HUMAN RESOURCE MANAGEMENT - 1

HRM
Human Resource Management (HRM) is all about managing the people within an organization. It involves
activities like recruiting, training, and developing employees, ensuring they are motivated and engaged,
handling performance evaluations, and dealing with employee relations. HRM plays a crucial role in creating a
positive work environment, supporting the organization's goals, and maximizing employee performance.

HRM FUNCTIONS
1. Staffing :
•Staffing is the process through which an organization ensures
that it always has the proper number of employees with the
appropriate skills in the right jobs, at the right time, to achieve
organizational objectives.
•Staffing involves job analysis, human resource planning,
recruitment, and selection .
2. Performance Management
•Performance management is a goal-oriented process that is
directed toward ensuring that organizational processes are in place to maximize the productivity of employees,
teams, and ultimately, the organization.
•Performance appraisal is a formal system of review and evaluation of individual or team task performance.
3. HUMAN Resource Development :
Training and development along with career planning and development activities, organization development,
and performance management and appraisal. •Training is designed to provide learners with the knowledge
and skills needed for their present jobs. Development involves learning that goes beyond today’s job and has a
more long-term focus.

COMPENSATION :
Compensation includes the total of all rewards provided to employees in return for their services.
Example : Salary and Wages
•Employee and labor relation
•Safety and Health

HR AS STRATEGIC FUNCTION
•Work to achieve organization objective beyond
daily HR functions
•Focus on issues truly important to top management

JOB ANALYSIS AND DESIGN

Job analysis : Systematic way to determine which employees are expected to
preform a particular function or task
Job analysis answers questions to :
1. Time taken to complete a task ?
2. Tasks that are grouped together ?
3. What kinds of behaviors are needed ?
4. What kind of person is best suit for job ? (Experience and traits )

MANPOWER PLANNING - 2

HUMAN RESOURCE PLANNING

Human Resource Planning is all about forecasting an organization's future human resource needs and ensuring
it has the right people in the right positions at the right time. It involves analyzing the current workforce,
determining future staffing needs, and developing strategies to meet those needs. Effective human resource
planning helps organizations to be prepared for changes, optimize employee performance, and achieve
business objectives.
•Human resource planning method of accessing demand and supply of Human resource .
•Eliminate gaps between demand and supply of Human Resource
•HR planning determines the number and types of employees to be recruited or phased out.
•Strategic and Human resource planning: Acknowledgement that HR policies and practices have critical
linkages with an organization’s overall strategy.
•HR must fit into the organization's strategy.

HR PLANNING PROCESS
1. Situation analysis / environmental scanning
2. Forecasting demand for human resources
3. Analysis of the supply of Human resources
4. Development of action plans.
 1. SITUATION ANALYSIS / ENVIRONMENTAL SCANNING
•First stage of HR planning
•HRM and strategic planning interact
•Scan the environment and identify the changes (if any related to the HR).
•Example : A company which who supply bus driver to school and colleges on monthly basis was planning to
recruit more than 200 drivers into it’s driver pool to support rapid expansion. Recently government announced
certain additional parameters and criteria to be eligible for driving vehicles used for transporting students.

2. FORECASTING DEMAND FOR EMPLOYEES

•Not only focused on how many but also on the type of employees required.
•Identify organization strategy – growth / shrink/stabilize / expansion??
•Four techniques to forecast demand
1. Expert estimate
2. Trend projection
3. Statistical Modeling
4. Unit –demand forecasting

EXPERT ESTIMATE
• Least mathematical approach
• Ask a person “expert” or group of experts based
upon their experience, guess , intuition.
•Delphi Technique
•Nominal Group Technique (NGT)

TREND PROJECTION
•Forecast based on a past relationship between factors related to employment and employment itself.

MODELING AND MULTIPLE – PREDICTIVE TECHNIQUE

• Sophisticated forecasting and model technique
• Relate single factor Like sales to employment.
• Regression analysis and model development

UNIT DEMAND FORECASTING

• Bottom to up approach
• Forecast from unit level to head quarter and over all organization

3. ANALYZING THE SUPPLY OF THE EMPLOYEES

•Current employee type and numbers
•Skills inventory : a tool used to assess the current supply of employees
•Skills inventory provides information on employees' skills , abilities, training and ability
•Maintaining the skills inventory is challenging
•Continuous data updates must be done

ACTIONS PLAN
1. Shortage of Employees :
A. Overtime
B. Part-time workers
C. Contracting
2. Surplus of Employees
A. Early Retirement
B. Demotions
C. Terminations
D. Layoffs

SUCCESSION PLANNING
•Succession planning is the process of ensuring that qualified persons are available to assume key managerial
positions once the positions are vacant.
•This succession planning definition includes untimely deaths, resignations, terminations, or the orderly
retirements of key managerial personnel.
•Example: General Electric (GE) provides an example of a company with an excellent succession plan. At GE the
goal is same-day succession. When senior vice president Larry Johnston quit to become the CEO at Albertsons,
the position was filled the same day. Bill Conaty, former senior vice president of HR at General Electric said,
“We had candidates with two or three backups for all key positions—including the C-suite and all business
units. And the board already knew who was lined up thanks to six-month reviews.”

JOB ANALYSIS AND DESIGN

•Job analysis is the systematic process of determining
the skills, duties, and
knowledge required for performing jobs in an
organization.
•With job analysis, the tasks needed to perform the
job are identified.
•The purpose of job analysis is to obtain answers to
six important questions:
1. What physical and mental tasks does the worker
accomplish?
2. When is the job to be completed?
3. Where is the job to be accomplished?
4. How does the worker do the job?
5. Why is the job done?
6. What qualifications are needed to perform the job?

REASONS FOR CONDUCTING JOB ANALYSIS

•Staffing
•Training and development
•Performance Appraisal
•Compensation
•Safety and health
•Employee and labor relations
•Legal considerations

JOB ANALYSIS METHOD

1. Questionnaire
2. Interview
3. Observation
4. Employee recording
5. Combination of Methodv

JOB DESCRIPTION (JD)

•The job description is a document that provides information regarding the essential tasks, duties, and
responsibilities of the job. The minimum acceptable qualifications a person should possess to perform a
particular job are contained in the job specification .
Frequently included in a job description are :
•Major duties performed
•Percentage of time devoted to each duty
•Performance standards to be achieved
•Working conditions and possible hazards
•Number of employees performing the job, and to whom they report
•The machines and equipment used on the job

PARTS OF JOB DESCRIPTION

•Job Identification
The job identification section includes the job title, the department, the reporting relationship, and a job
number or code.
•Date of the Job Analysis
The job analysis date is placed on the job description to aid in identifying job changes that would make the
description obsolete. Some firms have found it useful to place an expiration date on the document. This
practice ensures periodic review of job content and minimizes the number of obsolete job descriptions.
•Job Summary
The job summary provides a concise overview of the job. It is generally a short paragraph that states job
content.
•Duties Performed
The body of the job description delineates the major duties to be performed. Usually, one sentence beginning
with an action verb (such as receives, performs, establishes, or assembles) adequately explains each duty.
•Job Specification
Job specifications should always reflect the minimum, not the ideal qualifications for a particular job. Several
problems may result if specifications are inflated.

EXAMPLE OF JOB DESCRIPTION ----

JOB DESIGN
•Process of determining the specific tasks to be performed, the methods used in
performing these tasks, and how the job relates to other work in an organization
•Concept of Job Design :
1. Job Enrichment
2. Job enlargement
3. Job Rotation
4. Re-engineering

CONCEPTS OF JOB DESIGN

 Job Enrichment : Changes in the

content and level of responsibility
of a job so as to provide greater
challenges to the worker.
 Job enlargement is defined as
increasing the number of tasks a
worker performs, with all of the
tasks at the same level of
responsibility. Job enlargement,
sometimes called cross-training,
involves providing greater variety
to the worker. For example,
instead of knowing how to
operate only one machine, a
person is taught to operate two or even three, but no higher level of responsibility is required.
  Job rotation : Job rotation (cross-training) moves employees from one job to another to broaden their
experience.

JOB DESIGN CONCEPT

Reengineering is “the fundamental rethinking and radical redesign of business processes to achieve dramatic
improvements in critical contemporary measures of performance, such as cost, quality, service, and speed.”

LABOR TURNOVER
Labor turnover, also known as staffing turnover, refers to the ratio of a number of employees who leave a
company through attrition, dismissal or resignation to the total number of employees on the payroll in that
period.
Types of turnovers
1. Voluntary: when an employee leaves the organization on his/her own.
2. Involuntary: when the employees get terminated from his/her services.
3. Functional: when low performing employees are dent from the company in order to enhance the overall
performance.
4. Dysfunctional: when skillful, good performing employees leave the company leaving the company in a bad
shape.

PROBLEM OF MANPOWER PLANNING

1. In accurate forecasts (Data)
2. Expensive and time consuming
3. Support of top management
4. Resistance of employees
5. MIS systems
6. Coordination with other functions
7. Uncertainties

Recruitment - 3

Recruitment
• Process of attracting individuals:
– On a timely basis
– In sufficient numbers
– With appropriate qualifications
• Encouraging them to apply for jobs
Recruitment is a crucial part of Human Resource Management as it involves attracting, selecting, and hiring the
right individuals for job positions within an organization. It includes activities like posting job openings,
reviewing resumes, conducting interviews, and making job offers. Effective recruitment ensures that the
organization has a talented and qualified workforce to achieve its goals.

Alternatives to Recruitment
• Outsourcing and Offshoring
• Contingent workers
• Professional employer organizations (employee leasing)
• Overtime

Outsourcing and Offshoring

• Outsourcing: Transfers responsibility to external provider
• Offshoring: Migration of all or a significant part of development, maintenance, and delivery of services to a
vendor located in another country

Overtime
• Most commonly used method of meeting
short-term fluctuations in work volume
• Avoids recruitment, selection, and training costs
• Employees benefit from increased profit
• Potential problems

External Environment of Recruitment

• Labor market conditions
• Active or passive job seekers
• Legal considerations
• Corporate image

Labor Market Conditions

• Demand for and supply of specific skills
• Labor market for many professional and technical positions is global
• Possessing a college degree used to be passport to securing a good job
• Skills to perform crafts such as welders, pipe fitters, painters, and machinists are needed
• New technology may require that workers have a specialized degree

Active or Passive Job Seekers

• Active job seekers: Committed to finding another job
• Passive candidates: Typically employed, satisfied with their employer, and content in their current role
• Recruitment methods often differ

Legal Considerations
• Candidate and employer first, make contact during the recruitment
• Essential to emphasize nondiscriminatory practices
• Labor Department has issued guidelines concerning online recruiting policies

Promotion From Within

• Filling vacancies above entry-level positions with current employees
• Incentive to strive for advancement
• Organization usually aware of
employees’ capabilities
• Good goal: 80%

Trends & Innovations: Social

Media Recruiting
• If you are not using social media to get recruits, your competitors likely are
• Sites such as Twitter, Facebook, and
LinkedIn , Google+, YouTube and blogging
are available to utilize social media
recruiting

Employee Requisition
• Recruitment begins with employee
requisition.
• Document specifies:
– Job title
– Department
– Date employee is needed
– Other details

Recruitment Sources and Methods

• Recruitment sources: Places where qualified individuals are found
• Recruitment methods: Means by which potential employees can be attracted to firm

Internal Recruitment Methods

• Human resource databases
• Job posting
• Job bidding
• Internet
• Intranet
• Employee referral

Job Posting and Job Bidding

• Job posting: Procedure to inform employees of existing job openings
• Job bidding: Procedure that permits individuals in the organization to apply for posted job
Employee Referrals
• Number-one way workers find a job
• Referrals better qualified and stay on the job longer
• Recruit new hires through employee-referral incentive programs
• Employee enlistment

Why External Recruitment Is Needed

• Fill entry-level jobs
• Acquire skills not possessed by current employees
• Obtain employees with different backgrounds to provide a diversity of ideas

External Recruitment Sources

• High schools and vocational schools
• Community colleges
• Colleges and universities
• Competitors in the labor market
• Former employees
• Unemployed workers
• Military personnel
• Self-employed workers
• Ex-offenders

High Schools and Vocational Schools

• Clerical and other entry-level employees
• Some companies work with schools
• Companies may loan employees to schools

Community Colleges
• Sensitive to specific employment
needs in local labor market
• Graduate highly sought-after
students with marketable skills

Colleges and Universities

• Professional, technical, and management employees
• Placement directors, faculty, and administrators

Competitors in the Labor Market

• Used when relevant experience is needed
• Smaller firms look for employees trained by larger organizations
• Poaching: Actively recruiting employees from competitors

Former Employees
• In past, punished with no-return policies
• Smart employers try to get their best ex-employees to come back
• Also called boomeranging

Unemployed Workers
• Qualified applicants become unemployed every day
• Companies:
–Go out of business
– Cut back operations
– Merge with other firms
• Employees are laid off

Military Personnel
• Proven work history
• Flexible, motivated, drug free
• Goal and team oriented
Self-Employed Workers
• Technical
• Professional
• Administrative
• Entrepreneurial

Ex-Offenders
• Ex-offenders are a viable labor pool for restaurants
• Often work third shift
• Some organizations actively support hiring of ex-offenders

Mobile Recruiting
• Recruiting via mobile technology is moving at light-speed
• Mobile recruiting has generated blogs, webinars, seminars, e-newsletters, and online groups committed to
learning more

Online Recruitment
• Biggest change in way that organizations recruit
• Revolutionized the way companies recruit and job-seekers find jobs

Internet Recruiter
• Also called cyber recruiter
• The more a company recruits on Internet, the greater the need for Internet recruiters.
• High-tech firms have greatest needs

Virtual Job Fair

• Online recruiting method to attract large number of applicants
• Attracts wider range of applicants than might attend live fair
Corporate Career Website
• Accessible from company homepage
• Lists company positions available
• Provides way for applicants to apply for specific jobs
• Major resource for job seekers and companies
• Should be used as a selling device

Weblogs (Blogs)
• Use Google or a blog search engine
• Type in a key phrase, like “marketing jobs”
• Can be used for stealthy background Checks

General-Purpose Job Boards

• Job seekers can search for jobs by: Category, Experience, Education, Location, Any combination of categories
• Monster.com
• CareerBuilder.com

Niche Sites
• Websites that cater to a specific profession
• A site for virtually everyone

Contract Workers’ Sites

• Sites are available to assist contract workers
• These let workers advertise skills, set their price, and pick employers
• Freelance.com
• Guru.com

Hourly Workers’ Job Sites

• Attract blue-collar and service workers
• Most pursue jobs by filling out applications
• Allow job-seekers to build applications
• Often have a bilingual call center

Traditional External Recruitment Methods

• Media advertising
• Employment agencies —private and public
• Recruiters
• Job fairs
• Internships
• Executive search firms

Media Advertising
• Media such as: Radio, Newspaper, Television, Industry publications
• Previous experiences suggest the best approach
• Newspaper advertising has declined because of online recruiting

Private Employment Agencies

• Often called headhunters
• Best known for recruiting white-collar employees
• Used for virtually every kind of position
• Not paid until a person is places

Recruiters
Used with: Technical, Vocational, Community colleges, Colleges and universities

Job Fairs
• Attract large number of applicants to one location
• Opportunity to meet large number of candidates in short time

Internships
• Places student in a temporary job
• No obligation
• Temporary job for summer
• Part-time job during school year
• Students bridge gap from theory to practice

Executive Search Firms

• Locate experienced professionals and executives
• Target ideal candidates
• Find those not actively looking for a job

Training and Development – 4

Training and Development (T&D)

• Heart of a continuous effort
• Designed to improve employee:
–Competency
–Organizational performance

Training
• Provides workers with knowledge and skills needed for their present jobs
• Examples:
–Showing workers how to operate a lathe
–Showing supervisor how to schedule daily production

Development
• Learning with a long-term focus
• Goes beyond the worker’s current job
• Prepares employees to keep pace with organization as it changes and grows

Learning Organizatio
• Recognizes the importance of continuous performance-related T&D and takes appropriate action
• Basic characteristnics:
– Provides a supportive learning environment
– Provides specific learning processes and practices
– Leadership behavior in the organization supports and reinforces learning
• Learning programs aligned with strategic corporate goals

Factors Influencing T&D

• Top management support
• Shortage of skilled workers
• Technological advances
• World complexity
• Lifetime learning
• Learning styles
• Other human resource functions

Top Management Support

• Without it, T&D program will not succeed
• Most effective way to achieve success is for executives to provide needed resources to support T&D effort
• Training professionals are having to do more with less

Shortage of Skilled Workers

• Major shortages of future skilled workers
• Employers are begging for skilled workers
• Training needs are changing
• Executives are increasingly demanding additional skills
Technological Advances
• Change is occurring at an amazing speed
• Knowledge doubling every year
• No factor has influenced T&D more than technology

World Complexity
• World is getting more complex
• Entire world provides opportunities and threats
• How will training change in this global environment?

Lifetime Learning
• Learning can never stop
• It is a continuous process
• Employees who participate in ongoing education feel like their careers are advancing

Learning Styles
• No best way to learn that suits everyone
• Need to use a wide range of training methods
• Adults retain:

20% of what they read and hear

40% of what they see
50% of what they say
60% of what they do
90% of what they see, hear, say and do

Blended Training
• Also called blended learning
• Firms use multiple methods to deliver T&D
• Uses a combination of training methods that are strategically combined to best achieve training program’s
objectives

Learning Generalizations
• Learners progress in the area of learning only as far as needed to achieve their purposes
• The best time to learn is when learning can be useful
• Unless there is relevance, meaning, and emotion attached to the material taught, trainees will not learn
• Just-in-time training: Provided anytime, anywhere in the world, when it is needed

Other Human Resource Functions

• Other human resource functions can also have a crucial impact on T&D
• If recruitment-and-selection efforts or its compensation package attracts only marginally qualified workers,
the firm will need extensive T&D programs
• Safety and health programs also affected

Determining Specific Training and Development Needs

Must take a systematic approach to addressing bona fide needs:
•Organizational analysis
•Task analysis
•Person analysis
Companies now train for specific needs

Establishing Specific Training and Development Objectives

• Desired end results must be determined
• Clear and concise objectives must be formulated

Trends & Innovations: Mobile Learning

• Any learning that takes place via mobile or portable devices such as cell phones, personal digital assistants,
tablets, media players and e-readers
• Can take place in setting where the learning is to be put into practice
• Permits virtually instant feedback and portability

T&D Methods
• Instructor-led
• E-learning
• Case study
• Behavior modeling
• Role playing
• Business games
• In-basket training
• On-the-job training

Instructor-Led
• Continues to be effective for many types of employee training
• Conveys great deal of information in a relatively short time
• Allows for real-time discussion
• Charisma or personality that the instructor brings to class

E-Learning
• T&D method for online instruction
• Takes advantage of technology for greater flexibility of instruction
• Often most convenient delivery method for adult learners
• Major advantage is cost

Live Virtual Classroom

• Uses web-based platform to deliver live, instructor-led training to geographically dispersed learners
• Training can now be provided in blocks of time
• Provides both cost savings and convenience

Case Study
• Trainees study the information provided by the case
• Make decisions based on it
• Often used with instructor who serves as facilitator

Behavior Modeling
• Trainees learn by copying or replicating behaviors of others
• Shows managers how to handle various situations

Behavior Modeling and Twittering

• Twittering can be a way to augment behavior modeling
– A person who excels at a task sends out frequent updates about what he or she is doing
– Select exemplary performers to post regularly, and pick those who should follow their posts

Role Playing
• Participants respond to specific problems they encounter in jobs by acting out real-world situations
• Used to teach such skills as:
– Interviewing
– Grievance handling
– Performance appraisal reviews
– Conference leadership
– Team problem-solving
– Communication

Training Games
• Aid in group dynamic process
• Encourage learner involvement and stimulate interest
• Retain 75% of the knowledge they acquire when playing games

Business Games
• Permits participants to assume roles such as president, controller, or marketing vice president of two or more
similar hypothetical organizations
• Compete against each other by manipulating selected factors in a particular business situation

In-Basket Training
• Participant is asked to establish priorities for and then handle number of typical:
– Business papers or e-mail messages
– Memoranda
– Reports
– Telephone messages

On-the-Job Training
• Informal T&D method
• Permits employee to learn job tasks by actually performing them
• Most commonly used T&D method
• No problem transferring what has been learned to the actual task

Apprenticeship Training
• Combines classroom instruction with on-the-job training
• Traditionally used in skilled trade jobs
• Earns less than master craftsperson who is instructor
Training & Development Delivery Systems
• Corporate universities
• Colleges and universities
• Community colleges
• Online higher education
• Videoconferencing
• Vestibule system
• Video media
• Simulators

Corporate Universities
• Delivery system provided under umbrella of organization
• Focused on creating organizational change
• Proactive and strategic
• Recent years has seen decline of corporate universities

Colleges and Universities

• Primary method for training professional, technical, and management employees
• Corporate training programs often partner with colleges and universities

Community Colleges
• Publicly funded higher education
• Deliver vocational training and associate degree programs
• Rapid technological changes and corporate restructuring have created new demand

Online Higher Education

• Educational opportunities include degree and training programs
• Delivered either entirely or partially via Internet
• Allows employees to attend class at lunchtime, during day, or in evening
• Reduces or eliminates commute to school

Types of Online Higher Education

• Hybrid programs
• Online synchronized study
• Asynchronous learning

Vestibule System
• Occurs away from production area
• Uses equipment that closely resembles equipment actually used on the job
• Removes employee from pressure to produce while learning
• Emphasis on learning skills required for job

Video Media
• DVDs, videotapes, and film clips continue to be popular training delivery systems
• Especially appealing to small businesses

Simulators
• Devices or programs that are located away from the job site
• Replicate actual job demands
• Example: Flight simulators used to train pilots

Informal Training through Social Networking

• Today’s employees interact, learn, and work in much different ways and styles
• Often takes place outside the corporate training departments
• Constructivism: Teacher guides the learner toward multiple learning sources, rather than acting as the sole
source of knowledge

Management Development
• Upgrading skills and knowledge needed in current and future managerial positions
• Managers keep up with latest developments in their fields while managing ever-changing workforce in
dynamic environment
• First-line supervisors, middle managers, and executives may all participate

Mentoring
• Approach to advising, coaching, and nurturing
• Creating practical relationship to enhance:
– Individual career
–Personal and professional growth and development
• Mentor can be located anywhere
• Relationship can be formal or informal

Mentoring for Women and Minorities

• Some believe that having a mentor is essential to “make it to the top”
• Mentors tend to seek out mentees who resemble themselves
• Women and minorities are often left without mentors

Coaching
• Often considered responsibility of immediate boss or supervisor
• Coach provides assistance much like a mentor would
• Customized employee development

Reverse Mentoring
Process through which older employees learn from younger employees
Existence of these two diverse groups has led to reverse mentoring

Orientation (Onboarding)
• Initial T&D effort designed for employees
• Goal is to inform them about company, job, and workgroup
• Helps them decide whether or not to stay at a company within their first 6 months
Purposes of Orientation
• Employment situation
• Company policies and rules
• Compensation and benefits
• Corporate culture
• Team membership
• Employee development
• Socialization

Implementing Human Resource Development Programs

• Often difficult
• Many managers are action-oriented and feel they are too busy to engage in T&D efforts
• Qualified trainers must be available
• T&D requires a high degree of creativity

Metrics for Evaluating Trainingand Development

• Participant opinion
• Extent of learning
• Behavioral change
• Accomplishment of T&D objectives
• Return-on-investment from training
• Benchmarking

Participant Opinion
• Measures level of customer satisfaction
• Overall experience could bias some reports
• Good way to quickly and inexpensively obtain feedback

Extent of Learning
• Determines what participants have learned
• Pre-test/post-test control group design
• Differences are attributed to training provided
• Problem: Controlling external variables

Behavioral Change
• Tests give little insight into whether participants will change their behavior
• Best demonstration of value is when learning translates into lasting behavioral change

Accomplishment of T&D Objectives

• Asks whether training programs have actually impacted performance
• Example: Comparing accident rates before and after training provides a useful metric of success

Return-on-Investment from Training

• Highest level of determining training effectiveness is return-on-investment (ROI) from training
• CEOs want to see value in terms that they can appreciate, such as business impact, business alignment, and
return-on-investment

Benchmarking
• Process of monitoring and measuring firm’s internal processes, such as operations, and then comparing data
with information from companies that excel in those areas
• Focus on metrics, such as training costs, ratio of training staff to employees, and whether new or more
traditional delivery systems are used
Remuneration Systems – 5

Compensation: An Overview
Compensation refers to the total rewards provided to employees in exchange for their services.
• Direct financial compensation: Wages, salaries, bonuses, and commissions
• Indirect financial compensation (benefits): All other financial rewards
• Nonfinancial compensation: Satisfaction from job itself or from psychological and/or physical environment in
which employee works

compensation is all about how employees are rewarded for their work in an organization. It includes salaries,
bonuses, benefits, and other perks that employees receive in exchange for their contributions. A well-designed
compensation system is essential for attracting and retaining top talent, motivating employees, and ensuring
fairness within the organization.

EquityTheory
• Motivation is in proportion to the perceived fairness of rewards received for amount of effort exerted.
• Compared to what others around the person receive for their efforts,
• Equity and fairness important in compensation.

Equity in Financial Compensation

• Financial equity: Perception of fair pay
• External equity: Employees paid comparably to workers who perform similar jobs in other firms
• Internal equity: Employees paid according to relative value of jobs within a single organization
• Employee equity: Individuals performing similar jobs for same firm paid according to factors such as
performance level or seniority
• Team equity: More productive teams are rewarded more than less productive groups

Organization as a Determinant of Direct Financial Compensation

• Compensation policies
• Organizational level
• Ability to pay

Compensation Policies
• Pay leaders: Pay higher wages and salaries to attract high-quality, productive employees and thus achieve
lower per-unit labor costs
• Market rate, or going rate: Pay what most employers pay for same job
• Pay followers: Pay below market rate because of firm’s poor financial condition or belief that it does not
require highly
capable employees

Organizational Level
• Upper management often makes decisions to ensure consistency
• Extreme pressure to retain top performers may override desire to maintain consistency in pay structure
Ability to Pay
Organization’s assessment of its ability to pay is an important factor in determining pay levels.

Labor Market as Determinant of Direct Financial Compensation

• Labor market: Potential employees located within geographic area from which employees are recruited
• Pay for same jobs in different labor markets may vary considerably
Compensation Surveys
• A means of obtaining data regarding what other firms are paying for specific jobs or job classes within a given
labor market.
• Market rates remain the most important standard for determining pay.

Expediency
• Managers in highly technical and specialized areas occasionally need to use nontraditional means to
determine what constitutes competitive compensation for scarce talent and niche positions.
• Need real-time information

Cost of Living
• When prices rise over a period of
• Some firms index pay increases to inflation rate

Labor Unions
• Mandatory collective bargaining between management and unions on:
– Wages
– Hours
– Other terms and conditions of employment
• Cost-of-living allowance has been disappearing

The Economy
• Affects financial compensation decisions
• Depressed economy generally increases labor supply
• Cost of living often rises as economy expands
Job as Determinant of Direct Financial Compensation
• Job itself is a factor, especially in firms that have internal pay equity as primary consideration
• Organizations pay for value they attach to
certain:
– Duties
– Responsibilities
– Other job-related factors, such as working conditions

Job Analysis and Job Descriptions

• Before organization can determine relative difficulty or value of jobs, they must first define content
• This is done by job analysis and job descriptions

Job Evaluation
• Firm determines value of one job in relation to another

Employee as Determinant ofDirect Financial Compensation

• Performance (performance-based pay)
• Skills (skill-based pay)
• Competencies (competency-based pay)
• Seniority
• Experience
• Potential
• Political influence
• Luck
Performance-Based Pay
• Merit pay
• Variable pay
• Bonuses
• Spot bonuses
• Piecework

Merit Pay
• Pay increase given based on level of performance, as indicated in appraisal
• Historically a cost-of-living increase in disguise
• Increases the employee’s base pay
• Some companies are freezing or cutting pay for some so as to be able to reward others

Bonuses
• Companies are increasingly placing higher percentage of compensation budget in bonuses
• One-time financial award based on productivity
• Based on productivity that is not added to base pay
• Use of bonuses is a win–win situation

Spot Bonuses
• Relatively small gifts to employees for outstanding work or effort
• For work done in relatively short period of time
• $100 or $500, perhaps up to $5,000, shortly after noteworthy actions

Piecework
• Employees paid for each unit they produce
• Especially prevalent in production/operations area
• Need plan for developing output standards
• Not feasible for many jobs
• Have declined in their use

Skill-Based Pay
• Compensates on basis of job-related skills and knowledge
• Employees and departments benefit when employees obtain additional skills
• Appropriate where work tends to be routine and less varied
• Must provide adequate training opportunities or it becomes demotivating

Competency-Based Pay
• Compensates employees for capabilities they attain
• Type of skill-based pay plan for professional and managerial employees
• Disappearance of the traditional job provides primary rationale for this change

Seniorit
• Seniority: Length of time employee has been with company
• Management generally prefers performance as primary basis for compensation changes
• Unions tend to favor seniority

Experience
• Has potential for enhancing person’s ability to perform
• Materializes only if experience acquired is positive
• Today technology may have rendered experience useless unless person has kept up with the technology
available

Organization Membership
• Receive some compensation components without regard to particular job they perform or their level of
productivity
• Receive them because they are members of the organization

Potential
• Useless if it is never realized
• Many young employees are paid well because they have the potential to add future value
• Used to attract talented young people to the firm

Political Influence
• Firms should obviously try not to permit political influence to be a factor
• To deny its existence would be unrealistic
• Natural for a manager to favor a friend or relative in granting a pay increase or promotion

Luck
• Helps to be in the right place at the right time
• Opportunities are continually presenting themselves
• Luck works primarily for the efficient

Fringe Benefits
• an extra benefit supplementing an employee's money wage or salary, for example a company car, private
healthcare, etc.
• Rs 50,000 per month - Direct
• Car - Indirect / Benefit / Fringe

Employment Services and Administration – 6

Health, Safety andwelfare
• Safety Hazard and Health Hazards
• Safety Hazard : Potentail to cause immediate and sometime violent harm or death. Eg. Poorly maintained
equipment, unsafe machinery, exposure to chemicals
• Health Hazards : Slowly and comulatively lead to deterioration of health - illness
• Example : 3000 death in Bhopal after gas leak

Cause of work related Accidents and illness

• Tasks
• Working Conditions
• Nature of employees

Hazards in Textile Industry

• Cotton Dust - Brown Lung
• Noise - Hearing loss
• Chemical exposure - dyes - headache, allergy , cancer etc
• Moving machine parts without barriers - Loss of finger/hand
OSHA - Occuptational safety and health act
• Inspection
• Reporting

Stress Management
• Stress is common experience
• Minimal stress is good, excessvcauses lot of problems
1. Pschological Problem
2. High Blood pressure
3. Heart Disease
4. Anxiety & depression
• Stressors : Workload, roleconflict
• Coping up with stress - exercise, eliminate stressors, meditation

Sickness and Absense

• Sick leave Provision
• Medical certificate
• Absentism
• Notice of Absentism /Leave

Employee protection
• Employment protection laws and regulations deal with the rights of employees, including the right to
advance
notice of termination, the right to redundancy payments upon termination, rights to leave for maternity,
disability, and other medical issues, and many others.
• Some Rights that employee get in Nepal
– Min Pay = Rs 13,450 /-
– Notice of termination : 30 days
– Transport for female employee working in nightshift
– Provident fund / Gratuity / Pensions
– Unlawful terminations

Termination of employment contract

Employee can resign or can be dismissed from the job on various grounds. In both case notice period must be
served.
• Dismissal- Dismissal (also referred to as firing or sacking) is the termination of employment by an employer
against the will of the employee.
• Such a decision can be made by an employer for a variety of reasons, ranging from an economic downturn to
performance-related problems on the part of the employee

• Redundancy
– the state of being no longer in employment because there is no more work available.

Hazards
Wet floor

Industrial Relations– 7
What is the labor union?
An organized association of workers, often in a trade or profession, formed to protect and further their rights
and interests; a trade union.

Why Employees Join Unions

• Dissatisfaction with management
- Job security , Management attitude, Compensation
• Social outlet - various program
• Opportunity for leadership
• Forced unionization
• Peer pressure
Collective Bargaining Defined
Collective bargaining is group action / negotation with • objective to reach an agreement with the
management of the company.
• Collective negotation between employee andemployeer
• It is a process in which employers and duly appointed representatives of the employees negotiate an
agreement, pertaining to wages, hours, and other terms and conditions of employment.

Bargaining Unit
• Consists of employees recognized by the employer or certified by an administrative agency as appropriate for
representation by labor organization for purposes of collective bargaining.

• In Nepal : Assigned by Labor union or supported by 60% of employees in case of absence of labor union. (3-
11 member)

Bargaining Issues
Document that results from collective bargaining process is a labor agreement or contract.
•Recognition
•Management rights
•Union security
•Compensation and benefits
•Grievance procedure
•Employee security

Categories of Bargaining Issues

• Mandatory bargaining issues
– Wages, hours, etc.
• Permissive bargaining issues
– May be raised but neither side may insist that they be bargained over
• Prohibited bargaining issues
– Statutorily outlawed

Recognition
• Appears at the beginning of labor agreement
• Identifies union that is recognized as bargaining representative
• Describes bargaining unit

Management Rights
Section that is often (but not
always) written into labor
agreement that spells out rights of
management

Union Security
• Union member protection
• Union office & Facilities

Compensation and Benefits

• Wage rate schedule
• Overtime and premium pay
• Layoff or severance pay
• Holidays
• Vacation
• Family care

Grievance Procedure
• Grievance: Employee’s dissatisfaction or feeling of personal injustice relating to his or her employment
• Grievance procedure: Means by which employees can voice dissatisfaction with specific management actions

EmployeeSecurity
Seniority: Length of time employee
has been associated with a company, division, department, or job

Job-Related Factors
Many rules governing employee actions on job are included

Preparation for Negotiations

• Union must continuously gather information regarding membership needs to isolate areas of dissatisfaction
• Management also spends long hours preparing for negotiations

Negotiating the Agreement

• Begins with each side presenting initial demands
• Requires give and take
• Each side does not expect to obtain all demands presented

Breakdowns in Negotiations
• Third party intervention
• Union strategies for overcoming breakdowns
• Management strategies for overcoming breakdowns

Third Party Intervention

• Mediation: Neutral party comes in when impasse is reached
• Arbitration: Impartial third party makes binding decision to settle dispute
• Sources of mediators and arbitrators: Labour office, Ministry, Nepal government

Union Strategies for Overcoming Negotiation Breakdowns: Strikes

• Strikes: Union members refuse to work to pressure management in negotiations
• Strikes halt production, resulting in lost customers and revenue
• Fewer strikes today
• Timing is important
• Unions prefer to strike only as last resort

Union Strategies for Overcoming negotiation Breakdowns:Boycotts

• Union members agree to refuse to use or buy firm’s products
– Duration longer than strike
– Shoppers change buying habits
• Secondary boycott: Union practice to encourage third parties to stop doing business with company

Management Strategies for Overcoming Negotiation Breakdowns: Lockout

• Lockout: Management keeps employees out
• Operate by placing management and nonunion
workers in striking workers’ jobs
• Effective when:
– Management dealing with weak union
– Union treasury is depleted
– Business has excessive inventories
• Type of industry involved has considerable effect on impact of this maneuver

Reaching theAgreement
• Document that emerges from collective bargaining process is a “labor agreement” or “contract”
• Regulates relationship between employer and employees
• Essential but difficult task

Ratifying the Agreement

• May be more difficult for union
• Until approved by majority of union members, proposed agreement not final
• Approval process for management is easier

Administration of the Agreement

• Larger and perhaps more important
part of collective bargaining
• Seldom viewed by public
• Agreement establishes union-management relationship for duration of contract

Grievance Procedure in a Union Environment

• Normally well defined
• Usually restricted to violations of terms and conditions of agreement
• Multistep grievance procedure is most common type

Personnel Records – 8
Personnel Records
People employed in an organization engaged
• Personnel record and report is a statement describing an event, situation and happening in a clear manner.
• It provide both qualitative and quantitative information as to what happened and what is happening.
personnel records are essential documents that organizations maintain to keep track of
employees' information, such as personal details, job history, performance evaluations,
training records, and any other relevant data. These records help HR departments manage
employee information efficiently, make informed decisions, and ensure compliance with legal
requirements.
Personnel Records
• Complete details about all employees aremaintained in personnel records, such as, name, date of birth,
marital status, academic qualifications, professional qualifications, previous employment details, etc.
• Along with the form additional documents are also kept -
1. Citizenship /ID / License / Passport
2. Education Certificate
3. Photo
4. Experience Letter
5. Copy of employement contract
6. Application
7. Resume
8. Orientation File
9. Promotion Letters

Types of Personnel Records

• Records of employment contain applicants past records, list sources, employees progress, medical reports,
etc.
• Wages and salaries records contains pay roll records, methods of wages and salaries, leave records, turnover
records and other benefit records.

Personnel Records
• Training and development contains appraisal reports, transfer cases, training schedule, training methods.
• Health and safety records include sickness reports, safety provisions, medical history,
insurance reports, etc.
• Service Records are the essential records containing bio-data, residential and family information, academic
qualifications, marital status, past address and employment records.
Purposes of Personnel Records
• It helps to supply crucial information to managers regarding the employees.
• To keep an update record of leaves, lockouts, transfers, turnover, etc. of the employees.
• It helps the managers in framing varioustraining and development programmes on the basis of present
scenario.

Purposes of Personnel Records

• It helps the government organizations to gather data in respect to rate of turnover, rate of absenteeism and
other personnel matters.
• It helps the managers to make salary revisions, allowances and other benefits related to salaries.
• It also helps the researchers to carry in depth study with respect to industrial relations and goodwill of the
firm in the
market.

Impact of computer on Personnel functions

Popularly used computer applications / IT
• Human Resource ManagementInformation System (HRIS)
• Employee Self Portal
• Enterprise Resource Planning (ERP)
• Job Application System

Benefits of Computer on HRM

• Easy , Quick
• Ability to handle large data
• Lesser manpower required at HRM
• Bettter accurateness
• Information avaibility
• Easy and detailed report generation
• Payroll administration

Statistics application to personnel administration

• Statistical data are now widely used in making all administrative decisions.
• With statistical data and tools HRM decisions are made quickly and easily.
• Rational decision can be executed.

Important Topic for Exam

1.Job analysis, job analysis method

2.Action plan for shortage and excess of employees

3.Job description and vacancy announcement

4.Records , advantages and disadvantages of

computerized record, categories of personnel record

5.Payleaders, pay followers

6.Hazards, Hazards in textile industry

7.Labor union, bargaining unit, bargaining issues,

employee reason for joining labor union, grievance
procedure

8.Instructor Led trainings, internship, role playing

9.Compensation, spot bonus ,merit pay