Managing Global Workforce: Prof. Rama Shankar Yadav

Managing Global Workforce
Prof. Rama Shankar Yadav
Indian Institute of Management Rohtak
Circulation restricted.
Overview
• International HRM
• Difference between IHRM and Domestic HRM
• Basic steps in IHRM
• Key Issues in International Labour Relations

International Human Resource Management
• Globalization has significantly influence HRM practices and
policies
• All HRM functions need international orientation
• MNC operating internationally need to be more focused to attract,

motivate and transfer workforce globally
• The process of recruiting/hiring, allocating, motivating, training &

development, and compensating and utilizing human resources in
international business is called international human resource
management
• IHRM covers six main functions of domestic HRM such as HR

planning, recruiting, training and development, performance
management, compensation and labour relations
• The three countries categories of IHRM are country where

headquarter is based, country where subsidiary is located, and
country from where workforce and finances come
• The three types of workers in international business are host
country, parent country and third country nationals
• IHRM differs from domestic HRM on following points
1. More HR activities
2. Broader perspective
3. More involvement in employees’ personal lives
4. Greater workforce diversity
5. Change in Emphasis
6. More risk
7. More external influences

1) More HR activities
• IHRM has boarder scope in deal with employment related issues.
• For example: International taxation, host country regulations,

home country regulations, international orientation of relocating
and training of employees, and administrative and compensation
issues of expatriates, and language translation services
• Each HR functions has different scope and issues in IHRM
HR Planning
• Difficulty in implementation of HR policy and procedure in host

country
• Difficulty in aligning business strategy with HR strategy
• Providing career development opportunities to international

managers
Hiring
• Matching person and organizational fit (cultural match)
• Selection of expatriates
• Managing expatriates failures
• Managing repatriation process

Training and Development
• Language training
• Cultural training
• Training of expatriates and managers
Compensation
• Deciding compensation of expatriates
• Deciding compensation of parent, host, and third country

nationals
Performance Management
• Implementation of performance evaluation system in host country
• Physical distance, time difference, and reporting cost
• Raters to evaluate subsidiary performance

Industrial Relations
Who should deal industrial relations issues in subsidiary?
What is attitude and policy of parent company toward unions in

subsidiary?
What should be tactics to deal with unions in subsidiary?
2) Need for Broader Perspective
In dealing with compensation issues, HR manager in headquarter

need to consider different pay systems for parent, host, and third
country nationals, paying in different currencies, and change in
relative value of currency
In deciding fringe benefits, HR managers face difficulty, in most

countries providing health insurance is compulsory, whereas
definition of dependent varies from country to country, in some
countries dependent means multiple spouses, children, parents,
grandparents
3) More involvement in employees’ personal lives
In IHRM there is more involvement of HR department in dealing

with their personal issues for better selection, training, relocation and
effective management of global workforce
HRM department need to ascertain that managers selected for

foreign assignment understand housing, health care, and
remuneration package
HRM need to have more information about manager family,

schooling of their children, emotional and physical health of their
spouse and children etc.
‘International Human Resource Services’ section provide services to

managers like handling investment, banking, home rental, house
arrangements, home visits, and repatriation issues
Unlike domestic HRM in International HRM, HR manager needs to

understand more about their personal lives and provide support in
relocation for foreign assignment even assistance to children left
behind
4) Greater Work force Diversity
IHRM requires more emphasis on management of global and
diversified work force
Different work ethics, motivation level, cultural compatibility,

managing team work are main issues that IHRM to handle
5) Change in Emphasis
Emphasis has changed from idea of repatriation and dependence on
third country nationals towards development of local managers
As more trained local managers are available, the issue of training

and development of local managers come to highlight
Designing programs and policies to provide development

opportunities to local managers by placing them in headquarter
6) Risk Exposure
MNCs operating in different countries need to assess the law and

order situation and advise or provide support to their expatriates or
third countries employees
HR department may also need to have emergency evacuation

program for their employees working in highly risk areas
Poor selection decision may result into huge loss as in case of

expatriate may not perform well and recalled
If MNC’s policies and practices are hostile to unions, political party

or in violation of host country regulations, company can be asked to
win up operations or government may seize physical and financial
assets
7) External Influence
MNCs operating in host country face more external influence as

opposed to local company
Federal and local government, political figures, political and social

groups exert great pressure on foreign company
Subsidiary manager need to know local way of doing business,

dealing with different ministries, political parties, and labour unions
Growing interest in IHRM
There are number of reasons for growing interest in IHRM
Thanks to globalization, more and more entry of multinational

corporations means greater mobilization of human resources
In international business human resources performance is more

critical for success
The cost of underperformance in international assignment is very

high both in financial and image terms
The international expansion mainly depend on availability and

utilization of competent human resources
Finally, implementation of strategies is more crucial than developing,

and implementation is dependent upon culture that is developed by
HR policies and practices
Managing International HR Activities
HR Planning
Recruitment and
Organizational Effectiveness
Selection
Training and
Development
Performance
Management
Remuneration
Repatriation
Employee Relations
Multicultural
Management
Adopted from: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 664. 333
HR Planning
• HR planning in international business is more complex and

crucial
• HRP procedures are difficult to implement in different countries.

Cultural differences in view of planning
• Identification of top management
• Identification of critical competencies for future managers
• Providing developmental opportunities
• Tracking and supporting in pursuing international career path
• Aligning business strategy with HRP and vice-versa (European

and Asian strategy)
Recruitment and Selection
• Main issue in international hiring is not to select competent

employee but candidate who could mix with culture of
organization
Ethnocentric Approach
• All key management positions are held by parent country
nationals
• This is good strategy at early stage of new start up/operations in

host country
Polycentric Approach
• Subsidiary is headed by host country nationals and parent country
nationals are at the top positions in headquarter
• Some countries have made regulation or exert pressure to hire

host country nationals for top position in subsidiary
Geocentric Approach
In this staffing approach best people are selected to fill vacant

positions irrespective of their nationality
Staffing approach Advantages Disadvantages
Parent Country • Familiarity with • Difficulty in adjustment:
Nationals headquarters goals and foreign language, different
objectives culture and political and socio
• More organizational economic system
control and coordination • Cost of training, remuneration
• Competent managers are and family benefits
giving expatriate • Host countries nationals feel
opportunity demotivated when they see
• Specific skills and no further progress
experience • PCN can impose
unnecessarily HQ culture and
style
• Family adjustment issues
Staffing approach Advantages Disadvantages
Host Country • Familiarity with country’s • Communication problems
Nationals culture, political system and with home country
business practices management
• Low cost of hiring and • Little change of host
remuneration country nationals to get
• Promotional opportunities for international assignments
locals hence motivated and and experience
committed • Difficulty in inculcating HQ
• No language barrier management philosophy,
• Continuity of management culture, and best practices
Third Country • Low salary package as • Host country may not like
Nationals compared to PCN to hire TCN
• They are truly international • TCNs may not return to
managers their country
• May be more aware of host • Host country may be
country culture, political and sensitive or have hostile
economic system, language attitude toward TCN
hence easily and quickly • Resistance from subsidiary
adjust employees
Source: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 667 333
International Human Resource Management :
Special Reference to Expatriates
Lecture Overview
• International HRM
• Difference between IHRM and Domestic HRM
• Basic steps/activities in IHRM
• Key Issues in International Labour Relations

HR Planning
Recruitment and
Organizational Effectiveness
Selection
Training and
Development
Performance
Management
Remuneration
Repatriation
Employee Relations
Multicultural
Management
Adopted from: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 664. 333
Factors Influencing PCN and HCN Choice
Dimensions Factors
Parent Country Cultural distance between HQ and subsidiary, size
Characteristics of operation, research intensity
Industry Characteristics Financial institution, need for control, need to
customize
Subsidiary Age, acquired or strategic role of subsidiary,
Characteristics performance, ownership
Host Country Variables Educational levels, political risk, cost of hiring
Expatriates
Expatriates are those employees who work abroad (away from
their home country) for a specific time period with a planned
return to third country or home country
Expatriates Assignment life cycle Reassignment
Crises and abroad
adjustment
Need for Departure
expatriates
Post arrival
training
Repatriation
Pre assignment or and
Selection adjustment
training
process
Crises and
failure
Reasons of Expatriate Failure

US Firms Japanese Firms
Spouse adjustment problem Inability to cope with
international responsibilities
Inability of managers to adjust Difficulties with environment
Other family reasons Personal and emotional
problems
Personal and emotional Lack of technical competence
maturity of managers
Inability to cope with Spouse adjustment problem
international responsibilities
Expatriate Adjustment Process
Cultural Shock Cycle

High
Mood
Low
Months in new culture
Expatriate Selection Decision
Individual Situation
Technical Ability Country-cultural requirements
Cross cultural suitability MNC requirements
Family requirements Language
The common objectives of training and development in MNCs

are
• Bridging cultural gap between subsidiary and HQ
• Orientation challenges are different in HQ and subsidiary
• Building united corporate culture
• Training and development activity IHRM most of the time

focus on training of candidate likely to be posted abroad
• Expatriates are giving training to reduce likelihood of

failure in foreign assignment. The main components of
training of expatriate are cross cultural, language and
practical training, and management development programs
1) Cross Cultural Training:
• Expatriate receives pre-departure training on host country

culture to make it easy for him/her to adjust to new culture
• Expatriate often receives training on repatriation to avoid

cross cultural shock
Merits Demerits
More chances of success in May not remove cultural biases
foreign assignment
Provides comprehensive global Recipient may not take it
perspective serious
Sense of confidence May not make real difference
in business
Reduces cultural shock Can not prepare manager to
face all real life problem
In IHRM performance management tend to focus on evaluation

of performance and continuous improvement of individual,
subsidiary and corporate performance against pre set targets
and objectives
Steps in Performance Management of Expatriate
Linkage to organizational strategy
Setting individual performance goals
Identifying variable impacting performance
Appraising the performance
Providing regular feedback
Providing opportunities for development
Linking results with rewards
Expatriate’s Compensation
The objectives of expatriate compensation
1. Attract employees for international assignment
2. Facilitate the movement
3. Be cost effective
4. Provide consistent relationship between HQ employees

and foreign subsidiary
Problems with expatriate compensation
5. Gap between pay of parent, host and third country

nationals
6. The pay variation considering the expatriate's family
7. Issues relating to entry of expatriate back to parent

country
MNC Internal MNC external

environment environment
• Goal orientation • Parent nationality
• Capacity to pay • Local culture
• Internal workforce • Host and home
country government
composition
role
• Subsidiary role • Industry type
• Competitor's strategy
Staffing Option
Compensation
strategy
Source: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 6773
Base Salary
• Different meaning from domestic employment
• Primary component of package of allowances (foreign

assignment premium, house allowance, and cost of living
allowance)
• Payment in home country and host country currency
Benefits Issues
• Whether expatriate subscribe to home country benefits (if
there is tax exemption)
• Whether home or host country is responsible for social

security benefits
• Whether the benefits should be according to host or home

country requirements
• Whether home country benefits be available to local

citizens
Allowances
• Cost of living allowance, provide same standard of living as
expatriate was enjoying in home country
• Covers expenses like relocation, housing, hardship, and

education
• Spouse assistance (protect or compensate loss in case of

spouse lost income due to relocation)
• Offer support to find spouse job or placement in subsidiary

Incentives
• Incentive is once time lump-sum payment apart from
regular salary
• Tax equalization: MNC based on home country tax
obligation withhold or deduct amount from expatriate
salary and pay all taxes in host country
• Tax protection: Employee pays up to the taxes he would

pay on remuneration in his home country and entitled to
retain extra in case tax deduction is less in foreign
assignment
Tax Consideration
• Tax equalization: MNC based on home country tax

obligation withhold or deduct amount from expatriate
salary and pay all taxes in host country
• Tax protection: Employee pays taxes he would pay on

remuneration in his home country and entitled to retain
extra in case tax deduction is less in foreign assignment
Tailoring the package
Balance sheet approach

• Equate purchasing power of expatriate in host country with
home country
Going rate approach

• Expatriate compensation is linked with host country on
going rate
Lump-sum method
• Giving lump-sum amount and expatriate has option to
spend in a way he likes
Regional approach
• In which MNC decide compensation system for particular
region (Europe, South Asia, Middle east)
Repatriation
Bringing expatriate back to home country after completion of
assignment or due to other reasons (failure to perform,
adjustment problems, family problems)
Re-entry shock or reverse culture shock
Benefits of returnees
• Exposure to global culture and local culture
• Part of global network
• Understand operations of HQs and subsidiary (overseas

operations)
• Transfer technology, business knowledge back to home

country
• Provide coordination and communication support

Benefits from returnees
• Exposure to global culture and local culture
• Part of global network
• Understand operations of HQs and subsidiary (overseas

operations)
• Transfer technology, business knowledge back to home

country
• Provide coordination and communication support
• Personal and professional growth (global and broader

vision)
Repatriation Process
Preparation
Physical
relocation
Repatriation
Process
Transition
Re-adjustment
Source: Aswathappa. Human Resource Management, Text and Cases, 2008, p. 681
Repatriation
Challenges of Re-entry
Individual Perspective
• Personal Perspective: Face reverse cultural shock
schooling, social network, loss of income, lower social
status
• Professional disappointment: No use of his expertise and
skills gained during foreign assignment, less authority,
autonomy, and importance
• Often limited promotion opportunities and career choices

means removed from mainstream corporate advancement
Organizational Perspective
• Retaining the expatriate after repatriation
Industrial Relations
Who should deal industrial relations issues in subsidiary?
What is attitude and policy of parent company toward unions

in subsidiary?
What should be tactics to deal with unions in subsidiary?

Multiculturalism
Culture is customs, beliefs, values and norms that guide

behavior and pass from one generation to other
Multiculturalism when people from different cultures interact

regularly
IHR managers should have cross cultural competence
Should have strong personal identity, knowledge of different

cultures, communicate effectively in language of given culture
group
Hofstede Cultural dimensions: Power distance, uncertainty

avoidance, Individualism, and masculinity
Thank You
Questions ??
Human Resource Management
Session 2
WHAT IS HRM?
• Activities and practices to plan for, attract, select,
develop and retain human resources, to achieve
the organization’s goals
• The objective is to determine the best use of the

talent and skills available to accomplish the
organizational goals
44
Human resource management is the
responsibility of every manager—not just
those in human resources.
1-45
Why Is Human Resource Management Imp
ortant to All
Managers?
• No manager wants to:

o Hire the wrong person for the job
o Experience high turnover
o Have your people not doing their best
• You May Spend Some Time as an HR
Manager
1-46
Trends in Human Resource
Management
• Technological advances
• Globalization and competition
• Trends in the nature of work
• Demographic and workforce trends
• Economic challenges and trends
1-47
AREAS IN HRM
• HR Utilization
– Workplace planning
– Recruitment
– Selection
– Training and development
– Appraisal
– Compensation
– Managing Industrial Relations
48
JOB ANALYSIS
• Consider this example: Clarke and Associates, a strategic management
services company, has a client with a 65 percent turnover of sales
professionals over the past eighteen months. An analysis of the
resignations indicated that the average length of stay has been only
nine months. Perplexed by this dilemma and the resulting loss to
productivity and revenue, consultants from Clarke recommended an
investigation to find out why such high turnover levels exist. The complex
investigation partly involved contacting most of the individuals who
resigned to ask them why they quit. Responses indicated that what they
were hired to do often differed substantially from what they were
required to do. The actual work required different skills and
aptitudes. Many quit in frustration and fear that they would not be able
to meet job goals. They believed this might lead to a firing that would
look bad on their resume.
Unfortunately, the company’s training costs over the past three years
ran approximately 300 percent over budget. When one senior manager
was asked what made it so difficult to properly match the job
requirements with people skills, she had no answer. No one in the
organization had taken the time to find out what the jobs were all about.
In other words, the job analysis process was lacking.
Definition
Job :
• According to Dale Yoder ‘, “A job is a collection or

aggregation of tasks, duties and responsibilities which
as a whole, is regarded as a regular assignment to
individual employees and which is different from other
assignments”
51
Job Analysis
Job analysis is a systematic exploration of the

activities within a job.
– it defines and documents the duties,

responsibilities, and accountabilities of a job and
the conditions under which a job is performed
• Job analysis -
– Job description – document providing information

regarding tasks, duties, and responsibilities of job
– Job specification – minimum qualifications to

perform a particular job
• sample job analysis
53
Job Analysis
Required for :
 describing job to candidates
 guiding new-hires
 developing performance evaluation criteria
 evaluating job’s compensation worth

Job Analysis
Almost all HRM
activities are tied
to job analysis; it
recruiting
is the starting
labor selection
point for sound relations
HRM.
HR
safety &
planning
health
job analysis
job description
job specifications employee
compensation development
performance employee
management training
career
development
Job Analysis
Job analysis methods
1. observation– job analyst watches employees directly or reviews

film of workers on the job
2. individual interview– a team of job incumbents is selected and
extensively interviewed
3. group interview– a number of job incumbents are interviewed
simultaneously
4. structured questionnaire– workers complete a specifically
designed questionnaire
5. technical conference– uses supervisors with an extensive
knowledge of the job
6. diary– job incumbents record their daily activities
The best results are usually achieved with some combination of methods.
Timeliness of Job Analysis
Rapid pace of
technological change
makes need for
accurate job analysis
even more important
now and in the future.
57
Job Analysis: A Basic Human Resource Management Tool
 Human Resource
Tasks Responsibilities Duties Planning
 Recruitment
 Selection
 Training and
Development
Job  Performance Appraisal
Descriptions  Compensation and
Job Benefits
Analysis  Safety and Health
Job  Employee and Labor
Specifications Relations
 Legal Considerations
 Job Analysis for Teams
Knowledge Skills Abilities
58
HR Planning
• What is HR Planning?
 Why is it rarely done?
 What is the connection between a firm’s

strategic orientation and HR planning?
Strategic Planning
The process by which top management

determines overall organizational purposes and
objectives and how they are to be achieved
60
Examples of
Organizational Goals
• To increase company profits by 10% in the next fiscal year

(profitability)
• To close 25 retail outlets in the next four years (downsizing)
• To bottle 10% more cola drink in the next year (production)
• To guarantee one-day delivery of all the orders within the

country by 2020 (service level)
4.4
Human Resource Planning
– The process of analyzing and identifying the need

for and availability of human resources so that the
organization can meet its objectives.
2–62
Purpose of Strategic HR Planning
2–63
• HR Planning Responsibilities
– Top HR executive and subordinates gather

information from other managers to use in the
development of HR projections for top management
to use in strategic planning and setting
organizational goals
Typical Division of HR Responsibilities:
HR Planning Fig. 2-3
2–65
Human Resource Planning Process
External Environment
Internal Environment
Strategic Planning
Human Resource Planning
Forecasting Comparing Forecasting

Human Human Resource
Resource Requirements
Requirements and Availability Availability
Demand = Surplus of Shortage of

Supply Workers Workers
No Action Restricted Hiring, Recruitment

Reduced Hours,
Early Retirement, Selection
Layoff, Downsizing
66
Forecasting HR Supply and
Demand
• Forecasting
– The use of information from the past and present
to identify expected future conditions.
• Forecasting Periods
– Short-term—less than one year
– Intermediate—up to five years
– Long-range—more than five years
2–67
Forecasting HR Supply and Demand
• Forecasting the Demand for Human Resources
– Organization-wide estimate for total demand
– Unit breakdown for specific skill needs by number and

type of employee
• Develop decision rules (“fill rates”) for positions to be

filled internally and externally.
• Develop additional decision rules for positions impacted

by the chain effects of internal promotions and transfers.
2–68
Sample Questions from a Unit
Forecasting Questionnaire
• - List any jobs that have changed since the last forecasting period and
any that will change in the next forecasting period.
• - If vacancy can be filled with present employees, note whether
training will be required. Specify nature of training needs.
• - What percentage of employees are performing jobs up to standard?
• - How many employees will be absent in the next forecasting period
because of disability, educational, or other leaves?
4.11
Forecasting HR Supply and
Demand
Methods for Forecasting Demand
Quantitative Qualitative
(Mathematical) (Judgmental)
Trend analysis Rule of thumb
Ratio analysis Estimating:
Regression analysis Delphi technique
Simulation models Nominal group technique
2–70
Statistical Techniques Used to Project
Staffing Demand Needs
Name Description
Regression analysis Past levels of various work load indicators, such as sales,
production levels, and value added, are examined for statistical
relationships with staffing levels. Where sufficiently strong
relationships are found, a regression (or multiple regression)
model is derived. Forecasted levels of the retained indicator(s)
are entered into the resulting model and used to calculate the
associated level of human resource requirements.
Historical data are used to examine past levels of a productivity

Productivity ratios
index (P):
P = Work load / Number of People
Where constant, or systematic, relationships are found, human

resource requirements can be computed by diving predicted
work loads by P.
The Nominal Group Technique
A small group of 4-5 people gathers around a table. Leader identifies
judgment issue and gives participants procedural instructions.
Participants write down all ideas that occur to them, keeping their
lists private at this point. Creativity is encouraged during this phase.
Leader asks each participant to present ideas and writes them on a

blackboard or flipchart, continuing until all ideas have been recorded.
Participants discuss each other’s ideas, clarifying, expanding, and

evaluating them as a group.
Participants rank ideas privately in their own personal order and

preference.
The idea that ranks highest among the participants is adopted as the
group’s judgment.
The Delphi Technique
Leader identifies judgment issues and develops questionnaire.
Prospective participants are identified and asked to cooperate.
Leaders send questionnaire to willing participants, who record

their judgments and recommendations and return the
questionnaire.
Leaders compiles summaries and reproduces participants’

responses.
Leader sends the compiled list of judgment to all participants.
Participants comment on each other’s ideas and propose a

final judgment.
Leader looks
for consensus
Leader accepts consensus judgment as group’s choice.

Forecasting HR Supply
• Forecasting External HR Supply
– Factors affecting external supply

• Individuals entering and leaving the workforce
• Individuals graduating from schools and colleges
• Changing workforce composition and patterns
• Technological developments and shifts
• Actions of competing employers
• Government regulations and pressures
2–74
Forecasting HR Supply
• Forecasting Internal HR Supply
– Review skills inventories

– Examine organizational charts or staffing tables
– Replacement charts
– Implement succession planning
• The process of identifying longer-term plan for the
orderly replacement of key employees.
2–75
Executive Replacement Chart for Hypothetical
Company
2–76
Assessing the Internal Workforce
• Jobs and Skills Audit
– What jobs exist now?
– How many individuals are performing each job?
– What are the reporting relationships of jobs?
– How essential is each job?
– What jobs will be needed to implement future organizational

strategies?
– What are the characteristics of anticipated jobs?

Assessing the Internal Workforce
• Organizational Capabilities Inventory
– HRIS databases—sources of information about

employees’ knowledge, skills, and abilities (KSAs)
– Components of an organizational capabilities inventory

• Individual employee demographics
• Individual employee career progression
• Individual job performance data

2–78
Estimating Internal Labour Supply
for a Given Unit
2–79
Compare requirements and
availability
- Create plan of action to reconcile supply

and demand
a. Set objectives
b. Generate alternatives
Food for thought!
• Issue 1
– Does an organization have any ethical responsibility
to share with all of its employees the results of its
forecasting of HR requirements and availabilities?
Does it have any ethical responsibility not to do this?
Staffing Alternatives to Deal with
Employee Surpluses
Source: Compliments of Dan Ward, GTE Corporation

Making Downsizing More Effective Fig. 2-11
2–83
Staffing Alternatives to Deal with
Employee Shortages
Source: Compliments of Dan Ward, GTE Corporation

Information Needed to Identify
Appropriate Ways to Deal with Labour
Surplus/Shortage
• Financial and human costs and benefits
• Effects on other organizational components
• Length of time to implement the alternatives and

generate desired results
• Probability of success in reducing the shortage or

surplus
4.17
Case
HUMAN RESOURCE
MANAGEMENT
RECRUITMENT
AND
SELECTION
AFTER STUDYING THIS CHAPTER YOU SHOULD BE ABLE TO:
 Understand and Differentiate between strategic

recruitment and selection.
 Identify the dual goals of recruiting.
 Comprehend recruitment process from organizational as
well as individual perspective.
 Identify what strategic decisions are involved in recruiting.
 Explain the major recruitment methods and analyze their
advantages and disadvantages.
 Identify the basic selection criteria.
 Design and administer an effective selection process.
 Evaluate the three methods e.g., information gathering,
tests and interviewing used in employee selection.
 Appreciate varied contemporary interviewing techniques
used by interviewers.
HUMAN RESOURCE
MANAGEMENT
BUSINESS OBJECTIVES
HR PLANNING
JOB ANALYSIS
JOB DESCRIPTION JOB SPECIFICATION
RECRUITMENT
RECRUITMENT
The Process of generating a pool of qualified candidates for

a particular job.
OR
The Process of discovering potential candidates.

RECRUITMENT GOALS
Attract the Qualified Applicants.
Encourage Unqualified Applicants to self-

select themselves out.
Applicant Pool Quality
Best
Applicant “Best of the Best”

Pool
Applicant
Pool “Best of the Worst”
Worst
RECRUITMENT IS A TWO
WAY STREET
Organization is Looking Applicants are Looking

for a Qualified RECRUITMENT for the Potential
Applicants placement Opportunities
Person-Job Fit
Overqualified
Match
Underqualified
Person-Organization Fit
• Personality
• Goals
• Values
• Interpersonal skills
RECRUITMENT PROCESS
ORGANIZATION CANDIDATE
Receive Education and choose

Vacant or New position occurs
Occupation
Generate candidate pool via
internal or external recruitment Acquire Employment Experience
methods
Evaluate Candidates via Selection
Search for Job Openings
process
Impress Candidates Apply for jobs
Impress Company during Selection

Make Offer
process
Evaluate Jobs and Companies
Accept or Reject Job Offers

STRATEGIC RECRUITING
DECISIONS
 How Many Employees Needed

HR PLANNING  When Needed
DECISIONS  KSAs Needed
 Special Qualifications
 Where to Recruit: Internal/External

STRATEGIC  Who to Recruit: Flexible Staffing
RECRUITING Options
DECISIONS  Nature of Job Requirements
DECISIONS ON
RECRUITING  Advertising Choices
SOURCES/METHODS  Recruiting Activities
SOURCES OF RECRUITMENT
SOURCES OF
RECRUITMENT
INTERNAL EXTERNAL
SOURCES SOURCES
SOURCES OF RECRUITMENT
Job Posting
Promotions and
Transfers
INTERNAL Employee
SOURCES Referrals
Re-recruiting former
Employees
Internal Recruiting
Data base
SOURCES OF RECRUITMENT Cont . . .
INTERNAL SOURCES
ADVANTAGES DISADVANTAGES
 Morale of Promotee  Inbreeding

 Better assessment of abilities  Possible morale problems of
 Lower cost for some jobs those not promoted
 Motivator for good performance “Political” infighting for
 Causes a succession of promotions
promotions  Need for Management-
 Have to hire only at entry level Development program
Schools Colleges &

Universities / Educational
Associations
Advertising
EXTERNAL
SOURCES
Media Sources/ Online
Recruiting
Employment Agencies and

Consultants
EXTERNAL SOURCES
ADVANTAGES DISADVANTAGES
 New “blood” brings new  May not select someone who will
perspectives “fit” the job or organization
 Cheaper and faster than training  May cause morale problems for
 Professionals internal
 No group of political supporters in  Longer “adjustment” or orientation
company time
May bring new industry insights
Trends in recruitment
• Outsourcing
• Poaching
• E-Recruitment
RECRUITING EVALUATION
Quantity of Quality of
Applicants Applicants
As the goal of a good recruitment In addition to quantity, the issue arises as

program is to generate a large pool of to whether or not the qualifications of the
applicants from which to choose, applicant pool are sufficient to fill the job
quantity is a natural place to begin openings. Do the applicants meet job
evaluation specification and do they perform the
jobs well after hire?
Evaluating
Yield Ratio Recruiting Costs and
Benefits
In a cost/benefit analysis to evaluate
recruiting efforts, costs may include both
A comparison of the number of
direct costs (advertising, recruiters’
applicants at one stage of the salaries, travel, agency fees, telephone)
recruiting process to the number at and the indirect costs (involvement of
the next stage. operating managers, public relations,
image).
RECRUITING EVALUATION Cont . . .
Using Yield Ratios to Determine Needed Applicants:
300 Applicants
Initial Contacts/Final
Interview
(Yield ratio = 3:1)
100 Final Interviews
Final Interview/Offers
(Yield ratio = 2:1)
50 Offers
Offers/Hires
(Yield ratio = 2:1)
25 Hires
CONSTRAINTS ON RECRUITMENT
Image of the
Company
Attractiveness of
Job
Internal Organizational
Policy
Recruitment Cost
SELECTION
1
• The Process of making a “Hire” or “No Hire”
decision regarding each applicant for a job.
Or
2
• Selection is the process of choosing qualified
individuals who are available to fill the positions in
organization.
BASIC SELECTION
CRITERIA
Formal Education
Experience and Past Performance

BASIC
SELECTION
CRITERIA Physical Characteristics
Personality Characteristics
SELECTION PROCESS
Initial screening
Fail to meet minimum qualification
Passed
Completed application
Failed to complete job
application or failed job
specification
Passed
Employment test
Failed Test
Passed
Passed Conditional job
Comprehensive interview
offer
Failed to impress
interviewer and / meet
job expectations
Background Examination if
Problem required
encountered
Passed
Reject Applicant
Medical/physical examination if
required (conditional job offer
Unfit to do essential
elements of job Able to perform
essential elements
of job
Permanent job offer

SELECTION METHODS
The Three most Common Methods
used are:
1. Testing
2. Gathering Information
3. Interviewing
SELECTION METHODS Cont . . .
1. TESTING
Tests measure knowledge, skill, and

ability, as well as other characteristics,
such as personality traits.
TESTING TYPES
Work
Cognitive Personality Physical Integrity
Drug Test Sample
Ability Test Test Ability Test Test
Testing
1. Cognitive Ability Testing 2. Physical Ability Testing
It measures the learning,

understanding, and ability to It assesses muscular strength,
solve problems. e.g. cardiovascular endurance,
TESTING
Intelligence Tests. and coordination.
TYPES
3. Personality Testing
It measures the patterns of

thought, emotion, and
behavior. e.g. Myers Briggs
4. Integrity Testing 6. Drug Testing
Normally requires
It is designed to assess the TESTING applicants to provide
likelihood that applicants TYPES required sample that is
will be dishonest or engage
tested for illegal substances.
in illegal activity.
5. Work Sample Testing
Measures performance on
some element of the job.
2. INFORMATION GATHERING:
Common methods for gathering information include
application forms and résumés, biographical data, and
reference checking.
Application Forms  Generally ask for information such as

and Résumés address and phone number, education,
work experience, and special training.
Biographical  Historical events that have shaped a

Data person’s behavior and identity.
Reference  Involves contacting an applicant’s previous

Checking employers, teachers, or friends to learn
more about the applicant.
3. INTERVIEWS:
 The interview is the most frequently used

selection method.
 Interviewing occurs when applicants respond
to questions posed by a manager or some
other organizational representative
(interviewer).
 Typical areas in which questions are posed
include education, experience, knowledge of
job procedures, mental ability, personality,
communication ability, social skills.
Situational Interview
1. Structured
Interviews
Behavioral Interview
Types of
Interviews
2. Unstructured
Interviews
1. Structured 2. Unstructured
Interviews Interviews
Uses a list of predetermined

questions. All applicants are Interviews-open ended
asked the same set questions. questions are used such as
There are two types of “Tell me about yourself”
structured interviews.
SITUATIONAL BEHAVIORAL • This allows the interviewer

INTERVIEW INTERVIEW to probe and pose different
• In which the • In which the sets of questions to different
interviewer asks questions focus on applicants.
questions about what the applicant’s
the applicant would
do in a hypothetical
behavior in past
situation situations.
CREATING STRUCTURED INTERVIEW

QUESTIONS
INTERVIEW QUESTION
INTERVIEW EVALUATION FORM
 Kohinoor Mills Ltd.

 Wateen Telecom
 Fauz
KOHINOOR
MILLS LTD.
WATEEN
TELECOM
FAUZ
COMMON INTERVIEWING
MISTAKES
Snap Judgments Negative Emphasis
Halo Effect Horn Effect
Biases Cultural Noise

Session 4
Objectives
Following this presentation you should be able to complete the following

objectives:
1. Describe why training is important and distinguish among training and

development
2. Define the ASK concept, and comment upon the relative difficulty in
developing people’s attitudes, skills and knowledge
3. List the steps in the training process.
4. Develop an appropriate training plan.

128
What is Training?
Training - a planned effort by a company to facilitate employees’ learning of job-

related competencies.
• Competencies include knowledge, skills or behavior critical for successful job
performance.
The goal of training is for employees to master the competencies and apply them to
their day-to-day activities.
129
Do Employees Need Training ?
• The answer is “YES”
• However, we must know the

purpose and functions of training
before we can use it.
– Job complexity
– Job changes
– Employee diversity 130

Importance of Training
• Maintains qualified products / services

• Achieves high service standards
• Provides information for new comers
• Refreshes memory of old employees
• Achieves learning about new things; technology, products
/ service delivery
• Reduces mistakes - minimizing costs
• Reduced supervision
• Improves communication & relationships131- better
teamwork
The Gap Concept
Expected Curve
1,000 Cars Gap

200 Cars
Performanc Actual Curve
e/Results
800 Cars
Time
In training terms this means we need to
develop programs to fill the Gap
132
BEFORE YOU TRAIN…..
• MAKE SURE
PERFORMANCE
DEFICIENCY IS DUE TO
LACK OF TRAINING
133
Need for Training ?
The reasons for not As training experts we must

making the 1,000 analyze the situation to
cars: determine if:
• Not enough resources • Expected result too high
• Poor machines • Target achievable
• Poor staff skills • Is training the only way to
make it happen
• Are there other factors.
134
The ASK Concept
• If we follow the GAP concept, training is simply a
means to use activities to fill the gaps of
performance between the actual results and the
expected results.
• This GAP can be separated into 3 main themes
1. Attitude
2. Skills
3. Knowledge
135
Exercise 1
Rank ASK by difficulty to develop in people
• Attitude
• Skills • Easy
• Knowledge • Moderately
difficult
• Most difficult
136
137
Exercise 2
• Imagine you are the managing director of a full
service restaurant. One day you receive a complaint
letter from a guest reporting s/he was not satisfied
with the follow up regarding their criticism of being
overcharged in one of your restaurants.
– Why was the complaint made?
– Is there a training need?
138
Reasons to Consider Conducting
an Internal Needs Analysis
1. Employee obsolescence/out-dated –
– Technical advancements, cultural changes, new systems,

computerization
2. Career plateaus
– Need for education and training programs
3. Employee Turnover
– Development plan for new employees

139
TRAINING - LEARNING THEORY
• Motivation
• Feedback
• Reinforcement
• Practices improves
performance, then
plateaus
• Transferable
140
Principles of Learning
DeCenzo and Robbins HRM 7th 141

Edition
A Systematic Approach
to Training
Key Concepts in Preparing a Training Plan
Before you train and develop people identify what:
– They must know - before they can perform job
– They should know - to improve performance
– Would be nice for them to know – but not necessary to perform

duties.
142
Model of the Training Process*
*Goldstein, I. (2002) Training in Organizations 4th
Ed.
Assessment Stage Training Stage Evaluation Stage
Organizational
Needs Assessment
Task Need Assessment
Development of Design & Select Measure Training

Training Objectives Procedures Results
Development of Train Compare Results to

Criteria for Training Criteria
Evaluation
Feedback 143
Nine Steps in the Training Process
1. Assessing training needs

2. Preparing training plan
3. Specifying training objectives
4. Designing the training program(s)
5. Selecting the instructional methods
6. Completing the training plan
7. Implementing the training program
8. Evaluating the training 144
1) Training Needs Assessment
A. Organization analysis: identify training needs of the organization

according to its long-term goals-set the training goals.
B. Job analysis: identify training needs according to job

descriptions and specifications—specify skills / knowledge /
behavior to be trained.
145
Training Needs Assessment
C) People analysis: identify people that need training and their trainability-identify potential trainees.
Evaluate Competencies and Determine Performance Gaps
• Evaluate current competencies and identify where there are gaps between current ability and
desired ability
• To evaluate current competency level use:
– Performance evaluations
– Tests
– Surveys
– Self assessments
– Interviews
– Customer feedback
Exercise 3
• Imagine you are the manager of a factory with 500
workers making ice cream for export to Europe.
• What information and evidence do you need before
you can say the employees need training?
• Try to list 5 ideas.
147
Response to exercise 3
• Accidents report
Staff discipline report
• Staff
Sick leave report
enquiries & complaints
• Product
Customerquality control report
complaints
• Wastage
Refusal ofreport
orders made
• Efficiency
Quality of report
product report
•• Machinery
Market needsout-of-order
& trends report
• Demographic data & background of employees
148
2) Preparing Training Plan
Consider whether to design a long (5-10 years), medium (3-5 years)
or short (1 year) term plan.
• Ask your self “What are we going to achieve in the time period?”
• Use a holistic approach by using a calendar for inputting your

training activities.
149
Training Calendar Example
Training Area Month in the year

1 2 3 4 5 6 7...
Attitude
Train the trainer
Job competency
Sales techniques
Telephone manner
… 150
Individual Plans
• Training areas maybe tailor-made.
– Trainee should receive an individual timetable for self

progress.
151
Important Trainee Characteristics
• Trainee readiness
– Trainability tests
• Have prospective trainees perform a sample of tasks that
reflect KSAs needed for job
• Trainee motivation
– Arousal, persistence, and direction
– Factors related to high motivation
• Self-efficacy
• Locus of Control
• Commitment to Career
3) Specifying Training Objectives
• Formal description of what trainee should be able to do after training
• Training Objectives must be specific & measurable.
– Why? Very difficult to measure effectiveness after course is finished.
– What should trainees be able to accomplish after participating in the

training program?
– What is the desired level of such accomplishment, according to industry

or organizational standards?
– Do you want to develop attitudes, skills, knowledge

153
or some
4) Designing the Training Program(s)
1. Training
7. Programlocation
duration& environment
2. Program
8. Criteria &structure
methods for assessing participant
3. learning andmethods
Instruction achievement
9.
4. Criteria
Trainers&qualification
methods for evaluating the program
5. Nature of trainees
6. Support resources – materials, classroom
154
5) Selecting Training Methods
Note: This is the most important step
On-the job-training (OJT)

– learn while you’re working
Off -the job-training
155
TRAINING Methods (ON-THE-JOB)
• Strengths
– Simple
– Actual job
• Weaknesses
– Productivity
– Mistakes
• Types
– Apprenticeship
– Job instruction training
– Internships
156
– Job Rotation
TRAINING METHODS (OFF-THE-JOB)
• Classroom lectures
• Films and videos
• Demonstrations
• Case studies
• Simulations
• Programmed instruction
– Interactive video disks
– Virtual reality
157
AND…..
• Computer-based
training
• Vestibule training
158
Off-the-job Training Methods
159
EMPLOYEE DEVELOPMENT
• Future oriented
• Education, not training
– Reasoning, decision
making
– Personal growth
• Proactive
160
EMPLOYEE DEVELOPMENT METHODS
• Job rotation
• Assistant-to positions
• Committee assignment
• Conferences and
seminars
• Management Games
• Experiential Exercises
• Adventure Training
• Lectures 161
• Simulations
Exercise 4
• Imagine you are the training manger of a hotel that will open
next year. Your GM asks you to develop a training program that
aims to boost the team spirit of the newly formed Executive
Committee Members.
• Your GM suggests you organize a two-day course in a resort
location from 9 to 5 for both days.
• Your task is to suggest 3 training methods that suit the training
theme described above.
Hint: this is attitude, not skills nor knowledge training
162
Response to exercise 4
Suitable training
Remember your training
methodstheme
you might
was to
have
change
listed:
the individuals
attitudes
• Role-play
Employ
• Games exercises that trainees can:
• Participate in
• Simulation exercises
• React to
• Discussion/debate formats
• Provide feedback in
• Experiential exercises
• Receive inspiration to move on
• Self evaluation (e.g. video tape trainees performance & let them
evaluate their own behaviors).
163
6) Completing the Training Plan
• Target group – assess your audience
• Topic – task, skill or attitude ingredient
• Method – direct (one way communication) or indirect

(discussion, games, experimental exercises…). Important as
evaluation of trainees usually lies on the perception on what
they did in the training session
• Time – length, period, breaks important to consider

164
7) Implementing the Training
Program
Besides trainers qualifications and experience:
• Participant selection
• Group comfort - physical & psychological
• Trainer enthusiasm & skills
• Effective communication
• Feedback mechanism
• The need to learn new training skills
• Preparation by trainers
165
8) Evaluating the Training
• Training is only effective if the information is retained and

applied on the job. Evaluation of training is critical
• Questions to consider in evaluation include:
– How much did the training improve the competencies?
– How did the training improve employees’ job performance?
– How did the training support meeting of business

objectives? 166
Three Levels of Evaluation
1. Immediate Feedback
 Survey or interview directly after training
2. Post-Training Test
 Trainee applying learned tasks in workplace?
3. Post-Training Appraisals
 Conducted by immediate supervisors of trainees
167
Kirkpatrick’s Evaluation Criteria
• Level 1 – Reaction
– Did trainees like the training and feel it was useful
• Level 2 – Learning
– Did trainees learn material stated in the objectives
• Level 3 – Behavioral
– Are trainees using what was learned back on the job
• Level 4 – Results
– Are benefits greater than costs
Evaluation..
Conduct a Cost Benefit Analysis
• Consider the costs associated with the training methods, the extent to which
the training will address the performance gap, and the impact on business
• Cost factors include:

– Training time
– Content development time (if designed in-house)
– Training provider evaluation (if purchased from vendor)
– Training content delivery method
– Lost productivity from time spent in training
– Travel and logistical expenses
9) Planning Future Training
Last step in the training process
• After taking all evaluated comments, trainers should modify the

programs to keep good things and make suggested
improvements
– Remember, even with the same topic for different trainees,

trainers should address many parts of the training process
again and consider new approaches.
170
A Training Lesson Plan
• Topic
• Summary of Key Points
• Training Objectives
• Duration of Each Activity in Each Session
• Training Contents
• Training Methods / Activities
• Break(s)
• Exercise to Warm Up
171
• Questions to test Understanding
e.g. New Employee Orientation
Time Topic Method Activity

9:00-9:30 AM Welcome Speech Speech Talk & hand shake
by GM
9:30-10:00 AM Intro to Company Slide Slide Show &
Background Presentation Video Tape
3:00-4:00 PM Fire Safety Talk Security Fire Drill &

Manager Equipment
172
8: INTERNATIONAL ISSUES
• Training
– Culture
– Language
– Techniques
• Development
– Necessary for executives
– Expatriates
173
References
• Anthony W.P., Kacmar, K.M., Perrewé, P.L. (2002) Human
resource management: a strategic approach, 4th ed. Fort Worth
: Harcourt College Publishers.HF5549 .A866 2002
• Goldstein, I. L., Ford J.K. (2002) Training in organizations : needs
assessment, development, and evaluation, 4th ed. Belmont,
CA . HF5549.5.T7 G543 2002
• Greer, C.R. (1995) Strategy and human resources – a general
managerial perspective, Prentice Hall.
• Riley, Michael, (1996) Human resource management in the
hospitality and tourism industry, 2nd ed. Oxford ; Boston :
Butterworth-Heinemann. TX911.3.P4 R55 1996
174
and Appraisal
SESSION 5
After studying this chapter,
you should be able to:
1. Describe the appraisal process.
2. Explain and illustrate the problems to avoid in

appraising performance.
3. Understand various appraisal methods.
4. Perform an effective appraisal interview.
5. Discuss the pros and cons of using different raters

to appraise a person’s performance.
Basic Concepts in Performance
Management and Appraisal
Comparing
Performance Appraisal and
Performance Appraisal: Performance Management:

Setting work standards, assessing An integrated approach to
performance, and providing ensuring that an employee’s
feedback to employees to performance supports and
motivate, correct, and continue contributes to the organization’s
their performance. strategic aims.
Why Performance Management?
• Increasing use by employers of performance

management reflects:
– The belief that traditional performance appraisals
are often not just useless but counterproductive.
– The necessity in today’s globally competitive

industrial environment for every employee’s efforts
to focus on helping the company to achieve its
9–178
strategic goals.
An Introduction to Appraising
Performance
• Why appraise performance?
– Appraisals play an integral role in the employer’s performance
management process.
– Appraisals help in planning for correcting deficiencies and

reinforce things done correctly.
– Appraisals, in identifying employee strengths and weaknesses,

are useful for career planning
– Appraisals affect the employer’s salary raise decisions.

Performance Management Systems
Purposes of a Performance Management

System
– Feedback - let employees know how well they have
done and allow for employee input.
– Development – identify areas in which employees

have deficiencies or weaknesses.
– Documentation – for future references

The Components of an Effective
Performance Management Process
• Performance assessment (appraisal)

• Direction sharing
• Role clarification
• Goal alignment
• Developmental goal setting
• Ongoing performance monitoring
• Ongoing feedback
• Coaching and support
• Rewards, recognition, and compensation
Performance Appraisal Roles
• Supervisors
– Usually do the actual appraising.
– Must be familiar with basic appraisal techniques.
– Must understand and avoid problems that can

cripple appraisals.
– Must know how to conduct appraisals fairly.

9–182
Performance Appraisal Roles
(cont’d)
• HR department
– Serves a policy-making and advisory role.
– Provides advice and assistance regarding the appraisal tool to

use.
– Prepares forms and procedures and insists that all

departments use them.
– Responsible for training supervisors to improve their appraisal

skills.
– Responsible for monitoring the system to ensure that appraisal

formats and criteria are relevant and up to date.
Steps in Appraising Performance
• Defining the job
– Making sure that you and your subordinate agree on his
or her duties and job standards.
• Appraising performance
– Comparing your subordinate’s actual performance to the
standards that have been set; this usually involves some
type of rating form.
• Providing feedback
– Discussing the subordinate’s performance and progress,
and making plans for any development required.
Designing the Appraisal Tool
• What to measure?
– Work output (quality and quantity)
– Personal competencies
– Goal (objective) achievement
• How to measure?
– Graphic rating scales

Performance Appraisal Methods
• Graphic rating scale
– A scale that lists a number of traits and a range of

performance for each that is used to identify the
score that best describes an employee’s level of
performance for each trait.
Graphic
Rating Scale
with Space for
Comments
Portion of an Administrative Secretary’s Sample
Performance Appraisal Form
Source: James Buford Jr., Bettye Burkhalter, and Grover Jacobs, “Link Job
Description to Performance Appraisals,” Personnel Journal, June 1988, pp. 135–136.
(cont’d)
• Alternation ranking method
– Ranking employees from best to worst on a

particular trait, choosing highest, then lowest, until
all are ranked.
• Paired comparison method
– Ranking employees by making a chart of all possible

pairs of the employees for each trait and indicating
which is the better employee of the pair.
Alternation Ranking Scale
9–190
Ranking Employees by the
Paired Comparison Method
Note: + means “better than.” − means “worse than.” For each chart, add up the
number of +’s in each column to get the highest-ranked employee.
(cont’d)
• Forced distribution method
– Similar to grading on a curve; predetermined percentages of ratees
are placed in various performance categories.
– Example:
• 15% high performers
• 20% high-average performers
• 30% average performers
• 20% low-average performers

(cont’d)
• Behaviorally anchored rating scale (BARS)
– An appraisal method that uses quantified scale with specific

narrative examples of good and poor performance.
• Developing a BARS:
– Generate critical incidents
– Develop performance dimensions
– Reallocate incidents
– Scale the incidents
– Develop a final instrument

(cont’d)
• Advantages of using a BARS
– A more accurate gauge
– Clearer standards
– Feedback
– Independent dimensions
– Consistency
Examples of Critical Incidents for
an Assistant Plant Manager
Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skill
Source:Walter C. Borman, “Behavior

Based Rating,” in Ronald A. Berk (ed.),
Performance Assessment: Methods and
Applications (Baltimore, MD: Johns
Hopkins University Press, 1986), p. 103.
Management by Objectives (MBO)
• Involves setting specific measurable goals with each employee

and then periodically reviewing the progress made.
1. Set the organization’s goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual goals).
5. Performance reviews.
6. Provide feedback.
MBO
Defining Goals and Work Efforts
• Guidelines for effective goals
– Assign specific goals
– Assign measurable goals
– Assign challenging but doable goals
– Encourage participation
• SMART goals are:
– Specific, and clearly state the desired results.
– Measurable in answering “how much.”
– Attainable, and not too tough or too easy.

Performance
Performance
Management
ManagementOutline
Outline
Source: www.cwru.edu.
Performance
Performance
Management
Management
Outline
Outline
(cont’d)
(cont’d)
Performance
Performance
Management
Management
Outline
Outline(cont’d)
(cont’d)
Computerized and Web-Based
Performance Appraisal
• Performance appraisal software programs
– Keep notes on subordinates during the year.
– Electronically rate employees on a series of performance traits.
– Generate written text to support each part of the appraisal.
• Electronic performance monitoring (EPM)
– Having supervisors electronically monitor the amount of

computerized data an employee is processing per day, and
thereby his or her performance.
Advantages and Disadvantages of Appraisal Tools
Employee Score Card
• Balanced Scorecard management system- tremendous
versatility.
• The balanced scorecard allows to select criteria in each of

the four key perspectives – Financial, Customer, Internal
Process, and Learning and Growth – to develop a realistic
view of employee contribution.
• By applying the balanced scorecard to employee evaluations,

one can objectively analyze whether each employee is
making consistent progress toward becoming an essential
Balanced Scorecard
• Financial:
• Good steward of financial resources:
– Percentage of projects completed within budget or

number of months department operated within
budget
• Appropriate compensation for responsibility level:
– Variance from company’s historical salary for

comparable position or variance from industry
standard for comparable position
Customer
• Successful relationships with internal customers (coworkers,

subordinates, superiors):
– Number of complaints received or number of positive

responses on employee satisfaction surveys
• Successful relationships with external customers (clients,

vendors, business associates):
– Number of positive responses in satisfaction surveys for

those customers employee interacts with
Internal Processes
• Completes tasks effectively:
– Percentage of projects completed by deadline or number

of days operating without failure or injury
• Uses resources efficiently:
– Waste-to-production ratio in department or by assigned

project
Learning and Growth:
• Makes continual effort to improve skills and knowledge:
– Number of training opportunities participated in.
• - Actively looks for ways to promote company growth:
– Number of suggestions given to supervisor
9–209
Potential Rating Scale Appraisal
Problems
• Unclear standards
– An appraisal that is too open to interpretation.
• Halo effect
– Occurs when a supervisor’s rating of a subordinate on

one trait biases the rating of that person on other traits.
• Central tendency
– A tendency to rate all employees the same way, such as

rating them all average.
Potential Rating Scale Appraisal
Problems (cont’d)
• Strictness/leniency
– The problem that occurs when a supervisor has a

tendency to rate all subordinates either high or low.
• Bias
– The tendency to allow individual differences such as age,

race, and sex to affect the appraisal ratings employees
receive.
A Graphic Rating Scale with Unclear Standards
Note: For example, what exactly is meant by

“good,” “quantity of work,” and so forth?
How to Avoid Appraisal Problems
• Learn and understand the potential problems, and the

solutions for each.
• Use the right appraisal tool. Each tool has its own pros and
cons.
• Train supervisors to reduce rating errors such as halo,

leniency, and central tendency.
• Have raters compile positive and negative critical incidents

as they occur.
Who Should Do the Appraising?
• The immediate supervisor
• Peers
• Rating committees
• Self-ratings
• Subordinates
• 360-Degree feedback
The Appraisal Interview
• How to conduct the appraisal interview
– Talk in terms of objective work data.
– Don’t get personal.
– Encourage the person to talk.
– Provide feedback
Checklist
During the
Appraisal
Interview
Source: Reprinted with permission of

the publisher, HRnext.com. Copyright
HRnext.com, 2003.
The Appraisal Interview (cont’d)
• How to handle a defensive subordinate
– Recognize that defensive behavior is normal.
– Never attack a person’s defenses.
– Postpone action.
– Recognize your own limitations.

• How to criticize a subordinate
– Do it in a manner that lets the person maintain his or her

dignity and sense of worth.
– Criticize in private, and do it constructively.
– Avoid once-a-year “critical broadsides” by giving feedback on a

daily basis, so that the formal review contains no surprises.
– Never say the person is “always” wrong
– Criticism should be objective and free of any personal biases

on your part.
• How to ensure the interview leads to improved
performance
– Don’t make the subordinate feel threatened during the
interview.
– Give the subordinate the opportunity to present his or
her ideas and feelings and to influence the course of the
interview.
– Have a helpful and constructive supervisor conduct the
interview.
– Offer the subordinate the necessary support for
development and change.
• How to handle a formal written warning
– Purposes of the written warning
• To shake your employee out of bad habits.
• Help you defend your rating, both to your own boss and (if
needed) to the courts.
– Written warnings should:

• Identify standards by which employee is judged.
• Make clear that employee was aware of the standard.
• Specify deficiencies relative to the standard.
• Indicates employee’s prior opportunity for correction.
Creating the Total Performance
Management Process
• “What is our strategy and what are our goals?”
• “What does this mean for the goals we set for our
employees, and for how we train, appraise, promote,
and reward them?”
• What will be the technological support requirements?

Potential appraisal
• Potential appraisal refers to the identification of the talents

and skills of a person.
• Future-oriented
• Aimed to identify and evaluate the potential of the

employees to assume higher potential and responsibilities
in the organizational hierarchy.
9–222
PURPOSE OF POTENTIAL
APPRAISAL
• To inform employees of their future prospects
• To enable the organization to draft a management

succession programme
• To update training and recruitment activities
• To advise employee about the work to be done to enhance

their career opportunities
• Motivate the employee to future develop their skills and

9–223
competencies
Reward management
Session 6
Introduction
“What’s in it for me?”
• People do what they do to satisfy needs.
• Before they do anything, they look for a payoff or reward.
• The most obvious reward employees receive from work

is pay.
• However, rewards also include promotions, desirable

work assignments, and a host of other less obvious
payoffs—a smile, peer acceptance, work freedom, or a
kind word of recognition.
Reward Management
• This management discipline is concerned with the formulation and

implementation of strategies and policies, the purposes of which are to
reward employees
• fairly,
• equitably and
• consistently in accordance with their value to the organisation.
• It deals with:
• design,
• implementation and
• maintenance of reward systems (processes, practices,
procedures) that aim to meet the needs of both the organisation and
its stakeholders.
Philosophy of Reward Management
• Strategic sense: long-term focus & it must be derived from the business
strategy
• Total Reward approach: considering all approaches of reward (financial

or not) as a coherent whole; integration with other HRM strategies
• Differential reward according to the contribution
• Fairness, equity, consistency, transparency
• Attractive and competitive total remuneration
• Provide for the personal needs
• Increase commitment toward the organisation
• Tax-efficient
Total Reward (Armstrong 2009)
All types of reward:
• Non-financial as well as financial,
• Indirect as well as direct,
• Extrinsic as well as intrinsic.
Each element is developed, implemented and treated as

an integrated and coherent whole.
Rewarding Employees
• Major strategic rewards decisions:
– On what basis to decide pay
– What to pay individual employees
– What benefits to offer
– How to construct employee

recognition programs
What to pay
• Need to establish a pay structure
• Balance between:
– Internal equity – the worth of the job to the
organization
– External equity – the external competitiveness of an
organization’s pay relative to a pay elsewhere in its
industry
• A strategic decision with trade-offs
Remuneration model
Job Description Job Evaluation
Pay Survey Job Hierarchy
Pricing Jobs
Job-evaluation
A systematic process
• For defining the relative worth/ size of jobs/ roles
within an organisation
• For establishing internal relativities
• For designing an equitable grade structure and
grading jobs in the structure
• To give an input for reward considerations

The 4Ps of Reward
• Pay
– Salary, bonus, shares, etc.
• Praise
– Positive feedback, commendation, staff-of-the-year
award, etc.
• Promotion
– Status, career elevation, secondment, etc.
• Punishment
– Disciplinary action, withholding pay, or criticism, etc
Objectives in reward
management
• Acquire qualified personnel

• Retain current employees
• Ensure equity
• Reward desired behaviour
• Control costs
• Facilitate understanding
Acquire qualified personnel
• Compensation needs to be high enough to attract

applicants.
• Pay levels must respond to the supply and demand of

workers in the labour market since employers compete for
workers.
• Premium wages are sometimes needed to attract

applicants already working for others.
Retain current employees
• Employees may quit when compensation levels are not

competitive, resulting in higher turnover.
Ensure equity
• Compensation management strives for internal and

external equity.
• Internal equity requires that pay be related to the relative

worth of a job so that similar jobs get similar pay.
• External equity means paying workers what comparable

workers are paid by other firms in the labour market.
Reward desired behaviour
• Pay should reinforce desired behaviours and act as an

incentive for those behaviours to occur in the future.
• Effective compensation plans reward performance, loyalty,

experience, responsibility, and other behaviours.
Control costs
 A rational compensation system helps the organization

obtain and retain workers at a reasonable cost.
 Without effective compensation management, workers
could be overpaid or underpaid.
 Comply with legal regulations.
 A wage and salary system considers the legal
challenges imposed by the government and ensures the
employer's compliance.
Facilitate understanding
• The compensation management system should be easily

understood by human resource specialists, operating
managers, and employees.
Organization As A Determinant Of
Direct Financial Compensation
• It is based on
- Compensation policies
- Ability to pay
Compensation policies
• Pay leaders- pay higher wages & salaries
• Pay based on market rate- pay what most

employers pay for same job
• Pay followers- pay below market rate because poor

financial condition or believe do not require highly
capable employees
Ability to pay
• Organization’s assessment of ability to pay is

important factor in determining pay levels.
Labor Market As Determinant Of
Direct Financial Compensation
 It includes:
 Compensation surveys- what are other firms paying?,
geographic area of survey
 Cost of living- when prices rise over a period of time
 Labor Unions
 Compensation legislations
Job as determinant of direct
financial Compensation
• Job itself continues to be factor.
• Organizations pay for value they attach to certain duties,

responsibilities, and other job related factors as working
conditions.
• E.g, professional positions different level of salary

Employee as determinant of direct
Financial Compensation
• Performance
• Competencies
• Skills
• Experiences
• Seniority
REWARD CLASSIFICATIONS
• Intrinsic - Extrinsic
• Financial-Nonfinancial
• Membership-
Performance
248
INTRINSIC REWARDS
• Personal satisfaction
from the job itself
• Consistent with own
value system
• Decision making
• Freedom
• Control
• AND/OR….
249
INTRINSIC REWARDS
• Responsibility
• Interesting work
• Personal growth
• Diversity of activities
DeCenzo and Robbins HRM 7th 250

Edition
EXTRINSIC REWARDS
• Benefits provided by
the employer,
• Usually money,
promotion, or benefits.
251
EXTRINSIC FINANCIAL REWARDS
• Wages
• Bonuses
• Profit-sharing
• Vacations
• Sick leave
• Purchase discounts
252
EXTRINSIC NONFINANCIAL
REWARDS
• Do not affect the financial
position of the employee,
but rather add attraction to
life on the job
• What one employee views
as “something I’ve always
wanted,” another might
find relatively useless.
• Should be creative
253
EXTRINSIC NONFINANCIAL
REWARDS
• Office furnishings
• Lunch hours
• Parking spaces
• Work assignments,
locations
• Business cards
• Secretary
• Titles
254
MEMBERSHIP-BASED REWARDS
• Most organizational
rewards
• Regardless of
performance
• Examples
– Cost-of-living increases
– Benefits
– Salary due to labor
market conditions
256
Performance-based rewards
• Commissions,
• Piecework pay plans,
• Incentive systems,
• Group bonuses,
• Merit pay, or other forms of pay for performance.
Incentive Payments
 Incentives are variable rewards granted to employees
according to variations in their performance.
 Importance
Greater Output
Reduced supervision
High Efficiency
High Motivation
 Disadvantages
Deteriorated Quality
Jealousy feeling
Types of Incentive Schemes
 Individual Incentive Schemes
 Group Incentive Schemes
 Company – Wide Incentive Plans

Types of individual incentive
schemes
• Performance-related
• Competence related: Pay increases related to the level of

competence
• Skill-based: pay is related to acquisition of skills
• Service-related: pay is related to service-time

Team based incentives
• Based on team performance
• It can encourages teamwork, loyalty and co-operation
• It can be demotivating on individual level (encourages

social loafing)
Organization Wide Incentive Plans
• Profit-Sharing Plans : organization-wide programs

that distribute compensation based on an established
formula designed around profitability
• Employee stock ownership plan: It provides a

mechanism through which certain eligible employees
(based on length of service, contribution to the
department etc) may purchase the stock of the
company at a reduced rate.
17-19
Organization Wide Incentive Plans
Advantages:
 Empower the employee to participate in the growth

of a company as part owner and get a fair share of the
cake.
 Helps the company to retain talented employees

and make them committed to the job and the company
 Better industrial relations, reduced employee

turnover, lesser supervision, are other benefits
Compensation Administration
Structure of Rewards
264
16-5
Components of Pay Structure in

India
• The two essential components of pay structure are; basic wages
and dearness allowance .
• The basic wage rate is fixed taking the skill needs of the job,
experience needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the job.
• Dearness allowance it paid to employees in order to compensate
them for the occasional or regular rise in the price of essential
commodities.
 Under the Workmen's Compensation Act

Wages for leave period, holiday pay, overtime pay, bonus, attendance bonus
and good conduct bonus
 Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice , gratuity
payable on discharge
16-6
Components of Pay Structure
 Bonus
 Payments made under a profit sharing scheme
 Value of house accommodation
 Medical allowances
 Travelling allowances
 Any other sum paid to defray special expenses incurred by
the worker
 Contribution to pension, provident fund
17-21
Fringe Benefits
These are extra benefits provided to employees in addition to the

normal compensation paid in the form of wages or salaries.
Features
 Supplementary forms of compensation
 Paid to all employees
 Indirect compensation, since they are not directly related to performance
 May be statutory or voluntary
Need for fringe benefits

 Employee demands
 Trade union demands
 A kind of social security
 To improve industrial relations
17-22
Types of Fringe Benefits

T y p e s o f F r i n g e B e n e f i ts
P a y m e n t f o r T im e E m p lo y e e S a fe ty a n d W e lf a r e r e c r e a t i o n a l O ld a g e a n d
n o t w o rk e d s e c u r it y h e a lth fa c ilitie s r e tir e m e n t
b e n e fits
H o u rs o f P a id S h if t H o lid a y P a id
w o rk h o lid a y s p r e m iu m pay v a c a tio n
R e tre n c h m e n t L a y o ff
c o m p e n s a t io n c o m p e n s a t io n
S a fe t y W o r k m e n ’s H e a lth
m e a su re s c o m p e n s a tio n b e n e fits
C a n t e e n s C o n s u m e r C r e d it H o u s in g L e g a l a id E m p lo y e e W e lfa r e H o lid a y E d u c a t i o n a l T r a n s - P a r t i e s & M is c e -

s o c ie tie s s o c ie tie s c o u n s e llin g o r g a n is a t io n s h o m e s fa c ilitie s p o r ta tio n p ic n ic lla n e o u s
P r o v id e n t fu n d P e n s io n
D e p o s i t li n k e d i n s u r a n c e
G r a t u it y
Compensation Administration M e d ic a l b e n e fits
16-16
Broad banding
• Organizations that follow a skill-based or Competency Based Pay

System frequently use broad banding to structure their compensation
payments to employees.
• Broad branding simply compresses many traditional salary grades (say
15 to 20 grades) into a few wide salary bands (three or four grades).
• Depending on changing market conditions and organizational needs,
employees move from one position to another without raising
objectionable questions, (such as when the new grade is available, what
pay adjustments are made when duties change etc.)
• As a result movement of employees between departments, divisions
and locations becomes smooth
• Helps reduce the emphasis on hierarchy and status.
IMPORTANCE
Image Building
Ensure
Institutional Equity Legal
effectiveness Compliance
Effective
Compensation Administrati
Attract talent
vely Efficient
Motivate & Reward Valued

Retain Staff Behavior
Employee
Management
Challenges of remuneration
Skill
-based
Pay
Monetary
Vs. Non
Monetary Salary
Rewards Reviews
Remuneration
Below
Market or
Above
Pay
Market
Secrecy
Rates
Compar-
able
Worth
Career Planning and Development
11-2
The concept of career
A career comprises of a series of work related activities, that

offer continuity, order and meaning to a person’s life.
The underlying idea behind a career is that a person can
shape his destiny through a number of well planned and well
timed, positive steps.
The success of one’s career, therefore, depends on the
individual more than anything else.
Career And Succession Planning

11-3
Career: Important features
 A career develops over time

 The success of one's career depends, most often,
on one's own careful planning and timely steps
taken at a right time
 The important element in one's career is
experiencing psychological success.
The typical career of a person today would probably
include many positions and transitions.

11-4
Career stages
A career includes many positions, stages and transitions just as a

person’sH life
ig h does.
E x p lo r a t io n E s t a b lis h - M id c a r e e r L a te c a re e r D e c lin e
m ent
P e r fo r m a n c e
F r o m c o ll e g e F ir s t jo b W ill p e r f o r m a n c e T h e e ld e r P r e p a r in g
to w o rk a n d b e in g in c r e a s e o r s ta te s p e rs o n fo r
a c c e p te d b e g in t o re tire m e n t
d e c l in e ?
L o w 25 35 50 60 70
Age
11-5
Career stages
 Exploration: the transition that occurs in mid-twenties as one looks at work

after college education, seeking answer to various questions about careers from
teachers, friends etc.
 Establishment: this is the stage where one begins the search for work, picks up
the first job, commits mistakes and learns thereafter.
 Mid-career: Between 35 and 50 one is typically confronted with a plateaued
career, where your maturity and experience are still valued but there is the nagging
feeling of having lost the initial fire in the belly
 Late career: This is the stage where one relaxes a bit and plays an elderly role,
offering advice to younger ones as to how to avoid career mistakes and grow
continually.
 Decline: This is the stage where one is constantly reminded of retirement, after
a series of hits and misses.

11-10
Career anchors
These are distinct patterns of self-perceived talents, attitudes,

motives and values that guide and stabilise a person’s career after
several years of real world experiences.
More about eight career anchors

 Managerial
competence
 Technical competence
 Security
 Creativity
 Autonomy
 Dedication to a cause
 Pure challenge
 Life style

11-11
Career planning
Career planning is the process by which one selects career goals and
the path to achieve those goals. Career planning, it should be noted
here, is a prerequisite to effective human resource planning.
Why career planning?

Career planning seeks to meet the following objectives
 Attract and retain talent

 Use human resources properly and achieve greater productivity
 Reduce employee turnover
 Improve employee morale and motivation
 Meet the current and future human resource needs of the organisation

11-12
The process of career planning
 Identify individual needs and aspirations

 Analyse career opportunities
 Align employee needs with available career opportunities
 Develop action plans
 Carry out periodic review

11-13
Career Development
Career development consists of the personal actions one undertakes to achieve a

career plan. The actions for career development may be initiated by the individual
himself or by the organisation
Individual career development: Some of the important steps that could help
employees achieve their career goals could be listed thus;

11-14
Individual career development
 Performance
 Exposure
 Networking
 Leveraging
 Loyalty
 Mentors and sponsors
 Key subordinates
 Expanding capabilities over time

11-23
Career Management
Career management includes both organisational actions and

individual efforts aimed at setting career goals, formulating and
implementing strategies and monitoring the results.
The career management model

In d iv id u a l C a re e r
P la n n in g C a re e r
 A ssess needs D e v e lo p m e n t
 A n a ly s e c a r e e r o p p o r t u n it ie s
 S e t c a r e e r g o a ls  H o w i n d iv i d u a l s c a n r e a c h t h e t o p ?
 D e v e lo p a c t io n p la n s  H o w o r g a n is a tio n s c a n h e lp ?
 S e lf-a s s e s s m e n t to o ls
O r g a n is a t io n a l C a r e e r
 I n d i v id u a l c o u n s e llin g
P la n n in g
 I n f o r m a t io n s e r v ic e s
 A s s e s s h u m a n re s o u rc e  A s s e s s m e n t p ro g ra m m e s
r e q u ir e m e n t s  D e v e lo p m e n t p r o g r a m m e s
 C a re e r p a th s fo r e a c h p e rs o n  P r o g r a m m e s f o r s p e c ia l g r o u p s
 In te g ra te c a re e r g o a ls a n d
o r g a n is a t io n a l n e e d s
 I n it ia t e c a r e e r d e v e lo p m e n t e ff o r t s
Thank you!
Employee Welfare
Prof. Rama Shankar Yadav
Indian Institute of Management Rohtak
Circulation restricted.
Employee Welfare
• “Employee welfare means anything done for the comfort and

improvement, intellectual or social, of the employees over and
above the wages paid which is not a necessity of the industry”,
(Todd)
• It is taking care of the well being of workers by employers, trade

unions, governmental and non-governmental organizations.
• Employee welfare measures are also known as fringe benefits

and services.
• Welfare measures may be both voluntary and statutory

Employee welfare Objectives
• Employee welfare is in the interest of the employee,
the employer and the society as a whole.
• It’s objectives are: -
– It improves the loyalty and morale of the employees.
– It reduces labour turnover and absenteeism.
– Help to improve the goodwill and public image of the
enterprise.
– It helps to improve industrial relations and industrial peace.
– It helps to improve employee productivity
Agencies of Employee Welfare
• Central government: -
– The central government has made elaborate provisions for the
health, safety and welfare
• Under Factories Act 1948, and Mines Act 1952.
– These acts provides canteens, crèches, rest rooms, shelters etc.
• State government: -
– Government in different states and Union Territories provide
welfare facilities to workers.
– State government prescribes rules for the welfare of the
workers and ensures compliance with the provisions under
various labour laws
• Employers: -
– Employers in India in general looked upon welfare work as
fruitless and barren though some of them indeed had done
pioneering work.
• Like Tata Group
• Trade unions: -
– In India, trade unions have done little for the welfare of workers.
– But few sound and strong unions have been the pioneering in
this respect.
• The Ahmedabad textiles labour association and
• The Mazdoor sabha, Kanpur.
• Other agencies: -
– Some philanthropic, charitable and social service
organizations like: -
• Seva Sadan society, Y.M.C.A., etc
Types of Employee Welfare
• Intramural:-
– These are provided within the organization like: -
• 1. Canteen,
• 2. Rest rooms,
• 3. Crèches,
• 4. Uniform etc.
• Extramural:-
– These are provided outside the organization, like: -
• Housing,
• Education,
• Child welfare,
• Leave travel facilities,
• Interest free loans,
• Workers cooperative stores,
• Vocational guidance etc.
Types of Employee Welfare
• Statutory welfare work-
– Comprising the legal provisions in various pieces of
labour legislation.
• Voluntary welfare work –

– Includes those activities which are
• Undertaken by employers for their voluntary work.
• Philanthropic or charitable motives
Social Security Provision in India
• Social Insurance-
– Common fund is established with periodical contribution
from workers out of which all benefits in terms of cash or
kind are paid.
– The employers & state prove major portion of finances.
• Benefits such as PF, Group Insurance etc. are offered.
• Social Assistance-
– Benefits are offered to persons of small means by Govt out
of its general revenues.
• Eg- Old age pension
Social Security Employee Welfare
• Medical care
– Sickness benefit in cash
– Old age pension or retirement benefit
– Maternity benefit
– Accident benefit
– Survivor’s benefit
• Article 41 of Indian constitution
– “ The state shall with in the limits of its economic
capacity & development, make effective provision for
security , the right to work, to education & to public
assistance in cases of unemployment, old age, sickness
& disablement & in other cases of undeserved want”
Role of Management in Employee
Welfare
• Organizations provide welfare facilities to their employees to
keep their motivation levels high.
– The employee welfare schemes can be classified into two categories
viz.
• Statutory and Non-statutory welfare schemes.
• The statutory schemes
– Are compulsory to be provided by an organization as compliance to
the laws governing employee health and safety.
– These include provisions provided in industrial acts like
• Factories Act 1948,
• Mines Act 1962.
• Dock Workers Act (safety, health and welfare) 1986,
Statutory Welfare Schemes
• The statutory welfare schemes (1948 Act) include

the following provisions:
– Drinking Water
– Facilities for sitting
– First aid appliances
– Canteen facilities
– Creche for more than 30 women
– Lighting
– Welfare officer for 500 employees
Mines Act of 1952
• Creches for more than 50 women

• Canteen for more than 150 workers
• Shelter for more than 250 workers
• Shower baths and sanitary latrines
• Welfare officer for more than 500 workers
Plantation Act of 1951
• Recreation facility for workers and their children
• Educational facility
• Housing facility for all workers
• Umbrellas, blankets, raincoats and other amenities
Contract Labour Act 1970
• A canteen for more than 100 employees
• Rest rooms and alternative accommodation
• Sufficient supply of drinking water washing facilities
etc
• First aid boxes
Labour welfare officer- schedule 49 of
Factories Act
• Present in a factory of more than 500 workers

• Supervision of safety and welfare programmers
• Counseling of workers and adjustment in work
environment
• Formulate welfare policies
• Liasoning with officials and resolving disputes
Welfare Facilities at ITI
(A) CARE
– ESIC coverage
– Medical Facilities
– Medical Reimbursement
– Township Administration
– Welfare Funds
• Educational Scheme
• Welfare Association & Clubs
• Other Welfare Measures
– Non-Officers Canteen
– Officers Canteen
– Transport
– Uniform
– Safety
(B) TERMINAL BENEFITS
• Employees’ Provident Fund
• Gratuity Scheme
• Group Insurance Scheme
Fringe Benefits
• Definition
– The extra benefits provided to employees
in addition to the normal compensation
paid in the form of wage or salary.
• Features:
– They are supplementary forms of
compensation.
– They are paid to all employees based on
there membership in the organization.
– They help to raise the living conditions of
the employees.
– It may be statutory or voluntary.
Need for fringe benefits
• Employees demand
• Trade union demand
• Employer’s preference
• As a social security
• To improve human relations
Examples of fringes
1. Legally required payments
– Old age, survivors, disability and health insurance (commonly known as social
security)
– Worker’s compensation
– Unemployment compensation
2. Contingent and Deferred benefits
– Pension plans, Group life insurance
– maternity leave
– child care leave & sick leave etc.,
3. Payments for time not worked
– vacations & holidays
– voting pay allowances
4.Other benefits
– travel allowances & moving expenses
– uniform tool expenses
Non Statutory Schemes
• Personal Health Care (Regular medical check-ups):
– Some of the companies provide the facility for extensive
health check-up
• Flexi-time: The main objective of the flexitime policy
is to provide opportunity to employees to work with
flexible working schedules
• Employee Assistance Programs:
– Various assistant programs are arranged like
• External counselling service so that employees or
members of their immediate family can get counselling
on various matters.
Impact of Welfare on Productivity
• The welfare measures aim at integrating the
1. Socio-psychological needs of employees,
2. The unique requirements of a particular technology,
3. The structure and processes of the organization and the existing
sociocultural environment.
• It creates a culture of work commitment in organizations
and society which ensure higher productivity and greater
job satisfaction to the employees.
• The employees work with full enthusiasm and energetic
behaviour which results in the increase in production and
ultimately the increased profit.
I L O’s Employee Welfare
• ILO has suggested welfare funds on a collective basis to

finance activities in small undertakings.
• It has adopted a number of convections & recommendations
regarding industrial accidents & occupational health.
• New dimension to welfare activities has been provided by
ILO’s contribution to family welfare & population education
program among industrial workers in organised sector in India
• It has rendered exemplary service to all 3 elements composing
it
– Govt, employees & workers.
• It has greatly influenced labour legislation, labour welfare ,
trade unionism & Industrial Relations in India
Merits of employee welfare
• Motivates employees
• Employee Retention
• Minimized social evils
• Better Job satisfaction
• Cuts down labour turnover
Demerits of employee welfare
• Huge investment
• Employees being dissatisfied
SAFETY & HEALTH
“ Every 20 seconds of every working minute of every

hour throughout the world, some one dies as a result of
industrial accident.”
Safety & Accident
• Safety
– Freedom from the occurrence or risk of injury or loss.
• Industrial Safety
– Protection of workers from the danger of industrial
accidents.
• Accident
– An unplanned and uncontrolled event in which an action
or reaction of an object, a substance, a person, or a
radiation results in personal injury.
Need for Safety
• Cost saving
• Increased productivity
• Moral
• Legal
Health
• “The well-being of the employee (Physical as well as
Mental) in an industrial establishment.”
1. Physical Health
2. Mental Health
Employee Grievances
• A formal dispute between an employee &
management on the conditions of employment.
• Are complaints that have been formally registered in
accordance with the grievance procedure.
• Is any dissatisfaction or feeling of injustice in
connection with one’s employment situation that is
brought to the attention of the management.
Grievance must fall under the following
category:
• Amenities • Nature of job
• Compensation • Payments
• Conditions of work • Promotions
• Continuity of service • Safety environment
• Disciplinary action • Super Annuation
• Fines • Supersession
• Leave • Transfers
• Medical benefits • Victimisation
W’s of Grievance Handling
• WHO is involved
• WHEN did it happen
• WHERE did it happen
• WHAT happened (EXACTLY)
• WHY is it grieve-able
• WHEN must the grievance be filed
• WHAT are the deadline dates
Guidance for writing Grievance
• The Situation
– Who, what, when & where
• The Contention
– Why is it grieve-able
• The Remedy
– What is needed to remedy the situation
Grievance - Reasons
• Economic
– Wage fixation, wage computation, overtime, bonus
• Employees feel they are getting less than what they ought to get
• Working Environment
– Poor working conditions, defective equipment and machinery, tools,
materials.
– Supervision – Disposition of the boss towards the employee perceived
notions of favoritism, nepotism, bias etc.
• Work Group
– Strained relations or incompatibility with peers.
– Feeling of neglect, obstruction and victimization.
– Work Organization – Rigid and unfair rules, too much less work
responsibility, lack of recognition
Grievance - Source
Managerial Conditions Working Conditions
• Pay Scale or Wage rates • Unrealistic
Overtime • Non availability
• Benefits – Promotions, – Of proper tool, machines and
Incentives, Seniority and equipment for doing the job.
Discharges. – Tight production standards Bad
working conditions
• Lack of role clarity
• Poor relationship with the
• Autocratic Leadership style supervisor.
of supervisors.
• Negative approach to
• Lack regards for collective discipline.
agreement.
Grievance - Source
• Personal Factors
– Narrow attitude
– Over ambition
– Egoistic Personality
– Non- cooperative.
– Personal Problems outside factory
Grievance - Effects
• Loss of interest in work
• Poor quality of production
• Low production
• Increase in wastage or costs
• Indiscipline
• Unrest
• Increase in accidents
Grievance - Effects
• On Production – Low quality of production, Low
productivity, Increase in wastage, Increase in cost
of production.
• On Employees – Increased absenteeism, Reduction
in level of commitment, Increase in accidents,
Reduced level of employee moral.
• On Managers – Strained superior- subordinate
relations, Need for increased supervision/control
and follow up, Increase in unrest.
Grievance
Do’s Don’t
• Identify the relief the union is
Discuss the case with the union steward
seeking.
alone; the grievant should definitely be
• Fully inform your own superior of there.
grievance matters.
• Make agreements with individuals that
• Hold discussions privately. are inconsistent with the labour
arrangements.
• Command the respect of the union
representatives. • Hold back the remedy if the company
is wrong.
• Examine the grievant’s personal
record. • Admit the binding effect of a past
practice.
• Treat the union representative as
your equal. • Relinquish your authority to the union.
• Apply the grievance remedy to an
• Get the union to identify specific improper grievance.
contractual provisions allegedly
violated. • Argue grievance issues off the work
premises.
• Enforce the contractual time limits.
Benefits of Grievance Handling
• It encourages employees to raise concerns without
fear of reprisal.
• It provides a fair & speedy means of dealing of
grievances.
• It prevents minor disagreements developing into
more serious disputes.
• It saves employer’s time & money as solutions are
found for workplace problems.
• It helps build in organizational climate based on
openness and trust.
Grievance Identification Technique
• Observations
• Open Door Policy
• Gripe Boxes
• Exit Interviews
Grievance Redressal Machinery
• A grievance procedure is a formal process which is
preliminary to an arbitration, which enables the parties
involved to attempt to resolve their differences in a
peaceful, orderly and expeditious manner,
• It enables the company and the trade union to
investigate and discuss the problem at issue without in
any way interrupting the peaceful and orderly conduct
of business.
• When the grievance redressal machinery works
effectively, it satisfactorily resolves most of the
disputes between labour and management.
5 Step Procedure
• Steward or Aggrieved employee Foreman
• Business Agent IR Officer
• Company Grievance Committee Plant Manager
• Regional rep of union Corporate Management
• Arbitration by an impartial 3rd party
Grievance Procedure Steps in
Unionised Organizations
• In a unionized organisation, the operation of the
grievance may contain the following steps:
Step 1: The aggrieved employee verbally explains his
grievance to his immediate supervisor or in a conference
or a discussion specifically arranged for the purpose.
The employee seeks satisfaction from his supervisor.
The grievance can be settled if the supervisor has been
properly trained for the purpose, and if he adheres
strictly to a basic problem-solving method.
• Step 2:
– The second step begins when the grievance is not settled
by the supervisor.
– In this case, it is sent to a higher level manager with a
note in which are mentioned the time, place and nature of
the action to which the employee objects.
– The higher level manager goes into the grievance and
gives his decision on the matter.
• Step 3:
– This means that the grievance is to be submitted to the
Grievance Committee since the decisions of the
supervisor and of the higher level manager have not
solved the problem.
– This committee, which is composed of some fellow-
employees, the shop steward or a combination of union
and management representatives, considers the record and
may suggest a possible solution.
– It may call upon the grievant to accept the employer's
proposed settlement.
• Step 4:
– If the decision or suggestion of the Grievance Committee
is not accepted by the grievant, he may approach the
management or the corporate executive.
• Step 5:
– The final step is taken when the grievance is referred to an
arbitrator who is acceptable to the employee as well as the
management.
– They may agree beforehand that the arbitrator's award
will be final and binding on both the parties.
Employee discipline
• “Discipline is the force that prompts individuals or

groups to observe rules, regulations, standards and
procedures deemed necessary for an organization.”
[Richard D. Calhoon]
• Discipline means
– Orderliness
– It implies the absence of
• Chaos,
• Irregularity and confusion in the behaviour of
workers.
Nature of Discipline
• According to Megginson, discipline involves the following three
things.
– Self-discipline
• Implies that a person brings the discipline in himself with a
determination to achieve the goals that he has set for himself in
life.
– Orderly behaviours
• Refers to discipline as a condition that must exist for an orderly
behaviours in the organization.
– Punishment
• Is used to prevent indiscipline.
– When a worker goes astray in his conduct, he has to be punished for the
same and the recurrences of it must be prevented.
Types of Discipline
Positive Discipline Negative Discipline
• Positive discipline involves • Under negative discipline,

creation of an atmosphere in the penalties are used to force the
organisation whereby employees workers to obey rules and
willingly conform to the regulations.
established rules and regulations.
• In other words, workers try to
• Positive discipline can be adhere to rules and regulations
achieved through rewards and out of fear of warnings, penalties
effective leadership. and other forms of punishment.
• This approach to discipline is
called negative or punitive
approach.
Symptoms of general indiscipline
• Change in the normal behaviours
• Absenteeism
• Increased grievances
• Lack of concern for performance
• Go slow
• Disorderly behaviors
• Lack of concern for job
• Late coming etc
Causes Of Indiscipline
1. Unfair Management Practices:
– Management sometimes indulges in unfair practices like:
•Wage discrimination
•Non-compliance with promotional policies and transfer policies
•Discrimination in allotment of work
•Defective handling of grievances
•Payment of low wages
•Delay in payment of wages
•Creating low quality work life etc.
• These unfair management practices gradually result in indiscipline.
2. Absence of Effective Leadership:

Absence of effective leadership results in poor management
in the areas of direction, guidance, instructions etc.
This in turn, results in indiscipline.

3. Communication Barriers:
Communication barriers and absence of humane approach
on the part of superiors result in frustration and indiscipline
among the workers.
The management should clearly formulate the policies
regarding discipline.
These policies should be communicated and the policies should
be consistently followed in the organisations.
The management should also be empathetic towards the
employees.
4. Inadequate attention to personnel Problems:

Delay in solving personnel problems develops
frustration among individual workers.
The management should be proactive so that there is
no discontent among the workers.
It should adopt a parental attitude towards its
employees.
5. Victimisation:
Victimisation of subordinate also results in
indiscipline. The management should not exploit the
workers.
It is also in the long-term interest of the management to
take care of its internal customers
6. Absence of Code of Conduct.
This creates confusion and also provides chance for
discrimination while taking disciplinary action.
Forms of indiscipline
• Inconsistent behaviour of an employee and deviation from
the standard behaviour.
1. Unsafe behaviour of the employee.
2. Immoral action of the employee.
3. When employee is abusive, disturbs the peace and is
negligent towards his duties.
DISCIPLINARY PROCEDURE
• Issue of Charge Sheet

– Once the prima facie case of misconduct is established,
the management should proceed to issue a charge sheet to
the employee.
– Charge sheet is merely a notice of the charge and provides
the employee an opportunity to explain his conduct.
– Therefore, charge sheet is generally known as a slow
cause notice.
– In the charge sheet, each charge should be clearly
specified.
– There should be a separate charge for each allegation and
charge should not relate to any matter, which has already
Consideration of Explanation.
On getting the answer for the charge sheet served,
the explanation furnished should be considered and if it
is satisfactory, no disciplinary action needs to be taken.
On the contrary when the management is not satisfied
with the employee’s explanation, it can proceed with
full-fledged enquiry.
(However, if the worker admits the charge, the employer
can warn him or award him punishment without further
enquiry.)
• Suspension pending Enquiry.
– In case the charge is grave that is serious, a suspension order may
be served on the employee along with the charge sheet.
– According to the Industrial Employment (Standing Order) Act,
1946, the suspended worker is to be paid a subsistence allowance
equal to one-half of his wages for the first 90 days of suspension
and
• 3/4th of wages for the remaining period of suspension if the delay in the
completion of disciplinary proceedings is not due to the worker’s conduct.
– What is grave will depend on the discretion of the
management.
• It has to be decided in accordance with the Code Of Discipline.
• Holding of Enquiry.
– An enquiry officer should be appointed to hold the enquiry and a
notice to this effect should be given to the concerned worker.
– Principle of natural justice must be followed.
– The worker should not be denied the chance of explaining
himself.
– The enquiry officer should give sufficient notice to the worker so
that he may prepare to represent his case and make submission in
his defense.
– The enquiry officer should proceed in a proper manner and
examine witnesses.
– Fair opportunity should be given to the worker to cross-examine
the management witnesses.
• Order of Punishment.
– Disciplinary action can be taken when the misconduct of
the employee is proved.
– While deciding the nature of disciplinary action, the
employee’s previous record, precedents, effects of the
action on other employees, etc, have to be considered.
The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act 2013
• Purpose of this Act

– To provide protection against sexual harassment of
women at workplace and
– For the prevention and redressal of complaints of sexual
harassment and for the matters connected therewith of
thereto.
MAJOR CONTENTS OF THIS LAW
• Foundation of the Law
– Definitions
– Constitution of Internal Complaints Committee
– Constitution of Local Complaints Committee
– Complaint
– Inquiry into Complaint
– Duties of Employer
– Duties and Powers of District Officer
– Other Requirements
Definitions
• Prevention
– To stop or hinder something from happening, especially
by advance planning or action
• Prohibit
– To forbid by authority, A law, order, or decree that
forbids something
• Redressal
– To set right; remedy or rectify.
FOUNDATION OF THIS ACT
• Constitution of India
– Human Rights by International Conventions and
Instruments –
• Convention on the Elimination of all Forms of Discrimination
against Women (CEDAW)– which has been ratified on 25th
June 1993 by the Government of India.
• Article 11 of the CEDAW clarifies that
– Equality to employment can be seriously impaired when
women are subjected to gender specific violence, such a
sexual harassment at work .
REASONS FOR THIS ACT
1. Violation of women’s right to equality, life and
liberty.
– It creates an insecure and hostile work environment,
which discourages women’s participation in work,
thereby adversely affecting their social and economic
empowerment and the goal of inclusive growth.
2. Increase in women workforce participation:

– Both is organised and unorganised sectors, ensuring an
enabling working environment for women through
legislation is felt imperative by the Government
RIGHTS BY THE CONSTITUTION OF INDIA
• Article 14 & 15
– Embodies the concept of equality and prohibits
discrimination on the grounds of religion, race, caste, sex
or place of birth or any of them.
• Article 19
– Gives fundamental right to all citizens to practice any
profession, or to carry out any occupation, trade or
business.
– This right presupposes the availability of an enabling
environment for women, which equitous, safe and secure
in every aspect.
RIGHTS BY THE CONSTITUTION OF INDIA
• Article 21
– Right to life and personal liberty, includes the right to
live with dignity and in case of women it means that they
must be treated with due respect, decency and dignity at
workplace.
THE ACT EXTENDS TO WHOLE OF INDIA
• Employee:
– A person employed at the workplace for any work on

• Regular,
• Temporary,
• Ad-hoc,
• Daily wage basis,
• Either directly or through an agent,
– Including a contractor
THE ACT EXTENDS TO WHOLE OF INDIA
• Employer
– In relation to any department , organisation, undertaking,

establishment, enterprise, institution, office, branch or
unit of the appropriate Government or a local authority in
the above
– If not specified, any person responsible for management,
supervision or control of the workplace.
THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE
• Sexual Harassment
– Includes any one or more of the following unwelcome
acts or behaviour (whether directly or by implication) viz:
• Physical Contact or advances
• A demand or request for sexual favours
• Making sexually coloured remarks
• Showing pornography
• Any unwelcome physical, verbal or non-verbal conduct
of sexual nature.
Prevention of Sexual Harassment
• No woman shall be subjected to sexual harassment at workplace
• The following circumstances, among other circumstances, if it
occurs or is present in relation to or connected with any act or
behaviour of sexual harassment may amount to sexual
harassment
– Implied or explicit promise of preferential treatment in her
employment
– Implied or explicit threat or detrimental treatment in her
employment
– Implied or explicit threat about her present or future
employment status
– Interference with her work or creating an intimidating or
offensive or hostile work environment for her
– Humiliating treatment likely to affect her health or safety.
Constitution of Internal Complaints
Committee
• Every employer of a workplace shall by order in writing constitute a
committee to be known as “Internal Complaints Committee”
• Members of the Committee
– Presiding Officer who shall be a woman employed at a senior
level at workplace from amongst the employees
– Not less than two members from amongst employees preferably
committed to the cause of women/ experience in social work/
have legal knowledge
– One member from the NGO/ associations committed to the cause
of women/ person familiar with the issues relating to sexual
harassment
– The Committee members to hold office for 03 years and External
member will be paid fees
COMPLAINT OF SEXUAL
HARASSMENT
• A written Complaint to the Internal committee by the
complainant,
– Within a period of 03 months from the date of the incident
and
– In case of series if incidents, within a period of 03 months
from the date of last incident.
• The Internal committee can extend the period with reasons in
writing exceeding not more than 3 months
• Legal heir or such other person can make a complaint on
account of her physical or mental incapacity or death.
PROVISIONS FOR COMPLAINT
REDRESSAL
• Written report is necessary in each option
• Conciliation – at the request of the aggrieved woman
before initiating an inquiry to settle the matter
• No monetary settlement shall be made as a basis for
conciliation and no inquiry will be conducted
REDRESSAL
• Inquiry into Complaint
– The internal committee has same powers as are
vested in a civil court, such as
• Summoning and enforcing attendance of any
person and examining him on oath
• Requiring the discovery and production of
documents
• Any other matter which may be prescribed
• Inquiry to be completed within 90 days
REDRESSAL
• Inquiry Report and Recommendations
– To be provided to the employer by the Internal Committee, within 10
days of completion of inquiry and to be made available to the
concerned parties.
– If the committee reaches a conclusion that the allegation against the
respondent has not been proved, it shall recommend to the employer
that no action is required against the respondent.
– If the committee reaches a conclusion that the allegation against the
respondent has been proved, it shall recommend to the employer
– To take action as a misconduct in accordance with the provisions of
service rules applicable to the respondent, where no such service rules
have been made, in such a manner as may be prescribed
– To deduct an amount appropriate from the salary or wages (According
to Bare Act)
– The Employer shall act upon the recommendations within 60 days.
FALSE ACCUSATION
• Punishment for False or Malicious Complaint and
False Evidence
• If the internal committee comes to a conclusion that
it was a false and /or malicious accusation and /or the
witness has given false evidence or produced any
forged or misleading document,
– It may recommend the employer of the complainant
and/or the witness to take action in accordance with the
provisions of the service rules or where no such service
rules exist, in such manner as may be prescribed.
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Managing Global Workforce

Prof. Rama Shankar Yadav

Indian Institute of Management Rohtak

• Difference between IHRM and Domestic HRM

• Basic steps in IHRM

• Key Issues in International Labour Relations

• All HRM functions need international orientation

• MNC operating internationally need to be more focused to attract,

• The process of recruiting/hiring, allocating, motivating, training &

• IHRM covers six main functions of domestic HRM such as HR

• The three countries categories of IHRM are country where

• IHRM differs from domestic HRM on following points

3. More involvement in employees’ personal lives

4. Greater workforce diversity

7. More external influences

• IHRM has boarder scope in deal with employment related issues.

• For example: International taxation, host country regulations,

• Difficulty in implementation of HR policy and procedure in host

• Difficulty in aligning business strategy with HR strategy

• Providing career development opportunities to international

• Matching person and organizational fit (cultural match)

• Managing expatriates failures

• Managing repatriation process

• Training of expatriates and managers

• Deciding compensation of expatriates

• Deciding compensation of parent, host, and third country

• Implementation of performance evaluation system in host country

• Physical distance, time difference, and reporting cost

• Raters to evaluate subsidiary performance

Who should deal industrial relations issues in subsidiary?

What is attitude and policy of parent company toward unions in

What should be tactics to deal with unions in subsidiary?

2) Need for Broader Perspective

In dealing with compensation issues, HR manager in headquarter

In deciding fringe benefits, HR managers face difficulty, in most

In IHRM there is more involvement of HR department in dealing

HRM department need to ascertain that managers selected for

HRM need to have more information about manager family,

‘International Human Resource Services’ section provide services to

Unlike domestic HRM in International HRM, HR manager needs to

Different work ethics, motivation level, cultural compatibility,

As more trained local managers are available, the issue of training

Designing programs and policies to provide development

MNCs operating in different countries need to assess the law and

HR department may also need to have emergency evacuation

Poor selection decision may result into huge loss as in case of

If MNC’s policies and practices are hostile to unions, political party

MNCs operating in host country face more external influence as

Federal and local government, political figures, political and social

Subsidiary manager need to know local way of doing business,

There are number of reasons for growing interest in IHRM

Thanks to globalization, more and more entry of multinational

In international business human resources performance is more

The cost of underperformance in international assignment is very

The international expansion mainly depend on availability and

Finally, implementation of strategies is more crucial than developing,

• HR planning in international business is more complex and

• HRP procedures are difficult to implement in different countries.