‘An organisation can be defined as a system of roles, while a role itself is a system’. ‘The system of various roles which the individual carries and performs, and the system of various roles of which his/her role is a part.’ Explain with relevant examples, how the above statements assume importance and act as significant player in the process of various dimensions of Role Efficacy in an organisational set up. Give relevant details of the organisation, you are referring to for examples.
Ans. ORGANISATIONAL AND INDIVIDUAL ROLES
The efficiency and effectiveness of an organisation depends directly on how capable its personnel are and how effectively that are utilised for achieving organisational objectives. Capability of a person depends on his abiity to work and the types of training he receives. While the personal ability is evaluated through proper selection process, his training is taken care of by the organisation which involves developing appropriate skills and competence in people art different levels of the organisation. Integrated and systematic development of personnel in the organisation is referred to as human resources development.
HRD focuses on human resources as a means for organisation health. Though the ultimate objective of any activity or process in an organisation is to contribute to its well being, each process may have specific focus on a particular aspect. Management does this by focusing on personnel their competencies and their pride in the organisation. The focus of HRD on human resources is based on following assumptions:-
(i) Human Resources are the most valuable assets of any organisation
(ii) Unlike other resources human resources can be developed and increased to an unlimited extent.
(iii) A conductive organisational climate characterised by openers, trust, mutuality and collaboration is essential for developing human resources
(iv) People feel committed to their work and organisation, if the organisation develops the feelings of belongingness.
(v) People will develop this feeling if they are taken care of properly by the organisation
(vi) Peoples commitment is increased with the opportunity to discover develop and use their potential.
(vii) Everyone in the organisation is responsible for human resource development.
AS A SYSTEM OF ROLES
HRD does not view the development of an individual employee in isolation but it tries to integrate this with the total system of development, which is undertaken at four levels. –individual, dynamic, group and organisation.. At the individual level, HRD makes individual employees aware of the expectations that other persons have about their roles so that they are able to develop their skills and attitude accordingly.
At the dynamic level stronger superior-subordinate relationship is develop by developing the attitudes of mutual trust and help. At the group level focus is on developing collaborative team spirit and intergroup cooperation. At the organisation level, development of competencies involves the development of self renewal mechanism in the organisation which enables it to adapt environmental changes and to proud.
An organisation can be defined as a system of roles, in the context of present day competitive business, the quality of human capital of an organisation determines the degree of success which it can achieve since there is keen competition for human resources and not only competition for customers, the human capital can be created within the organisation and not acquired from outside. From this point of view, HRD has created its own needs in every organisation.
Fist and foremost role of HRD is to develop the competencies in people in all the levels in the organisation. Basically human resource development has two roles; to provide employees with greater opportunity to succeed and grow within the company and to strengthen management and professional teams at all levels of organisation level. Competency can be developed by increasing ability through increasing knowledge, skills and change in attitudes. Knowledge refers to the possession of information and ideas in a particular field which may be helpful in developing relationships among different variables related to that field.
Skill refers to expertise, expertness, practical ability or facility in an action of doing something. Attitude refers to the orientation of an individual in terms of settled mode of thinking or behaviour. Developing of competencies among individuals and teams consisting them is required in all types of organisations, business or non business. However in business organisations, their role is more focused because of increased competition.
HRD is also needed in an organisation to facilitate system wide changes. According to Mekinsey model , the interrelated aspects in an organisation are s8, Strategy, structure, system, staff, skills, styles and shared values. Change in any one element necessitates the change in other elements to absorb the change initiated in one element. HRD makes efforts to bring this system wide change and make all elements coherent;
Another role of HRD is to create conducive organisational climate congenial to individual growth as well as organisational growth by replacing the old and traditional assumptions about human beings with contemporary and more realistic assumptions about human beings.
Following conclusions can be drawn about people in an organisation regarding conducive organisational climate.
• People in the organisation become more competent because of the skills that are developed in them and the clarity of roles that they perform.
• Involvement in and commitment to job increase because of linkage between job performance and rewards both intrinsic and extrinsic.
• People develop better understanding to each other based on mutual trust and confidence which creates better cooperation.
• Top management becomes sensitive to human resources in terms of their utilisation and solution of problems.
ORGANISATION AND INDIVIDUAL GOALS
This is one of the areas of conflict between an organisation and its members. In order to bring congruency in there goals and consequently, organisational effectiveness, There is a need for integrating organisational and individual goals. The relationship between organisational and individual goals can be presented on following continuum.
Totally
Opposing Neutral Identical
I-------------------I--------------------I------------------I----------------I
Partially Compatible
Opposing
[Relation ship between organisational and industrial goals)
The relationship between individual and organisational goals can be identified by exploring what individuals want from the organisation and what the organisation wants from the individuals.
Human aspect is the predominant factor affecting his relations with others in the society. Man is a complicated human being with various emotions, fears, desires, ambitions, likes and dislikes. There is a constant interaction and interplay of there various dynamic human factors and it is necessary to chanelise them to work towards the common goals of the organisation.
EXAMPLE
Ashok Leyland Chennai is leading manufacturing firm in production of transports. It not only carter to the needs of the domestic requirements but also is a front runner in exporting its products to other countries. The organisation has very sound system of interpersonal relationships. Director of personnel is responsible for assisting management in the formulation of policies on personnel administration including employees training, manpower planning, industrial relations, employee’s welfare including community development and their implementation. He also does planning, direction, coordination and control of activities and personnel of the departments under him. The firm has an excellent work environment through transparent HR policies which are highly motivating and future positive self discipline. The essence of human relation philosophy of the firm is to cultivate and develop an environment where employees as individuals and as a group would wish to contribute their goals. Executives in upper and middle management recognise that the organisation involves a complicated network of relationships among people. The management’s job is to coordinate the efforts among people so that they will work towards the common goal.
Wednesday, May 18, 2011
What are the bare necessary Human Resource Function’s data required by a manager for conducting Human Resource Audit and why?
What are the bare necessary Human Resource Function’s data required by a manager for conducting Human Resource Audit and why? Critically evaluate with you experience with the organisation you have been working with or any organisation you are familiar with. Briefly give relevant details of the organisation, you are referring to.
Ans. HUMAN RESOURCES AUDIT
Audit is one of the important management control devices. HR audit is used widely to check the organisations performance in its management of human resources. To facilitate control, the audit reveals important facts such as absenteeism, labour turnover, employee grievances etc,. The primary objective of the audit is the critical review and evaluation of manpower management programme in the organization. HR audit is not limited to a review of the work of the personal department. All managers of an organization have personal responsibility. They all take part in developing policies and operate under there in handling their personnel responsibilities.
Therefore, HR audit goes beyond the limits of personnel department activities and considers the role of management in effective manpower utilisation.
“HR Audit refers to an examination and cultivation of policies, procedures and practices to determine the effectiveness of personnel management. It is an investigative analytical and comparative process. It undertakes a systematic search of the effectiveness of personnel programmes.
Personal audit is different from the measurement of employee moral. Attitudes and moral represent only a portion of the total facts and figures to be considered. HR Audit checks the indicators of the quality of leadership, motivation, communication, effectiveness of supervision etc.
From the above discussion it can be said that the HR Audit refers to :
(i) The measurement of the effectiveness of the human resource management’s mission, objectives, strategies, policies, procedures, programmes and activities.
(ii) The determination of what should or should not be done in the future as a result of such measurement.
According to “Gray”, “the primary purpose of personnel audit is to know how the various units are functioning and how they have been able to meet the policies and guidelines which were agreed upon, and to assist the rest of the organization by identifying the gap between objectives and results for the end product of an evaluation should be to formulate plans for corrections or adjustment.
Areas of Audit
The areas of HR audit include.
(i) Mission statement relating to human resource management
(ii) Objectives, goals and strategies of human resource managemen.
(iii) Accomplishments of human resource management.
(iv) Programmes of HRM including the detailed practices and procedures
(v) HRM policies
(vi) Role of HRM is total quality management.
QUALITATIVE AND QUANTITATIVE INDICATORS FOR PERSONNEL AUDIT
Under following headings qualitative and quantitative indicators of HR Audit can be determined.
1. PROCUREMENT : Qualitative indicator for this function are personal inventory, replacement tables, organizational planning, job description and specification, source evaluation. Exit interviews and induction programmes etc. Quantitative indicators under procurement functions are turnover rates, selection rations, retrenchment, dismissals and lay-offs, recruitment time –lag and recruitment time langend recruitment ratios.
2. TRAINING AND DEVELOPMENT: Qualitative indicators: Training programmes, supervisory and management development programmes, systematic promotions career planning and formal appraisal.
Qualitative indicators: Time taken in training, Apprentice ratios, scrap losses, productivity increases.
3. COMPENSATION: Qualitative indicators: Job evaluation programmes, wage and salary surveys, complain from employees about wages and salaries.
Quantitative indicators: Wage and salary differentials benefit range and costs, number of employees earning bonus in excess of standard rates.
4. INTEGRATION AND MAINTENANCE : Under qualitative indicators are employee handbook, employee voluntary participation in option service programmes. Under Quantitative indicators are measured moral, measured communication, Absenteeism and turnover rates number of grievances, suggestions ratios, Accident rates.
5. LABOUR RELATIONS: Qualitative indicators: Labour management committees, contract interpretations, no strike clause. Quantitative indicators: Work stoppages grievances and their settlement, arbitrations, costs etc.
Certain records are statistics which are properly maintained for HR Audit include the following.
(1) Employment Statistics such as number of new hires, voluntary quits, forced separations, are number entering and leaving the organisations.
(2) Statistics describing characteristics of present work force such as age, length of service, education etc.
(3) Grievance Statistics including number of new grievances, number handled at each level of management etc.
(4) Miscellaneous statistical data such as absenteeism, suggestions, received and approved, average lowly rate etc.
After examining the various HR policies, practices and procedures and their results, the auditors provide written reports of their findings, conclusions and suggestions. Summaries and evaluation of factual information present the most common content of auditors report. The report should be based solely on the findings. Reports also include recommendations which may meet the primary needs of top management. The auditor should ensure that the following essentials are included in the report.
(i) Table of contents
(ii) Preface giving a brief statement of the audit
(iii) Summary and conclusions
(iv) The report proper, in which each major division or department is covered separately. Each department may be devoted a separated section.
(v) Summary – it is general nature and is relevant to all the persons concerned. It does not include the matters reported to the top management.
(vi) Appendix. This includes supporting data that might be too voluminous to appear in the body of the report.
HR AUDIT IN ASHOK LEYLAND CHENNAI
HR Audit is given due consideration in the firm. The organization Ashok Leyland is premier manufacturing firm of Chennai and producing variety of motor vehicles. It not only caters to the national requirements, but also is exporting its products to the neighboring countries. HR Audit department carries out examination and evaluation of policies, procedures and practices to determine the effectiveness and efficiency of HRM.
HR auditors of the firm review the whole system of management programmes in which a management develops, allocates and supervises human resources.
2. They also seek explanations and information’s, that is, to get answers to such questions as “Why did it happen?” and “What happened?”.
3. One of the important function HR auditors do is that they evaluate the extent to which line managers have implemented the policies which have already been initiated.
4. They also evaluate the personnel staff and employees.
Thus in Ashok Leyland the HR auditors carry out specification of standards, collection and evaluation of information and preparation of audit reports.
Ans. HUMAN RESOURCES AUDIT
Audit is one of the important management control devices. HR audit is used widely to check the organisations performance in its management of human resources. To facilitate control, the audit reveals important facts such as absenteeism, labour turnover, employee grievances etc,. The primary objective of the audit is the critical review and evaluation of manpower management programme in the organization. HR audit is not limited to a review of the work of the personal department. All managers of an organization have personal responsibility. They all take part in developing policies and operate under there in handling their personnel responsibilities.
Therefore, HR audit goes beyond the limits of personnel department activities and considers the role of management in effective manpower utilisation.
“HR Audit refers to an examination and cultivation of policies, procedures and practices to determine the effectiveness of personnel management. It is an investigative analytical and comparative process. It undertakes a systematic search of the effectiveness of personnel programmes.
Personal audit is different from the measurement of employee moral. Attitudes and moral represent only a portion of the total facts and figures to be considered. HR Audit checks the indicators of the quality of leadership, motivation, communication, effectiveness of supervision etc.
From the above discussion it can be said that the HR Audit refers to :
(i) The measurement of the effectiveness of the human resource management’s mission, objectives, strategies, policies, procedures, programmes and activities.
(ii) The determination of what should or should not be done in the future as a result of such measurement.
According to “Gray”, “the primary purpose of personnel audit is to know how the various units are functioning and how they have been able to meet the policies and guidelines which were agreed upon, and to assist the rest of the organization by identifying the gap between objectives and results for the end product of an evaluation should be to formulate plans for corrections or adjustment.
Areas of Audit
The areas of HR audit include.
(i) Mission statement relating to human resource management
(ii) Objectives, goals and strategies of human resource managemen.
(iii) Accomplishments of human resource management.
(iv) Programmes of HRM including the detailed practices and procedures
(v) HRM policies
(vi) Role of HRM is total quality management.
QUALITATIVE AND QUANTITATIVE INDICATORS FOR PERSONNEL AUDIT
Under following headings qualitative and quantitative indicators of HR Audit can be determined.
1. PROCUREMENT : Qualitative indicator for this function are personal inventory, replacement tables, organizational planning, job description and specification, source evaluation. Exit interviews and induction programmes etc. Quantitative indicators under procurement functions are turnover rates, selection rations, retrenchment, dismissals and lay-offs, recruitment time –lag and recruitment time langend recruitment ratios.
2. TRAINING AND DEVELOPMENT: Qualitative indicators: Training programmes, supervisory and management development programmes, systematic promotions career planning and formal appraisal.
Qualitative indicators: Time taken in training, Apprentice ratios, scrap losses, productivity increases.
3. COMPENSATION: Qualitative indicators: Job evaluation programmes, wage and salary surveys, complain from employees about wages and salaries.
Quantitative indicators: Wage and salary differentials benefit range and costs, number of employees earning bonus in excess of standard rates.
4. INTEGRATION AND MAINTENANCE : Under qualitative indicators are employee handbook, employee voluntary participation in option service programmes. Under Quantitative indicators are measured moral, measured communication, Absenteeism and turnover rates number of grievances, suggestions ratios, Accident rates.
5. LABOUR RELATIONS: Qualitative indicators: Labour management committees, contract interpretations, no strike clause. Quantitative indicators: Work stoppages grievances and their settlement, arbitrations, costs etc.
Certain records are statistics which are properly maintained for HR Audit include the following.
(1) Employment Statistics such as number of new hires, voluntary quits, forced separations, are number entering and leaving the organisations.
(2) Statistics describing characteristics of present work force such as age, length of service, education etc.
(3) Grievance Statistics including number of new grievances, number handled at each level of management etc.
(4) Miscellaneous statistical data such as absenteeism, suggestions, received and approved, average lowly rate etc.
After examining the various HR policies, practices and procedures and their results, the auditors provide written reports of their findings, conclusions and suggestions. Summaries and evaluation of factual information present the most common content of auditors report. The report should be based solely on the findings. Reports also include recommendations which may meet the primary needs of top management. The auditor should ensure that the following essentials are included in the report.
(i) Table of contents
(ii) Preface giving a brief statement of the audit
(iii) Summary and conclusions
(iv) The report proper, in which each major division or department is covered separately. Each department may be devoted a separated section.
(v) Summary – it is general nature and is relevant to all the persons concerned. It does not include the matters reported to the top management.
(vi) Appendix. This includes supporting data that might be too voluminous to appear in the body of the report.
HR AUDIT IN ASHOK LEYLAND CHENNAI
HR Audit is given due consideration in the firm. The organization Ashok Leyland is premier manufacturing firm of Chennai and producing variety of motor vehicles. It not only caters to the national requirements, but also is exporting its products to the neighboring countries. HR Audit department carries out examination and evaluation of policies, procedures and practices to determine the effectiveness and efficiency of HRM.
HR auditors of the firm review the whole system of management programmes in which a management develops, allocates and supervises human resources.
2. They also seek explanations and information’s, that is, to get answers to such questions as “Why did it happen?” and “What happened?”.
3. One of the important function HR auditors do is that they evaluate the extent to which line managers have implemented the policies which have already been initiated.
4. They also evaluate the personnel staff and employees.
Thus in Ashok Leyland the HR auditors carry out specification of standards, collection and evaluation of information and preparation of audit reports.
Briefly describe various methods of job Analysis.
Briefly describe various methods of job Analysis. Evaluate and identify the method applied in an organisation known to you or you are familiar with. Critically analyze the role and importance of job Analysis on Work Flow in an organisational setup.
Ans. Job Analysis is very vital step in human resources planning process. A Job is a bundle of related tasks; A synonym of job is work. Work is understood as physical and mental activity that is carried out at a particular place and time, according to instructions, in return for money. Monetary consideration is necessary in determining whether an activity is really a work. Housewife does not do work as she is not doing it for money. Where as a servant’s job becomes work as with work job also carries monetary consideration. The job incumbent attends to all the allied tasks for wages or salaries.
The nature of work and how mangers organize work is a critical element affecting human resources activities. Before discussing design and organization of work it is desirable that we know “Job analysis” the tool of collecting job related data.
JOB ANALYSIS refers to the process of collecting information about a job. The process of job analysis results in two sets of data (i) job description and (ii) Job specification. Job description describes what a job involves- tasks and responsibilities tagged on to a job, Job title, duties, machines tools and equipment, working conditions and hazards from part of job description.
The capabilities that job holder should posses from part of job specification. Education training experience, judgment skills, communication skills and the like are a part of job specification.
Now what is very important is that there should be fit between job demands (job description) and abilities required to discharge the tasks (job-specification) any mismatch is likely to result in job dissatisfaction that carries dis- functional consequences like how productivity, absenteeism and turnover.
METHODS OF JOB ANALYSIS
The process of analyising a job is essentially one of data collection various approaches can be utilized for this purpose. They are:
(a) Observation Method
(b) Interview
(c) Questionnaire
(d) Check list
(e) Technical conferences
(f) Diary
METHODS OF COLLECTING JOB DATA
OBSERVATION
Here job analyst carefully observes the job holder at work and records what he or she does, how he or she does, and how much time is needed to complete a given task. This method is simple. Data collected is accurate because of direct observation. But this is time consuming method and in applicable in jobs which involve high properties of unobservable mental activities. The analyst needs to be trained to carefully observe and record the competence of the job incumbent and training means additional cost. For better results the method should be used along with other methods of job analysis.
INTERVIEW
In this method the analyst interviews the job holder and his supervisor to elicit information about the job. This method is usually structural one. It is time consuming method. The time problem will be compounded if the interviewer talks with 2 or more employees doing the same job. Further more managerial and professional jobs are more complicated to analyse and require a longer interview. There is also a problem of bias. Bias may cloud the accuracy and objectivity of the data obtained. But face to face contact makes it more meaningful and effective method.
QUESTIONNAIRE.
Job holders fill in the given structural questionnaire, which are then approved by the supervisors. Questionnaires whether standard or prepared one must contain the following data.
(i) Job title of the jobholder.
(ii) Job title of the job holders supervisor
(iii) Job titles and numbers of the staff reporting to the job holder.
(iv) A brief description of the overall role or purpose of the job.
(v) A list of the main tasks or duties that the job holder has to perform as specified these should specify the resources controlled, the equipment used, the contracts made and the frequency with which the tasks are carried out.
In this method information of a large number of jobs can be collected in a relatively short period of time. Further more, all the job holders participate in the method unlike in an interview where one or two workers only would participate.
But the accuracy of the information obtained through the questionnaire leaves much to be desired. Job analysis work requires specialized knowledge and training. An average employee although know what his/her duties are, he/she is not trained to identify the essential aspects of his/her work and often cannot express the information in a meaningful and clear fashion. To depend exclusively upon questionnaire as the source of job information is bound and creates some errors in the programme.
CHECKLIST.
Check list is similar to a questionnaire, but the response sheet contains fewer subjective judgments and tends to be either ‘yes-or-no’ variety. Preparation of a check list is a challenging job. The job holder is asked to check all the listed task in check list that he performs and indicate the amount of time spent on each task as well as the training and experiences required to be proficient in each task. Check list method is useful in large firms that have a large number of people assigned to one particular job. Also this technique is amendable to tabulation and recording on electronic data processing equipment. The technique however is costly and not suitable to small firm.
TECHNICAL CONFERENCE METHOD
In this method, services of supervisors who possess extensive knowledge about a job are used. The analyst initiates discussion which provides details of data collection, this method lacks accuracy as the actual job holders are not involved in collecting information.
DIARY METHOD
This method requires the job holders to record in detail their activities each day. If done accurately, this method is accurate and eliminates errors caused by memory lapse the job holder makes while answering questionnaires and checklist. But it is time consuming as recording has to be done for a number of days. It also engages considerable time of a production worker.
EXAMPLE
Method Applied in Heavy Vehicle Factory for the job analysis is not a single one. But it was observed that the observation and interview methods of collecting data or job information hold the greatest promise of completeness accuracy and better utilisation of time. Heavy Vehicle Factory (HVF) Chennai is premier organization responsible for producing heavy vehicle for defence organization. Job analysis in the firm has its impact on all the functions of HRM. Job analysis has helped the firm enhance the effectiveness of all HR activities.
Job analysis has helped the organization in the following ways:
(i) Laying the foundation for human resources planning.
(ii) Laying the foundation for employee hiring
(iii) Laying the foundation for training and development
(iv) Laying the foundation for performance appraisal
(v) Laying the foundation for salary and wages fixation
(vi) Laying the foundation for safety and health
If the particular job is simple and repetitive, observation is followed by the management. In most cases however interviews coupled with observation constitute the preferred approach.
ROLE OF JOB ANALYSIS
Job analysis is useful for overall management of all personnel activities. Job related data obtained from a job analysis programme are useful in HRP, employee hiring, training, job evaluation compensation etc.
Job analysis also play vital role in performance appraisal, computerized personnel information system and safely and health.
As for HRP the number and type of personnel are determined by the jobs which are to be staffed. The objective of employee hiring is to match the right people with the right jobs, which can be achieved only with adequate job information. For establishing wage and salary differentials job evaluation is done which is based on job description and job specification.
Hazardous conditions and unhealthy environments are identified with the help of job analysis and corrective measures are taken to improve them.
Ans. Job Analysis is very vital step in human resources planning process. A Job is a bundle of related tasks; A synonym of job is work. Work is understood as physical and mental activity that is carried out at a particular place and time, according to instructions, in return for money. Monetary consideration is necessary in determining whether an activity is really a work. Housewife does not do work as she is not doing it for money. Where as a servant’s job becomes work as with work job also carries monetary consideration. The job incumbent attends to all the allied tasks for wages or salaries.
The nature of work and how mangers organize work is a critical element affecting human resources activities. Before discussing design and organization of work it is desirable that we know “Job analysis” the tool of collecting job related data.
JOB ANALYSIS refers to the process of collecting information about a job. The process of job analysis results in two sets of data (i) job description and (ii) Job specification. Job description describes what a job involves- tasks and responsibilities tagged on to a job, Job title, duties, machines tools and equipment, working conditions and hazards from part of job description.
The capabilities that job holder should posses from part of job specification. Education training experience, judgment skills, communication skills and the like are a part of job specification.
Now what is very important is that there should be fit between job demands (job description) and abilities required to discharge the tasks (job-specification) any mismatch is likely to result in job dissatisfaction that carries dis- functional consequences like how productivity, absenteeism and turnover.
METHODS OF JOB ANALYSIS
The process of analyising a job is essentially one of data collection various approaches can be utilized for this purpose. They are:
(a) Observation Method
(b) Interview
(c) Questionnaire
(d) Check list
(e) Technical conferences
(f) Diary
METHODS OF COLLECTING JOB DATA
OBSERVATION
Here job analyst carefully observes the job holder at work and records what he or she does, how he or she does, and how much time is needed to complete a given task. This method is simple. Data collected is accurate because of direct observation. But this is time consuming method and in applicable in jobs which involve high properties of unobservable mental activities. The analyst needs to be trained to carefully observe and record the competence of the job incumbent and training means additional cost. For better results the method should be used along with other methods of job analysis.
INTERVIEW
In this method the analyst interviews the job holder and his supervisor to elicit information about the job. This method is usually structural one. It is time consuming method. The time problem will be compounded if the interviewer talks with 2 or more employees doing the same job. Further more managerial and professional jobs are more complicated to analyse and require a longer interview. There is also a problem of bias. Bias may cloud the accuracy and objectivity of the data obtained. But face to face contact makes it more meaningful and effective method.
QUESTIONNAIRE.
Job holders fill in the given structural questionnaire, which are then approved by the supervisors. Questionnaires whether standard or prepared one must contain the following data.
(i) Job title of the jobholder.
(ii) Job title of the job holders supervisor
(iii) Job titles and numbers of the staff reporting to the job holder.
(iv) A brief description of the overall role or purpose of the job.
(v) A list of the main tasks or duties that the job holder has to perform as specified these should specify the resources controlled, the equipment used, the contracts made and the frequency with which the tasks are carried out.
In this method information of a large number of jobs can be collected in a relatively short period of time. Further more, all the job holders participate in the method unlike in an interview where one or two workers only would participate.
But the accuracy of the information obtained through the questionnaire leaves much to be desired. Job analysis work requires specialized knowledge and training. An average employee although know what his/her duties are, he/she is not trained to identify the essential aspects of his/her work and often cannot express the information in a meaningful and clear fashion. To depend exclusively upon questionnaire as the source of job information is bound and creates some errors in the programme.
CHECKLIST.
Check list is similar to a questionnaire, but the response sheet contains fewer subjective judgments and tends to be either ‘yes-or-no’ variety. Preparation of a check list is a challenging job. The job holder is asked to check all the listed task in check list that he performs and indicate the amount of time spent on each task as well as the training and experiences required to be proficient in each task. Check list method is useful in large firms that have a large number of people assigned to one particular job. Also this technique is amendable to tabulation and recording on electronic data processing equipment. The technique however is costly and not suitable to small firm.
TECHNICAL CONFERENCE METHOD
In this method, services of supervisors who possess extensive knowledge about a job are used. The analyst initiates discussion which provides details of data collection, this method lacks accuracy as the actual job holders are not involved in collecting information.
DIARY METHOD
This method requires the job holders to record in detail their activities each day. If done accurately, this method is accurate and eliminates errors caused by memory lapse the job holder makes while answering questionnaires and checklist. But it is time consuming as recording has to be done for a number of days. It also engages considerable time of a production worker.
EXAMPLE
Method Applied in Heavy Vehicle Factory for the job analysis is not a single one. But it was observed that the observation and interview methods of collecting data or job information hold the greatest promise of completeness accuracy and better utilisation of time. Heavy Vehicle Factory (HVF) Chennai is premier organization responsible for producing heavy vehicle for defence organization. Job analysis in the firm has its impact on all the functions of HRM. Job analysis has helped the firm enhance the effectiveness of all HR activities.
Job analysis has helped the organization in the following ways:
(i) Laying the foundation for human resources planning.
(ii) Laying the foundation for employee hiring
(iii) Laying the foundation for training and development
(iv) Laying the foundation for performance appraisal
(v) Laying the foundation for salary and wages fixation
(vi) Laying the foundation for safety and health
If the particular job is simple and repetitive, observation is followed by the management. In most cases however interviews coupled with observation constitute the preferred approach.
ROLE OF JOB ANALYSIS
Job analysis is useful for overall management of all personnel activities. Job related data obtained from a job analysis programme are useful in HRP, employee hiring, training, job evaluation compensation etc.
Job analysis also play vital role in performance appraisal, computerized personnel information system and safely and health.
As for HRP the number and type of personnel are determined by the jobs which are to be staffed. The objective of employee hiring is to match the right people with the right jobs, which can be achieved only with adequate job information. For establishing wage and salary differentials job evaluation is done which is based on job description and job specification.
Hazardous conditions and unhealthy environments are identified with the help of job analysis and corrective measures are taken to improve them.
Challenges require organisations to build new capabilities.
‘Regardless of their industry, size or location, today’s organisations are faced with five critical challenges viz; Globalization, profitability through growth, Technology, Intellectual capital and change, Change and more Change. Collectively these challenges require organisations to build new capabilities.’
Critically comment on the above statements with respect to your experiences with the organisation you have been working for/known to you. Give relevant details of the organisation you are referring to.
Ans. CHALLENGES OF ORGANISATIONS
Regardless of their industry, size or location, today’s organisations are faced with many critical challenges. Such as globalization, profitability through growth technology, intellectual capital and change, change and more change. Collectively there challenges require organisations to build new capabilities. Above statement gives an insight how modern organisations small or big are to face variety of challenges. It is the prerequisite for the management to face there challenge effectively and effectively in order to turn them into their strength and win competitive advantage for their organisations.
The last decade of 20the century has brought management practices across the world and India has not been an exception to that. There changes have put various challenges before the management to adopt new strategies for managing business since HRM is the prime mover of management of people at work; it has to encounter that challenges effectively in order to enable organisations to achieve their objectives. Following trends which are emerging at the global level as well as in India, have far reacting impact on human resources management practices.
(i) Globalisation of economy
(ii) Corporate Restructuring
(iii) Newer Organisational designs
(iv) Emphasis on total quality management (TQM)
(v) Emphasis on Kaizen
(vi) Changing job profile
(vii) Changing work force profile
(viii) Increasing role of women employees
(ix) Emphasis on knowledge management
1. Globalisation of economy:
Today geographical boundaries of a country have only political relevance. The economic relevance has extended beyond that. Today, the market classification does not take into account only national parameters, but also global parameters. Many Indian companies have spread their wings beyond their national territory. Globalisation of business is helpful in earning profit but at the same time, it creates many challenges for management, particularly in the area of HRM. HRM practices are culture-bound and the culture of a nation differs from that of other countries. Therefore many of the HRM practices which are relevant for its operations in the country of its origin may not be relevant for its operation in other countries. HR managers are required to be familiar with the attitudes, beliefs and values prevalent in the host countries of other conditions prevailing in those countries which have bearing on HRM practices.
2. Profitability through growth:
Organisational development and growth efforts broadly aim at improving the organisational effectiveness and job satisfaction of the employees. There aims can be attained by humanising the organisations and encouraging the personal growth of individual employees. The objectives of this development and growth are to increase the communication among people, to increase commitment, self direction and self control, to enhance personal enthusiasm and satisfaction levels and to increase the level of trust and support among employees, to increase the level of individual and group responsibility in planning and execution. Thus the major task of HR managers is to harmonise the individual goals to those of broad organisational objectives
3. Technology:
With the removal of restrictions on technology import and acquisitions, many organisations have opted for newer technologies increased use of computers have added new dimension to technological innovation. With the result, old skills are fast becoming obsolete. In their place the operatives have to acquire new skills which has increased the training needs in such organisation and HR developments have to be more active. Technology brings the changes in the span of control, delegation of authority. These changes influence the changes in the present organisational structure. Technology influences the organisational structure through job redesign and change in job description demand for men. Skills and knowledge from the employees . There factors invariable necessitate the development of human resource.
Intellectual Aspects:
Enhancement of the level of the technology needs high level skills and knowledge. There high level skills and knowledge should be incorporated in the job description. Job handled by semi-skilled employees are how to be handled by a computer programmer Advance technology degrades some employees and retrenches some employees from, employment unless they are trained and developed on the application of new technology and methods. These factors demand for development of human resources. Hence it becomes imperative for the Human resource managers to take adequate steps to build the competencies and capabilities of their employees in order to make them important assets for the organisations.
Management of change
Change the order of the day. “Change before the change changes you”. And “change or decay” are the buzz words of the day. The factors that force the change include nature of the work force, technology, economic shocks, competition, social trends and world of politics. There is cultural diversity and need for unification. Also there is increase in professionalism, increase in formal education, increased level of soft skills and positive attitude in the employees. In the field of technology there is the advent of faster and cheaper computers, total quality management and business processing re-engineering. Then there are global competition, mergers and acquisitions and e-business fostering fierce competition. In social trends there are new concepts as (c1o2) Career first and others two, and increased career orientation among young ladies. In the world of political system changes major issues are collapse of Soviet Union, opening of markets in china and china becoming world number two economy. India is not far behind and is bound to catch up in near future if present trend continuous.
There changes require individuals and organisations to make new adjustments. Complexity and fear of adjustment give rise to resistance and problem to change management, especially the HRM is said to be an agent of change. HRM has to overcome the resistance and make it a successful venture. Management can take following steps for smooth transition of change;
• Participation of employees in decision making
• Planning for change
• Protecting Employees interests
• Group Dynamics and positive relationship among people
• Cautious and slow introduction
• Sharing the benefits of change
• Training and development
• Career planning and Development
• Organisational Development
Apart from above mentioned challenges there are plethora of other challenges organisation have to face, such as changing job profile, changing work force profile. Emphasis on total quality management and increasing role of women employees
EXAMPLE
Hindustan Organic Chemicals (HOC) has adopted various strategies to tope up various challenges put forward by changing scenario. They have adopted three-tier workers participation system, which is practised by most of the public sector enterprises. Three-tier participation operates through shop councils, joint councils and worker director.
Shop councils have equal representation from management and workers. The decisions of the council are made on the basis of consensus. Unsettled issues are referred to joint councils. Joint council also has equal representation from management and workers. CEO of firm is its chairman. The decisions of the councils are implemented within one month period. Meetings are held at least once in three months. A workers director is appointed from workers side to two years. He should have eligibility criteria as per ARC Administration Reforms Commissions of PSUs. Work director is appointed by the government. He takes parts in Board of Directors proceedings and draws fees and allowances as admissible to non executive directors.
Due to this healthy and purposeful participation of the workers the HOC management is able to face the challenges imposed by globalisation, technological advancement and social cultural aspects, very effectively and efficiently.
Critically comment on the above statements with respect to your experiences with the organisation you have been working for/known to you. Give relevant details of the organisation you are referring to.
Ans. CHALLENGES OF ORGANISATIONS
Regardless of their industry, size or location, today’s organisations are faced with many critical challenges. Such as globalization, profitability through growth technology, intellectual capital and change, change and more change. Collectively there challenges require organisations to build new capabilities. Above statement gives an insight how modern organisations small or big are to face variety of challenges. It is the prerequisite for the management to face there challenge effectively and effectively in order to turn them into their strength and win competitive advantage for their organisations.
The last decade of 20the century has brought management practices across the world and India has not been an exception to that. There changes have put various challenges before the management to adopt new strategies for managing business since HRM is the prime mover of management of people at work; it has to encounter that challenges effectively in order to enable organisations to achieve their objectives. Following trends which are emerging at the global level as well as in India, have far reacting impact on human resources management practices.
(i) Globalisation of economy
(ii) Corporate Restructuring
(iii) Newer Organisational designs
(iv) Emphasis on total quality management (TQM)
(v) Emphasis on Kaizen
(vi) Changing job profile
(vii) Changing work force profile
(viii) Increasing role of women employees
(ix) Emphasis on knowledge management
1. Globalisation of economy:
Today geographical boundaries of a country have only political relevance. The economic relevance has extended beyond that. Today, the market classification does not take into account only national parameters, but also global parameters. Many Indian companies have spread their wings beyond their national territory. Globalisation of business is helpful in earning profit but at the same time, it creates many challenges for management, particularly in the area of HRM. HRM practices are culture-bound and the culture of a nation differs from that of other countries. Therefore many of the HRM practices which are relevant for its operations in the country of its origin may not be relevant for its operation in other countries. HR managers are required to be familiar with the attitudes, beliefs and values prevalent in the host countries of other conditions prevailing in those countries which have bearing on HRM practices.
2. Profitability through growth:
Organisational development and growth efforts broadly aim at improving the organisational effectiveness and job satisfaction of the employees. There aims can be attained by humanising the organisations and encouraging the personal growth of individual employees. The objectives of this development and growth are to increase the communication among people, to increase commitment, self direction and self control, to enhance personal enthusiasm and satisfaction levels and to increase the level of trust and support among employees, to increase the level of individual and group responsibility in planning and execution. Thus the major task of HR managers is to harmonise the individual goals to those of broad organisational objectives
3. Technology:
With the removal of restrictions on technology import and acquisitions, many organisations have opted for newer technologies increased use of computers have added new dimension to technological innovation. With the result, old skills are fast becoming obsolete. In their place the operatives have to acquire new skills which has increased the training needs in such organisation and HR developments have to be more active. Technology brings the changes in the span of control, delegation of authority. These changes influence the changes in the present organisational structure. Technology influences the organisational structure through job redesign and change in job description demand for men. Skills and knowledge from the employees . There factors invariable necessitate the development of human resource.
Intellectual Aspects:
Enhancement of the level of the technology needs high level skills and knowledge. There high level skills and knowledge should be incorporated in the job description. Job handled by semi-skilled employees are how to be handled by a computer programmer Advance technology degrades some employees and retrenches some employees from, employment unless they are trained and developed on the application of new technology and methods. These factors demand for development of human resources. Hence it becomes imperative for the Human resource managers to take adequate steps to build the competencies and capabilities of their employees in order to make them important assets for the organisations.
Management of change
Change the order of the day. “Change before the change changes you”. And “change or decay” are the buzz words of the day. The factors that force the change include nature of the work force, technology, economic shocks, competition, social trends and world of politics. There is cultural diversity and need for unification. Also there is increase in professionalism, increase in formal education, increased level of soft skills and positive attitude in the employees. In the field of technology there is the advent of faster and cheaper computers, total quality management and business processing re-engineering. Then there are global competition, mergers and acquisitions and e-business fostering fierce competition. In social trends there are new concepts as (c1o2) Career first and others two, and increased career orientation among young ladies. In the world of political system changes major issues are collapse of Soviet Union, opening of markets in china and china becoming world number two economy. India is not far behind and is bound to catch up in near future if present trend continuous.
There changes require individuals and organisations to make new adjustments. Complexity and fear of adjustment give rise to resistance and problem to change management, especially the HRM is said to be an agent of change. HRM has to overcome the resistance and make it a successful venture. Management can take following steps for smooth transition of change;
• Participation of employees in decision making
• Planning for change
• Protecting Employees interests
• Group Dynamics and positive relationship among people
• Cautious and slow introduction
• Sharing the benefits of change
• Training and development
• Career planning and Development
• Organisational Development
Apart from above mentioned challenges there are plethora of other challenges organisation have to face, such as changing job profile, changing work force profile. Emphasis on total quality management and increasing role of women employees
EXAMPLE
Hindustan Organic Chemicals (HOC) has adopted various strategies to tope up various challenges put forward by changing scenario. They have adopted three-tier workers participation system, which is practised by most of the public sector enterprises. Three-tier participation operates through shop councils, joint councils and worker director.
Shop councils have equal representation from management and workers. The decisions of the council are made on the basis of consensus. Unsettled issues are referred to joint councils. Joint council also has equal representation from management and workers. CEO of firm is its chairman. The decisions of the councils are implemented within one month period. Meetings are held at least once in three months. A workers director is appointed from workers side to two years. He should have eligibility criteria as per ARC Administration Reforms Commissions of PSUs. Work director is appointed by the government. He takes parts in Board of Directors proceedings and draws fees and allowances as admissible to non executive directors.
Due to this healthy and purposeful participation of the workers the HOC management is able to face the challenges imposed by globalisation, technological advancement and social cultural aspects, very effectively and efficiently.
Tuesday, May 17, 2011
Discuss the changing role of HRM.
Discuss the changing role of HRM. Explain the challenges associated with HRM effective policies and practices in the context of present business scenario citing examples from your organization or any other organization you are familiar with. Briefly describe the organization you are referring to.
CHANGING ROLE OF HRM
In an organization, there are tall people, short people, fat people, thin people, black people, white people, elderly people, young people and so on. Even within each category there are enormous individual differences. Some will be intelligent, others not so intelligent, some are committed to jobs, others are not, some will be outgoing, others reserved and so on. “The point is that these differences demand attention so that each person can maximize his or her potential, so that organizations can maximize their effectiveness and so that the society as a whole can make the wisest use of its human resources” (Cascio). The challenge of HR managers today is to recognize talent and nurture the same carefully and achieve significant productivity gains over a period of time. The enterprise is nothing but people. Technological advances, globalize competition, demographic changes, the information revolution and trends toward a service society have changed the rules of the game significantly. In such a scenario, organizations with similar set of resources gain competitive advantage only through effective and efficient management of human resources (Dessler).
The role of a HR manager is shifting from a protector and screener to the planner and change agent. In present day competitive world, highly trained and committed employees are often a firm’s best bet. HR professionals play a key role in planning and implementing downsizing, restructuring and other cost-cutting activities. They enable a firm to be more responsive to product innovations and technological changes. For example, team based work assignments and productivity linked rewards could replace manufacturing systems. In service enterprises like anking, hotels, insurance firms, etc., discourteous employee responses may ruin the relationships with customers.
Employees who lack the temperament, maturity, social skills and tolerance for frequent contact should not be selected at all for service-oriented activities. HR professionals can help an organization select and train employees for such emerging roles. Employees are the primary pillars of corporate success. Machines neither have new ideas nor they can solve problems or grasp opportunities. Only people who are involved and thinking can make a difference. Through open communications, proper feedback and fair treatment of all employees’ grievances and discipline matters, HR professionals promote employee commitment at various levels. In such a case employees perform the assigned tasks willingly and enthusiastically and thus offer a competitive advantage to the organization. As rightly pointed out by Charles Creer, (Strategy and Human Resources, 1995), “in a growing number of organizations human resources are now viewed as a source of competitive advantage. Increasingly it is being recognized that competitive advantage can be obtained with a high quality workforce that enables organizations to compete on the lines of market responsiveness, product and service quality, differentiated products and technological innovation”.
In the new economy, winning will spring form organizational capabilities such as speed, responsiveness, agility, learning capacity and employee competence. Successful organizations will be those that are able to quickly turn strategy into action; to manage processes intelligently and efficiently; to maximize employee contribution and commitment; and to create the conditions of seamless change. The need to develop those capabilities brings us back to the mandate for HR set forth at the beginning of this article. Let’s take a closer look at each HR imperative in turn, becoming a Partner in Strategy Execution. Strategy is the responsibility of the company’s executive team – of which HR is a member. To be full-fledged strategic partners with senior management, however, HR executives should impel and guide serious discussion of how the company should be organized to carry out its strategy. Creating the conditions for this discussion involves four steps. First, HR should be held responsible for defining an organizational architecture. In other words, it should identify the underlying model of the company’s way of doing business. Several well-established frameworks can be used in this process. Jay Galbraith’s star model, for example, identifies five essential organizational component: strategy, structure, rewards, processes and people.
The well-known 7-S framework created by McKinsey & Company distinguishes seven components in a company’s architecture: strategy, structure, systems, staff, style, skills and shared values. It’s relatively unimportant which framework the HR staff uses to define the company’s architecture, as along as it’s robust. What matters more is that an architecture be articulated explicitly. Without such clarity managers can become myopic about how the company runs – and thus about what drives strategy implementation and what stands in its way. They might think only of structure as the driving force behind actions and decisions, and neglect systems or skills. Or they might understand the company primarily in terms of its values and pay inadequate attention to the influence of systems on how work – that is, strategy execution – actually gets accomplished. In India, the borderless world is shaking the roots of business. While some companies are feeling the excitement and facing up to the challenges, the demand for a tilted playing field6 indicates the anxiety among many Indian business leaders about competition. Increasingly, the mantra of the global economy is performance and competition.
CHANGING ROLE OF HRM
In an organization, there are tall people, short people, fat people, thin people, black people, white people, elderly people, young people and so on. Even within each category there are enormous individual differences. Some will be intelligent, others not so intelligent, some are committed to jobs, others are not, some will be outgoing, others reserved and so on. “The point is that these differences demand attention so that each person can maximize his or her potential, so that organizations can maximize their effectiveness and so that the society as a whole can make the wisest use of its human resources” (Cascio). The challenge of HR managers today is to recognize talent and nurture the same carefully and achieve significant productivity gains over a period of time. The enterprise is nothing but people. Technological advances, globalize competition, demographic changes, the information revolution and trends toward a service society have changed the rules of the game significantly. In such a scenario, organizations with similar set of resources gain competitive advantage only through effective and efficient management of human resources (Dessler).
The role of a HR manager is shifting from a protector and screener to the planner and change agent. In present day competitive world, highly trained and committed employees are often a firm’s best bet. HR professionals play a key role in planning and implementing downsizing, restructuring and other cost-cutting activities. They enable a firm to be more responsive to product innovations and technological changes. For example, team based work assignments and productivity linked rewards could replace manufacturing systems. In service enterprises like anking, hotels, insurance firms, etc., discourteous employee responses may ruin the relationships with customers.
Employees who lack the temperament, maturity, social skills and tolerance for frequent contact should not be selected at all for service-oriented activities. HR professionals can help an organization select and train employees for such emerging roles. Employees are the primary pillars of corporate success. Machines neither have new ideas nor they can solve problems or grasp opportunities. Only people who are involved and thinking can make a difference. Through open communications, proper feedback and fair treatment of all employees’ grievances and discipline matters, HR professionals promote employee commitment at various levels. In such a case employees perform the assigned tasks willingly and enthusiastically and thus offer a competitive advantage to the organization. As rightly pointed out by Charles Creer, (Strategy and Human Resources, 1995), “in a growing number of organizations human resources are now viewed as a source of competitive advantage. Increasingly it is being recognized that competitive advantage can be obtained with a high quality workforce that enables organizations to compete on the lines of market responsiveness, product and service quality, differentiated products and technological innovation”.
In the new economy, winning will spring form organizational capabilities such as speed, responsiveness, agility, learning capacity and employee competence. Successful organizations will be those that are able to quickly turn strategy into action; to manage processes intelligently and efficiently; to maximize employee contribution and commitment; and to create the conditions of seamless change. The need to develop those capabilities brings us back to the mandate for HR set forth at the beginning of this article. Let’s take a closer look at each HR imperative in turn, becoming a Partner in Strategy Execution. Strategy is the responsibility of the company’s executive team – of which HR is a member. To be full-fledged strategic partners with senior management, however, HR executives should impel and guide serious discussion of how the company should be organized to carry out its strategy. Creating the conditions for this discussion involves four steps. First, HR should be held responsible for defining an organizational architecture. In other words, it should identify the underlying model of the company’s way of doing business. Several well-established frameworks can be used in this process. Jay Galbraith’s star model, for example, identifies five essential organizational component: strategy, structure, rewards, processes and people.
The well-known 7-S framework created by McKinsey & Company distinguishes seven components in a company’s architecture: strategy, structure, systems, staff, style, skills and shared values. It’s relatively unimportant which framework the HR staff uses to define the company’s architecture, as along as it’s robust. What matters more is that an architecture be articulated explicitly. Without such clarity managers can become myopic about how the company runs – and thus about what drives strategy implementation and what stands in its way. They might think only of structure as the driving force behind actions and decisions, and neglect systems or skills. Or they might understand the company primarily in terms of its values and pay inadequate attention to the influence of systems on how work – that is, strategy execution – actually gets accomplished. In India, the borderless world is shaking the roots of business. While some companies are feeling the excitement and facing up to the challenges, the demand for a tilted playing field6 indicates the anxiety among many Indian business leaders about competition. Increasingly, the mantra of the global economy is performance and competition.
Explain the major components of industrial wage structures in India.
Explain the major components of industrial wage structures in India. Discuss the salient features of the compensation system of the organization you are working in or any organization you are familiar with.
What are the components of a compensation system?
Compensation will be perceived by employees as fair if based on systematic components. arious compensation systems have developed to determine the value of positions. These ystems utilize many similar components including job descriptions, salary ranges/structures, and written procedures.
The components of a compensation system include:
Job Descriptions: A critical component of compensation and selection systems, job descriptions define in writing the responsibilities, requirements, functions, duties, location, environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs individually or for entire job families.
Job Analysis: The process of analyzing jobs from which job descriptions are developed. Job analysis techniques include the use of interviews, questionnaires, and observation.
Job Evaluation: A system for comparing jobs for the purpose of determining appropriate compensation levels for individual jobs or job elements. There are four main techniques: Ranking, Classification, Factor Comparison, and Point Method.
Pay Structures: Useful for standardizing compensation practices. Most pay structures include several grades with each grade containing a minimum salary/wage and either step increments or grade range. Step increments are common with union positions where the pay for each job is pre-determined through collective bargaining.
Salary Surveys: Collections of salary and market data. May include average salaries, inflation indicators, and cost of living indicators, salary budget averages. Companies may purchase results of surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing the results of salary surveys conducted by other vendors, note that surveys may be conducted within a specific industry or across industries as well as within one geographical region or across different geographical regions. Know which industry or geographic location the salary results pertain to before comparing the results to your company.
Policies and Regulations:
Compensation will be perceived as fair if it is comprised of a system of components developed to maintain internal and external equity.
What are different types of compensation?
Different types of compensation include:
• Base Pay
• Commissions
• Overtime Pay
• Bonuses, Profit Sharing, Merit Pay
• Stock Options
• Travel/Meal/Housing Allowance
• Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...
What are regulations affecting compensation?
Compensation Plans
• Develop a program outline.
• Set an objective for the program.
• Establish target dates for implementation and completion.
• Determine a budget.
• Designate an individual to oversee designing the compensation program.
• Determine whether this position will be permanent or temporary.
• Determine who will oversee the program once it is established.
• Determine the cost of going outside versus looking inside.
• Determine the cost of a consultant's review.
• Develop a compensation philosophy.
• Form a compensation committee (presumably consisting of officers or at least including one officer of the company).
• Decide what, if any, differences should exist in pay structures for executives, professional employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based versus non-contingent pay).
• Determine whether the company should set salaries at, above, or below market.
• Decide the extent to which employee benefits should replace or supplement cash compensation.
• Conduct a job analysis of all positions.
• Conduct a general task analysis by major departments. Who must accomplish what tasks?
• Get input from senior vice presidents of marketing, finance, sales, administration, production, and other appropriate departments to determine the organizational structure and primary functions of each.
• Interview department managers and key employees, as necessary, to determine their specific job functions.
• Decide which job classifications should be exempt and which should be nonexempt.
• Develop model job descriptions for exempt and nonexempt positions and distribute the models to incumbents for review and comment; adjust job descriptions if necessary.
• Develop a final draft of job descriptions.
• Meet with department managers, as necessary, to review job descriptions.
• Finalize and document all job descriptions.
• Evaluate jobs.
• Rank the jobs within each senior vice president and manager's department, and then rank jobs between and among departments.
• Verify ranking by comparing it to industry market data concerning the ranking, and adjust if necessary.
• Prepare a matrix organizational review.
• On the basis of required tasks and forecasted business plans, develop a matrix of jobs crossing lines and departments.
• Compare the matrix with data from both the company structure and the industry wide market.
• Prepare flow charts of all ranks for each department for ease of interpretation and assessment.
• Present data and charts to the compensation committee for review and adjustment.
• Determine grades.
• Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and assign a grade to each level.
• Determine the number of pay grades, or monetary range of a position at a particular level, within each department.
• Establish grade pricing and salary range.
• Establish benchmark (key) jobs.
• Review the market price of benchmark jobs within the industry.
• Establish a trend line in accordance with company philosophy (i.e., where the company wants to be in relation to salary ranges in the industry).
• Determine an appropriate salary structure.
• Determine the difference between each salary step.
• Determine a minimum and a maximum percent spread.
• Slot the remaining jobs.
• Review job descriptions.
• Verify the purpose, necessity, or other reasons for maintaining a position.
• Meet with the compensation committee for review, adjustments, and approval.
• Develop a salary administration policy.
• Develop and document the general company policy.
• Develop and document specific policies for selected groups.
• Develop and document a strategy for merit raises and other pay increases, such as cost-of-living adjustments, bonuses, annual reviews, and promotions.
• Develop and document procedures to justify the policy (e.g., performance appraisal forms, a merit raise schedule).
• Meet with the compensation committee for review, adjustments, and approval.
• Obtain top executives' approval of the basic salary program.
• Develop and present cost impact studies that project the expense of bringing the present staff up to the proposed levels.
• Present data to the compensation committee for review, adjustment, and approval.
• Present data to the executive operating committee (senior managers and officers) for review and approval.
• Communicate the final program to employees and managers.
• Present the plan to the compensation committee for feedback, adjustments, review, and approval.
• Make a presentation to executive staff managers for approval or change, and incorporate necessary changes.
• Develop a plan for communicating the new program to employees, using slide shows or movies, literature, handouts, etc.
• Make presentations to managers and employees. Implement the program.
• Design and develop detailed systems, procedures, and forms.
• Work with HR information systems staff to establish effective implementation procedures, to develop appropriate data input forms, and to create effective monitoring reports for senior managers.
• Have the necessary forms printed.
• Develop and determine format specifications for all reports.
• Execute test runs on the human resources information system.
• Execute the program.
• Monitor the program.
• Monitor feedback from managers.
What are the components of a compensation system?
Compensation will be perceived by employees as fair if based on systematic components. arious compensation systems have developed to determine the value of positions. These ystems utilize many similar components including job descriptions, salary ranges/structures, and written procedures.
The components of a compensation system include:
Job Descriptions: A critical component of compensation and selection systems, job descriptions define in writing the responsibilities, requirements, functions, duties, location, environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs individually or for entire job families.
Job Analysis: The process of analyzing jobs from which job descriptions are developed. Job analysis techniques include the use of interviews, questionnaires, and observation.
Job Evaluation: A system for comparing jobs for the purpose of determining appropriate compensation levels for individual jobs or job elements. There are four main techniques: Ranking, Classification, Factor Comparison, and Point Method.
Pay Structures: Useful for standardizing compensation practices. Most pay structures include several grades with each grade containing a minimum salary/wage and either step increments or grade range. Step increments are common with union positions where the pay for each job is pre-determined through collective bargaining.
Salary Surveys: Collections of salary and market data. May include average salaries, inflation indicators, and cost of living indicators, salary budget averages. Companies may purchase results of surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing the results of salary surveys conducted by other vendors, note that surveys may be conducted within a specific industry or across industries as well as within one geographical region or across different geographical regions. Know which industry or geographic location the salary results pertain to before comparing the results to your company.
Policies and Regulations:
Compensation will be perceived as fair if it is comprised of a system of components developed to maintain internal and external equity.
What are different types of compensation?
Different types of compensation include:
• Base Pay
• Commissions
• Overtime Pay
• Bonuses, Profit Sharing, Merit Pay
• Stock Options
• Travel/Meal/Housing Allowance
• Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...
What are regulations affecting compensation?
Compensation Plans
• Develop a program outline.
• Set an objective for the program.
• Establish target dates for implementation and completion.
• Determine a budget.
• Designate an individual to oversee designing the compensation program.
• Determine whether this position will be permanent or temporary.
• Determine who will oversee the program once it is established.
• Determine the cost of going outside versus looking inside.
• Determine the cost of a consultant's review.
• Develop a compensation philosophy.
• Form a compensation committee (presumably consisting of officers or at least including one officer of the company).
• Decide what, if any, differences should exist in pay structures for executives, professional employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based versus non-contingent pay).
• Determine whether the company should set salaries at, above, or below market.
• Decide the extent to which employee benefits should replace or supplement cash compensation.
• Conduct a job analysis of all positions.
• Conduct a general task analysis by major departments. Who must accomplish what tasks?
• Get input from senior vice presidents of marketing, finance, sales, administration, production, and other appropriate departments to determine the organizational structure and primary functions of each.
• Interview department managers and key employees, as necessary, to determine their specific job functions.
• Decide which job classifications should be exempt and which should be nonexempt.
• Develop model job descriptions for exempt and nonexempt positions and distribute the models to incumbents for review and comment; adjust job descriptions if necessary.
• Develop a final draft of job descriptions.
• Meet with department managers, as necessary, to review job descriptions.
• Finalize and document all job descriptions.
• Evaluate jobs.
• Rank the jobs within each senior vice president and manager's department, and then rank jobs between and among departments.
• Verify ranking by comparing it to industry market data concerning the ranking, and adjust if necessary.
• Prepare a matrix organizational review.
• On the basis of required tasks and forecasted business plans, develop a matrix of jobs crossing lines and departments.
• Compare the matrix with data from both the company structure and the industry wide market.
• Prepare flow charts of all ranks for each department for ease of interpretation and assessment.
• Present data and charts to the compensation committee for review and adjustment.
• Determine grades.
• Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and assign a grade to each level.
• Determine the number of pay grades, or monetary range of a position at a particular level, within each department.
• Establish grade pricing and salary range.
• Establish benchmark (key) jobs.
• Review the market price of benchmark jobs within the industry.
• Establish a trend line in accordance with company philosophy (i.e., where the company wants to be in relation to salary ranges in the industry).
• Determine an appropriate salary structure.
• Determine the difference between each salary step.
• Determine a minimum and a maximum percent spread.
• Slot the remaining jobs.
• Review job descriptions.
• Verify the purpose, necessity, or other reasons for maintaining a position.
• Meet with the compensation committee for review, adjustments, and approval.
• Develop a salary administration policy.
• Develop and document the general company policy.
• Develop and document specific policies for selected groups.
• Develop and document a strategy for merit raises and other pay increases, such as cost-of-living adjustments, bonuses, annual reviews, and promotions.
• Develop and document procedures to justify the policy (e.g., performance appraisal forms, a merit raise schedule).
• Meet with the compensation committee for review, adjustments, and approval.
• Obtain top executives' approval of the basic salary program.
• Develop and present cost impact studies that project the expense of bringing the present staff up to the proposed levels.
• Present data to the compensation committee for review, adjustment, and approval.
• Present data to the executive operating committee (senior managers and officers) for review and approval.
• Communicate the final program to employees and managers.
• Present the plan to the compensation committee for feedback, adjustments, review, and approval.
• Make a presentation to executive staff managers for approval or change, and incorporate necessary changes.
• Develop a plan for communicating the new program to employees, using slide shows or movies, literature, handouts, etc.
• Make presentations to managers and employees. Implement the program.
• Design and develop detailed systems, procedures, and forms.
• Work with HR information systems staff to establish effective implementation procedures, to develop appropriate data input forms, and to create effective monitoring reports for senior managers.
• Have the necessary forms printed.
• Develop and determine format specifications for all reports.
• Execute test runs on the human resources information system.
• Execute the program.
• Monitor the program.
• Monitor feedback from managers.
Discuss the concept of Team.
Discuss the concept of Team. Explain various approaches to team development you have came across with respect to your own organization or any organization you are familiar with. Briefly describe the organization you are referring to.
THE CONCEPT OF TEAM
The concept of team is important, their effectiveness depends, to a large extent, on the teams of which they are members. In modern organisations individuals are required to work in different types of teams. In fact, new organisations can be described as composed of teams. What is a team? A team consists of individuals. However, collection of individuals in a place may be only a crowd. When the individuals come together for certain tasks, then we have formation of a group. The main function of a group is to exchange task- related information and discuss task-related issues. The countability in the group Building Roles and Teams remains of the individual. Each individual brings his/her competencies as well as the relevant information related to the task. Thus the group can be defined as a collection of individuals working in face-to-face relationship to share information and resources for a task to be achieved. The team is qualitatively different from the group in several ways. The team functions almost like an individual. In other words, the team is accountable for results; collective responsibility is taken. There is mutuality and complementarity of the members of the team. The most important characteristics of a team is that it creates synergy, i.e., the performance of the team is more than the collective performance of the individual members. A team can be defined as a group of individuals working in face-to-face relationship for a common goal, having collective accountability for the outcome of its effort.
TEAM DEVELOPMENT
Teams take time to develop. A team is not formed merely by declaring some individuals as a team. A lot of research has been done on group formation and development, and different theories of groups development have been suggested (e.g.Bennis & Shepard, 1956; Bion, 1961; Gibb, 1964; Schutz, 1958, 1982; Tuckman, 1965; Tuckman & Jensen, 1977; and Yalom, 1970). Tuckman (1977) summarising the various theories suggested five stages of group development. Tuckman’s model has been widely accepted: forming, storming, norming, performing, and adjourning. Kormanski & Mozenter (1987) integrated the various theories and suggested the following stages of team development. These stages are sequential (each stage is followed by the next one).
1) Awareness: At this stage individuals get to know each other. By knowing the goals of the team they commit themselves to the goals. The members get to know and accept to work together for a goal about which they have enough knowledge.
2) Conflict: At the first stage (awareness) the members know the team goals and accept to work together; but this is at the surface level. At the second stage they search and begin to ask questions. As a result several matters are clarified. They also fight with each and in this process of interaction resolve any hostilities they may have, resulting in the feeling of belonging to the group.
3) Cooperation: In the third stage the members own the team goals and get involved in those goals. Having resolved feelings, they also support each other.
4) Productivity: This is the stage of real achievement of the goals/outcomes, and the team members achieving these objectives feel proud of their achievement.
5) Separation: Having accomplished the goals or the outcomes, some task-specific teams may decide to get dissolved, or a time-bound time comes to a close. The excellent work done by the members is recognised, and the team members have a high sense of satisfaction of working with each other. This is the stage of closure of the team, or closure of one task on which the team was working.
Some of the approaches are as follows:
1) Johari Window Approach : According to this approach team building will involve helping individuals to take risk and frankly express their opinions and reactions, help them to accept feedback from others with enough opportunity to explore further and increasing their sensitivity to and perceptiveness of others’ needs and orientations. This can be done by developing a profile of a team based on individual members responses to an instrument (eg. The Instrument in Pareek, 2002).
2) Role Negotiation Approach: Team building can be done by using role negotiation (Harrison, 1971). Members of the team share each others’ images and then list expectations of what they would like the other group to continue to do, stop or reduce, and start or increase doing something which will make ones own group more effective. Based on such expectations negotiation between the two teams are to develop more and more collaboration between the two teams.
3) Team Roles Approach: As already mentioned Belbin (1981) suggested eight ‘team roles’ which ople take (chairman/coordinator, shaper, plant, monitor/ evaluator, company worker, resource investigator, team worker, completor/ finisher). Team building can be done by setting up effective teams and developing teams (Pareek, 1993).
4) Behaviour Modification Approach: Team building can also be done by helping people to become more effective in their individual orientations. . Collaboration depends on the individual’s orientation styles and attitudes. According to this approach some instruments (Pareek, 2002) are used to help individuals examine their styles and orientation and then increase their own effectiveness by modifying their behaviour. This is seen as an important way to nhance individuals’ potential for collaboration and team building. Using the concept of power, as already suggested, an instrument (Pareek, 2002) can be used to help team members examine their bases of power, and plan to increase their persuasive power.
5) Simulation Approach: Team building can be attempted by creating artificial teams in which people have an opportunity to experiment and learn from their behaviour in less threatening context. Various games or exercises are used for this purpose, like Broken Squares, Hollow Square, Win As Much As You Can, Maximising Your Gains etc. (Pareek & Rao, 1991). After people participate in such games they also discuss how similar dynamics operate in their backhome situation, and how they can use their learnings from simulations to make theirown teams effective.
6) Action Research Approach: In this approach team building is done through several steps which are generally taken in action research or organization development. Dyer (1978) has used this approach in his elaborate discussion of team building through five stages: data strengthening, data analysis, action planning, implementation, evaluation. In this approach diagnosis is done on the basis of questionnaires, interviews or observations. The steps involved in action research and OD are taken in this approach.
7) Appreciative Inquiry Approach: In this approach emphasis is given more on the positive aspects, including inspiring future dreams or goods, and appreciating positive qualities in each other. Appreciative Inquiry (Cooperrider & Whitney, 1999) has become quite popular as a method of increasing collaboration amongst people for building strong teams.
THE CONCEPT OF TEAM
The concept of team is important, their effectiveness depends, to a large extent, on the teams of which they are members. In modern organisations individuals are required to work in different types of teams. In fact, new organisations can be described as composed of teams. What is a team? A team consists of individuals. However, collection of individuals in a place may be only a crowd. When the individuals come together for certain tasks, then we have formation of a group. The main function of a group is to exchange task- related information and discuss task-related issues. The countability in the group Building Roles and Teams remains of the individual. Each individual brings his/her competencies as well as the relevant information related to the task. Thus the group can be defined as a collection of individuals working in face-to-face relationship to share information and resources for a task to be achieved. The team is qualitatively different from the group in several ways. The team functions almost like an individual. In other words, the team is accountable for results; collective responsibility is taken. There is mutuality and complementarity of the members of the team. The most important characteristics of a team is that it creates synergy, i.e., the performance of the team is more than the collective performance of the individual members. A team can be defined as a group of individuals working in face-to-face relationship for a common goal, having collective accountability for the outcome of its effort.
TEAM DEVELOPMENT
Teams take time to develop. A team is not formed merely by declaring some individuals as a team. A lot of research has been done on group formation and development, and different theories of groups development have been suggested (e.g.Bennis & Shepard, 1956; Bion, 1961; Gibb, 1964; Schutz, 1958, 1982; Tuckman, 1965; Tuckman & Jensen, 1977; and Yalom, 1970). Tuckman (1977) summarising the various theories suggested five stages of group development. Tuckman’s model has been widely accepted: forming, storming, norming, performing, and adjourning. Kormanski & Mozenter (1987) integrated the various theories and suggested the following stages of team development. These stages are sequential (each stage is followed by the next one).
1) Awareness: At this stage individuals get to know each other. By knowing the goals of the team they commit themselves to the goals. The members get to know and accept to work together for a goal about which they have enough knowledge.
2) Conflict: At the first stage (awareness) the members know the team goals and accept to work together; but this is at the surface level. At the second stage they search and begin to ask questions. As a result several matters are clarified. They also fight with each and in this process of interaction resolve any hostilities they may have, resulting in the feeling of belonging to the group.
3) Cooperation: In the third stage the members own the team goals and get involved in those goals. Having resolved feelings, they also support each other.
4) Productivity: This is the stage of real achievement of the goals/outcomes, and the team members achieving these objectives feel proud of their achievement.
5) Separation: Having accomplished the goals or the outcomes, some task-specific teams may decide to get dissolved, or a time-bound time comes to a close. The excellent work done by the members is recognised, and the team members have a high sense of satisfaction of working with each other. This is the stage of closure of the team, or closure of one task on which the team was working.
Some of the approaches are as follows:
1) Johari Window Approach : According to this approach team building will involve helping individuals to take risk and frankly express their opinions and reactions, help them to accept feedback from others with enough opportunity to explore further and increasing their sensitivity to and perceptiveness of others’ needs and orientations. This can be done by developing a profile of a team based on individual members responses to an instrument (eg. The Instrument in Pareek, 2002).
2) Role Negotiation Approach: Team building can be done by using role negotiation (Harrison, 1971). Members of the team share each others’ images and then list expectations of what they would like the other group to continue to do, stop or reduce, and start or increase doing something which will make ones own group more effective. Based on such expectations negotiation between the two teams are to develop more and more collaboration between the two teams.
3) Team Roles Approach: As already mentioned Belbin (1981) suggested eight ‘team roles’ which ople take (chairman/coordinator, shaper, plant, monitor/ evaluator, company worker, resource investigator, team worker, completor/ finisher). Team building can be done by setting up effective teams and developing teams (Pareek, 1993).
4) Behaviour Modification Approach: Team building can also be done by helping people to become more effective in their individual orientations. . Collaboration depends on the individual’s orientation styles and attitudes. According to this approach some instruments (Pareek, 2002) are used to help individuals examine their styles and orientation and then increase their own effectiveness by modifying their behaviour. This is seen as an important way to nhance individuals’ potential for collaboration and team building. Using the concept of power, as already suggested, an instrument (Pareek, 2002) can be used to help team members examine their bases of power, and plan to increase their persuasive power.
5) Simulation Approach: Team building can be attempted by creating artificial teams in which people have an opportunity to experiment and learn from their behaviour in less threatening context. Various games or exercises are used for this purpose, like Broken Squares, Hollow Square, Win As Much As You Can, Maximising Your Gains etc. (Pareek & Rao, 1991). After people participate in such games they also discuss how similar dynamics operate in their backhome situation, and how they can use their learnings from simulations to make theirown teams effective.
6) Action Research Approach: In this approach team building is done through several steps which are generally taken in action research or organization development. Dyer (1978) has used this approach in his elaborate discussion of team building through five stages: data strengthening, data analysis, action planning, implementation, evaluation. In this approach diagnosis is done on the basis of questionnaires, interviews or observations. The steps involved in action research and OD are taken in this approach.
7) Appreciative Inquiry Approach: In this approach emphasis is given more on the positive aspects, including inspiring future dreams or goods, and appreciating positive qualities in each other. Appreciative Inquiry (Cooperrider & Whitney, 1999) has become quite popular as a method of increasing collaboration amongst people for building strong teams.
Explain the concept of Human Resource Accounting (HRA).
Explain the concept of Human Resource Accounting (HRA). Describe the process of Human Resource Accounting of your organization or any organization you are familiar with. Bring out the advantages and limitations of HRA. Briefly describe the organization you are referring to.
HUMAN RESOURCE (HR) ACCOUNTING
Human resource is an important asset in the organization whose value goes on increasing with its right placement, application and development in the organization. In spite of vast physical resources with latest technology, an organization may quite often find itself in financial crisis if it does not have the right persons to manage its affairs. Thus human resource is a very valuable asset for the organization which aims to progress in all directions amidst heavy competition. Though the concept of Human resource Accounting is very old, organizations have-not made any effort to assign ay monetary value to this in their accounting practice till the recent past. The real efforts for viewing the human resource as an asset was started by behavioral scientist from 1960 onwards who tried to develop appropriate methodology and procedure for finding out the cost and value of the people in the organization. They attached the failure of conventional accounting practice to value the human resource of an organization along with material resources. Hence, human resources were identified as the value of production capacity of an organization, and the value of customer goodwill. There are two major reasons why human resource accounting has been receiving so much attention in the recent years.
a) There is genuine need for reliable and complete management of human resources.
b) Traditional framework of accounting is in the process to include a much broader set of measurement than was possible in the past.
c) People are the most important assets of an organization and yet the value of this asset does not appear in financial statements.
This information does not get included in management information systems. Conventional accounting of human resources consists of taking note of all expenses of human capital formation which does not seem either to be correct or meeting the actual needs. Human resource accounting, in simple terms, means accounting for people as the organizational resources. Human resource accounting is the process of identifying and measuring data about human resources and communicating this information to the interested parties. It is the measurement of the cost and value of people to the organization. It involves measuring costs incurred by private firms and public sector units to recruit, select, train and develop employees and judge their economic value to the organization.
Objectives of HR Accounting
The objective of HRA is not merely the recognition of the value of all resources used by the organisation, but it also includes the management of human resource which will ultimately enhance the quantity and quality of goods and services. The main objectives of HR Accounting system are as follows:
a) To furnish cost value information for making proper and effective management decisions about acquiring, allocating, developing and maintaining human resources in order to achieve cost effective organisational objectives.
b) To monitor effectively the use of human resources by the management.
c) To have an analysis of the human assets i.e. whether such assets are conserved, depleted or appreciated.
d) To aid in the development of management principles. and proper decision making for the future by classifying financial consequences of various practices.
e) In all, it facilitates valuation of human resources recording the valuation in the books of account and disclosure of the information in the financial statement.
f) It helps the organisation in decision making in the following areas: Direct Recruitment vs. promotion, transfer vs. retention, retrenchment vs. retention, impact on budgetary controls of human relations and organisational behaviour, decision on reallocation of plants closing down existing units and developing overseas subsidiaries etc.
Advantages of HR Accounting
Human Resource Planning anticipates not only the required kind and number of employees but also determines the action plan. The major benefits of HR accounting are:
a) It checks the corporate plan of the organisation. The corporate plan aiming for expansion, diversification, changes in technological growth etc. has to be worked out with the availability of human resources for such placements or key positions. If such manpower is not likely to be available, HR accounting suggests modification of the entire corporate plan.
b) It offsets uncertainty and change, as it enables the organisation to have the right person for the right job at the right time and place.
c) It provides scope for advancement and development of employees by effective training and development.
d) It helps individual employee to aspire for promotion and better benefits.
e) It aims to see that the human involvement in the organisation is not wasted and brings high returns to the organisation.
f) It helps to take steps to improve employee contribution in the form of increased productivity.
g) It provides different methods of testing to be used, interview techniques to be adopted in the selection process based on the level of skill, qualifications and experience of future human resources.
h) It can foresee the change in value, aptitude and attitude of human resources and accordingly change the techniques of interpersonal management
Limitations of HR Accounting
Human Resource Accounting is the term used to describe the accounting methods, system and techniques, which coupled with special knowledge and ability assist HR management in the valuation of personnel in financial terms. It is based on the assumption that there is great difference among the employees in their knowledge, ability and motivation in the same organization as well as across organizations. There are some who produce more, understand faster and show efficiency in training programmes as compared to others. HR accounting facilitates decision making about the personnel, either to keep or dispense with their services or to provide training accounting development and application in different industries and organizations has not fully grown. There are many limitations which make the management reluctant to introduce HR accounting in their organizations. Some of these limitations are given below:
a) There is no proper clear-cut and specific procedure or guidelines for finding cost and value of human resources of an organization
.
b) If the period of existence of human resource is uncertain, valuing them under uncertainty in future would be unrealistic
c) There is a fear that HR accounting may dehumanize and manipulate employees.
For example an employee with a comparatively low value may feel discouraged and develop a complex which will affect his competency to work.
d) The much needed empirical evidence is yet to be found to support the hypothesis that HR accounting as a tool of the management facilitates better and effective management of human resources.
e) In what form and manner, their value to be included in the financial statement is the question yet to be classified on which there is no consensus in the accounting profession.
f) There is a constant fear of the opposition from the trade unions that placing a value on employees would make them claim rewards and compensation based on such valuation.
g) As human resources are not capable of being owned, retained and utilized, unlike the physical assets, there is a problem for the management to treat them as assets in the strict sense.
h) Inspite of its significance and necessity, tax laws do not recognize human beings as assets.
HUMAN RESOURCE (HR) ACCOUNTING
Human resource is an important asset in the organization whose value goes on increasing with its right placement, application and development in the organization. In spite of vast physical resources with latest technology, an organization may quite often find itself in financial crisis if it does not have the right persons to manage its affairs. Thus human resource is a very valuable asset for the organization which aims to progress in all directions amidst heavy competition. Though the concept of Human resource Accounting is very old, organizations have-not made any effort to assign ay monetary value to this in their accounting practice till the recent past. The real efforts for viewing the human resource as an asset was started by behavioral scientist from 1960 onwards who tried to develop appropriate methodology and procedure for finding out the cost and value of the people in the organization. They attached the failure of conventional accounting practice to value the human resource of an organization along with material resources. Hence, human resources were identified as the value of production capacity of an organization, and the value of customer goodwill. There are two major reasons why human resource accounting has been receiving so much attention in the recent years.
a) There is genuine need for reliable and complete management of human resources.
b) Traditional framework of accounting is in the process to include a much broader set of measurement than was possible in the past.
c) People are the most important assets of an organization and yet the value of this asset does not appear in financial statements.
This information does not get included in management information systems. Conventional accounting of human resources consists of taking note of all expenses of human capital formation which does not seem either to be correct or meeting the actual needs. Human resource accounting, in simple terms, means accounting for people as the organizational resources. Human resource accounting is the process of identifying and measuring data about human resources and communicating this information to the interested parties. It is the measurement of the cost and value of people to the organization. It involves measuring costs incurred by private firms and public sector units to recruit, select, train and develop employees and judge their economic value to the organization.
Objectives of HR Accounting
The objective of HRA is not merely the recognition of the value of all resources used by the organisation, but it also includes the management of human resource which will ultimately enhance the quantity and quality of goods and services. The main objectives of HR Accounting system are as follows:
a) To furnish cost value information for making proper and effective management decisions about acquiring, allocating, developing and maintaining human resources in order to achieve cost effective organisational objectives.
b) To monitor effectively the use of human resources by the management.
c) To have an analysis of the human assets i.e. whether such assets are conserved, depleted or appreciated.
d) To aid in the development of management principles. and proper decision making for the future by classifying financial consequences of various practices.
e) In all, it facilitates valuation of human resources recording the valuation in the books of account and disclosure of the information in the financial statement.
f) It helps the organisation in decision making in the following areas: Direct Recruitment vs. promotion, transfer vs. retention, retrenchment vs. retention, impact on budgetary controls of human relations and organisational behaviour, decision on reallocation of plants closing down existing units and developing overseas subsidiaries etc.
Advantages of HR Accounting
Human Resource Planning anticipates not only the required kind and number of employees but also determines the action plan. The major benefits of HR accounting are:
a) It checks the corporate plan of the organisation. The corporate plan aiming for expansion, diversification, changes in technological growth etc. has to be worked out with the availability of human resources for such placements or key positions. If such manpower is not likely to be available, HR accounting suggests modification of the entire corporate plan.
b) It offsets uncertainty and change, as it enables the organisation to have the right person for the right job at the right time and place.
c) It provides scope for advancement and development of employees by effective training and development.
d) It helps individual employee to aspire for promotion and better benefits.
e) It aims to see that the human involvement in the organisation is not wasted and brings high returns to the organisation.
f) It helps to take steps to improve employee contribution in the form of increased productivity.
g) It provides different methods of testing to be used, interview techniques to be adopted in the selection process based on the level of skill, qualifications and experience of future human resources.
h) It can foresee the change in value, aptitude and attitude of human resources and accordingly change the techniques of interpersonal management
Limitations of HR Accounting
Human Resource Accounting is the term used to describe the accounting methods, system and techniques, which coupled with special knowledge and ability assist HR management in the valuation of personnel in financial terms. It is based on the assumption that there is great difference among the employees in their knowledge, ability and motivation in the same organization as well as across organizations. There are some who produce more, understand faster and show efficiency in training programmes as compared to others. HR accounting facilitates decision making about the personnel, either to keep or dispense with their services or to provide training accounting development and application in different industries and organizations has not fully grown. There are many limitations which make the management reluctant to introduce HR accounting in their organizations. Some of these limitations are given below:
a) There is no proper clear-cut and specific procedure or guidelines for finding cost and value of human resources of an organization
.
b) If the period of existence of human resource is uncertain, valuing them under uncertainty in future would be unrealistic
c) There is a fear that HR accounting may dehumanize and manipulate employees.
For example an employee with a comparatively low value may feel discouraged and develop a complex which will affect his competency to work.
d) The much needed empirical evidence is yet to be found to support the hypothesis that HR accounting as a tool of the management facilitates better and effective management of human resources.
e) In what form and manner, their value to be included in the financial statement is the question yet to be classified on which there is no consensus in the accounting profession.
f) There is a constant fear of the opposition from the trade unions that placing a value on employees would make them claim rewards and compensation based on such valuation.
g) As human resources are not capable of being owned, retained and utilized, unlike the physical assets, there is a problem for the management to treat them as assets in the strict sense.
h) Inspite of its significance and necessity, tax laws do not recognize human beings as assets.
Discuss the need and objectives of Human Resource planning (HRP).
Discuss the need and objectives of Human Resource planning (HRP). Describe the salient features and the process of Human Resource Planning undertaken by the organization you are working in or any organization you are familiar with. Briefly describe the organization you are referring to.
WHAT IS HUMAN RESOURCE PLANNING?
Human Resource Planning (HRP) may be defined as strategy for acquisition, utilization, improvement and preservation of the human resources of an enterprise. The objective is to provide right personnel for the right work and optimum utilization of the existing human resources. HRP exists as a part of the planning process of business. This is the activity of the management which is aimed at co-ordinating requirements for and the availability of different types of employers. The major activities of HRP include: forecasting (future requirements), inventorying (present strength), anticipating (comparison of present and future requirements) and planning (necessary programme to meet future requirements).
OBJECTIVES OF HRP
The objectives of HRP are mainly to:
a) Ensure optimum utilization of human resources currently employed;
b) Assess or forecast future requirements;
c) Cope up with the changing scenario;
d) Attaching with business plans of organization;
e) Anticipate redundancies;
f) Provide basis for human resource development (HRD); and
g) Assist in productivity bargaining.
Benefits of HRP
Proper HRP results into a number of benefits. Some of them are:
a) Create reservoir of talent.
b) Preparation for future HR needs.
c) Promote employees in a systematic manner.
d) Provide basis for HRD.
e) Help in career and succession planning.
Need for HRP at Macro Level
Major reasons for the emphasis on HRP at macro level include:
Employment-Unemployment Situation:
Though in general the number of educated unemployed is on the rise, there is acute shortage for a variety of skills. This emphasises the need for more effective recruitment and retaining people.
Technological Changes:
The myriad changes in production technologies, marketing methods and management techniques have been extensive and rapid. Their effect has been profound on job contents and job contexts. These changes cause problems relating to redundancies, retraining and redeployment. All these suggest the need to plan manpower needs intensively and systematically.
Organizational Changes:
In the turbulent environment marked by cyclical fluctuations and discontinuities, the nature and pace of changes in organizational environment, activities and structures affect manpower requirements and require strategic considerations.
Demographic Changes:
The changing profile of the work force in terms of age, sex, litercy, technical inputs and social background have implications for HRP.
Skill Shortages:
Unemployment does not mean that the labour market is a buyer’s market. Organizations have generally become more complex and require a wide range of specialist skills that are rare and scarce. Problems arise when such employees leave.
Governmental Influences:
Government control and changes in legislation with regard to affirmative action for disadvantaged groups, working conditions and hours of work restrictions on women and child employment, casual and contract labout, etc. have stimulated the organizations to become involved in systematic HRP.
Legislative Controls:
The days of executive fiat and ‘hire and fire’ policies are gone. Now legislation makes it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but difficult to shed the fat in terms of the numbers employed because of recent changes in labour law relating to lay-offs and closures. Those responsible for managing manpower must look far ahead and thus attempt to foresee manpower problems.
Impact of Pressure Groups:
Pressure groups such as unions, politicians and persons displaced from land by location of giant enterprises have been raising contradictory pressures on enterprise management such as internal recruitment and promotions, preference to employees’ children, is place persons, sons of the soil etc.
Systems Concept:
The spread of systems thinking and the advent of the macrocomputer as part of the on-going revolution in information technology which emphasises planning and newer ways of handling voluminous personnel records.
Lead Time:
The long lead time is necessary in the selection process and for training and deployment of the employee to handle new knowledge and skills successfully.
PROCESS OF HRP
The process of HRP is entirely based on the corporate plans and objectives. HRP is a continuous process of review, control and assessment. Figure 1 clearly indicates the
HRP process.
The major stages of HRP are as follows:
a) Analysing Operational Plans
It consists of the following substages:
i) Objectives and strategic plans of the company are analyzed.
ii) Plans concerning technological, finance, production are analyzed and HRP is prepared keeping these in mind.
iii) Future plans, goals, and objectives of the company are also taken into account.
b) Human Resource Demand Forecasting
HR demand forecasting mainly involves three sub functions:
i) Demand Forecast:
Process of estimating future quantity and quality of human resources required.
ii) Manpower Gaps:
Depending upon the requirement existing surplus human resources having desired skills are matched, if not found then shortage is shown.
iii) Supply Forecast:
Basing on the existing HR inventory and the demand forecast, the supply forecast of human resources is carried out in an organization.
PROBLEMS IN HRP PROCESS
The main problems in the process of HRP are as follows:
a) Inaccuracy: HRP is entirely dependent on the HR forecasting and supply, which cannot be a cent per cent accurate process.
b) Employee resistance: Employees and their unions feel that by HRP, their workload increases so they resist the process.
c)Uncertainties: Labour absenteeism, labour turnover, seasonal employment, technological changes and market fluctuations are the uncertainties which HRP process might have to face.
d) Inefficient information system: In Indian industries, HRIS is not much strong. In the absence of reliable data it is not possible to develop effective HRP.
e) Time and expense: HRP is time consuming and expensive exercice, so industries avoid.
WHAT IS HUMAN RESOURCE PLANNING?
Human Resource Planning (HRP) may be defined as strategy for acquisition, utilization, improvement and preservation of the human resources of an enterprise. The objective is to provide right personnel for the right work and optimum utilization of the existing human resources. HRP exists as a part of the planning process of business. This is the activity of the management which is aimed at co-ordinating requirements for and the availability of different types of employers. The major activities of HRP include: forecasting (future requirements), inventorying (present strength), anticipating (comparison of present and future requirements) and planning (necessary programme to meet future requirements).
OBJECTIVES OF HRP
The objectives of HRP are mainly to:
a) Ensure optimum utilization of human resources currently employed;
b) Assess or forecast future requirements;
c) Cope up with the changing scenario;
d) Attaching with business plans of organization;
e) Anticipate redundancies;
f) Provide basis for human resource development (HRD); and
g) Assist in productivity bargaining.
Benefits of HRP
Proper HRP results into a number of benefits. Some of them are:
a) Create reservoir of talent.
b) Preparation for future HR needs.
c) Promote employees in a systematic manner.
d) Provide basis for HRD.
e) Help in career and succession planning.
Need for HRP at Macro Level
Major reasons for the emphasis on HRP at macro level include:
Employment-Unemployment Situation:
Though in general the number of educated unemployed is on the rise, there is acute shortage for a variety of skills. This emphasises the need for more effective recruitment and retaining people.
Technological Changes:
The myriad changes in production technologies, marketing methods and management techniques have been extensive and rapid. Their effect has been profound on job contents and job contexts. These changes cause problems relating to redundancies, retraining and redeployment. All these suggest the need to plan manpower needs intensively and systematically.
Organizational Changes:
In the turbulent environment marked by cyclical fluctuations and discontinuities, the nature and pace of changes in organizational environment, activities and structures affect manpower requirements and require strategic considerations.
Demographic Changes:
The changing profile of the work force in terms of age, sex, litercy, technical inputs and social background have implications for HRP.
Skill Shortages:
Unemployment does not mean that the labour market is a buyer’s market. Organizations have generally become more complex and require a wide range of specialist skills that are rare and scarce. Problems arise when such employees leave.
Governmental Influences:
Government control and changes in legislation with regard to affirmative action for disadvantaged groups, working conditions and hours of work restrictions on women and child employment, casual and contract labout, etc. have stimulated the organizations to become involved in systematic HRP.
Legislative Controls:
The days of executive fiat and ‘hire and fire’ policies are gone. Now legislation makes it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but difficult to shed the fat in terms of the numbers employed because of recent changes in labour law relating to lay-offs and closures. Those responsible for managing manpower must look far ahead and thus attempt to foresee manpower problems.
Impact of Pressure Groups:
Pressure groups such as unions, politicians and persons displaced from land by location of giant enterprises have been raising contradictory pressures on enterprise management such as internal recruitment and promotions, preference to employees’ children, is place persons, sons of the soil etc.
Systems Concept:
The spread of systems thinking and the advent of the macrocomputer as part of the on-going revolution in information technology which emphasises planning and newer ways of handling voluminous personnel records.
Lead Time:
The long lead time is necessary in the selection process and for training and deployment of the employee to handle new knowledge and skills successfully.
PROCESS OF HRP
The process of HRP is entirely based on the corporate plans and objectives. HRP is a continuous process of review, control and assessment. Figure 1 clearly indicates the
HRP process.
The major stages of HRP are as follows:
a) Analysing Operational Plans
It consists of the following substages:
i) Objectives and strategic plans of the company are analyzed.
ii) Plans concerning technological, finance, production are analyzed and HRP is prepared keeping these in mind.
iii) Future plans, goals, and objectives of the company are also taken into account.
b) Human Resource Demand Forecasting
HR demand forecasting mainly involves three sub functions:
i) Demand Forecast:
Process of estimating future quantity and quality of human resources required.
ii) Manpower Gaps:
Depending upon the requirement existing surplus human resources having desired skills are matched, if not found then shortage is shown.
iii) Supply Forecast:
Basing on the existing HR inventory and the demand forecast, the supply forecast of human resources is carried out in an organization.
PROBLEMS IN HRP PROCESS
The main problems in the process of HRP are as follows:
a) Inaccuracy: HRP is entirely dependent on the HR forecasting and supply, which cannot be a cent per cent accurate process.
b) Employee resistance: Employees and their unions feel that by HRP, their workload increases so they resist the process.
c)Uncertainties: Labour absenteeism, labour turnover, seasonal employment, technological changes and market fluctuations are the uncertainties which HRP process might have to face.
d) Inefficient information system: In Indian industries, HRIS is not much strong. In the absence of reliable data it is not possible to develop effective HRP.
e) Time and expense: HRP is time consuming and expensive exercice, so industries avoid.
Discuss the compensation function and objectives.
Discuss the compensation function and objectives. Describe the components of wage structure of your own organization or any organization you are familiar with. Briefly describe the organization you are referring to.
The compensation function and objectives
- An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed.
- It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.
- Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system.
- The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.
- It should be easy to implement, should not result in exploitation of workers.
- It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to the workers.
- Such system would help management in complying with the various labor acts.
- Such system should also solve disputes between the employee union and management.
- The system should follow the management principle of equal pay.
- It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.
- Sound Compensation/Reward System brings peace in the relationship of employer and employees.
- It aims at creating a healthy competition among them and encourages employees to work hard and efficiently.
- The system provides growth and advancement opportunities to the deserving employees.
- The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover. The organization enjoys the stability.
- The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.
- The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce.
- The sound compensation system is hallmark of organization's success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees.
The compensation function and objectives
- An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed.
- It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.
- Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system.
- The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.
- It should be easy to implement, should not result in exploitation of workers.
- It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to the workers.
- Such system would help management in complying with the various labor acts.
- Such system should also solve disputes between the employee union and management.
- The system should follow the management principle of equal pay.
- It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.
- Sound Compensation/Reward System brings peace in the relationship of employer and employees.
- It aims at creating a healthy competition among them and encourages employees to work hard and efficiently.
- The system provides growth and advancement opportunities to the deserving employees.
- The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover. The organization enjoys the stability.
- The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.
- The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce.
- The sound compensation system is hallmark of organization's success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees.
What is performance coaching?
What is performance coaching? Discuss the phases of performance coaching and its importance in organizations.
There constitutes many benefits one could experience from a performance coaching relationship, whether or not the focus is on personal issues, or business. Here are a pack that you can expect:
• Clarifying what the individual wants from life. performance coaching will help a client to recognize what is important in life, where energy is best focused to realize this importance, and where to begin.
• Setting healthy and motivating goals. performance coaching helps the client to recognize what goals and dreams they really want to achieve instead of focusing on expectations that are often instilled in the individual by society and family.
• Accelerate business and personal growth. Individuals will learn how to focus and work towards finalizing their goals.
• Increased communication skills. Individuals will learn how to effectively communicate their needs and desires both in a professional and personal environment.
• Set priorities and follow through. Performance coaching clients will learn to be persistent and complete a task. They will learn how to become more effective, efficient, and productive in all areas of life.
• Find a healthy balance in life. Individuals will understand the importance of having a balanced spiritual, mental, and physical lifestyle.
The person in charge used to have unquestioned authority and ability to command and compel. Strict obedience was believed to be a necessity. Today, managers must focus on leading and persuading rather than ordering and forcing. In more and more industries today, especially retail, the never-ending supply of job applicants has dried up. Instead of "fire and replace," managers must develop the skills to "improve and correct." Leaders must learn effective performance coaching techniques and know how to convince workers to change their behavior in order to achieve organizational objectives.
The word "performance coaching" has been abused by some business experts, perhaps because they are less skilled in performance coaching techniques than they could be. Coaches in the business world run the gamut from well-trained professionals to rank amateurs who deal in unscientific methodologies. The true coach is a trained expert who understands the application of behavioral science concepts and human relations principles. It is important for us to remember that it is possible for managers to improve their coaching skills to the point where they can effectively change the inappropriate behaviors of employees into productive behaviors that drive organizational results.
One of the most critical skills a manager or executive must have is the ability to coach others to not only reinforce positive behaviors, but to also correct ineffective behaviors. I have studied a dozen different performance coaching systems and models in my professional career, but clearly the best one I’ve used is an Eight Step Model created by Drs. Steven Stowell and Matt Starcevich. It is described in their book titled The Coach, published by The Center for Management and Organization Effectiveness. As we explore performance coaching in this and subsequent articles you can gain additional information from the CMOE website. First of all let’s define what performance coaching is. It is an interactive communication and relationship process between leaders to team members, peers to peers, or even team members to leaders with the purpose of exerting a positive influence on people and/or the organization. Coaching enhances the behavior change, motivation, performance, awareness, and development of another person. Performance Coaching is typically an ongoing process of building a partnership for continuous improvement. Now, let’s consider when coaching is appropriate. This is an important discussion, because inexperienced coaches believe that coaching only takes place when something goes wrong. I’ve found eight situations when performance coaching should be considered by managers and executives. Notice that these situations are not all negative in nature. They are:
- When performance improves and deserves to be rewarded
- When performance declines and deserves to be corrected
- When a goal is achieved and deserves to be rewarded
- When a goal is missed and deserves to be discussed
- When an employee exhibits an inappropriate behavior that doesn’t affect his/her performance
- During the regular performance appraisal process
- When the employee deserves to understand his/her career opportunities
- When it’s just a good time to talk about how things are going
In every performance coaching workshop I have taught I have been asked if everyone will respond to a coach’s attempts at coaching. In other words are there some people who are not coachable or resistant to coaching? The answer to that question is, regrettably, yes. Here is how the numbers break down. Fifty percent of the general population will respond favorably to a coach’s attempts at coaching. In fact, the coach doesn’t necessarily have to be highly effective or even follow the model very closely in order to achieve moderate results. So if you have ten employees and they are "average," or represent "general population," and you have a little training in coaching, then about half the time you should get at least reasonable results from your attempts at performance coaching. Now that’s pretty encouraging! Another twenty-five percent of the general population will respond to coaching, but it will take longer and require greater skills from the coach. This means that as a manager you will need to sharpen your coaching skills and develop patience with the coaching process. Twenty percent or one person in five of the general population is what psychologists label a "performance coaching challenge." These people may respond performance coaching, but it’s likely to be a long-term process and any results you achieve may not be dramatic. Oftentimes, coaches get frustrated and give up before they see the results begin. Remember, these coaching challenges are capable of behavior change. It’s important to give them a chance to improve. Patient coaches many times achieve good results from these employees; it just takes time, skill, effort and a little luck. The final category of five percent is a group of our general population who struggle to even stay in the workplace. Turnover is higher in this category than in any of the other categories. Employees from this five percent group cause more frustration and irritation than from any other group. And, if there are any employees who could be classified as difficult to coach, or even "resistant to coaching," this would the category." Richard L. Williams is a business consultant specializing in performance coaching, quality improvement, team development, leadership development and organizational development/diagnostics. He has conducted more than 6,000 workshops to more than 250,000 managers and executives.
There constitutes many benefits one could experience from a performance coaching relationship, whether or not the focus is on personal issues, or business. Here are a pack that you can expect:
• Clarifying what the individual wants from life. performance coaching will help a client to recognize what is important in life, where energy is best focused to realize this importance, and where to begin.
• Setting healthy and motivating goals. performance coaching helps the client to recognize what goals and dreams they really want to achieve instead of focusing on expectations that are often instilled in the individual by society and family.
• Accelerate business and personal growth. Individuals will learn how to focus and work towards finalizing their goals.
• Increased communication skills. Individuals will learn how to effectively communicate their needs and desires both in a professional and personal environment.
• Set priorities and follow through. Performance coaching clients will learn to be persistent and complete a task. They will learn how to become more effective, efficient, and productive in all areas of life.
• Find a healthy balance in life. Individuals will understand the importance of having a balanced spiritual, mental, and physical lifestyle.
The person in charge used to have unquestioned authority and ability to command and compel. Strict obedience was believed to be a necessity. Today, managers must focus on leading and persuading rather than ordering and forcing. In more and more industries today, especially retail, the never-ending supply of job applicants has dried up. Instead of "fire and replace," managers must develop the skills to "improve and correct." Leaders must learn effective performance coaching techniques and know how to convince workers to change their behavior in order to achieve organizational objectives.
The word "performance coaching" has been abused by some business experts, perhaps because they are less skilled in performance coaching techniques than they could be. Coaches in the business world run the gamut from well-trained professionals to rank amateurs who deal in unscientific methodologies. The true coach is a trained expert who understands the application of behavioral science concepts and human relations principles. It is important for us to remember that it is possible for managers to improve their coaching skills to the point where they can effectively change the inappropriate behaviors of employees into productive behaviors that drive organizational results.
One of the most critical skills a manager or executive must have is the ability to coach others to not only reinforce positive behaviors, but to also correct ineffective behaviors. I have studied a dozen different performance coaching systems and models in my professional career, but clearly the best one I’ve used is an Eight Step Model created by Drs. Steven Stowell and Matt Starcevich. It is described in their book titled The Coach, published by The Center for Management and Organization Effectiveness. As we explore performance coaching in this and subsequent articles you can gain additional information from the CMOE website. First of all let’s define what performance coaching is. It is an interactive communication and relationship process between leaders to team members, peers to peers, or even team members to leaders with the purpose of exerting a positive influence on people and/or the organization. Coaching enhances the behavior change, motivation, performance, awareness, and development of another person. Performance Coaching is typically an ongoing process of building a partnership for continuous improvement. Now, let’s consider when coaching is appropriate. This is an important discussion, because inexperienced coaches believe that coaching only takes place when something goes wrong. I’ve found eight situations when performance coaching should be considered by managers and executives. Notice that these situations are not all negative in nature. They are:
- When performance improves and deserves to be rewarded
- When performance declines and deserves to be corrected
- When a goal is achieved and deserves to be rewarded
- When a goal is missed and deserves to be discussed
- When an employee exhibits an inappropriate behavior that doesn’t affect his/her performance
- During the regular performance appraisal process
- When the employee deserves to understand his/her career opportunities
- When it’s just a good time to talk about how things are going
In every performance coaching workshop I have taught I have been asked if everyone will respond to a coach’s attempts at coaching. In other words are there some people who are not coachable or resistant to coaching? The answer to that question is, regrettably, yes. Here is how the numbers break down. Fifty percent of the general population will respond favorably to a coach’s attempts at coaching. In fact, the coach doesn’t necessarily have to be highly effective or even follow the model very closely in order to achieve moderate results. So if you have ten employees and they are "average," or represent "general population," and you have a little training in coaching, then about half the time you should get at least reasonable results from your attempts at performance coaching. Now that’s pretty encouraging! Another twenty-five percent of the general population will respond to coaching, but it will take longer and require greater skills from the coach. This means that as a manager you will need to sharpen your coaching skills and develop patience with the coaching process. Twenty percent or one person in five of the general population is what psychologists label a "performance coaching challenge." These people may respond performance coaching, but it’s likely to be a long-term process and any results you achieve may not be dramatic. Oftentimes, coaches get frustrated and give up before they see the results begin. Remember, these coaching challenges are capable of behavior change. It’s important to give them a chance to improve. Patient coaches many times achieve good results from these employees; it just takes time, skill, effort and a little luck. The final category of five percent is a group of our general population who struggle to even stay in the workplace. Turnover is higher in this category than in any of the other categories. Employees from this five percent group cause more frustration and irritation than from any other group. And, if there are any employees who could be classified as difficult to coach, or even "resistant to coaching," this would the category." Richard L. Williams is a business consultant specializing in performance coaching, quality improvement, team development, leadership development and organizational development/diagnostics. He has conducted more than 6,000 workshops to more than 250,000 managers and executives.
Explain the performance appraisal process.
Explain the performance appraisal process. Describe the performance appraisal method and its merits & demerits in an organization you are familiar with. Briefly describe the organization you are referring to.
The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago.
The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance.
ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.
COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization.
The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.
MEASURING THE ACTUAL PERFORMANCE
The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.
COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE
The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance.
DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.
DECISION MAKING:
The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.
The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago.
The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance.
ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.
COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization.
The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.
MEASURING THE ACTUAL PERFORMANCE
The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.
COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE
The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance.
DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.
DECISION MAKING:
The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.
Discuss the importance of job analysis.
Discuss the importance of job analysis. Describe the methods of job analysis being followed in an organization you are acquainted with. Briefly describe the organization you are referring to.
Importance of Job Analysis
• Place employees in jobs that use their skills effectively
• Determine needs for new and experienced employees
• Plan for future human resource requirements
Analysis of jobs in the organization is a primary task for setting a baseline that enables human resources (HR) professionals to effectively manage job-related activities. Job analysis consists of two components: job description and job. The job description states job related details such as duties and responsibilities, salary and incentives, working conditions and facilities, etc whereas the job specification gives the related details like qualifications and qualities required by job holders, experience and training required, etc.. A job analysis is an efficient way to gather useful information about a job, and its cost-effectiveness makes it affordable for any organization (Adams). The main purpose of conducting job analysis is to prepare job description and job specification which in turn helps to hire the right quality of workforce into the organization. The general purpose of job analysis is to document the requirements of a job and the work performed. Job and task analysis is performed as a basis for later improvements, including: definition of a job domain; describing a job; developing performance appraisals, selection systems, promotion criteria, training needs assessment, and compensation plans. In the fields of Human Resources (HR) and Industrial Psychology, job analysis is often used to gather information for use in personnel selection, training, classification, and/or compensation. The field of vocational rehabilitation uses job analysis to determine the physical requirements of a job to determine whether an individual who has suffered some diminished capacity is capable of performing the job with, or without, some accommodation. Professionals developing certification exams use job analysis (often called something slightly different, such as "task analysis") to determine the elements of the domain which must be sampled in order to create a content valid exam. When a job analysis is conducted for the purpose of valuing the job (i.e., determining the appropriate compensation for incumbents) this is called "job evaluation." Any attempt to apply HR resources and talent to the organizationÆs jobs will be more effective if those jobs are clearly specified in terms of their variables. An effective training program for a particular job cannot be developed unless information about what the job entails is elucidated, for example. Details about the jobÆs content, systems, standards, and demands can be used to choose or develop a training program that specifically meets the needs of the employees analysis helps in analyzing the resources and establishing the strategies to accomplish the business goals and strategic objectives. Effectively developed, employee job descriptions are communication tools that are significant in an organization's success.
The main purpose of conducting job analysis is to prepare job description and job specification which helps to hire right quality of workforce.
Job Analysis can be used in training to identify or develop, training content, and assessment tests to measure effectiveness of training, equipment to be used in delivering the training and methods of training. Job Analysis can be used in compensation to identify or determine: skill levels, compensable job factors, work environment, responsibilities and required level of education. Job Analysis can be used in selection procedures to identify or develop job duties that should be included in advertisements of vacant positions, appropriate salary level for the position to help determine what salary should be offered to a candidate, minimum requirements for screening applicants, interview questions, selection tests/instruments (e.g., written tests; oral tests; job simulations), applicant appraisal forms and orientation materials for new hires. Job Analysis can be used in performance review to identify or develop goals and objectives, performance standards, evaluation criteria, length of probationary periods, and duties to be evaluated
An ideal job analysis should include
Duties and Tasks: The basic unit of a job is the performance of specific tasks and duties. This segment should include frequency, duration, effort, skill, complexity, equipment, standards, etc.
Environment: This segment identifies the working environment of a particular job. This may have a significant impact on the physical requirements to be able to perform a job.
Tools and Equipment: Some duties and tasks are performed using specific equipment and tools. These items need to be specified in a Job Analysis.
Relationships: The hierarchy of the organization must be clearly laid out. The employees should know who is under them and who they have to report to.
Requirements: The knowledge, skills, and abilities required to perform the job should be clearly listed.
There are several ways to conduct a job analysis, including: interviews with incumbents and supervisors, questionnaires (structured, open-ended, or both), observation, critical incident investigations, and gathering background information such as duty statements or classification specifications.
It is important for organizations to hire the right candidates who suit their work environment and requirements otherwise they will end up stagnating. It also important for the job seekers to pick up a job that suits their personality and interest as the first step will play a deciding role in shaping their career and position in life. This can be possible only when job seekers and organizations are able to communicate their requirements to each other. Plastopedia.com, the world’s leading International job portal which offers an interactive medium to job seekers and providers in the domain of plastic industry worldwide.
Importance of Job Analysis
• Place employees in jobs that use their skills effectively
• Determine needs for new and experienced employees
• Plan for future human resource requirements
Analysis of jobs in the organization is a primary task for setting a baseline that enables human resources (HR) professionals to effectively manage job-related activities. Job analysis consists of two components: job description and job. The job description states job related details such as duties and responsibilities, salary and incentives, working conditions and facilities, etc whereas the job specification gives the related details like qualifications and qualities required by job holders, experience and training required, etc.. A job analysis is an efficient way to gather useful information about a job, and its cost-effectiveness makes it affordable for any organization (Adams). The main purpose of conducting job analysis is to prepare job description and job specification which in turn helps to hire the right quality of workforce into the organization. The general purpose of job analysis is to document the requirements of a job and the work performed. Job and task analysis is performed as a basis for later improvements, including: definition of a job domain; describing a job; developing performance appraisals, selection systems, promotion criteria, training needs assessment, and compensation plans. In the fields of Human Resources (HR) and Industrial Psychology, job analysis is often used to gather information for use in personnel selection, training, classification, and/or compensation. The field of vocational rehabilitation uses job analysis to determine the physical requirements of a job to determine whether an individual who has suffered some diminished capacity is capable of performing the job with, or without, some accommodation. Professionals developing certification exams use job analysis (often called something slightly different, such as "task analysis") to determine the elements of the domain which must be sampled in order to create a content valid exam. When a job analysis is conducted for the purpose of valuing the job (i.e., determining the appropriate compensation for incumbents) this is called "job evaluation." Any attempt to apply HR resources and talent to the organizationÆs jobs will be more effective if those jobs are clearly specified in terms of their variables. An effective training program for a particular job cannot be developed unless information about what the job entails is elucidated, for example. Details about the jobÆs content, systems, standards, and demands can be used to choose or develop a training program that specifically meets the needs of the employees analysis helps in analyzing the resources and establishing the strategies to accomplish the business goals and strategic objectives. Effectively developed, employee job descriptions are communication tools that are significant in an organization's success.
The main purpose of conducting job analysis is to prepare job description and job specification which helps to hire right quality of workforce.
Job Analysis can be used in training to identify or develop, training content, and assessment tests to measure effectiveness of training, equipment to be used in delivering the training and methods of training. Job Analysis can be used in compensation to identify or determine: skill levels, compensable job factors, work environment, responsibilities and required level of education. Job Analysis can be used in selection procedures to identify or develop job duties that should be included in advertisements of vacant positions, appropriate salary level for the position to help determine what salary should be offered to a candidate, minimum requirements for screening applicants, interview questions, selection tests/instruments (e.g., written tests; oral tests; job simulations), applicant appraisal forms and orientation materials for new hires. Job Analysis can be used in performance review to identify or develop goals and objectives, performance standards, evaluation criteria, length of probationary periods, and duties to be evaluated
An ideal job analysis should include
Duties and Tasks: The basic unit of a job is the performance of specific tasks and duties. This segment should include frequency, duration, effort, skill, complexity, equipment, standards, etc.
Environment: This segment identifies the working environment of a particular job. This may have a significant impact on the physical requirements to be able to perform a job.
Tools and Equipment: Some duties and tasks are performed using specific equipment and tools. These items need to be specified in a Job Analysis.
Relationships: The hierarchy of the organization must be clearly laid out. The employees should know who is under them and who they have to report to.
Requirements: The knowledge, skills, and abilities required to perform the job should be clearly listed.
There are several ways to conduct a job analysis, including: interviews with incumbents and supervisors, questionnaires (structured, open-ended, or both), observation, critical incident investigations, and gathering background information such as duty statements or classification specifications.
It is important for organizations to hire the right candidates who suit their work environment and requirements otherwise they will end up stagnating. It also important for the job seekers to pick up a job that suits their personality and interest as the first step will play a deciding role in shaping their career and position in life. This can be possible only when job seekers and organizations are able to communicate their requirements to each other. Plastopedia.com, the world’s leading International job portal which offers an interactive medium to job seekers and providers in the domain of plastic industry worldwide.
Explain the changing role of HRM.
Explain the changing role of HRM. Discuss the challenges associated in the HRM in present business scenario citing examples from the organizations you are familiar with. Briefly describe the organization you are referring to.
The Foremost and prime HR function in any organization is recruiting the right person and then getting requisite quality and quantity of work (Read productivity) for a reasonable period of tenure, in line with organizational goals (Do most of organizations and the top HR Bosses themselves know about it?). One can call it Strategic Human Resource Management, which uses various tools and techniques for motivation, appraisal, training, cross cultural management, emerging issues in personnel laws like, sexual harassment and competence mapping, etc. In fact HR function is main responsibility of a supervisor and not of a HR Department, and higher goes the role and scope of responsibilities, higher the supervisor in Organization Hierarchy. In many organizations, for instance, IT industry, one has very loose or flattish hierarchy due to knowledge workers outfit. Over the decades HRM became a separated out function graduating from a simple Time Office function to a high profile Division in organizations until recently when most of HRM functions have been leased out (Outsourced) and what is left with HR departments is Planning and Strategy. But unfortunately the supervisors have abandoned their prime responsibility to manage men and think that this better be taken care of by HR Specialists. This is simply a myth. Increasing globalization and migration of labor in both directions like the financial capital, the challenges of staffing, retention and motivation of highly skilled workers from wider canvass and background and even education background, is really serious issue that better be not ignored by Businesses. My experience in corporate sector in India in various types of organizations ranging from Steels to Textiles, Chemicals and Services sector has been quite amusing and educative as far as the way HR has been handled by various types of entrepreneurs in India right from SBEs to the so called large corporate units. Majority of Indian businesses still treat employees as commodities and expect them to come trained and skilled in specific areas they are hired for (Even in US it is not feasible despite Industry Institutes interface). Hire and fire has been very popular policy in India and suppressing welfare laws regarding labor has been a favorable pass time, and matter of satisfaction & pride for Indian Businessmen. It was often observed by me that rapid expansion of businesses were scarcely accompanied by timely organizational structuring, expansion, training and growth in pace with such expansions and thus most of such expansions fell flat, even destroying their existing business lines and profitability.
The problem with HRM is that one cannot use clear cut formula that can be applied in particular situations due to highly subjective, emotional and cultural deviation amongst the employees. Secondly skilled and committed workers will become more and more scarce commodity due to rapid global expansion of business, high aspiration levels, fast growth mentality of youth including job-hopping, mobility of labor across borders and rapidly changing technologies. This is just too much to handle for traditional HR experts and involvement of Top line functional supervisors is essential for strategic growth of organizations. Indian businesses have a soft belly there due to still continuing contemptuous and casual attitude towards employees. As we move from Time Office to Personnel Management and on to HR Management to Human Asset management to Intellectual Capital paradigms, drastic changes in HR practices and HR organizations in Businesses is inevitable. Another thing to understand is that there is not very strong correlation between wages & incentives and motivation level of employees as is generally thought. Motivation and stability of employees is rather complicated task determined by several volatile factors, for instance, cultural background, family unit, education level and type, age, job satisfaction and so many others still not fully understood. It is another myth of HRM that giving doses of some foreign trip and 50 or 100 hrs of boring and stereotyped training sessions (requirement of TQM, ISO 9000 also) will raise motivation, skills and work style standards of employee. Most important change required is commitment, interest and achievement motivation within framework of organizational goals. One thing is very clear from above discussions that Quality and stability of Employees in organizations is going to be key differentiator and even main foundation for survival of a business in coming times and that too in highly nebulous environment of labor markets.
The third Myth worth mentioning is that employees always work better by giving better facilities, rewards and training sessions. I have found it to be doubtful in most situations. In fact the best way to train and induce employee to work and achieve higher is to create slight stress in work environment and little bit of job in security. As they say, throw the child in waters and it will pick swimming faster- very well applies to all human activities. There is no substitute for experience gained repeatedly by varied situations of decision-making and it is really confounding as to why inexperienced graduates from B-schools colleges are paid unreasonably high wages. Some one may like to deeply probe the issue whether such high remunerations are really effective in extraordinary achievements of organizations? One of the main reason for rise in corruption and materialistic pursuit by public sector employees is envy towards unusually high wage rates in so called hi-fi and MNC organizations around the globe, particularly in countries like India that are having poor quality of Public Administration, public awareness and legal systems. We can see that there is acute crisis facing the HR Managers who are yet to get their own roles re-defined and who have to find or create leaders in multi cultural setting in a highly competitive business environment and tight job market, with very high attrition rates in some sectors, like in Call Centers and software industries, and developing requisite inner motivation levels and soft skills that are often neglected in promotions and wage fixations (Here 'wage' is being used as a generic term for all kinds of compensation structures at all levels). While loyalty can be developed and maintained in employees, I would like to explode fourth Myth in HRM by revealing the fact that loyalty also has frequently roots in ethical, community and genetic background (We may call these attitudes, or inherent attitudes or life positions taken by an employee during initial grooming in young age). There is need to develop yet more effective psychometric tests or procedures to sift the candidates for right combination of IQ, EQ and loyalty index (I would like to find a formula for this term). One big damage globalization has done is to popularize the western materialistic high-growth rate focused employee culture prevalent in US where employees have little emotional concern with organizations they work (Even Japan is fast becoming victim to this epidemic!). Another challenge facing Organizations is to handle legal pressures relating to employee related laws of newer types like gender bias, racial or caste bias in employment, sexual harassment (At least two very senior officials of Indian Organizations have already been charges or accused of this in USA), ethical issues in handling organization information and challenges of multi-ethnic or multi-cultural staffed work places. Work place diversity is a good major of challenge in Organizations. This will grow in near future. According to Thomas (1992), dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience. The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the important organizational goals to be attained. A key issue that influences success in international arena is the awareness of cultural differences and thus development of both a business strategy and corresponding HR strategy that is consistent with the culture of host country. The interface between culture of the organization and culture of host country become important. Instead of leaving these issues to be tackled by HR personnel, the senior executives in international business arena have to take the HR strategies and solutions in their own hands. More and more Informational technology is being used in organizations to deliver HR services (Example HRSC of IBM) and a good part of these are being outsourced. This is natural outcome in changing business environment and brings in both advantages of expertise and economics. Large organizations otherwise also cannot cope with information exchange requirements in huge staffed organization in traditional manner unless they follow IBM like I nitiatives. The example of IBM HRSC is an attempt to combine people, technology and customer service, much as it does with its external customers. The center service about 20 business units in areas including benefits, retirement planning, compensation, employee suggestions, staffing, job posting, orientation, performance management, EEO compliance, employee separations, leave of absence, and skill development through 80 customer service representatives. This will be more or less true for all leading organizations in services sector in particular in near future. IBM too had repositioned itself as service driven organization.
Impact of technology can be viewed as challenges in:
- Necessary expansion/contraction of work force.
- Training needed to utilize new technology (A major reason of failures in Indian Small & mid size organizations from 80s to end of 90s)
- Effective change Management
- Impact on work group dynamics and concept of human face
- Costs for hiring, severance, training.
- Unwillingness of entrepreneurs to understand, recognize and adopt technology that can drive productivity, quality, customer satisfaction and new market opportunities.
- Sliming down of organizations particularly at lower levels and reduced hierarchy.
Another Myth of US based HR Practices is non-relevance of old employees or problem of graying workforce. The reason could be higher health care costs and perception of lower productivity. This may be true, but not in all circumstances. The element of loyalty may weigh favorably in favor of older employees as also their vast experience particularly useful in handling crises and negotiations, grievance handling within and outside organizations and networking advantage. I strongly decry the US corporate culture largely derived from social attitudes towards old in devaluing them .One serious disadvantage of old employees is their resistance to change in practices and call of business environment changes. As supply of baby boomers exceeds the demand, HR challenge is to handle this tricky issue including retirement and retraining or rehabilitation plan. INDIA culture simply does not suit Indian culture and ethos and we should not blindly go for INDIA system. HRM will not have to deal only with cultural diversity of employees and organization but also issues of minorities, backward classes and racial preferences in employment. Neither many-grounded theories are available in HR, nor the traditional HR practices will apply to most of organizational settings in coming times.
Traditional HR Versus Strategic HR
Indicator Traditional HR Strategic HR
Responsibility for HR
Focus
Role of HR
Initiatives
Time Horizon
Control
Job design
Key investments
Accountability Staff Specialists
Employee Relations
Transactional, Change follower and respondent
Slow, reactive and fragmented
Short-term
Bureaucratic-roles, policies, procedures
Tight division of labor, independence, specialization
Capital, Products
Cost center Line Managers
Partnership with internal and external customers
Transformational, change leader and initiator
Fast, proactive and integrated
Short, medium, Long (as necessary)
Organic-Flexible, whatever is necessary to succeed
Broad, flexible, cross training, teams
People, knowledge
Investment center
The traditional HR assumes a role of handling transaction as they arise. In India in most of organizations that are still bossed by 60+ adults from orthodox family business background (Babu ji culture), the role of HR personnel is not understood by them and they mostly serve as front for the CEO's decisions ranging from hiring, firing, wages, promotions and all kinds of manipulations. The traditional HR itself branched out as scientific division of labor relieving line managers from highly subjective, time consuming and inconvenient activities related to employee and which were not considered crucial to profit making and growth of organization. Strategic HR plays role of transformational change agent with focus on and in line with long term or strategic goals of organization. To become strategic the HR managers will have to be drawn from general Management rather than specialist training background, have to adopt long term and strategic focus and persuade management to look beyond current performance. Further, most of senior executives including entrepreneurs themselves hardly appreciative benefits and possibility of HRM as strategic partner. In fact most managers view HR with dislike being rule machines that hinder flexibility and carrying out of jobs. It is surprising but true that most senior executives in India as well as owners view human assets as liability and not owned by them and therefore a high-risk investment. HR activities in organizations are mostly taken up to do face lifting and present modernized face of organization because the direct benefits of HR are difficult to see and quantify. The HR and training budgets get axe first when need arises to do so.
The Foremost and prime HR function in any organization is recruiting the right person and then getting requisite quality and quantity of work (Read productivity) for a reasonable period of tenure, in line with organizational goals (Do most of organizations and the top HR Bosses themselves know about it?). One can call it Strategic Human Resource Management, which uses various tools and techniques for motivation, appraisal, training, cross cultural management, emerging issues in personnel laws like, sexual harassment and competence mapping, etc. In fact HR function is main responsibility of a supervisor and not of a HR Department, and higher goes the role and scope of responsibilities, higher the supervisor in Organization Hierarchy. In many organizations, for instance, IT industry, one has very loose or flattish hierarchy due to knowledge workers outfit. Over the decades HRM became a separated out function graduating from a simple Time Office function to a high profile Division in organizations until recently when most of HRM functions have been leased out (Outsourced) and what is left with HR departments is Planning and Strategy. But unfortunately the supervisors have abandoned their prime responsibility to manage men and think that this better be taken care of by HR Specialists. This is simply a myth. Increasing globalization and migration of labor in both directions like the financial capital, the challenges of staffing, retention and motivation of highly skilled workers from wider canvass and background and even education background, is really serious issue that better be not ignored by Businesses. My experience in corporate sector in India in various types of organizations ranging from Steels to Textiles, Chemicals and Services sector has been quite amusing and educative as far as the way HR has been handled by various types of entrepreneurs in India right from SBEs to the so called large corporate units. Majority of Indian businesses still treat employees as commodities and expect them to come trained and skilled in specific areas they are hired for (Even in US it is not feasible despite Industry Institutes interface). Hire and fire has been very popular policy in India and suppressing welfare laws regarding labor has been a favorable pass time, and matter of satisfaction & pride for Indian Businessmen. It was often observed by me that rapid expansion of businesses were scarcely accompanied by timely organizational structuring, expansion, training and growth in pace with such expansions and thus most of such expansions fell flat, even destroying their existing business lines and profitability.
The problem with HRM is that one cannot use clear cut formula that can be applied in particular situations due to highly subjective, emotional and cultural deviation amongst the employees. Secondly skilled and committed workers will become more and more scarce commodity due to rapid global expansion of business, high aspiration levels, fast growth mentality of youth including job-hopping, mobility of labor across borders and rapidly changing technologies. This is just too much to handle for traditional HR experts and involvement of Top line functional supervisors is essential for strategic growth of organizations. Indian businesses have a soft belly there due to still continuing contemptuous and casual attitude towards employees. As we move from Time Office to Personnel Management and on to HR Management to Human Asset management to Intellectual Capital paradigms, drastic changes in HR practices and HR organizations in Businesses is inevitable. Another thing to understand is that there is not very strong correlation between wages & incentives and motivation level of employees as is generally thought. Motivation and stability of employees is rather complicated task determined by several volatile factors, for instance, cultural background, family unit, education level and type, age, job satisfaction and so many others still not fully understood. It is another myth of HRM that giving doses of some foreign trip and 50 or 100 hrs of boring and stereotyped training sessions (requirement of TQM, ISO 9000 also) will raise motivation, skills and work style standards of employee. Most important change required is commitment, interest and achievement motivation within framework of organizational goals. One thing is very clear from above discussions that Quality and stability of Employees in organizations is going to be key differentiator and even main foundation for survival of a business in coming times and that too in highly nebulous environment of labor markets.
The third Myth worth mentioning is that employees always work better by giving better facilities, rewards and training sessions. I have found it to be doubtful in most situations. In fact the best way to train and induce employee to work and achieve higher is to create slight stress in work environment and little bit of job in security. As they say, throw the child in waters and it will pick swimming faster- very well applies to all human activities. There is no substitute for experience gained repeatedly by varied situations of decision-making and it is really confounding as to why inexperienced graduates from B-schools colleges are paid unreasonably high wages. Some one may like to deeply probe the issue whether such high remunerations are really effective in extraordinary achievements of organizations? One of the main reason for rise in corruption and materialistic pursuit by public sector employees is envy towards unusually high wage rates in so called hi-fi and MNC organizations around the globe, particularly in countries like India that are having poor quality of Public Administration, public awareness and legal systems. We can see that there is acute crisis facing the HR Managers who are yet to get their own roles re-defined and who have to find or create leaders in multi cultural setting in a highly competitive business environment and tight job market, with very high attrition rates in some sectors, like in Call Centers and software industries, and developing requisite inner motivation levels and soft skills that are often neglected in promotions and wage fixations (Here 'wage' is being used as a generic term for all kinds of compensation structures at all levels). While loyalty can be developed and maintained in employees, I would like to explode fourth Myth in HRM by revealing the fact that loyalty also has frequently roots in ethical, community and genetic background (We may call these attitudes, or inherent attitudes or life positions taken by an employee during initial grooming in young age). There is need to develop yet more effective psychometric tests or procedures to sift the candidates for right combination of IQ, EQ and loyalty index (I would like to find a formula for this term). One big damage globalization has done is to popularize the western materialistic high-growth rate focused employee culture prevalent in US where employees have little emotional concern with organizations they work (Even Japan is fast becoming victim to this epidemic!). Another challenge facing Organizations is to handle legal pressures relating to employee related laws of newer types like gender bias, racial or caste bias in employment, sexual harassment (At least two very senior officials of Indian Organizations have already been charges or accused of this in USA), ethical issues in handling organization information and challenges of multi-ethnic or multi-cultural staffed work places. Work place diversity is a good major of challenge in Organizations. This will grow in near future. According to Thomas (1992), dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience. The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the important organizational goals to be attained. A key issue that influences success in international arena is the awareness of cultural differences and thus development of both a business strategy and corresponding HR strategy that is consistent with the culture of host country. The interface between culture of the organization and culture of host country become important. Instead of leaving these issues to be tackled by HR personnel, the senior executives in international business arena have to take the HR strategies and solutions in their own hands. More and more Informational technology is being used in organizations to deliver HR services (Example HRSC of IBM) and a good part of these are being outsourced. This is natural outcome in changing business environment and brings in both advantages of expertise and economics. Large organizations otherwise also cannot cope with information exchange requirements in huge staffed organization in traditional manner unless they follow IBM like I nitiatives. The example of IBM HRSC is an attempt to combine people, technology and customer service, much as it does with its external customers. The center service about 20 business units in areas including benefits, retirement planning, compensation, employee suggestions, staffing, job posting, orientation, performance management, EEO compliance, employee separations, leave of absence, and skill development through 80 customer service representatives. This will be more or less true for all leading organizations in services sector in particular in near future. IBM too had repositioned itself as service driven organization.
Impact of technology can be viewed as challenges in:
- Necessary expansion/contraction of work force.
- Training needed to utilize new technology (A major reason of failures in Indian Small & mid size organizations from 80s to end of 90s)
- Effective change Management
- Impact on work group dynamics and concept of human face
- Costs for hiring, severance, training.
- Unwillingness of entrepreneurs to understand, recognize and adopt technology that can drive productivity, quality, customer satisfaction and new market opportunities.
- Sliming down of organizations particularly at lower levels and reduced hierarchy.
Another Myth of US based HR Practices is non-relevance of old employees or problem of graying workforce. The reason could be higher health care costs and perception of lower productivity. This may be true, but not in all circumstances. The element of loyalty may weigh favorably in favor of older employees as also their vast experience particularly useful in handling crises and negotiations, grievance handling within and outside organizations and networking advantage. I strongly decry the US corporate culture largely derived from social attitudes towards old in devaluing them .One serious disadvantage of old employees is their resistance to change in practices and call of business environment changes. As supply of baby boomers exceeds the demand, HR challenge is to handle this tricky issue including retirement and retraining or rehabilitation plan. INDIA culture simply does not suit Indian culture and ethos and we should not blindly go for INDIA system. HRM will not have to deal only with cultural diversity of employees and organization but also issues of minorities, backward classes and racial preferences in employment. Neither many-grounded theories are available in HR, nor the traditional HR practices will apply to most of organizational settings in coming times.
Traditional HR Versus Strategic HR
Indicator Traditional HR Strategic HR
Responsibility for HR
Focus
Role of HR
Initiatives
Time Horizon
Control
Job design
Key investments
Accountability Staff Specialists
Employee Relations
Transactional, Change follower and respondent
Slow, reactive and fragmented
Short-term
Bureaucratic-roles, policies, procedures
Tight division of labor, independence, specialization
Capital, Products
Cost center Line Managers
Partnership with internal and external customers
Transformational, change leader and initiator
Fast, proactive and integrated
Short, medium, Long (as necessary)
Organic-Flexible, whatever is necessary to succeed
Broad, flexible, cross training, teams
People, knowledge
Investment center
The traditional HR assumes a role of handling transaction as they arise. In India in most of organizations that are still bossed by 60+ adults from orthodox family business background (Babu ji culture), the role of HR personnel is not understood by them and they mostly serve as front for the CEO's decisions ranging from hiring, firing, wages, promotions and all kinds of manipulations. The traditional HR itself branched out as scientific division of labor relieving line managers from highly subjective, time consuming and inconvenient activities related to employee and which were not considered crucial to profit making and growth of organization. Strategic HR plays role of transformational change agent with focus on and in line with long term or strategic goals of organization. To become strategic the HR managers will have to be drawn from general Management rather than specialist training background, have to adopt long term and strategic focus and persuade management to look beyond current performance. Further, most of senior executives including entrepreneurs themselves hardly appreciative benefits and possibility of HRM as strategic partner. In fact most managers view HR with dislike being rule machines that hinder flexibility and carrying out of jobs. It is surprising but true that most senior executives in India as well as owners view human assets as liability and not owned by them and therefore a high-risk investment. HR activities in organizations are mostly taken up to do face lifting and present modernized face of organization because the direct benefits of HR are difficult to see and quantify. The HR and training budgets get axe first when need arises to do so.
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