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This book has been written by a few HR professionals who have long work experience in industries related to Indian Agriculture. An attempt has been made by the authors to make the book as contemporary as possible. A lot of examples, formats etc. have been included in this book which will help you relate better with your experience. Human Resource Management is one of the most exciting areas of management. As a matter of fact, HRM is the responsibility of both line and HR Managers and therefore, no matter in which role you will work in an organization, you will find HRM inescapable. As you grow in your career, you will have many people to manage. Therefore an understanding of HR concepts and practices will surely help you in dealing with your people issues better. Currently there is a shortage of talent in every industry. The situation is even worse in Rural and Agriculture-related industries. Therefore HR, as a management discipline, assumes considerable importance Attracting and Retaining talent in these industries

would become the top priority in every HR Managers agenda. This book echoes these concerns and hence has dedicated a substantial portion to these issues. The Authors wish you an enriching learning journey. Their efforts would be amply rewarded if this book becomes useful to you at any point in your professional life! Last but not the least; the Authors dedicate this book to their all important You.

Authors

1. HUMAN RESOURCE PLANNING


Human Resource Planning (HRP) is a process of systematically reviewing human resource needs to ensure that the required number of employees, with the required skills, experience and competencies, is available for the right jobs at the right time at the right cost. This process is preceded by strategic planning. During the strategic planning process, top management and the executing authority determine the departments strategic objectives and how they are to be achieved. Human resources play a critical role in the strategy implementation process because their commitment and competencies will largely determine whether or not a department will be able to achieve its objectives.
Internal Environment External Environment

The link between strategic planning and human resource planning can be illustrated as follows:
Strategic Planning

Strategic objectives

Action Plan

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Financial Requirements Physical Requirements Human Requirements

HR planning links people management to the organization's mission, vision, goals and objectives, as well as its strategic plan and budgetary resources. Thus, the three key elements of HRP process are: a) Forecasting the demand for labor, b) Performing a supply analysis, and c) Balancing supply and demand considerations. 1.1 HUMAN RESOURCE PLANNING MODEL

FORECAST DEMAND

FORECAST SUPPLY Internal BALANCE SUPPLY AND DEMAND

Considerations - Product/service demand - Economics - Technology - Financial resources - Absenteeism/turnover - Organizational growth - Management philosophy Techniques - Trend analysis - Managerial estimate - Delphi technique

Recruitment (Shortage) - Full time - Part-time - Recalls Reductions (Surplus)


- Terminations

- Staffing tables - Markov analysis - Skills inventories - Management inventories - Replacement charts - Succession planning External - Demographic changes - Education of workforce - Labor mobility - Government policies - Unemployment rate

- Layoffs - Demotions - Retirement

1.1.1 Forecasting Demand A key component of HRP is forecasting the number and type of people needed to meet organizational objectives. Since its an open system that we exist in, a variety of organizational factors, including competitive strategy, technology, structure, and productivity can influence the demand for labor. For example, utilization of advanced technology is generally accompanied by less demand for low-skilled workers and more demand for knowledge workers. Let us consider few of the main factors, which can help us, forecast demand of human resources in an organization. a) Organizational decisions: HR planning needs to take into account the rest of the organizations strategic plans, sales and production forecasts and new ventures to be more accurate. For example, If Britannia Industries Ltd. expects higher demand for biscuits and bread, the long-term HR plan must take this into consideration. Likewise, if it tries to venture into other lucrative fields such as milk-based products, confectionary items the demand for people possessing requisite skills in those areas in the next couple of years should be looked into carefully. Furthermore, where plans are changed, the effect of the changes must be estimated. Proposed expansion, contraction or diversification of the organizations activities will obviously affect the demand for labor in general or for particular skills. This may be estimated by market research, competitive analysis, trends in technological advances and so on. b) Workforce factors: Demand is also influenced by the internal in and out flux of the employees through retirements, terminations, resignations, deaths and leaves of absence, etc. These actions by employees become fairly predictable, once you spend more and more time with the organization or a certain industry. The above factors will affect how much labor will be required, given the expected productivity or work rate of different types of employee and the expected volume of business activity. Note that productivity will depend on capital expenditure, technology, work organization, employee motivation and skills, negotiated productivity deals and a number of other factors. Considering the above factors HR planners analyze the demand on the basis of the following:

a) Workforce analysis to determine the rate of influx and outflow of employee. It is through this analysis one can calculate the labor turnover rate, absenteeism rate, etc. Qualitative methods go a long way in analyzing the internal flow created by promotions, transfers etc. b) Workload analysis, with which one can calculate the numbers of persons required for various jobs with reference to a planned output. This takes into consideration factors such as absenteeism, and idle time, etc. Both quantitative and qualitative techniques are utilized for accurate results. c) Job analysis: Job analysis helps in finding out the abilities or skills required to do the jobs efficiently. A detailed study of jobs is usually made to identify the qualifications and experience required for them. Job analysis includes two things: job description and job specification. Job description, thus, is a factual statement of the duties and responsibilities of a specific job. It gives an indication of what is to be done, how it is to be done and why it is to be done. Job specification provides information on the human attributes in terms of education, skills, aptitudes and experience necessary to perform a job effectively. 1.1.2 Forecasting Supply Once an organization has forecast its future requirements for employees, it then goes on to the next search that is from where can it fulfill its requirements. It therefore needs to determine if there are sufficient numbers and types of employees and how many are eligible for the reasonable positions. Supply analysis thus, involves planning for procurement: who, from where, how and when of recruitment. It scans the internal and external environment for the best-fit candidate for the positions in question. Thus, there are two source of supply- internal and external. a) Internal sources: The most popular approach to be followed by all managers is to look within the organization among its cadre first. Until and unless the opening is not related to immensely diversified field of which the existing workforce might not possess requisite skills, and the cost of training may be working out to be high, it is easier to go in for an internal source for recruitment because it is cost saving in many ways to utilize what is already available to the organization. A profile of employee in terms of age, sex, education, training, experience, job level, past performance and future potential is continuously maintained for use whenever required. Thus, if

the requirements in terms of growth/diversification, internal movements of employees (transfer, promotions, retirement, etc.) are determined in advance then the data can be very useful. But while provisioning for the above corporate movements, one must keep an eye on the internal movement, such as, attrition, absenteeism, promotion, etc of the workforce as we have discussed earlier, through the workforce analysis. In addition to workforce analysis, the organization needs to maintain replacement charts or succession plans. Regular manpower audits are the best option to keep track of the available talent in terms of skills, performance and potential.

An internal supply analysis is done with (i) Staffing tables/manning charts, which are pictorial representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future employment requirements. (ii) Skill inventories that list each employees education, past work experience, etc. (iii) Replacement chart that helps us derive the profile of job holders, department-wise and reveals those who could be used as replacements whenever the need arises. b) External sources: It is only when the cost of procuring the labour from internal sources is more and also the present staff cannot be spared for the future assignment, the company can refer to the external market. For this, they need to keep themselves updated regularly on what is available now, what will be available later. Whether the skills required in future will be easily available or certain training, for instance need to be incorporated. For example, a company in the present scenario wanting to start its BPO operations in India may not have problem which a company 10 years back would have faced, as there are ample requisite skills available in the market. Not only skilled labor but also they are motivated to join such company for fast earnings. Thus, HR planners need to keep themselves abreast of the Labor market conditions such as local employment, trends of relevant categories of employees, competition for such skills, availability of part time labour, migration trends of labor, etc. 1.1.3 Determining Manpower Gaps

The final stage is to balance out the demand and supply gap. A comparison chart is developed to find what is available and to what extent it can fulfill the demand forecast. This exercise helps us to have an idea of the quantitative and qualitative gaps in the workforce. A reconciliation of demand and supply forecasts will give us the number of people to be recruited or made redundant as the case may be. This forms the basis for preparing the manpower plan. In this process a company always needs to keep repeating this step as it operate in a changing environment. Changes in product mix, union agreements, and competitive action are some of the important things that need special attention. The human resource requirements, thus identified are translated into a concrete manpower plan, backed up by detailed policies, and other human resources instruments and strategies (for example, recruitment, selection, training, promotion, retirement, replacement, etc.). The manpower plan is further divided into the following resultant operational plans: a) Recruitment plan to show how many and what type of people is required and when they are needed. b) Redeployment plan to help chart out the future movement in terms of training and transfers. c) Redundancy plan will indicate who is redundant, when and where; the plans for retraining, where this is possible; and plans for golden handshake, retrenchment, lay-off, etc. d) Training plan to chart out if training is required. If yes, when and to which level; whether it will be done in-house, done in phases or included as part of a formal induction program. This includes the cost and benefit analysis of all the options available. e) Productivity plan will indicate reasons for employee productivity or reducing employees costs through work simplification studies, mechanization, productivity bargaining, incentives and profit sharing schemes, job redesign, etc. f) Retention plan will indicate reasons for employee turnover and show strategies to avoid wastage through compensation policies, changes in work requirements and improvement in working conditions. g) Check/reviews points The success of the entire exercise is dependent upon frequent reviews so that none of the factors are left out and changes are constantly taken care of the important thing is to clearly demarcate point for periodical checks to incorporate deficiencies and periodic updating of manpower inventory based on training and performance reviews, in the light of changing circumstances.

1.2 CRITICAL FACTORS FOR SUCCESS OF HR PLANNING a) Integral to strategic planning - HR planning must be dealt with as an integral aspect of your departments strategic planning process. Those who are involved in HR-planning must have a deep understanding of the overall strategic plan, vision, mission, and objectives of your department. b) Commitment from leadership - It is essential that the leadership of the department is committed to human resources as a strategic asset. c) Senior Management should lead - The senior management of a department should lead the HR planning process. This is critical for the successful implementation of human resource matters. Their performance agreements should reflect their responsibilities. The Head of Human Resources should be the lead person to set the process in motion and to see it through to its conclusion. d) Suitable planning techniques - The planning techniques selected should suit the department and its specific circumstances. e) Adequate resources allocated - Adequate resources and time must be made available to undertake the planning process.

ANNEXURE 1: AN EXAMPLE OF MANPOWER ESTIMATION PROCESS IN AN OLD ORGANISATION This is an example of the manpower estimation exercise undertaken in three dairy unions which are about 30 years old. Systematic approach to eliminate non-value adding processes In the first stage various methods were used to identify the non-value adding activities and eliminate them to reduce the extra manpower and thus extra costs. The methods used were: a) Benchmarking Benchmarking is a systematic process of evaluating and comparing the capability of one organization with others for optimizing the organizations processes. In this case an internal benchmarking was done based on the best practices of three dairy union viz. Dairy 1, Dairy 2 and Dairy 3. The activities in all the dairy plants with throughput of 1 lakh litre per day (LPD) were identified. The number of manpower in each activity was studied. The minimum required manpower has been taken as the benchmark figure and the total benchmarked number was arrived. It was found that productivity can be significantly increased by implementing Job-rotation and Multitasking. b) Zero-basing In this process all activities are listed considering a new organization with updated technologies and process. It was done to eliminate non-value adding activities and redesign processes like order execution and procurement. It was found that productivity can be significantly improved by using enablers like Information Technology and Automation. c) Outsourcing It is process to appoint a third party agency to execute non-critical unskilled jobs. It was found that productivity can be significantly increased by outsourcing unskilled jobs (like sachet filling, crate washing and can cleaning) and noncritical jobs (like transportation, housekeeping, cash collection and indent punching).

Comparative Table showing number of Production staffs at the three dairy unions:
Activity Dairy 1 Dairy 2 Dairy 3 Best Practice Leave Reserve/Off Reserve/Reliever 34 12 22 12 RMRD 9 6 8 6 Loose Milk Filling 4 2 2 Sachet Filling 16 21 20 16 Cold Storage 4 6 8 4 Dispatch 5 2 2 Crate washing 2 4 5 4 Tanker Duty 4 3 1 1 Miscellaneous 2 2 ETP 3 Products 6 4 3 3 RMRD Testing 2 5 2 Total 91 63 71 52 Excess compared to ideal 64 36 44 *Ideal figures arrived after benchmarking, zero-basing and outsourcing Ideal* 6 6 2 0 6 2 0 0 3 2 27 -

Based on the above comparison, the manpower saving at Dairy 1 was about 57% on the ideal figure basis ( ideal figure is arrived after benchmarking, zero-basing and outsourcing). The detail of the same is shown in the figure below:

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All savings are a result of comparison with benchmarked processes of ideal dairy Savings in manpower Drivers-14, Sweepers-2, Sachet filling-18, Crate washing-2, Tanker duty-4, Order execution-7, marketing-14

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61

Savings in manpower Personal Deptt. -2 Milk value billing -1 Office attender -7 P&I staff - 13

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As-Is

Benchmarking

Zero-basing

Outsourcing

To-be

Notes

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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________________________________________________________ 2. ORGANIZATION DESIGN, JOB ANALYSIS AND COMPETENCY

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The organisation design is one of the results of Manpower planning process. In this section the overall process of organisation design including organisation structure, job analysis and job description is covered. 2.1 INTRODUCTION ORGANISATION STRUCTURE One could argue that no other topic has undergone as much change in the past decade as that of organising and organisational structure. Traditional designs are being questioned and re-evaluated in the search for designs that match changing environments and strategic directions. Before we move into the details of organization structure, we need to understand a few concepts, which have been explained below: Organising - Organising involves determining the work to be completed in order to achieve the organizations goals, appropriately dividing the work between staff and setting up the mechanisms to coordinate activities. You will remember that organising is one of the four functions of management. Organising in its broadest sense is about the process of making the organizations structure appropriate to its objectives, strategy, resources and environment. Organisational Structure - Organisational structure represents the formal channels through which the company is managed and depends greatly on the mission and strategy. Obviously, specific organisational designs vary from organisation to organisation. An organisation's structure determines what jobs employees do, how they are grouped and, therefore, how they interact with each other. It determines the number of levels in the organisation and the control structures. Organisational design- Organisational design is another expression for organization structure; but the word Design is very important. It represents that an organization has to be designed to be smartly responsive to the needs of business. Over the last decade there has been a broad trend towards more 'organic' designs for organisations. Emphasis has been laid to create designs around the customer and hence these designs essentially involve pushing down authority to the lower echelons of the structure. With decentralized authority, organisations are more responsive to address the changing needs of the marketplace than did the 'mechanistic' types of organisations, which were dependent on centralized authority and layers of bureaucracy. 2.2 DIVISIONALISATION OF STRUCTURE

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There are different bases on which various divisions in an organization can be created. The three traditional bases are product, territory and function. Later, many organisations have moved from these bases to create division on the basis of strategic business units. In each of these bases, functions involved and, therefore, departments created are different. 2.2.1 Product Divisionalisation In this form, each major product or product line is organized as a separate unit. Each unit has its own functional structure for various activities necessary for the product. Multi- product organisations use this as basis for divisionalisation. This is appropriate specially when each product is relatively complex and large amount of capital is required for each product. The product requires different types of efforts as compared to others in terms of marketing and / or production. For example, Century Mills have separated divisions for textile, cement, and shipping. Reliance Industries limited has six product divisions: textile, polyester, fiber intermediates, polymer, chemical, and oil and gas each being a huge business and having a distinct customer base. Therefore, the organization structure around products in both Century Mills and Reliance make an eminent sense. 2.2.2 Territorial Divisionalisation In this form, regional offices are established as separate units. Each regional office has its own set of functional departments and operates under the strategic policies and guidelines established by corporate management. This is useful for those organizations whose activities are geographically spread such as banking, transport, insurance, etc. For example, Life Insurance Corporation of India runs its life insurance business on the basis of territorial divisionalisation in which the entire geographical area of the country has been divided into five zones- Eastern, Central, Northern, Southern and Western. Each zone has further been divided into appropriate number of divisions, for example, Northern Zone into four divisions located at Jalandhar, Chandigarh, New Delhi, and Ajmer. Each division has a number of branches at different places covered by the division concerned.

2.2.3 Functional Divisionalisation

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In an organization, you often come across are functions like Finanace, HR, Marketing and Advertising, Purchase, Sales, Production, Maintenance, R & D etc. which are invariably populated with employees with certain degree of expertise in these areas. An organization can be structured around these functions. For example, a small, one product manufacturing unit may be structured around these functions only. 2.2.4 Strategic Business Unit Strategic Business Unit (SBU) is a profit or cost centre within a larger organization that has a degree of independence in operational management and it is controlled, not by bureaucratic rules but through its bottom-line performance. In multi-product or multi- geographic area companies, divisions are created in the form of various strategic business units (SBUs). SBU concept was evolved by General Electric Companies (GEC) of USA to manage-its multi product business. The fundamental concept in SBU is to identify the independent product/ market segments served by an organisation. Since each independent product/ market has a distinct environment, an SBU should be created for each such segment. Thus, different SBUs are involved in distinct strategic business areas with each area serving the distinct segment of the environment. For example, GEC was earlier having nine product groups and forty-eight strategic business units, many of which crossed group, division, and profit center lines. For instance, three separated divisions in food preparation appliances were merged in a single SBU to serve houseware market. In creating SBUs, following features become important: 1. Each SBU is managed as a portfolio of the organisation with a clearly-defined product/ market segment and clearly defined strategy. 2. Each SBU develops its strategy tailored to its needs with aligning it to corporate capabilities and needs. 3. Each SBU is allocated resources- both physical and human- according to its needs and contributions to the achievement of organizational objectives. In India, many companies have organized their businesses on the concept of SBU. In fact, most of the companies in information technology sector which are engaged in development of softwares for different purposes and for different customer segments have adopted this approach. Organisation Structure is often a combination of business, territory and product divisionalisation. The schematic structure below represents this:

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President

Strategic Business Units


Vice President Chemical Vice President Fertilizers Vice President Dairy

Territorial Departmentalization
Kota Plant Manager Mumbai Plant Manager Bangalore Plant Manager

Product Departmentalization
Consumer

Products

Industrial Products

Consumer

Products

Industrial Products

Consumer

Products

Industrial Products

2.2.5 Line and Staff Organisation Structure In any organization structure, we notice that there are certain functions or departments like Production and Marketing which are responsible for the direct objectives of an organization.These functions are called line functions. There are some other functions like HR, Accounts etc. which support and facilitate the line functions in attainment of business objectives. Such support functions are Staff functions. Whether a function is line or Staff largely depends upon its role with respect to the attainment organizational objectives. For example, in a manufacturing organization R&D is a staff function, whereas it is a line function in ICAR (Indian Council of Agricultural Research). Similarly recruitment is a staff function in most of the organizations but it is a line function for an organization like Banking Service Recruitment Board (BSRB) or Union Public Service Commission (UPSC).

Line and staff functions in an organization structure are shown in the Figure given below:

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Line and staff organization structure

Secretary

General Manager

Public Relation officer

Manager-Finance

Manager - Personnel

Manager production Production Engineer Foreman Worker

Manager marketing Sales Officer Sales Supervisor Salesman

The position as well as department in bold and italic is staff and other is line. These staff specialist may provide services to a particular position, department, or organization as a whole. 2.2.6 Project Organisation Structure Since change has become the only constant factor in the modern day business environment, organizations are compelled to take up various activities on project basis. This involves adding the required structure for the new project one and eliminating the project structure which is no more necessary. The project work can be managed through two forms of organization: pure project organization and matrix organization. The pure project organization is suitable for taking small number of larger projects with long duration so that a separate division can be created for each project. The projects for small duration can also be handled by Matrix organization a form of organization we will introduce to you little later in this chapter without creating any long term commitment in terms of employing additional people. In a Project organization various divisions are created only for the life time of a project. When a particular project is completed, the concerned division may disappear. Managers engaged in the Project are moved to some other projects or are assigned with other responsibilities or in the worst case scenario, are separated from the organization. Invariably during the execution phase,

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the frontline employees are hired on a fixed duration basis. Major project organizations in India are L & T, HCC, BHEL etc. Middleton observes that a project organization can also be the beginning of an organization cycle. The project may become a long term or permanent effort that eventually becomes a programme or branch organization. The latter, in turn, may become separated from the parent organization and be established as a full-fledged division, functionally organized. The establishment of project organization calls for appointment of a project management team which is responsible for the completion of the project. The Project Head prescribes what is to be done, when it is to be done, and how much resources are required. The functional personnel are drawn from various functional departments. focus point for the project activities.
General Manager

The functional manager decides who in the

department will perform the task and how it will be done. Thus, project manager is a unifying and

Project -A

Project - B

Quality Control

R&D

Contract admistration

Scheduli ng

Quality control

R&D

Contract administration

Scheduli ng

Purchasing Purchasing Engineering MANUFACTURING

Engineering

There could be a situation in an organization, when a project manager really does not have vertical authority on the personnel drawn from various functional department unlike a divisional manager who has line authority over the people working in various functional department assigned to his division. In the absence of any vertical authority, the project manager must convince the functional people so that they help him to complete the project within time. In such

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a situation, project manager faces an authority gap. He has responsibility for completing the project but does not have direct authority over the people associated with his project. Project organization structure can be presented as drawn above. 2.2.7 Matrix Organisation Structure Matrix organization structure is a combination of product/territorial and functional divisionalization. As a result, a matrix structure necessitates a dual reporting relationship one reporting to their Functional Head and another to the Product or the Territorial Head. For example the Regional HR Head of Eastern Region of a company, will have reporting to the overall Region Head based in Kolkata and the Head Office in Mumbai. A matrix organization structure is presented below of a leading fertilizers and chemical company of India: General Manager HR Head of the company, who is based in the

Production
Chemical

Marketing
Mktg Fin.

Finance

Personnel
Pers.

Prod.

Fertilizer

Prod

Mktg Prodd

Fin.

Pers

Consumer Products

Prod

Mktg rodd

Fin.

Pers

Hydrobromi c Acid

Prod

Mktg

Fin.

Pers

2.3 JOB ANALYSIS: OVERVIEW

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Job Analysis is a process to identify and determine in detail the particular job duties and the identification of knowledge, skills and attitude required to perform the job duties in an optimum manner. The Job; not the person: An important concept of Job Analysis is that the analysis is conducted of the Job, not the person. While Job Analysis data may be collected from incumbents through interviews or questionnaires, the product of the analysis is a description or specifications of the job, not a description of the person. Job Analysis should collect information on the following areas:

Duties and Tasks The basic unit of a job is the performance of specific tasks and duties. Information to be collected about these items may include: frequency, duration, effort, skill, complexity, equipment, standards, etc.

Environment This may have a significant impact on the physical requirements to be able to perform a job. The work environment may include unpleasant conditions such as offensive odors and temperature extremes. There may also be definite risks to the incumbent such as noxious fumes, radioactive substances, hostile and aggressive people, and dangerous explosives.

Tools and Equipment Some duties and tasks are performed using specific equipment and tools. Equipment may include protective clothing. These items need to be specified in a Job Analysis.

Relationships: This includes supervision given and received and relationships with internal or external people.

Requirements The knowledge, skills, and abilities (KSA's) required performing the job. While an incumbent may have higher KSA's than those required for the job, a Job Analysis typically only states the minimum requirements to perform the job.

Job analysis is a systematic approach to defining the job role, requirements, responsibilities, evaluation, etc. It helps in finding out required level of education, skills, knowledge, training, etc for the job position. It also depicts the job worth i.e. measurable effectiveness of the job and contribution of job to the organization. Thus, it effectively contributes to setting up the compensation package for the job position.

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2.3.1 Purpose of Job Analysis The purpose of Job Analysis is to establish and document the ' job relatedness' with other HR processes such as training, selection, compensation, and performance appraisal. 1) Selection Job Analysis can be used in selection procedures to identify or develop:

job duties that should be included in advertisements of vacant positions; appropriate salary level for the position to help determine what salary should be offered to a candidate;

minimum requirements (education and/or experience) for screening applicants; interview questions; selection tests/instruments (e.g., written tests; oral tests; job simulations); applicant appraisal/evaluation forms; orientation materials for applicants/new hires

2) Determining Training Needs Job Analysis can be used in training/"needs assessment" to identify or develop:

training content assessment tests to measure effectiveness of training equipment to be used in delivering the training methods of training (i.e., small group, computer-based, video, classroom...)

3) Compensation Job Analysis can be used in compensation to identify or determine:

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skill levels compensable job factors work environment (e.g., hazards; attention; physical effort) responsibilities (e.g., fiscal; supervisory) required level of education (indirectly related to salary level)

4) Performance Review Job Analysis can be used in performance review to identify or develop:

goals and objectives performance standards evaluation criteria length of probationary periods duties to be evaluated

2.3.2 Job Analysis Information Hierarchy Job Analysis is nothing but gathering of information. The hierarchy of information that job analysis seeks are shown in the figure:

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1. A Job Element is the smallest segment unit into which work can be divided. Putting the tomato on a hamburger is an example of an element in the job of a fry cook at McDonalds. 2. A task is distinct work activity carried out for a distinct purpose. Examples would include typing a letter, preparing a lecture, or unloading a mail truck. 3. A duty is a number of tasks. Counseling students is a duty if a college instructor. 4. A position refers to one or more duties performed by one person in an organisation. There are at least as many positions as there are workers in the organisation; vacancies may create more positions than employees. Examples of positions include Supervisor Grade IV, Accounts Payable Clerk I. 5. A Job is a type of position within the organisation. If a large insurance company employs sixty life insurance actuaries, then there are sixty positions, but just one life insurance actuary job. 6. A job family is a group of two or more jobs that either call for similar worker characteristics or contain parallel work tasks as determined by job analysis. At the previously mentioned insurance company, service clerks and policy correspondents represent two jobs that frequently are placed in a common job family because they have many similar worker characteristics. 7. An occupation is a group of similar jobs found across organisations. Electrician, accountant, and service maintenance engineers are some examples. 8. A career represents a sequence of positions, jobs, or occupations that a person has over his or her working life. It is important know the aforesaid information as job analysis begins at the level of the element and attempts to build understanding of jobs, occupations, and careers. 2.3.3 Importance of Job Analysis Job Analysis forms the basis for demand-supply analysis of manpower requirement, recruitments, compensation management, and training need assessment and performance appraisal.

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2.3.4 Components of Job Analysis Job analysis is a systematic procedure to analyze the requirements for the job role and job profile. Job analysis can be further categorized into following sub components.

a) Job Position / Role Job position refers to the designation of the job and employee in the organization. Job position forms an important part of the compensation strategy as it determines the level of the job in the organization. For example management level employees receive greater pay scale than nonmanagerial employees. The non-monetary benefits offered to two different levels in the organization also vary.

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b) Job Description / Job Specifications Job description refers the requirements an organization looks for a particular job position. It states the key skill requirements, the level of experience needed, level of education required, etc. It also describes the roles and responsibilities attached with the job position. The roles and responsibilities are key determinant factors in deciding the job specifications i.e. the level of experience, education, skills, etc required for the job. c) Job Worth / Evaluations Job Worth refers to estimating the job worthiness i.e. how much the job contributes to the organization. It is also known as job evaluation. Job description is used to analyze the job worthiness. It is also known as job evaluation. Roles and responsibilities helps in determining the outcome from the job profile. Once it is determined that how much the job is worth, it becomes easy to define the compensation strategy for the position. Therefore, job analysis forms an integral part in the formulation of compensation strategy of an organization. Organizations should conduct the job analysis in a systematic at regular intervals. Job analysis can be used for setting up the compensation packages, for reviewing employees performance with the standard level of performance, determining the training needs for employees who are lacking certain skills. 2.4 JOB DESCRIPTION 2.4.1 Definition Job descriptions are written statements that describe the:

Duties, Responsibilities, Most important contributions and outcomes needed from a position, Required qualifications of candidates, and Reporting relationship and coworkers of a particular job.

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Job descriptions are based on objective information obtained through job analysis, an understanding of the competencies and skills required to accomplish needed tasks, and the needs of the organization to produce work. Job descriptions clearly identify and spell out the responsibilities of a specific job. Job descriptions also include information about working conditions, tools, equipment used, knowledge and skills needed, and relationships with other positions. 2.4.2 How to Develop a Job Description The process of developing a job description helps you articulate the most important outcomes you need from an employee performing a particular job. A job description is also a communication tool that tells coworkers where their job leaves off and the job of another starts. A well-written job description tells an employee where their job fits within the overall department and the overall company. Well-written job descriptions help employees from other departments, who must work with the person hired, understand the boundaries of the person's responsibilities. Finally, the job description is an integral piece of the performance development planning process. Your goal in hiring is to find the brightest, most competent, flexible, reliable, multifaceted employees you can find. A job description, if not viewed as a straight jacket, helps your successful recruiting in several ways. A job description:

causes the manager of the position and any other employees already performing the job to agree on the responsibilities and scope of the position, helps Human Resources know the knowledge, skills, education, experience, and capabilities you seek in your new employee, so an effective recruiting plan is formulated,

informs candidates about the duties and responsibilities of the position for which they are applying,

informs employees who are assisting with the interview process about the questions to ask candidates and what you seek in the new employee, and

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may protect you legally when you can demonstrate why the candidate selected for a position was your most qualified and culturally suited applicant.

Examples of Job Description A specimen Job description of a Farm Produce Collection Center Incharge in an Agriculture company will be as follows:

Example 1: Farm Produce Collection Center (FPCC) Incharge


Activities/ Tasks 1 Annual sourcing plan with Monthly, Weekly, Daily Rolling Plans at FCC level to maintain a smooth system for receipt and 2 3 4 5 6 7 8 dispatch of Fruits & Vegetables (F&V). Decision on procurement pricing at FCC To identify farmers and maintain good relationship with farmers. Procurement from Orchards linked to various FCCs Administrative control on FCC activities. Arranging labour for daily operations. Upkeep & maintenance of premises. Liaison with local administration and people. Competitor price analysis Repeated Farmers Fill rate % deviations Labor cost Maintenance Cost Customer satisfaction 9 10 11 Security of premises & material. To ensure Quality procurement To ensure the farmers receives payments timely Index % losses Acceptance % Customer satisfaction 12 Competencies: 1 2 3 4 5 6 Teamwork & collaboration Decision making Customer service orientation Innovation & creativity Commitment to excellence Result orientation To ensure proper handling and reduce wastage. Index % Wastage Measurable Output Fill rate

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Educational Qualification: B.Sc / M.Sc Agri Experience: 4-8 years of experience in F&V handling

Example 2 - Agriculture Produce Processing Center (APPC) Activities/ Tasks 1 To arrange for collation of the city requirements and make a monthly & weekly plan of F&V processing. 2 3 To establish Management control systems in the APPC and manage performance of each product line. To comply with statutory requirements under Factories Act, Contract Labour Regulation and Abolition Act, PFA Act etc. 4 5 6 7 8 9 as may be applicable from time to time. To ensure product quality is maintained and retained in cold storage, ripening chambers, etc. To ensure optimum inventory management. To be able to meet unforeseen contingencies To indemnify the company from all legal implications and operational risk to the extend possible. To ensure inventory replenishment at every stage of the process. Equipment maintenance mgmt / history cards for equipments % Wastage Inventory Management Market Intelligence No. of deviations Inventory Management Maintenance Cost Competencies: Measurable Output Operational Efficiency Performance Management % Compliance

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1 Excellent project management skills 2 Technical Knowledge and Analytical 3 Strong coaching and people development skills 4 Empowers others by instilling a sense of ownership 5 Project and commercial thinking 6 Strategic Thinking. 7 Teamwork and Collaboration Educational Qualification: BE / B- Tech / Diploma in electrical Experience: 8-10 years of experience in related industry. 2.5 INTRODUCTION TO COMPETENCY Competencies of an individual are his knowledge, skills, attitude and motives related to his job role. The relative levels of these factors determine how good or bad he is on his job against the performance standards and compared to others. Competencies can be broadly broken down into two categories: behaviour based and work based. Behaviour-based competencies are personal characteristics/attributes that contribute to effective job performance e.g. interpersonal skills, team management skills, motivation etc. Work-based competencies are specific skills and abilities required to perform the job to a specific standard e.g. the use of spreadsheet software, fluency in spoken Japanese, management of a budget etc. Competency with HR Functions The concept of Competency applies to the full range of HR functions. An HR Professional needs to have a good understanding of competencies required for a position. This helps him to write an effective Job Specifications. Ask right questions during interviews in the end of this chapter (Annexure 2) as well as in the subsequent chapter we have covered Competency based Interview Technique. Set effective Goals and Objectives you will know more about G & O, when we cover Performance Management System Measure his performance against pre-decided Key Performance Indicators (KPI) Assess Training and Developmental Need

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One needs to do a very detailed study to arrive at the competences of a role holder vis--vis the competencies required for the role. We have given a sample audit format in the Annexure: 1, for assessing the HR competence of people performing HR function in an organization. This will help you understand the concept better (as well as the overall gamut of HR function):

ANNEXURE 1: HR COMPETENCE AUDIT Rating 5 - Has this competence in abundance Rating 4 - Has this competence adequately Rating 3 - Has this competence but can develop some more Rating 2 - Needs to develop this competence substantially Rating 1 - Does not have this competence, needs to start developing it HR competence Audit HR knowledge: Knowledge of HR philosophy, policies, practices and systems Knowledge of performance appraisal system practices Career planning and development system and practices Knowledge of organizational diagnoses, interventions Knowledge of learning theories Knowledge of training methods and systems. Knowledge of organisational structure and how they function. Knowledge of group dynamics and group function Knowledge of links between organisational goals, plans, policies, strategies, structure, technology, systems, people management systems, styles, etc. Knowledge of power dynamics and networking in the organisation Organisational plan, manpower and company requirements. Knowledge of social violence research methods. Knowledge of job analysis, job enrichment, job redesign and job evaluation Manpower planning methods. Knowledge of role analysis techniques. Knowledge of employee relation practices. Knowledge of role of reward

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Knowledge of the methodology of behaviour modification and attitude change. Knowledge of quality circles. Knowledge of recent development in management systems Knowledge of personality theories and management Understanding of personal and managerial effectiveness Knowledge of interpersonal relations and factors affecting them Knowledge of what constitutes organisation health and methods of surveys Knowledge of instruments and measurement of human behavior Knowledge of personal growth and its methods Knowledge of turnaround strategies Knowledge of creativity and problem solving techniques Knowledge of conflict management techniques and strategies HR skills: Influencing (Communication, persuasiveness assertiveness, inspirational and other skills needed to influence) top management Influencing skills needed to influence line manager Articulating HRD philosophy and values Designing skills for developing HRD systems Communication skills: Written (ability to communicate views, opinions, observations suggestion, etc. clearly to make an impact) Communication skills: Oral, etc, Skills to monitor the implementation of HR systems (designing questionnaires, data gathering, feedback and persuasion) Interpersonal sensitivity Ability give and receive feedback Counseling skills (Listening, rapport building, probing and exploring) Conflict management skills Ability to inspire others by arousing their values and superordinate goals Leaderships and initiatives Creativity Problem solving skills System designing skills Task analysis / Job analysis skills Organisational diagnosis skills

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Process observation and process sensitivity skills. Personal Attitudes and Values Empathy and understanding Positive and helpful attitude to others Faith in people and their competencies Introspective attitude Openness ( open to others suggestions and likes to be open in expressing his or her own views) Interpersonal trust Productivity Respect for others Self confident; faith in ones own competencies Sense of responsibility Sense of fairness (constant desire for objectivity and resistance to being impressionistic) Self Discipline (desire to set examples) Honesty (Desire to be sincere and honest) Willingness to experiment Learning orientation Willingness to treat every experience as a learning opportunity Perseverance Work motivation (desire to be involved in an d work harder for the organisation) Superordination (an attitude that he or she is working for larger goals) Empowering attitude: A tendency to respect others and a willingness to empower them, by not being overly concerned about a personal power base. Stress tolerance (ability to cope with stress, frustration, hostility and suspicion) Analysis These three areas HR professional knowledge, HR skills and personal attitude and values- are the true depiction of the competency of an HR professional. A 5-point scale ranging from having competency in abundance to having no competence on each element and its scores would indicate where we stand vis--vis HR capabilities. The competency of a professional is determined through his or her level of knowledge, capacity to utilize skills and personal attitudes and values towards the HR function (Chanda & Kabra, 2000). ANNEXURE 2: POSITION FULFILLMENT

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Recruitment Competencies are the basis to determine who should be interviewed and evaluated.. As you know, interview and selection is often a costly and time-consuming effort. The cycle time as well as cost can be reduced to a large extent through proper understanding of what competencies a candidate can bring to the job. With well defined competencies of the job positions at your end, you will be able to decide which CVs should be short-listed and what questions to be asked to the candidates.etc. During the interview, Qualification Competencies give us an indication on the required qualification for effective performance on the job. Selection While selecting an individual, competency assessment is used to determine the best person to fill the position. For position fulfillment it is important to have competencies with definitions and ratings. In case of competencies like creativity, learning orientation, flexibility, analytical skill etc. candidates can be rated on a scale as shown in the table below: SAMPLE COMPETENCY ASSESSMENT FORMAT

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Once the competencies are identified, a list of interview questions along with the competency rating sheet is needed to elicit information about relevant behavior. An interview panel may probe further to get the relevant information, for example as given in table. Table: Selection Interview Questions Describe an incident in which your workload was to heavy.

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How did you handle the situation? Tell me about a situation when you were trying to accomplish something and did not have ready access to the necessary resources. How did you get them? Describe a situation in which you had to juggle more than one task. Hoe did you handle them? Which one did you handle first and why? How did you manage time and task? Tell me about a situation when your planning was not helpful. What happens then, and how did you recover? Tell me about a time when you had to deal with two people asking you to work on different projects that requires more than 100 per cent of your time. How did you resolve the situation? State an example when you were not able to achieve the goal. What did you do? Describe a situation where your performance was excellent. What were the circumstances? What did you do? How did the people respond? An interview rating form provides a continuum of unacceptable to acceptable behavior examples, with three to six behavior examples for each competency. Interviewers may use a structured rating form to bring in objectivity along with focus in the interview, relating to what is the standard that is needed for a position. To give an example , for assessing a candidate on his listening skill, or Developing Others (as given below) the definition of competencies needs to be clearly marked out. The competency is marked on a point scale with an above and below standard. Also given below is some space for the respondent to explain why a certain standard has been chosen. This helps evaluators to focus on the behavior needed for a particular position without assessing mere feelings.

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Notes _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________

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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________________________________________________________

3. TALENT ACQUISITION

3.1 INDIAN OVERVIEW Over the last 15 years, Indian industry has worked hard on putting the basic building blocks of competitiveness into place. It has worked strongly to improve operational efficiency, quality, productivity and customer orientation.

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Today, Indian industry is competitive; and, it is acquiring a global footprint. It is now time for Indian industry - as indeed India - to set sights on a new and higher trajectory of competitiveness and globalization. The Context

The Indian economy has never had it so good. For the last three years of close to 9% growth. Outstanding performance in the services and industry sectors, both growing at over 11%. The macro economic indicators of the nation extremely sound. Investment as a percentage of GDP at a record high.

In the industry and services sectors, innovation, education and dynamism are the order of the day. Indian industry is today resurgent, confident and global in its aspirations.

This is the good news To catch up with the next wave of growth, the Indian economy has to rise to the occasion by

meeting expectations of customer both in India and overseas and facing increasing competition from all parts of the globe. But the one of the emerging challenges that the Indian industry is beginning to grapple with - be it in small, medium or large sectors - is that of talent acquisition and retention. While all sectors seem to be doing extremely well, they also have begun to experience the crunch of people and talent availability a possibility of shortage of talent in the supply side could stymie Indias economic growth and make its competitive edge blunt.

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India's Reality

320 million children in India are between the age of 6 and 16. Out of this only 10% will pass school and go beyond. Approximately 280 million people live below the poverty line and nearly 400 million people in India, live below $2 a day. India's per capita income is at $460, while Sri Lanka is $833 and US is at $30,000. 40 million unemployed people and this numbers are growing. In the next 5 years, the figure could reach to as much as 60 million people, more than entire populations of France, Italy and UK.

90% workforce in the unorganized sector. 30% casual labour with no regular source of income. India has the youngest population in the world. The median range is 24 and every other population in the world is getting older. 2.5 mn graduates passing out of colleges each year without skills connecting to employment. Mismatch between educational system output and Industry's manpower requirements.

India's Opportunity The correction is not impossible because India also faces a unique opportunity. It has the youngest population in the world; its median age in 2000 was less than 24, compared to 38 for Europe and 41 for Japan. Even China had a median age of 30. Alternatively viewed, this means that India has the unique opportunity to complement what an ageing rest of the world needs the most - productive workers. India in 2025 will have a dependency ratio of 12.1, i.e., for every 100 working-age adults there will be slightly more than 12 persons who are above the age of 65. For China the ratio will be 19.4, for Japan 49, for Europe 33.2. 3.2 UNDERSTANDING TALENT ACQUISITION Just as Customer Acquisition describes the overall strategic process around identifying market sectors, targeting client prospects, running direct marketing campaigns, selling and receiving the order (i.e. acquiring a new customer), Talent Acquisition involves all the activities around finding, attracting and engaging highly talented individuals into your organization.

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3.2.1 Talent Acquisition - As a Strategy Historically organizations have not treated the recruitment process as one of strategic importance, but of late many have woken up to the reality that the world has changed dramatically. No more can the organization pick and choose between several good candidates for one position. Global connectivity through internet has tipped the scales in favor of the highly talented individual looking for a new opportunity. Candidates can now advertise their desire to change jobs within minutes of making the decision of changing the organization and receive enquiries about their talent and interest within hours of placing their CV on the net.

Potentially, it is feasible that a high quality employee for any reason (bad appraisal, inappropriate or negative response from boss, extra workload stress etc.) can post his CV/Resume up on a particular job - site at midday today, receive three interested requests for contact with third party recruiters or headhunters within hours, be interviewed for an outstanding role (possibly with one of the competitors) tomorrow, receive an offer in writing the following day and resign that afternoon (within 2 days). On the other hand, if the Internet has enabled this process for candidates, it has also brought significant advantages for organizations. Direct access to the candidate market Now organizations can go direct to the candidate market, thereby cutting the time it takes to find the right people and also dramatically reducing their recruitment costs. However, simply posting up jobs on various jobs boards is not the answer. Best Practice Process Talent Acquisition needs to be addressed at the most senior levels within all organizations - big or small, public or private. This means that Talent Acquisition needs to fit seamlessly with the overall organizational strategy. It needs to have the appropriate level of resources behind it; it needs to be monitored and reported on at all board meetings and it needs to involve many people within the organization who attribute to it the importance that the organization requires.

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The realities of today's demographics and competition pressure have elevated the issue of talent attraction and retention to become one of the critical leadership concerns. Given the projected labor market and demographic trends, an organization's approach to talent acquisition can become a key differentiator and a source of competitive advantage. The changing market has revealed that prevailing "one size fits all" HR practices are no longer effective. Organizations must develop specific people strategies for their most critical segments that directly align with and support the business strategy. While individual approaches are customized to the needs of each organization, all approaches are based on key critical success factors. 3.2.2 Typical Talent Acquisition Process The steps involved in a typical talent acquisition process are as under: 1) Identify the manpower requirement and establish job description and job specification for the position. 2) Develop strategy to attract and acquire the required talent. The strategy involves identification of target group, mode of advertising the position, compensation to be offered as per market etc. 3) Notify the position to suitable candidates through various channels like recruitment consultancy firm, job portals, reference hunting or cold calling. 4) Shortlist the profiles. 5) Call the short listed candidates and put the through the selection process. The selection process typically involves a Cognitive Ability Test, Psychometric Testing, followed by the interviewing process. 6) The selection process yields a shortlist of probable candidates against each position. 7) The most suitable candidate identified though the selection process is called for salary negotiation. If the negotiations fail, the other probable candidates may be considered sequentially based on their position in the merit list and an agreement is reached regarding compensation and date of reporting.

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8) The candidate is then formally offered the position by way of an offer letter, which broadly explains the position; compensation offered and expected date of reporting of the candidate. The offer is however contingent upon candidates medical fitness. 9) A satisfactory medical fitness report validates the offer and the candidate is issued a formal appointment letter upon joining the organization. 3.3 RECRUITMENT The recruitment and selection are the two most crucial activities under Talent Acquisition. There is a thin line of difference between recruitment and selection, which we will discuss in the later part of this chapter. Recruitment is the first step among the HR processes towards creating competitive strength and strategic advantage for the organizations. Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews and requires many resources and time. A general recruitment process is as follows:

1. Identify vacancy 2. Prepare job description and person specification 3. Advertising the vacancy including that for Walk-in interviews 4. Managing the response i.e. capturing the whole range of responses, creating different folders, seeking clarifications from candidates if necessary, answering queries of

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candidates, handling reference candidates, managing at times solicitations of influential people like politicians and bureaucrats etc. 5. Short-listing 6. Arrange interviews 7. Conducting interview and decision making The recruitment process is immediately followed by the selection process i.e. the final interviews and the decision making, conveying the decision and the appointment formalities. 3.4 MODES OF RECRUITMENT Every organization has the option of choosing the candidates for its recruitment processes from two kinds of sources: internal and external sources. The sources within the organization itself (like transfer of employees from one department to other, promotions) to fill a position are known as the internal sources of recruitment. Recruitment candidates from all the other sources (like outsourcing agencies etc.) are known as the external sources of recruitment.

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SOURCES OF RECRUITMENT

3.5 FACTORS AFFECTING RECRUITMENT The recruitment function of the organisations is affected and governed by a mix of various internal and external forces. The internal forces or factors are the factors that can be controlled by the organisation. And the external factors are those factors which cannot be controlled by the organisation. The internal and external forces affecting recruitment function of an organisation are: FACTORS AFFECTING RECRUITMENT

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3.6 RECENT TRENDS IN RECRUITMENT The following trends are being seen in recruitment: 3.6.1 Outsourcing HR outsourcing is an arrangement in which one organization (client organization) hires the services of people from an outside firm (intermediary or service provider or contractor). Outsourced employees remain in the roll of their company (intermediary firm) but work for the client organization, often in the premises of the latter. The trend of outsourcing is on the rise as it gives the required flexibility of calibrating, from time to time, its employee number to the business requirement. Furthermore, it saves organizations from complying with the stringent conditions of retrenchment under Industrial Disputes Act, 1947. The outsourcing firms help their client organizations by the initial screening of the candidates according to the needs of the latter and creating a suitable pool of talent for the final selection by the organisation. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge the organisations for their services. Advantages of outsourcing are: 1. A Company need not plan for human resources much in advance. 2. Operational flexibility and cost advantage. 3. Turning the management's focus to strategic level processes of HRM

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4 Company is free from salary negotiations, weeding the unsuitable resumes/candidates. 5. Company can save a lot of its resources and time The major limitation of outsourcing is while outsourcing is an effective strategy for recruitment into jobs involving low-end skills and mass requirement of people; it is difficult to recruit outsourced employees in core and critical roles of an organization. 3.6.2 Poaching/Raiding Buying talent (rather than building it) is the latest mantra being followed by the organizations. Poaching means employing a competent and experienced person already working with another reputed company, most likely with the competition. A company can attract talent from another firm by offering attractive pay packages and a meaty role. Indian software and the retail industries are facing the severe brunt of poaching today. It has become a challenge for human resource managers to face and tackle poaching, as it weakens the competitive strength of the firm. 3.6.3 E-Recruitment Many organizations are currently making effective use of Internet as a source of recruitment. Known otherwise as E- Recruitment, the use of internet has improved the speed and efficiency of recruitment by leaps and bounds. Most of the big companies advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using the Internet. Alternatively job seekers place their CVs in worldwide web, which can be drawn by prospective employees depending upon their requirements. 3.7 RECRUITMENT VS SELECTION Both recruitment and selection are the two phases of the employment process. The differences between the two are: 1. Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation WHEREAS selection involves the series of steps by which the candidates are screened for choosing the most suitable persons for vacant posts. 2. The basic purpose of recruitment is to create a talent pool of candidates to enable the selection of best candidates for the organisation, by attracting more and more employees to apply in the

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organisation WHEREAS the basic purpose of selection process is to choose the right candidate to fill the various positions in the organisation. .. 3. Recruitment is a positive process i.e. encouraging more and more employees to apply WHEREAS selection is a negative process as it involves rejection of the unsuitable candidates. 4. Recruitment is concerned with tapping the sources of human resources WHEREAS selection is concerned with selecting the most suitable candidate through various interviews and tests. 5. There is no contract of recruitment established in recruitment WHEREAS selection results in a contract of service between the employer and the selected employee. 3.8 SELECTION PROCESS Selection is the process of choosing the most suitable persons out of all the applicants. In this process relevant information about applicants is collected through a series of steps so as to evaluate their suitability for the job to be filled. Selection is a process of matching the qualification and experience profile of applicants with the job requirements. The better fit between the two, the higher is the possibility of selection.

The selection process of a progressive and professional organization typically involves the following: 1) Preliminary Interview 2) Cognitive Ability Test 3) Psychometric Test 4) Selection Interview 5) Salary Negotiation 6) Physical Examination 7) Reference Check 8) Offer Letter.

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Flow chart of Selection Process

3.8.1 Preliminary Interview First of all initial screening has to be done to weed out totally undesirable / unqualified candidates. It is essentially a sorting process which can be done even through a telephonic interview, wherein the essential information about the nature of the job and organization can be shared with prospective employees. Necessary information is also elicited from the candidates about their education, skills, experience, communication skills, salary expectation, etc. If the candidate is found suitable, he is selected for further screening. Preliminary interview saves time and efforts of the company and the candidate. It avoid the unnecessary waiting for the rejected candidate and waste of money for further processing of an unsuitable candidate It is the first

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contact of an individual with the organization. Therefore, the interviewers should be courteous, receptive and informal, particularly when the candidate is being turned down. 3.8.2 Cognitive Ability Test The Cognitive Abilities Test is an assessment of a range of reasoning skills. The test looks at three types of reasoning ability: 1. Verbal (words, numbers and shapes or figures) 2. Quantitative and 3. Non-verbal reasoning. The verbal reasoning assesses reasoning processes using the medium of words (e.g., opposites, relationships, deduction, and categorization). It is not an assessment of reasoning with words, nor wider language skills such as speaking, listening or writing. The quantitative tests use numbers as the symbols process is the same as for verbal reasoning). The non-verbal tests looks at reasoning processes but use shapes and figures. A certain cut off qualifying mark is decided as a minimum requirement for a position or a group of position.

The Wonderlic Personnel Test (WPT) is an example of Cognitive Ability Test is a twelveminute, fifty-question intelligence test used to assess the aptitude of prospective employees for learning and problem-solving in a wide range of occupations.[1] The score is calculated as the number of correct answers given in the allotted time. WPT measures verbal, numerical and spatial capabilities. This highly culture based test is one of the most widely used psychological instruments all over the world. It attempts to screen the candidates for certain jobs within the shortest possible time. It may be termed as a quick IQ test. A score of 20 is intended to indicate average intelligence (corresponding to an intelligence quotient of 100; a rough conversion is accomplished via the following formula: IQ = 2WPT + 60).

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3.8.3 Psychometric Testing Psychometrics is the field of study concerned with the theory and technique of educational and psychological measurement, which includes the measurement of attitudes and personality traits. The field is primarily concerned with the study of differences between individuals and between groups of individuals. It involves two major research tasks, namely: (i) (ii) The construction of instruments (i.e. the test questionnaire) and procedures for measurement; The development and refinement of theoretical approaches to measurement.

Origin and background Much of the early theoretical and applied work in psychometrics was undertaken in an attempt to measure intelligence. Francis Galton is often referred to as the father of psychometrics, having devised and used mental tests. More recently, psychometric theories have been applied in the measurement of personality, attitudes, beliefs etc. Measurement of these unobservable phenomena is difficult, and much of the research and accumulated art in this discipline has been developed in an attempt to properly define and quantify such phenomena. The following psychometric tools are used by most organizations in combination or as a single application: 1) Predictive Index [PI] 2) MBTI 3) Firo B 4) Belbin For details on psychometric tests, please refer to the Annexures at the end of this chapter.

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3.8.4 Selection Interview The interview is the most critical step in talent acquisition as the decision to select or reject the shorlisted persons candidature is made during this step. The recruiters employ following approaches to evaluate the candidates suitability for the job: a) Behavioral Event interview (BEI) b) Competency based interview (CBI) a) Behavioral Event interview (BEI) What is a Behavioral Interview? A behavioral interview is a structured interview that is used to collect information about past behavior. Because past performance is a predictor of future behavior, a behavioral interview attempts to uncover your past performance by asking open-ended questions. Each question helps the interviewer learn about your past performance in a key skill area that is critical to success in the position for which you are interviewing. The interview will be conducted face-to-face whenever possible.

What Can Be Expected From A Behavioural Event Interview? Behavioural Event interviewing is a process by which an interviewer gains specific understanding of the knowledge, skills and attributes brought by a candidate. The questions asked relate specifically to competencies necessary to be effective in the position being filled, and require the interviewee to provide depth around specific capabilities. Traditionally, interviewers ask candidates questions requiring general knowledge or personal awareness, but these often have very little to do with the open position. Questions requesting a

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description of strengths, weaknesses and personality characteristics, while at times valuable, rarely relate specifically to the knowledge, skills and attributes necessary for a specific position. General questions also encourage memorized answers and rarely are the interviewee asked to back up what was said. For instance, in discussing his/her greatest strength, a candidate might say, Im motivated, hard working and I get along well with everyone. In this general format, the interviewer must project whether the candidate is a good fit. General questions typically generate only positive responses. In behavioral interviews, the interviewer also wants to know the potential negatives to understand the circumstances in which the candidate will not be able to demonstrate the required competencies. In a behavior-based interview, if motivation and self-direction are important for successful performance in the position, the interviewer could ask: Tell me about a time you went above the call of duty to complete a project. Or, Describe a situation where you had to complete work with little or no direction from superiors or colleagues. Here, the interviewee will be asked to prove his/her personal motivation with an actual story, rather than just saying, Im highly motivated. If the interviewer needs to determine how well the candidate gets along with others, she could say: Tell me about a time you worked with a team of people that could not agree on a projects objectives or Tell me about a time you dealt with a particularly difficult customer. Since the best predictor of future behavior is an individuals past behavior, behavior-based interviewing allows an interviewer to learn, with concrete examples, whether the person has the competency and whether they can apply it in this situation. Using the STAR Technique In a behavioral interview, the interviewer will ask questions about your past experiences. A useful way to prepare for this style of questioning is to use the STAR technique. The STAR technique is away to frame the answers to each question in an organized manner that will give the interviewer the most information about your past experience. As you prepare to answer each

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question, consider organizing your response by answering each of the following components of the STAR technique: What was the Situation in which you were involved? What was the Task you needed to accomplish? What Action(s) did you take? What Results did you achieve? A set of sample of BEI questions has been given in Annexure 2 for your reference. b) Competency based interview (CBI) Introduction The use of competencies by organizations is becoming very widespread. One use of competencies is for behavioral interview questions. It behooves the career counselor and their clients (e.g., job applicants) to understand the reasons for, and approach to, this type of interview and to prepare accordingly. It is harder to wing it in a competency-based interview and, therefore, analysis of ones background and capabilities are essential for preparing for a competency-based interview. Why Are Organizations Using Competencies More Now? A competency can be defined as a cluster of the knowledge, skills and attributes (KSAs) or personal characteristics an individual must possess and appropriately use for optimum success performing specified work. As organizations evolve and create new strategic plans to meet ever-changing business challenges, they are also defining their ideal talent profile. Talent profiles are based on competencies, so interviews and the selection process must be aligned. Organizations are moving or changing so fast that there is less time than ever to hire green talent and develop those employees to meet company expectations and fit the company culture over several years. And, hiring the wrong person today is costly in recruiting and hiring costs and in lost productivity. Competencies predict performance better than experience, technical skills, aptitude or personality. Traditional (non-behavioral) interviews do not predict performance.

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By clarifying what specific behaviors and practices make for employee effectiveness, competency models increase the likelihood of placing the right people into the right jobs. Organizational talent management today requires aligning multiple human resource functions including selection, development, performance management and succession management. The most effective way to align these functions for the benefit of the organization and employees at all levels is through use of competency models. How Do Organizations Benefit From Using Competencies? Competency-based human resource systems ensure that the people who get hired have the relevant competencies and potential to succeed. It has been estimated that the wrong hire costs 1.5 times that persons annual salary. And that doesnt measure the frustration of an individual trying to succeed in the wrong job. Competency-based systems can also be used to provide appropriate development to help employees realize their potential and to provide appraisal, feedback, and coaching to improve productivity. In addition, competencies provide employees with an objective, defined target for development and realistic career goals. Competencies become operational only if defined by behaviors, so interviewers, applicants, managers and employees can apply the model in the work setting. A behavioral description is a statement of the observable actions that indicate the presence of an underlying competency.

How Do Interviewers Ask Questions to Identify Candidates Competencies? Many organizations are now preparing interviewers by creating competency-based interview guides with questions that probe for the competencies needed for the open positions. Next follows some examples of competencies and sample questions that an interviewer might use in a behavior-based interview. For an Accountability competency (depending upon its definition and the behaviors the organization wants the worker to demonstrate), an interviewer might say to a candidate: Tell me about a time that you had too much work to complete and too little time to meet your deadline.

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Here, the interviewer may be trying to gain insight into several issues. Does the candidate take responsibility for the work assigned; can or does the candidate delegate the work; how does the candidate structure his time to get the necessary tasks completed? Does the candidate make excuses for not achieving the objective or do they achieve the objective even under difficult conditions? For an Analysis competency (depending upon its definition and the behaviors the organization wants the worker to demonstrate), an interviewer might say to a candidate: Give me an example of when you had to make an important decision about your work with a huge amount of data. Here the interviewer is seeking a specific example of how the candidate researches an issue, how they sort out the critical information from the rest to support their decision-making. For a conflict resolution competency (depending upon its definition and the behaviors the organization wants the worker to demonstrate), an interviewer might say to a candidate: Describe how you successfully handled a situation with a particularly difficult customer . For a Problem Solving competency (depending upon its definition and the behaviors the organization wants the worker to demonstrate), an interviewer might say to a candidate: "Describe a recent problem you encountered on the job and tell me how you went about solving the problem." Here the interviewer wants to understand the candidates approach and whether it fits with the culture and the position being filled. Another question might include: Tell me about a time when you did not have the necessary resources to accomplish a task. What did you do? If problem solving is a competency for the successful performance of the job, the interviewer needs to explore the candidates thinking and the actions they would take to solve a problem. A set of sample Competency Based Interview (CBI questions) has been given in Annexure 3 for your reference. 3.8.5 Salary Negotiations The situation in which a salary is negotiated could vary depending on whether the individual is a candidate with a certain degree of work experience, applying for a position in a company, or is a candidate with no prior work experience, applying for an entry level position in an organization.

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Another situation could be an employee looking for career advancement in his current organization. The details of each of these situations might be different. While negotiating compensation, the HR Managers keep in mind the following aspects: 1. The maximum limit within the salary band for the position the candidate is considered 2. The perceived value the candidate is likely to bring into the company - whether it is worth meeting or going close to the expected salary of the candidate? 3. .What is the salary range of employees already within the organization who have comparable qualification and experience? 4. What is the expectation of other candidates, who could be considered as alternatives? 5. How much does competition pay for such a candidate? 6. Does the candidate possess some rare skills and experience? Is there a big gap between demand and supply of the talent profile under consideration? 3.8.6 Physical / Medical Examination The applicants who have crossed the above stages are sent for a physical examination either to the companys physician or to a medical officer approved for the purpose. Such examination serves the following purposes: 1. It determines whether the candidate is physically fit to perform the job. Those who are physically unfit are rejected. 2. It reveals existing disabilities and provided a record of the employees health at the time of selection. This record will help in setting companys liability under the workmen Compensation Act for the claim for an injury. 3. It prevents the employment of people suffering from contagious diseases. 4. It identifies candidates who are otherwise suitable but require specific jobs due to physical handicaps and allergies. 3.8.7 Reference Check Prior to making a job offer, a prospective employer needs to check candidate references. Through reference check employer can check job performance, work ethic, and attendance at work, attitude and other criteria that are important to a company when making a decision on whom to offer the job to.

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Typical Reference Checking Format (Verify that the candidates reference checking permission signature is on your employment application before starting the interview.) Name: Reference Name: Company Name: Company Address: Company Phone: Dates of Employment: From:____________________ To:_____________________ Starting Position: ________________________ Ending: ___________________ Starting Salary: _________________________ Ending: ___________________ What does your company do? Please describe your reporting relationship with the candidate? If none, in what capacity did you observe the candidate's work? Reason for Leaving: Please describe the key responsibilities of the candidate in his/her most recent position. How many reporting staff did the candidate manage? Their roles? Tell me about the candidates most important contributions to the achievement of your organizations mission and goals. Describe the candidate's relationships with his/her coworkers, reporting staff (if applicable), and supervisors. Talk about the attitude and outlook the candidate brought to the workplace. Describe the candidate's productivity, commitment to quality and customer orientation. What are the candidate's most significant strengths? What are the candidate's most significant weaknesses? What is your overall assessment of the candidate? We are hiring this candidate to (job title or quick description). Would you recommend him/her for this position? Why or why not? Would you rehire this individual? Why or why not?

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3.8.8 Offer Letter The job offer letter is provided to the candidate when selected for the position. Most frequently, the candidate and the organization verbally negotiate the conditions of hire and the job offer letter confirms the verbal agreements. 3.9 RECRUITMENT CHALLENGES IN AGRIBUSINESS Agribusiness, as a concept, encompasses the whole range of activities from agro inputs manufacturing to marketing the staples, fruit and vegetables and semi-processes food items for the ultimate consumer. During last few years, Agri-retail has emerged as a new face of Agribusiness. India continues to be the top destination for retail development and investments. The rural and semi urban markets offer huge opportunities to retail players. With several industry heavyweights entering the food retail segment agri-retail has become the latest hot sector in India. Companies such as Tata, ITC, Reliance, Mahindra & Mahindra, Godrej, Ballarpur Industries, DSCL, and Bharti-Walmart etc all have mega plans for the segment. Global giants like Carrefour and Tesco are also showing keen interest to enter this food retail segment. According to a recent report by Ernst & Young, food and grocery account for almost 54% of the total Indian annual retail business. However, food retail continues to be dominated by small local stores in the unorganized sector and becomes most remunerative venture area for the corporations. With the entry of so many corporations in this segment, acquiring right talent has given sleepless nights to the HR Managers. The whole industry has woken up to the reality of a huge shortage of talent. Buying talent as a strategy from the industry has not met the complete manpower for the simple reason that Agri-retailing is still at a nascent stage. So, the Retail Players in the organized sectors are also trying out options of hiring people from Agri-input industries. They are also hiring young talents who have the potential to develop as future managers. It is evident from the fact that during recent years many top retail players are visiting the campuses of B- Schools like IRMA, MANAGE, NIAM and IIMs (ABM course) and various Agriculture Universities. Job market has undergone some fundamental changes with the entry of organized retail industry in terms of skill set required, attrition rate, technology, sources of recruitment, competition in the

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market etc. It is no wonder that attrition rate is at a all time high, HR professionals are constantly facing new challenges in one of their most important function- Recruitment. Some pertinent challenges can be summated as follows: 1. Supply and Demand: Agribusiness till now has been highly un-organized and diversified so it becomes difficult to meet the manpower demand against the availability of resources in the market. Various functions need specialized skills available at different locations depending on the product availability and sourcing point. 2. High Cost: In their urgency to build new businesses, organizations tend to adopt buy talent approach and this leads to the high manpower cost often to an unsustainable extent. To keep the manpower cost low, organizations need to shift focus from buy talent to build talent. 3. Educationally Qualified resources: Organizations face problem in recruiting appropriately qualified staff at managerial levels as there are very few Institutes like IRMA, NIAM, MANAGE etc. which offer courses in Rural/ Agribusiness management. Resources easily available are Agriculture Graduates and Post Graduates but they possess only subject knowledge and not managerial skills. So this leads to shortages at managerial level due to the limited number of candidates with the requisite knowledge and skills. 4. High Attrition rate: Candidates typically do not stay at organizations for long time and there is a tendency to move from company to company to improve levels of responsibility and remuneration. Faced by high competition companies need to focus on their corporate branding to ensure they are creating the right image and communicating this effectively to prospective candidates. It is also important that they then deliver high quality training and working conditions. 5. Strategic Prioritization: Retail business is also referred as penny business as the profit margin is low and the whole game is of volume. Till organization reaches a remunerable volume it needs to focus on austerity measures and use financial acumen. Therefore, strategic prioritization of positions and the time when they needs to be filled plays very critical role in ensuring the feasibility, viability and growth of a business.

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Reviewing staffing needs and prioritizing the tasks to meet the changes in the market becomes a challenge for the recruitment professionals. 6. Adaptability: Most of the people with subject knowledge and expertise are working with small companies operating in an un-organized sector at regional levels. It becomes difficult for them to operate with same kind of freedom they enjoyed in past due to lot of systems and operational procedures established in large corporations. This may lead to dissatisfaction and ineffectiveness at employees end. So to overcome this, organizations need to conduct continuous trainings etc to make the systems more employees friendly and facilitative. More importantly, before recruiting a candidate it is required to check his adaptability level and can do attitude through various psychometric test and BEI. 7. Process Compliance: When a candidate is hired from a small scale agriculture company, it becomes difficult to ensure the recruitment process adherence in terms of verification of salary certificate, appointment letters and other documents related to emoluments they get, as many small companies pay to their employees and establish a realistic compensation band. 8. Competencies of the recruiters and inadequate use of selection tools There is hardly any recruitment agency catering to the requirement of the companies in agri-business or rural initiatives barring one exception of Ruralnaukri.com. Moreover, many organizations in rural and agriculture sector, select their employees based on interview only. Except a few organizations like ITC, Reliance Retail etc. most of them do not use any other selection tools like Cognitive Test, Psychometric Test etc. In most of these organizations, the interviewers are also not trained in techniques such as BEI and Competency based Interview skills. without any supporting documents. So, it becomes critical for an organization to conduct compensation survey

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ANNEXURE 1: DETAILS ON THE PSYCHOMETRIC TESTS


PREDICTIVE INDEX The Predictive Index (PI) was developed by pinpoints traits that make employees understandable Arnod S. Daniels in 1953-54. PI is based on proven behavioral science techniques, it and predictable. It is a management tool for predicting, describing and measuring the work behavior and potential of individuals and groups at all organizational levels. It claims to provide assessment of performance drives, management styles, capabilities, potentials, interests and motivation. It also attempts to measure the effects of job demands, leadership styles, and organization culture on individual performance. The computer generated scoring of PI produces a graphic pattern with elements: self, selfconcept, and synthesis. The self measures the individuals basic pattern of behavior, doing what comes naturally. The self-concept measures the way individuals try to modify personal behavior to satisfy the demands placed on them. The synthesis measures how individuals behave in their environment. The inferences are drawn out of the check list on four broad factors- A, B, C & D. The factors are explained as follows:

Factors A DOMINANT

High Independent & Assertive Self-confident & Self-starter Individualistic & Competitive Outgoing & Optimistic Delegates authority Enthusiastic & Selling Patient Stable & Calm Deliberate & Consistent Steady

EXTROVERTED

PATIENT

FORMAL

Diligent & Attentive to details Precise & Organized Cautious & Conservative

Low Agreeable & Cooperative Accepting of company policies Accommodates the team Serious & Introspective Task oriented & Analytical Imaginative Reserved Tense & Restless Impatient with routines Intense Fast paced Informal Freely delegates details Non-conforming & Disorganized

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The PI assesses four primary and two resultant personality traits in individuals. The four primary traits are dominant (Factor-A), extroverted (Factor-B), patient (Factor-C), and formal (Factor-D). The two resultant traits are response level (Factor-M) and subjectivity level (Factor-E). Factor-A measures the drive for self-expression or level of assertiveness ranging from submissive to arrogant. Factor-B measures the social drive or level of introversion or extroversion from withdrawn to gregarious. Factor-C measures emotional tension or urgency in an individual from volatile to lethargic. Factor-D measures an individuals level of detail or style in approaching work from sloppy to perfectionist. The resultant Factor-M score is used to identify the norm relative to the measurements of the other factors. It is referred to as the response level and is used to measure an individuals stamina and capacity to adapt and handle stress. Finally, Factor-E measures the tendency for an individuals judgment to be subjective versus objective (or emotional versus logical) Samples Questions of PI - Each page has 86 adjectives, some examples of the adjectives which are mentioned in the list of two pages are: helpful, relaxed, exciting, assertive, esteemed, calm, popular, polite, attractive, trusting, amiable, diplomatic, etc. MBTI Fundamental to the Myers-Briggs Type Indicator is the concept of Psychological Type as originally developed by C. G. Jung. The typology model originated by Jung (and further developed by Briggs and Myers) regards personality type as similar to left or right handedness: individuals are either born with, or develop, certain preferred ways of thinking and acting. The MBTI sorts some of these psychological differences into four opposite pairs, or "dichotomies", with a resulting 16 possible psychological types. None of these types is "better" or "worse"; however, Briggs and Myers recognized that everyone naturally prefers one overall combination of type differences. In the same way that writing with the left hand is hard work for a right-hander, so people tend to find using their opposite psychological preferences more difficult, even if they can become more proficient (and therefore behaviorally flexible) with practice and development. The 16 different types are often referred to by an abbreviation of four letters, the initial letters of each of their four type preferences (except in the case of Intuition), for instance:

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ESTJ - Extraversion, Sensing, Thinking, Judging INFP - Introversion, iNtuition, Feeling, Perceiving

And so on for all 16 possible type combinations.

MBTI- The Basic Model S


Perceive Sensing Intuition

N T

2 Kinds of Mental Processes Judgments

Thinking

The Basic Model


Energy Orientation 2 Kinds Of Mental Orientations Extraverted Orientation

F I E P J

Feeling

Dichotomies
Introversion

Extraversion

Perceiving

Judging

Note that the terms used for each dichotomy have specific technical meanings relating to the MBTI which differ from their everyday usage. For example, people with a preference for Judging over Perceiving are not necessarily more "judgmental" or less "perceptive". The MBTI instrument does not measure aptitude, either; it simply indicates for one preference over another. So someone reporting a high score for Extraversion over Introversion on the MBTI assessment cannot be correctly described as 'more' or 'strongly' extraverted: they simply have a clear preference.

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Description of Dichotomies

Sixteen possible combinations

ISTJ ESTJ ISFJ ESFJ

ISTP ESTP ISFP ESFP

INFJ INFP ENFP ENFJ

INTJ INTP ENTP ENTJ

Sample Questions of MBTI It has 124 questions and each question has two options. Some example Circle the letter (a) or (b) for the option that most accurately describes how you usually act, think or feel. 1. My Best idea at work come from a. An interchange of ideas and sharing with other b. Quite thought on my own

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2. When I Run a meeting, I am usually a. Disciplined about following my prepared agenda b. Flexible and open to whatever comes up 3. When handling a subordinates development, I am most likely to a. Discuss a problem I have with his or her behavior b. Dislike telling him or her unpleasant things 4. I prefer the place where I work to be a. Structured with clear rules and regulations b. More open-ended and Liassez - Faire BELBIN TEAM INVENTORY The Belbin Team Inventory, also called the Belbin Self-Perception Inventory or the Belbin Team Role Inventory, is a test used to gain insight into an individual's behavioral type. It was developed by Dr. Meredith Belbin after studying numerous teams at Henley Management College The Belbin Team Role Inventory assesses how an individual behaves in a team environment. It is therefore a behavioural tool, subject to change, and not a psychometric instrument. The test includes 360-degree feedback from observers as well as the individual's own assessment of their behaviour, and contrasts how they see their behaviour versus how their colleagues do. Unlike the Myers-Briggs, which is conventionally used to sort people into one of 16 types by how clearly they express their preference for 4 dichotomous types of behaviour, the Belbin Inventory scores people on how strongly they express traits from 9 different Team Roles. An individual may and often does exhibit strong tendencies towards multiple Roles. Belbin himself asserts that the Team Roles are not equivalent to personality types.

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Sample Questions of Belbin There are total 7 Questions and support each question there are several statements, one has ten (10) points to distribute amongst the statements , depending on how much one agrees with each of them. Statements one disagrees with or is indifferent to will be awarded zero points. One may not give negative points to any statement, nor is allowed to award fewer than ten points in total. Q. What I Believe I Can Contribute to a Team: Statements a) I think I can quickly see and take advantage of opportunities. b) I can work well with a very wide range of people. c) I can usually sense what is realistic and likely to work. d) My capacity to follow through has much to do with my personal effectiveness. e) My ability rests in being able to draw people out whenever I detect they have something of value to contribute to group activities. f) My technical knowledge and experience is usually my major asset. g) I can offer a reasoned case for alternative courses of action without introducing bias or prejudice. h) Producing ideas is one of my natural assets. i) I am ready to face temporary unpopularity if it leads to worthwhile results in the end. FIRO-B Fundamental Interpersonal Relations Orientation (FIRO) is a theory of interpersonal relations, introduced by William Schutz in 1958.

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According to the theory, three dimensions of interpersonal relations are necessary and sufficient to explain most human interaction. The dimensions are called Inclusion, Control and Affection. These categories measure how much interaction a person wants in the areas of socializing, leadership and responsibilities, and more intimate personal relations. FIRO-B was created, based on this theory, a measurement instrument with scales that assess the behavioral aspects of the three dimensions. Scores are graded from 0-9 in scales of expressed and wanted behavior, which define how much a person expresses to others, and how much he wants from others. Schutz believed that FIRO scores in themselves were not terminal, and can and do change, and did not encourage typology; however, the four temperaments were eventually mapped to the FIRO-B scales, which led to the creation of a theory of Five Temperaments. Schutz himself discussed the impact of extreme behavior in the areas of inclusion, control, and affection as indicated by scores on the FIRO-B. For each area of interpersonal need the following three types of behavior would be evident: (1) deficient, (2) excessive, and (3) ideal. Deficient was defined as indicating that an individual was not trying to directly satisfy the need. Excessive was defined as indicating that an individual was constantly trying to satisfy the need. Ideal referred to satisfaction of the need. From this, he identified the following types: Inclusion types. 1. the undersocial (low EI, low WI) 2. the oversocial (high EI, high WI) 3. the social (moderate EI, moderate WI) Control types 1. the abdicrat (low EC, high WC) 2. the autocrat (high EC, low WC) 3. the democrat (moderate EC, moderate WC) Affection types 1. the underpersonal (low EA, low WA) 2. the overpersonal (high EA, high WA) 3. the personal (moderate EA moderate WA)

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In 1977, a clinical psychologist who worked with FIRO-B, Dr. Leo Ryan, produced maps of the scores for each area, called "locator charts", and assigned names for all of the score ranges in his Clinical Interpretation of FIRO-B: Temperament by APS (all 3 areas) Melancholy Phlegmatic Melancholy/ Phlegmatic Choleric Choleric Sanguine Living Up To Expectations Phlegmatic/ Choleric Phlegmatic The Optimist Sanguine Phlegmatic Supine/ Phlegmatic Sanguine Supine Supine Phlegmatic/ Melancholy Phlegmatic Phlegmatic

Score Low e and w

Inclusion The Loner "Now You See Him,

Control The Rebel

Affection The Pessimist "Image of

moderate e, low w Now You Don't" Tendencies High e, low w Now You See Him, Now You Don't

Self-Confident

Intimacy" Tendency

Mission Impossible "Mission

Image/(Mask) of Intimacy

high e, moderate w The Conversationalist

Impossible" with Narcissistic Tendencies DependantIndependent conflict Let's Take a Break Openly Dependant

People Gatherer high e and w (formerly, "Where are the People?") moderate e, high w Hidden Inhibitions

Cautious Lover In Disguise

low e, high w

Inhibited Individual

Person; (w=6: Loyal Lieutenant)

Cautious Lover

low e, moderate w Cautious Expectation

The Checker

Careful Moderation Warm

moderate e and w Social Flexibility

The Matcher

Individual/The Golden Mean

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Sample Questions of FIRO B - It has 54 questions and each question has 6 options. One has to select one option for each question which best applies to his / her behavior. Some example questions are as follows: 1. I try to be with people a) Usually b) Often c) Sometimes d) Occasionally e) Rarely f) Never

2. I let other people decide what to do a) Usually b) Often c) Sometimes d) Occasionally e) Rarely f) Never

3. I join social groups a) Usually b) Often c) Sometimes d) Occasionally e) Rarely f) Never

4. I try to have close relationships with people a) Usually b) Often c) Sometimes d) Occasionally e) Rarely f) Never

ANNEXURE 2: SAMPLE BEHAVIORAL EVENT INTERVIEW QUESTIONS


Tell me about a time when you were on a team, and one of the members wasnt doing his or her share. Tell me about a time when you felt a need to update your skills or knowledge in order to keep up with the changes in technology. How did you approach that? Describe a time when a customer got angry with you. How did you react? How did you resolve the situation? Please give me an example of a time when you took the initiative to improve a specific work process. Give me an example of a time when you surpassed a customers expectations.

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Tell me about a time when a customer requested special treatment that was out of the scope of normal procedures. What was the situation and how did you handle it? Describe a time when you had to use logic and good judgement to solve a problem. Tell me about a time when you had to cope with a stressful situation. Give me an example of a time when you had to make a split second decision. Give me an example of a time when you used your fact-finding skills to solve a problem. Describe a time when you put your needs aside to help a co-worker understand a task. How did you assist them? What was the result? Tell me about a time when a customer requested special treatment that was out of the scope of normal procedures. What was the situation and how did you handle it? Describe a time when you had to use logic and good judgment to solve a problem. Tell me about a time when you had to cope with a stressful situation. Give me an example of a time when you had to make a split second decision. Give me an example of a time when you used your fact-finding skills to solve a problem. Describe a time when you put your needs aside to help a co-worker understand a task. How did you assist them? What was the result?

ANNEXURE 3: COMPETENCY BASED INTERVIEW QUESTIONS


CORE COMPETENCIES Adaptability

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Tell me about a time when you changed your priorities to meet others' expectations. Describe a time when you altered your own behaviour to fit the situation. Tell me about a time when you had to change your point of view or your plans to take into account new information or changing priorities. Client Focus Give an example of how you provided service to a client/stakeholder beyond their expectations. How did you identify the need? How did you respond? Tell me about a time when you had to deal with a client/stakeholder service issue. Describe a situation in which you acted as an advocate within your organization for your stakeholders needs where there was some organizational resistance to be overcome. Communication Describe a situation you were involved in that required a multi-dimensional communication strategy. Give an example of a difficult or sensitive situation that required extensive communication. Tell me about a time when you really had to pay attention to what someone else was saying, actively seeking to understand their message. Organizational Awareness Describe the culture of your organization and give an example of how you work within this culture to achieve a goal. Describe the things you consider and the steps you take in assessing the viability of a new idea or initiative. Tell me about a time when you used your knowledge of the organization to get what you needed. Problem Solving and Judgment Tell me about a time when you had to identify the underlying causes to a problem. Describe a time when you had to analyze a problem and generate a solution. Tell me about a situation where you had to solve a problem or make a decision that required careful thought. What did you do?

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Results Orientation Tell me about a time when you set and achieved a goal. Tell me about a time when you improved the way things were typically done on the job. Describe something you have done to improve the performance of your work unit. Describe something you have done to maximize or improve the use of resources beyond your own work unit to achieve improved results. Teamwork Tell me about a time when you worked successfully as a member of a team. Describe a situation where you were successful in getting people to work together effectively. Describe a situation in which you were a member (not a leader) of a team, and a conflict arose within the team. What did you do? ROLE SPECIFIC COMPETENCIES Developing Others Tell me about a time when you coached someone to help them improve their skills or job performance. What did you do? Describe a time when you provided feedback to someone about their performance. Give me an example of a time when you recognized that a member of your team had a performance difficulty/deficiency. What did you do Impact and Influence Describe a recent situation in which you convinced an individual or a group to do something. Describe a time when you went through a series of steps to influence an individual or a group on an important issue. Describe a situation in which you needed to influence different stakeholders with differing perspectives. Innovation

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Describe something you have done that was new and different for your organization that improved performance and/or productivity. Tell me about a time when you identified a new, unusual or different approach for addressing a problem or task. Tell me about a recent problem in which old solutions wouldn't work. How did you solve the problem? Leadership Tell me about a time when you had to lead a group to achieve an objective. Describe a situation where you had to ensure that your "actions spoke louder than your words" to a team. Describe a situation where you inspired others to meet a common goal.

Relationship Building Describe a situation in which you developed an effective win/win relationship with a stakeholder or client. How did you go about building the relationship? Tell me about a time when you relied on a contact in your network to help you with a work-related task or problem. Give me an example of a time when you deliberately attempted to build rapport with a co-worker or customer. Resource Management Describe a situation in which you took a creative approach to resourcing to achieve a goal. Tell me about a time when you had to deal with a particular resource management issue regarding people, materials or assets. Describe the options you would consider to resource a project or goal if you did not have the available resources within your own span of control. Describe a situation in which you established a partnership with another organization or stakeholder to achieve a mutual goal. What steps did you take to ensure the partnership was effective?

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Self-Management Describe the level of stress in your job and what you do to manage it. Describe a time when you were in a high pressure situation. Describe a time when things didn't turn out as you had planned and you had to analyze the situation to address the issue. Strategic Thinking Describe a challenge or opportunity you identified based on your industry knowledge, and how you developed a strategy to respond to it. Describe a time you created a strategy to achieve a longer term business objective. Describe a time when you used your business knowledge to understand a specific business situation.

Notes _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________
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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________________________________________________________

4. PERFORMANCE MANAGEMENT SYSTEM


Performance management system, which typically includes performance appraisal and employee development, is the Achilles heel of human resources management. Performance management involves enabling people to perform their work to the best of their ability, meeting and perhaps exceeding targets and standards. Performance management is the process of assessing progress toward achieving predetermined goals. It is building on that process, adding the relevant communication and action on the progress achieved against these predetermined goals. Performance Management System enables a business to sustain profitability and performance by linking the employees' pay to competency and contribution. It provides opportunities for concerted personal development and career growth. It brings all the employees under a single strategic umbrella. Most importantly, it gives supervisors and subordinates an equal opportunity to express themselves under structured conditions.

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4.1 WHAT IS PERFORMANCE If due to the contribution of an individual: a) the Actual Result > the Desired Results , then the performance is excellent b) the Actual Result < Desired Result then it could constitute the performance improvement zone. Performance management and improvement in an organization usually is an annual cycle, in which: 1. Performance planning where goals and objectives are established, in the beginning of the appraisal year. 2. Performance coaching where a manager intervenes from time to time to give feedback and adjust and calibrate performance. 3. Performance appraisal where individual performance is formally documented. 4. Post appraisal, rewards based on performance are determined. 5. Development programmes are designed to enhance performance in the current job 6. Identification of employees for taking up higher positions in an organization is made. 4.2 THE ROLE OF BOSS IN APPRAISAL PROCESS A boss has an important role in the Appraisal. We briefly cover these aspects below: - To jointly agree on what is expected of the subordinate and what way the boss can support him to achieve the goals and objectives set - - To know and communicate how well he is doing - Give him guidance whenever needed in form of counselling, coaching, career planning etc. - Take decisions pertaining to salary increase, promotion, change of role, relocation etc. 4.3 KEY COMPONENTS OF A PERFORMANCE APPRAISAL SYSTEM 4.3.1 Identification of Key Performance Areas (KPAs) Performance should be appraised against certain goals and objectives (G&O). These G&O

should have been agreed between the employee and his supervisor. The ideal way is that every

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employee should sit with his reporting officer a year in advance and identify the areas of his performance which are important to perform his role. The critical functions associated with a given role may be called as key performance areas or key function areas. After identifying key function areas, it is necessary for both, the employee & his supervisor. 4.3.2 Setting of goals & objectives every year for the next year In order to have a clear understanding of the expectations, it is useful to set goals or objectives under each KPA. In order that an individual employee stays aligned to the company goals and objectives, The ideal way to reach an employee KRAs is by cascading the company objectives down to a unit level, then to a department level and then further cascading it to an individual level.

4.3.3 Identifying behavioural dimensions critical for managerial effectiveness A good performance appraisal system should also have a set of behavioural dimensions that are critical for managerial effectiveness. These dimensions should be desirable for performing more and higher managerial jobs. A few examples of such behavioural dimensions are given below:

Communication skills Inter-personal skills Problem-solving Team work Adaptability/Flexibility Initiative Decision Making Leadership Maturity

The behavioural dimensions vary from company to company. For example, the Tata Group has identified 13 leadership competencies, which form the part of its appraisal system. Every manager of the company is measured on these competencies. This has been done by Tata Group

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to communicate to the employees as to what are the important behaviours that the Tata Managers must display. This not only does bring a common understanding and standardization across the organization, it also helps develop a common culture that is customer-centric and contribution based. Behavioural dimension often varies with the level of individual in the organisation. 4.3.4 Periodic review of performance on G&O set and behavioural dimensions Review discussion meetings should include the following: - Review of progress on tasks and activities in relation to the employees performance plan; - The developmental initiatives taken by the employee himself and those planned by the management for the employee; - Identification of variances in terms of delays, requisite quality and shortfall in help planned for the employee, if any; - Analyzing the causes of the delay, the problems faced and the solutions adopted; - Preparation of action steps for solving identified problems and contingency plans for anticipated problems. Periodic review meetings become meaningful only when they help pause, reflect, take stock and strategize for any mid-couse correction either in the Goals and Objectives already set following some change triggered by the organization or there is addition or deletion of certain tasks. Further, the Reporting Officer may give a feedback for behaviour modification of the employee. For each goal and behaviour, the appraiser has to do a rating. Ratings on performance and behaviour are necessary in any appraisal system to generate data. These ratings also form a basis for discussions and exchange of expectations. Some companies use expressions like exceeds expectations (EE), Meets Expectations (ME), Below Expectations (BE); some other use scaling systems of 5 point, 10 point, etc. In an organization which follows a transparent appraisal system, these ratings give an opportunity for the employee to know why has the reporting officer rated him at 3 or 4 on a rating scale of 0 to 5. If the employee disagrees with the rating, he puts forth his point of view as to why the rating should be better. This leads to an open discussion and information sharing. It also clarifies the actual situation to both the parties at times leading to change in the original rating. 4.3.5 Performance review and discussions

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People spend a lot of time in the organisation trying to achieve targets and perform task related functions but they rarely spend any time to discuss how they are working. Performance appraisal should provide opportunity where an officer & supervisor can sit together and share with each other their problems, difficulties, perceptions, views, etc. The three key elements of performance review meetings are: - Feedback - Providing information on how a person has been doing. - Measurement assessing results against agreed targets and standards. - Exchange of views - Ensuring that the discussion involves a full, free and frank exchange of views about what has been achieved, what needs to be done to achieve more and what employees think about their work the way they are managed and their aspirations. 4.3.6 Identification of development needs & development of action plan for future Performance appraisal data is useful in identifying the training needs of employees. Constantly poor performance on certain dimensions can be identified. Training & development activities aimed at developing the employees on these dimensions can be planned. Development activities may take the form of organising internal training programmes, sponsoring for outside programmes, delegating higher responsibilities, job rotation for acquiring new skills, etc.

4.3.7 Team /Organisation level normalisation Normalisation is a process to rank individuals within a group or team on relative basis. For example- For a group of ten individuals normalisation will help to rank and identify who the best and not-so-best individuals within the group are. Normally the contribution of an employee is a function of his performance (which is achieved by attaining goals & objectives) and the leadership qualities he/she possesses. The employees are ranked on a relative basis so that the contribution rating gets distributed in a pattern.

GOALS & OBJECTIVES CONTRIBUTION MATRIX High Result Orientation (HRO) Average Result Orientation (ARO) Low (LRO) Result

Orientation

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Highly LEADERSHIP Competent (HC) Moderate Competent (MC) Low Competent (LC)

Very HIPOs A+ (20%) HIPOs A (10%) High Achievers B (10%)

HIPOs A (10%) Average Achievers B (10%) Placed OK C (10%)

Under Achievers B (10%) At Risk C (10%) High Risk CUnsatisfactory (10%)

The objective of doing the same is to plan the career/look after the employees who are your Very HIPOs (Very High potential employees) OR your most critical manpower and look for alternative routes for your employees who are not performing. The idea is to reward suitably to your high performing employees and weed out your bottom 10% employees so that fresh blood in form of new employees can be infused into the system. Very HIPOs (A+): These employees are your best employees in terms of achievement of goals and are highly competent. Very serious efforts need to be made to retain them as they are the key people driving the business. HIPOs (A): These employees are not the best but still are very critical for the operation of the business. Out of these, one group of people are very high on achievement of goals and the other group is extremely high on capability side. High/Average/Under Achievers (B/B+): These are three categories of employees. One group is very high on achievement of goals but totally lacks leadership qualities. Another group of employees are average on result orientation and competencies. The third group of employees are under achievers but do possess high competencies. The organization can harvest these & pull them to the level of HIPOs, by training & development. Placed OK / At risk (C): These employees are mostly passive to competition & lack a zest to achieve above average results. Out of these, one group of people are at high risk as they are the ones who are extremely low on achievement of goals and the other group is placed ok as they perform averagely and are better on capability side.

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High Risk / Unsatisfactory (C-): The organization has to do away with the unproductive 10% of the lot, in order to infuse new & innovative brains in the organization. These employees are easy target for any layoffs or retrenchment requirement in case of any restructuring. The Performance Appraisal process closes after the normalization & the Goals & Objectives for the next year are set along with the employee. 4.4 TRADITIONAL PERFORMANCE APPRAISAL METHODS 4.4.1 Confidential Report Method This is a traditional form of performance appraisal, still being followed by the Government of India and the State Goverments. A confidential report is a report on the subordinate by the immediate superior and covers a limited range of aspects like the candidates strengths, weaknesses, major achievements or failures, information on some personality traits and behavioural aspects. The confidential report system is usually a descriptive one and permits a lot of subjectivity. This method is widely used for a variety of employee related decisions, particularly transfers, promotions and redundancy management. 4.5.2 Essay Appraisal Method This traditional form of appraisal, also known as Free Form method involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator. 4.5.3 Straight Ranking Method This is one of the oldest and simplest techniques of performance appraisal. This technique provides for an ordinal scoring; first, second, third and so on. In this method, the appraiser is required to rank from the best to the poorest all the subordinates in the same work unit on the

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basis of their overall performance or effectiveness. This technique is quite useful and simple. However, it is difficult to assign relative ranking to those at the bottom.
STRAIGHT RANKING METHOD List all the employees you want to rank. Put the highest ranking employees name on line 1 and keep on ranking all the employees. Highest-ranking employee 1. ____________________________ 2. ____________________________ 3. ____________________________ 4. ____________________________ 5. ____________________________ 6. ____________________________ 7. ____________________________ 8. ____________________________ 9. ____________________________ 10. ___________________________ 11. ____________________________ 12. ____________________________ 13. ____________________________ 14. ____________________________ 15. ____________________________ 16. ____________________________ 17. ____________________________ 18. ____________________________ 19. ____________________________ 20. ____________________________ Lowest-ranking employee

4.4.4 Paired Comparison This is a better technique of comparison than the straight ranking method. This method

requires the rater to appraise which of the two employees is superior, instead of having to rank order all the employees in the same work unit. This method is widely used when the group to be appraised is small. Method of paired comparison; No. of persons to be compared, N = n (n 1) / 2 If we compare 7 persons, we will have 21 comparisons and if we compare 15 persons, we will have 105 comparisons. In this we see, if number of persons is roughly doubled, the number of comparisons to be made rose by factor of five. The final ranking is determined by the number of times an individual is judged better than the others. The rater compares an employee with every other individually as shown in the following diagram.

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In the above example, Bhavana is preferred over Arup, so Bhavana has got + and Arup has got -. Similar is the case, when Charles is compared with Arup. Whereas, Arup is preferred over Dilip and Eeshwar. Overall Bhavana is judged better than all others as she has got 4 +. The biggest limitation of paired comparison method is that it is too cumbersome for large numbers. A manager who wished to evaluate 20 subordinates using the paired comparison would be faced with almost 200 decisions. The paired comparison asks raters to judge ordinal position only which one is better with no allowance for an "equals" judgment.

4.4.5 Critical Incident Method In this method, a supervisor describes critical incidents, giving details of both positive and negative behaviour of the employee. These are then discussed with the employee. The discussion focuses on actual behaviour rather than on traits. While this technique is well suited for performance review interviews, it has the drawback that the supervisor has to note down the critical incidents as and when they occur. That may be impractical, and may delay feedback to employees. It makes little sense to wait six months or a year to discuss a misdeed, a mistake or good display of initiative. For eg. I saw Mishra closing the steam line valve at the instant the pipeline burst on 22 nd of August, 2007. We could save a lot of lives due to his instantaneous action. Advantages of this method:

Data is collected from the respondents perspective and in his or her own words. Does not force the respondents into any given framework.

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Identifies even rare events that might be missed by other methods which only focus on common and everyday events. Useful when problems occur but the cause and severity are not known. Inexpensive and provides rich information. Emphasizes the features that will make a system particularly vulnerable and can bring major benefits (e.g. safety). Can be applied using questionnaires or interviews. First problem comes from the type of the reported incidents. The critical incident technique will rely on events being remembered by users and will also requires the accurate and truthful reporting of them. Since critical incidents often rely on memory, incidents may be imprecise or may even go unreported.

Disadvantages of this method:

The method has a built-in bias towards incidents that happened recently, since these are easier to recall. It will emphasize only rare events; more common events will be missed. Respondents may not be accustomed to or willing to take the time to tell (or write) a complete story when describing a critical incident.

4.4.6 Checklist Method A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. The following are some of the sample questions in the checklist. Is the employee really interested in the task assigned? Is he respected by his colleagues (co-workers) Does he give respect to his superiors? Does he follow instructions properly? Does he make mistakes frequently? Yes/No Yes/No Yes/No Yes/No Yes/No

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A rating score from the checklist helps the manager in evaluation of the performance of the employee. The checklist method has a serious limitation. The rater may be biased in distinguishing the positive and negative questions. He may assign biased weights to the questions. Another limitation could be that this method is expensive and time consuming. Finally, it becomes difficult for the manager to assemble, analyze and weigh a number of statements about the employees characteristics, contributions and behaviors. In spite of these limitations, the checklist method is most frequently used in the employees performance evaluation. 4.5 MODERN METHODS OF PERFORMANCE APPRAISAL 4.5.1 Forced Distribution To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. It's a workforce-management tool based on the premise that in order to develop and thrive, a corporation must identify its best and worst performers, then nurture the former and rehabilitate and/or discard the latter. Jack Welch, retired Chief Executive Officer of General Electric (GE), is most often associated with forced ranking, since GE used this performance management tool to eliminate the bottom ten percent of performers each year. Many other companies and organizations have now realised the benefits of Forced distribution method. Dick Grote, president of Grote Consulting and a performance appraisal expert, contends "Managers would rather have a tooth pulled than have a performance conversation with a subordinate.Dealing with poor performers is probably the most difficult job that anybody with supervisory responsibility has". The general lenience with poor performers, which translate to an unfair and bigger burden for good performers, is the primary reason that so many companies have turned to forced ranking as a performance intervention. The result of such a process is often brutally blunt: The top 20 percent of performers are amply rewarded, and the bottom 10 percent is shown the door. Jack Welch, General Electrics former CEO, is often associated with a 20-70-10 distribution: the top 20 percent is rewarded for best performance, the middle 70 percent is rated average and the bottom 10 percent is coached for improvement. The rank-and-yank system, also

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associated with Jack Welch, automatically terminates employees in the bottom category, allowing organizations to purge the worst performers.

Grote explains it really well- In forced ranking you're evaluating the person in a different way; it's now a relative comparison. You're no longer asking how good a job X did against his objectives. Now what you're asking is, how good a job did X do compared to how well Y, Z and A did. That's a much more difficult one, and managers tend to be very reluctant to say X is as good as Y but not as good as Z. There are several ways to do this. The most common being the identification of top 20% workers in an organization, the vital 70% and the bottom 10%. The Forced Distribution method on the other hand is used upon the Bell Curve and includes identification of the: Distinguished 5%, Superior 20%, Fully Successful 50%, Needs Improvement 20% and Unsatisfactory 5%. Creating a forced ranking system forces a company to articulate the criteria that are required for success in the organization. General Electric Company (GE), for example, has identified its four Es: the set of criteria it uses to rank its managers and executives: high energy level, the ability to energize others around common goals, the edge to make tough yes/no decisions, and the ability to consistently execute and deliver on promises. These criteria were determined over a period of several years and were the result of serious deliberation. Other companies have settled on different criteria. Demerits: Forced ranking has its detractors. This technique of forcing managers to delineate performance has been called brutal and Darwinian. One common criticism is that it pits associates against each other, instead of fostering a collaborative work environment. On those occasions when managers lead truly high-performing teams, someone still must be ranked

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low, despite meeting performance plan goals. To replace that person with an unknown is expensive. 4.5.2 Behaviourally Anchored Rating Scales (BARS) This technique was developed by Patricia Cain Smith and Lorne Kendall. Behaviourally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioural statements describing important job performance qualities as good or bad (for eg. the qualities like inter-personal relationships, adaptability and reliability, job knowledge, etc). These statements are developed from critical incidents. It is a series of continuous graphic rating scales arranged vertically. Behavioural descriptions exemplifying various degrees of each dimension serve as anchors on the scale. The objective is to design in such a way as to allow superiors to be more comfortable while giving feedback. In this method, an employees actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge. Steps in BARS development Generate critical incidents: People with knowledge of the job to be probed, such as job holders and supervisors, describe specific examples of effective and ineffective behavior related to job performance. Develop performance dimensions: The people assigned the task of developing the instrument cluster the incidents into a small set of key performance dimensions. Generally between five and ten dimensions account for most of the performance. Example of performance dimensions include technical competence, relationships with customers, handling of paper work and meeting day-to-day deadlines. While developing varying levels of performance for each dimension (anchors), specific examples of behavior should be used, this could later be scaled in terms of good, average or below average performance. Reallocate incidents: Another group of participants who are knowledgeable about the job is instructed to retranslate or reclassify the critical incidents generated (in Step II) previously. They are given the definition of job dimension and told to assign each critical

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incident to the dimension that it describes best. At this stage, incidents for which there is not 75 per cent agreement are discarded as being too subjective. Scale the incidents: Each incident is then rated on a one-to-seven or one-to-nine scale with respect of how well it represents performance on the appropriate dimension. A rating of one represents ineffective performance; the top scale value indicates very effective performance. The second group of participants usually assigns the scale values. Means and standard deviations are then calculated for the scale values assigned to each incident. Develop a final instrument: About six or seven incidents for each performance dimension all having met both the retranslating and standard deviation criteria will be used as behavioral anchors. The final BARS instrument consists of a series of vertical scales (one for each dimension) anchored (or measured) by the final incidents. Table: An Example of Behaviorally Anchored Rating Scale (BARS) Performance Extremely good Good Above average Average Below average Poor Extremely poor Points 7 6 5 4 3 2 1 Behavior Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country. Can expect to initiate creative ideas for improved sales. Can expect to keep in touch with the customers throughout the year. Can manage, with difficulty, to deliver the goods in time. Can expect to unload the trucks when asked by the supervisor. Can expect to inform only a part of the customers. Can expect to take extended coffee breaks and roam around purposelessly.

Because the above process typically requires considerable employee participation, its acceptance by both supervisors and their subordinates may be greater. Proponents of BARS also claim that such a system differentiates among behavior, performance and results and consequently is able to provide a basis for setting developmental goals for the employee. Because it is job-specific and identifies observable and measurable behavior, it is a more reliable and valid method for performance appraisal.

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Researchers, after surveying several studies on BARS, concluded that despite the intuitive appeal of BARS, findings from research have not been encouraging. A specific deficiency is that the behaviors used are activity oriented rather than result oriented. This creates a potential problem for supervisors doing the evaluation, who may be forced to deal with employees who are performing the activity but not accomplishing the desired goals. Further, it is time consuming and expensive to create BARS. 4.5.3 Management by Objectives (MBO) The concept of Management by Objectives (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. Management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measures as guide for operating the unit and assessing the contributions of each of its members. Practicing management scientists and pedagogues view it as a philosophy of managerial practice; it is a method by which managers and subordinates plan, organize, control, communicate and debate. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities. Six MBO Stages

1. Define corporate objectives at board level


2. Analyze management tasks and devise formal job specifications, which allocate responsibilities and decisions to individual managers 3. Set performance standards 4. Agree and set specific objectives 5. Align individual targets with corporate objectives

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6. Establish a management information system to monitor achievements against objectives Unique features and advantages of MBO The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Some of the important features and advantages of MBO are:

Clarity of goals With MBO, came the concept of SMART goals i.e. goals that are: Specific, Measurable, Achievable, Realistic and Time bound.

The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.

The focus is on future rather than on past.

Goals and standards are set for the

performance for the future with periodic reviews and feedback.

Motivation Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better communication and Coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. MBO is a systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals. It allows the subordinate plenty of room to make creative decisions on his own

4.5.4 Balanced Scorecard To evaluate the organisational and employee performance in Performance appraisal management processes, the conventional approach measures the performance only on a few parameters like the action processes, results achieved or the financial measures etc. The Balanced scorecard an approach given by Kaplan and Norton in early 1990s - provides a framework of various measures to ensure the complete and balanced view of the performance of the employees. Balanced scorecard focuses on the measures that drive performance. Balanced scorecard is a tool to execute and monitor the organisational strategy by using a combination of financial and non financial measures. It is designed to translate vision and

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strategy into objectives and measures across four balanced perspectives: financial, customers, internal business process and learning and growth. It gives a framework ensuring that the strategy is translated into a coherent set of performance measures. The two basic features of the balanced scorecard are: A balanced set of measures based on the four perspectives of balanced scorecard Linking the measures to Employee Performance

The four Perspectives recommended by Kaplan and Norton for the managers to collect information are: Financial The financial measures include the results like profits, increase in the market share, return on investments and other economic measures as a result of the actions taken. Few examples of KPIs used are: Cash Flow, Return on Investment (ROI), Financial Result, Return on capital employed, Return on equity, etc. Customer - These measures help to get on customer satisfaction, the customers perspective about the organisation, customer loyalty, acquiring new customers. The data can be collected from the frequency and number of customer complaints, the time taken to deliver the products and services, improvement in quality etc. Few examples of KPIs are : Delivery Performance to Customer - by Date, Delivery Performance to Customer by Quality, Customer satisfaction Index, Customer intimacy or Product leadership, Customer retention %, New customer acquisition, market share, short lead time, on time delivery, Innovative products, etc. Internal business processes These are the measures related to the organizations internal processes which help to achieve the customer satisfaction. It includes the infrastructure, the long term and short term goals and objectives, organisational processes and procedures, systems and the human resources. Examples: Number of Activities, Opportunity Success Rate, Accident %, Equipment Effectiveness %, After sales service, Rejection %, Reduced time, etc. Learning & Growth The learning and growth measures cover the organisations ability to learn, innovate and improve. They can be judged by employee skills matrix, key competencies, value added and the revenue per employee. etc. Example: Employee Satisfaction Index, Internal Promotions %, Employee Turnover, Gender/Racial Ratios,

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Balanced Scorecard Approach to Measure Performance Instead of relying on just one instrument or measure, using a balanced set of measures ensures that all the aspects of the employees performance are covered and provide relevant support for the decisions taken. For each perspective of the following things are measured:

Objectives: the goals and the targets to be achieved Measures: the standards which will be used to measure the actual performance and the progress. Action plans: the initiatives taken and the course of action to be followed to achieve the objectives.

The balanced scorecard approach can be used and applied at both the individual and the organisational level. In most of the organisations, the common practice of measuring the employee performance refers to only the comparison of their action plans and behaviours with the standards set i.e. without actually measuring the results of their actions like profits and increase in market share. This conventional practice can lead to the appraisal of most of the employees without any or little progress towards achieving the goals and objectives of the organisation. Thus, the balanced scorecard gives the complete view of the employees and the organisational performance and helps to align the employee performance/action plans with the organisational goals. Benefits of Balanced Scorecard The benefits of the balanced scorecard approach in measuring performance are:

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Gives the complete picture of the employee as well as the organisational performance. It guides users in determining the critical success factors and performance indicators. Strategic review or analysis of the organisational capabilities and performance. Focusing the whole organisation on the few key things needed to create breakthrough performance. Integrating and directing the performance and efforts from the lowest levels in the organisation to achieve excellent overall performance.

4.5.5 Assessment Centres We can trace the existence of assessment centres back to 1942 when they were used by War Office Selection Boards in USA. Their introduction stemmed from the fact that the existing system was resulting in a large proportion of those officers it had predicted would be successful being 'returned to unit' as unsuitable. The assessment centre approach subsequently adopted was an attempt to accurately elicit the types of behaviour that an officer was required to display in order to be successful in their job. The tasks included leaderless group exercises, selection tests and individual interviews by a senior officer, junior officer and psychiatrist respectively. During the post war years this system was so successful that it was introduced for selection to the Civil Service and a variation of it is still used for officer selection in the armed forces to this day. Subsequently the use of assessment centres was taken up by the private sector especially the giant American Telephone and Telegraph Company (AT&T) which began using assessment centres for management selection in 1956 as well as Standard Oil Ohio, IBM, Sears and General Electric. Assessment centres typically involve the participants completing a range of exercises which simulate the activities carried out in the target job. Various combinations of these exercises and sometimes other assessment methods like psychometric testing and interviews are used to assess particular competencies in individuals. What can be called an assessment centre? Assessment Centres consist of many multiples Multiple competencies to be evaluated for in a candidate. Multiple observers to eliminate the subjectivity & increase objectivity involved in the process.

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Multiple participants 18 -21 batch size Multiple exercises like role plays, case analysis, presentations, group discussions etc Multiple simulations: These could be creative, crisis or exploitative type simulations. Multiple observations: Each observation is observed atleast twice.

Assessment centres are used for


Selection Assessment Centres help organizations in getting the right people in. Career development The identification of the competencies possessed by the individual helps organization decide his career plans. Potential appraisal Assessment Centres help organizations identify if the person can handle the challenges offered in the next higher position. Identification of high potential managers This creates a pool of managerial talents & multifunctional managers that would be available across the business group etc. Succession planning Identifying the right individual for critical positions such as CEO, CFO etc is very important for the success of the organization. Allocation of challenging assignments Assessment Centres provide the organization with the strengths and weaknesses of every participant. This helps the organization in deciding the candidates who would have the necessary abilities to undertake the proposed challenging assignments.

Management development Assessment Centres provide ample opportunity to its participants to reflect on ones capabilities and to improve by observing others perform in the AC.

Identification of training needs Assessment centres provide candidates and organization with concrete data on the improvement areas, which can be utilized, for training.

Exercises in Assessment Centres: Following are the most widely used exercises in Assessment Centres. Every exercise unveils presence/absence of certain competency in the participant. The competencies that are normally evaluated through these different exercises are mentioned below:
Tool Explanation Competency

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Case study interview

Requires candidates to read a large set of information and then answer questions relating to the subject matter

Analytical skills, assimilation of information, prioritization of information, time-management, working under pressure Analytical skills, business acumen, communication, interpersonal skills, personal attributes, teamwork

Competency-based interview

Includes personal history questions and problem-solving tasks and scenarios

Fact-finding exercise

Includes research and retrieval of information on a given subject or interaction with the interviewer to obtain further information from them Includes problem solving within a committee or team Includes prioritizing documents, drafting replies to letters, and delegating Includes building important tasks a structure with limited materials Involves a 10 to 15 minute presentation on a pre-determined topic. Includes a personality questionnaire and/or numerical, verbal, and diagrammatic reasoning tests. Involves acting-out a business-related situation Involves producing a concise written summary from a collection of documents.

Communication, professional interaction

Group exercise In-tray test Problem-solving task Presentation Psychometric/Pers onality/ Aptitude Tests Role-play exercise Written exercise

Personal assertiveness, teamwork, Interpersonal effectiveness, drive for result Time-management, analytical skills, business acumen Analytical skills, creativity, lateral thinking, resourcefulness Assimilation of information, presentation delivery, working under pressure Agreeableness, behavioural interaction, conscientiousness, extroversion /introversion, personal assertiveness, teamwork Approach to business situations Analytical skills, summarization, written communication

Advantages of Assessment Centres: Assessment centres not only help the organization in placing the right candidate for the right job/assignment but also helps in developing the participants. Assessment Centres can be customized for different kinds of jobs, competencies and organizational requirements. By involving the line managers in the procedure, assessment centres naturally gain support from them in the management decisions. Assessment Centres, even when conducted with selection purpose, do provide training to participants in the process.

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The validity coefficient is higher than most other techniques used for predicting performance. This is so because it simulates real job challenges and evaluates the candidate on the same.

Disadvantages of Assessment Centres: Assessment Centres are very costly and time consuming. Assessment Centres requires highly skilled observers as the observers may bring in their own perceptions and biases while evaluating. Those who receive poor assessment might become de-motivated and might lose confidence in their abilities. 4.5.6 360 Degree-Feedback 360-degree feedback, also known as 'multi-rater feedback', 'multisource feedback', or 'multisource assessment', is employee development feedback that comes from all around the employee. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders. In this system the candidate is assessed by a number of assessors including his boss, direct reports (subordinates), colleagues, internal customers and some times external customers. The assessment is made on a questionnaire specially designed to measure leadership styles, managerial qualities, impact and other behaviors considered critical for performance. Such feedback from multiple sources provides a credible picture and can be used for various purposes like: Providing insights into the strengths and developmental areas of the candidate in terms of the effective performance of roles, activities, styles, traits, qualities, competencies (knowledge, attitudes and skills), impact on others etc. Enhancing role clarity and establishing increased accountabilities. Identification of developmental needs and preparing development plans more objectively in relation to the current or future roles and performance improvements for an individual or a group of individuals. Leadership Development.

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Generating data for various personnel decisions (provided it is decided initially that the feedback is not meant only for the person but also to be shared completely with the organization).

Culture building and reinforcing other change management efforts and organization effectiveness directed interventions. This may include: TQM efforts, Customer focus or internal customer satisfaction enhancing interventions, Flat structures, Quality enhancing and cost reducing interventions, process changes, etc.

Aligning individual and group goals with organizational vision, values and goals. Planning internal customer satisfaction improvement measures. Identifying strengths that can be used to the best advantage of the business. Perception of feedback is more valid and objective, leading to acceptance of results and actions required. Encouraging more open feedback new insights.

360 degree feedback is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the on-the-job performance of the employee. 360 degree feedback has four integral components: 1. Self appraisal 2. Superiors appraisal 3. Subordinates appraisal 4. Peer appraisal. Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superiors appraisal forms the traditional part of the 360 degree appraisal where the employees responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superiors ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees abilities to work in a team, co-operation and sensitivity towards others.

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Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a "360-degree review" of the employees performance. The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. The results are also used by some organizations for making promotional or pay decisions, which is sometimes called "360-degree review. 360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes in perception about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe.

Disadvantages of 360-degree feedback Return on investment, for the time and energy required, is perceived to be minimal. Transparent feedback can be adversely affected by emotions and ongoing peer conflicts. Appraisees are not ready for honest and open feedback. Some cultures rigidly avoid passing negative feedback, or information, to superiors or elders. Under the circumstances, 360 degree feedback should be used as a supplement to other regular appraisal system used by the company. It should be limited to the senior and middle management levels of managers, who impact a large number of people within and outside an organization, including their own sub-ordinates.

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4.6 RATING ERRORS 4.6.1 Halo / Horn Effect Halo effect occurs when a rater attaches too much significance to a single factor of performance and gives similar ratings on other performance elements. Thus overall evaluation is significantly influenced by a single factor. Such a perception undermines the importance of other elements and leads to an unbalanced performance assessment of the individual. For example a manager rates a worker very high on quality because of her immaculate attention to details and lack of defects in her work. Then assuming the individual to be an overall high performer based on the quality of her work output, the manager rates her very high on efficiency, responsibility, punctuality, etc. without taking an objective look at her performance in these areas. 4.6.2 Central Tendency Error

Some supervisors "play safe" by rating around the golden mean - the average. This may be done to avoid the necessity to justify scoring across the two extremes as some systems expect managers to specify additional comments as they give too high or too low ratings to employees. This rating error is known as the central tendency bias. It is the huge amount of central tendency experienced in organizations across globe, which necessitated the introduction of bell curve or normalization forcing a comparison between employees performance and classifying them into different categories. We have already discussed normalization in the preceding section of this chapter. 4.6.3 Leniency Error

Some supervisors demonstrate a leniency bias and rate their subordinates very liberally which may make even average performers seem like star performers, attaining very high performance scores.

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For example : Mohan rates all his employees higher than he feels they actually deserve , in the assumption that this will cause them to live up to the high rating they have been given. 4.6.4 Recency (or Primacy) Effect

Performance appraisal involves assessment of employee performance for a specific period quarterly, annually etc. Employees may not perform uniformly throughout that period. It is therefore very important to review performance demonstrated throughout the period under consideration. However, recent events tend to overshadow the overall performance. Thus, a person who has worked very hard and excelled throughout the year, but for some inadvertent reasons had faced performance issues in the last weeks or month may at times get a poor appraisal from the supervisor, showing a recency bias. 4.6.5 First Impression Error

The tendency of a manager to make an initial positive or negative judgment of an employee and allow the first impression to colour or distort later information. For example; A manager who was new to the workplace observed an employee performing poorly (The employee was going through a bad phase of his life as his parents had just passed away in a road accident). Within a month the employees performance had returned to his previous high level, but the managers opinion of the individuals performance was adversely affected by the initial negative impression.

4.6.6

Similar-to-me effect

The tendency of individuals to rate people who resemble themselves higher than they rate others is called similar-to-me effect. For example: Mr. Singh has passed out from BHU and managed to become the zonal head of sales. He unwittingly rated Mr. Kumar who was also a pass out of BHU higher than his performance warranted.

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4.6.7

Attribution Error

The tendency to attribute performance failings to factors under the control of the individual and performance successes to external causes. For example: Ravi, a manager with a mixture of both excellent and mediocre performers in his work group, attributes the success of the excellent group to his quality of leadership and the failing of the mediocre group to their bad attitude and inherent laziness. 4.6.8 Stereo typing The tendency to generalize across groups and ignore individual differences. For example: Suresh, who is a salesman, is very quiet & reserved, almost meek. His sales record is, however, one of the best in the company. But his boss rated his performance lower than that of other sales people since he did not fit the mould, ignoring the results that Suresh had produced. 4.6.9 Status Effect The inclination to be affected by an individuals status / position while rating the individual. For example: Surbhi had a MBA degree from IIM, Ahmedabad and was selected for the companys fast track training programme. As a result his manager rated his performance as superior when actually it was mediocre.

4.6.10 Spillover / Past Performance Effect Permitting an individuals poor or excellent performance in a previous rating period to colour the managers judgement about his/her performance in this rating period. Or in other words, allowing past performance appraisal ratings to unjustly influence current ratings. For example: Last year Shravan was rated star and received the highest performance rating. This year again his supervisor rated him star, even though his performance this year was no better than other employees who were rated as performing.

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4.6.11 Strictness Error People differ in their tendency to evaluate people or performance. Some supervisors are very strict or conservative in their ratings and generally give low scores in their evaluations. This tendency may make high performers attain somewhat average ranking and average performers appear as poor performers. Raters with such tendency are known to have a strictness bias. 4.7 LIMITATIONS OF PERFORMANCE APPRAISAL In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are: Determining the evaluation criteria Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms. Create a rating instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Improper weightage Sometimes proper weight age may not be given to the different qualities to be rated. It is very important to give proper weightage Refer the form attached. Lack of competence The competence of the rater to rate the subordinates is a big question mark. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively. Errors in rating and evaluation Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the

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rater should exercise objectivity and fairness in evaluating and rating the performance of the employees. Resistance The appraisal process may face resistance from the employees and the trade unions (in factory situations) for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her. 4.8 CHARACTERISTICS OF AN EFFECTIVE PERFORMANCE APPRAISAL SYSTEM 1. Appraisal System should be tailored to specific needs of the Organization A company typically follows some strategies, tailored to its specific situation, to achieve its various goals. The company needs to ensure that the activities of its divisions, departments, other units and individual employees are aligned with and contribute to the firm's strategies and goals. The performance appraisal system should be designed to fit the specific requirements of the organization. 2. Rating factors should be objective and Concrete Employers should seek to maximize the degree of objectivity in performance appraisals, and to eliminate as much as possible the use of subjective factors. Dimensions such as initiative and dependability can be expressed in terms of behaviours. If a rater can demonstrate, in terms of employee behavior or work results, how and when the employee lacked a particular quality, then the appraisal will be more meaningful to the employee and more likely to be accepted.

3. Appraisals should be free of bias Performance ratings should not be influenced by race, sex, age or other factors. Unconscious or conscious prejudices toward subordinates may affect supervisors' appraisals. While prejudices are often deep-rooted, employers can, through explicit policy declarations, punishment of unacceptable supervisory behavior, and training, help to counteract these biases. 4. Procedures and administration should be uniform

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A system's procedures and its administration should be standardized and uniform in their application. This is especially important if information generated by the appraisals is to be used to compare employees. If it is not, the system will be seen as unfair and as giving preferential treatment to some employees and not to others. Periodic training of raters, issuance of clear instructions, definitions of terms used in appraisals and close monitoring of the system will help promote uniform administration. 5. The system should be easy to operate The system must be easy to administer and managers should be able to use it without undue effort. There should not be too many forms to complete; nor should they be burdensome to fill out. The system should not interfere with on-going operations. If the system proves too much of a burden for managers, they may see it as an imposition on their normal work activities. 6. The system's results should be used in decision making If nothing comes of performance appraisals, if they are merely recorded and placed in personnel files never to be referred to again, the system will be perceived as a useless exercise, as mere paperwork. For a system to be taken seriously it must be useful to line management. Using appraisals as a basis for rewards, promotions, work assignments, employee developmental activities, punishments and other personnel decisions will demonstrate the importance and credibility of the system. 7. The system should provide a review process To help ensure fairness in appraisal, some type of review mechanism should be established. Providing a safety valve may reduce complaints and is likely to help strengthen employee confidence in the system. Reviews of appraisals may be conducted automatically by superiors one or two levels above the rating supervisor. The process of review must be publicized to all employees.

8. The system should be acceptable to users Lack of user acceptance may well undermine a system. One way to increase acceptance is to involve users in developing the system. Providing periodic feedback on performance also is likely to promote acceptance of the system by ratees. Notifying them of performance shortcomings when they occur and giving ratees the opportunity to correct weaknesses reduce the possibility of surprises and resentment at the time of the annual performance review. 9. Performance ratings should be documented

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The ratings given to ratees should be substantiated by the raters and the ratings must be put in writing. The reasons for appraisals and specific instances of inadequate performance should be recorded in writing. Requiring raters to document their ratings provide other benefits such as motivating raters to give greater thought to their appraisals. 10. Raters should be trained and qualified For Performance appraisal to succeed, raters must be trained in the philosophy of the system and how to use the rating forms. Raters must be helped to develop skills for observing and recording employees' behavior and for giving them appropriate feedback. Training that uses role playing, behavior modeling through films and videotapes, and discussion is likely to be more effective than training which relies on lectures. In addition, the training should be bolstered by issuing written guidelines to which supervisors could refer. 11. Top Management Should Clearly Support the System Top management must demonstrate clearly, through words and actions that it is behind the system and is determined to see it succeed. Management's commitment may be manifested through strong policy statements backed by incentives that reward managers who help make the system a success and by penalties for those who are uncooperative or obstructive.

Linkages & Outcomes


Set Goals & Objectives

O U T C O M E S

Reward s

Performance Appraisal
Appraisal

Town Hall / Open House

Merit Salary Increase

Performance Management

Feedback Program

L I N K A G E S

Trainin g

Talent Review Planning 105

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4.9 ADMINISTERING OF PERFORMANCE MANAGEMENT SYSTEM IN LARGE ORGANISATIONS Performance management, in a human resource management, is the process of delivering sustained success to organizations by improving capabilities of individuals and teams. It supports the philosophical principle that people and not capital provide organizations with a competitive advantage. However in large organisations, performance management presents severe challenges in terms of practical implementation. The hallmark of an effective Performance management system is the ability to define and turn organizational strategies and plans into individual actions and record these actions into quantifiable terms. Process Flow of implementation of PMS Implementing PMS involves a phased process and these processes can be broadly classified into six phases. Phase 1 - PLAN/DESIGN Phase 2 - COMMUNICATE Phase 3 - TRAIN Phase 4 - MONITOR Phase 5 - CONSOLIDATE Phase 6 - FEEDBACK Phase 1 - PLAN /DESIGN

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The performance management system must be a systematic process to implement, therefore, planning becomes the most vital part. In large organisations, generally there is a central team who drives the entire initiative. This team along with the key business leaders and various stakeholders design the PMS system. Nowadays, technology plays a vital role in a successful implementation of PMS. In organisations, where the number of employees is too large and is geographically spread across various locations, technology/IT plays a major role. The appraisal form and the steps to complete the process are uploaded on the common portal of the organization. For confidentiality purpose, an employee can login to this portal and can access his form only after putting a password given to him/her. The system should be designed and supported by a proper database and relevant authorisations in such a way that only the relevant stakeholders are able to view the form. The e-enabled system provides for setting of goals & objectives in the beginning of the year with clear weightages, measures, targets which are broken quarterly or monthly. It follows a top down cascading approach. Business Head first prepare his/her G&O. Before the next level employees make their G&O, the G&O of business head should be visible to all of them. Similarly it is drilled down to the last level. On a quarterly or monthly basis, an online review mechanism is built in the system. To bring in transparency in assessment, organisations have started recording of critical incidents (achievements / struggles) by each supervisor against each of his team member. The objective is to eliminate reliance on memory as primary method of evaluating an employee. Time to time, the supervisor can keep on recording the critical incidents on the portal under PMS category. In many organisations, the system also provides option of either to share it with the employee or not. While designing an e-enabled system for PMS, factors to be kept in mind are: Ease of operation, network connectivity for geographically spread workforce, Confidentiality, whom to contact in case of problem, FAQs about the process, etc. Before launching the system, it should be thoroughly checked for ease of implementation. The e-enabled form should be easy to operate, should provide facility of auto save, should be easily viewable and should be easily printable. The system should be such that employees feel comfortable using the sytem therefore training plays a vital role in making employees understand the process. Phase 2 COMMUNICATE

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The implementation of performance management system fails largely due to the employees and management of the organization not having fully understood why the initiative had been created and what benefits both the employees and the organization were meant to derive from it. Once the system is approved and is checked for its robustness, the communication strategy should be implemented. This involves communicating the key features, benefits and impact of the scheme. The central team, driving the initiative, plays a crucial role as the communication should be common across locations. For each business or location, employees are identified who act as SPOCs (Single point of contact) for employees in their business or location. They also act as the representative of the central team who is driving this entire initiative. Phase 3 - TRAIN The implementation of e-enabled performance management systems often necessitates training. Train the trainer As a first step, the SPOCs are trained by the central team about the entire process. It becomes necessary to train them as they will be implementing the performance management system and drive it for their businesses or locations. Employee/staff briefings A briefing session for all participating employees (staff) can answer queries and concerns, providing a solid foundation for successful implementation. Performance management content can include the system structure, corporate rationale, expected benefits, requirements, "how-to-do" in system, steps involved in the process, who is to do what, approaches and the like. Team leader and manager training More extensive training is required for team leaders and managers who will conduct the review discussions. This includes: identifying and writing performance objectives, adapting corporate objectives to the individual/team, how to define the measures, discussion and questioning techniques, HR policies (particularly in regard to compensation, training/education support), handling salary discussions, etc. Phase 4 - MONITOR

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Phase 3 is generally the fore runner to the actual implementation. Once the process is implemented a constant monitoring is required. A careful monitoring of the implementation process is crucial to ensuring its sustained effectiveness. This includes activities such as obtaining measurable outcomes in order to provide a clear focus for monitoring and following through the process. Essential elements of this include control and feedback in the form of both formal and informal mechanisms that allow the process of implementation to be monitored. This helps in collecting real time feedback and provides with the opportunity of constant process improvement and timeliness of the entire process. A user manual for every stakeholder, i.e., the employee, his supervisor, supervisors supervisor, SPOC, etc. with step by step process is handy for smooth implementation of the Performance management system. Phase 5 - CONSOLIDATE This phase involves the consolidation of the outcome of the entire process. On the basis of the inference a clear demarcation is done between the high potential employees, performing employees, average employees and below average employees/laggards. Business wise and location wise performance rating of employees is normalized and a normal curve is arrived at. The employees are categorized on the basis of their performance (E.g. Excellent, good, average, below expectations, etc.) Phase 6 - FEEDBACK The communication post appraisal should not only include the Salary and compensation gains but also include the following - Performance areas to be improved - The level of work performance expectation - Identify and specify the support and resources to be provided to assist the employee. - Specific possible consequences if performance standards are not met. - Carrier progression chart

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ANNEXURE 1: SAMPLE GOALS & OBJECTIVES SHEET

Goal & Objectives Sheet - FY (2008-09) for Processing CentreIncharge


GOALS OBJECTIVE MEASURE No. of times stoppage of work due to breakdown Tonnage handling of products in each shift Weightage TARGET (Apr 1'08- Mar 31'09) Nil TARGET Q1 (Apr-June '08) Q2(July- Sep '08) Q3 (Oct-Dec '08) Q4 (Jan-Mar'08) Q1 (Apr-June '08) Actual Q2(July- Sep '08) Q3 (Oct-Dec '08) Q4 (Jan-Mar'08) Remarks 5

CUSTOMER

Timely supply of produce with optimum quality

Maximize efficiency of operations

90 MT/shift

Fill Rate as per PO % Fill rate No. of delivery delays Vs Total deliveries

10

More than 98%

Category Satisfaction Minimize Delivery time

>1%

Minimize Cost of Dump % operations & wastage Profitability Efficient distribution of No. of days of inventory at resources to ensure Processing Center optimal utilization Cost control on Utilities Annual Plan & Budget Proper planning and allocation of work Optimum utilization of manpower % wastage of consumables Accuracy of CPC budgerting (Budget Vs Actuals) % Attrition due to ambiguity of Role No. of Productivity reviews conducted No. of new initiatives taken Timely Identification of No. of Job rotations done to training needs develop fungible resources Training as per schedule No. of training schedules developed in coordination with Training team

10

>4%

>1 day

Financial

> 1%

Increased efficiency

> 2% deviation

Overall attrition > 8%

Twice a month

People

To maximize Productivity

Total 16 (4 per quarter)

Total 8

Fully trained man power

2 trainings per month

Operations

% compliance to SOPs for Measure and maximize Implementation and each process performance of each Compliance of % Compliance to statutory product line operating procedures requirements as may be applicable from time to time Ensure compliance to quality norms Ensure product quality as per the defined norms Reduce wastage while maintaining high quality standards % compliance to Safety and Hygeine as per norms Timely review of Quality specifications with QA Team

7.5

100% compliance

7.5

100% compliance

100% compliance

Every quarter

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Performance Management Form

General Guidelines:
Section I OBJECTIVE REVIEW & FEEDBACK - To be filled in by the employee and then discussed with the Immediate Supervisor Section II APPRAISERS FEEDBACK, RECOMMENDATION & RATING - To be filled in by the Appraiser Section III OVERALL RATING To be filled in by HR Section IV YOUR ASPIRATIONS AND DEVELOPMENTAL NEEDS - To be filled in by the employee & then discussed with Immediate Supervisor

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SECTION I

- OBJECTIVE REVIEW & FEEDBACK

(To be filled in by the Employee and discussed with the Immediate Supervisor)

Supervisor to rate the members performance on a scale of 1 to 10.


No Rating 1 & 2: Poor Performance, 3&4: Below Par, 5&6: At Par, 7&8: Above Par, 9&10: Excellent Objectives Self Review Centre Head / Reporting Senior Rating 1. Rating

2.

3.

4.

5.

6.

II Other assignments/tasks that you would like to mention other than those stated in Section I. No Successful Lapses (Assignments that did not fructify and Learnings from it)

III Any other activities that took up significant part of your time and efforts.

IV Specify the most important factors (Personal/Organisational/External) affecting your work Facilitating Hindering

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V Any other feedback / comments

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Section II APPRAISERS FEEDBACK, RECOMMENDATION & RATING I Comments of the Reporting Senior: Please write about the members personal & professional growth as experienced by you. Immediate Supervisor:

Department Head:

Please rate the members performance on a scale of 1 10 1 2 3 4 5 6 7 8 9 10

Section III
II Trends in the Performance of the member compared to last Appraisal. Declining Comments on the Performance trend: Stable Improving

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Section III
OVERALL RATING (To be filled in by Internal HR) 1 2 3 4 5 6 7 8 9 10

(Rating 1 & 2 : Poor Performance, 3&4 : Below Par, 5 &6 : At Par, 7 &8 : Above Par, 9 & 10 : Excellent)

Section IV - ASPIRATIONS AND DEVELOPMENTAL NEEDS Possible Career Development Options (please tick) :
Vertical Movement Gain in-depth exposure in the existing role Experience in another Business Move into different role within the Department Experience a new project Relocation

If any other, please specify:

Have you experienced any career movements such as a role change, transfer, promotion and role enhancement during your last one-year? If yes, has it been in tandem with your long-term aspirations?

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YOUR TRAINING FEEDBACK / NEED FOR THE YEAR Please give below the details of all the programmes attended by you during the period to. (Induction, Learning session, Seminars, Conferences or any other External or Internal training programmes)
Dates Nature of the programme Particulars of the programme Facilitator Effectiveness of the programme

1. S No

Please specify areas where you would need inputs by way of training (both professional & personal development). Also specify what would be your efforts in developing yourself in these areas. Training need My commitment/efforts Remarks (Immediate Supervisor / Department Head)

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2.

Do you have any professional membership? If, so give details.

Signature of the employee

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Notes _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________

_____________________________________________________________ ____________________________________________________________

5. COMPENSATION MANAGEMENT
We are in the era of Talent Crunch. Indias growing economy is able to generate many jobs at various levels, but due to shortage on the supply side, there is huge challenge in hunting, recruiting and retaining talents in all the sectors. Due to shortage of talent, organizations are into talent war. They are poaching on other companys employees and offering mindless pay hikes and fancy designations to on-board them. Even after offering high pays, companies are not sure whether the employee will stay with them for a reasonable period of time. In the given scenario when the availability of right talent is less and there are large number competitors vying for the scarcely available talent, Compensation Management plays an important role in attracting and retaining talents. In todays economy compensation management does not only mean paying salaries to employees at the end of the month. It is the process of designing the low-cost pay structure that will be adequate, equitable, fair and competitive in the market and thus attract, motivate and retain competent employees. 5.1 DEFINING COMPENSATION Traditionally compensation meant the remuneration in terms of money for services rendered by an employee to an organization. This has changed during the last decade 1. Now compensation includes both tangible and intangible benefits given to an employee. Tangible Benefits are financial in nature and includes basic pay, variable pay, retrial benefits, stock options, interest free loans, etc. Tangible Benefits are essential for attracting and recruiting employees. But on the flip side, it can be easily copied by competitors. Intangible Benefits includes work environment, job responsibilities, opportunities of professional development, etc., which essentially supplements tangible benefits. Intangible Benefits needs and helps in retaining employees. HayGroup combines both Tangible and Intangible Benefits and calls it Total Rewards approach. The same has been illustrated in figure 1.
1

An article on evolving thoughts on compensation is given as Annexure 1at the end of the chapter.

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Figure 1: Components of Total Rewards


Responsibility Base Pay Performance Pay / Variable Pay Medical Benefits Retiral Benefits Share Ownership Total Remuneration Meaningful Work Non-financial rewards arising from work and work environment Recognition Opportunity to use and develop skills Career Opportunities Quality of work life Total Reward

Financial Rewards and Benefits

Case Study : WIPRO Technologies Ltd. The governing theme in WIPRO is the well being of their employees. The benefits offered to them are on par with the best available in the industry. Their compensation package is also among the best in the industry and is aimed at not only attracting but also retaining the best talent. The package caters to all positions across WIPRO. Rewards for each position are based on performance, potential, criticality and market value. WIPRO have a comprehensive medical assistance programme that covers anything employee or his family may incur. The education assistance plan encourages employees to pursue course of their interest. The policy of the company also includes a sabbatical to pursue higher studies related to employees profession. WIPROs responsibility towards new employees doesnt stop at salaries and compensation only. They provide interest free loans to cover housing deposits or the purchase of a two-wheeler as well as contingency loans for marriage, illness or the death of a close family member. Besides these they offer stock options to deserving employees through employee empowerment. The WIPRO Employee Stock Option Plan (WESOP) allows employees to share in the success of the company. WIPRO also take great interesting the personal well being of their employees. They have contracted an external agency to take care of employees domestic chores such as bill payment and travel bookings so that they may spend their time in more enjoyable endeavors. They also provide credit cards to all the employees, transport to the development centres, and an onsite cafeteria. These benefits are offered in addition to host of deferred benefits like provident fund, gratuity, and a pension plan. All common processes like leave applications, travel planning, updating personal 122 information, etc., are automated through the extensive use of intranet-HR Web so that they need not spend time and effort on routine activities.

5.2 COMPENSATION MANAGEMENT IN HRM Human Resource Management (HRM) consists of various activities like manpower planning, recruitment, selection, training & development, performance management, career planning, etc. Compensation Management is an integral part of HRM, which has a role in most of the above mentioned activities, be it manpower planning, recruitment or performance management. Every Individual has certain motivational needs in life. Abraham Maslow has defined it in the form of a hierarchy. An individual expects his motivational needs to be fulfilled in exchange of the contribution he makes to the organization. Those organizations which are able to fulfill all the levels of motivational requirements of an individual are to a great extent successful in retaining its employees. Compensation management to a great extent helps organizations in fulfilling almost all of the motivational needs of its employees. 5.3 OBJECTIVES OF COMPENSATION MANAGEMENT The basic objectives of compensation management are mentioned below: (a) Acquiring right talent Compensation needs to be high enough to attract right talents. Pay levels must be decided on the basis of available supply and demand of the required skill in the market. (b) Retain competent employees Compensation must be based on the contribution of an employee. A high performing employee should be protected with competitive compensation package. This is usually done by introducing performance based variable pay in the pay structure, which ensures that high performers get compensation higher than the average or low performers. Another way of doing it is to keep the compensation of high performers between 66 th to 75th percentile in their respective pay grade and low performers below 50 th percentile. (c) Ensure equity Internal as well as external equity should be maintained in terms of relative worth of the jobs and their value in the outside market. Organizations do this by developing pay grades and fixing salary bands (pay range) for each pay grades. This ensures that all the employees at a particular grade will have compensation within a particular range. The process of

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developing pay grades and pay ranges are discussed in detail in next section i.e. Phases of compensation management. (d) Reward desired behaviours Compensation structure should reinforce desired behaviours and act as an incentive for those behaviours to be continuously repeated. This is done by designing the appraisal system which evaluates employees on the desired behaviors and give incentives accordingly. (e) Control cost A high manpower cost can reduce an organizations competitiveness. Compensation management helps in obtaining and retaining workers at reasonable cost. The jobs requiring rare skill sets are priced higher than the jobs which require skills which are easily available in the market. So a Product Manager of a commodity (which is a specialist role) will get higher incentive than a Marketing Manager, as this skill is easily available in the market. (f) Legal compliance Compliance to the legal challenges imposed by the various labour laws is a necessary part of compensation management. The Minimum Wages Act (1948), The Payment of Wages Act (1936), The Payment of Bonus Act (1965), The Equal Remuneration Act (1976) are some of the legal compliances which needs to be considered in compensation Management. The Minimum Wages Act, 1948 The act provides for the fixation of minimum wages in certain employment. The appropriate government fixes the minimum wages for different industries and reviews it at an interval not exceeding 5 years. The Act prescribes minimum wages for certain sweated and unorganized sectors. The minimum wages can be fixed based on time of work, or piece work at piece rate. For paying less than minimum rates of wages, the employer is liable for imprisonment upto 6 months or with fine upto Rs.500 or both. The Payment of Wages Act, 1936 The objective of this act is to regulate the payment of wages of certain classes of employed persons. The Act tries to protect the workers from irregular payment of wages and abrupt deductions by the management. The Act is applicable to all factories, industries, transport services engaged in carrying passengers or goods or both by road for hire or for reward, air transport services, docks, inland vessels, mines, quarries or oil fields, plantations, workshops, etc. It covers employees drawing average wage upto Rs.6500 per month. It states that wages should be paid to the employees before the expiry of 7 th day of the following month, when less than 1000 persons are employed by the establishment. In the case of more than 1000 workers, payment should be made before the expiry of the 10 th day of the following month. For non-payment of timely wages, the employer is liable for fine not less than Rs.100, which may exten to Rs.5000. The Equal Remuneration Act, 1976 This Act is applicable mostly to workers working on daily wage basis. The objective of this Act is to provide for the payment of equal remuneration to

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men and women workers. There should not be discrimination on the ground of sex. Remuneration must be same across gender for same work or work of a similar nature and same in respect of skill, effort, and responsibility performed under similar working conditions. The Act also ensures that there is no discrimination in the recruitment and promotion process. The Payment of Bonus Act, 1965 The objective of the Act is to maintain peace and harmony between labour and capital by allowing the employees to share the prosperity of the establishment reflected by the profits and by the contributions made by capital management and labour. Its a statutory liability of the employers of every establishment covered by the act to pay bonus. The Act covers profit bonuses only. The Act is applicable to every factory wherein 10 or more persons are employed with the aid of power and every establishment in which 20 or more persons are employed without the aid of power on any day of the accounting year. (g) Facilitate understanding Last but not the least a compensation structure must be easily understood by employees at all the levels of an organization. Employees should understand what amount they will be getting in hand at the end of the month, what amount is deducted for retrial benefits, insurance, or mediclaim, how incentive is linked to performance and how is it calculated. A simple compensation structure which can be easily understood by the employees can be a useful tool for hiring and retaining employees. The above mentioned objectives form the guiding principle in determining the basis of different phases of compensation management. 5.4 PHASES OF COMPENSATION MANAGEMENT
Phase I Phase II Job Analysis Job Evaluation

Job Ranking Phase III

Job Grading

Factor Comparison

Point System

Wage and Salary Surveys

Deptt. of Labour

Employer Associations

Professional Association

Self Conducted surveys

Phase IV

Pricing Jobs Matching Job evaluation worth and Market worth

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Pay range for each job

5.5.1 Job Analysis Job Analysis collects information about jobs to produce job and position description. This information also helps to provide the basis for job standards. With the job analysis information provided as part of the departments information system, compensation specialists have the minimum information they need to begin the next phase of compensation management i.e. job evaluations. 5.5.2 Job Evaluations Job evaluations are systematic procedures used to determine the relative worth of jobs. Each approach to job evaluation considers the responsibilities, skills, efforts, and the working condition of the job. The most common methods of job evaluation are: Job ranking, job grading, factor comparison, and the point system. Job Ranking The ranking method requires a committee typically composed of both management and employee representatives to arrange jobs in a simple rank order, from highest to lowest. The committee members compare two jobs and judge, which one is more important or difficult. Then they compare another job with the first two, and so on until all the jobs have been evaluated and ranked. The most obvious limitation to the ranking method is its sheer unmanageability in the situation where there is large number of jobs. Other drawbacks to be considered are the subjectivity of the method there are no definite or consistent standards which justify the rankings and because jobs are ranked only in terms of order, we have no knowledge of the distance between the ranks. Job Grading It is slightly more sophisticated method than job ranking, though still not very precise. In this method each job is assigned a grade or class. These classifications are created by identifying some common skills, knowledge, responsibilities with the desired goal being the creation of a number of distinct classes or grades of jobs. Examples might include shop jobs, clerical jobs, sales jobs, and so on, depending on the type of jobs the organization requires. Once the classifications are established, they are ranked in an overall order of importance according to the criteria chosen, and each job is placed in its appropriate classification. The

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standard description that most nearly matches the job description determines the jobs grading/classification. The grading method shares most of the disadvantages of ranking approach, plus the difficulty of writing classification descriptions, judging which jobs go where, and dealing with jobs that appear to walk into more than one classification. An example of Job grading is mentioned below. Job Grade I II III Standard Description Job is carried out under clearly set out instructions. Decisions are of a routine nature. Very little initiative required Job is carried out under indirect supervision. Decisions are made relevant to the workings of the specific job. Initiatives on a day-today basis. Job is carried out with little or no supervision. Decisions are made over a set range of issues under broad general directives of a superior officer Job requires co-ordination of information from a wide variety of sources. Decisions are generally required to be made on the basis of complex incomplete information. The synthesis of acquired specialised knowledge and know how to IV deal with problems, people or situations is implied in this level. The demand level would be in excess of work such as appreciation of or normative application of University rules and procedures. A high level of responsibility and initiative is implied in job functions assigned. Job involves a designated responsibility for contributing to the process of policy V formation and/or a key role in helping to set or contribute to corporate objectives. Decision-making is of a significant nature. Factor Comparison In this method the critical and compensable job components are compared by a committee. The compensable components are those factors common to all the jobs being evaluated such as responsibility, skill, mental effort, physical effort, and working conditions. Each factor is compared, one at a time, with the same factor for the other key jobs. This evaluation allows the committee to determine the relative importance of each job. The factor comparison method involves the following steps: Step 1 Determine the compensable factors Step 2 Determine key jobs Step 3 Apportion present wages for key jobs

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Compensable Critical factors

or Secretary (Rs.) 3.50 3.00 3.00 2.00 1.50 13.00 13.00

Key Jobs Janitor (Rs.) 2.00 2.00 1.50 3.00 2.00 10.50 10.50

File Clerk (Rs.) 1.50 1.50 1.50 2.00 1.50 8.00 8.00

Responsibility Skill Mental Effort Physical effort Working conditions Total Wage rate

Step 4 Place key jobs on factor comparison chart Step 5 Evaluate other jobs A Factor Comparison chart Rate 3.50 3.00 2.50 2.00 1.50 1.00 Point System It is used more than any other method. This system evaluates the compensable factors of each job. But instead of using wage rates, as factor comparison method does, it uses points. Although more difficult to develop initially, the point system is more precise than the factor comparison method because it can handle critical, compensable factors in more detail. This system involves six steps and is usually implemented by a job evaluation committee or by an individual analyst. Responsibility Secretary Secretary Janitor File Clerk Janitor File Clerk Janitor File Clerk Secretary Janitor Secretary File Clerk Janitor Secretary File Clerk Skill Mental Effort Physical Effort Working Conditions

A Point System Matrix Critical Factors Levels

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Minimum Responsibility a) Safety of others b) Equipment & Materials c) Assisting trainees d) Product/Service quality Skill a) Experience b) Education/ Training Effort a) Physical b) Mental Working Conditions a) Unpleasent b) Hazardous Total Points 25 20 5 20 45 25 25 35 20 20

Low 50 40 20 40 90 50 50 70 40 40

Moderate 75 60 35 60 135 75 75 105 60 60

High 100 80 50 80 180 100 100 150 80 80 1000

Step 1 Determine critical factors. Add more details by breaking down these factors into subfactors. Step 2 Determine the level of factors, since the amount of responsibility or skill or effort vary from job to job. Step 3 Allocate points to sub-factors starting from highest level. This allocation gives very precise weights to each element of the job, e.g. If safety is twice as important as assisting trainees (50) then it gets twice as many points. Step 4 Allocate points to levels. For simplicity, equal point differences usually are assigned between levels, e.g. 100, 75, 50, 25 or 50, 35, 20, 5, depending upon the importance of each level of each sub-factor. Step 5 Develop the point manual, which contains a written explanation of each job element. It also defines what is expected for various levels of each sub-factor. This information is needed to assign jobs to their appropriate levels. Step 6 When the point matrix and manual are ready, the relative value of each job can be determined. This process is subjective. It requires specialists to compare job descriptions with the point manual for each sub-factor. The match between the job description and the point manual statement reveals the level and points for each sub-factor of every job. The points for each sub-factor are added to find the total number of points for the job.

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After the total points for each job are known, the job is ranked. This relative ranking is then reviewed by department managers to ensure that this is appropriate. The point method has been widely used because it is relatively simple system to use. Also it considers the components of the job rather than the total job and is much more comprehensive than either the ranking or classification method. But one major drawback to the point method is the time needed to develop a system. 5.5.3 Wage and Salary Surveys To determine a fair rate of compensation, most firms rely on wage and salary surveys. These surveys discover what is the market worth for specific key jobs. The survey information can be obtained from various sources like department of labor (sometimes these surveys are out of date, so not used often), employer associations (a group of company of the same industry form this associations and conduct the survey within their organization. But less used as in todays competitive talent market, organizations are not ready to share data with the competitors), professional associations (like Hewitt Associates, Mercers, etc, which are independent organizations). The major problem with all these published surveys is comparability. Analysts cannot always be sure that their jobs match the jobs reported in the survey. So while using survey data from other sources, one should be sure about the sample of organizations taken, methodology used, timeliness (a very old survey may not be relevant in todays dynamic job market) and jobs considered. Self Conducted Survey If needed information is not already available, the employer can undertake its own pay survey. Employers with comparable jobs should be selected. Since surveys are expensive only key jobs are used. In the next phase, managers decide what information is needed for various jobs. Information such as starting pay, base pay, overtime rate, vacation and holiday policies and bonuses can also be included. The results of the pay survey usually are shared with those participating in the survey in order to gain their cooperation. Most surveys specify confidentiality, and data are summarized to ensure anonymity. 5.5.4 Pricing jobs

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In pricing jobs, the job evaluation worth is matched with market worth. Two activities are involved in pricing jobs: establishing appropriate pay grades for each jobs and then developing the pay range for each grade. Establishing Pay Grades Individual jobs having approximately the same job worth are grouped together to form a pay grade. Although no set rules govern establishing pay grades, generally 11 to 17 grades are used in small and medium-sized companies with fewer than 500 employees. However, a growing number of employers are reducing the number of grades by broadbanding. Broadbanding is the practice of using fewer pay grades with much broader ranges than in traditional compensation systems. Combining many grades into these broadbands is designed to encourage horizontal movement and therefore more skill acquisition. The primary reasons of broadbanding are: creating more flexible organization, encouraging competency development, and emphasizing career development. However, a problem with broad banding is that many employees have become conditioned to the idea that a promotion is accompanied by a pay raise and movement to a new pay grade. As a result of removing this grade progression, the organization may be seen as having fewer upward promotion opportunities available. Pay Ranges To decide on the pay ranges at each grade a market line (a graph showing the relationship between job value, as determined by job evaluation points and pay survey rates) is drawn.

Market Line

Pay survey hourly wage rates (Rs.)

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Job Evaluation Points

Using the market line as a starting point, the employer can determine the minimum and maximum pay levels for each grade by making market line the midpoint line of the new pay structure. Typical Pay Range widths Grades M4 M3 M2 M1 % around midpoint + 20-25% + 16-20% + 13-16% + 11-15%

As the above table shows, a smaller minimum-to-maximum range should be used for lower grades than for higher grades. This is done primarily because employees in lower grades tend to stay in them for shorter periods of time and have greater promotional opportunities, in comparison to higher grades where there are few possibilities of upward movements. In case of broadbanding much wider ranges, often exceeding 100% may be used. Once pay grades and ranges have been computed, then the current pay of employees is compared to the draft ranges. If the pay of a significant number of employees falls outside the ranges, then a revision of pay grades and ranges may be needed. Also, once costing and budgeting scenarios are run in order to assess the financial input of the new pay structure, and then pay policy decisions about market positioning may have to be revised, by either lowering or revising the systems. A step by step process of compensation planning is given in Annexure 2 at the end of this chapter. 5.6 COMPENSATION STRUCUTURE

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Compensation Structures in organizations are getting more and more complex and creative. Organizations are devoting time and resources to make their compensation structures more flexible and attractive to existing and potential employees. It is increasingly becoming one of the attraction and retention tools available with an organization. Factors affecting compensation structure of an organization are Company policies, Prevalent Industry norms and Market Trends. Over the last decade the salary structure has moved away from a monthly take home approach to a Total Cost to Company (CTC) approach where all allowances paid to an employee and benefits are included in it as well. And an annual figure is calculated rather than a monthly one. Compensation has become a Pay for performance phenomenon while earlier it was based on seniority. It has become the single biggest factor influencing an employees decision to stay with an organization or leave it. Organizations are devising new and unique ways to allow employees to have a say in how they are being paid so that compensation structures are tailor made according to individual needs and wants. Components of Employee Compensation, which are included in the CTC, are A. Cash Components- They are the components which are being paid to an employee in cash. They include include: Accommodation Car Paid vacation Medical benefits Telephoneetc. Basic salary Provident Fund contribution House rent allowance Leave travel allowance

B. Non- Cash Direct benefits- these are allowances or entitlement of an employee. These

In some organization the total CTC is divided into two parts, Fixed Pay and Flexible Pay. The organization only fixes the Basic Pay and the Provident Fund (this forms the Fixed Pay) and gives the balance salary as Choice Pay (also know as Flexi Pay Benefits (FPB) or Cafeteria Pay). Employees are allowed to choose from a menu of options to suit their individual requirement and

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convenience and reduce tax liability. They can also change their selection, if required, at suitable intervals. Other related compensation trends A. Variable Pay- Variable pay or bonus has gained importance over the last few years. It is now in the region of 7-35% of the basic pay. But in certain professions like sales or investment banking this figure can run up to 100-200% as well. Thus the increasing weight-age of Bonus Payouts is eclipsing the fixed pay components.. B. Equity Based Pay or ESOPs- Again Employees are given an option to opt for ESOPs. Employer gives an option to employee to purchase shares at a pre-determined price in future. The options vest over a period of time but are subject to certain conditions. Employee exercises his options and company allots shares. This is a part of the CTC of an employee. And totally voluntary on the part of them to exercise this options. It benefits the employee as they can create wealth and be part owners of the company they work for. While for employers this is an excellent compensation strategy, which requires no pay out by them, as the market pays the employees. Also since the vesting takes place over a period of time, it also acts as a retention strategy for the employee. C. Target-Based Pay- In certain organizations especially consulting organizations, the employees can actually choose their own CTC, which is directly proportionate to their targets. If they chose a higher CTC they will also have to achieve a higher sales target. Many recruitmentconsulting organizations are using this format for their senior and top management employees.

5.7 CHALLENGES IN TODAYS SCENARIO The challenge today is to have a competitive compensation package and at the same time keep the manpower cost low. The compensation strategy of an organization is a very strong and silent message to the employees about the priorities of the organization. It is definitely not just about the amount that you pay but also about how you use this to differentiate between employees. Competent and high potential employees, who are outstanding performers, should be differentiated from the regular and non performers. Rewarding and retaining the high performers and getting rid of the non performers is one of the major tasks of a compensation management

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team. In this growing economy with so much competition for acquiring right talent, that too in a talent crunch situation is going to be a tough job. A lot of innovation in the area of compensation management is required to overcome this challenge. ANNEXURE 1: HUMAN TOUCH An Effective Rewards-Based Compensation Program Always Helps Create an Employee Connect (Nihar Shah and Shanti Naresh, The Economic Time,16TH,May,2008) It is not just about the money. It is about money well spent and about trust well-earned. This is the good news about employee rewards. Paying people is obviously not a choice. The crucial choice lies first in choosing to invest in deeper bonds with employees. Then, it is about allocating financial resources to nourish this bond. We have found that this approach can have handsome payoffs for both companies and employees. If it were only about the money, then businesses that could pay more would retain their employees and grow, while companies that could not would lose their people and their business. Both kinds of companies would try to pay the most they could and then focus on extracting more from their people. These ideas make us wince, not because they are commonplace, and not because they do not work, but because they assume a purely transactional and unnecessarily combative view of human motivation. We have found that what works equally well, if not better, is when companies choose to look at business as an endeavour of the heart and mind, as an effort to create value and build a sustainable bottom-line in the process. If we were to to exten the same logic to employee rewards, then companies would make the paradigm shift from an exchange of financial currency to a building of human connection with ones employees. Here we will offer you three key ideas, and some examples of how companies can build this connection so that all stakeholders benefit. Choosing between right and right for us Our work with international and Indian companies suggests that the first step to building this connection is to look at employee rewards as an investment rather than a cost. Second, it involves extending the idea of total rewards to include benefits, work, lifestyles, and careers (see table below), while ensuring that these innovations falls within the framework of the companys values and philosophy. Third, it suggests that paying the highest amount is not necessarily the best

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strategy. Rather, the number that arguably matters the most is the employee satisfaction score on the total rewards package. Compensation Base Pay Guaranteed bonuses Short term incentives Long term incentives Financial allowances Financial recognition programs Deferred compensation Development and Career Performance Management Learning and development Career opportunity and pathing Tuition reimbursement Mobility opportunities Benefits Retirement Savings and other wealth creation programs Medical/Dental/Vision/Prescription drug, etc. Life Insurance Short and long term disability Accident coverage Job-related perquisites Work lifestyle Time offs Wellness programs Dependent care Workplace flexibility Commuter programs Workplace facilities and perquisites Experiential rewards Non-financial and status recognition

Rewards as an investment When companies choose to look at employee rewards as an investment, they make the important shift by asking themselves, What are we investing in? As part of reaching out to their predominantly young population, one of worlds most popular high tech companies decided that they would build food, off all things, into their rewards package. They worked towards ensuring that no employee would be more than 100ft away from food. This led to a famous set of cafeterias that the employees were proud of. This cannot be dismissed ass a wasteful whimsical investment. The company believed that when the employees have access to food that they like, their productivity goes up, and their employee feedback had indicated precisely this.

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Innovation and alignment in total rewards Next, when companies choose to move beyond cash payments and embrace a concept of total rewards, they can generate ideas that reinforce their core purpose as a company. A company in the pharmaceutical space has invested hugely in employee wellness and benefits, thereby tying in its rewards program with its mission. Or, in the case of an international technology conglomerate, their rewards package actually saved them a significant amount of money. They choose to reframe their costs occurring from office space investments as rewards challenge. They explored the possibility of incentivising their people to work from home, with occasional face-to-face meetings. Ahot-desking virtual working program began. It was not just the productivity increases that this company rejoiced in, it was what the employees had to say. They felt more trusted, less watched As a result, they began to go the extra mile. The flexible work program also became a great attraction for a number of prospective hires. The satisfaction score A number of companies choose to focus on obtaining a good satisfaction score from their stakeholders, on their rewards programmes. Companies that do this well focus initially on aligning their rewards programme with their values and philosophy while also monitoring their employee pulse. One such company, a leading software player, chooses to have rewards package that is so performance driven that they position guaranteed cash at the 50 th percentile and the rest falls under variable pay programme. Achieving this alignment, though, is not always easy. We have worked with clients who have had to untangle far deeper issues related to company philosophy and values. Companies that have built huge work forces of loyal employees often face the classic questions: How can we differentiate for performance and remain equitable? Do we even want to differentiate for performance? These companies then tilt towards analytical tools like conjoint analysis to understand the various reward tradeoffs that employees prefer. Some of them, having found that all categories of employees are open to performance-based-pay, have designed their rewards accordingly. But, employees cannot restrict themselves to only two parameters: their employees views and they own. The operating environment certainly plays an important role in the rewards scheme design. Sometimes, tax and accounting laws allow employees to benefit most through cash payments rather than through a variety of allowances and benefits. Also, employers have to balance what they can afford with the kinds of returns they can expect to see over time, in light of business profitability. Here they can balance their investments by allocating resources to a variety

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of short-term and long-term incentives, so that they can factor in the level and contribution of employees, the timings of payout as well as the spread of the return. In the case of a global IT organization that we worked with, this balance was struck through a clear strategy to allocate a higher variable pay spend to a segment of employees: higher performers and business drivers. When the total reward package goes beyond compensation, and when the design of the package considers the employer, employee, external and cost perspectives, companies can ensure that their rewards package channellises and sustain one of the best, least replicable competitive advantages there is: individual talent and commitment. The Attrition answer:Alums, not foes Does this imply that you will not loose valuable employees to companies that are paying better or higher? No. it does not. Valued employees may still leave for more money. In other cases you may want them to leave. But either way, if you have cared enough to structure a good rewards package, the chances are that they will, not with animosity, but as alums and ambassador of your employer brand, creating valuable goodwill. A total reward is about letting people know that you are on their side. An approach that will pay you rich dividends, whether they stay or leave. Key Tenets for building a competitive total rewards framework View rewards as an investment not a cost Look beyond cash compensation to include benefits, careers, work lifestyles. Focus on satisfaction scores with total rewards package Align reward strategy with the company philosophy and values Use voice-of-employees and related analytics to guide trade-off decisions Respond to external environment, while identifying and nurturing what is unique to your company Invest in communicating rewards package to your employees. ANNEXURE 2: STEPWISE REPRESENTATION OF COMPENSATION PROCESS (a) Develop a program outline.

Set an objective for the program. Establish target dates for implementation and completion. Determine a budget. Determine whether this position will be permanent or temporary. Determine who will oversee the program once it is established.

(b) Designate an individual to oversee designing the compensation program.


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Determine the cost of going outside versus looking inside. Determine the cost of a consultant's review. Form a compensation committee (presumably consisting of officers or at least including one officer of the company). Decide what, if any, differences should exist in pay structures for executives, professional employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based versus non-contingent pay).

(c) Develop a compensation philosophy.

Determine whether the company should set salaries at, above, or below market. Decide the extent to which employee benefits should replace or supplement cash compensation.

(d) Conduct a job analysis of all positions.

Conduct a general task analysis by major departments. What tasks must be accomplished by whom? Get input from senior vice presidents of marketing, finance, sales, administration, production, and other appropriate departments to determine the organizational structure and primary functions of each.

Interview department managers and key employees, as necessary, to determine their specific job functions. Decide which job classifications should be exempt and which should be nonexempt. Develop model job descriptions for exempt and nonexempt positions and distribute the models to incumbents for review and comment; adjust job descriptions if necessary. Develop a final draft of job descriptions. Meet with department managers, as necessary, to review job descriptions. Finalize and document all job descriptions. Rank the jobs within each senior vice president's and manager's department, and then rank jobs between and among departments. Verify ranking by comparing it to industry market data concerning the ranking, and adjust if necessary. Prepare a matrix organizational review. On the basis of required tasks and forecasted business plans, develop a matrix of jobs crossing lines and departments.

(e) Evaluate jobs.

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Compare the matrix with data from both the company structure and the industry wide market. Prepare flow charts of all ranks for each department for ease of interpretation and assessment. Present data and charts to the compensation committee for review and adjustment. Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and assign a grade to each level. Determine the number of pay grades, or monetary range of a position at a particular level, within each department.

(f) Determine grades.

(g) Establish grade pricing and salary range.


Establish benchmark (key) jobs. Review the market price of benchmark jobs within the industry. Establish a trend line in accordance with company philosophy (i.e., where the company wants to be in relation to salary ranges in the industry).

(h) Determine an appropriate salary structure.


Determine the difference between each salary step. Determine a minimum and a maximum percent spread. Slot the remaining jobs. Review job descriptions. Verify the purpose, necessity, or other reasons for maintaining a position. Meet with the compensation committee for review, adjustments, and approval. Develop and document the general company policy. Develop and document specific policies for selected groups. Develop and document a strategy for merit raises and other pay increases, such as costof-living adjustments, bonuses, annual reviews, and promotions. Develop and document procedures to justify the policy (e.g., performance appraisal forms, a merit raise schedule). Meet with the compensation committee for review, adjustments, and approval. Develop and present cost impact studies that project the expense of bringing the present staff up to the proposed levels.

(i) Develop a salary administration policy.


(j) Obtain top executives' approval of the basic salary program.

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Present data to the compensation committee for review, adjustment, and approval. Present data to the executive operating committee (senior managers and officers) for review and approval.

(k) Communicate the final program to employees and managers.

Present the plan to the compensation committee for feedback, adjustments, review, and approval. Make a presentation to executive staff managers for approval or change, and incorporate necessary changes. Develop a plan for communicating the new program to employees, using slide shows or movies, literature, handouts, etc. Make presentations to managers and employees. Implement the program. Design and develop detailed systems, procedures, and forms. Work with HR information systems staff to establish effective implementation procedures, to develop appropriate data input forms, and to create effective monitoring reports for senior managers.

Have the necessary forms printed. Develop and determine format specifications for all reports. Execute test runs on the human resources information system. Execute the program. Monitor feedback from managers. Make changes where necessary.

(l) Monitor the program.


Find flaws or problems in the program and adjust or modify where necessary.

Notes _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________


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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________________________________________________________

6. ENGAGEMENT AND WORKPLACE MOTIVATION


The story of Infosys Established in 1981, Infosys offers a complete range of software and consulting services. It is today one of the most respected IT major internationally.

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The sprawling campus of Infosys on the Hosur Road in the outskirt of Bangalore cannot escape anyones notice. Spread over 20 hectare area the architecture of the glass and steel buildings is a unique sight. Each morning the majority of thousands of IT professionals employed in Infosys, Bangalore arrive at the campus on shuttle bus service provided by the company. They have a host of options for entertainment and relaxation from the moment they arrive at the campus. They can walk into the spacious food courts for a mug of coffee or breakfast; start work-out in the gym or take a dip in the Olympic size swimming pool. This does not end here there are options like a mini golf course, basket ball court, art gallery etc. The workplace in Infosys has been designed to make the young engineers constantly charged and committed. In order to save the employees from other day-to-day hassles there are ATMs, helpdesks for travel and bill and credit card payments etc. Chartered Accountants visit the campus regularly to help the employees fill their tax returns. There is also a clinic on the campus. In Infosys, there is no difference between the top management members and a newly inducted engineer when it comes to the common facilities. Everyone queues up in the cafeteria. Similarly, they play an active part in social events to which employees families are invited. In a path-breaking move, Infosys granted stock option to all employees which created 1773 rupee millionaires at that point of time. Infosys also is committed to learning and continuous development of its people. It has a very well designed career management program for its employees. Grooming employees to be leaders is a key theme in Infosys. The company has established an impressive Leadership Development Centre in Mysore. The senior management spend a high percentage of their time here actively assisting the general functioning of the Centre and also conducting workshops. At the same time, Infosys has a strong performance orientation. It has a clear goal setting process between the supervisor and the employee. Annual increment and variable pay have a clear correlation with contribution. Infosys has been growing at a rate faster than the industry average on a year-on-year basis. It is a great example of motivation and performance.

6.1 RELATIONSHIP BETWEEN EMPLOYEE ENGAGEMENT AND PERFORMANCE The Gallup Organization one of the most leading HR and organization development consulting organization in the world had conducted a survey in 36 companies seeking to establish a correlation between employee engagement scores with business unit outcome data, such as

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profitability, sales, employee retention, customer satisfaction etc. The correlation was positive : highly engaged individuals were most often found in the high performance teams. A joint study was published in 1997 by the University of Sheffield, London School of

Economics and Chartered Institute of Personnel and Development in UK which was based on a research conducted in medium- sized manufacturing companies. Researchers measured the effect of HR practices in the companies, and used the same methodology to measure the impact of technology; strategy; emphasis on quality; and research and development. HR was by far the most influential, explaining 19% variation in profitability compared to research and development which registered 6%, and technology which accounted for just 1 %. 6.2 DEFINITION OF EMPLOYEE ENGAGEMENT THE HEWITT MODEL Hewitt Associates another great HR consulting company did a pioneering work on employee engagement. Put simply, engagement is a measure of the energy and passion that employees have for their organization. It is to the extent to which the organization has captured the hearts and minds of its employees. Engaged employees are those individuals who want, and who do actually take action, to improve the business result of their organization. Hewitt observed three key behaviours in employees that indicate high levels of employee Engagement. Engaged employees : STAY - they have an intense desire to be a member of the organization.

SAY they are passionate advocates for their workplace. They speak positively about their organization to co-workers, potential employees, and customers.

STRIVE they go beyond what is minimally required to produce extraordinary service and results for customers and colleagues.

Hewitt Associate has identified the following factors as the engagement drivers : 6.3 ENGAGEMENT DRIVERS People

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Senior Leadership Manager Co-worker Work Intrinsic Motivation Influence Work Tasks Resources Opportunities Career Opportunities Recognition Quality of Life Work/Life Balance Physical Work Environment Safety Procedures Policies HR Compensation Pay Benefits Drivers with the Strongest Relationship to Engagement, by Country Country India US China Australia Singapore Driver 1 Opportunities Work Activities Opportunities Opportunities Work Tasks Driver 2 Senior Leadership Opportunities Resources Policies Opportunities Driver 3 Work Activities Senior Leadership Benefits HR Recognition Driver 4 Immediate Manager Immediate Manager Work Tasks Recognition Policies

6.3.1 The Gallup Organizations Model The Gallup Organization, after years of research, has come out with the path breaking Q12 Model of measuring employee engagement. These 12 questions which are asked to the employees are very simple, non-threatening yet extremely powerful, as they help measure the engagement level in an organization. We reproduce these questions here as these give an

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indication at the factors that are important to employees. If the scores are higher, then the engagement level in the organization is believed to be high. Here are the questions : 1. Do I know what is expected of me at work? 2. Do I have materials and equipment I need to do my work well? 3. At work, do I have the opportunity to do what I do best everyday? 4. In the last seven days, have I received recognition or praise for good work? 5. Does my supervisor, or someone at work, seem to care about me as a person? 6. Is there someone at work who encourages my development? 7. At work, do my opinions seem to count? 8. Does the mission/purpose of my company make me feel like my work is important? 9. Are my co-workers committed to doing quality work? 10. Do I have a best friend at work? 11. In the last six months, have I talked to someone about my progress? 12. At work, have I had the opportunities to learn and grow? You may be wondering why there are no questions dealing with pay, benefits, senior management, or organizational structure. The Gallup consultants while developing the model had included questions related to all these aspects; but they disappeared at the analysis stage. While these issues are important they are important to everyone in the organization good, bad or mediocre. Yes, if an organization is paying 30 % below the market average, it may have difficulty in attracting people and retaining its good employees. But bringing its pay and benefits up to market levels, while a sensible first step, will not take the organization very far. These kind of issues can take you to the game, but they cant help you win.

6.3.2 Employee Satisfaction Survey As an HR Manager, you may like to measure employee satisfaction level in your organization. A model has been presented below which outlines a typical Employee Satisfaction Survey (ESS) framework :

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Employee Satisfaction Survey Model


What is the purpose of an ESS? - Development - Evaluation - Measuring Organisations practices - Communication How is data collected? - The survey is anonymous - Structured questionnaire given to all employees - The data is sorted and analyzed by an outside agency - Comments are invited from all employees - Communication Who gives the inputs - Management practices and managers - Attitudes - Values - Work environment - Pay and benefits - Culture Who gets the feedback? - All employees - Top Management and senior managers - Managers and employees at all levels How is feedback given? - Percentage comparisons of the data analyzed - Comments edited and presented as employees - Extremities are focused on to draw conclusions How is success measured? - Compare the results over period of 3-4 years - Look for changed satisfaction levels

How is action taken? - Focus on a couple of key issues that effect employees - Get a cross-cultural team to analyze them and take action - Monitor the change at regular intervals - Conduct the ESS regularly to measure change

What is assessed?

Who is assessed? - The organization

As you would have already understood that in order that an employee stays motivated and keeps performing in a productive manner, the following factors are important : 1. The vision and mission of the company is known to every employee and efforts are made to establish the connect between the employees role and the vision and mission of the organization; 2. Every employee has a clear Job Description ( JD ) and he knows what he is expected to do; 3. An employee is given feedback on his performance and contribution good performance and team behaviours are encouraged and unproductive and counter-productive behaviours are actively discouraged; 4. A set of stretch goals is set in the beginning of the year which is difficult but potentially achievable; 5. Job content meets job-holders expectations; 6. An organization culture which is free, friendly and empowering and encourages people to take risks and experiment and tolerates un-intentional mistakes; 7. The supervisors or bosses encouraging their employees; play an important role in developing, mentoring and

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8. A communication framework is available which not only does inform an employee on success stories as well as issues and concerns of the company but also makes the employees voice heard; 9. The Reward System in a company clearly demonstrates a positive bias for contribution; 10. The organization is committed to continuous learning and development of its people. 11. The workplace in a company offers a fun atmosphere bringing in an element of informality. 6.4 NON- MONETARY REWARDS Motivation is not only about inspiring people to work harder; it is also an effective way of retaining people and building loyalty. It has now been widely acknowledged that beyond a point, money has a limited role to play as a motivator. Efforts have been made by several organizations to make a workplace vibrant by taking into account the social and self esteem needs of employees. We give below certain examples: 1. You can Make a Difference Award at Colgate in order to encourage innovative ideas; 2. Star of the Month Award by Reliance Retail for best performance of a Custom Service Associate 3. Annual Performance Award by different companies; 4. NIS Sparta, a leading training organization sends a gift cheque in favour of the spouse on wedding anniversary;
Treats

Non-monetary Rewards
Knick-Knacks

5. NIIT gives a gift cheque on the birth of first child; gives a compulsory holiday on
Awards - Freeby Lunches - Desk accessories - Trophies January1 designating it as Granny Gratitude Day; gives a dating allowance to single - Festival bashes - Company watches - Diaries/Planners - Calendars - Wallets - T-Shirts - Plaques - Coffee breaks - Tie-pins,paintings brooches - Citations employees; uses the award winning drawn by employees children for the - Picnics - Dinner with the boss company calendar. - Dinner for the family - Birthday treats - Certificates - Scrolls - Letters of appreciation

Social Acknowledgement - Informal recognition - Recognition at office get-togethers - Friendly greeting, smiles, e-mail - Solicitation of advice, suggestions - Membership of recreation clubs TYPES OF NON-MONETARY - Use of company facilities for personal projects

Office Environment - Redecoration - office with a window - Piped music REWARDS - Flexible hours

Tokens - Movie tickets - Vacation trips - Coupons redeemable at stores - Anniversary, dating and birthday allowances/presents

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On the Job - More responsibility - Job rotation - Special assignments - Training - Representing the company at public foray.

6.5 IMPORTANT THEORIES ON MOTIVATION An individuals own motivation level has been recognized as an important competency to accomplish the tasks assigned to him. It is because, to excel in any goal accomplishment an individuals ability to do has to backed up by his love to do. This love to do is nothing but his motivation. People with differing levels of motivation demonstrate different levels of performance in an organization. Considerable research has been carried out and a number of theories on what motivates people have been propounded. A few important theories have been given below : 1. Need Hierarchical Theory by Abraham Maslow 2. Herzbergs Hygiene - Motivation Theory 3. Adams Equity Theory 4. Vrooms Expectancy Theory Need Hierarchical Theory According to Maslow, a man has a hierarchy of 5 needs Basic, Security, Social, Esteem and Self- actualization. Maslow considered first two - Basic and Security needs as lower order needs

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and remaining three as higher order needs of an individual. The differentiation between the two orders being that while lower needs are satisfied externally by things such as wages, the higher order needs are satisfied internally to the person. Needs Basic Security Social Needs Esteem Needs Self - Actualization General Examples Food, Water, Air, Sleep Shelter, clothing, safety from danger Organizational Examples Pay Heath and Accident Insurance, Provident Fund and Pension, ESI etc. Love, Affection, Peer group relationships , Belongingness friendly atmosphere in an organization Recognition Job Title Achievement, Self-fulfilment Challenging Job

6.5.2 Herzbergs Motivation & Hygiene Theory Frederick Herzbergs Motivation and Hygiene Theory assumes that one group of factors, motivators, account for high levels of job satisfaction and motivation. However, absence of hygiene factors can cause dissatisfaction with work.

Motivators Achievement Recognition Work itself Responsibility Advancement

Hygiene Factors Interpersonal Relationships Company Policy/ administration Supervision Salary Working conditions

The implication of Herzbergs research for management and HR practices is that even though managers carefully consider and address hygiene factors to avoid employee dissatisfaction, people may not be motivated to work harder.

6.5.3 Adams Equity Theory According to J Stacy Adams, Equity serves as a motivator. People want to be treated with fairness. Equity is defined as the perceived fairness of what a person gets compared to what he does. Inputs are what a person brings to the organization, including educational level, age,

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experience, productivity, and other skills and efforts. The items received by a person, or the outcomes, are the rewards obtained in exchange of inputs. Outcomes could be both tangible and intangible pay, benefits, recognition, achievement, prestige etc. The individuals view of fair value is critical to the relationship between performance and job satisfaction because ones sense of equity is an exchange and comparison process. This means, an individual not only compares his own outcomes to his own inputs but also he compares with his peers and those outside his organization over their Outcome vs. Inputs. Whether he feels satisfied or not would largely depend upon how he fares in this comparison. 6.5.4 Vrooms Expectancy Theory This theory states that individuals base decisions about their behaviours on their expectations that one or another alternate behaviour is more likely to lead to desired outcomes. The three crucial aspects of behaviour-outcome relationship are given below: - Effort-Performance expectation refer to employees beliefs that working harder will lead to performance. If people do not believe that working harder leads to performance, then their efforts may diminish. - Performance-Reward linkage considers individuals expectations that high performance actually will lead to rewards. The performance-rewards relationship indicates how instrumental or important effective performance is in producing desired results. - Value of Rewards refers to how valuable the rewards are to the employee. One determinant of employees willingness to exert effort is the degree to which they value the rewards offered by the organisation. This model of motivation suggests that individuals levels of efforts (motivation) are not simply functions of rewards. Employees must expect that they have the ability to perform the task well; they must feel that high performance will result in receiving rewards; and they must value those rewards. If all three conditions are met, employees will be motivated to exert greater effort.

EXERCISE Among you, who have some work experience, can take up this exercise of ranking the motivating factors in your company. But all of you must notice the statements under Column 1 and 2 to understand the factors which are supposed to create a motivating workplace.

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Ranking Workplace Motivators Motivator Economic Rewards Description Money is an important motivator. Compensation can be augmented by special achievement incentives, Spot bonuses, and cashequivalent rewards. Social and psychological meaning (recognition and sense of accomplishment) outweighs additional money and perquisites. Example Rank and

Promotions

Formal Rewards Informal Rewards

Psychic High- visibility recognition and other rewards of social significance are remembered for years.

Psychic Positive feedback from managers, peers, and others has a profound impact on motivation. It makes people feel appreciated for what they do and who they are, and for their unique abilities, skills, and knowledge. Opportunity to Grow Organization from a win-win partnership with employees to maintain a talented work force. Leadership By presenting a clear purpose, a vision worth striving for, and providing encouragement, leaders imbue people with hope, enthusiasm and determination. Goals energize people, inspire exceptional effort, provide a clear sense of work is expected, and offer challenge.

Goals

Challenging and The nature of work as a source of motivation varies Stimulating Work with personality. The work is as important a motivator as money. Autonomy Freedom to act, to make decisions, to work independently, is most valued by people. It is crucial to self-worth, strongly influences the decision of people to join and stay with an organization. Many workplace are woefully devoid of smiles and laughter, yet humor brightens the day infuses spirit into the culture.

Fun

How Motivating Is Your Organization? Directions: Use this exercise to identify ways your organization motivates employees. Check (+) if motivation occurs and check (-) if improvement is needed.

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Motivating factors in my company The organization has clearly defined vision, mission, goals, and objectives. Performance criteria are clearly defined and communicated to all employees. Resources are provided to help employees attain their goals and objectives. Rewards and recognition are a part of the culture. A support network is in place so employees know where to go for assistance when needed. Whenever, possible, the organization takes advantage of employee expertise by including them in meeting, discussions, and other fact-finding initiatives. Timely information sharing, including learned, occurs at all levels of the organizations. Communication is open and encouraged. The organization has a conflict resolution model available to all employees. The organization celebrates the successes of its team and employees. The organization supports personal growth with training opportunities and tuition reimbursement.

Notes

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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________________________________________________________

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7. TRAINING AND DEVELOPMENT


The competitive pressures facing organizations today require employees whose knowledge and ideas are current and whose skills and abilities can deliver results. They need to learn how to execute according to the Standard Operating Procedures (SOP) of the company, how to make decisions on their own to serve the customer, work well with others, and sift through vast amounts of information. In this context on the job training becomes all the relevant & necessary. Training can be defined as a planned programme designed to improve performance and bring about measurable changes in knowledge, skills, attitude, social behaviour and values of employees for doing a particular job. 7.1 ESSENTIAL COMPONENTS OF TRAINING Training programmes generally consist of 5 major components that constitute integral parts of a training programme. Trainee is the important component among these five components. Trainings should ideally be revolving around the training needs of the trainee. As all the components are controllable, one needs to have optimum of each of them to conduct effective training programme. Trainee Trainer Training Context or Situation of business Content Training environment 7.2 TYPES OF TRAINING Training can be classified in many ways. One of the most widely used method is based on the location of training programme. There are different types of trainings to suit different kinds of situations & objectives. Some of the common types of training are: Class room training On the job training Computer based training/Self paced training 7.3 TRAINING CYCLE

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A simple model of training process is as shown below: Identification of Training Needs Creation of Competency Gap Matrix Design Document for Content Development

Continuous Improvement Process

Evaluation

Training Rollout/Delivery

Program Pilot

Development of Content

Brief explanation of each of the above mentioned steps are as follows: 1. Identification of Training Needs: The process of identifying training needs . Retail organisations now a days do variety of business in different formats which offer a wide range of products like jewellery to agricultural produce. Although there are common training themes that can be leveraged throughout the company, each department will have its own unique set of training needs. The annexure 1 presents a snapshot of the typical training needs of a Store Associate in an organised retail store. 2. Creation of Competency Gap Matrix: The training needs can be mapped into competency dictionary for all roles in an organisation to identify the competency gaps that need to be bridged through the training interventions. Example : A fertilizer sales man knows about the fertilizers but has a gap in communication. We can design a specific training programme for communication. 3. Design Document for Content Development: Based on the competency gap matrix, a high level design document for content development can be prepared. 4. Development of Content: Once the content design document is meeting the requirements of organizational goals the content process will begin one can also think of Subject Matter Experts in developing contents. Example: Let us design a training programme for Tractor Operators. The team that designs Tractor implements expert Tractor Service Engineer content would consist of following team members as shown in picture below.

Content Development Team

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Tractor Sales Manager Soil Scientist

To develop content for training tractor operators we need to set up cross functional team consisting of a Training Content development expert, Soil Scientist, Tractor Sales Manager, Service Engineer & Tractor implements expert. The Content Development Team shall work in close coordination with the other team members to finalise the Standard Operating Procedures (SOPs), Training Needs and Competency Gaps to design content, relevant to tractor operators. 5. Program Pilot: After developing the training content it necessary to validate the content before we conduct the training programmes. During the pilot stage one needs to run a mock training programme in the presence of all the team who were involved in the content development. Any modifications to the content based on the sample run can be incorporated at this stage. 6. Training Roll-out/ Delivery : This is the stage where you plan to train large no of employees with the content developed. While we plan to roll-out we need to keep in mind the following points i) Schedule of training programme ii) Venue iii) Intimation to trainee & trainer iv) Training infrastructure like class room, seating arrangement etc. There is a separate section below on training delivery 7. Evaluation: The knowledge/Skill/Attitude acquired by the trainees to be evaluated at this stage. There are different methods & levels to evaluate a training programme. Two common methods or levels of training evaluation as:

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i) Effectiveness of Training intervention for the organisation ii) Use of training programme to trainees. Kirkpatricks Model One of the widely used methods of training evaluation was given by Kirkpatrick. This model evaluates the training programme from both the above dimensions. The figure below represents the Kirkpatricks Model for Training evaluation.
Business Business Impact Impact

Reaction Reaction

Learning Learning

Effectiveness Effectiveness

Whatdid didthe the What participants feel participants feel aboutthe theprogram? program? about

Whatdid didthe the What participants participants learnfrom fromthe the learn program knowledge, program - knowledge, factsetc.? etc.? facts

Havethe theparticipants participants Have of the training of the training program applied program applied theacquired acquired the skills/ /knowledge knowledge skills on the job?? on the job Feedbackfrom from Feedback Supervisor Supervisor postaaquarter quarter post

Hasthe thetraining training Has program program improvedthe thedesired desired improved businessmetrics metrics?? business

TrainingFeedback Feedback Training Form Form

PostTraining Training Post Assessment Assessment

Reviewof ofmetrics metrics Review likeESI, ESI,CSI CSI like

Inputsfrom fromeach eachof ofthese thesesources sourcesshall shallbe beused usedto toimprove improvethe theTraining TrainingContent Content/ /Process Process/ /Program Program Inputs

Kirkpatricks Model: This model evaluates training effectiveness at 4 levels as follows 1) Reaction: This stage is when we take the feed back of the trainees at the end of the training programme. Example: Ask trainees about what they like or dislike in the programme. Were they happy with the ambience, food, training aids etc. An annexure is attached to show a sample of feedback form 2) Learning / Retention: This is the second level of training evaluation. This measures how much a trainee has retained from the training programme. One can conduct a written test at the end of the training. It tests the understanding & memory of a trainee.

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3) Effectiveness: We can measure the effectiveness of training at workplace. At this level we measure weather a trainee is using what he has learnt in the training programme. Generally the supervisors of an employee observe and record the findings on a evaluation sheet. 4) Business Impact: At this level we measure if the training programme is useful to the organisation. Weather the training programme is giving more business & revenues. It is difficult to measure the training effectiveness at this level. Levels of Learning Organisation: Organisations learn at 3 levels as represented below Organisation Continuously builds the capability to regularly create market opportunities Quickly capitalizes on market opportunities by identifying existing organizational capabilities Defines emerging market demands to determine new capability requirements Teams Teams work together to share assumption, learn through dialogue, build new mental maps and actively transfer their learning to others Individual participants gain self understanding and develop skills for thinking and acting more effectively The organisation supports empowerment and gains problem solving and decision making capabilities Individuals Individuals are willing to learn continuously, competencies, skills & knowledge The organisation reward for learning new things Key words are like Effective feedback Teams gain effective members

7.4 TRAINING DELIVERY Training can be delivered on a distributed learning platform which can include one or more of the following methods

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One to one training-OOT Class Room Training-CRT E-learning & video based learning-CBT(Computer Based Training) On the Job Training-OJT Web conferencing. Outbound training. One to One training-OOT: this method is to train an employee on a specific skill for a short duration. This mode is very effective for skill transfer. It is expensive & time consuming. Example: a) How to use a seed drill b) Soil sample collection. 2) Class Room Training-CRT: This is the most commonly used method of training delivery platform. Most of organisations use this mode for training their employees. To make class room training effective one should have good training infrastructure and aids/tools like a) Class room with right temperature, light & ventilation b) Silent & clean environment around the training room. c) Class room should have comfortable seating arrangement with writing facility d) Writing board & markers e) LCD projector with pointer Example: i) Crop pattern planning training ii) Integrated Pest Management training iii) Irrigation methods training 3) E-learning/ Computer Based Training CBT : With the advent of IT & ever increasing literacy rate CBT has gained popularity. In this method one learns with the help of computers. Cost effective, overcomes distance & locational constraints. Effectiveness of training is a drawback & is one way. Examples: 1) Package of practices training 2) Agro climatic zones understanding. Internet learning portal

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Internet learning portal is a web based, on demand point of entry into choices for learning. It is a relatively inexpensive way to jump-start both education & training interventions. Organisation or individuals can access a learning portal to a) Find education & training resources b) Participate in on line discussions c) Find, Register & buy training Advantages of learning portals Provides organisations a ready virtual university covering large areas of interest One can indulge in online knowledge sharing Service is available on 24/7 basis One can access from home or office or anywhere Generally updated instantly Provides just in time training programmes Allows high speed upload & download facilities You do not need IT support or trainer intervention One can learn at his own pace of learning 4) On the Job Training OJT: here an employee learns by doing. This method is more suitable for skills training & is effective method. This method takes more time & expensive. Example: 1) Tractor drawn implements use 2) Silk worm rearing. Advantages of On the Job training a) Does not require special training facilities b) Does not require large training department c) Takes less time to train d) Does not require samples or equipments to train e) Does not require a training expert f) Cost effective for training an individual or small group Challenges of On the Job Training a) Some times disrupts the workplace b) Experts may lack training skills c) Experts may not follow procedures d) Gives the trainer an extra workload

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e) May lower productivity 5) Web conferencing: This is the latest method of on line training. Here the trainer speaks live on a web camera & trainees are geographically distributed & learn on line. Once can interact with the trainer. This method is relatively less expensive & some times interrupted by technical snags like server malfunction & breaks in unlinking to studio etc. This platform is being extensively used by Reliance Web world for courses offered by IIMA, IIMC & IIML Hughes network for courses offered by IIMB, XLRI Indira Gandhi National Open University Out bound Trainings: This mode of training is being used for imparting a specific Attitude or Skill. Most commonly used for developing Team Spirit, Relation building Socialising etc. Example: 1) Rive rafting 2) Trekking Future Trends Training departments need to develop a mechanism for creating cost effective, continuous stream of problem specific training programmes. Form alliances with other training organisations to collaborate on contents & other such things to get access to more information & reduce cost. More and more emphasis on technology aided learning like online & computer based Learnings. Conclusion Training is a continuous process & it is not just one time intervention. Training brings changes in Knowledge/Skill/Attitude of a trainee. Training will have a specific objective & all the activities in a training cycle should revolve around this objective. Training consists of 5 components viz. Trainee, Trainer, Content, Context & Training environment. Training effectiveness can be measured at different levels as per Kirkpatrick model. Class room method is the most widely used mode of training & it needs the entire training infrastructure in the training room. Based on Delivery mode trainings can be classified into different types. Training aims at developing employees who inturn with positively contribute the organisation goals. ANNEXURE-1

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Training needs identified Competencies to be Trained for employees at a F & V consolidation center Name of Mission Critical Essential Training Need Training Program Positions Center Incharge Operating Procedures Planning executive Product movement & Pricing Post harvest Equipment handling Organisation Background engineer Shift Incharge Good Manufacturing Practices Products presentation Quality Executive Quality HR Policies & Employee self Service Inventory SAP Executive Sourcing Negotiation, Local crop pattern Introduction to Fertilisers, Seeds & Pesticides Executive TOTAL Quality of Fruits & Vegetables Interaction with Farmers Evaluation Quality Product knowledge Quality Induction Introduction Quality GHP Portal Employee Quality Refresher of Package practices Quality Quality Farmer Management Certification Relation

Nice to Know Number Training hours SAP Decision Making Safety precautions 2 2 management People People 2 management Equipment handling of 4 Decision Making 4 2 4

of

ANNEXURE-2

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ANNEXURE-3 Individual Skill Assesment Sheet Assesment Scale : Beginner=B, Intermediate=I, Expert=E Using the scale provided, rate yourself in the following areas Skills Personal Computer Skills MS Word Power Point ABC flowchart Lotus Notes E-mail Internet Business Areas Administrative Communication Customer Service Leadership Quality Sales HR Project Management Statement of work development B I E Comments

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Proposal writing Pricing Resource planning Budgeting Analysis Crop planning Productivity Fertiliser consumption Irrigation Seed production Crop protection Extension Farmer Relation management Cooperatives interation Field visits ANNEXURE-4 Training Techniques template Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Technique Induction Training Stress management Delegation Negotiation Audio Visuals Self directed learning Programmed instruction On the Job training Computer based training Simulation Games Ice-Breakers Leadership games Skill games Communication games Strategic planners Team building games Creativity games In-Basket exercises Role play Role reversal Description Orientation for new recruits Trainings to cope up with work related stress Sessions for understanding importance of decentralization Role-play to develop bargaining skills Use of films , videos, audios, slides etc Learning by own self Methodical breakdown of tasks into small activities Done at work site under supervision Use of computers to learn Teaching by reaction of work situation under controlled conditions Structured tests of skills & aptitude Games to get team members to know each other Exercises to teach different types of leadership Tests to develop analytical abilities Exercises to build bias free listening & talking Games to test ability to plan ahead Exercises requiring collaborative efforts Tests to arrive at multiple solution Evaluating for response to imaginatory situations Adoption of roles Exercises to teach plurality of view points

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22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Doubling Tag teams Mirroring Mono drama Shifting physical positions Structured role playing Multiple role playing Built in tension Case study Shadowing Coaching Out bound training Grid programme Brain storming Lateral thinking In-put- output technique Morphological analysis Garden technique Attribute listening Synectics Cross cultural training

Brings out ideas which are often not expressed One role play alternatively by two participants Training with external perspective Insight into a given interaction Highlighting of communication problems Role play with predetermined objective Providing a common focus of discussion Teaching the importance of resolving matters Problem solving discussion Working under senior to watch & learn Senior management leading subordinates Adventure sports for teams Determination of effective leadership Discussions for developing innovative solutions Thinking randomly to come up with new ideas Suggesting solution specifically Listing of alternatives Steering a discussion to crystallize solutions Isolation, selection evaluation of a problem Probing subconscious mind to invoke intuition Programmes to teach specifics of varied culture

ANNEXURE-5

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NOTES
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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________

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8. DEVELOPMENT INTERVENTIONS (Other than Training)


Personal Development means creating opportunities for individual employees for acquiring new knowledge, skills, attitudes, execution and leadership competencies etc. so that the need of continuous improvement of an individual is met as well as the quality of human resources in an organization augments. Almost every Individual employee wants to develop in an organization. Classroom Training as a developmental intervention has limited effect; people develop in an organization through multiple means. Progressive organizations consciously create several development opportunities for their employees. As a matter of fact, creating learning opportunities has been one of the most important factors for attracting and retaining talent by the organizations. How much an individual does benefit from the development opportunities largely depends upon the quality and intensity of the interventions of an organization and the personal initiative of the individual. So in personal development, an individual has a very important role to play. Personal development includes feedback, coaching, mentoring, emotional intelligence, and career management & development. 8.1 FEEDBACK Feedback means informing people about how others perceive their actions and communications. It may sound easy but many people are reluctant to give feedback because there is a chance that the other employee may feel hurt. Under the circumstances, it is usually up to each employee to solicit feedback by approaching others with questions, such as: What should I do? How would you handle this situation? What do you think? How would you rate this issue on a scale of 1 to 5?

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Feedback should be sought from a person whose opinion an employee respects and who will encourage the employee to improve his performance. Therefore, the credibility and integrity of the person giving feedback are very important. Managers and supervisors, while giving feedback should focus on behaviour not on the person. They should give witnessable events as examples. The feedbacks should also be presented in a manner that is perceived as an opportunity and not a threat. While receiving feedback, an employee should : Ask for clarification or verification of information that is not completely understood; Remain objective about what is being said; Decide whether the feedback is valid; Provide an appropriate response like a Thank you or paraphrasing the feedback

After receiving feedback, employees must convert the feedback into an action or proposal for self improvement. 8.2 COACHING Coaching is an intervention designed to help employees gain competencies and overcome barriers to improved performance. It is one-on-one suggestions relative to observable workplace situations and usually given by a manager of the employee. It can be formal and planned or spontaneous and on the spot. A coach whether he is a Manager in the organization or on the cricket ground clarifies the expectations associated with the job; provides training opportunities and resources required for optimum performance; create conditions those are inspiring and providing feedback and praising employee successes. In his book Coaching Skills Robert Lucas presents an eight-step process for coaching:

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1. Establish reasonable goals with the employee: Goals should be attainable in terms of the employees skills and abilities. Success indicators might be revenue or reduced costs, quality, quantity or timelines. 2. Collect performance data: Gather large amounts of data regarding an employees performance to ensure a thorough analysis of performance. 3. Analyze Performance: Analyze performance information to determine performance gaps and ascertain the reasons e.g. knowledge, skill etc. which may have contributed to the gap. 4. Review and modify performance goals, if needed after a discussion with the employee. 5. Identify developmental resources like training etc. 6. Develop an action plan with goals and resources defined. 7. Implement strategies: the employee should have the resources, tools, information required to accomplish the goals. 8. Evaluate performance: Schedule follow up sessions to discuss progress and provide additional resources, if need be. Even CEOs need a coach this is a recent phenomenon called Executive Coaching. The Executive Coaches are outsiders. As you know, people in the highest level of organizational pyramid are very lonely. They need a sounding board to know how are they performing and how can they do better. It is something akin to Tiger Woods having a coach.. as a matter of fact, Tiger Woods considers his coach as the most important person in his life ! Below is given a table for assessing ones coaching skill. As far as you are concerned, please see the statements under the first column of the table these statement shows what are things does a coach need to do. When you really have an opportunity to coach someone may be, down a few years from now you can assess yourself using this format. Table: Assessing Coaching Skills Direction: Use this table to assess your coaching strengths and areas for improvement. Rate yourself on each statement Reflect on situations when you exhibited that behavior. Jot down ideas for your own personal performance improvement based on your reflection. Be your own coach. Yes No

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1. I provide frequent, timely, and feedback. 2. I ask open-ended questions and listen to the responses. 3. I never assume what motivates as employee. I ask. 4. I applaud employee successes. 5. I work with employees to develop measurable and attainable goals. 6. I provide the resources employees need to succeed.

7. I take time to discuss new ideas and initiatives with employees. 8. I solicit and follow up on employee suggestions. 9. I encourage creative problem solving. 10. I encourage open and honest communication.

8.3 MENTORING Mentoring is one-on-one relationship between a more experienced employee (mentor) and a less experienced employee (mentee). Mentoring and coaching are often confused. Although mentoring uses many of the techniques of coaching, it goes far beyond it is a relationship in which a mentor shares his personal experiences, wisdom etc. Most of the organizations do mentoring for their high potential young managers. The mentors are normally the senior people in the organization, who have had a demonstrated track record of achievement in the organization. Mentors and mentees are usually chosen from different departments. This helps establish a very congenial relationship between them. A mentor plays four key roles in an organization:

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Role Model : practice the values the organization endorses Coach : clarify the organizations culture and political structure so mentees can correctly direct their efforts Broker : help the mentees establish the contracts needed to succeed; Advocate: recommend and support the mentee for projects and task groups.

Who should be chosen as a mentor? The criteria associated in choosing a mentor are the following: A mentor should possess strong interpersonal skills Has contacts and influence inside and outside the company Recognizes others accomplishments Has excellent supervisory skills Willing to be available to mentee.

Why is mentoring required? Attract and retain top talents Upgrade the employees skills and knowledge Promote diversity of thought and style Develop leadership talent Preserve institutional memory Create inclusion Foster a collaborative environment Strengthens the competitive advantage of a company

At some point in life you would have mentored some one and some one else would have mentored you. Reflect those experiences in mind and fill up the table given below. Most importantly, the statements under Column 1, give you an insight on what actually the Mentors do.

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Table: What Mentors Do Directions: Following is a list of things that mentors do. Use this list to determine if you would be a good mentor. As appropriate for each one. Check others have done this for me or Ive done this for others or both. Others have done Ive done this this for me Set high expectations of performance Offer challenging ideas Help build self-confidence Encourage professional behavior Offer friendship Confront negative behaviors and attitudes Listen to personal problems Teach by example Provide growth experiences Offer quotable quotes Explain how the organization works Coach mentees Stand by mentees in critical situations Offer wise counsel Encourage winning behavior Inspire their mentees Offer encouragement for others

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Assist with mentees careers

8.4 EMOTIONAL INTELLIGENCE Daniel Goleman, a psychologist in US, created the Emotional Intelligence framework. As a matter of fact, this concept has attracted a lot of attention in the corporate world. But what is emotional intelligence (EI)? It essentially involves two things. First, the high EI person recognizes and deals with the inner feelings and thoughts of others in an effective way. Secondly, EI means the ability to understand ones own impact on others and the high EI person knows how to deal with the feelings of others. A high EI person manages his team very effectively. Emotional Intelligence is critical to the success of organizations. According to Goleman, the more the leader exhibits competencies like initiative, nurture of others, team leadership, selfconfidence, drive to achieve, and empathy, the more positive the organizational climate. The more inspired people are, the more loyal they are. It is an organization where the best people stay, because they love what they do. And, the more an organization has that climate, the better its business performance, as measured by profit growth, net operating income, growth in sales, growth in earnings, attaining business goals. Golemans Emotional Competence Framework Personal Competence How we manage ourselves Self- Awareness : Knowing ones internal states, preferences, resources, and intuitions emotional awareness, accurate selfassessment, and self- confidence Self Regulation : Managing ones internal states, impulses, and resources self-control, trustworthiness, conscientiousness, adaptability and innovation Motivation : Emotional tendencies that guide Social skills : responses in communication, collaboration, Adeptness eliciting desirable others conflict cooperation, influence, management, and team Social Competence How we handle relationships Empathy : Awareness of others feelings, needs, and concerns understanding others, developing others, service orientation, leveraging diversity, and political awareness

leadership, change catalyst, building bonds,

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or facilitate reaching goals achievement, drive, commitment, initiative, and optimism

capabilities.

Many organizations are developing awareness of EI through workshops and training programmes. It is being increasingly realized that a more emotionally intelligent workplace is able to leverage its human capital in a much better way by fostering better team work, collaboration and thereby harnessing its intellectual strengths. 8.5 CAREER MANAGEMENT AND DEVELOPMENT Good organizations take responsibility of career management and development of their employees. This is done to i. ii. iii. meet the aspiration of employees so that an organization is able to retain the best talent; and build multiple skills and competencies among the managers and employees create a leadership pipeline in an organization

There are several ways the organizations create opportunities for their employees. A few are included in this chapter to give you an overview. The areas we have covered under career management and development interventions are: 1. Job rotation 2. Understudy 3. Career Pathing 4. Succession Planning 8.6 JOB ROTATION Job rotation is an approach to management development where an individual is moved through a schedule of assignments designed to give him or her, a breadth of exposure to the entire operation. Job rotation is also practiced to allow qualified employees to gain more insights into the processes of a company, and to reduce boredom and increase job satisfaction through job variation.

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At the senior management levels, job rotation - frequently referred to as management rotation, is tightly linked with succession planning - developing a pool of people capable of stepping into an existing job. Here the goal is to provide learning experiences which facilitate changes in thinking and perspective equivalent to the "horizon" of the level of the succession planning. For lower management levels job rotation has normally one of two purposes: promotability or skill enhancement. In many cases senior managers seem unwilling to risk instability in their units by moving qualified people from jobs where the lower level manager is being successful and reflecting positively on the actions of the senior manager. An organized and helpful way to develop talent for the management or executive level of the organization is job rotation. It is the process of preparing employees at a lower level to replace someone at the next higher level. It is generally done for the designations that are crucial for the effective and efficient functioning of the organization. Benefits of Job Rotation Some of the major benefits of job rotation are:

It provides the employees with opportunities to broaden the horizon of knowledge, skills, and abilities by working in different departments, business units, functions, and countries

Identification of Knowledge, skills, and attitudes (KSAs) required It determines the areas where improvement is required Assessment of the employees who have the potential and caliber for filling the position

8.7 UNDERSTUDY An understudy learns the job through carefully watching the manager, to whom he is understudy. The understudy gets an opportunity to understand the challenge of role and the ways and means to approach to different issues and concerns. Currently a lot of top B-School graduates are taken as Executive Assistants to the CEOs, which give them an opportunity to view the organization

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from the top. After a stint as Executive Assistants, they are placed in line roles. This develops these talented young managers into becoming ladders in future. 8.8 CAREER PATHING A career path is a realistic, sequential and flexible line of progression through which an employee typically moves during employment. Four types of career paths have been shown in the table given below: It is clear from the table that we need to understand a job thoroughly as well as its relationship with others in the organization structure to design career path. Career path data should be developed for each job based on: Thorough job analysis i.e. job description and job specifications Accurate historical trends and future projections how many steps, can a role holder move Similarities to the career pathing of other jobs within comparable job categories and families Four Types of Career paths There are four types of career path, which has been depicted below in a pictorial form.

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Tradition

Definition Job progression upward from one job to the next Features: Employee moves step by step to gain experience and preparation Straightforward move, clearly laid out; job sequence and preparation Movement based on tenure Flawed approach for todays business due to mergers, acquisitions, joint ventures(see Chapter 8);erosion of loyalty and job security

Network

Definition: Job progression with both vertical and horizontal avenues for advancement Features: Identifies vertical job sequence and horizontal job opportunities Capitalizes on education and broad avenues of experience Represent opportunities for employee development Increases employee loyalty Definition: Job progression that allows for lateral movement Features: Employees can become revitalized and find new challenges, opportunities, and creative endeavors Neither compensation nor benefits is associated here Promotions are not involved Employees become value-added commodities because they learn different jobs

Lateral Skill

Dual Career

Definition: A method of rewarding technical and professional personnel who want to continue to contribute but who choose not to be elevated to the managerial ranks Features: Provides for progression in special areas sales, marketing, finance, HRM, engineering, etc Personal rewarded for specialized knowledge and personal contributions as individual and team members Compensation comparable to what managers in other areas receive Retention rates high Helps organization make smooth transition from within

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8.9 SUCCESSION PLANNING Succession Planning ensures that right people will be available from within the organization to assume managerial and executive positions once the positions become available. Succession Planning is a process of: Identifying key individuals by their productivity and work ethics; Developing these individuals through training, coaching, mentoring, job rotation etc. Periodically tracking their progress and assessing their readiness to take up the job for which they have been ear-marked. The benefit of succession planning is that an organization is able to retain the top talents; it becomes sure of the quality of the replacement and ensures that the top leaders in the organization have the culture-fit. For your clarity, we give a Replacement Table the organizations use for the Succession Planning Process. Replacement Tables- A Tool for Succession Planning Replacement tables (see the example below) are one of the tools that succession planners use. Replacement table shows position titles, Current occupants of the positions, Predicted replacement needs (urgency), and the names and promotions potential of possible replacements. Directions: Review the example, then complete the blank form for high-profile managers in your organizational unit.

Legend

Replacement Need A B Need now Need within one year

Potential for Promotion 1.Qualified now 2.Qualified within six month

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Need within 2-5 years

3. Qualified in one year 4.Qualification uncertain but available.

D. No anticipated need Example:

Chief Executive Officer J.Mosal


Khurana Sonthosh Ganguly

B
1 1 2

Personnel Director T.Desai M. patel G.Soski A.Ray

A 4 2 3

Chief Financial Officer B Srivastav Mohanty Thomas 3 3 2

Compensation Director N.Aggarwal S Joshi J Shah K Kumar

D 1 3 3

Comptroller Bharti M Iyer Balachandra S. Singh

C 2 3 1

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NOTES _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________

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_____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________________________________________________________ 9. HUMAN RESOURCE INFORMATION SYSTEM


A generation ago computers were first introduced into businesses and organizations to automate clerical functions and routine transactions. Today, information technology (IT) is an integral part of any managers daily life and forms the backbone for every managerial function of the modern organization. Whether it be integrating ERP systems for operational control, improving customer relationship management using data mining, launching a comprehensive web-based human resource management system, or executing financial transaction in electronic markets, modern information systems (IS) are the life blood of the organization linking all the different functions together in an integrated way and getting information to decision makers at the right time and in the right format. Information systems have long matured beyond their direct use as a tool for increasing the efficiency of back-office operations. They have been used by long-established companies to change their position in the market, and they have been used by innovators to create new companies in markets, which formerly did not exist. Thus a HR manager of this century should be acquainted with different facets of HRIS. 9.1 WHAT IS HRIS? A human resources information system (HRIS) is the system used to acquire, store, manipulate, analyse, retrieve, and distribute an organisations human resources information. Definition: A Human Resource Information System is a systematic procedure for collecting, storing, maintaining, retrieving, and validating data needed by an organization about its human resources

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An HRIS is not simply computer hardware and associated HR-related software; it also includes people, forms, policies, and procedures and data. The purpose of the HRIS is to provide information to facilitate or support strategic tactical & operational decisions. 9.2 WHY HRIS IS IMPORTANT? In the evolution of organisations one thing that persisted over ages is the need for change. With globalization of economies & technological advances this change became all the more important to exist & sustain. Each and every sub function of an organisation undergoes changes to be innovative and efficient on quality, cost and time. Human resource function also needed to undergo transformation to keep pace with the other functions. Essential function of human resource management is to respond to the demands of internal & external environment of an organisation. Internal requirement is to provide human resource for various activities of the organisation. External requirement is to understand the labor market & compliance with government policies. HRIS is an operational tool in an organisation but can be used for strategic purposes as the organisations mature over a period of time. Let us consider following two incidents to strengthen our belief in HRIS.

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HRIS interaction with other HR functions

HR Planning and Analysis Organization charts Staffing projections Skill inventories Turn over analysis Restructuring costing Internal job matching Equal Employment Applicant tracking Workforce utilization Availability analysis Staffing Recruiting sources Applicant tracking Job offer refusal analysis HR Development Employee training profiles Training needs assessments Succession planning Career interests. Compensation and Benefits Pay structure Wage/Salary costing Flexible benefit administration Vacation usage Benefits usage analysis

HRIS

Health, Safety and Security Safety training Accident records Material data records

Employee and Labor Relations Union negotiation costing Auditing records Attitude survey results Exit interview analysis Employee work history

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Incident-1 Mr. Ramesh Kumar was newly appointed as HOD of HR department for Laxmi Seeds Ltd. Laxmi Seeds is a hybrid seeds company with 1200 employees. One morning CEO calls Ramesh & asks for list of employees who hail form rural areas with their designation & gender. CEO was to attend an unscheduled meeting with Rural Development ministry to get tax benefits for employing rural women work force at officer & below levels. Ramesh had 3 team members in his department & one of them was on leave. After numerous phone calls to various colleagues Ramesh could not get this information. Laxmi Seeds maintains its employee records in personal hard copy files & the best information he could get was guesses. Getting right figures for Ramesh took almost 5 days. CEO was upset for not getting this information. This one incident made Laxmi Seeds to think seriously about HRIS implementation. How much time would an HRIS take to get the above information? Incident -2 Tejas Fertilisers & Chemicals has its Urea production plant at Kota, Rajasthan with an installed capacity of 1000 TPD employing 480 work forces. Due to high petroleum based naphtha prices cost of production shot up & Tejas started recording marginal losses from November 2007. There was an acute shortage of Urea in the market due to reduced production by most of the Urea manufacturers. On June first Tejas factory workers went on strike demanding higher salaries. During monsoon season Tejas can not remain idle even for one day. Management & Worker unions sat down for discussion to call off the strike. Some of the aged workers were demanding free Urea distribution to all the factory workers, but younger lot was interested more in salary hike. Women workers were interested in reducing the working hours along with increased pay hike. Most of the long serving employees were not interested in strike. Mr. Arjun Yadav the CEO of the company was to decide quickly, which is the most economical option to satisfy all the workers & resume work. Tejas has its employee personal files in their head office at Delhi. Can HR manager help Arjun to take a decision? How much time HR manager needs to get the relevant information that may help in calling off the strike. Can HRIS help in this situation? In the first incident had the information is available in time the problem could have been solved. In the second incident if the employee data is available in the place of work probably strike could

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have been quickly called off & production would have started. These two incidents illustrate how important is HRIS to an organisation. The ability to perform jobs faster is not only the motivation for HRIS. Getting information & reports faster is indeed a goal of HRIS but not the only goal. Another major goal is accurate information. Thanks to revolution in IT almost all the processes in an organisation are getting automated one by one. In these circumstances HR need to interact with all other internal & external departments that necessitates HRIS. HR sub functions Planning Staffing Training & Career development Performance Management System Compensation & Benefits Employee engagement

External Environment Legal Social Political

Internal Environment Different departments Trade unions

HRIS

Business partners Vendors Customers Competitors

Strategic Partners Share holders Directors/CEO

Fig. 1.2 : HRIS Interaction with other Systems

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9.3 LEVELS/TYPES OF HRIS : HRIS PYRAMID There are 4 different levels of HRIS as shown in the HRIS pyramid below

KIND OF SYSTEM
STRATEGIC LEVEL

GROUPS SERVED
SENIOR MANAGERS/CEO ESS DSS

MANAGEMENT LEVEL

MIDDLE MANAGERS MIS

OPERATIONAL LEVEL

1) Operational-level Systems: For operational / Execution level Managers Examples: 1) TPS: Transaction Processing Systems Issue of ID cards to employees 2) OAS: Office Automation Systems Attendance punching & recording Support operational managers by keeping track of the elementary activities and transactions of the organization. The important purpose of systems at this level is to answer routine questions and track the flow of transactions through the organization. Covers things such as sales, receipts, cash deposits, payroll, credit decisions, and flow of materials.

KNOWLEDGE LEVEL

KWS

KNOWLEDGE WORKERS

AOS TPS

OPERATIONAL MANAGERS

Fig.1.2: HRIS Pyramid

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2) Knowledge-level Systems: For knowledge workers like Architects, Statisticians, and Designers. Example: 1) KWS: Knowledge Worker Systems Auto CADD, Simulation Studies Support knowledge and data workers in an organisation. The purpose of these systems is to help the organisation discover, organise and integrate new and existing knowledge into the business. These systems, specially in the form of collaboration tools, workstations, and office These systems are the fastest growing applications in business today.

3) Management-level Systems For Middle Managers to take review level decisions. Examples: 1) MIS: Management Information Systems Data of monthly review meeting Designed to serve the monitoring, controlling, decision-making, and administrative activities of middle managers. These typically provide periodic reports rather than instant information on operations. Some of these systems support non-routine decision-making, focusing on less-structured decisions for which information requirements are not always clear. This will often require information from out with the organisation, as well as from normal operational level data. 4) Strategic-level Systems: For HODs, CEOs mostly for medium to long term planning Example: 1) DSS: Decision Support System Should we buy a new machine or not? 2) ESS: Executive Support System Should we expand into new territory? Help senior management tackle and address strategic issues and long-term trends, both within the organisation and in the external environment. Principal concern is matching organizational capability to changes, and opportunities, occurring in the medium to long term (i.e. 5 - 10 years) in the external environment.

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9.4 HOW TO DEVELOP AN HRIS FOR AN ORGANISATION An HRIS system can be obtained by updating an existing system or by developing a new system. These existing systems may be generally payroll or other existing modules. One need not go for automation of all the functions of HR at a time. Based on the size of the organisation, type of industry and many such factors one can think of having HRIS function wise. 1) Updating the existing system: What ever the exiting basic manual or computerised information is available can be developed in to an HRIS. Advantages of updating the existing module: i) It is cost effective ii) Can be quickly developed as data are already in the system Disadvantages are : i) It will not be flexible and may not fit the exact requirements of the organisation ii) Modifying the software will be difficult later on. 2) New system can be acquired in one of the following ways: Develop a new system from the scratch internally Adapt a system used by another group company or another company Use an external service Buy a vendor ( Vendor is a supplier of Software & hardware) system and modify it, or purchase and use it Advantages i) Fits well for the requirements of the organisation

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ii)

Easy to upgrade for future needs.

Disadvantages 1) Costly 2) Some times you need to depend on the other party for service. 9.5 COMPONENTS OF HRIS DEVELOPMENT IN AN ORGANISATION HRIS development has 3 essential stages like choosing the HRIS system, Hardware requirements and Vendor service. In all these 3 cases you need to keep following points in mind while taking decisions. A) HRIS System 1) Is HRIS required? 2) What kind of HRIS is required? 3) What specific functions are expected form HRIS in the present business context? 4) Cost benefits analysis. 5) Which functions of HR needs automation now? 6) Should we go for automation of all the functions of HRIS? B) Hardware requirement 1) What amount of storage is required? 2) What computer language it uses? 3) Can the system interface with the other system? 4) Is the system suitable for networked environment? 5) What provision the system should have for uploading and downloading data? 6) How frequently it has to be updated or serviced ? C) Vendor Services 1) How long are they in business?

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2) Is there any evidence of financial stability? 3) How they will support client? 4) How often the companies update the software? 5) How long the product is in market? 6) Who are the reference users? 7) What type of training support they provide? 8) What is the vendors commitment to research? Some of the readily available HRIS products in market are: i) ii) iii) People Soft SAP-Human Resource Management System Oracle-HR module

9.6 REPORTS GENERATION Once you implement HRIS and feed all your human resource information into system you can generate different types of reports. There are different ways of classifying these reports. Most prominent way is based on Periodicity and Complexity also known as based on Frequency & Dimension. 1) Reports based on Periodicity/Frequency: a) Extracts/Data dump ( raw information taken from computer or server with out any processing) : Generally taken for routine activities. These reports may not have much analysis & calculations. Examples : List of employees, Department wise headcount. b) Production/Fixed reports: These are factory production reports. Many times taken per shift or weekly or monthly. Examples: Weekly work hours for each employee, Defects in products per shift per employee.

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c) Library/Catalogue reports: These are generally taken at specific intervals like quarterly or annually or at any other specified interval. Examples: Quarterly attrition reports, Monthly wage bill. d) Ad-hoc reports: These reports do not have any periodicity but generated as & when required. Examples: List of employees whose birthday falls next week. List of employees who are getting salary less than Rs.10000 per month. 2) Reports based on complexity/Dimension a) Simple reports: Reports which are like raw data & are simple to understand. These reports generally come with simple conclusions. Examples: List of male & female employees, List of employees who were promoted previous year. b) Computation reports: These reports generally come with some calculations & conclusions. These reports will have some basic analysis & conclusions. Examples: Average salary of male & female employees, Air & Rail travel costs of employees in marketing & production departments. c) Comparison reports: These reports will process data, analyse, and mostly compare with time dimension. Examples: Month wise cost of production of different products in different shifts, No of monthly new joinees with their salary & salary of existing employees when they joined & present salaries. d) Statistical reports: These reports process data & analyse the data with statistical tools & present conclusions. Example: Relation between training & employee efficiency, Relation between salary revision & attrition.

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e) Graphic reports: These reports use analytical tools like statistics & calculations to present the conclusions. Generally conclusions are graphically represented with summary like Pie charts, histograms and other QC tools. Examples: Percentage representation of salary differences for different roles in metros & mini metros, Correlation between age and productivity in different shifts. 9.7 SECURITY ISSUES One of the major disadvantages of Information Systems in general and HRIS in particular is its susceptibility to thefts. Since large amount of information is stored in one place & one can easily access it with some knowledge of IT. Yet one should plan for strong IT security measures to minimize the chances of information getting into wrong hands. There are several ways of protecting the HRIS like : 1) Having access control systems for classified data 2) Insulating with fire walls for the system at all entry points 3) Develop anti hacking alerts & self check measures

9.8 CONCLUSION In todays world one can not ignore the relevance of HRIS for an organisation. HRIS is a transactional tool that can be used for strategic application. Requirement of HRIS for different level of people is different. There are four various levels of HRIS to suit the needs of different levels of employees. One buy a readily available HRIS package from market or develop internally. HRIS helps us to generate various reports & conclusion that help in taking decisions in an organisation. We need to protect HRIS from getting into wrong hands by adopting IT security measures.

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ANNEXURES HRIS helps us to generate reports. Reports can be categorized as per the levels of HRIS as discussed in chapter levels of HRIS. These reports help us in our decisions. Reports generated generally use different formulas & calculations as presented below. This sections also shows the sample formats of different common reports generated by HRIS.The reports differ from organisation to organisation & situation.

Recruitment Efficiency : Time taken to fill vacancies RE = Total calendar days from each requisition to accepted offer No of openings filled Turnover Cost: Cost to terminate TC = Cost to hire + vacancy cost + Productivity loss Employees lost Employee turnover rate : Volunteer turnover ETR= No of employees volunteered to leave Total no. of Employees Cost of Hiring CH= Advertising expenses +Agency fee+ Recruiters pay +10% Miscellaneous No of employees hired Productivity Manpower Productivity = No. of Tonnes of Fruits Sorted per day No. of Workers employed per day

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1) Manpower Supply & availability report location-wise


Manpower Vacancy report Location-wise
NEW STATE HO Andhra Pradesh NEW LOCATION Gurgaon Hyderabad Vijaywada Vizag Delhi / Ncr Delhi Noida Faridabad Gujarat Ahmedabad Naroda Karnataka Bangalore Belgam Madhya Pradesh Bhopal Indore Maharashtra Mumbai Pune Punjab Chandigarh Jalandhar Rajasthan Jaipur Jodhpur Tamil Nadu Chennai Madurai Kerala Kochi Coimbatore Grand Total No. of positions 200 50 50 50 80 50 50 80 80 80 50 80 50 100 80 80 50 80 50 100 80 80 80 1730 Filled 80 34 21 4 11 42 5 7 4 23 12 34 23 85 65 41 22 33 58 85 70 55 20 834 Vacancy 120 16 29 46 69 8 45 73 76 57 38 46 27 15 15 39 28 47 -8 15 10 25 60 896

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2) Manpower Supply & availability report department wise

Manpower Vacancy report Location wise


BUSINESS Category Department Tractors sales Irrigation pumps Agricultural implements Category Total Food Business Fruits Vegetables Dry Fruits Spices Pulses Rice Sugar Non Veg Food Business Total Grand Total No. of positions 150 150 250 550 200 350 100 150 130 120 80 50 1180 1730 Filled 82 75 137 294 135 182 68 92 123 50 76 50 776 1070 Vacancy 68 75 113 256 65 168 32 58 7 70 4 0 404 660

3) Manpower transfer report.

Employee Transfer Report EC. No. Employee Name Current Designation Sr. Manager Deputy Manager Manager Present Location Bangalo re Bangalo re Bangalo re New Location Delhi Hyderab ad Mumbai Role as per Organisation Structure Seed production officer Farm superdent Kanva Kumar Supervisor Name Pramod Garg Pramod Garg Pramod Garg Transfer Date 1st April 2008 1st April 2008 1st April 2008

400321 400322 400323

Ravi Nayak Pramod Desai Naveen Shetty

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4) Candidate job offer details report

Details Of Employee - As Per Offer Letter / Offer Initiation Document

Sr.No

Employee Name

DOB

DOJ

Grade

Designation

Dept/Function as per offer letter

City Location

Jerome 1 Joseph Padma 2 Laxmi 3 Pallavi Negi 4 Ram K

12.11.1972 12.11.1973 12.07.1974 11.11.1968

22.05.2007 22.05.2007 22.05.2007 22.05.2007

MT M3 M1 E1

Management Product Trainee development Sr. Manager Asst. Manager Executive Supply Chain Training Human Resource

Chennai Delhi Delhi Mumbai

5) Medical insurance premium tracking report

Medical Insurance Premium details EMPLOYEE SUM PREMIUM NAME CATEGORY ID INSURED (p.a) 2000342 Arvind Saraf 2000453 Vijay Yadav Pesticides Seeds 200,000 200,000 1,862 1,862

SR NO. 1 2

LOCATION BANGALORE BANGALORE

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7) Employee Personal Data.

Employee personal data Employee ID 1234 1235 1236 1237 1238 1239 1240 1241 1242 1243 1244 Full name Raja Rao Ravi Kumar Kamal Suri Laxmi M Prabhu K Suman Lakhani Ramesh K R Subhashini Amandeep Kour Raju Yadav Rajeev Khurana Grade M3 M2 M2 M3 M3 M3 E3 M2 M1 M1 M1 Location Bangalore Bangalore Bangalore Bangalore Bangalore Mumbai Cochin Bangalore Ludhiana Noida Noida Gender Age Male Male Male Male Male Female Male Female Female Male Male 34 33 36 55 32 26 28 22 38 41 27 Blood Group A B O O A B AB O O O A

8) Employee salary details report Employee Salary Details Sl No. 1 2 3 4 Name Pravin Shah Prabal Malik Smita Singh Laxmi C Dept D&L Business Head HR HR Business Process & Quality Function D&L Mens HR HR Business Process & Quality Grade E2 M3 M2 M4 Basic 576768 1950000 785103.96 863553.96 Incentive 26767.92 210000 73400.04 63549.96 Total 603536 2160000 858504 927104

Noel George

E3

700000

50000

750000

199

Charu Singh

Business Ops

CEO Office

M2

261669.96

39249.96

300920

9) Attrition by Performance

Departments Pesticides Fertilisers Seeds Agri Equipments Supply Chain Marketing HR Finance Grand Total
Overall Attrition rate

ATTRITION Summary of defferent kinds of performers Ratings Very Oustanding Good Good Average Poor 1% 3% 4% 4% 2% 2% 2% 3% 1% 4% 1% 0% 0% 0% 5% 0% 2% 0% 0% 0% 0% 0% 0% 2% 4% 0% 0% 0% 3% 2% 0% 0% 2% 4% 0% 0% 0% 1% 0% 1% 4.00% 7.00% 10.00% 14.00% 18.00%
11%

Not covered 1% 0% 1% 0% 3% 0% 1% 1% 7.00%

Total 15% 12% 7% 2% 9% 5% 7% 3%

200

NOTES _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________
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_____________________________________________________________ ____________________________________________________________

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