Human Resources Management

• Introduction to Human Resources Management

• Human Resource Planning

• Job Analysis

• Recruitment & Selection

• Training & Development

• Performance Appraisal

• Wages & Salary Administration

• Promotion & Demotion

• Transfer

• Morale

Introduction to Human Resource Management

ByDr. Jacob Cherian M.Com., M.S.W., M.Phil., Ph.D.

Chairman, Marketing Dept.,College of Business Administration,

Jeddah.

Human Resource Management

Human Resource Management is a management function involving procurement of suitable human resources, train and develops their competencies, motivate them, reward them effectively and create in them an urge to be part of the management team whose aim should be rendered, dedicated, committed service for the success and growth of the organisation.

Personnel vs Human Resource ManagementPersonnel vs Human Resource Management 1) Personnel Management is 1) Personnel Management is management of peoplemanagement of people

(1) HRM is management of (1) HRM is management of employees’ skills, knowledge, employees’ skills, knowledge, abilities, talents, aptitude, and abilities, talents, aptitude, and creative abilities. creative abilities.

(2) Personnel Management views (2) Personnel Management views man as economic personman as economic person

(2) HRM views man not only as (2) HRM views man not only as economic person but looks at him economic person but looks at him as a full person — taking social as a full person — taking social and psychological factors in views.and psychological factors in views.

(3) Employee is treated as cost (3) Employee is treated as cost centre and hence controls cost of centre and hence controls cost of “Personnel” in the organisation“Personnel” in the organisation

(3) Employees are treated as profit (3) Employees are treated as profit centre and hence they invest in centre and hence they invest in Human Resources Development -Human Resources Development -and future accrues from this and future accrues from this resourcesresources

(4) Employee is viewed as a tool (4) Employee is viewed as a tool or equipment which can the or equipment which can the purchased and usedpurchased and used

(4) Employee is treated as a (4) Employee is treated as a resource.resource.

Employees are utilized for Employees are utilized for organizational benefitorganizational benefit

(5) Employees are utilized for (5) Employees are utilized for organizational benefitorganizational benefit

(5) Employees are utilized for (5) Employees are utilized for mutual benefit both for mutual benefit both for organisation and employees’ ownorganisation and employees’ own

NEED AND IMPORTANCE OF NEED AND IMPORTANCE OF HUMAN RESOURCE HUMAN RESOURCE

PLANNINGPLANNING 1. Personnel Requirements:1. Personnel Requirements:

2. Recruitment and Selection:2. Recruitment and Selection:

3. Placement of Personnel3. Placement of Personnel

4. Training:4. Training:

5. Performance Appraisal:5. Performance Appraisal:

6. Transfers:6. Transfers:

7. Promotions7. Promotions

8. Career Planning and Development:8. Career Planning and Development:

9. Organizational Development:9. Organizational Development:

10 Motivation of Personnel10 Motivation of Personnel

11. Potential Appraisal and Development11. Potential Appraisal and Development

12. Rewards12. Rewards

13. Employee Welfare13. Employee Welfare

14. Quality of Work Life:14. Quality of Work Life:

15. Human Resource information:15. Human Resource information:

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Limitations of Human Limitations of Human Resource ManagementResource Management

1. Future is uncertain:

2. Conservative attitude of management:

3. Problem of discarding surplus staff:

4. Time Consuming and Paper Work:

5. Problem of recognizing change:

7. Expensive:

6. Shortages of highly skilled personnel:

HUMAN RESOURCE HUMAN RESOURCE PLANNINGPLANNING

HRR sometimes called as manpower planning, involves identifying HRR sometimes called as manpower planning, involves identifying

staffing needs, ana1ysing available personnel, and determining staffing needs, ana1ysing available personnel, and determining

what additions and / or replacements are required to maintain a staff what additions and / or replacements are required to maintain a staff

of the desired size and quality.of the desired size and quality.

It may be defined as a strategy for the acquisition, utilization, It may be defined as a strategy for the acquisition, utilization,

improvement and preservation of an organization’s human improvement and preservation of an organization’s human

resources. resources.

In simple words, HRP is a process of identifying human resource In simple words, HRP is a process of identifying human resource

requirements in terms of quality and quantity It is not Just the requirements in terms of quality and quantity It is not Just the

quantity of manpower that matters, but more so the quality of quantity of manpower that matters, but more so the quality of

manpower.manpower.

PROCESS OF HUMAN RESOURCE PLANNINGPROCESS OF HUMAN RESOURCE PLANNING

1. Review of Organizational Objectives1. Review of Organizational Objectives

2. Personnel Requirements Forecast2. Personnel Requirements Forecast

3. Personnel Supply Forecast3. Personnel Supply Forecast

4. Make Comparison4. Make Comparison

5. If no Differences5. If no Differences

6. If there are Differences6. If there are Differences

7. Motivating the Manpower:7. Motivating the Manpower:

88. Monitoring Personnel Requirements. Monitoring Personnel Requirements

Job AnalysisJob Analysis

Job analysis is the starting point of recruitment and Job analysis is the starting point of recruitment and

selection. It is the systematic process of collecting and selection. It is the systematic process of collecting and

studying information about the various jobs in the studying information about the various jobs in the

organization. organization.

In the words of Edwin Flippo “ Job analysis is the In the words of Edwin Flippo “ Job analysis is the

process of studying and collecting information relating process of studying and collecting information relating

to the operations and responsibility of a specific job”to the operations and responsibility of a specific job”

Job Analysis

Job Description Job Specification

Job title

Duties &responsibilities

Working conditions

Salary & incentives

Qualification

Qualities

Experience

Family background

Machines to be used Training

Inter-personal skills

Job analysis consists of two broad areasJob analysis consists of two broad areas

a)a) Job descriptionJob description

b)b) Job specificationJob specification

Job descriptionJob description give details of the job in respect of give details of the job in respect of

duties, responsibilities and other aspects.duties, responsibilities and other aspects.

Job specificationJob specification gives details relating to the gives details relating to the

candidate who is supposed to do the job, such as candidate who is supposed to do the job, such as

qualification, experience etc.qualification, experience etc.

Purpose of Job AnalysisPurpose of Job Analysis

1. 1. Recruitment and selectionRecruitment and selection

2. 2. Proper placementProper placement

3. 3. Performance appraisalPerformance appraisal

4. 4. Effective trainingEffective training

5.5. Job evaluationJob evaluation

6.6. Promotion and transferPromotion and transfer

7.7. Acceptance of the job offerAcceptance of the job offer

1515

Job DescriptionJob Description Job SpecificationJob Specification1.1. MeaningMeaning

Job description gives details of the job in Job description gives details of the job in respect of duties, responsibilities, salary and respect of duties, responsibilities, salary and incentives etc.incentives etc.

Job specification give details relating to the Job specification give details relating to the candidate who is expected to do the job such as candidate who is expected to do the job such as qualities and qualificationsqualities and qualifications

2.2. Order Order

It precedes job specificationIt precedes job specification

It follows job descriptionIt follows job description

3. Job / Candidate Focus3. Job / Candidate Focus

It focuses on jobIt focuses on job

It focuses on candidateIt focuses on candidate

4. Nature4. Nature

It is in more complex in natureIt is in more complex in nature

It is more simple in natureIt is more simple in nature

5. Contents 5. Contents

It contains details of the jobIt contains details of the job

It contains details of candidateIt contains details of candidate

6. Use to Candidate6. Use to Candidate

It gives a clear information about the job to be doneIt gives a clear information about the job to be done

It gives a clear idea about he requirments of the It gives a clear idea about he requirments of the candidatescandidates

Recruitment and SelectionRecruitment and Selection

Recruitment and selection are two of the Recruitment and selection are two of the most important functions of Human most important functions of Human resource Management. resource Management.

Recruitment precedes selection and helps Recruitment precedes selection and helps in selecting a right candidate.in selecting a right candidate.

RecruitmentRecruitment

It is a process to discover the sources of It is a process to discover the sources of man-power to meet the requirements of the man-power to meet the requirements of the staffing schedule and to employ effective staffing schedule and to employ effective measures for attracting that manpower in measures for attracting that manpower in adequate numbers to facilitate effective adequate numbers to facilitate effective selection of efficient personnel.selection of efficient personnel.

In simple words, it is a process of attracting In simple words, it is a process of attracting people to apply for jobs available in the people to apply for jobs available in the company.company.

SelectionSelection

It is a process of selecting right person for It is a process of selecting right person for the right job.the right job.

Today professionally managed companies Today professionally managed companies seek to find the right job for the right seek to find the right job for the right person.person.

Sources of Recruitment of Sources of Recruitment of PersonnelPersonnel

1.1. Internal SourcesInternal Sources PromotionsPromotions TransfersTransfers Retired StaffRetired Staff Recall from long leaveRecall from long leave Internal AdvertisementsInternal Advertisements

Advantages of Internal SourcesAdvantages of Internal Sources

1.1. Time saving and economicalTime saving and economical

2.2. No need of induction trainingNo need of induction training

3.3. Reduces executive turnoverReduces executive turnover

4.4. Develops loyalty and sense of responsibilityDevelops loyalty and sense of responsibility

5.5. Well versed with company’s policies, rules Well versed with company’s policies, rules and regulationsand regulations

6.6. Improves morale of the company personnelImproves morale of the company personnel

Demerits of Internal SourcesDemerits of Internal Sources

1.1. Prevents new blood from outside with innovative ideas, fresh Prevents new blood from outside with innovative ideas, fresh

thinking and dynamism from entering the companythinking and dynamism from entering the company

2.2. Possibility of not finding the required executive within the company.Possibility of not finding the required executive within the company.

3.3. Position of the person who was promoted or transferred falls vacant.Position of the person who was promoted or transferred falls vacant.

4.4. Bias or partiality in promoting or transferring personnel Bias or partiality in promoting or transferring personnel

5.5. Generate a feeling of discontent among those who are not Generate a feeling of discontent among those who are not

promoted.promoted.

6.6. Requires well maintained confidential reports of employees so that Requires well maintained confidential reports of employees so that

the right employee is promoted or transferred.the right employee is promoted or transferred.

External SourcesExternal Sources

1.1. Management ConsultantsManagement Consultants

2.2. AdvertisementsAdvertisements

3.3. Management InstitutesManagement Institutes

4.4. RecommendationsRecommendations

5.5. Deputation of PersonnelDeputation of Personnel

Advantages of External SourcesAdvantages of External Sources

1.1. It encourages new blood with innovative It encourages new blood with innovative ideasideas

2.2. It offers wider scope in selectionIt offers wider scope in selection

3.3. There are less chances of partialityThere are less chances of partiality

4.4. It does not require well maintained It does not require well maintained confidential records.confidential records.

Demerits of External SourcesDemerits of External Sources1.1. There are chances of existing executive turnover, as There are chances of existing executive turnover, as

outsiders are given a chance.outsiders are given a chance.

2.2. It may not develop loyalty among the existing It may not develop loyalty among the existing

executives.executives.

3.3. It is time consuming as lengthy selection process is It is time consuming as lengthy selection process is

required.required.

4.4. It is also expensive as advertisements and various It is also expensive as advertisements and various

tests need to be conducted.tests need to be conducted.

SELECTION PROCESSSELECTION PROCESS

1. Job Analysis1. Job Analysis

2. Advertising the job2. Advertising the job

3. Initial Screening 3. Initial Screening

4. Application Blank4. Application Blank

5. Tests5. Tests

6. Interview6. Interview

7. Reference check7. Reference check

8. Medical check8. Medical check

9. Final Interview9. Final Interview

10. Job offer 10. Job offer

11. Follow-up11. Follow-up

Types of Employment TestsTypes of Employment Tests

Use of employment tests is fairly widespread in personnel Use of employment tests is fairly widespread in personnel selection. Such tests provide a systematic basis for comparing selection. Such tests provide a systematic basis for comparing

performances, personality traits, and intelligenceperformances, personality traits, and intelligence. . 1.1. Performance TestPerformance Test

2.2. Personality TestPersonality Test

3.3. Aptitude testAptitude test

4.4. Interest TestInterest Test

5.5. Intelligence TestIntelligence Test

6.6. Projective TestProjective Test

7.7. General Knowledge TestGeneral Knowledge Test

8.8. Perception TestPerception Test

1. Performance Test:1. Performance Test:

This test tries to measure the This test tries to measure the performance of candidates in respect of a performance of candidates in respect of a certain job. Such test is specially designed certain job. Such test is specially designed to measure specific skills and knowledge to measure specific skills and knowledge required for a job. For example, typing required for a job. For example, typing test can measure speed and accuracy of a test can measure speed and accuracy of a typisttypist

2. Personality Test:2. Personality Test:

It is conducted to judge maturity, social or It is conducted to judge maturity, social or inter-personal skills, behaviour under inter-personal skills, behaviour under stress and strain, etc. This test is very stress and strain, etc. This test is very much essential in case of selection of much essential in case of selection of sales force, public relations staff, etc. sales force, public relations staff, etc. where personality plays an important role.where personality plays an important role.

3. Aptitude ‘Test:3. Aptitude ‘Test:

It helps to judge specific talent or ability to It helps to judge specific talent or ability to acquire a particular skill. Some people have acquire a particular skill. Some people have good talents or aptitude for selling, others for good talents or aptitude for selling, others for accounting, and so on. This type of test helps accounting, and so on. This type of test helps the company to select the right candidate and the company to select the right candidate and then provide the right job best suited to him. then provide the right job best suited to him.

4. Interest Test:4. Interest Test:

This test is conducted to find out likes and This test is conducted to find out likes and dislikes of candidates towards dislikes of candidates towards occupations, hobbies, etc. Such tests occupations, hobbies, etc. Such tests indicate which occupations are more in indicate which occupations are more in line with a person’s interest. Such tests line with a person’s interest. Such tests also enable the company to provide also enable the company to provide vocational guidance to the selected vocational guidance to the selected candidates and even to the existing candidates and even to the existing employees.employees.

5.5. Intelligence Test:Intelligence Test:

These tests help to evaluate traits of These tests help to evaluate traits of intelligence. Mental ability, presence of intelligence. Mental ability, presence of mind (alertness), numerical ability, mind (alertness), numerical ability, memory and such other aspects can be memory and such other aspects can be measured. Such tests are used for measured. Such tests are used for admission to MBA courses, recruitment for admission to MBA courses, recruitment for executive positions in banks and other executive positions in banks and other organizations. organizations.

6. Projective Test:6. Projective Test:

This test requires interpretation of This test requires interpretation of problems or situations. For example, a problems or situations. For example, a photograph or a picture can be shown to photograph or a picture can be shown to the candidates and they are asked to give the candidates and they are asked to give their views, and opinions about the picture. their views, and opinions about the picture.

7.7. General knowledge Test:General knowledge Test:

Now-a-days, G.K. Tests are very common Now-a-days, G.K. Tests are very common to find general awareness of the to find general awareness of the candidates in the field of sports, politics, candidates in the field of sports, politics, world affairs, current affairs, etc. world affairs, current affairs, etc.

8. Perception Test 8. Perception Test

At times, perception test can be conducted At times, perception test can be conducted to find out beliefs, attitudes, mental to find out beliefs, attitudes, mental sharpness, etc. sharpness, etc.

Advantages of TestsAdvantages of Tests1.1. In selection process much stress is given to mental qualities rather than physical ones. In selection process much stress is given to mental qualities rather than physical ones.

2. They can be used to check2. They can be used to check on the reported experience of the applicant. on the reported experience of the applicant.

3. A testing program may be of a great value in personnel selection as a measurement of 3. A testing program may be of a great value in personnel selection as a measurement of

an applicant’s ability.an applicant’s ability.

4. They can also be used as a basis for objective comparison between4. They can also be used as a basis for objective comparison between applicants.applicants.

5. Such tests are commonly used to judge candidates properly and can help in selecting 5. Such tests are commonly used to judge candidates properly and can help in selecting

not the best, but the most suitable candidate.not the best, but the most suitable candidate.

6. Personality test can throw light on the character of the candidate. 6. Personality test can throw light on the character of the candidate.

7. Vocational aptitude test can enable the firm for proper placement of the selected 7. Vocational aptitude test can enable the firm for proper placement of the selected

candidates. candidates.

8. They can be used for guiding and counseling persons seeking various jobs. 8. They can be used for guiding and counseling persons seeking various jobs.

9. If conducted properly, they can reduce the work of oral interviewers.9. If conducted properly, they can reduce the work of oral interviewers.

10. Tests like I.Q. tests enable to find out the mental capacity of the candidate to deal with 10. Tests like I.Q. tests enable to find out the mental capacity of the candidate to deal with

any eventuality. any eventuality.

11. The tests can be used to discriminate the suitable candidates from the unsuitable ones. 11. The tests can be used to discriminate the suitable candidates from the unsuitable ones.

12. Tests, if systematically conducted, are more objective and reliable as compared to 12. Tests, if systematically conducted, are more objective and reliable as compared to

other personal assessment techniques.other personal assessment techniques.

How to make testing more effective

• 1. Proper arrangement:• 2. Structure the tests:• 3. Use of Variety of Tests: • 4. Proper supervisors• 5. Proper assessment: • 6. Avoid Bias • 7. Intimation to candidates: • 8. Valid and reliable tests:• 9. Guidance from experts • 10. Follow Up

Interview

An interview is an oral examination. It is a two-way communication where the interviewers can obtain as much as required information from the candidate and the candidate can ask for information about the company and the job.

To the Company

• 1. Information of the candidate

• 2. Supplements Application Blank

• 3. Employment Decision

• 4. New Insights

• 6. Promotes Goodwill

• 5. Assists in Promotions, Transfers

To the Candidates

1. Opportunity

2. Confidence in Candidates:

3. Information of the company/job

3. Contacts:

Guidelines to make interview more effective

Guidelines before the interview

1. Make proper arrangement

2. Select proper Interviewers

3. Instructions to Interviewers

4. Schedule the Interviews

5. Structure the interview

Guidelines during the Guidelines during the InterviewInterview

11 . .Establish rapportEstablish rapport

22 . .Length of interviewsLength of interviews

33 . .Two-way processTwo-way process

44 . .Guidelines for asking questionsGuidelines for asking questions

55 . .Listen attentivelyListen attentively

66 . .Avoid biasAvoid bias

77 . .Avoid mannerismsAvoid mannerisms

After the InterviewAfter the Interview

Examination of Notes / ObservationsExamination of Notes / Observations Preparation of ReportPreparation of Report Follow-upFollow-up

Importance of Scientific Selection PolicyImportance of Scientific Selection Policy

1.1. Facilitate PlacementFacilitate Placement2.2. Facilitate TrainingFacilitate Training3.3. Improves EfficiencyImproves Efficiency4.4. Better RelationsBetter Relations5.5. MotivationMotivation6.6. Optimum use of ResourcesOptimum use of Resources7.7. Reduction in AbsenteeismReduction in Absenteeism8.8. Reduction in WastagesReduction in Wastages9.9. Reduction in Employees TurnoverReduction in Employees Turnover10.10. Improves goodwill of the companyImproves goodwill of the company11.11. High MoraleHigh Morale

Limitations of the Selection Limitations of the Selection ProcessProcess

1.1. Problem of Employment TestsProblem of Employment Tests

2.2. Time consuming and ExpensiveTime consuming and Expensive

3.3. Possible Changes in Employee NeedsPossible Changes in Employee Needs

4.4. Selection BiasSelection Bias

5.5. Problem of AdjustmentProblem of Adjustment

6.6. Problem of InterviewersProblem of Interviewers

RECRUITMENT SELECTION

Meaning

It is a process of searching for prospective employees and stimulating them to apply for jobs

It is a process of choosing the most suitable candidate from those who apply for job.

Steps Involves

It normally involves . It involves a series of steps

- Job analysis - Initial Screening

- Determining sources - Application of Tests

- Advertising job. - Conducting Interviews-Medical/Reference Check-Selection Decision

 

Major Factor

Advertising the job is a major factor.

The final selection decision is a major factor.

Order

Recruitment precedes selection. Selection follows recruitment.

Purpose

The purpose of recruitment is to attract as much candidates as possible.

The purpose of selection is to select the most suitable candidate and rejecting others.

Staff / Line Function

Recruitment is done by the Selection is done by the

personnel departmental, department concerned or by

so it is a staff function the top department and it is

a line function.

Time required

Recruitment requires less time as it normally involves advertising the job.

Selection is a lengthy process and as such time consumed is quite more.

Help from experts

It is a simple process and normally does not require help from experts

It is complicated process and normally experts are required to conduct tests and interviews.

Cost factors

Recruitment normally is not Selection is quite expensive as

advertising the job. money is spent on testing and

- conducting interviews.

Subjective/Objective

Recruitment is more objective in nature.

Selection is subjective as there may be favouritism, and bias in selection.

GROUP DISCUSSIONSGROUP DISCUSSIONS

Now-a-days, group discussions play an important role in the Now-a-days, group discussions play an important role in the selection of candidates, especially at managerial level. It has selection of candidates, especially at managerial level. It has become an important tool in the selection process. In group become an important tool in the selection process. In group discussion, the participants may be divided into two groups. A discussion, the participants may be divided into two groups. A topic is presented to them. For example: 'Leaders are born and topic is presented to them. For example: 'Leaders are born and not made’. One group may talk in favour of it and another not made’. One group may talk in favour of it and another group may talk against it. At times the participants may not be group may talk against it. At times the participants may not be divided into two groups, i.e. there will be only one group. The divided into two groups, i.e. there will be only one group. The participants will present their viewpoints on the topic. participants will present their viewpoints on the topic. Accordingly, the selectors may judge the candidates. The Accordingly, the selectors may judge the candidates. The following attributes of candidates could be evaluated from the following attributes of candidates could be evaluated from the group discussion group discussion

1. Initiative: 1. Initiative: The ability to take action without being told. The candidate who initiates the discussion shows this attribute.The ability to take action without being told. The candidate who initiates the discussion shows this attribute.

2. Content: 2. Content: The ability to generate sound ideas. What is important is the quality of talk and not quantity of speech.The ability to generate sound ideas. What is important is the quality of talk and not quantity of speech.

3. Persuasiveness: 3. Persuasiveness: The ability to influence others by sound reasoning, i.e. to sell one's point of view to others.The ability to influence others by sound reasoning, i.e. to sell one's point of view to others.

4.4. Conflict handling ability:Conflict handling ability: The candidate may also sort out or manage differences or disputed viewpoints between two or more members of the The candidate may also sort out or manage differences or disputed viewpoints between two or more members of the

group to the satisfaction of all.group to the satisfaction of all.

5. Leadership: 5. Leadership: The candidate who takes the lead to start the discussion. He may also guide and encourage others to participate in the The candidate who takes the lead to start the discussion. He may also guide and encourage others to participate in the

discussion.discussion.

6. Communication: 6. Communication: The ability to express one's thoughts or ideas clearly and concisely.The ability to express one's thoughts or ideas clearly and concisely.

7. Group Acceptance: 7. Group Acceptance: Some participants may dominate to grab the limelight. Such attitude is not desirable. Others must be given a chance to Some participants may dominate to grab the limelight. Such attitude is not desirable. Others must be given a chance to

present their viewpoints.present their viewpoints.

8. Time Management:8. Time Management: The participant who takes the lead to summarize the discussion just before the completion of allotted time for The participant who takes the lead to summarize the discussion just before the completion of allotted time for

discussion.discussion.

Training & DevelopmentTraining & Development MEANING OF TRAININGMEANING OF TRAINING

Training is one of the important aspects of manpower development. It has Training is one of the important aspects of manpower development. It has gained significance since 1960s and continues to be of growing importance gained significance since 1960s and continues to be of growing importance for organizations today. Training is normally viewed as a short term for organizations today. Training is normally viewed as a short term educational process utilizing a planned, systematic and organized procedure educational process utilizing a planned, systematic and organized procedure by which non-managerial personnel acquire the technical knowledge and by which non-managerial personnel acquire the technical knowledge and skills necessary for increased effectiveness in achieving organizational skills necessary for increased effectiveness in achieving organizational goals.goals.

In the words of Wayne Cascio, "Training consists of planned programs In the words of Wayne Cascio, "Training consists of planned programs undertaken to improve employee knowledge. skills, attitudes, and social undertaken to improve employee knowledge. skills, attitudes, and social behaviour so that the performance of the organization improves behaviour so that the performance of the organization improves considerably. “considerably. “

In simple words, training is a process of developing or imparting skills, In simple words, training is a process of developing or imparting skills, knowledge and changing attitudes so as to increase individual and knowledge and changing attitudes so as to increase individual and organizational effectiveness.organizational effectiveness.

MEANING OF DEVELOPMENTMEANING OF DEVELOPMENT

Development is viewed as a long term educational process Development is viewed as a long term educational process utilizing a planned and systematic procedure by which utilizing a planned and systematic procedure by which managerial personnel acquire conceptual and theoretical managerial personnel acquire conceptual and theoretical knowledge for enhancing general administrative abilities. The knowledge for enhancing general administrative abilities. The major objectives of training and development programmes major objectives of training and development programmes are:are:

To improve individual and organizational performance, To improve individual and organizational performance, To prepare personnel for advancement.To prepare personnel for advancement.

PURPOSES OF TRAINING AND PURPOSES OF TRAINING AND DEVELOPMENTDEVELOPMENT

1. 1. To improve quality of work forceTo improve quality of work force 2. To enhance employee growth2. To enhance employee growth 3. To prevent obsolescence3. To prevent obsolescence 4. To motivate personnel4. To motivate personnel 5. To assist new comers5. To assist new comers 6. To increase productivity6. To increase productivity 7. To improve health and safety7. To improve health and safety 8. To create reserve managerial force8. To create reserve managerial force 9. To bridge the ever increasing gap9. To bridge the ever increasing gap 10. To meet the challenges posed10. To meet the challenges posed 11. To develop human potential11. To develop human potential 12. To have trained personnel12. To have trained personnel 13. To facilitate exchange of views13. To facilitate exchange of views 14. To develop and maintain good labour relations14. To develop and maintain good labour relations

AREAS OF TRAINING

• 1. Knowledge:

• 2. Technical Skills:

• 3. Social Skills:

• 4. Attitudes:

• 5. Techniques:

• 6. Administrative’ and Conceptual Skills:

BENEFITS I ADVANTAGES 0F TRAINING

To the Company:

• 1. Increased efficiency and productivity:

• 2. Reduced supervision:

• 3. Reduced accidents and wastages:

• 4. Reduced absenteeism and turnover

• 5. Assist new comers

• 6. Information about firm's policies and programmes

• 8. Other benefits

• 7. Competent and capable employees:

Advantages to the Candidates:

• 9. Confidence in employees

• 10. Positive attitude

• 14. Co-operation with others

• 12. Refreshing

• 13. High Rewards

• 11. Chances for promotion

Types of TrainingTypes of Training

1.1. Induction TrainingInduction Training

2.2. Job TrainingJob Training

3.3. Training for PromotionTraining for Promotion

4.4. Refresher TrainingRefresher Training

Methods of Training for Operative Personnel

1. On – The – Job Training2. Apprenticeship Training3. Vestibule Training4. Job Rotation5. Classroom Methods

Methods of Managerial Training and Methods of Managerial Training and DevelopmentDevelopment

ON-THE-JOB METHODSON-THE-JOB METHODS

Job RotationJob Rotation Planned ProgressionPlanned Progression Coaching and CounsellingCoaching and Counselling UnderstudiesUnderstudies Junior BoardsJunior Boards

OFF-THE-JOB METHODS

1. Classroom Methods

• Lectures

• Discussion

• Case study

• Role playing

2. Simulation

3. Business or Management Games

4. Committees and Conferences

5. Readings, Television, and Video Instructions

PERFORMANCE APPRAISALPERFORMANCE APPRAISAL

Performance appraisal is a process of Performance appraisal is a process of evaluating work performance of the personnel evaluating work performance of the personnel so as to facilitate individual and organizational so as to facilitate individual and organizational effectiveness. Performance appraisal is also effectiveness. Performance appraisal is also referred as merit rating, employee rating, and referred as merit rating, employee rating, and service rating.service rating.

Principles of employee appraisal

• 1. Proper evaluators• 2. Proper timing• 3. Proper Feedback• 4. Proper weightage • 5. Provision of appeal• 6. Defined job dimensions• 7. Behaviour based dimensions• 8. Performance Appraisal Policy• 9. Reliability• 10. Easy to administer

Limitations of Performance AppraisalHallo effect

• 1. Hallo effect• 2. Problem of Leniency or Strictness• 3. Central Tendency• 4. Personal Bias• 5. The Problem of Appropriate Technique• 6. Fear of Losing Valued Subordinates• 7. Fear of confrontations• 8. Paper work• 9. Fear of spoiling relations• 10. Horn effect• 11. Latest behaviour • 12. First impressions

Techniques of Performance Techniques of Performance AppraisalAppraisal

1.1. Narrative EssayNarrative Essay2.2. Ranking MethodsRanking Methods3.3. Graphic Rating ScaleGraphic Rating Scale4.4. Behaviourally Anchored Rating ScaleBehaviourally Anchored Rating Scale5.5. Critically Incident MethodCritically Incident Method6.6. Check ListCheck List7.7. Management by ObjectivesManagement by Objectives8.8. Confidential reportsConfidential reports9.9. Field Review methodsField Review methods10.10.Assessment CentresAssessment Centres

TECHNIQUES OF TECHNIQUES OF PERFORMANCE APPRAISALPERFORMANCE APPRAISAL

There are several methods or techniques of performance appraisal. The There are several methods or techniques of performance appraisal. The most common methods are as follows:most common methods are as follows:

1. Narrative essay:1. Narrative essay: The most simplest method is the narrative essay. In this, the rater describes The most simplest method is the narrative essay. In this, the rater describes

in detail an employee's strengths and weaknesses, and potential, together in detail an employee's strengths and weaknesses, and potential, together with suggestions for improvement. If essays are written well, they can give with suggestions for improvement. If essays are written well, they can give detailed feedback to the subordinates in respect of their performance.detailed feedback to the subordinates in respect of their performance.

2. Ranking Methods:2. Ranking Methods: There are various ranking methods which are commonly used to evaluate There are various ranking methods which are commonly used to evaluate

the performance of the employees. Ranking methods offer convenience to the performance of the employees. Ranking methods offer convenience to evaluate the performance and they are less time consuming. The ranking evaluate the performance and they are less time consuming. The ranking methods used are:methods used are:

(a) Simple ranking method. (b) Alternation ranking method. (c) Paired (a) Simple ranking method. (b) Alternation ranking method. (c) Paired comparison method.comparison method.

(i) Simple Ranking Method:(i) Simple Ranking Method:

The oldest and most elementary method is The oldest and most elementary method is the simple ranking method. In this case, a the simple ranking method. In this case, a rater ranks all employees from best rater ranks all employees from best employee to worst employee or from employee to worst employee or from highest to lowest. For example, if there are highest to lowest. For example, if there are 10 employees under a supervisor, then the 10 employees under a supervisor, then the best employee will get rank 1, the second best employee will get rank 1, the second best will get rank 2 and so on. .best will get rank 2 and so on. .

(ii) Alternation ranking method:(ii) Alternation ranking method: In this case, the rater initially lists all In this case, the rater initially lists all

employees on a sheet of paper. From this employees on a sheet of paper. From this list he first selects the best employee as list he first selects the best employee as (No.1), then the worst performer (No.n), (No.1), then the worst performer (No.n),

then the second best performer as (No.2), then the second best performer as (No.2), and then the second worst (No.n-l), and so and then the second worst (No.n-l), and so

on, alternating from the top to the bottom on, alternating from the top to the bottom of the list until all employees have been of the list until all employees have been

ranked.ranked.

For example if there are 10 employees, For example if there are 10 employees, then the best employee would be ranked then the best employee would be ranked

on No.1 and the worst as No.10. The on No.1 and the worst as No.10. The second best as No.2 and second worst as second best as No.2 and second worst as

No.9 and so on.No.9 and so on.

(iii) Paired Comparisons:(iii) Paired Comparisons: Paired comparison is a variation of simple ranking Paired comparison is a variation of simple ranking

method. A person is compared with other individuals method. A person is compared with other individuals and given a rank by the number of times he is and given a rank by the number of times he is considered better. For example, if a company has considered better. For example, if a company has five employees (1, 2, 3, 4, and 5), then there will be five employees (1, 2, 3, 4, and 5), then there will be 10 paired comparisons like this:10 paired comparisons like this:

1-2 - - -

1-3 2-3 - -

1-4 2-4 3-4 -

1-5 2-5 3-5 4-5

Formula to find out the number of Formula to find out the number of comparisons:comparisons:

No. of Comparisons = N (N - 1) / 2No. of Comparisons = N (N - 1) / 2 N = Number of subordinatesN = Number of subordinates

3. Graphic Rating Scale:3. Graphic Rating Scale: In this method, the raters use a graphic scale to In this method, the raters use a graphic scale to

appraise certain specific factors such as quality appraise certain specific factors such as quality of work, quantity of work, dependability, etc. The of work, quantity of work, dependability, etc. The following is an example of graphic scale:following is an example of graphic scale:

The graphic scale method is simple to The graphic scale method is simple to understand, easy to conduct and less time understand, easy to conduct and less time consuming. However, there is lot of paper work consuming. However, there is lot of paper work and there are chances of rater bias. This is the and there are chances of rater bias. This is the most commonly used method. In this case, the most commonly used method. In this case, the raters use a graphic scale to appraise certain raters use a graphic scale to appraise certain specific factors, such as quality of work, quantity specific factors, such as quality of work, quantity of work, dependability, and so on. of work, dependability, and so on.

3. Graphic Rating Scale:3. Graphic Rating Scale:

In this method, the In this method, the raters use a graphic raters use a graphic scale to appraise scale to appraise certain specific certain specific factors such as factors such as quality of work, quality of work, quantity of work, quantity of work, dependability, etc. dependability, etc.

Quality of Work

Quantity of Work

Dependability

Excellent √

Good √ √

Average

Poor

4. Behaviourally Anchored Rating Scale (BARS) :

It is a variation of simple graphic scale. In this case, the behaviour or attitude towards the job is

appraised. There are employees who have a positive attitude towards the job, and they make

every effort to upgrade and update their knowledge and skills to handle their activities.

There are other employees who may tend to develop a negative attitude or behaviour towards their job and as such they may make least efforts to upgrade and update their knowledge and skills

to perform their activities.

5. Critical Incident Method:

• In this case, the supervisor gives a brief report of things which employees did that were particularly effective or

ineffective in accomplishing their jobs. There are times, when certain incidents that take place have a direct

bearing on the performance of the employee.

• For instance, a salesman may overcome a suspicious and rude customer and finally effects a sale to the

satisfaction of the customer. This was made possible because the salesman used his patience and tact to

convince the rude and suspicious customer to buy the product. The sales supervisor may record such incident

in the performance appraisal of the salesman.

6. Check List:6. Check List:

In this case, a list is prepared containing various In this case, a list is prepared containing various statements relating, to employee's behaviour on statements relating, to employee's behaviour on

the job. The rater indicates the individual the job. The rater indicates the individual performance by checking yes or no squares to performance by checking yes or no squares to

various statements. Naturally, the rater must be various statements. Naturally, the rater must be very familiar with the job behaviour of the very familiar with the job behaviour of the

employees.employees.

The greatest advantages are its simplicity, The greatest advantages are its simplicity, convenience, less time consuming, and less convenience, less time consuming, and less

expensive.expensive.

The greatest drawback is that the statements are The greatest drawback is that the statements are structured and it lacks the depth of critical structured and it lacks the depth of critical

incidents and essays.incidents and essays.

7. Role Analysis:

• Role analysis is a process of analyzing the role of a manager in relation to roles of other

managers or members who are affected by his performance.

• The role set members can conduct performance appraisal of the focal role. The focal role can

make necessary changes to improve his performance.

8. Management by Objectives 8. Management by Objectives (MBO) (MBO)

This technique is also used to measure the performance This technique is also used to measure the performance of employees, especially belonging to managerial ranks. of employees, especially belonging to managerial ranks. In this case, the process involved is as follows:.In this case, the process involved is as follows:.

The superior and subordinate managers of an The superior and subordinate managers of an organization jointly define common goals.organization jointly define common goals.

Jointly frame plans;Jointly frame plans;

The subordinate manager implements the plan.The subordinate manager implements the plan.

Then there is joint review of plans, whereby, the actual Then there is joint review of plans, whereby, the actual performance is measured against planned performance.performance is measured against planned performance.

9. Confidential Reports:

This is an old and traditional method of appraising

employees. A confidential report is a report on the

subordinate by the immediate superior and covers a limited

range of aspects such as the employee's strengths,

weaknesses, major failures or achievements and

information on some personality traits and behavioural

aspects. The confidential report is used for a variety of

personnel decisions such as transfers, promotions, etc.

10. Assessment Centers:10. Assessment Centers: This technique is used more so in the case of This technique is used more so in the case of

selection rather than performance appraisal. selection rather than performance appraisal. However, now-a-days, some firms use this However, now-a-days, some firms use this

technique in performance appraisal, technique in performance appraisal, especially at the time promoting managers especially at the time promoting managers

to higher levels.to higher levels.

The ratees’ are subject to various The ratees’ are subject to various psychological tests, management games, psychological tests, management games,

oral presentations, and such other various oral presentations, and such other various exercises. The ratees are asked questions exercises. The ratees are asked questions

and accordingly judged by the raters.'and accordingly judged by the raters.'

WHO SHOULD BE INVOLVED WHO SHOULD BE INVOLVED IN PERFORMANCE IN PERFORMANCE

APPRAISALAPPRAISAL

The answer to this question involves a The answer to this question involves a number of related questions such as number of related questions such as

the followingthe following::

11 . . What should be evaluatedWhat should be evaluated??

22 . .Who should be evaluatedWho should be evaluated??

33 . .When should the evaluation take When should the evaluation take placeplace??

44 . .Who is responsible for conducting Who is responsible for conducting performance appraisalperformance appraisal ? ?

Wages and Salary

Employees' are paid for their services in terms of

money called wage payment. Wages are

usually paid in cash at the end of one day or one

month. Wage payment is important to all

categories of employees. Their life, welfare and

even social status depend on wage payment.

Wage payment is equally important to employers

as their profit depends on the total wage bill.

Factors influencing Wage Factors influencing Wage RatesRates

Wage rates are influenced by a number of Wage rates are influenced by a number of factors. The following are the main factors.factors. The following are the main factors.

Demand and supply of labourDemand and supply of labourNature of jobNature of jobcost of livingcost of livingBargaining power of employeesBargaining power of employeesState regulationState regulationProductivityProductivityAbility of the employerAbility of the employerWage level in other enterpriseWage level in other enterprise

Time Rate System

Time rate system is the oldest and simplest method of wage payment. In the time rate system, wages are paid as per the time spent by the employees in the organization. The production given by the employees is not taken into consideration. The employer buys the hours and pays them compensation accordingly.

AdvantagesAdvantages

Simple and easily understandableSimple and easily understandable Regular and stable income.Regular and stable income. Quality of workQuality of work Acceptance by trade unionsAcceptance by trade unions Eliminates wastagesEliminates wastages

Disadvantages

• No incentive to efficient employees• Increased costs• Uncertainty of labour cost• No distinction between efficient

and lazy employees• Decline efficiency

Piece Rate System

Piece rate system is another basic system of wage

payment. It is just opposite to time rate system. It

is also treated as incentive wage system as it

encourages employees to produce more and also

to earn more. In the piece rate system, wages are

paid as per the production given by the employee

and not as per the time spent by the employees.

Advantages

• Incentive to employees

• Certainty

• Economy

• Low supervision cost

• Estimation of labour cost

DisadvantagesDisadvantages

Harmful to employeesHarmful to employees Heavy wastagesHeavy wastages Inferior qualityInferior quality High production costHigh production cost Uncertainty of earningsUncertainty of earnings Rate cuttingRate cutting Disliked by trade unions.Disliked by trade unions.

Points of difference Time wage system Piece wage system

1. Payment basis Payment is made on the basis of time spent by

the employees

Payment is made on the basis of production

given by the employees

2. Guarantee of minimum wages

It gives guarantee of minimum wages

It does not give guarantee of minimum wages

3. Nature of method It is easy to understand and simple to administer

It is complicated method

4. Acceptability Employees & trade unions supports this system

Employers and efficient employees support this

system

5. Distinction between employees

It does not make any distinction between the efficient and inefficient

employees

It makes distinction

6. Effect on production Production goes slow but quality is maintained

Production goes faster but quality may suffer

7. Supervision Strict supervision is necessary

Strict supervision is not necessary

ESSENTIALS OF A SOUND WAGE PLAN ESSENTIALS OF A SOUND WAGE PLAN

(1) Simplicity:(1) Simplicity: (2) Offering incentives(2) Offering incentives:: (3) Just and Fair:(3) Just and Fair: (4) Linked with Productivity:(4) Linked with Productivity: (5) Comparable to Prevailing Rates:(5) Comparable to Prevailing Rates: (6) Related to Cost of Living; (6) Related to Cost of Living; (7) Flexibility:(7) Flexibility: (8) Promptness:(8) Promptness: (9) Protection:(9) Protection: (10) Facilitating Control:(10) Facilitating Control: (11) Equal Pay for Equal Work:(11) Equal Pay for Equal Work: (12) Dealing with Grievances:(12) Dealing with Grievances:

Incentive Wage PlanIncentive Wage Plan

It is observed that both Time wage system It is observed that both Time wage system and .Piece-rate system have their strong points and .Piece-rate system have their strong points and weaknesses. Hence some incentive wage and weaknesses. Hence some incentive wage plans need to be developed to enhance the plans need to be developed to enhance the production and for promoting cordial employer-production and for promoting cordial employer-employee relations. The basic object of good employee relations. The basic object of good wage incentive plan should be to encourage wage incentive plan should be to encourage workers to put in their best on their jobs workers to put in their best on their jobs overcoming their weaknesses like laziness, overcoming their weaknesses like laziness, suspicion, indifference, distrust of management.suspicion, indifference, distrust of management.

ESSENTIAL FEATURES OF A ESSENTIAL FEATURES OF A GOOD INCENTIVE WAGE PLANGOOD INCENTIVE WAGE PLAN

1. It should ensure that efforts and rewards are 1. It should ensure that efforts and rewards are directly directly related.related.

2. The reward must be clearly identifiable.2. The reward must be clearly identifiable.

3. The reward must be valuable to Employee.3. The reward must be valuable to Employee.

4. It should be simple and easy to understand and easily 4. It should be simple and easy to understand and easily calculable by the employee.calculable by the employee.

5. The standards on which the plan is based should be effective.5. The standards on which the plan is based should be effective.

6. It should guarantee an hourly base rate.6. It should guarantee an hourly base rate.

7. It should develop clear policies and rules for attaining the 7. It should develop clear policies and rules for attaining the standards. standards.

8. It must minimize frictions between workers.8. It must minimize frictions between workers.

9. It should not be very costly in operation.9. It should not be very costly in operation.

10. It should be flexible to take care of technological and 10. It should be flexible to take care of technological and other other changes. changes.

11. It should be compatible with the financial resources of 11. It should be compatible with the financial resources of the the company. company.

12. Reward offered under such incentive plans must be 12. Reward offered under such incentive plans must be consistent consistent with government regulations.with government regulations.

13. It should be fair and equitable to both the management 13. It should be fair and equitable to both the management as as well as labour.well as labour.

14. It should provide rewards promptly after the 14. It should provide rewards promptly after the performance.performance.

15. It should not only increase production but also result in 15. It should not only increase production but also result in higher higher productivity.productivity.

Incentive Wage PlansIncentive Wage Plans

Some important Incentive wages plans are Some important Incentive wages plans are discussed below:discussed below:

1. Halsey Plan1. Halsey Plan 2 Rowan Plan.2 Rowan Plan. 3. Taylor's Differential Piece Wage Plan3. Taylor's Differential Piece Wage Plan 4. Emerson's Efficiency Plan4. Emerson's Efficiency Plan 5. Gantt's Bonus Plan5. Gantt's Bonus Plan 6. Bedeaux Point Premium Plan.6. Bedeaux Point Premium Plan. 7. Priestman Bonus system,7. Priestman Bonus system,

Halsey plan:• This incentive plan developed by an American Mechanical Engineer, Mr.

F.A Halsey to encourage efficiency amongst workers and to guarantee them wages according to time basis.

• Under this plan standard time required for the job is predetermined on the basis of past experience. Workers who perform the job in less than the standard time are rewarded with the Bonus which is equal to 50% of the time saved.

• For example if a job requiring 40 hours is done in 32 hours and if the worker is paid at the rate of 50 halala per hour. Then the total wages of the worker will be calculated as follows:

• Time Wage = 32 x 0.50 = S.R.16• Time Saved for Payment of Bonus = 8 X 50/100 = 4 Hours• :. Bonus = 4 X 0.5 = S.R. 2

Total earnings of the worker will be S.R. 16 + 2 = S.R. 18.

2. Rowan plan:• In 1901 Mr. James Rowan developed his incentive plan, which is

essentially a modified version of Halsey Plan.

• The only difference between Halsey Plan and Rowan Plan relates to the calculation of the Bonus. Under this Plan, bonus is calculated on that proportion of the time saved which the time taken bears to the standard time.

• For e.g. if a 40 - hour job is done in 32 hours and if the hourly rate in 75 halala the total earnings of the worker will be calculated as under:

• Guaranteed Time Wage = 32 X 0.75 = S.R. 24

• Bonus = Time Saved X Time Taken/ Standard Time X Hourly Rate

• = 8 X 32 / 40 X 0.75 = S.R. 4.8

• :. Total earnings will be = S.R. 24 + 4.8 = S.R. 28.80

3. Taylor's Differential Piece Rate Plan3. Taylor's Differential Piece Rate Plan F.W. Taylor, the father of scientific management developed F.W. Taylor, the father of scientific management developed

his incentive plan in 1880, which puts, premium on his incentive plan in 1880, which puts, premium on efficiency. Inefficiency under this plan is penalized. ]efficiency. Inefficiency under this plan is penalized. ]

The standard of output per hour or per day is The standard of output per hour or per day is predetermined on the basis of time and motion studies and predetermined on the basis of time and motion studies and two piece-wage rates are laid. Those workers who attain or two piece-wage rates are laid. Those workers who attain or exceed the standard output are paid at a higher rate and exceed the standard output are paid at a higher rate and those workers who fail to attain the standard output are those workers who fail to attain the standard output are paid at a lower rate. paid at a lower rate.

For example the standard output may be fixed at 40 units For example the standard output may be fixed at 40 units per day and the piece-rate payable laid down is 60 halala per day and the piece-rate payable laid down is 60 halala and 50-halala per unit. and 50-halala per unit.

If a worker produces 42 units, he will be paid at the higher If a worker produces 42 units, he will be paid at the higher piece rate i.e., 42 X 0.60 = S.R. 25.20 piece rate i.e., 42 X 0.60 = S.R. 25.20

whereas if another worker produces 38 units, he will be whereas if another worker produces 38 units, he will be paid at a lower rate i.e., 38 X 0.50 - S.R. 19.00. paid at a lower rate i.e., 38 X 0.50 - S.R. 19.00.

Thus efficiency is rewarded and inefficiency is penalized.Thus efficiency is rewarded and inefficiency is penalized.

44 . .Emerson's Efficiency PlanEmerson's Efficiency Plan:: Emerson developed his incentive plan, which is no doubt modified version Emerson developed his incentive plan, which is no doubt modified version

of Taylor’s plan but with a big differenceof Taylor’s plan but with a big difference . .

Under this plan the worker is guaranteed wages on time basis even if he Under this plan the worker is guaranteed wages on time basis even if he fails to attain the standard outputfails to attain the standard output..

For the purpose of determining efficiency, either the standard output per For the purpose of determining efficiency, either the standard output per unit of time is fixed or the standard time for a job is determined and the unit of time is fixed or the standard time for a job is determined and the

efficiency is measured by comparing the actual performance against the efficiency is measured by comparing the actual performance against the predetermined standardspredetermined standards . .

Percentage of efficiency (on the basis of time) = Standard time allowed / Percentage of efficiency (on the basis of time) = Standard time allowed / Time taken X 100Time taken X 100

Percentage of efficiency (on the basis of production) = Actual production / Percentage of efficiency (on the basis of production) = Actual production / Standard production X 100Standard production X 100

For example, the standard output per day is 40 units and the actual output For example, the standard output per day is 40 units and the actual output is 30, then the efficiency is 75 percent If the output is 45, the efficiency is is 30, then the efficiency is 75 percent If the output is 45, the efficiency is

112.5 percent112.5 percent .. ..

The rate of Bonus payable at 90 percent efficiency is 10 percent of Time The rate of Bonus payable at 90 percent efficiency is 10 percent of Time wages earned. At 100 percent efficiency, bonus payable is 20 percent of wages earned. At 100 percent efficiency, bonus payable is 20 percent of

Time Wages earned and beyond 100 percent efficiency, Bonus of 30 Time Wages earned and beyond 100 percent efficiency, Bonus of 30 percent of Time wages earned is paidpercent of Time wages earned is paid..

Emerson proposed that no bonus should be payable if the efficiency was Emerson proposed that no bonus should be payable if the efficiency was less than 66.7 per centless than 66.7 per cent . .

5. Gantt's Bonus Plan :5. Gantt's Bonus Plan : Gantt’s Bonus Plan is slightly modified from the Emerson’s Gantt’s Bonus Plan is slightly modified from the Emerson’s

Efficiency Plan. The Main difference is that no bonus is Efficiency Plan. The Main difference is that no bonus is payable to a worker if his efficiency is less than 100%.payable to a worker if his efficiency is less than 100%.

For example, if a 20 hour job is done in 21 hours reflecting For example, if a 20 hour job is done in 21 hours reflecting an efficiency of 95 percent, the worker concerned will get an efficiency of 95 percent, the worker concerned will get wages on time basis for 21 hours only, without any bonus.wages on time basis for 21 hours only, without any bonus.

But at 100% and above efficiency a bonus at the rate of But at 100% and above efficiency a bonus at the rate of

20% of time wages earned is payable. 20% of time wages earned is payable.

For example, 20 hour job is done in 20 hours i.e., at 100% For example, 20 hour job is done in 20 hours i.e., at 100% Efficiency, and if hourly rate is 50 halala per hour, Total Efficiency, and if hourly rate is 50 halala per hour, Total earnings of the worker will be calculated as under:earnings of the worker will be calculated as under:

Time Wages = 20 X 0.50 = S.R. 10.Time Wages = 20 X 0.50 = S.R. 10. Bonus = 10 X 20/100 = S.R. 2.Bonus = 10 X 20/100 = S.R. 2. :. Total Earnings will be 10 + 2 = S.R. 12:. Total Earnings will be 10 + 2 = S.R. 12

6. Beadeaux Point Premium Plan:6. Beadeaux Point Premium Plan:

This incentive plan is modified versions of Halsey This incentive plan is modified versions of Halsey and Rowan Plan with a difference that the benefit and Rowan Plan with a difference that the benefit of time saved by the worker in the process of of time saved by the worker in the process of production is shared with the foreman in the ratio production is shared with the foreman in the ratio of 3:1. of 3:1.

The sharing of benefit is, made on the The sharing of benefit is, made on the assumption that worker cannot produce better assumption that worker cannot produce better results without the full cooperation of the results without the full cooperation of the foreman. And hence the foreman is also entitled foreman. And hence the foreman is also entitled to an incentive so that the workers get right to an incentive so that the workers get right encouragement and impetus to produce better encouragement and impetus to produce better result. result.

Under this plan total earnings of the worker would Under this plan total earnings of the worker would include actual time wages plus a Bonus include actual time wages plus a Bonus equivalent to 75% of the time saved represented equivalent to 75% of the time saved represented by the excess of standard.by the excess of standard.

7. Priestman Bonus System:7. Priestman Bonus System:

Under, entire workforce as a whole is considered Under, entire workforce as a whole is considered for payment of bonus to workers. If, during a for payment of bonus to workers. If, during a particular year, the output rises either above the particular year, the output rises either above the standard output or the previous year’s output, the standard output or the previous year’s output, the wages of the workers are increased in the same wages of the workers are increased in the same ratio. ratio.

Thus, for e.g. in 1988 the average output per Thus, for e.g. in 1988 the average output per worker was 10 units and in 1989, the average worker was 10 units and in 1989, the average output per worker is likely to be 11 units,- the output per worker is likely to be 11 units,- the wages payable to workers in 1989 will be wages payable to workers in 1989 will be 10%higher than in 1988.10%higher than in 1988.

Project Reports.Project Reports.

Project –I Project –I

A study onA study on “ “Performance Appraisal Performance Appraisal Techniques”Techniques”

Project –IIProject –II

A study on “Incentive Wage A study on “Incentive Wage Plans”Plans”

PROMOTIONPROMOTIONIt is a vertical movement of an employee to a position with It is a vertical movement of an employee to a position with higher status, more pay and benefits and greater higher status, more pay and benefits and greater responsibilities.responsibilities.

A sound and properly administered promotion policy A sound and properly administered promotion policy develops morale, stimulates efficiency and provides develops morale, stimulates efficiency and provides opportunity for advancement to loyal employees. opportunity for advancement to loyal employees.

The opportunity and hope of promotion motivates The opportunity and hope of promotion motivates employees to better efforts and tends to retain them with employees to better efforts and tends to retain them with the organization. Thus, it reduces labour turnover.the organization. Thus, it reduces labour turnover.

It increases interest in training and self-development as a It increases interest in training and self-development as a necessary preparation for promotion. necessary preparation for promotion.

A company without any clear-cut promotion policy will have A company without any clear-cut promotion policy will have disgruntled and dissatisfied workers. Discontent will disgruntled and dissatisfied workers. Discontent will produce frustration and turn good workers into trouble-produce frustration and turn good workers into trouble-makers.makers.

Basis of promotion Basis of promotion Seniority, vs. MeritSeniority, vs. Merit

There is controversy as to what should There is controversy as to what should be the criteria for promotion seniority be the criteria for promotion seniority or merit.or merit.

Trade unions prefer seniority while Trade unions prefer seniority while managements prefer merit. managements prefer merit.

Seniority refers to the relative length Seniority refers to the relative length of recognized service in an of recognized service in an organization, while merit includes organization, while merit includes ability, efficiency, skill, aptitude etc.ability, efficiency, skill, aptitude etc.

Arguments for Seniority:Arguments for Seniority: (1) The system is simple to understand and easy to operate.(1) The system is simple to understand and easy to operate.

(2) It recognizes the older member's need for respect. Respect for elders is (2) It recognizes the older member's need for respect. Respect for elders is a part of cultural value system in a number of societies. Seniority as the a part of cultural value system in a number of societies. Seniority as the basis of promotion is consistent with such cultural value system of the basis of promotion is consistent with such cultural value system of the society. Subordi nates are willing to work under a senior person. Therefore, society. Subordi nates are willing to work under a senior person. Therefore, seniority has a wide acceptance on the part of most employees.seniority has a wide acceptance on the part of most employees.

(3) There will be no chance of favouritism or bias, whimsical or arbitrary (3) There will be no chance of favouritism or bias, whimsical or arbitrary action. Thus, objectivity can be ensured. Also, there will be lesser action. Thus, objectivity can be ensured. Also, there will be lesser grievances or disputes regarding promotion since the measurement of grievances or disputes regarding promotion since the measurement of seniority are simple as well as exact.seniority are simple as well as exact.

(4) Promotion will be given as a matter of course and every employee will (4) Promotion will be given as a matter of course and every employee will know his place in the promotion list.know his place in the promotion list.

(5) It promotes discipline and morale in the organization, since all are (5) It promotes discipline and morale in the organization, since all are assured that promotion will come when it is due. It offers a greater feeling assured that promotion will come when it is due. It offers a greater feeling of security and develops a sense of belonging among employees.of security and develops a sense of belonging among employees.

(6) Seniority is lost if an employee quits the job. Hence, there will be a (6) Seniority is lost if an employee quits the job. Hence, there will be a tendency to stay with the organization. Thus, the rate of labour turnover tendency to stay with the organization. Thus, the rate of labour turnover will be reduced.will be reduced.

(7) Seniority and experience go hand in hand. A senior employee is a more (7) Seniority and experience go hand in hand. A senior employee is a more experienced person. experienced person.

Arguments Against Seniority:Arguments Against Seniority: (1) Seniority and competence do not necessarily go (1) Seniority and competence do not necessarily go

together. It is quite likely that inefficient, unskilled and together. It is quite likely that inefficient, unskilled and second grade employees may get promotion.second grade employees may get promotion.

(2) It provides no incentive to employees particularly (2) It provides no incentive to employees particularly beginners to increase their knowledge or improve their beginners to increase their knowledge or improve their skills or performance because they know that there are skills or performance because they know that there are no chances of their promotion until those senior to no chances of their promotion until those senior to them leave the organization or are promoted.them leave the organization or are promoted.

(3) The worth of ail, individual is not appreciated and (3) The worth of ail, individual is not appreciated and given due recognition. This generates frustration and given due recognition. This generates frustration and may constrain employees to leave the organization for may constrain employees to leave the organization for better prospects elsewhere.better prospects elsewhere.

(4) It fails to attract young, promising and capable (4) It fails to attract young, promising and capable persons to the organization.persons to the organization.

Arguments For Merit:Arguments For Merit:

(1) Merit as the basis of promotion offers maximum (1) Merit as the basis of promotion offers maximum inducement for improvement of knowledge, skills and inducement for improvement of knowledge, skills and performance. Employees know that competence is the only performance. Employees know that competence is the only basis for getting promotion. It also motivates employees having basis for getting promotion. It also motivates employees having potential for development.potential for development.

(2) It encourages an employee to work hard and ensures more (2) It encourages an employee to work hard and ensures more efficiency due to the opportunity for advancement in the efficiency due to the opportunity for advancement in the organization.organization.

(3) Merit-based promotion policy attracts young and promising (3) Merit-based promotion policy attracts young and promising Candidates to apply for jobs in the organization. This infuses Candidates to apply for jobs in the organization. This infuses fresh blood into the organization.fresh blood into the organization.

(4) There is greater loyalty on the part of employees since the (4) There is greater loyalty on the part of employees since the employees is satisfied that their merit and competence will be employees is satisfied that their merit and competence will be properly appreciated and rewarded.properly appreciated and rewarded.

Arguments Against Merit:Arguments Against Merit: (1) The 'merit' criterion ignores the value of experience.(1) The 'merit' criterion ignores the value of experience.

(2) Since there is no fool proof method of judging the ability of an (2) Since there is no fool proof method of judging the ability of an employee, it is likely to lead to faulty judgement. Besides, the employee, it is likely to lead to faulty judgement. Besides, the judgement varies from individual to individual. An employee may judgement varies from individual to individual. An employee may be considered able and fit for promotion by one rater but not by be considered able and fit for promotion by one rater but not by the other.the other.

(3) It may also lead to favouritism, injustice etc. on the part of (3) It may also lead to favouritism, injustice etc. on the part of management. This will result in discontent among those who are management. This will result in discontent among those who are not promoted and unhealthy employer-employee relationships.not promoted and unhealthy employer-employee relationships.

(4) It lacks trade union support.(4) It lacks trade union support.

It can be said that at lower level, seniority should be the basis of It can be said that at lower level, seniority should be the basis of promotion. In respect of middle management level, Seniority-cum-promotion. In respect of middle management level, Seniority-cum-merit should be the criterion. For higher managerial positions, merit should be the criterion. For higher managerial positions, merit alone should be guiding factor. merit alone should be guiding factor.

ESSENTIALS OF A SOUND PROMOTION POLICY

• A comprehensive and realistic promotion policy should cover the following points:• (1) There should be clear-cut lines of promotion describing education, experience, ability etc.

required for each job.

• (2) The opening for promotions must be communicated to the employees well in advance.•• (3) Scientific performance appraisal should be used to ensure rational and fair decision

regarding promotion.

• (4) Potential candidates should be given training for promotion.

• (5) Supervisors recommendation must be duly considered by management

• (6) There should be a probationary period of say one year before confirmation.

• (7) The basis of promotion should be seniority at lower levels, seniority- cum-merit at middle levels and merit at higher levels.

• (8) Middle and Higher Management level jobs should, whenever possible, be filled up through promotion from within.

• (9) A provision for arbitration should be available to deal with grievances pertaining to promotion from aggrieved party/trade unions.

Demotion• Demotion is just the opposite of promotion. It implies lowering

down of status, salary and responsibilities of an employee. Demotion is generally used as a measure of punishment and is a preliminary step leading to discharge.

• Reasons for Demotion:

An employee may be demoted for the following reasons:

• The employee's job may not exist or become less important because of re-organization of company.

• The employee may no longer be thought of capable of carrying out his present responsibilities efficiently.

• Demotion may be used as a disciplinary weapon.

Effects of Demotion:Demotions are made infrequently since they produce

adverse effects as follows: -

• There will be dissatisfaction of esteem and self-actualization needs,

• The employee may become centre of discontent in the organization; - Other employee may lose confidence in the organization

• There will be overall frustration and demoralization

Essential Conditions for Effectiveness:

The pre-requisites for demotion to serve its purpose are as follows:

• Clarity of rules framed, violation of which would subject an employee to demotion,

• Clear communication of this information to employees,

• Proper investigation of any alleged violation,

• Consistent and equitable application of penalty,

• Provision for review.

TRANSFER

• Transfer refers to the change in which the pay, status and responsibilities of the new post are mostly the same as of the old. It is a lateral movement of an employee, not involving promotion or demotion. A transfer may require an employee to change his work place, work group, work content, department or an organizational unit.

A good transfer policy should have the following features.

• (1) Clarify the conditions under which transfers will be made.

• (2) Decide the persons who will have authority for initiating and implementing transfers.

• (3) Clarify the jurisdiction within which transfers will be made such as within a unit, between departments, divisions, plants, etc.

• (4) Decide the basis of transfer.

• (5) Decide the rate of pay and the cost of moving to be given to the transferee.

• (6) Communicate duly the fact of transfer in writing to the concerned persons well in advance and all other concerned persons.

• (7) Avoid frequent transfers and transfer for the sake of transfer only.

Advantages of a Good Transfer Policy:

• (1) It increases employee productivity and organisational effectiveness,

• (2) It provides greater job satisfaction to the concerned employees. Hence,they contribute their best efforts to the organization,

• (3) It remedies faulty placements,

• (4) It increases motivation by avoiding monotony,

• (5) It develops the employee for future promotion,

• (6) It improves superior- subordinate relations,

• (7) It helps to stabilize fluctuating work requirements.

Distinction between Promotion and Transfer

Definition and Meaning:

Organisational co-operation and conflict are significantly affected by employee morale. Hence, in human resource management, it is important to under stand the meaning of morale, the effects of morale and the factors of morale development.

• The term 'Morale' has been variously defined by different authors.

• Flippo has described morale "as a mental condition or attitude of individuals and groups which determines their willingness to co-operate".

• Theo Haimann says: "It is a state of mind and emotions affecting the attitude and willingness to work which, in turn, affect individual and organizational objectives.”

• Davis observes: "Organisational morale is basically a mental condition of groups and individuals which determine their attitude".

• Leighton holds the view that "Morale is the capacity of a group of people to pull together persistently and consistently in the pursuit of a common pur pose.“

• According to Jucius, "Morale is a state of mind or of a willingness to work which, in turn, affects individual and organizational objectives". Morale, he adds, is composed of the following:

• What is it? - It is an attitude of mind, an esprit de corps, a state of well being, and an emotional force.

• What does it do? - It affects output, quality of a product, costs, co-operation, enthusiasm, discipline, initiative and other ingredients of success.

• Where does it reside? - It resides in the minds and emotions of individuals and in their group reactions.

• Whom does it affect? - Immediately, it affects the employees and executives in their interactions. Ultimately, it affects the consumers and the community.

• What does it affect? - It affects an employee's or a group's willingness to work and to co-operate in the best interests of the organizations for which they work.

It is clear from the above that morale refers to the degree of enthusiasm and willingness with which the individual members of a group pull together persistently and consistently in the pursuit of a common purpose.

• Morale is a state of mind or willingness to work which, in turn, affects individual and organizational objectives.

Morale means and includes:

• - Faith in the organization• - An attitude of mind• - Feelings of employees towards work, fellow workers

and employer• - Courage, confidence, initiative, drive and enthusiasm• - Job satisfaction• - A sense of belonging - a feeling of togetherness.

Morale implies readiness to co-operate warmly towards achievement of organization’s objectives.

Advantages of High Morale:

• (i) Willing co-operation fur the attainment of organizational objectives;

• (ii) Loyalty to the organization;

• (iii) Good discipline;

• (iv) Strong organizational stamina i.e. the ability to cope up with pressures and difficulties;

• (v) A high degree of employee interest in the job and in the organization;

• (vi) A greater degree of employee initiative and drive, devotion and enthusiasm;

• (vii) Pride in the organization;

• (viii) High moral reduces grievances, disputes, labour turnover, absenteeism, frustration, accidents, cost of supervision and control.

• (ix) High morale results in higher productivity and profits.

• (x) High moral leads to cordial relations between management and labour.

Consequences of Low Morale:• Low or bad morale, on the other hand, generates an

attitude of apathy, non involvement and non-co-operation.

• It causes mental unrest on the part of employees and weak organizational stamina.

• A low morale hampers production and reduces productivity.

• The other consequences of low morale are: high rate of labour turnover and absenteeism; excessive complaints, grievances and disputes; more frustrations etc.

Factors Determining / Affecting Morale:

• (1) Objectives of the Organization:

• (2) Job Factors:

• (3) Working Conditions and Work Environment:

• (4) Compensation:

• (5) Top Management Attitudes, Organizational Climate and Company Policies:

• (6) Supervision:

• (7) Compatibility with Co-workers:

• (9) Trade Union's Role:

• (8) Off the Job Factors:

Measures for Raising Employee Morale:

• (1) Provide Job enlargement, Job enrichment, Job rotation, Job transfer and Job sharing to make the job interesting and to reduce monotony.

• (2) Provide a fair compensation plan for all employees with bonus and incentives.

• (3) Provide job security.

• (4) Ensure good supervision.

• (5) Provide a congenial work environment and conducive working conditions.

• (6) Establish a sound grievance procedure for ventilation and redressal of grievances.

• (7) Have adequate delegation of authority at different levels.

• (8) Design an effective channel of two-way communication.

• (9) Pursue sound promotion policy and provide opportunity for promotion.

• (10) Introduce workers' participation in management through suggestionschemes and joint consultations.

• (11) Provide employee counselling.

• (12) Place employees on the right job according to their merits, aptitudes, interests and abilities.

• (13) Provide welfare facilities like housing, medical, recreational etc.

• (14) 'Provide adequate training to employees.

• (15) Encourage group activities for the employees like sports, social get-together etc.

• (16) Provide sound compensation scheme with incentives for increased efficiency and productivity.

• (17) Analyze and remove the causes of workers' dissatisfaction. • (18) Respect the individual, be courteous and just and fair in dealing with die

employees.

• (19) Encourage initiative.

• (20) Provide an honest and competent leadership and progressive management team.

Remember that morale cannot be purchased or ordered. It has to be earnedor deserved.