Concise Notes HRM

7/31/2019 Concise Notes HRM

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Mgmt study material created/ compiled by - Commander RK Singh [email protected]

R O L E O F H R M A N A G E R S

1. Humanitarian Role: Reminding moral and ethical obligations to employees.

2. Counsellor: Consultations to employees about marital, health, mental, physical andcareer problems.

3. Mediator: Playing the role of a peacemaker during disputes, conflicts between

individuals and groups or management.

4. Spokesman: To represent the company in Media and other forums because he hasbetter overall picture of his companys operations.

5. Problem Solver: Solving problems of overall human resource management and long-

term organizational planning.

6. Change Agent: Introducing and implementing institutional changes and installing

organizational development programs

7. Management of Manpower Resources: Broadly concerned with leadership both in thegroup and individual relationships and labour-management relations.

M A N A G E R I A L F U N C T I O N S O F H R M

1. Planning: Research and plan about wage trends, labour market conditions, uniondemands and other personnel benefits. Forecasting manpower needs etc.

2. Organizing: Organizing manpower for the achievement of organizational goals and

objectives.

3. Staffing: Recruitment & Selection4. Directing: Issuance of orders and instructions, providing guidance and motivation to

managers and employees.

5. Controlling: Regulating personnel activities and policies according to plans.

Observations and comparisons of deviations

O P E R A T I O N A L F U N C T I O N S O F H R M

1. Procurement: Planning, Recruitment and Selection, Induction and Placement

2. Development: Training, Development, Career planning and counselling.

3. Compensation: Wage and Salary determination and administration

4. Integration: Integration of human resources with organization.

5. Maintenance: Sustaining and improving working conditions, retentions, employee

communication

6. Separations: Managing separations caused by resignations, terminations, lay offs,

death, medical sickness etc.

Page 1 of 20 - Human Resource Management Notes


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S T R A T E G I C H U M A N R E S O U R C E

Def init ion of Strategic Ma nagement

Strategic Management is that set of managerial decisions and actions that determine thelong-term performance of a corporation. It includes environmental scanning, strategy

formulation, strategy implementation, evaluation and control.

The study of strategic management therefore emphasizes monitoring and evaluating

environmental opportunities and threats in the light of a corporations strengths and

weaknesses.

S T E P S I N S T R A T E G I C M A N A G E M E N T

1. Environmental Sc anning: Analyze the Opportunities and Threats in External

Environment

2. Strategy Formul ation: Formulate Strategies to match Strengths and Weaknesses. It

can be done at Corporate level, Business Unit Level and Functional Level.

3. Strategy Imp lementation: Implement the Strategies

4. Evaluation & Cont rol: Ensure the organizational objectives are met.

R O L E O F H R M I N S T R A T E G I C M A N A G E M E N T

Role in Strategy Formulation: HRM is in a unique position to supply competitiveintelligence that may be useful in strategy formulation. Details regarding advanced incentive

plans used by competitors, opinion survey data from employees, elicit information about

customer complaints, information about pending legislation etc. can be provided by HRM.

Unique HR capabilities serve as a driving force in strategy formulation.

Role in Strategy Implementation: HR Manager helps strategy implementation by

supplying competent people. Additionally, HRM facilitates strategy implementation byencouraging proactive thinking, communicating goals and improving productivity and

quality.

H U M A N R E S O U R C E D E V E L O P M E NT



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Human Resource Development is a process to help people to acquire competencies and toincrease their knowledge, skills and capabilities for better performance and higher

productivity.

P R O A C T I V E H R D S T R A T E G I E S F O R L O N G

T E R M P L A N N I N G A N D G R O W T H

A proactive HRD strategy can implement plans directed at improving personal competence

and productive potentials of human resources.

Following strategic choices can be considered which would help todays organizations to

survive and grow.

Change Management: Manage change properly and become an effective change agent

rather than being a victim of change itself.

Values: Adopt proactive HRD measures, which encourage values of trust, autonomy,

proactive approach and experimentation.

Maximize Productivity and Efficiency: Maximize productivity and efficiency of the

organization by helping qualitative growth of people

S U C C E S S I O N P L A N N I N G

Meaning of Succession Planning

Succession planning is the process or activities connected with the filling of key positions in

the organization hierarchy as vacancies arise. Succession planning focuses on identification

of future vacancies and locating the probable successor. For example in succession planningthe key concern can be who will be next CEO or what will happen if the Marketing Manager

retires in coming March. Grooming a person to fill an important position may take years.

Succession planning involves identification of key positions in the company and thenscouting for people who can effectively fill those positions at short notice.

Importance of Succession Planning

1. Succession planning helps when there is a sudden need due to job hopping/death ofserious injury to a key employee.

2. There is little or no set back due to absence of key employee.

3. Acts as a motivator for the individual employee who comes to know of theimpending promotion in advance.



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4. Succession planning helps create loyalty towards the organization and improved

motivation and morale of individual employees.

5. Organization gains stable workforce and low employee turnover.

6. Ultimately organization becomes successful in accomplishing its goals effectively.

J O B A N A L Y S I S

Def init ion 1

Job Analysis is a process of collecting and studying the information relating to operationsand responsibilities of a specific job. The immediate products of this analysis are Job

Description and Job Specifications.

P U R P O S E O F J O B A N A L Y S I S : -

Hu ma n Re source Planning (HR P) : Job analysis helps in determining staffing

needs, type, quality and quantity.

Recruitme nt & Se lection : Knowing the staffing needs is essential for

Recruitment and Selection Right person for each job. Sourcing of recruits also

becomes easy and cost effective

Training & Dev elo pment : Job analysis is the key to determining Training and

Development programs.

Job Ev aluation : Job evaluation means determination of relative worth of each job

for the purpose of establishing wage and salary. This is possible with the help of job

description and specifications; i.e. Job Analysis.

Remu neration : Job analysis also helps in determining wage and salary for the

jobs.

Performa nce Ap praisal : Job analysis helps in fixing the bench marks of

performance standards which in turn help in objective Performance appraisal,

rewards, promotions, etc.

Safety & He alth : Job Analysis helps to uncover hazardous conditions and unhealthy

environmental factors so that corrective measures can be taken to minimize and avoidpossibility of human injury.



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J O B D E S C R I P T I O N

Job Description implies objective listing of the job title, tasks, and responsibilities involved

in a job. Job description is a broad statement of purpose, scope, duties and responsibilities

of a particular job.

C o n t e n t s o f J o b D e s c r i p t i o n

1. Job Identification

2. Job Summary

3. Job Duties and Responsibilities

4. Supervision specification

5. Machines, tools and materials

6. Work conditions

7. Work hazards

8. Definition of unusual terms

J O B S P E C I F I C A T I O N S

Job Specification involves listing of qualifications, skills and abilities required in anemployee to meet the job description. These specifications are minimum required to do the

job satisfactorily.

In other words, it is a statement of minimum acceptable physical/psychological attributes and

professional skills necessary to perform the job properly. Job specifications seek to indicatekind of persons who can be expected to meet the role requirements. Thus, it is basically

concerned with matters of selection, screening and placement and is intended to serve as a

guide in hiring.

C o n t e n t s o f J o b S p e c i f i c a t i o n s

1. Physical Characteristics

2. Psychological characteristics

3. Personal characteristics

4. Educational Qualifications



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5. Skill Set and Experience/Responsibilities

6. Demographic features

Job specifications can be further divided into three broad categories

1.Essential Attributes

2. Desirable Attributes

3. Contra-Indicators Attributes which are likely to act as impediments to success ofjob

J O B E V A L U A T I O N

Job evaluation is the process of analyzing and assessing various jobs systematically to

ascertain their relative worth in an organization.

Jobs are evaluated on the basis of content and placed in order of importance. This establishesJob Hierarchies, which becomes the basis for satisfactory wage differentials among various

jobs.

Jobs are ranked (not jobholders)

P R O C E S S O F J O B E V A L U A T I O N :

1. Defining objectives of job evaluation

(a) Identify jobs to be evaluated (Benchmark jobs or all jobs)

(b) Who should evaluate job?

(c) What training do the evaluators need?

(d) How much time involved?

(e) What are the criteria for evaluation?

(f) Methods of evaluation to be used

2. Wage Survey

3. Employee Classification

4. Establishing wage and salary differentials.

M E T H O D S O F J O B E V A L U A T I O N

1. Analytical Methods



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(a) Point Ranking Methods: Different factors are selected for different jobs with

accompanying differences in degrees and points.

(b) Factor Comparison Method: The important factors are selected which can

be assumed to be common to all jobs. Each of these factors are then ranked

with other jobs. The worth of the job is then taken by adding together all the

point values.

2. Non-Analytical Methods

(a) Ranking Method: Jobs are ranked on the basis of their title or contents. Like

Managers, Supervisors, Workers, Peon, etc. All managers whether from

production, planning, sales, stores or Allied Services (House Keeping) Depttare treated equal. Job is not broken down into factors etc. It is easier to

implement but not always satisfactory for the employees.

(b) Job Grading Method: It is based on the job as a whole and the differentiation is

made on the basis of job classes and grades. Like in a hotel, Receptionistsjob may be graded higher than back office billing clerks job. Similarly, a

production/sales manager billet may be graded higher than Allied ServicesManagers. In this method it is important to form a grade description to cover

discernible differences in skills, importance to companys core operations,

responsibilities and other characteristics.

P I T F A L L S O F J O B E V A L U A T I O N :

1. Sometimes encourages employees to manipulate for promotion/internal placement when

there may be limited opportunities for enhancement as a result of downsizing.

2. It promotes internal focus (office politics) instead of customer orientation

3. Not suitable for forward looking organizations, which may have trimmed multiple jobtitles into two or three broad jobs.

J O B D E S I G N



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In the most simplified form - The process of breaking/organizing work into specific tasks in

order to perform a specific job is called Job Design. Job Design is the logical Sequence toJob Analysis. Job design involves conscious efforts to organise tasks, duties and

responsibilities into a unit of work to achieve certain objective.

Steps in Job Design1. Specification of Individual Tasks

2. Specification of Methods for Tasks Performance

3. Combination of Tasks into Specific Jobs to be assigned to individuals

F A C T O R S A F F E C T I N G J O B D E S I G N

1. Organizational factors

(a) Characteristics of Tasks (Planning, Execution and Controlling of Task)(b) Work Flow (Process Sequences)

(c) Ergonomics (Time & Motion Study)

(d) Work Practices (Set of ways of performing tasks)

2. Environmental Factors

(a) Employee Abilities and Availability

(b) Social and Cultural Expectations

3.Behavioural Elements

(a) Feedback

(b) Autonomy

(c) Use of Abilities

(d) Variety

T E C H N I Q U E S O F J O B D E S I G N

1. Work Simpl ifi cati on : Job is simplified or specialized. The job is broken down

into small parts and each part is assigned to an individual. To be more specific, worksimplification is breaking down the job to such small tasks that complexity is taken out of

them. Like in a assembly line of car, one person only tighten wheel nuts with a pneumatic

tool which tighten the nuts. The complexity of ensuring that each nut is tightened to required

degree has been transferred to machine and the worker only applies the tool to the rightplace. He does not even put the wheel in place. In such cases, work becomes repetitive in

nature. Work simplification is used when jobs are not specialized.



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2. Job Rotation : Same job, same people, same surrounding, days over days,

months over months, leads to boredom and even fatigue. And it manifests in higher errorrate, fall in productivity, absenteeism, job hopping, etc. Job rotation is answer to such

problems. While broadly the job may remain same, minor variations between jobs are

enough to rejuvenate the employee. It not only benefits the personnel but also the

organisation in equal measure

(a) Benefit to the Employee. It is a development tool since the employees getexposure to several jobs which develops their personality and employability.

It improves their self-image and leads to personal growth. Such cross

functional deployments often reveal hidden performance potentials/skills ofmany employees in the course of new job.

(b) Benefits to the Company: Such cross functional knowledge of employeesprovides the company with a fall back option in case of absence of any

employee. It also gives flexibility to the management to reorganise the

functional setup just in case of need like demand pattern shift or change inbusiness model or any other eventuality. Also, periodic job rotation is the

best method to avoid compartmentalisation of departments. Movement of

personnel between departments and first hand knowledge of limitations andproblems faced by other departments reduces frictions and leads to better

cooperation between them. Interpersonal bonds developed during in the

course of such cross functional job rotation further smoothens the interaction

between departments. On the negative side, training costs rise and it can alsode-motivate intelligent and ambitious trainees who might take it as their

undesirability in their own department unless it is well laid down policy of the

company.

3. Job Enl argeme nt : It means expanding the number of tasks, or duties assigned toa given job. Job enlargement is naturally opposite to work simplification. Adding more tasks

or duties to a job does not necessarily mean that new skills and abilities are needed. There is

only horizontal expansion. It is with same skills taking additional responsibilities like

increasing the number of machines operators under a supervisor from 10 to 15. Jobenlargement may involve breaking up of the existing work system and redesigning a new

work system. For this employees also need to be trained to adjust to the new system. Job

enlargement is said to contribute to employee motivation but the claim is not validated inpractice.

4. Job Enrichment : Job enrichment is to add a few more motivators to a job tomake it more rewarding. A job is enriched when the nature of the job is exciting, challenging,

rewarding and creative or gives the job holder more decision-making, planning and

controlling powers. An enriched job will have more authority, responsibility, autonomy

(vertical enrichment), more variety of tasks (horizontal enrichment) and more growthopportunities. The employee does more planning and controlling with less supervision but

more self-evaluation. For example: transferring some of the supervisors tasks to the

employee and making his job enriched. As per Hertzberg, who was the father of this term, anenriched job has eight characteristics:



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(a) Direct Feedback : Employee should be able to get immediate knowledge of theresults they are achieving.

(b) Client Relationship : An employee who serves a client or customer directly

has an enriched job. The client can be outside or inside the firm.

(c) New Learning : An enriched job allows its incumbent to feel that he is growingintellectually.

(d) Scheduling Own Work : Freedom to schedule own work (autonomy) is job

enrichment.

(e) Unique Experience : A enriched job has some unique qualities or features.

(f) Control over Resources : One approach to Job enrichment is for the each

employee to have control over his or her resources and expenses.

(g) Direct Communication Authority : An enriched job allows worker to

communicate directly with people who use his or her output.

(h) Personal Accountability : An enriched job holds the incumbent responsible for

the results. He or she receives praise for good work and blame for poor work.

Problems wi th Job En richme nt

(a) Job enrichment is not a substitute for good governance. If other environmentalfactors in the business are not right, mere job enrichment will not mean much.

(b) Job enrichment may have short term negative effects till the worker gets used to

the new responsibility.

(c) Job enrichment itself might not be a great motivator since it is job-intrinsic factor.

As per the two-factor motivation theory, job enrichment is not enough. Itshould be preceded by hygienic factors etc.

(d) Job enrichment assumes that workers want more responsibilities and those

workers who are motivated by less responsibility, job enrichment surely de-

motivates them

(e) Workers participation may affect the enrichment process itself.

(f) Change is difficult to implement and is always resisted as job enrichment brings

in a changes the responsibility.

5. Autonomo us o r Self-Di rect ed Teams : Empowerment results in self-

directed work teams. A self-directed team is a group of employees responsible for a wholework segment. They work together, handle day-to-day problems, plan and control, and are

highly effective team.

R E C R U I T M E N T



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F A C T O R S A F F E C T I N G R E C R U I T M E N T

External Factors:

1. Demand and Supply status of specific skills set.

2. Unemployment Rate (Area-wise)3. Labour Market Conditions

4. Political and Legal Environment (Reservations, Labour laws)

5. Companys Image

Internal Factors:

1. Recruitment Policy (Internal Hiring or External Hiring?)

2. Human Resource Planning (Planning of resources required)

3. Size of the Organization (Bigger the size lesser the recruitment problems)4. Cost

5. Growth and Expansion Plans

R E C R U I T M E N T P R O C E S S

1. Recruitment Strategy Development

(a) Trained or untrained (to be trained at companys expense)

(b) Internal or external sourcing

Internal Recruitment (Source 1)

(i) Present employees

(ii) Employee referrals

(iii) Transfers & Promotions

(iv) Former Employees

(v) Previous Applicants

External Recruitment (Source 2)

(i) Professionals or Trade Associations

(ii) Advertisements

(iii) Employment Exchanges

(iv) Campus Recruitment

(v) Walk-ins Interviews



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(vi) Consultants

(vii) Contractors

(viii) Displaced Persons

(ix) Radio & Television

(x) Acquisitions & Mergers

(c) Competitors

(d) Technological tools to be used for advertising

(e) Where to look

(f) How to look

2. Recruitment Planning

(a) Number of applicants sought (Based on past experience)

(b) Types of applicants to be called (Qualification, category, area, etc)

3. Searching

(a) Source activation

(b) Selling

4. Screening of Applications

5. Evaluation and Cost Control

(a) Salary Cost(b) Management & Professional Time spent

(c) Advertisement Cost

(d) Producing Supporting literature

(e) Recruitment Overheads and Expenses

(f) Cost of Overtime and Outsourcing

(g) Consultants fees

(h)



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S E L E C T I O N

M E A N I N G O F S E L E C T I O N

Selection is the process of picking up individuals (out of the pool of job applicants) withrequisite qualifications and competence to fill jobs in the organization. A formal definition of

Selection is as under:

Selection is the process of differentiating between applicants in order to identify and hire

those with a greater likelihood of success in a job.

R E C R U I T M E N T V s S E L E C T I O N : D I F F E R E N C E

Recruitment Selection

1. Recruitment refers to the process ofidentifying and encouraging people with

required qualifications to apply for job.

2. Recruitment is said to be positive in itsapproach as it seeks to attract as many

candidates as possible.

1. Selection is concerned with picking upthe right candidates from a pool of

applicants.

2. Selection on the other hand is negativein its application in as much as it seeks

to eliminate as many unqualified

applicants as possible in order toidentify the right candidates.

P R O C E S S / S T E P S I N S E L E C T I O N

1. Preliminary Intervi ew : This is a short interview. The purpose of preliminary

interviews is to weed out the prima facie misfit applicants. It is also called courtesy

interview and is a good public relations exercise.

2. Selection Te sts : Jobseekers who pass the preliminary interviews are called for tests.There are various types of tests conducted depending upon nature of job and the

company. These tests can be Aptitude Tests, Personality Tests and Ability Tests and

are conducted to judge how well an individual can perform tasks related to the job.Besides this, there are some other tests also like Interest Tests (activity preferences),Graphology Test (Handwriting), Medical Tests, Psychometric Tests etc.

3. Emp loyme nt Interview : The next step in selection is employment interview. Here,

interview is a formal and in-depth conversation to assess applicants suitability. It is

considered to be an excellent selection device. Interview type and pattern can varygreatly. Interviews can be One-to-One, Panel Interview, or Sequential Interviews.



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Besides there can be Structured and Unstructured interviews, Behavioural Interviews,

Stress Interviews.

4. Referenc e & Ba ckground Ch ecks : Reference checks and background checks areconducted for provisionally identified candidates to verify the information provided

by them. Reference checks can be through formal letters or telephonic. However, it ismore of a formality and selections decisions are very seldom affected by it.

5. Selection De cision : After obtaining all the information, selection decision is

made. The final decision has to be made out of applicants who have been identified assuitable. The views of line managers carry much weight at this stage because it is

they who are eventually responsible for the performance of the new employee.

Considering the job climate, often more than required number is selected to cater forany selected candidate withdrawing at the job offer stage.

6. Phys ical Ex amination : After the selection decision is made, the candidate is

required to undergo a physical fitness test. A job offer is often contingent upon the

candidate passing the physical examination.

7. Job Offer : The next step in selection process is job offer to those applicants who

have successfully passed all tests. It is made by way of letter of appointment.

8. Contr act of Emp loym ent : After the job offer is made and candidates accept the

offer, certain documents are needed to be executed by the employer and thecandidate. A formal contract of employment, containing written contractual terms of

employment etc are signed by both sides.

T R A I N I N G A N D D E V E L O P M E N T : D I F F E R E N C E

Training Development

Training is skills focused Development is creating learning abilities

Training is presumed to have a formal

education

Development is not education dependent

Training needs depend upon lack or

deficiency in skills

Development depends on personal drive and

ambition

Trainings are generally need based Development is voluntary

Training is a narrower concept focused onjob related skills

Development is a broader concept focusedon personality development

Training may not include development Development includes training wherevernecessary

Training is aimed at improving job relatedefficiency and performance

Development aims at overall personaleffectiveness (including job efficiencies)

M E T H O D S O F T R A I N I N G



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On the Job Trainings (OJT): When an employee learns the job in actual working site in

real life situation, and not simulated environment, it is called OJT. Employee learns whileworking. Take the instance of roadside mechanics. Small boys working there as helpers learn

while helping the head mechanic. They do not learn the defect analysis and engine repairing

skills in any classroom on engine models.

Advantages of On-the-Job Training:

1. It is directly in the context of job

2. It is often informal

3. It is most effective because it is learning by experience

4. It is least expensive

5. Trainees are highly motivated

6. It is free from artificial classroom situations

Disadvantages of On-the-Job Training:

1. Trainer may not be experienced enough to train or he may not be so inclined.

2. It is not systematically organized

3. Poorly conducted programs may create safety hazards

On the Job Training Methods

1. Job Rotation: Refer page 27.

2. Job Coaching: An experienced employee can give a verbal presentation toexplain the nitty-grittys of the job.

3. Job Instruction: It may consist of an instruction or directions to perform a

particular task or a function. It may be in the form of orders or steps to

perform a task.

4. Apprenticeships: Generally fresh graduates are put under the experiencedemployee to learn the functions of job.

5. Internships and Assistantships: Interns or assistants are recruited to perform

specific time-bound jobs or projects during their education.

Off the Job Training: Trainings conducted in simulated environments, classrooms,seminars, etc are called Off the Job Training.

Advantages of Off-the-Job Training

1. Trainers are usually experienced enough to train

2. It is systematically organized



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3. Efficiently created programs may add lot of value

Disadvantages of Off-the-Job Training:

1. It is not directly in the context of job

2. It is often formal3. It may not be based on experience.

4. It is expensive.

5. Trainees may not be much motivated

6. It is artificial in nature

Off the Job Training Methods

1. Classroom Lectures: Advantage It can be used for large groups. Cost pertrainee is low. Disadvantages Low interest of employees . It is not learning

by practice. It is One-way communication. No authentic feedback mechanism.Likely to lead to boredom for employees.

2. Audio-Visual: It can be done using Films, Televisions, Video, and Presentationsetc. Advantages Wide range of realistic examples, quality control possible.

Disadvantages One-way communication, No feedback mechanism. No

flexibility for different audience.

3. Simulation: Creating a real life situation for decision-making and understandingthe actual job conditions give it. Ensures active participation of all trainees.

Can be very effective but needs good conductors.

4. Case Studies: It is a written description of an actual situation in the past in same

organisation or some where else and trainees are supposed to analyze andgive their conclusions in writing. This is another excellent method to ensure

full and whole hearted participation of employees and generates good interest

among them. Case is later discussed by instructor with all the pros and cons ofeach option. It is an ideal method to promote decision-making abilities within

the constraints of limited data.

5. Role Plays: Here trainees assume the part of the specific personalities in a case

study and enact it in front of the audience. It is more emotional orientationand improves interpersonal relationships. Attitudinal change is another result.

These are generally used in MDP.

6. Sensitivity Trainings: This is more from the point of view of behaviouralassessment as to how an individual will conduct himself and behave towardsothers under different circumstances. There is no pre-planned agenda and it is

instant. Advantages increased ability to empathize, listening skills,

openness, tolerance, and conflict resolution skills. Disadvantage Participants

may resort to their old habits after the training.



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7. Programmed Instructions: Provided in the form of blocks either in book or a

teaching machine using questions and feedbacks without the intervention oftrainer. Advantages Self paced, trainees can progress at their own speed,

strong motivation for repeat learning, material is structured and self-

contained. Disadvantages Scope for learning is less; cost of books, manuals

or machinery is expensive.8. Computer Aided Instructions: It is extension of PI method, by using

computers. Advantages Provides accountabilities, modifiable to

technological innovations, flexible to time. Disadvantages High cost.

9. Laboratory Training.

P E R F O R M A N C E A P P R A I S A L S

T E C H N I Q U E S / M E T H O D S O F P E R F O R M A N C E

A P P R A I S A L S

Numerous methods have been devised to measure the quantity and quality of performance

appraisals. Each of the methods is effective for a particular class of employees in certain

types of organization only.

Broadly all methods of appraisals can be divided into two different categories.

Past Oriented Methods Future Oriented Methods

P A S T O R I E N T E D M E T H O D S

1. Forced Distribution Method: One of the problems faced in large organizations is

relative assessment tendencies of raters. Some are too lenient and others too severe. This

method overcomes that problem. It forces every one to do a comparative rating of all theemployees on a predetermined distribution pattern of good to bad. Say 10% employees in

Excellent Grade, 20% in Good Grade, 40% in Average Grade, 20% in Below AverageGrade and 10% in Unsat grade. The real problem of this method occurs in organizationswhere there is a tendency to pack certain key departments with all good employees and

some other departments with discards and laggards. Relatively good employees of key

departments get poor rating and relatively poor employees of laggards departments getgood rating.



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10% 20% 40% 20% 10%

Unsat Below Avg Average Good Excellent

2. Critical Incidents Method : It takes cognisance of abnormal incidences only, good orbad. Supervisors record such incidents as and when they occur. Advantages

Evaluations are based on actual job behaviours. Ratings are supported by descriptions,thus favouritism is beaten. Feedback is easy and reduces recency biases. Disadvantages Negative incidents may get priority or incidences could be forgotten.

F U T U R E O R I E N T E D M E T H O D S

3. Management By Objectives (MBO) : Performance is rated against the achievement ofobjectives mutually agreed by the employee and the management. Advantage It is

direct and accurate and transparent.

Disadvantages Applicable only to quantifiable jobs. Short-term goals given preference at

the cost of long-term goals etc.

4. Assessment Centres : This technique was first developed in USA and UK in 1943. An

assessment centre is a central location where managers may come together to have theirparticipation in job related exercises evaluated by trained observers. It is more focused on

observation of behaviours across a series of select exercises or work samples. Assessees

are requested to participate in in-basket exercises, work groups, computer simulations,role playing and other similar activities which require same attributes for successful

performance in actual job.

Disadvantages Concentrates on future performance potential. No assessment of past

performance. Costs of employees travelling and lodging, psychologists. Ratings stronglyinfluenced by assessees inter-personal skills. Solid performers may feel suffocated in

simulated situations.

Advantages Well-conducted assessment centre can achieve better forecasts of future

performance and progress than other methods of appraisals. Also reliability, content validityand predictive ability are said to be high in Assessment Centres. The tests also make sure that



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the wrong people are not hired or promoted. Finally, it clearly defines the criteria for

selection and promotion.

5. 360-Degree Feedback : It is a technique in which performance data/feedback/rating is

collected from all sections of people employee interacts in the course of his job like

immediate supervisors, team members, customers, peers, subordinates and self withdifferent weightage to each group of raters. This technique has been found to be

extremely useful and effective. It is especially useful to measure inter-personal skills,customer satisfaction and team building skills. One of the biggest advantage of this

system is that assesssees can not afford to neglect any constituency and has to show all-

round performance. However, on the negative side, receiving feedback from multiplesources can be intimidating, threatening, expensive and time consuming.

Purpose of performance evaluation is to make sure that employees goals, employees

behaviour and feedback about performance are all linked to the corporate strategy.

Problems of Rating:1. Leniency & Severity Either too lenient or too severe. All good or all bad.

2. Central Tendency Majority is crowded around average.

3. Halo/Gholem Effect Entire assessment is affected by one or few aspects.

4. Rater Effect Favouritism, stereotyping, hostility, etc, kind of biases.

5. Primacy & Recency Effect Early period or near end period behaviour effects.

6. Perceptual Sets Effects of old beliefs about groups, regions, groups, etc

7. Spill-over Effects Effects of previous appraisal affecting recent appraisal

8. Status Effect High esteemed or low esteemed job bearing on the appraisal.



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P E R S O N N E L P O L I C I E S

M E A N I N G O F P E R S O N N E L P O L I C Y

A Policy is a Plan of Action. It is a statement of intentions committing the management to a

general course of action. A Policy may contain philosophy and principles as well. However a

policy statement is more specific and commits the management to a definite course of action.

Hence Personnel policy is the companys plan of action towards treatment of its employees

in matters of pay, benefits, welfare, work, etc. A personnel policy spells out basic needs ofthe employees. Through personnel policy the personnel department ensure a fair and

consistent treatment to all personnel by minimizing favouritism and discrimination.

Personnel policy serves as a standard of treatment to all employees. Sound personnel policies

help build employee motivation and loyalty. And this happens when personnel policiesreflect fair play and justice and help people grow within the organization. Personnel policies

are also plans of action to resolve intra-personal, inter-personal and inter-group conflicts.

I M P O R T A N C E O F P E R S O N N E L P O L I C Y

Personnel policy is very important for an organization since it gives several benefits for

managing the human resources effectively. Listed below are some of the benefits:

1. Consistent Treatment: Personnel policies ensure consistent treatment of allpersonnel throughout the organization.

2. Fair Play & Justice: Personnel policies reflect established principles of fair play

and justice.

3. Minimize Favouritism: Personnel policies help minimize favouritism and

discrimination

4. Promote Stability: Personnel policies ensure continuity of action plan even if top

management is changed. These policies promote stability.

5. Motivation & Loyalty: Sound Personnel policies help build employee motivation

and loyalty.6. Basic Needs: Personnel policy helps the management to think deeply about basic

needs of organization and the employees.

7. Standard of Performance: Personnel policies serve as a standard of performance.

8. Growth: Personnel policies help people grow within the organization.


Concise Notes HRM

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