Operational HRIS

Operational human resource information systems provide the manager

with data to support routine and repetitive human resource decisions. Several
operational-level information systems collect and report human resource
data. These systems include information about the organizations positions
and employees and about governmental regulations.
1. Employee Information Systems
The human resource department must maintain information on each of the
organizations employees for a variety of decision and reporting purposes.
One part of this employee information system is a set of human resource
profile records. An employee profile usually contains personal and
organization-related information, such as name, address, sex, minority
status, marital status, citizenship, years of service or seniority data,
education and training, previous experience, employment history within the
organization, salary rate, salary or wage grade, and retirement and health
plan choices. The employee inventory may also contain data about employee
preferences for geographical locations and work shifts. Another part of an
employee information system is an employee skills inventory. The skills
inventory contains information about every employee, such as work
experience, work preferences, test scores, interests, and special skills or
proficiencies.
2. Position Control Systems
A job is usually defined as a group of identical positions. A position, on the
other hand, consists of tasks performed by one worker. The purpose of a
position control system is to identify each position in the organization, the
job title within which the position is classified, and the employee currently
assigned to the position. Reference to the position control system allows a
human resource manager to identify the details about unfilled positions.
3. Applicant Selection and Placement Information Systems
After jobs and the employee requirements for those jobs have been identified
and after a suitable pool of job candidates has been recruited, the candidates
must be screened, evaluated, selected, and placed in the positions that are
open. The primary purpose of the applicant selection and placement
information system is to assist human resource staff in these tasks.

4. Performance Management Information Systems

Performance Management Information Systems include performance
appraisal data and productivity information data. Performance management
information systems data is frequently used as evidence in employee
grievance matters. Careful documentation of employee performance and of
how the performance was measured and reported is critical to acceptance of
appraisal information in grievance hearings. Performance management
information can lead to a number of decisions beyond merely supporting the
operational decision to retain, promote, transfer, or terminate a single
employee.
5. Government Reporting and Compliance Information Systems
Government Reporting and Compliance Information Systems provide
information needed both to maintain compliance with government
regulations and to improve productivity and reduce costs associated with
employees.
Tactical HRIS
Tactical human resource information systems provide managers with
support for decisions that emphasize the allocation of resources. Within the
human resource management area, these decisions include recruitment
decisions; job analysis and design decisions, training and development
decisions, and employee compensation plan decisions.
1. Job Analysis and Design Information Systems
The information inputs to the job analysis and design information system
include data from interviews with supervisors and workers and affirmative
action guidelines. Inputs also include information from sources external to
the firm, such as labor unions, competitors, and government from sources
external to the firm, such as labor unions, competitors, and government
agencies. The outputs of the job analysis information system are job
descriptions and job specifications. These outputs provide managers with the
basis for many tactical human resource decisions.
2. Recruiting Information Systems
To direct the recruiting function, the organization needs to develop a
recruiting plan. The plan specifies the positions to be filled and the skills
required of the employees for these positions. To develop the plan and to

monitor its success, a recruiting information system is necessary to collect

and process the many different types of information needed to construct the
plan, including a list of unfilled positions; the duties and requirements of
these positions; lists of planned employee retirements, transfers, or
terminations; information about the skills and preferences of current
employees; and summaries of employee appraisals. Other inputs to the
recruiting plan include data about turnover rates and about the success of
past placements.
3. Compensation and Benefits Information Systems
The Compensation and Benefits Information Systems may support a variety
of tactical human resource decisions, especially when compensation and
benefits information is related to information from internal and external
sources. Compensation and benefit plans can play an important part in
improving an organizations productivity. Tying employee productivity to
pay or encouraging increased productivity with incentive pay plans can often
improve an organizations productivity substantially.
4. Employee Training and Development Systems
The training offered by the employee training and development systems
must meet the needs of jobs available in the organization as identified
through the position control system and the job analysis and design system.
The training should also be directed at those persons interested and capable
of benefiting from it, as identified by the skills inventory and human
resource files.
Strategic HRIS
1. Information Systems Supporting Workforce Planning
Organization involved in long-term strategic planning, such as those
planning to expand into new market areas, construct factories or offices in
new locations, or add new products, will need information about the quantity
and quality of the available workforce to achieve their goals. Information
systems that support workforce planning serve this purpose.
2. Information Systems Supporting Labor Negotiations
Negotiating with craft, maintenance, office, and factory unions requires
information gathered from many of the human resource information
systems. The human resource team completing the negotiating needs to be

able to obtain numerous ad hoc reports that analyze the organizations and
unions positions within the framework of both the industry and the current
economic situation. It is also important that the negotiating team be able to
receive ad hoc reports on a very timely basis because additional questions
and tactics will occur to the team while they are conducting labor
negotiations.
3. Specialized Human Resource Information Systems Software
A great deal of software has been specifically designed for the human
resource function. This software is available for all types and sizes of
computers, including microcomputers. Software specifically designed for the
human resource management function can be divided into two basic
categories: comprehensive human resource information systems software
and limited-function packages that support one or a few human resource
activities.
Comprehensive HRIS
In the last few years, the software industry has produced several products
that organize the various human resource information systems into
integrated software referred to as human resource information systems or
HRIS software.
In general, the computerization of HRIS has resulted in an integrated
database of human resource files. Position files, employee files, skills
inventory files, job analysis and design files, affirmative action files,
occupational health and safety files, and many other human resource files
are constructed in a coordinated manner using database management
systems software so that application programs can produce reports from any
or all of the files. Thus, the human resource management director can
produce reports listing likely internal candidates for open positions by
running an application program that queries position files, job requirements
files, and skills inventory files.
Limited-Function HRIS
Numerous commercial software packages are sold for use on mainframes,
minicomputers, and microcomputers that are designed to handle one or a
small number of human resource functions. Microcomputer versions of these
single-function software packages are relatively inexpensive and easy to
operate and allow the human resource manager to automate a function
quickly and easily.

1. Training Software
Many training software packages are available for all types and sizes of
computers to provide on-line training for employees. They include
Management training software
Sales training software
Microcomputer training software
Word processing training software
These software packages can be used in computer-based training programs
designed by human resource department for training specific employees ingroup and independent study programs. Computer-based training aids often
simplify the trainers job and allow the trainer to individualize instruction
more easily than in traditional, group-based training classes.
Performance Appraisal Methods
It is a systematic evaluation of an individual with respect to
performance on the job and individuals potential for
development.
Definition 2: Formal System, Reasons and Measures of
future performance
It is formal, structured system of measuring, evaluating job
related behaviors and outcomes to discover reasons of
performance and how to perform effectively in future so that
employee, organization and society all benefits.
Meaning of Performance Appraisals
Performance Appraisals is the assessment of individuals
performance in a systematic way. It is a developmental tool
used for all round development of the employee and the
organization. The performance is measured against such
factors as job knowledge, quality and quantity of output,
initiative, leadership abilities, supervision, dependability, cooperation, judgment, versatility and health. Assessment
should be confined to past as well as potential performance

also. The second definition is more focused on behaviors as

a part of assessment because behaviors do affect job
results.
Performance Appraisals and Job Analysis Relationship

Job Analysis

Performance Standards

Describe the work and Translate job

personnel requirement requirements into
of a particular job.
levels of acceptable or
unacceptable
performance
Objectives of Performance Appraisals

Performance Appraisals
Describe the job
relevant strengths and
weaknesses of each
individual.

Use of Performance Appraisals

1. Promotions
2. Confirmations
3. Training and Development
4. Compensation reviews
5. Competency building
6. Improve communication
7. Evaluation of HR Programs
8. Feedback & Grievances
4 Goals of Performance Appraisals
General Goals
Specific Goals
Developmental Use
Individual needs
Performance feedback

Administrative Decisions / Uses

Transfers and Placements

Strengths and Development needs
Salary

Organizational Maintenance

Promotion
Retention / Termination
Recognition
Lay offs
Poor Performers identification
HR Planning

Documentation

Training Needs
Organizational Goal achievements
Goal Identification
HR Systems Evaluation
Reinforcement of organizational
needs
Validation Research
For HR Decisions
Legal Requirements

Performance Appraisal Process

1. Objectives definition of appraisal
2. Job expectations establishment
3. Design an appraisal program
4. Appraise the performance
5. Performance Interviews
6. Use data for appropriate purposes
7. Identify opportunities variables
8. Using social processes, physical processes, human and
computer assistance
Difference between Traditional and Modern (Systems) approach
to Appraisals

Categories

Traditional Appraisals

Guiding Values

Individualistic, Control
oriented, Documentary

Leadership Styles
Frequency
Formalities
Rewards

Directional, Evaluative
Occasional
High
Individualistic

Modern, Systems
Appraisals
Systematic,
Developmental,
Problem solving
Facilitative, Coaching
Frequent
Low
Grouped,
Organizational

TECHNIQUES / METHODS OF PERFORMANCE

APPRAISALS
Numerous methods have been devised to measure the
quantity and quality of performance appraisals. Each of the
methods is effective for some purposes for some
organizations only. None should be dismissed or accepted as
appropriate except as they relate to the particular needs of
the organization or an employee.
Broadly all methods of appraisals can be divided into two
different categories.
Past Oriented Methods
Future Oriented Methods
Past Oriented Methods
1. Rating Scales: Rating scales consists of several
numerical scales representing job related performance
criterions such as dependability, initiative, output,
attendance, attitude etc. Each scales ranges from excellent
to poor. The total numerical scores are computed and final
conclusions are derived. Advantages Adaptability, easy to

use, low cost, every type of job can be evaluated, large

number of employees covered, no formal training required.
Disadvantages Raters biases
2. Checklist: Under this method, checklist of statements
of traits of employee in the form of Yes or No based
questions is prepared. Here the rater only does the reporting
or checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow rater
to give relative ratings
3. Forced Choice Method: The series of statements
arranged in the blocks of two or more are given and the
rater indicates which statement is true or false. The rater is
forced to make a choice. HR department does actual
assessment. Advantages Absence of personal biases
because of forced choice. Disadvantages Statements may
be wrongly framed.
4. Forced Distribution Method: here employees are
clustered around a high point on a rating scale. Rater is
compelled to distribute the employees on all points on the
scale. It is assumed that the performance is conformed to
normal distribution. Advantages Eliminates Disadvantages
Assumption of normal distribution, unrealistic, errors of
central tendency.
5. Critical Incidents Method: The approach is focused
on certain critical behaviors of employee that makes all the
difference in the performance. Supervisors as and when they
occur record such incidents. Advantages Evaluations are
based on actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback may

be too much and may appear to be punishment.

6. Behaviorally Anchored Rating Scales: statements of
effective and ineffective behaviors determine the points.
They are said to be behaviorally anchored. The rater is
supposed to say, which behavior describes the employee
performance. Advantages helps overcome rating errors.
Disadvantages Suffers from distortions inherent in most
rating techniques.
7. Field Review Method: This is an appraisal done by
someone outside employees own department usually from
corporate or HR department. Advantages Useful for
managerial level promotions, when comparable information
is needed, Disadvantages Outsider is generally not familiar
with employees work environment, Observation of actual
behaviors not possible.
8. Performance Tests & Observations: This is based on
the test of knowledge or skills. The tests may be written or
an actual presentation of skills. Tests must be reliable and
validated to be useful. Advantage Tests may be apt to
measure potential more than actual performance.
Disadvantages Tests may suffer if costs of test
development or administration are high.
9. Confidential Records: Mostly used by government
departments, however its application in industry is not ruled
out. Here the report is given in the form of Annual
Confidentiality Report (ACR) and may record ratings with
respect to following items; attendance, self expression, team
work, leadership, initiative, technical ability, reasoning
ability, originality and resourcefulness etc. The system is
highly secretive and confidential. Feedback to the assessee
is given only in case of an adverse entry. Disadvantage is
that it is highly subjective and ratings can be manipulated
because the evaluations are linked to HR actions like
promotions etc.

10. Essay Method: In this method the rater writes down

the employee description in detail within a number of broad
categories like, overall impression of performance,
promoteability of employee, existing capabilities and
qualifications of performing jobs, strengths and weaknesses
and training needs of the employee. Advantage It is
extremely useful in filing information gaps about the
employees that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers. They
may get confused success depends on the memory power of
raters.
11. Cost Accounting Method: Here performance is
evaluated from the monetary returns yields to his or her
organization. Cost to keep employee, and benefit the
organization derives is ascertained. Hence it is more
dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired
Comparisons): These are collection of different methods
that compare performance with that of other co-workers.
The usual techniques used may be ranking methods and
paired comparison method.
Ranking Methods: Superior ranks his worker based on
merit, from best to worst. However how best and why
best are not elaborated in this method. It is easy to
administer and explanation.
Paired Comparison Methods: In this method each
employee is rated with another employee in the form of
pairs. The number of comparisons may be calculated
with the help of a formula as under.
N x (N-1) / 2
Future Oriented Methods
1. Management By Objectives: It means management
by objectives and the performance is rated against the

achievement of objectives stated by the management. MBO

process goes as under.
Establish goals and desired outcomes for each subordinate
Setting performance standards
Comparison of actual goals with goals attained by the
employee
Establish new goals and new strategies for goals not
achieved in previous year.
Advantage It is more useful for managerial positions.
Disadvantages Not applicable to all jobs, allocation of
merit pay may result in setting short-term goals rather than
important and long-term goals etc.
2. Psychological Appraisals: These appraisals are more
directed to assess employees potential for future
performance rather than the past one. It is done in the form
of in-depth interviews, psychological tests, and discussion
with supervisors and review of other evaluations. It is more
focused on employees emotional, intellectual, and
motivational and other personal characteristics affecting his
performance. This approach is slow and costly and may be
useful for bright young members who may have
considerable potential. However quality of these appraisals
largely depend upon the skills of psychologists who perform
the evaluation.
3. Assessment Centers: This technique was first
developed in USA and UK in 1943. An assessment center is a
central location where managers may come together to have
their participation in job related exercises evaluated by
trained observers. It is more focused on observation of
behaviors across a series of select exercises or work
samples. Assessees are requested to participate in in-basket
exercises, work groups, computer simulations, role playing
and other similar activities which require same attributes for
successful performance in actual job. The characteristics
assessed in assessment center can be assertiveness,
persuasive ability, communicating ability, planning and

organizational ability, self confidence, resistance to stress,

energy level, decision making, sensitivity to feelings,
administrative ability, creativity and mental alertness etc.
Disadvantages Costs of employees traveling and lodging,
psychologists, ratings strongly influenced by assessees
inter-personal skills. Solid performers may feel suffocated in
simulated situations. Those who are not selected for this
also may get affected.
Advantages well-conducted assessment center can
achieve better forecasts of future performance and progress
than other methods of appraisals. Also reliability, content
validity and predictive ability are said to be high in
assessment centers. The tests also make sure that the
wrong people are not hired or promoted. Finally it clearly
defines the criteria for selection and promotion.
4. 360-Degree Feedback: It is a technique which is
systematic collection of performance data on an individual
group, derived from a number of stakeholders like
immediate supervisors, team members, customers, peers
and self. In fact anyone who has useful information on how
an employee does a job may be one of the appraisers. This
technique is highly useful in terms of broader perspective,
greater self-development and multi-source feedback is
useful. 360-degree appraisals are useful to measure interpersonal skills, customer satisfaction and team building
skills. However on the negative side, receiving feedback
from multiple sources can be intimidating, threatening etc.
Multiple raters may be less adept at providing balanced and
objective feedback.

The Three Fundamental Roles of Information Systems in

Business
Organizations strive to be market leaders in their given industry. In climates where
factors such as recession, inflationary pressures and increased competition can

hinder the achievement of this goal, companies look for strategies that lead to
competitive advantages. One such strategy is the adoption of information systems
within the company. Information systems help a company make adequate use of
its data, reduce workload and assist with compliance with various mandatory
regulations.

Information Storage and Analysis

At the date of publication, many companies no longer manage their data and
information manually with registers and hard-copy formats. Through the adoption
of information systems, companies can make use of sophisticated and
comprehensive databases that can contain all imaginable pieces of data about the
company. Information systems store, update and even analyze the information,
which the company can then use to pinpoint solutions to current or future
problems. Furthermore, these systems can integrate data from various sources,
inside and outside the company, keeping the company up to date with internal
performance and external opportunities and threats.

Assist With Making Decisions

The long-term success of a company depends upon the adequacy of its strategic
plans. An organizations management team uses information systems to formulate
strategic plans and make decisions for the organization's longevity and prosperity.
The business uses information systems to evaluate information from all sources,
including information from external references such as Reuters or Bloomberg,
which provide information on the general economy. This analysis of and
comparison to market trends helps organizations analyze the adequacy and quality
of their strategic decisions.

Assist With Business Processes

Information systems aid businesses in developing a larger number of value addedsystems in the company. For example, a company can integrate information
systems with the manufacturing cycle to ensure that the output it produces
complies with the requirements of the various quality management standards.
Adoption of information systems simplifies business processes and removes
unnecessary activities. Information systems add controls to employee processes,
ensuring that only users with the applicable rights can perform certain tasks.
Further, information systems eliminate repetitive tasks and increase accuracy,
allowing employees to concentrate on more high-level functions. Information
systems can also lead to better project planning and implementation through
effective monitoring and comparison against established criteria.

Considerations
Implementing information systems within an organization can prove to be costly.
Implementation costs include not only installation of the systems but also
employee training sessions. In addition, employees may see the adoption of
information systems as an unwarranted change and, thus, may resist this change.
Resistance to change can hinder business operations and can cause employee
turnover. Companies should have leadership in place to assess the adequacy of the
decision to have an information system and to guide the company through the
transition phase and weigh information systems cost against the potential benefits.

The 6 components that must come together in order to produce

an information system are:
1. Hardware: The term hardware refers to machinery. This category
includes the computer itself, which is often referred to as the central
processing unit (CPU), and all of its support equipments. Among the
support equipments are input and output devices, storage devices
and communications devices.
2. Software: The term software refers to computer programs and the
manuals (if any) that support them. Computer programs are machinereadable instructions that direct the circuitry within the hardware parts
of the system to function in ways that produce useful information from
data. Programs are generally stored on some input / output medium,
often a disk or tape.
3. Data: Data are facts that are used by programs to produce useful
information. Like programs, data are generally stored in machinereadable form on disk or tape until the computer needs them.
4. Procedures: Procedures are the policies that govern the operation
of a computer system. "Procedures are to people what software is to
hardware" is a common analogy that is used to illustrate the role of
procedures in a system.
5. People: Every system needs people if it is to be useful. Often the
most over-looked element of the system are the people, probably the
component that most influence the success or failure of information
systems. This includes "not only the users, but those who operate
and service the computers, those who maintain the data, and those
who support the network of computers." <Kroenke, D. M. (2015). MIS

Essentials. Pearson Education>

6. Feedback: it is another component of the IS, that defines that an IS
may be provided with a feedback (Although this component isn't
necessary to function).
Data is the bridge between Hardware and People. This means that
the data we collect is only data, until we involve people. At that point,
data is now information.
LESSON OVERVIEW
This lecture will primarily help students who intend to be managers, deal
effectively with the challenges of
managing people. Firms that deal with these challenges effectively are likely to
outperform those that do
not. These challenges may be categorized according to their primary focus: the
environment, the
organization, or the individual.
A. HRM in a Changing Environment: The Challenges
Today's organizations are facing challenges upon following levels:
i. Environmental Challenges
ii. Organizational Challenges
iii. Individual Challenges
i.
Environmental Challenges
Environmental challenges refer to forces external to the firm that are largely
beyond management's control
but influence organizational performance. They include: rapid change, the
internet revolution, workforce
diversity, globalization, legislation, evolving work and family roles, and skill
shortages and the rise of the
service sector.
Six important environmental challenges today are:
a) Rapid change,
b) Work force diversity,
c) Globalization,
d) Legislation,
e) Technology
f) Evolving work and family roles,
g) Skill shortages and the rise of the service sector
a) Rapid Change
Many organizations face a volatile environment in which change is nearly
constant. If they are to survive
and prosper, they need to adapt to change quickly and effectively. Human
resources are almost always at the
heart of an effective response system. Here are a few examples of how HR
policies can help or hinder a

firm grappling with external change:

b) Work Force Diversity.
All these trends present both a significant challenge and a real opportunity for
managers. Firms that
formulate and implement HR strategies that capitalize on employee diversity are
more likely to survive and
prosper.
c) Globalization.
One of the most dramatic challenges facing as they enter the twenty-first century
is how to compete against
foreign firms, both domestically and abroad. Many companies are already being
compelled to think globally,
something that doesn't come easily to firms long accustomed to doing business
in a large and expanding
domestic market with minimal foreign competition.
Weak response to international competition may be resulting in upwards layoffs
in every year. Human
resources can play a critical role in a business's ability to compete head-to-head
with foreign producers. The
implications of a global economy on human resource management are many.
Here are a few examples:
Worldwide company culture
Some firms try to develop a global company identity to smooth over cultural
differences between domestic
employees and those in international operations. Minimizing these differences
increases cooperation and can have a strong impact on the bottom line. For
instance, the head of human resources at the European
division of Colgate Palmolive notes, "We try to build a common corporate culture.
We want them all to be
Colgaters."
Global alliances"
Some firms actively engage in international alliances with foreign firms or acquire
companies overseas to
take advantage of global markets. Making such alliances work requires a highly
trained and devoted staff.
For instance, Phillips (a Netherlands lighting and electronics firm) became the
largest lighting manufacturer
in the world by establishing a joint venture with AT&T and making several key
acquisitions.
These illustrations show how firms can use HR strategies to gain a worldwide
competitive advantage.
d) Legislation
Much of the growth in the HR function over the past three decades may be
attributed to its crucial role in
keeping the company out of trouble with the law. Most firms are deeply
concerned with potential liability

resulting from personnel decisions that may violate laws enacted by the state
legislatures, and/or local
governments. These laws are constantly interpreted in thousands of cases
brought before government
agencies, federal courts, state courts, and t Supreme Court.
How successfully a firm manages its human resources depends to a large extent
on its ability to deal
effectively with government regulations. Operating within the legal framework
requires keeping track of the
external legal environment and developing internal systems (for example,
supervisory training and grievance
procedures) to ensure compliance and minimize complaints. Many firms are now
developing formal policies
on sexual harassment and establishing internal administrative channels to deal
with alleged incidents before
employees feel the need to file a lawsuit.
Legislation often has a differential impact on public- and private sector
organizations. (Public sector is
another term for governmental agencies; private sector refers to all other types of
organizations.) Some
legislation applies only to public-sector organizations. For instance, affirmative
action requirements are
typically limited to public organizations and to organizations that do contract work
for them. However,
much legislation applies to both public- and private sector organizations. In fact,
it's difficult to think of any
HR practices that are not influenced by government regulations.
e) Technology
The world has never before seen such rapid technological changes as are
presently occurring in the
computer and telecommunications industries. One estimate is that technological
change is occurring so
rapidly that individuals may have to change their entire skills three or four times
in their career. The
advances being made, affect every area of a business including human resource
management.
f) Evolving Work and Family Roles
The proportion of dual-career families, in which both wife and husband (or both
members of a couple)
work, is increasing every year. Unfortunately, women face the double burden of
working at home and on
the job, devoting 42 hours per week on average to the office and an additional 30
hours at home to
children. This compares to 43 hours spent working in the office and only 12 hours
at home for men.
More and more companies are introducing "family-friendly" programs that give

them a competitive
advantage in the labor market. These programs are HR tactics that companies
use to hire and retain the
best-qualified employees, male or female, and they are very likely to payoff. For
instance, among the well
known organizations / firms, half of all recruits are women, but only 5% of
partners are women. Major
talent is being wasted as many women drop out after lengthy training because
they have decided that the
demanding 10- to 12-year partner track requires a total sacrifice of family life.
These firms have started to
change their policies and are already seeing gains as a result. Different
companies have recently begun
offering child-care and eldercare referral services as well to facilitate women
workers as well as are
introducing alternative scheduling to allow employees some flexibility in their
work hours.
g) Skill Shortages and the Rise of the Service Sector.
Expansion of service-sector employment is linked to a number of factors,
including changes in consumer
tastes and preferences, legal and regulatory changes, advances in science and
technology that have
eliminated many manufacturing jobs, and changes in the way businesses are
organized and managed.
Service, technical, and managerial positions that require college degrees will
make up half of all manufacturing and service jobs by 2000. Unfortunately, most
available workers will be too unskilled to fill
those jobs. Even now, many companies complain that the supply of skilled labor
is dwindling and that they
must provide their employees with basic training to make up for the shortcomings
of the public education
system. To rectify these shortcomings, companies currently spend large amount
year on a wide variety of
training programs.
ii.
Organizational Challenges
Organizational challenges refer to concerns that are internal to the firm.
However, they are often a
byproduct of environmental forces because no firm operates in a vacuum. These
issues include:
competitive position (cost, quality, and distinctive capability), decentralization,
downsizing, organizational
restructuring, self-managed work teams, small businesses, organizational
culture, technology, and
outsourcing.
Organizational challenges are concerns or problems internal to a firm. They are

often a byproduct of
environmental forces because no firm operates in a vacuum. Still, managers can
usually exert much more
control over organizational challenges than over environmental challenges.
Effective managers spot
organizational issues and deal with them before they become major problems.
One of the themes of this
text is proactively: the need for firms to take action before problems get out of
hand. Only managers who
are well informed about important HR issues and organizational challenges can
do this. These challenges
include the need for a competitive position and flexibility, the problems of
downsizing and organizational
restructuring, the use of self-managed work teams, the rise of small businesses,
the need to create a strong
organizational culture, the role of technology, and the rise of outsourcing.
An organization will outperform its competitors if it effectively utilizes its work
force's unique combination
of skills and abilities to exploit environmental opportunities and neutralize threats.
HR policies can
influence an organization's competitive position by
a) Controlling costs,
b) Improving quality, and
c) Creating distinctive capabilities
d) Restructuring
a) Controlling costs
One way for a firm to gain a competitive advantage is to maintain low costs and a
strong cash flow. A
compensation system that uses innovative reward strategies to control labor
costs can help the organization
grow. A well-designed compensation system rewards employees for behaviors
that benefit the company.
Other factors besides compensation policies can enhance a firm's
competitiveness by keeping labor costs
under control. These include: better employee selection so that workers are more
likely to stay with the
company and to perform better while they are there, training employees to make
them more efficient and
productive; attaining harmonious labor relations); effectively managing health and
safety issues in the
workplace and structuring work to reduce the time and resources needed to
design, produce, and deliver
products or services
b) Improving quality.
The second way to gain a competitive advantage is to engage in continuous
quality improvement. Many

companies are implementing total quality management (TQM) initiatives, which

are programs designed to
improve the quality of all the processes that lead to a final product or service. In a
TQM program, every
aspect of the organization is oriented toward providing a quality product or
service.
c) Creating Distinctive Capabilities
The third way to gain a competitive advantage is to utilize people with distinctive
capabilities to create
unsurpassed competence in a particular area (for example, 3M's competence in
adhesives, Carlson
Corporation's leading presence in the travel business, and Xerox's dominance of
the photocopier market).
d) Restructuring
A number of firms are changing the way the functions are performed. For
example, some companies are
restructuring HR for reasons such as time pressures, financial considerations,
and market pressures. This estructuring often results in a shift in terms of who
performs each function. Organizations still perform the
majority of a firm's HR functions inside the firm.
Adjusting to HR restructuring trends--who performs the human resource
management tasks? The
traditional human resource manager continues to be in place in most
organizations, but some organizations
are also using shared service centers, outsourcing, and line managers to assist
in the delivery of human
resources to better accomplish organizational objectives. Additionally, the size of
some HR departments is
getting smaller because certain functions are now being accomplished by others.
This shift permits the HR
managers to focus on more strategic and mission-oriented activities.
i.
The Human Resource Manager--An individual who normally acts in an
advisory or staff capacity, working with other managers to help them deal with
human resource matters. One general trend is that HR personnel are servicing
an
increasing number of employees. The human resource manager is primarily
responsible for coordinating the management of human resources to help the
organization achieve its goals. There is a shared responsibility between line
managers and human resource professionals.
ii. Shared Service Centers--Take routine, transaction-based activities that are
dispersed throughout the organization and consolidate them in one place.
iii. Outsourcing Firms--The process of transferring responsibility for an area of
service and its objectives to an external provider. The main reason for this
movement was to reduce transaction time, but other benefits include cost
reductions and quality improvements. Companies found that administrative,

repetitive tasks are often performed in a more cost-effective manner by external

sources.
iv. Line Managers--Line managers, by the nature of their jobs, are involved with
human resources. Line managers in certain firms are being used more to deliver
HR services. When implemented, this change reduces the size of the HR
department.
v. Decentralization: In the traditional organizational structure, most major
decisions are made at the top and implemented at lower levels. It is not
uncommon for these organizations to centralize major functions, such as human
resources, marketing, and production, in a single location (typically corporate
headquarters) that serves as the firm's command center. Multiple layers of
management are generally used to execute orders issued at the top and to
control
the lower ranks from above. Employees who are committed to the firm tend to
move up the ranks over time in what some have called the internal labor market.
However, the traditional top-down form of organization is quickly becoming
obsolete, both because it is costly to operate and because it is too inflexible to
compete effectively. It is being replaced by decentralization, which transfers
responsibility and decision-making authority from a central office to people and
locations closer to the situation that demands attention. HR strategies can play a
crucial role in enhancing organizational flexibility by improving decision-making
processes within the firm. The need for maintaining or creating organizational
flexibility in HR strategies is addressed in several chapters of this book, including
those dealing with work flows, compensation and training.
vi. Downsizing - Periodic reductions in a company's work force to improve its
bottom line-often called downsizing-are becoming standard business practice,
even among firms that were once legendary for their "no layoff' policies, such as
AT&T, IBM, Kodak, and Xerox. In addition to fostering a lack of emotional
commitment, transient employment relationships create a new set of challenges
for firms and people competing in the labor market, as well as for government
agencies that must deal with the social problems associated with employment
insecurity (including loss of health insurance and mental illness). However, the
good news for laid-off employees is that the poor-performance stigma
traditionally
attached to being fired or laid off is fading.
iii.
Individual Challenges
Human resource issues at the individual level address concerns that are most
pertinent to decisions
involving specific employees. These issues almost always reflect what is
happening in the larger
organization. How individuals are treated also is likely to have an effect on
organizational issues. For
instance, if many key employees leave a firm to join its competitor, it will affect
the competitive posture of
the firm. The individual issues include matching people and organization, ethics

and social responsibility,

productivity, empowerment, brain drain, and job insecurity.
Human resource issues at the individual level address the decisions most
pertinent to specific employees.
These individual challenges almost always reflect what is happening in the larger
organization. For instance,
technology affects individual productivity; it also has ethical ramifications in terms
of how information is
used to make HR decisions (for example, use of credit or medical history data to
decide whom to hire).
How the company treats its individual employees is also likely to affect the
organizational challenges we
discussed earlier. For example, if many key employees leave the firm to join
competitors, the organization's
competitive position is likely to be affected. In other words, there is a two-way
relationship between
organizational and individual challenges. This is unlike the relationship between
environmental and
organizational challenges, in which the relationship goes only one way few
organizations can have much
impact on the environment. The most important individual challenges today
involve, productivity, ethics
and social responsibility, productivity, empowerment, brain drain, job security and
matching people and
organizations. Here we discuss each of them...
a. Productivity is a measure of how much value individual employees add to the
goods or services
that the organization produces. The greater the output per individual, the higher
the organization's
productivity. Two important factors that affect individual productivity are ability
and motivation.
Employee ability, competence in performing a job, can be improved through a
hiring and placement
process that selects the best individuals for the job. It can also be improved
through training and
career development programs designed to sharpen employees' skills and
prepare them for additional
responsibilities. Motivation refers to a person's desire to do the best possible job
or to exert the
maximum effort to perform assigned tasks. Motivation energizes, directs, and
sustains human
behavior. A growing number of companies recognize that employees are more
likely to choose a
firm and stay there if they believe that it offers a high quality of work life (QWL).
b. Ethics and Social Responsibility - Corporate social responsibility refers to
the extent to which

companies should and do channel resources toward improving one or more

segments of society
other than the firm's owners or stockholders. Ethics is the bedrock of socially
responsible behavior.
People's expectations that their employers will behave ethically are increasing,
so much that many
firms and professional organizations have created codes of ethics outlining
principles and standards
of personal conduct for their members. Unfortunately, these codes often do not
meet employees'
expectations of ethical employer behavior. These negative perceptions have
worsened over the
years. In a recent poll of Harvard Business Review readers, almost half the
respondents indicated their
belief that managers do not consistently make ethical decisions. The widespread
perceptions of
unethical behavior may be attributed to the fact that managerial decisions are
rarely clear-cut. Except
in a few blatant cases (such as willful misrepresentation), what is ethical or
unethical is open to
debate. Even the most detailed codes of ethics are still general enough to allow
much room for
managerial discretion. In other words, many specific decisions related to the
management of human
resources are subject to judgment calls. A company that exercises social
responsibility attempts to
balance its commitments-not only to its investors, but also to its employees, its
customers, other
businesses, and the community or communities in which it operates. For
example, McDonald's
established Ronald McDonald houses several years ago to provide lodging for
families of sick children hospitalized away from home. Sears and General
Electric support artists and performers,
and many local merchants support local children's sports teams.
c. Empowerment - In recent years many firms have reduced employee
dependence on superiors and
placed more emphasis on individual control over (and responsibility for) the work
that needs to be
done. This process has been labeled empowerment because it transfers
direction from an external
source (normally the immediate supervisor) to an internal source (the individual's
own desire to do
well). In essence, the process of empowerment entails providing workers with the
skills and
authority to make decisions that would traditionally be made by managers. The
goal of

empowerment is an organization consisting of enthusiastic, committed people

who perform their
work ably because they believe in it and enjoys doing it (internal control). This
situation is in stark
contrast to an organization that gets people to work as an act of compliance to
avoid punishment
(for example, being fired) or to qualify for a paycheck (external control).
d. Brain Drain - With organizational success more and more dependent on
knowledge held by
specific employees, companies are becoming more susceptible to brain drain-the
loss of intellectual
property that results when competitors lure away key employees. High-Tec firms
are particularly
vulnerable to this problem. Such important industries as semiconductors and
electronics suffer from
high employee turnover as key employees, inspired by the potential for huge
profits, leave
established firms to start their own businesses. This brain drain can negatively
affect innovation and
cause major delays in the introduction of new products. To make matters worse,
departing
employees, particularly those in upper management, can wreak considerable
havoc by taking other
talent with them when they leave. To combat the problem of defection to
competitors, some firms
are crafting elaborate ant defection devices. For example, Compaq computer has
introduced a policy
that revokes bonuses and other benefits to key executives if they take other
employees with them
when they quit. Micron Technology staggers key employees' bonuses; they lose
un-awarded portions
when they leave.
e. Job Insecurity - In this era of downsizing and restructuring, many employees
fear for their jobs.
For most workers, being able to count on a steady job and regular promotions is
a thing of the past.
Even the most profitable companies have laid off workers. Companies argue that
regardless of how
well the firm is doing, layoffs have become essential in an age of cutthroat
competition. In addition,
the stock market often looks favorably on layoffs. For employees, however,
chronic job insecurity is
a major source of stress and can lead to lower performance and productivity.
Though union
membership has been declining in recent years, many workers still belong to
unions, and job security

is now a top union priority. In return for job security, though, many union leaders
have had to make
major concessions regarding pay and benefits.
f. Matching People and Organizations Research suggests that HR strategies
contribute to firm
performance most when the firm uses these strategies to attract and retain the
type of employee
who best fits the firm's culture and overall business objectives. For example, one
study showed that
the competencies and personality characteristics of top executives could hamper
or improve firm
performance, depending on what the firm's business strategies are. Fast-growth
firms perform better
with managers who have a strong marketing and sales background, who are
willing to take risks, and
who have a high tolerance for ambiguity. However, these managerial traits
actually reduce the
performance of mature firms that have an established product and are more
interested in
maintaining (rather than expanding) their market share. Other research has
shown that small hightech firms benefit by hiring employees who are willing to work in an atmosphere
of high
uncertainty, low pay, and rapid change in exchange for greater intrinsic
satisfaction and the financial
opportunities associated with a risky but potentially very lucrative product launch

The five factors involved in the changing

environment of HRM are as follows:

1. Work force Diversity

2. Economic and Technological Change
3. Globalization
4. Organisational Restructuring
5. Changing Nature of Work.
Business environment is changing environment and so is HR
environment. The changing environment of HRM includes work force
diversity, economic and technological change, globalisation,
organisational restructuring, changes in the nature of jobs and work
and so on.
1. Work force Diversity:
Diversity has been defined as any attribute that humans are likely to
use to tell themselves, that person is different from me and, thus,

includes such factors as race, sex, age, values, and cultural norms.
The Indian work force is characterized by such diversity that is
deepening and spreading day by day.
It is likely to be more diverse as women, minority- group members,
and older workers flood the work force. With the increasing number
of women entering the work force due to a combination of factors like
womens emancipation, economic needs, greater equality of sexes,
education and so on, additional pressures of managing a different set
of problems at the work place have arisen. As such, the number of
women is on increase in all walks of life i.e., teachers, lawyers,
doctors, engineers, accountants, pilots, parliamentarians and so on.
However, increasing number of women in the work force has been
necessitating the implementation of more flexible work scheduling,
child care facilities, maternity and now paternity leave also and
transfer to location of husbands place of posting.
Also, as the work force ages, employers will have to grapple with
greater health care costs and higher pension contributions. On the
whole, the increased diversity of work force will place tremendous
demands on the HR management function.
Further, creating unanimity from a diverse work force has also
become a challenge for HR manager. This is because, as several
experts put it; diversity is marked by two fundamental and
inconsistent realities operating today with it. One is that
organisations claim they seek to maximize diversity in the work place,
and maximize the capabilities of such a diverse work force.
The other is that traditional human resources system will not allow
diversity, only similarity. These experts emphasize that employers
traditionally hire, appraise, and promote people who fit a particular
employers image of what employees should believe and act like. At
the same time, there is corresponding tendency to screen out those
who do not fit.
2. Economic and Technological Change:
Along with time, several economic and technological changes have
occurred that have altered employment and occupational pattern. In
India too, there is a perceptible shift in occupational structure from
agriculture to industry to services.
The New Economic Policy, 1991 has led to liberalization and
globalization giving genesis to multinational organisations with their
multicultural dimensions having certain implications for HRM. The
implications of globalization for HRM are discussed subsequently.

The Indian economy has already become an open economy but it will
be more so from April 2003 with the complete lifting of quantitative
restrictions (QRs) on imports in India.
Technology has become the hallmark of the modem organisations. As
such, modem organisations have become the technology-driven
organisations. So to say, men are replaced by machinery.
Manufacturing technology, for example, has changed to automation
and robotisation.
Manufacturing advances like these will eliminate many blue-collar
jobs, replacing them with fewer but more highly skilled jobs. Similar
changes are taking place in office automation, where personal
computers, word processing, and management information system
(MIS) continue to change the nature of office work.
The explosive growth of information technology linked to the internet
has ushered in many changes throughout the organisation. One of the
major changes led by information technology is that it has hastened
what experts call the fall of hierarchy, i.e., managers depend less
and less on yesterdays stick-to-the -chain-of-command approach,
to their organising function.
This is so because earlier it used to be, if one wanted information, one
had to go up, over and down through the organisation. Now, one just
taps in. Thats what broke down the hierarchy. Somuchso, now
employees do not need to be present a definite work place.
Instead, they can work from their own places/ residences through the
net. This has given genesis to a new breed of organisations, called
virtual organisations. (VO).
3. Globalization:
The New Economic Policy, 1991 has, among other things, globalised
the Indian economy. There has been a growing tendency among
business firms to extend their sales or manufacturing to new markets
aboard. The rate of globalization in the past few years in India has
been nothing short of phenomenal.
Globalization increases competition in the international business.
Firms that formerly competed only with local firms, now have to
compete with foreign firms/competitors. Thus, the world has become
a global market where competition is a two-way street.
Globalization has given genesis to the multinational corporations
(MNCs). The MNCs are characterised by their cultural diversities,
intensified competition, variations in business practices and so on. As
an international business expert puts it, the bottom line is that the

growing integration of the world economy into a single, huge market

place is increasing the intensity of competition in a wide range of
manufacturing and service industries.
Given these conditions, from tapping the global labour force to
formulating selection, training and compensation policies for
expatriate employees have posed major challenges for HRM in the
next few years. This has underlined the need for studying and
understanding HRM of multinational organisations or international
organisations separately.
4. Organisational Restructuring:
Organisational restructuring is used to make the organisation
competitive. From this point of view, mergers and acquisitions of
firms have become common forms of restructuring to ensure
organisational competitiveness. The mega-mergers in the banking,
telecommunications and petroleum companies have been very visible
in our country. Downsizing is yet another form of organisational
restructuring.
As a part of the organisational changes, many organisations have
rightsized themselves by various ways like eliminating layers of
managers, closing facilities, merging with other organisations, or out
placing workers. There has been a practice to flatten organisations by
removing several layers of management and to improve productivity,
quality, and service while also reducing costs. Whatever be the form
of restructuring, jobs are redesigned and people affected.
One of the challenges that HRM faces with organisational
restructuring is dealing with the human consequences of change. For
example, the human cost associated with downsizing has been much
debated and discussed in the popular press. As such, HRM needs to
focus on the changed scenario uniquely and that is not so simple.
Thus, management of HR activities has become crucial for HR
managers.
5. Changing Nature of Work:
Along with changes in technology and globalization, the nature of
jobs and work has also changed. For example, technological changes
like introduction of fax machines, information technology, and
personal computers have allowed companies to relocate operations to
locations with lower wages. There is also a trend toward increased use
of temporary or part-time workers in organisations.
One most significant change in the nature of work is that it has
changed from manual to mental/ knowledge work. In this context, the

management expert Peter Druckers views are worth citing. He said

that the typical business will soon bear little resemblance to the
typical manufacturing company of 30 years ago.
The typical business will be knowledge-based, an organisation
composed largely of specialists who direct and discipline their own
performance through organized feedback from colleagues, customers,
and headquarter. For this reason, it will be what he calls an
information-based organization.
As a result, the organizations are giving and will give growing
emphasis on their human capital i.e., the knowledge, education,
training, skills, and expertise of employees, the expense of physical
capital like equipment, machinery and physical plants This growing
emphasis on education and human capital has, among other things,
changed the nature of economy as service-oriented economy.
In the changed economic scenario, jobs demand a certain level of
expertise that is far beyond that required of most workers 20 or 30
years ago. This means that companies are relying more on employees
creativity and skills, i.e., employees brain power.
As Fortune magazine has rightly said:
Brain power .has never before been so important for business.
Every company depends increasingly on knowledge-patents,
processes, management skills, technologies, information about
customers and suppliers, and old-fashioned experience. Added
together, this knowledge is intellectual capital.
As such, the HR environment has changed. The challenge posed by
changed environment is fostering intellectuals or human capital
needs managing these differently than those of previous generation.
Here, Drucker puts that the centre of gravity in employment is
moving fast from manual or clerical workers to knowledge workers,
who resist the command and control model that business took from
the military 100 years ago. Now that the changing environment of
HRM is delineated, we can conveniently present the new HR
management practices in such changing environment.
DSS
Broadly speaking, decision support systems are a set of manual or computerbased tools that assist in some decision-making activity. In today's business
environment, however, decision support systems (DSS) are commonly
understood to be computerized management information systems designed
to help business owners, executives, and managers resolve complicated

business problems and/or questions. Good decision support systems can help
business people perform a wide variety of functions, including cash flow
analysis, concept ranking, multistage forecasting, product performance
improvement, and resource allocation analysis. Previously regarded as
primarily a tool for big companies, DSS has in recent years come to be
recognized as a potentially valuable tool for small business enterprises as
well.
THE STRUCTURE OF DECISIONS
In order to discuss the support of decisions and what DSS tools can or
should do, it is necessary to have a perspective on the nature of the decision
process and the various requirements of supporting it. One way of looking at
a decision is in terms of its key components. The first component is the data
collected by a decision maker to be used in making the decision. The second
is the process selected by the decision maker to combine this data. Finally,
there is an evaluation or learning component that compares decisions and
examines them to see if there is a need to change either the data being used
or the process that combines the data. These components of a decision
interact with the characteristics of the decision being made.
Structured Decisions
Many analysts categorize decisions according to the degree of structure
involved in the decision-making activity. Business analysts describe a
structured decision as one in which all three components of a decisionthe
data, process, and evaluationare determined. Since structured decisions
are made on a regular basis in business environments, it makes sense to
place a comparatively rigid framework around the decision and the people
making it.
Structured decision support systems may simply use a checklist or form to
ensure that all necessary data are collected and that the decision making
process is not skewed by the absence of data. If the choice is also to support
the procedural or process component of the decision, then it is quite possible
to develop a program either as part of the checklist or form. In fact, it is also
possible and desirable to develop computer programs that collect and
combine the data, thus giving the process a high degree of consistency or
structure. When there is a desire to make a decision more structured, the
support system for that decision is designed to ensure consistency. Many
firms that hire individuals without a great deal of experience provide them
with detailed guidelines on their decision making activities and support them
by giving them little flexibility. One interesting consequence of making a
decision more structured is that the liability for inappropriate decisions is
shifted from individual decision makers to the larger company or

organization.
Unstructured Decisions
At the other end of the continuum are unstructured decisions. While these
have the same components as structured onesdata, process, and
evaluationthere is little agreement on their nature. With unstructured
decisions, for example, each decision maker may use different data and
processes to reach a conclusion. In addition, because of the nature of the
decision there may only a limited number of people within the organization
qualified to evaluate the decision.
Generally, unstructured decisions are made in instances in which all
elements of the business environmentcustomer expectations, competitor
response, cost of securing raw materials, etc.are not completely
understood (new product and marketing strategy decisions commonly fit into
this category). Unstructured decision systems typically focus on the
individual who or the team that will make the decision. These decision
makers are usually entrusted with decisions that are unstructured because of
their experience or expertise; it is their individual ability that is of value.
One approach to support systems in this area is to construct a program that
simulates the process used by a particular individual. In essence, these
systemscommonly referred to as "expert systems"prompt the user with
a series of questions regarding a decision situation. "Once the expert system
has sufficient information about the decision scenario, it uses an inference
engine which draws upon a data base of expertise in this decision area to
provide the manager with the best possible alternative for the problem,"
explained Jatinder N. D. Gupta and Thomas M. Harris in the Journal of
Systems Management. "The purported advantage of this decision aid is that it
allows the manager the use of the collective knowledge of experts in this
decision realm. Some of the current DSS applications have included longrange and strategic planning policy setting, new product planning, market
planning, cash flow management, operational planning and budgeting, and
portfolio management."
Another approach is to monitor and document the process used so that the
decision maker(s) can readily review what has already been examined and
concluded. An even more novel approach used is to provide environments
specially designed to give these decision makers an atmosphere conducive to
their particular tastes. The key to support of unstructured decisions is to
understand the role that individuals experience or expertise plays in the
decision and to allow for individual approaches.
Semi-Structured Decisions
In the middle of the continuum are semi-structured decisionswhere most

of what are considered to be true decision support systems are focused.

Decisions of this type are characterized as having some agreement on the
data, process, and/or evaluation to be used, but are also typified by efforts to
retain some level of human judgment in the decision making process. An
initial step in analyzing which support system is required is to understand
where the limitations of the decision maker may be manifested (i.e., the data
acquisition portion, the process component, or the evaluation of outcomes).
Grappling with the latter two types of decisionsunstructured and semistructuredcan be particularly problematic for small businesses, which
often have limited technological or work force resources. As Gupta and
Harris indicated, "many decision situations faced by executives in small
business are one-of-a-kind, one-shot occurrences requiring specifically
tailored solution approaches without the benefit of any previously available
rules or procedures. This unstructured or semi-structured nature of these
decisions situations aggravates the problem of limited resources and staff
expertise available to a small business executive to analyze important
decisions appropriately. Faced with this difficulty, an executive in a small
business must seek tools and techniques that do not demand too much of his
time and resources and are useful to make his life easier." Subsequently,
small businesses have increasingly turned to DSS to provide them with
assistance in business guidance and management.
KEY DSS FUNCTIONS
Gupta and Harris observed that DSS is predicated on the effective
performance of three functions: information management, data
quantification, and model manipulation. "Information management refers to
the storage, retrieval, and reporting of information in a structured format
convenient to the user. Data quantification is the process by which large
amounts of information are condensed and analytically manipulated into a
few core indicators that extract the essence of data. Model manipulation
refers to the construction and resolution of various scenarios to answer 'what
if' questions. It includes the processes of model formulation, alternatives
generation and solution of the proposed models, often through the use of
several operations research/management science approaches."
Entrepreneurs and owners of established enterprises are urged to make
certain that their business needs a DSS before buying the various computer
systems and software necessary to create one. Some small businesses, of
course, have no need of a DSS. The owner of a car washing establishment,
for instance, would be highly unlikely to make such an investment. But for
those business owners who are guiding a complex operation, a decision
support system can be a valuable tool. Another key consideration is whether

the business's key personnel will ensure that the necessary time and effort is
spent to incorporate DSS into the establishment's operations. After all, even
the best decision support system is of little use if the business does not
possess the training and knowledge necessary to use it effectively. If, after
careful study of questions of DSS utility, the small business owner decides
that DSS can help his or her company, the necessary investment can be
made, and the key managers of the business can begin the process of
developing their own DSS applications using available spreadsheet software.
DSS UNCERTAINTIES AND LIMITATIONS
While decision support systems have been embraced by small business
operators in a wide range of industries in recent years, entrepreneurs,
programmers, and business consultants all agree that such systems are not
perfect.
Level of "User-Friendliness"
Some observers contend that although decision support systems have
become much more user-friendly in recent years, it remains an issue,
especially for small business operations that do not have significant
resources in terms of technological knowledge.
Hard-to-Quantify Factors
Another limitation that decision makers confront has to do with combining
or processing the information that they obtain. In many cases these
limitations are due to the number of mathematical calculations required. For
instance, a manufacturer pondering the introduction of a new product can
not do so without first deciding on a price for the product. In order to make
this decision, the effect of different variables (including price) on demand
for the product and the subsequent profit must be evaluated. The
manufacturer's perceptions of the demand for the product can be captured in
a mathematical formula that portrays the relationship between profit, price,
and other variables considered important. Once the relationships have been
expressed, the decision maker may now want to change the values for
different variables and see what the effect on profits would be. The ability to
save mathematical relationships and then obtain results for different values
is a feature of many decision support systems. This is called "what-if"
analysis, and today's spreadsheet software packages are fully equipped to
support this decision-making activity. Of course, additional factors must be
taken into consideration as well when making business decisions. Hard-toquantify factors such as future interest rates, new legislation, and hunches
about product shelf life may all be considered. So even though the
calculations may indicate that a certain demand for the product will be
achieved at a certain price, the decision maker must use his or her judgment

in making the final decision.

If the decision maker simply follows the output of a process model, then the
decision is being moved toward the structured end of the continuum. In
certain corporate environments, it may be easier for the decision maker to
follow the prescriptions of the DSS; users of support systems are usually
aware of the risks associated with certain choices. If decision makers feel
that there is more risk associated with exercising judgment and opposing the
suggestion of the DSS than there is in simply supporting the process, the
DSS is moving the decision more toward the structured end of the spectrum.
Therefore, the way in which a DSS will be used must be considered within
the decision-making environment.
Processing Model Limitations
Another problem with the use of support systems that perform calculations is
that the user/decision maker may not be fully aware of the limitations or
assumptions of the particular processing model. There may be instances in
which the decision maker has an idea of the knowledge that is desired, but
not necessarily the best way to get that knowledge. This problem may be
seen in the use of statistical analysis to support a decision. Most statistical
packages provide a variety of tests and will perform them on whatever data
is presented, regardless of whether or not it is appropriate. This problem has
been recognized by designers of support systems and has resulted in the
development of DSS that support the choice of the type of analysis.

2.9.1 Career Planning and Development:

retaining skilled employees, management should assist individuals to
plan their careers with realistic information about career opportunities
that exist within a particular organization. Career planning is a recently
developed phenomenon and organizations are nowadays looking HRD
in this new angle.
The tremendous growth of organizations in recent times due to
technological improvements and tough competition in global market
necessitates the organizations not only to select the right type of
staffs, but also to retain them in the organizations. The dynamic and
growth oriented employees should be allowed to grow through career
development programs because the high turnover of such potential
staff leads to great loss in terms of cost, quality and productivity.
1.

Career Performance:

The individually perceived sequence of attitudes and behavior

associated with the work related experiences and activities over the
span of the person's life.' Thus, a career refers to both attitude and
behavior and it is work related. Each person's career is unique. It has

an upward mobility i.e.

making more money, having more responsibility, acquiring more
status and power.

Motivation and Career

Development:
2.

Handsome monetary as well as fringe benefits and elevation in job are

the main indicators of career performance. The modern organizations
are basically interested in career performance since it has a direct
relationship with goal attainment. The two aspects -the extent of
organization's performance appraisal, and the pessimistic attitude of
the individual to realize the career effectivenessshould be well understood by the management for better career
development. So, career performance is the integrated effort of both
management and the employees.
CAREER PLANNING AN ESSENTIAL COMPONENT OF HUMAN
RESOURCE MANAGEMENT

The current economic context, marked by increased competition,

integration in the European Union and especially the need to maintain
competitive advantage in an increasingly uncertain business
environment, have led to the introduction and the deployment of
human resources activities until recently neglected. Thus, more
companies in Romania have started to develop and implement
organized planning and career development systems of employees.
In human resource management, career planning aims to identify
needs, aspirations and opportunities for individuals career and the
implementation of developing human resources programs to support
that career .

Guidance on some of the competencies expected

The following points are a non- exhaustive series of aspects that could
be covered by the career
development plan, and it is relevant to the short-term objectives that
will be set by the researcher and the reviewer at the beginning of the
fellowship period. The objectives should be set with respect to the
skills and experience that each researcher should acquire at a given
time of his/her career. A postgraduate researcher at PhD level will
have very different needs compared to a post-doctoral researcher at
an advanced stage of his/her professional development. These
objectives should be revised at the end of the fellowship and should be
used as a pro-active monitoring of progress in the researcher's career.
1.

Research results.

These should give an overview of the main direct results obtained as a

consequence of the research carried out during the training period. It
may include publications, conference, workshop attendance, courses,

and /or seminar presentations, patents etc. This will vary according to
the area of research and the type of results most common to each
field. The information at this level should be relatively general since
the career development plan does not strictly constitute a report on
the scientific results achieved.

Research Skills and

techniques acquired.
2.

Competence in experimental design, quantitative and qualitative

methods, relevant research methodologies, data capture, statistics,
analytical skills. Original, independent and critical thinking. Critical
analysis and evaluation of one's findings and those of others
Acquisition of new expertise in areas and techniques related to the
researcher's field and adequate understanding their appropriate
application Foresight and technology transfer, grasp of ethics and
appreciation of IPPR.
3.

Research Management.

Ability to successfully identify and secure possible sources of funding

for personal and team research as appropriate. Project management
skills relating to proposals and tenders work
programming,
deadlines
negotiation
financial planning, and resource management. Skills appropriate to
working with others and in teams and in teambuilding.
4.

Communication skills.

Personal presentation skills, poster presentations, skills in report

writing and preparing
supervision, and delivery, with funders,
academic papers and books. To be able to defend research outcomes
at seminars, conferences, etc. Contribute to promote public
understanding of one's own field

Other professional
training (course work,
teaching activity):
5.

Involvement in teaching, supervision or mentoring

Anticipated networking
opportunities.
6.

Develop/maintain co-operative networks and working relationships as

appropriate with supervisor/peers/colleagues
within the institution and the wider research community

Other activities (community, etc) with professional

relevance.
7.

Issues related with career management, including transferable skills,

management of own career progression, ways to develop
employability, awareness of what potential employers are looking for
when considering CV applications etc.

PAY STATUARY

1. Communication:
Constant and accurate communication levels designed to fairly inform
as to what is being achieved both individually
and at a corporate level are a priority in any incentive scheme. The
key message is that incentive pay is not further reward for what
individuals are already paid to do. It is reward for smarter
performance, better levels of organization performance, greater
commitment, and so on. This is an area where schemes often fail as
incentive pay is seen as further reward for work already done.
2.

Performance Management

The more important part of the communication process is the

interaction between the manager
and the employee as to what is happening. Issues such as ensuring
goals are set, understood and achievable, what level of progress is
being made, should goals be altered (relatively rare in the course of an
annual cycle), what training is necessary, and all the other issues
covered in good performance improvement programmes including
incentive pay outcomes are covered here.
3.

Line of Sight

Ensuring targets and hence incentive opportunities align with what you
can influence is important and is accepted as
being basic to understanding and channeling behavior. Line of sight
varies depending on the level of the role, the size of the organization
and the complexity of the job. Share options as an incentive have an
excellent line of sight in a high tech start-up - probably for all levels of
staff but are less relevant for basic support roles in a multinational.
4.

Tenacity

It will probably take two years to fully integrate a new incentive based
remuneration structure with a three or four month lead in period prior
to its initial introduction. Management, HR,
everyone, will have to have patience and understand that the system
will need fine tuning in the course of the first two cycles. It should not
be seen as a big deal, just necessary adjustment to reflect
organization culture and practical experience.
5.

Dollars

Make the potential dollars worth having a shot at. One, two or three
percent of base salary are very low percentages to put on offer in an
incentive scheme and are likely not to be motivating. A base figure
should be around 5% for any role. Percentages vary enormously and
can be multiples
of salary depending on the role. Remember always this money is
contingent on performance, ie. It is not a gimmee and many incentive
schemes put the money on offer into a range (eg. Between 5% and
10%).
6.

Time Period

Set the giving out of rewards commensurate with the level of role and
the type of duties being undertaken. For many roles a yearly timescale
is appropriate. Some support roles would probably benefit from a six
monthly or quarterly payout period, as is common in many sales and
production roles. Why?
It keeps the link between the work done and the reward clear.

Understand how
Motivation Works
7.

What motivates individuals when it comes to reward and recognition

lies within a complex of personal, career , and organization interaction
factors? It is not particularly simple and varies at different stages of
the career cycle. The theory is complex and still relatively new and can
be best summarized in that our understanding has highlighted a few
areas that rarely work in any circumstances and suggested a number
of
others that are likely to succeed. With incentive pay the motivation
link is bound up with personal ownership of it and commitment hence
the strong emphasis on communication.
8.

When to Introduce

There may never be a wrong time, but certainly sometimes may be

better than others. If other major institutional changes are occurring
then it may not be the best time to introduce. Remember that a
package of initiatives will make incentive pay succeed with the
communication and performance
management components being key supports.
9.

Who is in the Scheme?

Everyone would be the answer today, although it may be better to

phase it in starting with a senior management level. The key to
incentive pay is understanding that it is primarily a different way of
paying people involving a different perspective which, if it is truly
working correctly, links organization success with personal reward.

What happens to the Wage

and Salary Bill?
10.

A well designed scheme should be effectively self funding.

Alignment of
divisional, and accountabilities
targets should be seamless. If this link is not there you run the danger
of merely increasing your wage and salary bill. Any scheme that
ignores this link will have serious questions asked of it at board and/or
senior management level.

3.3

Summary

The goal on this concept should be provide the information which has
a surprise value and which reduces the
to
individual, corporate financial
uncertainty. It should simultaneously build the knowledge base in the
organization by processing the data obtained from different sources in
different ways.