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Resource Management
BITS Pilani Lecture-1 Date :22/7/17 Total Slides : 43 Swati Alok
Hyderabad Campus
Discuss.
Every manager
is
an
HR manager
Text Book: Human Resource Management: Text and Cases, Tata McGraw Hill, 7th Edition,
by K Aswathappa
Learning Objectives
Introduction
Meaning & Definition of HRM
Scope of HRM
Differences between PM , HRM, IR, HRD
HRM-Functions & Objectives
Why Study HRM?
Harvard HRM Model
External and internal environment impacting HR functions
Stakeholders Interests
Shareholders
Management
Employee Groups
Government
Community
Unions
HRM Long Term
HR outcomes
Employee Influence Consequences
Commitment
HR flow Individual well being
Competence
Reward systems Organizational well
Situational Factors Congruence
Work systems being
Workforce characteristics Cost- Effectiveness
Societal well being
Business strategy and conditions
Management Philosophy
Labor market
Unions
Task technology
Laws and Societal Values
Societal objectives
To be ethically & socially responsible to the needs of the
society while minimizing the negative impact of such
demands upon the organization.
Organizational objectives
To recognize the role of HRM in bringing about
organizational effectiveness
Personal objectives
To assist employees in achieving their personal goals in
a manner that their personal goals enhance the
individuals contribution to the organization
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Model of HRM
TheStakeholders
Harvard Interests
Model
Shareholders
Management
Employee Groups
Government
Community
Unions
HRM Long Term
HR outcomes
Employee Influence Consequences
Commitment
HR flow Individual well being
Competence
Reward systems Organizational well
Situational Factors Congruence
Work systems being
Workforce characteristics Cost- Effectiveness
Societal well being
Business strategy and conditions
Management Philosophy
Labor market
Unions
Task technology
Laws and Societal Values
TheStakeholders
Harvard Interests
Model
Shareholders
Management
Employee Groups
Government
Community
Unions
HRM Long Term
HR outcomes
Employee Influence Consequences
Commitment
HR flow Individual well being
Competence
Reward systems Organizational well
Situational Factors Congruence
Work systems being
Workforce characteristics Cost- Effectiveness
Societal well being
Business strategy and conditions
Management Philosophy
Labor market
Unions
Task technology
Laws and Societal Values
General Specific
Unions
A firms personal activities will be influenced by its own
unions as well as the unions of other plants.
A trade union may be understood as association of workers
or management formed to protect their own individual
interest.
All HR activities like recruitment, selection, training,
compensation are carried out in consultation with union
leaders. Eg : The Bokaro steel plant has 68 trade unions.
Calcutta Corporation has about 100 trade unions.
TheStakeholders
Harvard Interests
Model
Shareholders
Management
Employee Groups
Government
Community
Unions
Long Term
HRM HR outcomes
Consequences
Employee Influence Commitment
Individual well being
HR flow Competence
Organizational well
Situational Factors Reward systems Congruence
being
Workforce characteristics Work systems Cost- Effectiveness
Societal well being
Business strategy and conditions
Management Philosophy
Labor market
Unions
Task technology
Laws and Societal Values
Quiz-II 5%
Quiz-III/ Assignment-II 5%
1|4
RoyaltyFree/ Stockdisc/ Getty Images
Definition of strategy
A strategy is the set of actions through which an
organization , develops resources and uses them to
deliver services or products in a way which its users find
valuable, while meeting the financial and other objectives
and constraints imposed by key stakeholders. Most
successful strategies give an organization:
some property that is unique, or at least distinctive;
the means for renewing its competitive advantage as the
environment changes.
Different types of stakeholder
Different stakeholders and objectives
Shareholder dividend + stock price appreciation
Suppliers- predictable orders , bills paid
Creditors- commitment to met on time
Customers- safe products , value for price paid
Employees- fair day pay , benefits
Union- large body of fee paying members
Government- tax revenues
.
Strategic management: refers to the process of crafting
strategies , their implementation and evaluation of their
effectiveness.
Strategies bridge where the company is now , with
where it wants to be tomorrow.
Strategy Implementation
Strategy Evaluation
External Analysis
opportunities
threats
Identify the
Internal Analysis
strengths
weaknesses
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FIGURE 36 Worksheet for Environmental Scanning
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About Surf excel
Launched in 1954
Oldest detergent used in more then 20 countries
Very strong brand communication
Available in wide variety and product size. (surf excel blue, matic, quick wash, comfort in
5 kg, 2kg, 250grm)
Solid base company of Unilever (HUL) , employee 2lks, operated in 100 countries, $868
m in R&D;
Strong competitors, (tide, nirma, ariel, oxycean, sundry)
Substitute products (liquid detergent, bars)
Lack of control in supply chain mgmt
No famous brand ambassador
High price of product
Changing life style
Applying tactics and surprise
Explore new geographical market
Political effects, economical effect, legislative effect;environmental effect
Chances of price war
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FIGURE 37 SWOT Matrix, with Generic Examples
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FIGURE 38 Type of Strategy at Each Company Level
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Types of Corporate Strategies
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Concentration Strategy
Horizontal Integration
The process of acquiring or merging with industry
competitors
Vertical Integration
Expanding operations backward into an industry that
produces inputs for the company or forward into an industry
that distributes the companys products
9 | 20
Raw-Materials-to-Costumer Value-Added Chain
in the Personal Computer Industry
9 | 21
Full and Taper Integration
9 | 22
Transfer of Competencies at
Philip Morris ( Related diversification)
10 | 23
Sharing Resources at Procter &
Gamble (related Diversification)
10 | 24
Types of Competitive Strategies
Business-Level
Competitive Strategies
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Business strategies
Strategic Advantage
Uniqueness Perceived Low Cost Position
by the Customer
Strategic Target
Particular FOCUS
Segment Only
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Strategic Human Resource
Management
Formulating and executing Human resource policies
and practices that the company needs to achieve its
strategic aims.
Three approaches to HR strategies:
The best fit Approach: Contingency (environment not
stable, If-then; HR strategy should be based on change in
environment)
Best Practices Approach: One size fits all/circumstances-
Prescriptive in nature
Resource based view: use its resources to create an
environment that is favourable to itself
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Porters Business Unit Strategies
Cost leadership
- HR emphasis on efficient, low-cost production, highly
structured procedures, and discourages creativity and
innovation
Differentiation -
- HR emphasis on innovation, flexibility, and renewal of
the workforce by attracting new talent from other firms
Focus
- HR emphasis would be cross between those described
for low-cost producers and differentiators
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Competitive strategies and work flow
system
strategy structure Design dimensions
134
Organizations as bundles of resources
Offices, laboratories, factories, equipment
Physical assets Specialized equipment, important locations
3 | 36
Examples of
Firms
Capabilities
337
The Four Criteria of Sustainable Competitive Advantage
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FIGURE 39 Southwest Airlines Activity System
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Southwest Airlines
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SHRM involves five phases:
Key Terms :
SWOT analysis
Corporate level Strategy ( Growth, stability, Renewal)
Business level Strategy (Cost leadership. Differentiation,
Focus)
Linking or aligning business level strategy with HR
functions
3 approach to HR strategy
Organisational Activities
and Policies
HR Demand
HR Supply Forecast
Forecast
HR Programming
HRP Implementation
Surplus
Shortage
Restricted Hiring
Recruitment
Reduced Hours
Selection, etc
VRS, Layoff, etc
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Causes for Demand/supply
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Methods of Demand Estimation
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Methods of Demand
Estimation
NGT: A group decision making technique in which group members are
presented with a problem, each member independently writes
down his /her ideas on the problem. and then each member
presents one idea to the group until all ideas have been
presented. Group ideas are discussed and ranked by having
each member vote for 3-5 most imp.
RATIO ANALYSIS
RATIO between output & manpower deployed to
achieve that output is established at a given point
of time
Eg., revenue per employee, sales vol. per salesperson,
service contract per engineer, units produced per
employee, etc.,
A forecasting technique for determining future staff needs
by using ratios between a causal factor and the number of
employees needed.
Assumes that the relationship between the causal factor
and staffing needs is constant
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Determining the Relationship Between
Hospital Size and Number of Nurses
Figure 53
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Forecasting & Analyzing HR
Supply
The supply analysis covers:
Existing sources of supply
Internal sources of supply
External sources of supply
HR INVENTORY (2 types)
Skills inventory: describes the skills & knowledge
of non-managerial employees & is used primarily for
making placement & promotion decisions
Management inventory: contains the same
information as in skills inventory, but only for
managerial employees which describes the work
history, strengths, weaknesses, promotion potential,
career goals, no. of employees supevised, training
received, total budget managed, types of
employees supervised
Figure 54
524
Action Decisions in HR
Planning
Strategy HR Initiative
HRP involves
Demand forecasting
Identifying supply need
Find the gap if any
Take corrective action
For surplus go for retrenchment, layoff, VRs
For shortage go for recruitment & promotions
Chapter 5
Analyzing Work and Designing Jobs
Learning Objectives
Job
Generally defined as a set of closely related activities
carried out for pay.
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The Basics of Job Analysis:
Terms
Job Analysis
The procedure through which we determine the duties
of a job (job description) and the characteristics of the
people (job specification) who should be hired for it.
Job Description
A list of a jobs duties, responsibilities, reporting
relationships, working conditions, and supervisory
responsibilities - one product of a job analysis
Job Specifications
A list of a jobs human requirements, that is, the
requisite education, skills, personality and so on - a
product of a job analysis
Compensation
Information
Collected via
Job Analysis
Discovering Performance
unassigned duties appraisal
Training
Questionnaires/
Interviews Observations Diaries/Logs
Checklists
Information Sources
Interview Formats
Individual employees
Structured (Checklist)
Groups of employees
Unstructured
Supervisors with
knowledge of the job
Advantages
Quick, direct way to find
overlooked information
Disadvantage
Distorted information
Method 2: Questionnaires
Note: Use a
questionnaire like
this to interview job
incumbents, or have
them fill it out.
Job Analysis Questionnaire for Developing Job Descriptions (contd)
Example of Position/Job Description Intended for Use Online
Example of Position/Job Description Intended for Use Online (contd)
Method 3: Observation
Information Source
Advantages
Observing and noting the Provides first-hand
physical activities of information
employees as they go Reduces distortion
about their jobs by of information
managers. Disadvantages
Time consuming
Reactivity response distorts
employee behavior
Difficulty in capturing
entire job cycle
Of little use if job involves a
high level of mental activity
Method 4: Participant Diaries/Logs
Quantitative Job
Analysis
Figure 46
454
Writing Job Descriptions
Job
identification
Job Job
specifications summary
Sections of a
Typical Job
Working Description Responsibilities and
conditions duties
Standards of Authority of
performance the incumbent
The Job Description
Job Identification Responsibilities and Duties
Job title: name of job
Date: when the description Major responsibilities and
was written duties (essential functions)
Prepared by: who wrote the
description Decision-making authority
Direct supervision
Job Summary
Budgetary limitations
General nature of the job
Major functions/activities Standards of Performance and
Relationships Working Conditions
Reports to:
What it takes to do the job
Supervises:
Works with:
successfully
Outside the company:
Job summary: Example-
Project manager
To be responsible for the overall direction, coordination,
implementation, execution, control and completion of
specific projects ensuring consistency with company
strategy, commitments and goals.
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Sample Job Description, Pearson Education
Sample Job Description, Pearson Education
Job Design Approaches
Job Design:
From Specialized
to Enriched Jobs
Tasks Tasks
Tasks
Assemble Test
Drill holes
Parts Component
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Job Enlargement
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Job enrichment
Task 2 Ordering
materials
(controlling)
Planning
workload
Drill holes
Task 1 Assemble Parts
(doing) Test
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Job Characteristics Model
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Exhibit 157 Guidelines for Job Redesign
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Job Analysis in a Jobless World
Measure performance
Measurable skills, knowledge, and competencies are the heart of
any companys performance management process.
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Vybhav case : pg 161: Competency mapping :
Retail division- Sales Assistants
Form a competency framework task force consisting of
HR manager , sales head, sales supervisor
Questionnaire administered to Sales supervisors to
understand sales assistance behaviors of high
performers, career path, skill needed and also name
list of top performers.
20-25% sales assistants are interviewed, questionnaire
to identify skills needed for the job
HR then meet with top performers to identify the
difference b/w them and mediocre
Observe behaviors of sales assistants while on job
Prepare draft of competencies with descriptions .eg..
Competency Chart
Competencies Definitions
Communication skill
Positive feedback
Delivering results
Delivering customer service
Positive feedback
Delivering results
Delivering customer service
Competency Definition
Technical and Professional expertise Demonstrated knowledge and skills within a particular functional domain.
Teamwork A cooperative attitude between those working together on a task/series of tasks and
jobs
Initiative A preference to act and doing more than what is required or expected
Decision making and Problem solving An ability to select a course of action amongst several alternatives.
Communication An ability to impart or exchange thoughts and ideas orally and in written
job analysis
job description
job specifications
organization chart
process chart
diary/log
position analysis questionnaire (PAQ)
Functional Job analysis
job enlargement
job rotation
job enrichment
competency-based job analysis
MM ZC441: Human
Resource Management
BITS Pilani Lecture-4 Total ppt: 51 Date: 30/7/17 Swati Alok
Hyderabad Campus
BITS Pilani
Hyderabad Campus
Chapter-6
Recruiting Human Resources
Learning Objectives
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Recruitment process
Recruitment planning (yield ratio; make-buy skill )
Employee requisition
Recruitment
Offer Acceptance
20
Offers/Acceptance (3:2)
Job Offer
30 Interview/Offers (4:3)
Invited for Final
Interview
40
Screening/Invites (5:1)
Invited to Screening
Interview
200
Contacts/Screens (10:1)
Initial Contacts
2000
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Internal recruitment methods
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Internal Sources of Candidates:
Hiring from Within
Advantages Disadvantages
Foreknowledge of Failed applicants
candidates strengths become discontented
and weaknesses
Time wasted
More accurate view of
candidates skills interviewing inside
candidates who will not
Candidates have a
stronger commitment to be considered
the company Inbreeding of the status
Increases employee quo
morale
Less training and
orientation required
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External recruitment sources
Vocational schools
College & universities
Competitors in labour market
Former employees
Unemployed
Military personnel
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External recruitment methods
Media advertising
Employment agencies
Job fairs
Internships
Walk-in interviews
Event recruiting
E-recruitment
Employee Referrals
Applicants who are referred to the organization by current
employees
Referral is a cost-effective recruitment program.
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External recruitment methods
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Designing advertisement
When drafting your recruitment advertisements, bear in mind the following points which are universally applicable job
advertisement should be:
eye-catching (Wherever you advertise, have a bold heading. You can use the job title itself if it sounds impressive or
is unusual..Alternatively, you might prefer to put the name of your company across the top of the advertisement. Do this if it is
both well known and has a good reputation locally or nationally, as appropriate. )
concise (Once the potential applicant has seen the recruitment advertisement, lie must study it. To encourage this, the
text should be brief and to the point. Supply key information as succinctly as possible. Use compact paragraphs and short
sentences. Stick to plain English, avoiding fancy and confusing phrases. If details are not relevant, cut them out. Should your
words not be absolutely clear, change them. Otherwise, the reader will lose interest and look at the next advertisement
instead. )
logical (Similarly, set out the text in a sensible and progressive order (job duties, salary, fringe benefits and so on).
Jumping back and forth to and from different subjects is discouraging. Each paragraph should deal with one, self contained
topic. Every sentence should make one simple point Do not cover the same topic or points again. Never repeat yourself)
humour-free (Although humour can be very effective in some advertising campaigns, steer clear of it in recruitment
advertisements. Most people view job hunting as a serious matter-they could be unemployed with a mortgage to pay and
children to support- and might be alienated by comments which they regard as flippant or patronizing. Also, everyones sense
of humour is different. Funny ha-ha to one person may be funny peculiar to another. )
non-discriminatory (As always, you should avoid discriminating on the grounds of sex, marital status or race. The
presentation and phrasing of your advertisements must not imply that only people of a particular sex, marital status or racial
group should apply for the job. Be especially careful of your job title. Replace the discriminatory Barmaid or Salesman with
Bar Person and Sales Person. Put Typist (Male or Female) and Car Mechanic (Male or Female). Should you use a
personal pronoun, state He/She or He or She? The Equal Opportunities. It is worth adding here that you should encourage
suitable people with disabilities to contact you too. Perhaps add a phrase such as We welcome applications from disabled
persons. This will help to ensure that you are seen as a company which offers fair and equal opportunities to all suitably
qualified applicants.)
16
Help
Wanted Ad
colleges
Competitors/o
ther firms
unemployed
High schools
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Assessing effectiveness of recruitment
source (example)
Source No. of No. of Total cost Turnover Average
employment acceptances after 1 performance
offers year rating at 1
year
College
recruitmen
t
referrals
E-
recruiting
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Cisco Case
Methods adopted:
Corporate website
Advertisement
Referral program (Amazing people)
Job fair (event recruiting)
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Summary
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Why is Careful Selection
important?
Legal
Organizational Costs of Recruiting
Obligations and
Performance and Hiring
Liability
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Selection Process External Environment
Internal Environment
Preliminary Interview
Selection Tests
Employment Interview
Rejected Applicants
Reference and
Background Analysis
Selection Decision
Physical Examination
Job Offer
Employment Contract
Evaluation
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Basic Testing Concepts
Reliability
The consistency of scores obtained by the same
person when retested with the identical or equivalent
tests.
Are the test results stable over time?
Test validity
The accuracy with which a test, interview, and so on
measures what it purports to measure or fulfills the
function it was designed to fill.
Does the test actually measure what we need for it to
measure?
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Types of validity
Test validity
Criterion
Content validity
validity
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Types of Validity
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How to Validate a Test (contd)
Step 4: Relate Test Scores and Criteria
Correlation analysis
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Selection test
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Cognitive ability test
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Job knowledge test
Source: Reproduced by permission. Copyright 1967, 1969 by The Psychological Corporation, New York, NY. All rights reserved. Authors
note: 1969 is the latest copyright on this test, which is still the main one used for this purpose. Figure 65
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Personality test
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Interest inventory test
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Integrity test
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Structured interview test
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Work sample test
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Assessment center ( A set of stimulated tasks or exercise that
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Other selection Tests
Graphology test is designed to analyse the handwriting of
an individual. It has been said that an individuals
handwriting can suggest the degree of energy, inhibitions
and spontaneity, as well as disclose the idiosyncracies,
and elements of balance and control.
Polygraph tests are designed to ensure accuracy of the
information given in the applications. Department stores,
treasury offices and jewellery shops that is those highly
vulnerable to theft or swindling may find polygraph
tests useful
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Methods of Interviews
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Kinds of Interview
Type Type of Questions Field(s) where applicable
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Three Ways to Make the
Interview Useful
Beware of committing
interviewing errors
Why?
To verify factual information provided by applicants.
To uncover damaging information.
Former Employers
Current Supervisors
Written References
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Job offer is made through a letter of appointment.
Decency demands that the rejected applicants be informed
about their non-selection.
Contracts of Employment:
Job titles, duties, date of joining, salary, method of
payment, working hours, holidays, notice period.
Chapters to be Covered
Chapter 9: Training, Development and
orientation
Learning Objectives
Trainingprovide employees
With specific skills, or
Help correct deficiencies in performance
Activities designed to provide learners with the knowledge and skills needed for
their present jobs
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Difference between training &
deveoplemt
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Steps in the Training Process
1 Needs analysis
2 Instructional design
Deciding on objectives of T&D
Designing the measures of success
4 Implementation
5 Evaluation
7
Group or Organizational
Analysis Individual Analysis
(Goals of the organization and Performance Appraisal, KSA
trends likely to affect these analysis
goals)
Task analysis
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Task
Analysis
Record
Form
Table 81
2005 Prentice Hall Inc. All rights
810
reserved.
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Performance analysis
Verifying there is performance deficiency and determine
whether that deficiency should be rectified through
training or through some other means.
I expect each salespersons to make 10 new contracts per
week, but john average only six
Other plants our size average no more than 2 accidents per
month; we are averaging five
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Performance analysis
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Initiatives to Rectify Performance
Discrepancy Performance Discrepancy
Yes
Is it worth fixing
Yes
Job Aid
Training
Practice
Transfer or Terminate
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Competency models
Determine the level at which particular job positions need
to perform (basic level, intermediate level. Advanced
level)
Identify skill gap (mising links)
Identify the training
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Required competencies
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Setting training objectives
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Design of Training program (content)
Learning style (principles) and training methods should
match
Learning principles are guidelines to the ways in which
people learn most effectively
More the principles are reflected in trianing , the more
effective training is likely to be
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Objectives and training methods should match (six training
orientations )
content
concept practice
Role play, case studies,
GD, games, skill
building workshop,
sensitivity training,
labs team development,
intragroup
development , process
consultation
21
Learning principles
Participation: leads to motivation, reinforcement ,
learn faster, long lasting; eg-bicycle riding
Repetition: active practice; opportunity to
practice on learned task
Relevance: material learnt during training exp
should have relevance for job situation
Transference : should be able to transfer in
job (training should match job demand)
Feedback : continuous feedback is required
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The OJT Training Method
On-the-Job Training (OJT) Advantages
Inexpensive
Having a person learn a
Learn by doing
job by actually doing the
No disruption in work
job.
Immediate feedback
Types: Less preparations required
Orientation
Job Instruction
Internship
apprenticeship
Coaching or understudy
Job rotation
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24
Boilermaker Machinist
Bricklayer (construction) Maintenance mechanic (any industry)
Carpenter Millwright
Construction craft laborer Operating engineer
Cook (any industry) Painter (construction)
Cook (hotel and restaurant) Pipefitter (construction)
Correction officer Plumber
Electrician Power plant operator
Electrician (aircraft) Roofer
Electrician (maintenance) Sheet-metal worker
Electronics mechanic Structural-steel worker
Firefighter Telecommunications technician
Tool and die maker
Figure 82
Source: Olivia Crosby, Apprenticeships, Occupational Outlook Quarterly, 46, no. 2 (Summer 2002), p. 5.
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Managerial on-the-Job Training
Job rotation
Moving a trainee from department to department to
broaden his or her experience and identify strong and
weak points.
Coaching/Understudy approach
The trainee works directly with a senior manager or
with the person he or she is to replace; the latter is
responsible for the trainees coaching.
Action learning
Management trainees are allowed to work full-time
analyzing and solving problems in other departments.
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Programmed instruction
Presenting Providing
Allowing the
questions, facts, feedback on
person to
or problems to the accuracy
respond
the learner of answers
Advantages
Reduced training time
Self-paced learning
Immediate feedback
Reduced risk of error for learner
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concept practice
Role play, case studies,
GD, games, skill
building workshop,
sensitivity training,
labs team development,
intragroup
development , process
consultation
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Training methods and activities
for which they are used
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Learning principles in different T&D methods
Methods Participat repetition releva transfer Feed
ion nce ence back
Job instruction training yes yes yes yes ST
Job rotation yes sometimes yes ST no
apprenticeships yes sometimes yes ST ST
lecture no no no ST no
Video presentation no no no yes no
Vestibule training yes yes someti yes ST
mes
Role playing yes sometimes somet no ST
times
Case study yes sometimes someti ST ST
mes
simulation yes sometimes ST ST ST
Programmed learning yes yes No yes yes
Laboratory training yes yes no yes
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Media used ( T&D delivery systems)
Corporate Universities
Colleges and universities
E Learning
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E- learning
Also known as distributed learning, distance e learning;
online training :form of learning that uses a network for delivery,
interaction or facilitation. The network might include LAN, WAN,
Intranet, internet
Lower costs
Time savings
Flexibility
Faster response
High degree of interactivity
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E- Learning
Disadvantages:
E-learning is compatible only if organizations has learning
culture(help of senior mgmt, right business model, right
personnel to implement)
E- learning could become boring text based course if not
designed properly
E- learners may experience loneliness
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IBM training design
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Levels of Training Evaluation
Levels Questions being asked Measures
Accidents
Quality
Productivity
Is the Turnover
organisation or Morale
unit better because of Costs
Result Profits
the training?
Performance
Are trainees behaving differently on Appraisal by
the job after training? Are they using superior, peer,
the skills and knowledge they learnt client,
Behaviour
in training? subordinate
Written tests
To what extent do trainees have greater Performance
knowledge or skill after the training tests
programme than they did before? Graded
Learning
simulations
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BITS Pilani, Hyderabad Campus
Level-1 Reaction
Know what is
Begin the
Feel welcome Understand the expected in
socialization
and at ease organization work and
process
behavior
Employee benefit
Job Duties
information
Personnel
Employee Safety measures
policies and
Orientation and regulations
organizational issues
Introductions to Facilities
companys organisation tour
Chapters to be Covered
Chapter 10: Appraising and Managing
Performance
Chapter Outline
Performance Performance
Job Analysis
Standards Appraisal
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BITS Pilani, Hyderabad Campus
Uses of Performance Appraisal
Human resource planning - Data must be
available to identify those who have the potential
to be promoted
Recruitment and selection - May be helpful in
predicting the performance of job applicants
Training and development - Point out an
employees specific needs for training and
development
Career planning and development - Essential in
assessing an employees strengths and
weaknesses and in determining the persons
potential
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BITS Pilani, Hyderabad Campus
Uses of Performance Appraisal (Cont.)
Compensation programs - Provide a basis for
rational decisions regarding pay adjustments
Internal employee relations - Used for decisions
in several areas of internal employee relations,
including promotion, demotion, termination,
layoff, and transfer
8-6
BITS Pilani, Hyderabad Campus
Multiple Purposes of Appraisal
Table 10.1. Multiple Purposes of Performance Assessment
General Applications Specific Purpose
Identification of individual needs
Performance feedback
Developmental Uses
Determining transfer and job assignments
Identification of individual strengths and developmental needs
Salary
Promotion
Retention or termination
Administrative Uses/Decisions
Recognition of individual performance
Lay-offs
Identification of poor performers
HR planning
Determining organisation training needs
Evaluation of organisational goal achievement
Organisational Maintenance/Objectives
Information for goal identification
Evaluation of HR systems
Reinforcement of organisational development
Criteria for validation research
Documentation Documentation for HR decisions
Helping to meet legal requirements
Source: Cynthia D. Fisher, et al. Human resource management, Houghton Mifflin, 1997, p.455
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BITS Pilani, Hyderabad Campus
The Performance Appraisal
Process
Objectives of Performance Appraisal
Appraise Performance
Performance Interview
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BITS Pilani, Hyderabad Campus
Design Appraisal Programme-
Issues
Formal
Vs
What Informal
Whose
Methods Performanc
? e?
Who are
When to Appraisal
Evaluate?
the
Design
raters?
What to What
Evaluate? Problems?
How to
solve?
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BITS Pilani, Hyderabad Campus
What should be rated?
(measuring criteria)
1. Quality
2. Quantity
3. Timeliness
4. Cost Effectiveness
5. Need for supervision
6. Interpersonal Impact
7. Community Service
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BITS Pilani, Hyderabad Campus
Appraisal model (future
oriented or past oriented)
MBO Future-oriented
Rating Scales
Cost
Accounting Checklists
Forced
Choice
ACRs Appraisal
Methods
Forced
Tests and Distribution
Observations
Critical
Field Review Incident
BARS
Psychological Past-oriented
Appraisals
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BITS Pilani, Hyderabad Campus
When to be rated (appraisal
cycle)
Annual
Semi annual
Quarterly
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BITS Pilani, Hyderabad Campus
Essay
Brief narrative describing performance
Tends to focus on extreme behavior
Depends heavily on evaluator's writing ability
Comparing essay evaluations might be difficult
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BITS Pilani, Hyderabad Campus
Performance Appraisal Methods
Graphic rating scale
A scale that lists a number of traits and a range of performance for each that is
used to identify the score that best describes an employees level of performance
for each trait.
. 916
BITS Pilani, Hyderabad Campus
Graphic
Rating Scale
with Space
for
Comments
Figure 93
917
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Performance
Management Outline
Figure 95a
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Performance Appraisal Methods
(contd)
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Alternation Ranking Scale
Figure 96
. 920
BITS Pilani, Hyderabad Campus
Ranking Employees by the
Paired Comparison Method
Note: + means better than. means worse than. For each chart, add up the number of
1s in each column to get the highest-ranked employee.
Figure 97
. 921
BITS Pilani, Hyderabad Campus
Critical Incidents
Written records of highly favorable and
unfavorable work actions
Appraisal more likely to cover entire
evaluation period
Does not focus on last few weeks or
months
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Examples of Critical Incidents for
an Assistant Plant Manager
Table 91
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Behaviorally Anchored Rating Scales
(BARS)
Combines traditional rating scales and
critical incidents methods
Job behaviors derived from critical
incidents described more objectively
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BITS Pilani, Hyderabad Campus
Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skill
Source:Walter C.
Borman, Behavior
Based Rating, in
Ronald A. Berk
(ed.), Performance
Assessment:
Methods and
Applications
(Baltimore, MD:
Johns
Hopkins University
Press, 1986), p. 103.
Figure 99
. 925
BITS Pilani, Hyderabad Campus
Management by Objectives (MBO)
Involves setting specific measurable goals with each
employee and then periodically reviewing the progress
made.
1. Set the organizations goals.
2. Set departmental goals.
3. Discuss departmental goals.
4. Define expected results (set individual goals).
5. Performance reviews.
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Steps in a Typical MBO Program
Specific objectives
collaboratively set
with employees
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360 Degree Feedback
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BITS Pilani, Hyderabad Campus
Performance Appraisal Methods
(contd)
Forced distribution method
Similar to grading on a curve; predetermined percentages of ratees are placed in
various performance categories.
Example:
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Forced distributions
(Pros/cons)
Creates and sustains a high-performance culture
Establishes well-defined consequences.
Makes performance management a corporate
priority
Lets employees know where they stand
Be detrimental to morale
Emphasize individual performance at the expense of
team performance
Promote competition
Table 93
. 933
Basic Concepts in Performance
Management and Appraisal
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Performance Management
Performance Management
Is the continuous process of identifying, measuring, and
developing the performance of individuals and teams and aligning
their performance with the organizations goals.
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Guidelines for Conducting
an Interview
Talk in terms of
Dont get Encourage the Get
objective work
personal person to talk agreement
data
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BITS Pilani, Hyderabad Campus
Performance appraisal in
Wipro (example)
Parameters Wipro
8-38
Appraiser Discomfort
Performance
appraisal process
cuts into managers
time
Experience can be
unpleasant when
employee has not
performed well
8-39
Lack of Objectivity
In rating scales method, commonly used
factors such as attitude, appearance, and
personality are difficult to measure
Factors may have little to do with
employees job performance
Employee appraisal based primarily on
personal characteristics may place
evaluator and company in untenable
positions
8-40
Potential Rating Scale Appraisal
Problems
Unclear standards
An appraisal that is too open to interpretation.
Central tendency
A tendency to rate all employees the same
way, such as rating them all average.
. 941
A Graphic Rating Scale with Unclear Standards
Table 92
942
Halo/Horn Error
Halo error - Occurs when manager
generalizes one positive performance
feature or incident to all aspects of
employee performance resulting in
higher rating
Horn error - Evaluation error occurs
when manager generalizes one
negative performance feature or
incident to all aspects of employee
performance resulting in lower rating
8-43
Leniency/Strictness
Leniency - Giving
undeserved high ratings
Strictness - Being unduly
critical of employees work
performance
Worst situation is when firm
has both lenient and strict
managers and does nothing
to level inequities
8-44
Central Tendency
Error occurs when employees are
incorrectly rated near average or middle of
scale
May be encouraged by some rating scale
systems requiring evaluator to justify in
writing extremely high or extremely low
ratings
8-45
Recent Behavior Bias
Employees behavior often improves and
productivity tends to rise several days or
weeks before scheduled evaluation
Only natural for rater to remember recent
behavior more clearly than actions from
more distant past
Maintaining records of performance
8-46
Personal Bias (Stereotyping)
Managers allow individual differences
such as gender, race or age to affect
ratings they give
Effects of cultural bias, or stereotyping,
can influence appraisals
Other factors Example: mild-mannered
employees may be appraised more
harshly simply because they do not
seriously object to results
8-47
Manipulating the Evaluation
Sometimes, managers control virtually
every aspect of appraisal process and are
in position to manipulate system
Example: Want to give pay raise to certain
employee. Supervisor may give employee
a undeserved high performance evaluation
8-48
Characteristics of Effective Appraisal
System
Job-related criteria
Performance expectations
Standardization
Trained appraisers
Continuous open communication
Conduct performance reviews
Due process
8-49
Job-Related Criteria
Most basic criterion needed in employee
performance appraisals
Uniform Guidelines and court decisions
quite clear on this point
8-50
Performance Expectations
Managers and subordinates must agree
on performance expectations in advance
of appraisal period
If employees clearly understand
expectations, they can evaluate own
performance and make timely adjustments
8-51
Standardization
8-52
Trained Appraisers
Common deficiency in
appraisal systems -
evaluators seldom receive
training on how to conduct
effective evaluations
Training should be ongoing
How to rate employees and
how to conduct appraisal
interviews
8-53
Continuous Open Communication
Employees have strong
need to know how well they
are performing
Good appraisal system
provides highly desired
feedback on continuing
basis
Should be few surprises in
performance review
8-54
Conduct Performance Reviews
Special time should be set for formal
discussion of employees performance
Withholding appraisal results is absurd
Performance review allows them to detect
any errors or omissions in appraisal, or
employee may simply disagree with
evaluation and want to challenge it
2008 by Prentice8-55
Hall
Due Process
Provide employees
opportunity to appeal
appraisal results
Must have procedure
for pursuing
grievances and
having them
addressed objectively
8-56