Human ResourceManagement

Functions

• Acquisition

– HRP

– Recruitment & Selection

– Socialisation

Functions

• Development

– Training

– Management Development

– Career Development

Functions

• Motivation

– Job Satisfaction

– Performance Appraisal

Functions

• Maintenance

– Compensation Administration

– Grievance Redressal

– Safety & Security

– Labour Relations

Human Resource Planning (HRP)

• Human Resource Planning is the process by

which an organisation ensures that it has the

right number and kinds of people

Human Resource Planning (HRP)

• Purpose– Assess where the organisaton is ?– Where it is going ?– What implications these assessment have on

future demand and supply ?– Attempt to match supply and demand– Making them compatiable with achievements of

organisaton’s future needs

Steps in HRP

1. Assessing current human resources Developing a profile & job analysis

a) Human Resource Inventoryb) Job Analysis

Steps in HRP

2. Assessing where the organisation is going

a) Demand Forecasting

Steps in HRP

3. Implications of future demands

4. Implications of future supply1. Internal supply

a) Increasing supplyb) Decreasing supply

2. Estimated changes in external supply

5. Matching Demand and Supply

Special Case in HRP

• Retrenchment

A.Out placementB.LayoffsC.Leaves of absence with out payD.LoaningE.Work sharingF. Reduced work hoursG.Early retirementH.Attrition

Job Analysis

• Job analysis is the procedure for determining the duties & skill requirements of a job and the kind of person who should be hired for it.

Steps in Job analysis

1. Select job for analysis2. Further information3. Process information4. Job description5. Job specification6. Uses of Job description & Specification

Job Analysis Methods

1. Observation method2. Individual Interview method3. Group Interview method4. Structured questionnaire method5. Technical conference method6. Diary method

Purpose of Job Analysis

I. Job description

II. Job specification

III. Job evaluation

Recruitment

• Factors influencing recruiting effortsa) sizeb) Efficiency of past recruiting effortsc) Working conditionsd) Organisations in growth, stagnation,decline

mode

Constraints

1. Image of the organisation2. Nature of the job to filled3. Hazardous, lacking prospects4. Internal organisational policies5. Trade union requirements6. Govt. influence on recruiting process7. Cost of recruitment

Sources

1. Internal search2. Advertisements3. Employee referrals 4. Employment agencies

1. Public agencies2. Private agencies3. Head hunters

Sources

5. Temporary help services6. Schools, colleges & universities7. Professional organisations8. Casual or unsolicited applications

Selection

a) Correct acceptance

b) Acceptance error

c) Reject error

d) Correct rejection

Discreet selection process

a) Initial screeningb) Completion of application formc) Employment testd) Comprehensive interviewe) Background investigationf) Physical examinationg) Final employment decisionh) Comprehensive approach

Key elements of successful predictors

a) Reliabilityb) Validity

a) Content validityb) Construct validityc) Criterion related validity

a) Predictive validityb) Concurrent validityc) Cut scores

Selection Devices

I. Application formsII. Employment test

I. Written testsII. Performance simulation tests

i. Work samplingii. Assessment centers

III. Other testsi. Graphology testsii. Polygraph tests

Selection Devices

III. Interviewsa. Structure interviewsb. Train interviewersc. Understand jobd. Avoid other informatione. Standardise evaluation formsf. Make notesg. Avoid short interviews

Selection Devices

IV. Realistic job previews

V. Background investigation

VI. Physical examination

Socialising the new employee

• Organisational culture

a. Roles

b. Values

c. Norms

Socialisation process underlying assumptions

a) Influences employee performanceb) New employees suffer from anxietyc) Socialisation does not occur in a vacuumd) People adjust in similar ways

Socialisation Process

a) Pre-arrival stage

b) Encounter stage

c) Metamorphosis stage

Considerations in developing a Socialisation Process

A. Formal B. InformalC. IndividualD. CollectiveE. Fixed or varied time periodF. Serial or disjunctiveG. Investiture or divestiture

Training

• Determining training needs– What are organisation’s goals– What are tasks to be completed to achieve these

goals– What behaviours are necessary for each

incumbent to complete his assigned tasks– What are the defeciencies

Signals

• Productivity

• Rejection

Methods for determining training needs

a) Observation and analysis of job performanceb) Management and staff conferences &

recommendationsc) Analysis of job requirementsd) Consideration of current and projected

changes e) Surveys reports & inventoriesf) interviews

Formal employee training methods

a. On-the-job trainingi. Appentice ship programmesii. Job instruction training (JIT)

a. Preparing the trainees by telling about the jobb. Presenting the instructionsc. Having trainees try out the jobd. Placing the workers into the job

Formal employee training methods

b. Off-the-job traininga. Class room lecturesb. Filmsc. Simulation exercisesd. Computer modelinge. Vestibule training

Formal employee training methods

c. Programmed instructions

Management development

Methods for developing managersI. On-the-job development

a. Coachingb. Under study assignmentc. Job rotationd. Committee assignments

Methods for developing managersa. Off-the-job development

a. Sensitivity trainingb. Transactional analysisc. Lecture coursesd. Simulation exercises

Evaluating training effectiveness

A. Test-retest method

B. Pre-post performance method

C. Experimental-control group

method

Areas of assessment

a. Trainee reaction

b. Learning

c. Behaviour

d. Results

Final assessment on the basis of

• Cost

• Change

• Impact

Career Development

• Career stages

a. Explorationb. Establishmentc. Mid-careerd. Late careere. Decline

Effective organisational career development

a. Challenging initial jobsb. Dissemination of career option informationc. Job postingd. Assessment centerse. Career counselingf. Career development workshopsg. Periodic job changesh. Sabbaticals

Motivation: is the willingness to do something and is conditioned by this

action’s ability to satisfy some need for the individual.

• Unsatisfied > Tension > Drives > Search > Behaviour

• Goal Achievement > Need satisfaction > Reduction of tension

Maslow’s Hierarchy of Needs

1. Physiological – hunger, thirst, shelter, sex2. Safety – Protection from physical and emotional

harm3. Love – affection, belongingness, acceptance,

friendship4. Esteem – Internal factors : Self respect, autonomy

External factors : status, recognition, attention5. Self activation – drive to become what one is

capable of becoming, achieving one’s potential.

Douglas McGregor’s Theory X & Theory Y

Assumptions: Managers view of human nature is based on one of the two sets of assumptions about people.

Theory X1. Employees inherently dislike work and whenever possible,

will attempt to avoid it.2. Since they dislike work, they have to coerced controlled or

threatened to achieve desired goal.3. Employees will shirk responsibilities and seek formal

direction.4. Most workers place security above all other factors

associated with work and will display little ambition.

Theory Y1. Employees can view work as being as natural as rest or play.2. Employees will exercise self direction and self control, if they are

committed to the objectives.3. Average person can learn to accept even seek responsibility4. Creativity – that is ability to make good decisions is widely dispersed

throughout the population.

Theory X – arouses lower order needs.Theory Y – arouses higher order needs.

Frederick Herzberg’s Two factor Theory

• Intrinsic factors – Achievement, recognition, the work itself, responsibility and advancement seem to be related to job satisfaction.

• Extrinsic Factors – Company policy & administration, supervision, interpersonal relations and working condition seem to relate to dissatisfaction.

Motivation – Hygiene Theory

Satisfaction, No satisfactionMotivators

No Dissatisfaction, DissatisfactionHygiene Factors

McClelland’s three needs motivation theory

• According to David McClelland – 3 major relevant motives or needs in work place

1. Need for achievement – drive to excel, to achieve in relation to a set of standards, to strive to succeed

2. Need for affiliation - Desire for friendly & close interpersonal relationships.

3. Need for Power – Need to make others behave in a way that they would not have behaved otherwise.

Drive for Achievement ( nAch )Drive for affiliation ( nAff )Drive for Power ( nPow )

• The characteristics of (nAch) closely align with Successful Entrepreneurship

“ The Characteristics of (nAff) & (nPow) tend to be closely related to managerial success.

McClelland gives evidence that best managers are high in their need for power and low in their need for affiliation.

Motivation Theory – Expectancy Approach Victor H.Vroom.

• The strength of the tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of the outcome to the individual.

• Three variables are:1. Attractiveness : Importance of the potential

outcome/reward.2. Performance/reward linkage : the degree to which the

individual believes that performing at a particular level will lead to attainment of each job outcome.

3. Effort – Performance linkage : the perceived probability by the individual that exerting a given amount of reward.

• Motivation– Strength of drive towards an action

• Valence – Strength of a person’s preference to one outcome in relation to

others.• Expectancy

– Probability of getting it with certain actions

• Urge to perform depends on the attractiveness of the outcome or reward.

• Valence X Expectancy = Motivation

Psychological Approach

• Assumptions: Individuals have a unique mixture of ingredients that make up their personality. However one ingredient will be predominant (Personality type)

• There are four categories of personality types : a) Dominant : very strong, good decision makers, great leader

Motivators- (Power, Authority, Control over results, freedom from restraint, wide scope of operations)

b) Influencing : good talkersMotivators-(popularity, recognition, contact with people,

freedom of expression, favourable relationships and social status)c) Steady : those who are extremely loyal to others, very predictable.

Motivators-(stability, planned charge, conflict free environment, clear responsibilities, concrete results and job security)

d) Careful : who is meticulous about details , who sets high standards for themselves.(precision work and high quality of work are motivators)

Working of the Expectancy Model

MotivationIncreased drive

ValenceStrong Desire for Promotion

ExpectancyModerate probability that certain actions will lead to promotion

Action1. Greater effort2. Training

Primary Outcome1. Promotion2. Higher Pay

Secondary Outcome1. Higher Status2. Recognition from associates3. Purchasing products that family wants

Renewed drive : satisfactionTendency to continueTo be motivated

Organisational Behaviour Modification Model or O.B. Model. B.F. Skinner.

• Basic Assumption– Behaviour depends on its consequences.– Behaviour modification is achieved through Operant conditioning

which is a type of re-inforcement to modify behaviour by its consequences

– Law of effect• The more favourable are the consequences of certain behaviour,

the more will be the tendency to repeat the behaviour and vice versa.

Positive Re-inforcement

• A favourable consequence that encourages repetition of a behaviour

Negative Re-inforcement• A behaviour is accompanied by a removal of

an unfavourable consequence.

Shaping

• Occurs when re-inforcements are successively given, as one comesw closer to the desired behaviour.

• Punishment : An unfavourable consequence that accompanies behaviour and discourages repetition of the behaviour.

• Extinction: No significant consequence accompanying behaviour.

Schedules of Reinforcementa) Continuous reinforcement

reinforcement accompanied by each correct behavior.b) Partial reinforcement

There are four types of partial reinforcementa) Fixed interval

eg: saloonb) Variable intervalc) Fixed ratio

Reinforcement after a certain number of correct response.d) Variable ratio

Reinforcement after a variable number of correct response.

Performance Appraisal

• Appraisal Process1. Establishment of Performance standard through

job analysis & job description.2. Communicate performance expectations to

employees3. Measure actual performance4. Compare actual with standards5. Discuss appraisal with employee6. Initiate corrective action.

Appraisal Methods

A. Absolute standardsi. Essay appraisal

narrative

ii. Critical Incident appraisalkey factors/ critical incidents that makes

difference. It is based on behaviour.iii. Check list

check list of behavioural descriptions and yes or no will be marked.

iv. Graphic Rating ScalesPerformance factor Rating scales

Quantity, Quality, dependability, Knowledge, co-operationConsistently unsatisfaction, occasionally

unsatisfaction, consistently satisfaction, occasional satisfaction, consistently satisfaction

v. Forced Choicerater has to choose between two or more statements, all of which may be favourable or un favorable. The appraiser's job is to identify which statement is most descriptive of the individual.

vi. BARS : Behaviourlly Anchored Rating Scales

These combines major elements from critical incidents and graphic rating scale approaches.

The appraiser rates the employee based on items on a continuum but the points are actual behaviour. BARS specify definite, observable and measurable job behaviour.

B. Relative StandardsIndividuals compared with others.1. Group Order Ranking

Requires the evaluator to place employees in a particular classification. Top – 1/5th next – 1/5th.

2. Individual RankingRanking the employees in the order.

3. Paired ComparisonIt ranks each individual in relation to all other on a one-o-one basis.

C. Objectives

Employees are evaluated by how well they accomplish a specific set of objectives.

MBO : Process of converting organisational objectives into personal objectives.

Steps: 1) good setting2) action planning3) self control4) periodic review

Factors that can distort appraisals

a. Leniency ErrorEvery evaluator has his own value system which act as a standard against which appraisals are made. Some mark high & others low.

b. Halo ErrorHalo effect or error is a tendency to rate high or low on

all factors. Due to the impression of a high or low rating on some specific factor.

c. Similarity ErrorWhen evaluators rate other people in the

same way that the evaluators perceive themselves, they are making a similiarity error.

d. Low appraiser MotivationIf the evaluator knows that poor appraisal

could limit employee’s future. The evaluator may be reluctant to give a realistic appraisal.

• Central tendencyReluctance to make extreme ratings in either direction.

• Forcing information to match• non-performance criteria

all ready decided, non-performance criteria. E.g. seniority.

• Inflationary pressuresinflated ratings

• In appropriate substitutes for performance In case defining performance is difficult in appropriate substitutes

may be used.

Attribution TheoryTheory Y oriented manager – high ratingsTheory X oriented manager – low ratings

Suggestions for improved P.A

A. Behaviourally based measuresCompared to personality & traits such as loyalty, courage, reliability. Those who get high scores need not be high performance.

B. Combine absolute & relative standardsabsolute standards – draw back, biased by positive leniency of evaluator.

Relative standard – draw back if number of individuals are small.

On going feed backContinuous feed back rather than occasional review.

• Multiple raters– The more numbers of raters probability of attaining more accurate

information.• Selective rating

– Raters make evaluations on only those areas on which they are in a good position to rate.

• Trained Appraiser– Training appraisers make them more accurate raters.

• Peer Evaluations – In case the manager doesn’t have day to

day information, he takes the help of peer evaluation

• Post appraisal review– Have to follow up appraisal interview.

Rewards

• Intrinsic rewards– Satisfaction from the job itself

• Extrinsic rewards– Money, promotion & benefits

• Financial Vs non financial rewards– Status conscious

• Performance based Vs Membership based.– Commissions, pace work, pay plans, incentive systems,

group bonuses.• Membership based rewards

– Cost of living indices, profit shares, benefit and salary increases attributable to labour market conditions.

Qualities of effective Rewards

• Importance– Reward should be important to person receiving

them• Equitable distribution

– Must be fairly distributed• Visibility

– Rewards should be visible.• Flexibility• Low cost

Criteria on which rewards can be distributed.

1. Performance2. Effort3. Seniority4. Skills held5. Job difficulty6. Discretionary time.

Compensation Administration

• Lowest cost pay structure that will attract motivate and retain competent employees and that also will be perceived as fair by these employees.

• Essence of compensation administration is job evaluation and establishment of pay structure.

Method of Job Evaluation

a) Ranking Method– A committee comprised of management and

employee representative rank the job in order.

b) Classification Method– Based on skills, knowledge, responsibilities

etc.– Eg:- shop job, clerical job, sales job.– Once the classification is made they are

ranked in an overall order of importance.

c) Factor Comparison Method

– Select key jobs as standards.– Chose the factor in the key job, such as skill

requirements, mental requirements, physical requirements, responsibility, working conditions.

– Base wage rate is fixed for the key job and divide it among different factors.

– This become the standard based on which other jobs are evaluated.

d) Point Method

• This method breaks job down based on various identifiable criteria (skill, effort and responsibility.) and then allocates points to each of these criteria. Appropriate weights are given depending on the importance of each criterion.

Establishing Pay Structure

• Wage Surveys

• Wage Curves

Factors Determining Pay rates

• Legal Consideration• Union Influence on Compensation Decision• Competitive strategy, Corporate Policy• Salary Compression• Geography

Incentive Compensation Plan

on the basis of performance• Individual incentive

– Piece rate plans, time saving bonuses, commissions

• Group Incentive

• Organisation wide incentives.

Executive compensation

a) Executive SalariesSupplemental Financial Compensationb) Deferred bonusc) Stock options (ESOP)Supplemental Non-financial compensationd) Perquisitese) Golden Parachute

Severance salary or guaranteed position in the newly created organisation

Disciplining the Employees• Types of discipline problems

– Attendance problem– On the job behaviours– Dishonesty– Out side activities

o Disciplinary Actionso Oral warningo Written warningo Suspensiono Demotiono Pay cuto Dismissal

Benefits & Services

• Legally required benefits1. Social security2. Unemployment Compensation3. Workers compensation4. State disability laws

income supplement for short term illness

Voluntary benefits

1. Rest periods2. Holidays3. Vacations4. Sick leave5. Leave of absence6. Pension programme7. Capital accumulation plans8. Insurance

1. Group life insurance2. Health insurance3. Health maintenance organisations (HMO)4. Preferred provider organisations (PPO)

Services

1. Company sponsored social & recreational events

2. Counseling3. Cultural activities4. Credit unions5. Housing6. Other services

Safety & Health

Occupational Safety & Health Act OSHA• Standards for enforcementsa) Imminent danger: accident is about to occurb) Serious accidents: occurred should be reported with in 48

hrsc) Employee complaintsd) Targeted inspectionse) Random inspections

Causes of accidents1. Human2. Environmental

• Preventive measures

a) Educationb) Skill trainingc) Engineeringd) Protectione) Regulation enforcement

Trends in health programs

• Attending work related health problem• Attending psychological problems

– Alcoholism– Drug abuse

Stress

• Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint or demand, related to what he or she desires and which the out come is perceived to be both uncertain & important.

• Stress can be positive when situation offer an opportunity• Stress can be negative when constraints of demands are

placed on us

Causes of stress

• Due to factors called stressors1. Personal factors2. Organisational factors

Symptoms of stress 3. Physiological symptoms

Increased B.P. headaches, heart attack

4. Psychological symptomssignificant dissatisfaction with the job, tension, anxiety, irritation, boredom, procrastination.

3. Behavioural symptoms

• Productivity changes, absenteeism, turn over, increased smoking, alcohol consumption.

• Burn out Organisational effect of stress.– Chronic emotional stress with a) Emotional/physical exhaustionb) Lowered job productivity c) Over depersonalization

Reducing burnout

1. Identification2. Prevention3. Mediation4. Remediation

Labour relations

• How unions constrain managerial powers1. Reduction in management’s power2. Potential for strikes3. Fear of increased costs4. Threats to efficiency5. Loss of employee commitment6. Union review of HRM policies.

Goals for group representations• Why Unions ?1. Wages & effort2. Employment security

1. Closed shop only union members as employees

2. Union shop after probation employee will have to join union

3. Right to work state compulsory membership forbidden.

4. Maintenance of membership no compulsion to join but once joined , continue during lock in period.

5. Preferential shop when a union member given preference over non union member.

6. Agency shop Agreement that requires non union

member employees to pay union fees as condition of continuing employment.

7. Open shopTechnically no union

3. Grievance procedures4. Union power

Collective bargaining

• Refers to as the negotiation, administration and interpretation of a written agreement between two parties that covers a specific period of time.

• Collective bargaining – objective– Agree upon an acceptable contract

acceptable to management, union related to a) wages, b) hours, c) terms & conditions.

Collective bargaining process

1. Organising workers2. RC election-representation certification

3. Preparation for negotiationCollecting background information internally &

externally

4. Negotiations5. Contract administration

Trends in collective bargaining

1. Rejection of agreements2. Public employee militance3. Union avoidance4. Union busting5. Concessionary bargaining

Ethical issues related to human resources management

• Sources of business ethics

1. Religion2. Cultural experience3. The legal system

Ethical dilemmas

A. Face to face ethicsB. Corporate policy ethicsC. Functional area ethics

• H.R Ethical issues* Cash & incentive plans

1. Base salaries2. Annual incentive plans3. Long term incentive plans4. Executive perquisites

* Performance appraisal* Race, gender, age & disability* Job discrimination* Privacy issues* Safety & health* Employee responsibilities

Managing ethics

• Top management• Code of ethics• Ethics committees• Whistle blowing• Ethics training programme• Ethics & law

Global perspective of HRM

Main characteristics of International HRM• More human resource activities• Need for a broader perspective• More involvement in employee personal lives• Changes in emphasis as the work force mix of expatiates

and locals vary• Risk exposure• More external influences

Managing international HR activities

• Basic steps1. HR Planning2. Recruitment & selection3. Training & development4. Performance management5. Remuneration6. Repatriation7. Employee relations8. Multicultural management