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Ans No. 01(a) The Legal Environment of Human Resource Management

DISCRIMINATION IN THE WORKPLACE
Employment discrimination occurs in a variety of ways, and there are a number of methods for seeking redress through the courts. While the legal definition of discrimination differs depending on the specific law, it can be broadly defined as employment decision making or working conditions that are unfairly advantageous (or disadvantageous) to members of one group compared to members of another group. The decision making can apply to personnel selection, admission to training programs, promotions, work assignments, transfers, compensation, layoffs, punishments, and dismissals. The conditions also can pertain to the work atmosphere itself. For example, a common lawsuit today concerns allegations of sexually harassing behaviors at work that place an individual in an offensive or intimidating environment.

EQUAL OPPORTUNITY LAWS AND REGULATION

Figure 3-2 presents a summary of illegal discriminatory practices. Of the many sources of redress that are available, the most frequently used sources are federal laws: Title VII of the 1964 U.S. Civil Rights Act (CRA),The Age Discrimination in Employment Act of 1967 (ADEA), and the Americans with Disabilities Act of 1990 (ADA). (See Figure 3-3 for some excerpts from Title VII.) Most of the states and many municipalities also have their own fair employment laws. Complainants can also use the equal protection clause of the U.S. Constitution in lawsuits against the states. All claims of discrimination under CRA, ADEA, and ADA must first be filed with the EEOC, which received 82,792 charges of discrimination in 2007, an increase of 9 percent from 2006 (check out their Web site at www.eeoc.gov). The highest percentage of claims of discrimination is for race, gender, age, disability, national origin, and religion (in that order).

Figure 3-2 Discriminatory Practices

Under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA), it is illegal to discriminate in any aspect of employment, including:

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Hiring and firing Compensation, assignment, or classification of employees Transfer, promotion, layoff, or recall Job advertisements Recruitment Testing Use of company facilities Training and apprenticeship programs Fringe benefits Pay, retirement plans, and disability leave Other terms and conditions of employment Discriminatory practices under these laws also include: Harassment on the basis of race, color, religion, sex, national origin, disability, or age. Retaliation against an individual for filing a charge of discrimination, participating in an investigation, or opposing discriminatory practices. Employment decisions based on stereotypes or assumptions about the abilities, traits, or performance of individuals of a certain sex, race, age, religion, or ethnic group, or individuals with disabilities. Denying employment opportunities to a person because of marr iage to, or association with, an individual of a particular race, religion, national origin, or an individual with a disability. Title VII also prohibits discrimination because of participation in schools or places of worship associated with a particular racial, ethnic, or religious group. Employers are required to post notices to all employees advising them of their rights under the laws EEOC enforces and their right to be free from retaliation. Such notices must be accessible, as needed, to persons with visual or other disabilities that affect reading. Note: Many states and municipalities also have enacted protections against discrimination and harassment based on sexual orientation, status as a parent, marital status and political affiliation. Federal legislation prohibiting discrimination based on sexual orientation passed the U.S. House of Representatives in 2007 and may become law in 2009. TITLE VII

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Title VII prohibits not only intentional discrimination, but also practices that have the effect of discriminating against individuals because of their race, color, national origin, religion, or sex. Race or Color Discrimination Equal employment opportunity cannot be denied any person because of his/her racial group or perceived racial group, his/her race-linked characteristics (e.g., hair texture, color, facial features), or because of his/her marriage to or association with someone of a particular race or color. National Origin Discrimination It is illegal to discriminate against an individual because of birthplace, ancestry, culture, or linguistic characteristics common to a specific ethnic group. A rule requiring that employees speak only English on the job may violate Title VII unless an employer shows that the requirement is necessary for conducting business. If the employer believes such a rule is necessary, employees must be informed when English is required and the consequences of violating the rule. The immigration reform and Control Act (IRCA) of 1986 requires employers to assure that employees hired are legally authorized to work in the U.S. However, an employer who requests employment verification only for individuals of a particular national origin, or individuals who appear to be or sound foreign, may violate both Title VII and IRCA; verification must be obtained from all applicants and employees. Employers who impose citizenship requirements or give preferences to U.S. citizens in hiring or employment opportunities also may violate IRCA. Additional information about IRCA may be obtained from the Office of Special Counsel for Immigration-Related Unfair Employment Practices at 1-800-255-7688 (voice), 1-800-237-2515 Religious Accommodation An employer is required to reasonably accommodate the religious belief of an employee or prospective employee, unless doing so would impose an undue hardship. Sex Discrimination Title VIIs broad prohibitions against sex discrimination specifically cover:

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Sexual harassmentthis includes practices ranging from direct requests for sexual favors to workplace conditions that create a hostile environment for persons of either gender, including same sex harassment. (The hostile environment standard also applies to harassment on the bases of race, color, national origin, religion, age, and disability.) Pregnancy-based discriminationPregnancy, childbirth, and related medical conditions must be treated in the same way as other temporary illnesses or conditions. Additional rights are available to parents and others under the Family and Medical Leave Act, which is enforced by the U.S. Department of Labor. For information on the FMLA, or to file an FMLA complaint, individuals should contact the nearest office of the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor. The Wage and Hour Division is listed in most telephone directories under U.S. Government. AGE DISCRIMINATION IN EMPLOYMENT ACT The ADEAs broad ban against age discrimination also specifically prohibits: Statements or specifications in job notices or advertisements of age preference and limitations. An age limit may only be specified in the rare circumstance where age has been proven to be a bona fide occupational qualification. Discrimination on the basis of age by apprenticeship programs, inclu ding joint labormanagement apprenticeship programs. Denial of benefits to older employees. An employer may reduce benefits based on age only if the cost of providing the reduced benefits to older workers is the same as the cost of providing benefits to younger workers. EQUAL PAY ACT The equal pay act (EPA) prohibits discrimination on the basis of sex in the payment of wages or benefits, where men and women perform work of similar skill, effort, and responsibility for the same employer under similar working conditions. Note that: Employers may not reduce wages of either sex to equalize pay between men and women. A violation of the EPA may occur where a different wage was/is paid to a person who worked in the same job before or after an employee of the opposite sex.

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A violation may also occur where a labor union causes the employer to violate the law. Note: The Paycheck Fairness Act may have amended this law in 2009.

TITLES I AND V OF THE AMERICANS WITH DISABILITIES ACT The ADA prohibits discrimination on the basis of disability in all employment practices. It is necessary to understand several important ADA definitions to know who is protected by the law and what constitutes illegal discrimination: Individual with a Disability An individual with a disability under the ADA is a person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such impairment, or is regarded as having such impairment. Major life activities are activities that an average person can perform with little or no difficulty such as walking, breathing, seeing, hearing, speaking, learning, and working. Note: The 2008 ADA Amendments Act changed the definition of a disability. Qualified Individual with a Disability A qualified employee or applicant with a disability is someone who satisfies skill, experience, education, and other job-related requirements of the position held or desired, and who, with or without reasonable accommodation, can perform the essential functions of that position. Reasonable Accommodation Reasonable accommodation may include, but is not limited to, making existing facilities used by employees readily accessible to and usable by persons with disabilities; job restructuring; modification of work schedules; providing additional unpaid leave; reassignment to a vacant position; acquiring or modifying equipment or devices; adjusting or modifying examinations, training materials, or policies; and providing qualified readers or interpreters. Reasonable accommodation may be necessary to apply for a job, to perform job functions, or to enjoy the benefits and privileges of employment that are enjoyed by people without disabilities. An employer is not required to lower production standards to make an accommodation. An employer generally is not obligated to provide personal use items such as eyeglasses or hearing aids. Undue Hardship

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An employer is required to make a reasonable accommodation to a qualified individual with a disability unless doing so would impose an undue hardship on the operation of the employers business. Undue hardship means an action that requires significant difficulty or expense when considered in relation to factors such as a businesss size, financial resources, and the nature and structure of its operation.

Prohibited Inquiries and Examinations Before making an offer of employment, an employer may not ask job applicants about the existence, nature, or severity of a disability. Applicants may be asked about their ability to perform job functions. A job offer may be conditioned on the results of a medical examination, but only if the examination is required for all entering employees in the same job category. Medical examinations of employees must be job-related and consistent with business necessity. Drug and Alcohol Use Employees and applicants currently engaging in the illegal use of drugs are not protected by the ADA when an employer acts on the basis of such use. Tests for illegal use of drugs are not considered medical examinations and, therefore, are not subject to the ADAs restrictions on medical examinations. Employers may hold individuals who are illegally using drugs and individuals with alcoholism to the same standards of performance as other employees.

THE CIVIL RIGHTS ACT OF 1991 The Civil Rights Act of 1991 made major changes in the federal laws against employment discrimination enforced by EEOC. Enacted in part to reverse several Supreme Court decisions that limited the rights of persons protected by these laws, the Act also provides additional protections. The Act authorizes compensatory and punitive damages in cases of intentional discrimination and provides for obtaining attorneys fees and the possibility of jury trials. It also directs the EEOC to expand its technical assistance and outreach activities. EEOC The U.S. Equal Employment Opportunity Commission (EEOC), an agency of the U.S. Department of Labor, was created to monitor and enforce compliance with several laws, including Title VII. The EEOC can (and often does) file Title VII suits against organizations for violations of the law. The EEOC also issues interpretive regulations regarding employment practices (see www.eeoc.gov to review these guidelines). Among the many regulatory interpretations issued by the EEOC are the Uniform Guidelines on Employee Selection Procedures that provide

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recommendations for employment staffing, the Interpretative Guidelines on Sexual Harassment, and the Policy Guidance on Reasonable Accommodation Under the Americans with Disabilities Act. HRM specialists participated in the development of these guidelines. While these guidelines are not law, the courts often use them to evaluate claims in a case. The EEOC also requires that most employers with 100 or more employees submit an annual EEO-1 form. Figure 3-4 presents the new 2008 form. Data from these forms are used to identify possible patterns of discrimination in particular organizations or segments of the workforce. The EEOC may then take legal action against an organization based on these data. The EEOC offers a mediation program that is available at no cost to the parties. Mediation is an informal process in which a neutral third party assists the opposing parties to reach a voluntary, negotiated resolution of a charge of discrimination. The decision to mediate is completely voluntary for the charging party and the employer. Mediation gives the parties the opportunity to discuss the issues raised in the charge, clear up misunderstandings, determine the underlying interests or concerns, find areas of agreement, and, ultimately, incorporate those areas of agreements into resolutions. A mediator does not resolve the charge or impose a decision on the parties. Instead, the mediator helps the parties to agree on a mutually acceptable resolution. The mediation process is strictly confidential. In 2005, the EEOC and McDonalds USA signed an agreement to mediate workplace disputes prior to an EEOC investigation or potential litigation when a charge of discrimination is filed with the federal agency in some regions of the United States. This mediation partnership was the 90th such national or regional agreement between the EEOC and a large employer (mainly Fortune 500 companies). The EEOC oversees over 12,000 mediations annually. Under the terms of such agreements, all eligible charges of discrimination filed with the Commission naming McDonalds as the employer will be referred directly to the mediation unit.

How to Tackle Discrimination and Promote Equality

This section explains what you can do to promote a more equal workplace, and be confident that you are complying with legislation. For individual advice as to how your business can take these steps, we would recommend that you contact a solicitor specializing in employment law, or a professional human resources advisor or consultant. The former equality commissions produced statutory codes of practice covering many aspects of the topics discussed in this section. Statutory codes of practice have been approved by parliament, and can be taken into account by employment tribunals.

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Review your current position Develop an equality policy and action plan Promote equality and good employment practice Specific guidance Equality training Deal properly with complaints and grievances Monitor progress

Ans No. 01(b)

DIVERSITY MANAGEMENT What is "Diversity Management?"?
The concept of diversity management has been in news since the past two decades. Owing to the increasing workforce diversity which is mainly the result of the managements acknowledgement of the fact that diverse workforce results in innovative ideas and higher overall organizational efficiency, more and more organizations are seriously considering the diversity management techniques to maintain harmony among the workers. On comparing workforce in the present with that of the past, we see a considerable demographic shift in terms of nationalities, ethnic background, socio-economic status etc. Although the management of late has recognized the importance of diversity management, it has not been easy for them to implement. It calls for changing the organization so that it is acceptable to the diverse work force. Affecting a diversity management program is often accompanied by resentment from the dominating group because of their perception that the new policies will make the minority dominant and will not be supportive to their interests. Also, organizational change is in itself a complex task. In the context of workforce diversity, it involves creating an inclusive work environment that is aligned with a firms mission and strategy. In this kind of work environment employee differences are respected. It should not be considered as a legal obligation. Rather it should be seen as machinery for increasing overall organizational productivity.

Learning as a means of inculcating diversity management

For effecting Diversity Management in the system, employees should be receptive to new ideas. Learning is a continuous process which leads to change in behavior. Learning makes the firm more adaptive to changing business environment. For starting any organizational change the writer emphasizes on Reflective Learning in contrast to Reactive Learning. In Reactive Learning, the organization tackles the pressure for change by reviewing its existing policies or procedures. Organizations generally fail to think about the situations that called for the change and their implications. Engaging in Reactive Learning may not be fruitful for the company in the long run and it generally considered as a quick fix solution. The same strategy was implemented by Denmark-based Novo Nordisk. Initially it based its diversity program on the human rights and discrimination in the workplace. But later on, they engaged Reflective learning and

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considered diversity program as a vehicle to improve the reputation of the company, and enhance its innovativeness.

The Three Steps of Diversity Management

After considering the type of learning required to be implemented by companies, the writer suggests three major steps in Diversity Management which is called as The ABC Building Blocks Assessing and Affirming Differences Building Bridges to support workforce diversity Cultivating capabilities and competitive advantage.

Assessing and Affirming Differences

To begin with, the management should assess the demographics of the workforce so that every section of workers is taken into consideration. This will also ensure that resistance to change is minimized. Atlanta, Georgia, branch of Marriott Hotels failed on this front and their idea of maintaining a childcare center for its working parents failed miserably. Later on, they had to review their plan to increase their business. Thus, their initial failure gave them a lesson that Demographics and socio-economic status should also be given due importance before making any change in the organization.

Building Bridges to support workforce diversity

Building bridges to support workforce diversity is the second step in organizational change. The top management should be involved in the implementation for it to succeed. Many times the indifference of the top management results in the failure of effective implementation of the change. The management should be passionate enough and assess the reason why there is a need for organizational change. Involving the workers also minimizes the chance of resentment.

Cultivating capabilities and competitive advantage

The third building block is cultivating capabilities and competitive advantage. This step is seen as members coming together and a brainstorming session is conducted. Every member is free to give his suggestion and the best suggestion is implemented. Thus it is disseminated in the organization. These steps are followed by Proctor & Gamble which gained competitive advantage in South Africa by exporting the idea of exporting the idea to use local companies in their distribution system.

Implication for managers:

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If diversity is to be managed properly in order to foster better organizational performance, it is important for managers to understand and value cognitive diversity. One of the reasons is that the problems of today's business activities are complex to a higher extent than multiple years ago. Understanding the concept of cognitive diversity therefore is highly desirable for good management. Moreover, research projects are larger and more expensive, partly due to the economic hard times. Another result of the economic downfall is the greater need for innovation. Since competition increased significantly, companies have to diversify and innovate on fields other than their direct and indirect opponents. A last point of attention would include the essence of predicting the future becoming more important in the years that lay ahead of us. Beyond cognitive diversity, group-based diversity (i.e., diversity along ethnic, religious, gender, age, socio-economic status lines) is also important to understand value and manage. Implications of managers on the work level are can be seen as more practical than the concepts described above. This can be said to be a hand-on approach. To realize the potential of employees in businesses, managers should be open for individual differences. In several cases managers would like to see employees to behave in a different way, while this is not method that employees are used to and in which they are most efficient. To realize the potential of the employees, it often is helpful to build teams capable of solving complex problems and making better predictions. Since people think and act differently and moreover have different backgrounds, a broad range of ideas will be gathered. In this way the best possible solution can be reached easily. One can say that in this way, you tap into a diversity of perspectives, heuristics, interpretations and predictive models to create innovating organizations capable of sustaining competitive advantage.

Some critical managing diversity issues are summarized below: Creating an inclusive organization Working to change the corporate culture towards valuing diversity Demonstrating commitment through flexibility Creating awareness and skills learning and training Measuring and creating incentives Linking valuing diversity to strategic objectives Assuring top management support Clear and credible communication

Ans No. 02:

HR scorecard

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Measures the HR functions effectiveness and efficiency in producing employee behaviors needed to achieve the companys strategic goals.

Creating an HR scorecard Must know what the companys strategy is. Must understand the causal links between HR activities, employee behaviors, organizational Outcomes, and the organizations performance. Must have metrics to measure all the activities and results involved.

7 Steps of HR Scorecard Approach:

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Step 1 Clarify and articulate the business strategy Step 2 Develop the business case for HR as a strategic asset Step 3 Create a strategy map for the firm Step 4 Identify HR deliverables within the strategy map Step 5 Align the HR architecture with HR deliverables Step 6 Design the strategic measurement system Step 7 Execute management by measurement

Step 1 Clarify and articulate the business strategy

Main Idea

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Until a firm clarifies its business strategy precisely and in a way that employees understand, it will be impossible to measure how successful the organization is. Therefore, before focusing on implementing the strategy of the business, there must be the capacity to definitively state the preferred business strategy clearly, concisely and free of ambiguities.

Supporting Ideas The HR role within a firm has evolved over the past century quite dramatically: The traditional perspective was to view HR as being purely administrative administering benefits and payroll. In the 1990s, HR started to be seen as a strategic asset from several perspectives: Personnel Hiring and developing exceptional employees. Compensation Rewards for exceptional performers. Alignment Executing whatever management wants. High-performance Using HR to achieve greatness. In the emerging digital business era, the emergence of a new paradigm wherein wealth is created from intangible assets is beginning. This new paradigm suggests HR has a direct impact on business performance since the HR architecture influences how effectively a business can execute its preferred business strategy.

The HR Function

Historically, HR managers focused on the delivery of services such as recruiting, compensation and benefits. Todays HR managers tend to be more interested in finding ways to deliver HR services that directly support the designated strategy of the business. HR managers are acquiring the competencies required to provide strategic human resources management services.

The HR Management System

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This system attempts to maximize the overall quality of the organizations human capital by putting in place and supporting policies and practices which: Create links between promotions and competencies. Provide skills training. Attract and retain high performers. Strategic Employee Behaviors

All the employee actions which are productive in implementing the firms preferred strategy are strategic employee behaviors. Therefore, this area will incorporate behaviors that flow from core competencies as well as situation-specific behaviors required at key points in the value chain. HR focuses on motivating the appropriate behaviors.

Step 2 Develop the business case for HR as a strategic asset

Main Idea Once a firm has clarified its strategy, HR professionals need to be able to build a compelling business case for why and how HR can support that strategy. The overriding theme of this business case should be implementation of the firms strategy, and HRs contribution to implementation through: Creating value with good HR alignment. Controlling costs, thereby enhancing operational efficiency.

Supporting Ideas More often than not, the real challenge in building HRs business case is identifying viable measures of HR performance. Until HR legitimately can show how it contributes to the firms financial success, it will always be in danger of being labeled a cost-center rather than a strategic resource. So what are the characteristics of good HR measures? Good measures capture both the amount of something and the cause. Good measures have context they provide benchmarks for comparison. Good measures are unambiguous they dont use language which can be interpreted several different ways. Good measures are simple they avoid blurring the picture with unrelated information. Good measures contribute in meaningful ways to overall performance evaluation. They are the metrics that matter and can be acted upon.

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Step 3 Create a strategy map for the firm

Main Idea A strategy map (or a value chain) shows how the firm creates value in terms managers and employees can relate to. In other words, the strategy map details which organizational processes and capabilities drive firm performance. To state that clearly: Indicators are specified which either drive performance (leading) or measure results (lagging). The complete spectrum of results are incorporated, both those that are readily visible and quantifiable (tangible) and those that arent (intangi bles). Business indicators leading and lagging Results tangible and intangible

Supporting Ideas Every firm has a value chain even those companies which have never taken the time or effort to articulate the process by which they embed added value within their products and services. A strategy map details each link in that chain. For example, a simple strategy map would be:

From an HR perspective, the strategy map is developed by seeking the answers to questions such as: What strategic goals are critical to achieve rather than simply nice to have if possible? What are the performance drivers for each goal? How can progress towards each goal be measured? What are the barriers that can block the achievement of each goal? How do employees need to behave in order to ensure the firm achieves each of these goals? Is the HR architecture providing the firm with the employee competencies & behaviors needed to achieve those goals? If not, what needs to change within the HR architecture?

By seeking the answer to these questions and creating a strategy map, it will become clear what contribution HR can make to the organizations business.

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Step 4 Identify HR deliverables within the strategy map

Main Idea Most HR outputs are created wherever the HR system intersects the strategy implementation system. Thus, HR managers should identify all HR performance drivers and HR enablers or deliverables which exist within the strategy map. By identifying those drivers and enablers, HR policies which enhance those factors can then be developed. Supporting Ideas To be able to correctly identify where HR creates most of its value, HR managers must understand the business intimately and in detail. That will then give them the insight to see precisely where HR deliverables are supporting the firm level performance drivers in the strategy map. For example:

Step 5 Align the HR architecture with HR deliverables

Main Idea To align the HR system with the firms strategy implementation system, a competency model and development program will be needed to generate the requisite HR deliverables. This will require internal alignment (between all three components of the HR architecture) and external alignment with all other elements in the value chain. In essence, unless there is alignment (with the periodic reshaping that will be required as firms change their business strategies), the HR strategy will not only fail to create value but May even destroy value. Supporting Ideas Alignment between the HR architecture and the strategic requirements of the firm is obviously of vital importance in producing a strategically focused workforce. There are two types of alignment: HR function HR system Strategic employee behaviors

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1. Internal the ability and potential for the firm to use HR as a strategic asset. Internal alignment is measured by evaluating the feedback from those who interact with the HR system on a daily basis line managers and front-line employees. If those people feel there is a high degree of fit and consistency, then there is most likely a strong correlation between the HR architecture and its deliverables. Conversely, internal misalignment means the HR system is consistently sending conflicting signals about what the organization values. By diagnosing and analyzing internal alignment, HR managers can spot problems within the HR architecture and undertake quick remedial actions. 2. External the extent to which the HR system is designed to implement the firms strategy. External alignment measures the match between the firms strategic value drivers and the HR deliverables which contribute to each driver. To make this measurement, both scale (the measurement tool used) and perspective (individual viewpoints) are required. External alignment is usually measured by making tests. The HR deliverables are evaluated on how closely they match the strategy map. Then the HR system is tested to determine specifically what HR deliverables are being generated. That will show whether or not the HR deliverables are, in fact, the key performance drivers for the firms strategy.

Step 6 Design the strategic measurement system

The HR scorecard Results measurements tangible and intangible

Main Idea
A viable HR strategic measurement system: Measures the correct HR performance drivers and enablers. Chooses the correct measures for each deliverable. Ideally, the HR scorecard will accurately measure the impact of all HR policies on firm performance and capture the full impact of HR. The more sophisticated and detailed this measurement is, the greater the potential benefits are.

Supporting Ideas
A well thought-out HR scorecard has four basic dimensions: 1. HR Deliverables These help you identify the causal relationships through which HR generates value in the firm, with an emphasis on HR performance drivers and HR enablers. Ideally, HR deliverables whose actual impact on the firms performance can be measured should be used. The acid test for

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whether the HR deliverables are clearly stated is line managers will understand them and be willing to pay for them.

2. The High-Performance Work System Once the HR deliverables have been clearly defined, the High-Performance Work System (consisting of HR policies, processes and practices) implements the business strategy and generates the deliverables specified. 3. External HR System Alignment Measures This dimension measures how well the HR system is aligned with the firms key performance drivers. When properly aligned, the HR system should be making a definable and significant contribution to the value creation process. Regular measures should be incorporated, so if alignment slips, the appropriate action can be taken quickly and appropriately. 4. HR Efficiency Measures These are the metrics, benchmarks and standards by which the HR systems performance will be gauged and evaluated.

Step 7 Execute management by measurement Main Idea

Implementing the HR scorecard is more than just a one-off event. Its also more than simply keeping a running total of HR results. Instead, a well constructed HR scorecard allows HR managers to monitor their input into the firms results on an ongoing basis and make periodic adjustments to ensure the HR architecture remains aligned with the evolving business strategy of the firm.

Supporting Ideas
To build acceptance for a newly developed HR scorecard: Find a champion or key executive sponsor. Enlist the aid of a key executive, an influential line manager and the head of HR to champion the implementation of the HR scorecard. Create a need. Either build up the potential of a business threat or focus on the great opportunity that can be exploited if the HR scorecard is put in place and used well. The more compelling the opportunity or the greater the threat, the more urgency the HR scorecard will have. Shape a vision.

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Show that with a well implemented HR scorecard, the firm will have a strong and sustainable competitive advantage. Encourage commitment and involvement. When the people most closely involved have information about the HR scorecard, understand what it will do and have participated in shaping it, they will become committed to it. Make it possible for as many people as possible to generate that kind of commitment. Build the enabling systems. A good HR scorecard always requires financial investment, management support and investment in technology. Put those ancillary systems in place and the scorecard project will be able to move forward rapidly. Have early success and demonstrate progress. If the HR scorecard can solve a long standing problem or do something significant, people will notice. That will create momentum, which can then be strengthened with regular updates and validation programs. Sustain the effort. To keep the HR scorecard relevant, update it frequently. Make an ongoing investment in the methodology. People will gradually get onside with the scorecard as they see what it is achieving.

Ans No. 03 (a): Job Analysis

Job Analysis, in simple words, means a process of collecting detailed information about a job. It is a process of collecting all relevant information about the job. The information collected relates to the nature of the job and the qualification required for performing the job. Job Analysis is the starting point of the whole process of recruitment and selection.

Definitions of Job Analysis: According to Edwin Flippo, "Job Analysis is the process of studying and collecting information relating to the operations and responsibility of a specific job." According to David A. DeCenzo and Stephen P. Robbins, "Job Analysis is a systematic exploration of the activities within a job. It is a basic technical procedure, one that is used to define the duties, responsibilities and accountability of a job."

Nature of Job Analysis:

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Everything about the workforce, its collective skills, morale, experience, and motivation depended on attracting and selecting the right employees.

About Job Analysis: You can say that job analysis has a meaning as the procedure through which you determine the duties of these positions and characteristics of the people to hire them. Job analysis used for writing job description and job specifications. Job description also means a list of what the job entails. Job specifications got meaning what kind of people to hire for the job. Supervisor or Human resource specialists normally collect one or more data through job analysis: -Human behaviors: The HR specialist collects data such as sensing, communicating, deciding and writing. -Work activities: He or she collects information such as cleaning, selling, teaching or painting. Included how, why, and when the employee performs each activity -Performance standards: The employer may also want information about the jobs standards which will be used by management to appraise employees.

Usage of Job Analysis Information

Recruitment and Selection: Job analysis provides information about what job entails and what human characteristics are required to perform the job. The information, in form of job descriptions and specifications, helps management decide what sort of people to recruit and hire. Compensation: The information of job analysis is crucial for estimating the value of each job and its appropriate compensation (salary and bonus).Compensation usually depends on jobs required skill and degree of responsibility, education level and safety hazards, etc.

Steps in Job Analysis

Below are six steps in doing job analysis:

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Step number 1: Decide how you will use the data information, since this will determine the data you collect and how you collect them. Some data collection methods such as interviewing the employee and asking job entail. Another methods, like position analysis questionnaire. Step number 2: Review relevant background information such as organization charts, job descriptions and process charts. Organization chart shows the organization wide division of work, how the job in question relates to other jobs, and where the job fits in the whole organization. A process chart provides more detailed picture of the work flow. Finally, the existing job description usually provides a starting point for building the revised job description. Step number 3: Selecting representative positions: Because there may be too many similar jobs to analyze. Step number 4: Actually analyze the job: By collecting data information on job activities, required employee working conditions, human traits, abilities and employee behaviors. Step number 5: Verify the job analysis information with the employee performing the job and with his/her supervisor. Step number 6: Develop job description and specification. Both of them are two tangible products of job analysis. Job description is a written statement that describes the activities and responsibilities of the job and also working conditions and safety hazards. Job specifications underline the personal qualities, skills, traits, background required for the job needed.

Ans No. 03 (b):

EMPLOYMENT PLANNING AND FORECASTING
The basic purpose of having a human resource plan is to have an accurate estimate of the number of employees required, with matching skill requirements to meet organizational objectives. It provides information about the manner in which existing personnel are employed, the kind of skills required for different categories of jobs and human resource requirements over a period of time in relation to organizational objectives. It would also give an indication of the lead time that is available to select and train the required number of additional manpower. More specifically, HR planning is required to meet the following objectives:

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i. Forecast personnel requirements: HR planning is essential to determine the future manpower needs in an organization. In the absence of such a plan, it would be difficult to have the services of right kind of people at the right time. ii. Cope with changes: HR planning is required to cope with changes in market conditions, technology, products and government regulations in an effective way. These changes may often require the services of people with the requisite technical knowledge and training. In the absence of an HR plan, we may not be in a position to enlist their services in time. iii. Use existing manpower productively: By keeping an inventory of existing personnel in an enterprise by skill, level, training, educational qualifications, work experience; it will be possible to utilize the existing resources more usefully in relation to the job requirements. This also helps in decreasing wage and salary costs in the long run. iv. Promote employees in a systematic manner: HR planning provides useful information on the basis of which management decides on the promotion of eligible personnel in the organization. In the absence of an HR plan, it may be difficult to ensure regular promotions to competent people on a justifiable basis.

Forecasting Techniques Used in Personnel Planning and Recruiting

Employee planning and forecasting is the process of determining the positions to be filled in a business organization and the way to fill them. The process addresses issues of future personnel requirements with regards to retaining current employees and hiring additional employees to meet the production activities of the business.

Computer Models
Software programs are applied in computer models to enable the business to forecast future personnel needs using the planned expansion of reduction of production and sales volumes. You need to apply the results of interviews, surveys and estimates of changes in workforce requirements when using the computer models to forecast employee needs. The current changes in employee numbers also enable you to establish a relationship between the current staffing capacity and future staffing needs.

Trend Analysis
Indexing is the main process that is employed in the trend analysis method. The indexing process involves matching rates of growth or decline in employment to a particular number that serves as the guiding index. The results of the indexing process enable you to establish a

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sequence for the likely changes in production that will affect the staffing needs. The ratio of the number of production employees to total revenues is generally used as the guiding index.

Experience-based Forecast
When using the experience-based forecast, you refer to past experiences of the business to determine the future staffing requirements. For example, you can examine the approaches that the business employed during past periods of production prosperity to hire additional employees or those that it applied during periods of production declines to downsize the number of employees.

Ratio Analysis
Forecasts of future personnel requirements on the basis of historical ratios between production cost and production output can be conducted through the ratio analysis method. You need to consider the number of personnel that was employed to achieve past production targets and sales volumes. The historical ratio will enable you to determine the total number of employees that you will require to achieve your targeted production volumes.

The Scatter Plot Method

The scatter plot method involves plotting a graph to estimate the number of employees the business will need in the future in relation to changes in the production activities. You use two variables in the graph to measure changes in production activities against the number of staff required. For example, you can use sales as one variable and the number of staffing as the corresponding variable. The graph is used to determine the way the two variables are related such that you forecast the changes in production activities to predict future staffing needs.

Ans No. 04 (a):

Problems to Avoid During Appraising Performance:
Twelve common performance review distortions that can lead to corporate litigation. Incomplete, inaccurate, vague, and subjective performance evaluations are common fare in many organizations. Unfortunately, they are also the incriminating evidence in any resulting wrongful termination or discrimination case. While no supervisor or manager should give an unproductive employee ambiguous feedback simply to avoid a possible lawsuit, managers must be mindful of the legalities of their performance management practices. 1. Inadequate preparation: Supervisors often feel that they have too much to do and insufficient time. Since performance appraisals are neither intellectually challenging nor enjoyable, many supervisors procrastinate doing the paperwork. As a result, the appraisals lack attention to important details such as language and consistency, and

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they are often void of complete descriptions of the employees' work performance. Supervisors should plan ahead and take the necessary time to perform and document appraisals.

2. Lack of clear standards: Clear, measurable performance standards are essential for accurate and legally defensible performance appraisals. Objective standards, communicated clearly and consistently to employees, are the only way to ensure that employees understand what is expected of them. Clear standards apply to specific and significant tasks of the position, reflect acceptable or satisfactory levels of performance, are expressed precisely, focus on critical and specific aspects or features of performance, and address both measurable performance criteria (such as production goals) and elements of judgment and initiative.

3. Inconsistency in ratings among supervisors: Employees frequently allege employment discrimination when supervisors reprimand or discipline them for infractions that other employees routinely get away with. Sometimes this occurs with the same supervisor, but more often it is the result of different perceptions among supervisors about what constitutes acceptable performance. Supervisors should clarify performance standards for like jobs to achieve a consensus regarding performancerating definitions.

4. Rating personality rather than performance: Supervisors may respond quickly or strongly to personality traits, such as aggressiveness, that prevent them from objectively evaluating performance. The appraisal should focus only on actions, accomplishments, and specific instances of unacceptable performance.

5. The "halo effect": A halo effect occurs when a supervisor gives an excellent employee top ratings in all areas or gives an unsatisfactory employee low ratings in all areas. The halo effect results from the supervisor's tendency to let a strong judgment in one area color his or her judgment of other behaviors. In reality, poor employees usually have some strength, just as high achievers have some weaknesses. Job-specific performance standards can minimize the halo effect.

6. Inappropriate time span: Performance appraisals should cover the entire rating period and the employee's progress from one rating period to the next. Supervisors

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should address each element of performance, including improvement from the immediately preceding appraisal. Supervisors who refer back to incidents that occurred before the last appraisal are potentially unfair to the employee and risk letting subjectivity into their analysis.

7. The "contrast effect": The exceptionally good (or bad) performance of one or more employees may greatly distort the evaluations that others receive. While contrasting the relative contributions of a group of employees con tributes constructively to the appraisal performance process, the rating of one employee should not shift the ratings for others except in extraordinary circumstances (such as a limited bonus pool).

8. Inadequate observation: Supervisors who are not thoroughly familiar with all aspects of an employee's performance may feel compelled to complete standardized forms completely. Such supervisors should not conduct the appraisal, as they are often unable to arrange for a sufficient number of observations or to completely review written reports or other work the employee produces. Let supervisors know they can ask for help with appraisals when needed to reduce the risk of subjectivity that is not jobrelated and assumptions about the employee that are based upon personal characteristics.

9. Overemphasis on uncharacteristic performance: Unusual behavior is often more memorable than typical behavior. Supervisors observing behavior that seems uncharacteristic should make an effort to determine whether it is part of a pattern or is related to a medical problem or disability.

10. Unduly negative ratings: Sometimes supervisors deflate an employee's performance rating because they believe the employee will benefit from a "push." Other times they are attempting to subdue a troublesome employee, to use fear as a motivation to improve, to encourage a problem or marginal employee to leave, to develop a perpetual reason for dismissal or discipline, to create a record to justify a discharge, or to "cover up" performance problems of other employees or problems within the supervisor's department.

11. Inflated ratings: When supervisors are uncomfortable being candid with an employee for fear of discrimination charges, they may inflate the employee's performance rating.

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To make the appraisal easier, keep a file of work samples, reports, or information that reflects performance results during the rating period. Other reasons for inflating ratings include: to boost an employee's spirits or encourage a marginal employee to work harder, to avoid confrontation with a hostile employee or to avoid claims of discrimination, to get difficult employees transferred out of the department, to boost the relative rankings of their subordinates or department vis-a-vis other departments, to keep from revealing the department's problems to management, or to save time and avoid the level of documentation required to support performance appraisals that might trigger discipline and/or discharge.

12. Subjective language in written appraisals: Even carefully constructed written appraisals may contain language that the courts could misconstrue during a trial. Sometimes assumptions about people based on their personal characteristics invade the appraisal process. Even when the comment is "positive" if it references gender, age, or other characteristics, it may reveal a mixed motive. Some examples include: Age- Too set in his/her ways; Can't teach an old dog new tricks; Lacks "energy" or "drive." Gender- Brings a welcome woman's touch to her work; Uses "unladylike" language; "Effeminate mannerisms" make exercise of authority difficult. Disability- Lacks front office appearance; May be embarrassed by negative reactions of other employees and/or customers, suppliers, or vendors. Race/ethnicity- The "chemistry" isn't right; Communication difficulties due to "detectable accent"; Not a team player.

Ans No. 04 (b):

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Pros & Cons of Performance Appraisals

The traditional manager-employee performance appraisal can divert valuable supervisory assets (time, attention and brain power) from the daily company mission. As this is taking place, the employees are busy reviewing the past year in their minds, cataloging the projects they did well and those where their performance fell short of managerial expectations. Instead of focusing on the job at hand, employees and managers can be diverted by an annual occurrence, which may not provide the most accurate measure of performance.

Significance
Giving employees a chance to participate in an evaluation of their performance allows them to have a voice in the direction of their training and growth. Some employees who participate in self-appraisals tend to be harder on them and feel management does not see their daily efforts.

Function
The performance evaluation can open two-way communication about employee performance and development. But the manager needs to participate in frequent training, taking away from his other responsibilities.

Effects
Regardless of how performance appraisals are administered, the process can set up an unintended competition between employees and managers, especially when trust is lacking. On the plus side, creating an honest give-and-take regarding expectations and performance can help an organization grow and move forward.

Considerations
If the evaluations are oriented from top down, employees can feel "blamed" for situations beyond their control. These kinds of evaluations do allow management to evaluate by looking at the employee's performance based on specific goals, making measurement easier.

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Misconceptions
Employees in some organizations don't look forward to performance reviews, feeling they are going to be poorly rated. However, if management and employees invest themselves in a true assessment of goals and performance, using open communication, employees, as well as the organization, can benefit.

Rating Scales
The graphic rating scale and behavioral rating scale are two common rating scale appraisal techniques. With the graphic scale, employees are simply assigned a score on criteria important to job success. The behavioral scale focuses on actual behaviors. Pros of ratings scales include ease of use and understanding. Many managers and employees are familiar with them. They offer a simple way to communicate areas of strengths and weaknesses. A common negative of rating scales is the assumption that they are directly tied to an employee's raise or bonus. This can cause score inflation. Managers can also have negative bias toward employees.

Narrative Techniques
The narrative technique and critical-independent method involve more details analyses of job performance. You write an essay assessment of performance with the narrative and keep a running log describing positive and negative performance and behaviors with the criticalindependent method. A pro of these techniques is the thoroughness of detail in analyzing employee behaviors. Additionally, you can focus on praising positive behavior and addressing areas for correction. A concern is the reaction of the employee, though. He might interpret the evaluation too positively or too negatively relative to a scoring system.

Comparison Methods
The militiaperson comparison method and forced distribution methods are two common comparison appraisal techniques. These approaches compare the subject employee's performance to peers. This allows you to communicate to an employee areas in which he overor under-performs relative to others in similar positions. This can motivate performance in competitive workplaces and among competitive employees. The risks of these methods include the potential of in-fighting and the lack of harmony you might see in your employee ranks.

360 Feedback

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A popular contemporary appraisal technique is the 360 degree feedback. In this method, employees are evaluated by colleagues, customers, subordinates, other interested parties an supervisors. The major advantage of this technique is that it offers the employee a glimpse of how others view his performance in various relationships critical to his job. It also allows a better chance to compare different perspectives in the evaluation process. Biased evaluators, poor alignment with goals and negative employee feelings are among cons of this approach.

Ans No. 05 (a):

Roles in Career Development
The employee, the manager, and the employer all play roles in planning, guiding, and developing the employees career. However, the employee must always accept full responsibility for his or her own career development and career success. This is one task that no employee should ever leave to a manager or employer. For the individual employee, the career planning process means matching individual strengths and weaknesses with occupational opportunities and threats. The person wants to pursue occupations, jobs, and a career that capitalize on his or her interests, aptitudes, values, and skills. He or she wants to choose occupations, jobs, and a career, and a career that make sense in terms of projected future demand for various types of occupations. Of course, career planning only gets one so far. Many people who had previously worked hard to train as computer systems analysts were devastated to find that the dot-com collapse had dramatically reduced the need for systems analysts. However, uncertainties like these only underscore the need for keeping ones finger on the pulse of the job market, so as to be better positioned to move when a career change is required. Many people make the mistake of changing occupations or of remaining unhappily in their present jobs when they could be happier without making a big career change. For some people, a little fine-tuning will often suffice. The employee, if dissatisfied at work, has to figure out where the problem lies. Some people may like their occupation and the employers for whom they work, but not how their specific jobs are structured. Others may find their employers ways

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of doing things are the problem. In any case, its not always the occupation thats the problem. Why decide to switch from being a lawyer to a teacher, when its not the profession but that law firm 80-hour week thats the problem?

The Employees Role:

Making decisions like these is the employees responsibility. For example, an employee can do several things short of changing occupations. An employee must know what he is looking for in a job and to what extent his current position is fulfilling his needs. Get rid of energy-draining, low impact responsibilities. Employee can enhance his networks, for instance, by joining a cross-functional team at work, discussing career goals with role models, conducting informational interviews with people whose jobs are of interest and becoming a board member for a nonprofit organization so that the employee can interact with new people. If an employee is satisfied with his occupation and where he works, but not with his job as it is currently organized, the employee must reconfigure his job. For example, consider alternative work arrangements such as part time work, flexible hours, or telecommuting; delegate or eliminate the job function least preferred and seek out a stretch assignment that will let him work on something that the employee finds challenging. Studies also suggest that having a mentor a senior person who can be a sounding board for career questions and concerns, and provide career-related guidance and assistance can significantly enhance career satisfaction and success. Here again the employer can play an important role, for instance, by encouraging and rewarding senior managers to serve as mentors. But again, it is ultimately the employees responsibility to find a mentor and to maintain a productive relationship.

The employers role:

The researchers surveyed 524 organizations in the United Kingdom to determine how often they used 17 career management practices. Posting job openings was the most popular practice. The other top career practices, in descending order, were: formal education; careeroriented performance appraisals; counseling by managers; lateral, developmental moves; counseling by HR; retirement preparations; and succession planning. Sun Microsystems has a relatively formal and well thought out program. , It maintains a career development center staffed by certified counselors to help employees fill development gaps and choose career opportunities at Sun. The firm believes its program helps explain why its average employee tenure of four years is more than twice that estimated at other Silicon Valley firms. The employers career development responsibilities depend somewhat on how long the employee has been with the firm. Before hiring,, realistic job previews can help prospective

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employees more accurately gauge whether the job is indeed for them, and particularly whether a jobs demand are a good fit with a candidates skills and interests. Especially for recent college graduates, the first job can be crucial for building confidence and a more realistic picture of what he or she can and cannot do: Providing challenging first jobs and having an experienced mentor who can help the person the ropes, are important. Some refer to this as preventing reality shock a phenomenon that occurs when a new employees high expectations and enthusiasm confront the reality of a boring, unchallenging job. After the person has been on the job for a while, an employer can take steps to contribute in a positive way to the employees career. Career-oriented appraisals in which the manager is trained not just to appraise the employee but also to match the person s strengths and weaknesses with a feasible career path and required development work is one important step. Similarly, providing periodic planned job rotation can help the person develop a more realistic picture of what he or she is good at, and thus the sort of future career moves that might be best.

Role of Managers in helping Employees Manage their Careers

Not only is it possible to help your employees manage their careers; it is also one of the most powerful thing you can do as a manager.

Five things Managers can do Listen: Get them talking about their interests, skills, values and context Level: Get them reflecting about how others see their skills and development areas Look ahead: Get them considering how their world of work is changing Leverage: Get them analyzing different career moves Link: Get them moving on what and how they need to learn

Ans No. 05 (b): Competency Based Pay Systems

This section will examine three competency-based pay systems: professionals, teachers, and skill-based pay. Professional Pay Systems

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Certain professional jobs in an organization call for special compensation systems. This is determined by the nature of the job and the labor market for these skills. The Professional's Job A professional job is one that "involves the application of learned knowledge to the solution of enterprise problems and the achievement of enterprise goals."16 This learned knowledge is ordinarily acquired through a college education or some other extended period of formal study. Professional work is mental, requiring the person to apply specialized knowledge to decision making. It is difficult to manage professional work, since management often does not have the same knowledge and is therefore dependent on the judgment of the professional. The training of the professional develops a sense of independence that does not jibe well with traditional management techniques.

The Professional Worker From the discussion thus far it can be seen that professionals are educated, independent and have a close personal connection with their job and profession. In some ways the idea of being a professional and working in an organization are antithetical. The professional is an independent agent and the organization is a client. This is an extreme and traditional notion of the professional, but the vestiges of it remain with the organizational professional. The feeling of independence from organizational constraints still creates a tension between the organization and the professional. Certainly professionals perceive that their most important input to the employment exchange is the knowledge and skill they bring to the job.

The Wage Level In most organizations that use large numbers of professionals, particularly scientists and engineers, these employees are central to the successful functioning of the organization. Therefore, it is likely the organization will choose a strategy of leading or, at a minimum, meeting the market in paying this group of employees. In addition, the labor market for professionals is clearly defined. Knowledge of the market can be gained from college graduates' salaries, since the major entrance embarkation point is directly from college campuses.

Information about wages in the professional arena is widely disseminated in professional literature. In fact this is a major problem for organizational compensation decision makers. Much of the information published about wage rates in professional literature does not meet the collection and analysis standards discussed in chapter 6, so the accuracy of the data is suspect. But the fact is that the professional feels just as inequitably paid after examining that misleading information as if had been accurate.

The Wage Structure Evaluation of professional jobs is difficult. Particularly in scientific and artistic arenas it takes a long exposure time to the language of the field before accurate

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judgments can be made by the organizational compensation decision maker. The use of a body of knowledge is the primary task of the professional. This is not always a factor in job evaluation, and it is not always weighed as heavily as it ought to be to accurately evaluate the professional's job. There is a great deal of freedom as to how work is done by the professional. But this factor can be over weighted, since the control on the professional is more internal than external. All this leads to difficulty in determining the proper level of the professional's job within the job hierarchy. Higher-level professionals apply more experienced judgment to the decisions they are asked to make.

Variable Pay Professional employees are not likely to be placed into incentive plans. If anything they may be granted stock options given their decision making responsibilities. It is both movement within grades and promotions that are important ways of rewarding the professional. The criteria used for both of these decisions are mixed, since performance is often hard to judge for this group of employees. Time and experience are major considerations. It is assumed that performance improves with experience in professionals, at least in the early years, and that they can undertake higher-level jobs as they gain experience. Promotion and movement within grade appears, then, almost automatic for at least a few levels. Later, obsolescence leads to the problem of professionals occupying levels above their usefulness to the organization. Maturity Curves Paying for skills and knowledge seems particularly appropriate for rewarding professionals; their job emphasizes the personal contributions of their skill level and experiences. One way of achieving this type of payment system is though the establishment of a maturity curve. This technique is a deceptively simple device. It is a set of curves that record the progression of professional salaries in terms of years of experience, usually defined as years since college or last degree. Figure 15-5 is an illustration of a maturity curve.

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There have been a number of suggestions and attempts to change. These are instructive to this discussion of competency pay. Develop a Career Progression. At present all teachers are treated as being the same since they all do the same thing-teach a class. This is unlike most professions where there is a progression of responsibilities or a change of roles as the person gains experience in the field. This progression often takes up to 5-7 years before the person is considered a journeyman and is left to do their job with minimal supervision. Toward the end of their career many professionals become mentors to younger professionals. There have been some attempts at programs that have developed these career-ladder programs within the teaching profession with some success.

Knowledge Based Pay. The current pay system rewards teachers for the accumulation of educational credits and degrees. Knowledge and skills-based pay links teacher salaries to specific knowledge and skills that the district has determined are needed for their schools to be effective. Teachers might acquire these knowledge and skills through coursework, individual study, and collaboration with others, professional networking, professional development, or reflective work in their classrooms. What is important is not how much time teachers spend in university classrooms, but that they have developed and demonstrated specific teaching skills, such as adapting teaching approaches to student learning styles, using assessment to measure student learning and modify curriculum and instruction, and using technology as an instructional tool.

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Equality vs. Equity Most current teacher pay systems pays all teachers on the same pay scale with the assumption that "a teacher is a teacher." There are two circumstances in which this breaks down. The first is where skill in a specific discipline is needed to teach the students. This is a problem that increases in the upper grades. Mathematics exemplifies this problem. It is hard to get Mathematics majors to go into teaching because there are too many employment opportunities in other areas of the economy that pay considerably more money. In order to pay competitively the school district would have to grant some form of bonus to these teachers or set up a different pay scale based upon the market wages for Mathematicians.

Pay for Performance Probably the most talked about and politically popular approach to improving teacher pay is some form of pay for performance. In an era of testing student achievement, this would seem to be a good solution but this in not always the case. Proposed plans vary on a number of important dimensions.

Skill-Based Pay The term Skill-Based Pay has two meanings in the literature. The broad meaning would be identical to the term Competency Pay used in this chapter and would include everything discussed here. The more restrictive meaning is a particular form of Competency Pay associated with blue-collar work and usually involves work teams or groups. Skill-Based Pay in this more narrow sense is a pay system in which pay increases are linked to the number or depth of skills an employee acquires and applies to the organizational units' work, as opposed to the job to which the employee is assigned.

New Trends in Employee Compensation

In todays day and age, compensation packages have evolved to include perks and benefits that were unheard of a generation ago. Gone are the days of meeting with employees once a year to give them a pat on the back and the standard four percent merit increase. With the world progressing and peoples wants and needs shifting, in order to stay competitive, an organizations compensation program must continually change. Merely updating the way a company pays employees may not be enough to keep pace. Because the current marketplace is so competitive, in order to attract, retain and motivate the kind of people who are committed to the success of an organization, it may necessitate a complete compensation system overhaul.

There are a number of catalysts present that have strongly influenced the direction and philosophy behind employee compensation packages. Things like the changing business

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environment including new technology like the Internet, downsizing due to sluggish economic growth, and the transition to flexible or contingency work forces have caused companies to rethink their approach to compensation. As well, the old business model of authority dictating from the top down has been replaced in many organizations with horizontal cross-functional work teams which require a different system to reward performance. And finally, companies today want their compensation programs to help increase productivity and reduce costs. But traditional programs dont reward employees for cutting costs or increasing profits. This creates significant conflict between organizational and employee wants and needs. In my personal experience, when employees see no personal gain for working hard or harder, they have no motivation to embrace continuous improvement.

A new approach to compensation includes new and enticing ways to attract and motivate employees with a wide range of perks designed to enhance individual effort and, in some cases, promote team building and chemistry. While large companies have long touted major corporate perks, including tuition payments and daycare on site, many smaller businesses are now providing plenty of attractive cost-effective perks that are having some very positive results. The following information will attempt to outline the direction employee compensation packages seem to be going, as well as explain some of the reasons these types of modes of compensation are gaining in popularity.

To start with, a consideration for most companies is consistency and fairness in base pay structures. In this era of rather small incremental pay increases, employees feel that if they cant be paid more, then they should at least be paid fairly. The refore, internal pay equity in organizations and pay for performance are becoming even higher priorities. Things like automatic incremental raises, simple cost of living increases, and lump-sum merit payments are quickly falling out of favors. Conversely, growth has been observed in management incentives, key staff incentives, and multi-year cash-incentive plans focused on the achievement of longterm corporate goals.

Another trend in employee compensation approaches has been to focus on work/life balance initiatives. This has become important to many employees, particularly due to the rise in two wage-earner families. Employees are willing to forego large pay increases for advances in the area of work/life balance. For example, rather than the strictly structured eight hour work day schedule Monday through Friday, offering flexible work schedules are more attractive to employees as a way to achieve more of a balanced lifestyle. Some employers embrace alternate work arrangements like ten hour work days scheduled four days a week, job sharing between employees and allowing employees to work from home to offer employees added flexibility. Working from home is very attractive to some staff to avoid the daily commute and

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to complete their work around their own schedule to allow additional time with family. And as previously mentioned, large corporations can offer things like on-site daycare which is a huge benefit to employees with children in light of the rising costs of childcare.

And when it comes to the direction actual financial compensation packages are heading, there have been a number of changes in this regard. There has been a shift from pay for job and status to pay for individual employee skills and contributions. As well, discretionary bonuses have been replaced by incentive awards for achieving defined goals and objectives. Innovative compensation programs also include:

* Broad-banding or reducing the number of pay grades in an organization while expanding the actual salary ranges. The benefit here is being able to expand the actual pay for performance and competency component.

* Competency-based programs involve identifying the skills employees need to possess in order to meet expectations in a given position. The key benefit here is that the employee continually upgrades their skills and the emphasis is on paying the individual and not the job.

* Incentive compensation this is paying that is directly connected to the performance of the individual or the team and has been found to increase employee performance in the right environment. The right environment means employees are actually motivated by money, the employees efforts and results are measurable and the potential rewards are significant.

The final trend in compensation to discuss is stock options, the leading means of compensation for executives and managers in the 1990s. With stock options, the employee owns the option to buy stock in their company at a price that is fixed beforehand and is exercised by a specific date. The goal here would be to motivate the employee to work hard to create the greatest possible value for their company. So when the time came for the employee to buy the stock, they would hopefully earn the expected additional value of the stock by purchasing at the lower price. Some companies are getting away from stock options because of their inherent volatility and are moving towards a more controllable and predictable system that involves providing variable compensation that is tied to medium and long-term strategic goals. Still, stock options remain a component for high-level positions in many organizations. Some feel they are a good avenue for executive staff to share in a companys success and to create value for those professionals who are committed to the company for long-term goals.

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All of the various approaches to employee compensation that have been covered are not appropriate for every type of organization. To implement programs that promote wellness initiatives or competency and performance based compensation for example, requires a significant investment of time and resources. While the planning and implementation required is no small task, it can pay large dividends for the organization in the areas of employee development and satisfaction, as well as achieving corporate goals and objectives. In summary, the best compensation system for any organization is one that ties the interests of the employees with that of the company and creates real commitment among staff to work together to strengthen the corporation. The best method is to conduct a complete and thorough analysis of the company to determine what motivates the particular staff members at each level of the organization. Based on this information, the appropriate vehicles for compensation as discussed previously can be implemented. This should create a workforce that is motivated and engaged, which should facilitate the achievement of corporate goals and objectives.