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THE CONCEPT OF HRM

We often hear the term Human Resource Management, Employee Relations and Personnel Management used in the popular press as well as by Industry experts. Whenever we hear these terms, we conjure images of efficient managers busily going about their work in glitzy offices. In this article, we look at the question what is HRM ? by giving a broad overview of the topic and introducing the readers to the practice of HRM in contemporary organizations. Though as with all popular perceptions, the above imagery has some validity, the fact remains that there is much more to the field of HRM and despite popular depictions of the same, the art and science of HRM is indeed complex. We have chosen the term art and science as HRM is both the art of managing people by recourse to creative and innovative approaches; it is a science as well because of the precision and rigorous application of theory that is required.

As outlined above, the process of defining HRM leads us to two different definitions. The first definition of HRM is that it is the process of managing people in organizations in a structured and thorough manner. This covers the fields of staffing (hiring people), retention of people, pay and perks setting and management, performance management, change management and taking care of exits from the company to round off the activities. This is the traditional definition of HRM which leads some experts to define it as a modern version of the Personnel Management function that was used earlier.

Features of Human Resource Management


Following are the features of Human Resource Management

1. HRM as a Process HRM is a process of four functions: Acquisition of human resources: This function includes Human Resource Planning, Recruitment, Selection, Placement and Induction of staff. Development of human resources: This function includes Training and Development and Career development. The knowledge, skills, attitudes and social behaviours of the staff are developed. Motivation of human resources: This function includes giving recognition and rewards to the staff. it also includes Performance Appraisal and handling the problems of staff. Maintenance of human resources: This function includes providing the best working conditions for employees. It also looks after the health and safety of the staff. 2. Continuous Process HRM is not a one-time process. It is a continuous process. It has to continuously change and adjust according to the changes in the environment, changes in the expectations of the staff, etc. HRM has to give continuous training and development to the staff due to changes in technology. 3. Focus on Objectives HRM gives a lot of importance to achievement of objectives. The four main objectives HRM has to achieve are : Individual objectives of the staff. Group or Departmental objectives. Organisational objectives. Societal objectives.

4. Universal Application HRM has universal application. That is, it can be used for business as well as for other organisations such as schools, colleges, hospital, religious organisations, etc. 5. Integrated use of Subsystems HRM involves the integrated use of sub-systems such as Training and Development, Career Development, Organisational Development, Performance Appraisal, Potential Appraisal, etc. All these subsystems increase the efficiency of the staff and bring success to the organisation. 6. Multidisciplinary HRM is multidisciplinary. That is, it uses many different subjects such as Psychology, Communication, Philosophy, Sociology, Management, Education, etc. 7. Develops Team Spirit HRM tries to develop the team spirit of the full organisation. Team spirit helps the staff to work together for achieving the objectives of the organisation. Now-a-days more importance is given to team work and not to individuals. 8. Develops Staff Potentialities HRM develops the potentialities of the staff by giving them training and development. This will make the staff more efficient, and it will give them more job satisfaction. 9. Key Elements for solving problems Today, we have rapid technological, managerial, economic and social changes. These changes bring many problems. HRM continuously tries to solve these problems. 10. Long Term Benefits HRM brings many long term benefits to the individuals (staff), the organisation and the society. It gives many financial and non-financial benefits to the staff. It

improves the image and profits of the organisation. It also provides a regular supply of good quality goods and services at reasonable prices to the society.

Hrm Scope & Objectives


Human resources may be defined as the total knowledge, skills, creative abilities, talents and aptitudes of an organization's workforce, as well as the values, attitudes, approaches and beliefs of the individuals involved in the affairs of the organization. It is the sum total or aggregate of inherent abilities, acquired knowledge and skills represented by the talents and aptitudes of the persons employed in the organization. Human Resource Management: Defined Human Resource Management has come to be recognized as an inherent part of management, which is concerned with the human resources of an organization. Its objective is the maintenance of better human relations in the organization by the development, application and evaluation of policies, procedures and programmes relating to human resources to optimize their contribution towards the realization of organizational objectives. Human Resource Management: Nature Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include: It is pervasive in nature as it is present in all enterprises. Its focus is on results rather than on rules. It tries to help employees develop their potential fully. It encourages employees to give their best to the organization. It is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results.

It helps an organization meet its goals in the future by providing for competent and well-motivated employees. It tries to build and maintain cordial relations between people working at various levels in the organization. It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc. Human Resource Management: Scope The scope of HRM is very wide: 1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc. 2. Welfare aspect-It deals with working conditions and amenities such as canteens, creches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc. 3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc. Human Resource Management: Beliefs The Human Resource Management philosophy is based on the following beliefs: Human resource is the most important asset in the organization and can be developed and increased to an unlimited extent. A healthy climate with values of openness, enthusiasm, trust, mutuality and collaboration is essential for developing human resource. HRM can be planned and monitored in ways that are beneficial both to the individuals and the organization. Employees feel committed to their work and the organization, if the organization

perpetuates a feeling of belongingness. Employees feel highly motivated if the organization provides for satisfaction of their basic and higher level needs. Employee commitment is increased with the opportunity to discover and use one's capabilities and potential in one's work. It is every manager's responsibility to ensure the development and utilisation of the capabilities of subordinates. Human Resource Management: Objectives To help the organization reach its goals. To ensure effective utilization and maximum development of human resources. To identify and satisfy the needs of the individuals. To ensure reconciliation of individual goals with those of the organization. To achieve and maintain high morale among employees. To provide the organization with well-trained and well-motivated employees. To increase to the fullest the employee's job satisfaction and self-actualization. To develop and maintain a quality of work life. To be ethically and socially responsive to the needs of society. To develop overall personality employees in its multidimensional To enhance employee's capabilities to perform the present job. To equip the employees with precision and clarity in transaction of business. To inculcate the sense of team spirit, team work and inter-team collaboration. aspect.

Human Resource Management Process


HR is a vast field that sets off, builds a strategy, executes and ends with a enduring solution. To deal with Human Resources seems to be very easy, but when it comes to be the player then starts the real snag in handling it. It is always easy to

underscore someone or to that matter anyone about anything. However, the best is always esteemed. HR in a company is always reachable to each one of them irrespective of the levels. To start or make the first move it is the HR department that any one should get in touch with. They strategize the policies and procedures in the company for which it would have been a year, to do so provided the focus is on to Quality processes. HR includes the following processes: 1. Recruitment & selection 2. Training and development 3. Compensation and Benefits 4. Performance Management System 5. Employee relations Component should be consistent with the others, organization structure, and strategy. i. Recruitment: Develop a pool of qualified applicants. ii. Selection: Determine relative qualifications & potential for a job. iii. Training & Development: Ongoing process to develop workers abilities and skills. iv. Performance Management System: Provides information about how to train, motivate, and reward workers. Managers can evaluate and then give feedback to enhance worker performance. v. Employee Relations: Managers need an effective relationship with labor unions that represent workers. Unions help establish pay, and working conditions.

vi. Pay and Benefits: High performing employees should be rewarded with raises, bonuses. Increased pay provides additional incentive. Benefits, such as health insurance, reward membership in firm. HR Planning There are many ways to define HR planning, or explain what it is, but the following definitions, taken from the Government of Canada human resources site, is a good, useful working definition: Rigorous HR planning links people management to the organizations mission, vision, goals and objectives, as well as its strategic plan and budgetary resources. A key goal of HR planning is to get the right number of people with the right skills, experience and competencies in the right jobs at the right time at the right cost. Note the emphasis on linkage to strategic planning and business planning in the first sentence, and the emphasis on the arrangement and alignment of staff and employees in the last sentence. Heres another definition, perhaps a bit simpler: The processes by which management ensures that it has the right personnel, who are capable of completing those tasks that help the organization, reach its objectives. Human resource planning refers to the planning of human resource functions, or in other words, planning how human resource management will be executed. Recruiting Selecting Hiring Orienting

Training and retraining Motivating Coaching Mentoring Counseling Recognizing achievements Empowering Communicating Evaluating Promoting Laying off Dismissing So, in effect HR planning refers to the development of plans in these areas or in similar areas. You may want to develop your own list specific to your organization a list that reflects the functions that HR does in your company. Relevance of HR Planning Many people associate human resource planning with what very large companies do IBM, or Ford. Thats because, almost by necessity, large companies need to have a much more formal and comprehensive approach to HR planning because of their size and the complexity of their businesses. That said, even a business owner with a very few employees need to think (that is, plan) about various personnel and human resources issues. Many small business owners do this without really thinking about it. For example, a small business owner needs to think and plan about what benefits to offer, how to manage growth

of staff, how to plan how many staff are needed, how to evaluate employee performance, and so on. So, even if you have one or two employees, its useful to plan like the big boys regarding human resource and personnel issues. The methods you use may be simpler but you still need to do it, so you are prepared.

FUNCTIONS OF HRM
The functions of HRM can be broadly classified into two categories; 1) Managerial Functions 2) Operative Functions

I. Managerial Functions
Managerial functions involve; i. Planning: It is a pre-determined course of action. Planning is determined of personnel programmes and changes in advance that will contribute to the organisational goals. In other words, planning involves human resources, requirements, recruitments, selection, training, etc. It also involves forecasting of persona\el needs, changing values, attitudes and behaviour of employees and their impact on organisation. ii. Organising: An organisation is a means to an end. It is essential to carry out the determined course of action. It can be said as structure and a process by which co-operative group of human beings allocates its task among its members, identifies relationship and integrates its activities towards common objective. iii. Directing: The next logical function after completing the above two is executing the plan. The basic function of personnel management is at any

level is motivating, commanding, leading and activating people. This is an important managerial function in building sound industrial and human relations besides securing employee contribution. iv. Controlling: Performance is to be verified in order to know that the personnel functions are performed in conformity with the plans and directions. Controlling also involves checking, verifying and comparing of the actuals with the plans, identification of deviations, if any, and correcting of identified deviations.

II. Operative Functions


The operative functions of resources management are related to specific activities of personnel management like employment, development, compensations and relations. 1. Employment: Its the first operative function of HRM. Employment is concerned with securing and employing the people possessing required kind and level of human resources necessary to achieve the organisational objectives. It covers the functions such as Job analysis, human resource planning, recruitment, selection, placement, induction and internal mobility. (i) Job Analysis: Its the process of study and collection of information relating to the operations and responsibilities of a specific job. (ii) Human Resource Planning: Its a process for determination and assuring that the organisation will have an adequate number of qualified persons, available at prior times, performing jobs which would meet the needs of the organisation and which would provide satisfaction for the individuals involved.

(iii)

Recruitment: Its the process of searching for prospective employees and stimulating them to apply for jobs in an organisation. Placement: Its the process of assigning the selected candidate with the most suitable job in terms of job requirements. It is matching the employee specifications with job requirement.

(iv)

(v)

Induction and Orientation:Induction and orientation are the techniques by which a new employee is rehabilitated in the changed surrounding and introduced to the practices, policies, purposes and people, etc., of the organisation

2. Human Resource Planning: Its the process of improving, moulding and changing the skills, knowledge, creative ability, aptitude, attitude, values commitments, etc., based on present and future job and organisational requirements. (i) Performance Appraisal: Its the systematic evaluation of individuals with respect to their performance on the job and their potential for development. (ii) Training: Its the process of imparting the employees the technical and operational skills and knowledge. (iii) Management Development: Its the process of designing and conducting suitable executive development programmes so as to develop the managerial skill of employees. (iv) Career Planning and Development: It is the planning of ones career and implementation of career plans by means of education, training, job search and acquisition of work experiences. (v) Organisation Development: It is a planned process designed to improve organisational effectiveness and health through modification

I individuals and group behaviour, culture and systems of the organisation using knowledge and technology of applied behavioural science.

3. Compensation: It is the process of providing adequate, equitable and fair


remuneration to the employees. It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits, social security measures. (i) Job Evaluation: It is the process of determining relative worth of jobs. (ii) Wage and Salary Administration: This is the process of developing and operating a suitable wage and salary programme. (iii) Incentives: It is the process of formulating, administrating and reviewing the schemes of financial incentives in addition to regular payments of wage and salary. (iv) Bonus: It includes payments of statutory bonus according to the Payment Of bonus Act,1965, and its latest amendments. (v) Fringe Benefits: These are the various benefits at the fringe to the wage. Management provides these benefits to motivate the employees and to meet their lifes contingencies. (vi) Social Security Measures: Management provide social security to their employees in addition to the fringe benefits.

4. Human Relation: Practicing various human resources policies and


programmes like employment, development and compensation and interaction among employees creates a sense of relationship between the individual workers and management, among workers and trade unions and

management. Human resource is an area of management in integrating people into work situation in a way that motivates them to work together productively, co-operatively and with economic, psychological and social satisfaction.

5. Effectiveness of Human Resource Management: Effectiveness of


various personnel programmes and practices can be measured or evaluated by means of organisational health and human resources accounting, etc. (a) Organisational Health: Organisational health may be studied through the result of employees contribution to the organisation and the employee job satisfaction. The result of the employee satisfaction can be understood by labour turnover, absenteeism, commitment. Low rate of absenteeism and specific and high rate of employee commitment most probably indicates employee satisfaction about the job and the organisation. (b) Human Resource Accounting, Audit and Research: (i) Human Resource Accounting: It is a measurement of the cost and value of human resources to the organisation. Human resource management is said to be effective if the value and contribution of human resource to the organisation is more than the cost of human resource. (ii) Human Resource Audit: Human resource audit refers to an examination and evaluation of policies, procedures and practices to determine the effectiveness of HRM. Personnel audit measures the effectiveness of personnel programmes and

practices and determines what should or should not be done in future. (iii) Human Resource Research: It is the process of evaluating the effectiveness of human resource policies and practices and developing more appropriate ones.

Guests Model of HRM

In earlier times, the Personnel Manager of a factory or firm was the person in charge of ensuring employee welfare and interceding between the management and the employees. In recent times, the term has been replaced with HR manager.

Personnel Management
Traditionally the term personnel management was used to refer to the set of activities concerning the workforce which included staffing, payroll, contractual

obligations and other administrative tasks. In this respect, personnel management encompasses the range of activities that are to do with managing the workforce rather than resources. Personnel Management is more administrative in nature and the Personnel Managers main job is to ensure that the needs of the workforce as they pertain to their immediate concerns are taken care of. Further, personnel managers typically played the role of mediators between the management and the employees and hence there was always the feeling that personnel management was not in tune with the objectives of the management. Human Resource Management With the advent of resource centric organizations in recent decades, it has become imperative to put people first as well as secure management objectives of maximizing the ROI (Return on Investment) on the resources. This has led to the development of the modern HRM function which is primarily concerned with ensuring the fulfillment of management objectives and at the same time ensuring that the needs of the resources are taken care of. In this way, HRM differs from personnel management not only in its broader scope but also in the way in which its mission is defined. HRM goes beyond the administrative tasks of personnel management and encompasses a broad vision of how management would like the resources to contribute to the success of the organization. Differences Between Hrm And Personnel Management Although both human resource management (HRM) and personnel management focus on people management, if we examine critically, there are many differences between them. Some are listed below: i) Nature of relations: The nature of relations can be seen through two different perspective views which are Pluralist and Unitarist. There is a clear distinct difference between both because in personnel management, the focus is more on individualistic where individual interest is more than group interest. The relationship between management and employees are merely on contractual basis where one hires and the others perform. Whereas, HRM focuses more on

Unitarist where the word "uni" refers to one and together. Here, HRM through a shared vision between management and staff create a corporate vision and mission which are linked to business goals and the fulfillment of mutual interest where the organizations needs are satisfied by employees and employees' needs are well-taken care by the organization. Motorola and Seagate are good examples of organizations that belief in this Unitarist approach which also focuses in team management and sees employees as partners in an organization. Relation of power and management: The distribution of power in personnel management is centralized where the top management has full authority in decision-making where even the personnel managers are not even allowed to give ideas or take part in any decision which involves "employees". HRM, on the other hand, sees the decentralization of power where the power between top management is shared with middle and lower management groups. This is known as "empowerment" because employees play an important role together with line and HR managers to make collective and mutual decisions, which can benefit both the management and employees themselves. In fact, HRM focuses more on TQM approach as part of a team management with the involvement and participation of management and employees with shared power and authority. The nature of management is focused more on bottom-up approach with employees giving feedback to the top management and then the top management gives support to employees to achieve mutually agreed goals and objectives. ii) Leadership and management role: Personnel management emphasizes much on leadership style which is very transactional. This style of leadership merely sees the leader as a task-oriented person. This leader focuses more on procedures that must be followed, punishment form non-performance and non-compliance of rules and regulations and put figures and task accomplishments ahead of human factors

such as personal bonding, interpersonal relationship, trust, understanding, tolerance and care. HRM creates leaders who are transformational. This leadership style encourages business objectives to be shared by both employees and management. Here, leaders only focus more on people-oriented and importance on rules, procedures and regulations are eliminated and replaced with: Shared vision; Corporate culture and missions; Trust and flexibility; and HRM needs that integrates business needs. iii) Contract of employment: In personnel management, employees contract of employment is clearly written and employees must observe strictly the agreed employment contract. The contract is so rigid that there is no room for changes and modifications. There is no compromise in written contracts that stipulates rules, regulations, job and obligations. HRM, on the other hand, does not focus on one-time life-long contract where working hours and other terms and conditions of employment are seen as less rigid. Here, it goes beyond the normal contract that takes place between organizations and employees. The new "flexible approach" encourages employees to choose various ways to keep contributing their skills and knowledge to the organization. HRM, with its new approach, has created flexi-working hours, work from home policies and not forgetting the creation on "open contract" system that is currently practiced by some multinational companies such as Motorola, Siemens and GEC. HRM today gives employees the opportunity and freedom to select any type of working system that can suit them and at the same time benefit the organization as well. Drucker (1996) calls this approach a "win-win" approach. iv) Pay policies and job design: Pay policies in personnel management is merely

based on skills and knowledge required for the perspective jobs only. The value is based on the ability to perform the task and duties as per the employment contract requirement only. It does not encourage value-added incentives to be paid out. This is also because the job design is very functional, where the functions are more departmentalized in which each job falls into one functional department. This is merely known as division on labour based on job needs and skill possessions and requirement. HRM, on the contrary, encourages organizations to look beyond pay for functional duties. Here, the pay is designed to encourage continuous job performance and improvement which is linked to value-added incentives such as gain sharing schemes, group profit sharing and individual incentive plans. The job design is no more functional based but teamwork and cyclical based. HRM creates a new approach towards job design such as job rotation which is inter and intra-departmental based and job enlargement which encourages one potential and capable individual to take on more tasks to add value to his/her job and in return enjoy added incentives and benefits.

DIMENTION 1. EMPLOYEMENT CONTRACT

PERSONNEL HRM MANAGEMENT Careful delineation of Aim to go written contracts beyond contract Importance of devising clear rules Procedures Can do outlook, impatience with rule Business need and Values/ mission

2. RULES

3. GUIDE TO MANAGEMENT ACTION 4. BEHAVIOURAL REFEENT

Norms/customs practices

Monitoring 5. MANAGERIAL TASK 6. KEY RELATIONS 7. INITIATIVES 8. SPEED DECISION 9. MANAGEMENT ROLE OF Slow Transactional Indirect Negotiation Labor management Piecemeal

Nurturing Customer Integrated Fast Transformationa l leadership Direct Facilitation

10.COMMUNICATION 11.PRIZED MANAGEMENT SKILLS Separate, marginal task Job evaluation integrated, task Performance related key

12.SELECTION Separately negotiated 13.PAY Collective contracts Many Division of labour Reach temporary truce bargaining

Harmonization Individual contracts Few Team work Manage climate

14.CONDITIONS 15.LABOUR MANAGEMENT

16.JOB CATEGORIES AND GRADES 17.JOB DESIGN

Controlled courses 18.CONFLICT HANDLING

access

to

and culture Learning companies Wide-ranging cultural, structural and personnel strategies People are treated as assets

Personnel procedures 19.TRAINING AND DEVELOPMENT Labour is is treated as a tool which is expendable and replaceable

20.FOCUS OF ATTENTION FOR INTERVENTIONS

21.RESPECT EMPLOYEES

FOR

Interests of organization uppermost Precedes HRM

the are Mutuality interests of

22.SHARED INTRESTS

Latest in the evolution of the subject

23.EVOLUTION

Human Resource Management: Evolution


The early part of the century saw a concern for improved efficiency through careful design of work. During the middle part of the century emphasis shifted to

the employee's productivity. Recent decades have focused on increased concern for the quality of working life, total quality management and worker's participation in management. These three phases may be termed as welfare, development and empowerment.

Human Resource Management: Nature Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include Its focus is on results rather than on rules. It tries to help employees develop their potential fully. It encourages employees to give their best to the organization. It is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. It helps an organization meet its goals in the future by providing for competent and well-motivated employees. It tries to build and maintain cordial relations between people working at various levels in the organization. It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.

Hr as a Profession
Hr Specialist The duties of HR Specialist are to take control of whole HR department i.e all the work that are done from this department.

Hr Generalist They are also termed as HR managers.

The new roles of HR manager are:1) Strategic Partner: Aligning HRM strategies to business strategies is important to help the company execute its business strategy. 2)AdministrativeExpert: Playing the role of administrative expert requires designing and delivering efficient and effective HRM systems, processes and practices. These include systems for selection, training, developing, appraising and rewarding employees. 3) Employee Advocate: The employee advocate role entails managing the commitment and contributions of employees. No matter how skilled workers may be, if they are alienated or angry, they will not contribute their efforts to the firms success nor will they stay with the firm for long.

4) Change Agent: The final role change agent requires that HRM help transform organizations to meet the new competitive conditions. In todays fast changing competitive world HR managers need to help identify and manage processes for change. Hr Executives They are representatives who are part of senior management who gives information to line managers and staff managers. Line manager A manager who is authorized to direct the work of subordinates and is responsible for accomplishing the organizations tasks. Staff manager A manager who assists and advises line managers. Duties/Responsibilities 1. 2. 3. 4. 5. Placing the right person on the right job Starting new employees in the organization (orientation) Training employees for jobs that are new to them Improving the job performance of each person Gaining creative cooperation and developing smooth working relationships 6. Interpreting the firms policies and procedures 7. Controlling labor costs 8. Developing the abilities of each person 9. Creating and maintaining department morale 10.Protecting employees health and physical condition

Environment of HRM
External environment:-

1. Economic Factors- includes all those economic factors which affect the HR function which are suppliers, customers, competitors & globalization. 2. Political Legal Factors- covers the impact of political institution on the HRM department. To be specific HR planning, recruitment & selection, placement, training, remuneration is governed by Constitutional provisions. 3. Social & cultural Factors- Now days society at large has become more demanding. Firms cannot operate in isolation; they are stuck with the society. A firm has to operate by public consent to satisfy society needs. 4. Technological Factors- In the present competitive world, technological developments can dramatically influence an organizations environment. Technological advancement can create new competitive advantages that are more powerful than the existing one. 5. Unions- Trade unions constitute one of the major power blocks in many countries. With the formation & recognition of unions, the issues relating to employees interest are longer determined by the unilateral actions of the management. These have to be discussed with union representatives. 6. Professionalism- Job holders and seekers have become highly professionalized & knowledgeable now days. On the one hand such organization can boast of a progressive & modern outlook of its personnel but on the other hand, the problems faced are also serious. Internal Factors:1. Mission- It is the very purpose & justification for the existence of the firm. An organization mission statement tells- what is it, why it exists & the contribution it can make. 2. Policies- They are the guide maps in the organization. It tells people what they may or may not do. An objective shows the destination but the route towards that destination is shown by policies.

3. Organizational Culture- It the sum total of the shared values, habits & belief within an organization. It depicts the personality of the organization. The HR managers have to adjust to the culture of the organization. HR managers have to choose the path that best reflects the culture of the firm & the attitudes of the people. 4. Organizational Conflict- There is often conflict between organizational culture & employees attitudes. Few of them are Personal v/s organizational goal Rights v/s duties Doing v/s becoming Authority v/s responsibility Short term v/s long term 5. Organizational Structure- There are 2 types of structure-tall & flat. Tall structures are suitable to companies that are labor oriented. The authority is vested at the top & the pyramid shows the hierarchy of position. Flat structures are suitable to technology oriented companies. It indicates decentralization of authority. 6. HRSystem- The survival, development & performance of an organization depends heavily on the quality of its personnel. Organization today are crating HRD departments, providing free flow of upward communication & enhancing the status of the employees.

Human resource planning


Human resources planning is a process that identifies current and future human resources needs for an organization to achieve its goals. Human resources planning should serve as a link between human resources management and the overall strategic plan of an organization. Need for human resource planning Replacement of persons

Labour turnover Expansion plans Technological changes Objectives Assessing skill requirement in future Controlling wage and salary cost Ensuring optimum use of human resource Ensuring high labour productivity

Process Analysis of objectives and strategic plans for the company Preparing manpower inventory Manpower forecasting Manpower plans Training and development plans Appraisal of manpower planning Reduced labour costs Optimum utilisation of manpower force Identification of gaps in existing manpower Growth of the organisation

Benefits

Need & Importance of HRP Forecast future personnel needs: To avoid the situations of surplus or deficiency of manpower in future, it is important to plan manpower in advance. For this purpose a proper forecasting of futures business needs helps you to ascertain our future manpower needs. Cope with change: HRP enables an enterprise to cope with changes in competitive forces, markets, technology, products and government regulations. Such changes generate changes in job content, skills demands and number of human resources required. Creating highly talented personnel: Since jobs are becoming highly intellectual and incumbents getting vastly professionalized, HRP helps prevent shortages of labor caused by attritions. Further technology changes

would further upgrade or degrade jobs and create manpower shortages. In these situations only accurate human resource planning can help to meet the resource requirements. Protection of weaker sections: A well-conceived personnel planning would also help to protect the interests of the SC/ST, physically handicapped, children of socially oppressed and backward classes who enjoy a certain percentage of employments notwithstanding the constitutional provisions of equal opportunity for all. International strategies: International expansion strategies largely depend upon effective HRP. With growing trends towards global operations, the need for HRP further becomes more important as the need to integrate HRP more closely into the organization keeps growing. This is also because the process of meeting staffing needs from foreign countries grows in a complex manner. Increasing investments in HR: Another importance is the investment that an organization makes in human capital. It is important that employees are used effectively throughout their careers. Because human assets can increase the organization value tremendously as opposed to physical assets Resistance to change & move: The growing resistance towards change and move, self evaluation, loyalty and dedication making it more difficult to assume that organization can move its employees everywhere. Here HRP becomes very important and needs the resources to be planned carefully.

HRP PROCESS
The human resource planning process is defined as, a course of actions that the human capital takes up for a methodical achievement of predetermined goals. 1) WORKFORCE ANALYSIS: The first step involves establishing a clear understanding of the organizations direction and external environment, and analyzing the internal and external factors that influence labour supply and demand. Human resource managers should understand both internal and external environments. Data on external environment include the general status of the economy, industry, technology and competition; labour market regulations and trends;

unemployment rate; skills available and the age and sex distribution of the labour force. Internal data includes short- and long-term organizational plans and strategies. 2) FORECASTING HUMAN RESOURCE DEMAND: The second step involves identifying changes to the service delivery and labour force requirements of the organization. The aim of forecasting is to determine the number and type of employees needed in the future. Forecasting should consider the past and the present requirements as well as the future organizational directions. HR Planning requires the collection of data on the organizational goals and objectives. One should understand where the Organization wants to go and how it wants to get to that point. 3) ANALYZING SUPPLY: After knowing what human resources are required in the Organization, the next step is to take stock of the employees in the organization from internal or external means. The HR inventory should not only relate to data concerning numbers, ages, and locations, but also an analysis of individuals and skills. Skills inventory provides valid information on professional and technical skills and other qualifications provided in the firm. It reveals what skills are immediately available when compared to the forecasted requirements. 4) DEVELOP AND IMPLEMENT STRATEGIES The final step in human resource planning is developing action plans based on the gathered data, analysis and available alternatives. It involves the planning and design of specific programs and projects to meet future business needs. The key issue is that the plans should be acceptable to both top management and employees. There are three fundamentals necessary for this first step (Strategy Development): 1. Know where the organization is going. 2. There must be acceptance and backing from top management for the planning. 3. There must be knowledge of the available resources (i.e.) financial, physical and human (Management and technical). Once the strategies are developed these strategies are implemented, which involves the execution of specific programs and projects to develop and maintain the workforce capability and capacity requirements. Once in action, the HR Plans become corporate plans. Having been made and concurred with top management, the plans become a part of the companys long-range plan.

5) MONITOR AND EVALUATE: The final step of Human resource Planning involves determining the effectiveness and efficiency of the workforce planning strategies that were implemented.

Recruitment
Recruitment is a process to discover the sources of manpower to meet the requirements of staffing & to employee effective measures for attracting that manpower in adequate numbers to facilitate, selection of an efficient working force. It is a positive activity which aims at inviting maximum number of applicants for the job. It is the process of getting the right kind of people to apply for vacancies in organization. Thus, recruitment as a process starts with identification of the need for human resources and ends with getting the prospective employees to apply for the vacancies. Definition According to Yoder Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force. It is a process to locate the sources where from the required human resource can be available and attract them towards the organization. According to Byers & Rue Recruitment is the process of seeking and attracting a pool of people from which qualified candidates for job vacancies can be chosen. Factors affecting recruitment The factors effecting recruitment are: Size if the organization. The employment condition. The effect of past recruiting efforts.

Working condition and salary. Rate of growth of organization. The future expansion plans. Cultural, economic and legal factors. Companys image. Recruitment policy.

Selection
Selection is the process of picking up individuals out of the pool of job applicants with requisite qualifications and competence to fill jobs in the organization. According to Dale Yoder Selection is the process in which candidates for employment are divided into two classes- those who are to be offered employment and those who are not. The overall aim of the recruitment and selection process should be to obtain at minimum cost the number and quality of employees required to satisfy the human resource needs of the company. A sound selection policy ensures the selection of suitable candidates. The three stages of recruitment and selection dealt within this chapter are: 1. Defining requirements preparing job descriptions and specifications; deciding terms and conditions of employment; 2. Attracting candidates reviewing and evaluating alternative sources of applicants, inside and outside the company, advertising, using agencies and consultants;

3. Selecting candidates sifting applications, interviewing, testing, assessing candidates, assessment centres, offering employment, obtaining references; preparing contracts of employment. The Recruitment and Selection Process is one of the basic HR Processes. Recruitment and Selection is very sensitive as many managers have a need to hire a new employee and this process is always under a strict monitoring from their side. The Recruitment and Selection Process must be simple and must be robust enough to operate excellently in the moment of the insufficient number of candidates on the job market and the process must be also able to process a large number of candidates within given time limit. The clearly defined Recruitment and Selection Process is a key to the success of any Human Resources Department.

Personnel Policies
A policy is a sketch of act. A policy is encoded route of deed that found a show to work to conventional objectives. Personal policies are reports of personal of an organization and offer a broad structure in which choices on personnel topics can be made devoid of position to superior establishment. It put down principles for decision creation in the meadow of personnel management. Some of the characteristics are in the personnel policies, which are personnel policies are copied from the personnel objectives of the organization. It has common declaration of broad accepting. It reproduces the documented purpose of top management with view to the human resources of the organization. Personnel policies are the status tactics. The requirement of personnel policies occurs essentially from general objectives of the organization, a business thought is need which will direct result creating at all effective point. The natural assistance of workforces can be get throughout a now and pale action to all. Personnel policies give the source for equality and constancy. Principles and importance of personnel policies:

Personnel policies give obvious thought. It assists the executive to direct the allocation of power and present the intellect of safety. It gives regularity and reliability of management and also provides permanence and steadiness. There are some principles in personnel policies, which are set the exact person to the correct place, give training to each one for the allocate work and create the organization a harmonized group. It has to deliver correct tools and correct circumstances of job, presents security among chance, inducement and credit and also seem in front and sketch to the front for further and enhanced things. Types of personnel policies in HRM: The types of personnel policies of HRM classified into several categories depending on their basis and range. Originated Policies recognized by top management intentionally in order to direct administrative thought at different stages. Appealed Policies are invented to assemble the needs of exact strange conditions which have not been enclosed by the previous policies. Imposed policies are shaped beneath force as of exterior organization like government trade association and union. General Policies reproduces the necessary viewpoint and main concern of the top management in prepares the make plan for chart the organizations development chart. Specific policies envelop precise matters like employ, pleasing and good deal. Written policies are indirect from the performance of associates. Written policies are explains executive thought on paper, therefore that there is awfully small area for free explanation.

Sources of recruitment
Recruitment is of 2 types 1. Internal Recruitment - is a recruitment which takes place within the concern or organization. Internal sources of recruitment are readily available to an organization. Internal sources are primarily three from existing employment or through Reemployment of ex-employees or through employee referrals. Re-employment of exemployees is one of the internal sources of recruitment in which employees can be invited and appointed to fill vacancies in the concern. There are situations when ex-

employees provide unsolicited applications also. Advantages of internal recruitment a) There is a positive effect on staff morale. b) Internal recruiting results in lower cost to the company than looking outside the company. c) Takes less time to complete the recruitment process d) Can access known past performance. e) Can reward the good work of employees. f) Internal candidates are already familiar with the company's culture, policies and procedures Disadvantages of internal recruitment 1. There is no opportunity to get new talent in this method. 2. The method involves selecting people from those available in the company so there is limited scope for selection. 3. There are chances of biased and partiality. 4. Chances of employee discontent are very high. sources of internal recruitment a. Transfers & promotions- any organizations choose to fill vacancies through promotions or transfers from within whenever possible. Employees can acquaint potential applicants with the advantages of a job with the company, furnish letters of introduction, and encourage them to apply. b. Job Posting and Bidding The major means for recruiting employees for jobs within the organization is a job posting system. Job posting and bidding is a system in which the employer

provides notices of job openings and employees respond by applying for specific openings. The organization can notify employees of all job vacancies by posting notices, circulating publications, or in some other way inviting employees to apply for jobs. c. Re-employment of ex-employees - Re-employment of ex-employees is one of the internal sources of recruitment in which employees can be invited and appointed to fill vacancies in the concern. There are situations when exemployees provide unsolicited applications also. d. Internal Recruiting Database- Computerized internal talent banks, or applicant tracking systems, are used to furnish a listing of the potential talents available for organizations. Employers that must deal with a large number of applicants and job openings have found it beneficial to use such software as part of a human resource information system (HRIS). Software of this type allows employers to enter resumes and then sort the resumes by occupational fields, skills, areas of interests, and previous work histories.

External Recruitment External sources of recruitment have to be solicited from outside the organization. External sources are external to a concern. But it involves lot of time and money. The external sources of recruitment include - Employment at factory gate, advertisements, employment exchanges, employment agencies, educational institutes, labour contractors, recommendations etc. Sources of external recruitment includes:

a. Advertisement - It is an external source which has got an important place in recruitment procedure. The biggest advantage of advertisement is that it covers a wide area of market and scattered applicants can get information from advertisements. Medium used is Newspapers and Television. b. Employment Exchanges - There are certain Employment exchanges which are run by government. Most of the government undertakings and concerns employ people through such exchanges. Now-a-days recruitment in government agencies has become compulsory through employment exchange. c. Employment Agencies - There are certain professional organizations which look towards recruitment and employment of people, i.e. these private agencies run by private individuals supply required manpower to needy concerns. d. Educational Institutions - There are certain professional Institutions which serves as an external source for recruiting fresh graduates from these institutes. This kind of recruitment done through such educational institutions, is called as Campus Recruitment. They have special recruitment cells which helps in providing jobs to fresh candidates. e. Recommendations - There are certain people who have experience in a particular area. They enjoy goodwill and a stand in the company. There are certain vacancies which are filled by recommendations of such people. The biggest drawback of this source is that the company has to rely totally on such people which can later on prove to be inefficient. f. Labor Contractors - These are the specialist people who supply manpower to the Factory or Manufacturing plants. Through these contractors, workers are appointed on contract basis, i.e. for a particular time period. Under conditions when these contractors leave the organization, such people who are appointed have to also leave the concern.

g. Internet recruitment- With increasing importance to internet, companies and candidates have started using the internet as medium of advertisement and search for jobs. There are various job sites like naukri.com and monster.com etc. candidates can also post their profiles on these sites. This method is growing in popularity. h. Walk in interview :Another method of recruitment which is gaining importance is the walk in

interview method. An advertisement about the location and time of walk in interview is given in the news paper. Candidates require to directly appearing for the interview and have to bring a copy of their C.V. with them. This method is very popular among B.P.O and call centers. Advantages of external recruitment 1. There is influx of new talent in the method. 2. The method encourages more and more competition. 3. There is lesser chance of partiality through this method. 4. If options like campus recruitment have been exercised we get a chance to employ fresh graduates, thus increasing employment. Disadvantages of external recruitment 1) It is costly because it involves processes of recruitment, selection, training & development. 2) It is time consuming 3) It reduces loyalty to the firm

SELECTION PROCESS Selection is the process of identifying suitable candidate for the available jobs from the available applicant pool. Employee Selection is the process of putting right men on right job. It is a procedure of matching organizational requirements with the skills and qualifications of people. By selecting best candidate for the required job, the organization will get quality performance of employees. Moreover, organization will face less of absenteeism and employee turnover problems. By selecting right candidate for the required job, organization will also save time and money. Proper screening of candidates takes place during selection procedure. All the potential candidates who apply for the given job are tested. Selection is a negative process as the inappropriate candidates are rejected here. Recruitment precedes selection in staffing process. Selection involves choosing the best candidate with best abilities, skills and knowledge for the required job.

Difference between Recruitment and Selection Process RECRUITMENT Procurement process begins Positive approach Doesnt require expert Searching function SELECTION Procurement process ends Negative approach Requires expert Screening function

The Employee selection Process takes place in following order1. Employment application forms/blanks Application form is a traditional and widely used device for collecting information from candidates. The application form should provide all the information relevant to selection. The employment application form should contain: Biographical information, Educational qualification, Work experience, Pay and other perquisites, Additional information, References

2. Selection test Psychological tests are being increasingly used in employee selection. It provides systematic basis for comparing the behaviour, performance and attitudes of two persons. A test is a standardized assessment of a sample but critical behaviour of candidates to determine their suitability for the job. Characteristics of Psychological tests Objectivity: It refers to the validity and reliability of the measuring tools. Reliability refers to standardization of the procedure of administering and scoring the tests results. Validity is a test which helps predict whether a person will be successful in a given job. Standardization: It means that there is uniformity in the procedure followed in conducting the tests. Sample of behaviour: It refers to tests contents which should predict a representative sample.. Types of Psychological tests Ability tests: It assist in determining how well an individual can perform task related to a job. Intelligence test : Measure general intellectual abilities. Aptitude test: Measures latent talent of a person. Achievement test: Assess specialized or technical knowledge. Personality test: It is given to measure a prospective employees motivation to function in a particular working environment. It helps to assess and predict the basic characteristics of a person. Its results are useful in predicting the future performance of the candidate. Interest test: It is used to measure an individuals activity preference. Honesty/Integrity test: It helps to find out the attitude and the actual behaviour of the candidate. Situational test: Measures applicants reaction when placed in a particular situation. It helps to measure his ability to undergo stress and his demonstration of ingenuity under pressure. Eg: Group discussion

EVALUATION OF PSYCHOLOGICAL TEST Merits: Objective in evaluation Ideal for large groups Predictor of intangible talents Goal specific and target oriented Record for future

Demerits: Lack of flexibility Unsuitable for smaller groups 3. Selection Interview It is a face to face conversation to collect information from a candidate to determine his/her suitability for a job. It is used to find whether the candidate is best suited for the required job or not. But such interviews consume time and money both. Kinds of Interview Structured Interview: The interviewer uses a preset standardized questions which are put to all the interviewees. Unstructured Interview: Interview is largely unplanned and the interviewee does most of the talking. It is advantageous in as much as it leads to a friendly conversation between the interviewer and interviewee and in the process, the latter reveals more of his/her desires and problems. In-depth Interview: Its purpose is to discuss the information concerning the candidate in detail. The intention is to ensure that no vital information is missed out. Stress Interview: It attempts to learn how an applicant will respond to pressure. Panel Interview: It consists of 2 or more interviewers and the figure may go up to as many as 15. It is more formal than one-to-one, but if handled and organized well it can provide a wealth of information. Computerised Interview: Applicant is asked computerized oral questions.

Strategies for an effective interview Familiarising oneself with the information available Getting ready with an interview plan Creating a supportive environment Conducting the interview Ending the interview Reviewing the performance

Weakness of Interview Method Lack of objectivity Halo effect Inadequacy of time Lack of uniformity The absence of training for the interviewers.

4. Physical Examination: Medical tests are conducted to ensure physical fitness of the potential employee. It will decrease chances of employee absenteeism. Applicants are sent for a physical examination either to the companys physician or to a medical officer approved for the purpose. 5. Job Offer Job offer is made through a letter of appointment. It is a formal communication which specifies the details of the job offer made to the selected candidate.

Types of Selection Methods


After an organization selects candidates qualified for the position, it typically contacts them for interviews and testing. Interviewing and testing are determined by the company's guidelines and procedures. The hiring teams will then meet and

make a collective decision on which candidate it would like to hire. Normally, human resources will contact the candidate and make a verbal offer. Application Forms Application forms are a means of collecting written information about an applicant's biographical info and educational qualifications. Application forms typically request information on an applicant's home address, last employer, previous work experience, education and other information pertinent to employment, such as names and addresses of references. The application form also serves as a guide for the employment interview.

Psychometric tests These are particularly useful if you want to assess candidates for managerial or senior appointments or candidates for appointments where there is a special need for the post - such as strong relationship building skills. These types of test are especially good at assisting with assessing how candidates are likely to behave, for example, towards a manager, towards their peers, and towards their subordinates. Personality Test There are two general types of personality test which are sometimes used in selection decisions. These are self-report personality tests and projective techniques. These personality measures have been used most often in the selection of candidates for managerial positions. They are also frequently used as part of assessment centres, which are a popular method of identifying potential managerial talent. Employment Interviews The employment interview is a vehicle for information exchange between applicant and interviewer regarding an applicant's suitability and interest in a job the employer seeks to fill. These are the kinds of interviews usually used : Panel Interview Stress Interview In-depth Interview Structured Interview

Unstructured Interview

Training and Development


In the field of human resource management training and development is the field which is concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings. It has been known by several names, including human resource development, and learning and development. "Employee Development" was seen as too evocative of the master-slave relationship between employer and employee for those who refer to their employees as "partners" or "associates" to be comfortable with. "Human Resource Development" was rejected by academics, who objected to the idea that people were "resources" an idea that they felt to be demeaning to the individual. Eventually, the CIPD settled upon "Learning and Development", although that was itself not free from problems, "learning" being an over general and ambiguous name. Moreover, the field is still widely known by the other names. Training and development encompasses three main activities: training, education, and development.. However, to practitioners, they encompass three separate, although interrelated, activities:

Training: This activity is both focused upon, and evaluated against, the job that an individual currently holds.

Education: This activity focuses upon the jobs that an individual may potentially hold in the future, and is evaluated against those jobs.

Development: This activity focuses upon the activities that the organization employing the individual, or that the individual is part of, may partake in the future, and is almost impossible to evaluate

Designing training is far more than devising courses; it can include activities such as:

Learning from observation of trained workers; Receiving coaching from seniors; Discovery as the result of working party, project team membership or attendance at meetings;

Job swaps within and without the organization; Undertaking planned reading, or follow from the use of selfteaching texts and video tapes;

Learning via involvement in research, report writing and visiting other works or organizations.

So far as group training is concerned in addition to formal courses there are:


Lectures and talks by senior or specialist managers; Discussion group (conference and meeting) activities; Briefing by senior staffs; Role-playing exercises and simulation of actual conditions; Video and computer teaching activities; Case studies (and discussion) tests, quizzes, panel 'games', group forums, observation exercises and inspection and reporting techniques.

Evaluation of the effectiveness of training is done to ensure that it is cost effective, to identify needs to modify or extend what is being provided, to reveal new needs and redefine priorities and most of all to ensure that the objectives of the training are being met.

The latter may not be easy to ascertain where results cannot be measured mathematically. In the case of attitude and behavioral changes sought, leadership abilities, drive and ambition fostered, etc., achievement is a matter of the judgment of senior staffs. Exact validation might be impossible but unless on the whole the judgments are favorable the cooperation of managers in identifying needs, releasing personnel and assisting in training ventures will cease.

Training objective are: Updating knowledge and skill. To meet the changing requirements of the lob. New technique and ways. Prepare employees for higher level tasks. To train the employee in the indigenous and alien cultural value. To train the employee to increase his quantity and quality of output. This may involve improvement in work method or skills. To train employee for promotion to higher jobs. To train the bright but dronish employee in the formation of his goals. To train employee towards better job adjustment and high morale. To reduce supervision, accidents, wastage.

Difference between Education, Training and Development


In simple terms education provides a knowledge base that underpins any other activities the individual may engage in at a later stage. Training is not as general and tends to concentrate on skills development. Development allows both activities to be integrated. It has been described as the general enhancement and growth of an individuals skills and abilities through conscious and unconscious learning. Training and development Training and development are closely interrelated terms that aim to help in achieving the objectives of the company while at the same time increase the efficiency and productivity of the employees

Training of a new employee is an integral part of his induction and orientation. Training is imparted so that he understands his roles and responsibilities and learns to perform the tasks entrusted to him with ease and with efficiency. Training makes an employee more productive for the organization and is thus concerned with his immediate improvement. Development of an employee is an ongoing process which continues well beyond training. The focus of development process is the person himself where the focus of training is the organization. Development concerns with making the employee efficient enough to handle critical situations in future. So while training concentrates on short term needs of the organization, development looks after long term goals of the organization. Training often takes place in groups, and is an event that is variously called as workshops and seminars. However, training can also be one on one when a supervisor instructs a new employee on a machine. Sometimes a manager deliberately pairs up a new employee with an experienced one. This is done to make the new employee learn to do things correctly. Sometimes, a manager may entrust an employee the job that may not be a part of his duty but plays a part in his development. Development refers to techniques such as stress management, breathing exercises through Yoga and meditation that are not directly related with the production process of a company but play an important part in the development of the employee. It is clear then that it is easy to see the tangible effects of a training program but difficult to quantify the benefits accruing to the company through employee development though it really helps employees to grow on a personal level. In brief: Training vs. Development While training is an event, development is a process Training focuses on short term goals of the company while development focuses on the employee as a person While training results can be measured in terms of benefits to the organization, the advantages of development are much more subtle

Training and Education There is no denying the importance of training and without training, education would be incomplete. Formal education is what is imparted in schools from elementary to 10+2 stage after which a student peruses undergraduate and then graduate level courses. The basic purpose of this type of education is to impart knowledge about facts, concepts, events and principles. All these form the foundation upon which skills learnt later work smoothly Training on the other hand is focused upon gaining a particular skill. Training is taken to master a particular task or job and is mostly imparted to adults to let them become proficient in a particular skill. If you are learning about driving laws and theoretical aspects of driving, you are getting education and not training. It is clear then that education pertains to remembering facts and understanding concepts. On the other hand training pertains to practical aspects of a task or job and is imparted in training institutes and special training sessions. Another difference is that training has to come after education. If you do not know about the basic nature of chemicals through education, you can never conduct practicals in chemistry. There are some profession where training is more important than education such as plumbing, carpentry, weaving, accounting, marketing and even computer programming where skills can be easily learnt through practical training rather than through formal education.

In brief: Education is a formal system of learning that is long while training is a method that makes a person skilled in a particular job or task only Both education and training are necessary to make concepts clear to a person Some professions are highly training dependent where education alone cannot make a difference

System Model of Training


The system model consists of five phases and should be repeated on a regular basis to make further improvements. The training should achieve the purpose of helping employee to perform their work to required standards. The steps involved in System Model of training are as follows: 1. Analyze and identify the training needs i.e. to analyze the department, job, employees requirement, who needs training, what do they need to learn, estimating training cost, etc The next step is to develop a performance measure on the basis of which actual performance would be evaluated. 2. Design and provide training to meet identified needs. This step requires developing objectives of training, identifying the learning steps, sequencing and structuring the contents. 3. Develop- This phase requires listing the activities in the training program that will assist the participants to learn, selecting delivery method, examining the training material, validating information to be imparted to make sure it accomplishes all the goals & objectives. 4. Implementing is the hardest part of the system because one wrong step can lead to the failure of whole training programme. 5. Evaluating each phase so as to make sure it has achieved its aim in terms of subsequent work performance. Making necessary amendments to any of the previous stage in order to remedy or improve failure practices.

On The Job Training Methods


1.Coaching Coaching is one of the training methods, which is considered as a corrective method for performance. It is one to one interaction. It helps in identifying weaknesses and focus on the area that needs improvement This method best suits for the people at the top because if we see on emotional front, when a person reaches the top, he gets lonely and it becomes difficult to find someone to talk to. It helps in finding out the executives specific developmental needs. The needs can be identified through 60 degree performance reviews. 2. Mentoring It is an ongoing relationship that is developed between a senior and junior employee. Mentoring provides guidance and clear understanding of how the organization goes to achieve its vision and mission to the junior employee. The meetings are not as structured and regular than in coaching. By dealing with diverse mentees, the executive is given the chance to grow professionally by developing management skills and learning how to work with people with diverse background, culture, and language and personality types. Mentoring focus on attitude development. Conducted for management-level employees. Mentoring is

done by someone inside the company. It is one-to-one interaction. It helps in identifying weaknesses and focus on the area that needs improvement 3. Job Rotation This approach allows the manger to operate in diverse roles and understand the different issues that crop up. 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 calibre for filling the position. 4. Job Instruction Training Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and procedural), skills and attitudes development.

JIT consists of four steps: Plan This step includes a written breakdown of the work to be done because the trainer and the trainee must understand that documentation is must and important for the familiarity of work. A trainer who is aware of the work well is likely to do many things and in the process might miss few things. Present In this step, trainer provides the synopsis of the job while presenting the participants the different aspects of the work. When the trainer finished, the trainee demonstrates how to do the job and why is that done in that specific manner. Trainee actually demonstrates the procedure while emphasizing the key points and safety instructions. Trial This step actually a kind of rehearsal step, in which trainee tries to perform the work and the trainer is able to provide instant feedback. In this step, the focus is on improving the method of instruction because a trainer considers that any error if occurring may be a function of training not the trainee. This step allows the trainee to see the after effects of using an incorrect method. The trainer then helps the trainee by questioning and guiding to identify the correct procedure. Follow-up In this step, the trainer checks the trainees job frequently after the training program is over to prevent bad work habits from developing.

Types Of Off the Job Training


Employee training at a site away from actual work place is called off-the job training method. The different types of off-the job training are the following: Lecturing: This method is used to create understanding of a topic or to influence behavior, attitudes through lecture. A lecture can be in printed or oral form. Lecture is given to enhance the knowledge of listener or to give him the theoretical aspect of a topic. It is difficult to imagine training without lecture format. There are some variations in Lecture method. The variation here means that some forms of lectures are interactive while some are not. Games: Game is defined as spirited activity or exercise in which trainees compete with each other according to the defined set of rules. Simulation is creating computer versions of real-life games. It is about imitating or making judgment or opining how events might occur in a real situation. Business games are based on the set of rules, procedures, plans, relationships, principles derived from the research. In business games, trainees are given some information that describes a particular situation and are then asked to make decisions that will best suit in the favour of the company. Audio Visual Method: Audiovisual methods such as television, videotapes and films are the most effective means of providing real world conditions and situations in a short time. One advantage is that the presentation is the same no matter how many times it's played. This is not true with lectures, which can change as the speaker is changed or can be influenced by outside constraints. The major flaw with the audiovisual method is that it does not allow for questions and interactions with the speaker, nor does it allow for changes in the presentation for different audiences. Programme Instructions: Programmed learning, computer-aided instruction and interactive video all have one thing in common: they allow the trainee to learn at his or her own pace. Also, they allow material already learned to be bypassed in favour of material with which a trainee is having difficulty. After the introductory period, the instructor need not be present, and the trainee can learn as his or her

time allows. These methods sound good, but may be beyond the resources of some small businesses. Computer Assisted Instructions: Computer-assisted instruction has also been growing in use in a wide number of employment areas. It is more flexible and open to technological innovations. It has been used to teach novice nurses how to perform intravenous injections, to teach jet engine mechanics in the US Air Force maintenance tasks, and to provide safety instruction for food service workers in an urban hospital. Role play: Its just like acting out a given role as in a stage play. In this method of training, the trainees are required to enact defined roles on the basis of oral or written description of a particular situation. They are training techniques that attempt to bring realistic decision making situations to the trainee. Likely problems and alternative solutions are presented for discussion. The adage there is no better trainer than experience is exemplified with this type of training. Experienced employees can describe real world experiences, and can help in and learn from developing the solutions to these simulations. This method is cost effective and is used in marketing and management training. Simulation: Any training activity that explicitly places the trainee in an artificial environment that closely mirrors actual working conditions can be considered a Simulation. Simulation activities include case experiences, experiential exercises, vestibule training, management games & role-play. Here real life situations / conditions are created to enable the employee to experience and prepare for the world of work. This type of training is often used to develop physical, behavioural and team building training. NASA for example uses simulators to train astronauts before they set out for the outer space. This type of training is very effective but the simulators are costly to develop. Vestibule Training: Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. While expensive, Vestibule training allows employees to get a full feel for doing task without real world pressures. Additionally, it minimizes the problem of transferring learning to the job.

In Basket Exercise: Also known as In-tray method of training. The trainee are presented with a pack of papers and files in a tray containing administrative problems and are asked to take decisions on these problems and to take decisions on these within a stipulated time. The decisions taken by the trainees are compared with one another. The trainees are provided feedback on their performance. In this technique, trainee is given some information about the role to be played such as, description, responsibilities, general context about the role. The trainee is then given the log of materials that make up the in-basket and asked to respond to materials within a particular time period. After all the trainees complete in-basket, a discussion with the trainer takes place. Case Study Method: The use of case studies is most appropriate when: Analytic, problem-solving, and critical thinking skills are most important. The KSAs are complex and participants need time to master them. Active participation is desired. The process of learning (questioning, interpreting, and so on) is as important as the content. Team problem solving and interaction are possible. Case study analysis is perhaps the most frequently used tool for developing interpersonal, decision making and analytical skills within the trainees. It is a very good and cheap tool for developing problem solving skills within the individuals. The basic drawback is non availability of updated case studies. Generally one or two cases are discussed every year and there is no updating subsequently.

The Four Basic Skills of Human Resource Management


Human resource (HR) management is a vital part of your company. To be truly effective, your human resource team must be experts in a number of important areas. The HR team is responsible for diverse aspects of each employee's career, from recruitment to hiring to various aspects of their job while employed at your company. An effective human resource team effectively executes your policies and procedures and keeps your workforce motivated and productive. Hiring and Recruitment Your human resource manager must be adept at hiring and recruiting new employees. Identifying, recruiting, interviewing and hiring high-performing employees is essential for the long term success of your company. Creating policies and procedures for the hiring and recruiting process and teaching these skills to all of your managers is also critical for the future of your organization.

Compensation and Benefits Human resource managers must also create, administer and improve your compensation and benefit structures. Retaining excellent associates depends on many factors. Outstanding pay and benefits are two critical factors that will ultimately determine how well your employees feel about your organization and the likelihood that they will remain with your company in the future. Crafting an effective compensation system and determining the best benefits package for all of your employees are skills that are mandatory for your HR manager. Training and Development Training and development skills are also vital assets for your human resource manager. The ability to create training programs that solve human performance problems will yield important benefits for your organization. Instructional design skills, as well as outstanding facilitation and presentation abilities, result in training programs that produce tangible results for your company. Talents in program evaluation and employee feedback are also needed to constantly improve the quality of all of your training programs. Performance Management The ability to effectively manage the performances of your employees is an integral part of your human resource manager's job duties. Establishing and implementing a complete performance improvement process is an essential skill. Designing your performance review process, maintaining it and effectively monitoring its implementation are challenging tasks. Coaching your managers on how to use your performance management program is also an important function of your HR team. Examples: M&S signs Jon Jon was unemployed for 8 years before joining the IAP provision. At first, he was disruptive and a poor influence on those around him. During his initial assessment, we identified that long-term unemployment had undermined his motivation and his confidence. Jons Skills Training Customer Advisor conducted frequent one-to-one sessions with him to change his attitude and build his confidence, as well as arranging workshops to help with motivation, CV writing, job searching and confidence building to help him overcome his barriers.

After 6 weeks, Jon was more positive and keen to return to employment in the retail sector. With the help of our Account Management team, Jon was able to secure a four week work placement at Peacocks. Soon afterwards, he managed to secure a permanent position with Marks & Spencer as a retail assistant. Jon comments, I wasnt particularly keen on going on training courses, but this reawakened my enthusiasm. The trainers and my advisor were very good and their methods of teaching helped you absorb everything. Courses that could have been very boring were made very interesting. I would highly recommend the courses and workshops to my fellow jobseekers, and hope like me, Skills Training can help others find the dream job they want.

Team Training
Many firms today use work teams and employee empowerment to improve their effectiveness. Both the team approach and worker empowerment are components of what many firms call worker involvement programs. These programs aim to boost organizational effectiveness by getting employees to participate in the planning, organizing and general managing of their jobs. Employees must be trained to be good team members. For instance, Toyota devotes hours of training new employees to listen to each other and to cooperate throughout Toyotas training process, dedication to teamwork is stressed. For example, short exercises to illustrate examples of good and bad teamwork, and to mould new employees attitudes regarding good teamwork. Some firms use outdoor training such as Outward Bound Programs to build teamwork. Outdoor training usually involves taking a firms management team out into rugged mountainous terrains. There they learn team spirit and cooperation and the need to trust and rely on each other by overcoming physical obstacles. The idea is to build trust, particularly with ones colleagues.

Diversity Training

Diversity training is training for the purpose of increasing participants' cultural awareness, knowledge, and skills, which is based on the assumption that the training will benefit an organization by protecting against civil rights violations, increasing the inclusion of different identity groups, and promoting better teamwork. The purpose of training is not only to increase awareness of workplace diversity, but also to develop and enhance skills among employees to help them communicate more profoundly in the future. Differences in race, sexual orientation, education and work experience can cause tremendous damage. Although diversity training cannot all together change individuals beliefs, it has the ability to increase awareness, impart knowledge and educate employees further on how to accept differences among fellow employees. The main goal of a successful diversity training program is to create a positive work environment by helping employees recognize and be tolerant of differences among co-workers.

On the individual level, training increases awareness of ones beliefs about oneself and others focuses on beliefs, assumptions, behaviours and consequences addresses conscious and unconscious bias examines patterns of behaviour and their consequences increases skills in managing relationships within the changing workforce and customer base

On the group level, training increases understanding of the influence of diversity on human dynamics, including verbal and non-verbal communication identifies different beliefs and behaviour patterns regarding time management, work ethics, work-life balance, conflict resolution, and group harmony versus individual contribution discusses issues around loyalty to racial, ethnic or religious groups, and the family versus the work group practices conflict resolution skills to reduce diversity-related conflict

On the organizational level, training offers an inclusive definition of workforce diversity that expands understanding beyondrace and gender and eliminates the notion of diverse \ versus non-diverse individuals addresses the business imperative of workforce diversity connects specific business goals and objectives to workforce diversity increases understanding of the relationship between workforce diversity and quality improvement, performance management, marketing, customer service and other aspects of business reviews and reinforces organizational principles, policies and practices to tap the assets of the changing workforce addresses recruitment and retention addresses developmental and promotional opportunities within the context of a changing workforce

Importance of training to organization


Organizational training is the process of determining the appropriateness of training by evaluating the characteristics of the organization. The organization looks at training needs of the organizations strategy, resources available for training and managements support for training activities. The importance of training to the organization is as: Leads to improved profitability and/or more positive attitude towards profit orientation. Improves the job knowledge and skills at all levels of the organization. Improves the morale of the workforce. Helps people identify with organizational goals. Helps create a better corporate image. Fosters authenticity, openness and trust. Improves relationship between boss and subordinate. Aids in organizational development.

Learns from the trainee. Helps prepare guidelines for work. Aids in understanding and carrying out organizational policies. Provides information for future needs in all areas of the organization. Organization gets more effective decision-making and problem-solving skills. Aids in development for promotion from within. Aids in increasing productivity and/or quality of work. Helps keep costs down in many areas, e.g. production, personnel, administration etc. Improves labour-management relations. Reduces outside consulting costs by utilizing competent internal consultation. Stimulates preventive management as opposed to putting out fires. Eliminates suboptimal behaviour (such as hiding tools). Creates an appropriate climate for growth, communication. Helps employees adjust to change. Aids in handling conflict, thereby helping to prevent stress and tension.

Importance of Training to Employees:


Training is the process from which employees acquire the capabilities to perform their jobs and is an essential part of any successful business. In addition, employees will not reach their full potential and higher levels of productivity will not be achieved unless employees are adequately trained. Development of skills of employees Training and Development helps in increasing the job knowledge and skills of employees at each level. It helps to expand the limits of human intellect and an overall personality of the employees. Training

Helps in developing leadership skills, motivation, loyalty, better attitudes and other aspects that successful workers and managers usually display. Helps in improving the morale of the work force Increase employees knowledge of foreign competitors and cultures, which is critical for success in foreign markets. Ensure that employees have the basic skills to work with new technology, such as robots and computer assisted manufacturing processes. Helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees. Overall, training impacts organizational competitiveness, revenue and performance

Training the employees is important because 1. Rapid technological innovations impacting the workplace have made it necessary for people to consistently update their knowledge and skills. 2. People have to work in multidimensional areas, which usually demand far more from their area of specialization. 3. Change in the style of management. 4. Due to non-practical college education. 5. For career advancement and self-development. 6. For higher motivation and productivity. 7. To make the job challenging and interesting. 8. For employee motivation and retention. 9. Prevention of obsolescence and absenteeism.

10.To bridge gap between skills requirement and skills availability An analysis of training need is an essential requirement to the design of effective training. The purpose of training need analysis is to determine whether there is a gap between what is required for effective performance and present level of performance. Why training need analysis? Training need analysis is conducted to determine whether resources required are available or not. It helps to plan the budget of the company, areas where training is required, and also highlights the occasions where training might not be appropriate but requires alternate action.

Training Need arises at three levels:

Corporate need and training need are interdependent because the organization performance ultimately depends on the performance of its individual employee and its sub group . Organizational Level Training need analysis at organizational level focuses on strategic planning, business need, and goals. It starts with the assessment of internal environment of the organization such as, procedures, structures, policies, strengths, and weaknesses and external environment such as opportunities and threats. After doing the SWOT analysis, weaknesses can be dealt with the training interventions, while strengths can further be strengthened with continued training. Threats can be reduced by identifying the areas where training is required. And, opportunities can be exploited by balancing it against costs . For this approach to be successful, the HR department of the company requires to be involved in strategic planning. In this planning, HR develops strategies to be sure that the employees in the organization have the required Knowledge, Skills, and Attributes (KSAs) based on the future KSAs requirements at each level. Individual Level Training need analysis at individual level focuses on each and every individual in the organization. At this level, the organization checks whether an employee is performing at desired level or the performance is below expectation. If the difference between the expected performance and actual performance comes out to be positive, then certainly there is a need of training. However, individual competence can also be linked to individual need. The methods that are used to analyze the individual need are:

Appraisal and performance review Peer appraisal Competency assessments Subordinate appraisal Client feedback Customer feedback Self-assessment or self-appraisal

Operational Level Training Need analysis at operational level focuses on the work that is being assigned to the employees. The job analyst gathers the information on whether the job is clearly understood by an employee or not. He gathers this information through technical interview, observation, psychological test; questionnaires asking the closed ended as well as open ended questions, etc. Today, jobs are dynamic and keep changing over the time. Employees need to prepare for these changes. The job analyst also gathers information on the tasks needs to be done plus the tasks that will be required in the future. Based on the information collected, training Need analysis (TNA) is done.

Meaning of Performance Appraisal After an employee has been selected for a job, has been trained to do it and has worked on it for a period of time, his / her performance needs to be evaluated. Performance appraisal is the process of evaluating how employees do their job. Performance appraisal is the method of evaluating the behavior of employees in the work spot, normally including both the quantitative and qualitative aspects of job performance. It is a systematic and objective way of evaluating both work-related behavior and potential of employees. It is a process that involves determining and communicating to an employee how he or she is performing the job and ideally establishing a plan of improvement. Features: 1) It is a systematic process. 2) It tries to find out how well the employee is performing the job and tries to establish a plan for further improvement. 3) Appraisal is carried out periodically and is not a one shot deal. 4) It is not a past oriented activity. Rather it is a future oriented activity showing employees where they have gone wrong and ways to correct it. 5) It is not limited to calling the fouls, it focuses on employee development. 6) It may be formal or informal.

Need for Performance Appraisal

(1) Provide information about the performance ranks basing on which decision regarding salary fixation, confirmation, promotion, transfer and demotion are taken. (2) Provide feedback information about the level of achievement and behavior of subordinate. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary. (3) Provide information which helps to counsel the subordinate. (4) Provide information to diagnose deficiency in employee regarding skill, knowledge, determine training and development needs and to prescribe the means for employee growth provides information for correcting placement.

Importance of performance appraisal

Motivation and Satisfaction Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. Absenteeism and turnover rates in some organizations might be greatly reduced if more attention were paid to it. Training and Development Performance appraisal offers an excellent opportunity perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. Recruitment and Induction Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years?

Purpose
Performance Appraisal is being practiced in 90% of the organisations worldwide. Self Appraisal and potential appraisal also form a part of the performance appraisal

processes Typically, Performance Appraisal is aimed at:

To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. To diagnose the training and development needs of the future. Provide information to assist in the HR decisions like promotions, transfers etc. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees. Helps to strengthen the relationship and communication between superior subordinates and management employees.

Methods of Performance Appraisal


Traditional methods 1. Confidential Reporting: It i mostly used in government and public enterprises. It is prepared at the end of the year and highlights the strengths and weaknesses of subordinates. The impressions of the superior are recorded and subordinate do not get any feedback. 2. Graphic Rating Scales: A printed form is used to evaluate employees. A rating scale lists traits and range of performance value of each trait. The supervisor rates each subordinate by circling the scores for their performance. 3. Straight Ranking: Under this method the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is expressed in terms of his numerical rank. The evaluator is asked to rate the employees from highest to lowest on some overall criterion. 4. Paired comparison: Each worker is compared with all other employees in the group; for every trait, the worker is compared with all others. The number of

decisions to be made can be determined with the help of the formulae n(n-2). 5. Grading system: Employees are given grades according to the judgement of the rator. 6. Forced distribution: Under this method the rater is asked to appraise the employee according to a predetermined distribution scale. Since higher or lower end of the scales are not used, the raters bias is sought to be eliminated. The scale is as follow: Rater is asked to place: 10% of employees in outstanding group 20% - above average 40%- average 20% - below average 10% - poor 7. Critical Incident method: Under this method manager prepares lists of statements of every effective and ineffective behaviour of an employee. These critical incidents or events represent the outstanding or poor behaviour of employees on the job.The manager maintains logs on each employee, whereby he periodically record critical incidents of the workers behaviour. 8. Group Appraisal: In this method an employee is appraised by a group of appraisers. This include immediate supervisor and other supervisors who have close contact with the employee like head of department, manager etc. This group uses any of the appraisal techniques. 9. Work sample method: Employees are given from time to time work related test which are then evaluated.

Modern methods 1. Behaviourally Anchored rating scale: This method is a combination of the rating scale and critical incident techniques of employee evaluation. The critical incidents serve as anchor statements on scale and the rating form

usually contains six to eight specifically defined performance dimensions. 2. Management by Objective: MBO requires the management to set specific, measurable goals with each employee and then periodically discuss the latters progress towards these goals. This technique emphasizes participatively set goals that are tangible, verifiable and measurable. 3. Human Resource Accounting: It is a sophisticated way to measure (in financial terms) the effectiveness of personnel management activities and the use of people in an organization. HRA process shows the investment by organization in its people and how the value of these people changes over time. 4. Assessment Centre: In this approach employees from all departments are brought together on group assignments similar to the ones they would be handling when promoted. Observer ranks each and every individual in order of merit. By this method all employees get an opportunity to show their talents and capabilities and secure promotion based on merit. 5. 3600 Feedback: Involves a systematic collection of performance data on an individual or group divided from stakeholders. 6. 7200 Feedback: Process of running a 3600 feedback instrument twice the first time and then 9 to 12 months later.

Process of Performance Appraisal


Establishing Performance Standards The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms.

Communicating The Standards

Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to them. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators . Measuring The Actual Performance The most difficult part of the process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process. Comparing the actual with the Desired Performance. The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis . Discussing Results The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance.

Decision Making The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

Traditional Methods of Performance Appraisal


1. 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. This description is the assessment of the employees performance based on certain parameters 2. Straight Ranking Method This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation. 3. Paired Comparison A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. 4. Critical Incidents Methods In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur. For e.g. A salesman is very patient with a difficult customer, and he succeeds in selling the goods to that customer. This is a critical incident. The supervisor writes a brief report about this incident. This report is in favor of the salesman. So the salesmen will get a high rating. This method has some disadvantages, as some supervisors only record negative incidents. They do not record positive incidents. Some supervisors are also biased while recording the incidents.

5. Field Review In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias. 6. Checklist Method The rate is given a checklist of the descriptions of the behavior of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees. For e.g. check the following sample of a simple checklist.

The rater has to tick mark "Yes" or "No" for each statement. The rater must have full knowledge about the employee's behavior on the job. The main advantages of checklist method are:- It is simple, It is convenient, It takes less time, and it is very economical.

7. Graphic Rating Scale In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

8. 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. The rater chooses the appropriate fit for the categories on his own discretion. 9. Confidential Reports This is an old and traditional method of rating the employees. A confidential report is a report about the employee. It is prepared by his immediate superior. It contains information about the employee's strengths, weaknesses, major failure and achievements. It also contains information about the employee's personality traits (qualities) and about his behavior. Confidential report is used to take decisions about transfers, promotions, etc. Modern Methods of Performance Appraisal 360 Degree Performance Appraisals 360 degree feedback, also known as 'multi-rater 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 appraisal has four integral components 1. Self appraisal 2. Superiors appraisal 3.Subordinates appraisal 4. Peer appraisal BARS - Behaviorally Anchored Rating Scales .

Behaviorally anchored rating scales (BARS) are rating scales whose scale points are defined by statements of effective and ineffective behaviors. They are said to be behaviorally anchored in that the scales represent a continuum of descriptive statements of behaviors ranging from least to most effective. An evaluator must indicate which behavior on each scale best describes an employee's performance. BARS differ from other rating scales in that scale points are specifically defined behaviors. Also, BARS are constructed by the evaluators who will use them. There are four steps in the BARS construction process: 1.Listing of all the important dimensions of performance for a job or jobs 2.Collection of critical incidents of effective and ineffective behavior 3.Classification of effective and ineffective behaviors to appropriate performance dimensions 4.Assignment of numerical values to each behavior within each dimension (i.e., scaling of behavioral anchors)

Problem in Performance Appraisal


The problem with subjective measure is the rating which is not verifiable by others and has the opportunity for bias. The rate biases include: (a) halo effect (b) the error of central tendency, (c) the leniency and strictness biases (d) personal prejudice, and (e) the recent performance effect (a) Halo Effect: It is the tendency of the raters to depend excessively on the rating of one trait or behavioral consideration in rating all others traits or behavioral considerations. One way of minimizing the halo effect is appraising all the employees by one trait before going to rate on the basis of another trait. (b) The error of Central Tendency: Some raters follow play safe policy in rating by rating all the employees around the middle point of the rating scale and they avoid rating the people at both the extremes of the scale. They follow play safe policy because of answerability to management or lack of knowledge about the job and person he is rating or least interest in his job. (c) The Leniency and Strictness: The leniency bias crops when some raters have a tendency to be liberal in their rating by assigning higher rates consistently. Such

ratings do not serve any purpose. Equally damaging one is assigning consistently low rates. (d) Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at the lower end, which may distort the rating purpose and affect the career of these employees. (e)The Recent performance Effect: The raters generally remember the recent actions, of the employee at the time of rating and rate on the basis of these recent actions favorable or unfavorable than on the whole activities. Other factors that are considered as problems are Failure of the superiors in conducting performance appraisal and post performance appraisal interview. Most part of the appraisal is based on subjectivity. Less reliability and validity of the performance appraisal techniques. Negative ratings affect interpersonal relations and industrial relations system. Influence of external environmental factors and uncontrollable internal factors. Feedback and post appraisal interview may have a setback on production. Management emphasizes on punishment rather than development of an employee in performance appraisal. Some ratings particularly about the potential appraisal are purely based on guess work. The other problems of performance appraisal reported by various studies are: Relationship between appraisal rates and performances after promotions was not significant. Some superiors completed appraisal reports within a few minutes. Absence of inter-rater reliability. The situation was unpleasant in feedback interview. Superiors lack that tact of offering the suggestions constructively to subordinates.

Supervisors were often confused due to too many objectives of performance appraisal. Advantages of Performance Appraisal through Computers: There will be an objective analysis of traits of both the superior and subordinate and a chance to subordinate to express his views even after performance appraisal. An employee shall express his emotional needs and his value system which may not be possible direct face to face with superior. Communication through computer overcomes the communication barrier between the superior and subordinate. Computer based appraisal will remove the inherent weakness of the appraisal system that is subjective assessment of vague and abstract performance targets, unclear guidelines for appraisal etc. Performance Appraisal Performance appraisal is a systematic evaluation of the individuals with regard to his or her performance on the job and his potential for development. Reasons Why Appraisal Programs Fails Sometimes: There are many reasons why performance appraisal system might not be effective. Some of the most common problems include: Rating biases: The problem with subjective measure (is that rating which is not verifiable by others) has the opportunity for bias. The rather biases include a) Halo effect: It is the tendency of the ratters to defend excessively on the rating of one trait or behavioural considerations. One way of minimizing the halo effect is appraising all the employees by one trait before going to rate on the basis of another trait. b) The error of central tendency: Some ratters follow play safe policy in rating by rating all the employees around the middle point of the rating scale and they avoid rating the people at both the extremes of the scale. They follow play safe policy because of answerability to management or lack of knowledge about the job and person he is rating or least interest in his job. c) The leniency and strictness: The leniency bias crops when some raters have a tendency to be liberal in their ratings by assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging one is assigning consistently low rates. d) Personal prejudice: If the ratter dislikes any employee or any group, he may rate them at the lower end, which may distort the rating purpose and affect the career of these employees.

e) The recency effect: The ratters generally remember the recent actions of the employee at the time of rating and rate on the basis of these recent action-favourable or unfavorable-rather than on the whole activities. Employee is not given clear objectives at the beginning of performance period. Manager may not be able to observe performance or have all the information. Performance standards may not be clear. Inconsistency in ratings among supervisors or other raters. Rating personality rather than performance. Inappropriate time span (either too short or too long). Overemphasis on uncharacteristic performance. Inflated ratings because managers do not want to deal with bad news Subjective or vague language in written appraisals. Organizational politics or personal relationships cloud judgments. No through discussion of causes of performance problems. Manager may not be trained at evaluation or giving feedback. No follow-up and coaching after the evaluation Inadequate preparation on the part of the manager

Other reasons performance appraisal programs can fail to yield the desired results include: The relationship between the employees job description and the criteria on the appraisal form is not clear. The relationship between the employees job description and the criteria on the appraisal form isnt clear. Managers feel that little or no benefit will be derived from the time and energy spent in the process, or they are concerned only with bad performance. Managers dislike the face-to-face confrontation of appraisal interviews. Managers are not sufficiently adept at rating employees or providing them with appraisal feedback. The judgment role of appraisal conflicts with the helping role of developing employees. The appraisal is just once-a-year event, and there is little follow-up afterward.

Compensation

Compensation means the entire package that is paid to an employee, which includes all monetary and non-monetary emoluments ie, salary, PF, and other such benefits. Rewards is one part of compensation, its a process which helps in reinforcing the behaviour, in a lay mans language is a monetary or no monetary recognition given to an employee in lieu of better performance. Compensation includes monthly salary and all benefit like PF, ESI, medical, gratuity and reward is the amount or benefit which one will get for his extra ordinary performance. Compensation is given for the work done for company under job profile. Anything that is given to employee for his good performance is reward. Reward may be given for other supportive social, environmental activities and may not be regular. Reward may be promotion, enhanced job profile, special increment in salary, praise, recognition etc.

Components of Compensation (Direct)Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite time .

House Rent Allowance Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to work. Conveyance Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them. Leave Travel Allowance These allowances are provided to retain the best talent in the organization. The

employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization. Medical Reimbursement Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These mediclaims include health-insurances and treatment bills reimbursements. Bonus Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one months salary of the employee.

Special Allowance Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are provided to employees to provide them social security and motivate them which improve the organizational productivity.

COMPONENTS OF COMPENSATION (INDIRECT)


They include Leave Policy, Overtime Policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes, Flexible Timings. Leave Policy:-It is the right of employee to get adequate number of leave while working with the organization. The organizations provide for paid leaves such as, casual leaves, medical leaves (sick leave), and maternity leaves, statutory pay, etc. Overtime Policy:-Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities, overtime pay etc. Hospitalization:-The employees should be provided allowances to get their regular check-ups, say at an interval of one year. Even their dependents should be eligible for the medi-claims that provide them emotional and social security. Insurance:-Organizations also provide for accidental insurance and life insurance for employees. This gives them the emotional security and they feel themselves valued in the organization. Leave Travel:- The employees are provided with leaves and travel allowances to go for holiday with their families. Some organizations arrange for a tour for the employees of the organization. This is usually done to make the employees stress free.

Retirement Benefits:- Organizations provide for pension plans and other benefits for their employees which benefits them after they retire from the organization at the prescribed age. Holiday Homes:-Organizations provide for holiday homes and guest house for their employees at different locations. These holiday homes are usually located in hill station and other most wanted holiday spots. The organizations make sure that the employees do not face any kind of difficulties during their stay in the guest house. Flexible Timings:-Organizations provide for flexible timings to the employees who cannot come to work during normal shifts due to their personal problems and valid reasons. Compensation is the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required. Types of Compensation for Total Rewards Direct Compensation Base Pay Premium Pay (overtime, longevity, hazardous, shift differential, on-call, benefits replacement pay) Contingent Programs (achievement award and merit pay) Indirect Compensation Protection Programs (social security, workers compensation, unemployment compensation, pension plans, health, dental, vision, life, accidental death and long term disability insurance) Paid Leave (vacation, holidays, jury duty, sick leave, military leave) Intangible Compensation Non-monetary rewards (work-life balance, alternative work schedules, onthe-job training, development and training opportunities)

Types of Employee Rewards Employee rewards are an excellent tool to recognize good performance and make the employee feel valued and appreciated. There are many ways to reward employees that involve both monetary and non-monetary efforts. At times a simple "thank you" can go a long way. The important thing about employee rewards is that they must be fair to all employees and given in appropriate situations. The company policy on employee rewards should be specific and clearly defined. Monetary Rewards Monetary rewards are given for a variety of reasons. Some examples are meeting sales goals, achieving quality, outstanding performance in a given situation, or delivering a special project. Typical rewards are money in a form of a bonus, trips paid for by the company, gifts from a rewards catalog, or services such as cell phone or paid cable. Non-Monetary Rewards Non-monetary rewards are given for going above and beyond as a team player, perfect attendance, or learning a new skill. Examples of non-monetary rewards are movie tickets, restaurant coupons, certificates, thanks from the bosses, flexible schedules, a day off, picnics, recognition of birthdays, and free lunches. Other Rewards Other types of rewards can also be given to employees. Some examples are a parking space, outstanding employee plaque, corner office space, personalized items (brief cases, day planners), shirts, jackets, and employee discounts. Regardless of the type of rewards given, be consistent and fair in delivering the rewards program. REWARD IS A BROADER TERM AND COMPENSATION IS A PART OF REWARD.

RECENT TRENDS IN HRM


Human resource management is a process of bringing people and organizations together so that the goals of each other are met. The role of HR manager is shifting from that of a protector and screener to the role of a planner and change agent.

Personnel directors are the new corporate heroes. The name of the game today in business is personnel . Nowadays it is not possible to show a good financial or operating report unless your personnel relations are in order. Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Indian organizations are also witnessing a change in systems, management cultures and philosophy due to the global alignment of Indian organizations. There is a need for multi skill development. Role of HRM is becoming all the more important. Some of the recent trends that are being observed are as follows:

The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more on people centric organizations. Organizations now need to prepare themselves in order to address people centered issues with commitment from the top management, with renewed thrust on HR issues, more particularly on training. Charles Handy also advocated future organizational models like Shamrock, Federal and Triple I. Such organizational models also refocus on people centric issues and call for redefining the future role of HR professionals. To leapfrog ahead of competition in this world of uncertainty, organizations have introduced six- sigma practices. Six- sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. These practices improve organizational values and helps in creating defect free product or services at minimum cost. Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization. Exult, the international pioneer in HR BPO already roped in Bank of America, international players BP Amoco & over the years plan to spread their business to most of the Fortune 500 companies. With the increase of global job mobility, recruiting competent people is also increasingly becoming difficult, especially in India. Therefore by creating an enabling culture, organizations are also required to work out a retention strategy for the existing skilled manpower.

Recent Trends In Recruitment Recruitment is the process of hiring qualified candidate for the required vacant position in the organization. The basic steps involved in recruitment process understand the requirement, sourcing the right person, interviewing, and selecting the candidate. Recent trends in recruitment are:

Outsourcing: Outsourcing firms will provide talented candidates for the required position in the organizations. They will conduct the initial screening and send the talent pool of candidates to the organization for final selection. They will also acts like intermediaries between candidates and companies. But these firms charge the organization for their services.

Poaching/Raiding: Poaching means buying talent. The companies will hire the talented and experienced person already working in the reputed organization. Most of the companies buy the talented persons from their competitor in the industry. The companies will offer more packages to attract the talented persons.

E-recruitment: E-recruitment means using the Internet technology for hiring process. Internet is the external source of recruitment. The companies will advertise their vacant positions in the web and the job seekers apply through online.

Mobile technology: SMS messages are a great way to reach qualified candidates quickly and cheaply .The biggest advantage of SMS is the immediacy and frequency that the users check these messages. This can provide immediate insight on how effective and compelling the job ad is to potential candidates. This method can be used by recruitment agencies to remind candidates about upcoming interviews, confirmations and/or just to keep in

contact.

Instant Messaging: Instant messaging services such as MSN messenger, SKYPE, AIM and ICQ will allow for quick communication with candidates, clients and other contacts to facilitate in answering questions regarding jobs vacancies or other job related queries. Instant messaging allows prospects to talk straight away.

Blogs: There are many ways blogs can be utilized in the recruitment process. Firstly, blogs can be used to inexpensively market job opportunities for candidates. Secondly, blogs covering CV, interview and career tips can be written for job seekers. This provides an opportunity for firms to offer their expertise and knowledge, building a brand with a wider audience and moreover enhance the communication with candidates, clients and other contacts in an inexpensive manner.

Trends in Employee Selection: Resume Screening is a Thing of the Past


While resumes are clearly flawed, they are still a mainstay in most organizations, in fact, with advances in technology that allows candidates to electronically submit documents to a companys recruiting inbox, most HR departments receive far more resumes today than ever before. This needs to change. A closer examination of the use of resumes points to the many problems they present first; resume screening is a time and labor-intensive process for the hiring organization. Carefully evaluating a stack of resumes requires a significant amount of human attention the type of attention that is difficult for most organizations to dedicate. As a result, the process may become one of selective attention (e.g. only

reviewing resumes from candidates who have some type of an inside track to the position), or worse, a random task that only reviews candidates that happen to be on the top of the pile. Such an approach is clearly not optimal as it eliminates applicants for reasons unrelated to their qualifications. The resume process is also time consuming for candidates. Oftentimes, the very best candidates are the ones who are already employed, and as a result, may be turned off by the time it takes to update their resume or tailor it for the requirements of a specific job opening. This can have a significant impact on the quality of candidate pools. Second, even if an organization is able to dedicate the time to review each resume, the evaluation process is a subjective art with very little science to back it up. Research demonstrates that evaluators have a difficult time applying a set of consistent standards across multiple candidates or they consistently apply standards that are irrelevant to future job success. Progressive organizations have attempted to combat these problems by developing explicit evaluation criteria and/or providing screeners with various types of rater error training. Nevertheless, because the information obtained from resumes is highly unstructured, even well trained, experienced screeners are required to apply substantial judgment when making their evaluations. Unfortunately, this leads to biases and prediction errors that reduce screening accuracy. Further, the problem is compounded when multiple screeners are used to evaluate resumes for the same position. Poor inter-rater reliability among raters leads to even more evaluation inconsistency. Third, the resume process makes it difficult, if not impossible, to accurately and efficiently quantify applicant information in a way that allows for a rank ordering of candidates according to their likelihood of job success. Instead, information from resumes only allows for a qualitative evaluation that requires a significant inferential leap in order to combine the available data into an overall prediction of future

success. For example, suppose you are evaluating two candidates for a position that requires a certain level of experience and education. Both candidates possess at least the minimum qualifications for the role; however, candidate A is viewed as having stronger work experience than candidate B. At the same time, candidate B is viewed as having an educational background that is more in line with the role. How are these candidates compared? Without a process that carefully weights each piece of information, screeners are left to themselves to make such judgments. This reduces an organizations ability to make fine-grained distinctions within groups of candidates who might all possess the basic qualifications for a position. Additionally, because resumes are typically not scored, or measured quantitatively, it is difficult to track predictions and provide resume screeners with feedback on their evaluations. Without feedback it difficult for organizations to continually adjust and improve their hiring processes. Finally, resume screening has been shown to have a significant adverse impact against minority candidates. More specifically, the University of Chicago's Marianne Bertrand and MIT's Sendhil Mullainathan responded to 1300 job ads with resumes that used either statistically common black names (Lakisha and Jamal) or white names (Emily and Greg). Black applicants had to send out 50% more resumes per interview callback compared to whites. In other words, a qualified applicant with a black sounding name has to send out 15 resumes per interview invitation versus 10 resumes per invite for candidates with white sounding names. Furthermore, companies that advertised they were equal opportunity employers were no more likely to provide an opportunity to the black candidate than were companies that did not emphasize equal opportunity. This finding led Mullainathan to suggest that even unconscious biases have to be considered if equal opportunity is a true goal. The simplest way to do this is to ensure that your pre-screening methodology cannot

consider a persons name when evaluating candidates. So how can we evaluate candidates quickly, fairly and objectively without even seeing their name? Fortunately, advances in our knowledge of the screening process have made it possible to eliminate, or at least substantially minimize the problems with resumes outlined above. There are a number of best practices that organizations should employ when designing a candidate screening process. First, and most critical, is that you should have a clear and objective definition of what the job in question entails. For most HR professionals, this comes as no surprise. However, the practice of applying this principle is not always straightforward. For example, while an organization might have job descriptions that outline the basic elements associated with each position, these descriptions may not break the job elements down into discrete, and measurable types of knowledges, skills, abilities and work style characteristics. Without this information, it becomes difficult to apply a common set of standards from which to evaluate candidates. This in turn, leads to subjectivity in how candidates are screened. Once the elements of the job have been identified, it is important to develop a structured approach for soliciting the relevant information. Traditional resumes fall woefully short of accomplishing this goal. When someone is asked to submit a resume, you are essentially asking that person to provide a generic, exclusively positive overview of his or her work and educational history and hope that the information they choose to include provides insight into whether or not they possess the qualities deemed important for the job. A much more effective process is to carefully focus the type of information that you request so you can be sure to solicit data that is truly relevant for your decision-

making process. By having a structured questionnaire that not only collects work and educational history, but also data related to specific critical elements of the job, you are able to focus candidates attention so they provide relevant comprehensive (i.e., positive and negative) information. There are a number of other benefits to a structured screening approach. In addition to ensuring that you are collecting relevant information from candidates, a structured screening approach gives you the ability to develop an objective, standardized methodology for evaluating candidates. Such an approach eliminates subjective biases and inconsistencies that are unavoidable when using traditional resume methodology. Also, it enables you to potentially generate a score for each applicant that can subsequently be used to rank order candidates according to their likelihood of job success. This has huge time saving implications for HR departments as it allows for automated candidate screening. It also helps to make fine-grained distinctions between candidates who on the surface all appear to have similar qualifications. And, over time, these scores can be tracked to continually improve the accuracy of the process. Another, more subtle benefit to having a structured screening approach is that it tends to be a more efficient and engaging task for applicants. The process of developing and/or updating a resume can be an arduous task that provides no insight for candidates as to what the job actually entails or how well a candidates qualifications match the job requirements. With a structured questionnaire, applicants are able to make a much better determination of their odds of success due to the information that is being solicited. For example, if the questionnaire asks if a candidate is willing to climb ladders and walk across catwalks then it can be inferred that part of the job includes climbing ladders and crossing catwalks. Additionally, the questionnaire can be constructed so that applicants who do not possess the minimum qualifications do

not proceed through the entire questionnaire. Thus, saving time for everyone. On the surface, this may appear to be a fairly trivial benefit for organizations. However, in reality, this can have a significant impact on the quality of candidates that end up applying. As mentioned earlier, the best candidates are often those who are already employed and may have little motivation to develop and/or update a resume without having at least some sense of their odds of being hired.

Recent Trends in the area of Training and Development


Personal Learning Environments (PLE) Learning Portals or Personal Learning Environments (PLE). They represent the next generation of learning management systems, and the professions effort to endorse learner preferences while also fulfilling their duties to continue providing relevant and useful content. Its new duty is to deliver training in a variety of modalities preferred by any learner including laptops, mobile devices or video. Such user flexibility has gained new importance to trainers in the wake of Googles ascension as the training professions most competitive technology ever. It should be noted that personal learning environments differ from standard learning portals, which serve organizations as non-customized platforms dominated by learning management systems. PLEs, by contrast, are highly personalized portals that employ filtering technologies to recognize individual users and their preferences and provide them with highly customized experiences. While the LMS remains the core technology employed by organizations to manage their training, it is only one component of the personal learning environment with which learners can select from formal and informally delivered content. Social Learning is Still a Facilitated Process There is a common myth that social learning is an open, free-for-all world where learners go online, communicate with peers, and comment about what theyve learned. Although it does feature Internet-based tools that facilitate global communication, the highest quality social learning environments are differentiated by the continued involvement of facilitators and instructors.

Social learning is a strategy that incorporates the magic of social interface with the discipline of a structured learning environment. The best examples include mentor networks and fast-growing ad hoc universes that connect learners with subject matter experts when and where they need them. In addition, virtual classroom training provides a rich multimedia experience that includes group and one-on-one communications as the facilitator dictates. With social learning, instructors are challenged to deliver and facilitate training in many new ways, surely a challenge to trainers who are discovering that the potential of virtual is everywhere, on all platforms and for all segments of training. Contrary to the myth that the instructor is going away because of e-learning, the reality is the instructor is still with us, and they are not going anywhere any time soon. Growth of Gamification The old saying that learning can be fun is truer today than ever before. The spirit of competition not only makes learning more enjoyable, it increases retention and boosts all important time-to-competency measurements. Its a concept employed by sales organizations and now quickly spreading throughout the enterprise. Competitive games serve both employer and employee. Gaming is not just a training phenomenon but a social and marketing phenomenon. Organizations of all sorts are discovering innovative ways to use funware to influence behaviour. In a 2011 Gartner Research Report, they predicted that by 2015, more than 50% of organizations that manage innovation processes will gamify them. Gartner also predicts that within two years, more than 70% of Global 2000 organizations will employ at least one gamified learning application. Most importantly, games incentivize employees to learn and accomplish more skills, which raise competency levels throughout the organization. Social Badging, the New Tool of Recognition Everyone wants to be recognized for their achievements. Certifications, degrees and job titles have long been badges that signify our position of responsibility or professional accomplishments. But social media has demonstrated that business professionals long for other forms of recognition. The number of followers on Twitter is a status symbol for how important we are. The number of friends we have on Face book acknowledges how much we are valued by others, and the number of likes to what we publish demonstrates the value of our message. In the corporate setting, receiving a Black Belt not only demonstrates how much

training we have completed, but also that we have demonstrated success in managing projects. All are forms of social badges. Personal learning environments provide us a new world to create more of these forms of recognition. Badging is growing at such a rate that our challenge will be determining how to vet out which badges are acceptable and valued in our environment. Growing Focus on Knowledge Retention Retaining and protecting corporate knowledge is a critical objective for any company, no matter their size and industry. Protecting intellectual property is an ongoing legal battle. But protecting and retaining the talent who creates intellectual property is our responsibility as training professionals. Whenever a talented individual leaves for another opportunity, more than that persons skills and career potential are lost. Knowledge and intellectual property leaves also. In todays highly mobile and globally competitive corporate culture, and with baby boomers aging out of the workforce, companies are accelerating efforts to identify and retain high potential talent. For training and HR departments, that priority begins with differentiating high potential employees earlier, and channeling them into customized, and oftentimes, fast-track programs that emphasize training and advancement opportunities. Outsourcing Grows While Off-shoring Retrenches The use of training outsourcing as a business strategy is continuing to expand, but there is shift in the types of sourcing relationships employed by companies. Part of that dynamic is a reduction in off-shoring relationships in countries such as India as the labour cost differential between on-shoring and off-shoring continues to erode an occurrence that is happening not only in training but across other sectors too. In addition, with the virtual disappearance of comprehensive training outsourcing partnerships, the bulk of business process outsourcing (BPO) in the training space involves selective outsourcing. The lions share of those deals involves content and delivery services. By contrast, training departments are opting to keep back office administration in-house to retain control of that fixed-expense function. This is ironic, since training administration is considered by many to be the least strategic set of processes for training organizations, but the easiest of processes to control.

Current Trends in Performance Appraisal


Elimination of ratings as rating seems to distract all efforts of organizational improvement. Identification of constraints and eradicating them. Create internal performance consultants whose duty is to define performance standards and analyze performance. Self-review provides an opportunity to every employee to comment on his /her perceptions and views on achievement of targets Day-to-day feedback and bi-monthly feedback sessions. Manager as a coach instead of appraiser. Performance management as a function of training & development. Companies are using multiple performance appraisal formats for individual appraisals. MBO has maintained a steady level of use among practitioners. The use of graphic rating scales has decreased steadily over time. The use of narrative essay as a performance assessment technique is becoming more common. The common methods of performance appraisal today are 1) 900Appraisal The employee evaluates himself and shows his strengths and achievements or his boss evaluates him. (Self or Boss). 2) 1800Appraisal The employee and the boss evaluate his performance on a monthly basis. (Self and Boss). 3) 2700Appraisal The method wherein the employee is evaluated by 3persons, himself, boss and co-workers. 4) 3600Appraisal Also known as multi-rater feedback, where feedback about employees performance comes from a Supervisor/superior, co-worker, client/customer, subordinates and the self-assessment of the employee himself)

5) 7200 Appraisal As the name itself suggests, in this method, the 360 appraisal method is practiced twice. First the 360 appraisal is done, where the performance of the employee is analysed and having a good feedback mechanism, the boss sits down with the employee again a second time and gives him feedback and tips on achieving the set targets.

1. 6) Rank & Yank strategy Also known as in or out policy the rank and yank strategy refers to the performance appraisal model in which the employees are first ranked from Best to Worst and these rankings are used to identify and separate poor performers from the good performers. Then the action plans for improvement of the poor performers are discussed and they are given a certain time to improve their performance, after which the appropriate HR decisions are taken. Some of the prominent corporations which follow this strategy are Ford, Microsoft and Sun Microsystems.

7) Balance score card It is a tool to measure the performance of the employees which was developed by Robert Kaplan and David Norton. It not only measures the performance of employees but also includes: a) Financial Perspective: Includes measures such as operating income, return on capital employed etc.b) Customer perspective: Includes measures such as customer satisfaction, customer retention, etc. c) Business process perspective: Includes measures like cost incurred on the employee, quality of output etc.d) Learning & growth perspective: Includes parameters such as employee satisfaction, employee retention, skills, etc. There is a logical connection between learning and growth arising in a better business process, which in turn leads to an increased value to the customer and eventually in improved financial performance of the organisation

COMPENSATION MANAGEMENT: RECENT TREND


Compensation or remuneration in general terms means direct wages, salaries, or allowances given to the work force of the business organization compensation management or wage and salary administration refer to establishment and implementation of sound policies and practices of employee compensation considering the worth of concerned employee and concerned job. It includes such areas as job evaluation, surveys of wage and salaries, analysis of relevant organisational problems, development and maintenance of wage structure, establishing rules for administering wages, wage payments, incentives, profit sharing, wage changes and adjustments, Supplementary payments, control of compensation costs and other related items. Contingent factors in compensation plan: Internal factors 1. Organisational strategy and attitude. 2. Organisational culture. 3. Nature and worth of job. 4. Capacity to pay. 5. Nature of human resource. External factors 1. Nature of Hr market. 2. Cost of living. 3. Employee union. 4. Legal framework 5. Socio-economic factors

Both above mentioned factors influence the compensation system in an organisation.

Infact because of such reasons the compensation system is very strategic in nature. Global competition in hr market infuence the retention of employees within the organisation. From the employer's perspective, compensation is an issue of both affordability and employee motivation. Companies must consider what they can reasonably afford to pay their employees and the ramifications of their decisions: will they affect employee turnover and productivity? In addition,some employers and managers believe pay can influence employee work ethic and behavior and hence link compensation to performance. Moreover social, economic, legal, and political forces also exert influence on compensation management, making it a complicated yet important part of managing a business. More specifically, six primary but interrelated factors can shape a company's pay structure: 1. Social Customs: Beginning in the thirteenth century, employees began demanding a "just" wage. This idea evolved into the current notion of a federally mandated minimum wage. Hence, economic forces do not determine wages alone. 2. Economic Conditions: Demand for labor influences employee wages. Employers pay wages based on the relative contributions employees make to production goals. In addition, supply and demand for knowledge and skills helps determine wages. 3. Company Factors: Pay structures depend on the kind of technology a company has and on whether a company uses pay as an incentive to motivate employees to improve job performance and to accept more responsibilities. 4. Job Requirements: Some jobs may require greater skills, knowledge, or experience than others and hence fetch a higher pay rate. 5. Employee Knowledge and Skills: Likewise, employees bring different levels of skills and knowledge to companies and hence they are qualified to work at different levels of a company hierarchy and receive different rates of pay as a result. 6. Employee Acceptance: Employees expect fair pay rates and determine if they receive fair wages by comparing their wages with their coworkers' and supervisors' rates of pay. If employees consider their pay rates unfair, they may seek employment elsewhere, put forth little effort in their jobs, or file lawsuits. After considering the factors now I want to mention that in recent trend the compensation in an organisation is considered as a cause of grievance because of inequity in pay scale and hidden aspects due to which the employee considered himself cheated and not able to trust on management regarding their wages and salaries but recently in most of the organisations pay transparency is applied which is giving positive results lets discuss pay transparency.

PAY TRANSPERANCY As in this era of competition the employees are very careful regarding their pay structure they dont want that anybody can cheat them so they want a transparent pay system. In fact some organizations are using transparent pay system, this is helpful for them to retain their employees within the organization pay transparency is an important trend in compensation management that warrants both focused discussion and targeted actions in most companies. In traditional time the payment system was not revealed to employees and not to other companies but decisions about compensation now occur in the world of information changed forever by internet people today have access to unparalleled amounts of information , including information about compensation which historically has been kept secret numerous websites provide salary survey data freely and the explosion of web 2.0 social networks and social media spreads compensation data and conversations without any limits. Pay transparency influence employees. Fosters trust in management Increases employees engagement Encourages discretionary efforts Reduces turnover Create competitive advantage People want to work where they understand their value and feel they can trust their employers. In such tan environment, they are willing to work harder, offering more of their discretionary effort towards the organisational goals. Employee trust, then, is not an end in itself but a foundation for competitive business advantage. INDIAN INDUSTRY ANALYSIS Indian industries are aiming for high growth and are looking for talented human resource. For the purpose they are offering most competitive compensation packages. Besides the monetary and non-monetary benefits some organizations also offer development benefits such as online degree programmes or certification courses. Insurance sector has succeeded in increasing the compensation packages at highest rate followed by Banking and IT sectors. In Indian industry rate of salary hike also depends on the job position in the organizational hierarchy. During year 2006 technical and professional skill oriented jobs were offered more salary hikes than the senior management.

REFERENCE http://eng.hi138.com/?i280580_Compensation_Management_in_Vocational_Problem s_and_SoC OMPENSATION ADMINISTRATION http://www.referenceforbusiness.com/encyclopedia/Clo-Con/CompensationAdministration.html http://payroll.naukrihub.com/compensation/indian-industry/ www.indianmba.com/Faculty_Column/FC1003/fc1003.html

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