Beruflich Dokumente
Kultur Dokumente
II
Sub Code - 471
Developed by
Prof. Nitasha Gutgutia
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
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Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe
2. Dr. B.P. Sabale
3. Prof. Dr. Vijay Khole
4. Prof. Anuradha Deshmukh
Group Director
Chancellor, D.Y. Patil University, Former Vice-Chancellor
Former Director
Welingkar Institute of Navi Mumbai
(Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
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CONTENTS
Contents
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STRATEGIC ROLE OF HUMAN RESOURCES MANAGEMENT
Chapter 1
STRATEGIC ROLE OF HUMAN RESOURCES
MANAGEMENT
Objectives
Structure:
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Most managers agree that they perform numerous functions in their jobs.
These functions include the management functions of planning, controlling,
leading, organizing and staffing. The specific activities covered in these
functions include:
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Defining Strategy
The word strategy has been used in English since 1656 and originates from
“Strategies”, a Greek noun meaning ‘commander-in-chief’. Oxford
dictionary defines it as ‘generalship’. In management context it is
interchangeably used with long-term planning, an action which senior
management carries out to achieve organization’s long-term goals. ‘
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Senior Management
Environment Resources
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Fig. 1.1: Three Major Interdependent Poles of Strategic Management
The Figure 1.2 depicts the Strategic Management Process. As shown, this is
a step-wise process and this process is broken down into five steps –
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5. The final step involves determining gap between desired change and
performance vis-á-vis to the actual change and performance post the
implementation of the strategy.
As per the above process steps, we can say that strategic management
process is rational and linear process. However, it is a normative process,
showing how ideally strategic management should be carried out rather
than how it is actually carried out in organizations. Strategic decision
making being a political process implies that there would always be a gap
between reality and theoretical process.
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Environment Assessment
Step 2 Internal Scan
External Scan
Formulating Strategy
Step 3 Strategic Choice
Organization
Business
Functional
Implementing Strategy
Leadership
Step 4 Structure
Control Systems
Human Resources
Evaluating Strategy
Step 5 Operating Performance
Financial Performance
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Fig. 1.2: The Strategic Management Process
Strategic Planning
As discussed earlier, strategies may be formulated at three levels, hence,
strategic planning happens at three levels.
Business Unit Level Strategy Planning: At the next level down, this
planning involves how the business heads would build and strengthen their
long-term business competitiveness in the market.
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There have been several strategic environmental trends that are impacting
most organizations today, determining the strategic directions or paths
they may be taking or may take.
Strategic Trends
Some basic strategic trends impacting majority organizations across the
globe include –
• Globalization
• Features of Workforce
• Advances in Technology
• Work Nature
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and older workers enter the workforce. Diversity includes such factors as
race, gender, age, values, and cultural norms. Also a striking emerging
feature of workforce is that labor force is aging. The median age of the
labor force across the globe is projected to rise.
Nature of Work - Technology has also been changing the nature of work
not only in the new e-commerce companies but also in the factory jobs
which are becoming more and more technologically challenging. Further,
there is a continuing shift from manufacturing to service jobs. This implies
that the center of gravity in employment is moving fast from manual and
clerical workers to knowledge workers, who resist the command and
control model that business took earlier.
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Fig. 1.3: Types of Organizational Level Strategies
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Strategy
The company will provide its customers with the freshest and finest
organic food available. Its team will ensure each customer has an
outstanding shopping experience by providing a high level of service and
product information. At key functional levels the company decided the
following strategies:
• Human Resources –
• Implement an employee stock ownership program for those
employees who have worked for the business for minimum one
year.
• Develop an employee training program to further enhance all
employees’ product knowledge and customer service skills.
• Marketing –
• Create a unified look for the stores, the website, and product
packaging.
• Design a marketing plan to increase purchases by current customers
and attract new customers within the existing target markets.
Emergence of SHRM
The various latest strategic trends as highlighted above and the
developments in the field of HRM bring forth the contribution HRM can
make towards business success and hence, there is an increasing emphasis
on HRM to become an integral part of business strategy. The emergence of
the term ‘Strategic Human Resource Management’ (SHRM) is an outcome
of such efforts. It is largely concerned with ‘integration’ of HRM into the
business strategy and ‘adaptation’ of HRM at all levels of the organization
(Guest, 1987; Schuler, 1992).
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Definition of SHRM
The field of strategic HRM is still evolving and there is little agreement
among scholars regarding an acceptable definition. Broadly speaking,
SHRM is about systematically linking people with the organization; more
specifically, it is about the integration of HRM strategies into corporate
strategies. Strategic HRM thus links corporate strategy and HRM, and
emphasizes the integration of HR with the business and its environment.
‘Asset of processes and activities jointly shared by human resource and line
managers to solve people-related business problems’ (Schuler and Walker,
1990).
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Aim of SHRM
The fundamental aim of Strategic HRM is to generate strategic capability by
ensuring that the organization has skilled, engaged and well-motivated
employees to achieve sustained competitive advantage. Schuler (1992)
states that: Strategic human resource management is largely about
integration and adaptation. Its concern is to ensure that: (1) human
resource (HR) management is fully integrated with the strategy and
strategic needs of the company; (2) HR policies cohere both across policy
areas and across hierarchies; and (3) HR practices are adjusted, accepted
and used by line managers and employees as part of their everyday work.
Significance of SHRM
Staffing the organization, building teams, developing people skills,
identifying approaches to performance and customer service improvement,
and rewarding employees are equally critical for line managers as they are
for HR managers. An effective line manager needs to understand his
people, work with them effectively, and possess knowledge about various
systems and processes to form a skilled and motivated team. The manager
also must be aware of economic, technological, social, and legal issues
affecting employees and ultimately facilitate efforts to achieve
organizational objectives.
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Fig. 1.4: A Linear Strategic HRM Model
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Types of HR Strategies
All organizations are different from each other and thus, their HR
strategies. There may not be a set of standard characteristics. However,
two basic types of HR strategies can be identified. These are classified as:
Overarching HR Strategies
Overarching strategies describe the general intent of the organization
about how human resources should be managed, developed and what
steps be taken to attract and retain the resources organization requires
and further, ensure such resources are committed, motivated and engaged.
They may be broad statements of aims and purpose, which lead to more
specific strategies. They are focused on overall organizational effectiveness
– achieving human resource advantage by, as Boxall and Purcell (2003)
point out, employing ‘better people in organizations with better process’,
developing high-performance work processes and generally creating ‘a
great place to work’. The following is an example of overarching HR
strategy statements:
Specific HR Strategies
Specific HR strategies are created to describe what the organization
intends achieving in areas such as:
• Talent management – how the organization intends to ‘win the war for
talent’;
• Continuous improvement – providing for focused and continuous
incremental innovation sustained over a period of time;
• Knowledge management – creating, acquiring, capturing, sharing and
using knowledge to enhance learning and performance;
• Resourcing – attracting and retaining high-quality people;
• Learning and developing – providing an environment in which employees
are encouraged to learn and develop;
• Reward – defining what the organization wants to do in the longer term
to develop and implement reward policies, practices and processes that
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will further the achievement of its business goals and meet the needs of
its stakeholders;
• Employee relations – defining the intentions of the organization about
what needs to be done and what needs to be changed in the ways in
which the organization manages its relationships with employees and
their trade unions.
Diageo:
These are the three broad strands to the Organization and People Strategy:
(1) Reward and recognition: use recognition and reward programs to
stimulate outstanding team and individual performance contributions. (2)
Talent management: drive the attraction, retention and professional growth
of a deep pool of diverse, talented employees. (3) Organizational
effectiveness: ensure that the business adapts its organization to maximize
employee contribution and deliver performance goals. It provides direction
to the company’s talent, operational effectiveness and performance and
reward agendas. The company’s underlying thinking is that the people
strategy is not for the Human Resource function to own but is the
responsibility of the whole organization, hence, the title ‘Organization and
People Strategy’.
The Models
Three specific models as defined by Richardson and Thompson (1999) are
Best Practice and Best Fit, and ‘Configurationally’ or Bundling. These
models are described below.
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1. employment security;
2. selective hiring;
3. self-managed teams;
4. high compensation contingent on performance;
5. training to provide a skilled and motivated workforce;
6. reduction of status differentials;
7. Sharing information.
The ‘best practice’ model has been highly debated owing to varying views
on what constitutes the best practices. It is also criticized since it does not
have any discussion pertaining to organizational strategy. Moreover,
business is dynamic and ever evolving and any standard static best
practice will be shortlived and inconsistent with the business since what
was once a best practice may not always be.
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There are issues with the best fit model, relies on classical rational
planning approach which does not take into account the dynamic and fluid
nature of strategy, focus is on fit rather than needs of the people and
greater emphasis on external context than internal context.
The problem with the bundling approach is that of deciding what the best
way to relate different practices together is. There is no evidence that one
bundle is generally better than another.
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• External fit: This focuses on how well HR practices meet with the
demands of organization’s external environment.
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Table 1.5
A. Organizational Strategies HR Strategies
Stability Motivation and retention of skilled
employees – Job rotation, job
enrichment and empowerment
Growth (Internal Growth) Training and elevating existing
employees, hiring junior level
employees and outsourcing some
category of jobs
Concentration Training and developing employees,
outsourcing specialized skills
Mergers and Acquisitions Improving employee morale,
managing and unifying cultural
diversity, integrating wage and
benefits structures, creating new
organization structures, plan
outplacement and devise severance
package policies
Horizontal Integration Training existing employees on new
skills required, hiring new people
for new line of business, devising
new HR policies and processes
Joint Ventures Managing cultural diversity, training
employees to systems and
technology of the partner company,
devising compensation packages,
agreements, etc., for deputed
employees
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IBM’s overall business strategy focuses on four areas: (1) innovation, (2)
business value, (3) global integration, and (4) on-demand infrastructure.
Behind this overall strategy are all of the employees who make it work.
Hence, IBM’s HR strategy identifies company characteristics that motivate
and energize those employees. And IBM motivates its employees through -
Performance-based opportunities, leadership, hiring diverse and talented
people, flexibility, A value-based climate. At IBM, the goals are clear and
HR is expected to - Anticipate and build skills, lead transformation and
grow IBM.
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Activity
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1.8 SUMMARY
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5. Disinvestment is a ____________________.
(a) Growth Strategy
(b) Combination Strategy
(c) Retrenchment Strategy
(d) Stability
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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TALENT MANAGEMENT
Chapter 2
TALENT MANAGEMENT
Objectives
Structure:
2.1 Introduction
2.2 Meaning of Talent and Talent Management
2.3 Drivers of Talent Management
2.4 The Process of Talent Management
2.5 Building a Talent Management Strategy
2.6 Talent Management Best Practices
2.7 Challenges Faced in Talent Management
2.8 Case
2.9 Summary
2.10 Self Assessment Questions
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2.1 INTRODUCTION
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Figure 2.1: The Evolution of Talent Management Models
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TALENT MANAGEMENT
Source: The Talent Powered Organization – Peter Cheese, Robert J Thomas and Elizabeth
Craig.
Defining Talent
Defining Talent should be the first issue to be dealt with before starting to
manage talent. An agreement on the meaning of talent is the base of
talent management. The dictionary meaning of talent is “a natural ability to
be good at something, especially without being taught” (Cambridge
dictionary). In general, terms, talent is as an inborn disposition and ability
to do well in a particular field. However, in an organizational context talent
generally refers to an employee who significantly contributes to the
organization´s performance. According Topomoy Deb (2005), “Talent refers
to the recurring patten of thought, feeling or behavior that can be
productively applied.”
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Organizations face difficulty in finding suitable candidates and if they do, its
tough to retain them. Hence, talent management can be called an
integrated process to ensure an organization has a continuous flow of
talent for the right job at the right time. Effective talent management is a
key component of a high performing business culture and its successful
integration requires support from senior management. Consequently, talent
management is seen as significant as other business processes.
• Workforce trends
• Changing environment of work and expected skill shortage
• Globalization
• The knowledge economy
• Technology
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Workforce Trends
Factors such as an increasingly global and virtual workforce, different
generations working together, longer life expectancies and an empowered
and autonomous workforce have forever changed the workplace. Due to
demographic changes, the workforce is also increasingly diverse—from
age, gender and ethnicity to lifestyles, migration patterns and cultural
norms. Organizations are already taking advantage of these workplace
trends. For example, P&G believes that hiring the right set of people forms
majority of talent management and follows the norm of hiring many of its
future leaders as campus hires. Demographic changes are happening in the
age profile of the people (ageing workforce vs. generation Y and younger
generations) and in the structure of the workforce (increasing diversity,
different skill sets, varied expectations).
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Globalization
Globalization has provided people and organizations with immense
opportunities, making the economies more diverse yet integrated. The
competition is becoming many folds; it is intensifying and spreading wide.
Technology
Technology is increasingly making the world swifter and connected, thereby
significantly impacting people and organizations. Technology in the form of
web-based systems, internal and external social media, smarter mobile
phones, cloud computing and big data and various other technology-based
applications, cannot be ignored as they drive today’s workforce to be more
active and productive.
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Figure 2.2: The Talent Management Process
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In the middle of Talent Management process are the job specifications and
competency framework that impact each of the sub-processes.
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• Using hiring methods that ensure high quality recruits with high levels of
stability and inclination to stay with organization for substantial time
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Cost: What is the risk of a workforce becoming unaffordable? What will it cost
an organization to recruit and retain the people it needs? Will it be able to
afford the overall cost of its workforce?
Capacity: Risks around the succession into critical roles and retention of critical
people and teams. In other words, will an organization be able to create and
maintain the size and shape of workforce needed to deliver its business plan?
Source: “Time for a more holistic approach to talent risk”- KPMG International
The qualities required by the leadership and talent management owners for
developing and implementing talent management strategies –
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4. Ensure skill alignment of talent: One of the greatest tasks facing the
talent management is matching right people with the right skills and
systematically identifying the competencies of their talent. Hence,
organizations are focusing on building robust systems for assessing the
skills of current talent and forecasting the skills required. This enables
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Learning with outreach: movement of learning outside the ‘four walls ‘of the
organization to reach and influence suppliers, customers and other partners in
the organization’s value chain
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2.8 CASE
Source – The Talent Powered Organization: Peter Cheese, Robert J Thomas, and
Elizabeth Craig
SAP America
SAP America, the northern American sales and services division of
enterprise software giant SAP, embarked on a new business strategy in
2002, in order to turnaround its declining revenue and market share. SAP
America’s future depended on its ability to deliver a steady stream of
innovative software applications to its customers and tailor them to their
targeted market segments. Executive’s therefor, wanted to ensure that the
company focused on the human capital processes that could help it
innovate. The senior leaders felt that the people component of executing
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their strategy was the most critical and if they did not get that part right,
they would not win. In addition, it was critical for them to win.
• Identifying clear learning and training requirements for its job families
and ensuring managers work more with employees as coaches and
mentors to develop learning plans;
One year into the turnaround efforts, many initiatives were paying off in
improved process and capability.
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2.9 SUMMARY
This chapter summarizes the concept of talent management. It begins with
briefly introducing the concept along with touching upon the evolution of
talent management from personnel control to talent multiplication. It
further goes on to define the concept of talent, which varies from
organizations to organizations. The different ways of defining talent
management has been comprehensively covered here and the chapter
provides us with both narrow and broad understanding of talent
management. The chapter further explains us the process of talent
management and briefly explains the various steps involved in this
process. The development of talent management strategy is an imperative
for HR managers and the components of this strategy building have been
explained in this chapter briefly. The chapter also covers the numerous
best practices followed across organizations in the arena of making talent
management a successful process. It also, aligns us to the several
challenges faced by organizations and talent management professionals in
the development and execution of talent Management strategy and
process. Finally, the chapter, through a case explains talent management
and its key focus areas in practice.
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REFERENCES
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TALENT MANAGEMENT
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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EMPLOYEE ENGAGEMENT
Chapter 3
EMPLOYEE ENGAGEMENT
Objectives
Structure:
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EMPLOYEE ENGAGEMENT
Introduction
Today Managers experience a far greater demand of efficiency and
productivity than any other times in history. Managers have been grappling
with many challenges to succeed over competition. Owning to fast paced
technological advances in techniques of operation, organizations require
employees with increased technical and professional skills. They expect
operational autonomy, job satisfaction and status and cannot be dealt with
traditional management styles. This has shifted manager’s attention
towards employees’ side of organizations and are realizing that employees
engaged in their work and committed to their organizations offer
competitive advantages to the organization in the form of higher
productivity and stability. Thus, different organizations are heavily
investing in policies and practices that foster engagement in their people.
Jack Welch from GE, cited employee engagement as first, customer
satisfaction as second and free cash in-flow as third, as the top three best
measures of an organization’s health. Previously organizations possessed
greater power; however, today the power balance has changed with
employee owing to the larger power in the form of knowledge and
professional skills. In short, the organization now needs the employee
more significantly than the reverse. It is not enough to merely satisfy or
keep employees pacified. Today, the key is connecting with the core values
and beliefs of people and creating a passion, rather than just providing
tasks. All management initiatives can be fruitfully realized only with willful
involvement and engagement of employees. Successful organizations of
future are following a holistic approach to managing the human side and
engaging.
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Definition
Nevertheless, what is employee engagement exactly? Though different
organizations define engagement differently, some common themes
emerge. These themes include employees’ satisfaction with their work and
pride in their employer, the extent to which people enjoy and believe in
what they do for work and the perception that their employer values what
they bring to the table. The greater an employee’s engagement, the more
likely he or she is to “go the extra mile” and deliver excellent on-the-job
performance. In addition, engaged employees may be more likely to
commit to staying with their current organization. A global software
company for example, found that highly engaged employees are more
likely to be high performers than less engaged employees and they are far
less likely to voluntarily leave the company.
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To date, there is no single and generally accepted definition for the term
employee engagement. Gallup organization defines employee engagement
as the involvement with and enthusiasm for work. Gallup as cited by
Dernovsek (2008) likens employee engagement to a positive employees’
emotional attachment and employees’ commitment.
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Source: http://www.oregon.gov/oha/OHPR/PCO/Pages
Significance
The significance of engagement is that it is at the heart of the employment
relationship. It is about what people do and how they behave in their roles
and what makes them act in ways that further the achievement of the
objectives of both the organization and themselves. Owing to its
overwhelming contribution to increasing business performance, great
significance has been tagged to employee engagement by senior leadership
across organizations.
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• The tussle for talent and its retention - In the knowledge hungry
environment, it is a growing challenge for every organization to identify
the right hire with appropriate skills and knowledge. There exists a
dearth of knowledge workers, further accentuated by aging workforce
issues across the globe. This scenario causes a major talent tussle in the
human resources market among organizations across industries or globe.
The tussle for talent does not end once the talent is hired, a bigger
challenge faced by organizations today, is retaining this talent in its right
job. Thus, hiring and retaining talent are critical for organizations to
survive and thrive in future. Organizations are beginning to realize the
enormous financial costs of attrition and re-training and increasingly
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• Organizational reputation
• Pay
• Recognition
• Leadership
• Engaging managers
• Employee voice
• Integrity
• The nature of work
• The work environment and culture
• Opportunities for learning and development
Pay: is an important factor that can drive engagement to the extent that a
lack of it may act as an impediment to employee engagement. It is seen as
an important factor to engagement with the organisation to reach the base
level of engagement with the employees. In the times of low pay rises or
none at all and rising prices, it does become an important driver. An article
in Business Standard referred to a study by Aon Hewitt done in 2013,
which showed pay as the number three driver for employee engagement.
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This feeling of being valued translates into employees being engaged with
their work and organization.
Integrity: Most organizations have clearly laid down value system and
behavioral norms. A sense of trust in the minds of people for their
organization is a very big enabler of engagement. This trust is built when
the employees clearly understand the organizational values and do not see
a gap between what is stated and what is practiced. If they experience that
leadership and colleagues live the stated behavioral norms and values,
mistrust can never set in.
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Leadership
• Commitment from the top: The vision, mission and values of employee
engagement must be established with top management commitment as
unless the leadership believes in it, owns it, transfers it down the line, it
will always be viewed as an “another HR thing”. The attempt should be
that employee engagement be an action-oriented meaningful service
from top management rather than a mere lip service.
Integrity
• Build a distinctive corporate culture: Organizations must promote a
strong work culture in which the goals and values of managers are
aligned across all functions as well to the organizational goals and
values. Build a culture of mutual respect by keeping success stories alive
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• Bridging the gap between practiced and laid down organizational values:
Managers across all levels must ensure the organizational values and
norms are well understood and practiced in the manner they are stated.
No disconnect should be allowed to creep in actions and value systems,
particularly by the senior leaders. This ensures an environment of faith
and trust is created in the organization, taking engagement to higher
levels.
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Exhibit 3.3: Ten Tips for Keeping Employees Engaged During Change
1. Plan ahead - We can focus our planning efforts on the people we support--think
about what the change means on an individual level, how you want each person to
feel about the change, their differences in work and communication styles, and
prepare to pull each employee into the vision.
2. Know where you are going - There is nothing more grounding during change
than knowing where you are going, and nothing more reassuring than believing you
can get there. It is our job to articulate the purpose and advocate the change in a
way that is meaningful and actionable at the team and individual level.
4. Set the tone - During times of change, communicate early, communicate with
intent, and communicate often. Influence attitudes and behavior by communicating
confidently and positively. If you are not sold on the change yourself, share your
reservations and set the example for moving toward acceptance.
5. Acknowledge the loss - Change involves loss and we cannot move people
towards change unless we understand and acknowledge what it is they stand to
lose without challenging it. Make time to meet each person and ask them how they
feel about the change; discuss current experiences, pain points and fears.
6. What’s in it for them - Champion the change by building connections between the
goals of the organization and the individual talents and aspirations of those on the
team. If you do not know what your people aspire to, ask them! Find out where
they want to go, and identify opportunities that help them get there.
9. Lean into the dip - Move people towards acceptance of the change by celebrating
small wins and rewarding the successes of the new team. Be proactive and mediate
conflict in ways that embody the new team mindset, and use problem solving as an
opportunity to foster collaboration.
10.Observe and reassess - Be observant and notice what is going on around you,
build feedback loops into the process wherever possible, create dialogue, encourage
team members to share information openly, and listen. Tell them what you can do,
and always do what you say.
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Organizational Reputation
•Strong internal brand communication - In order to retain and engage
employees it is important to build a strong employer brand through the
various good practices, however, this should be backed by strong internal
brand communication and reinforcement. This helps overcome the
tendency of employees to focus on smaller negatives while building an
image of the organization.
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one may ask how much is the organization willing to invest in specific HR
practices designed to encourage engagement, commitment or both.
It must be kept in mind that each individual values different things about
the organization’s work experience and benefits. Hence, while planning an
initiative time must be dedicated to understand the impact on employees
with different life situations—married, single, older, children at home,
childless and so forth. After considering, HR leaders must ensure the
initiative has a net positive for the majority of people. If possible, they may
consider operationalizing several initiatives at once that benefit different
groups, ensuring none feeling disillusioned.
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!
Figure 3.1: Employee Engagement and Productivity
Reduces Absenteeism
Employee engagement has a negative correlation with rates of
absenteeism. Engaged employees display very low absenteeism and are
completely dedicated while they are at work, because they value what they
do and are able to see the significance of their effort in contributing to the
organizational success.
Encourages Retention
Replacing an employee may cost one and a half times the employee salary;
hence, retention has a substantial positive effect on the profitability.
Research confirms that engagement lowers employees’ intention to leave
and hence, engaged employees are less likely to quit their jobs and pursue
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Simply stated, engaged employees are less likely to leave their job. If an
employee has no emotional commitment to their job, there is a greater
chance that they will leave to pursue a job that offers, for example, higher
remuneration or more flexible work conditions. Figure 3.2 shows how high
employee engagement leads to retention.
!
Figure 3.2: Employee Engagement and Retention
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Figure 3.3: Employee Engagement and Customer Loyalty
Profitability
Employee engagement indirectly impacts profitability positively, through
improving retention, customer loyalty and productivity. Various researches
reflect that organization with higher number of engaged employees are
more likely to exceed the industry average of annual growth. Further
research also shows that high performing organizations attract highly
engaged employees.
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Engagement Surveys
Engagement data is generally collected via employee responses to a
survey, usually delivered online. Employees indicate the extent to which
they agree or disagree with the items in the survey.
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Overview
Seven out of the twelve questions relate to the immediate personal contacts of
the respondent in the workplace. Two of the questions relate to alignment – the
relationship of the respondent’s job to the goals of the organization, three
questions highlight the importance of personal development, and three
questions emphasize the need for workers to feel personally valued.
Based on the survey responses, Gallup divides workers into three categories:
engaged, not engaged and actively disengaged. The descriptor for ‘engaged’ is
worth noting as it sets a quite a high benchmark. Engaged workers are deeply
committed to their job and organization. Strongly energized, they exult in using
their individual talent to fulfil the objectives of their organization. They make
suggestions and launch new ideas. They enjoy taking individual responsibility.
They strive constantly to improve their performance. They thrive on strong
relationships with their managers and co-workers. They spread positive energy
to their colleagues.
Source: The Talent Powered Organization: Peter Cheese, Robert J Thomas, and
Elizabeth Craig
A good survey not only helps you determine the levels of engagement/
disengagement of employees but also brings forth the efficacy of the
elements that help drive engagement within the organization. In general,
the following are characteristics of a good survey –
• Short
• Valid and reliable
• Limited flexibility
• Actionable
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(1) Never
(2) Almost Never (a few times a year)
(3) Rarely (once a month or less)
(4) Sometimes (a few times a month)
(5) Often (once a week)
(6) Very often (a few times a week)
(7) Always (everyday)
Area For each of the statement rate how you Rate from
feel 1 to 7
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3.9 CASE
Google
‘Enjoy what you do, where you do it, and the people you do it with.’
“What is it that you really want to do? Your master plan is not just your 5-
year plan. At Google, our strategy is simple: we hire great people and
support them in turning their aspirations into reality. We work hard here,
and play here, and dream here. Googlers are bright, passionate people
with diverse backgrounds, coming together to create a unique culture. One
where the open exchange of ideas is encouraged and thinking beyond the
norm is expected; no matter what position you happen to hold. Working at
Google is as much a mindset as it is a job.”
4. Work and play are not mutually exclusive. It is possible to code and
pass the buck at the same time.
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8. Uniting the world, one user at a time. People in every country and
every language use our products. As such, we think, act, and work
globally – just our little contribution to making the world a better place.
Fortune Magazine and the Great Place to Work Institute named Google in
the 2014 “Best Company to Work For.” This marks their fifth time at the top
of the list.
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3.10 SUMMARY
This chapter attempts to build an understanding of the critical HR concept
“employee engagement”. It briefly introduces the concept and takes us
through its evolution. There has been a thorough attempt to define the
concept, despite there being multiple varying definition with no consensus
on a common definition. The chapter further briefly highlights the different
dimensions of employee engagement. It focuses on the factors influencing
employee engagement such as organizational reputation, leadership, the
work environment, etc. Based on these drivers, the chapter defines the
various employee engagement strategies organizations can execute for
success. The various guidelines to be kept in mind while designing
employee engagement initiatives are also established in this chapter. The
chapter explains through numerous points and examples how high
employee engagement can positively impact business performance. The
significance of measurement is known to all, the chapter explains us why
employee engagement must be measured and it lays down how the
measurement can be done. Finally, through a case study, the chapter
attempts to through greater light on the concept of employee engagement.
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
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Chapter 4
MANAGING DIVERSITY
Objectives
• Understand what are the barriers to diversity management and what will
be the outcomes of ignoring diversity
Structure:
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Defining Diversity
“Diversity refers to differences among people in terms of dimensions such
as age, ethnicity, gender, race, or physical ability.” - Richard Daft (2007)
Why is it when many of us think of diversity, we think of ethnicity and race
first, and then gender? Diversity is a much broader concept. Diversity
means those human attributes that are distinct from our own and out of
the groups to which we belong, yet present in other individuals and groups.
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With the globalization and rise in global companies, the sphere of diversity
management has enlarged. It not only involves managing differences of
workforce within one country or region but also the workforce differences
across countries and regions.
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3. Women at work – There are changes that are happening in the family
dynamics such as structuring of tasks among members, size of the
families, level of education and changing consumption patterns has
increased the number of women active in the working population. In
fact, professions which were erstwhile dominated by males are seeing
women joining in and very much being part of the job market and
critical roles. However, the glass ceiling (Exhibit 4.1) might operate but
attempts are being made to break the glass ceiling for growth of
women.
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!
Figure 4.1: Factors Interplaying to Influence Diversity
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Advantages
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people see the same point with different frames of reference and when
they are put together, they are likely to come out with best solutions to
the issues and problems at hand.
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Disadvantages
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Glass Ceiling: The glass ceiling is an invisible barrier that separates women
from top management positions. They can look up through the ceiling and see
top management, but prevailing attitudes and stereotypes are invisible
obstacles to their own advancement. This barrier also impedes the career
progress of minorities. In addition, women and minorities are often excluded
from informal manager networks and often do not get access to the type of
general and line management experience that is required for moving to the top.
Research suggests the existence of glass walls that serve as invisible barriers to
important lateral movement within the organization. Glass walls, like exclusion
from manager networks, bar experience in areas such as line supervision that
would enable women and minorities to advance vertically. Evidence that the
glass ceiling persists is the distribution of women and minorities, who are
clustered at the bottom levels of the corporate hierarchy. Among minority
groups, women have made the biggest strides in recent years, but they still
represent only 15.7 percent of corporate officers in America’s 500 largest
companies, up from 12.5 per cent in 2000 and 8.7 per cent in 1995. In 2007,
just 7 companies, or 1 per cent, among the Fortune 500 companies had female
CEOs.
Opt-out Trend: Many women are never hitting the glass ceiling because they
choose to get off the fast track long before it comes into view. In recent years,
an ongoing discussion concerns something referred to as the opt-out trend. In
a recent survey of nearly 2,500 women and 653 men, 37 per cent of highly
qualified women report that they voluntarily left the workforce at some point in
their careers, compared to only 24 per cent of similarly qualified men. Quite a
debate rages over the reasons for the larger number of women who drop out of
mainstream careers. Opt-out proponents say women are deciding that
corporate success is not worth the price in terms of reduced family and
personal time, greater stress, and negative health effects. For example, Marge
Magner left her job as CEO of Citigroup’s Consumer Group after suffering both
the death of her mother and a personal life-changing accident in the same year.
Although some women are voluntarily leaving the fast track, many more
genuinely want to move up the corporate ladder but find their paths blocked.
The greatest disadvantages of women leaders stem largely from prejudicial
attitudes and a heavily male-oriented corporate culture. Some years ago, when
Procter & Gamble asked the female executives it considered “regretted
losses” (that is, high performers the company wanted to retain) why they left
their jobs, the most common answer was that they did not feel valued by the
company.
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linking employee incentives and growth to their ability to manage and grow
diversity.
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Source: Article “Over Looking biases: Tech firms hire women and minorities” -
Human Capital, Jan 2015
• If numerous women entering the organization at the lower level are new
mothers, the organization can reevaluate job plans and develop
opportunities for childcare.
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Online training tool helps managers tap into various diversity scenarios
that might occur in the workplace and see how they can manage them in
an appropriate way. In addition to online training, companies may also use
classroom sessions, experiential exercises, videotapes or DVDs, and
outside consulting firms that help organizations with diversity management
issues.
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multicultural teams are preferred and put together, especially where there
is a great need for creativity and innovation in meeting the objectives at
hand. However, it must be kept in mind that such teams are tough to
manage due to high scope for miscommunication and misunderstanding.
However, they have greater difficulty in learning to communicate and
working smoothly, but if effectively managed along with one or more of
other initiatives like diversity awareness training their effectiveness can be
enhanced and might operate at higher productivity than homogeneous
teams
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• Challenge of balancing family and work: Mostly, women are posed with
this challenge. Even today, in most cultures women are expected to
manage the household and take care of their children, despite being in
high pressure jobs. A change in attitudes is happening, however, the
greatest responsibility of the household lies with the women still.
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• Diversity not viewed as priority of the organization: The people may not
see diversity efforts by the organization as contributing towards the
organizational success. Hence, it is not viewed as a priority.
• Efforts on the part of the leadership: This can help overcome the other
barriers by proper communication and management of any change
efforts and perceptions when the people feel threatened. Many times,
leadership efforts may be insufficient.
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The world of work has changed dramatically over the past decade. Companies
are more global and employee groups more diverse than ever before.
Organizational structures are less hierarchical and more collaborative. And
today’s networked offices are full of technological distractions that would have
been unimaginable to the 20th-century manager.
Source: https://hbr.org/2012/01/three-skills-every-21st-century-manager-
needs
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Activity
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…………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………
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4.9 SUMMARY
This chapter begins by explaining the definitions of the three terms –
Diversity, Diversity at Workplace and Diversity management to help us
understand them better. This then highlights the various factors that are
affecting diversity including Globalization, Migration, Women at work,
Increasing value of older population, Political diversity, Different types of
employees, Caste or Racial diversity, Economic payback and Social
responsibility, Legal requirement and Capacity-building strategy. Then the
chapter explains the different characteristics of the diversity management
along with its various advantages and disadvantages. Further covered in
the chapter are the various diversity initiatives such as diversity trainings,
multicultural teams, etc., that organizations undertake to meet their
diversity objectives. Along with the initiatives, we also study the nine best
practices of diversity management. This chapter also explains the
numerous barriers to effectiveness of the diversity management initiatives
and highlights the consequences of ignoring diversity. Then it explains the
critical role of human resources function in diversity management. Finally,
the chapter covers the effects diversity has on individuals and groups.
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REFERENCES
1. Human Resource Management – Gary Dessler.
3. http://adellefrank.com/blog/review-best-practices-managing-
organizational-diversity
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
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MEASURING HRM EFFECTIVENESS
Chapter 5
MEASURING HRM EFFECTIVENESS
Objectives
Structure:
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Definition
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1. What are the activities that are being subjected to the measurement
system?
2. What is the level of criticality for measurement systems in respect of
those transactions?
3. By tracking those activities and transactions, what business outcomes
can be achieved?
4. Is the business manager keen on that measurement?
5. Is it a priority for the HRM or business manager?
6. What is the history of such measurement?
7. On how many occasions in the past, did the business manager need
or use such data?
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• To reflect upon and better the overall climate and health of the
organization.
• To avoid the fads and “flavors of the month” approach within HR and
evaluate whether the new intervention is truly a quality improvement.
• To ensure that employees stay motivated and productive.
• To enhance HR’s image within the organization by linking its contributions
to organizational success.
• To ensure that the HR resources are managed effectively as well as
efficiently.
• To determine the effect of HR activities on people and their performance.
• To understand the impact of people on business performance.
• To bring objectivity in the understanding of HR outcomes.
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Over the years, numerous approaches have developed for measuring the
effectiveness of HR. Some approaches measure the whole of HR; some
measure a part of HR. Some approaches may be less effective while the
others may be more effective. Depending upon the context of organization
and measurement content, the different approaches may be adopted.
However, here we have bifurcated the approaches based on their use and
look at the most commonly used approaches by organizations and the
others not so common ones. We will also study the commonly used
approaches in detail.
HR Auditing
An HR audit is an analytical, investigative and comparative process that is
devised to evaluate the efficacy and efficiency of the HR function. It
involves a systematic research and data analysis that can aid to improve
the HR function. However, it falls short of a valid approach to measuring
the contribution of the HR function.
HR Benchmarking.
Benchmarking refers to comparing key measures representing HR output
with that of organizations seen to be having best practices. It began as a
quality movement, but, now is viewed as a learning process that can help
improve overall HR effectiveness.
Return on Investment.
Return on Investment (ROI) approach to HR measurement involves
comparing the cost of HR initiatives to the financial benefits achieved
through them. The cost of HR initiatives can be easily estimated, however,
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HR Cost Monitoring
Another approach to evaluate HR performance is to monitor HR costs and
compare with benchmark cost data from the industry. Examples of some
HR costs and cost ratios are costs per new hire, training costs per
employee, absenteeism costs, and turnover costs.
Other Approaches
HR Case Studies
Under this approach, any successful HR practice or initiative is recorded of
specific audiences. For example, a report on successful implementation of
new performance management system may be presented to senior
management. Case studies can be spread with minimal expenditure and
are highly significant. Data on HR performance, employee views, or inputs
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Performance rating of
new employees after 6
months
3 Performance Percentage of
and Career employees
Management participating in career
development program
Percentage of
employees who fully
complete their IDPs
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HR Profit Center
Many researcher recommend that HR as a profit Centre approach is the
ultimate for HR effectiveness measurement. This approach means that the
traditional perspective of HR as a cost - center needs to be replaced by a
perspective of HR as an investment that can add to the bottom-line
actually operating as a profit center. The fundamental premise in this is
that the other functions be charged for the services of HR and have the
option to use external services instead of in-house HR services. In this
manner the HR function may be profitable or breakeven, or incur a loss.
Assuming the services are priced on a competitive basis the profit, the
profit represents a financial return on the investment allocated to the HR
function. Though profit center approach is the ultimate objective of many
HR functions, however, it has yet to be successfully applied.
HR Effectiveness Index
Some organizations are trying to build a single composite index of
effectiveness for HR. An early instance of one such an index was developed
and used by the GE in 1950s. This was known as Employee Relations Index
(ERI) and was based on eight indicators identified after a detailed study of
employee behavior. The indicators included were absenteeism, initial
dispensary visits, terminations, grievances, and work stoppages. Post that,
study and development of such an index continues. A comprehensive study
involved 71 organizations across eight industry segments. The index
developed represented a combination of the six measures; and important
correlations were developed between productivity and profit. The main
benefit of this approach is that a single composite index is easy to calculate
and comprehend. Other benefits include usefulness in making inter-
organizational comparisons, in establishing internal control and goal
setting. However, development of such an index is still being researched
and studied.
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HR Audits
The HR Audit is the main tool that most organizations use to measure the
effectiveness and efficiency of their HR functions. HR audits may be
conducted by an external audit agency or in-house teams. The HRM audit
facilitates:
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• Succession planning
• Training and development
• Performance measurement
• HR planning
• Compensation and benefits
• HR communication
• Special management projects
• Human resource information systems
• Relationship management or employee relations
These are the wide range of topics of major interest pertaining to HRM
practices in any organization and questions on each of these factors must
be very carefully prepared either by the interviewer or by the audit team.
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Audit Reports
Audit report is detailed elucidation of HR processes and practices
containing both acclamation for effective processes and practices and
suggestions for the improvement areas. The idea of giving credit and
discredit in the audit is a balanced approach ensuring greater acceptance
of the analysis and recommendations. There are various sections in the
audit report. These include –
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Benchmarking
Benchmarking is the process of an organization comparing its key metrics
of performance with those of other comparative organizations. It forms
another approach to assessing HR performance and is an important
methodology for bringing about quality improvements in processes. This
approach allows the organization to learn and adapt ‘the best’ practices in
the functional area by the process of comparison of its performance on
specific activities with those in ‘best practice’ organizations. The
benchmarking process is increasingly being seen as very critical for
survival. However, it is not about just imitating, as each organization is
different from the other and the best practice may be directly applicable to
all organizations. Hence, the words of caution lies in “adapt” and not adopt
and to understand the real basis behind each practice and adjust it
according to specific needs of the organization and them implement.
Advantage of Benchmarking
Benchmarking can be seen as a way for an organization to become
competitive. By looking at what other comparative organizations are dong,
they can identify own areas of improvement. This approach also provides
the ways of improvement for the reorganization, with limited effort and
without reinventing the wheel. The change process gets accelerated with
help of available best practices models from similar companies within their
industry guiding the change process
Benchmarking Process
Listed below are the seven essential phases in benchmarking process –
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2. Collecting data - Data is collected during and after the launch of the
HR initiative using various methods such as survey questionnaires,
interviews, focus groups etc.
The ROI formula uses the net benefits of the HR initiative divided by the
costs. The formula is:
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This shows, for every Rs. 1 of cost Rs. 2 was returned as monetary
benefits.
This shows, for every Rs. 1 of cost Rs. 1 was returned as net monetary
benefits, after covering the investment cost.
Thus, it can be seen that both BCR and ROI provide similar information
with slightly different angles.
For short-term initiatives, benefits are calculated over one year, while for
long-term initiatives the benefits are spread over several years. This
duration must be determined during the planning phase.
Standards–Guiding Principles
To ensure consistency in measurement, standard processes and operating
procedures must be implemented. Outlined in the exhibit 5.4 these guiding
principles make sure that a proper conservative approach is taken and the
principles build credibility and support among senior management who
evaluate the outcomes.
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Source: Proving the Value of HR: How and Why to Measure ROI, 2nd edition,
Jack J. Phillips and Patricia Pulliam Phillips
Application
A speedy application is very critical during any change or new process in
order to utilize optimally what has been learnt.
Implementation
For any tool to be successful, it must be appropriately utilized and
internalized within HR function. Any change tends to receive realistic or
perceived barriers from the key stakeholders and hence, must be dealt
with to overcome any resistance and successful implementation of change.
Implementation includes assigning responsibilities, developing requisite
skills, and building plans and setting goals. It also includes readying the
environment, team members, and support for such comprehensive
analysis. The challenge in implementation is that HR managers tend to
view ROI as an individual performance assessment rather than a process
improvement tool and hence, be unsupportive and vary of this approach. A
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Besides the factors mentioned above that drive the selection of the
approach to measurement, it must be kept in mind the main three types of
information which organization’s necessarily requires from HR, which will
also drive any measurement of HR function
!
Figure 5.1: Essential Information from HR
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5.6 HR SCORECARD
On the lines of a balanced scorecard for business the HR scorecard has
been developed. HR scorecard is a mechanism to describe and assess the
value of people and people management systems are created within the
organizations and a mechanism to communicate key organizational goals
to the employees. This is an HR measurement system based on
organizational strategy and the capabilities and the behaviors of the
employees needed to implement that strategy. The scorecard provides
quick and instant feedback about the HR function’s performance The HR
scorecard includes the key HR measures as defined in the HR strategy and
the business strategy. Thus, organizational strategy defines the main
priorities for Human Resource.
The HR Scorecard has five key elements as indicated by Brian Becker &
Dave Ulrich (2001)
• The first element is what they called Workforce Success. It asks: Has the
workforce accomplished the key strategic objectives for the business?
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• The second element is what they called Right HR Costs. It asks: Is our
total investment in the workforce (not just the HR function) appropriate
(not just minimized)?
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Activity
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5.8 SUMMARY
This chapter begins by defining the word measurement and then connects
it to HRM explaining what is meant when we say measuring HR
effectiveness. It further explains the significance of measuring HRM
effectiveness as well as the objectives an HR measurement should have.
Then the different approaches to measuring HRM are highlighted, which
include the commonly used and other not so commonly used approaches.
The commonly used approaches include HR audit, Benchmarking, HR cost
monitoring and ROI approach while the other approaches include HR MBO
approach, employee attitude surveys, HR Case studies, HR Profit centre,
Human Capital Measurement, HR KPIs and HR Effectiveness Index. Then
the chapter explains the processes in detail of the commonly used
approaches. It also provides us various parameters that help in
determining which approach to be selected while measuring HR
effectiveness. Also, highlights the significance of HR measurement as part
of the overall business balanced scorecard. The chapter further focuses on
the concept of HR scorecard as an ultimate measurement tool for HR
effectiveness. Finally, the chapter brings out the various challenges
associated with the measurement of HR effectiveness.
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4. According to, Brian Becker & Dave Ulrich (2001), which one of the
following does not form a part of the five elements of HR scorecard?
(a) Right Manager
(b) Right HR professionals
(c) Right HR costs
(d) Right Practices
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REFERENCES
1. Human Resource Management – Gary Dessler.
3. Proving the Value of HR: How and Why to Measure ROI – Jack J. Phillips
and Patricia Pulliam Phillips.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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FOUNDATION AND UNDERSTANDING OF EMPLOYEE BEHAVIOR
CHAPTER 6
FOUNDATION AND UNDERSTANDING OF
EMPLOYEE BEHAVIOR
Objectives
Structure:
6.1 Introduction
6.2 Biographical Characteristics and Abilities
6.3 Emotions and Moods
6.4 Personality and Values
6.5 Learning
6.6 Attitudes and Job satisfaction
6.7 Perception and Individual Decision Making
6.8 Summary
6.9 Self Assessment Questions
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6.1 INTRODUCTION
Age
Age of an individual affects behavior at work. The aspects of behavior that
gets impacted by age includes job performance, flexibility, judgement,
work ethics, level of commitment, absenteeism, productivity and job
satisfaction. Job performance, flexibility, absenteeism and productivity are
viewed to decline with age. Judgement, work ethics, level of commitment
and job satisfaction are seen to improve with age. However, these are
general trends pertaining to age and may not reflect individual cases.
Gender
There are not too many key differences between men and women. Those
that get affected include problem solving, analytical skills, competitive
drive, motivation, sociability and learnability. Further, it is also seen that
women tend to confirm to authority much easily than men and men are
more aggressive with a higher expectation to succeed compared to women.
As regards absenteeism and preference for flexibility in work schedule,
women score higher than men.
Tenure
The tenure of individual impacts the work-related behaviors like
absenteeism, productivity, and turnover and job satisfaction. Job
productivity and job satisfaction have positive relationship with tenure
while absenteeism and turnover are negatively related to tenure. Further,
no concrete link has been found between job performance and tenure.
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Abilities
Ability can be defined as a person’s capacity to perform the various tasks in
a job. Abilities comprise of two factors –
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The closer any two emotions are to each other on this succession, they are
more likely to be confused with each other. This implies that sometimes
happiness might be mistaken for surprise, being next to each other in the
succession. However, happiness can rarely be confused for disgust, being
extremely far from each other.
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• Personality Traits
• Timing
• Stress levels
• Social activities
• Quality of Sleep
• Workout
• Age
• Gender
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• Workout - Some workout daily does impact moods, however the impact
is not very powerful. It does increase positive mood for particularly those
depressed.
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positive moods last longer for older people, and even their bad moods
fade away quickly.
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Emotional Intelligence
“Emotional intelligence is the ability to perceive emotions, to access and
generate emotions so as to assist thought, to understand emotions and
emotional knowledge, and to reflectively regulate emotions so as to
promote emotional and intellectual growth.” - Mayer & Salovey, 1997
Positives of EI
• EI has an intuitive appeal
• EI can predict parameters that make a difference
• EI is biologically based
Negatives of EI
• Absence of a common agreeable definition
• Measurement is difficult
• Seen as personality with a new name
Emotion Regulation
Emotion regulation is to identify and modify the emotions you feel and
thereby, moods. Some example of activities that help in emotion regulation
- change your emotions include
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stressful day at work people have trouble relaxing after they get off
work, however, it has been observed that the effect of work on mood
generally wears out by next day.
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Measuring Personality
The main reason for measuring personality is that various studies have
proved that a number of personality tests are beneficial in hiring decisions
and predicting right fit for the job. The two most commonly used modes of
measuring personality are –
• Self-report surveys involve self-assessment of individuals on various
parameters.
• Observer-ratings surveys involve an independent evaluation of an
individual’s personality by another observer such as co-worker, manager,
interviewer, etc.
In case of hiring or promotion decisions, both these modes are generally
used.
Personality Determinants
Various studies have revealed that an individual’s personality maybe a
result of heredity or of environment or both. Let us look at heredity more
closely.
Heredity
This refers to the genetic transmission of attributes from parent to
offspring. These attributes maybe physical, physiological and psychological.
The heredity approach states that the fundamental elucidation of an
individual’s personality is the molecular construct of the genes. When an
attribute is displayed in majority of the situations, they become the
personality traits of the individuals. One of the famous approaches
identifying and classifying primary traits that govern behaviors are the
Myers-Briggs Type Indicator.
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Risk Taking – The act of doing something that involves taking chances in
order to achieve a goal. This determines the time and information people
take to make a decision. High risk taking people tend to make more rapid
decisions and use less information than did the low risk takers.
Values
Values are our fundamental beliefs or principles we use to define the mode
of conduct or a state of existence that is right, good and just. Values have
two attributes - content and intensity.
• The content attribute defines whether a mode of conduct or end-state of
existence is significant.
• The intensity attribute specifies level of this significance
The hierarchy of values, bases the content and intensity attributes form our
value system. A major part of the values, individuals hold is established in
the early years—by parents, teachers, friends, and others.
Significance of Values
Values lay the basis of people’s comprehension of other’s attitudes and
behaviors and influence their views about them. When people join
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Classification of Values
Values can be classified into Terminal and Instrumental Values -
• Terminal Values are desirable states of existence and signify the life
objectives of a person to be achieved through his or her behavior.
Terminal Values include things like happiness, self-respect, family
security, recognition, freedom, comfortable life, professional excellence,
etc.
• Instrumental Values are core values, permanent in nature, comprise
personal traits, signify preferable modes of behavior, and include values
like honesty, ambition, sincerity, independence, imaginativeness,
courageousness, competitiveness, etc.
6.5 Learning
Learning is defined as a relatively permanent transformation in behavior
(or behavioral tendency) occurring owing to individual’s interaction with his
or her environment.
It is a powerful incentive for many employees to continue in their
organizations. Learning tends to impact individual behavior significantly by
influencing abilities, role perceptions, motivation and knowledge. Learning
can also be referred to as modification of behavior through practice,
training, or experience.
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Torrington et al., (2005) stated that there are a number of ways people
learn and outlined the following as some of the effective means of work-
related learning techniques:
• Action learning
• Coaching
• Mentoring
• Peer relationships
• Learning logs.
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the way they adopt to pursue and how these plans are modified by
experience.
Attitude Components
There are three components of attitude –
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Job Satisfaction describes how content or satisfied employees are with their
jobs. Bases their assessment of it features, a person with a high level of
job satisfaction holds positive feelings about his or her job, while a person
with a low level holds negative feelings. Two approaches may be used to
measure job satisfaction. The single global rating that is a response to one
question. The second approach is a combination of several aspects of the
job like pay, supervision, etc., to give an overall job satisfaction score. The
numerous causes of satisfaction include enjoying the work or team
members, ample training and variety or the salary and benefits.
Job Involvement - The degree to which an employee is engaged in and
enthusiastic about performing their work. High level of job involvement
among people leads to lower absenteeism and turnover.
Perception
Oxford dictionary defines perception as “the ability to see, hear,
or become aware of something through the senses” or as “an intuitive
understanding and insight”.
“Perception is a process by which individuals organize and interpret their
sensory impressions in order to give meaning to their environment.
However, what we perceive can be substantially different from objective
reality”– Stephen P. Robbins
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!
Figure 6.1: Factors affecting Perception
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• Mental Ability - People with higher mental ability though are expected to
be less susceptible to common decision errors, they fall prey to
anchoring, overconfidence, and escalation of commitment. However, once
warned about errors, they learn quickly to avoid them. .
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Activity
During an interview process, an interviewer is meeting 6 to 7 candidates
one after another without any gap in between two candidates. What kind of
perception error is he likely to make in such a situation? Explain why?
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6.8 SUMMARY
This chapter deals with the foundation of individual behavior and the
various factors that affect it. It focuses on understanding individual
behaviors as employees within an organizational set-up. The chapter
highlights how biographical characteristics and human abilities shape
individual behavior. It further explains the effect of emotions, moods and
the related concept of emotional intelligence on the employee behavior. In
addition, the chapter focuses on the individual personality shaping their
behaviors. Individual learning ways impact their action is shown the
chapter. It also explains how attitudes and values manifest themselves as
individual behavioral outcomes, particularly at workplaces. Finally, the
chapter talks about the individual perception, how they are formed and
how they result in actions on part of people. It highlights how perception
and individual decision making are related to each other.
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REEFERNCE
8. www.myersbriggs.org/my-mbti-personality-type/mbti-basics/
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 7
EMPLOYEE MOTIVATION
Objectives
Structure:
7.6 Summary
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“The forces within us that activate our behavior and direct it towards one
goal rather than another.” – Phares and Chaplin (1997)
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Intrinsic Motivation
Intrinsic motivation means that the motivational triggers lie within the
individual. An individual performs the task and gives it due vigor, direction
and diligence since its outcomes would be in line with his or her self-belief
or satisfies an intrinsic need. Thus, it can be said that intrinsic motivation
reflects the want to do something because it is enjoyable. If one were
intrinsically motivated, he or she would not seek out external rewards such
as praise or awards and perform the task for its own sake.
Extrinsic Motivation
Extrinsic motivation means that the motivational triggers lie outside of the
individual. An individual performs the task and gives it due vigor, direction
and diligence since its outcomes would be in line with desires controlled by
an external source or satisfy an extrinsic need. It is important to note that
though the trigger is external but the outcome will still be rewarding for the
individual. Thus, it can be said that extrinsic motivation reflects the want to
do something because of external rewards such as awards, money, and
praise. If one is extrinsically motivated he or she may not enjoy the task
but is engaged in it to earn some external reward or avoid some
punishment.
Thus, we can say that extrinsic motivation is external in nature and the
best known and the most controversial motivation is money. Given below
are some examples:-
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Many believe that intrinsic motivation is better than extrinsic. This can be
because nothing can be more ideal than being self-motivated towards a
task that arises due to internal factors only. On the workplace, such people
require very little supervision to get work done. Also seen that, intrinsically
motivated individuals tend be on time, and are more likely to excel in their
work. Thus managers, seek to increase intrinsic motivation, which can be
achieved by greater autonomy, fun at work and encouraging creativity.
However, it may not always be the case that intrinsic motivation is the
best, even though it is preferable. In scenarios, where the task is critical to
be done and the expert may not have intrinsic motivation to do it, a strong
extrinsic reward may be necessary to get the task done. Thus, extrinsic
motivation may be useful in certain circumstances -
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He states that though none of the needs is ever fully satisfied but a
substantially satisfied need may no longer motivate. As each need
becomes substantially gratified, the higher one becomes dominant.
According to Maslow, in order to motivate a person, one must figure out at
what level of hierarchy the person is presently and focus on satisfying
needs at or above that level, and ultimately moving up the hierarchy.
Further as per Maslow the five needs may be classified into higher and
lower orders. Lower order needs are starting needs including physiological
and safety needs. Higher order needs include social, esteem, and self-
actualization. Figure 7.1 depicts the Maslow’s Hierarchy of needs.
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!
Figure 7.1 Maslow’s Hierarchy of Needs
The theory states that higher-order needs are internally satisfied (within
the person), while lower-order needs are mainly externally satisfied
(through salary, goods and tenure). Accordingly, knowing at what need the
individual is helps in understanding what factors can motivate him/her to
perform.
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Theory Y - Under this theory, managers believe people are able to see their
work as being as natural as play or rest, and hence, an average person can
learn to take responsibility.
Two-Factor Theory
This theory has been proposed and formulated by Frederick Herzberg and
is called Motivation-Hygiene Theory. Herzberg believed that an individual’s
relation to work is basic, and that attitude toward work decides success or
failure. During his study, he asked individuals to describe situations when
they felt exceptionally good or exceptionally bad about their work. Because
of the significantly different responses, Herzberg understood that
dissatisfaction may not be the opposite of satisfaction and eliminating
dissatisfying features from a job does not necessarily make it satisfying. He
found that intrinsic factors such as advancement, recognition,
responsibility, and achievement to be related to job satisfaction since
respondents who felt good about their work tended to attribute these
factors to themselves, while dissatisfied respondents tended to attribute it
to extrinsic factors, such as supervision, pay, company policies, and
working conditions.
• Hygiene factors – When these factors are sufficient people will be neither
dissatisfied nor satisfied but will not be motivated on the job. These
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• Motivating factors – When these factors are provided in the job people
feel intrinsically rewarded and hence motivated on the job. These factors
are associated with work itself or outcomes derived from it such as
promotional opportunities, personal growth opportunities, recognition,
responsibility, and achievement.
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McClelland’s theory had the best research support among the early
theories. However, it had limited practical use as McClelland had argued
that these three needs are subconscious and may not be easy to measure.
• Self-determination Theory
• Job Engagement
• Goal-setting Theory
• Self-efficacy Theory
• Equity Theory
• Interactional Justice
• Expectancy Theory
Self-determination Theory
This theory proposes that individuals prefer that they have control over
their actions, hence, any task undertaken by own choice will be more
motivating than a task imposed upon them. Self-determination theory
draws focus from cognitive evaluation theory, which hypothesizes that
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Further, this theory also proposes that along with being driven by a need
for autonomy, people look for ways to achieve competence and positive
connections with others.
Job Engagement
Job engagement would mean the investment of individual’s physical,
cognitive and emotional energies into job performance. Most managers are
realizing that something deeper than merely liking or finding a job
interesting, drives performance. For over 30 years, the Gallup organization
has been using 12 questions to assess link of employee engagement to
positive work outcomes. Various studies have found that a highly
successful organization would have far larger number of engaged
employees than an averagely successful organization. Further, groups with
more engaged employees have higher productivity levels and lower safety
incidents and turnover.
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Goal-setting Theory
In the late 1960s, Edwin Locke proposed the goal-setting theory that
states that the intentions to work toward a goal form a major source of
work motivation. This implies that goals aid an individual, determine what
is to be done and how much effort is required. This means specific, difficult
and accepted goals backed by feedback, drive performance -
focus.
❖ Difficult goals energize us as hard work is required to attain them
❖ Difficult goals result in higher persistence to achieve them
❖ Challenging goals drive to find strategies that help perform more
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• Goal Commitment
• Task Characteristics
• National Culture
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!
Figure 7.2 Edwin Locke’s Goal Setting Theory
S – Specific
M – Measurable
A – Achievable
R – Relevant
T – Time bound
There are various other terms used for each of the letters by different scholars,
however, these are the most common.
Source: Various
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Self-efficacy Theory
This theory is also known as social cognitive theory or social learning
theory and was developed by Albert Bandura. Self-efficacy means a
person’s belief about himself being capable of carrying out a task. The
higher one’s self-efficacy, the greater the confidence one has in one’s
ability to succeed. Hence, in tough situations, individuals having low self-
efficacy tend to reduce their efforts or completely give up and those with
high self-efficacy attempt harder to complete the challenge at hand. Self-
efficacy creates a positive spiral where high efficacy leads to increased
engagement and performance and in turn further increases in efficacy.
People with high self-efficacy tend to increase effort and motivation post
negative feedback whereas those with low self-efficacy tend to reduce their
effort.
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Equity Theory
This theory is about equity and motivation and was proposed by J. Stacy
Adams. The theory states that people tend to compare their job rewards
with their inputs and arrive at an outcome-input ratio which they assessed
with respect to similar others in the system. If this ratio is equal to that of
others, a state of equilibrium or equity is perceived. A dissonance arises
when the ratio is unequal, the form of anger when perceived undervalued
and guilt when perceived as overvalued. Adams proposed that this
negative state of dissonance motivates people to act to eliminate it and set
in equity. This can get more complex by the reference of comparisons the
people choose. As per the theory, there can be four referent comparisons:
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• Change inputs
• Change outcomes
• Distort perceptions of self
• Distort perceptions of others
• Choose a different referent
• Leave the field
One of the major concern with equity theory is that not all inequities lead
to motivation to act. These would be cases of a favorable inequity
perceived by a person or a case of a tolerant person unaffected by
unfavorable inequity.
Interactional Justice
Interactional justice describes a person’s view of the level to which he or
she is treated with dignity, concern, and respect. When individuals feel
treated in an unfair way, they tend to get back in hostile manner. Evidence
suggests that people’s view of injustice is more closely related to their
managers since they relate interactional justice or injustice to the
conveyor. There are three forms of justice- Interactional, Distributive and
Procedural. Distributive justice that is mostly related to satisfaction and
commitment of organization with outcomes like salary. Then, Procedural
justice which relates mostly to job satisfaction, employee trust, withdrawal
from the organization, job performance, and citizenship behaviors.
However, there is least evidence for interactional justice.
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Expectancy Theory
This theory is developed by Victor Vroom and it argues that the strength of
our tendency to act in a certain way depends on the strength of our
expectation of a given outcome and its attractiveness. Practically, it means
that people tend to be motivated for exerting high level of effort only when
they expect it will result in good appraisal leading to rewards such as
increments, elevation, bonuses, etc. These rewards in turn will satisfy their
personal goals. This theory involves three relationships
!
Figure 7.3: Expectancy Theory
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Expectancy theory can help understand the reason behind they many
employees are not motivated and put the minimum efforts to get by. To
understand better we look at the theory’s three relationships as questions
people need to respond positively for their motivation to be maximized.
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and skill-based pay. Why? Because it is one thing to know specific theories,
it is quite another to see how, as a manager, you can use them.
According to JCM, any job can be described in terms of five core job
dimensions:
The first three dimensions—skill variety, task identity, and task significance
—together form a meaningful work an individual will perceive as important,
valuable, and worthwhile. All dimensions can be combined into a single
predictive index, called the motivating potential scores (MPS), and
calculated as follows:
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The greater the presence of these three psychological states, the higher
will be people’ motivation, performance, and satisfaction, and lowered will
be absenteeism and attrition. The work with high autonomy gives people a
sense of personal responsibility towards results and with feedback, people
will know their effectiveness on the job. We can see from the formula, that
for any work to be high on MPS, it may be higher on minimum one of the
first three dimensions of meaningful work but must be high on autonomy
and feedback both. Ultimately, this model proposes that if jobs have high
score on MPS, performance and satisfaction will improve and consequently
absenteeism and turnover will reduce.
Job Rotation
To avoid excessive routinisation of work people may be shifted from one
task to other requiring similar skills and at the similar organizational level.
This is termed as job rotation. This aids in reducing boredom, enhancing
motivation, and building employee understanding of their work contribution
to the organizational goals.
Job Enrichment
This refers to enriching jobs by increasing the level to which the people can
control the planning, execution, and evaluation of their work. An enriched
job allows people carry out activities holistically, increase autonomy and
responsibility, and provides feedback self-improvement. Based on JCM, a
few guidelines are provided for enriching jobs. Combining tasks that put
together smaller tasks back to create a different and bigger work module.
Establishing customer relationships improves the direct relationships
between employees and their customers (internal or external). Vertically
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expanding jobs provides people with responsibility and control not formerly
available.
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Participative Management
It is a joint decision making program where employees possess a
significant amount of decision making authority along with their managers.
Many times, it is used to boost morale and productivity in the teams, but it
will motivate employees only if they are involved in decisions that are for
their interests. Participative management also needs employees to have
the requisite competence and knowledge for making a fruitful contribution
to decision making and there must be trust and confidence among all
involved. With participative management, organizations may have higher
stock returns, lower turnover rates, higher productivity, etc., and
individuals may experience an impact on their productivity, motivation, and
job satisfaction. Evidence shows such effects on organizations and
individuals to be not very significant, hence, it cannot be said a sure way
for performance improvement.
Representative Participation
The objective of this is to redistribute power within an organization;
ensuring employees get an equal footing through a representation of a
small group of employees in decision making processes. The two most
common forms are Works Councils and Board Representatives. Works
Councils are groups of nominated or elected employees who must be
consulted when management makes decisions about employees. Board
Representatives are employees who sit on a company’s board of directors
and represent employees’ interests. Evidence suggests very little efficacy
of representative management in increasing motivation and thereby
organizational performance.
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Activity
1. A woman, who has recently joined back after maternity leave, is facing
issues managing her work timings in office due to pressures of childcare
and her work. This is affecting her work productivity and is demotivating
her. She is contemplating quitting her job to meet her family needs and
has a discussion with her manager regarding the same. Suggest what
would be the most appropriate way to motivate and retain this
employee.
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7.6 SUMMARY
The chapter explains the concept of people motivation, particularly,
focusing on workplace and employee motivation. Further, classifies
motivation into intrinsic and extrinsic motivation that helps understand
individuals better. It also explains which of the two types of motivation may
be useful when. The chapter then explains the different theories of
motivation. The chapter classifies motivation theories into early theories
and contemporary theories. The early theories include Hierarchy of Needs
Theory, Theory X and Theory Y,-Factor Theory and McClelland’s Theory of
Needs. The contemporary theories include Self-Determination Theory, Job
Engagement, Goal-setting Theory, Self-Efficacy Theory, Equity Theory,
Interactional Justice and Expectancy Theory. Finally, the chapter highlights
the various application of employee motivation in the organizational
context. It explains how employees can be motivated using motivations
through Job design, through employee involvement and through use of
salary.
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1. “An employee working late in office to impress his manager and receive
the recognition for most hard working employee.” This is an example of
which type of motivation?
(a) Intrinsic
(b) Extrinsic
(c) Both
(d) Neither
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REFERENCES
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23.A Theory of Goal Setting & Task Performance – Edwin A. Locke, Gary P.
Latham.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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FOUNDATION AND UNDERSTANDING OF EMPLOYEE TEAMS
CHAPTER 8
FOUNDATION AND UNDERSTANDING OF
EMPLOYEE TEAMS
Objectives
Structure:
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• Forming – This being the first stage, there is high degree of uncertainty
regarding goals, design, and leadership of the group. Group members
are “testing the waters” to find out what behavior is acceptable and what
is not. The stage will be complete when members feel part of the group.
• Storming – This is a stage of conflict within the group since members
accept the group’s formation but tend to resist the restraints it poses on
their individual identities. In addition, there exists a conflict on the
leadership of the group. The stage will be complete with a formation of a
leadership hierarchy in the group.
• Norming – This is the stage when group experiences cohesiveness and
close relationships are formed along with a deep bond and sense of
group identity. The stage is complete with the structure crystallizing and
common expectations being set regarding appropriate member
behaviors.
• Performing – This is the stage when the group structure is operational
and accepted. The energy of the group shifted towards task performance
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from understanding and familiarizing with each other. This would be the
final stage for permanent groups.
!
Figure 8.1: Stages of Group Development
Group Properties
Some of the key properties of the groups are - roles, norms, status, size,
cohesiveness and diversity.
Group Roles
This refers to group of expected behaviors from an individual in a given
position in a group. People play different roles in different groups. Given
below are various dimensions of group role.
• Role Expectations - Refer to way others view about how one should
behave in a given situation. At work, role expectations are defined
through psychological contract (an unwritten agreement that exists
between employees and employer). It lays down expectations of
management from employees and vice versa. If the expectations are not
met, it may result in low performance and satisfaction.
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Group Norms
Groups have fixed norms that refer to agreed behavioral principles among
members that convey what they can and cannot to do in given situations.
They affect individual behavior with limited external controls, once
members have agreed and accepted them. Norms vary from group to
group and can cover any facet of group behavior. Performance norm is one
of the most common norm that lays down clear indications about level of
hard work, level of output, ways of doing the tasks etc. Other norms
include appearance norms (such as dress codes), social arrangement
norms (such as whom to have lunch with), and resource allocation norms
(such as distribution of resources like equipment, salary etc.).
Conformity - Any group member wants acceptance from the group hence,
tends to conform to the group norms. Individuals experience immense
pressure to transform their attitudes and behaviors in order to conform to
the norms. The key reasons for conformity include need for accurate view
of reality as per group consensus, developing a meaningful social
relationship and maintaining a favorable self-perception. People do not
conform to the pressures of norms from all the groups they are part of.
They tend to conform to the important groups. This clearly implies that all
groups impose different conformity pressures.
Group Status
This a socially defined position or rank assigned to groups or group
members by others and is a major motivator. It can result in significant
behavioral outcomes when people view difference between their perception
of their status and others perception of their status.
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Status and Norms - Status tend to impact the power of norms and
conformity pressures. High-status tends to provide greater freedom to
deviate from norms than low status. Individuals with high-status are better
able to resist conformity pressures, need not care about the group’s social
rewards and enjoy greater freedom as long as their actions are not majorly
harmful to the group.
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Group Size
Group size tends to affect group behavior but the impact depends on
dependent variables in consideration. Smaller groups tend to be good in
quick completion of task and encourage individuals to perform better, while
larger groups score better in problem solving. Hence, if the group goal is
fact finding, then a larger group (approximately size of 12 or more
members) will generate better outcomes, whereas a smaller group
(approximately 7 members) might utilize these facts into a productivity
output more effectively.
Social Loafing is the inclination of people to put lower effort while working
jointly than alone. This is a major concern regarding the size of the group
and it goes against the assumption that the group productivity must be at
least equal to the sum of the individual productivities. In the late 1920s, a
German psychologist Max Ringelmann compared the outcomes of individual
and group performance on a rope-pulling task. He found that though group
performance increases with group size, but the adding more members has
diminishing returns on productivity. Hence, larger group size, say of 5, may
be more productive than a group of four, but the individual productivity of
each member declines moving from four to five members. One of the
causes for social loafing could be the belief that others are not doing their
fair share and one reinstates equity by decreasing ones effort. Another
cause could be is the spreading of responsibility that means since group
outcomes cannot be attributed to any one person, the link between an
individual’s input and the group’s output is unclear. People tend become
free riders and rely on overall group efforts.
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Group Cohesiveness
Different groups have different levels of cohesiveness, i.e., the extent to
which members are attracted to one another and motivated to be part of
the group. High cohesiveness could be due to members having spent large
amount of time together, the small size fosters high interaction, or some
common external threats brought members close. Cohesiveness impacts
group productivity and relation between the two depends on group’s
performance norms. High performance norms and high cohesiveness leads
to higher productivity than in low cohesiveness. However, with high
cohesiveness but low performance norms, productivity will be low. When
both cohesiveness and performance norms are low, productivity is in the
low-to-moderate range.
Group Diversity
Group members are similar or dissimilar to each other to the extent. Group
diversity could be due to various factors age, ethnicity, gender, culture etc.
It could be both beneficial and detrimental to the group. Diversity may
increase group conflict, especially in the forming stage. However, if the
members are able to iron out their short-term differences, diversity
enhances creativity in the group. In addition, though groups where values
or views of members differ, a conflict may arise but a strong leader
focusing on group task and encouraging learning can reduce this conflict.
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From the above pros and cons, we can figure out that group decision
making scores high on effectiveness but low on efficiency. Hence, while
decision making organizations need to keep the trade-off in mind.
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The main strength of the nominal group technique is that it allows a formal
group interaction yet does not constrain individual thinking and tends to
make up for the drawback of brainstorming.
Work group is a group that connects mainly to share information and make
decisions in order to help each member perform within his or her
respective area of responsibility. The members of these groups may have
different goals to achieve and need not engage in joint work requiring
combined effort. Hence, the performance is a simple addition of individual
contributions with no positive synergy.
Work team is a group that connects to perform and achieve a common goal
through a collaborative effort. This coordinated effort generates positive
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This positive synergy is the very reason why organizations extensively use
work teams to build a potential to generate larger outputs with zero
increase in inputs.
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• Common Plan and Purpose - Establishing the shared mission and plan
is key to the effectiveness of a team. Thus, members of effective team
tend to devote time and energies towards arriving at a shared plan and
purpose, giving them a sense of direction, guiding them towards the
common objective under all circumstances. Effective teams tend to be
strong in their review mechanisms and they make necessary adjustments
in their plans with changing situations
• SMART Goals - Effective teams must set SMART goals for themselves.
SMART implies specific, measurable, achievable, and relevant and time
bound. Such goals ensure clear communication and help maintain focus
on results. .
• Team Conflicts - Contrary to the belief not all conflicts in a team are
necessarily undesirable and it is seen that conflict and team performance
have a complex relationship. Though relationship conflicts (interpersonal
incompatibilities) may be dysfunctional, however, task conflicts
(disagreements in task content) tend to be productive by stimulating
discussions, critical evaluation of alternatives and better decisions. It can
be said that neither too much nor too little conflict is desirable for a
team’s performance. Resolution of team conflicts helps to differentiate
between effective and ineffective teams. In case of effective teams,
resolution is based on discussions of concerned issues, while ineffective
teams tend to focus on individual personalities and mannerisms.
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Functions of Communication
Functions of communication within a team are given below. Almost every
group communication performs one or more of these functions.
• Control of member behaviors - E.g., Formal guidelines employees are
required to follow in terms of job descriptions, company policies, etc.
• Motivation - By setting SMART goals, continuous feedbacks and
rewarding desirable behaviors, motivation is stimulated
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Communication Process
The figure 8.2 Below depicts the common communication process. The
main parts of this process are
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!
Figure 8.2: The Process of Communication
Communication Direction
Depending upon the directing of flow the communication may flow
vertically or horizontally. Further, vertical communication maybe upward or
downward.
Vertical Communication
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Horizontal Communication
Communication happening among same work team members, peer groups,
or any other laterally equivalent employees is termed as horizontal
communication. Such communication saves time, facilitates coordination,
and may be formally sanctioned when there is need to circumvent
hierarchy and speeden the actions.
Interpersonal Communication
In order to transfer meaning among themselves, group members mainly
depend on the given three forms of interpersonal communications - oral,
written, and non-verbal communication.
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Electronic Communications
It has become an indispensable and primary mode of communication in
organizations and includes e-mail, text messaging, social networking,
blogs, and video conferencing.
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Instant Messaging (IM) and Text Messaging (TM) - IM and TM may take
place in real time or use portable communication devices like handphones
etc. They are preferable for one- or two-line messages that would just
clutter up an e-mail inbox. As a disadvantage, users find this technology
intrusive and distracting while at work. In addition, because such messages
can be interfered with easily, there is a concern about the security of IM
and TM. Further, informality of such messaging may not be appropriate for
business communication.
Social Networking - Communication highly advanced with the rise of social
networking sites like Facebook and LinkedIn. Any social networking site has
millions of active users and is actually composed of separate networks
based on schools, companies, or regions. In an attempt maintain control
over people’s use of social networking for professional purposes, many
organizations have developed their own in-house social networking
applications as well. For effective use of social network must one avoid
annoying the contacts by every day or weekly unimportant items and also
keep in mind that prospective employer might view the social networking
profiles.
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Others may not be rich and possess these factors. Face-to-face interactions
score highest in channel richness being strong on all three factors whereas
Impersonal written communication score the lowest. However, the choice
of channel depends o the type of message. Routine messages being
straightforward having low ambiguity can be carried by low richness
channels efficiently while non-routine complicated messages will require
channel high in richness.
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Trait Theories
Various strong leaders from past such Buddha, Napoleon, Mahatma
Gandhi, etc., are generally described in terms of their traits. Consequently,
Trait theories of leadership focus on personal qualities and characteristics.
A number of studies and analyses confirm that most leaders are different
and the specific traits that characterized them immensely vary. However,
through various researches, mainly The Big Five personality Framework, it
has emerged that good leaders do have key traits in common including
extraversion, sociable, dominant, conscientiousness, openness to
experience and emotional intelligence (core being empathy). The Big Five
personality framework also helped understand that –
Behavioral Theories
Unlike trait research that lay down the basis for choosing the right
individuals for leadership, behavioral theories propose to train people to
become leaders. The Ohio state study in behavioral theory lists two
behaviors that majorly accounted for most of the leadership behavior:
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Contingency Theory
Some leaders tend to gain success in a particular situation while in another
they may not be effective. Such leaders may be appointed temporarily and
are dismissed as circumstances settle. The rise and fall of such leaders
demonstrates that predicting leadership success is not as simple as
identifying a few traits or behaviors. In their cases, what worked in tough
times and in smooth times does not appear to translate into long-term
success. Contingency theory of leadership can be explained through the
most widely used model: the Fiedler model.
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The model evaluates the situation in terms of these three variables. Fiedler
states that the better the leader–member relations, the more highly
structured the job, and the stronger the position power, the more control
the leader has. From a leader’s perspective a situation in which all the
above three factors score high is the most favorable one.
Overall, the validity of the model is quite high, with sufficient evidence to
support it. However, the downside to the model maybe that logic behind
the LPC questionnaire is not clear, subjectivity exists in scores of
respondents and contingency models tend to be complex to assess
practically.
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Many charismatic leaders may allow their personal gains to supersede the
organizational goals. In many cases success depends on the situation and
visions rather than the charismatic leader. Some charismatic leader may be
successful in convincing people to chase a disastrous vision. Individuals
can be trained for charismatic behaviors.
Transformational Leadership
Leaders they inspire people to surpass their interests for the betterment of
the organization and tend to have an outstanding impact on people.
Transformational leaders –
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Limitations to mentoring:
• Not all people may participate with equal rigor and diversity of race,
gender, ethnicity, etc., may be restrictive for mentoring.
• Formal programs may not be as effective as the informal ones owing to
poor planning and design, lack of mentor commitment, mismatch
between work style and need of the mentor and mentee.
• People view mentors more as a source of expanding networking and
further their needs of networking.
• Poor delegation – Many leaders being insecure, do not transfer all the
requisite jobs to their subordinates, especially, if the subordinate is high
performing. This leads to clutter and too much on the leaders plate and
hampers overall performance. In certain cases, the leader over delegates
tasks to his people, where those that need to be carried out by an
individual of his caliber are also transferred to subordinates. In such
cases, also the tasks tend to be poorly done due to over burdening and
lower caliber of subordinates. Hence, poor delegation reduces the
effectiveness of the leaders. The effective leaders should strike a balance
in his delegation of tasks.
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• Favoritism – It is a known fact that people get along better with some
people than others. This compatibility issues can exist between the
leaders and his team members, where the leaders may get along better
with some members in comparison to others. However, it is the leader’s
maturity to handle this compatibility difference sensitively to ensure it
does not result in favoritism on his part. If it does, it can affect the teams
engagement levels and thereby effectiveness overall.
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Activity
1. In a multinational organization, An Indian and a Chinese are being put
together as a team on a particular project for 2 years. The HR manager
is worried about this team and it performance. If you are the HR
manager, please explain in detail why would you be worried and what
would do you think can be done to eliminate your cause of worry.
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8.8 SUMMARY
This chapter explains us the concept of a group and explains its properties,
its development and its decisions making process. The chapter further
explains the concept of team and differentiates it from work group. It tells
us about the various types of teams and the factors responsible for
creating an effective team. It also highlights the various drawbacks of
working in teams. The chapter takes us through the concept of team
communication in detail, highlighting the communication process, direction,
channels and interpersonal communication. Finally, the chapter explains us
the concept of team leadership. Under this, it explains the various theories
of leadership, what are charismatic and transformational leaders, concept
of mentoring and the barriers to effective leadership.
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1. The last stage of development for temporarily formed group will be ___.
(a) Performing
(b) Storming
(c) Norming
(d) Adjourning
4. Any communication between the Marketing Head and the Finance Head
of an organization would be _____________.
(a) An upward communication
(b) A downward communication
(c) A vertical communication
(d) A horizontal communicxation
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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POWER, CONFLICT, NEGOTIATION AND INTERGROUP BEHAVIORS
Chapter 9
POWER, CONFLICT, NEGOTIATION AND
INTERGROUP BEHAVIORS
Objectives
• Understand the concept of power, its bases, power tactics and factors
affecting effectiveness of the tactics.
Structure:
9.4 Negotiation
9.5 Summary
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In any organization or group, both power and political behavior are natural
processes. In order to understand individuals and their interpersonal
behaviors one must understand both these concepts as well as how power
is attained and applied. Though it may be said that “Power corrupts” but it
may not always be seen in a negative light. It is critical to understand what
role power plays and how it operates in groups and organizations.
Definition of Power
Power implies the ability of one individual to impact the behavior of
another so the other individual behaves according to the first individual’s
desires.
Power is a capacity or potential and one may possess power but may or
may not use it. A key aspect of power is that it is linked to dependence. In
a relationship, the higher a person’s dependence on another, the higher the
other person’s power. Dependence is based on options that a person views
and level of significance he or she attaches to these options other person
controls, which implies that an individual can have power over someone
only if the individual controls something the other desires.
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Bases of Power
The bases or sources of power can be categorized into two general groups:
1. Formal and
2. Personal
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Power Tactics
People use power tactics to translate power bases into specific action.
There have been identified nine distinct influence tactics:
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Some of the tactics may be more effective than others. When the people
concerned are highly interested in the decision process outcomes then
rational persuasion, inspirational appeals, and consultation tend to be the
most effective. The least effective of all tactics is pressure, which may have
a reverse effect at times.
• Individual skill using the tactic - The level of political skill or their
capability to influence others to further their own goals is different for
different people. Those who are politically skilled are the one who use all
the influence tactics effectively. High stakes tend to make the political
skill appear more effective. Politically effective people exert influence on
others without them realizing. However, in highly open, fair and just
environments politically skilled people tend to be ineffective in utilizing
their influencing tactics.
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Existence of Politics
It is a widely understood fact that the political behavior is a major part of
organizational life. Many managers believe some political behavior, as long
as not detrimental to others, can be considered ethical and necessary.
Many see it as a necessary evil and believe that those who do not use it
will have trouble getting things done. Overall, it is difficult for organizations
to be completely free of politics. The reason being organizations have
individuals and groups with different values, objectives, and interests and
the resources available in organizations are limited. This fact is the main
reason for conflict over the allocation of these limited resources like
budgets, space, responsibilities, and salary increments. Had the resources
been abundant, then all would have been able to satisfy their needs,
however, since they are limited, everyone’s goals are not met. Further,
people tend to view others gains coming at their own expense. Hence, the
conflict arises. Such forces lead to competition for the limited
organizational resources. This competition results into politics only since
people believe that the criteria for allocation of these limited resources is
subjective. These criteria being performance, improvement, satisfactory
work etc. The degree of such criteria for example, good performance,
adequate improvement, etc., that will determine allocation of resources is
open to interpretation. People may not view others efforts or performance
as sufficient to be considered good and warrant a resource allocation in
others favor. Existence of such subjectivity in decision-making and lack of
objective factors in the organization tends to encourage politics. Since
majority, decisions are to be made in this climate of ambiguity individuals
or groups will use any influence possible to twist the facts in order to
advance their needs and objectives. This leads to actions termed as
politicking. An organization may be politics –free only if all people share
the same objectives and interests, if organizational resources are
abundant, and if performance outcomes are free from subjectivity.
However, this is an idealist situation non-existence in the real world.
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Individual Factors
• Personality Traits – Certain personality traits lead to higher political
behavior. These traits are high self-monitors, possess an internal locus of
control and high need for power.
• Individual investment in the organization, if high, less likely use of
illegitimate means.
• Perceived alternatives are high the more individual tends to risk
illegitimate political actions.
• Expectations of success impact use of illegitimate political actions and
higher expectations lead to a greater use.
Organizational Factors
Certain situations and cultures promote politics -
• In case of organization’s decreasing resources, people may resort to
political behavior to save their portions.
• Major changes, particularly those leading to reallocation of resources,
lead to conflict and politicking
• In case of opportunities of growth, politicking may prevail.
• Cultures characterized by low trust, role ambiguity, and unclear
performance measurement systems, self-serving senior managers,
encourage political behavior largely.
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are active politicks or, conversely, because they feel additional pressures
from entering into and competing in the political arena.
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The most common idea about conflict is that it is a perception and if no one
is aware of a conflict, then it can be said that conflict does not exist.
Therefore, for conflict to start some antagonism or discordance and some
kind of interaction is necessary.
• Communication,
• Structure,
• Personal variables.
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• This stage is critical as the actual conflict is defined and the parties
understand the conflict issues. Defining conflict is important as it outlines
the possible settlements.
• Emotions impact perceptions, thus negative emotions lead to
oversimplification of issues, loss of trust, and lead to negative view of
others’ behavior and positive emotions have reverse and favorable effect
during a conflict situation.
Competing - When one person seeks to satisfy his or her own interests
regardless of the impact on the other parties to the conflict, that person is
competing. You compete when you place a bet that only one person can win,
for example.
Collaborating - When parties in conflict each desire to fully satisfy the
concerns of all parties, there is cooperation and a search for a mutually
beneficial outcome. In collaborating, the parties intend to solve a problem by
clarifying differences rather than by accommodating various points of view. If
you attempt to find a win–win solution that allows both parties’ goals to be
completely achieved, that is collaborating.
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Avoiding - A person may recognize a conflict exists and want to withdraw from
or suppress it. Examples of avoiding include trying to ignore a conflict and
avoiding others with whom you disagree.
Stage V: Consequences
This is the stage where consequences of a conflict present themselves.
Such consequences may be due to the action–reaction interplay between
the conflicting parties. When these conflicts improve group’s performance
they may be called constructive and when they hinder the group’s
performance, they may be called destructive.
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• By allowing, the groups split the solution into areas of their top priority
and focusing on how to satisfy their top priorities. In such a way both
conflicting parties may not get all of what they want but can get most
important of what they want.
9.4 NEGOTIATION
“Negotiations are formal discussions in which people or groups try to reach
an agreement, especially in a business or political situation” – Macmillan
Dictionary
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For instance, a woman negotiating with the fruit seller to reduce the price
per kilograms of the mangoes is said to be engaging in distributive
bargaining. The main characteristic of such type of bargaining is that it
operates under zero-sum conditions—that is, any benefit one gets is at the
expense of the other and vice versa. Every rupee she gets to reduce from
the fruit seller is a rupee she saves and every rupee more the fruit seller
can get the woman to spend comes at her expense. The crux of distributive
bargaining is negotiating over getting a larger share of a fixed pie, which
means a fixed quantity of goods or services to be shared. Negotiating
parties tend to bargain distributively when the pie is fixed or they perceive
it to be. Most common organizational instance of distributive negotiation is
labor– management wage negotiations. Here the labor representatives are
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• An anchoring bias sets in, i.e., people tend to get fixated on initial
information, and fail to sufficiently adjust the anchor on the basis of
subsequent information.
One must be cautious while making initial offer as it sets an anchor about
the following –
• The initial offer must be on the high end but be reasonable, i.e., not
higher than other party’s target point.
• Should not, over cautious and set in something much lower than what
one could have got as a settlement.
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Bargaining and Problem Solving – This is the key step where the actual
discussions take place in order to reach a settlement. Here, both parties
are expected to make concessions.
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Gender Differences – The negation styles between men and women may
not be different but the outcomes of negotiations are. Though popular
stereotype is that women are more cooperative and pleasant in
negotiations than men but evidence suggest that men negotiate better
outcomes than women do, although the difference is relatively small. The
values placed on outcomes vary between men and women. For instance,
for women interpersonal relationship hold bigger than having the corner
cubicle and a larger salary or the corner office. Evidence also shows that
women’s own attitudes and behaviors tend to harm the negotiations.
Women managers have less confidence than men have in anticipation of
negotiating and are less satisfied with their performance afterward despite
their outcomes being similar to those for men. Men tend to see an
ambiguous situation as an opportunity for negotiation while women do not.
Studies suggest that women tend to be less aggressive in negotiations as
they tend to be concerned about reprisal from others. Another finding
shows that women are more likely to engage in assertive negotiation when
they are bargaining on behalf of someone else than for themselves.
Third-party Negotiations
Negotiations that cannot be completed without an external intervention
either in the form of a mediator, arbitrator or conciliator are called third-
party negotiations. A need for third party negotiations arises when the
individuals or group representatives reach an impasse and are unable to
come to a mutually beneficial outcome through the direct negotiations. In
third party negotiations, there may be any of the three roles the third party
may play –
1. Mediator
2. Arbitrator
3. Conciliator
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Activity
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1. After having, understood the concept of power here, can you comment
on the powerful situation of the Oil-owning Nations in the world and
explain the reasons for their situations.
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9.5 SUMMARY
This chapter explains the concept of power and the bases for power. Under
power, it also explains the various power tactics used by individuals and
groups. Additionally, covers the factors affecting the effectiveness of these
power tactics. It further explains the term politics and explains various
related concepts such as factors contributing to political behavior and
response of individuals to organizational politics etc. Then the chapter
moves on to explain the concept of Conflict. Here, it highlights, in detail,
the process of conflict and the ways of managing constructive conflict.
Finally, the chapter covers the concept of negotiation and its various
nuances. Under negotiation, the chapter covers the two types of bargaining
strategies– distributive and integrative – an attempt to differentiate
between them. It further explains the negotiation process, the various
individual factors affecting negotiation styles and ultimately the concept of
third party negotiations.
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !268
ORGANIZATION STRUCTURE AND DESIGN
Chapter 10
ORGANIZATION STRUCTURE AND DESIGN
Objectives
• Understand why structures differ and what are the determinants of the
structures
Structure:
10.5 Summary
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ORGANIZATION STRUCTURE AND DESIGN
Definition
An organizational structure refers to the manner in which the various job
tasks are formally divided, grouped and coordinated.
Elements
There are six key elements of organization’s structure:
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Departmentalization
After splitting the tasks based on specialization, they are grouped as
common tasks for coordination. The basis of grouping the tasks for
coordination is known as departmentalization. Departmentalization can be
done in various ways; the most common ones are as follows –
• Function-wise
• Product or Service-wise
• Geography or territory-wise
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Chain of Command
The chain of command is a hierarchy of authority that determines who is in
charge and those on top of the hierarchy direct and controls the activities
of the organizational members below them. Two key elements of chain of
command are - authority and unity of command. Authority refers power
obtained formally. It is institutionalized and legal right inherent in a
particular job, function or position that enable its holder to successfully
carry out responsibilities by directing others to perform. To ensure proper
coordination activities, each position occupies a place in the chain of
command, and each position is assigned a degree of authority in order to
have the responsibilities fulfilled. The principle of unity of command aid in
preserving the concept of an unbroken line of authority. This principle
states that an individual would be responsible to only one supervisor, who
in turn is responsible to only one supervisor and so on up the
organizational hierarchy. This is because dual command will be a source of
conflict, as an individual might have to cope with parallel demands from
more than one superior. Though with times changing concepts like
empowered employees, self-managed teams, cross-functional team,
project based teams have led to multiple reportings in various scenarios,
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Span of Control
Span of control simply refers to the number of subordinates a supervisor
has or in more detail, it refers to the number of subordinates that a
supervisor can directly supervise effectively and efficiently. The concept of
span of control is important as it helps to decide the number of levels and
managers an organization has. All things being equal, the wider the span of
control, the more efficient the organization is, particularly, in terms of cost.
Too large spans of control may lead to ineffectiveness and lead to
performance dip as with large teams a supervisor may not have sufficient
time and energy to manage all subordinates and is unable to provide the
ideal quality of leadership and support. Small spans of control, say having
five or six subordinates, may be more effective as the manager can
maintain close supervision. However, narrow spans have their own
demerits.
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Formalization
According to Price and Mueller (1986), Formalization is the degree to which
the norms of an organization are explicitly formulated. It implies the extent
to which jobs and roles in an organization are standardized. Owing to
standardization, employee has very limited autonomy over his work
methods and plans. Under formalization, people are expected always to
handle the same input in exactly the same manner, resulting in a
homogeneous and sustained output. There exist fixed job descriptions,
various organizational norms, and clear standard operating procedures in
the organizations with high level of formalization. In organizations with low
formalization, job behaviors are not fixed, and employees enjoy great deal
of autonomy in their work methods and plans. Standardization discourages
employees to engage in alternative behaviors by removing the need to do
so. The level of formalization can vary widely within and among
organizations. For instance, the entire organization may have clearly laid
down procedures to operate along with norms and rules, however, within
the same set up a newly started department, say, Public relations might
currently be operating without any formal procedures or norms.
Table 10.1: Key Design Questions and Answers for Proper Organization
Structure
The answer is provided
The Key Design Question
by
To what degree are the tasks divided into
1 Work Specialization
separate jobs?
2 On what basis will jobs be grouped together? Departmentalization
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Centralization and
5 Where does decision making lie?
Decentralization
To what degree will there be rules and
6 regulations, to direct employees and Formalization
managers?
Source: Organizational Behavior, Stephen Robbins and Timothy A. Judge
There are numerous organization designs that can be formed basis the
definitions given above, the most common designs seen in organizations
across the globe are -
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!
Figure 10.1: Sample Simple Structure
Bureaucratic Structure
Bureaucracy is a management system that relies on a set of rules and
regulations, separation of function and a hierarchical structure
implementing controls over an organization. Standardization is the key
concept underlying all bureaucracies. This is so as standardized work
processes lead to better coordination and control. Bureaucratic structures
are mainly seen in government offices or public sector units. Such
structures are distinguished by highly routine operating tasks achieved by
rigid division of labor, high level of formalization, specialized tasks,
departmentalized function-wise, centralized authority, small spans of
control, and clear hierarchy of authority and decision making following
chain of command. Figure 10.2 depicts a sample bureaucratic structure.
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!
Figure 10.2 Sample Bureaucratic Structure
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• The dual reporting creates confusion and this ambiguity can lead to
conflict.
• It can lead to power struggles as usually the product managers tend to
compete for the best specialists to be assigned to their products. Under
bureaucracy, rules eliminate the struggles for power while matrix leaves
scope for power struggles between functional and product managers.
• It puts stress on people, particularly, those who prefer security and shun
ambiguity. Dual reporting causes role conflict and low clarity of
expectations that leads to insecurity and role ambiguity as against the
comfort of bureaucracy’s predictability.
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!
Figure 10.3 Sample Matrix Structure
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!
Figure 10.4: Sample Virtual Organization
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This term was coined by GE’s former chairman, Jack Welch. It was Jack Welch’s
dream for GE, that despite its huge size he should be able to remove vertical
and horizontal boundaries internally and break down barriers between GE and
its external stakeholders. The boundaryless organization attempts to get rid of
the chain of command, have limitless spans of control, and replace
departments with empowered teams. Although GE has not yet achieved this
boundaryless state—and probably never will—it has made significant progress
towards that end. So have other companies, such as Hewlett-Packard, AT&T,
Motorola, and 3M. Let us see what a boundaryless organization looks like and
what some firms are doing to make it a reality. By removing vertical
boundaries, management flattens the hierarchy and minimizes status and rank.
Cross-hierarchical teams (which includes overseeing directly any activities done
in-house and to coordinate relationships with the other organizations that
manufacture, distribute, and perform other crucial functions for the virtual
organization.), participative decision making practices, and the use of 360-
degree performance appraisals (in which peers and others above and below the
employee evaluate performance) are examples of what GE is doing to break
down vertical boundaries. Xerox now develops new products through
multidisciplinary teams that work on a single process instead of on narrow
functional tasks. Some AT&T units prepare annual budgets based not on
functions or departments but on processes, such as the maintenance of a
worldwide telecommunications network. Another way to lower horizontal
barriers is to rotate people through different functional areas using lateral
transfers. This approach turns specialists into generalists. When operational,
the boundaryless organization also breaks down geographic barriers. Today,
most large U.S. companies see themselves as global corporations; many, like
Coca-Cola and McDonald’s, do as much business overseas as in the United
States, and some struggle to incorporate geographic regions into their
structure. The boundaryless organization provides one solution because it
considers geography more of a tactical, logistical issue than a structural one. In
short, the goal is to break down cultural barriers. One way to do so is through
strategic alliances. Firms such as NEC Corporation, Boeing, and Apple each
have strategic alliances or partnerships with dozens of companies. These
alliances blur the distinction between one organization and another as
employees work on joint projects. In addition, some companies allow
customers to perform functions previously done by management. Some AT&T
units receive bonuses based on customer evaluations of the teams that serve
them. Finally, telecommuting is blurring organizational boundaries. The security
analyst with Merrill Lynch who does her job from her ranch in Montana or the
software designer in Boulder, Colorado, who works for a San Francisco firm are
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just two of the millions of workers operating outside the physical boundaries of
their employers’ premises.
Source: Organization Behavior, Stephen P. Robbins, Timothy A. Judge
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Structure
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!
Figure10.5 The Mechanistic Model
!
Figure 10.6: The Organic Model
• Organizational Strategy
• Organizational Size
• Technology
• Environment
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Organizational Strategy
Structure is a means to attain goals, which are derived from organizational
strategy. Hence, structure should follow strategy. Any changes in strategy
would result in structural changes. Let us understand the relationship of
strategy and structure through the three strategy dimensions—innovation,
cost minimization and imitation.
Organization Size
The size of the organizations determines its structure. Large organizations
that employ 2000 or more people tend to have more specialization, more
departmentalization, more vertical levels, and more rules and regulations
than do small organizations. However, size becomes less important as an
organization expands.
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Technology
Technology is the manner in which an organization transfers inputs into
outputs. Every organization may have at least one technology for
converting financial, human, and physical resources into products or
services. While understanding structure–technology relations, technology is
seen through degree of routineness. Routine activities have automated and
standardized operations. Non-routine activities are customized and require
frequent revision and updating. In general, organizations engaged in non-
routine activities tend to prefer organic structures, while those performing
routine activities prefer mechanistic structures.
Environment
Outside institutions or forces that can impact an organization’s
performance like suppliers, customers, competitors, government regulatory
agencies, and public pressure and groups constitute the organization’s
environment. A dynamic environment forms greater uncertainty for
managers than does a static environment. In order to minimize
uncertainty, managers tend to broaden their structure to sense and
respond to threats. Some of the companies may form strategic alliances, to
better compete in the market. Any organization’s environment can be
looked at through the three dimensions:
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!
Figure 10.7: Determinants of Organizational Structure
1 0 . 4 O R G A N I Z AT I O N A L D E S I G N S A N D E M P L O Y E E
BEHAVIOR
People have different preferences about their work environment and not
everybody may prefer the freedom and flexibility of an organic structure.
In addition, every structure has its different factors, which are preferred or
not preferred by individuals, these differences and their preferences affect
the employee behavior. Research with respect to organization designs and
employee behavior shows that –
Also, seen is that after that level of work specialization, productivity gets
affected negatively owing to human diseconomies of performing repetitive
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!
Figure 10.8: Relationship between Work Specialization and Employee
Productivity
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Activity
1. Finance executive, reports to the Accounts Head of his department,
however, he also reports into the Business Unit of a particular business,
which he caters to for all the finance functional needs. Please explain if
it is possible for an individual to have more than one reporting in an
organization. If yes, explain in detail what such type of structure is.
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10.5 SUMMARY
This chapter defines what organization structure is and explains the
different elements of organization structure, namely, division of labor or
work specialization, departmentalization, chain of command, span of
control, centralization and decentralization, and formalization. It takes us
through the commonly used organization designs namely, the simple
structure, the bureaucratic organization, the matrix structure, the virtual
organization and the boundaryless organization. It also explains the two
basic models of organization design – The mechanistic model and the
organic model. The chapter highlights the various determinants of
organization structure, which are responsible for different structures across
the globe. Finally, the chapter takes us through the relationship between
employee behavior and organizational design.
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a. Formalization
b. Division of labor
c. Departmentalization
d. Span of control
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 11
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Objectives
Structure:
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• A g g r e s s i ve n e s s - T h e e x t e n t t o w h i c h o r g a n i z a t i o n va l u e s
competitiveness over easy going and strives to outperform competitors.
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!
Figure 11.1: Characteristics Defining Organizational Culture
Uniformity of Cultures
Culture of the organization is a common view about the organization held
by its people, despite coming from diverse backgrounds. However, most
large organizations have a dominant culture and various subcultures.
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that has the core values of the dominant culture and the additional
values unique to its members.
It can be seen that if larger number of people adopt the core values with a
greater level of commitment, the culture tends to be stronger and has
much larger impact on people’s behavior since the high level of acceptance
and vigor results into climate of high behavioral control. An advantage of a
strong culture is it checks employee turnover by showing strong agreement
regarding what the organization stands for and this consensus on motive
builds solidarity, faithfulness and organizational allegiance reducing
people’s tendency to quit. A negative effect of strong culture can arise in
case there is disagreement between the perceptions of managers and team
disagrees about organizational support resulting in negative mood of team
members dropping their performance. Such negative effects would be
more pronounced when managers believe the organization provides more
support than the team think it does.
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who are part of the organization, and this atmosphere is known as the
climate of an organization. The climate of an organization is subject to
frequent changes and can be shaped by the top management of an
organization. If culture represents the personality of the organization,
climate is the organization's mood. Organizational climate is much easier to
experience and measure than organizational culture and much easier to
change.
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Initiation of a Culture
The organization’s exciting way of doing things and the various norms are
mainly, owing to what it has done before and how successful it was in
doing it. This implies paramount source of an organization’s culture is its
founders. When the organization begins, it is small and free from any
earlier customs or ideologies, the founders have a vision for the
organization and they are easily able to impose that on all members.
Formation of culture can happen in three ways –
• First, founders recruit and retain only people whose thoughts and
feelings are compatible with those of the organization.
• Second, founders condition and fraternize these employees to their own
way of thinking and feeling.
• Finally, founders endorse their values and beliefs by their own behavior,
which influences employees to identify with them and internalize them.
The founders’ personality gets ingrained in the culture, once the
organization succeeds.
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job. However, the final decision is based on the judgement of the decision
maker regarding the fitment of the candidate in the organization
ascertained via the consistency level between the individual’s values
system and that of the organization, at least major portion of that.
Besides, aiding the organization in making judgment about the candidate,
selection also provides important insights to the applicants. Those who find
a conflict between their values and those of the organization can decide to
be out of the selection process. Selection is a thus a two-way street,
allowing both employer and applicant avoid a mismatch and sustaining the
organization’s culture by weeding out those who might be deterrent to its
core values.
1. Pre-joining
2. Interface and
3. Transformation
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2. Interface stage – This stage begins once the candidate joins the
organization as a new employee at this stage he faces the possibility
that expectations—about the job, colleagues, supervisor, and the
organization as a whole—may differ from reality. The interface stage will
concretize previous beliefs, if the expectations were accurate. However,
this may not always be the case, a new joiner may become very
disappointed and resign. This can be evaded if the recruitment and
selection is done carefully and properly and friendship ties are
encouraged building higher commitment from the new joiners.
!
Figure 11.2: Pictorial Representation of Socialization Process
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!
Figure 11.3 Formation of Cultures
Source: Organizational Behavior – Stephen P. Robbins and Timothy A. Judge
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!
Figure 11.4: Edgar Schien Three Levels of Organization Culture
Stories
Inspiring Stories coming from senior managers, particularly, the founders
of the organization help create an impression in the minds of employees
regarding the organizational culture. They tend to be prescriptive as in
advising people about what is OK to do and what is not. Such stories flow
through the organization, binding the present to the past and justifying
current practices. These stories could be either general experiences of the
organization’s founders or senior leaders, narratives about breaking rules,
rags-to-riches successes, relocation of employees, reactions to past
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mistakes etc. They may often answer questions like - How does the
manager react to mistakes? How the organization deals with crises? How
do people rise to the top of the organizations? Who, if anyone, can break
rules? Even individual employees develop their own stories regarding how
they became either fit or unfit within the organization during socialization,
including first days at work, initial interactions with others, and first
impressions regarding life at the organization.
Rituals
Rituals are recurrent series of activities that articulates and emphasizes the
core values of the organization and practices such as what objectives are
most critical or which people are key. For instance, celebrating people’s
personal milestones like birthdays, anniversaries etc. (cake – cutting with
snacks in office premises on birthday), annual off-site parties or get-
together with families etc., new hire welcome lunches, exiting employees
farewell lunches, etc.
Material Symbols
Material symbols include various physical or tangible aspects of the
organization that can been seen by the employees. Such material symbols
are also consistent with and reinforce the organizational culture. Such
material symbols include layout of corporate office, the types of vehicles
senior executives are provided, size of offices, the elegance of furnishings,
executive benefits and attire. These symbols communicate to an employee
who is important, the degree of equality top management want to
maintain, and what behaviors are appropriate, such as risk taking,
conservative, individualistic, social, etc.
Organizational Language
The language used at workplaces tell us a lot about the organization’s
culture as well as the values held by the organization’s subcultures. The
various phrases, metaphors and words used by senior leaders of the
organization also, reflect the corporate culture. Some organizations also
rely on language to help new members identify with the culture, build an
acceptance for it, and further aid in preserving it. Organizations have their
own unique terminologies for things like equipment, officers, key
individuals, suppliers, customers, or products that relate to the business.
New employees may first find difficult in understanding and adopting the
organizational acronyms and jargon. However, once they have been able to
internalize them they act as a common platform to bond with members of
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relevance of the original values and share stories that illustrate why people
believe in them, they can still serve your company well. Acknowledging the
existing culture’s assets will also make major change feel less like a top-
down imposition and more like a shared evolution. Further, to harness the
cultural elements you want to support is by acknowledging them. Another
strength companies can leverage is the employees who are already aligned
with their strategy and desired culture. Most companies, if they look hard
enough, will find that they have pockets of activity where people are already
exhibiting the new, desired behaviors everyday.
Source: https://hbr.org/2012/07/cultural-change-that-sticks
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• High in risk tolerance - Employees are supported for taking risks and
innovating,
Such a culture takes a strategic perspective and takes equally into account
the rights of various stakeholders like employees, shareholders and the
community. A strong ethical culture has a very strong and positive impact
on employee behavior. There can be severe negative outcomes of a culture
of unethical behavior such as include customer boycotts, fines, lawsuits,
etc. Hence, the managers must drive towards an ethical culture. Some of
the principles and practices that can promote an ethical culture -
• Having role model - Senior Manager must act as role models for the
employees setting ethical examples and sending out positive message.
This is because employees observe behaviors and actions of senior
management as a standard for ideal behavior.
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the review must include not only outcomes but also the means to the
outcomes. Consequently, those taking actions and decisions as per code
of ethics must be specifically rewarded while those who do not must be
specifically reprimanded.
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Source: http://geert-hofstede.com/national-culture.html
Activity
1. Compare national cultures of any two countries of your choice based on
the Hofstede’s dimensions of National Culture.
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11.10 SUMMARY
This chapter starts by defining culture and organizational culture and then
moves on to explain the significance of the organizational culture. It then
explains the difference between organizational culture and organizational
climate along with the relation of organizational climate and performance.
The chapter highlights the various disadvantages associated with extremely
strong organizational cultures. The process of building and maintaining the
culture has also been outlined here. The chapter then explains the key
ways by which organizational culture is transmitted among employees. It
then explains what ethical organizational culture is and how it is built. It
further highlights the features of the most desirable positive organizational
culture. Finally, the chapter explains the connection between the
organizational culture and national culture and provides a brief
understanding of different dimensions of national culture.
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5. Which of the following is one of the effective forms used to transmit the
culture to the employees?
a. Prayers
b. Articles
c. Plays
d. Rituals
Answers of MCQs: 1. - (d); 2. - (a); 3. - (c); 4. - (b); 5. - (d).
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 12
ORGANIZATION CHANGE AND
EFFECTIVENESS
Objective
Structure:
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!
Figure 12.1: Forces of Change
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Change Agents
The onus of any kind of change sits with them. Change agents can see
futuristically unlike others, able to drive motivation and invention, and
efficiently execute the vision. Change agents can be managers or team
members, new or existing employees, or external consultants. They may
face failure owing to resistance from others in the organization. HR
managers in companies like Hindustan Unilevers, Godrej, and LG
electronics are strong change agents for these organizations.
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• Instant
• Delayed
Given below are the main forces driving resistance to change. They have
been categorized by their sources.
A change is not always good because speed may result in poor decisions,
and sometimes those beginning the change are unable to realize the full
scale of the effects or their real costs. Changes that are high speed can be
risky and may result in collapse of the organizations, in some cases. Before
actioning change, the change agents must carefully evaluate the full
implications.
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!
Figure 12.2: Overcoming Resistance to Change
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!
Figure 12.3: Lewin's 3-Step Model for Change Management
• Unfreezing: This step means decreasing the forces tending to keep the
organization in its existing state. Unfreezing might be accomplished by
moving away from the equilibrium state in three ways. First, use of the
driving forces in which behaviors are directed away from existing state
by providing new information indicating inadequacies in the current state
or by reducing the grip of current values and attitudes. Second by
enhancing the restraining forces that interfere with the movement away
from existing state by applying any of the tactics to overcome resistance
to change. Third, is using a combination of first two ways. If unfreezing
faces a very high resistance, then the change agents resort to both
alleviating resistance and enhancing the attractiveness of the change.
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• They may fail to create a sense of urgency about the need for change,
• Fail to create a coalition for managing the change process,
• Fail to have a vision for change and effectively communicate it, to
remove obstacles that could impede the vision’s achievement,
• Fail to provide short-term and achievable goals, and
• Fail to anchor the changes into the organization’s culture.
• They may also declare victory too soon.
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Organizational Development
!
Figure 12.4: Values Underlying Organizational Development
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1. Sensitivity Training
2. Survey Feedback
3. Process Consultation
4. Team Building
5. Intergroup Development
6. Appreciative Inquiry
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• Structural variables
• Cultural characteristics
• Human resource features
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• High self-confidence
• Persistence
• High energy levels and
• High risk appetite
• Ability to inspire and energize others
• Ability to gain commitment of others
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!
Figure 12.5: Building Learning Organization
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There are numerous ways by which organizations are made into learning
organizations. Listed below are some keys suggestions for building
successful learning organizations -
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Consequences of stress
• Physiological Symptoms – Stress can be connected with various
symptoms of poor health such as increase in heart rate, change in
metabolism, headaches, and increase in breathing rate, insomnia, upset
stomach and low energy levels.
• Psychological Symptoms – These symptoms may be hard to identify and
include isolation, disengagement, powerlessness, meaninglessness,
insecurity, depression, anxiety, tension and boredom.
• Behavioral Symptoms – Various studies have consistently shown the
behavior-stress relationship being consistent. The behavioral symptoms
of stress include suicidal talk or behavior, absenteeism, accident-prone,
risk-taking, unhealthy eating habits, addictive behavior, exhaustion,
withdrawal, low productivity, poor punctuality and sleeping difficulties.
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!
Figure 12.6 Relationship between Stress and performance: Inverted U-shaped
Curve
Source: Organization Behavior, Stephen P. Robbins and Timothy A. Judge
Stress Management
There may be no clear understanding of what is an acceptable level of
stress and discrepancies in views of management and individuals
concerning stress levels. A low level of stress may be perceived by
employees as undesirable, whereas organization may see it as desirable as
it may serve the source of energy for the employee to performance on the
job. However, despite the varying perceptions, it is commonly accepted
that any level of stress that is undesirable needs to be managed and
lowered. Stress cannot completely go away, but through proper
management, it can be brought handled to reduce or even eliminate its
undesirable consequences. Stress is managed at both individual and
organizational level.
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• Physical Exercise
• Relaxation Techniques
• Time Management
• Social Support Network
Activity
1. An IT organization has designed a new performance management
system, in which the incentives and growth is linked to performance.
This is a big change for the employees as earlier, the incentives and
growth in the organization was linked purely to tenure of service.
Consequently, the organization is facing high level of resistance from
within. As an HR head, what will be your recommendations to the senior
leaders of the organization to help implement this change?
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12.8 SUMMARY
This chapter explains us the concept of change as well as organizational
change. It further highlights the various forces acting to bring about
change in an organization. It then, takes us through the process of planned
change. The chapter attempts to bring out the various causes and
manifestation of resistance to change. It then highlights the various
methods of overcoming resistance to change. Change management is very
critical and the chapter covers it in detail, explaining the three main
approaches to managing change including Lewin’s classic three-step model
of the change process, Kotter’s eight-step plan, action research, and
organizational development. The chapter then brings forward the need for
a transforming culture and criticality for creating a culture for change. This
it shows via two approaches, i.e., inciting innovative culture and building a
learning organization. Finally, the chapter deals with one of the key side
effects of on-going change within the organization, i.e., stress. Also,
highlights the various stress management techniques.
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4. What are the four D’s of the “Appreciative enquiry” cycle as suggested
by Cooperrider and Diana Whitney?
a. Destination, Dream, Design and Discovery
b. Discovery, Dream, Design and Destiny
c. Destination, Dream, Destiny, Design
d. Dream, Distinctiveness, Design, Discovery
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REFERENCES
8. The Fifth Discipline: The Art & Practice of The Learning Organization –
Peter M. Senge.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 13
HR POLICIES, PRACTICES AND WORK
DESIGN
Objectives
Structure:
13.1 Introduction
13.2 Selection Practices
13.3 Learning and Development Programs
13.4 Performance Management System
13.5 Career Management System
13.6 Quality of Work Life (QWL)
13.7 Summary
13.8 Self Assessment Questions
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13.1 INTRODUCTION
We must understand that for the overall organization’s effectiveness the
key HR processes and policies should be designed in the most effective
manner. These policies have a large impact on employees’ motivation and
daily job. The key HR processes and practices lie in the areas of selection,
training and learning and development, performance evaluation, career
management and managing quality of Work life.
Selection Process
A typical selection process that is followed in majority of the companies is
shown in Figure 13.1. With a few modification in tools or skipping a
particular test, more or less majority organizations design their selection
process on the given lines. Let us examine each step in detail to
understand the effective practices.
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Figure 13.1: A Typical Selection Process
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Written Tests
They are widely used selection tools and are recognized as valid tests that
can help predict who will be successful on the job.
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1. Work sample tests – Such test are work samples devised to measure
candidate’s knowledge, skills, and abilities on the job. Each work sample
is matched with a job-performance. Work samples are used to hire
skilled workers like electricians, mechanics, production workers etc.
Interviews
Interviews are one of the most widely used selection tool to assess not
only individual’s performance capabilities for the job but also the
organizational cultural fit. There are various types of interviews and the
most common types are –
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Reference Check
Reference check is a process of an employer contacting a candidate’s
previous employers, schools and/or colleges to get information about
candidate’s previous job history or educational qualifications. The rationale
behind this is to know how the candidate performed previously and would
he or she be recommended for hiring by the previous employers or
educators. There are various difficulties involved, firstly the previous
employers may not keen to share complete information and the individuals
tend to provide details of referee who would give only favorable responses
about the individual. In today’s world of social media, reference check is
going to a different platform. With people’s profiles being easily accessible
on the social media, many employers today are checking them before
confirming their hiring decisions.
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Induction Training
Induction Training involves learning imparted to new joiner to help them
adjust in their new job role and to familiarize them with working
environment, culture, behavioral norms and other concerned employees.
This also, incorporates other three types of training in very brief form;
sufficient enough to get the new joiner begin his work, before starting to
learn on the job. It also covers an overview of the business and the
products and services as well as the history, stories and rituals of the
organization. The duration of such training varies from one day to two
weeks.
Technical Training
This training varies from job to job and it is mainly a type of learning with
the aim of training the employee on any technology aspects of the job. For
instance, in a sales role, this will include learning of use of customer
relationship management (CRM) system for finding new prospect clients. It
is very important as firstly, technology keeps changing at a very fast pace
and its users must be regularly updated so that their productivity does not
drop. Secondly, new structural designs keep being introduced in the
organization, which affect the level of technology affecting individual roles.
Functional Training
These learning initiatives focus on developing a person in the area of his or
her own function for example, finance, marketing, sales, human Resource,
etc. The objective behind such programs is to train the individuals on the
various processes, standard operating procedures and effective ways of
working with respect to their specific functions. Many a times such a
training may also be termed as “Process Training”, since people learn to run
the various processes within their purview. A common example of such a
training is the Sales Training provided to sales employees.
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Training Methods
There are numerous ways learning can be imparted and people can be
developed. Given below are the various training methods –
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degree to which learners are able to transfer the material from training to
their jobs, or by the return on investments in training.
In terms of the behaviors above, good performance will mean doing well on
both task performance and citizenship and reducing counter productivity.
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Performance Assessor
The most common performance assessor for any individual is his or her
immediate supervisor and this has been the case traditionally. However, in
today’s empowered organization, simply relying on immediate supervisor’s
assessment may not be sufficient.
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• Subordinates
• Costumers
Essay Appraisal – In this the source answers a set of questions about the
individual’s performance in an essay form, which may include strengths
and weaknesses about the employee or statements about past
performance. They can also include specific examples of past
performance.
Critical Incident Appraisals – Under this method, the manager keeps track
of instances of effective and ineffective behavior on part of the employee
while on the job and formally records them during the appraisal time. This
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Behaviorally Anchored Rating Scale (BARS) – In this method, first the main
performance parameter such as effective communication is defined. Next
this method uses narrative information, such as from a critical incidents
file, and allocates a rating to each expected behavior. “Good” and “poor”
behavior for each category is clearly laid down under this method. The
main advantage of BARS is that it builds focus on desired behaviors critical
for job performance. It combines a graphic rating.
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Table 13.1: Merits and Demerits of Performance Appraisal Methods
Appraisal
Merits Demerits
Method
Graphic Rating Cost effective Limited objectivity
Scale
Simple to understand Limited contribution to salary
and promotion and decisions
Essay Appraisal Feedback on the positive High level subjectivity
attributes of the employee is
provided easily Validity influenced by written
communication of the
appraiser
Involves a lot of time
Checklist scale Measurable attributes Detailed responses are not
indicate behavioral allowed
expectations
Critical Increased specificity with real Negative incidents tend to be
Incidents instances observed and recorded more
often
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Performance Feedback
Managers find providing performance feedback as one of the most
unpleasant and difficult part of their roles. Unless they are not pressured
they prefer to avoid this. Reasons behind this behavior on part of
managers include –
• Tendency to avoid confrontation in case of negative feedback
• Poor acceptance and blame game for poor performance by employees of
negative feedback
• Discrepancy is employee and manager perception regarding level of
performance, even during positive feedback
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Organizational Perspective –
• Building future leaders and specialists within the organization to ensure a
committed leadership driving towards strategic success
• Enabling effective resourcing and redeployment of people resources,
particularly in the times of change or crisis.
• Improving business performance by providing career opportunities and
build highly committed and productive workforce.
• Increasing employee engagement by meeting, the intrinsic needs of
growth and development of individuals by helping employees in
managing their careers and providing developmental opportunities and
growth in the form of promotion, job enrichment, preferred lateral
movements, etc.
• Becoming preferred employer in the eyes of external and internal talent
by providing an environment of progress and development. This aids in
attracting and retaining requisite talent.
Individual Perspective –
• Monitoring own skill set to ensure they are up to date as per the growth
of the environment.
• Understanding own skills and abilities and the alternative option available
for future growth.
• Moving up the leadership ladder and taking on senior and more
challenging positions.
• Preparing to take on larger and senior roles through transfers,
responsibility enhancements, development programs, etc.
• Opportunity to be guided by senor leaders as mentors
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Promotions
As part of career management, companies move the employees from one
level to another level through promotional tests. Such upward movement is
called “promotion”. According to Paul Pigors and Charles A. Myers,
“promotion is advancement of an employee to a better job – better in
terms of greater responsibility, more prestige or status, greater skill and
especially increased rate of pay or salary.” The main conditions of
promotion are –
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• Utilize the employee’s skill and knowledge at the appropriate level in the
organizational hierarchy resulting in organizational effectiveness and
employee satisfaction
• To develop competitive spirit and inculcate the zeal in the employees to
acquire the skill, knowledge, etc., required for higher-level jobs.
• To develop competent internal source of employees ready to take up jobs
at the higher level in the changing environment.
• To promote employee’s self-development and make them await their turn
of promotions. It reduces employee turnover.
• To promote a feeling of content within the existing conditions of the
company and a sense of belongingness
• To promote interest in training, development programs and team
development areas. To build loyalty and boost morale.
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Thus, the two main basis of promotion enjoy certain advantages and at the
same time suffer from certain limitations. Hence, a combination of both of
them may be regarded as an effective basis of promotion.
Transfers
Transfer is a type of mobility that is restricted to movement of an employee
from one job to another in the same level of organizational hierarchy. It
can be defined as a lateral shift causing movement of individuals from one
position to another usually without involving any marked change in duties
responsibilities, skills needed or compensation. It may involve a promotion,
demotion or no change in job status other than moving from one job to
another. However, it can be viewed as change in assignment in which the
employee moves from one job to another in the same level of hierarchy
requiring similar skills involving approximately same level of responsibility,
same status and the same level of pay.
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• Due to family problems like taking care of domestic affairs in his native
place.
• In order to relieve himself from the monotony or boredom caused due to
doing the same job for years together.
• To avoid conflicts with his superiors.
• With a view to search for a job with opportunities for advancement to a
higher level, job opportunities for financial gains, etc.
Benefits of Transfer
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Knowledge Management
“Knowledge Management is the coordination and exploitation of
organizational knowledge resources, in order to create benefit and
competitive advantage" (Drucker 1999).
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Meaning
There has been much concern today about decent wages, convenient
working hours, conducive working conditions, etc. The term quality of work
life has appeared in research journals and the press in USA only in 1970s.
There is no generally acceptable definition about this term. However, some
attempts were made to describe the term quality of work life (QWL). It
refers to the favorableness or unfavorableness of a job environment for
people. QWL means different things to different people. J Richard and J Loy
define QWL as “the degree to which members of a work organization are
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Quality of work life improvements are defined as any activity which takes
place at every level of an organization, which seeks greater organizational
effectiveness through the enhancement of human dignity and growth; a
process through which the stockholders in the organization management,
unions and employees - learn how to work together better to determine for
themselves what actions, changes and improvements are desirable and
workable in order to achieve the twin and simultaneous goals of an
improved quality of life at work for all members of the organization and
greater effectiveness for both the company and the unions.
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7. Work and Quality of Life - QWL provides for the balanced relationship
among work, non-work and family aspects of life. In other words, family
life and social life should not be strained by working hours including
overtime work, work during inconvenient hours, business travel,
transfers vacations etc.
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• Adequacy of Resources
• Seniority and Merit in Promotions
• Employment on Permanent Basis
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Table 13.2
HR Activity Effect on Quality of Work Life
Job Analysis Analyze the job in such a way that human needs like
freedom, challenging work autonomy can be satisfied.
Selection Selecting the right person and placing him/her in the right
position. This satisfies needs for reward and interesting
work, etc.
Job Enrichment Satisfies higher order needs like pride, ego, etc.
Activity
1. One of the senior manager of an organization is facing issues guiding his
team members, delegating work and motivating them to perform. You
as HR manager, explain what type of training program will be provided
to this senior manager and why? Also, prepare a training plan with the
training methods and evaluation criteria listed.
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13.7 SUMMARY
This chapter begins by explaining what selection is and the typical process
followed across all organizations. Next, it explains the learning and
development function and the types of learning programs. Further, the
performance management system is explained with various different types
of tools and techniques covered here. Then the chapter describes the
career management system, which is very a critical system. Under this,
concepts of promotion, transfers and knowledge management are also
highlighted. Finally, the chapter takes us through the concept of quality of
work life (QWL) and the eight broad conditions related to it. Under QWL, it
also covers the special issues of QWL and its relationships with fringe
benefits and employee productivity.
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4. “Under this promotion, the employee is moved to the next higher level
in the organizational hierarchy with greater responsibility, authority and
status without any salary increase. Choose the correct option.
a. Dry promotion
b. Down-gradation
c. Vertical promotion
d. Upgradation
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 14
QUANTITATIVE TECHNIQUES IN HRM
Objectives
Structure:
14.7 Summary
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6. Relationship analysis
7. Ratio measures
2. Scrutiny of data – Once the raw data has been collected; it must be
thoroughly scrutinized for any inconsistencies or observational or
recording errors of the variable values.
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1 5
2 10
3 25
4 12
5 6
In case, the variable is continuous, i.e., a variable that can assume any
value within its range of variation, the data is arranged in different classes
within a range, the range to called class interval. Example of such a
frequency distribution can be represented by an age distribution of
employees within the organization in Table 14.2.
Table 14.2
Age (years) Number of employees
25 – 30 150
30 – 35 250
35 – 40 200
40 – 45 120
45 – 50 75
50 – 55 30
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!
Figure 14.1: Bar Diagram
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!
Figure 14.2: Line Diagram
Histograms
This is suited for frequency distributions with continuous variable having
continuous classes (upper limit of a class is the lower limit of following
class). The magnitudes of the class intervals are plotted along the X-axis
and the corresponding frequencies along the Y-axis (ordinate). The
rectangles are drawn on each class intervals with height in proportion to its
frequency. The number of such rectangles will be equal to the number of
such classes. Figure 14.3, shows sample histograms based on data from
the Table 14.2.
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Figure 14.3: Histograms
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Pie Charts
A pie chart is a circle divided into component sectors according to the
break-up of components given in percentage. A circle represents an angle
of 360 degrees, around the center, and then this 360-degree angle is
divided in proportion to the percentages. In the circle of the desired size, a
radius is drawn and the calculated angles of various percentages are
constructed one after another. Each sector is shaded differently by lines,
dots or different colors to look unique. A pie chart is good to represent the
component break-up of something. For example, Total employee strength’s
functional divide shown in Figure 14.4.
!
Figure 14.4: Pie Chart
Line Graphs
In this kind of graph, we have two variables under consideration. A variable
is taken along X-axis and another is taken along Y-axis. The variable values
are suitably scaled along the axes and all distances are measured from the
origin. The independent variable is taken on the X-axis and the dependent
variable is taken on the Y-axis. The corresponding points are plotted and
joined by a line segment in order. These graphs represent a trend or
variability occurring in data, used in correlation and regression analysis
covered later.
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Frequency Polygon
It is formed by joining mid-points of all the rectangles of a histogram. It
can also be drawn without constructing a Histogram. The corresponding
points of the frequencies corresponding to the mid points of the classes are
plotted on the chart. Then the points are joined to make the graph. Both
the sides of the frequency polygon are extended to meet the X-axis of the
mid-points of the immediately lower and higher-class intervals of zero
frequency. This is done to ensure that the area of the Frequency polygon is
the same as that of corresponding histogram. In the Figure 14.5, a
frequency polygon has been drawn on the histograms of Figure 14.3.
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Figure 14.5 Frequency Polygon
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Skewed distributions – Often the top of the curve will be displaced to the
right or left, when total number of values on either sides of the mode is not
equal. In such a distribution, values of the mean, the mode and the median
do not coincide. This is known as a "skewed distribution." Figure 14.6
below shows the normal and skewed distribution curves.
!
Figure 14.6 Normal and Skewed Distribution Curves
Mean, Median and Mode are described as averages. An Average has been
described as a single figure, which has certain characteristics, representing
the whole data.
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24 2
25 6
26 10
27 2
28 3
29 7
30 1
31 3
32 1
(23X5) + (24X2) + (25X6) + (26X10) + (27X2) + (28X3) + (29X7) + (30X1) + (31X3) + (31X1)
Simple Mean =
! 5 + 2 + 6 +10 + 2 + 3+ 7 +1+ 3+1
= 26.75
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Hence, we can say, if the variable is X with values X1, X2, X3, X4, X5
and their frequencies F with values f1, f2, f3, f4, f5, then simple
mean will be as follows ,
ΣFX
! Simple Mean =
ΣF
Σ – Summation
FX – Product of X and F
ΣWX
! Weighted Mean =
ΣW
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where the number of variables are odd, then the median is the exact
center variable, however, if the number of observations is even, then
median will be the simple mean of the center two variables.
Considering, the same example of the ages of participants in a
training program, we can calculate median age.
Ages (in years) arranged in ascending order – 23, 23, 26, 27, 27, 28,
29, 32, 33, 34
Since the total number of ages is even, we take the simple mean of
the center two values that is 27 and 28. The simple mean of the two
is 27.5. Hence, the Median age is 27.5 years.
4. Quartiles are those values of the statistical data that divide the
whole set of statistical observations into four equal parts. Hence,
there are three quartiles in a series, with median being the middle
quartile.
5. Percentile are those values of the statistical data that divide the
whole set of statistical observations into 100 equal parts. Hence,
there are 99 percentiles in a series.
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4. Measures of Dispersion
1. Range
2. Interquartile range
3. Variance
4. Standard Deviation
Example: - Using the data given in Table 14.1, we can calculate the
Variance for the data. The mean of this data is 26.75 and we have
calculated the deviations from the mean and their respective square values
in Table 14.4. The sum of frequencies is 40 and the sum of squares of
deviations is 88.125.
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24 2 2.75 7.5625
25 6 1.75 3.0625
26 10 0.75 0.5625
27 2 -0.25 0.0625
28 3 -1.25 1.5625
29 7 -2.25 5.0625
30 1 -3.25 10.5625
31 3 -4.25 18.0625
32 1 -5.25 27.5625
Hence, on the basis of Table 14.2, Variance = 88.125/ 40;
= 2.203125
5. Sampling
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Sampling is a device that makes one able to draw inferences about the
whole population, simply by observing, or measuring few of the sampling
units.
6. Relationship Analysis
1. Correlation
2. Regression
3. Scatter Diagram
4. Trend Analysis
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5. Markov Analysis
!
Figure 14.7: Examples of a Negative & Positive Correlation
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!
Figure 14.8: Scatter Diagram
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!
Figure 14.9: Scatter Diagram with Regression Line
7. Ratio Measurements
Ratio shows how much of one thing there is in comparison to the other
thing or for every amount of one thing how much is another. It is a
commonly used qualitative measure that can be defined as a relationship
between two numeric values of similar kind (e.g., money, objects, persons,
etc.). They are used to make comparison between two things and may be
expressed as decimals. For example, an individual’s total annual salary is
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Rs. 10,00,000 and his annual expenditure is Rs.6,00,000. Hence, the ratio
of his expenditure to his salary will be calculated as follows –
The ratio of 0.6 that implies for every Rs. 1 of salary the individual spends
Rs. 0.6.
There are numerous types of ratios used in HRM, the common ones include
Cost benefit ratio, Return on investment (ROI) ratio and compa–ratio. We
have already discussed Cost Benefit ratio and ROI in Chapter 5. Let us
briefly understand Compa–ratio.
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Table 14.5
S. HR Sub-function Quantitative Techniques most
No. or practice area commonly used
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Activity
1. An HR head wants to evaluate the effectiveness of an initiative
undertaken to reduce turnover costs. What would be an appropriate
quantitative technique to carry out this measurement? What kind of data
would be required, explain with the help of an example?
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14.7 SUMMARY
This chapter explains us the meaning of quantitative techniques. It then
highlights the significance of such technique in an organization and its
business. Further, focuses on the various uses of quantitative techniques in
Human Resource, Management. Next, the chapter briefly explains the
quantitative techniques that are commonly used in HR which can be
categorized as Collection and presentation of data, Diagrammatic/Graphical
representation of data, Measures of central tendency or location, Measures
of dispersion, Sampling, Relationship analysis and Ratio measures. In the
next section, the different quantitative techniques that are used in different
sub-functional are presented in tabular form. Finally, the chapter shows us
the other side of the coin, i.e., the various shortcomings associated with
using quantities techniques.
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1 8
2 14
3 7
4 5
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5 5
6 4
7 4
8 3
9 4
10 2
Total 56
a. 5 years
b. 8 years
c. 2 years
d. None of the above
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REFERENCES
□□□
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 15
RECENT TRENDS AND PRACTICES IN HRM
Objectives
Structure:
15.6 Summary
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• No longer, the organizations are able to follow “One size fits all “approach
towards their people owing to increasing expectations of employees from
their work, diversity in workforce (presence of both generation X and
generation Y employees), organizations are realizing talent to be their
competitive advantage for success and “war for talent” is intensifying.
Thus, Talent management is becoming the top priority for HR
professionals across sectors.
• In today’s time and place, workforce is getting more and more diversified
and it is becoming critical to identify their common and diverse needs
and devise development strategy in an unbiased manner. Organizations
are increasing their focus on more effectively segmenting the different
layers of talent based on their performance and potential, as this will aid
in long-term success of the organization.
• On the hiring front HR has shifted focus from merely talent acquisition to
talent identification and talent life cycle management within the
organization. Simply hiring best talent is not sufficient, Need is being felt
for developing future leaders, engaging talent and deploying them
effectively after on-boarding.
• Talent management becoming highly critical, but a shortage of requisite
talent is pushing HR professionals to tap into newer talent pools across
the globe for e.g., rehiring retired employees.
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Analytics is not much about numbers but about logic and reasoning and is
different from analysis, which is the equivalent of number crunching.
Analytics uses analysis but then builds on it to understand the 'why' behind
the figures and/or to predict decisions. It is not about the quantity of data
churned; it is about the logic used to link metrics to results
• The value being driven from HR analytics is becoming more and more
prominent with organizations gaining strong understanding of Big data.
• The HR decisions driven by hunch and intuition earlier are increasingly
relying on data backed by analytics.
• Analytics concept being relatively new, experimentation in this field is
excepted to grow manyfold with emergence of newer models
• Usage of the analytics will range from developing talent strategies to
various hypothetical scenarios as well. The HR metrics if derived
accurately from analytics, may also maximize effectiveness of tangible
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• They can redirect the money they spend today on the wrong employee
initiatives to more beneficial employee initiatives. Specifically, those
initiatives that impact critical business metrics and outcomes instead of the
latest unquantified HR fads that promise to make employees happier, more
engaged and satisfied.
• The investments that they decide to make that focus on employees will result
in tangible outcomes that benefit shareholders, customers and employees
themselves.
• The returns on such investments, via their impact on the top and/or bottom
lines, can be quantified.
• HR departments can be held accountable for impacting the bottom line the
same way business or product leaders are held accountable.
• HR executives will be included in the conversation, because they can now
quantify their numerous impacts on business outcomes.
HR Analytics Metrics
Planning & Staffing - Net hire ratio, Cost per hire, Cost/fill, Cost/candidate,
Time to fill, Time to productivity, Candidate satisfaction, Decline rate, Selection
rate, Hires vs projections, Separations vs projections, Productivity differential,
Recruiting cost ratio, Time to start, Time to productivity, New hire turnover
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• Senior leaders are working towards role modelling and giving directions
to the new generation in the workforce
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appraiser and appraisee, also being web-based giving the ease to them
of access at their convenience and comfort.
• Appraising team performance – In today’s workplaces, teams have
become more prevalent, however, erstwhile appraisals were designed to
measure individual performance. HR professionals are increasingly
devising ways to incorporate team appraisal. However, only team
appraisals become difficult hence, a combination of both team and
individual appraisals are being adopted by the companies.
• Greater decentralizaion in the process – There is greater flexibility and
high level of customization being introduced in performance
management, department or business unit wise. This is giving a high
level of belief and ownership in the process and it is being viewed a
strategic tool to cater to their needs rather than a process enforced on
them. With the process being customized to the specific unit’s context
largely, the output tends to be more meaningful and value adding to the
organization.
• Increased participations and ownership of employees – Performance
management tends to be more effective when the individuals are active
and are part of goal setting, progress monitoring and feedback collection
for their own work performance.
• Strong need for all-rounded feedback – Previously 360 degrees feedback
was sought more for a developmental purposes; however, it has been an
increasing requirement to obtain performance evaluation from peers,
subordinates, customers in addition to the managers’ feedback. The
objective being well-rounded and accurate assessment.
• Simplifying the system and encourage meaningful interactions – Strong
shift towards making the process, form filling and goal setting less
complicated. Greater emphasis is being built around encouraging
meaningful dialogue between the appraisers and appraises. Simpler
systems are more flexible and hence, receive greater acceptance from
appraisers and appraisees.
• Year round feedback and continuous recording – Shift from a one or two
times a year activity to a continuous activity. This is made to keep the
process active in the form of performance logs, update sections and
continuous recording methods.
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Benefits to HR
A cloud-based HR system can help remove the administrative stress from a
growing HR team and allow them to concentrate on their business. So let us
look at some of the most important benefits of cloud computing for HR
professionals:
Mobility - The cloud offers users access to information from everywhere and
anywhere. This allows greater flexibility for HR and recruiting professionals on
the move thanks to improved access to critical information. Mobile cloud
applications also allow recruiting and HR managers to take action on
management self-service transactions from anywhere without having to wait to
get to a desktop or laptop. Whether you’re in the office, traveling or working
from home, everyone has access to critical business information.
Affordable costs - With the cloud, there is no need for costly financial
installments, in-house IT technicians, server space or expensive software and
site licenses. Transitioning to the cloud also reduces the cost of system
upgrades because the vendor manages the bulk of the upgrade tasks. Also,
personalization and extensions move forward with the upgrade, allowing users
to take advantage of the new features and functions.
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various implications of the trends mentioned above. Let us look at the key
implications for the HR professionals -
• HR department will become leaner by outsourcing
• Strategic thinking for HR will become an imperative
• Increasing demand for specialists
• Increasing use of analytics and big data in HR
• Increasing imperative to deal with remote workforce
• HR to become more like marketing
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New entrants into the HR field will have to be prepared for this increased
use of analytics. And this will provide them opportunity to be part of
greater value adding HR function. Therefore, HR will look for such
professionals strong on analytical skills and are able to utilize HR analytics
in the best possible way, make projections and drive positive
transformations using the available information.
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It is also believed that HR’s role as marketing will need to extend beyond
hiring and will require “internal focus” and building employees as brand
ambassadors and having brand ownership.
Exhibit 15.3
Activity
1. Based on your understanding list down the various creative ways HR
function can use the new age media - social media - to increase its
effectiveness.
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15.6 SUMMARY
This chapter focuses on the current trends that are being faced by the HR
functions of organizations. Organizations in the face of transforming
business environments are experiencing people challenges, which are
influencing the changes in the people practices and policies. HR function is
experiencing a dynamic environment and thereby new trends. There are
macros trends which the function as a whole is experiencing, however at
the micro level or sub-function level like recruitment and selection,
compensation and benefits, learning and development etc. are also facing
various changes impacting their operations. Overall business environment
is experiencing technological advancements and changes in technology are
setting new trends. Thus, the chapter highlights that these technological
advancements have not left the HR function alone and have greatly
affected the function with its changing trends. HR technology is also rapidly
undergoing transformation. The chapter finally highlights the implications
for the HR professionals of the given scenarios of massive transformations
in all arenas of HR function. It tells us how the roles and responsibilities
are being impacted with the changing face of the workplace and its people.
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1. Which one of the following is a key global trend, reshaping the future of
HR?
a. Ongoing explosion of technology in the form of mobile, social and
cloud computing.
b. Diverse multigenerational workforce on the rise
c. Change in the business focus owing to changing social, political and
regulatory global environments.
d. All of the above
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c. e-Learning gaining high popularity across the globe, for its ease of
availability 24X7, autonomy of speed and content to learner and easy
to keep updated.
d. None of the above
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REFERENCES
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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APPENDIX I: CASE STUDIES
Questions
1. Would you consider Raghav to be a savvy negotiator? If yes. Why?
2. What kind of bargaining is taking place between Raghav and Ashish?
Explain.
3. If you were in Ashish’s place, how would you deal with the situation
further?
The pay of Mr. Sharma has been fixed at that level of Mr. Singh, who joined
the Institute in 1974, as the University Grants Commission did not
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recommend any weightages for the teachers who put up less than five
years’ experience. Mr. Sharma was quite unhappy over the parity of salary
of the teachers of the institute with those of University teachers and
college teachers on the one hand and equalizing his pay with his junior Mr.
Singh on the other hand.
The institute again revised the pay scales of the teachers in 1987 based on
the pay scales recommended by the University Grants Commission in
1986. University Grants Commission again maintained parity in pay scales
of Institute teachers, University teachers and College teachers. The pay
scale of Mr. Sharma was revised and it was fixed at 3,700, which was equal
to the pay of Mr. Singh, Mr. Kulkarni who joined the institute in 1984 and
Mr. Prasad who joined the Institute in 1986.
Mr. Sharma rushed to the chambers of the Director of the Indian Institute
of Technology on 20th July 1988 and told him he was quitting the job in
the institute and he was going to join Government Degree College,
Rajahmundry. He further said that he was going to get the same salary in a
small town. The Director was shocked after listening to Mr. Sharma.
Questions
1. Do you justify the decision made by Mr. Sharma?
2. Do you suggest any measures to stop Mr. Sharma from quitting the job?
3. Do you think that there is something wrong with the institute pay
practices and the University Grants Commission’s recommendations? If
yes, what are they? How do you rectify them?
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is nothing personal between the two women; the requirements of their jobs
just bring them into conflict.
Questions
1. What is the kind of conflict that exists between Rama and Preeti?
2. What steps do you recommend to be taken to manage the conflict
between them?
Questions
1. What is the peculiarity of this case?
2. What would be the comments of the Legal Adviser and the Chief
Personnel Manager?
3. How would you settle the issue if you were the General Manager of the
Bank?
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elevated to the position of Managing Director just two months ago. Mr.
Murthy has been performing various personnel functions since 1976 as
Chief Personnel Manager. He has been given complete freedom and
authority regarding all personnel functions including wage fixation,
adjustments, revisions, bargaining etc. The employees several times
reported their dissatisfaction about the wage level to the Managing
Director. But the Managing Director used to convince them about the
systems and techniques followed by Mr. Murthy in fixing wages.
The employees got a doubt about the information supplied by Mr. Murthy
about the wage levels in comparable industries and the living cost index.
Consequently, they approached Mr. Murthy for clarification. Mr. Murthy did
not clarify their doubt immediately and asked them to meet him after 10
days so that he will collect and provide all the facts, data and information.
Accordingly, they met him after 10 days. Then he simply said that “the
information provided in the latest collective bargaining meeting is correct
but the information supplied in the earlier meetings was not completely
correct. He further added that he was forced by the top management to
supply such incorrect information.” The situation resulted in industrial
unrest in the company for 14 days and the new Managing Director solved
the issue by enhancing the wages by 100 per cent.
Question
1. What is the communication problem involved in this case?
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Questions
1. Why the staff is finding it difficult to achieve such simple goals set by
the owner?
2. You as a program director must find solution for the issues and make
suggestions for improving performance?
3. What is the impact of poor performance on the motivation levels of the
team? Which theory will be applicable here? Explain
4. Would you like to give some feedback to the owner? If yes, what would
it be?
Mr. Sashidhar joined Uptron Electronics Ltd. on 21st January 1996 with
great enthusiasm. He also found his job to be quite comfortable and a
challenging one and he felt it was highly prestigious to work with this
company during the formative years of his career. He found his superiors
as well as subordinates to be friendly and co-operative. But this climate did
not live long. After one year of his service, he slowly learnt about a number
of unpleasant stories about the company management, the superior-
subordinate relations, rate of employee turnover, especially at higher level.
But he decided to stay on as he promised several things to the
management in the interview. He wanted to please and change the attitude
of the management through his diligent performance firm commitment and
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It was quite surprising for the General Manager to see the resignation
letter of Mr. Sashidhar along with a cheque equivalent to a month's salary
one fine morning on 18th January 1998. The General Manager failed to
convince Mr. Sashidhar to withdraw his resignation. The General Manager
relieved him on 25th January, 1998. The General Manager wanted to
appoint a committee to go into the matter immediately but dropped the
idea later.
Questions
1. What prevented the General Manager from appointing a Committee?
2. What is wrong with the recruitment policy of the Company?
3. Why did Mr. Sashidhar’s resignation surprise the General Manager?
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