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Human Resource
Management-Concepts and
Challenges
1Dr.Meena Sharma
HRM –Meaning & DefinitionA) Meaning :
The human resource management is the management
of people at work and management of manager. It
studies the various aspects of human beings. It gives
proper scope for the enhancement of efficiency and skill
of employees.
B) Definitions :
• Prof.Gary Dassler,”HRM is a process of acquiring,
training, apprising and compensating employees and
attending to their labour relations, healthy and safety and
fairness concern”.
• ‘HRM involves all management decisions and practices
that directly affects or influence the people or human
resource who work for the organization”
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Objectives
To create able and motivate workforce
To help in achieving in Organisational Goals
To employ skilled employees
TO provide skilled and trained employees
TO communicate HR policies to employees
To help employees in achieving their personal goals
To be socially responsible to needs of society
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SCOPE of HRM
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E) Scope of HRM :
1) Human Resources Planning:
Human resource planning is a process by which the company to identify the number
of jobs vacant, whether the company has excess staff or shortage of staff and to deal
with this excess or shortage.
2) Job Analysis Design:
Job analysis gives a detailed explanation about each and every job in the company.
3) Recruitment and Selection:
Company prepares advertisements and publishes them in the news papers. A
number of applications are received after the advertisement is published, interviews
are conducted and the right employee is selected.
4) Orientation and Induction:
Once the employees have been selected an induction or orientation program is
conducted. The employees are informed about the background of the company.
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E) Scope of HRM :
5) Training and Development:
Every employee goes under training program which helps him to put up a better
performance on the job.
6) Performance Appraisal:
HR department checks the performance of the employee. Based on these appraisal
future promotions, incentives, increments in salary are decided.
7) Compensation Planning and Remuneration:
There are various rules regarding compensation and other benefits.
8) Motivation, Welfare, Health and Safety:
Motivation becomes important to sustain the number of employees in the company.
9) Industrial Relations:
Another important area of HRM is maintaining co-ordinal relations with the union
members.
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Functions of HRM
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1. Managerial –
2. Planning3. Organizing 4. Directing5. Controlling6. Innovation7. Representation8. Coordination9. Decision-making
Operational
1. HR Planning2. HR Acquisition 3. T&D4. PA5. Compensation and Benefits 6. Occupational Safety and Health 7. Integration and Maintenance Employee Relations
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Importance of HRM
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Practices and Policies of HRM
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HRM refers to practices and policies framed for the
management of human resource organisation, including
Recruiting, screening, reward in grand appraising.
Practices of HRM
Safe, Healthy & Happy
Workplace Open Book Management
Style :
Performance - linked Bonuses
360 Degree Performance Management
Feedback System
Fair Evaluation System for Employees Knowledge
Sharing
Highlight Performer
Open House Discussion Feedback
Mechanism
Reward Ceremonies
Delight Employees
with Unexpected
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Practices and Policies of
HRM
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Leadership and
Strategy
• Recruiting and Hiring
• Employee Development
• Compensation
• Workplace Challenges
• Discrimination Issues
• Manpower Planning
• Recruitments
• Motivation
• Principle
• Procedures
• Performance Appraisal
• Promotion
• Principles
• Promotion Procedures
• Training
• Induction
• Management development
• Vocational
• Language and communication
• Welfare Dr.Meena Sharma
HR policies and practices HR policies are the formal rules and guidelines
that organization put in place to hire, train, access and reward the members of their
workplace.
HR policies are the system of codified decisions, established by an organisation,to support
administrative personnel functions,performancemanagement ,employee relations and resource
planning 12Dr.Meena Sharma
Purpose:
To be clear with employees on –
➢ the nature of the organization
➢ What they should expect from the company
➢ What the company expects from them
➢ How policies and procedures work at the company
➢ What is acceptable and unacceptable behavior
➢ The consequences of the unacceptable behavior
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HR practices
Some methods utilized by HRD staff are called best
practices
Mean the way an employment action is handled is the
recommended way according to HR experts.
It is to apply principles and policies.
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Challenges due to Globalization
Skill Shortage
Knowledge management
Challenges related to training
Changing workforce dynamics
Changed employee expectations
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Challenges ……
Compliance with Laws and Regulation. ...
Management Changes. ...
Leadership Development. ...
Workforce Training and Development. ...
Adapting to Innovation. ...
Compensation.
Talent retention
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STRATEGIC HUMAN RESOURCE MANAGEMENT
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A) Meaning :
Strategic human resource management (SHRM) is about the formulation
of HR strategies in alignment with the overall corporate strategy to
achieve the goals of the organisation
B) Definition :
➢ R. S. Schuler :
“Strategic human resource management is concerned with all those
activities that affect the behaviour of individuals in their efforts to
formulate and implement the strategic needs of business."
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Nature of SHRM:
1) Organisational Level :
Because strategies
involve decisions about
key goals, major
policies and the
allocation of resources,
they tend to be
formulated at the top.
2) Focus :
Strategies are business-
driven and focus on
organisational
effectiveness; thus in
this perspective people
are viewed primarily as
resources to be
managed toward the
achievement of
Strategic business
goals.
Provide Direction to
Achieve Goal
Approach to Decision Making
Offers Benefits to
Organisation
Long Term Process
Integration of Strategy
Roles
Organisational Level
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1.4 Models of SHRM
1. Harvard Model- by Michael Beer
2. Matching Model- by Fombrun
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Harvard Model- comprised of following
components.
1.Stakeholder interest. These stakeholders include ….
These interests define the HRM policies.
2 situational factors influence these interests. Situational
factors include workforce characteristics, unions, and all
the other factors.
3. Situational factors and stakeholder interest
influence HRM policies. These include the core HR
activities, like recruitment, training, and reward systems.
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4.When done well, HRM policies lead to positive HRM
outcomes. These include the previously mentioned
retention, cost-effectiveness, commitment, and
competence.
5. These positive HRM outcomes lead to long-term
consequences. These can be individual, organizational,
and societal.
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II) Devanna et.al – Strategic Human Resource Management “Matching Model’:
Michigan model of HRM has originated from the writings of C. Fomtbrun. Noel Tichy
and M./t. Devanna in Michigan school
The model shows how activities within HRM can be unified and designed in order to
support the organisations strategy.
It is divided into two parts: first which shows HR-strategy integration and second which
depicts the HR cycle.
A) Important HR issues to achieve such a match:
❑ Selection of the most suitable people to meet business needs.
❑ Performance in the pursuit of business, objectives.
❑ Rewards for appropriate performance.
❑ Development of skills and knowledge required to meet business objectives.
B) Managerial Implications of the Model :
❑ The model is focused on individual and organisational performance.
❑ It concentrates on managing human assets to achieve strategic goals.
❑ The model contributes lo human resource performance. 27Dr.Meena Sharma
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This model held that the HR system and the organizational structure should be
managed in a way that is congruent with organizational strategy.
The main focus was on the four functions of HRM
1. SELECTION,
2. APPRAISAL,
3. DEVELOPMENT D
4. REWARDS,AND
THEIR INTERRELATEDNESS
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Matching model ensures way to achieve the
organizational objectives is the applying of
above five major functions of HRM very
effectively.
The work and contribution of properly
selected human resource has to be evaluated
in using appropriate techniques.
Some kinds of rewards have to be offered on
the basis of results of appraisal and the
performances of employees..
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UNIT 2. HR Acquisition and
Retention
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job analysis
A) Meaning :
Job analysis is the systematic study of jobs to identify
the observable work activities, tasks, and
responsibilities associated with a particular job or group
of jobs. It is the process of collecting information
relating to the operations and responsibilities pertaining
to a specific job.
B) Definitions :
Edwin B.Flippo :
"Job analysis is the process of studying and collecting
information relating to the operations and
responsibilities of a specific job“Dr.Meena Sharma 32
Purpose of Job Analysis
Recruitment and Selection
Performance Analysis
Training and DevelopmentCompensation
Management
Job Designing and Redesigning
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Process of Job Analysis
Planning
Preparing &
Communicating
Conduction
Development
Maintaining & updatin
g
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Job Description :
Writing Job Description :
a) Meaning :
Job description is a written list of a job's duties,
responsibilities, reporting relationships, working
conditions, and supervisory responsibilities involved in a
job.
b) Definition :▪ Edwin B. Flippo :
"The first and immediate product of the job analysis
process is job description As in title indicates, this
document is basically descriptive in nature and
constitutes a record of existing pertinent job facts."
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Process
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Job Design
A) Meaning :
Job design means to decide the contents of a job. It fixes
the duties and responsibilities of the job, the methods of
doing the job and the relationships between the job
holder (manager) and his superiors, subordinates and
colleagues.
B) Definition :▪ L. E. Davis :
“Job design is the specification of the contents, methods,
and relationships of jobs in order to satisfy technological
and organizational requirements as well as the social and
personal requirements of the job holders"
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Factors affecting Job
Design
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job design
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. Job Enlargement :
Job enlargement refers to that job design technique
which integrates the various tasks performed at the
same level(horizontally) to the employee’s existing job
duties.
Means taking charge of more duties and responsibilities
which are not mentioned in the job description.
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Job Enrichment:
more authority task are added to
existing job.
Gives more control and managerial access to perform tasks
and responsibilities. ...
Job enrichment can be defined as a vertical restructuring
of a job, i.e. integration of the tasks, role, responsibilities
and authority across different levels in an organization, to
add value to the employee’s existing job profile.
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human resource
planning
A) Meaning:
Human Resource Planning (HRP) refers to the process
of evaluation and identification of HR requirements for
meeting organizational goals to ensure competitive
advantage in the marketplace.
▪ Bulla and Scoh: • “It is the process for ensuring that the Human Resources
requirements of an organization are identified and plans
are made for satisfying those requirements”. Human
Resources planning are based on the concept that
people are the most important strategic resources of an
organization.
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Objectives of Human
Resource Planning
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Limitations of Human Resource Planning:
1. Lack of Overall Expertise:
HR practitioners are perceived as experts in handling
personnel matters, but are not experts in managing
business.
2. Incompatible:
HR information often is incompatible with other information
used in strategy formulation.
3. Ineffective in Some Cases:
Non-involvement of operating managers renders HRP
ineffective. HRP is not strictly an HR department function.
4. Inaccuracy:
HRP involves forecasting the demand and supply of
personnel required. Its effectiveness depends upon
accurate projection which are not cent per cent accurate.
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Recruitment
A) Meaning :
Recruitment is the process of attracting, evaluating, and
hiring employees for an organization.
B) Definition : Edwin B. Flippo :
“Recruitment is the process of searching for prospective
employees and stimulating them to apply for jobs in the
organization’
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Recruitment Process:
Recruitment process is a process of
identifying the jobs vacancy, analyzing
the job requirements, reviewing
applications, screening, shortlisting and
selecting the right candidate
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I) E-Recruiting Methods
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Selection
Meaning:
Selection either, internal or external is a deliberate effort
of the organization to select a fixed number of personnel
from a large number of applicants.
Definition :▪ Dale Yoder :
“Selection is the process in which candidates for
employment are divided into two classes- those who are
to be offered employment and those who are not.”
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Selection Procedure :
Successive steps in selection
Initial contact
Preliminary interview
Application bank
Selection test
Interviewing
Checking references
Approval by supervisor
Selection
Job offer
Contract
Evaluation
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Induction /Orientation
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• Benefits to Employees-
1. Define career goals more specifically
2. Focused self development
3. Increased Productivity
• Benefits to Organization-
1. Assured availability of talent
2. Attract & retain talent
3. Promoting organizational Image….
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Career Planning-Process
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Succession Planning
Meaning-
Succession Planning is the process of identifying and
tracking high-potential employees who will be able to
fill top management positions when they become
vacant. ... Succession planning involves understanding
the organization's long-term goals and objectives,
identifying employee development needs, and
determining trends
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Definition: Succession Planning is defined as the
systematic process of recognizing and creating future
leaders who are able to take the position of the old
ones when they leave the organization due to
retirement, resignation, termination, transfer,
promotion or death.
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Process
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Transfer
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Transfer of Employees
Meaning:
Transfer implies movement of an employee from one
job to another without any increase in pay, status or
responsibilities.
Definition
According to Dale Yoder “A transfer involves the shifting
of an employee from one job to another without special
reference to change in responsibilities or
compensation”.
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Promotion
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Promotion
Meaning
Promotion means advancement in terms of job designation, salary and benefits.
According to Prof. Khanka,
promotion is vertical movement of an employee within the organization.
In other words, promotion refers to the upward movement of an employee from one job to another higher one, with increase in salary, status and responsibilities.
According to —Scott and Clothier “A promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.”
“A promotion involves a change from one job to another that is better in terms of status and responsibilities”. —Edwin B. Flippo
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Promotion involves the
following ingredients:
(i) Improves job, status and prestige.
(ii) Gives more responsibility.
(iii) Brings increase in pay and perks.
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objectives
(i) For the optimum utilization of the employees’ skill, knowledge at the appropriate level in the organizational hierarchy resulting in organizational effectiveness and employee satisfaction.
(ii) For the development of competitive spirit and inculcate the enthusiasm in the employees to acquire the skill, knowledge etc. needed for the higher level jobs.
(iii) To develop competent internal source of employees ready to take up jobs at higher levels in the changing environment.
(iv) For the promotion of a feeling of content with the existing conditions of the company and a sense of belongingness to the company.
(v) To promote employee’s self-development and be ready for the promotion as and when their turn of promotion occurs.
(vi) To promote interest in training, development programmes and in team development areas.
(vii) To get rid of the problems created by the leaders of workers’ unions by promoting them in the officers’ levels where they are less effective in creating problems.
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Employee Promotion –
Significance:
Handles the New Job Efficiently,
Motivates Higher Morale,
Ensures More Efficiency,
Cost in Training will be Less &
Solves Personnel Problems
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Retention of Employee
ability of an organization to retain its employees.
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Definition: Employee Retention
Employee retention is the overall strategy or ability of
an organisation to retain its best employees and hence
maintain a lower turnover.
An organisation is able to achieve this by adopting
various employee retention programs. Employee
retention is and should be one of the main focus areas
of the human resources department in any organization.
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Importance of Employee
Retention
Each organization spends a lot on attracting the
best talent. These employees contribute a lot
towards the success of the company.
All these contributions directly impact the bottom
line of the company. The employees who stay with
the company for longer time contribute efficiently
and become integral part of the company and the
position. Now if these employees leave the
company and join the competitor, this would be
mean double loss for the first company.
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Employee retention
strategies
Hiring the Right People
Better Job Design to enhance motivation and engage
the employee.
Shaping their Growth and Development
Encouraging Open Communication
Providing out-of-the-box Benefits
Appreciating your Employees
Salary And Benefits Must Be Competitive. ...
Developing Orientation Programs
Balancing their Workload………
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Advantages of Employee
Retention
A lot of investment is needed to train an employee and
to make him productive. The employee retention makes
sure the employee stays and applies the learning for the
growth of the organization.
Employee retained in organization feel part of the
overall vision and become better contributors in the
long run.
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Unit 3
79Dr.Meena Sharma
Unit -3
Managing Employee
performance and
training
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Performance Appraisal
A) Meaning :
Performance appraisal is a process of evaluation andemployees’ performance of a job in the terms ofrequirements. Performance means the degree ofaccomplishment of the task which is assigned to theindividual. In other words, performance appraisal gives usan idea about the completion of job. In every field, thetechnique of performance appraisal is applied e.g. bankersevaluate the performance of their creditors or loan holders,teachers evaluate the performance of students or parentsevaluate the behavior of their children
B) Definitions :
1) Spriegel W. R. : ““It is defined as a process of evaluating an employee’s
performance of a job in terms of its requirements.”
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Importance
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Performance Appraisal
Process
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Who are the raters
Which methods
When to evaluate
What
Method?
What are the problems
How to solve
Biases
Issues in HRM
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3) Grading Method :
As per this method, the worth of job is established in
advance which
is carefully defined e.g. A = Outstanding, B = Very Good, C
= Good, D = Poor / Bad, etc.
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4.1 Performance Appraisal
8) Critical Incident :
Under this method, worker’s performance is measured in terms of certain events or
episodes.
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10) Group Appraisal :
As per this method employees are appraised by a
particular group consisting of some experts.
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4.1 Performance Appraisal
B ) Modern Methods :
1) Assessment Centre :
As per this method, various assessment centers are created to take feedback of
employees’ performance.
2) Behaviorally Anchored Rating Scales (BARS) :
These are the rating scales whose scale points are determined by statements of
effective and ineffective behavior.
3) Appraisal By Results or Management By Objectives (MBO) :
As per this method, more attention is given towards responsibility, accountability
and achievement of goals.
4) Human Asset Accounting Method :
This method gives more importance to the human capital in terms of money. It
considers key factors as loyalties, attitudes, motivations, communication skills and
decision-making power, etc.
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Behaviorally Anchored
Rating Scales (BARS)
A BARS can be developed in following steps.
Collecting samples of effective and ineffective job behavior from the experts by analyzing the critical incident method
Converting these samples into performance dimension
Relocating the performance dimension (from unacceptable to outstanding)
Rating the performance dimension accordingly, starting from 1
Finally, using the scale anchor to evaluate employee’s performance
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4.1 Performance Appraisal
4) Peer appraisal :
Employee
SuperiorsCustomers
Peers
Suppliers
Subordinates
Suppliers
Peers
Customers
Components of 360 degree
Appraisal Dr.Meena Sharma 101
Management by
objectives (MBO)
Management by objectives (MBO) is a
strategic management model that aims to improve the
performance of an organization by clearly
defining objectives that are agreed to by
both management and employees. ... The term was
first outlined by management guru Peter Drucker in his
1954 book, The Practice of Management
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Performance
management (PM)
• Performance management (PM) is a process of
ensuring that set of activities and outputs meets an
organization's goals in an
• Performance management can focus on
the performance of an organization, a department, an
employee, or the processes in place
to manage particular tasks.
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Performance Feedback
A) Meaning :
❑ Feedback is an essential communication tool in businessperformance management.
❑ The performance feedback process is ongoing between managersand employees.
❑ The exchange of information involves both performance expectedand performance exhibited.
❑ Encourage the employees to talk to management and reportproblems to resolve any issues.
B) Recommendations for Effective Performance Feedback :
1) Feedback Should Be Given Frequently, Not Once n Year :
Managers have a responsibility to correct performancedeficiencies immediately on becoming aware of them. a majordeterminant of the effectiveness of a feedback session is thedegree to which the subordinate is not surprised by the evaluation.
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Create the Right Contest for the Discussion :
Managers should choose a neutral location for the feed-backsession. should describe the meeting as an opportunity to discussthe role of the employee.
3) Ask the Employee to Rate His or Her Performance before theSession :
Having employees complete a self-assessment before thefeedback session can be very productive. It requires employees tothink about their performance over the past rating period, and itencourages them to think about their weaknesses.
4) Encourage the Subordinate to Participate in the Session :
When employees participate in the feedback session, they areconsistently satisfied with the process. Participation includesallowing employees to voice their opinions of the evaluation, aswell as discuss performance goals.
5) Recognize Effective Performance through Praise :
Performance feedback sessions as focusing on theemployee's performance problems. The purpose of the session isto give accurate performance feedback, which entails recognizingeffective performance as well as poor performance.
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Training
Training is the act of increasing the knowledge and skill
of an employee for doing his/her job.
Act of increasing
Knowledge
Skill and
Attitude
for doing his/her job
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1. Training:
Training is the act of increasing the knowledge and skill
of an employee for doing a particular job. Training is the
methods used to give new or present employees the
skills they need to perform their jobs.
Development:
Development is a long-run process. It is concerned with
managerial personnel.
B) Definitions :
▪ Michael J. Jucius. :
"Training is a process by which the aptitudes, skills and
abilities of employees to perform specific jobs are
increased.”
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E) Importance/ Objectives of Training:
1) Quick Learning:
Training helps to reduce the learning time to reach the acceptable level of performance. The employees need not learn by observing others and waste time if the formal training programme exists in the organization
2) Higher Productivity:
Training increases the skill of the new employee in the performance of a particular job. An increase in skill usually helps increase in both quantity and quality of output.
3) Standardization of Procedures:
With the help of training, the best available methods of performing the work can he standardized and taught to all employees.
4) Less Supervision:
If the employees are given adequate training, the need of supervision will be lessened. Training docs not eliminate the need for supervision but it reduces the need for detailed and continuous supervision.
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5)Economical Operations:
Trained personnel will be able to make better and economical use of
materials and equipment.
6)Higher Morale:
The morale of employees is increased if they are given proper training. A
good training progrmme will mould employees attitudes towards
organizational activities and generate better cooperation and greater loyalty.
7)Preparation of Future Managers:
When totally new skills are required by an organization, it has to face
great difficulties in the selection process. Training can be used in spotting out
promising men and preparing them for promotion.
8)Better Management:
A manager can make use of training to manage in a better way. To him,
training the employees can assist improving planning, organizing, directing
and controlling. Dr.Meena Sharma 114
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Process
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3.3 Training Methods
Trainings in an organization
can be divided to two broad
types. They are on-the-job
trainings and off-the-job
trainings. These on-the-job
trainings are given to the
employees while they are
conducting their regular
works at the same places.
Off-the-job techniques
include lectures, special
study, audio visual
conferences or discussions,
case studies, role playing,
simulation, programmed
instructions, and laboratory
trainings.
On-The-Job Training
Apprenticeship Training
Job Rotation
Internship and Assistantship
Job Instruction Training
Off-The-Job Training
Programmed Learning
Simulation Method
Laboratory Training
Case Study Method
Lecture Method
Role Playing
Video Conferencing
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3.3 Training Methods1. On- the-job Training:
In this method a trainee is placed on the job and then taught the necessary skills to
perform his job. Thus in this method the trainee learns by observing and handling the
job under the guidance and supervision of instructor or a supervisor. Thus it is also
called the learning by doing method. The various kinds of on-the-job training are
explained as follows:
a) Apprenticeship:
It is the oldest and most commonly used method of training in technical areas and
crafts and trades where the skills of the job are learnt over a long period of time.
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Job Rotation: movement of the trainee from one job to
another. The trainee receives job knowledge and gains
experience from his supervisor or trainer in each of the different
job assignments.
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Internship :
Internship is one of the on-the-job training methods.
Individuals entering industry in skilled trades like machinist,
electrician and laboratory technician are provided with
thorough instruction though theoretical and practical aspects.
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d) Job Instruction:
This method is also known as training through step by step.Under this method, trainer explains the trainee the way ofdoing the jobs, job knowledge and skills and allows him todo the job.
2) Off-the-job Training:
Off-the-job training is conducted in a location specificallydesignated for training. It may be near the workplace oraway from work, at a special training center or a resortconducting the training away from the workplace minimizedistractions and allows trainees to devote their full attentionto the material being taught- However, off-the-job trainingprograms may not provide as much transfer of training to theactual job as do on-the-job programs.
a) Programmed Learning:
This method is also known as scheduled learning orprogrammed instruction method. Under this method, thetrainees are made to reply to the job-oriented questions,problems, concepts, cases and facts as part of learning jobskills.
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d) Job Instruction:
This method is also known as training through step by step.Under this method, trainer explains the trainee the way ofdoing the jobs, job knowledge and skills and allows him todo the job.
2) Off-the-job Training:
Off-the-job training is conducted in a location specificallydesignated for training. It may be near the workplace oraway from work, at a special training center or a resortconducting the training away from the workplace minimizedistractions and allows trainees to devote their full attentionto the material being taught- However, off-the-job trainingprograms may not provide as much transfer of training to theactual job as do on-the-job programs.
a) Programmed Learning:
This method is also known as scheduled learning orprogrammed instruction method. Under this method, thetrainees are made to reply to the job-oriented questions,problems, concepts, cases and facts as part of learning jobskills
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D .Case Studies:• This method involves studying cases from
all perspectives, analyzing the various optionsavailable to the company for solving problemsor address issues and arriving at mostsuitable answers.
• e) Lecture:In lecture method trainers used to communicate with spoken words which they want the trainees to learn, it is primarily one way communication of learned capabilities from trainer to audience.
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d) Role Play :
The trainees act out a given role as they would in a stage
play. Role players are informed of a situation about the
respective roles that they have to play.
d) Video-conferencing:
This is one of the distance learning methods for training.
It is best suited when the trainer and the trainees are
separated geographically. It allows people in one location
to communicate live via audio—visual aids with people In
another city.
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A) Various Types of Management Development Programs:
1. Mentoring and Coaching:
Mentoring and coaching have become important means ofmanagement development. Because the purposes ofmentoring and coaching are similar in concept and the termsare often used interchangeably in the literature, they arediscussed together.
2. Reverse Mentoring
Reverse mentoring is a process where older employeeslearn from younger ones. There are people inorganizations approaching retirement, who do not want toretire, and who have tremendous knowledge that should notgo to waste.
3. Orientation:
Orientation is the initial T& D effort for new employees thatinform them about the company, the job, and the workgroup.
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B) Implementing Management Development Programs:
A perfectly conceived training program will fail ifmanagement cannot convince the participants of its merits.Participants must believe that the program has value andwill help them achieve their personal and professionalgoals. Management development is any attempt to improvemanagerial performance by imparting knowledge, changingattitudes or increasing skills.
a) Assessing the company's strategic needs (forinstance, to till future executive openings or to boostcompetitiveness,
b) Appraising manager's current performance, and then
c) Developing the managers (and future managers).
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Evaluation of Training
Training evaluation is a systematic process to analyze
if training programs and initiatives are effective and
efficient.
Trainers and human resource professionals use training
evaluation to assess if the employee training programs
are aligned with the company's goals and objectives.
Has the objective fulfilled
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Kirkpatrick’s Model of Training
Evaluation
Reaction of the Trainee - thoughts and feelings of the
participants about the training
Learning - the increase in knowledge or understanding
as a result of the training
Behavior - extent of change in behavior, attitude or
capability
Results - the effect on the bottom line of the company
as a result of the training.
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Level 1: Reaction
The degree to which participants find the training favorable, engaging and relevant to their jobs
Level 2: Learning
The degree to which participants acquire the intended knowledge, skills, attitude, confidence and commitment based on their participation in the training
Level 3: Behavior
The degree to which participants apply what they learned during training when they are back on the job
Level 4: Results
The degree to which targeted outcomes occur as a result of the training and the
support and accountability package
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Unit -4
Compensation
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the Actual Performance:
cxzcxbxhabhdsgA) Concept :
❑ Meaning
❑ The term compensation means money and other benefits received by employee for
providing services to his employer..
❑ It is the result of agreement between the employer and employee, whereby for a
specified work or service, rendered by the employee, the employer agrees to pay a
specified sum of money.
❑ Compensation is not just about regular rewards for work done but also attempts
made by employers to retain employees.
❑ Employee compensation is the essence of human resource management.
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the Actual Performance:
cxzcxbxhabhdsg2) Definitions :
1) Terry Leap :
“Compensation is a board term pertaining to financial rewards received by persons
through their employment relationship with an organisation.”
2) Gary Dessler :
“Compensation means all forms of pay or rewards going to employees and arising
from their employment.“
3) R. Wayne Mondy :
“Compensation is the total of all rewards provided to employees in return for their
services. The overall purposes of providing compensation are to attract, retain and
motive employees."
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Concept of Compensation
Management
Known as wage and salary
Compensation Management is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.
It includes Job evaluation, survey of wages and salaries, analysis of org problems, development and maintenance of wage structure,esta. Rules for administering wage ,incentives, bonus, profit sharing, adjustments, supplimentary payments, control of compensation cost and other items.
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Compensation It refers to wide range of financial and non-financial rewards to
employees for their services rendered to the organization.
Compensation
Financial Non- Financial
wages salaries Family Picnic
Dinner/lunch
with boss
Company car
Employee benefits
Paid vacationsInsurance
Maternity leave Free travel facilities
Retirement benefitsHRA
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Incentives MEANING :Incentive are the rewards to an employee ,
over and above his base wage salary, in
recognition of his performance and contribution.
“An incentive scheme is a plan or programmes to motivate individual or group
performance. An incentive programme is most frequently built on monetary
rewards but may also include a variety of non-monetary rewards or prizes.”
BY- Burack and smith Dr.Meena Sharma 141
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Types of incentive plan
For White collared
employee
Salary Commission Combination
For blue collared
employee
Group incentive
Individual incentive
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Wage and Incentive plan for blue collared employees
Piece wage Time wageWage incentive
plan
Group incentive
Co-partnership
ESOPProfit
sharingCafeteria
compensation
Individual incentive
Based on time
Halsey plan
Rowan plan
Based on productivity
Gantt plan
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fringe benefit
An extra benefit supplementing an employee's money wage or salary, for example a company car, private healthcare, etc.
F. Benefits are a commonly used tool to reward employees for their performance or to lift up the work conditions of the company. There are many different types of benefits, but the purpose of them is normally to motivate, compensate, and provide a more comfortable work or personal situation to the beneficiary.
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Types of Fringe Benefits
Statutory Benefits
Mandatory and provided by all the organizations
E.g.: paid holiday leaves
Voluntary- non statutory Benefits
Determined by the individual organizations on their own
E.g.: transportation facilities, child care,
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the Actual Performance:
cxzcxbxhabhdsg
I ) Importance of Compensation Management :
2) Attract Top Talent :
3) Distinguish the Employers:
4) Brings the Differentiation into the Organization :Competitive Advantage :
6) Manages the Personnel Expenses :
•
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Organization’s strategy
Evaluation and review
Analysis of contingent factor
Job analysis and evaluation
Compensation policy
Design and implementation of compensation plan
Compensation Management Process
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J) Current Trends in Compensation :
1) Group Mediclaim Insurance Scheme:
2) Personal Accident Insurance Scheme:
3) Company Leased Accommodation:
4) Recreation, ATM and Concierge Facilities:
5) Corporate Credit Card:
6) Cellular Phone / Laptop:
7) Personal Health Care (Regular medical check-ups):
8) Loans:
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Factor Affecting compensation
plan
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Components of Salary Structure
1. Basic Salary – Basic Salary is the minimum salary given by the employer to employee keeping in mind his qualifications, experience and technical skills. Basic salary is always given under grade system. This is a fixed component in your salary portion or CTC package (cost to company).
2. House Rent Allowance (HRA) – It is a component of the salary portion, which is provided by the employer to his/her employee. Employeed or Salaried Individuals who live in a rented house property can claim full or partial HRA exemption under section 10(13A). However, HRA is fully taxable in the hands of employees if they don’t live in a rented accommodation.
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HRA Exemption allowed will be
least of the following:
a) Actual HRA Received
b) Actual Rent paid reduced by 10% of Salary
c) 50% of basic salary in case where taxpayer is residing
in a metro city.
d) 40% of basic salary in case where taxpayer is residing
in a non-metro city
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Conveyance Allowance
3. Conveyance Allowance – Conveyance Allowance is to be given to the salaried individuals for meeting travel expenses from their residence to work/office. From FY 2015-16, the conveyance allowance has been exempted up to Rs.1600 per month or Rs.19,200 per annum u/s 10 of Income Tax Act’1961.
You can claim this exemption only if it is provided by your Employer and not at the time of filing Income Tax Return.
In Budget 2018, Standard deduction of Rs.40,000 has been proposed to replace Transport Allowance of Rs.1600 p.m i.e Rs. 19,200 p.a and reimbursement of miscellaneous medical expenses of Rs.15,000 p.a.
Amendment :In Budget 2019 proposals, Standard deduction of Rs.40,000 is increased to Rs.50,000 applicable for FY 2019-20 (AY 2020-21).
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Leave Travel Allowance
(LTA)
4. Leave Travel Allowance (LTA) – It is an allowance given to an employee from his employer for his travel expenses. LTA is also known as Leave Travel Concession (LTC). Salaried Individuals can claim exemption of LTA u/s 10(5) of Income Tax Act, 1961. Salaried employees are required to submit the proof of travel bills to their employer to claim the exemption. The exemption on LTA cannot be claimed in your Income Tax return. LTA can only be claimed from your employer.
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Medical Reimbursement
5. Medical Reimbursement – A Salaried Individual can claim medical expenses up to Rs.15,000 for which you must submit bills to your employer. Under this Employers reimburse the portion of the medical expenses incurred by the employee. Deductions can be claimed for the medical expenses incurred on your dependents. Out of Rs.15000, unclaimed amount of Medical Reimbursement will be added to your taxable salary.
6. Special Allowance – The amount of special allowance is fully taxable in your salary.
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7. Bonus – Any bonus paid to employees as performance
incentive is fully taxable. This is all based on company
polices. Bonus received by the employee is fully taxable
in the hands of the employee on receipt basis and will
be included in the gross salary of employee.
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Syllabus: Retirement,
termination, VRS, Suspention
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A) Meaning :
According to Yoder, separation is a negative recruitment. It may be In the form
of resignation, dismissal or discharge, suspension, retrenchment or lay-off.
B) Reasons of Organisational Exit :
1) Professional Reasons :
Employees may exit organisation when
they decide to seek better positions,
responsibilities and status outside the
present organization.
2) Personal Reasons :
The important personal reasons for organisa-
tional exit are relocation for family reasons like
marriage of the employees and health crisis of
family members
Reasons of Organisational Exit
Professional Reasons
Personal Reasons
Involuntary Reasons
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3) Involuntary Separation :
An involuntary separation is caused by the factors which remain beyond the purview
of the employees. These factors are classified as:
a) Health problems
b) Behavioural Problems
c) Organisational Problems
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1) Retirement :
Retirement is the major cause of separation ofemployees from the organisation. It can be defined as thetermination of service of an employee on reaching the ageof superannuation. For example, at present thesuperannuation age for the teachers working in theCentral Universities is 62 years and in case of some stategovernment employees, it is 58 years. Some peoplecharacterize retirement as ‘role less role’.
Retirement may be of two types:
(i) Compulsory Retirement:
(ii) Voluntary Retirement:
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1 Resignation
Initiated by employee. Notice period… due to……
Resignation is termination of service by an employee by
serving a notice, called ‘resignation’ on the employer.
Resignation may be voluntary or involuntary. A voluntary
resignation is when an employee himself/herself
decides to resign on the grounds of ill health, marriage,
better job prospects in other organisations, etc.
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Voluntary Retirement
Scheme (VRS):
Voluntary retirement scheme is a method used by
companies to reduce surplus staff.
The voluntary retirement scheme (VRS) is the most
human technique to provide overall reduction in the
existing strength of the employees.
It is a technique used by companies for trimming the
workforce employed in the industrial unit.
It is also known as ‘Golden Handshake’ as it is the
golden route to retrenchment
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Following are some common
reasons for announcing a VRS
scheme: 1. Due to recession in the business.
2. Due to reduce labour costs to cut total cost of
production.
3. Due to intense competition, the establishment
becomes unviable unless downsizing is resorted to.
4. Due to joint-ventures with foreign collaborations.
5. Due to takeovers and mergers.
6. Due to obsolescence of Product/Technology.
7. Due to the need for getting rid of surplus workforce
without resorting to termination of jobs.
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Eligibility
VRS applies to an employee who has completed 10 years of service or is above 40 years of age.
His name must be in muster
The scheme applies to all employees including workers and executives, except the directors of a company.
The amount receivable on account of voluntary retirement of the employee does not exceed the amount equivalent to three months’ salary for each completed year of service, or salary at the time of retirement multiplied by the balance months of service left before the date of retirement on superannuation of the employee. It is the last salary drawn which is to form the basis for computing the amount of payment.
Upto 500000 tax exemp
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Layoff
• it is a temporary separation of employees from the organization. Organisations usually resort to layoffs to overcome the problems of business slowdown and other temporary business interruptions.
• Layoff implies denial of employment to the employees for reasons beyond the control of employer. Breakdown of machinery, seasonal fluctuations in demand, shortage of power, raw materials, etc. are the examples of reasons leading to layoff.
According to Section 2 (KKK) of the Industrial Disputes Act, 1947, lay off is defined as “the failure, refusal or inability of an employer, on account of shortage of coal, power or raw materials or accumulation of stocks or breakdown of machinery or by any other reason, to give employment to a workman whose name appears on the muster rolls of his industrial establishment and who has not been retrenched”.
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It is important to note that the employee-employer relationship does not
come to an end but is suspended for some time Layoff may be temporary.
According to the Section 25© of the Industrial Disputes Act, 1947, a laid
off worker is entitled to compensation equal to 50 per cent of the basic
wages and dearness allowance that would have been payable to him had
he not been laid off.
However, the worker needs to satisfy the following conditions to be
entitled to the compensation:
(i) Should not be casual worker
(ii) His name should appear in the muster roll of the establishment.
(iii) Have completed not less than one year of continuous service.
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Retrenchment
Retrenchment means permanent termination of an
employee’s services for economic reasons.
Retrenchment occurs on account of surplus staff, poor
demand for products, general economic slowdown, etc.
It’s worth noticing that termination of services on
account of retirement, winding up of a business, illness
or on disciplinary grounds does not constitute
retrenchment.
The Industrial Disputes Act, 1947 makes it obligatory for
organisations employing 100 or more employees to give
three months’ notice to the employee to be retrenched
and also seek prior approval of the Government.
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Dismissal:
Dismissal is termination of service of an employee as a
punitive measure. This may occur either on account of
unsatisfactory performance or misconduct. Persistent
failure on the part of employee to perform up to the
expectations or specified standard is considered as
unsatisfactory performance. Wilful violation of rules and
regulation by the employee is treated as misconduct.
Dismissal is a drastic step seriously impairing the
earnings and image of the employee.
Before an employee is dismissed, he must be served
advance notice to explain his position. The reasons for
dismissal must be clearly made known to the employee.
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Suspension
A suspension is when you remain employed but are
asked to not attend your place of work, or engage in
any work at all (such as working from home).
There are two main types of suspension:
1. suspension for medical or health and safety reasons;
2. suspension as part of a disciplinary procedure
(investigation).
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Suspension for medical or health and safety reasons
You may be suspended if your job is posing a risk to your
health or safety. For example, if you develop an allergic
reaction to chemicals you are exposed to while working.
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Suspension as part of a
disciplinary procedure
(investigation) You may be suspended on full pay if allegations of
misconduct have been made against you and are being
investigated. Suspension on full pay is not a
punishment, but part of the investigation process in a
disciplinary procedure for many employers.
Your employer should give you a clear reason for the
suspension and explain what other options have been
explored instead of suspension. If you are suspended
because of allegations against you, you are entitled to
know what the allegations are.
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What is a grievance?
A grievance is a formal dispute between an employee &
management on the conditions of employment.
Grievances are complaints that have been formally
registered in accordance with the grievance procedure.
A grievance is any dissatisfaction or feeling of injustice
in connection with one’s employment situation that is
brought to the attention of the management.
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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.
Grievance is any dissatisfaction that adversely affects
organizational relations and productivity
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Distinguish between dissatisfaction,
complaint, and grievance
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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.
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Features
Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the organization.
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. 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.
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Causes of Grievances
1. Economic:
2. Work environment:
3. Supervision:
4. Organizational change:
5. Employee relations:
6. Miscellaneous:
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GRIEVANCE PROCEDURE IN
INDIAN INDUSTRY
STEP 1: In the first step the grievance is to be
submitted to departmental representative, who is a
representative of management. He has to give his
answer within 48 hours.
STEP 2: If the departmental representative fails to
provide a solution, the aggrieved employee can take his
grievance to head of the department, who has to give
his decision within 3 days.
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STEP 3: If the aggrieved employee is not satisfied with the decision of
departmental head, he can take the grievance to Grievance Committee.
The Grievance Committee makes its recommendations to the manager
within 7 days in the form of a report. The final decision of the
management on the report of Grievance Committee must be
communicated to the aggrieved employee within 3 days of the receipt of
report. An appeal for revision of final decision can be made by the worker
if he is not satisfied with it. The management must communicate its
decision to the worker within 7 days.
STEP 4: If the grievance still remains unsettled, the case may be referred
to voluntary arbitration.
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Unit 4
Emerging Trends in HRM
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HRIS?
HRIS stands for Human Resources
Information System.
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Systematic procedure for collecting, storing,
maintaining, retrieving and validating data needed
by org about its employees and HR activities.
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Definition
According to Walker
HRIS is a Systematic procedure for collecting, storing,
maintaining, retrieving and validating data needed by
org. about its employees and personal activities and
organization unit characteristics .
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Keep records of ….
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Need
Maintaining employee record in information system is easy as compared to manual record keeping
For easy availability of information
To reduce cost of storing data
less time consuming as compared to manual task
For higher accuracy
For getting organised data & If Manual then disorganise
TO proide basis for decision
To Store data & information of each exployee for ready reference
24*7 available
For Locational benefits
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Uses of HRIS
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HR Accounting
System of accounting
Human resource is considered as an Assets
Expenses like wage, salary, bonus, training etc are
recorded in the books of accounts
Value of HR also recorded in the books of A/c
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Meaning Of Human Resource Accounting
Human resource accounting is defined as:
❑ The art of valuing,
❑ recording and
❑ presenting systematically
❑ the worth of human resources in the books of
account of an organization.
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DEFINITION
HRA is the measurement of cost and value of the
people for the organisation_ by Flamholtz
American Accounting Association Committee- HRA is
process and identification and measuring data about
HR & communicating this data to interested parties .
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Process
1. HRA objectives
2. Developing HRA measurements
3. Developing HRA Database
4. Pilot testing
5. Implementing HRA system
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ASPECTS/METHODS OF HUMAN RESOURCE
ACCOUNTING
HUMAN RESOURCE
ACCOUNTING
Human resource cost accounting
1.Historical cost
approach
2.Replacement cost approach
3. Opportunity cost approach
Human resource value
accounting
▪ The lev and schwartz model
▪ Flamholtz model (1971)
▪ Giles and robinson’s human asset multiplier method
▪ Hermanson’s unpurchased goodwill and adjusted discounted future wage model
▪ Jaggi and lau model
▪ Morse net benefits model (1973)
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HR AUDIT
➢HR Audit is a tool for evaluating the personnel
activities(policies, procedures and activities) of
an organization.Dr.Meena Sharma 210
Definition
Biles and Schuler
HR Audit evaluates the HR activities in an organisation
with a view to their effectiveness and efficiency
Flamholtz
HR Audit is a systematic assessment of strength, limitation
and developmental needs of its existing
Hr policiesin the context of Org. effectiveness.
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Scope ….
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Process of HRA
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CONTENTS OF AUDIT REPORT:
1. The agreed objectives of the audit
2. The agreed criteria, including a list of reference documents
against which the audit was conducted
3. Completed tasks
4. Dates and times
5. Dated and signed by the auditors.
6. Should contain findings/summary with reference to supporting
evidences
7. Identification of the auditees' representatives participating in the
audit
8. The identification of the audit-team members
9. Summary of the audit process including any obstacles encountered
10. Audit conclusions on conformance, suitability, and effectiveness
11. Recommendations
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HR Shared Services
This third-party management is often referred to as HR
shared services.
Many organisation Now a days outsource their functions
like recruitment, payroll, talent mgmt. ,data analysis,
Customer services
etc…
Examples of HR Shared Services
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objectives
Economies of scale
Cost saving
Companies can focus on more strategic tasks
Offer Improve customer services
Keep transparency employee & employer
Those include tasks such as talent
Enhance professional services
Provide customer with quality ,timely and effective
service
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Benefits
Lower and more transparent costs.
Allows focus on strategic things –
Cuts down on redundant employees
Ensures consistency –Reduces cost
Improves productivity
Increases customer satisfaction
better quality services.
higher customer satisfaction ratings, through an improved match between customer expectations and service.
Greater Efficiency. ...
Improved Productivity. ...
Access to Top Talent and Best Practices.
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Issues in HR Services
De-humanisation of HR – In today’s times, employees love to have a face to face interaction with the HR personnel to discuss their problems
Morale of existing employees – Pay cuts, job losses and less wages are also a side effect of outsourcing HR services. This can heavily impact the morale of the employees and hence, the overall productivity. It can also develop a rebellious feeling in the minds of the employees.
Lack of understanding of a culture – Being an outsider, it may be difficult for the vendors to understand the culture of the company and fulfil the needs accordingly.
Confidentiality – While outsourcing some HR function, there may be cases where some vital employee and customer data is leaked to the consultancy company.
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