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HRM 20ms3012 Module 4-Merged
HRM 20ms3012 Module 4-Merged
By
V. LAWRANCE., M.E., M.B.A., B.G.L., D.L.L., F.I.E.,
Professor in Management Studies
Karunya University
Coimbatore- 641 114 V. Lawrabnce., Professor in Managementb Studies., karunya
08-05-2021 1
University
COMPENSATION
Definition
The term compensation is used to indicate the employee’s gross earnings in the form of
financial rewards and benefits. Compensation means the reward that is received by an
employee for the work performed in an organization. Compensation can also be defined as
follows:
The management should ensure that compensation structure is designed after taking into
account certain factors such as
✓ Qualification,
✓ Experience,
✓ Attitude And
✓ Prevailing Rates In The Markets.
➢Employees may receive financial and non-financial compensations for the work performed
by them.
➢The compensation should be paid to each employee on the basis of their abilities
and training.
➢Compensation should be in the form of package.
➢It should motivate the employees towards increasing productivity.
➢It should be capable of taking care of employees for safety and security needs also.
➢It should be flexible and clear.
➢It should not be excessive.
➢Compensation should be decided by the management as per the norms fixed by the
legislations in consultation with the union.
6
Prof. V. Lawrance., Prof. in management Studies., karunya University
Components of compensation
Wages and Salary-
➢Employees get an annual increment on wages and salaries, based on nature of the job,
type of industry, employees’ seniority, and merit.
Incentives-
➢In addition to wages and salaries employees get incentives, which are also known as
payment by results. Incentives are of two types: individual incentives and group
incentives.
Fringe Benefits-
➢Provident fund, gratuity, accidental benefit, health and group insurance, uniform,
canteen, discounts on purchase of company’s products etc.
➢Whereas a fringe benefit is well defined and would include all employees within the
organization, perquisites (or perk) are less well defined and sometimes given to employees
as a special privilege.
Non-monetary benefits-
➢Job sharing, flextime, recognition (e.g. employee of the month), challenging job
assignments are example of non-monetary benefits.
➢A business strategy is the means by which it sets out to achieve its desired ends
(objectives).
➢It can simply be described as a long-term business planning. will cover a period of
about 3-5 years.
➢Examples:
1) Raising the finance to build a new factory or plant.
2) Strategies are concerned with the scope of a business' activities i.e. what and where
they produce.
➢To be competitive a firm shouldn't just copy the ideas of rivals. They should seek to out
compete rivals. There are two main ways of being competitive.
✓By selling goods at lower prices than rivals. This is possible when a firm is the
market leader and benefits from economies of scale.
✓By differentiating your product from those of rivals - which enables you to charge a
higher price if desired..
▪ Economies of scale - The advantages that large firms have from producing large
volumes of output enabling them to spread their costs over more units of output.
▪ Differentiation - Making a product different from rival offerings e.g. through
packaging and labeling, customer care, additional extra features, etc.
V. Lawrance., Professor in Management Studies
08-05-2021 10
Karunya University
Compensation and business strategy
Compensation Strategy :
➢Derived from the HR Strategy and it defines the position of the organization on the job
market, the main bonus principles in the organization and rules for the base salary
setting.
➢The compensation strategy is the strategy, which is approved by the Board of the
organization.
➢The owner of the compensation strategy is always the top executive management of the
organization.
➢The compensation strategy has a huge impact on the costs of the organization and that
is the main reason for the top management approval. The rest of managers are the users
of the compensation strategy.
➢Defines the basic compensation components used in the organization and the standard
rules applied to each compensation
08-05-2021
component.
V. Lawrance., Professor in Management Studies
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Karunya University
Compensation and business strategy
Aligning Compensation Strategy with Business Strategy:
Achieving competitive advantage through low Review all reward practices to ensure They
costs08-05-2021 V. Lawrance., Professor inprovide value for money
Management Studies
12
Karunya University
Strategic Options for Compensation Levels
(Refer module-2)
Skill-based Pay:
Seniority:
➢A maturity curve specifies the amount of annual increase a person will receive for time
on the job with the firm.
The term "wage" may be defined as the remuneration paid by the employer for the services of
hourly, daily, weekly and fortnightly employees.
'Salary is defined as the remuneration paid to the clerical and Managerial personnel employed
on monthly or annual basis’.
These two terms are used interchangeably. As such the term wage or salary can be defined as
the direct remuneration paid to an employee compensating in services to an organisation
3. Wage & salary administration plans. Must always be consistent with overall
organisation plans & programmes.
4. Wage & salary administration plans and programmes should be in conformity with the
social & economic objectives of the country like attainment of equality of income
distribution and controlling inflationary trends.
1. Identifying the available salary opportunities, their costs, estimating the worth of its
members of these salary opportunities and communicating them to employees.
3. Developing quality quantity and time standards relating to work and goals.
Contd ……….
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 21
University
Wage & salary administration
The Elements of Wage and Salary System:
9. Finding out the dissatisfaction arising from unfulfilled needs and unattained goals.
10. Adjusting the salary levels accordingly with a view to enable the employees to reach
unreached goals and fulfil the unfulfilled needs.
➢The first two factors are related to job evaluation and wage survey, while the third
to performance appraisal.
➢The wages and salary practices of other organisation have an important impact on the
employment, retention and morale of the personnel.
➢If external alignment is lacking, the organisation will not be able to retain or attract
capable employees from outside.
➢Normally employer's choose the average wage level so that employees do not leave,
even it must be above the average level.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 24
University
Wage & salary administration
Steps Involved in Determination of Wage Rate
➢The wages and salary practices of other organisation have an important impact on the
employment, retention and morale of the personnel.
➢If external alignment is lacking, the organisation will not be able to retain or attract
capable employees from outside.
➢Normally employer's choose the average wage level so that employees do not leave,
even it must be above the average level.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 26
University
Wage & salary administration
Pay-Compression:
➢Occurs when individuals with substantially different levels of experience or performance
are paid wages or salaries that are relatively equal.
➢Pay Compression occurs when the market rate for starting salaries increases at a rate
faster than an organization can raise pay for individuals who are already on the payroll
Pay Inversion:
➢New employees are paid more than experienced employees
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 28
University
Incentives and performance based rewards
➢An incentive plan must include in its purview the characteristics of time-based and
output-based systems of wage payment.
Merit Pay:
➢Is awarded individuals on the basis of the relative value of their individual contributions
to the organization.
➢Spot awards are given after the event has been completed, usually without
pre‐determined goals or set performance levels and paid as a one‐time bonus.
➢Substantial impact that raises productivity, lowers production costs, and increases
earnings of workers.
➢Less direct supervision is required to maintain reasonable levels of output than under
payment by time.
➢Greater conflict may emerge between employees seeking to maximize output and
managers concerned about deteriorating quality levels.
➢Attempts to introduce new technology may be resisted by employees concerned about
the impact on production standards.
➢Reduced willingness of employees to suggest new production methods for fear of
subsequent increases in production standards.
➢Increased complaints that equipment is poorly maintained, hindering employee efforts
to earn larger incentives.
➢Increased turnover among new employees discouraged by the unwillingness of
experienced workers to cooperate in on-the-job training.
➢Elevated levels of mistrust between workers and management
Employee
Gainsharing Profit Stock
stock
Plans sharing options
ownership
(Scanlon) plans plans
(ESOPS)
➢Employees have an opportunity to earn a Gainsharing bonus (if there is a gain) generally
on a monthly or quarterly basis.
➢Gainsharing applies to all types of business that require employee collaboration and is
found in manufacturing, health care, distribution, and service, as well as the public sector
and non-profit organizations.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 37
University
Gain sharing
1. The Scanlon Plan
➢The Scanlon plan was the first gain sharing plan to be widely used. It ties extra
earnings to the ratio of labor cost relative to production value.
➢The greater the amount workers produce relative to the hourly wage they receive, the
higher the extra compensation they'll earn.
➢Without a gain sharing plan, employees who are paid strictly according to an hourly
wage have little reason to produce more in less time.
➢Workers who receive extra compensation for more productive work have a real
incentive to produce more in less time. They earn more money per hour even if they
work fewer hours.
➢In addition to the undeniable appeal of finishing early but earning the same amount of
pay, they may take extra pride in being able to complete work more efficiently as their
skills develop.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 38
University
Gain sharing
How Scanlon plan is implemented
➢It starts with the top-level managers, they sit together and discuss about the formulation
and implementation of Scanlon plan.
➢After thorough discussions they come up with Scanlon plan Roadmap as to how to put
the plan into the practice. Before putting the plan into practice, the roadmap is
communicated to all the employees irrespective of positions in the organisation for their
acceptance.
➢If the roadmap is not accepted by the majority of people in the organisation, it will be
stopped. If it is accepted by the majority, a separate team is created to formulate a
written plan as to how to put the Scanlon plan in to practice in the organization.
➢Finally, written plan of Scanlon plan should be approved by all in the organisation so as
to finally put it into practice. For the purpose of monitoring implementation of the
written plan of Scanlon plan, subcommittees are formulated.
Contd …..
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 39
University
Gain sharing
How Scanlon plan is implemented
➢The Scanlon plan is not a true profit-sharing plan, because employees receive incentive
compensation for reducing labor costs, regardless of whether the organization
ultimately makes a profit.
➢ Organizations that have implemented the Scanlon plan have experienced an increase in
productivity and a decrease in labor costs.
Illustration- 1:
A firm might have a target ratio of 10 %. In this case, if the company expected to do
$100,000 in sales, it would attempt to keep its labor costs to $10,000. If employees are
able to hit the same sales value of production with a ratio that’s lower than 10%, the
gains of that efficiency are shared with firm and employees. For example, if the firm's
workforce were able to realize $100,000 in sales value of production with only $9,000 in
labor costs, the $1,000 in savings would be split among the employees and their firm.
Illustration 2:
➢Profit sharing is a scheme to augment the compensation of workers through the sharing
of profits of the company.
➢This compensation is in addition to the regular wages and bears a definite percentage
relationship to company profits.
➢This definition would exclude bonuses based on profits which are not assured on a
continuing basis.
Contd…..
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 43
University
Profit sharing
What is Profit Sharing ?
➢It would be highly successful if the parties’ viz., labour and employers take each other
into mutual confidence.
➢The concept of profit-sharing is now accepted in the industrial world and also at the
government level.
➢In western countries, profit- sharing is very popular among the industrial workers.
However, this concept is not popular in India.
Contd…
➢We have a system of bonus payment which is compulsory even when there is no profit
to a company in India
➢In India, workers and trade unions are interested in bonus payment and they are not
interested in profit-sharing agreement.
➢This is because bonus payment is compulsory even when the workers are not
cooperative and there is no profit to the industrial unit.
➢It is coming under Pay for Performance Plan in Long Term Incentive Plan
➢In an ESOP, employees receive regular shares of the company’s stock as a benefit for
working at the company.
➢All employees are eligible to participate in the ESOP after a certain period of time
employed, usually one to two years depending on the Plan
➢These share option plans include ownership as direct stocks issued in name of the
employee, bonus or profit sharing through these shares, which is completely up to the
employer as to what can be availed and by whom.
➢It is also called Employee Stock Option Plan because it is an option that is provided
by the employer so employees may purchase the company stocks up to a certain limit
at a predefined price in future (after the employees have spent a certain duration of
time in the company).
Contd….
➢It is a right of an employee but not an obligation to exercise this option after the
vesting period.
➢These stocks are offered to employees with no upfront costs and are usually lower
than FMV (Fair Market Value/Market Price) of the share.
➢If the price of the stocks go up, then the employee may avail this plan and buy shares
at the pre-decided costs. If the share prices drop, then the employee may refuse to go
for this option to purchase and own shares.
Cond….
➢The deal between an employee and an employer is agreed upon certain terms and
conditions by both parties.
➢There are certain norms laid down by SEBI (Securities and Exchange Board of India) that
must be followed for granting ESOP such as tenure of service or that an employee must be
a permanent one.
➢It may be selective or be for all employees, completely at the discretion of the employer.
Grant Date –
➢It is basically the date on which the employer grants the option to the employee for
owning or purchasing stocks.
➢In an agreement, both the employer and the employee decide the conditions for
granting the Employee Share Ownership Plan, the duration after which the employee
can exercise it.
Vesting Period –
➢It is the period of time between the Grant Date and the date on which the employee
can actually exercise the option/purchase the stocks at the decided price.
➢It is usually 1-3 years. It can be looked at as a lock in period for an employee to
work in a firm to avail ESOP.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 50
University
Employee Stock Ownership Plans (ESOPs)
Key Terms to Know for Understanding ESOP
Vesting Date –
➢Same as the agreed on Grant Date, it is the date from when the employee can actually
vest in company’s shares by buying them at the defined price after the vesting period
is over.
Exercising Period –
➢The period that follows after the vesting period, the duration of time in which an
employee can exercise the ESOP.
➢After the stocks are vested or an employee has spent the relevant time in company as
well as fulfilled all the criteria required for using this option, s/he may actually
purchase them during this period of time.
Exercise Price –
➢It is the price at which the employees exercise the option of buying the shares which is
determined in the agreement before hand, that this will be the fixed price for the
employee to buy shares on the Grant Date (date of option granted by employer) or
Vesting Date or Exercising Date (date when the employee purchases).
Expiration Date –
➢The last date of exercise period after which the employee can not exercise Employee
Share Option Plan and buy share options.
Employee Benefits
1. Profit Sharing
2. Tax Benefits
3. Ownership
Employer Benefits
1.Retention of talent
2.Motivating employees
3. Cashless Rewards
➢It has an important role to play in differentiating two jobs offering the same salary,
which vary in terms of the benefits offered.
➢In finer terms, any kind of consideration given to the employees, in return for the
services provided by them to the company is called employee benefits.
➢Indirect Compensation:
➢Not linked with performance/merit:
➢Labour cost:
➢Accrues to all:
Indirect Compensation:
➢Employee benefits do not accrue to an employee for reaching the targets, for a
particular level of performance, or possessing a particular skill/merit rather they are
provided for keeping the interest of the workers intact and making the job valuable
to him/her.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 57
University
Employee Benefits
Characteristics of Employee Benefits
Labour cost:
➢No matter if an employee receives cash or non-cash benefits, it ultimately accounts
for the cost to the company.
Accrues to all:
➢Whatever perks provided by the employer in the name of employee benefits are
offered to all the employees, and not just to a particular group.
➢However, the designation of the employee does make a difference in the number and
amount of benefits.
➢To offer such benefits to the employees, which are offered by other organizations in the
same industry to their employees, to create a competitive package.
➢To raise the standard of living of the employees, which will result in the improvement in
the quality of their work life.
➢To refine the image of the organization in the eyes of the public at large.
➢To constitute an ideal package for an employee, which enhances the overall value they
get from their job.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 59
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Employee Benefits
Types of Employee Benefits
➢Those Benefits which are required by law, which must be provided by the employer to
their employees are called legally required benefits. some legally required benefits are :
Post-employment benefits:
➢The employment benefits which becomes payable on the completion of the employment
term are called post-employment benefits. some examples of such benefits are
✓Pension,
✓Gratuity,
✓Provident Fund,
✓Post-employment Medical Care
Long-term benefits:
➢Any benefit which does not fall due within a period of twelve months, is covered under long
term benefits. Examples of long term benefits are
✓Sabbatical leave,
✓long term disability benefits,
Termination benefits:
➢These are those employee benefits which need to be settled completely within a period
of 12 months post the end of the reporting time in which the employee has rendered the
services.
➢Those employee benefits which can be considered as the short-term employee benefits
are listed below.
➢When an employee has offered services to your organization, salary and wages are the
standard receivables of your employees.
➢The social security contributions in India are governed by the Employees Provident
Fund and the Miscellaneous Provision Act 1952
➢The schemes under this are the Employee Provident Fund (EPF) scheme and the
Employee’s Pension Scheme (EPS) into which there are equal contributions made by
both employees and employers.
➢Many organizations provide the benefits of availing paid annual leaves, sick leaves,
maternity leaves, etc. which can be carried forward to the next year and even encashed
while leaving the organization.
➢Many organizations offer their employees the benefit of sharing the profit of the
organization in the form of bonus if they have been with the organization for a specific
period of time.
These are the benefits which are available to the employees after their retirement from
rendering services to the organization.
a. Pension and lump sum payments on retirement are one of the common post-
employment benefits provided by most of the organizations.
The other long-term employee benefits include the below-mentioned benefits such as
a. Long-service leave or sabbatical leave during which the employees have the job
guarantee even if they are not being paid.
➢This is a part of the social security contributions in India and is governed by the
Employees Provident Fund and the Miscellaneous Provision Act 1952.
➢The schemes under this are the Employee Provident Fund (EPF) scheme and the
Employee’s Pension Scheme (EPS)
➢According to the laws and regulations, the employees working in organizations to which
the PF Act is applicable have to contribute a fixed rate of 12% from their salary and
have the option of paying up to 24% i.e. an additional 12% for this.
➢The employer would also contribute of 12% of the basic salary of an employee. Out of
the 12%, 8.33% is used for the pension part of the provident fund i.e. Employee Pension
Scheme and the remaining 3.67% is contributed towards the Employee’s Provident Fund
Prof. V. Lawrance, Dept. of Management Studies, Karunya
Account.
08-05-2021
University
77
Employee Benefits in india
Retirement Benefits :
b. Voluntary Provident funds (VPF)
➢This is also a form of the traditional savings scheme under the Employee’s Provident
Fund.
➢In the case of the Voluntary Provident Fund (VPF), the employee would determine the
fixed contribution which needs to be made for the scheme every month.
➢The employees would make their contribution voluntarily and this scheme is also known
as the Voluntary Retirement Fund Scheme.
➢Since the VPF is an extended version of the EPF, only those employees who are
receiving salary every month can invest into this savings scheme.
Contd ……
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 78
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Employee Benefits in india
Retirement Benefits :
b. Voluntary Provident funds (VPF)
➢This savings scheme does not include the compulsory 12% contribution that is made by
employers in the case of the EPF.
➢The interest rate of this fund is determined by the Government of India in a yearly
manner and this scheme also has a lock-in period of 5 years.
➢The employees can even contribute 100% of their basic salary along with their dearness
allowance towards the VPF. It is quite easy to open a VPF account and the risk involved
is also minimal in this scheme
➢Many companies opt out of the EPFO, take the administrative burden of the funds and
set up their provident fund trusts to manage them in-house in the form of Private
Provident Fund.
➢Many reputed corporate organizations in the country opt for the in-house PF trust as it is
quite employee-friendly and also a matter of pride for the employers as well as
employees.
➢The Private Provident Fund offers better returns to employees and would also offer
benefits like early withdrawal and loan facility against the deposit.
➢These plans are optional benefit plans associated with retirement of employees and are
offered to some selected employees.
➢Many organizations use superannuation plan as a long-term incentive plan for the
managers.
➢ These plans are not much popular with employees as they have a longer vesting period,
are not portable and the money can be withdrawn only after a certain age.
iii. Gratuity
Gratuity=N*B*15/26
➢Pension plans are very few in private organizations. Certain industries like railways,
mines, banks, plantation, and etc. offer pension plans for their employees.
➢Pension plans can also be called “retirement plans” which generally means the
investment of some portion of an employee’s income into a plan that can provide regular
income after retirement. In our country, pension plans have mainly two stages.i.e. the
accumulation stage and the vesting stage.
✓During the accumulation stage, the employee would pay the premium until he
reaches the age of retirement.
✓In the second stage, the retired employee obtains the annuities till his death or the
death of his nominee.
Prof. V. Lawrance, Dept. of Management Studies, Karunya
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Employee Benefits in india
Other employee benefits
➢In May 2009 NPS was made available to all citizens of India for making investments
voluntarily.
➢With the NPS, the savings of employees would be invested in the equity and the debts
market depending on the preference of the employee.
➢This will allow the employees to withdraw 60% of the total fund at the retirement time
as a corpus and the remaining 40% can be used for the purchase of an annuity.
➢Gradually, employers are shifting the trend towards providing high-deductible health
insurance plans or co-pay health insurance plans for their employees.
➢Most of the employers provide medical cover to its employees by health insurance
policies which can be termed as indemnity products.
➢The coverage provided by the policies covers the employee, his spouse, and children.
Some employers also provide insurance policies that offer cover for the employee’s
parents as well.
Contd …..
Prof. V. Lawrance, Dept. of Management Studies, Karunya
08-05-2021 88
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Employee Benefits in india
Other employee benefits
➢Usually, the health insurance coverage provided by the employers has a minimum sum
assured of around Rs. 2, 00,000 for each employee.
➢Many corporate organizations also offer corporate buffet amount which can be used if
the employees have used up the entire sum assured.
➢Employers have now started understanding the importance of employee wellness and
are now offering preventive health check-up programs for employees, health risk
assessments and memberships to the gym as well.
➢One important aspect which employers must consider while providing these wellness
benefits to its employees is the quality of services provided by the service providers.
Contd ….
➢For the funding of these wellness programs, there are usually the below-mentioned
ways.
✓Partial funding is done by the employer and the remaining funding to be done by the
employee.
✓The employer negotiates with various service providers and gets discounts for its
employees. The complete cost is paid off by the employees but the price is
negotiated ones.
a. Food coupons
b. Flextime
c. Conveyance
d. Leave encashment
e. Financial education
By
V. LAWRANCE., M.E., M.B.A., B.G.L., D.L.L., F.I.E.,
Professor in Management Studies
Karunya University
Coimbatore- 641 114
Development:
➢Refers to teaching managers and professionals the skills needed for both present and
future jobs
Eg. Management development programs may help may help managers better
understand how to motivate employs / Time management etc.
V. Lawrabnce.,
07-05-2021 Professor in Managementb Studies., karunya University 2
Learning, Training, Development and Education
Comparison
factor Learning Training Development Education (Formal)
Clarity of Can be vague and difficult to Can be specified Stated in general Stated in general terms
Objective identify clearly terms
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021 5
University
1. Jean Piaget’s theory
➢Jean Piaget mentioned two important cognitive processes for learning to occur: Assimilation
and Accommodation.
➢Assimilation is the process of integration of new experiences in our existing mental categories.
Eg. Grandmother, Playschool Teacher in the existing category of “mother”
➢Accommodation happens through creation of a new category in our mental map. Eg. Creation
of new category such as “Mother” and Animals”
➢Process of accommodation requires more individual effort than the process of assimilation
since accommodation requires creation of an altogether new category inside the mental map.
➢This explains why at time trainers face difficulties in training middle managers who were
comfortable with the old system of working- New training requires them to create an
V. Lawrabnce., Professor in
altogether new way of dealing with things (new category creation in their mental map). 6
Managementb Studies., karunya
07-05-2021
University
2. albert bandura’s social learning theory
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021 7
University
2. albert bandura’s social learning theory
➢Most of the behaviors are learned observationally through the process of modeling, such
as by observing others, individuals form ideas of how behaviors are to be performed and
at a later stage this guides individual’s actions.
(1) Attention
(2) Retention
(3) Reproduction
(4) Motivation
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021
University
Contd 8……
2. albert bandura’s social learning theory
1.Attention :
➢Trainers first job is to grab the attention of Trainees thro’ voice modulation or
interesting presentation
2. Retention:
➢Trainers can facilitate retention by asking trainees different usage of the learning
material which will involve the participants to visualize different applications of learnt
content and thereby retaining in mind)
3. Reproduction:
➢Practice of observed behavior leads to skill enhancement and eventually perfecting
behavior. Behavioral reproduction has both cognitive and environmental elements.
4. Motivation :
➢Individuals need to have an inner drive. Anticipatory learning happens when an
individual learns consequences of a behavior simply by observing the act being
V. Lawrabnce., Professor in
performed
Managementb
07-05-2021 by others, without getting actually engaged in the behavior.
Studies., karunya 9
University
3.david Kolb’s Model on learning style of individuals
➢One of the most learning style theories
➢According to Kolb, individual’s generic dispositions, life experiences and the present
environmental play a vital role in their learning styles.
➢He is the proponent of different learning styles, a theory of experimental learning and
style learning inventory.
➢Experimental learning has been viewed by David Kolb as four stage cycle as below:
1. Concrete Experience (Feeling)
Learners get involved in learning by replying on their own feelings
2. Reflective Observation ( Watching)
Learners step back and reflect what they have experienced at first stage
3. Abstract Conceptualization ( Thinking)
Learners try to make sense of what has happened and starts interpreting events and
their relationships
4. Active Experimentation ( Doing)
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021 10
Learners
University attempt to put their into practice
3. Kolb’s Model on learning style of individuals
Learning style inventory captures the degree to which individuals display the different
learning styles. The four Learning styles that emerge as given below.
Diverger:
➢This type of learners prefer concrete to abstract learning.
Assimilator:
➢This type of learner would not take anything on its face value. They prefer reflection and
abstraction.
➢They have the ability to create theoretical models and assimilate disparate observations
into an integrated solution.
Converger:
➢Convergers experiment actively and they are more interested in application of theory.
Accomodator:
➢They like to solve problems on a trial and error method. Unstructured learning
environment is most suitable for this group of learners.
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021 11
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3. david Kolb’s Model on learning style of individuals
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021 12
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3. Kolb’s Model on learning style of individuals
Experiential learning Theory (ELT) drawing developed six propositions:
4. Learning is just not cognition - it involves thinking, feeling, perceiving and behaving of
the learner.
6. Learning is the process of creating knowledge rather than mere transmission of existing
fixed ideas.
V. Lawrabnce., Professor in
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Training NEEDs ANALYSIS
➢Today's work environment requires employees to be skilled in performing complex tasks
in an efficient, cost-effective, and safe manner.
➢Training (a performance improvement tool) is needed when employees are not
performing up to a certain standard or at an expected level of performance.
➢The difference between actual the actual level of job performance and the expected level
of job performance indicates a need for training.
➢The identification of training needs is the first step in a uniform method of instructional
design.
➢A successful training needs analysis will identify those who need training and what kind
of training is needed.
➢It is counter-productive to offer training to individuals who do not need it or to offer the
wrong kind of training.
➢A Training Needs Analysis helps to put the training resources to good use.
1. Organizational Analysis.
2. Person Analysis.
3. Work analysis / Task Analysis.
4. Performance Analysis.
5. Content Analysis.
6. Training Suitability Analysis
7. Cost-Benefit Analysis.
➢An analysis of the business needs or other reasons the training is desired.
✓ What the history of the organization has been with regard to employee training
and other management interventions.
➢Analysis dealing with potential participants and instructors involved in the process.
✓Who will receive the training and their level of existing knowledge on the subject,
➢Also known as a task analysis or job analysis, this analysis seeks to specify the main
duties and skill level required.
➢This helps ensure that the training which is developed will include relevant links to the
content of the job.
4. Performance Analysis.
➢If performance is below expectations, can training help to improve this performance?
7. Cost-Benefit Analysis:
➢Effective training results in a return of value to the organization that is greater than the
initial investment to produce or administer the training.
Needs Determining
analysis Setting approach
organizational
• Organization’s job- and individual • In-house programs
related needs training and • Outsourced
• Capabilities of the development programs
existing workforce goals
V. Lawrabnce., Professor in
Managementb Studies., karunya
07-05-2021 21
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Two approaches of T and D
◼ Traditional approach
◼ Modern approach
TRADITIONAL AND MODERN APPROACH
OF TRAINING AND DEVLOPMENT
◼ BEHAVIORAL METHODS
CONTD…
❑ COGNITIVE METHODS
Cognitive methods are more of giving theoretical
training to the trainees. The various methods
under Cognitive approach provide the rules for
how to do something, written or verbal
information, demonstrate relationships among
concepts, etc.
FOCUSES- changes in knowledge and attitude by
learning.
Methods that come under Cognitive approach
◼ LECTURES
◼ DEMONSTRATIONS
◼ DISCUSSIONS
❑ Taxi Drivers
❑ Telephone Operators
❑ Maintenance Workers
❑ Airline Pilots
CASE STUDY
◼ The trainee is given with some written
material, and the some complex
situations of a real or imaginary
organization.
DEVELOPMENT
COACHING
❑ It is one-to-one interaction
◼ SENSITIVITY TRAINING
◼ TRANSACTIONAL ANALYSIS
◼ SIMULATION EXERCISES
Sensitivity Training
◼ Sensitivity training is about making
people understand about themselves
and others reasonably, which is done by
developing in them social sensitivity
and behavioural flexibility.
Transactional Analysis
1. Reaction- What participants felt and thought about the training programme can be
captured immediately after the training programme gets over.
2. Learning-To capture what participants have learned out of the programme participants
can be tested how much they have retained the knowledge imparted in the programme.
3. Behaviour- Behavioural changes take time and hence much after the training
programme (usually 3-6 months after the training) this can be tested.
4. Result- Organizations send trainees to attend training programme so that it can have
ultimate impact on the bottom line of the organization. Hence organization will be
interested to know after attending the training what is the impact on profitability of the
organization.
V. Lawrabnce., Professor in
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Capacity Building
Meaning :
➢Capacity Building is the development of an organisation’s core skills and capabilities in
order to build the organisation’s effectiveness and sustainability such as
✓leadership,
✓management,
✓finance
✓fund raising.
➢Capacity building involves building on the available knowledge base both in technical
and human relations fields.
➢Knowledge and experience are needed to solve incident and apprehended problems and
implement necessary changes to augment organisational capacity to preempt change as
also withstand attendant pressure.
➢Since 1950, Management or Executive Development has been the most prominent area
of personnel or human resources management. It is also called management revolution.
➢The set of experiences and activities that people engage in related to their job and
livelihood over the course of their working life.
Career Stages
➢The Career Stages refers to the stages of career development that an individual passes
through.
➢Basically, there are 5 career stages, which an individual has to undergo during his
lifetime.
➢The exploration stage is the pre-employment stage, wherein the individuals are in
their mid-twenties and enter from their college life to the work environment.
➢The individuals narrow down their work preferences on the basis of the directions
shown by their parents, friends, family, teachers.
➢At this stage, several expectations about the work are created that may be the
fantasies, or unrealistic beliefs about the work, very much before entering into the
firm.
Establishment:
➢At this stage, an individual actually experiences the work culture in his first job.
➢ Here, all the expectations and fantasies come to an end, and one has to face the reality
of life.
➢It is also called as a learning stage; wherein the fresher learns under the guidance of a
mentor.
➢At this stage, the fresher commits many mistakes and try to learn from these, thereby
gaining a position in the society and working for his career advancement.
➢At this stage, the individual is no longer considered to be a fresher and his mistakes
are taken seriously by the senior management.
➢Here, the employee must evaluate his current career position, i.e. whether he is
advancing, or has stabilized or has started to decline and look for the future career
prospects.
➢At this stage, an individual has to maintain a balance between his career and his
personal life i.e. spouse and children.
➢If an individual grows even after the mid-career (i.e. 20 years after mid-forties), then he is
considered to be having the pleasant experience with the work.
➢Here, an individual becomes the mentor and guide others through his experiences.
Decline:
➢This is the last stage of career development.
➢At this stage, an individual has to step out of his work or get a retirement from his official
commitments. It is considered as one of the difficult stages, as it is very hard for the
employees to leave the firm who are doing excellent even after their late career
Prof. V. Lawrance., Prof. in
management Studies., karunya 10–77 10- 77
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HRM and Career Management
Attracting:
Deciding whether the source of recruitment should be internal or external and seeking for
the suitable individuals to fill in the vacant positions through Job Portals, Social Network
& referrals.
Selecting:
Recruiting and selecting the personnel. It involves the following steps:
➢ Scheduling written test and interviews.
• Remuneration and Reward: Increasing pay and remuneration of the employees as a reward for their
better performance.
• Providing Opportunities: Giving the charge of challenging projects to the employees along with the
authority and responsibility of the same, makes them more confident.
• Role Design: The role of employees in the organisation must be designed to keep them occupied and
committed, it must be flexible enough to inculcate and adapt to the employee’s talent and knowledge.
• Job Rotation: Employees lack enthusiasm if they perform the same kind of work daily. Thus, job
rotation or temporary shifting of employees from one job to another within the organisation is essential
to keep them engaged and motivated.
• Training and Development: On the job training, e-learning programmes, work-related tutorials,
educational courses, internship, etc. are essential to enhance the competencies, skills and knowledge
of the employees.
• Succession Planning: Internal promotions helps identify and develop an individual who can be the
successor to senior positions in the organisation.
• Flexibility: Providing a flexible work environment to the employees makes them more adaptable to the
organisation and brings out their creativity.
• Relationship Management: Maintaining a positive workplace where employees are free to express
their ideas, take part in the decision-making process, encourage employees to achieve goals and are
rewarded for better performance leads to employee retention.
• Self-motivation: Nothing can be effective if the employee is not self-determined and motivated to
work.
➢Planning is thus “the process of establishing objectives and courses of action prior to
taking action.”
➢It is a comprehensive framework for making decisions in advance. It also facilitates the
organizing, leading, and controlling functions of management.
➢Planning also helps identify potential opportunities and threats, and facilitates control. It is
concerned with the end (what is to be done) as well as with means (how it is to be done).
V. Lawrabnce., Professor in Managementb Studies., karunya
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Human Resource Planning
Human Resource Planning (HRP) : Definition
➢It may be defined as strategy for acquisition, utilization, improvement and preservation of
the human resources of an enterprise.
➢The objective is to provide right personnel for the right work and optimum utilization of
the existing human resources. HRP exists as a part of the planning process of business.
➢This is the activity of the management which is aimed at co-ordinating requirements for
and the availability of different types of employers.The major activities of HRP include:
Human resources planning is the process by which management ensures that it has the right
personnel, who are capable of completing those tasks that help the organization reach its
objectives. It involves the forecasting of human resources needs and the projected matching of
individuals with expected vacancies. --International Labour Organization
➢Making an inventory of present manpower resources and assessing the extent to which
these resources are employed optimally.
➢Anticipating manpower problems by projecting present resources into the future and
comparing them with the forecast of requirements to determine their adequacy, both
quantitatively and qualitatively; and
➢A number of organizations, especially public sector units (PSUs) in India are facing the
problem of surplus labour.
➢It is the result of surplus labour that the companies later on offer schemes like Voluntary
Retirement Scheme (VRS) to eliminate surplus staff.
➢Thus, it is better to plan well about employees in advance. Through HRP, one can
ensure the employment of proper number and type of personnel.
➢HRP is the first step in all HRM functions. So, HRP provides the essential information
needed for the other HRM functions like recruitment, selection, training and
development, promotion, etc.
➢This means changes in the demand of personnel, content of job, qualification and
experience needed. HRP helps the organization in adjusting to new changes.
➢Human assets can increase in value as opposed to physical assets. Thus, HRP is
considered important for the proper planning of future employees.
➢Through proper HRP, an organization comes to know about the exact requirement of
personnel in future plans.
V. Lawrabnce., Professor in Managementb Studies., karunya
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The need and importance of HRP in the organizations
6. Employee Turnover:
➢Every organization suffers from the small turnover of labour, sometime or the other. This
is high among young graduates in the private sector.
➢This necessitates again doing manpower planning for further recruiting and hiring.
2. Human resource policies – Human resources policies of the company regarding quality of
human resource, compensation level, quality of work-life, etc., influences human resource
plan.
3. Job analysis – Fundamentally, human resource plan is based on job analysis. Job
description and job specification determines the kind of employees required.
4. Time horizons – Companies with stable competitive environment can plan for the long run
whereas the firms with unstable competitive environment can plan for only short- term
range.
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V. Lawrabnce., Professor in Managementb Studies., karunya Contd….
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Human Resource Plan – Factors:
Internal Factors (Sources):
5. Type and quality of information – Any planning process needs qualitative and accurate
information. This is more so with human resource plan; strategic, organisational and
specific information.
7. Trade unions – Influence of trade unions regarding number of working hours per week,
recruitment sources, etc., affect the HRP.
1. National level – Generally, government at the centre plan for human resources at the
national level. It forecasts the demand for and supply of human resource, for the entire
nation.
2. Sector level – Manpower requirements for a particular sector like agricultural sector,
industrial sector or tertiary sector are projected based on the government policy, projected
output/operations, etc.
3. Industry level – Manpower needs of a particular industry like cement, textiles, chemical
are predicted taking into account the output/operational level of that particular industry.
4. Unit level – This covers the estimation of human resource needs of an organisation or
company based on its corporate/business plan
V. Lawrabnce., Professor in Managementb Studies., karunya
Contd…..
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Human Resource Planning at Different Levels:
6. Job level – Manpower needs of a particular job family within department like Mechanical
Engineer is forecast at this level.
➢Several mechanisms can help managers forecast the supply of Human Resources in
regard to current employees.
➢Organization is likely to be able to draw on considerable historical data about its own
ability to hire and retain employees
➢In addition the organization can collect information about the extent to which people
leave their jobs voluntarily or involuntarily
✓Improved health and medical care allow people to be productive for longer periods of
their lives.
➢One Important ingredient in this assessment is the Organization's own growth , stability,
or decline.
➢Employees for jobs in high demand will be more difficult to hire and more expensive
to hire.
➢Students and future employees who track these demand trends often make decisions
about what majors to pursue in college based on their anticipated employability.
➢The planning process and the associated forecasting and supply and demand relative to
labour is important source for the HR manager.
V. Lawrabnce., Professor in Managementb Studies., karunya
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METHODS OF Human Resource Planning
Human Resource Process requires thinking related to future, which is full of
uncertainty. To plan for the future uncertainties, HR Managers need to use both
Qualitative and Quantitative techniques.
I. Qualitative Techniques:
1. Scenario Planning
2. Critical Incidence Technique
3. Delphi Technique
4. Nominal Group technique
II. Quantitative Techniques:
1. Time Study
2. Work Sampling
3. Ratio Analysis
4. Markov Chain Analysis
5. Regression Analysis
➢For example, Farmers use scenarios to predict whether the harvest will be good or bad,
depending on the weather. It helps them forecast their sales but also their future
investments.
➢Scenario planning aims to define your critical uncertainties and develop reasonable
scenarios in order to discuss the impacts and the responses to give for each one of them.
➢If you are aware of what could happen, you are more likely to deal with what will
happen.
➢For Example a job incumbent might be asked: Take me through some incidents in your
work life when you felt extremely happy about the job or please narrate some incidents
when you felt extremely sad about your work.
➢Based on Job incumbents’ narration of the stories, the critical dimensions of the job can
come out.
➢For example, a clerk in the office library may narrate that she felt extremely happy about
her job when her supervisor gave her task for research on how many ways record keeping
can be done and she could present findings in the department meeting.
➢For enriching the job of a record keeper, this critical incident can serve as a input.
➢This method can be used with supplies, and customers as well to understand the critical
issues of the organization V. Lawrabnce., Professor in Managementb Studies., karunya
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METHODS OF Human Resource Planning
I.2.Critical incident technique has the following steps.
1. We start with determining and reviewing the incidents that have taken place during the
course of the job
2. Fact finding which involves gathering information of the incident from the members.
3. The third step is to analyze the facts and the data collected by the interviewer from the
participants and determine the issues
4. The fourth step is to determine possible solutions for the issues that have been identified
1. Helps to identify rare events which might be missed by other methods as they focus only
on common events.
5. Many ways to implement the technique like observation, questionnaires and interviews
1. Many incidents may go unreported or might not be precise as the reporting of incidents
relies on memory of the respondent.
3. The incidents narrated may not be representative of everyday situation that takes place
during the job.
➢In the Delphi technique, a panel of relevant people is chosen to address an issue. It
facilitates group decision making.
➢Experts are chosen on the basis of their knowledge of internal factors that might affect a
business (e.g., projected retirement), their knowledge of the general business plans of
the organization, knowledge of the external factors that might affect demand for the
firm’s product and service and hence its internal demand for labor.
➢Face-to-face group discussion among the experts is avoided to eliminate criticism and
compromise on good ideas.
➢To avoid these problems, an intermediary is used. The job of the intermediary is to
pool, summarize and then feedback to the experts the information generated
independently by all the other experts during the first round of forecasting.
➢The cycle is then repeated so that the experts are given the opportunity to revise their
forecasts and the reasons behind their revised forecasts.
The following are the key characteristics of the Delphi method: the anonymity of the
participants, structuring of information flow, regular feedback and the role of the facilitator.
Guidelines to make the Delphi process most useful:
➢Give the experts enough information to make an informed judgment.
➢Do not require precision.
➢Keep the exercise as simple as possible.
➢Be sure that the classification of employees and other definitions are understood in the
same way by all experts.
➢Enlist top management’s an expert’s support of the Delphi process by showing how good
forecasts will benefit the organization and how they will affect profitability and
workforce productivity.
➢Brief time is allotted so that questions can be asked – but only for clarification ask the
kinds of questions a unit manager can answer.
➢Group members individually designate their preferences for the best alternatives by
secret ballot.
➢The
20-04-2021 group “decision” is announced.
V. Lawrabnce., Professor in Managementb Studies., karunya
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METHODS OF Human Resource Planning
I. 4. Nominal Group Technique
Advantages :
➢There is an opportunity for equal participation by all members. Participation is broad, not
limited to a few powerful members.
➢It allows tighter control of time. Thus, it quickens the decision-making process. It is a
time-saving process.
➢A single member cannot dominate in the decision process. There is little chance of
occurring group thinking.
➢Because of wider participation, members can come up with new ideas.
Disadvantages:
➢Group members are frustrated by the rigidity of the procedure,
➢Gain no feelings of cohesiveness,
➢Do not have the opportunity to benefit from the cross-fertilization of ideas.
➢The success of the nominal technique depends on each member’s capacity.
V. Lawrabnce., Professor in Managementb Studies., karunya
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METHODS OF Human Resource Planning
II. Quantitative Techniques:
1. Time Study
2. Work Sampling
3. Ratio Analysis
4. Markov Chain Analysis
5. Regression Analysis
➢Once standard time gets set workers can no more change the time standard till through
another time study a new time standard gets set.
➢For setting standard time HR professionals need to collaborate with industrial engineers
who have considerable exposure of time study and motion study.
Activity 1 2 3 4 5 Rating
Task A 7 5 6 28 8 130%
Task B 4 3 4 5 3 90%
Task C 3 2 13 2 3 120%
Task A 6.5
Task A 8.45
➢Developed by L.Tippet.
➢Knowing the percentage of time spent on various activities, organization can redesign the
work, or make different work allocation for a worker.
➢Like time study here also number of observations required for the work sampling needs
to be determined with statistical sample size estimation.
Client Meeting 59
Personal Time 34
Bill processing 19
Idle 40
Overall he is idle 74 times (40 idle and 34 personal time) which is 33.64% (=74/220).
Management decide underutilized or over utilized
V. Lawrabnce., Professor in Managementb Studies., karunya
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METHODS OF Human Resource Planning
II.3 RATIO ANALYSIS:
➢RATIO between output & manpower deployed to achieve that output is established at a
given point of time
➢(Eg., revenue per employee, sales vol. per salesperson, service contract per engineer,
units produced per employee, etc.,)
Example of Ratio
V. Lawrabnce., Analysis
Professor in Managementb Studies., karunya
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METHODS OF Human Resource Planning
II.4. REGRESSION ANALYSIS
➢Drawing a statistical comparison of past relationship among variables
✓Statistical relationship between no. of patients (business factor) & employment
✓level of nurses in a nursing home may be useful in forecasting the no. of employees that
will be needed if the no. of patients increases by say 20%
➢Markov Chain analysis uses transition probability matrix to make future predictions.
➢For preparing the transition probability matrix two time periods need to be chosen.
➢These chosen time periods should be such where business runs in an usual way, and there
are not such external disturbances which can make the business situation unstable.
➢The time gap between these two periods should not be too long, since we are interested to
note the changes that took place in between these two periods, which will serve as a
template for modeling future changes
Level 4 45 14 2 0 11 72
Level 3 2 22 13 1 7 45
Level 2 0 0 23 9 1 33
Level 1 0 0 0 5 1 6
Total 47in
V. Lawrabnce., Professor 36 38 15 20
20-04-2021 Studies., karunya
Managementb 5–47
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Table : Estimated Transition Probability Matrix
V. Lawrabnce., Professor in
Managementb Studies., karunya
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Table 3.5 c. Number of employees in 2017
Levels No of employees
Designation wise no of employees in 2017 – based on
our transition probability matrix we can predict level
Level 4 80
wise what would be the manpower situation in 2018.
Level 3 50
Level 2 38
Table3.5 d. Employee Forecast for 2018
Level 1 8
Level 4 50 16 2 0 12 80
Level 3 2 24 14 1 8 50
Level 2 0 0 26 10 1 38
Level 1 0 0 0 7 1 8
V. Lawrabnce., Professor in
Managementb Studies., karunya
20-04-2021 5–49
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Succession Planning
➢Through performance appraisal system companies generally identify who are the key
performers.
➢Coaching and Mentoring play a vital role in developing the successors.
➢Special assignments are given to managers so that they can quickly pick up key
responsibilities.
➢Identification of successor is made part of the key result area (KRA) of some of the
managers.
➢(For companies like Colgate Palmolive high performers are put in different countries
so that they can get adequate exposure of overall customer demographic and enhance
their relevant skill.)
➢Creating forum so that juniors can debate, discuss, put forth their viewpoints go a long
way in developing worthy successors.
➢Second, the successor will be subject to poaching where competitors may lure the
successor with a better offering.
➢Lastly there is a fear that internal political dynamics of the organization may create
unnecessary pressure for the declared “crown prince”, which will not let the
announced successor to perform at his/her best.
➢Axis bank – Mr. Nayak – CEO – pillar of success – no succession plan – mention no name-
RBI suggested splitting CEO – chairman & MD – resisted by Nayak – COO – resigned –
RBI could do nothing – stay as non executive chairman – appoint CEO – but not accepted
by Nayak. No internal so external – Ms. Shikaha SharmA – Nayak recorded dissent by not
voting. Though Nayak brought success failed in succession planning.
➢L&T – Mr. Manibhai Naik – Chairman & MD – age to 70 – another 5 yrs – to address
succession challenges – split – Venkataramanan – CEO & MD – Naik stepped down –
Executive chairman of the company – Shows failure of L&T in addressing succession
challenges.
➢GE Jack Welch – ready – succession planning part of HR strategy – star performers
identified – 3 names before retirement – Jeff Immelt – successor to Jack – James – 3M
➢When an employee having sound technical knowledge after few years of work
experience gets a promotion s/he may encounter this stage.
➢Skills required for the manager to successfully move from this passage include
meticulous planning of work, assigning work responsibilities to others, motivating
and coaching others (particularly subordinates).
➢This stage is different from the first stage since now it entails managing “managers”
who are colleagues rather than subordinates.
➢Once the manager takes bigger responsibility than the prior stage, now the skills
required would include selecting and managing other potential leaders, measuring
other managers’ progress, making other managers accountable for their work.
1. Working together with other functional mangers, where one functional area
may compete with other functional area for same organizational resources
➢When a manager is assigned a higher responsibility and moves from one particular
functional area to the task of integrating different functional areas as business
manager then the manager is at passage four.
➢This passage requires knowledge of other functional areas, and ability to handle wider
variety of people, and diversity.
➢Business managers are often assigned the task of keeping balance between short term
and long term goals based on profit, market share, and overall company objectives.
➢When running from one single business the manger moves to handling more businesses,
s/he comes at this passage.
➢At this stage a manager requires much broader outlook than the earlier stages and an
enhanced leadership capability.
➢Is the process of gathering and organizing detailed information about various jobs
within the organization so that managers can better understand the process through
which they are performed most effectively
➢Job Analysis is a fundamental block of Planning Process, but also relates to other HRM
Processes
➢Provides fundamental input to the HR manager such as knowledge, skills, and abilities
(KSAs) which are the fundamental requirements necessary to perform a job.
Job Families
➢Are groups of jobs with similar task and KSA requirements.
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The Job Analysis Process
Job Analyst
➢Is the individual who performs job analysis in an organization.
➢Are individuals presumed to be highly knowledgeable about a job and who provides data
for job analysis.
SELECTION:
Performance Appraisal
✓Employee Know What To Do Before Being Assessed
Compensation
✓Job Evaluation – Knowledge, Competencies
➢Description of the task- Ability-capability- Job Interface With Other Job- Behaviour
Required – Physical Movement – Demand
➢Working Condition –
➢Job Analysts
✓May be a specialist within HRM function or a Consultant hired from the outside
✓ Data obtained by observation
✓Especially useful for unskilled manual jobs
✓Less relevant for jobs involving creative thought and analytic skills
✓Occupational interest
✓Values
✓Work style- achievement, intelligence
✓Knowledge
✓Skill – write speak
✓Cross functional – negotiation, time mgmt.,
✓Requirement - license
V. Lawrabnce., Professor in Managementb Studies., karunya
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Specific Job Analysis Techniques
Job Analysis
Fleishman Job Analysis System Position Analysis Questionnaire
Techniques
➢Has one or more SMEs (Subject Matter Experts) prepare a written narrative or text
description of the job.
➢To some extent, the quality of the information depends upon the writing skills of the
job analyst.
➢Does not require a great deal of training for someone to complete a narrative job
analysis
V. Lawrabnce., Professor in Managementb Studies., karunya
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Job Analysis Techniques
2. The Fleishman Job-Analysis System
➢Is a family of job analysis methods, each with unique characteristics; each focuses on
analyzing all the tasks performed in the focal job.
➢Any given job has more number of tasks. Once a list containing list of tasks for a
particular job, a job analyst evaluates each dimensions such as:
✓ Relative amount of time spent on the task,
✓The frequency,
✓Relative importance,
✓Relative difficulty
➢Often used in Municipal and Country Governments and also in U.S. military.
➢Attempts to provide a single job analysis instrument that can be used with a wide variety
of jobs.
➢All the jobs can be described in terms of the Level of involvement with People, data,
things
➢For Example, a General Motors manufacturing site might be said to set up machines(
things), mentor people, and synthesize data.
➢The exact definition of each term is provided to the Job Analyst.
➢One Instrument For All Jobs
➢Not widely used in Private Industries.
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Job AnAlysis Techniques (conT’d)
5. Position Analysis Questionnaire (PAQ)
1. Information input
2. Mental Process
3. Work output
4. Relationship with other people
5. Job context
6. Other Characteristics
➢Job analysis are asked to determine whether each scale applies to the specific job being
analysed. The analysts rates
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Managementb Studies., karunya
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Job AnAlysis Techniques (conT’d)
➢These ratings are then submitted to a centralized location and the computer software
complies a report.
➢Contains 197 items that analyze how managerial jobs are done in terms of 13
components considered essential to all managerial jobs.
➢The essential components are supervision, staff service, Internal Business control,
Complexity and Stress
➢It focuses the Organisation’s attention an aspects of the job that lead to more or
less effective performance
➢ It specifies the major job elements, provides examples of job tasks, and provides some
indication of their relative importance in the effective conduct of the job.
➢ Focuses on the individual who will perform the job and indicates the knowledge,
abilities, skills, and other characteristics that an individual must have to be able to
perform the job.
Job Redesign
Job rotation :
➢Eg. An employee for a taxi service may work as a Driver on Monday, work as a
dispatcher on Tuesday, and may work on repairs on Wednesday etc
➢The jobs do not change, but instead, the employee moves from job to job
➢Workers who are rotated to a “new” job may be more satisfied at first, but novelty
soon wanes.
Job Enlargement
➢Increasing the scope of one’s duties and responsibilities. The increase in scope is
quantitative in nature and not qualitative and at the same level.
➢Job enlargement is a horizontal restructuring method that aims at increase in the
workforce flexibility and at the same time reducing monotony that may creep up over a
period of time.
➢ It is also known as horizontal loading in that the responsibilities increase at the same
level and not vertically.
➢Job enlargement requires appropriate training especially on time and people
management. Task related training is not required much since the person is already
aware of the same or doing it for some time
Advantages:
✓Reduced Monotony
✓Increased Work Flexibility
✓No Skills Training Required
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Job redesign
Job enrichment
➢It is a management concept that involves redesigning jobs so that they're more
challenging to the employee and have less repetitive work.
➢To improve employee motivation and productivity, jobs should be modified to increase
the motivators present for the employee.
✓Provide opportunities for employee advancement (as in promotions into jobs requiring
more skills).
✓Provide opportunities for employee growth (as in, an increase in skills and knowledge
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Employee Empowerment
Job: It is a group of positions that are similar as to kind and level of work.
Job Analysis: It is the process of studying and collecting information relating to the
operations and responsibilities of a specific job.
Motion study: It is one of the ways of studying job. It is a process of analyzing a job to
find the easiest, most effective, and most economical method of doing it.
Evaluation:
It is a data reduction process that involves the collection of large amounts of data which are
analyzed and synthesized into an overall judgment of worth or merit. The implication here is
that the judgment of worth can be supported by the data
Job Evaluation:
It is a systematic and orderly process of determining the worth of a job in relation to other
jobs. The objective of this process is to determine the correct rate of pay. It is therefore not
the same as job analysis. Rather it follows the job analysis process, which provides the basic
data to be evaluated.
Scott, Clothier and Priegel defines job evaluation as “the operation of evaluating a
particular job in relation to other jobs either within or outside the organization”.
The British Institute of Management defines “job evaluation as the process of analysis
and assessment of jobs to ascertain reliably their negative worth using the assessment as
the basis for a balanced wages structure”.
2.Approval - The competent authority reviews job descriptions and approve if he satisfies.
3.Review- Human Resources reviews the job description as submitted with the supervisor prior
to evaluation by the Job Evaluation Committee
5. Confirmation - SSAC confirms all job evaluations and titles recommended by JEC.
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Job evaluation
Methods of Job Evaluation – Non-Analytical and Analytical Methods
The methods of job evaluation can broadly be classified as:
1. Non-analytical methods, and
2. Analytical methods.
Method # 1. Non-Analytical:
➢These methods are traditional and simple.
➢They consider all the jobs available, compare them, and then rank them. In complex
organisations, they cannot be used.
➢They can be used in such cases where the jobs are distinctly different and not similar.
i. Ranking method
ii. Job classification method. (Job Grading Method)
Method # 2. Analytical:
➢Under these methods, the jobs are broken down into different tasks.
➢Different factors such as – skill, responsibility, education level, and so on, are assessed
for each job.
➢The comparison of factor by factor, sometimes, allocating points or monetary sums for
each factor is made for meaningful interpretation.
➢two types of analytical methods:
1. Helps in developing a equitable and consistent wage and salary structure based on the relative
worth of jobs in an organization.
2. Helps in minimizing conflict between labour unions and management and, in turn, helps in
promoting harmonious relations between them.
3. Job evaluation simplifies wage administration by establishing uniformity in wage rates.
4. It provides a logical basis for wage negotiations and collective bargaining.
5. In the case new jobs, job evaluation facilitates spotting them into the existing wage and salary
structure.
6. It provides the realistic basis for determination of wages.
7. The information generated by job evaluation may also be used for improvement of selection,
transfer and promotion procedures on the basis of comparative job requirements.
8. It helps in rating all these jobs and determining the wages and salary and also removing
ambiguity in them.
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Job evaluation
Limitations/Drawbacks of job evaluation
1. Job evaluation is susceptible because of human error and subjective judgement. .
2. There is a variation between wages fixated through job evaluation and market forces.
3. When job evaluation is applied for the first time in an organization, it creates doubts in the
minds of workers whose jobs are evaluated and trade unions that it may do away with
collective bargaining for fixing wage rates.
4. Job evaluation methods being lacking in scientific basis are often looked upon as
suspicious about the efficacy of methods of job evaluation.
5. Job evaluation is a time-consuming process requiring specialised technical personnel to
undertake it and, thus, is likely to be costly also.
6. Job evaluation is not found suitable for establishing the relative worth of the managerial
jobs which are skill-oriented. But, these skills cannot be measured in quantitative terms.
7. Given the changes in job contents and work conditions, frequent evaluation of jobs is
essential. This is not always so easy and simple.
8. Job evaluation leads to frequent and substantial changes in wage and salary structures.
This, in turn, creates financial burden on organization.
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Recruiting
Definition :
➢The process of developing a pool of qualified applicants who are interested in working
for the organization and from which the organization might reasonably select the best
individual or individuals to hire for employment.
1. Company’s Size – Organizations with big size usually find it easier to recruit
compared to small organizations.
2. Cost- Organizations can reduce this cost by ensuring high retention of existing
employees.
4. Future expansion plans- When organizations have future expansion plans, either in
the existing or new markets then recruitment from outside becomes essential.
3. Legal provisions in the country- Government time to time announces how much
percentage of vacancies should belong to ethnic minorities (SC/STs/ physically Challenged
individuals).
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Sources for Recruiting
• Internal Recruiting
• Looking inside the organization
• Job posting
• Supervisory recommendations
• External recruiting
• Looking to sources outside
the organization
for prospective
employees
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Advantages and Disadvantages of Internal and External Recruiting
Ripple Effect : When an employee is promoted or transferred, it automatically creates a job vacancy. If this
vacancy is filled through internal recruitment, a second vacancy arises, which in turn may be filled through
internal recruitment leading to a further vacancy. In other words, the promotion can create a ripple effect
throughout the organization, which only comes to a halt when a vacancy is filled through external recruitment.
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External Recruiting Methods
Word-of-mouth
Electronic
College placement offices
recruiting
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External Recruiting Methods
Word-of-Mouth:
➢The Organization simply informs current employees that positions are available and
encourages them to refer friends, family friends , or neighbors for those jobs.
➢This method is in-excpensive
Advertisements:
➢Advertisements on websites and in newspapers and related publications are also
popular methods of External recruiting
➢Attracts somewhat fewer qualified applications than do some other methods.
College Placement Offices:
➢Most larger Organisations visit college campuses every year to interview graduates
for jobs within the organization.
➢Advantage for the organization is that it can specify qualifications such as major,
grade point average and so on.
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External Recruiting Methods
✓Helps ensure that job seekers understand the actual nature of jobs available to them.
✓Provides job applicants with an opportunity to observe others performing the work.
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Steps in the Selection Process
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The Selection Process
Selection Process:
➢Is concerned with identifying the best candidate or candidates for jobs from among
the pool of qualified applicants developed during the recruiting process.
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Big Five Personality Traits
Neuroticism
Openness to
Extraversion
experience
Agreeableness Conscientiousness
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Big Five Personality Traits
Openness - People who like to learn new things and enjoy new experiences usually score high
in openness. Openness includes traits like being insightful and imaginative and having a wide
variety of interests.
Conscientiousness - People that have a high degree of conscientiousness are reliable and
prompt. Traits include being organized, methodic, and thorough. – (Faithfulness/Honesty)
Extraversion - Extraverts get their energy from interacting with others, while introverts get
their energy from within themselves. Extraversion includes the traits of energetic, talkative, and
assertive.
Agreeableness - These individuals are friendly, cooperative, and compassionate. People with
low agreeableness may be more distant. Traits include being kind, affectionate, and sympathetic.
Neuroticism - This dimension relates to one’s emotional stability and degree of negative
emotions. People that score high on neuroticism often experience emotional instability and
negative emotions. Traits include being moody and tense.
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Personality Trait – The Big Five Factors
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Sample Selection
System
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1. Applications and background checks
➢A first step in most selection is to ask applicants to complete an employment application or
Application Blank
➢An Employment Application asks individuals for various facts and information pertaining
to their personal background.
➢Commonly asked questions include details such as name, educational background, personal
career goals and experience. All Questions on an employment application must relate to an
individual’s ability to perform a job
➢Application blanks, when used in typical selection systems, provide a quick and
inexpensive mechanism for gathering several kinds of objective information about an
individual and information of a type that can be easily verified.
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Employment Applications
Types of employment
applications
Biodata
Weighted application
application
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Weighted application blank
➢Using the information gathered from current high and low performers in the organization,
it is often possible to determine whether specific levels of education, experience and so on
gathered on the application blank are related to a person’s ability to perform a job
effectively.
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Bio data application blank
➢Focuses on the same type of information found in a regular application, but it also goes into
more complex and detailed assessments about the background
➢As with weighted application blanks, responses to these questions are then studied to see if
they differentiate between employees who have done well and those who have done poorly
on the job.
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Sample Employment
Application
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Prof. V. Lawrance., Dept. of Mangement Studies, Karunya University
Sample Employment
Application
(conT’d)
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2. Employment tests
Employment Tests :
Measure the characteristics of an individual, such as personality, intelligence, or aptitude.
1. Cognitive ability tests
2. Psychomotor ability tests
3. Personality Tests (Measure traits, or tendencies to act, that are relatively unchanging
in a person)
a) Self-report inventory
b) Projective technique
4. Integrity Test
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2. Employment tests
1. Cognitive ability tests:
➢Cognitive ability tests measure a candidate’s general mental capacity which is strongly
correlated to job performance.
➢These kinds of tests are much more accurate predictors of job performance than
interviews or experience.
➢Workable uses a General Aptitude Test (GAT) which measures logical, verbal and
numerical reasoning.
➢Limitations
✓As with any cognitive ability test, practice can improve test takers’ scores.
✓Also, cognitive ability tests are vulnerable to racial and ethnic differences, posing a
discrimination risk.
✓Use multiple evaluation methods and don’t base hiring decisions on these tests
alone. Just use the results as a guide.
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2. Employment tests
2. Psychomotor Test
➢Psychomotor Test are used for determining the precision, coordination, control and
reaction time for candidates in the hiring process.
➢It not only assesses the mechanical performance of the candidate but also their ability to
understand and follow instructions and perform motor responses.
➢This kind of tests are widely used for deciding the best candidate for surgeons or pilots
etc. The test measures the candidate’s reaction time, multitasking capacity and
coordinating abilities.
➢The evaluator rates the candidate’s performance against a predefined benchmark. This is
standardized for all applicants.
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2. Employment test
3. a. Self-report inventory
➢It is a type of psychological test in which a person fills out a survey or questionnaire
with or without the help of an investigator.
➢Self-report inventories often ask direct questions about personal interests, values,
symptoms, behaviors, and traits or personality types.
➢Inventories are different from tests in that there is no objectively correct answer;
responses are based on opinions and subjective perceptions.
➢Most self-report inventories are brief and can be taken or administered within five to 15
minutes, although some, such as the Minnesota Multiphasic Personality Inventory
(MMPI), can take several hours to fully complete.
➢They are popular because they can be inexpensive to give and to score, and their scores
can oftenProf.show
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2. Employment test
3.a) Self-report inventory …………………..Contd…
➢There are three major approaches to developing self-report inventories: theory-guided,
factor analysis, and criterion-keyed.
2. Factor analysis uses statistical methods to organize groups of related items into
subscales.
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2. Employment test
3. a.) Self-report inventory ……………………. Contd…
Advantages:
➢Many self-report inventories can be completed very quickly, often in as little as 15
minutes. This type of questionnaire is an affordable option for researchers faced with
tight budgets.
➢The results of self-report inventories are generally much more reliable and valid than
projective tests. Scoring of the tests a standardized and based on norms that have been
previously established.
Disadvantages:
➢The MMPI takes approximately 3 hours to complete. In some cases, test respondents
may simply lose interest and not answer questions accurately.
➢Additionally, people are sometimes not the best judges of their own behavior.
➢Some individuals may try to hide their own feelings, thoughts, and attitudes
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2. Employment test
3. b) Projective test
➢It is a type of personality test in which you offer responses to ambiguous scenes, words,
or images.
➢The goal of such tests is to uncover the hidden conflicts or emotions that you project onto
the test with the hope that these issues can then be addressed through psychotherapy or
other appropriate treatments.
➢Projective tests are intended to uncover feelings, desires, and conflicts that are hidden
from conscious awareness.
➢Despite controversy over their use, projective tests remain quite popular and are
extensively used in both clinical and forensic settings.
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2. Employment test
3. b) Projective test ……………………Contd….
Limitations
➢The respondent's answers can be heavily influenced by the examiner's attitudes or the
test setting.
➢Projective tests that do not have standard grading scales tend to lack both validity and
reliability.
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2. employmenT TesTs (conT’d)
4. Integrity Tests: (or Honesty Test)
➢The honesty or integrity of individuals can be tested via pre-employment screening from
employers.
➢Employers may administer personnel selection tests within the scope of background
checks that are used to assess the likelihood that behavior.
➢Integrity tests are administered to assess whether the honesty of the potential candidate is
acceptable in respect to theft and counterproductive work behavior. These tests may
weigh in on the final personnel decisions
➢Integrity testing for employment selection became popular during the 1980s.
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3. Work simulations
1. Job Simulation
➢Job simulations are employment tests that ask candidates to perform tasks that they
would perform on the job.
➢Applicants complete tasks that are similar to tasks they would complete when actually
working in the position on a day to day basis.
➢For example, for a secretary position, a job simulation might involve typing a
passage and completing forms accurately. For a waitress position, a simulation
may involve taking a fake customer’s order correctly, or processing a check.
➢Job simulations can also evaluate interpersonal skills, such as resolving an agitated
customer’s complaint.
➢By using job simulations, employers can evaluate whether a job candidate can do the
job, rather than guess based on interview answers and personality questionnaires.
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3. Work simulations
1. Job Simulation………………………………. Contd…..
Advantages:
➢Higher predictive validity: If a candidate scores well on a job simulation, they are more
likely to perform the job well.
➢Better applicant insight into the job role: Job applicants are exposed to the tasks they will
perform and can determine whether they would enjoy the work.
➢Fairness: Because simulations are job-related, job applicants can immediately understand
the relationship of the test to the job and perceive the evaluation process as more fair than
other employment tests.
Disadvantages:
➢Costs: An in-person job simulation requires raters, a space to conduct the simulation and a
scheduling program to give everyone time to complete the simulations.
➢Time: Job simulations can be time-consuming to develop and administer.
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3. Work simulations
2. In-basket test:
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4. Personal Interviews
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4. personAl inTerviews (conT’d)
Types of Interviews
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4. personal interviews
1. STRUCTURED INTERVIEW
➢It is a type of interview in which the interviewer asks a particular set of predetermined
questions.
➢In structured interviews, questions are planned and created in advance, which means that
all candidates are asked the same questions in the same order.
➢Structured interviews are also known as: Standardized interviews, Patterned interviews,
Planned interviews, Formal interviews
Advantages of structured interview
➢Since in structured interviews all the candidates are asked the same questions, it’s easy
to compare their answers and hire the right job candidate. You can evaluate candidates in
a most objective and fair way, which also makes structured interviews more legally
defensible.
Disadvantages of structured interview
➢On the other hand, structured interviews are harder and more complicated to develop.
You have to write them, test them and make sure interviewers stick to them.
➢You also risk your interview questions leaking out, which means future candidates can
come prepared
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Prof. V. Lawrance.,
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4. personal interviews
2. UNSTRUCTURED INTERVIEW
➢It is a type of interview in which the interviewer asks questions which are not prepared in
advance.
➢In unstructured interviews, questions arise spontaneously in a free-flowing conversation,
which means that different candidates are asked different questions.
➢Unstructured interviews are also known as: Informal interviews, Casual interviews, Free-
flowing interviews
Advantages of unstructured interviews
➢The main advantage of an unstructured interview is their personalized approach. This is
especially useful when you compare candidates who are equally qualified or for jobs
where their personality and communication skills are crucial.
➢Because it allows a free-flowing conversation, they seem much more casual and help
candidates relax and feel more comfortable during the interview.
Disadvantages of unstructured interviews
➢Since in unstructured interviews different candidates are asked different questions, it’s
harder to compare their answers and evaluate candidates equally and objectively.
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4. personal interviews
3. SEMI-STRUCTURED INTERVIEW
➢It is a type of interview in which the interviewer asks only a few predetermined questions
while the rest of the questions are not planned in advance.
➢In semi-structured interviews, some questions are predetermined and asked all candidates,
while others arise spontaneously in a free-flowing conversation.
➢Semi-structured interviews are also known as: Moderately structured interviews, Hybrid
interviews, Combined interviews
Advantages of semi-structured interviews
➢Since semi-structured interviews combine both the structured and unstructured interview
styles, they can offer the best form both worlds.
➢They can secure objective comparison of candidates, but at the same time provide a more
personalized and spontaneous approach that allows exploration of interesting points in
specific candidate’s resume.
Disadvantages of unstructured interviews
➢Compared with structured interviews, semi-structured interviews are less objective and
legally harder to defend.
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4. personal interviews
4. SITUATIONAL INTERVIEW
➢In this, job-seekers are asked to respond to a specific situation they may face on the job.
➢These types of questions are designed to draw out more of your analytical and problem-
solving skills as well as how you handle problems with short notice and minimal
preparation.
➢Situational interviews are similar to behavioral interviews except while behavioral focus
on a past experience situational interviews focus on a hypothetical situation.
✓For example in a behavioral interview the interviewer might start a question with
"Tell me about a time you had to deal with..." In a situational interview the
interviewer asks "How would you handle..."
➢The key to preparation and success in situational interviews is simply to review your past
work experiences and review the steps you took to resolve problems and make
corrections.
➢You should also have short stories of some of these past experiences so you can also
incorporate them into your answers to show that you have experience handling similar
situation
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4. Personal Interview - errors
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4. Personal Interview - errors
1. First Impression Error
Example Late comer cause interviewer to make a negative judgement
2. Contrast Error:
The next person interviewed may suffer or benefit of previous candidate performance
3. Similarity Errors:
Occur when the interviewer is unduly influenced by the fact that the interviewee is similar
to the interviewer in one or more important ways- Eg. Same Home Town
4. Non-relevancy Errors:
The interviewer may be inappropriately influenced by an individual’s posture, dress, and
appearance
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156
5. Other selection techniques
1.References and Recommendations
2.Assessment Centers
➢Job applicant is usually asked to provide either letters of recommendation or the names
and addresses of individuals who may be contacted to write such letters
➢Organization can use this information as a basis for accessing a person’s past experiences
and work history.
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157
5. Other selection techniques
2. Assessment Centers:
➢The individuals to be assessed are brought together in a single place such as the
company’s training head quarters or conference facility in a Hotel
➢These individuals may undergo experimental exercises, Group Deciosin making, case
analysis, individual employment tests
➢Each evaluator provides an in depth evaluation of each attendee and makes an overall
evaluation about the person’s suitability for promotion.
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Competitive Advantage through Selection
➢Strategic Management has argued that resources which are rare, valuable, inimitable and
non-substitutable give long term competitive advantage to organization- Human capital in
general has all these critical characteristics.
➢By choosing the right kind of human resource organizations can ensure long term
sustainability.
➢Research suggests good fit between strategic skills of executives and organizational
strategy ensures high rate of return.
False Positives
• Applicants who are predicted to be successful and are hired but ultimately fail.
False Negatives
• Applicants who are predicted to fail and are not hired, but had they been hired,
they would have been successful.
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Selection Errors
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Orientation, Induction, Onboarding and Placement
Orientation:
➢Provides an overview to newly hired employees about organizational history, mission,
rules and procedures.
➢Orientation is one day (first day) activity, and may include simple things as telling
employees where to park the car or duration of lunch time.
Onboarding:
➢It is about helping new employees develop right attitude.
➢At least first 90 days of integrating new hire into the new organization can be referred
as on boarding.
➢Starts even much before an employee formally joins the organization; it begins just
after an employee gets the offer letter and continues much beyond three months period
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Studies, Karunya University
Orientation, Induction, Onboarding and Placement
Induction Training :
➢Induction is process focused, whereas onboarding is a much broader term and includes
complete acclimatization of employees and engaging them within the organization.
➢Induction Training may impart varying degree of knowledge ranging from generic
material to very specific aspects of the job, internal and external contact points,
workplace policies and procedures.