Productivity, Workforce & Information Management: Productivity - Definition,

Various methods of measurement, Factors effecting productivity, Strategies for

improving productivity, Various methods of Job evaluation & merit rating, Various

incentive payment schemes, Behavioral aspects, Financial incentives. MIS, Importance of

MIS, Organizational & information system structure, Role of MIS in decision making

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PRODUCTIVITY

In 1883, Littre defined productivity as the "faculty to produce," that is, the desire to produce.

In 1950, the Organisation for European Economic Cooperation (OEEC) provided the

following definition of productivity:

"Productivity is the quotient obtained by dividing output by one of the factors of production.

In this way it is possible to speak of the productivity of the capital, investment, or raw

materials according to whether output is being considered in relation to capital, investment,

or raw materials, etc."

Productivity may be defined as follows:

Productivity = Output/Input (Kanawaty)

The term productivity can be used to assess or measure the extent to which a certain output

can be extracted from a given input. The inputs of an enterprise are land and buildings,

materials, plant machines and equipment, energy and human resources. The outputs are

saleable products and services.

Some Techniques for Measurement of Productivity:

Productivity has been defined as the ratio of output to input. An increase in productivity

means an increase in output that is proportionally greater than increase in input.

Productivity may be measured either on an aggregate basis or individual basis. On aggregate

basis, output is compared with all inputs taken (added) together. This is called as total

productivity. On individual basis, output is compared with any one of the input factor and this

is called as partial productivity or factor productivity.

Total productivity index = Total output / Total Input

where, Total output = Total production of goods and services

Total Input = Labour + Material + Capital + Energy

This index measures the productivity of the entire organisation with use of all resources. It is

a way of evaluating efficiency of entire plant or firm.

Other Factor productivity or partial productivity indices:

Labour productivity (in terms of hours) = Total quantity produced / Actual man hours

required to produce that quantity

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Labour productivity (in terms of money) = Total cost (or sales value) of output produced /

Amount in terms of rupees spent on workers

Material productivity = Number of units produced / Total material cost

Machine productivity = Output in standard hours / Actual machine hours

Capital productivity = Total output / Capital employed

Factors effecting productivity

1 capital investments in production

2 capital investments in technology

3 capital investments in equipment

4 capital investments in facilities

5 economies of scale

6 workforce knowledge and skill resulting from training and experience

7 technological changes

8 work methods

9 Procedures

10 Systems

11 quality of products

12 quality of processes

13 quality of management

14 legislative and regulatory environment

15 general levels of education

16 social environment

17 geographic factors

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Strategies for improving productivity:

- Development of new basic process or fundamental improvement of existing one:

Method Study to improve ease of operation & maintenance at design stage

- Install more modern or higher capacity plant or equipment or modernize existing one:

Method Study to improve plant layout and to improve ease of operation when

modernizing

- Reduce the work content of the product: Method Study to improve design for ease of

production

- Reduce the work content of the process: Method study to reduce wasted effort and

time in operating the process by eliminating unnecessary movement

- Reduce ineffective time due to management or workers: Work Measurement to

investigate existing practice, locate ineffective time and set standards of performance

as basis for -Planning and control, Utilisation of plant, Labour cost control, Incentive

schemes

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JOB EVALUATION

Job evaluation is a technique to rate a job (but not a worker). Therefore, after the job

is evaluated, it becomes the starting point to fix the base-wage for a worker so that the wage

is fair and equitable. Job evaluation is the criterion for relative differentiation of base-wage

rates by establishing the relative worth of various jobs in an organization. The bases for semi-

skilled or unskilled worker’s job evaluation are factors related to job, such as: skill, effort,

responsibility, job risk, hazard, job conditions, etc. For skilled jobs, factors related to

qualification, experience, dynamics of responsibility and complexity in decision-making,

leadership quality accountability, etc., are major factors in job evaluation.

Job evaluation is an attempt to determine and compare the demands which the normal

performance of particular jobs makes on average workers, without taking into account the

individual abilities or performance of the workers concerned.

— International Labor Organization

Job evaluation is used to analyse and assess the job for ascertaining its relative worth by

objective assessment and comparison for determining the basis for a rational wage structure.

For an effective job evaluation, proper description and specification of the job are needed.

The main purpose of job evaluation is to decide the base for wage-payment for different

categories of jobs:

Purpose of job-evaluation

BENEFITS OF JOB EVALUATION

(1) It helps the management in establishing an objective rationale for acceptable wage-

structure.

(2) It takes into account many factors other than the skill difference.

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(3) It helps in skill match with job. It is helpful in the selection, training and promotion of

workers.

(4) It establishes cordial labour relationship.

(5) It helps in determining the rate of a new job.

OBJECTIVE OF JOB EVALUATION

The main objectives of job-evaluation are as follows:

(1) Job evaluation is used to determine the relative worth of every job. Relative wages may

be fixed on the basis of an objective evaluation and comparison.

(2) It establishes the general wage level, which could be comparable with factories nearby.

(3) It provides a basis for ranking different jobs.

(4) The relative worth and wage-structure of a new job may be easily established in

comparison with the established jobs.

(5) It helps in establishing line of authority, responsibility and accountability.

(6) It provides a sound basis for wage negotiation. It reduces grievances of workers due to

improper wages. It eliminates wage inequality within the organization.

(7) Job evaluation is useful in the selection and recruitment process, as skill match with job

profile may be achieved.

(8) It is helpful in achieving cordial relations between management and union.

(9) It provides a base for on-job training and orientation programs.

Pre-Requisite of Job Evaluation

(1) Facts related to job content which are termed as: (a) job description, and (b) job-

specification.

(2) Top management support and commitment

(3) Cooperation of union and individual workers

(4) Comparison of jobs

(5) Involvement of expert in job-evaluation techniques.

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LIMITATIONS OF JOB EVALUATION

(1) Exactness or precision is missing in the job-evaluation. There is no standard table for

all the activities. All jobs cannot be measured and compared accurately.

(2) It does not account for many inter-related economic factors. For example, the law of

demand and supply of labor is a prime factor in determining wage rate in industry.

Due to high demand of software engineers in handling special problems (say, Y2K

problem), the temporary wage structure was quite high. This remains unattended to in

a generalized approach of job-evaluation.

(3) No special attention is paid for exceptional merit, needed in the performance of the

job. Many a times, workers feel frustrated due to this. For example, many highly

talented scientists and professors feel frustrated in R & D activities, as their

counterparts in field and civil services are better compensated in terms of promotion,

power, perks and salary.

(4) The basic assumption in job-evaluation is that a work of equal worth should be

equally paid as these are both equally attractive and equally demanding. In real life,

this contention is challengeable. In real life, there are numerous examples when the

job of same worth (say, a lecturer and an I.A.S.) are not equally attractive to the job

seekers.

(5) The change in production technology (for example, conventional lathe to CNC lathe),

information system, subordination, etc., severely affect the job content. Therefore, a

job-evaluation conducted few days back may not be valid today. The job content of an

operation is a dynamic process and so should be the job-evaluation also. However,

generally job-evaluation is not a regular affair in industry. Therefore, the wage-

structure on the basis of obsolete job-evaluation is a source of great irritant in

industrial relation.

METHODS OF JOB EVALUATION

There are four general methods for job-evaluation.

(1) Ranking Method

This is the simplest and most inexpensive way to do job-evaluation. This method is

suited for small organizations where the evaluators have an intimate knowledge of all the

jobs.

A committee of experts is constituted for the evaluation of the jobs. Each member

should have a complete knowledge of the job-content because job-content forms the basis for

the evaluation. The experts evaluate the job-content and job description and then they rank

the jobs in hierarchical (either ascending or descending) order on the basis of the relative

importance of the job. The decision is on a cumulative perception of the job-content and no

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specific factor is deeply analyzed. All the rankings of each committee member are averaged

to find a final score in terms of relative ranking of each job.

Advantages

(i) It is the simplest method.

(ii) Easy to understand and easy to adopt.

(iii) Inexpensive, as it involves no major cost or time.

(iv) It takes less time than any of the other method.

Disadvantages

(i) In this method, no rating is used. Only a simple listing of order is generated. Hence,

there is no distinction between each.

(ii) The method is subjected to chances of high error and therefore it is less accurate.

(iii) No commonly acceptable base is available for dealing with ranks.

(iv) The method is not suited for large companies.

(2) Classification or Grade Description Method

This is a non-quantitative method and suited for organizations that have a large

number of activities. This method is an improvement over the ranking method, as a

predetermined scale of values is used.

The job evaluation is done by establishing job classes or grade description. An

evaluation team is assigned the job of looking into each job description and gives weight to it

in the light of relevant factors such as, skill experience, education, etc. Each job is assigned to

a particular grade or class. For each grade, different monetary compensation or wage is

decided.

Advantages of Grade Description Method

(i) A large number of jobs can be handled easily after the grade descriptions are

documented.

(ii) It is relatively simple and inexpensive.

(iii) It is easy for people to understand in terms of grades or classification.

Disadvantages of Grade Description Method

(i) Compared to simple ranking system, it takes more time and thus costs more.

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(ii) Compared to point-rating method, it is less accurate.

(iii) It does not use a detailed job analysis.

(3) Factor Comparison Method

This is a quantitative approach for job-evaluation. It resembles the classification

method as levels or grades are used in both. Five key-factor scales are used for analysis and

evaluating jobs. These factors are: (1) skill, (2) mental effort, (3) physical effort, (4)

responsibility, and (5) working conditions. A composite score is obtained for all factors.

Following steps are followed in this method:

Step 1: Select a number of “key” jobs (generally 15 to 25). Record wages of “key jobs”.

Key-jobs are selected in such a way that these/are fairly paid.

Step 2: Analyze each “key job” for the five critical-factors, namely: (1) mental requirement,

(2) physical requirements, (3) skill requirements, (4) working conditions, and (5)

responsibility.

Step 3: Rank each of the key-jobs within each factor. The rank may vary between factors.

Step 4: Assign wages according to each factor. It should be in proportion to the requirement

of each factor in the job.

Step 5: Calculate total wage-rate for a job by adding the wage-rate for each factor. This

provides a job comparison scale. Insert key-jobs in it.

Step 6: Evaluate the job under consideration using factor-by-factor in relation to the key jobs

on job comparison scale. Then evaluate and compare each job with other jobs in terms of

each factor.

Step 7: Design, adjust and operate the wage-structure.

Advantages of Factor Comparison Method

(i) It uses wages of the existing key jobs, which provide standard against which all other

jobs are compared.

(ii) Direct comparison is used for determining wages.

(iii) A scale for comparing factor of new jobs is available in this method. This speeds up

the evaluation for non-key or new jobs.

(iv) It is quantitative, yet relatively easy to apply once the factor and levels have been

decided.

Disadvantages of Factor Comparison Method

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(i) It is costly and time-consuming to setup initially.

(ii) The initial set-up is to be changed every time the wage-structure changes.

(iii) If unfairly paid jobs are selected as key-jobs, then the entire scaling of factors gives

wrong results.

(iv) Subjectivity in the grading is often challengeable. Different evaluator may give

different wages for one factor.

(4) Point Method

It is a detailed, quantitative technique, which uses analytical approach to measure the

worth of a job. Merrill Lott (1925) developed this method.

Each job is broken into different component factors. For each factor, a point or weight

is assigned as per its relative importance. Total point value is the summation of all such

points. Following steps are adopted:

Step 1: Select the jobs to be evaluated.

Step 2: Determine the factors for consideration. These factors may be: (a) skill, (b) effort, (c)

initiative, (d) physical requirement, (e) Responsibility, etc. Clearly define each factor.

Step 3: For each factor, determine the number of degrees to be allocated.

Step 4: Assign points for each degree of all factors.

Step 5: Choose few (say, 5 to 10) key-jobs and evaluate each by applying Step 1 to Step 4

Advantages of Point Method

(i) Most reliable and accurate due to detailed analysis

(ii) Less chance of subjectivity and judgment after initial grade tables are established.

(iii) Most widely used

Limitations of Point Method

(i) Analysis involves experienced persons.

(ii) Time-consuming in establishing initial grade tables.

(iii) Subjectivity in initial grade table cannot be totally eliminated.

Comparison of Different Job Evaluation Methods

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Factors Simple

Ranking

Job Grading Factor

Comparison

Point System

1. Nature Non-

quantitative

Non-

quantitative

Quantitative Quantitative

2. Type of

Comparison

Job to Job Job to category

definition

Job to Job Job to Category

3. Factors evaluated No No 3 to 7 Around 10

4. Technique Ranking of jobs

in order of

difficulty

Comparing job

to arbitrarily

defined grade

Multiple scaler of

point and key-job

titles

Multiple scale

of points and

definitions of

factor degrees

5. Adoption Least Medium Medium Most popular

6. Comparative

stage

Easy, simple

and crude

Easy, simple

and crude

Modification over

simple ranking

Modification

over job-

grading

7. Advantage Simple Simple Practical Practical

JOB EVALUATION EXAMPLE

In a job-evaluation on scheme, three job factors are needed. Tables 27.2 – 27.4 give

point value for each degree of these factors. A particular job of office-staff needed 3 degrees

of mental demand, 5 degrees of experience and training and 2 degrees of personal contact.

(a) Determine the cumulative points for this.

(b) Plot a linear curve of wage-rate vs point when 3 key-jobs with cumulative point of

100, 150 and 225 have wages as Rs.2000, Rs.5225 and Rs.10,000 respectively.

(c) Determine a suitable base for the office-staff under consideration in (a):

Job factors of office staff job

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Job factor Degree

1. Mental demand 3

2. Experience and training 5

3. Personal contact 2

Mental demand for office job

Degree Factor Point Value

1 Independent Judgment 200

2 Judgment under general guidance 150

3 Judgment under special guidance 125

4 Limited Judgment 100

Experience and training for office job

Degree Factor Point Value

1 Above 10 year 100

2 7 to 10 year 75

3 5 to 7 year 50

4 3 to 5 year 35

5 2 to 3 year 25

6 1 to 2 year 10

7 Below 1 year 5

Personal contact in office job

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Degree Factor Point Value

1 Contact within organization and outside organization

at all positions

50

2 Contact within the organization at all levels 25

3 Contact within the organization at specific level 10

Solution

(a) In this hypothetical job, an office-staff has relative ranking of three factors as follows:

S.No. Factor Total point (Weight) Percent

1. Mental demand 200 × 100 = 57.14

2. Experience and training 100 × 100 = 28.57

3. Personal contact 50 × 100 = 14.29

Total point of each factor in above table is the maximum point value in tables 27.2 –

27. 4.

Now, for the given job, the degrees for three factors are 3, 5 and 2 respectively. From

Table 27.2, mental demand of 3 degrees has a point value of 125. From table 27.3, 5 degrees

of experience, and training has 25 point value in Table 27.4, 2 degrees of personal contact

have point value equal to 25. Thus, we get the following total points for this job:

Factor Degree Points

Mental demand Judgment under special guidance 3 125

Experience and training 2 to 3 years 5 25

Personal contact Within organization at all levels 2 25

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Total points 175

Thus, cumulative point for this job is 175.

(b) For three key-jobs, cumulative points vs. wages are as follows:

Key job Points Wages (Rs.)

1

2

3

100

150

225

2,000

5,225

10,000

Its plot is as follows:

(c) For the given office job, the total points are 175. In the above plot, we see that for

this point the wages are Rs.6800.

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MERIT RATING

Introduction

Merit-rating is associated with performance appraisal of an employee. This is a

systematic approach for evaluating the performance of an employee on the job, which he

performs. This is also called as performance appraisal, personnel rating and employee

evaluation.

Merit-rating is a formal, objective procedure for evaluating personality, contributions

and potentials of employees in a working organization.

Job Evaluation Vs Merit Rating

Job-evaluation and merit-rating are compared in the following ways:

Job Evaluation vs Merit Rating

Job Evaluation Merit Rating

(1) It evaluated a job or work (1) It evaluated a worker

(2) It is for the purpose of fixing a base-

wage for a job.

(2) It is for the purpose of deciding reward

for exceptional merit of worker.

(3) It is independent of operator or worker.

It is impersonal in nature.

(3) It is independent of job. It is impersonal

in nature.

(4) Useful for decision regarding wage and

salary administration, skill match, etc.

(4) Useful for decision regarding training,

placement, promotion, counseling, etc.

(5) It considers requirement of job. (5) It considers ability and performance of

individual.

Advantages of Merit Rating

Merit-rating plays very important role in the human resource administration of a firm. Its

advantages are:

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(1) Systematic evaluation of employees

(2) Facilitates matching of job with individual.

(3) Facilitates promotion related decisions.

(4) Facilitates training related decisions.

(5) Helpful in identifying weakness of the employees which may systematically be

removed.

(6) Provides base for guidance and counseling for the employees.

(7) Develops healthy competition among workers to improve performance.

(8) Serves as motivational tool for employees.

(9) Provides objective basis for bonus, incentive wage, and salary related decisions.

(10) Improves employee-employer relationship due to increased trust and confidence.

(11) Sound base for negotiation with trade union.

Objectives of Merit Rating

1. Helps in executive decisions related to human resource department (HRD).

2. Appraisal of workers.

3. Continuous record for the worth of a worker.

4. Tool for decisions related to training, placement, promotions, confirmation,

increment, transfer and counseling of workers.

5. Useful for understanding areas of improvement in a worker

6. Helps in discovering special talent in a worker.

7. Useful in personal research, validation of training objectives and training

methodology.

Performance appraisal (or merit rating) is the process of evaluating the employees’

performance on the job in terms of requirements of the job.

— Scott, Clotheir and Spriegel

Merit-rating refers to all formal procedures used in working organizations to evaluate

personalities and contributions and potential of group member.

— Yoder

REQUIREMENTS FOR SUCCESS OF MERIT RATING SYSTEM

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A successful merit rating system should be objective. Standard for outputs should be

set against which performance should be measured:

The Merit Rating/Performance Appraisal Process

For a merit rating system, these requirements are of prime importance:

(1) Commitment and support of top management

(2) Approval of employees and union

(3) Knowledgeable rater

(4) Education and training of employee to understand the rating system

(5) Continuous rating system and periodic review

(6) Grievance redressal system

(7) Administrative support for generating and retrieving necessary information

(8) Sufficient time, fund and formats for the rating.

METHODS FOR MERIT RATING

(1) Ranking Method

This is the simplest method in which all the employees are compared with one

another. They are ranked in descending order from best to worst. This method has a serious

limitation that it is not diagnostic to point the specific areas of weakness and strength of a

worker. The method is highly subjective. The difference in rank does not provide the exact

nature or quantum of merit-differential. There are chances of personal bias of the rater.

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(2) Paired Comparison Method

In this method, each member of the group is compared with remaining other

members of the group. Each judgment is recorded in terms of score. These scores are added

up to find the final ranking of each person.

This method is an improvement over ranking method. It is a more rational and

comprehensive method. The bias of the rater is minimized, yet it may not be over. The

method involves large number of comparisons. For example, for a group of n persons, total

number of comparisons is factorial (n — 1)! Therefore, for a group of 10 persons, the trained

comparisons would be 362880 and for 50 persons, it is 6.08 × 1062

Therefore, this method is

quite time consuming when number of employees are more.

(3) Checklist Method

In this method, the rate is given a set of statements related to the employee’s

performance, attitude, behavior and shortcomings. The rate is asked to tick-mark either yes or

no. Each yes/no carries certain points, which when added up, give final rating of the

employee.

Specimen Checklist

XYZ Pvt. Ltd. New Delhi

Employee : Bhim

Employee Code : QC-387

Position :

Department : SQC

Date of Rating : 27-06-2000

Rater Code : R-18

Tick mark (?) the most appropriate box.

Statement True False

1. Understands work

2. Assumes responsibility

3. Makes no mistakes

4. Innovative in approach

5. Keeps work area clean

?

?

?

?

?

?

?

?

?

?

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6. Does not need close supervision

7. Very regular on work

?

?

?

?

Total 4 3

Signature of rater

(4) Graphic Rating Scale

In this method, the rater marks the rating on a graphic rating scale, the scale

containing different degrees of performance in terms of phrases, such as: outstanding,

excellent, good, average and poor. For each degree few numbers are allotted. Different

performance measures are rated on this scale:

Specimen

Performance measure

Degree of Scale

Outstanding Excellent Good Average Poor

10 9 8 7 6 5 4 3 2 1 00

Knowledge of work

Leadership

Housekeeping

Regularity

?

?

?

?

Employees are rated on the basis of many factors related to personal attributes,

leadership quality, on-job performance, interpersonal quality, loyalty, attendance, etc. Some

of these factors are:

1. Quality of work

1.1 Accuracy

1.2 Rejections and scrap

1.3 Thoroughness

1.4 Economy of time

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1.5 House keeping

1.6 Contribution in quality circle team

1.7 Contribution in other TQM effort

2. Quantity of work

2.1 Output

2.2 Approach in meeting over-demand

3. Personal Qualities

3.1 Team spirit

3.2 Attitude for work

3.3 Loyalty

3.4 Leadership

3.5 Relations with superior

3.6 Relations with subordinates

3.7 Integrity

3.8 Judgment

4. Others

4.1 Attendance

4.2 Ability to follow instructions

4.3 Safety habits

4.4 Interest in training and learning

4.5 Interest in corporate culture, etc.

Generally, a rater gives grade on a scale of one to five or remarks such as:

exceptional, good, fair, satisfactory and unsatisfactory. All such ratings are added to find the

total performance. There are other ways to express in qualitative terms, such as exceptional,

good, fair and poor. On the basis of cumulative performance, the overall rating is given which

may be above-standard, standard or below standard.

(5) Rating by Result

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In this method, the rating is done on the basis of achievement of set objectives.

Therefore, performance standards are set in advance. It is known to both rater and employee.

Under achievement or over achievement is noticed by the rater. Therefore, this method

eliminates the personal bias of the rater. Another advantage of this method is transparency in

rating. Thirdly, continuous review of rating is possible by both employee and his supervisor.

Possibility for improvement may be explored at regular intervals. Since approach is

participative, it instills confidence in employees. The method is more suited for executives

and managers as it requires proper education and training on the path of employees.

LIMITATIONS OF MERIT RATING

(1) Bias of rater may under-rate or over-rates an employee.

(2) Due to Halo Effect (which is the tendency of a rater to consistently rate under or

above the average), the ratings may not be accurate.

(3) Assessment of irrelevant factors may result in deceptive rating.

(4) Due to improper weightage of factors, the ratings may be improper.

(5) Due to fear, negligence, insufficient time, insufficient information or temperament,

the rater may play safe and give average rating to an otherwise good or unsatisfactory

employee.

(6) Reward for employee may not follow immediately after a good rating due to

organization constraints. This may lead to dissatisfaction.

(7) Many rating factors are very subjective. Due to this, exact rating may not be

forthcoming. For example, innovativeness, drive, organizational loyalty, etc., are

difficult to be quantified in exact terms.

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Example of Point system in Job Evaluation Method

The point system of job-evaluation is more commonly in use than other methods. Each job or

class of jobs can be evaluated in terms of several factors associated with the physical and

intellectual requirements, together with the responsibility and risk involved. Each factor

should be defined and well understood, and the necessary score points should be assigned to

each. The evaluation, schedule should be prepared by experts who are conversant with the

jobs, and should be examined by the representatives of the parties concerned. In order to

establish a nation-wide standard, the committee may include members from the Government,

Labour Tribunal officials and leaders of recognized Labour Unions. The evaluation plans can

also be adopted industry-wise, or organization-wise.

An example of a job-evaluation schedule used in some American industries, is given below.

The score points advance from minimum to maximum in six equal steps. For instance, item

(1) will score one of the six degrees 15, 30, 45, 60, 75 and 90 in different jobs. Each degree

or step should also be well defined so that the evaluating members can come to a closer

agreement and understanding. Only two out of the above twelve factors are elaborated here

by way of explanation. Education required, 1st degree (15 points) = Ability to read and write;

2nd degree (30) = Grammar school education; 3rd degree (45) =2 years of high school or

trade school or equivalent; 4th degree (60)= 4 years of high school or graduation from

business school or equivalent; 5th degree (75)=2 years of college training or equivalent; 6th

degree (90) =college or university degree or equivalent. Experience required: 1st degree

(25)=upto 2 months; 2nd degree (50)=2-6 months; 3rd degree (75)=6 month —2 years; 4th

degree (100)=2-4 years; 5th degree (125)=4-6 years; 6th degree (150)=over 6 years. The

schedule can be modified to suit Indian conditions.

As a first step, a few representative types of jobs should be evaluted. All the jobs cannot be

evaluated all at once. But the beginning must be made with the important classes of jobs.

Once this is done, other jobs can be fitted in among them until the scope of the evaluation is

extended to cover all of them.

A single evaluation schedule can be used to cover a large number of jobs and a wide range of

pay. A uniform plan has sometimes been used to cover the hourly-based wages and the white-

collar salaries upto $ 4000 per year (approx Rs. 1500|- per month). Different plans are also

used.

Merit Rating and Job Pricing

Job-evaluation and merit rating, however, are quite different. Job evaluation fixes the relative

job merits, while merit rating relates to the relative abilities of the individual workers. Thus

Job evaluation helps in fixing job prices (pay or pay-scale), and merit rating helps picking out

efficient workers for promotion, extra advancement, reward, etc.

Job evaluation gives the respective total score points for the different jobs. Thus the relative

values of the jobs are obtained. Now if each point or each 100 points are assigned a money

value, the respective pay for the different jobs becomes rationally fixed.

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The job prices obtained by the above method may be taken for the base of scale of each job.

Fixed pay does not provide incentive. Incentive programme based solely on merit rating is

practically unworkable. Usually a time-increment scale is used. In a few organizations some

merit increment (e g production bonus on individual or collective production) is given in

addition to the time-scale.

Time Scale

Time-increment, if too meagre, however, would not provide sufficient incentive to the

employees. On the other hand, if the top of the scale is very much higher than the start there

is likely to be administrative abuse. The time-scale should be fairly commensurate with the

increase of production or quality with experience on the job. The rate of increment cannot

however, be quite equal to the increase in production or quality but somewhat more than that,

considering the need for increased earning with age and on other considerations.

It has been observed that time increment smaller than 5% per year hardly provides any

incentive. It has also been held by some experts that an increase of 50% through the scale-

period should be considered too high and it betrays the purpose of job evaluation. The basis

of the argument is that the full time-efficiency (experience) reaches its highest within some

five years or so on a particular job. Thus a long drawn out time-scale with a wide factor

between the final and initial pay (final as 2-3 times initial, in many of our pay scales) would

be inadmissible under any scientific pay administration.

The long drawn out time-scales, prevalent in our country, are not justified by time-experience

efficiency. It Is also a system which encourages mediocrity and play-safe attitude in contrast

to initiative and positive action. Better efficiency can be expected through narrower time-

scales (not exceeding through 5 or 7 years) with adequate job grades for promotion and with

the provision for merit-incentives.

(Merit rating by the annual confidential reports as usually followed in this country, specially

in Government or semi-Government departments, should be discontinued forthwith and

should be replaced by point rating system on well-defined factors).

Basic Rates The basic rates of pay and wages should take into consideration the statutory

minimum wage, prevalent rates and cost of living. The rates should be as consolidated as

possible, and should exclude allowances under various names. This will make the status of

the employees better understandable or comparable, and will also make the accounting easier.

It need not be thought that job-evaluation is an extremely complex and time-consuming

undertaking. Records show that nearly 100 jobs can be described and evaluated per month.

Sooner we start on this scientific procedure the better.

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MANAGEMENT INFORMATION SYSTEM ( MIS) CONCEPT

The concept of the MIS has evolved over a period of time comprising many different facets

of the organizational function. MIS is a necessity of all the organizations.

The initial concept of MIS was to process data from the organization and present it in the

form of reports at regular intervals. The system was largely capable of handling the data from

collection to processing. It was more impersonal, requiring each individual to pick and

choose the processed data and use it for his requirements. This concept was further modified

when a distinction was made between data and information. The information is a product of

an analysis of data. This concept is similar to a raw material and the finished product. What

are needed are information and not a mass of data. However, the data can be analyzed in a

number of ways, producing different shades and specifications of the information as a

product. It was, therefore, demanded that the system concept be an individual- oriented, as

each individual may have a different orientation towards the information. This concept was

further modified, that the system should present information in such a form and format that it

creates an impact on its user, provoking a decision or an investigation. It was later realized

then even though such an impact was a welcome modification, some sort of selective

approach was necessary in the analysis and reporting. Hence, the concept of exception

reporting was imbibed in MIS.

The concept of MIS in today’s world is a system which handles the databases, provides

computing facilities to the end user and gives a variety of decision making tools to the user of

the system. The concept of MIS gives high regard to the individual and his ability to use

information. An MIS gives information through data analysis. While analyzing the data, it

relies on many academic disciplines. These include the theories, principles and concepts from

the Management Science, Psychology and Human Behavior, making the MID more effective

and useful. These academic disciplines are used in designing the MIS, evolving the decision

support tools for modeling and decision - making.

The MIS has more than one definition, some of which are give below.

1. The MIS is defined as a system which provides information support for decision making in

the organization.

2. The MIS is defined as an integrated system of man and machine for providing the

information to support the operations, the management and the decision making function in

the organization.

3. The MIS is defined as a system based on the database of the organization evolved for the

purpose of providing information to the people in the organization.

4. The MIS is defined as a Computer based Information System.

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In order to get a better grip on the activity of information processing, it is necessary to have a

formal system which should take care of the following points:

Handling of a voluminous data.

Confirmation of the validity of data and transaction.

Complex processing of data and multidimensional analysis.

Quick search and retrieval.

Mass storage.

Communication of the information system to the user on time.

Fulfilling the changing needs of the information.

The management information system uses computers and communication technology to deal

with these points of supreme importance.

The type, the size and the structure of corporate organization becomes the basis for the MIS

organization for handling the MIS function and management alternatives.

The major issues involved are:

1. Whether the function should be handled as a centralized or decentralized activity.

2. The allocation of the hardware and software resources.

3. The maintenance of the service level at an appropriate level.

4. Fitting the organization of the MIS in the corporate organization, its culture and the

management philosophy.

Factors Contributing to Success:

If a MIS is to be a success then it should have all the features listed as follows.

The MIS is integrated into the managerial functions. It sets clear objectives to ensure that

the MIS focuses on the major issues of the business. Also adequate development resources

are provided and the human and organizational barriers to progress are removed.

An appropriate information processing technology required to meet the data processing

and analysis needs of the users of the MIS is selected.

The MIS is oriented, defined and designed in terms of the users requirements and its

operational viability is ensured.

The MIS is kept under continuous surveillance, so that its open system design is modified

according to the changing information needs.

MIS focuses on the results and goals, and highlights the factors and reasons for non-

achievement.

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MIS is not allowed to end up into an information generation mill avoiding the noise in the

information and the communication system.

The MIS recognizes that a manager is a human being and therefore, the systems must

consider all the human behavioral factors in the process of the management.

The MIS recognizes that the different information needs for different objectives must be

met with. The globalization of information in isolation from the different objectives leads to

too much information and its non-use.

The MIS is easy to operate and, therefore, the design of the MIS has such features which

make up a user-friendly design.

Centralized Organizations of MIS

Factors Contributing to Failures:

Many a times MIS is a failure. The common factors which are responsible for this are listed

as follows.

The MIS is conceived as a data processing and not as an information processing

The MIS does not provide that information which is needed by the managers but it tends to

provide the information generally the function calls for. The MIS then becomes an

impersonal system.

Under-estimating the complexity in the business systems and not recognizing it in the MIS

design leads to problems in the successful implementation.

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Adequate attention is not given to the quality control aspects of the inputs, the process and

the outputs leading to insufficient checks and controls in the MIS.

The MIS is developed without streamlining the transaction processing systems in the

organization.

Lack of training and appreciation that the users of the information and the generators of the

data are different, and they have to play an important responsible role in the MIS.

The MIS does not meet certain critical and key factors of its users such as a response to the

query on the database, an inability to get the processing done in a particular manner, lack of

user-friendly system and the dependence on the system personnel.

A belief that the computerized MIS can solve all the management problems of planning

and control of the business.

Lack of administrative discipline in following the standardized systems and procedures,

wrong-codings and deviating from the system specifications result in incomplete and

incorrect information.

The MIS does not give perfect information to all the users in the organization.

Any attempt towards such a goal will be unsuccessful because every user has a human

ingenuity, bias, certain assumption not known to the designer. The MIS cannot match-up

these by providing perfect information.

Decentralized Organisation of MIS

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The following are the most important reasons to have a good management information

system:

1. To control the creation and growth of records

Despite decades of using various non-paper storage media, the amount of paper in our offices

continues to escalate. An effective records information system addresses both creation control

(limits the generation of records or copies not required to operate the business) and records

retention (a system for destroying useless records or retiring inactive records), thus stabilizing

the growth of records in all formats.

2. To reduce operating costs

Recordkeeping requires administrative dollars for filing equipment, space in offices, and

staffing to maintain an organized filing system (or to search for lost records when there is no

organized system).

It costs considerably less per linear foot of records to store inactive records in a Data Records

Center versus in the office. [Multiply that by 30% to 50% of the records in an office that

doesn't have a records management program in place], and there is an opportunity to effect

some cost savings in space and equipment, and an opportunity to utilize staff more

productively - just by implementing a records management program.

3. To improve efficiency and productivity

Time spent searching for missing or misfiled records is non-productive. A good records

management program (e.g. a document system) can help any organization upgrade its

recordkeeping systems so that information retrieval is enhanced, with corresponding

improvements in office efficiency and productivity. A well designed and operated filing

system with an effective index can facilitate retrieval and deliver information to users as

quickly as they need it.

Moreover, a well managed information system acting as a corporate asset enables

organizations to objectively evaluate their use of information and accurately lay out a

roadmap for improvements that optimize business returns.

4. To assimilate new records management technologies

A good records management program provides an organization with the capability to

assimilate new technologies and take advantage of their many benefits. Investments in new

computer systems whether this is financial, business or otherwise, don't solve filing problems

unless current manual recordkeeping or bookkeeping systems are analyzed (and occasionally,

overhauled) before automation is applied.

5. To ensure regulatory compliance

In terms of recordkeeping requirements, China is a heavily regulated country. These laws can

create major compliance problems for businesses and government agencies since they can be

difficult to locate, interpret and apply. The only way an organization can be reasonably sure

that it is in full compliance with laws and regulations is by operating a good management

information system which takes responsibility for regulatory compliance, while working

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closely with the local authorities. Failure to comply with laws and regulations could result in

severe fines, penalties or other legal consequences.

6. To minimize litigation risks

Business organizations implement management information systems and programs in order to

reduce the risks associated with litigation and potential penalties. This can be equally true in

Government agencies. For example, a consistently applied records management program can

reduce the liabilities associated with document disposal by providing for their systematic,

routine disposal in the normal course of business.

7. To safeguard vital information

Every organization, public or private, needs a comprehensive program for protecting its vital

records and information from catastrophe or disaster, because every organization is

vulnerable to loss. Operated as part of a good management information system, vital records

programs preserve the integrity and confidentiality of the most important records and

safeguard the vital information assets according to a "Plan" to protect the records. This is

especially the case for financial information whereby ERP (Enterprise Resource Planning)

systems are being deployed in large companies.

8. To support better management decision making

In today's business environment, the manager that has the relevant data first often wins, either

by making the decision ahead of the competition, or by making a better, more informed

decision. A good management information system can help ensure that managers and

executives have the information they need when they need it.

By implementing an enterprise-wide file organization, including indexing and retrieval

capability, managers can obtain and assemble pertinent information quickly for current

decisions and future business planning purposes. Likewise, implementing a good ERP

system to take account of all the business’ processes both financial and operational will give

an organization more advantages than one who was operating a manual based system.

9. To preserve the corporate memory

An organization's files, records and financial data contain its institutional memory, an

irreplaceable asset that is often overlooked. Every business day, you create the records, which

could become background data for future management decisions and planning.

10. To foster professionalism in running the business

A business office with files, documents and financial data askew, stacked on top of file

cabinets and in boxes everywhere, creates a poor working environment. The perceptions of

customers and the public, and "image" and "morale" of the staff, though hard to quantify in

cost-benefit terms, may be among the best reasons to establish a good management

information system.

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REFERENCES:

Kanawaty, Introduction to Work Study, 4th Edition, International Labour Office, Geneva,

1992

Littre, Larousee Etymological Dictionary, 1946-49 edition.

OEEC, Terminology of Productivity, 1950.

http://shodhganga.inflibnet.ac.in/bitstream/10603/13108/8/08_chapter%203.pdf

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