
of visual stacking. Visually imagine the top of a downward staircase beginning at the left and
descending on the right. The child elements are towards the bottom of the stairs and the parent
elements are at the top. This structure is effective when representing more complicated
hierarchies where steps are not placed in obvious sequences. Further steps are concealed unless
all of the steps are revealed in sequence. In the computer desktop example, a file that is being
sought after can only be found once another file is opened. The link for the desired file is within
another document. All the steps must be completed until the final destination is reached.

Informal representation

In plain English, a hierarchy can be thought of as a set in which: No element is superior to itself,
and

1. One element, the hierarch, is superior to all of the other elements in the set.

The first requirement is also interpreted to mean that a hierarchy can have no circular
relationships; the association between two objects is always transitive. The second requirement
asserts that a hierarchy must have a leader or root that is common to all of the objects.

Mathematical representation

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Mathematically, in its most general form, a hierarchy is a partially ordered set or poset.[7] The
system in this case is the entire poset, which is constituted of elements. Within this system, each
element shares a particular unambiguous property. Objects with the same property value are
grouped together, and each of those resulting levels is referred to as a class."Hierarchy" is
particularly used to refer to a poset in which the classes are organized in terms of increasing
complexity. Operations such as addition, subtraction, multiplication and division are often
performed in a certain sequence or order. Usually, addition and subtraction are performed after
multiplication and division has already been applied to a problem. The use of parenthesis is also
a representation of hierarchy, for they show which operation is to be done prior to the following
ones. For example: (2 + 5) × (7 - 4). In this problem, typically one would multiply 5 by 7 first,
based on the rules of mathematical hierarchy. But when the parentheses are placed, one will
know to do the operations within the parentheses first before continuing on with the problem.
These rules are largely dominant in algebraic problems, ones that include several steps in order
to solve. The use of hierarchy in mathematics is beneficial in order to quickly and efficiently
solve a problem without having to go through the process of slowly dissecting the problem. Most
of these rules are now known as the proper way into solving certain equations.Matryoshka dolls,
also known as nesting dolls or Russian dolls. Each doll is encompassed inside another until the
smallest one is reached. This is the concept of nesting. When the concept is applied to sets, the
resulting ordering is a nested hierarchy.A nested hierarchy or inclusion hierarchy is a
hierarchical ordering of nested sets.[8] The concept of nesting is exemplified in Russian
matryoshka dolls. Each doll is encompassed by another doll, all the way to the outer doll. The
outer doll holds all of the inner dolls, the next outer doll holds all the remaining inner dolls, and
so on. Matryoshkas represent a nested hierarchy where each level contains only one object, i.e.,
there is only one of each size of doll; a generalized nested hierarchy allows for multiple objects
within levels but with each object having only one parent at each level. The general concept is

both demonstrated and mathematically formulated in the following example:

A square can always also be referred to as a quadrilateral, polygon or shape. In this way, it is a
hierarchy. However, consider the set of polygons using this classification. A square can only be a
quadrilateral; it can never be a triangle, hexagon, etc.Nested hierarchies are the organizational
schemes behind taxonomies and systematic classifications. For example, using the original
Linnaean taxonomy (the version he laid out in the 10th edition of Systema Naturae), a human

can be formulated as:

Taxonomies may change frequently (as seen in biological taxonomy), but the underlying concept
of nested hierarchies is always the same.In many programming taxonomies and syntax models
(as well as fractals in mathematics), nested hierarchies, including Russian dolls, are also used to
illustrate the properties of Self-similarity and Recursion. Recursion itself is included as a subset
of hierarchical programming, and recursive thinking can be synonymous with a form of
hierarchical thinking and logic.

A containment hierarchy is a direct extrapolation of the nested hierarchy concept. All of the
ordered sets are still nested, but every set must be "strict"—no two sets can be identical. The
shapes example above can be modified to demonstrate this:

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The notation means x is a subset of y but is not equal to y.

A general example of a containment hierarchy is demonstrated in class inheritance in object-

oriented programming.Two types of containment hierarchies are the subsumptive containment
hierarchy and the compositional containment hierarchy. A subsumptive hierarchy "subsumes" its
children, and a compositional hierarchy is "composed" of its children. A hierarchy can also be
both subsumptive and compositional

Subsumptive containment hierarchy

A subsumptive containment hierarchy is a classification of object classes from the general to the
specific. Other names for this type of hierarchy are "taxonomic hierarchy" and "IS-A
hierarchy".[7][12][13] The last term describes the relationship between each level—a lower-level
object "is a" member of the higher class. The taxonomical structure outlined above is a
subsumptive containment hierarchy. Using again the example of Linnaean taxonomy, it can be
seen that an object that is part of the level Mammalia "is a" member of the level Animalia; more
specifically, a human "is a" primate, a primate "is a" mammal, and so on. A subsumptive
hierarchy can also be defined abstractly as a hierarchy of "concepts".[13] For example, with the
Linnaean hierarchy outlined above, an entity name like Animalia is a way to group all the species
that fit the conceptualization of an animal.

Compositional containment hierarchy

A compositional containment hierarchy is an ordering of the parts that make up a system—the

system is "composed" of these parts.[14] Most engineered structures, whether natural or artificial,
can be broken down in this manner.The compositional hierarchy that every person encounters at
every moment is the hierarchy of life. Every person can be reduced to organ systems, which are
composed of organs, which are composed of tissues, which are composed of cells, which are
composed of molecules, which are composed of atoms. In fact, the last two levels apply to all
matter, at least at the macroscopic scale. Moreover, each of these levels inherit all the properties
of their children.In this particular example, there are also emergent properties—functions that
are not seen at the lower level (e.g., cognition is not a property of neurons but is of the brain)—
and a scalar quality (molecules are bigger than atoms, cells are bigger than molecules, etc.). Both
of these concepts commonly exist in compositional hierarchies, but they are not a required
general property. These level hierarchies are characterized by bi-directional causation.[8] Upward
causation involves lower-level entities causing some property of a higher level entity; children
entities may interact to yield parent entities, and parents are composed at least partly by their
children. Downward causation refers to the effect that the incorporation of entity x into a higher-
level entity can have on x's properties and interactions. Furthermore, the entities found at each
level are autonomous.

Contexts and applications

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Almost every system of organization applied to the world is arranged hierarchically.[15] By their
common definitions, every nation has a government and every government is hierarchical.[16][17]
Socioeconomic systems are stratified into a social hierarchy (the social stratification of
societies), and all systematic classification schemes (taxonomies) are hierarchical. Most
organized religions, regardless of their internal governance structures, operate as a hierarchy
under God. Many Christian denominations have an autocephalous ecclesiastical hierarchy of
leadership. Families are viewed as a hierarchical structure in terms of cousinship (e.g., first
cousin once removed, second cousin, etc.), ancestry (as depicted in a family tree) and inheritance
(succession and heirship). All the requisites of a well-rounded life and lifestyle can be organized
using Maslow's hierarchy of human needs. Learning must often follow a hierarchical scheme—to
learn differential equations one must first learn calculus; to learn calculus one must first learn
elementary algebra; and so on. Even nature itself has its own hierarchies, as numerous schemes
such as Linnaean taxonomy, the organization of life, and biomass pyramids attempt to document.
Hierarchies are so infused into daily life that they are viewed as trivial. While the above
examples are often clearly depicted in a hierarchical form and are classic examples, hierarchies
exist in numerous systems where this branching structure is not immediately apparent. For
example, most postal code systems are hierarchical. Using the Canadian postal code system, the
top level's binding concept is the "postal district", and consists of 18 objects (letters). The next
level down is the "zone", where the objects are the digits 0–9. This is an example of an
overlapping hierarchy, because each of these 10 objects has 18 parents. The hierarchy continues
downward to generate, in theory, 7,200,000 unique codes of the format A0A 0A0 (the second and
third letter position allow 20 objects each). Most library classification systems are also
hierarchical. The Dewey Decimal System is regarded as infinitely hierarchical because there is
no finite bound on the number of digits can be used after the decimal point.

A simple organizational hierarchy depicted in the form of a tree. Diagrams like this are called
organizational charts.

Organizations

Organizations can be structured as a dominance hierarchy. In an organizational hierarchy, there

is a single person or group with the most power and authority, and each subsequent level
represents a lesser authority. Most organizations are structured in this manner, including
governments, companies, militia and organized religions. The units or persons within an
organization are depicted hierarchically in an organizational chart.In a reverse hierarchy, the
conceptual pyramid of authority is turned upside-down, so that the apex is at the bottom and the
base is at the top. This model represents the idea that members of the higher rankings are
responsible for the members of the lower rankings.

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Computer graphic imaging

Within most CGI and computer animation programs is the use of hierarchies. On a 3D model of
a human, the chest is a parent of the upper left arm, which is a parent of the lower left arm, which
is a parent of the hand. This is used in modeling and animation of almost everything built as a 3D
digital model.

Linguistics

Many grammatical theories, such as phrase-structure grammar, involve hierarchy.Direct–inverse

languages such as Cree and Mapudungun distinguish subject and object on verbs not by different
subject and object markers, but via a hierarchy of persons.In this system, the three (or four with
Algonquian languages) persons are placed in a hierarchy of salience. To distinguish which is
subject and which object, inverse markers are used if the object outranks the subject.

Music

The structure of a musical composition is often understood hierarchically (for example by

Heinrich Schenker (1768–1835, see Schenkerian analysis), and in the (1985) Generative Theory
of Tonal Music, by composer Fred Lerdahl and linguist Ray Jackendoff). The sum of all notes in
a piece is understood to be an all-inclusive surface, which can be reduced to successively more
sparse and more fundamental types of motion. The levels of structure that operate in Schenker's
theory are the foreground, which is seen in all the details of the musical score; the middle
ground, which is roughly a summary of an essential contrapuntal progression and voice-leading;
and the background or Ursatz, which is one of only a few basic "long-range counterpoint"
structures that are shared in the gamut of tonal music literature.The pitches and form of tonal
music are organized hierarchically, all pitches deriving their importance from their relationship
to a tonic key, and secondary themes in other keys are brought back to the tonic in a
recapitulation of the primary theme. Susan McClary connects this specifically in the sonata-
allegro form to the feminist hierarchy of gender (see above) in her book Feminine Endings, even
pointing out that primary themes were often previously called "masculine" and secondary themes
"feminine."

Ethics, behavioral psychology, philosophies of identity

Career-oriented purposes can be diagrammed using a hierarchy describing how less important
actions support a larger goal.

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In ethics, various virtues are enumerated and sometimes organized hierarchically according to
certain brands of virtue theory.In some of these random examples, there is an asymmetry of
'compositional' significance between levels of structure, so that small parts of the whole
hierarchical array depend, for their meaning, on their membership in larger parts.There is a
hierarchy of activities in human life: productive activity serves or is guided by the moral life; the
moral life is guided by practical reason; practical reason (used in moral and political life) serves
contemplative reason (whereby we contemplate God). Practical reason sets aside time and
resources for contemplative reason.In the work of diverse theorists such as William James
(1842–1910), Michel Foucault (1926–1984) and Hayden White, important critiques of
hierarchical epistemology are advanced. James famously asserts in his work "Radical
Empiricism" that clear distinctions of type and category are a constant but unwritten goal of
scientific reasoning, so that when they are discovered, success is declared. But if aspects of the
world are organized differently, involving inherent and intractable ambiguities, then scientific
questions are often considered unresolved.Hierarchy in ethics emerged in Western Europe, West
Asia and North Africa around the 1600s. In this aspect, the term hierarchy refers to how
distinguishable they are from real to unreal. Feminists, Marxists, anarchists, communists, critical
theorists and others, all of whom have multiple interpretations, criticize the hierarchies
commonly found within human society, especially in social relationships. Hierarchies are present
in all parts of society: in businesses, schools, families, etc. These relationships are often viewed
as necessary. Entities that stand in hierarchical arrangements are animals, humans, plants, etc. In
some[which?] cultures, God can also be an addition to this hierarchy. However, feminists, Marxists,
critical theorists and others analyze hierarchy in terms of the values and power that it arbitrarily
assigns to one group over another. Hierarchical ethics offers a way of logical reasoning that is
compatible with religious commitments. In some[which?] cultures, there is hierarchy within
humanity. The dominant man in a family is above women, and children are after. In social
classes, they are arranged as follows: king, civic officials, craftsmen, unskilled workers.

Misconduct

In law, misconduct is wrongful, improper, or unlawful conduct motivated by premeditated or

intentional purpose or by obstinate indifference to the consequences of one's acts.

Two categories of misconduct are sexual misconduct and official misconduct. In connection with
school discipline, "misconduct" is generally understood to be student behavior that is
unacceptable to school officials but does not violate criminal statutes, including absenteeism,
tardiness, bullying, and inappropriate language. (Special Education Dictionary, 2003, LRP
Publications) Misconduct in the workplace generally falls under two categories. Minor
misconduct is seen as unacceptable but is not a criminal offense (e.g. being late, faking
qualifications).[1] Gross misconduct can lead to dismissal (e.g. stealing or sexual harassment).

• "Misconduct" includes something seen as unacceptable as well as criminal offenses e.g.

deceptive manipulation.
• "Gross misconduct"[2] can lead to immediate dismissal because it is serious enough and
possibly criminal, e.g. stealing or sexual harassment.

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Misconduct refers to an action, rather than neglecting to take action, or inaction which could be
referred to as poor performance.

Examples of gross misconductBeing drunk or under the influence of any drug while on duty

• Illegal drug use or alcohol at work

• Fighting
• Sexual harassment at workplace
• Stealing
• Subjecting people to discrimination
• Falsifying time records
• Falsification of accounts
• Negligence
• Bribery
• Gross insubordination/ disobedience / misappropriation
• Conviction of a felony (in some states)
• Illicit use

Negligence

Negligence (Lat. negligentia, from neglegere, to neglect, literally "not to pick up something") is
a failure to exercise the care that a reasonably prudent person would exercise in like
circumstances.[1] The area of tort law known as negligence involves harm caused by
carelessness, not intentional harm.According to Jay M. Feinman of the Rutgers University
School of Law;The core idea of negligence is that people should exercise reasonable care when
they act by taking account of the potential harm that they might foreseeably cause to other
people." "Those who go personally or bring property where they know that they or it may come
into collision with the persons or property of others have by law a duty cast upon them to use
reasonable care and skill to avoid such a collision."— per Lord Blackburn in The Dublin,
Wicklow, and Wexford Railway Company v Slattery.Through civil litigation, if an injured person
proves that another person acted negligently to cause their injury, they can recover damages to
compensate for their harm. Proving a case for negligence can potentially entitle the injured
plaintiff to compensation for harm to their body, property, mental well-being, financial status, or
intimate relationships. However, because negligence cases are very fact-specific, this general
definition does not fully explain the concept of when the law will require one person to
compensate another for losses caused by accidental injury. Further, the law of negligence at
common law is only one aspect of the law of liability. Although resulting damages must be
proven in order to recover compensation in a negligence action, the nature and extent of those
damages are not the primary focus of negligence cases.

Negligence suits have historically been analyzed in stages, called elements, similar to the
analysis of crimes (see Element (criminal law)). An important concept related to elements is that
if a plaintiff (the injured party) fails to prove any one element of his claim, he loses on the entire
tort claim. For example, assume that a particular tort has five elements. Each element must be
proven. If the plaintiff proves only four of the five elements, the plaintiff has not succeeded in
making out his claim.Common law jurisdictions may differ slightly in the exact classification of

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the elements of negligence, but the elements that must be established in every negligence case
are: duty, breach, causation, and damages. Each is defined and explained in greater detail in the
paragraphs below. Negligence can be conceived of as having just three elements - conduct,
causation and damages. More often, it is said to have four (duty, breach, causation and punitive
damages) or five (duty, breach, actual cause, proximate cause, and damages). Each would be
correct, depending on how much specificity someone is seeking. "The broad agreement on the
conceptual model", writes Professor Robertson of the University of Texas at Austin, "entails
recognition that the five elements are best defined with care and kept separate. But in practice",
he goes on to warn, "several varieties of confusion or conceptual mistakes have sometimes
occurred."[4]

Duty of care

A decomposed snail in Scotland was the humble beginning of the modern English law of
negligence.Duty of care involves adherence to a standard of reasonable care while performing
any acts that could foreseeably harm others; see Hedley Byrne & Co Ltd v Heller & Partners Ltd.

The case of Donoghue v. Stevenson[6] [1932] illustrates the law of negligence, laying the
foundations of the fault principle around the Commonwealth. The Pursuer, May Donoghue,
drank ginger beer given to her by a friend, who bought it from a shop. The beer was supplied by
a manufacturer, a certain David Stevenson in Scotland. While drinking the drink, Donoghue
discovered the remains of an allegedly decomposed snail. She then sued Stevenson, though there
was no relationship of contract, as the friend had made the payment. As there was no contract the
doctrine of privity prevented a direct action against Stevenson.In his ruling, justice Lord
MacMillan defined a new category of delict (the Scots law nearest equivalent of tort), (which is
really not based on negligence but on what is now known as the "implied warranty of fitness of a
product" in a completely different category of tort--"products liability") because it was analogous
to previous cases about people hurting each other. Lord Atkin interpreted the biblical passages to
'love thy neighbour,' as the legal requirement to 'not harm thy neighbour.' He then went on to
define neighbour as "persons who are so closely and directly affected by my act that I ought
reasonably to have them in contemplation as being so affected when I am directing my mind to
the acts or omissions that are called in question." Reasonably foreseeable harm must be
compensated. This is the first principle of negligence.In England the more recent case of 'Caparo
Industries Plc v. Dickman' [1990] introduced a 'threefold test' for a duty of care. Harm must be
(1) reasonably foreseeable (2) there must be a relationship of proximity between the plaintiff and
defendant and (3) it must be 'fair, just and reasonable' to impose liability. However, these act as
guidelines for the courts in establishing a duty of care; much of the principle is still at the
discretion of judges.In Australia, Donoghue v Stevenson was used as a persuasive precedent in
the case of Grant v Australian Knitting Mills (AKR) (1936).[7] This was a landmark case in the
development of negligence law in Australia. Whether a duty of care is owed for psychiatric, as
opposed to physical, harm was discussed in the Australian case of Tame v State of New South
Wales; Annetts v Australian Stations Pty Ltd (2002).[9] Determining a duty for mental harm has
now been subsumed into the Civil Liability Act 2002 in New South Wales.[10] The application of
Part 3 of the Civil Liability Act 2002 (NSW) was demonstrated in Wicks v SRA (NSW); Sheehan
v SRA (NSW).[11]

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Breach of duty

Once it is established that the defendant owed a duty to the plaintiff/claimant, the matter of
whether or not that duty was breached must be settled. The test is both subjective and objective.
The defendant who knowingly (subjective) exposes the plaintiff/claimant to a substantial risk of
loss, breaches that duty. The defendant who fails to realize the substantial risk of loss to the
plaintiff/claimant, which any reasonable person [objective] in the same situation would clearly
have realized, also breaches that duty. Breach of duty is not limited to professionals or persons
under written or oral contract; all members of society have a duty to exercise reasonable care
toward others and their property. A person who engages in activities that pose an unreasonable
risk toward others and their property that actually results in harm, breaches their duty of
reasonable care. An example is shown in the facts of Bolton v. Stone,[14] a 1951 legal case
decided by the House of Lords which established that a defendant is not negligent if the damage
to the plaintiff was not a reasonably foreseeable consequence of his conduct. In the case, a Miss
Stone was struck on the head by a cricket ball while standing outside her house. Cricket balls
were not normally hit a far enough distance to pose a danger to people standing as far away as
was Miss Stone. Although she was injured, the court held that she did not have a legitimate claim
because the danger was not sufficiently foreseeable. As stated in the opinion, 'Reasonable risk'
cannot be judged with the benefit of hindsight. As Lord Denning said in Roe v. Minister of
Health,[15] the past should not be viewed through rose coloured spectacles. Therefore, there was
no negligence on the part of the medical professionals in a case faulting them for using
contaminated medical jars because the scientific standards of the time indicated a low possibility
of medical jar contamination. Even if some were harmed, the professionals took reasonable care
for risk to their patients.

Factual causation (Direct Cause

For a defendant to be held liable, it must be shown that the particular acts or omissions were the
cause of the loss or damage sustained. [16] Although the notion sounds simple, the causation
between one's breach of duty and the harm that results to another can at times be very
complicated. The basic test is to ask whether the injury would have occurred 'but for', or without,
the accused party's breach of the duty owed to the injured party.[17] Even more precisely, if a
breaching party materially increases the risk of harm to another, then the breaching party can be
sued to the value of harm that he caused.Asbestos litigations which have been ongoing for
decades revolve around the issue of causation. Interwoven with the simple idea of a party
causing harm to another are issues on insurance bills and compensations, which sometimes drove
compensating companies out of business.

Legal causation or remoteness

Negligence can lead to this sort of collision - a train wreck at Gare Montparnasse in 1895.

Sometimes factual causation is distinguished from 'legal causation' to avert the danger of
defendants being exposed to, in the words of Cardozo, J., "liability in an indeterminate amount
for an indeterminate time to an indeterminate class."[18] It is said a new question arises of how

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remote a consequence a person's harm is from another's negligence. We say that one's negligence
is 'too remote' (in England) or not a 'proximate cause' (in the U.S.) of another's harm if one
would 'never' reasonably foresee it happening. Note that a 'proximate cause' in U.S. terminology
(to do with the chain of events between the action and the injury) should not be confused with
the 'proximity test' under the English duty of care (to do with closeness of relationship). The idea
of legal causation is that if no one can foresee something bad happening, and therefore take care
to avoid it, how could anyone be responsible? For instance, in Palsgraf v. Long Island Rail Road
Co.[19] the judge decided that the defendant, a railway, was not liable for an injury suffered by a
distant bystander. The plaintiff, Palsgraf, was hit by scales that fell on her as she waited on a
train platform. The scales fell because of a far-away commotion. A train conductor had run to
help a man into a departing train. The man was carrying a package as he jogged to jump in the
train door. The package had fireworks in it. The conductor mishandled the passenger or his
package, causing the package to fall. The fireworks slipped and exploded on the ground causing
shockwaves to travel through the platform. As a consequence, the scales fell.[20] Because Palsgraf
was hurt by the falling scales, she sued the train company who employed the conductor for
negligence. The defendant train company argued it should not be liable as a matter of law,
because despite the fact that they employed the employee, who was negligent, his negligence
was too remote from the plaintiff's injury. On appeal, the majority of the court agreed, with four
judges adopting the reasons, written by Judge Cardozo, that the defendant owed no duty of care
to the plaintiff, because a duty was owed only to foreseeable plaintiffs. Three judges dissented,
arguing, as written by Judge Andrews, that the defendant owed a duty to the plaintiff, regardless
of foreseeability, because all men owe one another a duty not to act negligently.Such disparity of
views on the element of remoteness continues to trouble the judiciary. Courts that follow
Cardozo's view have greater control in negligence cases. If the court can find that, as a matter of
law, the defendant owed no duty of care to the plaintiff, the plaintiff will lose his case for
negligence before having a chance to present to the jury. Cardozo's view is the majority view.
However, some courts follow the position put forth by Judge Andrews. In jurisdictions following
the minority rule, defendants must phrase their remoteness arguments in terms of proximate
cause if they wish the court to take the case away from the jury.Remoteness takes another form,
seen in The Wagon Mound (No. 1).[22] The Wagon Mound was a ship in Sydney harbour. The
ship leaked oil creating a slick in part of the harbour. The wharf owner asked the ship owner
about the danger and was told he could continue his work because the slick would not burn. The
wharf owner allowed work to continue on the wharf, which sent sparks onto a rag in the water
which ignited and created a fire which burnt down the wharf. The UK House of Lords
determined that the wharf owner 'intervened' in the causal chain, creating a responsibility for the
fire which canceled out the liability of the ship owner.In Australia the concept of remoteness, or
proximity, was tested with the case of Jaensch v. Coffey.[23] The wife of a policeman, Mrs Coffey
suffered a nervous shock injury from the aftermath of a motor vehicle collision although she was
not actually at the scene at the time of the collision. The court upheld that, in addition to it being
reasonably foreseeable that his wife might suffer such an injury, it required that there be
sufficient proximity between the plaintiff and the defendant who caused the collision. Here there
was sufficient causal proximity. Also see the case of Kavanagh v Akhtar[24][25] and Tame v.
NSW.[26]

Harm

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Even though there is breach of duty, and the cause of some injury to the defendant, a plaintiff
may not recover unless he can prove that the defendant's breach caused a pecuniary injury. This
should not be mistaken with the requirements that a plaintiff prove harm to recover. As a general
rule, a plaintiff can only rely on a legal remedy to the point that he proves that he suffered a loss;
it was reasonably foreseeable. It means something more than pecuniary loss is a necessary
element of the plaintiff's case in negligence. When damages are not a necessary element, a
plaintiff can win his case without showing that he suffered any loss; he would be entitled to
nominal damages and any other damages according to proof. (See Constantine v Imperial Hotels
Ltd [1944] KB]).Negligence is different in that the plaintiff must prove his loss, and a particular
kind of loss, to recover. In some cases, a defendant may not dispute the loss, but the requirement
is significant in cases where a defendant cannot deny his negligence, but the plaintiff suffered no
loss as a result. If the plaintiff can prove pecuniary loss, then he can also obtain damages for non-
pecuniary injuries, such as emotional distress.The requirement of pecuniary loss can be shown in
a number of ways. A plaintiff who is physically injured by allegedly negligent conduct may
show that he had to pay a medical bill. If his property is damaged, he could show the income lost
because he could not use it, the cost to repair it, although he could only recover for one of these
things.The damage may be physical, purely economic, both physical and economic (loss of
earnings following a personal injury[27]), or reputational (in a defamation case).In English law,
the right to claim for purely economic loss is limited to a number of 'special' and clearly defined
circumstances, often related to the nature of the duty to the plaintiff as between clients and
lawyers, financial advisers, and other professions where money is central to the consultative
services.Emotional distress has been recognized as an actionable tort. Generally, emotional
distress damages had to be parasitic. That is, the plaintiff could recover for emotional distress
caused by injury, but only if it accompanied a physical or pecuniary injury.A claimant who has
suffered only emotional distress and no pecuniary loss would not recover for negligence.
However, courts have recently allowed recovery for a plaintiff to recover for purely emotional
distress under certain circumstances. The state courts of California allowed recovery for
emotional distress alone – even in the absence of any physical injury, when the defendant
physically injures a relative of the plaintiff, and the plaintiff witnesses it.

Damages

Damages place a monetary value on the harm done, following the principle of restitutio in
integrum (Latin for "restoration to the original condition"). Thus, for most purposes connected
with the quantification of damages, the degree of culpability in the breach of the duty of care is
irrelevant. Once the breach of the duty is established, the only requirement is to compensate the
victim.One of the main tests that is posed when deliberating whether a claimant is entitled to
compensation for a tort, is the "reasonable person". The test is self-explanatory: would a
reasonable person (as determined by a judge or jury), under the given circumstances, have done
what the defendant did to cause the injury in question; or, in other words, would a reasonable
person, acting reasonably, have engaged in similar conduct when compared to the one whose
actions caused the injury in question? Simple as the "reasonable person" test sounds, it is very
complicated. It is a risky test because it involves the opinion of either the judge or the jury that
can be based on limited facts. However, as vague as the "reasonable person" test seems, it is
extremely important in deciding whether or not a plaintiff is entitled to compensation for a
negligence tort.

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Damages are compensatory in nature. Compensatory damages addresses a plaintiff/claimant's
losses (in cases involving physical or mental injury the amount awarded also compensates for
pain and suffering). The award should make the plaintiff whole, sufficient to put the plaintiff
back in the position he or she was before Defendant's negligent act. Anything more would
unlawfully permit a plaintiff to profit from the tort.

Types of damage

• Special damages - quantifiable dollar losses suffered from the date of defendant's
negligent act (the tort) up to a specified time (proven at trial). Special damage examples
include lost wages, medical bills, and damage to property such as one's car.
• General damages - these are damages that are not quantified in monetary terms (e.g.,
there's no invoice or receipt as there would be to prove special damages). A general
damage example is an amount for the pain and suffering one experiences from a car
collision. Lastly, where the plaintiff proves only minimal loss or damage, or the court or
jury is unable to quantify the losses, the court or jury may award nominal damages.
• Punitive damages - Punitive damages are to punish a defendant, rather than to
compensate plaintiffs, in negligence cases. In most jurisdictions punitive damages are
recoverable in a negligence action, but only if the plaintiff shows that the defendant’s
conduct was more than ordinary negligence (i.e., wanton and willful or reckless).

Procedure in the United States

The plaintiff must prove each element to win his case. Therefore, if it is highly unlikely that the
plaintiff can prove one of the elements, the defendant may request judicial resolution early on, to
prevent the case from going to a jury. This can be by way of a demurrer, motion to dismiss, or
motion for summary judgment. The ability to resolve a negligence case without trial is very
important to defendants. Without the specific limits provided by the four elements, any plaintiff
could claim any defendant was responsible for any loss, and subject him to a costly trial. The
elements allow a defendant to test a plaintiff's accusations before trial, as well as providing a
guide to the "finder of fact" (jury) to decide whether the defendant is or is not liable, after the
trial. Whether the case is resolved with or without trial again depends heavily on the particular
facts of the case, and the ability of the parties to frame the issues to the court. The duty and
causation elements in particular give the court the greatest opportunity to take the case from the
jury, because they directly involve questions of policy. The court can find that regardless of the
disputed facts, if any, the case can be resolved as a matter of law from undisputed facts, because
two people in the position of the plaintiff and defendant simply cannot be legally responsible to
one another for negligent injury.On appeal, the court reviewing a decision in a negligence case
will analyze in terms of at least one of these elements, depending on the disposition of the case
and the question on appeal. For example, if it is an appeal from a final judgment after a jury
verdict, the reviewing court will look to see that the jury was properly instructed on each
contested element, and that the record shows sufficient evidence for the jury's findings. On an
appeal from a dismissal or judgment against the plaintiff without trial, the court will review de
novo whether the court below properly found that the plaintiff could not prove any or all of his
case.

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Layoff

Layoff (in British[1] and American English) or Retrenchment in South African English, is the
temporary suspension or permanent termination of employment of an employee or (more
commonly) a group of employees (collective layoff)[2] for business reasons, such as when certain
positions are no longer necessary or when a business slow-down occurs. In the UK, permanent
termination due to elimination of a position is usually called redundancy (Redundancy: your
rights, 2016).

Laidoff workers or displaced workers refers to workers who have lost or left their jobs because
their employer has closed or moved, there was insufficient work for them to do, or their position
or shift was abolished (Borbely, 2011). Originally the term layoff referred exclusively to a
temporary interruption in work, as when factory work cyclically falls off. In late 20th and early
21st century North America, layoff usually means the permanent elimination of a position,
requiring the addition of "temporary" to specify the original meaning.Many synonyms such as
downsizing exist, most of which are euphemisms or doublespeak and more abstract descriptions
of the process, most of which can also be used for more inclusive processes than that of reducing
the number of employees. Downsizing in a company is defined to involve the reduction of
employees in a workforce. Downsizing in companies was a popular practice during the 1980s
and early 1990s as it was seen as a way to deliver better shareholder value as it helps to reduce
costs (downsizing, 2015).[5] Indeed, recent research on downsizing in the U.S.,[6] UK,[7] and
Japan[8][9] suggests that downsizing is being regarded by management as one of the preferred
routes to turning around declining organisations, cutting costs, and improving organisational
performance,[10] most often as a cost-cutting measure.

Terminology

Euphemisms are often used to "soften the blow" in the process of firing and being fired.[11] The
term "layoff" originally meant a temporary interruption in work (and usually pay). The term
became a euphemism for permanent termination of employment and now usually means that,
requiring the addition of "temporary" to refer to the original meaning. Many other euphemisms
have been coined for "(permanent) layoff", including "downsizing", "excess reduction",
"rightsizing", "leveraging synergies", delayering", "smartsizing", "redeployment", "workforce
reduction", "workforce optimization", "simplification", "force shaping", "recussion", and
"reduction in force" (also called "RIF", especially in the government employment sector).

"Mass layoff" is defined by the United States Department of Labor as 50 or more workers laid
off from the same company around the same time. "Attrition" implies that positions will be
eliminated as workers quit or retire. "Early retirement" means workers may quit now yet still
remain eligible for their retirement benefits later. While "redundancy" is a specific legal term in
UK labour law. When an employer is faced with work of a particular type ceasing or diminishing
at a particular location,[12] it may be perceived[by whom?] as obfuscation. Firings imply misconduct
or failure while layoffs imply economic forces beyond the employer's and employees' control,
especially in the face of a recession such as the one that began in the late 2000s.In (French
speaking) Belgium the term Procédure Renault has become a synonym for the consultation

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process leading to mass redundancies, due to a controversial mass layoff and resultant legislation
in the late 1990s.

• RIF - A generic reduction in force, of undetermined method. Often pronounced like the
word riff rather than spelled out. Sometimes used as a verb, as in "the employees were
pretty heavily riffed".
• eRIF – Layoff notice by email.
• IRIF - Involuntary reduction in force - The employee(s) did not voluntarily choose to
leave the company. This usually implies that the method of reduction involved either
layoffs, firings, or both, but would not usually imply resignations or retirements. If the
employee is fired rather than laid off, the term "with cause" may be appended to indicate
that the separation was due to this employee's performance and/or behavior, rather than
being financially motivated.
• VRIF - Voluntary reduction in force - The employee(s) did play a role in choosing to
leave the company, most likely through resignation or retirement. In some instances, a
company may exert pressure on an employee to make this choice, perhaps by implying
that a layoff or termination would otherwise be imminent, or by offering an attractive
severance or early retirement package.
• WFR - Work force reduction.

Unemployment compensation

The risk of being laid off varies depending on the workplace and country a person is working in.
Unemployment compensation in any country or workplace is a function which has two main
factors. The first factor of unemployment compensation depends on the distribution of
unemployment benefits in a workplace. The second factor is the risk of inequality being
conditioned upon the political regime type in the country an employee is working in (Wonik,
2010).[13] For example, in Canada, Dorion (1995) states that white-collar workers who have been
made redunant receive higher re-employment wages, than those in blue-collar occupations as
there job is regarded as being of a higher status than blue collar workers. Where as in France,
Margolis (1999, 2002) finds that workers who have been laid off have smaller unemployment
periods and higher re-employment earnings in comparison with other unemployed people
(Okatenko, 2010).[14] So for workers who have been laid off from their job, the amount of
unemployment compensation they receive really depends on the occupation and country they
were working in.The method of separation may have an effect on a former employee's ability to
collect whatever form of unemployment compensation might be available in their jurisdiction. In
many U.S. states, workers who are laid off can file an unemployment claim and receive
compensation. Depending on local or state laws, workers who leave voluntarily are generally
ineligible to collect unemployment benefits, as are those who are fired for gross misconduct.
Also, lay-offs due to a firm's moving production overseas may entitle one to increased re-training
benefits. Some companies in the United States utilize Supplemental Unemployment Benefits
(Lihzis, 2016).[15] Since they were first introduced by organized labor and the Department of
Labor in the early 1950s, and first issued in a Revenue Ruling by the IRS in 1956, SUB-Pay
Plans[16] have enabled employers to supplement the receipt of state unemployment insurance
benefits for employees that experience an involuntary layoff. By establishing severance
payments as SUB-Pay benefits, the payments are not considered wages for FICA, FUTA, and

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SUI tax purposes, and employee FICA tax. To qualify for SUB-Pay benefits, the participant must
be eligible for state unemployment insurance benefits and the separation benefit must be paid on
a periodic basis.Certain countries (such as Belgium, Netherlands, Portugal, Spain, Italy, France
and Germany), distinguish between leaving the company of one's own free will, in which case
the person is not entitled to unemployment benefits, but may receive a onetime payment and
leaving a company as part of a reduction in labour force size, in which case the person is entitled
to them. A RIF reduces the number of positions, rather than laying off specific people, and is
usually accompanied by internal redeployment.A person might leave even if their job is not
reduced, even though the employer has strong objections. In this situation, it's more beneficial
for the state to facilitate the departure of the more professionally active people, since they are
less likely to remain jobless. Often they find new jobs while still being paid by their old
companies, costing nothing to the social security system in the end.There have also been
increasing concerns about the organizational effectiveness of the post-downsized ‘anorexic
organization’. The benefits, which organizations claim to be seeking from downsizing, centre on
savings in labour costs, speedier decision making, better communication, reduced product
development time, enhanced involvement of employees and greater responsiveness to customers
(De Meuse et al. 1997, p. 168). However, some writers draw attention to the ‘obsessive’ pursuit
of downsizing to the point of self-starvation marked by excessive cost cutting, organ failure and
an extreme pathological fear of becoming inefficient. Hence ‘trimming’ and ‘tightening belts’
are the order of the day (Tyler and Wilkinson 2007)

Unemployment compensation in Australia

When an employee has been laid off in Australia their employer has to give them redundancy
pay, which is also known as severance pay. The only time that a redundancy payment doesn’t
have to be paid is if an employee is casual, working for a small business or has worked for a
business for less than twelve months. The redundancy compensation payment for employees
depends on the length of time an employee has worked for an employer which excludes unpaid
leave.If an employer can’t afford the redundancy payment they are supposed to give their
employee, once making them redundant, or they find their employee another job that is suitable
for the employee. An employer is able to apply for a reduction in the amount of money they have
to pay the employee they have made redundant. An employer can do this by applying to the Fair
Work Commission for a redundancy payment reduction (Redundancy - Fair Work Ombudsman,
2016).

Examples

Peter was a general laborer working for a building company for over four years, when he got laid
off. He was laid off because of the small number of contracts the company had recently obtained.
In which the company Peter was working for no longer required as many laborers, of which
Peter was one the company decided they could do with out (What happens if I’ve been made
redundant from work?, 2016).[18] Once hearing the news from his employer that he had been
made redundant, Peter felt upset and overwhelmed as he new he still had to feed his family and
pay rent with his only possible source of income since being laid off, being from Centerlink. This
caused tough times for Peter and his wife and children but with the guidance and monitory
assistance from Centrelink and small redundancy compensation payment he received he was able

444
to look after his family for the short three weeks he was unemployed for. To regain employment
in such a short time, Peter contacted recruitment agencies, registered with online job websites,
such as SEEK and started sourcing local papers. In which he also sent letters, emails and
contacted companies by phone who where seeking employees until he was successful in
regaining employment (Work and careers: How to recover from losing your job, 2009).[19]
Although the period in which Peter was unemployed for was tough, it all worked out well as he
was able to regain employment.

Financial crisis

The term financial crisis is applied broadly to a variety of situations in which some financial
assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries,
many financial crises were associated with banking panics, and many recessions coincided with
these panics. Other situations that are often called financial crises include stock market crashes
and the bursting of other financial bubbles, currency crises, and sovereign defaults.[1][2] Financial
crises directly result in a loss of paper wealth but do not necessarily result in changes in the real
economy.Many economists have offered theories about how financial crises develop and how
they could be prevented. There is no consensus, however, and financial crises continue to occur
from time to time.

When a bank suffers a sudden rush of withdrawals by depositors, this is called a bank run. Since
banks lend out most of the cash they receive in deposits (see fractional-reserve banking), it is
difficult for them to quickly pay back all deposits if these are suddenly demanded, so a run
renders the bank insolvent, causing customers to lose their deposits, to the extent that they are
not covered by deposit insurance. An event in which bank runs are widespread is called a
systemic banking crisis or banking panic. Examples of bank runs include the run on the Bank of
the United States in 1931 and the run on Northern Rock in 2007. Banking crises generally occur
after periods of risky lending and resulting loan defaults.

Currency crisis

There is no widely accepted definition of a currency crisis, which is normally considered as part
of a financial crisis. Kaminsky et al. (1998), for instance, define currency crises as when a
weighted average of monthly percentage depreciations in the exchange rate and monthly
percentage declines in exchange reserves exceeds its mean by more than three standard
deviations. Frankel and Rose (1996) define a currency crisis as a nominal depreciation of a
currency of at least 25% but it is also defined at least 10% increase in the rate of depreciation. In
general, a currency crisis can be defined as a situation when the participants in an exchange
market come to recognize that a pegged exchange rate is about to fail, causing speculation
against the peg that hastens the failure and forces a devaluation or appreciation, see Al-Assaf et
al. (2013).[5]

Speculative bubbles and crashes

A speculative bubble exists in the event of large, sustained overpricing of some class of assets. [6]
One factor that frequently contributes to a bubble is the presence of buyers who purchase an

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asset based solely on the expectation that they can later resell it at a higher price, rather than
calculating the income it will generate in the future. If there is a bubble, there is also a risk of a
crash in asset prices: market participants will go on buying only as long as they expect others to
buy, and when many decide to sell the price will fall. However, it is difficult to predict whether
an asset's price actually equals its fundamental value, so it is hard to detect bubbles reliably.
Some economists insist that bubbles never or almost never occur.

Black Friday, 9 May 1873, Vienna Stock Exchange. The Panic of 1873 and Long Depression
followed.Well-known examples of bubbles (or purported bubbles) and crashes in stock prices
and other asset prices include the Dutch tulip mania, the Wall Street Crash of 1929, the Japanese
property bubble of the 1980s, the crash of the dot-com bubble in 2000–2001, and the now-
deflating United States housing bubble. The 2000s sparked a real estate bubble where housing
prices were increasing significantly as an asset good.

International financial crisis

When a country that maintains a fixed exchange rate is suddenly forced to devalue its currency
due to accruing an unsustainable current account deficit, this is called a currency crisis or
balance of payments crisis. When a country fails to pay back its sovereign debt, this is called a
sovereign default. While devaluation and default could both be voluntary decisions of the
government, they are often perceived to be the involuntary results of a change in investor
sentiment that leads to a sudden stop in capital inflows or a sudden increase in capital
flight.Several currencies that formed part of the European Exchange Rate Mechanism suffered
crises in 1992–93 and were forced to devalue or withdraw from the mechanism. Another round
of currency crises took place in Asia in 1997–98. Many Latin American countries defaulted on
their debt in the early 1980s. The 1998 Russian financial crisis resulted in a devaluation of the
ruble and default on Russian government bonds.

Wider economic crisis

Negative GDP growth lasting two or more quarters is called a recession. An especially
prolonged or severe recession may be called a depression, while a long period of slow but not
necessarily negative growth is sometimes called economic stagnation.

Declining consumer spending.

Some economists argue that many recessions have been caused in large part by financial crises.
One important example is the Great Depression, which was preceded in many countries by bank
runs and stock market crashes. The subprime mortgage crisis and the bursting of other real estate
bubbles around the world also led to recession in the U.S. and a number of other countries in late
2008 and 2009.

Some economists argue that financial crises are caused by recessions instead of the other way
around, and that even where a financial crisis is the initial shock that sets off a recession, other
factors may be more important in prolonging the recession. In particular, Milton Friedman and
Anna Schwartz argued that the initial economic decline associated with the crash of 1929 and the

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bank panics of the 1930s would not have turned into a prolonged depression if it had not been
reinforced by monetary policy mistakes on the part of the Federal Reserve,[11] a position
supported by Ben Bernanke.[12]

Causes and consequences

It is often observed that successful investment requires each investor in a financial market to
guess what other investors will do. George Soros has called this need to guess the intentions of
others 'reflexivity'.[13] Similarly, John Maynard Keynes compared financial markets to a beauty
contest game in which each participant tries to predict which model other participants will
consider most beautiful.[14] Circularity and self-fulfilling prophecies may be exaggerated when
reliable information is not available because of opaque disclosures or a lack of disclosure.
Furthermore, in many cases investors have incentives to coordinate their choices. For example,
someone who thinks other investors want to buy lots of Japanese yen may expect the yen to rise
in value, and therefore has an incentive to buy yen too. Likewise, a depositor in IndyMac Bank
who expects other depositors to withdraw their funds may expect the bank to fail, and therefore
has an incentive to withdraw too. Economists call an incentive to mimic the strategies of others
strategic complementarity. It has been argued that if people or firms have a sufficiently strong
incentive to do the same thing they expect others to do, then self-fulfilling prophecies may
occur.[17] For example, if investors expect the value of the yen to rise, this may cause its value to
rise; if depositors expect a bank to fail this may cause it to fail.[18] Therefore, financial crises are
sometimes viewed as a vicious circle in which investors shun some institution or asset because
they expect others to do so.

Leverage

Leverage, which means borrowing to finance investments, is frequently cited as a contributor to

financial crises.[15] When a financial institution (or an individual) only invests its own money, it
can, in the very worst case, lose its own money. But when it borrows in order to invest more, it
can potentially earn more from its investment, but it can also lose more than all it has. Therefore,
leverage magnifies the potential returns from investment, but also creates a risk of bankruptcy.
Since bankruptcy means that a firm fails to honor all its promised payments to other firms, it may
spread financial troubles from one firm to another (see 'Contagion' below).The average degree of
leverage in the economy often rises prior to a financial crisis. For example, borrowing to finance
investment in the stock market ("margin buying") became increasingly common prior to the Wall
Street Crash of 1929. In addition, some scholars have argued that financial institutions can
contribute to fragility by hiding leverage, and thereby contributing to underpricing of risk.

Asset-liability mismatch

Another factor believed to contribute to financial crises is asset-liability mismatch, a situation in

which the risks associated with an institution's debts and assets are not appropriately aligned. For
example, commercial banks offer deposit accounts which can be withdrawn at any time and they
use the proceeds to make long-term loans to businesses and homeowners. The mismatch between
the banks' short-term liabilities (its deposits) and its long-term assets (its loans) is seen as one of
the reasons bank runs occur (when depositors panic and decide to withdraw their funds more

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quickly than the bank can get back the proceeds of its loans).[18] Likewise, Bear Stearns failed in
2007–08 because it was unable to renew the short-term debt it used to finance long-term
investments in mortgage securities.In an international context, many emerging market
governments are unable to sell bonds denominated in their own currencies, and therefore sell
bonds denominated in US dollars instead. This generates a mismatch between the currency
denomination of their liabilities (their bonds) and their assets (their local tax revenues), so that
they run a risk of sovereign default due to fluctuations in exchange rates.

Uncertainty and herd behavior

Many analyses of financial crises emphasize the role of investment mistakes caused by lack of
knowledge or the imperfections of human reasoning. Behavioral finance studies errors in
economic and quantitative reasoning. Psychologist Torbjorn K A Eliazon has also analyzed
failures of economic reasoning in his concept of 'œcopathy'. Historians, notably Charles P.
Kindleberger, have pointed out that crises often follow soon after major financial or technical
innovations that present investors with new types of financial opportunities, which he called
"displacements" of investors' expectations.[22][23] Early examples include the South Sea Bubble
and Mississippi Bubble of 1720, which occurred when the notion of investment in shares of
company stock was itself new and unfamiliar,[24] and the Crash of 1929, which followed the
introduction of new electrical and transportation technologies.[25] More recently, many financial
crises followed changes in the investment environment brought about by financial deregulation,
and the crash of the dot com bubble in 2001 arguably began with "irrational exuberance" about
Internet technology. Unfamiliarity with recent technical and financial innovations may help
explain how investors sometimes grossly overestimate asset values. Also, if the first investors in
a new class of assets (for example, stock in "dot com" companies) profit from rising asset values
as other investors learn about the innovation (in our example, as others learn about the potential
of the Internet), then still more others may follow their example, driving the price even higher as
they rush to buy in hopes of similar profits. If such "herd behavior" causes prices to spiral up far
above the true value of the assets, a crash may become inevitable. If for any reason the price
briefly falls, so that investors realize that further gains are not assured, then the spiral may go
into reverse, with price decreases causing a rush of sales, reinforcing the decrease in prices.

Regulatory failures

Governments have attempted to eliminate or mitigate financial crises by regulating the financial
sector. One major goal of regulation is transparency: making institutions' financial situations
publicly known by requiring regular reporting under standardized accounting procedures.
Another goal of regulation is making sure institutions have sufficient assets to meet their
contractual obligations, through reserve requirements, capital requirements, and other limits on
leverage.

Some financial crises have been blamed on insufficient regulation, and have led to changes in
regulation in order to avoid a repeat. For example, the former Managing Director of the
International Monetary Fund, Dominique Strauss-Kahn, has blamed the financial crisis of 2008
on 'regulatory failure to guard against excessive risk-taking in the financial system, especially in
the US'.[27] Likewise, the New York Times singled out the deregulation of credit default swaps as

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a cause of the crisis. However, excessive regulation has also been cited as a possible cause of
financial crises. In particular, the Basel II Accord has been criticized for requiring banks to
increase their capital when risks rise, which might cause them to decrease lending precisely
when capital is scarce, potentially aggravating a financial crisis. International regulatory
convergence has been interpreted in terms of regulatory herding, deepening market herding
(discussed above) and so increasing systemic risk. From this perspective, maintaining diverse
regulatory regimes would be a safeguard.Fraud has played a role in the collapse of some
financial institutions, when companies have attracted depositors with misleading claims about
their investment strategies, or have embezzled the resulting income. Examples include Charles
Ponzi's scam in early 20th century Boston, the collapse of the MMM investment fund in Russia
in 1994, the scams that led to the Albanian Lottery Uprising of 1997, and the collapse of Madoff
Investment Securities in 2008.Many rogue traders that have caused large losses at financial
institutions have been accused of acting fraudulently in order to hide their trades. Fraud in
mortgage financing has also been cited as one possible cause of the 2008 subprime mortgage
crisis; government officials stated on September 23, 2008 that the FBI was looking into possible
fraud by mortgage financing companies Fannie Mae and Freddie Mac, Lehman Brothers, and
insurer American International Group.[32] Likewise it has been argued that many financial
companies failed in the recent crisis because their managers failed to carry out their fiduciary
duties.

Contagion

Contagion refers to the idea that financial crises may spread from one institution to another, as
when a bank run spreads from a few banks to many others, or from one country to another, as
when currency crises, sovereign defaults, or stock market crashes spread across countries. When
the failure of one particular financial institution threatens the stability of many other institutions,
this is called systemic risk. One widely cited example of contagion was the spread of the Thai
crisis in 1997 to other countries like South Korea. However, economists often debate whether
observing crises in many countries around the same time is truly caused by contagion from one
market to another, or whether it is instead caused by similar underlying problems that would
have affected each country individually even in the absence of international linkages.

Recessionary effects

Some financial crises have little effect outside of the financial sector, like the Wall Street crash
of 1987, but other crises are believed to have played a role in decreasing growth in the rest of the
economy. There are many theories why a financial crisis could have a recessionary effect on the
rest of the economy. These theoretical ideas include the 'financial accelerator', 'flight to quality'
and 'flight to liquidity', and the Kiyotaki-Moore model. Some 'third generation' models of
currency crises explore how currency crises and banking crises together can cause recessions.

Theories

Austrian School economists Ludwig von Mises and Friedrich Hayek discussed the business cycle
starting with Mises' Theory of Money and Credit, published in 1912.

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Marxist theories

Recurrent major depressions in the world economy at the pace of 20 and 50 years (often referred
to as the business cycle) have been the subject of studies since Jean Charles Léonard de
Sismondi (1773–1842) provided the first theory of crisis in a critique of classical political
economy's assumption of equilibrium between supply and demand. Developing an economic
crisis theory became the central recurring concept throughout Karl Marx's mature work. Marx's
law of the tendency for the rate of profit to fall borrowed many features of the presentation of
John Stuart Mill's discussion Of the Tendency of Profits to a Minimum (Principles of Political
Economy Book IV Chapter IV). The theory is a corollary of the Tendency towards the
Centralization of Profits.In a capitalist system, successfully-operating businesses return less
money to their workers (in the form of wages) than the value of the goods produced by those
workers (i.e. the amount of money the products are sold for). This profit first goes towards
covering the initial investment in the business. In the long-run, however, when one considers the
combined economic activity of all successfully-operating business, it is clear that less money (in
the form of wages) is being returned to the mass of the population (the workers) than is available
to them to buy all of these goods being produced. Furthermore, the expansion of businesses in
the process of competing for markets leads to an abundance of goods and a general fall in their
prices, further exacerbating the tendency for the rate of profit to fall.The viability of this theory
depends upon two main factors: firstly, the degree to which profit is taxed by government and
returned to the mass of people in the form of welfare, family benefits and health and education
spending; and secondly, the proportion of the population who are workers rather than
investors/business owners. Given the extraordinary capital expenditure required to enter modern
economic sectors like airline transport, the military industry, or chemical production, these
sectors are extremely difficult for new businesses to enter and are being concentrated in fewer
and fewer hands.Empirical and econometric research continue especially in the world systems
theory and in the debate about Nikolai Kondratiev and the so-called 50-years Kondratiev waves.
Major figures of world systems theory, like Andre Gunder Frank and Immanuel Wallerstein,
consistently warned about the crash that the world economy is now facing[citation needed]. World
systems scholars and Kondratiev cycle researchers always implied that Washington Consensus
oriented economists never understood the dangers and perils, which leading industrial nations
will be facing and are now facing at the end of the long economic cycle which began after the oil
crisis of 1973.

Minsky's theory

Hyman Minsky has proposed a post-Keynesian explanation that is most applicable to a closed
economy. He theorized that financial fragility is a typical feature of any capitalist economy. High
fragility leads to a higher risk of a financial crisis. To facilitate his analysis, Minsky defines three
approaches to financing firms may choose, according to their tolerance of risk. They are hedge
finance, speculative finance, and Ponzi finance. Ponzi finance leads to the most fragility.

• for hedge finance, income flows are expected to meet financial obligations in every
period, including both the principal and the interest on loans.
• for speculative finance, a firm must roll over debt because income flows are expected to
only cover interest costs. None of the principal is paid off.

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 • for Ponzi finance, expected income flows will not even cover interest cost, so the firm
must borrow more or sell off assets simply to service its debt. The hope is that either the
market value of assets or income will rise enough to pay off interest and principal.

Financial fragility levels move together with the business cycle. After a recession, firms have lost
much financing and choose only hedge, the safest. As the economy grows and expected profits
rise, firms tend to believe that they can allow themselves to take on speculative financing. In this
case, they know that profits will not cover all the interest all the time. Firms, however, believe
that profits will rise and the loans will eventually be repaid without much trouble. More loans
lead to more investment, and the economy grows further. Then lenders also start believing that
they will get back all the money they lend. Therefore, they are ready to lend to firms without full
guarantees of success.Lenders know that such firms will have problems repaying. Still, they
believe these firms will refinance from elsewhere as their expected profits rise. This is Ponzi
financing. In this way, the economy has taken on much risky credit. Now it is only a question of
time before some big firm actually defaults. Lenders understand the actual risks in the economy
and stop giving credit so easily. Refinancing becomes impossible for many, and more firms
default. If no new money comes into the economy to allow the refinancing process, a real
economic crisis begins. During the recession, firms start to hedge again, and the cycle is closed.

Coordination games

Mathematical approaches to modeling financial crises have emphasized that there is often
positive feedback[35] between market participants' decisions (see strategic complementarity).[36]
Positive feedback implies that there may be dramatic changes in asset values in response to small
changes in economic fundamentals. For example, some models of currency crises (including that
of Paul Krugman) imply that a fixed exchange rate may be stable for a long period of time, but
will collapse suddenly in an avalanche of currency sales in response to a sufficient deterioration
of government finances or underlying economic conditions. According to some theories, positive
feedback implies that the economy can have more than one equilibrium. There may be an
equilibrium in which market participants invest heavily in asset markets because they expect
assets to be valuable, but there may be another equilibrium where participants flee asset markets
because they expect others to flee too.[39] This is the type of argument underlying Diamond and
Dybvig's model of bank runs, in which savers withdraw their assets from the bank because they
expect others to withdraw too.[18] Likewise, in Obstfeld's model of currency crises, when
economic conditions are neither too bad nor too good, there are two possible outcomes:
speculators may or may not decide to attack the currency depending on what they expect other
speculators to do.

Herding models and learning models

A variety of models have been developed in which asset values may spiral excessively up or
down as investors learn from each other. In these models, asset purchases by a few agents
encourage others to buy too, not because the true value of the asset increases when many buy
(which is called "strategic complementarity"), but because investors come to believe the true
asset value is high when they observe others buying.In "herding" models, it is assumed that
investors are fully rational, but only have partial information about the economy. In these

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models, when a few investors buy some type of asset, this reveals that they have some positive
information about that asset, which increases the rational incentive of others to buy the asset too.
Even though this is a fully rational decision, it may sometimes lead to mistakenly high asset
values (implying, eventually, a crash) since the first investors may, by chance, have been
mistaken. Herding models, based on Complexity Science, indicate that it is the internal structure
of the market, not external influences, which is primarily responsible for crashes. In "adaptive
learning" or "adaptive expectations" models, investors are assumed to be imperfectly rational,
basing their reasoning only on recent experience. In such models, if the price of a given asset
rises for some period of time, investors may begin to believe that its price always rises, which
increases their tendency to buy and thus drives the price up further. Likewise, observing a few
price decreases may give rise to a downward price spiral, so in models of this type large
fluctuations in asset prices may occur. Agent-based models of financial markets often assume
investors act on the basis of adaptive learning or adaptive expectations.

History

A noted survey of financial crises is This Time is Different: Eight Centuries of Financial Folly
(Reinhart & Rogoff 2009), by economists Carmen Reinhart and Kenneth Rogoff, who are
regarded as among the foremost historians of financial crises.[47] In this survey, they trace the
history of financial crisis back to sovereign defaults – default on public debt, – which were the
form of crisis prior to the 18th century and continue, then and now causing private bank failures;
crises since the 18th century feature both public debt default and private debt default. Reinhart
and Rogoff also class debasement of currency and hyperinflation as being forms of financial
crisis, broadly speaking, because they lead to unilateral reduction (repudiation) of debt.

Prior to 19th century

Reinhart and Rogoff trace inflation (to reduce debt) to Dionysius of Syracuse, of the 4th century
BCE, and begin their "eight centuries" in 1258; debasement of currency also occurred under the
Roman empire and Byzantine empire. Among the earliest crises Reinhart and Rogoff study is the
1340 default of England, due to setbacks in its war with France (the Hundred Years' War; see
details). Further early sovereign defaults include seven defaults by imperial Spain, four under
Philip II, three under his successors.

Other global and national financial mania since the 17th century include:

• 1637: Bursting of tulip mania* in the Netherlands – while tulip mania is popularly
reported as an example of a financial crisis, and was a speculative bubble, modern
scholarship holds that its broader economic impact was limited to negligible, and that it
did not precipitate a financial crisis.
• 1720: Bursting of South Sea Bubble (Great Britain) and Mississippi Bubble (France) –
earliest of modern financial crises; in both cases the company assumed the national debt
of the country (80–85% in Great Britain, 100% in France), and thereupon the bubble
burst.
• Crisis of 1772 - 20 important banks in London went bankrupt after one banking house
defaulted

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 • Panic of 1792 - run on banks in US precipitated by the expansion of credit by the newly
formed Bank of the United States
• Panic of 1796–1797 - British and US credit crisis caused by land speculation bubble

19th century

Promotion and relegation

Leeds United have been transferred between divisions of the English football league system
several times.In sports leagues, promotion and relegation is a process where teams are
transferred between two divisions based on their performance for the completed season. The
best-ranked team or teams in the lower division are promoted to the higher division for the next
season, and the worst-ranked team or teams in the higher division are relegated to the lower
division for the next season. In some leagues, playoffs or qualifying rounds are also used to
determine rankings. This process can continue through several levels of divisions, with teams
being exchanged between levels 1 and 2, levels 2 and 3, levels 3 and 4, and so on. During the
season, teams that are high enough in the league table that they would qualify for promotion are
sometimes said to be in the promotion zone, and those at the bottom are in the relegation zone
(or, colloquially, the drop zone or facing the drop.An alternate system of league organisation
which is used primarily in the US, Canada and Australia is a closed model which always has the
same teams playing, with occasional admission of expansion teams and relocation of existing
teams, and with no movement between the major league and minor leagues.

The number of teams exchanged between the divisions is almost always identical. Exceptions
occur when the higher division wishes to change the size of its membership, or has lost one or
more of its clubs (to financial insolvency or expulsion, for example) and wishes to restore its
previous membership size, in which case fewer teams may be relegated from that division, or
more accepted for promotion from the division below. Such variations will almost inevitably
cause a "knock-on" effect through the lower divisions. For example, in 1995 the Premier League
voted to reduce its numbers by two and achieved the desired change by relegating four teams
instead of the usual three, whilst allowing only two promotions from Football League Division
One.The system is said to be the defining characteristic of the "European" form of professional
sports league organization. Promotion and relegation have the effect of allowing the maintenance
of a hierarchy of leagues and divisions, according to the relative strength of their teams. They
also maintain the importance of games played by many low-ranked teams near the end of the
season, which may be at risk of relegation. In contrast, a low-ranked US or Canadian team's final
games serve little purpose, and in fact losing may be beneficial to such teams, yielding a better
position in the next year's draft.Although not intrinsic to the system, problems can occur due to
the differing monetary payouts and revenue-generating potential that different divisions provide
to their clubs. For example, financial hardship has sometimes occurred in leagues where clubs do
not reduce their wage bill once relegated. This usually occurs for one of two reasons: first, the
club can't move underperforming players on, or second, the club is gambling on being promoted
back straight away and is prepared to take a financial loss for one or two seasons to do so. Some
leagues (most notably English football's Premier League) offer "parachute payments" to its
relegated teams for the following year(s).[3] The payouts are higher than the prize money
received by some non-relegated teams and are designed to soften the financial hit that clubs take

453
whilst dropping out of the Premier League. However, in many cases these parachute payments
just serve to inflate the costs of competing for promotion among the lower division clubs as
newly relegated teams retain a financial advantage.In some countries and at certain levels, teams
in line for promotion may have to satisfy certain non-playing conditions in order to be accepted
by the higher league, such as financial solvency, stadium capacity, and facilities. If these are not
satisfied, a lower-ranked team may be promoted in their place, or a team in the league above may
be saved from relegation.While the purpose of the promotion/relegation system is to maintain
competitive balance, it may also be used as a disciplinary tool in special cases. On several
occasions, the Italian Football Federation has relegated clubs found to have been involved in
match-fixing. This occurred most recently in 2006, when the season's initial champions Juventus
were relegated to Serie B, and two other teams were initially relegated but then restored to Serie
A after appeal (see 2006 Serie A scandal). In some Communist nations, particularly several in
Europe after World War II, clubs were promoted and relegated for political reasons rather than
performance; clubs in East Germany, Romania, and Yugoslavia were given top-flight placements
by the Communist authorities from their beginnings, and often held onto their places with these
authorities' backing.

International sport

In international football, most tournaments allow all eligible countries to compete together,
though some allow stronger teams to enter a later stage than weaker teams who play preliminary
qualifiers. An exception is the proposed UEFA Nations League, which will feature promotion
and relegation across four levels. In tennis, the Davis Cup has promotion and relegation where
each group uses a knockout tournament format in which first-round losers play off to avoid
relegation. The Ice Hockey World Championships, Bandy World Championships, Floorball
World Championships and European Team Championships in athletics have promotion and
relegation, with the winners of the top division being that year's overall champion.

Non-relegation systems

In the United States, Canada, and Australia, teams are usually not promoted or relegated.
Recently, the North American Soccer League, and the United Soccer Leagues of the United
States, having teams from across the United States, and some teams from Canada, Puerto Rico,
Bermuda and Antigua and Barbuda, discussed a relegation system. The USL set up two leagues,
the PRO and the Premier Development League (PDL). Although the system is now in place, it is
not compulsory and is rarely used. Occasionally teams voluntarily relegate themselves for
financial reasons, while the league promotes ambitious second division teams. There is no
promotion or relegation to or from Major League Soccer; the league cites the main reason as the
nature of the franchise system. The owner has purchased the right to operate a major league team
in a specific city, and relegation would in effect be a breach of that contract by the league. MLS
has also had a steady pattern of expansion, much of which comes from promoted lower-level
teams, negating the need for relegation.In the United States, colleges, most notably the extensive
and lucrative NCAA programs (rather than sport clubs as in Europe), act as the primary suppliers
of players to two of the major professional team sports: American football and basketball.
Baseball drafts players out of either college or high school, while the majority of most teenage
hockey players on Canadian junior teams are drafted out of major junior, a semi-pro youth club

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system, with a growing number of players in the United States coming out of the NCAA's
American collegiate programs, such as Hockey East. Although the NCAA is divided into three
separate divisions (Divisions I, II, and III) and teams can voluntarily move up or down between
the three, membership in a division is determined, among other things, by the number of athletic
scholarships a school offers. In men's ice hockey, the NCAA only conducts championships in
Divisions I and III; schools that are Division II members are allowed to play as Division I in that
sport, with the same scholarship limits as full-time Division I schools.American/Canadian
baseball and hockey have lower-level professional leagues, referred to as minor leagues. Most of
these teams affiliate with a major league team in player development contracts. Likewise the
National Basketball Association has recently begun operating its own developmental league. The
minor league system can be viewed as an informal relegation system based on individual players
rather than teams. Players remain employees of (or, in the case of hockey, under contract to) the
parent organization and are assigned to the minor league level appropriate to their skill and
development. (In baseball, there are roughly five levels, known as Rookie, Short-Season A, A,
AA, and AAA, with each major league team having one to three exclusively affiliated minor
league teams at each level.) Skillful players are often promoted, or 'called up', to the parent major
league team while under-performing players or players recovering from a major injury are 'sent
down' to an affiliated minor league team. (Major league players recovering from injury are often
sent to A or AA level teams, however, for reasons of geographical proximity, rather than level of
competition; this is particularly true of teams based in California, Texas and Florida.) Transfers
of players between various levels of minor leagues are also common. Such promotions and
demotions, however, are not mandatory but are made at management's discretion, and may be
made at any time during a season. There is one documented case of a modified promotion and
relegation system in hockey, pertaining to the dissolution of the World Hockey Association: as
part of the NHL–WHA merger, the top four WHA teams were "promoted" to the NHL (albeit not
without being stripped of several million dollars and virtually their entire rosters), while the
bottom two were relegated to the Central Hockey League, paid cash, and got to keep more of
their players.No gridiron football leagues in North America uses the promotion and relegation
system. Though teams in the indoor football leagues often jump from league to league on an
annual basis, most of the indoor leagues are considered roughly on par with each other, and as
such are not being promoted or relegated at all. The Iowa Barnstormers and Albany Firebirds, at
least in name, were relegated from the top level Arena Football League down to its minor league,
AF2, but the AFL and AF2 incarnations of each team were not the same legal entities. The only
thing each team had in common with its counterpart was its market location and trademarks (it
also, unlike the European model, had nothing to do with records). Iowa would later be brought
back up to the top level in 2010 as part of a bankruptcy reorganization.In 2006, the American
Indoor Football League hastily and temporarily promoted three amateur teams (among them the
Chambersburg Cardinals) to the professional ranks to fill holes in the schedule. Similarly, the
2009 New Jersey Revolution professional indoor football team left the Continental Indoor
Football League and played an abbreviated three-game schedule, all against semi-pro teams,
which were presumably paid for their appearances. In both cases, their promotion was a matter
of proximity and convenience, and as such had nothing to do with the teams' finances or
performance on the field; in all seven of the games that involved a semi-pro team and an indoor
professional team, the professional team won decisively, with many of the games being shutouts
(very rare in indoor football). These are the only known cases of an amateur team moving to the
professional ranks since the formation of professional football in the early part of the 20th

455
century.Australia’s A-League does not use a promotion and relegation system. As the league is
still relativity young (having only been established in 2004 as a successor to the National Soccer
League), steady expansion of the competition is the current priority. The A-League shares
franchising elements similar to other ball codes within Australia and major North American
sports leagues. The governing body, Football Federation Australia, are currently taking steps to
expand the A-League although some have questioned the logic with many clubs struggling to
stay afloat financially.Current expansion of the A-League includes the reintroduction of Northern
Fury FC by 2018,[4] and the possibility of new teams from the areas including Canberra, Darwin,
Townsville, Geelong, Sunshine Coast, Tasmania, Wollongong, Ipswich, and also Auckland, New
Zealand. Other Asian regions including Singapore are also being considered. A national knock-
out cup competition titled the FFA Cup and in the style of the FA Cup commenced in 2014. The
plan for the cup includes amateur and semi-professional clubs, including National Premier
Leagues, and A-League clubs entering the draw on a progressive basis. The options allow for
existing State and Territory based cup competitions to remain in place as feeder competitions to
the national cup. Although not yet confirmed, in future, the winner of the FFA Cup would have
the possibility of being promoted to the A-League competition if the winning team was not
already in the competition. Outside of the top flight, promotion and relegation are very common
in local and amateur levels of football throughout Australia.In Japan, the J. League uses a
promotion and relegation system. For the first two divisions it is the same as the Spanish, French,
and Greek systems above. But Nippon Professional Baseball does not, perhaps owing to
American influence. Professional American football uses a promotion and relegation system in
Japan as well — which the now-defunct NFL Europa (due to its much smaller size, only six
teams) did not have. Similar differences between association football and baseball have become
established in other East Asian countries where both games are played professionally, namely
South Korea, China, and Taiwan.The Super League, a rugby league organization that operates in
the United Kingdom with one team in France, abandoned the promotion and relegation system in
favor of a licence system. While teams could still be promoted and relegated, their moves were
not based solely on performance and were no longer automatic; instead, the league issued a
number of licences based on a combination of performance and financial ability to compete at a
top level. The licences were issued for three years. However, this licensing system was
abandoned and promotion and relegation was brought back for the 2015 season.

Historical comparisons

In baseball, the earliest American sport to develop professional leagues, the National Association
of Base Ball Players (NABBP) was established in 1857 as a national governing body for the
game. In many respects, it would resemble England's Football Association when founded in
1863. Both espoused strict amateurism in their early years and welcomed hundreds of clubs as
members.

Baseball's National Association was not able to survive the onset of professionalism. It
responded to the trend — clubs secretly paying or indirectly compensating players — by
establishing a "professional" class for 1869. As quickly as 1871, most of those clubs broke away
and formed the National Association of Professional Base Ball Players (NAPBBP).[5] That new,
professional Association was open at a modest fee, but it proved to be unstable. It was replaced
by the National League of Professional Base Ball Clubs in 1876, which has endured to the

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present day. The founders of the new League judged that in order to prosper, they must make
baseball's highest level of competition a "closed shop", with a strict limit on the number of
teams, each member having exclusive local rights. The modest National League guarantee of a
place in the league year after year would permit the owners to monopolize fan bases in their
exclusive territories and give them the confidence to invest in infrastructure, such as improved
ballparks. In turn, those would guarantee the revenues to support traveling halfway across a
continent for games.[7] Indeed, after its first season, the new league banked on its still doubtful
stability by expelling its members in New York and Philadelphia (the two largest cities), because
they had breached agreements to visit the four western clubs at the end of the season.The NL's
dominance of baseball was challenged several times but only by entire leagues, after its first few
years. Eight clubs, the established norm for a national league, was a prohibitively high threshold
for a new venture. Two challengers succeeded beyond the short-term, with the National League
fighting off a challenge from the American Association after a decade (concluded 1891). In 1903
it accepted parity with the American League and the formation of the organization that would
become Major League Baseball. The peace agreement between the NL and the AL did not
change the "closed shop" of top-level baseball but entrenched it by including the AL in the shop.
This was further confirmed by the Supreme Court's 1922 ruling in Federal Baseball Club v.
National League, giving MLB a legal monopoly over professional baseball in the US.

Early football leagues in England

In contrast to baseball's NABBP, the first governing body in English football survived the onset
of professionalism, which it formally accepted in 1885. Perhaps the great geographical
concentration of population[8] and the corresponding short distances between urban centres was
crucial. Certainly it provided the opportunity for more clubs' developing large fan bases without
incurring great travel costs. Professional football did not gain acceptance until after the turn of
the 20th century in most of Southern England. The earliest league members travelled only
through the Midlands and North. When The Football League was founded in 1888, it was not
intended to be a rival of The Football Association but rather the top competition within it. The
new league was not universally accepted as England's top-calibre competition right away. To
help win fans of clubs outside The Football League, its circuit was not closed; rather, a system
was established in which the worst teams at the end of each season would need to win re-election
against any clubs wishing to join.A rival league, the Football Alliance, was formed in 1889.
When the two merged in 1892, it was not on equal terms; rather, most of the Alliance clubs were
put in the new Football League Second Division, whose best teams would move up to the First
Division in place of its worst teams. Another merger, with the top division of the Southern
League in 1920, helped form the Third Division in similar fashion. Since then no new league has
been formed of non-league clubs to try to achieve parity with The Football League (only to play
at a lower level, like independent professional leagues in American baseball today).

For decades, teams finishing near the bottom of The Football League's lowest division(s) faced
re-election rather than automatic relegation. But the principle of promotion and relegation had
been firmly established, and it eventually expanded to the football pyramid in place today.
Meanwhile, The FA has remained English football's overall governing body, retaining amateur
and professional clubs rather than breaking up.

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Use in other competitions

Promotion and relegation has been used in several eSports leagues. In the World Cyber Games
realm, Blizzard Entertainment's video game StarCraft II: Wings of Liberty uses a seven-level
promotion and relegation systemfor its tournament structure. Individual players and pre-made
teams can be promoted and relegated during the first few weeks of a league season, which
generally lasts around 11 weeks, with promotion and relegation taking place based on a hidden
skill rating, which is in turn based on wins and losses.[11] The most professional League of
Legends leagues like the League of Legends Championship Series and League of Legends
Champions Korea use a promotion and relegation system. The Counter-Strike: Global Offensive
Majors use a similar system wherein the top eight finishers of one of the tri-annual Majors are
designated with the "Legends" seed and automatically qualified for the next Major tournament.
The bottom eight teams must play in a qualifying tournament in order to compete at the next
Major.From 1993 until 2003, the Eurovision Song Contest used various systems of relegation to
reconcile the number of countries wishing to participate (approximately 30 at the time) with the
number of performances allowed considering time constraints of a live television program. The
addition of a semi-final in 2004 allowed for more than 26 songs, but in 2008 automatic
qualification of the previous year's top 10 to the final was removed.

Job

A person's job is their role in society. A job is an activity, often regular and often performed in
exchange for payment. Many people have multiple jobs, such as those of parent, homemaker,
and employee. A person can begin a job by becoming an employee, volunteering, starting a
business, or becoming a parent. The duration of a job may range from an hour (in the case of odd
jobs) to a lifetime (in the case of some judges).

An activity that requires a person's mental or physical effort is work (as in "a day's work"). If a
person is trained for a certain type of job, they may have a profession. The series of jobs a person
holds in their life is their career.

Jobs for people

Most people spend up to forty, or more hours each week in paid employment. Some exceptions
are children, those who are retired, and people with certain types of disability, but within these
groups many will work part-time or occasionally, will work in one or more volunteer positions,
or will work as a homemaker. From the age of 5 or so, many children's primary role in society—
and therefore their 'job' -- is to learn and study as a student.

Types of jobs

Jobs can be categorized by the hours per week into full time or part time. They can be
categorized as temporary, odd jobs, seasonal, self-employment, consulting, or contract
employment.Jobs can be categorized as paid or unpaid. Examples of unpaid jobs include
volunteer, homemaker, mentor, student, and sometimes intern.Jobs can be categorized by the
level of experience required: entry level, intern, and co-op.Some jobs require specific training or

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an academic degree.Those without paid full-time employment may be categorized as
unemployed or underemployed if they are seeking a full-time paid job.Moonlighting is the
practice of holding an additional job or jobs, often at night, in addition to one's main job, usually
to earn extra income. A person who moonlights may have little time left for sleep or leisure
activities.The Office for National Statistics in the United Kingdom lists 27,966 different job
titles, within a website published 2015.

Day job

The expression day job is often used for a job one works in to make ends meet while performing
low-paying (or non-paying) work in their preferred vocation. Archetypal examples of this are the
woman who works as a waitress (her day job) while she tries to become an actress, and the
professional athlete who works as a laborer in the off season because he is currently only able to
make the roster of a semi-professional team.While many people do hold a full-time occupation,
"day job" specifically refers to those who hold the position solely to pay living expenses so they
can pursue, through low paying entry work, the job they really want (which may also be during
the day). The phrase strongly implies that the day job would be quit, if only the real vocation
paid a living wage.The phrase "don't quit your day job" is a humorous response to a poor or
mediocre performance not up to professional caliber. The phrase implies that the performer is not
talented enough in that activity to be able to make a career out of it.

Getting a job

Getting a first job is an important rite of passage in many cultures.[2] The youth may start by
doing household work, odd jobs, or working for a family business. In many countries, school
children get summer jobs during the longer summer vacation. Students enrolled in higher
education can apply for internships or coops to further enhance the probability of securing an
entry level job upon graduation.Résumés summarize a person's education and job experience for
potential employers. Employers read job candidate résumés to decide whom to interview for an
open position.During the last years so called Career-oriented Social Networking Sites such as
LinkedIn have become more and more popular in order to get a job via social media.[3]

Use of the word

Workers often talk of "getting a job", or "having a job". This conceptual metaphor of a "job" as a
possession has led to its use in slogans such as "money for jobs, not bombs". Similar conceptions
are that of "land" as a possession (real estate) or intellectual rights as a possession (intellectual
property).

Job opening

In economics, a vacancy or job opening refers to a job offered by a firm that wishes to hire a
worker. Ideally, the right person is hired at the right time in the right place to work for the
organization. The planning, or lead time, necessary to fill the job opening is worked out in
advance to allow sufficient time for recruitment, offer, acceptance, notice period and start date.

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Occupation and life expectancy

Manual work seems to shorten the lifespan.[4] High rank[5] (a higher position at the pecking
order) has a positive effect. Professions that cause anxiety have a direct negative impact on
health and lifespan.[6] Some data are more complex to interpret due to the various reasons of long
life expectancy; thus skilled professionals, employees with secure jobs and low anxiety
occupants may live a long life for variant reasons.[7] The more positive characteristics a job has,
the more it attributes on a longer lifespan.[8][9] Gender, country[10] and actual (what statistics
reveal, not what people believe) danger are also notable parameters.

• JOB CHANGE: - TRANSFER, PROMOTION AND SEPARATION

1). What is job change?

Ans. Mobility of employees from one job to another through transfer, promotion and
demotion is internal mobility and some employees leave the organization due to
resignation, retirement and termination is called external mobility. Taking internal and
external together makes job change.

2). Why job change emerge?

Ans. Mobility and flexibility in the workforce are necessary to cope with the changing
requirement of an organization. These changes emerge out of: -

* Changes in the structure of the organization involving job redesign, job regrouping etc.

* Changes in technology.

* Changes in political environment.

* Changes in legal policies.

* Fluctuation in volume of work due to expansion, diversification etc.

* Changes in demand of trade union.

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* Changes in the knowledge, skills and values of employees.

3). What are the purposes of job change?

Ans. Job changes serve following useful purposes: -

* To maximize employee efficiency.

* To improve organizational effectiveness.

* To ensure discipline.

* To cope with changes in operations.

4). What is transfer?

Ans. A transfer refers to a horizontal or lateral movement of an employee from one job to
another in the same organization without any significant change in status or pay. It has
been defined as “a lateral shift causing movement of individuals from one position to
another usually without involving any marked change in duties, responsibilities, skills
needed or compensation.”

5). What are the purposes of transfer?

Ans. Transfers may be made to achieve following objectives: -

* To meet organizational needs.

* To adjust the work force.

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* To better utilize employees.

* To enhance job skills, knowledge and aptitude.

* To make employee more versatile.

* To satisfy employee needs.

* To punish non-performers.

6). What is promotion?

Ans. Promotion refers to advancement of an employee to a higher post carrying greater

responsibility, higher status and better salary. It is the upward movement of an employee
in the organization’s hierarchy, to another job commanding greater authority, higher
status and better working conditions.

7). What are the advantages of promotion?

Ans. The advantages of promotion are: -

* To retain skilled and talented employees.

* To boost the morale and sense of belonging of employees.

* To utilize more effectively the knowledge and skills of employees.

* To attract competent internal source of employees for higher level jobs.

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 * To develop a competitive spirit among employees for acquiring knowledge and skills
required by higher level jobs.

Control (management)

Control, or controlling, is one of the managerial functions like planning, organizing, staffing
and directing. It is an important function because it helps to check the errors and to take the
corrective action so that deviation from standards are minimized and stated goals of the
organization are achieved in a desired manner.According to modern concepts, control is a
foreseeing action whereas earlier concept of control was used only when errors were detected.
Control in management means setting standards, measuring actual performance and taking
corrective action.

In 1916, Henri Fayol formulated one of the first definitions of control as it pertains to
management:

Control of an undertaking consists of seeing that everything is being carried out in accordance
with the plan which has been adopted, the orders which have been given, and the principles
which have been laid down. Its object is to point out mistakes in order that they may be rectified
and prevented from recurring.[1]

According to EFL Brech:

Control is checking current performance against pre-determined standards contained in the

plans, with a view to ensure adequate progress and satisfactory performance.

According to Harold Koontz:

Controlling is the measurement and correction of performance in order to make sure that
enterprise objectives and the plans devised to attain them are accomplished.

According to Stafford Beer:

Management is the profession of control.

Robert J. Mockler presented a more comprehensive definition of managerial control:

Management control can be defined as a systematic effort by business management to compare

performance to predetermined standards, plans, or objectives in order to determine whether
performance is in line with these standards and presumably in order to take any remedial action
required to see that human and other corporate resources are being used in the most effective
and efficient way possible in achieving corporate objectives.[2]

Also control can be defined as "that function of the system that adjusts operations as needed to
achieve the plan, or to maintain variations from system objectives within allowable limits". The

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control subsystem functions in close harmony with the operating system. The degree to which
they interact depends on the nature of the operating system and its objectives. Stability concerns
a system's ability to maintain a pattern of output without wide fluctuations. Rapidity of response
pertains to the speed with which a system can correct variations and return to expected output.[3]

A political election can illustrate the concept of control and the importance of feedback. Each
party organizes a campaign to get its candidate selected and outlines a plan to inform the public
about both the candidate's credentials and the party's platform. As the election nears, opinion
polls furnish feedback about the effectiveness of the campaign and about each candidate's
chances to win. Depending on the nature of this feedback, certain adjustments in strategy and/or
tactics can be made in an attempt to achieve the desired result.

From these definitions it can be stated that there is close link between planning and controlling.
Planning is a process by which an organization's objectives and the methods to achieve the
objectives are established, and controlling is a process which measures and directs the actual
performance against the planned goals of the organization. Thus, goals and objectives are often
referred to as siamese twins of management. the managerial function of management and
correction of performance in order to make sure that enterprise objectives and the goals devised
to attain them being accomplished.

CharacteristicsControl is a continuous process

• Control is a management process

• Control is embedded in each level of organizational hierarchy
• Control is forward looking
• Control is closely linked with planning
• Control is a tool for achieving organizational activities
• Control is an end process
• Control compares actual performance with planned performance*
• Control point out the error in the execution process
• Control helps in minimizing cost
• Control helps in achieving standard
• Control saves the time
• Control helps management for monitoring performance

Elements

The four basic elements in a control system:

1. the characteristic or condition to be controlled

2. the sensor
3. the comparator
4. the activator

occur in the same sequence and maintain a consistent relationship to each other in every
system.[3]

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The first element is the characteristic or condition of the operating system which is to be
measured. We select a specific characteristic because a correlation exists between it and how the
system is performing. The characteristic can be the output of the system during any stage of
processing or it may be a condition that is the result of the system. For example, it may be the
heat energy produced by the furnace or the temperature in the room which has changed because
of the heat generated by the furnace. In an elementary school system, the hours a teacher works
or the gain in knowledge demonstrated by the students on a national examination are examples
of characteristics that may be selected for measurement, or control.The second element of
control, the sensor, is a means for measuring the characteristic or condition. For example, in a
home heating system this device would be the thermostat, and in a quality-control system this
measurement might be performed by a visual inspection of the product.The third element of
control, the comparator, determines the need for correction by comparing what is occurring with
what has been planned. Some deviation from the plan is usual and expected, but when variations
are beyond those considered acceptable, corrective action is required. It involves a sort of
preventative action which indicates that good control is being achieved.The fourth element of
control, the activator, is the corrective action taken to return the system to its expected output.
The actual person, device, or method used to direct corrective inputs into the operating system
may take a variety of forms. It may be a hydraulic controller positioned by a solenoid or electric
motor in response to an electronic error signal, an employee directed to rework the parts that
failed to pass quality inspection, or a school principal who decides to buy additional books to
provide for an increased number of students. As long as a plan is performed within allowable
limits, corrective action is not necessary; however, this seldom occurs in practice. Information is
the medium of control, because the flow of sensory data and later the flow of corrective
information allow a characteristic or condition of the system to be controlled. To illustrate how
information flow facilitates control, let us review the elements of control in the context of
information.

Relationship between the elements of control and real time information

Controlled characteristic or condition

The primary requirement of a control system is that it maintains the level and kind of output
necessary to achieve the system's objectives.[5] It is usually impractical to control every feature
and condition associated with the system's output. Therefore, the choice of the controlled item
(and appropriate information about it) is extremely important. There should be a direct
correlation between the controlled item and the system's operation. In other words, control of the
selected characteristic should have a direct relationship to the goal or objective of the system.

Sensor

After the characteristic is sensed, or measured, information pertinent to control is fed back.
Exactly what information needs to be transmitted and also the language that will best facilitate
the communication process and reduce the possibility of distortion in transmission must be
carefully considered. Information that is to be compared with the standard, or plan, should be
expressed in the same terms or language as in the original plan to facilitate decision making.
Using machine methods (computers) may require extensive translation of the information. Since

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optimal languages for computation and for human review are not always the same, the relative
ease of translation may be a significant factor in selecting the units of measurement or the
language unit in the sensing element. In many instances, the measurement may be sampled rather
than providing a complete and continuous feedback of information about the operation. A
sampling procedure suggests measuring some segment or portion of the operation that will
represent the total.

Comparison with standard

In a social system, the norms of acceptable behavior become the standard against which so-
called deviant behavior may be judged. Regulations and laws provide a more formal collection
of information for society. Social norms change, but very slowly. In contrast, the standards
outlined by a formal law can be changed from one day to the next through revision,
discontinuation, or replacement by another. Information about deviant behavior becomes the
basis for controlling social activity. Output information is compared with the standard or norm
and significant deviations are noted. In an industrial example, frequency distribution (a
tabulation of the number of times a given characteristic occurs within the sample of products
being checked) may be used to show the average quality, the spread, and the comparison of
output with a standard.If there is a significant and uncorrectable difference between output and
plan, the system is "out of control." This means that the objectives of the system are not feasible
in relation to the capabilities of the present design. Either the objectives must be reevaluated or
the system redesigned to add new capacity or capability. For example, the traffic in drugs has
been increasing in some cities at an alarming rate. The citizens must decide whether to revise the
police system so as to regain control, or whether to modify the law to reflect a different norm of
acceptable behavior.

Implementor

The activator unit responds to the information received from the comparator and initiates
corrective action. If the system is a machine-to-machine system, the corrective inputs (decision
rules) are designed into the network. When the control relates to a man-to-machine or man-to-
man system, however, the individual(s) in charge must evaluate (1) the accuracy of the feedback
information, (2) the significance of the variation, and (3) what corrective inputs will restore the
system to a reasonable degree of stability. Once the decision has been made to direct new inputs
into the system, the actual process may be relatively easy. A small amount of energy can change
the operation of jet airplanes, automatic steel mills, and hydroelectric power plants. The pilot
presses a button, and the landing gear of the airplane goes up or down; the operator of a steel mill
pushes a lever, and a ribbon of white-hot steel races through the plant; a worker at a control
board directs the flow of electrical energy throughout a regional network of stations and
substations. It takes but a small amount of control energy to release or stop large quantities of
input.[4]

The comparator may be located far from the operating system, although at least some of the
elements must be in close proximity to operations. For example, the measurement (the sensory
element) is usually at the point of operations. The measurement information can be transmitted
to a distant point for comparison with the standard (comparator), and when deviations occur, the

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correcting input can be released from the distant point. However, the input (activator) will be
located at the operating system. This ability to control from afar means that aircraft can be flown
by remote control, dangerous manufacturing processes can be operated from a safe distance, and
national organizations can be directed from centralized headquarters.

Process

Step 1. Setting performance standards.

Standards are the criteria against which actual performance will be measured. Standards are set
in both quantitative and qualitative terms.

Step 2. Measurement of actual performance

Performance is measured in an objective and reliable manner. It should be checked in the same
unit in which the standards are set.

Step 3. Comparing actual performance with standards.

Step 4. Analysis deviations.

Step 5. Taking corrective measures.

Kinds

Control may be grouped according to three general classifications:[3]

1. the nature of the information flow designed into the system (open- or closed-loop control)
2. the kind of components included in the design (man or machine control systems)
3. the relationship of control to the decision process (organizational or operational control).

Open- and closed-loop control

A street-lighting system controlled by a timing device is an example of an open-loop system. At

a certain time each evening, a mechanical device closes the circuit and energy flows through the
electric lines to light the lamps. Note, however, that the timing mechanism is an independent unit
and is not measuring the objective function of the lighting system. If the lights should be needed
on a dark, stormy day the timing device would not recognize this need and therefore would not
activate energy inputs. Corrective properties may sometimes be built into the controller (for
example, to modify the time the lights are turned on as the days grow shorter or longer), but this
would not close the loop. In another instance, the sensing, comparison, or adjustment may be
made through action taken by an individual who is not part of the system. For example, the lights
may be turned on by someone who happens to pass by and recognizes the need for additional
light.If control is exercised as a result of the operation rather than because of outside or
predetermined arrangements, it is a closed-loop system. The home thermostat is the classic
example of a control device in a closed-loop system. When the room temperature drops below

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the desired point, the control mechanism closes the circuit to start the furnace and the
temperature rises. The furnace-activating circuit is turned off as the temperature reaches the
preselected level. The significant difference between this type of system and an open-loop
system is that the control device is an element of the system it serves and measures the
performance of the system. In other words, all four control elements are integral to the specific
system.An essential part of a closed-loop system is feedback; that is, the output of the system is
measured continually through the item controlled, and the input is modified to reduce any
difference or error toward zero. Many of the patterns of information flow in organizations are
found to have the nature of closed loops, which use feedback. The reason for such a condition is
apparent when one recognizes that any system, if it is to achieve a predetermined goal, must have
available to it at all times an indication of its degree of attainment. In general, every goal-seeking
system employs feedback.

Human and machine control

The elements of control are easy to identify in machine systems. For example, the characteristic
to be controlled might be some variable like speed or temperature, and the sensing device could
be a speedometer or a thermometer. An expectation of precision exists because the characteristic
is quantifiable and the standard and the normal variation to be expected can be described in exact
terms. In automatic machine systems, inputs of information are used in a process of continual
adjustment to achieve output specifications. When even a small variation from the standard
occurs, the correction process begins. The automatic system is highly structured, designed to
accept certain kinds of input and produce specific output, and programmed to regulate the
transformation of inputs within a narrow range of variation. For an illustration of mechanical
control: as the load on a steam engine increases and the engine starts to slow down, the regulator
reacts by opening a valve that releases additional inputs of steam energy. This new input returns
the engine to the desired number of revolutions per minute. This type of mechanical control is
crude in comparison to the more sophisticated electronic control systems in everyday use.
Consider the complex missile-guidance systems that measure the actual course according to
predetermined mathematical calculations and make almost instantaneous corrections to direct the
missile to its target.Machine systems can be complex because of the sophisticated technology,
whereas control of people is complex because the elements of control are difficult to determine.
In human control systems, the relationship between objectives and associated characteristics is
often vague; the measurement of the characteristic may be extremely subjective; the expected
standard is difficult to define; and the amount of new inputs required is impossible to quantify.
To illustrate, let us refer once more to a formalized social system in which deviant behavior is
controlled through a process of observed violation of the existing law (sensing), court hearings
and trials (comparison with standard), incarceration when the accused is found guilty
(correction), and release from custody after rehabilitation of the individual has occurred.[6]

The speed limit established for freeway driving is one standard of performance that is
quantifiable, but even in this instance, the degree of permissible variation and the amount of the
actual variation are often a subject of disagreement between the patrolman and the suspected
violator. The complexity of our society is reflected in many of our laws and regulations, which
establish the general standards for economic, political, and social operations. A citizen may not
know or understand the law and consequently would not know whether or not he was guilty of a

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violation.Most organized systems are some combination of man and machine; some elements of
control may be performed by machine whereas others are accomplished by man. In addition,
some standards may be precisely structured whereas others may be little more than general
guidelines with wide variations expected in output. Man must act as the controller when
measurement is subjective and judgment is required. Machines such as computers are incapable
of making exceptions from the specified control criteria regardless of how much a particular case
might warrant special consideration. A pilot acts in conjunction with computers and automatic
pilots to fly large jets. In the event of unexpected weather changes, or possible collision with
another plane, he must intercede and assume direct control.[4]

Organizational and operational control

The concept of organizational control is implicit in the bureaucratic theory of Max Weber.
Associated with this theory are such concepts as "span of control", "closeness of supervision",
and "hierarchical authority". Weber's view tends to include all levels or types of organizational
control as being the same. More recently, writers have tended to differentiate the control process
between that which emphasizes the nature of the organizational or systems design and that which
deals with daily operations. To illustrate the difference, we "evaluate" the performance of a
system to see how effective and efficient the design proved to be or to discover why it failed. In
contrast, we operate and "control" the system with respect to the daily inputs of material,
information, and energy. In both instances, the elements of feedback are present, but
organizational control tends to review and evaluate the nature and arrangement of components in
the system, whereas operational control tends to adjust the daily inputs.The direction for
organizational control comes from the goals and strategic plans of the organization. General
plans are translated into specific performance measures such as share of the market, earnings,
return on investment, and budgets. The process of organizational control is to review and
evaluate the performance of the system against these established norms. Rewards for meeting or
exceeding standards may range from special recognition to salary increases or promotions. On
the other hand, a failure to meet expectations may signal the need to reorganize or redesign.[7]

In organizational control, the approach used in the program of review and evaluation depends
on the reason for the evaluation — that is, is it because the system is not effective (accomplishing
its objectives)? Is the system failing to achieve an expected standard of efficiency? Is the
evaluation being conducted because of a breakdown or failure in operations? Is it merely a
periodic audit-and-review process?

When a system has failed or is in great difficulty, special diagnostic techniques may be required
to isolate the trouble areas and to identify the causes of the difficulty. It is appropriate to
investigate areas that have been troublesome before or areas where some measure of
performance can be quickly identified. For example, if an organization's output backlog builds
rapidly, it is logical to check first to see if the problem is due to such readily obtainable measures
as increased demand or to a drop in available man hours. When a more detailed analysis is
necessary, a systematic procedure should be followed. In contrast to organizational control,
operational control serves to regulate the day-to-day output relative to schedules, specifications,
and costs. Is the output of product or service the proper quality and is it available as scheduled?
Are inventories of raw materials, goods-in-process, and finished products being purchased and

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produced in the desired quantities? Are the costs associated with the transformation process in
line with cost estimates? Is the information needed in the transformation process available in the
right form and at the right time? Is the energy resource being utilized efficiently?

The most difficult task of management concerns monitoring the behavior of individuals,
comparing performance to some standard, and providing rewards or punishment as indicated.
Sometimes this control over people relates entirely to their output. For example, a manager might
not be concerned with the behavior of a salesman as long as sales were as high as expected. In
other instances, close supervision of the salesman might be appropriate if achieving customer
satisfaction were one of the sales organization's main objectives.The larger the unit, the more
likely that the control characteristic will be related to some output goal. It also follows that if it is
difficult or impossible to identify the actual output of individuals, it is better to measure the
performance of the entire group. This means that individuals' levels of motivation and the
measurement of their performance become subjective judgments made by the supervisor.
Controlling output also suggests the difficulty of controlling individuals' performance and
relating this to the total system's objectives.

Problems

The perfect plan could be outlined if every possible variation of input could be anticipated and if
the system would operate as predicted. This kind of planning is neither realistic, economical, nor
feasible for most business systems. If it were feasible, planning requirements would be so
complex that the system would be out of date before it could be operated. Therefore, we design
control into systems. This requires more thought in the systems design but allows more
flexibility of operations and makes it possible to operate a system using unpredictable
components and undetermined input. Still, the design and effective operation of control are not
without problems.The objective of the system is to perform some specified function. The
objective of organizational control is to see that the specified function is achieved. The objective
of operational control is to ensure that variations in daily output are maintained within prescribed
limits.It is one thing to design a system that contains all of the elements of control, and quite
another to make it operate true to the best objectives of design. Operating "in control" or "with
plan" does not guarantee optimum performance. For example, the plan may not make the best
use of the inputs of materials, energy, or information — in other words, the system may not be
designed to operate efficiently. Some of the more typical problems relating to control include the
difficulty of measurement, the problem of timing information flow, and the setting of proper
standards. When objectives are not limited to quantitative output, the measurement of system
effectiveness is difficult to make and subsequently perplexing to evaluate. Many of the
characteristics pertaining to output do not lend themselves to quantitative measurement. This is
true particularly when inputs of human energy cannot be related directly to output. The same
situation applies to machines and other equipment associated with human involvement, when
output is not in specific units. In evaluating man-machine or human-oriented systems,
psychological and sociological factors obviously do not easily translate into quantifiable terms.
For example, how does mental fatigue affect the quality or quantity of output? And, if it does, is
mental fatigue a function of the lack of a challenging assignment or the fear of a potential
injury?

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Subjective inputs may be transferred into numerical data, but there is always the danger of an
incorrect appraisal and transfer, and the danger that the analyst may assume undue confidence in
such data after they have been quantified. Let us suppose, for example, that the decisions made
by an executive are rated from 1 to 10, 10 being the perfect decision. After determining the
ranking for each decision, adding these, and dividing by the total number of decisions made, the
average ranking would indicate a particular executive's score in his decision-making role. On the
basis of this score, judgments — which could be quite erroneous — might be made about his
decision-making effectiveness. One executive with a ranking of 6.75 might be considered more
effective than another who had a ranking of 6.25, and yet the two managers may have made
decisions under different circumstances and conditions. External factors over which neither
executive had any control may have influenced the difference in "effectiveness".[7]

Quantifying human behavior, despite its extreme difficulty, subjectivity, and imprecision in
relation to measuring physical characteristics is the most prevalent and important measurement
made in large systems. The behavior of individuals ultimately dictates the success or failure of
every man-made system.

Information flow[edit]

Oscillation and Feedback

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Another problem of control relates to the improper timing of information introduced into the
feedback channel. Improper timing can occur in both computerized and human control systems,
either by mistakes in measurement or in judgment. The more rapid the system's response to an
error signal, the more likely it is that the system could overadjust; yet the need for prompt action
is important because any delay in providing corrective input could also be crucial. A system
generating feedback inconsistent with current need will tend to fluctuate and will not adjust in
the desired manner.

The most serious problem in information flow arises when the delay in feedback is exactly one-
half cycle, for then the corrective action is superimposed on a variation from norm which, at that
moment, is in the same direction as that of the correction. This causes the system to overcorrect,
and then if the reverse adjustment is made out of cycle, to correct too much in the other direction,
and so on until the system fluctuates ("oscillates") out of control. This phenomenon is illustrated
in Figure 1. “Oscillation and Feedback”. If, at Point A, the trend below standard is recognized
and new inputs are added, but not until Point B, the system will overreact and go beyond the
allowable limits. Again, if this is recognized at Point C, but inputs are not withdrawn until Point
D, it will cause the system to drop below the lower limit of allowable variation.[7]

One solution to this problem rests in anticipation, which involves measuring not only the change
but also the rate of change. The correction is outlined as a factor of the type and rate of the error.
The difficulty also might be overcome by reducing the time lag between the measurement of the
output and the adjustment to input. If a trend can be indicated, a time lead can be introduced to
compensate for the time lag, bringing about consistency between the need for correction and the
type and magnitude of the indicated action. It is usually more effective for an organization to
maintain continuous measurement of its performance and to make small adjustments in
operations constantly (this assumes a highly sensitive control system). Information feedback,
consequently, should be timely and correct to be effective. That is, the information should
provide an accurate indication of the status of the system.[3]

Setting standards

Setting the proper standards or control limits is a problem in many systems. Parents are
confronted with this dilemma in expressing what they expect of their children, and business
managers face the same issue in establishing standards that will be acceptable to employees.
Some theorists have proposed that workers be allowed to set their own standards, on the
assumption that when people establish their own goals, they are more apt to accept and achieve
them.Standards should be as precise as possible and communicated to all persons concerned.
Moreover, communication alone is not sufficient; understanding is necessary. In human systems,
standards tend to be poorly defined and the allowable range of deviation from standard also
indefinite. For example, how many hours each day should a professor be expected to be available
for student consultation? Or, what kind of behavior should be expected by students in the
classroom? Discretion and personal judgment play a large part in such systems, to determine
whether corrective action should be taken.Perhaps the most difficult problem in human systems
is the unresponsiveness of individuals to indicated correction. This may take the form of
opposition and subversion to control, or it may be related to the lack of defined responsibility or
authority to take action. Leadership and positive motivation then become vital ingredients in

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achieving the proper response to input requirements.Most control problems relate to design; thus
the solution to these problems must start at that point. Automatic control systems, provided that
human intervention is possible to handle exceptions, offer the greatest promise. There is a
danger, however, that we may measure characteristics that do not represent effective
performance (as in the case of the speaker who requested that all of the people who could not
hear what he was saying should raise their hands), or that improper information may be
communicated.[7]

Concept of Control:
The term control has different connotations depending upon the context of the use of the term. In
manufacturing it refers to a Device or mechanism installed or instituted to guide or regulates the
activities or operation of an apparatus, machine, person, or system; in law it refers to controlling
interest and in management as an authority to order and manage the workings and management
of an entity.

Control is a management process to aim at achieving defined goals within an established

timetable, and comprises of three components: (1) setting standards, (2) measuring actual
performance, and (3) taking corrective action.

Characteristics of Control:
Following characteristics of control can be identified:

1. Control is a Managerial Process:

Management process comprises of five functions, viz., planning, organizing, staffing, directing
and controlling. Thus, control is part of the process of management.

2. Control is forward looking:

Whatever has happened has happened, and the manager can take corrective action only of the
future operations. Past is relevant to suggest what has gone wrong and how to correct the future.

3. Control exists at each level of Organization:

Anyone who is a manager, has to involve into control – may be Chairman, Managing Director,
CEO, Departmental head, or first line manager. However, at every level the control will differ –
top management would be involved in strategic control, middle management into tactical control
and lower level into operational control.

4. Control is a Continuous Process:

Controlling is not the last function of management but it is a continuous process. Control is not a
one-time activity, but a continuous process. The process of setting the standards needs constant
analysis and revision depending upon external forces, plans, and internal performance.

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5. Control is closely linked with Planning:

Planning and controlling are closely linked. The two are rightly called as ‘Siamese twins’ of
management. “Every objective, every goal, every policy, every procedure and every budget
become standard against which actual performance is compared.

Planning sets the ship’s course and controlling keeps it on course. When the ship begins to veer
off the course, the navigator notices it and recommends a new heading designed to return the
ship to its proper course. Once control process is over its findings are integrated into planning to
prescribe new standards for control.

6. Purpose of Controlling is Goal Oriented and hence Positive:

Control is there because without it the business may go off the track. The controlling has positive
purpose both for the organization (to make things happen) and individuals (to give up a part of
their independence for the attainment of organizational goals).

Process of Control:
Following are the steps involved into the process of control:

1. Establish the Standards:

Within an organization’s overall strategic plan, managers define goals for organizational
departments in specific, precise, operational terms that include standards of performance to
compare with organizational activities. However, for some of the activities the standards cannot
be specific and precise.

Standards, against which actual performance will be compared, may be derived from past
experience, statistical methods and benchmarking (based upon best industry practices). As far as
possible, the standards are developed bilaterally rather than top management deciding
unilaterally, keeping in view the organization’s goals.

Standards may be tangible (clear, concrete, specific, and generally measurable) – numerical
standards, monetary, physical, and time standards; and intangible (relating to human
characteristics) – desirable attitudes, high morale, ethics, and cooperation.

2. Measure Actual Performance:

Most organizations prepare formal reports of performance measurements both quantitative and
qualitative (where quantification is not possible) that the managers review regularly. These
measurements should be related to the standards set in the first step of the control process.

For example, if sales growth is a target, the organization should have a means of gathering and
reporting sales data. Data can be collected through personal observation (through management
by walking around the place where things are happening), statistical reports (made possible by
computers), oral reporting (through conferencing, one-to-one meeting, or telephone calls),
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written reporting (comprehensive and concise, accounting information – normally a combination
of all. To be of use, the information flow should be regular and timely.

3. Compare Performance with the Standards:

This step compares actual activities to performance standards. When managers read computer
reports or walk through their plants, they identify whether actual performance meets, exceeds, or
falls short of standards.

Typically, performance reports simplify such comparison by placing the performance standards
for the reporting period alongside the actual performance for the same period and by computing
the variance—that is, the difference between each actual amount and the associated standard.

The manager must know of the standard permitted variation (both positive and negative).
Management by exception is most appropriate and practical to keep insignificant deviations
away. Timetable for the comparison depends upon many factors including importance and
complexity attached with importance and complexity.

4. Take Corrective Action and Reinforcement of Successes:

When performance deviates from standards, managers must determine what changes, if any, are
necessary and how to apply them. In the productivity and quality-centered environment, workers
and managers are often empowered to evaluate their own work. After the evaluator determines
the cause or causes of deviation, he or she can take the fourth step— corrective action.

The corrective action may be to maintain status quo (reinforcing successes), correcting the
deviation, or changing standards. The most effective course may be prescribed by policies or
may be best left up to employees’ judgment and initiative. The corrective action may be
immediate or basic (modifying the standards themselves).

Importance of Control:
1. Guides the Management in Achieving Pre-determined Goals:

The continuous flow of information about projects keeps the long range of planning on the right
track. It helps in taking corrective actions in future if the performance is not up to the mark.

2. Ensures Effective Use of Scarce and Valuable Resources:

The control system helps in improving organizational efficiency. Various control devices act as
motivators to managers. The performance of every person is regularly monitored and any
deficiency if present is corrected at the earliest.

Controls put psychological pressure on persons in the organization. On the other hand control
also enables management to decide whether employees are doing right things.

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3. Facilitates Coordination:

Control helps in coordination of activities through unity of action. Every manager will try to
coordinate the activities of his subordinates in order to achieve departmental goals.

Similarly the chief executive also coordinates the functioning of various departments. The
control acts as a check on the performance and proper results are achieved only when activities
are coordinated.

4. Leads to Delegation and Decentralization of Authority:

A decision about follow-up action is also facilitated. Control makes delegation easier/better.
Decentralization of authority is necessary in big enterprises. The management cannot delegate
authority without ensuring proper control.

The targets or goals of various departments are used as a control technique. Various control
techniques like budgeting, cost control; pre action approvals etc. allow decentralization without
losing control over activities.

5. Spares Top Management to Concentrate on Policy Making:

For control processes management’s attention is not required every now and then. The
management by exception enables top management to concentrate on policy formulation.

Why do people Oppose Control?

Many people are averse to the concept of control for the following reasons:

(i) New, more “organic” forms of organizations (self-organizing organizations, self- managed
teams, network organizations, etc.) allow organizations to be more responsive and adaptable in
today’s rapidly changing world. These forms also cultivate empowerment among employees,
much more than the hierarchical, rigidly structured organizations of the past.

(ii) Many people assert that as the nature of organizations has changed so must the nature of
management control. Some people go so far as to claim that management shouldn’t exercise any
form of control whatsoever.

They claim that management should exist to support employee’s efforts to be fully productive
members of organizations and communities – therefore, any form of control is completely
counterproductive to management and employees.

(iii) Some people even react strongly against the phrase “management control”. The word itself
has a negative connotation, e.g., it can sound dominating, coercive and heavy-handed. It seems
that writers of management literature now prefer use of the term “coordinating” rather than
“controlling”.

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(iv) People also oppose controls as they are thought of decreasing autonomy, stifling creativity,
threatening security, and perpetuating oppression. This may lead to change in expertise and
power structure, and social structure in the organisation.

Types of Control:
Controls can be numerous in kind. These may be classified on the basis of (a) timing, (b)
designing systems, (c) management levels, and (d) Responsibility

On the basis of timing:

Control can focus on events before, during, or after a process. For example, a local automobile
dealer can focus on activities before, during, or after sales of new cars. Such controls may be
respectively called as Preventive, Detective, and Corrective.

On this basis the control may be:

(i) Feed forward Control

(ii) Concurrent Control

(iii) Feedback Control

1. Feed forward Control:

The objective of feed forward control or preliminary control is to anticipate the likely problems
and to exercise control even before the activity has started or problem has occurred or been
reported. It is future directed.

This kind of control is very popular in airlines. They go in for preventive maintenance activities
to detect and prevent structural damage, which may result in disaster. These controls are evident
in the selection and hiring of new employees. It helps in taking action beforehand.

In case of feedback control, one relies on historical data, which will come after the activity has
been performed. This means information is late and the rectification is not possible. One can
make correction only for future activities.

That means whatever wrong has been done is done, and it cannot be undone. Though, future-
directed control is largely disregarded in practice, because managers have been excessively
dependent on accounting and statistical data for the purpose of control. In the absence of any
means of looking forward, reference to history is considered better than no reference at all.

However, the concept of feed forwarding has been applied now and then. One common way
managers have practised it is through careful and repeated forecasts using the latest available
information, comparing what is desired with the forecasts, and introducing program changes so
that forecasts can be made more promising.

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2. Concurrent Control:

Concurrent control monitors ongoing employee activity to ensure consistency with quality
standards takes place while an activity is on or in progress. It involves the regulation of ongoing
activities that are part of transformation process to ensure that they conform to organizational
standards.

The technique of direct supervision is the best-known form of concurrent control. Concurrent
control is designed to ensure that employees’ activities produce the correct results and to correct
the problems, if any, before they become costly.

In case of computer typing, if the spelling is wrong or construction is incorrect, the programme
immediately alerts the user. Many manufacturing operations include devices that measure
whether the items being produced meet quality standards.

Since concurrent control involves regulating ongoing tasks, it requires a complete understanding
of the specific tasks involved and their relationship to the desired and product.

Concurrent control sometimes is called steering, screening or yes-no control, because it often
involves checkpoints at which decisions are made about whether to continue progress, take
corrective action, or stop work altogether on products or services.

3. Feedback Control:

The control takes place after the job is over. Corrective action is taken after analysing variances
with the planned standards at the end of the activity. It is also known as ‘post action control’,
because feedback control is exercised after the event has taken place.

Such control is used when feed forward or concurrent is not possible or very costly; or when
exact processes involved in performing a work is difficult to specify in advance.

The twin advantages of feedback control are that meaningful information is received with regard
to planning efforts, and feedback control enhances employee motivation.

On the basis of designing Control Systems:

Three approaches may be followed while designing control systems, viz., Market Control,
Bureaucratic Control, and Clan Control. However, most organisations do not depend only on just
one of them.

1. Market Control:

Control is based upon market mechanisms of competitive activities in terms of price and market
share. Different divisions are converted into profit centres and their performance is evaluated by
segmental top line (turnover), bottom line (profit) and the market share.

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Using market control will mean that the managers in future will allocate resources or create
departments or other activities in line with the market forces.

2. Bureaucratic Control:

Bureaucratic control focuses on authority, rule and regulations, procedures and policies. Most of
the public sector units in India go in for bureaucratic control.

If they do not go by the rulebook, the legislative committees and the ministries under whom they
work will reprimand them. In a hospital no medicine can be used unless the prescription is there
and it is recorded in the issue register, even if the patient may die in between.

3. Clan Control:

The control systems are designed in a way that give way to shared vision, shared values, norms,
traditions and beliefs, etc., part of the organisational culture.

It is not based upon hierarchical mechanisms, but work-related and performance measures. This
kind of control is most suitable for the organisations which use team style of work groups and
where technology changes very fast.

On the basis of Levels:

People at different level have different planning responsibilities, so do they undertake
controlling. On the basis of levels controls, can be categorised as Operational, Structural,
Tactical, and Strategic.

1. Operational Control:

Its focus remains upon the processes used by the organisation for transforming the inputs
(resources) into outputs (products/services). Operational controls are used at the lower
management. It is exercised almost every day. Quality control, financial controls are part of
operational controls.

2. Structural Control:

Are the different elements of organisation structure serving their intended aims? Is there
overstaffing? Is the ratio of staff to line increasing? Necessary action is to be undertaken.

Two important forms of structural control can be bureaucratic control and clan control, about
which we have already talked. Structural control is exercised by top and middle management.

3. Tactical Control:

Since tactical control deals with the departmental objectives, the controls are largely exercised by
middle management levels.

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4. Strategic Control:

Strategic controls are early warning systems. Strategic control is the process to determine
whether the effectiveness of a corporate, business and functional strategies are successful in
helping organisations to meet its goals. Strategic controls are exercised by top level management.

On the basis of Responsibility:

Who has the responsibility of controlling? The responsibility may rest with the person executing
the things or with the supervisor or manager. This way control may be internal and external.

Internal control permits highly motivated people to exercise self-discipline. External control
means that the thread of control is in the hands of supervisor or manager and control is exercised
through formal systems.

Requirements of Effective Control System:

A control system is not an automatic phenomenon but deliberately created. Though different
organisations may design their control systems according to their unique and special
characteristics or conditions, yet in designing a good and effective control system the following
basic requirements must be kept in view:

1. Focus on Objectives and Needs:

The effective control system should emphasise on attainment of organizational objectives. It

should function in harmony with the needs of the enterprise. For example, the personnel
department may use feed forward control for recruiting a new employee, and concurrent control
for training.

At the shop level, control has to be easy, but more sophisticated and broad ranging controls may
be developed for higher level managers. Thus, controls should be tailored to plans and positions.

2. Immediate Warning and Timely Action:

Rapid reporting of variations is at the core of control. An ideal control system could detect, not
create bottlenecks and report significant deviation as promptly as possible so that necessary
corrective action may be taken well in time. This needs an efficient system of appraisal and
timely flow of information.

3. Indicative, Suggestive as well as corrective:

Controls should not only be able to point to the deviations, but they should also suggest
corrective action that is supposed to check the recurrence of variations or problems in future.

Control is justified only if indicated or experienced deviations from plans are corrected through
appropriate planning, organizing, staffing and directing. Control should also lead to making

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valuable forecasts to the managers so that they become aware of the problems likely to confront
them in the future.

4. Understandable, Objective, and Economical:

Controls should be simple and easy to understand, standards of performance are quantified to
appear unbiased, and specific tools and techniques should be comprehensive, understandable,
and economical for the managers.

They must know all the details and critical points in the control device as well as its usefulness.
If developed and complex statistical and mathematical techniques are adopted, then proper
training has to be imparted to managers.

Standards should be determined based on facts and participation. Effective control systems must
answer questions such as, “How much does it cost?” “What will it save?” or “What are the
returns on the investment?”

The benefits of controls should outweigh the costs. Expensive and elaborate control systems will
not suit, for example to small enterprise.

5. Focus on Functions and Factors:

Control should emphasise the functions, such as production, marketing, finance, human
resources, etc and focus on four factors – quality, quantity, timely use and costs. Not one, but
multiple controls should be adopted.

6. Strategic Points Control:

Control should be selective and concentrate on key result areas of the company. Every detail or
thing cannot and is not to be controlled in order to save time, cost and effort.

Certain strategic, critical or vital points must be identified along with the expectations at those
points where failures cannot be tolerated and appropriate control devices should be designed and
imposed at those stages.

Controls are applied where failure cannot be tolerated or where costs cannot exceed a certain
amount. The critical points include all the areas of an organization’s operations that directly
affect the success of its key operations.

7. Flexibility:

Control must not become ends in themselves. It must be environment friendly and be able to
make modifications or revisions necessitated by the rapidly changing and complex business
environment. Flexibility in control system is generally achieved by the use of alternative plans or
flexible budgets.

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8. Attention to Human Factor:

Excess control causes corruption. It should not arouse negative reactions but positive feelings
among people through focus on work, not on people. The aim of control should be to create self-
control and creativity among members through enmeshing it in the organisational culture.
Employee involvement in the design of controls can increase acceptance.

9. Suitability:

Controls have to be consistent with the organization structure, where the responsibility for action
lies, position, competence, and needs of the individuals who have to interpret the control
measures and exercise control. The higher the quality of managers and their subordinates, the
less will be the need for indirect controls.

Control Techniques:
Many techniques have been developed to control the activities in management. The list is very
long, and it is difficult to describe them all.

Some of the important techniques are:

Financial Control:
Finance is related with mobilization of funds and their utilization and the return on them.
Financial control is exercised through the following:

1. Financial Statements:

Income statement (telling about expenses, segmental incomes, overall income and expenses, and
the net profit/loss), and Balance Sheet (shows the net worth at a single point of time and the
extent to which the debt or equity finance the assets)

2. Financial Audits:

Financial audits, either internal or external are conducted to ensure that the financial
management is done in line with the generally accepted policies, procedures, laws, and ethical
guidelines. Audits may be internal (by Organisation’s own staff), external (statutory audit by
chartered accountants), and management audit (by experts).

3. Ratio Analysis:

Ratio analysis monitors liquidity, profitability, debt, and activity related aspects.

4. Budgetary Controls:

Budgetary control is the process of constructing budgets, comparing actual performance with the
budget one and revising budgets or activities in the light of changed conditions.

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Budgetary control is as such not related only to finance area, but all functional areas do take help
of budgetary control. Budgets help not only in planning but also help to keep a tab on overall
spending.

Budgeting may be top-down (managers prepare the budget and ask subordinates to use); bottom-
up (figures come from lower levels and adjusted at upper levels); zero-based (justifying
allocation of funds on the basis of activities or goals); and flexible budgeting (varying standards
and varying allocations).

5. Break-even Analysis:

It is a tool of profit planning and deals with cost-volume-profit relationships.

6. Accounting:

Accounting includes responsibility accounting, cost accounting, standard cost approach, direct
costing, and marginal costing.

Marketing Control:
In the field of marketing, to see that customer gets right product at the right price at the right
place and through right communication, the control is exercised through the following:

Market Research:

It is to assess customers’ needs, expectations and the delivery; and the competitive scenario.

Test Marketing:

To assess consumer acceptance of a new product, a small-scale marketing is done. HUL uses
Chennai for most of its test marketing.

Marketing Statistics:

Marketing managers control through marketing ratios and other statistics.

Human resource control:

Human resource control is required to have a check on the quality of new personnel and also to
monitor performances of existing employees so as to determine firm’s overall effectiveness.

Goal setting, instituting policies and procedures to guide them are to help them. Common
controls include performance appraisals, disciplinary programmes, observations, and
development assessments.

Information Control:

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All organizations have confidential and sensitive information to be kept secret. How to control
access to computer databases is very important. This has become a key contemporary issue in
control. Organizations keep a watch on employee’s computer usage in general and internet in
particular.

Production Control:
To ensure quality production in right quantity at right time economically production controls are
required. Two of the important techniques include: Inventory control (ABC Analysis, Economic
Order Quantity, Just-in time inventory control), and quality control (through inspection,
statistical quality control).

Project Control:
Network analysis is most suitable for the projects which are not routine in minimizing cost and
completing project well in time. Network analysis makes use of two techniques – Programme
Evaluation and Review Technique (PERT), and Critical Path Method (CPM

Grievance Handling: Definition, Features Causes, and Effects !

Introduction and Definition of Grievance:

A grievance is any dissatisfaction or feeling of injustice having connection with one’s
employment situation which is brought to the attention of management. Speaking broadly, a
grievance is any dissatisfaction that adversely affects organizational relations and productivity.
To understand what a grievance is, it is necessary to distinguish between dissatisfaction,
complaint, and grievance.

1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is expressed in
words.

2. Complaint is a spoken or written dissatisfaction brought to the attention of the supervisor or

the shop steward.

3. Grievance is a complaint that has been formally presented to a management representative or

to a union official.

According to Michael Jucious, ‘grievance is any discontent or dissatisfaction whether expressed

or not, whether valid or not, arising out of anything connected with the company which an
employee thinks, believes or even feels to be unfair, unjust or inequitable’.

In short, grievance is a state of dissatisfaction, expressed or unexpressed, written or unwritten,

justified or unjustified, having connection with employment situation.

Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the
organization.

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2. The dissatisfaction must arise out of employment and not due to personal or family problems.

3. The discontent can arise out of real or imaginary reasons. When employees feel that injustice
has been done to them, they have a grievance. The reason for such a feeling may be valid or
invalid, legitimate or irrational, justifiable or ridiculous.

4. The discontent may be voiced or unvoiced, but it must find expression in some form.
However, discontent per se is not a grievance. Initially, the employee may complain orally or in
writing. If this is not looked into promptly, the employee feels a sense of lack of justice. Now,
the discontent grows and takes the shape of a grievance.

5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s

expectations from the organization.

Causes of Grievances:
Grievances may occur due to a number of reasons:

1. Economic:

Employees may demand for individual wage adjustments. They may feel that they are paid less
when compared to others. For example, late bonus, payments, adjustments to overtime pay,
perceived inequalities in treatment, claims for equal pay, and appeals against performance-
related pay awards.

2. Work environment:

It may be undesirable or unsatisfactory conditions of work. For example, light, space, heat, or
poor physical conditions of workplace, defective tools and equipment, poor quality of material,
unfair rules, and lack of recognition.

3. Supervision:

It may be objections to the general methods of supervision related to the attitudes of the
supervisor towards the employee such as perceived notions of bias, favouritism, nepotism, caste
affiliations and regional feelings.

4. Organizational change:

Any change in the organizational policies can result in grievances. For example, the
implementation of revised company policies or new working practices.

5. Employee relations:

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Employees are unable to adjust with their colleagues, suffer from feelings of neglect and
victimization and become an object of ridicule and humiliation, or other inter- employee
disputes.

6. Miscellaneous:

These may be issues relating to certain violations in respect of promotions, safety methods,
transfer, disciplinary rules, fines, granting leaves, medical facilities, etc.

Effects of Grievance:
Grievances, if not identified and redressed, may adversely affect workers, managers, and the
organization.

The effects are the following:

1. On the production:

a. Low quality of production

b. Low productivity

c. Increase in the wastage of material, spoilage/leakage of machinery

d. Increase in the cost of production per unit

2. On the employees:

a. Increase in the rate of absenteeism and turnover

b. Reduction in the level of commitment, sincerity and punctuality

c. Increase in the incidence of accidents

d. Reduction in the level of employee morale.

3. On the managers:

a. Strained superior-subordinate relations.

b. Increase in the degree of supervision and control.

c. Increase in indiscipline cases

d. Increase in unrest and thereby machinery to maintain industrial peace

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Need for a Formal Procedure to Handle Grievances:
A grievance handling system serves as an outlet for employee frustrations, discontents, and
gripes like a pressure release value on a steam boiler. Employees do not have to keep their
frustrations bottled up until eventually discontent causes explosion.

The existence of an effective grievance procedure reduces the need of arbitrary action by
supervisors because supervisors know that the employees are able to protect such behavior and
make protests to be heard by higher management. The very fact that employees have a right to be
heard and are actually heard helps to improve morale. In view of all these, every organization
should have a clear-cut procedure for grievance handling.

Chapter 11: Grievance Procedures And Review

The College provides methods for regular full-time and part-time staff members to seek timely
and objective resolution of grievances and concerns arising in the workplace. Limited term
employees, temporary employees, and employees in their orientation period do not have access
to the grievance procedures and review.

The procedures described below differentiate between types of grievances and identifies the
processes appropriate to each. The employee relations manager, the equal opportunity officer,
and other staff in Human Resources are available for confidential initial consultations at any
time.

Non-Retaliation Policy

Employees may use the procedures described below without fear of retaliation from supervisors
or others against whom a complaint may be lodged. Retaliation against any member of the
community for good faith participat ion in the procedures described below is a violation of
College policy. Retaliation will not be tolerated and will be subject to College disciplinary
procedures up to and including dismissal. Any violation of this policy should be reported to
Human Resources, the EO officer or another appropriate College resource person immediately
(e.g., associate vice president of Human Resources or vice president for College and Community
Relations).

Good Faith Participation

The grievance process is dependent upon the willingness of all those involved to participate in
good faith, whether as a complainant, respondent, witness or support person. Accordingly, it is
expected that staff members will participate in the grievance procedure in an open, civil and
respectful manner that is aimed at productive resolution. Should an employee be found to have
knowingly and intentionally brought forward a false charge, provided false witness or in any

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other way knowingly and intentionally acts to thwart the grievance procedure process, they could
be subject to disciplinary action up to and including dismissal.

Support Person

At any stage of the grievance process you may have a campus support person of your choice (a
coworker, or another staff or faculty member) participate with you subject to her or his
availability, in order to help you present your concern effectively and to provide you with moral
support. Your support person is permitted, but not required, to speak on your behalf. If you don't
have anyone in mind but would like a support person, the EO officer and ER manager have a list
of staff and faculty members who are available to serve as staff advocates or support persons.
Please note that, since these reviews are internal campus processes, the support person must be a
Swarthmore College employee, rather than anyone from outside the College.

Confidentiality

It is important to recognize that understanding the nature of the complaint and facilitating
resolution typically requires speaking with others. The EO officer and/or employee relations
manager will take this step only when necessary to resolve the complaint and only with those
persons relevant to the resolution of the complaint.

It is presumed that all participants of a grievance (i.e., complainant, respondent, interviewees,

witnesses, supervisors, support persons, members of the grievance panel, etc.) will maintain the
confidentiality of the proceedings to ensure an unencumbered resolution process.

Channels for Review

These processes are designed to help both staff members and supervisors constructively
understand and address work-related conflicts. Depending on the nature of the conflict, there are
different channels of review. Some types of issues lend themselves to grievance review. Other
issues may not technically be grievances but still may warrant review by a higher-level
administrator. There are two types of grievances and one channel for administrative review:

Discrimination Grievance

This grievance process is for those issues that the person bringing the grievance believes involve
discrimination on the basis of sex, race, color, age, religion, national or ethnic origin, sexual
orientation, gender identity or expression, pregnancy, marital status, medical condition, veteran
status, disability, or any other legally protected category. This policy is consistent with relevant
governmental statutes and regulations, including those pursuant to Title IX of the Federal
Education Amendments of 1972 and Section 504 of the Federal Rehabilitation Act of 1973.

Standard Grievance

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This grievance process is for disputed disciplinary actions regarding job performance, such as
disciplinary warnings, suspensions, and/or terminations of employment for unsatisfactory
performance or misconduct. Also included in this category are performance evaluations.

Administrative /Managerial Review

There are several types of issues that are appropriate for Administrative/Managerial review.
Administrative concerns regarding such issues as job titles, individual rates of pay, job grades,
work assignments, work unit or position restructuring are subject to review in conjunction with
Human Resources through departmental and administrative reporting lines. Concerns about
mismanagement or the appropriateness of managerial action taken or not taken are subject to
review by managers at the next higher level, up to and including the Board of Managers where
appropriate. Other concerns which may not be appropriate for either of the grievance processes,
such as interpersonal conflict between employees, may also be handled through
administrative/managerial review.

If there is any question about which review process is appropriate for a given complaint, the
associate vice president of Human Resources, together with the equal opportunity officer, will
determine the appropriate channel. Each review process is described below.

Discrimination Procedure

Under normal circumstances, the time frames referred to herein should be followed. Any change
in these timeframes must be authorized by the EO Officer in consultation with all involved
parties. These timeframes do not include days when the College is not open for normal
operations or days when either the grievant or the respondent are unavailable due to illness or
previously scheduled time away.

Step 1. Seek Informal Resolution Within Thirty Days

If you believe you have been the victim of discrimination or harassment because of any legally
prohibited or College recognized factor such as age, race, religion, sex (including sexual
harassment), national or ethnic origin, sexual orientation, gender identity or expression,
disability, pregnancy status, or veteran status - you may discuss the concern with the perceived
offender or your supervisor, if you are comfortable doing so.

If you are not comfortable speaking with the perceived offender or your supervisor, or you have
done so and have received an unfavorable result, you should contact the equal opportunity
officer within thirty days of the last action believed to have been discrimination. The equal
opportunity officer will be able to answer questions and help facilitate an informal resolution of
the concern.

Depending on the nature and severity of your concern, the equal opportunity officer will conduct
a prompt and thorough investigation which may require collecting and analyzing data and/or
speaking with others. The equal opportunity officer will submit findings of the investigation and
any recommendations to you and the supervisor, with copies to other managers as appropriate.

489
The equal opportunity officer may suggest informal methods of resolution which may involve,
but are not limited to, any one or more of the following: a meeting of the parties, mediation,
counseling, training, or disciplinary action.

Step 2. Review by Respondent's Supervisor

If informal methods to resolve the concern were unsuccessful and you wish to file a grievance,
submit a Request for Formal Review to the equal opportunity officer. The Request for Formal
Review serves as your written complaint. This form is available from the equal opportunity
officer who can also provide assistance in completing it.

A copy of the Request for Formal Review will be given to the alleged offender ("respondent").
Other copies will be distributed to the respondent's direct supervisor and the next level of
management.

Within five days of receiving the completed Request for Formal Review, the EO officer will
arrange a meeting between the complainant and the respondent's supervisor. If the complainant
wishes, the EO officer can attend the meeting to facilitate the discussion. The complainant's
support person may also attend.

Within ten days following the meeting, the supervisor must provide the complainant with a
written response analyzing the issues at hand and determining whether any actions are warranted.
A copy must also be given to the equal opportunity officer. You may appeal the decision of the
supervisor to a grievance review panel by notifying the equal opportunity officer in writing
within five days.

Step 3. Review by Grievance Review Panel

A Grievance Review Panel normally will be convened within 10 days of receipt of your request
for appeal. If the grievance involves termination of employment, every effort will be made to
expedite the review process. A panel consists of three Swarthmore College employees who will
hear the grievance. There are additional guidelines to forming the grievance panel, which will be
explained in detail by the equal opportunity officer at this stage in the process. The complainant
may select one of the panelists, the supervisor of the respondent may designate one panelist, and
those two panelists will select a third person, who serves on, and chairs, the panel. If the parties
don't have anyone in mind to select as a panelist, the equal opportunity officer can provide a list
of Swarthmore College staff and faculty members who are available to serve as panelists. The
equal opportunity officer will give all panelists training on equal opportunity issues and the role
of the panel before serving. The equal opportunity officer schedules and facilitates the meeting.
The equal opportunity and employee relations officers serve as resources regarding College
policy/practice, relevant employment and equal opportunity laws, and collect any information
and documentation needed by the panel, but neither officer has a decision-making role.

At the panel review hearing, you will have the opportunity to explain to the panel why you
believe the decision of the department is incorrect and why it should be modified or overturned.
The department will have the opportunity to explain why the supervisor or manager took the

490
action and why she/he thinks the action was appropriate and should be upheld. The panel may
ask the EO officer to share findings of any investigation and any recommendations. The parties
may each present a list of witnesses who are believed to have first-hand knowledge about the
events giving rise to the action and who may support a party's case. The panel can decide
whether it wishes to interview a proposed witness.

Within ten days following the completion of its hearing(s), the panel will submit a report of its
findings and any recommendations to you and the respondent's supervisor. The respondent's
supervisor will have five days to submit a response to the panel's report to you. A copy must also
be given to the equal opportunity officer.
Either party may appeal the decision of the Grievance Review Panel to the president by notifying
the equal opportunity officer in writing within five days.

Step 4. Review and Final Decision by President

Review by the president will only be allowed on the grounds of significant procedural error or
inadequate consideration, as assessed by the president. If the president deems the appeal
appropriate, he or she will determine the method and depth of the review. The president will
issue a written decision within a timely manner. Decisions of the president are final.

If the employee is not satisfied with the final decision of the president and wishes to pursue the
matter further, she/he may request assistance from the equal opportunity officer in identifying
appropriate state and federal agencies with which the employee may wish to consult.

STANDARD GRIEVANCE PROCEDURE

Under normal circumstances, the time frames referred to herein should be followed. Any change
in these time frames must be authorized by the employee relations officer in consultation with all
involved parties. These timeframes, unless otherwise specified, do not include days when the
College is not open for normal operations or days when either the grievant or the respondent are
unavailable due to illness or previously scheduled time away.

Step 1. Informal Discussion with a Supervisor or Manager

It is the goal of the College to resolve concerns informally whenever possible. If problems arise
in a work situation, the people closest to the situation should have the first opportunity to try to
work through issues or disagreements. In many cases, concerns can be resolved through effective
dialogue between staff members and their supervisors and departmental administrators. The
College strives for a positive workplace in which good communication helps avoid problems and
quickly resolves concerns when they arise.

If you believe your supervisor has inappropriately issued a performance counseling action,
disciplinary warning, suspension, or termination for misconduct or unsatisfactory performance,
and if you are comfortable doing so, discuss the concern with your supervisor within thirty
calendar days of the action.

491
If you are uncomfortable approaching your supervisor directly, you may bring your concern to
either the employee relations (ER) manager in Human Resources or the College's equal
opportunity (EO) officer within thirty calendar days of the action. The ER manager or EO officer
may be able to help answer questions for you or help facilitate an informal resolution of your
concern.

The ER manager or EO officer will give you and the supervisor written notice once informal
attempts to resolve your concern have concluded. The supervisor will have ten days following
this notification to give you a written response to your concern.

There could be occasions with Step 1 of the procedure may not be appropriate. In such a case,
the grievant may choose to waive Step 1 and begin the grievance at Step 2.

Step 2. Review by Next Level Manager

If informal methods do not resolve the concern to your satisfaction, and you would like to file a
grievance, you should complete a Request for Formal Review within five days of receipt of the
written response from your supervisor. The form is available from either the ER manager or EO
officer and both are available for advice and assistance in filling it out. The form asks you to
describe why you think the action taken by your supervisor is inappropriate, why you think it
should be modified or overturned, and what resolution you are seeking. Your department head
and the next level manager will receive a copy of the form as notification that a request for
review has been filed.

Within five days of receiving the Grievance Form the ER manager will arrange a meeting
between you and the next level manager. If you wish, the ER manager can attend the meeting to
facilitate the discussion. If you have a support person, he or she may also attend.

Within ten days following the meeting, the next level manager must provide you with a written
response analyzing the issues at hand and determining whether he or she feels any actions are
warranted. If you don't get a timely response, or if you do not consider the issue to be
satisfactorily addressed by the response from the manager, you should notify the employee
relations manager in writing within five days that you wish to pursue your appeal to a Grievance
Review Panel.

Step 3 . Review by Grievance Review Panel

A Grievance Review Panel normally will be convened within 10 days of receipt of your request
for appeal barring any difficulties in selecting and scheduling the panel. If the grievance involves
termination of employment, every effort will be made to expedite the review process. The panel
consists of three Swarthmore College employees who will hear the positions of the parties and
may choose to call witnesses with first-hand knowledge. The complainant may select one of the
panelists, the supervisor of the respondent may designate one panelist, and those two panelists
will select a third person, who serves on, and chairs, the panel. If the parties don't have anyone in
mind to select as a panelist, the employee relations manager can provide a list of Swarthmore
College staff and faculty members who are available to serve as panelists. There are additional

492
timeframes and guidelines to selecting and convening the grievance panel, which will be
explained in detail by the employee relations manager at this stage in the process.

The employee relations manager will give all panelists training on relevant policy or legal issues
and the role of the panel before serving. The employee relations manager schedules and
facilitates the meeting. The employee relations manager and the equal opportunity officer also
serve as resources regarding College policy/practice, relevant employment and equal opportunity
laws, and collect any information and documentation needed by the panel, but neither officer has
a decision-making role.

Either party may appeal the decision of the Grievance Review Panel to the president by notifying
the employee relations officer in writing within five days.

Step 4. Review and Final Decision by President

Review by the president will only be allowed on the grounds of significant procedural error or
inadequate consideration, as assessed by the president. If the president deems the appeal
appropriate, he or she will determine the method and depth of the review. The president will
issue a written decision within a timely manner. Decisions of the president are final.

Administrative/Managerial Review

Concerns regarding such administrative issues as job titles, individual rates of pay, and job
grades, are subject to review in conjunction with Human Resources through departmental and
administrative reporting lines. Please see your supervisor or Human Resources if your concern is
in one of these areas.

Concerns about mismanagement or the appropriateness of managerial action taken or not taken
are subject to review by managers at the next higher level, up to and including the Board of
Managers where appropriate. If you have a concern in this area, you may discuss the issue with
the individual supervising the manager about whom you have concerns. If you are unsatisfied
with the response you receive, you may continue all the way up the managerial chain until you
reach the president. If you are still unsatisfied with the response you receive from the president,
or if the concern you have is about the president, you may directly contact the chair of the Audit
Subcommittee of the Finance Committee of the Board of Managers by writing to them at
audit@swarthmore.edu. If you are not comfortable with any of these steps and would like
assistance, please contact the Equal Opportunity Officer, the Employee Relations Manager, the
Human Resources Department or the Office of the President.

Concerns about other issues, such as interpersonal conflict, begin with a discussion with either
your supervisor or the ER manager. After a discussion of the issues, decisions will be made
jointly about how to proceed. Options may include mediation, counseling and/or intervention.

Grievance redressal

493
Grievance Redressal is a management- and governance-related process used commonly in
India. While the term "Grievance Redressal" primarily covers the receipt and processing of
complaints from citizens and consumers, a wider definition includes actions taken on any issue
raised by them to avail services more effectively.

The traditional approach to Grievance Redressal, handled through letters and complaint forms,
has very little appeal and its usage rarely reflects the actual state of customer satisfaction or lack
thereof. However, new Internet-based approaches used by the government and more by private
organizations, such as Public Grievance Portal (Govt of India), Trip Advisor, and
ActPlease.com.

Grievance Redressal mechanism is mandated in Government agencies and departments that are
directly involved with serving citizens and organizations. Usually a Public Relations Officer
(PRO) is designated with the role of receiving complaints and initiating corrective action, but
this mechanism often fails on account of lack of authority vested in the PRO over officers of
various capacities. The Government of India has made effort to systematize the nature of
grievance redressal through legislation,[1] being driven by civil society agitations under
leadership of Anna Hazare and Arvind Kejriwal for enactment of the Jan Lokpal Bill into law.[2]
Sandeep

Private businesses and Non-Profits engaged in service delivery, such as hotels, restaurants,
colleges, etc. often tend to set up their own mechanisms, such as Feedback forms and Contact
Us pages. Such means to get direct feedback enable businesses to take corrective action in time.
Governments also often accept the responsibility of Consumer protection from private
organizations through Legislation[3] as well as setting up Consumer Courts and Organizations
for Dispute Resolution.[4] Such consumer courts pursue quick action for redress, while
maintaining affordability and ease to the consumer.

Coverage

Grievance Redressal typically covers the following types of complaints:

• Service Unavailability
• Non-Delivery against Commitment
• Excessive Delays
• Injustice concerns (such as over race, caste, sex)
• Staff Misbehaviour
• Malpractice

Wider definition of grievance redressal covers:

• Malfunctions under Warranty coverage

• Product Support issues
• Citizen Vigilance reports
• Employee Disputes

494
Process

Workflow for Grievance Redressal as handled by sites such as ActPlease.com

Organizations define their own process flows for grievance redressal. These are rarely made
known to the public in case of private businesses; governments and non-profits usually share
voluntarily or by mandate the hierarchy of officers responsible for taking corrective action. Some
organizations maintain a custom-developed ticketing software, while others count on SaaS
Portals such as ActPlease.com. Feedback Portals such as TripAdvisor and Yelp are driven by
consumers, and organizations / businesses have the option to join and participate. Depending on
the desire to correct as well as level of transparency of the organization, grievance redressal flow
can include the following steps:

Input acceptance

Customers convey their grievance to the organization through feedback forms, letters, registered
communications, emails, etc. These inputs may be submitted by mail, over the Internet, or in
person.

Anonymity

Customers are often reluctant to report grievances that target individual executives of the
organization, especially those who may influence their future interactions or have the potential to
take vengeance. Under such conditions, the organization needs to assure the customer that her
495
identity will be hidden from executives, and preferably from everyone. This, however, opens the
potential problem of deceitful negative inputs purposefully targeted against specific executives,
as the people reporting are kept anonymous.

Spam Prevention

Feedback forms on website are prone to spam submissions. There are cases when employees
themselves submit feedback - positive for their professional gain, and negative if targeting
colleagues. Some service centers make employees sign blank feedback forms to create positive
statistics. Such situations can be prevented by seeking verification of identity of customers. This
is especially possible on online setups, such as ActPlease.com, which uses SMS to verify the
authenticity of the mobile number of reporter. Basic tools such as Captcha can prevent automatic
spammers. Mass submission of false feedback becomes less likely and easy to detect in case of
paper-based submission.

Acknowledgement & Status Tracking

Customers tend to develop much greater confidence in the grievance and feedback mechanism if
they are given a formal acknowledgement. The acknowledgement could be by SMS and Email,
as used by ActPlease.com, or simply by publicly posting their message on the appropriate forum,
such as TripAdvisor. Ticketing Systems such as osTicket and Fresh Desk, as well as SaaS
systems such as ActPlease respond with acknowledgements with unique tracking numbers.
These may be used by customers to check status of action taken on their complaint.

Forwarding

Paper-based feedback as well as standard feedback forms on websites usually forward inputs to a
single officer or email address. This naturally causes scope for delay or failure to reach the right
persons. However, smarter ticketing systems sort grievances based on their classification, and
then redirect each to their relevant executive(s) instantly.

Escalation

Smart Grievance Portals such as ActPlease expect organizations to configure typical action time
for each type of complaint, as well as set up the hierarchy for escalation. When an executive fails
to take corrective action in time, the matter is promoted to the officer next in line in seniority.

Action

Computerized and web-based systems have an advantage over paper-based systems as they can
alert the reporter immediately upon completion of action, as marked by the executive in charge.

Verification

496
Customer may certify, if applicable and asked, whether the corrective action taken on their
grievance satisfies them or is not substantial enough. Should it not be, the complaint may be
marked as pending again, or be forwarded to a more senior officer in escalated form.

Measurements

The effectiveness of implementation of a grievance redressal mechanism can be calculated with

the following parameters:

• Count of cases received

• Nature of cases received
• Acceptance of anonymous feedback
• Ratio of false inputs
• Time taken for corrective action
• Escalations required
• Confirmations & rejections after completion
• Repeat nature of grievances

Challenges

Traditional Grievance Redressal mechanisms tend to fail, or are very ineffective, on account of
some of these causes:

• Unavailability or Difficulty to access means to report grievances, at times done so

purposefully, or due to lack of priority
• Lack of authority of PRO over relevant departments and executives in Government
organizations
• Disconnect of senior decision-maker executives with end customers
• Non-motivation of front-end managers to forward negative feedback to higher-ups
• Fear of citizens / consumers to report malpractice about officers with substantial
authority
• Inability of smaller private organizations to set up computerized mechanisms
• Inaccuracy and spamming of feedback forms, driving false impressions
• Delayed feedback acceptance, as feedback is taken after service has been provided,
while corrective action may be taken typically during the delivery of service

Grievance Redressal Options available to Organizations

Paper-based Feedback Forms

These are most popular and usually used by consumer service businesses, such as hotels and
restaurants. They are less likely to be effective, as there is reduced assurance of their reaching the
decision-making authorities. These also usually do not give any formal confirmation or tracking
number to the complainant. Possibility of fake submissions also remains. Customers therefore
have less confidence on such forms. Confidence can be strengthened if a central call center sends

497
an acknowledgement of receipt of such feedback. Another possible reinforcement may be done
by taking digitized input, which can be processed using scantron machines.

Contact Us Links

Websites of organizations generally carry the Contact Us page, which lists the email and phone
numbers to use to submit any concerns. Many websites also provide a form to fill that
automatically gets sent by email, with confirmation to the reporter.

Customer-driven Feedback Websites

Websites such as Yelp and TripAdvisor allow customers to post grievances and
recommendations about organizations from personal experience. Designated representatives of
these organizations have the option to respond to such communications, though these responses
are often just standard text. The feedback also tends to be subjective and unlikely to be auto-
sorted and forwarded for action.

Organization-oriented Portals

Organizations can subscribe to grievance redressal portals such as ActPlease.com to invite their
customers to report their grievances and request action. As such portals are configured by the
organizations themselves, they can ensure that complaints are directed properly. ActPlease, being
a third party site, handles anonymity of the reporter from the organization when necessary, while
ensuring the genuine nature of the person, through SMS verification. Such SaaS Portals are easy
to use and easily affordable for all organizations including SMEs, while empowering them with
the latest tools such as Mobile Apps and Customized Websites.

Custom-developed Ticketing Systems

Large organizations involved in customer service set up their own ticketing systems with similar
features as the SaaS portals, but with greater customization in the processing of grievances.
Examples of such organizations are Bharat Sanchar Nigam Limited and Torrent Power. Large-
scale ERP software, such as SAP and Genie also provide facility for setting up ticketed grievance
redressal and customer support systems.

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 • Denison, Daniel R., Haaland, S. and Goelzer, P. (2004) "Corporate Culture and
Organizational Effectiveness: Is Asia Different from the Rest of the World?"
Organizational Dynamics, pp. 98–1 09
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• Parker, M. (2000) Organizational Culture and Identity, London: Sage.
• Parsons, Talcott, Shils, Edward (1951), Toward a General Theory of Action, reprinted as
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• Peters and Waterman (1982). In Search of Excellence. Harper & Row (New York).
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Further reading[edit]

• Rosauer, Bernard L. (2013). "Three Bell Curves: Organizational Culture Decoded".

• Barney, J. B. (1986). "Organizational Culture: Can It Be a Source of Sustained
Competitive Advantage?".". Academy of Management Review 11 (3): 656–665.
doi:10.5465/amr.1986.4306261.
• Black, Richard J. (2003) Organizational Culture: Creating the Influence Needed for
Strategic Success, London UK, ISBN 1-58112-211-X
• Bligh, Michelle C (2006). "Surviving Post-merger 'Culture Clash': Can Cultural
Leadership Lessen the Casualties?". Leadership 2: 395–426.
doi:10.1177/1742715006068937.

524
 • Boddy, C. R. (2011) Corporate Psychopaths: Organizational Destroyers, Palgrave
Macmillan
• Hartnell, C. A., Ou, A. Y., & Kinicki, A. (2011, January 17). "Organizational Culture and
Organizational Effectiveness: A Meta-Analytic Investigation of the Competing Values
Framework's Theoretical Suppositions." Journal of Applied Psychology (online
publication). doi:10.1037/a0021987
• Jex, Steven M. Jex & Britt, Thomas W. (2008) Organizational Psychology, A Scientist-
Practitioner Approach, John Wiley & Sons, ISBN 978-0-470-10976-2.
• Kleinbaum, Rob and Aviva (2013). Creating a Culture of Profitability, Probabilistic
Publishing, ISBN 978-0964793897.
• Markus, Hazel (1977). "Self-schemata and processing information about the self".
Journal of Personality and Social Psychology 35 (2): 63–78. doi:10.1037/0022-
3514.35.2.63.
• Mills, Albert J (1988). "Organization, Gender and Culture". Organization Studies 9 (3):
351–369. doi:10.1177/017084068800900304.
• O'Donovan, Gabrielle (2006). The Corporate Culture Handbook: How to Plan,
Implement and Measure a Successful Culture Change Programme, The Liffey Press,
ISBN 1-904148-97-2
• Papa, Michael J., et al. (2008). Organizational Communication Perspectives and Trends
(4th Ed.). Sage Publications.
• Phegan, B. (1996–2000) Developing Your Company Culture, A Handbook for Leaders
and Managers, Context Press, ISBN 0-9642205-0-4
• Sopow, E. (2007). Corporate personality disorder. Lincoln NB: iUniverse.
• Luthans, F. & Doh Jonathan, P. (2015). "International Management, Culture, Strategy
and Behavior" (9th ed.). Mc Graw Hill

External links[edit]

• Organizational Culture and Institutional Transformation (pdf) - From the Education

Resources Information Center Clearinghouse on Higher Education Washington, DC.

Corporate executives discussing the importance of building a healthy, effective organizational

culture

• Organizational Culture, Joel Peterson (Chairman of JetBlue Corporation and

managing partner of Trammell Crow Company), Stanford Graduate School of
Business
• Organizational Culture Trumps Strategy, Mindy Grossman (CEO of the Home
Shopping Network [HSN]), Stanford Graduate School of Business
• Organizational Culture, Isadore Sharp (founder and chairman of Four Seasons
Hotels and Resorts), Stanford Graduate School of Business
• Organizational Debt is like Technical debt – but worse, Steve Blank
(entrepreneur, investor and Stanford University professor)

1. ^ For example, an employee's refusal to violate law or an employee's assertion of rights.

525
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Ewing, Keith (1994). Britain and the ILO (2nd ed.). London: Institute of Employment
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4. ^ There are 189 Conventions, however some have been superseded by others. For
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5. ^ e.g. European Union–South Korea Free Trade Agreement (14 May 2011) OJ 2011
L127, Article 13.
6. ^ See also Lawson v Serco Ltd (2006 UKHL 3) and Duncombe v Secretary of State for
Children, Schools and Families (2011 UKSC 36)

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13. ^ "Bernard Thibault au plus haut". L'Express (in French). April 28, 2006. Archived from
the original on 2007-10-17. Retrieved 2006-05-05.
14. ^ Galbi, Douglas A. (13 June 1994). "Child Labor and the Division of Labor in the Early
English Cotton Mills". Galbi Think!.
15. ^ "The State of the World's Children 1997". UNICEF. Retrieved 2007-04-15.

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 16. ^ Weller, Ken. "The Lordstown Struggle and the Real Crisis in Production". Archived
from the original on February 13, 2006.
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Congress". Basle, Switzerland.
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Under Globalization?. Washington, DC: Institute for International Economics.
ISBN 9780881323320.
21. ^ Tariff Preference Regulation (EC) No. 732/2008 Articles 7, 8, 15, and Annex II and III
22. ^ Ravat v Halliburton Manufacturing and Services Ltd (United Kingdom Supreme Court
8 February 2012). Text ([2012] UKSC 1)
23. ^ Rome I Regulation (Regulation (EC) No 593/2008) Full text
24. ^ Rome I, recital 23 and Brussels I, recital 13
25. ^ Brussels I Regulation (EC) No 44/2001
26. ^ Laval Ltd v Swedish Builders Union C-319/05 (2008) Case text
27. ^ (French) Section syndicale d'entreprise December 27, 1968 law
28. ^ (French) SMIG
29. ^ Parul Sharma (February 2007). "Split Legal Regime in India‘s Labour Laws"
(PDF).[dead link]
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22, 2011.
31. ^ "World Bank criticizes India's labor laws".
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33. ^ Kjellberg, Anders (2009) "The Swedish Model of Industrial Relations: Self-Regulation
and Combined Centralisation-Decentralisation", in Craig Phelan (ed.) Trade Unionism
since 1945: Towards a Global History. Oxford: Peter Lang, pp. 155-198. Volume 1
(Western Europe, Eastern Europe, Africa and the Middle East). ISBN 978-3-03911-410-8
34. ^ J. Brühwiler: Arbeitsrecht in der Schweiz
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Citation.co.uk. Retrieved 2013-08-18.
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41. ^ "Paid Vacation Around the World". infoplease. Pearson Education.
42. ^ a b "US Constitution – 5th and 14th Amendments". findUSlaw.
43. ^ "Civil Rights Act of 1964". findUSlaw.

Further reading[edit]

• Stephen F. Befort and John W. Budd, Invisible Hands, Invisible Objectives: Bringing
Workplace Law and Public Policy Into Focus (2009) Stanford University Press

527
• Blanpain, Prof. R., (University of Leuven, Belgium), Editor. The International
Encyclopaedia for Labour Law and Industrial Relations. Retrieved June 26, 2014.
• E McGaughey, 'Behavioural Economics and Labour Law' (2014) SSRN
• Keith Ewing, Aileen McColgan and Hugh Collins, Labour Law, Cases, Texts and
Materials (2005) Hart Publishing
• Simon Deakin and Gillian Morris, Labour Law (2005) Hart Publishing ISBN 978-1-
84113-560-1
• Keshawn Walker and Arn Morell, "Labor and Employment: Workplace Warzone",
Georgetown University Thesis (2005)
• P. L. Malik's Industrial Law (Covering Labour Law in India) (2 Volumes with Free CD-
ROM) (2015 ed.). Eastern Book Company. pp. 1–3656. ISBN 9789351451808.
• Labour Laws - A Primer (2011 ed.). Eastern Book Company. pp. 1–224.
ISBN 9789350281437.

1. ^ "BBC Definition of lobbying". BBC News. 2008-10-01. Retrieved 2013-06-20.

2. ^ a b NPR - A Lobbyist by Any Other Name? - NPR discussion of Ulysses Grant and
origins of the term lobbyist.
3. ^ Deanna Gelak (previous president of the American League of Lobbyists) mentioned
this in her book Lobbying and Advocacy: Winning Strategies, Resources,
Recommendations, Ethics and Ongoing Compliance for Lobbyists and Washington
Advocates, TheCapitol.Net, 2008, LobbyingAndAdvocacy.com
4. ^ "lobbying". Merriam-Webster Dictionary.Com.
5. ^ "lobbying". BBC News (London). 1 October 2008. Retrieved 24 March 2010.
6. ^ "lobbyist". Random House Unabridged Dictionary. 2006.
7. ^ Non-Profit Action description of "Lobbying Versus Advocacy: Legal Definitions".
8. ^ U.S. Senate definition of Lobbying.
9. ^ Andrew Bounds and Marine Formentinie in Brussels, EU Lobbyists Face Tougher
Regulation, Financial Times, August 16, 2007.
10. ^ A. Paul Pross. "Lobbying - The Canadian Encyclopedia". Encyclopediecanadienne.ca.
Retrieved 2013-06-20.
11. ^ Fitzgerald, Julian (2006). Lobbying In Australia: You Can’t Expect Anything to
Change If You Don’t Speak Up.
12. ^ "Who is on the register?". Department of the Prime Minister & Cabinet. Australian
Government. Retrieved 2015-04-15.
13. ^ "About the Register". Public Sector Commission - Register of Lobbyists. Government of
Western Australia. 2011-07-20. Retrieved 2015-04-15.
14. ^ "Register of Lobbyists : Register of Lobbyists". lobbyists.dpac.tas.gov.au. Retrieved
2015-07-03.
15. ^ "South Australian Lobbyist Code of Conduct and Public Register". Department of
Premier & Cabinet. Government of South Australia. Retrieved 2015-04-15.
16. ^ "Questions and answers for Victorian Register of Lobbyists". Victorian Public Sector
Commissioner - Register of Lobbyists. State Government of Victoria. 2014-06-20.

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17. ^ "Taming Brussels lobby". New European. April 25, 2011.
18. ^ Lehman, Wilhelm (2003). "Lobbying in the European Union: current rules and
practices" (PDF). Retrieved September 14, 2011.
19. ^ Petrillo, Pier Luigi (March 2013). "Form of government and lobbying UK and UE, a
comparative perspective". Apertacontrada.it.
20. ^ Kierkegaard, Sylvia (2005). "How the Cookie (almost crumbled)." Computer Law and
Security Report. Vol. 21, Issue 4.
21. ^ Green Paper on European Transparency Initiative European Commission, 2006.
Retrieved September 20, 2009
22. ^ "Pleins feux sur les lobbies dans l'UE (28 October 2009)". Ec.europa.eu. 2009-10-28.
Retrieved 2013-06-20.
23. ^ Pseudo *. "Le lobbying passe aussi par le web (12 March 2012)". Dsmw.org. Retrieved
2013-06-20.
24. ^ French National Assembly : Motion for a Resolution on Lobbying (21 November 2006)
Archived March 25, 2009, at the Wayback Machine.
25. ^ a b DellaVigna, Stefano; Durante, Ruben; Knight, Brian; Ferrara, Eliana La. "Market-
Based Lobbying: Evidence from Advertising Spending in Italy †". American Economic
Journal: Applied Economics 8 (1): 224–256. doi:10.1257/app.20150042.
26. ^ Evangeline Marzec of Demand Media (2012-01-14). "What Is Corporate Lobbying?".
Chron.com. Retrieved 2012-01-14.
27. ^ Brad Plumer (October 10, 2011). "The outsized returns from lobbying". The
Washington Post. Retrieved 2012-01-13. ...Hiring a top-flight lobbyist looks like a
spectacular investment ...
28. ^ Lux, Sean; Crook, T. Russell; Woehr, David J. (January 2011). "Mixing Business With
Politics: A Meta-Analysis of the Antecedents and Outcomes of Corporate Political
Activity". Journal of Management. Retrieved November 26, 2012. doi:
10.1177/0149206310392233 Journal of Management; vol. 37 no. 1 223-247
29. ^ Raquel Meyer Alexander, Stephen W. Mazza, & Susan Scholz. (8 April 2009).
"Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax
Breaks for Multinational Corporations" Retrieved 7 March 2013.
30. ^ "Lobbying Act, Regulations and Code of Conduct". Office of the Commissioner of
Lobbying of Canada. September 10, 2010. Retrieved January 15, 2012.
31. ^ "Lobbies in the Knesset". Knesset.gov.il. 1997-04-01. Retrieved 2013-06-20.

• P. L. Petrillo, Form of government and lobbying in UE and UK, in (march, 2013)

• Joos, Klemens: Lobbying in the new Europe. Successful representation of interests after
the Treaty of Lisbon, 244 pages, ISBN 978-3-527-50597-5, Wiley VCH 2011
• Geiger, Andreas: EU Lobbying handbook, A guide to modern participation in Brussels,
244 pages, ISBN 3-9811316-0-6, Helios Media GmbH, 2006
• GLOSSARY - Alphabetical list of terms associated with the Lobbying industry
• The Bulletin, 16 March 2006, p. 14, Lobbying Europe: facts and fiction
• The European Lawyer, December 2005/January 2006, p. 9, The lobbyists have landed
• Financial Times, 3 October 2005, p. 8, Brussels braces for a U.S. lobbying invasion
• Public Affairs News, November 2004, p. 34, Judgement Call
• The European Lawyer, December 2004/January 2005, p. 26, Lifting the lid on lobbying

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• Pier Luigi Petrillo, Democracies under Pressures. Lobbies and Parliaments in a
comparative public law, Giuffrè 2011 (www.giuffre.it)
• Pietro Semeraro, I delitti di millantato credito e traffico di influenza,ed. Giuffre,
Milano,2000.
• Pietro Semeraro, Trading in Influence and Lobbying in the Spanish Criminal Code, PDF
• Wiszowaty, Marcin: Legal Regulation of Lobbying in New Members States of the
European Union, Arbeitspapiere und Materialien - Forschungsstelle Osteuropa an der
Universitat Bremen, No. 74: Heiko Pleines (ed.): Participation of Civil Society in New
Modes of Governance. The Case of the New Member States. Part 2: Questions of
Accountability. February 2006 (PDF)
• Heiko Kretschmer/ Hans-Jörg Schmedes: Enhancing Transparency in EU Lobbying?
How the European Commission's Lack of Courage and Determination Impedes
Substantial Progress, Internationale Politik und Gesellschaft 1/ 2010, S. 112-122
• "Lobbying". BBC News: Politics (London: BBC). 22 December 2005. Retrieved 2007-01-
30.
• "Police loans inquiry is widenened". BBC News: Politics (London: BBC). 30 March
2006. Retrieved 2007-01-30.

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