Human Resources Management

Akio Morita, founder of Sony corporation once said “there is no magic” in the success of Japanese companies.Its how they treat their people.World’s leading food company Nestle’s CEO, Peter Brabeck –Every single person in the organization should ask himself or herself-is there anything I can do to add a little more value to our company.

Evolution of HRM• The development of Personnel Management– US & UK……. Voluntary– India……government interventions & Compulsions– 20th Century there was a loss in production due to

industrial dispute which was because of the malpractices in the recruitment of workers and payment of wages.

– The Royal Commission of labour in India (1931) under the chairmanship of J.H.Whitley recommended the abolition of the jobber system and appointed labour officers to perform recruitment and welfare activity.

Conti….

• After independence Labour officer was identified as personnel manager

• Factories law• Pragmatic and flexible approach.

Importance of HRM

• Social significance• Professional significance• Significance for individual enterprise

Objectives of HRM

• Primary objectives– Goods and services– Monetary and non monetary– Satisfaction of community

• Secondary objectives– Achieving the primary objectives economically,

efficiently and effectively.

Role of HR• First appeared– Files clerk– Record keeper– Liaison man– Trouble shooter

• Modern era– Consience– Counsellor– Mediator– company spokesman– Problem solver– Change agent

Personnel policies• Policy is a pre determined, selected course

established as a guide towards accepted goals and objectives

• General and specific• examples

HRIS

• HRIS is a systematic way of storing data and information for each individual employee to aid planning, decision making, and submitting of returns and reports of the external agencies.

Human resource planning

Effective HRP is a process of analyzing an organizations human resources needs under changing conditions and developing the activities necessary to satisfy these needs.HRP’s effectiveness depends on the existing manpower utilised and future needs are met.Need forecasting and advance planning

Cont…

Individual plansOrganizational plansDevelopment plansSocietal pressuresLong range plansManagement DevelopmentCareer planning

Link between HRP and Strategic Planning

Company’s commonly prepare annual forecasts of staffing needs as a base for external recruitment, promotion and annual training programme planning. They fail to consider long-range business plans and needs, such as new facilities, new products, retrenchment and expansion.A manufacturing firm established a palnt in Gurgaon. Due to lack of expertise and the market the company was sold to a European company.

Recruitment

Recruitment is the process of searching for Prospective employees and stimulating them to apply for the job in the organization.

Sources of Recruitment

Internal sources-Stimulating transfer and promotion-Increase morale- Past Performance AppraisalExternal sources-Lower entry jobs, expansion, specifications cannot be metBoomerang employees

External sourcesAdvertisementEmployment ExchangeEducational InstitutionsPlacement AgenciesOn- Site VisitsInternshipsReferrals and Walk-InsLabour UnionsNepotismLeasing

Selection decisions comprises1. Determine the nature of job to be filled2. Determine the type of personnel required3. Determine the sources of recruitment4. Determine the selection process

SelectionIt is the process of discovering qualifications and characteristics of the job applicant in order to establish their likely suitable for the job position.Two Types of errorsReject errorsSelect errors

Contd…Good selection requires a methodWhat am I looking for

Analyze the jobHow do I find out?

Recruit through agencies and consultancyHow can I recognize when I see it

Select through application forms

Stages in selection processStage 1: Screening of Application formsStage 2: Tests

IntelligenceAptitudeAbilityInterestPerformance

-Work Sampling-Assessment Centres

Contd…Psychological test1. Intelligence tests

general traits-Word fluency-Verbal Comprehension-Arithmetical ability

2. Aptitude tests3. Interest test4. Personalitytest

Thematic Apperception testRorschach ink blot test

Contd..

Stage 3: Selection interviewStage 4: Selection Decision

PLACEMENTPlacement may be defined as “ the determination of the job to which an accepted candidate is to be assigned and his assignment to that job.”

SocializationA process of adaptation to a new culture of the organization.IBM, Wal-Mart, P&G and Nestle

Socialization Process

Productivity

Pre-arrival Encounter MetamorphosisCommitment

Turnover

Training and Development

Training may be defined as a planned programme designed to improve performance and to bring about measurable changes in knowledge, skills, attitude and social behavior of employees for doing a particular job.

- focus on soft-skills- interpersonal communication, teamwork, Innovation and leadership.

Principles of Learning1. Initial motivation or readiness2. Multiple response or response by trial and error3. Selection of responses through reinforcement4. Principle of Extinction5. Law of exercise in habit formation

Purpose of Training and Develoment

-Creating a pool of readily available and adequate replacements for personnel.-Enhancing the company’s ability to adopt and use advances in technology because of a highly knowledgeable staff-Expansion programmes

Training methodsOn the job techniques- coaching-orientations-job instruction training-apprenticeships-job rotations-assistantships-internships

contd• Off the job techniques

-lectures, special study, films, television conferences or discussions, case studies, role-playing, simulation exercises, sensitivity training, TA,

Knowledge Management‘’Knowledge Management is a systematic, explicit and deliberate building, renewal and application of knowledge to maximise an enterprise knowledge related effectiveness and returns from its knowledge assets’’

Industrial economy based on assembly lines and hierarchical control to a global decentralised information driven economy.

…Knowledge Management Architecture

1. Tactic 2. ExplicitExplicit knowledge is formal knowledge that can be packaged as information, reports, articles, manuals, patents, pictures, video images, sound, software etc.

KM Life cycle

Knowledge life cycle1. Capturing 2. Organizing3. Refining 4. Transfer

KnowledgeUnderstanding gained through experience or study.

..Tactical knowledge is personal knowledge embedded in individual experience and is shared and exchanged through direct face –face contact.The four components of KMA1. Developing New Knowledge2. Securing New and Existing knowledge3. Distributing Knowledge4. Combining available Knowledge

Knowledge Management ProcessBeckmans has proposed a comprehensive 8- stage process for KM.1. Identify2. Collect3. Select4. Store5. Share6. Apply7. Create8. Sell

CM goal is to design the lowest cost pay structure that will attract, motivate and retain competent employees.Consequences of pay Dissatisfaction1. Performance2. Strikes3. Grievances4. Other jobs5. Absenteeism & Turnover6. Poor mental health

Compensation Management

..CM- Direct Compensation( wages, salaries, incentives, gains)- Indirect Compensation (Fringe benefits)Objectives of CM1. Acquire qualified personnel2. Retain present employees3. Reward desired behavior4. Control cost5. Comply with legal regulations

..Major phases of CMPhase 1Identify and study jobs

-job analysisPhase 2Internal Equity

-Job Evaluation1. Job Ranking 2. Job Grading3. Factor Comparision4. Point System

..FactorsResponsibilitySkillMental effortPhysical effortWorking Conditions

..Factor ComparisionSteps1. Determine the compensible factors2. Determine key jobs3. Apportion present wages for key jobs4. Place key jobs on a factor Comparision Chart5. Evaluate other jobs

..Point system1. Determine critical factors2. Determine the levels of factors3. Allocate points to subfactors4. Allocate points to levels5. Develop the point manual6. Apply the point system

…Phase 3External equity- wage and salary surveysPhase 4Matching internal and external worth

Reward systemAn incentive or a reward can be anything that attracts the worker’s attention and stimulates him to work.Compensation1. Monetary2. Non- Monetary

Factors determining rewards

1. Performance2. Effort3. Seniority4. Skills held5. Job difficulty6. Discretionary time

Non-Monetary rewards1. Treats-free lunches, dinner, B’day treats2. Knick-Knacks-Tie pins, Calendars, T-Shirts3. Awards- Trophies, Certificates4. Environment-Flexible hours, Music5. Social Acknowledgement-Friendly greetings,

membership of clubs6. Tokens- Movie tickets, Vacation trips

Career Planning and Development

Career is progress or general course of action of a person in some profession or in an organization.Career planning is the process by which one selects career goals and the path to these goals.Career development consists of the personal actions one undertakes to achieve a career plan.

Career stages

• Exploration- from college to work• Establishment- first job and being accepted• Mid career- will performance increase or

begin to decline?• Late career-the elder statesperson• Decline- preparing for retirement

Career Development Initiatives

Career Planning WorkshopsCareer CounsellingMentoringSabbaticalsPersonal Development PlansCareer workbooks

Mentor & Protege Relationships

Mentor- Superior, Leader, ManagerProtege-Sub-ordinate, Followers

Relationship can be increased and developed by imparting Counselling sessions.

Promotion“ A promotion is the transfer of an employee in an organisation to a job which pays more money or one that carries some preferred status.”Demotion

Demotion has been defined as the assignment of an individual to a job of lower rank and pay usually involving lower level of difficulty and responsibility

Transfers

Yoder and associates have defined transfer as “ a lateral shift causing movement of individuals from one position to another usually without involving any marked change in duties, responsibilities, skills needed or compensation

ControllingControlling is the measurement and correction of performance in order to make that enterprise objectives and the plans devised to attain them are accomplished

Control process1.Establishing Standards2.Measuring performance against standards and3.Correcting variations from standards and

plans

Performance Appraisal system

Performance Appraisal refers to all those procedures that are used to evaluate the personality, the performance, and the potential of its group members.Objectives of Performance Appraisal1. Providing basis for promotion/transfers/termination2. Enhancing employee’s effectiveness3. Aiding in designing T& D 4. Developing interpersonnel relationship5. Counselling, Controlling & Wage Administration

Methods of Performance AppraisalPast Oriented

i. Ranking methodii. Paired Comparison methodiii. Graphic Rating scale methodiv. Checklistsv. Forced Choice list methodvi. Critical Incidents methodvii. Forced Distribution method

Condt…viii. BARSix. Field Reviewx. Tests and Observationsxi. ACRSxii. Essay methodxiii. Cost accounting

Condt…Future Oriented method1. MBO2. 360 degree Appraisal3. Psychological appraisals4. Assessment Centres

540 degree feedback-Customer and Suppliers720 degree feedback- Family and stakeholders

Appraisal process

Objectives of Performance AppraisalEstablish Job ExpectationsDesign an Appraisal ProgrammeAppraise PerformancePerformance interviewArchive Appraisal DataUse Appraisal Data for Appropriate Purpose

Components of Employee Remuneration

Environment

Financial Non -financial

Hourly and Monthly Rated

WagesSalaries

Incentives

Individual PlansGroup Plans

Fringe Benefits

P.F. GratuityMedical careAccident reliefHealth and Group insurance, etc.

Perquisites

Company carClub membershipPaid holidaysFurnished houseStock option schemes, etc.

Job Context

Challenging jobResponsibilitiesRecognitionGrowth prospectsSupervisionWorking conditionsJob sharing, etc

Benefits

Indirect financial and nonfinancial payments employees receive for continuing their employment with the company.Fringe benefitsRefers to the extra benefits provided to employees in addition to the normal compensation paid in the form of wage or salary.

Types of Fringe Benefits

• Payment for time not worked• Employee security • Safety and health• Welfare recreational facilities• Old age and retirement benefits

Benefits picture today

Wages and salaries- 72.1%Legally required benefits- 8.5%Insurance- 6.9%Paid Leave-6.5%Retirement and savings-3.0%Supplemental pay- 2.8%

Zappos

Zappos, a Las Vegas based online shoe and apparel retail company, is considered one of the 100 Best Companies to Work For. The company was formed just 10 years ago and employs 1500 people. Zappos boasts over a billion dollars in annual sales and job perks that includes free massages, tailoring and lunch. They have a nap room, life coach and company sponsored concierge services.

Zappos values

Tony Hsieh, the CEO at Zappos believes that creating and supporting a work culture that employees enjoy is critical for organizational success. Having fun at work is a priority and being weird is encouraged. Hsieh comments, "It's definitely part of our culture to bring out happiness in employees, because it's only with happy employees that they can bring out the happiness in customers through better customer service."

Classification of benefits

1. Pay for time not worked2. Insurance benefits3. Retirement benefits4. Services

Pay for time not worked

It is also called as supplemental pay benefits which are the benefits for time not worked such as unemployment insurance, vacation pay and holiday pay and sick pay.Unemployement InsuranceProvides benefits if a person is unable to work through some fault other than his or her own.

Pay for time not worked

Vacations and HolidaysThe number of paid employee vacation days varies considerably from employer to employer ranging from one week to five weeks based on the experience in the same company.Sick leaveProvides pay to an employee when he or she is out of work because of illness.

Pay for time not worked

Parental leave and the family and medical leave ActIt is an important benefit availed from about 80% of women workers.Severance PayA one time payment some employers provide when terminating an employee. (downsizing-39 to 30 weeks, I week- I year of service.)

Pay for time not worked

Supplemental Unemployment BenefitsProvide for a “guaranteed annual income” in certain industries where employers must shut down to change machinery or due to reduced work.

Insurance Benefits

Worker’s compensationProvides income and medical benefits to work- related accident victims or their dependents regardless of fault.Group life insuranceProvides lower rates for the employer or employee and includes all employees, including new employees, regardless of health or physical condition.

Retirement benefits

Social SecurityPension PlanningPension Alternatives- early retirement windowsA type of offering by which employees are encouraged to retire early, the incentive being liberal pension benefits plus perhaps a cash payment.Cash balance pension plans

Personal Services

Employee Assistance ProgramsFamily- Friendly BenefitsSubsidized child careElder careFlexible benefits Programs

GrievancesComplaintIndication of employee dissatisfaction.Grievance Complaint formally stated in writing. Grievance proceduresFormal channels of communications used to resolve grievances.

Steps in a Grievance ProcedureStep5:Arbitration by: Impartial third partyStep4:Meeting between: National Union Representative &

Company Executive or Corporate Industrial Relations Officer

Step3: Meeting between: Committee of Union Officers & Company

ManagersStep2: Meeting between: Chief Steward & Supervisor’s Manager

and/or HR ManagerStep1: Discussion of written grievance between: Union Steward &

Supervisor