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TRANSCRIPT
Ашиглах ном
Copyright © 2019 Department of Business Administration, UH. All Rights Reserved
Лекц 1
Хүний нөөцийн
менежментийн тухай
Хүний нөөц (ХН)
Хүний нөөц нь янз бүрийн ажил үүрэг
гүйцэтгэдэг байгууллагад ажиллаж байгаа
хүмүүс.
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Хүний нөөцийн менежмент
(ХНМ)?
Copyright © 2019 Department of Business Administration, UH. All Rights Reserved
Хүний нөөцийн менежмент (ХНМ)
Байгууллагын үйл ажиллагааны үр
ашгийг нэмэгдүүлэхийн тулд
чадварлаг ажиллах хүчийг
ажиллуулах, хөгжүүлэхтэй
холбоотой удирдлагын үйл
ажиллагаа иж бүрэн багц.
Copyright © 2019 Department of Business Administration, UH. All Rights Reserved
Яагаад ХНМ-ийг судлах хэрэгтэй вэ?
• Хүмүүстэй үр бүтээлтэй ажиллах, ур
чадвар, мотиваци бүхий ажиллах хүчнийг
бүрдүүлэх
• Байгууллага дахь шинэчлэлт өөрчлөлт,
нөөцүүд нь ажиллагчдын мэдлэг, ур
чадвар, хандлагаар л бий болгож байдаг.
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ХНМ бусад шинжлэх ухаантай
холбогдох нь
• Эдийн засаг (wages, markets, resources)
• Сэтгэл судлал (motivation, satisfaction)
• Социологи (organization structure, culture)
• Хууль (min.wage, labor contracts, Union)
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ХНМ-н ач холбогдол юу вэ?
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1. Байгууллагын түвшинд
a) Байгууллага дахь шилдэг ажилчдыг тогтоон барих
2. Хувь хүний түвшинд
a) Багийн ажлыг урамшуулах, дэмжих
b) Өсөх дэвших боломж олгох
c) Чадвартай, тууштай ажиллах
3. Нийгмийн түвшинд
a) Ажил эрхлэх боломжоор хангах
b) Авьяасыг нээн илрүүлэх, хөгжүүлэх
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Бүх ажилтанд ХНМ яагаад чухал вэ?
• Хувийн алдаа гаргахаас сэргийлэх
• Ашиг болон гүйцэтгэлийг сайжруулах
• Зарим цаг хугацаанд HR менежер болж үзэх
• Жижиг байгууллагын HR– чи өөрөө HR
менежерийг хийх боломж нээлттэй
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Хүний нөөцийн функц –Удирдлага & Үйл
ажиллагаа
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Байгууллагын хүний нөөцийн
албаны бүтэц
Жижиг байгууллага дахь Хүний нөөц
Owner
Production
Manager
Personnel
Assistant
Office
ManagerAccounts
ManagerMarketing
Managers
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Том байгууллага дахь хүний нөөцийн алба
Chairman
Deputy
Director
Training
Director
HRMDirector
R & DDirector
FinanceDirector
Production
Deputy
Director
Recruitment
Deputy
Director
Promotions
Байгууллагын хүний нөөцийн
албаны бүтэц
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Ямар хандлага ХНМ-д гарч байна вэ?
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• Лекц 2
Хүний нөөцийн стратеги
менежмент
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Стратеги менежментийн тухай
Стратеги удирдлагын үйл явц:
• зорилгыг тодорхойлох /стратегийн зорилго/
• хэрэгцээнд зориулан нөөцийг хуваарилах буюу
тохируулах /нөөцөд суурилсан стратеги-resource based
strategy/
• корпораци болон үйл ажиллагааны стратегийн хооронд
стратегийн тэнцвэрт /strategic fit/ байдлыг хангах
• өрсөлдөх давуу талыг /competitive advantage/ бий болгох
• стратегийн менежментийн үйл явцаар дамжуулан
стратегийн төлөвлөгөөг боловсруулах, хэрэгжүүлэх
стратегийн зорилтыг тодорхойлох чадварыг багтаасан
байгууллагын стратегийн чадавхийг /strategic
capability/ хөгжүүлэх - стратеги нь өөрчлөлтийг удирдах,
төлөвлөх байдлаар хэрэгжүүдэг.
Стратегийн түвшин
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Корпорацийн стратегийн төрөл
Concentration
Төвлөрөх
Vertical
integration
Босоо
интеграц
Diversification
Төрөлжүүлэх
Corporate Strategy
Possibilities
Consolidation
Бэхжүүлэх
Geographic
expansion
Өргөжих
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Бизнесийн буюу өрсөлдөөний
стратегийн төрөл
Cost leadership
Зардлаар манлайлах
Differentiation
Ялгарах
Business-Level
Competitive Strategies
Focus/Niche
Төвлөрөх
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Стратеги төлөвлөлтийн
менежерүүдийн үүрэг
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Стратеги төлөвлөлтийн
менежерүүдийн үүрэг
Help devise
the strategic plan
Төлөвлөгөө
боловсруулах
Supporting
functional/
departmental
strategies
Дэмжлэг
үзүүлэх
Department Managers and
Strategy Planning
Execute
the strategic
plans
Хэрэгжүүлэх
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Хүний нөөцийн стратеги менежмент
• ХН-н онцлогийг ашиглан өрсөлдөх давуу тал олж
авах түүнээ хадгалах байгууллагын үйл
ажиллагаа юм.
• ХН-н стратеги нь ажилд авах, сургалт, хөгжүүлэлт,
гүйцэтгэлийн менежмент, шагнал, ажиллагсдын
харилцааны стратеги, бодлого, дадал, ажил
эрхлэлтийн харилцаа зэрэг байгууллагын шийдвэр,
төлөвлөгөөтэй холбоотой шийдвэр гаргахад чиглэсэн
арга зам юм.
• ХН-н стратеги нь бизнесийн стратегитай, өөр
хоорондоо давхацдаг. Хүний нөөцийн стратеги нь
байгууллагын бизнесийн стратегийн стратегийн
бүрэлдэхүүн хэсэг юм.
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Дөрвөн зүйлийг агуулдаг:
1.Төлөвлөлтөнд ашиглах
2.Хөдөлмөр эрхлэлтийн бодлогыг тодорхойлох
3.ХН-н стратегийг бизнесийн стратегитай
уялдуулах
4.ХН-ийг стратегийн нөөц гэж үздэг учраас
өрсөлдөх давуу талыг бий болгох
Хүний нөөцийн стратеги менежмент
Copyright © 2019 Department of Business Administration, UH. All Rights Reserved
Стратегийн шинжилгээ
Analysis
• What is the business strategy and the business needs emerging from it?
• What are the cultural and environmental factors we need to take into
account?
• What are the key HR weaknesses and issues?
• What are the gaps between what we are doing and what we ought to do?
Diagnosis
• Why do the HR issues and weaknesses exist?
• What is the cause of any gaps?
• What factors are influencing the situation (cultural, environmental,
competition, political etc)?
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Стратегийн шинжилгээ
Conclusions and recommendations
What are the conclusions from the analysis and diagnosis?
What do we need to do to fill the gaps?
What alternative strategies are available?
Which alternative is recommended and why?
Action planning
• What actions do we need to take to implement the proposals?
• What problems might we meet and how would we overcome them?
• Who takes the action and when?
• How do we ensure that we have the committed and capable line
managers we need?
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Resource planning
• What resources do we need and, how will we obtain them and how
will we convince management that they are necessary?
• What supporting processes are required?
Costs and benefits
• What are the costs and benefits to the organization?
• How will employees benefit?
• What business needs will the strategy satisfy?
Стратегийн шинжилгээ
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ХН-н тэнцвэрийн загвар
1984 онд уг загварыг Fombrun, Titchy and Devanna нар гаргасан.
SelectionPerformance
management
Rewards
Development
Performance
Adapted from Fombrun et al (1984) Strategic Human Resource Management, Wiley
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HARVARD-н зураглал
"Өнөөдөр байгууллагын HR-тай холбоотой маш их дарамж шахалт эрч хүчээавч ихсэж
байгаа тул илүү өргөн хүрээтэй, цогц хэлбэрээр стратегийг харж ажилтнудыг хувьсах зардал
гэхээсээ илүүтэй байгууллагын үнэт хөрөнгө гэж анхааралдаа авах хэрэгтэй байна” гэж
Харвардын их сургуулийн эрдэмтэд Michael Beer болон түүний нөхөд үзэл баримтлалаа
болгон дараах зураглалыг гаргасан.
Stakeholder
interests:
• shareholders
• management
• employees
• government
• unions
Situational factors:
• work force
characteristics
• business
strategy and
conditions
• management
philosophy
• labour market
• unions
• task technology
• laws and social
values
HRM policy
choices:
• employee influence
• human resource
flow
• reward systems
• work systems
Long-term
consequences:
• individual well-
being
• organizational
effectiveness
• societal
well-being
HR outcomes:
• commitment
• congruence
• cost-effectiveness
Source: Beer, M et al (1984) Managing Human Assets, The Free Press
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ХН хэрхэн байгууллагын гүйцэтгэлд
нөлөөлөх вэ?
Source: John Purcell et al (2003) Inside the Box: How people management impacts onorganizational performance, CIPD
• Байгууллага нь маш тодорхой эрхэм зорилго, үнэт
зүйлсийг (“том санаа”) тодорхойлж, түүнийг ажилтнуудад
суулгаж, тэвчээртэй, нэгдмэл байдлаар, хэмжиж, удирдан
зохион байгуулах
• Сэтгэл зүйн эерэг гэрээг хөгжүүлэх замаар ажиллагсдын
хүсэл эрмэлзэл, итгэл үнэмшлийг бий болгох
• “Ажиллахад таатай газар байгуулах“ замаар хувь хүний
хэрэгцээг хангах бодлогыг боловсруулж, хэрэгжүүлэх
• ХН-н менежерүүдэд хүний нөөцийн бодлогыг
хэрэгжүүлэхэд гүйцэтгэх үүргийнх нь талаар дэмжлэг
үзүүлэх, зөвлөгөө өгөх
• Өөрчлөлтийг үр дүнтэй удирдах
Copyright © 2019 Department of Business Administration, UH. All Rights Reserved
• Лекц 3
Competency based HRM
Competency-based HRM uses the concept of competency and the results of
competency analysis to inform and improve the processes of recruitment andselection, performance management, employee development and employee reward.
COMPETENCY-BASED HRM DEFINED
Competencies represent the language of performance. They can articulate both the
expected outcomes from an individual’s efforts and the manner in which these
activities are carried out. Because everyone in the organization can learn to speak
this language, competencies provide a common, universally understood means of
describing expected performance in many different contexts.
Source: Rankin, N (2002) Raising performance through people: the ninth competency survey, Competency &
Emotional Intelligence, January
COMPETENCY AND PERFORMANCE
Behavioural competencies (soft skills) – how people are expected to behave in
order to perform their work well. ‘Competency is a person-based concept which
refers to the dimensions of behaviour lying behind competent performance.’
(Woodruffe, 1991)
Technical or functional competencies (hard skills) – what people are expected to
know and be able to do to perform their work well. They can also be described as
work-based or occupational competencies which refer to expectations of workplace
performance and the standards and outputs that people carrying out specified rolesare expected to attain. The term ‘competences’ is sometimes used as an alternative
to technical competencies. Woodruffe (1990) defines competence as: ‘A work-related concept which refers to areas of work at which the person is competent’. It is
what people have to know and be able to do to work well.
Competence framework – this contains definitions of all the competencies used in
the whole or part of an organization (a function or occupation). It provides the basis
for the use of competencies in such areas as recruitment, employee development
and reward.
COMPETENCY DEFINITIONS
Contribution-
related pay
Career family
structures
Organization
design and
development
Job and
role design
Recruitment
and
selection
Assessment/
development
centres
Performance
managementTraining
needs
analysis
Personal
development
Competence
framework
APPLICATIONS OF COMPETENCY
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• Лекц 4
Why emotional intelligence is
important for HRM?
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Emotional intelligence is…
• “…your ability to acquire and apply knowledge of your
emotions and the emotions of others” (Stock, 2000).
• "…a type of social intelligence that involves the ability to
monitor one's own and others' emotions, to discriminate
among them, and to use the information to guide one's
thinking and actions" (Mayer & Salovey, 1993, p. 433)
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EI in the workplace is… EI is not…
Your Values and Beliefs Your Products and Services
Generally Unspoken Promoted Externally
Your Style Your Policies and Procedures
The Types of People You Hire Your Recruiting Process
What Behaviors You Reward What Behaviors You Want
(Dunn, 2003)
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Where Did EI Originate?
EI has its roots in the concept ofsocial intelligence, first identified byE.L. Thorndike in 1920 whodefined social intelligence as "theability to understand and managemen and women, boys and girls -- toact wisely in human relations”(Thorndike, 1920, p. 228).
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Daniel Goleman
Daniel Goleman popularized EI in hisbook, Emotional Intelligence: Why ItCan Matter More than IQ for Character,Health and Lifelong Achievement (1995).
In the book, he posed the theory that empathyand communication skills, social and leadershipskills are central to success in life and personalrelationships. Rather than a high IQ, it is farbetter to have a high E-IQ, emotional intelligence,if you want to be a valued and productivemember of our society.
Photo Source:
http://www.roycecarlton.com/pdf/Goleman-Kit.pdf
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Core Competencies Associated with EI
Emotional intelligence
"is a type of social intelligence that involves the ability to monitor
one's own and others' emotions, to discriminate among them,
and to use the information to guide one's thinking and actions"
(Mayer & Salovey, 1993, p. 433).
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Core Competencies (cont’d)
According to Salovey & Mayer (1990), EI can be categorized into five domains:
1. Self awareness
2. Self management
3. Self motivation
4. Recognizing emotions in others
5. Relationship management
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Self Awareness is…Observing yourself and being able to recognize a feeling as
it happens. The ability to accurately perceive and be
cognizant of your emotions as you interact with others.
Core Competencies (cont’d)
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Self-Management is…
Transforming your emotions. The ability to use emotional
awareness to positively and purposefully manage and
direct your emotions and behavior. Finding ways to handle
fears and anxieties, anger, and sadness.
Core Competencies (cont’d)
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Self-Motivation is…
The ability to manage and control your emotions by calling
up feelings of confidence and enthusiasm in yourself.
Delaying gratification and stifling impulses.
Core Competencies (cont’d)
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Empathy is…
The ability to read and understand the emotional cues of
others and determine what causes them to respond
favorably or adversely to a common point of reference.
Appreciating the differences in how people feel about things.
Core Competencies (cont’d)
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Relationship Management is…
Setting a positive tone of cooperation. The ability to use
emotional awareness to direct and manage interactions
with others to build more effective, purposeful and mutually
beneficial relationships.
Core Competencies (cont’d)
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• EI as Leadership Competencies
• EI as Personality Traits & Characteristics
• EI as Intelligence (Ability)
more…
Here are three models of EI for you toconsider:
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• Лекц 5
Job Analysis, Talent
management and Employee
selection process
Business strategyResourcing
strategy Role
Management
development
Management
succession
The talent
pool – a
skilled,
engaged and
committed
workforce
Career
management
Continuing talent audit
External
resourcing
Internal
resourcing
Performance
management
Talent
relationship
management
Total
reward
Attraction and
retention
policies
Learning and
development
Engagement/
commitment
THE ELEMENTS OF TALENT MANAGEMENT
Vacancy
Internal
resourcing
External
resourcing
Induction
Succession
planning data
Potential
review and
discussion
Performance
management
review and
discussion
Competency
profile andachievement
of results
Development
interventions:
• internal
transfer
• job
enrichment
• coaching
• mentoring
• project
• 360 degree
• courses
• seminars
Development
plan and
review of
potential
and
performance
• new role
• promotion
• secondment
Resourcing Talent management Talent development
TALENT ACQUISITION AND DEVELOPMENT AT CENTRICA
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The Basics of Job Analysis
• Work activities
• Human behaviors
• Machines, tools,
equipment, and work aids
• Performance standards
• Job context
• Human requirements
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What Is Job Analysis?
• Job Analysis – is the procedure through which
you determine the duties and skill requirements of
a job and the kind of person who should be hired
for it.
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Uses of Job Analysis Information
• Recruitment
and selection
• EEO
compliance
• Performance
appraisal
• Compensation
• Training
FIGURE 4-2 Uses of Job Analysis Information
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Conducting a Job Analysis
1. How will information be used?
2. Background information
3. Representative positions
4. Collect and analyze data
5. Verify
6. Job description and specification
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• Лекц 6
Performance Management
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Basics of Performance Appraisal
• The performance appraisal process steps
1. Sets work standards
2. Assesses performance
3. Provides feedback to the employee
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Why Appraise Performance?
Five reasons:
1. Used for pay, promotion, and retention decisions
2. Links performance management to company
goals
3. The manager can correct deficiencies and
reinforce strengths
4. With appraisals employee’s can review career
plans
5. Training needs are identified
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Defining the Employee’s Goals and
Performance Standards
1. Goals
2. Job dimensions or Traits
3. Behaviors or Competencies
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Techniques for Appraising
Performance (1 of 2)
1. Graphic Rating Scale
2. Alternation Ranking
3. Paired Comparison
4. Forced Distribution
5. Critical Incident Method
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Techniques for Appraising
Performance (2 of 2)
6. Narrative Forms
7. Behavior Anchored Rating
Scale
8. Mixed Standards Scales
9. Management by
Objectives (MBO)
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• Лекц 7
Employee motivation
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Motivating the Workforce
What motivates employees to perform?
How can managers boost morale?
How do you maximize worker performance?
How can you encourage creativity and innovation?
Nature of Human Relations
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Determining what motivates employees to
perform on the job is the focus of human
relations.
Nature of Human Relations
Motivating the Workforce
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•Motivation is an inner drive that directs a person’s behavior toward goals.
•A goal is the satisfaction of a need
•A need is the difference between a desired state and the actual state.
What is motivation?
Motivating the Workforce
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The basic model of motivation
shows that when a need exists, an
individual engages in goal-directed
behavior designed to satisfy that
need.
Motivating the Workforce
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Morale – an employee’s attitude toward his or her job,
employer, and colleagues.
High Morale•High levels of productivity
•High returns to stakeholders
•Employee loyalty
Human Relations
Motivating the Workforce
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High Morale•High levels of productivity
•High returns to stakeholders
•Employee loyalty
Low Morale•Absenteeism
•Lack of commitment
•High turnover
Motivating the Workforce
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Motivating the Workforce
Morale Boosters:
•Respect
•Involvement
•Appreciation
•Compensation
•Promotion
•Pleasant work environment
•Positive organizational culture
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Motivating the Workforce
Google’s focus on happy, committed
employees --•Massage therapy
•Laundry service
•Gourmet meals & snacks
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• Лекц 8
Managing Careers
and Retention
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Careers Today
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The Psychological Contract
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Employee’s Role in Career
Management
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Employer’s Role in Career
Management
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Employer’s Career Management
Methods
• Training
• Planning Workshops
• Career Coaches
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Diversity Counts (1 of 2)
Figure 10-2 Career Guideline Suggestions for Those with
Disabilities
Strategy Key Import of Strategy
Espousing a positive mind-set and
demonstrating extreme
persistence
Overcome worries and tocus on
tasks at hand
Sensitizing people to ability over disability:
• Signaling ability by learning new skills
• Signaling ability by helping coworkers
through newly gained skills
• Signaling ability by trying to enhance
performance through feedback seeking
Trounce stereotypes regarding
competence
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Diversity Counts (2 of 2)
Strategy Key Import of Strategy
Engaging in disability advocacy:
• Awareness building
• Influencing organizational policymaking
with regard to accommodation
Sensitize others to performance
potential of all PWD and help all
PWD
perform
Building, leveraging, and contributing to
relevant networks:
• Forming networks comprising PWD
• Seeking mentors who have a disability
• Serving as role models or mentors to
other PWD
Aid general adjustment and career
growth of self and other PWD
Source: “Career Management Strategies of People With Disabilities,” Human Resource Management,
may - June 2014, volume 53, number three, page 455-456. Reprinted by permission from John Wiley &
Sons, Inc. Cleared via Copyright Clearance Center
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The Manager as Mentor and Coach
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Coaching and Mentoring
1. Set High Standards
2. Invest The Time
3. Actively Steer Protégés
4. Requires Trust
5. Professional Competence
6. Consistency
7. Ability to Communicate
8. Share Control
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A Comprehensive Approach to
Retaining Employees
• Exit Interviews
• Attitude Surveys
• Open door / Hotlines
• Stay Interviews
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• Лекц 9
Developing issues
IDENTIFYING LEARNING NEEDS
Analysis of business and human resource plans
Business and HR plans should indicate in general terms the types of skills and competences that may be required in thefuture and the numbers of people with those skills and competences who will be needed. These broad indicators have to be
translated into more specific plans which cover, for example, the outputs from training programmes of people with particular
skills or a combination of skills (multiskilling).
Surveys
Special surveys may be carried out, which analyse the information from a number of sources, eg performance reviews, to
identify corporate and group learning and training needs. This information can be usefully supplemented by interviewingpeople to establish their views about what they need to learn. But they often find it difficult to articulate learning needs and it
is best to lead with a discussion of the work they do and identify any areas where they believe that their performance and
potential could be improved by a learning or training programme.
An analysis should also be made of any areas where future changes in work processes, methods or job responsibilities are
planned and of any common gaps in skills or knowledge or weaknesses in performance that indicate a learning need.
Further information should be derived from training evaluations, as described later.
Performance and development reviews
Performance management processes, as described in sections 15 to 17, should be a prime source of information about
individual learning and development needs. The performance management approach to learning concentrates on the
preparation of performance improvement programmes and learning contracts, which are related to jointly determined action
plans. The emphasis is on continuous development. Every contact between managers and individuals throughout the year is
regarded as a learning opportunity.
Job, role and competency analysis
Job, role and competence analysis for identifying learning and training needs means:
• Describing the contentof jobs and roles by reference to key activities and outcomes.
• Defining the performance standards required in terms of quality and output.
• Defining the knowledge, skills and competencesneeded to perform the job in orderto meet the performance standards.
LEARNING NEEDS ANALYSIS:
IDENTIFYING THE TRAINING GAP
Training gap What should beWhat is
Actual performance
levels
Knowledge and skill
possessed
Performance levels
required
Knowledge and skill
required
Corporate Function Individual
Performance
reviews
Training
surveys
Business
plans
Human
resource plans
Job and role
analysis
LEARNING NEEDS MODEL
LEARNING PROGRAMMES:
SKILLS DEVELOPMENT
CIPD Survey 2005 – the views of organizations on the skills they needed
to develop in order of importance:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
management and leadership
communication
business skills
customer service
advanced technical skills
broader skill sets
coaching and mentoring
innovation
IT skills
ability to adapt easily to change.
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Implementing Training Programs
• Types of on-the-job training
‒ Coaching or Understudy
‒ Job rotation
‒ Special assignments
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Steps in the OTJ Training (1 of 2)
Step 1: Prepare the learner
1. Put the learner at ease.
2. Explain why he or she is being taught.
3. Create interest and find out what the learner already knows about the job.
4. Explain the whole job and relate it to some job the worker already knows.
5. Place the learner as close to the normal working position as possible.
6. Familiarize the worker with equipment, materials, tools, and trade terms.
Step 2: Present the operation
1. Explain quantity and quality requirements.
2. Go through the job at the normal work pace.
3. Go through the job at a slow pace several times, explaining each step.
Between operations, explain the difficult parts, or those in which errors are
likely to be made.
4. Again, go through the job at a slow pace several times; explain the key
points.
5. Have the learner explain the steps as you go through the job at a slow pace.
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Steps in the OTJ Training (2 of 2)
Step 3: Do a tryout
1. Have the learner go through the job several times, slowly, explaining each
step to you. Correct mistakes and, if necessary, do some of the complicated
steps the first few times.
2. Run the job at the normal pace.
3. Have the learner do the job, gradually building up skill and speed.
4. Once the learner can do the job, let the work begin, but don't abandon him or
her.
Step 4: Follow-up
1. Designate to whom the learner should go for help.
2. Gradually decrease supervision, checking work from time to time.
3. Correct faulty work patterns before they become a habit. Show why the
method you suggest is superior.
4. Compliment good work.
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Apprenticeship Training
• Apprenticeship Training – a structured process by
which people become skilled workers through a
combination of classroom instruction and on-the-job
training.
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Informal Learning
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Job Instruction Training
• Job Instruction Training (JIT) – listing each job’s
basic tasks, along with key points, in order to provide
step-by-step training for employees.
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• Лекц 10
Establishing Strategic Pay
Plans
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Aligning Total Rewards with Strategy
• Aligned Reward Strategy - is creating a
compensation package that produces the
employee behaviors the firm needs to achieve
its competitive strategy.
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11–95
Think of Something that was unfair.
• Explore what it is and why it was unfair.
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11–96
Critical Thinking Questions:
1. Why do most private firms choose to have a pay secrecy policy? Do they work?
Does pay secrecy fit with a high commitment HR system where employee
participation is a strong element of corporate culture?
2. Should a manager receive higher pay than the subordinates that she/he supervises?
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Copyright © 2002 South-Western.
All rights reserved.
11–97
Critical Thinking Questions:
3. What are the strategic advantages of paying below the market for pay? Can a firm
sustain this pay choice?
4. Why would a firm decide to pay above the market? Is this choice open to all firms in an
industry or sector?
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Equity and its Impact on Pay Rates (1 of 2)
• Equity Theory of Motivation - is once a person
perceives an inequity a tension or drive will
develop that motivates him or her to reduce the
tension and perceived inequity.
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Equity and its Impact on Pay Rates (2 of 2)
Type of Equity
1. External
2. Internal
3. Individual
4. Procedural
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Equity Theory (cont’d)
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Equity Theory (cont’d)
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Why Pay Secrecy?
• The compensation employees get is privileged information to both the parties
• Pay secrecy diminishes an opportunity for comparison among employees and
organization's exposure to perceived inequality
• Though perfectly justifiable pay differences are complicated and difficult to explain
reasons, especially if people doing similar jobs are lined at different pay levels under
different market conditions
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Why Pay Secrecy?
• Pay secrecy can prevent embarrassing situations by shielding under-paid and under-
performing employees.
• Managers enjoy more freedom in administering pay in a pay secrecy organization, as
the difference in the pay need not be explained to others.
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Why NOT Pay Secrecy?
• Open communication and build trust
• An open pay system drives the point home to employees
that the management believes in fair and open policies.
• Open pay policies not only take power and control from the
managers but politics are also less likely to surface
resulting in merit getting rewarded.
• When pay information is kept as secret, employees make
inaccurate perceptions. Further more, those perceptions
work against increasing motivation.
– Hence, to maximise motivation employees need to know how
performance is defined and measured and finally rewarded.
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Pay Polices
• Seniority-based
• Performance
• Other pay policies
• Geography