Operational HRIS Operational human resource information systems provide the manager with data to support routine and repetitive human resource decisions. Several operational-level information systems collect and report human resource data. These systems include information about the organizations positions and employees and about governmental regulations. 1. Employee Information Systems The human resource department must maintain information on each of the organizations employees for a variety of decision and reporting purposes. One part of this employee information system is a set of human resource profile records. An employee profile usually contains personal and organization-related information, such as name, address, sex, minority status, marital status, citizenship, years of service or seniority data, education and training, previous experience, employment history within the organization, salary rate, salary or wage grade, and retirement and health plan choices. The employee inventory may also contain data about employee preferences for geographical locations and work shifts. Another part of an employee information system is an employee skills inventory. The skills inventory contains information about every employee, such as work experience, work preferences, test scores, interests, and special skills or proficiencies. 2. Position Control Systems A job is usually defined as a group of identical positions. A position, on the other hand, consists of tasks performed by one worker. The purpose of a position control system is to identify each position in the organization, the job title within which the position is classified, and the employee currently assigned to the position. Reference to the position control system allows a human resource manager to identify the details about unfilled positions. 3. Applicant Selection and Placement Information Systems After jobs and the employee requirements for those jobs have been identified and after a suitable pool of job candidates has been recruited, the candidates must be screened, evaluated, selected, and placed in the positions that are open. The primary purpose of the applicant selection and placement information system is to assist human resource staff in these tasks.

4. Performance Management Information Systems Performance Management Information Systems include performance appraisal data and productivity information data. Performance management information systems data is frequently used as evidence in employee grievance matters. Careful documentation of employee performance and of how the performance was measured and reported is critical to acceptance of appraisal information in grievance hearings. Performance management information can lead to a number of decisions beyond merely supporting the operational decision to retain, promote, transfer, or terminate a single employee. 5. Government Reporting and Compliance Information Systems Government Reporting and Compliance Information Systems provide information needed both to maintain compliance with government regulations and to improve productivity and reduce costs associated with employees. Tactical HRIS Tactical human resource information systems provide managers with support for decisions that emphasize the allocation of resources. Within the human resource management area, these decisions include recruitment decisions; job analysis and design decisions, training and development decisions, and employee compensation plan decisions. 1. Job Analysis and Design Information Systems The information inputs to the job analysis and design information system include data from interviews with supervisors and workers and affirmative action guidelines. Inputs also include information from sources external to the firm, such as labor unions, competitors, and government from sources external to the firm, such as labor unions, competitors, and government agencies. The outputs of the job analysis information system are job descriptions and job specifications. These outputs provide managers with the basis for many tactical human resource decisions. 2. Recruiting Information Systems To direct the recruiting function, the organization needs to develop a recruiting plan. The plan specifies the positions to be filled and the skills required of the employees for these positions. To develop the plan and to

monitor its success, a recruiting information system is necessary to collect and process the many different types of information needed to construct the plan, including a list of unfilled positions; the duties and requirements of these positions; lists of planned employee retirements, transfers, or terminations; information about the skills and preferences of current employees; and summaries of employee appraisals. Other inputs to the recruiting plan include data about turnover rates and about the success of past placements. 3. Compensation and Benefits Information Systems The Compensation and Benefits Information Systems may support a variety of tactical human resource decisions, especially when compensation and benefits information is related to information from internal and external sources. Compensation and benefit plans can play an important part in improving an organizations productivity. Tying employee productivity to pay or encouraging increased productivity with incentive pay plans can often improve an organizations productivity substantially. 4. Employee Training and Development Systems The training offered by the employee training and development systems must meet the needs of jobs available in the organization as identified through the position control system and the job analysis and design system. The training should also be directed at those persons interested and capable of benefiting from it, as identified by the skills inventory and human resource files. Strategic HRIS 1. Information Systems Supporting Workforce Planning Organization involved in long-term strategic planning, such as those planning to expand into new market areas, construct factories or offices in new locations, or add new products, will need information about the quantity and quality of the available workforce to achieve their goals. Information systems that support workforce planning serve this purpose. 2. Information Systems Supporting Labor Negotiations Negotiating with craft, maintenance, office, and factory unions requires information gathered from many of the human resource information systems. The human resource team completing the negotiating needs to be

able to obtain numerous ad hoc reports that analyze the organizations and unions positions within the framework of both the industry and the current economic situation. It is also important that the negotiating team be able to receive ad hoc reports on a very timely basis because additional questions and tactics will occur to the team while they are conducting labor negotiations. 3. Specialized Human Resource Information Systems Software A great deal of software has been specifically designed for the human resource function. This software is available for all types and sizes of computers, including microcomputers. Software specifically designed for the human resource management function can be divided into two basic categories: comprehensive human resource information systems software and limited-function packages that support one or a few human resource activities. Comprehensive HRIS In the last few years, the software industry has produced several products that organize the various human resource information systems into integrated software referred to as human resource information systems or HRIS software. In general, the computerization of HRIS has resulted in an integrated database of human resource files. Position files, employee files, skills inventory files, job analysis and design files, affirmative action files, occupational health and safety files, and many other human resource files are constructed in a coordinated manner using database management systems software so that application programs can produce reports from any or all of the files. Thus, the human resource management director can produce reports listing likely internal candidates for open positions by running an application program that queries position files, job requirements files, and skills inventory files. Limited-Function HRIS Numerous commercial software packages are sold for use on mainframes, minicomputers, and microcomputers that are designed to handle one or a small number of human resource functions. Microcomputer versions of these single-function software packages are relatively inexpensive and easy to operate and allow the human resource manager to automate a function quickly and easily.

1. Training Software Many training software packages are available for all types and sizes of computers to provide on-line training for employees. They include Management training software Sales training software Microcomputer training software Word processing training software These software packages can be used in computer-based training programs designed by human resource department for training specific employees in-group and independent study programs. Computer-based training aids often simplify the trainers job and allow the trainer to individualize instruction more easily than in traditional, group-based training classes. Performance Appraisal Methods It is a systematic evaluation of an individual with respect to performance on the job and individuals potential for development. Definition 2: Formal System, Reasons and Measures of future performance It is formal, structured system of measuring, evaluating job related behaviors and outcomes to discover reasons of performance and how to perform effectively in future so that employee, organization and society all benefits. Meaning of Performance Appraisals Performance Appraisals is the assessment of individuals performance in a systematic way. It is a developmental tool used for all round development of the employee and the organization. The performance is measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility and health. Assessment should be confined to past as well as potential performance

also. The second definition is more focused on behaviors as a part of assessment because behaviors do affect job results. Performance Appraisals and Job Analysis Relationship Job Analysis Performance Standards

Performance Appraisals

Describe the work and personnel requirement of a particular job.

Translate job requirements into levels of acceptable or unacceptable performance

Describe the job relevant strengths and weaknesses of each individual.

Objectives of Performance Appraisals Use of Performance Appraisals 1. Promotions 2. Confirmations 3. Training and Development 4. Compensation reviews 5. Competency building 6. Improve communication 7. Evaluation of HR Programs 8. Feedback & Grievances 4 Goals of Performance Appraisals General Goals Specific Goals Developmental Use Individual needs

Performance feedback

Transfers and Placements Strengths and Development needs

Administrative Decisions / Uses Salary Promotion Retention / Termination Recognition Lay offs Poor Performers identification

Organizational Maintenance HR Planning Training Needs Organizational Goal achievements Goal Identification HR Systems Evaluation Reinforcement of organizational needs

Documentation Validation Research For HR Decisions Legal Requirements

Performance Appraisal Process 1. Objectives definition of appraisal 2. Job expectations establishment 3. Design an appraisal program 4. Appraise the performance 5. Performance Interviews 6. Use data for appropriate purposes 7. Identify opportunities variables 8. Using social processes, physical processes, human and computer assistance Difference between Traditional and Modern (Systems) approach to Appraisals

Categories Traditional Appraisals Modern, Systems

Appraisals Guiding Values Individualistic, Control

oriented, Documentary Systematic, Developmental, Problem solving

Leadership Styles Directional, Evaluative Facilitative, Coaching Frequency Occasional Frequent Formalities High Low Rewards Individualistic Grouped,

Organizational TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS Numerous methods have been devised to measure the quantity and quality of performance appraisals. Each of the methods is effective for some purposes for some organizations only. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or an employee. Broadly all methods of appraisals can be divided into two different categories.

Past Oriented Methods Future Oriented Methods

Past Oriented Methods 1. Rating Scales: Rating scales consists of several numerical scales representing job related performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages Adaptability, easy to

use, low cost, every type of job can be evaluated, large number of employees covered, no formal training required. Disadvantages Raters biases 2. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. Advantages economy, ease of administration, limited training required, standardization. Disadvantages Raters biases, use of improper weighs by HR, does not allow rater to give relative ratings 3. Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. The rater is forced to make a choice. HR department does actual assessment. Advantages Absence of personal biases because of forced choice. Disadvantages Statements may be wrongly framed. 4. Forced Distribution Method: here employees are clustered around a high point on a rating scale. Rater is compelled to distribute the employees on all points on the scale. It is assumed that the performance is conformed to normal distribution. Advantages Eliminates Disadvantages Assumption of normal distribution, unrealistic, errors of central tendency. 5. Critical Incidents Method: The approach is focused on certain critical behaviors of employee that makes all the difference in the performance. Supervisors as and when they occur record such incidents. Advantages Evaluations are based on actual job behaviors, ratings are supported by descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may

be too much and may appear to be punishment. 6. Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors determine the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior describes the employee performance. Advantages helps overcome rating errors. Disadvantages Suffers from distortions inherent in most rating techniques. 7. Field Review Method: This is an appraisal done by someone outside employees own department usually from corporate or HR department. Advantages Useful for managerial level promotions, when comparable information is needed, Disadvantages Outsider is generally not familiar with employees work environment, Observation of actual behaviors not possible. 8. Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may be written or an actual presentation of skills. Tests must be reliable and validated to be useful. Advantage Tests may be apt to measure potential more than actual performance. Disadvantages Tests may suffer if costs of test development or administration are high. 9. Confidential Records: Mostly used by government departments, however its application in industry is not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may record ratings with respect to following items; attendance, self expression, team work, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly secretive and confidential. Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc.

10. Essay Method: In this method the rater writes down the employee description in detail within a number of broad categories like, overall impression of performance, promoteability of employee, existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the employee. Advantage It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. Disadvantages It its highly dependent upon the writing skills of rater and most of them are not good writers. They may get confused success depends on the memory power of raters. 11. Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or her organization. Cost to keep employee, and benefit the organization derives is ascertained. Hence it is more dependent upon cost and benefit analysis. 12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of different methods that compare performance with that of other co-workers. The usual techniques used may be ranking methods and paired comparison method. Ranking Methods: Superior ranks his worker based on

merit, from best to worst. However how best and why best are not elaborated in this method. It is easy to administer and explanation.

Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. The number of comparisons may be calculated with the help of a formula as under.

N x (N-1) / 2 Future Oriented Methods 1. Management By Objectives: It means management by objectives and the performance is rated against the

achievement of objectives stated by the management. MBO process goes as under. 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. Advantage It is more useful for managerial positions. Disadvantages Not applicable to all jobs, allocation of merit pay may result in setting short-term goals rather than important and long-term goals etc. 2. Psychological Appraisals: These appraisals are more directed to assess employees potential for future performance rather than the past one. It is done in the form of in-depth interviews, psychological tests, and discussion with supervisors and review of other evaluations. It is more focused on employees emotional, intellectual, 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. However quality of these appraisals largely depend upon the skills of psychologists who perform the evaluation. 3. Assessment Centers: This technique was first developed in USA and UK in 1943. 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. Assessees are requested to participate in in-basket exercises, work groups, computer simulations, role playing and other similar activities which require same attributes for successful performance in actual job. The characteristics assessed in assessment center can be assertiveness, persuasive ability, communicating ability, planning and

organizational ability, self confidence, resistance to stress, energy level, decision making, sensitivity to feelings, administrative ability, creativity and mental alertness etc. Disadvantages Costs of employees traveling and lodging, psychologists, ratings strongly influenced by assessees inter-personal skills. Solid performers may feel suffocated in simulated situations. Those who are not selected for this also may get affected. Advantages well-conducted assessment center can achieve better forecasts of future performance and progress than other methods of appraisals. Also 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. 4. 360-Degree Feedback: 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 inter-personal 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. The Three Fundamental Roles of Information Systems in Business Organizations strive to be market leaders in their given industry. In climates where factors such as recession, inflationary pressures and increased competition can

hinder the achievement of this goal, companies look for strategies that lead to competitive advantages. One such strategy is the adoption of information systems within the company. Information systems help a company make adequate use of its data, reduce workload and assist with compliance with various mandatory regulations. Information Storage and Analysis At the date of publication, many companies no longer manage their data and information manually with registers and hard-copy formats. Through the adoption of information systems, companies can make use of sophisticated and comprehensive databases that can contain all imaginable pieces of data about the company. Information systems store, update and even analyze the information, which the company can then use to pinpoint solutions to current or future problems. Furthermore, these systems can integrate data from various sources, inside and outside the company, keeping the company up to date with internal performance and external opportunities and threats. Assist With Making Decisions The long-term success of a company depends upon the adequacy of its strategic plans. An organizations management team uses information systems to formulate strategic plans and make decisions for the organization's longevity and prosperity. The business uses information systems to evaluate information from all sources, including information from external references such as Reuters or Bloomberg, which provide information on the general economy. This analysis of and comparison to market trends helps organizations analyze the adequacy and quality of their strategic decisions. Assist With Business Processes Information systems aid businesses in developing a larger number of value added-systems in the company. For example, a company can integrate information systems with the manufacturing cycle to ensure that the output it produces complies with the requirements of the various quality management standards. Adoption of information systems simplifies business processes and removes unnecessary activities. Information systems add controls to employee processes, ensuring that only users with the applicable rights can perform certain tasks. Further, information systems eliminate repetitive tasks and increase accuracy, allowing employees to concentrate on more high-level functions. Information systems can also lead to better project planning and implementation through effective monitoring and comparison against established criteria.

Considerations Implementing information systems within an organization can prove to be costly. Implementation costs include not only installation of the systems but also employee training sessions. In addition, employees may see the adoption of information systems as an unwarranted change and, thus, may resist this change. Resistance to change can hinder business operations and can cause employee turnover. Companies should have leadership in place to assess the adequacy of the decision to have an information system and to guide the company through the transition phase and weigh information systems cost against the potential benefits. The 6 components that must come together in order to produce an information system are: 1. Hardware: The term hardware refers to machinery. This category includes the computer itself, which is often referred to as the central processing unit (CPU), and all of its support equipments. Among the support equipments are input and output devices, storage devices and communications devices. 2. Software: The term software refers to computer programs and the manuals (if any) that support them. Computer programs are machine-readable instructions that direct the circuitry within the hardware parts of the system to function in ways that produce useful information from data. Programs are generally stored on some input / output medium, often a disk or tape. 3. Data: Data are facts that are used by programs to produce useful information. Like programs, data are generally stored in machine-readable form on disk or tape until the computer needs them. 4. Procedures: Procedures are the policies that govern the operation of a computer system. "Procedures are to people what software is to hardware" is a common analogy that is used to illustrate the role of procedures in a system. 5. People: Every system needs people if it is to be useful. Often the most over-looked element of the system are the people, probably the component that most influence the success or failure of information systems. This includes "not only the users, but those who operate and service the computers, those who maintain the data, and those who support the network of computers."

Essentials. Pearson Education> 6. Feedback: it is another component of the IS, that defines that an IS may be provided with a feedback (Although this component isn't necessary to function). Data is the bridge between Hardware and People. This means that the data we collect is only data, until we involve people. At that point, data is now information. LESSON OVERVIEW This lecture will primarily help students who intend to be managers, deal effectively with the challenges of managing people. Firms that deal with these challenges effectively are likely to outperform those that do not. These challenges may be categorized according to their primary focus: the environment, the organization, or the individual. A. HRM in a Changing Environment: The Challenges Today's organizations are facing challenges upon following levels: i. Environmental Challenges ii. Organizational Challenges iii. Individual Challenges i. Environmental Challenges Environmental challenges refer to forces external to the firm that are largely beyond management's control but influence organizational performance. They include: rapid change, the internet revolution, workforce diversity, globalization, legislation, evolving work and family roles, and skill shortages and the rise of the service sector. Six important environmental challenges today are: a) Rapid change, b) Work force diversity, c) Globalization, d) Legislation, e) Technology f) Evolving work and family roles, g) Skill shortages and the rise of the service sector a) Rapid Change Many organizations face a volatile environment in which change is nearly constant. If they are to survive and prosper, they need to adapt to change quickly and effectively. Human resources are almost always at the heart of an effective response system. Here are a few examples of how HR policies can help or hinder a

firm grappling with external change: b) Work Force Diversity. All these trends present both a significant challenge and a real opportunity for managers. Firms that formulate and implement HR strategies that capitalize on employee diversity are more likely to survive and prosper. c) Globalization. One of the most dramatic challenges facing as they enter the twenty-first century is how to compete against foreign firms, both domestically and abroad. Many companies are already being compelled to think globally, something that doesn't come easily to firms long accustomed to doing business in a large and expanding domestic market with minimal foreign competition. Weak response to international competition may be resulting in upwards layoffs in every year. Human resources can play a critical role in a business's ability to compete head-to-head with foreign producers. The implications of a global economy on human resource management are many. Here are a few examples: Worldwide company culture Some firms try to develop a global company identity to smooth over cultural differences between domestic employees and those in international operations. Minimizing these differences increases cooperation and can have a strong impact on the bottom line. For instance, the head of human resources at the European division of Colgate Palmolive notes, "We try to build a common corporate culture. We want them all to be Colgaters." Global alliances" Some firms actively engage in international alliances with foreign firms or acquire companies overseas to take advantage of global markets. Making such alliances work requires a highly trained and devoted staff. For instance, Phillips (a Netherlands lighting and electronics firm) became the largest lighting manufacturer in the world by establishing a joint venture with AT&T and making several key acquisitions. These illustrations show how firms can use HR strategies to gain a worldwide competitive advantage. d) Legislation Much of the growth in the HR function over the past three decades may be attributed to its crucial role in keeping the company out of trouble with the law. Most firms are deeply concerned with potential liability

resulting from personnel decisions that may violate laws enacted by the state legislatures, and/or local governments. These laws are constantly interpreted in thousands of cases brought before government agencies, federal courts, state courts, and t Supreme Court. How successfully a firm manages its human resources depends to a large extent on its ability to deal effectively with government regulations. Operating within the legal framework requires keeping track of the external legal environment and developing internal systems (for example, supervisory training and grievance procedures) to ensure compliance and minimize complaints. Many firms are now developing formal policies on sexual harassment and establishing internal administrative channels to deal with alleged incidents before employees feel the need to file a lawsuit. Legislation often has a differential impact on public- and private sector organizations. (Public sector is another term for governmental agencies; private sector refers to all other types of organizations.) Some legislation applies only to public-sector organizations. For instance, affirmative action requirements are typically limited to public organizations and to organizations that do contract work for them. However, much legislation applies to both public- and private sector organizations. In fact, it's difficult to think of any HR practices that are not influenced by government regulations. e) Technology The world has never before seen such rapid technological changes as are presently occurring in the computer and telecommunications industries. One estimate is that technological change is occurring so rapidly that individuals may have to change their entire skills three or four times in their career. The advances being made, affect every area of a business including human resource management. f) Evolving Work and Family Roles The proportion of dual-career families, in which both wife and husband (or both members of a couple) work, is increasing every year. Unfortunately, women face the double burden of working at home and on the job, devoting 42 hours per week on average to the office and an additional 30 hours at home to children. This compares to 43 hours spent working in the office and only 12 hours at home for men. More and more companies are introducing "family-friendly" programs that give

them a competitive advantage in the labor market. These programs are HR tactics that companies use to hire and retain the best-qualified employees, male or female, and they are very likely to payoff. For instance, among the well known organizations / firms, half of all recruits are women, but only 5% of partners are women. Major talent is being wasted as many women drop out after lengthy training because they have decided that the demanding 10- to 12-year partner track requires a total sacrifice of family life. These firms have started to change their policies and are already seeing gains as a result. Different companies have recently begun offering child-care and eldercare referral services as well to facilitate women workers as well as are introducing alternative scheduling to allow employees some flexibility in their work hours. g) Skill Shortages and the Rise of the Service Sector. Expansion of service-sector employment is linked to a number of factors, including changes in consumer tastes and preferences, legal and regulatory changes, advances in science and technology that have eliminated many manufacturing jobs, and changes in the way businesses are organized and managed. Service, technical, and managerial positions that require college degrees will make up half of all manufacturing and service jobs by 2000. Unfortunately, most available workers will be too unskilled to fill those jobs. Even now, many companies complain that the supply of skilled labor is dwindling and that they must provide their employees with basic training to make up for the shortcomings of the public education system. To rectify these shortcomings, companies currently spend large amount year on a wide variety of training programs. ii. Organizational Challenges Organizational challenges refer to concerns that are internal to the firm. However, they are often a byproduct of environmental forces because no firm operates in a vacuum. These issues include: competitive position (cost, quality, and distinctive capability), decentralization, downsizing, organizational restructuring, self-managed work teams, small businesses, organizational culture, technology, and outsourcing. Organizational challenges are concerns or problems internal to a firm. They are

often a byproduct of environmental forces because no firm operates in a vacuum. Still, managers can usually exert much more control over organizational challenges than over environmental challenges. Effective managers spot organizational issues and deal with them before they become major problems. One of the themes of this text is proactively: the need for firms to take action before problems get out of hand. Only managers who are well informed about important HR issues and organizational challenges can do this. These challenges include the need for a competitive position and flexibility, the problems of downsizing and organizational restructuring, the use of self-managed work teams, the rise of small businesses, the need to create a strong organizational culture, the role of technology, and the rise of outsourcing. An organization will outperform its competitors if it effectively utilizes its work force's unique combination of skills and abilities to exploit environmental opportunities and neutralize threats. HR policies can influence an organization's competitive position by a) Controlling costs, b) Improving quality, and c) Creating distinctive capabilities d) Restructuring a) Controlling costs One way for a firm to gain a competitive advantage is to maintain low costs and a strong cash flow. A compensation system that uses innovative reward strategies to control labor costs can help the organization grow. A well-designed compensation system rewards employees for behaviors that benefit the company. Other factors besides compensation policies can enhance a firm's competitiveness by keeping labor costs under control. These include: better employee selection so that workers are more likely to stay with the company and to perform better while they are there, training employees to make them more efficient and productive; attaining harmonious labor relations); effectively managing health and safety issues in the workplace and structuring work to reduce the time and resources needed to design, produce, and deliver products or services b) Improving quality. The second way to gain a competitive advantage is to engage in continuous quality improvement. Many

companies are implementing total quality management (TQM) initiatives, which are programs designed to improve the quality of all the processes that lead to a final product or service. In a TQM program, every aspect of the organization is oriented toward providing a quality product or service. c) Creating Distinctive Capabilities The third way to gain a competitive advantage is to utilize people with distinctive capabilities to create unsurpassed competence in a particular area (for example, 3M's competence in adhesives, Carlson Corporation's leading presence in the travel business, and Xerox's dominance of the photocopier market). d) Restructuring A number of firms are changing the way the functions are performed. For example, some companies are restructuring HR for reasons such as time pressures, financial considerations, and market pressures. This estructuring often results in a shift in terms of who performs each function. Organizations still perform the majority of a firm's HR functions inside the firm. Adjusting to HR restructuring trends--who performs the human resource management tasks? The traditional human resource manager continues to be in place in most organizations, but some organizations are also using shared service centers, outsourcing, and line managers to assist in the delivery of human resources to better accomplish organizational objectives. Additionally, the size of some HR departments is getting smaller because certain functions are now being accomplished by others. This shift permits the HR managers to focus on more strategic and mission-oriented activities. i. The Human Resource Manager--An individual who normally acts in an advisory or staff capacity, working with other managers to help them deal with human resource matters. One general trend is that HR personnel are servicing an increasing number of employees. The human resource manager is primarily responsible for coordinating the management of human resources to help the organization achieve its goals. There is a shared responsibility between line managers and human resource professionals. ii. Shared Service Centers--Take routine, transaction-based activities that are dispersed throughout the organization and consolidate them in one place. iii. Outsourcing Firms--The process of transferring responsibility for an area of service and its objectives to an external provider. The main reason for this movement was to reduce transaction time, but other benefits include cost reductions and quality improvements. Companies found that administrative,

repetitive tasks are often performed in a more cost-effective manner by external sources. iv. Line Managers--Line managers, by the nature of their jobs, are involved with human resources. Line managers in certain firms are being used more to deliver HR services. When implemented, this change reduces the size of the HR department. v. Decentralization: In the traditional organizational structure, most major decisions are made at the top and implemented at lower levels. It is not uncommon for these organizations to centralize major functions, such as human resources, marketing, and production, in a single location (typically corporate headquarters) that serves as the firm's command center. Multiple layers of management are generally used to execute orders issued at the top and to control the lower ranks from above. Employees who are committed to the firm tend to move up the ranks over time in what some have called the internal labor market. However, the traditional top-down form of organization is quickly becoming obsolete, both because it is costly to operate and because it is too inflexible to compete effectively. It is being replaced by decentralization, which transfers responsibility and decision-making authority from a central office to people and locations closer to the situation that demands attention. HR strategies can play a crucial role in enhancing organizational flexibility by improving decision-making processes within the firm. The need for maintaining or creating organizational flexibility in HR strategies is addressed in several chapters of this book, including those dealing with work flows, compensation and training. vi. Downsizing - Periodic reductions in a company's work force to improve its bottom line-often called downsizing-are becoming standard business practice, even among firms that were once legendary for their "no layoff' policies, such as AT&T, IBM, Kodak, and Xerox. In addition to fostering a lack of emotional commitment, transient employment relationships create a new set of challenges for firms and people competing in the labor market, as well as for government agencies that must deal with the social problems associated with employment insecurity (including loss of health insurance and mental illness). However, the good news for laid-off employees is that the poor-performance stigma traditionally attached to being fired or laid off is fading. iii. Individual Challenges Human resource issues at the individual level address concerns that are most pertinent to decisions involving specific employees. These issues almost always reflect what is happening in the larger organization. How individuals are treated also is likely to have an effect on organizational issues. For instance, if many key employees leave a firm to join its competitor, it will affect the competitive posture of the firm. The individual issues include matching people and organization, ethics

and social responsibility, productivity, empowerment, brain drain, and job insecurity. Human resource issues at the individual level address the decisions most pertinent to specific employees. These individual challenges almost always reflect what is happening in the larger organization. For instance, technology affects individual productivity; it also has ethical ramifications in terms of how information is used to make HR decisions (for example, use of credit or medical history data to decide whom to hire). How the company treats its individual employees is also likely to affect the organizational challenges we discussed earlier. For example, if many key employees leave the firm to join competitors, the organization's competitive position is likely to be affected. In other words, there is a two-way relationship between organizational and individual challenges. This is unlike the relationship between environmental and organizational challenges, in which the relationship goes only one way few organizations can have much impact on the environment. The most important individual challenges today involve, productivity, ethics and social responsibility, productivity, empowerment, brain drain, job security and matching people and organizations. Here we discuss each of them... a. Productivity is a measure of how much value individual employees add to the goods or services that the organization produces. The greater the output per individual, the higher the organization's productivity. Two important factors that affect individual productivity are ability and motivation. Employee ability, competence in performing a job, can be improved through a hiring and placement process that selects the best individuals for the job. It can also be improved through training and career development programs designed to sharpen employees' skills and prepare them for additional responsibilities. Motivation refers to a person's desire to do the best possible job or to exert the maximum effort to perform assigned tasks. Motivation energizes, directs, and sustains human behavior. A growing number of companies recognize that employees are more likely to choose a firm and stay there if they believe that it offers a high quality of work life (QWL). b. Ethics and Social Responsibility - Corporate social responsibility refers to the extent to which

companies should and do channel resources toward improving one or more segments of society other than the firm's owners or stockholders. Ethics is the bedrock of socially responsible behavior. People's expectations that their employers will behave ethically are increasing, so much that many firms and professional organizations have created codes of ethics outlining principles and standards of personal conduct for their members. Unfortunately, these codes often do not meet employees' expectations of ethical employer behavior. These negative perceptions have worsened over the years. In a recent poll of Harvard Business Review readers, almost half the respondents indicated their belief that managers do not consistently make ethical decisions. The widespread perceptions of unethical behavior may be attributed to the fact that managerial decisions are rarely clear-cut. Except in a few blatant cases (such as willful misrepresentation), what is ethical or unethical is open to debate. Even the most detailed codes of ethics are still general enough to allow much room for managerial discretion. In other words, many specific decisions related to the management of human resources are subject to judgment calls. A company that exercises social responsibility attempts to balance its commitments-not only to its investors, but also to its employees, its customers, other businesses, and the community or communities in which it operates. For example, McDonald's established Ronald McDonald houses several years ago to provide lodging for families of sick children hospitalized away from home. Sears and General Electric support artists and performers, and many local merchants support local children's sports teams. c. Empowerment - In recent years many firms have reduced employee dependence on superiors and placed more emphasis on individual control over (and responsibility for) the work that needs to be done. This process has been labeled empowerment because it transfers direction from an external source (normally the immediate supervisor) to an internal source (the individual's own desire to do well). In essence, the process of empowerment entails providing workers with the skills and authority to make decisions that would traditionally be made by managers. The goal of

empowerment is an organization consisting of enthusiastic, committed people who perform their work ably because they believe in it and enjoys doing it (internal control). This situation is in stark contrast to an organization that gets people to work as an act of compliance to avoid punishment (for example, being fired) or to qualify for a paycheck (external control). d. Brain Drain - With organizational success more and more dependent on knowledge held by specific employees, companies are becoming more susceptible to brain drain-the loss of intellectual property that results when competitors lure away key employees. High-Tec firms are particularly vulnerable to this problem. Such important industries as semiconductors and electronics suffer from high employee turnover as key employees, inspired by the potential for huge profits, leave established firms to start their own businesses. This brain drain can negatively affect innovation and cause major delays in the introduction of new products. To make matters worse, departing employees, particularly those in upper management, can wreak considerable havoc by taking other talent with them when they leave. To combat the problem of defection to competitors, some firms are crafting elaborate ant defection devices. For example, Compaq computer has introduced a policy that revokes bonuses and other benefits to key executives if they take other employees with them when they quit. Micron Technology staggers key employees' bonuses; they lose un-awarded portions when they leave. e. Job Insecurity - In this era of downsizing and restructuring, many employees fear for their jobs. For most workers, being able to count on a steady job and regular promotions is a thing of the past. Even the most profitable companies have laid off workers. Companies argue that regardless of how well the firm is doing, layoffs have become essential in an age of cutthroat competition. In addition, the stock market often looks favorably on layoffs. For employees, however, chronic job insecurity is a major source of stress and can lead to lower performance and productivity. Though union membership has been declining in recent years, many workers still belong to unions, and job security

is now a top union priority. In return for job security, though, many union leaders have had to make major concessions regarding pay and benefits. f. Matching People and Organizations Research suggests that HR strategies contribute to firm performance most when the firm uses these strategies to attract and retain the type of employee who best fits the firm's culture and overall business objectives. For example, one study showed that the competencies and personality characteristics of top executives could hamper or improve firm performance, depending on what the firm's business strategies are. Fast-growth firms perform better with managers who have a strong marketing and sales background, who are willing to take risks, and who have a high tolerance for ambiguity. However, these managerial traits actually reduce the performance of mature firms that have an established product and are more interested in maintaining (rather than expanding) their market share. Other research has shown that small high- tech firms benefit by hiring employees who are willing to work in an atmosphere of high uncertainty, low pay, and rapid change in exchange for greater intrinsic satisfaction and the financial opportunities associated with a risky but potentially very lucrative product launch

The five factors involved in the changing environment of HRM are as follows: 1. Work force Diversity 2. Economic and Technological Change 3. Globalization 4. Organisational Restructuring 5. Changing Nature of Work. Business environment is changing environment and so is HR environment. The changing environment of HRM includes work force diversity, economic and technological change, globalisation, organisational restructuring, changes in the nature of jobs and work and so on. 1. Work force Diversity: Diversity has been defined as any attribute that humans are likely to use to tell themselves, that person is different from me and, thus,

includes such factors as race, sex, age, values, and cultural norms. The Indian work force is characterized by such diversity that is deepening and spreading day by day. It is likely to be more diverse as women, minority- group members, and older workers flood the work force. With the increasing number of women entering the work force due to a combination of factors like womens emancipation, economic needs, greater equality of sexes, education and so on, additional pressures of managing a different set of problems at the work place have arisen. As such, the number of women is on increase in all walks of life i.e., teachers, lawyers, doctors, engineers, accountants, pilots, parliamentarians and so on. However, increasing number of women in the work force has been necessitating the implementation of more flexible work scheduling, child care facilities, maternity and now paternity leave also and transfer to location of husbands place of posting. Also, as the work force ages, employers will have to grapple with greater health care costs and higher pension contributions. On the whole, the increased diversity of work force will place tremendous demands on the HR management function. Further, creating unanimity from a diverse work force has also become a challenge for HR manager. This is because, as several experts put it; diversity is marked by two fundamental and inconsistent realities operating today with it. One is that organisations claim they seek to maximize diversity in the work place, and maximize the capabilities of such a diverse work force. The other is that traditional human resources system will not allow diversity, only similarity. These experts emphasize that employers traditionally hire, appraise, and promote people who fit a particular employers image of what employees should believe and act like. At the same time, there is corresponding tendency to screen out those who do not fit. 2. Economic and Technological Change: Along with time, several economic and technological changes have occurred that have altered employment and occupational pattern. In India too, there is a perceptible shift in occupational structure from agriculture to industry to services. The New Economic Policy, 1991 has led to liberalization and globalization giving genesis to multinational organisations with their multicultural dimensions having certain implications for HRM. The implications of globalization for HRM are discussed subsequently.

The Indian economy has already become an open economy but it will be more so from April 2003 with the complete lifting of quantitative restrictions (QRs) on imports in India. Technology has become the hallmark of the modem organisations. As such, modem organisations have become the technology-driven organisations. So to say, men are replaced by machinery. Manufacturing technology, for example, has changed to automation and robotisation. Manufacturing advances like these will eliminate many blue-collar jobs, replacing them with fewer but more highly skilled jobs. Similar changes are taking place in office automation, where personal computers, word processing, and management information system (MIS) continue to change the nature of office work. The explosive growth of information technology linked to the internet has ushered in many changes throughout the organisation. One of the major changes led by information technology is that it has hastened what experts call the fall of hierarchy, i.e., managers depend less and less on yesterdays stick-to-the -chain-of-command approach, to their organising function. This is so because earlier it used to be, if one wanted information, one had to go up, over and down through the organisation. Now, one just taps in. Thats what broke down the hierarchy. Somuchso, now employees do not need to be present a definite work place. Instead, they can work from their own places/ residences through the net. This has given genesis to a new breed of organisations, called virtual organisations. (VO). 3. Globalization: The New Economic Policy, 1991 has, among other things, globalised the Indian economy. There has been a growing tendency among business firms to extend their sales or manufacturing to new markets aboard. The rate of globalization in the past few years in India has been nothing short of phenomenal. Globalization increases competition in the international business. Firms that formerly competed only with local firms, now have to compete with foreign firms/competitors. Thus, the world has become a global market where competition is a two-way street. Globalization has given genesis to the multinational corporations (MNCs). The MNCs are characterised by their cultural diversities, intensified competition, variations in business practices and so on. As an international business expert puts it, the bottom line is that the

growing integration of the world economy into a single, huge market place is increasing the intensity of competition in a wide range of manufacturing and service industries. Given these conditions, from tapping the global labour force to formulating selection, training and compensation policies for expatriate employees have posed major challenges for HRM in the next few years. This has underlined the need for studying and understanding HRM of multinational organisations or international organisations separately. 4. Organisational Restructuring: Organisational restructuring is used to make the organisation competitive. From this point of view, mergers and acquisitions of firms have become common forms of restructuring to ensure organisational competitiveness. The mega-mergers in the banking, telecommunications and petroleum companies have been very visible in our country. Downsizing is yet another form of organisational restructuring. As a part of the organisational changes, many organisations have rightsized themselves by various ways like eliminating layers of managers, closing facilities, merging with other organisations, or out placing workers. There has been a practice to flatten organisations by removing several layers of management and to improve productivity, quality, and service while also reducing costs. Whatever be the form of restructuring, jobs are redesigned and people affected. One of the challenges that HRM faces with organisational restructuring is dealing with the human consequences of change. For example, the human cost associated with downsizing has been much debated and discussed in the popular press. As such, HRM needs to focus on the changed scenario uniquely and that is not so simple. Thus, management of HR activities has become crucial for HR managers. 5. Changing Nature of Work: Along with changes in technology and globalization, the nature of jobs and work has also changed. For example, technological changes like introduction of fax machines, information technology, and personal computers have allowed companies to relocate operations to locations with lower wages. There is also a trend toward increased use of temporary or part-time workers in organisations. One most significant change in the nature of work is that it has changed from manual to mental/ knowledge work. In this context, the

management expert Peter Druckers views are worth citing. He said that the typical business will soon bear little resemblance to the typical manufacturing company of 30 years ago. The typical business will be knowledge-based, an organisation composed largely of specialists who direct and discipline their own performance through organized feedback from colleagues, customers, and headquarter. For this reason, it will be what he calls an information-based organization. As a result, the organizations are giving and will give growing emphasis on their human capital i.e., the knowledge, education, training, skills, and expertise of employees, the expense of physical capital like equipment, machinery and physical plants This growing emphasis on education and human capital has, among other things, changed the nature of economy as service-oriented economy. In the changed economic scenario, jobs demand a certain level of expertise that is far beyond that required of most workers 20 or 30 years ago. This means that companies are relying more on employees creativity and skills, i.e., employees brain power. As Fortune magazine has rightly said: Brain power .has never before been so important for business. Every company depends increasingly on knowledge-patents, processes, management skills, technologies, information about customers and suppliers, and old-fashioned experience. Added together, this knowledge is intellectual capital. As such, the HR environment has changed. The challenge posed by changed environment is fostering intellectuals or human capital needs managing these differently than those of previous generation. Here, Drucker puts that the centre of gravity in employment is moving fast from manual or clerical workers to knowledge workers, who resist the command and control model that business took from the military 100 years ago. Now that the changing environment of HRM is delineated, we can conveniently present the new HR management practices in such changing environment. DSS Broadly speaking, decision support systems are a set of manual or computer-based tools that assist in some decision-making activity. In today's business environment, however, decision support systems (DSS) are commonly understood to be computerized management information systems designed to help business owners, executives, and managers resolve complicated

business problems and/or questions. Good decision support systems can help business people perform a wide variety of functions, including cash flow analysis, concept ranking, multistage forecasting, product performance improvement, and resource allocation analysis. Previously regarded as primarily a tool for big companies, DSS has in recent years come to be recognized as a potentially valuable tool for small business enterprises as well. THE STRUCTURE OF DECISIONS In order to discuss the support of decisions and what DSS tools can or should do, it is necessary to have a perspective on the nature of the decision process and the various requirements of supporting it. One way of looking at a decision is in terms of its key components. The first component is the data collected by a decision maker to be used in making the decision. The second is the process selected by the decision maker to combine this data. Finally, there is an evaluation or learning component that compares decisions and examines them to see if there is a need to change either the data being used or the process that combines the data. These components of a decision interact with the characteristics of the decision being made. Structured Decisions Many analysts categorize decisions according to the degree of structure involved in the decision-making activity. Business analysts describe a structured decision as one in which all three components of a decisionthe data, process, and evaluationare determined. Since structured decisions are made on a regular basis in business environments, it makes sense to place a comparatively rigid framework around the decision and the people making it. Structured decision support systems may simply use a checklist or form to ensure that all necessary data are collected and that the decision making process is not skewed by the absence of data. If the choice is also to support the procedural or process component of the decision, then it is quite possible to develop a program either as part of the checklist or form. In fact, it is also possible and desirable to develop computer programs that collect and combine the data, thus giving the process a high degree of consistency or structure. When there is a desire to make a decision more structured, the support system for that decision is designed to ensure consistency. Many firms that hire individuals without a great deal of experience provide them with detailed guidelines on their decision making activities and support them by giving them little flexibility. One interesting consequence of making a decision more structured is that the liability for inappropriate decisions is shifted from individual decision makers to the larger company or

organization. Unstructured Decisions At the other end of the continuum are unstructured decisions. While these have the same components as structured onesdata, process, and evaluationthere is little agreement on their nature. With unstructured decisions, for example, each decision maker may use different data and processes to reach a conclusion. In addition, because of the nature of the decision there may only a limited number of people within the organization qualified to evaluate the decision. Generally, unstructured decisions are made in instances in which all elements of the business environmentcustomer expectations, competitor response, cost of securing raw materials, etc.are not completely understood (new product and marketing strategy decisions commonly fit into this category). Unstructured decision systems typically focus on the individual who or the team that will make the decision. These decision makers are usually entrusted with decisions that are unstructured because of their experience or expertise; it is their individual ability that is of value. One approach to support systems in this area is to construct a program that simulates the process used by a particular individual. In essence, these systemscommonly referred to as "expert systems"prompt the user with a series of questions regarding a decision situation. "Once the expert system has sufficient information about the decision scenario, it uses an inference engine which draws upon a data base of expertise in this decision area to provide the manager with the best possible alternative for the problem," explained Jatinder N. D. Gupta and Thomas M. Harris in the Journal of Systems Management. "The purported advantage of this decision aid is that it allows the manager the use of the collective knowledge of experts in this decision realm. Some of the current DSS applications have included long-range and strategic planning policy setting, new product planning, market planning, cash flow management, operational planning and budgeting, and portfolio management." Another approach is to monitor and document the process used so that the decision maker(s) can readily review what has already been examined and concluded. An even more novel approach used is to provide environments specially designed to give these decision makers an atmosphere conducive to their particular tastes. The key to support of unstructured decisions is to understand the role that individuals experience or expertise plays in the decision and to allow for individual approaches. Semi-Structured Decisions In the middle of the continuum are semi-structured decisionswhere most

of what are considered to be true decision support systems are focused. Decisions of this type are characterized as having some agreement on the data, process, and/or evaluation to be used, but are also typified by efforts to retain some level of human judgment in the decision making process. An initial step in analyzing which support system is required is to understand where the limitations of the decision maker may be manifested (i.e., the data acquisition portion, the process component, or the evaluation of outcomes). Grappling with the latter two types of decisionsunstructured and semi-structuredcan be particularly problematic for small businesses, which often have limited technological or work force resources. As Gupta and Harris indicated, "many decision situations faced by executives in small business are one-of-a-kind, one-shot occurrences requiring specifically tailored solution approaches without the benefit of any previously available rules or procedures. This unstructured or semi-structured nature of these decisions situations aggravates the problem of limited resources and staff expertise available to a small business executive to analyze important decisions appropriately. Faced with this difficulty, an executive in a small business must seek tools and techniques that do not demand too much of his time and resources and are useful to make his life easier." Subsequently, small businesses have increasingly turned to DSS to provide them with assistance in business guidance and management. KEY DSS FUNCTIONS Gupta and Harris observed that DSS is predicated on the effective performance of three functions: information management, data quantification, and model manipulation. "Information management refers to the storage, retrieval, and reporting of information in a structured format convenient to the user. Data quantification is the process by which large amounts of information are condensed and analytically manipulated into a few core indicators that extract the essence of data. Model manipulation refers to the construction and resolution of various scenarios to answer 'what if' questions. It includes the processes of model formulation, alternatives generation and solution of the proposed models, often through the use of several operations research/management science approaches." Entrepreneurs and owners of established enterprises are urged to make certain that their business needs a DSS before buying the various computer systems and software necessary to create one. Some small businesses, of course, have no need of a DSS. The owner of a car washing establishment, for instance, would be highly unlikely to make such an investment. But for those business owners who are guiding a complex operation, a decision support system can be a valuable tool. Another key consideration is whether

the business's key personnel will ensure that the necessary time and effort is spent to incorporate DSS into the establishment's operations. After all, even the best decision support system is of little use if the business does not possess the training and knowledge necessary to use it effectively. If, after careful study of questions of DSS utility, the small business owner decides that DSS can help his or her company, the necessary investment can be made, and the key managers of the business can begin the process of developing their own DSS applications using available spreadsheet software. DSS UNCERTAINTIES AND LIMITATIONS While decision support systems have been embraced by small business operators in a wide range of industries in recent years, entrepreneurs, programmers, and business consultants all agree that such systems are not perfect. Level of "User-Friendliness" Some observers contend that although decision support systems have become much more user-friendly in recent years, it remains an issue, especially for small business operations that do not have significant resources in terms of technological knowledge. Hard-to-Quantify Factors Another limitation that decision makers confront has to do with combining or processing the information that they obtain. In many cases these limitations are due to the number of mathematical calculations required. For instance, a manufacturer pondering the introduction of a new product can not do so without first deciding on a price for the product. In order to make this decision, the effect of different variables (including price) on demand for the product and the subsequent profit must be evaluated. The manufacturer's perceptions of the demand for the product can be captured in a mathematical formula that portrays the relationship between profit, price, and other variables considered important. Once the relationships have been expressed, the decision maker may now want to change the values for different variables and see what the effect on profits would be. The ability to save mathematical relationships and then obtain results for different values is a feature of many decision support systems. This is called "what-if" analysis, and today's spreadsheet software packages are fully equipped to support this decision-making activity. Of course, additional factors must be taken into consideration as well when making business decisions. Hard-to-quantify factors such as future interest rates, new legislation, and hunches about product shelf life may all be considered. So even though the calculations may indicate that a certain demand for the product will be achieved at a certain price, the decision maker must use his or her judgment

in making the final decision. If the decision maker simply follows the output of a process model, then the decision is being moved toward the structured end of the continuum. In certain corporate environments, it may be easier for the decision maker to follow the prescriptions of the DSS; users of support systems are usually aware of the risks associated with certain choices. If decision makers feel that there is more risk associated with exercising judgment and opposing the suggestion of the DSS than there is in simply supporting the process, the DSS is moving the decision more toward the structured end of the spectrum. Therefore, the way in which a DSS will be used must be considered within the decision-making environment. Processing Model Limitations Another problem with the use of support systems that perform calculations is that the user/decision maker may not be fully aware of the limitations or assumptions of the particular processing model. There may be instances in which the decision maker has an idea of the knowledge that is desired, but not necessarily the best way to get that knowledge. This problem may be seen in the use of statistical analysis to support a decision. Most statistical packages provide a variety of tests and will perform them on whatever data is presented, regardless of whether or not it is appropriate. This problem has been recognized by designers of support systems and has resulted in the development of DSS that support the choice of the type of analysis. 2.9.1 Career Planning and Development: retaining skilled employees, management should assist individuals to plan their careers with realistic information about career opportunities that exist within a particular organization. Career planning is a recently developed phenomenon and organizations are nowadays looking HRD in this new angle. The tremendous growth of organizations in recent times due to technological improvements and tough competition in global market necessitates the organizations not only to select the right type of staffs, but also to retain them in the organizations. The dynamic and growth oriented employees should be allowed to grow through career development programs because the high turnover of such potential staff leads to great loss in terms of cost, quality and productivity. 1. Career Performance: The individually perceived sequence of attitudes and behavior associated with the work related experiences and activities over the span of the person's life.' Thus, a career refers to both attitude and behavior and it is work related. Each person's career is unique. It has

an upward mobility i.e. making more money, having more responsibility, acquiring more status and power. 2. Motivation and Career Development: Handsome monetary as well as fringe benefits and elevation in job are the main indicators of career performance. The modern organizations are basically interested in career performance since it has a direct relationship with goal attainment. The two aspects -the extent of organization's performance appraisal, and the pessimistic attitude of the individual to realize the career effectiveness- should be well understood by the management for better career development. So, career performance is the integrated effort of both management and the employees. CAREER PLANNING AN ESSENTIAL COMPONENT OF HUMAN RESOURCE MANAGEMENT The current economic context, marked by increased competition, integration in the European Union and especially the need to maintain competitive advantage in an increasingly uncertain business environment, have led to the introduction and the deployment of human resources activities until recently neglected. Thus, more companies in Romania have started to develop and implement organized planning and career development systems of employees. In human resource management, career planning aims to identify needs, aspirations and opportunities for individuals career and the implementation of developing human resources programs to support that career . Guidance on some of the competencies expected The following points are a non- exhaustive series of aspects that could be covered by the career development plan, and it is relevant to the short-term objectives that will be set by the researcher and the reviewer at the beginning of the fellowship period. The objectives should be set with respect to the skills and experience that each researcher should acquire at a given time of his/her career. A postgraduate researcher at PhD level will have very different needs compared to a post-doctoral researcher at an advanced stage of his/her professional development. These objectives should be revised at the end of the fellowship and should be used as a pro-active monitoring of progress in the researcher's career. 1. Research results. These should give an overview of the main direct results obtained as a consequence of the research carried out during the training period. It may include publications, conference, workshop attendance, courses,

and /or seminar presentations, patents etc. This will vary according to the area of research and the type of results most common to each field. The information at this level should be relatively general since the career development plan does not strictly constitute a report on the scientific results achieved. 2. Research Skills and techniques acquired. Competence in experimental design, quantitative and qualitative methods, relevant research methodologies, data capture, statistics, analytical skills. Original, independent and critical thinking. Critical analysis and evaluation of one's findings and those of others Acquisition of new expertise in areas and techniques related to the researcher's field and adequate understanding their appropriate application Foresight and technology transfer, grasp of ethics and appreciation of IPPR. 3. Research Management. Ability to successfully identify and secure possible sources of funding for personal and team research as appropriate. Project management skills relating to proposals and tenders work programming, deadlines negotiation financial planning, and resource management. Skills appropriate to working with others and in teams and in teambuilding. 4. Communication skills. Personal presentation skills, poster presentations, skills in report writing and preparing supervision, and delivery, with funders, academic papers and books. To be able to defend research outcomes at seminars, conferences, etc. Contribute to promote public understanding of one's own field 5. Other professional training (course work, teaching activity): Involvement in teaching, supervision or mentoring 6. Anticipated networking opportunities. Develop/maintain co-operative networks and working relationships as appropriate with supervisor/peers/colleagues within the institution and the wider research community 7. Other activities (community, etc) with professional relevance.

Issues related with career management, including transferable skills, management of own career progression, ways to develop employability, awareness of what potential employers are looking for when considering CV applications etc. PAY STATUARY 1. Communication: Constant and accurate communication levels designed to fairly inform as to what is being achieved both individually and at a corporate level are a priority in any incentive scheme. The key message is that incentive pay is not further reward for what individuals are already paid to do. It is reward for smarter performance, better levels of organization performance, greater commitment, and so on. This is an area where schemes often fail as incentive pay is seen as further reward for work already done. 2. Performance Management The more important part of the communication process is the interaction between the manager and the employee as to what is happening. Issues such as ensuring goals are set, understood and achievable, what level of progress is being made, should goals be altered (relatively rare in the course of an annual cycle), what training is necessary, and all the other issues covered in good performance improvement programmes including incentive pay outcomes are covered here. 3. Line of Sight Ensuring targets and hence incentive opportunities align with what you can influence is important and is accepted as being basic to understanding and channeling behavior. Line of sight varies depending on the level of the role, the size of the organization and the complexity of the job. Share options as an incentive have an excellent line of sight in a high tech start-up - probably for all levels of staff but are less relevant for basic support roles in a multinational. 4. Tenacity It will probably take two years to fully integrate a new incentive based remuneration structure with a three or four month lead in period prior to its initial introduction. Management, HR, everyone, will have to have patience and understand that the system will need fine tuning in the course of the first two cycles. It should not be seen as a big deal, just necessary adjustment to reflect organization culture and practical experience. 5. Dollars

Make the potential dollars worth having a shot at. One, two or three percent of base salary are very low percentages to put on offer in an incentive scheme and are likely not to be motivating. A base figure should be around 5% for any role. Percentages vary enormously and can be multiples of salary depending on the role. Remember always this money is contingent on performance, ie. It is not a gimmee and many incentive schemes put the money on offer into a range (eg. Between 5% and 10%). 6. Time Period Set the giving out of rewards commensurate with the level of role and the type of duties being undertaken. For many roles a yearly timescale is appropriate. Some support roles would probably benefit from a six monthly or quarterly payout period, as is common in many sales and production roles. Why? It keeps the link between the work done and the reward clear. 7. Understand how Motivation Works What motivates individuals when it comes to reward and recognition lies within a complex of personal, career , and organization interaction factors? It is not particularly simple and varies at different stages of the career cycle. The theory is complex and still relatively new and can be best summarized in that our understanding has highlighted a few areas that rarely work in any circumstances and suggested a number of others that are likely to succeed. With incentive pay the motivation link is bound up with personal ownership of it and commitment hence the strong emphasis on communication. 8. When to Introduce There may never be a wrong time, but certainly sometimes may be better than others. If other major institutional changes are occurring then it may not be the best time to introduce. Remember that a package of initiatives will make incentive pay succeed with the communication and performance management components being key supports. 9. Who is in the Scheme? Everyone would be the answer today, although it may be better to phase it in starting with a senior management level. The key to incentive pay is understanding that it is primarily a different way of paying people involving a different perspective which, if it is truly working correctly, links organization success with personal reward. 10. What happens to the Wage and Salary Bill?

A well designed scheme should be effectively self funding. Alignment of divisional, and accountabilities targets should be seamless. If this link is not there you run the danger of merely increasing your wage and salary bill. Any scheme that ignores this link will have serious questions asked of it at board and/or senior management level.

3.3 Summary The goal on this concept should be provide the information which has a surprise value and which reduces the to individual, corporate financial uncertainty. It should simultaneously build the knowledge base in the organization by processing the data obtained from different sources in different ways.