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RAVI INDER SINGH
WHAT IS HRM?
y HR IS THE MOST IMPORTANT ASSET FOR ANY ORGN. y MANAGEMENT--y PROCESS OF EFFECIENTLY GETTING ACTIVITIES
COMPLETED WITH AND THROUGH OTHER PEOPLE
WHAT IS A MANAGEMENT PROCESS?
y MUST INCLUDE y GOALS
y THE PROCESS IS AS FOLLOWS: y PLANNING y ORGANISING y LEADING y CONTROLLING
y HRM PROCESS IS: y ACQUISITION y DEVELOPMENT y MOTIVATION y MAINTENANCE .SO NOW WHAT IS HRM? y HRM IS CONCERNED WITH THE PEOPLE DIMENSION OF MANAGEMENT.
ACQUISITION y HUMAN RESOURCE PLANNING y RECRUITMENT y SELECTION y SOCIALISATION OF EMPLOYEES INTERNAL--EXTERNAL .
DEVELOPMENT y EMPLOYEE TRAINING y MANAGEMENT DEVELOPMENT y CAREER DEVELOPMENT .
MOTIVATION y JOB DESIGN y PERFORMANCE EVALUATION y REWARDS y JOB EVALUATION y COMPENSATION/BENEFITS y DISCIPLINE .
MAINTENANCE y SAFETY AND HEALTH y EMPLOYEE/LABOUR RELATIONS y OVERALL WORKABLE ENVIRONMENT .
HR WHEEL HUMAN RESOURCE AREAS TRAINING AND DEVELOPMENT ORGANISATION DEVELOPMENT ORGANISATION/JOB DESIGN HUMAN RESOUCE PLANNING .
HUMAN RESOURCE AREAS y TRAINING AND DEVELOPMENT y ORGANISATION DEVELOPMENT y ORGANISATION/JOB DESIGN y HUMAN RESOURCE PLANNING y SELECTION AND STAFFING y PERSONNEL RESEARCH AND INFORMATION SYSTEMS y COMPENSATION/BENEFITS y EMPLOYEE ASSISTANCE y UNION/LABOUR RELATIONS .
OUTPUT OF HR y QUALITY OF WORK LIFE y PRODUCTIVITY y READINESS FOR CHANGE y *****FURTHER CHAPTERS***** .
EXTERNAL INFLUENCES ON HR y GOVERNMENT REGULATIONS y LABOUR UNIONS y MANAGEMENT PRACTICE .
SCOPE OF HRM y RANGES FROM ENTRY TO EXIT OF AN EMPLOYEE IN AN ORGANISATION y BASED ON THE FOLLOWING ACTIVITIES: 1. Recruitment & Selection 5. Orientation & Placement 6. Job Design 4. HR Planning 2. Training & Development . Job Analysis 3.
HRM ACTIVITIES CONTD y Performance Appraisals y Job Evaluation y Employee and Executive Remuneration y Motivation y Communication y Welfare y Safety & Health y Industrial Relations .
7 Categories of Scope of HRM y Introduction to HRM y Employee Hiring y Employee and Executive Remuneration y Employee Motivation y Employee Maintenance y Industrial Relations y Prospects of HRM .
y y PERSONNEL POLICIES PROCEDURAL POLICIES FUNCTIONAL ROLE SERVICE ROLE .ROLE OF HRM y ADVISORY ROLE 1. 2.
ROLE OF HR MANAGER(TODAY) y Humanitarian Role y Counselor y Mediator y Spokesman y Problem Solver y Change Agent y Management of Manpower Resources .
ROLE OF HR MANAGERS(FUTURE) y Protection and enhancement of human and non-human y y y y y y resources Finding the best way of using people to accomplish organizational goals Improve organizational performance Integration of techniques of information technology with the human resources Utilizing behavioral scientists in the best way for his people Meeting challenges of increasing organizational effectiveness Managing diverse workforce .
MANAGERIAL FUNCTIONS OF HR y Planning y Organizing y Staffing y Directing y Controlling .
Operational Functions of HRM y Procurement y Development y Compensation y Integration y Maintenance y Separations .
CHALLENGES FACED BY HR y Globalization y Corporate Re-organizations y Changing Demographics of Workforce y Changed employee expectation y New Industrial Relations Approach y Renewed People Focus y Managing the Managers y Weaker Society interests y Contribution to the success of organizations .
? ..STRATEGIC HRM y STRATEGY««? y STRATEGIC MANAGEMENT««.
STRATEGIC HRM y STRATEGY««? y ´Strategy is a way of doing something.µ y STRATEGIC MANAGEMENT««. implementing and evaluating business strategies to achieve organizational objectives is called Strategic Managementµ .. It includes the formulation of goals and set of action plans for accomplishment of that goal.? y ´A Process of formulating.
µ . strategy implementation and evaluation and control.DEFINITION OF STRATEGIC MGT y ´Strategic Management is that set of managerial decisions and actions that determine the long-term performance of a corporation. It includes environmental scanning. strategy formulation.
STEPS IN STRATEGIC MGT y Environmental Scanning y Strategy Formulation y Strategy Implementation y Evaluation & Control: .
BENEFITS OF STRATEGIC MGT
y y y y y y y y y y y y
Allows identification, prioritization and exploration of opportunities. Provides an objective view of management problems. Improved co-ordination and control Minimizes the effects of adverse conditions and changes Allows major decisions to better support established objectives Allows more effective allocation of time and resources Allows fewer resources and lesser time devoted to correcting ad hoc decisions Creates framework for internal communication Helps to integrate the individual behaviors Provides basis for the clarification of responsibilities Encourages forward thinking Encourages favorable attitude towards change.
ROLE OF HR IN STRATEGIC MGT
y Role in Strategy Formulation
y Role in Strategy Implementation
HUMAN RESOURCE PLANNING
y Definition 1: y Need, Availability, Supply=Demand y ´HRP includes estimation of how many qualified people are
necessary to carry out the assigned activities, how many people will be available, and what, if anything, must be done to ensure personnel supply equals personnel demand at the appropriate point in the future.µ
µ . by which an organization ensures that it has the right number and kind of people at the right place. Capability. capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives. at the right time.HUMAN RESOURCE PLANNING y Definition 2: y Right numbers. Organization Objectives y ´HRP is a Process.
HUMAN RESOURCE PLANNING y Definition 3: y Translation of objectives into HR numbers y ´HRP is a process of translating organizational objectives and plans into the number of workers needed to meet those objectives.µ .
IMPORTANCE OF HRP y Forecast future personnel needs y Cope with change y Creating highly talented personnel y Protection of weaker sections y International strategies y Increasing investments in HR y Resistance to change & move .
HRP SYSTEM INCLUDES y Overall Organization Objectives y Business Environment y Forecasting Manpower Needs y Assessing Manpower Supply y Matching Manpower Demand-Supply factors .
Assessing future human resources needs and developing a program to meet those needs.Employment Planning y Employment planning y The process by which management ensures it has the right number and kinds of people in the right places at the right time. 2. . Assessing current human resources. who are capable of helping the organization achieve its goals y Steps in the planning process: 1.
and other information about each employee in the organization y Job analysis y An assessment of the kinds of skills. education. languages spoken. prior employer. and abilities needed to successfully perform each job in an organization . training.Employee Assessment y Human resource inventory report y A report listing the name. knowledge.
and why it is done y Tasks. how it is done. skills. duties and responsibilities that the job entails y Job specification y A statement of the minimum acceptable qualifications that an incumbent must possess to perform a given job successfully y Knowledge. and abilities required of the job holder .Job Analysis Components y Job description y A written statement of what a job holder does.
or the image may have been corrupted. Restart your computer.Recruitment And Selection y Recruitment y The process of locating. If the red x still appears. identifying. and attracting capable applicants y Selection process y The process of screening job applicants to ensure that the most appropriate candidates are hired The image cannot be displayed. you may have to delete the image and then insert it again. and then open the file again. Your computer may not have enough memory to open the image. .
Traditional Recruiting Sources y Internal searches y Advertisements y Employee referrals y Public employment agencies y Private employment agencies y School placement y Temporary help services y Employee leasing and independent contractors .
Downsizing Options y Firing y Layoffs y Attrition y Transfers y Reduced workweeks y Early retirements y Job sharing .
. y HR must be more involved in designing not just executing the company s strategic plan. y That employees play an expanded role in employers performance improvement efforts.HR s Strategic Challenges y Strategic plan y A company s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. y Three basic challenges y The need to support corporate productivity and performance improvement efforts.
.The Strategic Management Process y Strategic management y The process of identifying and executing the organization s mission by matching its capabilities with the demands of its environment. y Strategy y A strategy is a course of action. y The company s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.
Strategic Management Process (cont d) y Strategic management tasks y Step 1: Define the Business and Its Mission y Step 2: Perform External and Internal Audits y Step 3: Translate the Mission into Strategic Goals y Step 4: Formulate a Strategy to Achieve the Strategic Goals y Step 5: Implement the Strategy y Step 6: Evaluate Performance .
Overview of Strategic Management .
A SWOT Chart SWOT Analysis The use of a SWOT chart to compile and organize the process of identifying company Strengths. . Weaknesses. Opportunities. and Threats.
HR and Competitive Advantage y Competitive advantage y Any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share. y Superior human resources are an important source of competitive advantage .
. y Formulating and executing HR systems HR policies and activities that produce the employee competencies and behaviors the company needs to achieve its strategic aims.Strategic Human Resource Management y Strategic Human Resource Management y The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility.
Linking Corporate and HR Strategies .
. y Conceptualize and execute organizational change.HR S Strategic Roles y HR professionals should be part of the firm s strategic planning executive team. y Provide alternative insights. y Help establish and execute strategy. y Are centrally involved in creating responsive and market- driven organizations. y Identify the human issues that are vital to business strategy.
and activities must make sense in terms of the company s corporate and competitive strategies.HR s Strategy Execution Role y The HR department s strategies. and they must support those strategies. . policies.
y Supplying competitive intelligence that may be useful in the strategic planning process.HR s Strategy Formulation Role y HR helps top management formulate strategy in a variety of ways by. y Supplying information regarding the company s internal human strengths and weaknesses. . y Build a persuasive case that shows how in specific and measurable terms the firm s HR activities can and do contribute to creating value for the company.
Creating a Strategy-oriented HR System y Components of the HR process y HR professionals who have strategic and other skills y HR policies and activities that comprise the HR system itself y Employee behaviors and competencies that the company s strategy requires. .
The Basic Architecture of HR .
The High-Performance Work System y High-performance work system (HPWS) practices. and disciplinary practices) y Flexible work assignments. . y Other practices include those that foster skilled workforces and expanded opportunities to use those skills. communications. y High commitment work practices (such as improved employee development. y High-involvement employee practices (such as job enrichment and team-based organizations).
Translating Strategy into HR Policy and Practice Basic Model of How to Align HR Strategy and Actions with Business Strategy .
and the organization s performance. .The HR Scorecard Approach y HR scorecard y Measures the HR function s effectiveness and efficiency in producing employee behaviors needed to achieve the company s strategic goals. y Must understand the causal links between HR activities. organizational outcomes. y Creating an HR scorecard y Must know what the company s strategy is. employee behaviors. y Must have metrics to measure all the activities and results involved.
Strategic HR Relationships HR Activities Emergent Employee Behaviors Strategically Relevant Organizational Outcomes Organizational Performance Achieve Strategic Goals .
The HR Scorecard Approach to Formulating HR Policies. Activities. and Strategies .
Using the HR Scorecard Approach y Step 1: y y y y y y Define the Business Strategy Step 2: Outline the Company s Value Chain Step 3: Identify the Strategically Required Organizational Outcomes Step 4: Identify the Required WorkforceCompetencies and Behaviors Step 5: Identify the Strategically Relevant HR System Policies and Activities Step 6: Design the HR Scorecard Measurement System Step 7: Periodically Evaluate the Measurement System .
y The process of job analysis results into two sets of data. Job Description Job Specification 2. 1. .JOB ANALYSIS y Job Analysis is a process of collecting information about a job.
Steps of Job Analysis y Collecting and recording job information y Checking the job information for accuracy y Writing job description based on information collected to determine the skills. knowledge. abilities and activities required y Updating and upgrading this information .
PURPOSE OF JOB ANALYSIS y Human Resource Planning (HRP) y Recruitment & Selection y Training & Development y Job Evaluation y Remuneration y Performance Appraisal y Personnel Information y Safety & Health .
PROCESS OF JOB ANALYSIS y Process 1: Strategic Choices y Process 2: Collecting Information y Process 3: Processing Information y Process 4: Job Description y Process 5: Job Specification .
Strategic Choices y Extent of involvement of employees y Level of details of job analysis y Timing and frequency of Job Analysis y Past-oriented and future-oriented Job Analysis y Sources of Job Data .
Strategic Choices y Extent of involvement of employees: y Extent of employee involvement is a debatable point. Hence extent of involvement depends on the needs of the organization and employee. . Too less involvement leads to suspicion about the motives behind the job. Too much involvement may result in bias in favor of a job in terms of inflating duties and responsibilities. Besides it may also lead to inaccurate information.
If the purpose is just clarification the details required would be less. levels of details required would be great.Strategic Choices y Level of details of job analysis: y The nature of jobs being analyzed determines the level of details in job analysis. . If the purpose were for training programs or assessing the worth of job.
for new organization y New Job is created y Changes in Job. Technology and Processes y Deficiencies and Disparities in Job y New compensation plan is introduced y Updating and upgrading is required. .Strategic Choices y Timing and frequency of Job Analysis: When do you do Job Analysis? y Initial stage.
y Past-oriented and future-oriented Job Analysis: y For rapidly changing organization more future oriented
approach would be desired. For traditional organizations past oriented analysis would be required. However more future oriented analysis may be derived based on past data.
y Sources of Job Data: y Non-Human Sources y Existing job descriptions and specifications y Equipment maintenance records y Equipment design blueprints y Architectural blueprints of work area y Films of employee working y Training manuals and materials y Magazines, newspapers, literatures
y Sources of Job Data y Human Sources y Job Analysis y Job Incumbents y Supervisors y Job Experts
Collecting Information y Information collection is done on the basis of following 3 parameters y Types of Data for Job Analysis y Methods of Data Collection y Who to Collect Data .
Collecting Information y Types of Data for Job Analysis: y Work Activities (Tasks details) y Interface with other jobs and equipments (Procedures. Training. Tools. Behaviors. Movements) y Machines. Materials. Experience) . Social. Organizational. Services) y Job Context (Physical. Education. Work schedule) y Personal Requirement (Skills. Equipments and Work Aids (List. Products.
Collecting Information y Methods of Data Collection: y Observation y Interview y Questionnaires y Checklists y Technical Conference y Diary Methods .
Collecting Information y Who to Collect Data? y Trained Job Analysts y Supervisors y Job Incumbents .
Specifically job related data would be useful to prepare job description and specifications. which form the next two processes of job analysis.Processing Information y Once the job information is collected it needs to be processed. so that it would be useful in various personnel functions. .
knowledge and abilities for each job in a way that meets the needs of employees and the organization. rewards and qualification y ´Job Design integrates work content (tasks.µ . relationships). the rewards and qualifications required including skills.JOB DESIGN y Integration of work. functions.
STEPS IN JOB DESIGN y Specification of Individual Tasks y Specification of Methods of Tasks Performance y Combination of Tasks into Specific Jobs to be assigned to individuals .
FACTORS AFFECTING JOB DESIGN y Organizational factors: y Characteristics of Tasks (Planning. Execution and Controlling of Task) y Work Flow (Process Sequences) y Ergonomics (Time & Motion Study) y Work Practices (Set of ways of performing tasks) .
FACTORS AFFECTING JOB DESIGN y Environmental Factors: y Employee Abilities and Availability y Social and Cultural Expectations y Behavioral Elements: y Feedback y Autonomy y Use of Abilities y Variety .
TECHNIQUES OF JOB DESIGN: y Work Simplification y Job Rotation y Job Enlargement y Job Enrichment y Autonomous of Self-Directed Teams y High Performance Work Design .
The result is a pool of application from which new employees are selected.µ .RECRUITMENT & SELECTION y RECRUITMENT y Definition Of Recruitment: y Finding and Attracting Applications y ´Recruitment is the Process of finding and attracting capable applicants for employment. The Process begins when new recruits are sought and ends when their applications are submitted.
Though theoretically recruitment process is said to end with the receipt of applications.RECRUITMENT y MEANING OF RECRUITMENT: y Recruitment is understood as the process of searching for and obtaining applicants for jobs. from among them the right people can be selected. in practice the activity extends to the screening of applications so as to eliminate those who are not qualified for the job. .
Reduce the probability that job applicants once selected would leave shortly Meet legal and social obligations Identify and prepare potential job applicants Evaluate effectiveness of various recruitment techniques and sources for job applicants.PURPOSE & IMPORTANCE OF RECRUITMENT y Determine the present and future requirements in conjunction y y y y y y with personnel planning and job analysis activities Increase the pool of job candidates at minimum cost Help increase success rate of selection process by reducing number of under-qualified or over-qualified applications. .
FACTORS GOVERNING RECRUITMENT y External Factors: y Demand and Supply (Specific Skills) y Unemployment Rate (Area-wise) y Labor Market Conditions y Political and Legal Environment (Reservations. Labor laws) y Image .
FACTORS GOVERNING RECRUITMENT y Internal Factors y Recruitment Policy (Internal Hiring or External Hiring?) y Human Resource Planning (Planning of resources required) y Size of the Organization (Bigger the size lesser the recruitment problems) y Cost y Growth and Expansion Plans .
RECRUITMENT PROCESS y Recruitment Planning y Recruitment Strategy Development y Internal Recruitment (Source 1) y External Recruitment (Source 2) y Searching y Evaluation and Cost Control y Evaluation of Recruitment Process .
SELECTION: y MEANING OF SELECTION: y Selection is the process of picking up individuals (out of the pool of job applicants) with requisite qualifications and competence to fill jobs in the organization. A formal definition of Selection is as under y Definition of Selection: Process of differentiating y ´Selection is the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success in a job.µ .
PROCESS / STEPS IN SELECTION y Preliminary Interview y Selection Tests y Employment Interview y Reference & Background Checks y Selection Decision y Physical Examination y Job Offer y Contract of Employment .
ESSENTIALS OF A GOOD SELECTION PRACTICE y Detailed job descriptions and job specifications prepared in y y y y y y advance and endorsed by personnel and line management Trained the selectors Determine aids to be used for selection process Check competence of recruitment consultants before retention Involve line managers at all stages Attempt to validate the procedure Help the appointed candidate to succeed by training and management development .
BARRIERS TO EFFECTIVE SELECTION: y Perception y y Fairness y Validity y Reliability y Pressure .
usually by changing the employee·s attitude or increasing his or her skills and knowledge.TRAINING & DEVELOPMENT y Definition of Training & Development: y Improve performance y ´Training & Development is any attempt to improve current or future employee performance by increasing an employee·s ability to perform through learning.µ .
What are the Training Inputs? y Skills y Education y Development y Ethics y Problem Solving Skills y Decision Making y Attitudinal Changes .
absenteeism. scraps and damages to machinery can be avoided y Serves as effective source of recruitment y It is an investment in HR with a promise of better returns in future y Reduces dissatisfaction. complaints and turnover of employees . flexibility and capacity for growth in an organization y Accidents.Importance of Training & Development y Helps remove performance deficiencies in employees y Greater stability.
Need of Training y Individual level y Diagnosis of present problems and future challenges y Improve individual performance or fix up performance deficiency y Improve skills or knowledge or any other problem y To anticipate future skill-needs and prepare employee to handle more challenging tasks y To prepare for possible job transfers .
Need of Training y Group level y To face any change in organization strategy at group levels y When new products and services are launched y To avoid scraps and accident rates .
Identification of Training Needs (Methods) y Individual Training Needs Identification y Performance Appraisals y Interviews y Questionnaires y Attitude Surveys y Training Progress Feedback y Work Sampling y Rating Scales .
Identification of Training Needs (Methods) y Group Level Training Needs Identification y Organizational Goals and Objectives y Personnel / Skills Inventories y Organizational Climate Indices y Efficiency Indices y Exit Interviews y MBO / Work Planning Systems y Quality Circles y Customer Satisfaction Survey y Analysis of Current and Anticipated Changes .
Benefits of Training Needs Identification y Trainers can be informed about the broader needs in advance y Trainers Perception Gaps can be reduced between employees and their supervisors. y Trainers can design course inputs closer to the specific needs of the participants y Diagnosis of causes of performance deficiencies can be done .
Methods of Training y On the Job Trainings y Job Rotation y Job Coaching y Job Instruction y Apprenticeships y Internships and Assistantships .
Methods of Training y Off the Job Trainings y Classroom Lectures y Audio-Visual y Simulation y Case Studies y Sensitivity Trainings y Programmed Instructions y Computer Aided Instructions y Laboratory Training .
Barriers to Effective Training: y Lack of Management commitment y Inadequate Training budget y Education degrees lack skills y Large scale poaching of trained staff y Non-coordination from workers due to downsizing trends y Employers and B Schools operating distantly y Unions influence .
their co-workers and the organization per se.µ .INDUCTION & ORIENATION y Definition 1: y Planned Introduction y ´It is a Planned Introduction of employees to their jobs.
Orientation y Orientation conveys 4 types of information y Daily Work Routine y Organization Profile y Importance of Jobs to the organization y Detailed Orientation Presentations .
Purpose of Orientation y To make new employees feel at home in new environment y To remove their anxiety about new workplace y To remove their inadequacies about new peers y To remove worries about their job performance y To provide them job information. environment .
Prerequisites of Effective Orientation Program y Prepare for receiving new employee y Determine information new employee wants to know y Determine how to present information y Completion of Paperwork .
Problems of Orientations y Busy or Untrained supervisor y Too much information y Overloaded with paperwork y Given menial tasks and discourage interests y Demanding tasks where failure chances are high y Employee thrown into action soon y Wrong perceptions of employees .
JOB EVALUATION y Scope of Job Evaluation y The job evaluation is done for the purpose of wage and salary differentials. ability to pay. demand for and supply of labor. . industrial parity. collective bargaining and the like.
Process of Job Evaluation: y Defining objectives of job evaluation y Identify jobs to be evaluated (Benchmark jobs or all jobs) y Who should evaluate job? y What training do the evaluators need? y How much time involved? y What are the criteria for evaluation? y Methods of evaluation to be used y Wage Survey y Employee Classification y Establishing wage and salary differentials .
The worth of the job is then taken by adding together all the point values . y Factor Comparison Method: The important factors are selected which can be assumed to be common to all jobs.Methods of Job Evaluation y Analytical Methods y Point Ranking Methods: Different factors are selected for different jobs with accompanying differences in degrees and points. Each of these factors are then ranked with other jobs.
y Job Grading Method: It is based on the job as a whole and the differentiation is made on the basis of job classes and grades. Job is not broken down into factors etc.Methods of Job Evaluation y Non-Analytical Methods y Ranking Method: Jobs are ranked on the basis of its title or contents. responsibilities and other characteristics . In this method it is important to form a grade description to cover discernible differences in skills.
y It promotes internal focus instead of customer orientation y Not suitable for forward looking organizations. which has trimmed multiple job titles into two or three broad jobs .Pitfalls of Job Evaluation y Encourages employees on how to advance in position when there may be limited opportunities for enhancement as a result of downsizing.
organization and society all benefits . structured system of measuring. y It is formal.PERFORMANCE APPRAISALS y It is a systematic evaluation of an individual with respect to performance on the job and individual·s potential for development. evaluating job related behaviors and outcomes to discover reasons of performance and how to perform effectively in future so that employee.
Objectives of Performance Appraisals y Use of Performance Appraisals y Promotions y Confirmations y Training and Development y Compensation reviews y Competency building y Improve communication y Evaluation of HR Programs y Feedback & Grievances .
TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS y Past Oriented Methods y Rating Scales y Checklist y Forced Choice Method y Forced Distribution Method y Critical Incidents Method y Behaviorally Anchored Rating Scales .
y Field Review Method y Performance Tests & Observations y Confidential Records y Essay Method y Cost Accounting Method y Comparative Evaluation Method (Ranking & Paired Comparisons .contd.Past Oriented Methods«.
The total numerical scores are computed and final conclusions are derived. large number of employees covered.Rating Scales: y Rating scales consists of several numerical scales representing job related performance criterions such as dependability. every type of job can be evaluated. initiative. easy to use. low cost. Advantages ² Adaptability. Disadvantages ² Rater·s biases . no formal training required. output. attendance. attitude etc. Each scales ranges from excellent to poor.
standardization. Advantages ² economy. does not allow rater to give relative ratings . limited training required.Checklist y Under this method. Here the rater only does the reporting or checking and HR department does the actual evaluation. checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Disadvantages ² Raters biases. use of improper weighs by HR. ease of administration.
. The rater is forced to make a choice.Forced Choice Method: y The series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. Advantages ² Absence of personal biases because of forced choice. HR department does actual assessment. Disadvantages ² Statements may be wrongly framed.
Advantages ² Eliminates Disadvantages ² Assumption of normal distribution.Forced Distribution Method: y Here employees are clustered around a high point on a rating scale. unrealistic. It is assumed that the performance is conformed to normal distribution. errors of central tendency . Rater is compelled to distribute the employees on all points on the scale.
overly close supervision. forgetting incidents. ratings are supported by descriptions. reduces recency biases. . Disadvantages ² Negative incidents can be prioritized.Critical Incidents Method: y The approach is focused on certain critical behaviors of employee that makes all the difference in the performance. feedback is easy. chances of subordinate improvement are high. Supervisors as and when they occur record such incidents. Advantages ² Evaluations are based on actual job behaviors. feedback may be too much and may appear to be punishment.
The rater is supposed to say. They are said to be behaviorally anchored. Disadvantages ² Suffers from distortions inherent in most rating techniques . which behavior describes the employee performance.Behaviorally Anchored Rating Scales: y Statements of effective and ineffective behaviors determine the points. Advantages ² helps overcome rating errors.
Disadvantages ² Outsider is generally not familiar with employees work environment. when comparable information is needed. Advantages ² Useful for managerial level promotions. Observation of actual behaviors not possible .Field Review Method: y This is an appraisal done by someone outside employees· own department usually from corporate or HR department.
Performance Tests & Observations: y This is based on the test of knowledge or skills. Tests must be reliable and validated to be useful. The tests may be written or an actual presentation of skills. Advantage ² Tests may be apt to measure potential more than actual performance. Disadvantages ² Tests may suffer if costs of test development or administration are high .
leadership. Feedback to the assessee is given only in case of an adverse entry. initiative. Here the report is given in the form of Annual Confidentiality Report (ACR) and may record ratings with respect to following items. self expression. originality and resourcefulness etc. however its application in industry is not ruled out.Confidential Records: y Mostly used by government departments. team work. Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc. attendance. The system is highly secretive and confidential. . technical ability. reasoning ability.
Disadvantages ² It its highly dependent upon the writing skills of rater and most of them are not good writers. existing capabilities and qualifications of performing jobs.Essay Method: y In this method the rater writes down the employee description in detail within a number of broad categories like. They may get confused success depends on the memory power of raters . promoteability of employee. strengths and weaknesses and training needs of the employee. Advantage ² It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. overall impression of performance.
Cost Accounting Method: y Here performance is evaluated from the monetary returns yields to his or her organization. Hence it is more dependent upon cost and benefit analysis . and benefit the organization derives is ascertained. Cost to keep employee.
The usual techniques used may be ranking methods and paired comparison method. y Ranking Methods: Superior ranks his worker based on merit.Comparative Evaluation Method (Ranking & Paired Comparisons): y These are collection of different methods that compare performance with that of other co-workers. It is easy to administer and explanation. . from best to worst. y Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. However how best and why best are not elaborated in this method.
Advantage ² It is more useful for managerial positions. Establish goals and desired outcomes for each subordinate Setting performance standards Comparison of actual goals with goals attained by the employee Establish new goals and new strategies for goals not achieved in previous year. Disadvantages ² Not applicable to all jobs.Future Oriented Methods y Management By Objectives: It means management by y y y y y y objectives and the performance is rated against the achievement of objectives stated by the management. MBO process goes as under. allocation of merit pay may result in setting short-term goals rather than important and long-term goals etc .
and discussion with supervisors and review of other evaluations. and motivational and other personal characteristics affecting his performance. This approach is slow and costly and may be useful for bright young members who may have considerable potential.Psychological Appraisals: y These appraisals are more directed to assess employees potential for future performance rather than the past one. It is more focused on employees emotional. intellectual. However quality of these appraisals largely depend upon the skills of psychologists who perform the evaluation . It is done in the form of in-depth interviews. psychological tests.
y Assessment Centers y An assessment center is a central location where managers
may come together to have their participation in job related exercises evaluated by trained observers. It is more focused on observation of behaviors across a series of select exercises or work samples. y Reliability, content validity and predictive ability are said to be high in assessment centers. The tests also make sure that the wrong people are not hired or promoted. Finally it clearly defines the criteria for selection and promotion
y It is a technique which is systematic collection of performance
data on an individual group, derived from a number of stakeholders like immediate supervisors, team members, customers, peers and self. In fact anyone who has useful information on how an employee does a job may be one of the appraisers. This technique is highly useful in terms of broader perspective, greater self-development and multi-source feedback is useful. 360-degree appraisals are useful to measure interpersonal skills, customer satisfaction and team building skills. However on the negative side, receiving feedback from multiple sources can be intimidating, threatening etc. Multiple raters may be less adept at providing balanced and objective feedback.
Ethics of Performance Appraisals
y Formal Standardized Performance Appraisal Systems y Uniform to all employees, no illegal differentiations based on y y y y
cast, religion etc. Standards formally communicated to all employees Freedom to review performance appraisal results Written instructions and training to raters All personal decision makers should be aware of antidiscrimination laws
race.Essentials of a Good Performance Appraisal System Standardized Performance Appraisal System Uniformity of appraisals Defined performance standards Trained Raters Use of relevant rating tools or methods Should be based on job analysis Use of objectively verifiable data Avoid rating problems like halo effect. severity etc. leniency. y Consistent Documentations maintained y No room for discrimination based on cast. religion. creed. central tendency. region etc y y y y y y y y .
EMPLOYEE COMPENSATION & BENEFITS y Employee Compensation refers to all forms of pay or rewards going to employees and arising from their employment. commissions and bonus) y INDIRECT PAYMENTS y (financial benefits such as insurance and vacations) . salaries. y DIRECT FINANCIAL PAYMENTS y (wages.
determining a job·s relative WORTH y GROUP SIMILAR JOBS INTO PAY GRADES y (jobs of approx.determining prevailing wage rates--- BENCHMARK JOB y JOB EVALUATION --.Establishing Pay Rates y Salary Survey --. equal difficulty) y PRICE EACH PAY GRADE y FINE TUNE PAY GRADES .
COMPETENCY BASED PAY y Where the company pays for the employee·s range. depth and types of skills and knowledge. rather than for the job title he or she holds .
INCENTIVES y PIECEWORK y STRAIGHT PIECE RATE y HOUR RATE .