MM ZC441: Human

Resource Management
BITS Pilani Lecture-16 Total PPT: 51 – Date – 29/10/16 Swati Alok
Hyderabad Campus
Definition

• HRM refers to acquisition,,

motivation and retention
maintenance of Human
Resources in an
organization.

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Every manager is an HR
manager…

Line manager: A manager who is authorized to direct the

work of subordinates and is responsible for
accomplishing the organization’s tasks.
Staff manager :A manager who assists and advises line
managers.

Line employee: an employee involved directly in producing

the company’s goos or delivering services
Staff employees are those who support the line function

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The Appraisal Process

Performance Appraisal is an objective assessment of an

individual’s performance against well defined
benchmarks.
Performance Management refers to the entire process of
appraising performances, giving feedback to the
employees, and offering rewards or punishments to
them.

Performance Performance
Job Analysis
Standards Appraisal

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Performance management –
Design
While designing performance appraisal we need to look at

Cycle: annual, semiannual, quarterly. Project based

Model: past oriented , future oriented
Instrument: online, paper based
Measuring criteria and rating scale
Performance methods: used and why
Purpose : for reward, career development, training,
administration purpose etc

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 Advantages and Disadvantages of Appraisal Tools

Table 9–3
. 9–6
Components of Employee Remuneration
Environment

Remuneration

Financial Non-financial

Job Context
Fringe Benefits Perquisites
Challenging job
PF Company car
Hourly and Responsibilities
Incentives Gratuity Club membership
Monthly rated Recognition
Individual plans Medical Care Paid holidays
Wages Growth prospects
Group plans Accident Relief Furnished house
Salaries Supervision
Health and Group Stock option
Working conditions
Insurance, etc. Schemes, etc.
Job sharing, etc.

Direct Indirect

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Equity in Financial Compensation
External equity - Employees are paid comparably to
workers who perform similar jobs in other firms. In order
to maintain external equity, organizations go for market
survey.
Internal equity - Employees are paid according to relative
value of jobs within same organization. In order to
maintain internal equity, organizations go for job
evaluation.
Individual equity- in internal equity a relationship is drawn
between jobs but in individual equity, individual
employees doing same job are compared in order to
maintain individual equity, organizations use pay ranges
for compensating employees.

9-8
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Pay structure design

Job analysis
Job evaluation
Pay policy identification
Pay survey analysis
Pay structure creation

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BITS Pilani, Hyderabad Campus
 Step -1 : Job analysis : Identify benchmark job for establishing pay rate

Benchmark jobs (jobs that are common and consistent across a wide range of
employers) will be the focus of this exercise because they will be used to
design the pay structure.

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BITS Pilani, Hyderabad Campus
Point method (job evaluation) for
other benchmark jobs
Benchmark jobs Point values

Desk receptionist 120

Administrative assistant 145

Payroll assistant 175

Operation analyst 215

Benefit manager 245

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Step 4: Pay Survey Analysis

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Calculate weighted means

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Pay survey data

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 Step 5: Pay Structure Creation

The next task is to conduct a simple regression using

Microsoft Excel to create a market pay line. Enter the job
evaluation points (as X) and weighted average base pay
rates (as Y) for each benchmark job and generate the
regression results.
Identify the slope and y-intercept and write the equation for
the market pay line
Y =the predicted base pay
M =the slope of the line
x=the job evaluation points
B =the y-intercept

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Regression analysis in excel -
example

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Regression analysis in excel –
example (continued)

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Step 5: Pay Structure Creation

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Because your company wants to lead in base pay by 3 percent, adjust the predicted
pay rates to determine the base pay rate you will offer for each benchmark job

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 Types of Incentive Plans
Pay-for-performance plans
– Individual incentive/recognition programs
– Sales compensation programs
– Team/group-based variable pay programs
– Organizationwide incentive programs
– Executive incentive compensation programs

© 2005 Prentice Hall Inc. All

12–22
rights reserved.
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Major Employee Benefits

• Payment for time not worked

• Insurance Benefits
• Compensation benefits
• Pension Plans, gratuity
(Retirement benefits)

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 Methods of Participation

High High

Degree of empowerment
Level in organisation

Low Form of involvement Many and Low

Few Employee skills requirement complex

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Benefits of Participative
Management
1. Increase Productivity (Effectiveness and efficiency)
2. Better Decisions
3. Employee Morale
4. Improved job satisfaction
5. Greater Commitment
6. Faster Adaptation to Change
7. Greater trust
8. Better Communication
9. Better Teamwork

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 16–26
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 Causes of Industrial Accidents

Unsafe acts of persons Unsafe Mechanical or Physical Conditions

1. Operating without clearance, failure to heed 1. Inadequately guarded, guards of improper height,
warning. strength, mesh, etc.

2. Operating or working at an unsafe speed. 2. Unguarded, absence or required guards.

3. Defective, rough, sharp, slippery, decayed,

3. Making safety devices inoperative.
cracked, etc.
4. Using unsafe equipment, or using equipment
4. Unsafely designed machines, tools, etc.
unsafely.
5. Unsafely arranged, poor housekeeping
5. Unsafe loading, placing, mixing, combining, etc.
congestion, blocked exits, etc.

6. Taking an unsafe position or posture. 6. inadequately lighted, sources of glare, etc.

7. Working on moving or dangerous equipment. 7. Inadequately ventilated, impure oil source, etc.

8. Unsafely clothed, no goggles, glares or masks,

8. Distracting, teasing, abusing, startling, etc.
high heels, etc.
9. Failure to use safe attire or personal protective 9. Unsafe processes, mechanical, chemical,
devices. electrical, nuclear, etc.

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 Reduce the unsafe conditions
Providing protective equipment such as safety glasses,
earplugs, respirators and gloves (protection)
Having warnings such as sirens, horns, labels, signs and
odor in natural gas (eliminate potential risks)
Having engineering control such as ventilation, machine
guarding, sound enclosures and circuit breakers
(engineering)
Having less hazardous elimination or substitution systems
to eliminate noise and reduce energy and speed.
(reduce potential distractions)

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 Reduce Unsafe acts
– Emphasize top management commitment.
– Emphasize safety.(praise employee for safety behavior, listen to employees
suggestion wrt to safety measures, complaints, maintain open safety
communication, link mangers bonus to safety improvements)
– Establish a safety policy.
– Reduce unsafe acts through selection.(ERI test, physical test, simulation test)
– Provide safety training.(use of equipment, warning of potential hazards, safe
practices)
– Use posters and other propaganda.(should be combined with safety program)
– Use positive reinforcement. (incentives by providing points for each safety
behaviours)
– Use behavior-based safety programs. (identify the workers behavior that
contribute to accidents and then training workers to avoid these behaviors)
– Encourage worker participation.(identify potential problem, accept the safety
program)
– Conduct safety and health inspections regularly (employees safety committee)
16–29
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 Parties to IR

Employees Employers

Employer-Employee
Employee Association Employers Association
Relations

Government Courts and Tribunals

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Factors Leading to
Unionisation
Individual Personality, Interests
and Preferences

Expectation that Work will fulfil

Personality, Interests and
Preferences
• Employment Contract
• Psychological Contract

Satisfaction Work Situation Influence of Management

Dissatisfaction with Work Attempt to Resolve

Situation Situation Individually

Union Instrumentality

Unionisation

Source: Randall S. Schuler. Et al., Effective Personnel Management, p.562

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BITS Pilani, Hyderabad Campus
Primary union

3 categories

1. Industrial unions
2. General unions
3. Craft unions

Primary union of industrial type is further classified on basis

of their unit of organization as
Plant level union, region cum industry level industrial union

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Primary union- industrial
union

Industrial Unions workers of different categories form into a

union that is called industrial union. It links all craftsmen and
skilled workers in any one industry. It is organized upon and
industry-wise rather than a craft-wise basis.
Textile Labour Association of Ahmedabad, The Rashtriya Mill
Mazdoor Sangh, Bombay.
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Primary union - general

General Unions if the workers of any industry, any

region and of any job or occupation form into one
union in order to protect the overall interests of the
workers
The Jamshedpur labour Union, Rohtas worker,s union

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Primary union –craft

Craft Unions if the workers of the same craft or

category of the job form into an union, that union is
called Craft union. Such organizations include those
workers having similar skills, training and specialization.
The Ahmedabad Weaver’s Union, the Kanpur Suti Mill
Mazdoor Sabha

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Types of unions

Federations : Industrial unions, either of same industry or

of the different industry may form into an association in
order to improve Trade Union Unity. Such Unions of
Unions are called federations.

Federation can be at two level- national and regional

At regional level- UP Chini Mazdoor federation, bihar sugar
workers federations
At national level :
Eg: Federation of Indian Railways, Indian national iron and
steel workers, Indian national defense workers
federations, all Indian railway federation
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Structure of trade unions

National federations. These are national level bodies to

which plant level unions, local unions or regional level
unions may get affiliated. These are the apex bodies at
the top of the structure. They act as coordinating
bodies. These national federations may have their own
regional or state level coordinating bodies to which the
plant level unions may get affiliated.

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National level federations

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Structure of trade unions

Local Level federations. This is the second level in the

structure from below. The local trade union federation
holds together the plant level unions at the local level in
a particular craft and industry. These local level
federations might be affiliated to either some regional
level or national level federation or these may be
independent.

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Regional level federations

Regional level federations. These are the organisations

of all the constituent unions in a particular state or region.

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Central federations

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Problems of trade union and
weakness
Multiplicity of Unions. There exist several trade unions in the same
establishment. The multiplicity of unions is the result of outside leadership
and labour laws. The law permits and gives sanctity to small unions. Any
seven persons can form a union under the Trade Unions Act, 1926. This Act
confers rights on such a union. It is allowed under the Act to raise disputes,
file suits, go to conciliation and even bargain with employers. Therefore,
small sections of workers are encouraged to form separate Unions. There is
no restriction on the number of unions to be registered in one
establishment. (bokaro steel-68, SAIL-240, Air india- 14)

Outside Leadership. Trade unions in India are led largely by people who
themselves are not workers. These outsiders are politicians, intellectuals
and professionals having no experience of work in industry. Outsiders
continue to dominate the trade unions to advance their personal interests.

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Dispute Settlement
Mechanisms
Collective
Bargaining Arbitration

Code of Disputes
Discipline Settlement Conciliation

Grievance Consultative
Procedure Machinery Adjudication

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PROCEDURE FOR TAKING DISCIPLINARY ACTION

. Preliminary Investigation

Issue of a Charge-sheet

Notice of Enquiry

Conduct of Enquiry.

Recording of Findings by the Enquiry Officer

Awarding Punishment.

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Causes for Separation

Separations

Voluntary Involuntary

Quits Retirements Discharges Layoffs Retrenchment VRS Rightsizing

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Performance-Replaceability Strategy Matrix
(manage turnover with less pain and more pleasure)

REPLACEABILITY

Difficult Easy

High performers – difficult to replace

High performers – easy to replace
Highly dysfunctional turnover
High Dysfunctional turnover
PERFORMANCE

Retain/invest in employee
Retain/invest in employee
Develop backups

Average performers – difficult to replace

Average performers – easy to replace
Dysfunctional turnover
Average Dysfunctional turnover if replacement costs are high
Retain/provide performance incentives
Retain/provide performance incentives
Develop backups

Poor performers – difficult to replace

Short-term dysfunctional/Long-term functional Poor performers – easy to replace
Low turnover Functional turnover
Improve performance or terminate Improve performance or terminate
Develop backups

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 Trends in corporate governance:

Boards shaping company strategy

Institutional investors active on boards
Shareholder demands that directors and top management own
significant stock
More involvement of non-affiliated outside directors
Increased representation of women and minorities
Smaller boards
Splitting the Chairman and CEO positions
Society expects boards to balance profitability with social needs of
society.

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• All the best !
• Good Luck for
Comprehensive Exam !

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