MB0043-Unit-01-Human Resource Management An Introduction

Unit-01-Human Resource Management An Introduction Structure: 1.1 Introduction Objectives 1.2 Distinction between Personnel Management & Human Resources Management 1.3 Human Resources and its importance 1.4 Evolution of the Human Resource Management 1.5 Human Relations Theory 1.6 Objectives of Human Relation 1.7 Summary 1.8 Caselet 1.9 Terminal Questions 1.10 Answers 1.1 Introduction As you look around you, you will see that todays organizations is characterised by constant changes. These changes relate to global economic factors as well as shifts in kind of people that are currently employed in organizations. You will agree that the life style of employees has significantly changed as compared to what you saw 8-10 years ago. The economic changes sweeping through all countries are significantly impacting work culture, working procedures, and workplace norms. For example you will find . that people are changing jobs more often people work longer and even carry work home the hiring process in firms are more elaborate and take longer than it used to, to hire a employee

 firms today take more care of their employees, lot more facilities and benefits given to employees This Unit focuses on introducing you to the most critical success factor for an organization its human resource. Todays corporation constantly moulds itself to meet the business challenges despite economic, political and social patterns in which it exists. The efforts made by organizations to sustain business metrics like revenue, profits and growth, market share is possible only through the people in the organization who work towards making this happen within the enterprise. One of the most useful definition of Human Resources Management (HRM) is provided by Fisher, Schoendfelt and Shaw in their book Human Resources Management, HRM involves all management decisions and practices that directly affect or influence the people or Human resources who work for the organization. And yet another simple definition is provided by Bernardin and Russell in their book Human Resources Management An Experiential Approach, as How people are managed is human resources management. And to add to the external challenges there are internal challenges, the workforce is constantly changing their ideas, attitudes and values. Per Dale Yoder observation, employment relationships in corporate revel the following trends: 1) Increased complexity of organization and employment communication and a distinction between owners, managers and employees. 2) Decreased number of employers and self-employed and enlarged size of workforce. 3) Enhanced need for training in view of increased requirements of specialised skills. 4) Public interventions and legal complication in employer-employee relationships. 5) Enhanced training and development of managers and professionalization of management education. 6) Possibility of employment explosion in view of the ever-increasing size of workforce. 7) Rising formal level of education of rank-and-file employees who are becoming increasingly critical of management malpractices and errors Rank-and-file employees rapidly growing demands in different employment situations. 9) Increased applications of behavioural science by enterprising managers.

10) Recognition of close relationship between profits and earnings and ability to manage human resources. These trends help an organization to re-engineer itself to ensure that the business metrics are met and the organization remains profitable. Although the changes may provide solution to some problems, they may create several new ones. For example the workforce that constitutes the IT industry is highly educated and ranks high on intellect which proves a boon to the rapid progress that technology has brought about in improving the quality of life for people around the world. This workforce however needs to be managed carefully to deliver the desired results, for example a poor quality software code can jeopardise the reputation of the entire organization with its clients and hamper future contracts and projects. Awareness of these challenges enables the managers as well as the HR teams within the organization to anticipate them and build necessary policies and procedures to meet them. The ability to find the solutions to these problems can play a critical role in the organizations ability to cope with the challenges and be profitable. Herein the HR department plays the role of a consultant advisor while the manager owns the responsibility to decide the best course of action and be responsible for execution. Specifically, the managers responsibility is to lead, guide and direct the efforts of his team to reach the desired goals. Therefore it is a critical competency for every manager in todays organization to be effective human resources professional as well and be responsible and accountable for his people responsibilities as much as for the business results. Objectives: After studying this unit, you will be able to: Distinguish between Personnel Management and Human Resource Management Explain Human resources as a function Debate the importance and evolution of HRM Discuss the Concept of Human Relations and its objectives 1.2 Distinction between Personnel Management & Human Resources Management The history of Human Resources Management traces its roots to the erstwhile Personnel Management that was prevalent in the companies of a few decades ago. Though the two terms Personnel Management and Human Resources Management are interchangeably used by most of the authors, there are key differentiators that make Personnel Management (PM) different from Human Resources Management (HRM). HRM is clearly based on the foundation of behavioural science knowledge relating to the handling of employees to motivate organizational goals. The focus is more proactive approach and pays attention to employee satisfaction and delight. Business goals and objectives and the strategies that will enable this to happen are the foundation for HRM.

The basic philosophy is driven by the Theory Y approach where the belief is that people like to work and do not prefer to be supervised and made to perform. The employee becomes a champion for the organization and its product/service. PM is that management style that deals with the control and reactive problem solving approach to resolve employee issues in a organizations. The philosophy for the PM approach relied on the Theory X approach that believed that people do not naturally like to work and need to be coerced to work and often need to be driven to work. Is more the stick approach rather than carrot approach. Rigid rules of dos and donts exist and these provide the framework for employees behaviour at the workplace. Employee welfare and formal grievance systems play a significant role here and thereby managing industrial relations with high amount of trade union activity are highlighted. Very few organizations today practice this style to people management, as the benefits and the long term gains from a HRM approach, impact business results far more. HRM emphasizes on training, as an important area of people management, which covers the following aspects: 1. Increasing productivity 2. Improving quality 3. Improving organisational climate 4. Ensuring personnel growth etc. Self Assessment Questions 1. Personnel Management is proactive while Human Resources Management is reactive (True / False) 2. Trade unions influence the HRM policies of a company (True / False) 3. PM practices support business results better than HRM practices (True / False) 4. Career planning and employee growth is a initiative of the HRM philosophy (True / False) 5. A grievance management system is a common HRM function. (True / False) 1.3 Human Resources and its Importance For any country its human resources can be defined as the sum total of the knowledge, skills, creative abilities, talents and aptitudes. Similarly, from the viewpoint of an organization, it represents the sum total of inherent abilities, acquired knowledge and skills, talent and aptitudes of its employees. The human resources have also been

designated as human factors. According to Julius, the human factor refers to a whole consisting of inter-related, interdependent and inter-acting physiological, psychological, sociological and ethical components. In order to have healthy human resources there is the need to pay attention to and provide for physiological components, such as food, rest and environmental conditions to satisfy the physiological needs of people at the workplace. Also important is focus on protection against harmful and destructive conditions and attempts to avoid drop in income/benefits or even employment status (e.g. a demotion from a higher level or role to a lower level or role) so as to have physiological security. On the psychological aspects, there is the element of emotions and impulses. These aspects are far more subjective and to add to the challenge are uniquely different for each individual. While something can inspire someone the same things can depress and act as a de-motivator for others. People in the organizational context have numerous psychological needs such as autonomy, achievement, power, acquisitiveness etc. It is natural for employees to look for the satisfaction of these needs within the organization. As a social being, each individual looks to satisfy his/her personal needs and aspirations as also the sense of affiliation, status, recognition, prestige etc. Another factor that influences individuals at work are ethical in nature and it addresses the right and wrong-ness of whatever the individual experiences. Conflicts in what the individual perceives as right or wrong vs. what the organization encourages as right or wrong impacts the behaviour of the individual and his/her satisfaction /well-being within the organization. It is not uncommon of people leaving a company because they did not like the policies that they needed to comply with, e.g. corruption in dealing with certain authorities etc. There is no doubt that human resources have been critical in organizations since the very beginning and continue to be critical and significant in todays organizations. The paradox lies in the fact that even today the majority of challenges in organizations pertain to the human and social rather than physical, technical or economic factors. It is a truism that productivity is associated markedly with the nature of human resources and their total environment consisting of inter-related, inter-dependent and interacting economic and non-economic (i.e., political, religious, cultural, sociological and psychological factors. Thus, the significance of human resources can be examined from at least two standpoints-economic and non-economic. While the economic factors are easily identifiable and controllable the non-economic factors require keen observation and listening skills and will need to be redressed differently and sensitively. Self Assessment Questions 6. According to_____________, the human factor refers to a whole consisting of interrelated, interdependent and inter-acting physiological, psychological, sociological and ethical components.

7. The ______________ elements in managing employees are more challenging as compared to the physiological ones. 8. Psychologically, it is characterised by ____________ and _____________. 9. Majority of the problems in organizational setting are _________ and _______ rather than physical, technical or economic. 10. Conflicts in perception w.r.t. __________ also impact employee behaviour at work. 1.4 Evolution of the Human Resource Management The historical background to the management techniques of human resources are in vogue since ancient times. Its only in the past 100 odd years that the techniques and study of human behaviour at work has become formal and structured with certain basic practices established as core and a host of other practices left to each organization to design and implement as per their individual business driven practices. As per Fisher, Schonfeldt and Shaw, in their book titled Human Resources Management, they have characterised the history of HRM as having evolved through four broad phases, the Craft system, the scientific system, the human relations approach and the prevalent organizational science-human resources approach. The Craft system refers to early trends noticed in Egypt and Babylon, where skills based training was provided to people to ensure a steady flow of craftsmen required to build huge monuments. By the 13th century, subsequently the trend was noticed in Europe and later craft guilds evolved to ensure not only the skill acquisition but regulate the conditions of employment, level of skill and improved production techniques. Most relevant in the domestic industry where generations of skilled workers trained and became experts in a particular skill. The Scientific Management approach was a key part of the industrial revolution typical of the nineteenth and early twentieth century. It was instilled in the principles of mass production and organization of work simple work skills and supervisory/managerial skills. This rapidly emerged as the assembly line approach to managing workflow, which later Fredrick Taylor (1856-1915) pioneered based on the philosophy that employees wanted to be used efficiently and money being the primary motivator. Over a period of time this was proved wrong as employee dissent grew and union issues surfaced. It was during this phase that employee welfare as a key HR practice emerged which redressed employee issues like recreational facilities, medical program and employee grievance systems. The Human Relations approach was an outcome of the famous studies undertaken by US social scientist Elton Mayo and Fritz Roethlisberger at the Western Electrics Hawthorne plant in Chicago.

The Hawthorne Studies: As described in virtually every book written about management, the human relations or behavioral school of management began in 1927 with a group of studies conducted at the Hawthorne plant of Western Electric, an AT&T subsidiary. Curiously, these studies were prompted by an experiment carried out by the companys engineers between 1924 and 1932. Following the scientific management tradition, these engineers were applying research methods to answer job-related problems. Two groups were studied to determine the effects of different levels of illumination on worker performance. One group received increased illumination, while the other did not. A preliminary finding was that, when illumination was increased, the level of performance also increased. Surprisingly to the engineers, productivity also increased when the level of illumination was decreased almost to moonlight levels. One interpretation made of these results was that the employees involved in the experiment enjoyed being the centre of attention; they reacted positively because management cared about them. The reason for the increase in the production was not the physical but the psychological impact of the employees attitude towards the job and towards the company. Such a phenomenon taking place in any research setting is now called the Hawthorne effect. As a result of these preliminary investigations, a team of researchers headed by Elton Mayo and F.J. Roethlisberger from Harvard conducted a lengthy series of experiments extending over a six year period. The conclusions they reached served as the bedrock of later developments in the human relations approach to management. Among their key findings were the following: Economic incentives are less potent than generally believed in influencing employees to achieve high levels of output. Leadership practices and work-group pressures profoundly influence employee satisfaction and performance. Any factor influencing employee behaviour is embedded in a social system. For instance, to understand the impact of pay on performance, you also have to understand the climate that exists in the work group and the leadership style of the superior. Leadership Style and Practices: As a consequence of the Hawthorne Studies, worker attitudes, morale, and group influences became a concern of researchers. A notable development of the nature occurred shortly after World War II at the University of Michigan. A group of social scientists formed an organization, later to be called the Institute for Social Research, to study those principles of leadership that were associated with highest productivity. Based upon work with clerical and production employees, an important conclusion was that supervisors of high-producing units behaved differently from those of low-producing

units. Among the differences in style noted were that supervisors of productive groups in comparison to their lower producing counterparts were: More emotionally supportive of subordinates. More likely to pay a differentiated role plan, regulate, and coordinate the activities of subordinates, but not become directly involved in work tasks. More likely to exercise general rather than close or light supervision. The origin and progress of the human relations movement (particularly in U.S.A.) has been due to certain social and cultural forces working there, such as Recognition of the dignity of the individual and his personality. The individual has a lot of freedom of choice and the idea of decision-making by oneself is deep-rooted in the national tradition. A child is brought up to value independence and encouraged to think on his own and not to be dependent on parents. Virtual disappearance of owner managers and the growth of professional managers capable of managing according to professional code. Strong organizations of labour, at all levels, calling for higher skills in communication and participative behaviour on the part of the management. Shortage of labour led to skilled labour being treated as nearly irreplaceable. Hence, much greater care in utilising this scarce and valuable resource had to be thought of in the form of "Human Relations." Higher standards of living of American labour. Since their physical and security needs were generally satisfied, increased participation alone could satisfy their emerging social and ego needs. The possible weakening of work ethics, requiring managers to develop new attitudes towards labour. The changing work environment-greater specialization and a large scope of operations which require a greater degree of managerial effectiveness with and through employees. A significant increase in the general educational level of employees who, as a result, demanded more from their employers. Concurrent with the growth of human relations in work organizations, has been the burgeoning of techniques and programmes to foster human growth off the job. In the last two decades, millions of people seeking personal growth (or sometimes simply emotional

arousal) have participated in programmes such as encounter groups, marriage enrichment groups, seminar training, couples groups, and transactional analysis. During the early 1970s, the human potential (meaning development of ones potential) movement began to appear in work settings. Management awareness training and assertiveness training represent two other techniques related to the development of human potential. Both are designed to deal with the problem of job discrimination against women. In management awareness training, managers are made more sensitive to their sexist attitudes (such as thinking of all engineers are male) and in changing their attitudes. Assertiveness training has been widely used to help women to be more direct in making known their demands for equal opportunity. Career development programmes in industry are more prevalent today than at any time in the past. Although varying widely in content, all these programmes are designed to help the individual make career decisions that will move him or her toward self-fulfillment. In the process, it is assumed that the person will make a better contribution to the organization. Finally the Organizational Sciences approach to human resources management has brought the focus to the scientific process within organizations that can impact employee experience, and less on just the individual. Todays organizations focus on building their processes and policies and compete to emerge as preferred employers (best employer). It is not uncommon for competing organizations to woo the employees through advertising more and better employee-friendly initiatives like work-from-home jobs, careers for married couples, global work assignments and internal job postings and world class workplace infrastructures from in-campus cricket grounds to gymnasiums for employee wellbeing. This is the HR that we now see around us. Activity 1: Maintaining a competent and motivated workforce is a difficult task. From your general observations, list out four major challenges, a HR Manager faces in maintaining a competent workforce. Self Assessment Questions 11. Leadership practices and work-group pressures profoundly influence employee __________________________________. 12. Any factor influencing employee behaviour is embedded in a __________. For instance, to understand the impact of pay on performance, you also have to understand the __________that exists in the work group and the ____________ of the superior.

13. The origin and progress of the human relations movement (particularly in U.S.A.) has been due to certain________________________ working there, such as Recognition of the dignity of the individual and his personality. 14. In management awareness training, managers are made more ___________ _____________(such as thinking of all engineers are male) and in ___________ ___________________. 1.5 Human Relations Concept To understand the nature of human relations, we begin with a concise and operational definition that acts as guidance to what people expect at work. Human Relations in Management is a process that brings employees into contact with and causes them to be influenced by their leaders, their jobs, and other aspects of the organizations which they work in. It includes everything at the workplace that influences the behavior of employees: their relationships with their mangers, with other employees, the kind of work they do, and the impact on them of the practices of the organization as a whole. As discussed earlier this knowledge of the employees expectations are critical for the achievement of the business results of revenue, profit, growth, market share. In the best possible way, "human relations refer to the interaction of people in all walks of lifein schools, homes, business and government." Huneryager and Heckmann define the expression thus: Human relations are a systematic, developing body of knowledge devoted to explaining the behavior of individuals in the working organization." In the opinion of McFarland, "Human Relations is the study and practice of utilizing human resources through knowledge and through an understanding of the activities, attitudes, sentiments, and inter-relationships of people at work." When applied to a business or an industry, it refers to every dimension of interaction that happens between employee and employee, employee and manager, teams and managers, employee and customer and employee and vendor (one who provides a support or a service). It is therefore a key objective of every organization to ensure that all dimensions of the human relations are redressed appropriately to ensure positive human relations. When a relationship exists in an organization, it is referred to as employee-human relations; and when it exists outside it, it is known as public human relations. Organizations need to pay due attention to not just the way it treats employees but also the methods and processes in place to recognize and reward teams of employees depending on what they achieve and deliver for the organization. This calls for another dimension in managing human relations that focus on the employee as a social animal. To place it in perspective, the human relations focus of an organization needs to have programs in place to take care of: a) Employee needs

b) Team needs c) Customer/vendor needs The challenges in front of the modern organization are therefore many and varied, but have to be met in order for survival. Self Assessment Questions 15. ______________________________ is a process that brings employees into contact with and causes them to be influenced by their leaders, their jobs, and other aspects of the organizations which they work. 16. The decline in popularity of the term human relations" stems in part from the frustrations experienced by managers of the fifties and sixties who attempted to use a human relations concept which was un-realistically limited to ___________________________. 17. In the broadest sense, human relations refer to the _______________ of people in all walks of life-in schools, homes, business and government. 1.6 Objectives of Human Relations A human Relations Programme thereby attempts at enhancing employee motivation and workplace morale through an improved three-way communications and through employee participation in the decision making processes. Human relations seek to emphasise employee aspects of work rather than technical or economic aspects. For example while it might be in the best interest of an organization to have a employee skilled and completely proficient in one job/ set or responsibilities, todays organization provides opportunities for employees to multi-skill and acquire knowledge of new yet related jobs/responsibilities. These acts as a motivator for employees as they benefit by learning new skills / jobs and given an opportunity can perform and excel in another job. It also seeks to make employment and working conditions less impersonal. The human relations approach emphasises policies and techniques designed to improve employee morale and job satisfaction. For example it is common place in organizations to provide for / encourage employee empowerment where-in the team brings about creative measures to reduce cost/ improve customer satisfaction. Such teams design and implement self-driven initiatives to bring about the business result. It is believed that this is accompanied by increased employee efficiency and reduction in employee dissatisfaction. An understanding of emerging workplace human behaviour can be summarised as: i) Assist the manager to develop a better realization of how his own attitudes and behaviour play a part in everyday affairs of the team and its morale;

ii) Assist the manager to develop a keener sensitivity towards the team members and interpersonal dynamics iii) Partner with the managers in helping him drive the business goals and take part ownership of work challenges and how best to resolve them iv) Enable him to anticipate and prevent problems, or at least to resolve more effectively those that he cannot avoid; and v) Network with other teams with related dependencies and help resolve inter-team business impacting challenges This Scope of Human Relations springs up from the problems which have many different causes and perspectives. Halloran has stated these as: Every person brings a unique set of talents, ambitions and work experience to a job. These personal attributes change over time, often as a result of the degree of success or failure the person experiences in the work world. Matching so many unique sets of personal qualities to a standardized technology can create problems. The organizational aspects of a company, such as its size, geographic location, economic health, and degree of automation, define the scope of work and the activity in each work division. These frequently arbitrary, structural definitions often cause difficulties in human relations. Innovations in technology and production methods generally require the restructuring of job roles and responsibilities. Radical changes in basic organizational structure can cause severe strains between employees and management and create intense problems in human relations. Promotion of individuals to positions of greater responsibility and authority generally creates a need for changed behaviour patterns between the new supervisors and their former peers, which in time, can create human relations problems. Inexperienced employees may not be able to perform their roles or tasks in work groups in a competent manner. The time they take to adjust can not only create problems with production schedules, but can also create particular kinds of human relations problems between them and their co-employees and supervisors. The variety of causes of human relations problems lead to the conclusion that no one programme or single approach can create conditions for good human relations. Therefore, as shared earlier it in common for organizations and individuals in organization to constantly innovate and resolve challenges that will benefit both the organization as well as the employee.

This helps understand the key HR objectives which can be best illustrated by understanding the functions that HR attempts to fulfil in any organization: i) Human Resource Planning estimating the need for resources in order achieve the desired business results. HR plans can be both short term/immediate as well as long term / strategic. The HR team partners with the line managers to understand the business goals and targets for the year and then together plan the HR needs in order to meet the goals. ii) Acquisition of human resources staffing the organizations with the right mix of skills and competencies at the right time. It also includes HR initiatives like promotions and internal job posting to fulfil this requirement for human resources. Staffing teams in organizations are usually a separate group of specialists who work closely with the line managers to understand the skills and competencies needed for the job and engage together to select the best talent for the open positions. iii) Training and employee development focuses on managing training activities to upgrade skills and knowledge as well as soft skills like team building and leadership. The training team is again a group of HR specialists who propose the training program and consult with the line managers to ensure that the program achieves the desired outcomes. iv) Building performance management systems focuses on the right processes to set goals for performance as individuals/teams and related measurement methods. This is a core HR activity and is supported by the HR generalist. v) Reward systems establishing appropriate compensation systems and reward mechanisms that would reward the desired outcome and results in accordance with the corporate values. This again forms a part of the HR generalists tasks. How employees progress in a organization how they are paid w.r.t. internal and external market factors, what employee benefits are offered, are some aspect that this function redresses. vi) Human Resources Information Systems that would take care of the operational transactions from the time an employee joins till the time the employee exits, like personnel files, compensation administration, payroll, benefits administration and issuing letters and testimonials. This task is supported by as separate HR operations team who act as a HR helpdesk and provide information to the employees/managers.

Activity 2 Read 2-3 articles and list out few welfare measures e.g. pensions plans etc, which companies are offering to their employees. Then against each, mention the reason, why you think the company has provided this benefit. Self Assessment Questions

18. Human relations seek to emphasise _________ aspects of work rather than technical or economic aspects. 19. Every person brings a unique set of talents, ambitions and work experience to a job. Innovations in technology and production methods generally require the restructuring of __________________________. 20. ____________________may not be able to perform their roles or tasks in work groups in a competent manner. 21. ___________________________ help determine the correct processes for setting goals and measuring achievements.

1.7 Summary Management of human resources is the essence of being a manager who has to get things done through others. And in this activity the manager is supported by the HR professionals who act as the expert providing the right guidance within the framework of the organizations policies and practices. The human resources have also been designated as human factors that need to be managed at the workplace in order to ensure that the business objectives are met. According to Julius, the human factor refers to a whole consisting of inter-related, interdependent and inter-acting physiological, psychological, sociological and ethical components. Majority of the problems in organizational setting are human and social rather than physical, technical or economic. The physical resources will not give results unless the human resources are applied to them. Management of human resources is being regarded as a specialised profession such as that of medicine and law. The Human Resources Department is responsible for many varied functions including employment, safety, training, wage and salary administration and research and development. The Head of the Human Resources Department is associated with top management and helps it in the formulation of Human Resources policies for the company.

 Human Relations in Management is a process that brings employees into contact with and causes them to be influenced by their leaders, their jobs, and other aspects of the organizations which they work. It includes everything in the work environment that influences the behaviour of employees: A human relations programme represents an attempt at improving employee morale and motivation. As a consequence of the Hawthorne Studies, worker attitudes, morale, and group influences became a concern of researchers. The terms Personnel Management and Human Resources Management are interchangeably used by most of the authors, though there are some differences between them. HRM is a broad concept which covers many personnel aspects and includes social, professional and individual enterprise aspects, whereas Personnel Management focuses only on personnel aspects such as leadership, justice determination, task specialisation, staffing, performance appraisal, etc. HRM is more growth-oriented whereas Personnel Management is slightly narrow. 1.8 Caselet Talent management: How to invest in your workforce By Douglas MacMillan The war for talent. The coming brain drain.- Mismanaged succession. In recent years, judging by steady increases in spending on talent management, workforce challenges like these have become top of mind for most companies, large and small. But what is the most productive way to invest in your workforce, and what are the chances you will see a tangible return? A new study conducted jointly by IBMs Institute for Business Value and Washingtonbased think tank Human Capital Institute (HCI), and shared exclusively with BusinessWeek.com, has yielded promising answers to those questions. Last spring, researchers from IBM and HCI surveyed 1,900 professionals in over 1,000 public- and private-sector companies, from a range of industries, geographies and organizational sizes. Respondents scored their companies in 30 specific competencies, which fell into six key practices of talent management: strategy development, attracting and retaining, motivating and developing, deploying and managing, connecting and enabling, and transforming and sustaining.

Companies with high scores across the board were more likely to have strong financial performance, based on reported change in operating profits between 2003 and 2006. "Its not the first research to show a correlation between talent management and financial results," admits Allan Schweyer, executive director of HCI and one of the authors of the report, "but its one in a handful, and I think it really adds to that body of evidence that is helping organizations to build a solid business case for investments in talent management." Planning ahead Organizational size was a main difference-maker between companies that did well on the survey and those that did poorly. Researchers found that large companies defined as having 10,000 to 50,000 employees do not only manage their existing employees more efficiently, but they are better equipped to plan ahead for the number of people and types of skills they will need to bring into their organization in the future. "Smaller competitors who havent done this work really scramble in a lot of cases when it comes to filling holes in their workforce," says Schweyer. Large companies outperformed the total sample by 4 percent in linking workforcemanagement strategy to business strategy, and by 7 percent in having metrics that provide input into strategic workforce planning decisions. Yet small companies do have the advantage of being nimble and able to manage their workforce on an intimate, informal level. Organizations with fewer than 1,000 employees were 4 percent better than the total sample at collaboration and sharing knowledge, 6 percent better at promoting virtual working, and 4 percent better at identifying relevant skills. Surprisingly, medium-size companies between 1,000 and 10,000 employees were less likely to have implemented five out of the six talent management practices in the study. At that size, says IBM associate partner Eric Lesser, "youre too small to do it by yourself but perhaps havent built the infrastructure or managerial focus" that larger companies have. Lesser and the other authors of the report termed these companies "organizational adolescents" that have growing pains because they are unable both to diagnose issues and keep a long-term perspective. Major differences between industries also emerged in the report: Knowledge-intensive businesses tended to focus on development and collaboration, while service-intensive ones emphasized employee attraction and retention. All nonprofit industries studied government, education, and health care lagged behind the private sector in virtually all areas of talent management. The best way to invest in talent management depends greatly on the size and industry of a company. And there is no easy fix for the human resources woes that are becoming more common in all business.

But for those looking to link talent to profits, there were two competencies that a majority of the best-performing companies had in common: understanding and addressing workforce attitudes and engagement levels; and aligning employee incentives with appropriate business goals. Source : BusinessWeek; Thursday, August 14, 2008 1.9 Terminal Questions 1. What is Human Resources Management? What is its importance in the Modern world? 2. Bring out with examples the interaction between Economic and Noneconomic factors in Human Resources Management. 3. Enumerate the growth of Human Resources Management in India and its impact on Indias ethos. 4. Explain the factors responsible for growth of Human Relations. 5. Distinguish between Personnel Management & Human Resources Management. 1.10 Answers Answers to Self Assessment Questions 1. False 2. False 3. False 4. True 5. False 6. Jucius, 7. psychological, 8. Emotions and impulses, 9. Human and social, 10. Ethics

11. Satisfaction and performance, 12. Social system, climate, leadership style, 13. Social and cultural forces, 14. Sensitive to their attitudes, changing their attitudes 15. Human Relations Management, 16. people-people relationships, 17. Interaction 18. Employee 19. Job roles and responsibilities 20. Inexperienced employees 21. Performance management systems Answers to Terminal Questions: 1. Refer to 1.3 2. Refer to 1.4 3. Refer to 1.5 4. Refer to 1.5 5. Refer to 1.6 References 1. Human Resources Management by Fisher, Schoenfeldt and Shaw 2. Managing Human Resources Productivity, Quality of Work Life, Profits by Wayne F. Cascio 3. International Human Resources Management : Text and Cases by K Aswathappa and Sadhna Dash 4. Human Resources Management by K Aswathappa

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MB0043-Unit-02-HRM in India
Unit-02-HRM in India Structure: 2.1 Introduction Objectives 2.2 HRM in India 2.3 Human Relations Movement 2.4 Cultural dimension of the Indian workforce 2.5 Scope of HR in India 2.6 Summary 2.7 Caselet 2.8 Terminal Questions 2.9 Answers 2.1 Introduction You will agree that the evolution of the Indian organizations have happened at a different pace as compared to what happened in the rest of the world. You might have read articles in magazines and on the web on the challenges that multinational company may face while doing business in a country like India.. MNC faces difficulty in setting up business in India in terms of paper work related to registration and due to laws of the land. Organization also faces a lot of challenges in hiring and retaining its employees. We will spend time in this Unit discussing what Indias challenges were and how it has overcome them to emerge a winner. The Indian story for organizational success is one that is deeply rooted in its history and culture. The Indian value system is rich in terms of joint family system and has respect for elders. The British rule along with the freedom struggle has strongly impacted the shaping of the Indian workplace. The largely agrarian nature of the countrys wealth builds hard work, dignity for labour, saving for the future and shared responsibility these

are the key attributes of Indian workforce. And these attributes even today are the foundation of the success of the Indian firm. To add on this, the role of the countrys democratic governance framework with its sturdy term of Five Year Plan have enabled policy makers and the financial institutions to set the stage for Indias success. The farsightedness of the government in the area of education, particularly, has contributed immensely to the control of population. This together with the assistance from the developed countries helped the country create its own value proposition globally. Unique in its strengths and its weaknesses India today is identified as among the leading emerging economic in the world sharing space with larger countries (both in size and scope) like Russia, China and Brazil. India continues to climb the curve of success even after 60 years of independence, with symbiotic trade relations with almost every other country in the world. Objective: After studying this unit you will be able to: Recall the history of Indian concepts in human resources management Identify its uniqueness as compared to the rest of the world Evaluate the impact of the countrys culture on the organizations culture 2.2 HRM in India As it stands today the Indian organization could not have hoped for more. In addition to being strategically positioned on the corporate world map as a low-cost, highly skilled destination, the Indian corporate is emerging as a base for committed, intelligent and a knowledgeable workforce. This has been achieved by the help of a strong foundation provided by the Indian education system at the primary, secondary, technical and at professional level. It is a undisputed fact that the Indian Institute of Technology, the National Institute of Technology and the famed India Institute of Management are among the world-class institutions to name a few. Quality education and research are encouraged on these campuses and across the country, which mould and contribute to the practices in Indian organizations. The HRM practices in Indian organizations are a parody of sorts. There is a strong foundation that is a simple extension of the HR practices from the established western organizations and the developed countries. However there is a equally strong cultural impact on the hiring practices, compensation standards, benefits and statutory benefits, performance linked rewards and payout, which though in-step with international HRM practices have a flavour their own. We will discuss a few distinct differentiators that impact HRM practices in Indian organizations:

 The Indian culture is one that is deeply rooted in its societal and collectivistic values whereby there is a natural urge to collaborate at the workplace, work in teams and groups with ease. The diversity that is seen in the Indian society w.r.t. diverse religions and states are reflected in the ability of the Indian to accept diversity of views and thought without inhibitions. Not much effort needs to be expended to practice tolerance towards others points of view. The tolerance for ambiguity and uncertainty however is low in the Indian which requires a lot more detailing of jobs and roles and responsibilities. There is need therefore to establish definite boundaries of authority and responsibility. Work culture-wise, the natural ability to work hard and long hours, perseverance and the need to earn money impact the way the work is organised in Indian organizations. It is not uncommon for the Indian to compromise personal time with family / friends to instead attend to work and satisfy a customer. There is a overwhelming sense of service that manifests itself at the workplace. Availability of a large educated group of individuals of different calibre of knowledge and skill allows the country to undertake different nature of work beginning with lower skilled activities such as BPOs(Business Process Outsourcing) and moving up the value curve to far more advanced activities .KPOs (Knowledge Process Outsourcing). Compensation and benefits costs continue to provide a competitive advantage for India making it a preferred business location the world over. There is a natural expressed need to belong. This again is typical of the Indian and has brought about a significant amount of customisation of the workplace and its norms to allow for cultural events and activities through the year. There is a lot more scope for socialising that exists in the Indian organizations. Current trend in the over populated urban part of the country are quickly fading out to tire 2 and tire 3 cities and town where the cost of living and wage levels are not as competitive, further expanding the Indian resource base for hiring and building talent, contributing to the overall gain of the country. HRM in India however is not structurally well-researched and hence a lack of theoretical information to track and document its progress. Unlike in the emerged countries like the USA and the UK where the research networks are mature and well established. Research is yet at its infancy in India and there is a lot of dependence on the emerged countries in emulating best practices in the way people are hired and managed. Today the organizations of Indian origin have their unique HR strategies that work best for them. Work more and earn more is a common and accepted philosophy at the Indian workplace. Work is respected and revered and almost worshipped in Indian organizations. Benefits

are basic yet equitable and adequate. There is a high focus on cash in hand as opposed to benefits and perks. Our statutory and legal frameworks, as a result, are a lot more liberal and less restrictive as compared to the emerged countries. An open society drives openness at the workplace and hypocrisy is largely discouraged, leading to well structured policies and processes that drive workplace behaviour. Diversity for India is a challenge very different from its existence in the rest of the world. Diversity initiatives in India normally focus around challenges related to gender diversity. Its only in the past few years that there is a pattern of women in the Indian corporate. Today this is a key issue. There is a lot of strategising and initiatives in all Indian MNCs as well as Indian domestic firms toward wooing this critical potential talent for organizational advantage. Activity 1 Speak to your friends or relatives who are working in a public sector company or in a MNC. Try to compare the HR practices of a public sector company to a MNC.

Self Assessment Questions

1. In India diversity is a concern because we are very conservative and a closed society (True / False) 2. India is gaining importance because of the quality as well as the cheap cost of living (True / False) 3. Our legal framework is very advanced, allowing for foreign companies to work easily in India (True / False) 4. Grievance management systems is a common HRM function (True / False) 2.3 Human Relations Movement Kautilya provides an account of the techniques of human resources management as early as 4th century B.C. in the "Artha-Shastra". As per the book, there existed logical procedures and principles in organizing labour namely the Shreni or guild system and in the principles of the co-operative sector. The wages were in terms of quantity and quality of work turned out and punishment for unnecessarily delaying the work or spoiling it. The writing of Kautilya provides an excellent discussion on staffing and personnel management, including the detailing of what today are called job descriptions, qualifications for jobs, methods of selection, employee and supervisor development, formally established incentive methods (Sarasa- saama- daana- bheda- danda- catura, the Carrot and Stick approach) and even the science of performance evaluation. The guild system was pioneered and closely followed by the establishment of the co-operative

sector of craftsmen and traders organizing themselves to promote their professional interests. Numerous professional societies were similarly formed each establishing systematic procedures and policies to nurture their own interests. Significantly, these practices also respected the principles of the division of labour, which can easily be traced to the caste system that even today is a inseparable part of the Indian cultural system. The society got divided into Individuals engaging themselves in activities such as teaching, sacrifice or state management were designated as Brahmins While those specialising in fighting were termed as Kshatriyas. Individuals engaged in the areas of trade, business and agriculture were called Vaishyas and Those devoting themselves in manual work were known as Shudras. Herein hereditary facilitated the transfer of skills and training from one generation to another. Quickly even specialised skills became hereditary suchas goldsmiths, weavers, potters, blacksmiths, carpenters, hunters, charioteers, snake charmers, architects, sculptors, armourers identified as separate communities by themselves. Between the employer and employees justice and equity laid a sound foundation for successful enterprise. During the medieval period, India experienced aggressions for around 700 years, during the Mughal rule. While trade and commerce flourished, majority of the artisans and the craftsmen remained poor and lived simple lives compounded by the large and joint family system that prevailed. Low wages, oppressive political conditions and poor physique characterised the workplace. Nothing significantly changed during the British rule. Oppression and poor working conditions prevailed in all industries and intensified in the tea estates that were the key focus of the British for obvious reasons that tea was a key export product. This prevailed till the enactment of the Factory Act of 1881. This coincided with the waves of industrialization and urban growth that India witnessed. The Act brought about the first set of formal guidelines and rules that the industries had to comply with. Workers employed in the factories were allowed a week off-day and provisions were made for supervision, quality and hours of work. Sadly the act also established the minimum age of children for employment to be seven years and the maximum working hours for them to not exceed seven hours a day and only in the day-shift. This set the stage for the organization of employees to ensure fair work and pay and in 1890, the first labour organization Bombay Mill Hands Association was established. In 1905, the printers Union at Calcutta and in 1907, the Postal Union at Bombay were established. The Madras Labour Union was organized thereafter in 1918. The Central

Labour Board was established in 1922 to bring together the different unions in the Bombay city and the All India Trade Union Congress was organized. The formal implementation of the Indian Trade Unions Act took place in 1926, one more landmark in the history of industrial relations in the country. There was a large scale expansion of the trade union movement after the Second World War especially after the independence. The union-government interactions significantly stepped up to accommodate for the removal of the war-time restrictions on strikes, formation of three more central labour organizations and the competition among them and the use of adjudication rather than collective bargaining techniques to resolve issues. In 1960, 45 percent of the total industrial workforce was claimed to be unionised. Today, the total membership is estimated to be around 4.3 million i.e., 28 percent of total workforce. The post-independence period also marked the formation of the Personnel Department in different public and private sectors. Under the Factories Act, 1948, employers had to employ a Welfare Officer in a factory employing 500 or more workers. Similarly the Mines Act, 1952, empowers the Government to specify employment of welfare officer/officers. While welfare constituted a large part of the responsibilities of the Personnel department, there were other tasks and responsibilities that were assigned as well. The responsibilities included other varied functions including the employment of suitable people, workplace safety and driving awareness, training and wage and salary administration. The Personnel department however operated in a somewhat isolated manner and executed tasks as assigned by the head of the organization / core business teams. The interactions with the other heads of departments were limited and only on a need-based rationale. In the past two decades the workforce in India has evolved rapidly to emerge as a nation of intelligent, skilled and highly aware and mature professional, who stand shoulder-toshoulder with the professional from the world over. The workplace is an equitable one which believes in the values of respect for the individual and aspiration to be the best in the world. The role of the Human Resources function can no longer be ignored or sidelined. It is viewed as a strategic partner and has found a place at the top management table. The Head of Human Resources function is selected with as much care and attention as the CEO and is consulted in all business decisions, irrespective of its direct/ indirect implications to human resources. Being a HR professional is a conscious decision that a individual takes early in his / her life and pursues it with dedication and commitment. Self Assessment Questions 5. Kautilya provides a systematic treatment of management of human resources as early as 4th century B.C. in his treatise titled . 6. From the 14th century B.C. to the latter half of the 10th century A.D., the relationships between the employer and employees were marked by

7. In "Varnashram" or caste system, those devoting themselves in manual work were known as 8. During early British rule, there prevailed a ..policy towards the business. 9. The Madras Labour Union was organized in.. 2.4 Cultural dimension of the Indian workforce The foundation for understanding the unique work practices at a country level can best be understood by first understanding the cultural aspects of the countrys workforce. The pioneering work done by Dutch scientist, Geert Hofstede is a useful tool in understanding the cultural differences used to differentiate countries. He identified five cultural dimensions around which countries have been clustered. The dimensions are: power distance, uncertainty avoidance, individualism, masculinity and long term orientation. Geert Hofstede dimensions are based on research conducted among over 1000 IBM employees working globally. While there continued to be other studies like the GLOBE (Global Leadership and Organisational Behaviour Effectiveness) project and Trompenaars Framework, Hofstedes model is most popular. Power Distance Power distance is the extent to which less powerful members of institutions and organisations accept that power is distributed unequally. Countries in which people blindly obey the orders of superiors have high power distance. High power distance countries have norms, values and beliefs that support: Inequality is good; everyone has a place; some are high, some are low Most people should be dependent on a leader, The powerful are entitled to privileges, and The powerful should yield their power. India scores 77 on power distance, indicating high power distance as a result of the inequalities both at the level of the society as well as the at the workplace. Indian organizations typically have hierarchical structures, position yields power and subordination is acceptable. The dimension of high power distance at the workplace can be best understood as: People dislike work and try to avoid it.

 Managers believe that they must adopt Theory X leadership style, that is, they must be authoritarian, and force workers to perform and need to supervise their subordinates closely. Organisational structures and systems tend to match the assumption regarding leadership and motivation Decision making is centralised. Those at the top make most of the decisions. Organisations tend to have tall structures. They will have a large proportion of supervisory personnel, and The people at the lower levels often will have low job qualifications Such structures encourage and promote inequality between people at different levels. Uncertainty Avoidance Uncertainty avoidance is the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these. India scores 40 indicating low to average uncertainty avoidance characteristics. Countries with low uncertainty avoidance have people who are more willing to accept that risks are associated with the unknown, and that life must go on in spite of this. Specifically, high uncertainty avoidance countries are characterised by norms, values, and beliefs which accept that: Conflict should not be avoided, Deviant people and ideas should be tolerated, Laws are not very important and need not necessarily be followed, Experts and authorities are not always correct, and Consensus is not important Low uncertainty avoidance societies such as ours have organisation settings with less structuring of activities, fewer written rules, more risk-taking by managers, higher labour turnover and more ambitious employees. Such an organisation encourages employees to use their initiative and assume responsibility for their actions. Denmark and Great Britain are good examples of low uncertainty avoidance cultures. Germany, Japan, and Spain typify high uncertainty avoidance societies Individualism

Individualism is the tendency of people to look after themselves and their family only. The opposite of this is collectivism which refers to the tendency of people to belong to groups and to look after each other in exchange for loyalty. India scores 48 on Individualism, indicating somewhat low scores, therefore tending towards a more collectivistic society. Collectivist countries believe that: Ones identity is based on ones group membership, Group decision making is best, and Groups protect individuals in exchange for their loyalty to the group. Organisations in collectivist societies tend to promote nepotism in selecting managers. In contrast, in individualistic societies, favouritism shown to friends and relatives is considered to be unfair and even illegal. Further, organisations in collectivist cultures base promotions mostly on seniority and age, whereas in individualist societies, they are based on ones performance. Finally, in collectivist cultures, important decisions are made by older and senior managers as opposed to individualist cultures, where decision making is an individuals responsibility. Individualism is common in the US, Canada, Australia, Denmark, and Sweden. The people of India, Indonesia, Pakistan and a number of South American countries exhibit collectivism Masculinity Masculinity refers to a situation in which the dominant values in a society are success, money and other material things. Hofstede measured this dimension on a continuum ranging from masculinity to femininity. India scores 56 tending to be closed to masculinity than feminity. In highly masculine societies, jobs are clearly defined by gender. There are mens jobs and womens jobs. Men usually choose jobs that are associated with long-term careers. Women usually choose jobs that are associated with short-term employment, before marriage. Ranking of Countries on Hofstedes Cultural Dimensions Table 2.1 Comparative table containing the scores Country Distance Arab countries Argentina Power IndividualismUncertaintyMasculinity Avoidance 80 38 68 53 49 46 86 56

Australia Brazil Canada Denmark East Africa France Germany FR Great Britain Greece Hong Kong India Indonesia Iran Israel Japan Malaysia Mexico New Zealand Pakistan Philippines Singapore South Africa South Korea Spain Sweden Switzerland Taiwan Thailand Turkey USA West Africa

36 69 39 18 64 68 35 35 60 68 77 78 58 13 54 104 81 22 55 94 74 49 60 57 31 34 58 64 66 40 77

90 38 80 74 27 71 67 89 35 25 48 14 41 54 46 26 30 79 14 32 20 65 18 51 71 68 17 20 37 91 20

51 76 48 23 52 86 65 35 112 29 40 48 59 81 92 36 82 49 70 44 8 49 85 86 29 58 69 64 85 46 54

61 49 52 16 41 43 66 66 57 57 56 46 43 47 95 50 69 58 50 64 48 63 39 42 5 70 45 34 45 62 46

Source: http://www.geert-hofstede.com/hofstede_dimensions.php 2.5 Scope of HR in India Contrary to these forces, in India the owner manager / government/public sector manager was an industry icon and a national hero of sorts. The Personnel Management practices were dominant of the brick-and-motor industry. Though the approach was largely welfare oriented and reactive in nature it served effectively for the large PSU organizations that built the countrys foundation. A large part of the workforce were migrant from the rural parts of the country and armed with educational qualifications that served as their passport to a secure future. Many left the country to study and pursue career overseas. This phenomenon was called brain drain and happened during 1990 through to 2005. The best of the Indian talent left the country. Per present statistics there are close to 1.7 million people of Indian origin in America according to the US Census

Bureau. The Indian American median family income is $60,093, as against the national median family income of $38,885., left the country. The estimated buying power of the Indian Americans in the United States is around US $20 billion. The high income clearly reflects the advanced educational levels achieved by Indian abroad. Its only in the past 10-12 years with the immense growth on account of the IT industry that winds of change began to blow. It was largely the advent of the Information Technology era in India that brought with it the western management practices. MNCs (multinational companies) started up their operations in India. The FDI (foreign direct investment) went up steeply as the world saw the potential in the countrys human resources. India became a preferred location for MNCs primarily from the USA, followed by other developed countries. It was natural for the MNCs setting up operations in India to establish their existing and proven management practices that were successfully working in the organizations back home. It also helped them manage their business similarly. This gave birth to a new generation of management as well as HRM practices. New hiring methods, new ways of paying salaries, new employment terms and most importantly increased focus on individual performance and outcomes. There was emphasis on deliverables and linking individual and team performance to business results and success. Given the highly educated workforce there was a de-emphasis in the role of the trade unions. The era of the trade union dominance gave way to the new order of individual negotiated salaries and terms and clearly performance linked assessment systems. Another transformation that the Indian workplace witnessed was the focus on ethics and ethical practices in doing business. It was only fair to expect that with the weak legal system, it needed the support of the government policies and the corporate policies to beat the corruption that existed. This has significantly contributed to India emerging as a preferred destination for doing business. All of this has yielded to give way to the birth of the professional manager. Professional managers today are a critical and essential part of the Indian corporate. The professional manager brought about a shift in the culture from a highly authoritarian approach of getting work done, to a more collaborative and participative approach. In the traditional Indian culture where the child is brought up to be dependent on parents and superiors this shift was breakthrough and took its time to manifest. The entrepreneurs who earlier operated in a secure, sheltered market and hardly face challenges, were challenged by the globalization that swept in with the liberalization policies and measure brought in by the Indian government late 1995 and onwards. Despite the challenges, the Indian employee and his manager evolved. Together they stepped up to face the challenge head-on and to win not only in India but also globally. The levers of (a) low cost, (b) highly skilled, and (c) English as the medium of education and it being the corporate-language; were the key drivers that enabled the flow of global business to India. There was exponential growth in employment both directly (jobs in the international and domestic companies) as well as indirectly (as support industries like transport, catering and ancillary industries). The simultaneous investment of the government in building the necessary infrastructure did its share of providing impetus towards creating more jobs for the people of the country.

Hence, human relations movement in India has evolved very differently as compared to what we see in the developed economies of the USA and the UK. What is currently acting as a limitation is the enhanced awareness on the need for research based HRM practices. While there is a lot of work happening in the Indian education system to promote this, it is going to take a while before it can create a distinct body of knowledge that is reference-able. For now the industry relies on emulating westerns HR practices and customizing on a as-needed basis for the Indian corporation. For the rest the Industry forums and consortiums like the NASSCOM act as a hub bringing together organizations on a regular basis to discuss challenges and share best practices and identify ways and means to overcome them together. So far this has been successful and working to the advantage of the Indian corporate. Leading MNC research and consulting firms like Mercer and Hewitt too contribute to the industry through carrying out research and sharing reports on a regular basis. The approach however remains analytical and less prescriptive. Activity 2 Identify three practices in Indian companies that you know of that are specific to the Indian culture. Think of festivals and how they are celebrated in companies. Self Assessment Questions 10. The culture is highly __________________in character. 11. For lack of _________________, the workers cannot and do not have any say in their jobs or working conditions. 12. ___________________ here means not only the efficient sending and receiving of messages but also includes sensitivity to the understanding of feelings, attitudes and cognitions of the subordinate. 13. It was the advent of the Information Technology era in India that brought with it the _________________________ practices. 14. There was exponential growth in employment both ___________ as well as ______________. 2.6 Summary HRM in India has been impacted both by its own history as well as multinational companies that came and established their operations in the country. The countrys culture has played a critical role in building value for the country globally.

 The caste system and the way it was structured to differentiate between different categories of jobs remains a basic framework for the way work is distributed at the workplace. The coming of the British to India and their administrations brought immense insights into the country on how to manage labour and work. It also gave rise to the trade unions and workplace equality issues. The impact of the World War I and II made their own impact on the Indian organizations. The early days of structured HRM activities were largely hygiene related and focused on the Personnel management principles. Human Resources management as it is practiced today is a outcome of the cultural (local) as well as the global MNC policies. 2.7 Caselet Indian tech tries to retain top workers By Jessica Mehroin Irani At a time when most IT companies are reducing employee numbers to cut costs, tech majors such as Wipro, TCS and Infosys are rechanellizing their manpower. Sabbaticals are more common and people on the bench are being asked to undergo longer and more rigorous training programs. Wipro has asked some of its non-billable and skilled employees to move to subsidiary Wipro Infotech on the same pay package as earlier; but they will continue to be on the payrolls of Wipro Technologies. "These are not under performers, but talented people we dont want to lose. The move to Infotech is currently for a year, and this will give them a chance to be productive," said Pratik Kumar, Wipro executive vice president of human resources. This will also help the company in sustaining high utilization rates. The other option given to employees, who have been on the bench for over six months, is a special program which allows them to come to work for 10 days a month, at half their salary. "This allows them to take up certification programs, work on innovation projects and help in creating question banks for domain specific internal tests," said Kumar. "Once we see an opening for them on a project, we will transfer them immediately." TCS has also put its benched employees on high-end training programs in areas such as enterprise resource planning, business intelligence and analytics. "We are building a

larger skill set as we would like to be ready when the demand picks up," said a TCS spokesperson. The IT Company has also invited its employees to write research papers on technology that can be used by the company. Reducing employee numbers for saving costs is a short-term solution, said Nandita Gurjar, head of global HR at Infosys. "When demand picks up, well be hiring skill pools at a higher cost; there will also be the cost of extra training. Weed out non-performers, but retain talent even if they are not being utilized currently." While Infosys has said that 50 employees, at any given point of time, can take a year off and work for an NGO at half their salaries, its peer Wipro has introduced project rejuvenate where employees, across all levels, can take a year-long sabbatical and pursue their hobbies. This is not restricted to those on the bench, but also for those working on projects. Even though these people are asked to take a pay cut, it does not matter. "As long as you get to keep your job and do fun things to de-stress, a pay cut doesnt matter," said a Wipro employee. Source: BusinessWeek, Monday, March 30, 2009 09:22 AM 2.8 Terminal Questions 1. HRM Enumerate the growth of Human Resources Management in India and its impact on Indias ethos. 2. howHow did the India culture impact workplace HR practices? 3. How are the early HRM challenges different from that of the current? 2.9 Answers Answers to Self Assessment Questions 1. False, 2. True, 3. False 4. True 5. Artha- Shastra, 6. By justice and equity

7. Shudras, 8. Laissez-faire, 9. 1918 10. Authoritarian, 11. Job-opportunities, 12. Communication, 13. Western management, 14. Directly, indirectly Answers to Terminal Questions 1. Refer to 2.3 2. Refer to 2.2 3. Refer to 2.4 References 1. Personnel Management by C B Mmoria 2. Human Resources Management : Text and Cases by K Aswathappa 3.International Human Recoruces Management : Text and cases Aswathappa and Dash Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-03-Human Resource Planning

Unit-03-Human Resource Planning Structure: 3.1 Introduction Objectives 3.2 Human Resource Planning 3.3 Need for Human Resource Planning 3.4 Process of Human Resource Planning 3.5 Human Resource Planning System 3.6 Successful Human Resource Planning 3.7 Summary 3.8 Caselet 3.9 Terminal Questions 3.10 Answers 3.1 Introduction Planning is considered as the first step for task performance. Whenever there is some work that needs to be done, at home or at work, the first thing you do is to plan out. For example if you want to build a custom-fit cupboard for a available space in your bedroom you would seek recommendations from your friends for good carpenters in the neighbourhood, evaluate them per your requirements, agree on time and cost and assign the task to them. Similar is the role of the Human Resource Planning activity in the human resources function. It is the first, most important and crucial step in building and growing an organization. Through human resource planning, the management strives to have the right number and the right kinds of people at the right places, at the right time, to do things which result in both the organization and the individual receiving the maximum long-range benefit. Human resource Planning (HRP) constitutes the significant first step in planning for the

human resources requirements of the firm. It is an extremely important step and is closely linked to the business plan of the organizations. Organization in different stages of their life cycle will have a different HRPlan. This unit throws light on the process of recruitment. Objectives: After studying this unit, you will be able to: Explain Human Resources Planning Describe the HRP process Evaluate the usefulness of HRP 3.2 Human Resource Planning Human resource or manpower planning is the process by which a management determines how an organization should move from its current manpower position to its desired manpower position. Through planning, a management strives to have the right number and the right kind of people at the right places, at the right time, to do things which result in both the organization and the individual receiving the maximum longrange benefit". The organizations business plan to invest in a particular product/market or a service will drive the HRP activity towards hiring to meet the business need. In the event an organization is divesting or shutting down a particular business unit or a manufacturing division the HRP activities would focus on the redeployment of the workforce that will be rendered unemployed as a result of the business decision. An organization wanting to retain its current market share and revenue projection at status quo would be supported by HRP activities that are limited to only filling positions falling vacant due to natural organizational attrition. Hence the HRP focus in a organizations is closely linked to the business plan and acts as a bridge between what an organization wishes to achieve and how it will go about achieving it w.r.t. the human resources requirements. The scope of HRP is futuristic in nature and usually runs parallel to the annual business planning exercise. It commences prior to the start of the companys new financial year. For example if the business year for a company runs April to March. The business planning and the HR planning activities for the New Year beginning in April is usually completed and in place by the 1st week of April. Once the HR plan is in place it is broken up into a quarterly or even a monthly plan which then is the input for the recruitment team to go and hire accordingly. Steps in Human Resource Planning: The Human Resource Planning process consists of a set of activities, viz.

a) Forecasting manpower requirements, either by using mathematical tools to project trends in the economic environment and development in industry, or in by using simple judgemental estimates based on the specific future business plans of the company; b) Creating an inventory of present manpower resources and assessing the extent to which these resources are employed/ optimally; c) Identifying manpower problems by projecting present resources into the future to determine their adequacy, both quantitatively and qualitatively; and d) Planning the necessary programmes of requirement selection, training, development, utilization, transfer, promotion, motivation and compensation to ensure that future manpower requirements are properly met. Thus, it will be noted that manpower planning consists in projecting future manpower requirements and developing manpower plans for the implementation of the projections. Activity 1 A company is being set up by a group of 3 professionals. The business objective is to sell mobile phones of a Chinese company which has come up with an inexpensive range of handset ranging from Rs.1200 to Rs.7000. The plan of the founders is to sell it through dealership with leading mobile sales stores in the city. They need to submit a human resource plan for the next 18months to their investors. List down all the important steps of HR planning for this company. Self Assessment Questions 1. Through planning, a management strives to have the right number and the right kind of people at the right places, at the right time, to do things which result in both the ______________________________ receiving the maximum long-range. 2. Anticipating manpower problems by projecting present resources into the future and comparing them with the forecast of requirements to determine their adequacy, both ________________________________. 3. Manpower planning consists in _____________________________ and developing manpower plans for the implementation of the projections 3.3 Need for Human Resource Planning Human Resource Planning is a mandatory part of every organizations annual planning process. Every organization that plans for its business goals for the year also plans for how it will go about achieving them, and therein the planning for the human resource:

1. To carry on its work, each organization needs competent staff with the necessary qualifications, skills, knowledge, work experience and aptitude for work. 2. Since employees exit and organization both naturally (as a result of superannuation) and unnaturally (as a result of resignation), there is an on-going need for hiring replacement staff to augment employee exit. Otherwise, work would be impacted. 3. In order to meet the need for more employees due to organizational growth and expansion, this in turn calls for larger quantities of the same goods and services as well as new goods. This growth could be rapid or gradual depending on the nature of the business, its competitors, its position in the market and the general economy. 4. Often organizations might need to replace the nature of the present workforce as a result of its changing needs, therefore the need to hire new set of employees. To meet the challenge of the changed needs of technology / product/service innovation the existing employees need to be trained or new skill sets induced into the organization. 5. Manpower planning is also needed in order to identify an organizations need to reduce its workforce. In situations where the organization is faced with severe revenue and growth limitations it might need to plan well to manage how it will reduce its workforce. Options such as redeployment and outplacement can be planned for and executed properly.

Self Assessment Questions

4. Human Resource Planning is essential because of frequent _______________ which is unavoidable and even beneficial 5. Manpower Planning is required in order to meet the needs of expansion programmes which become necessary because of increase in the demand for goods and services _____________________, a rising standard of living 6. Manpower planning is also needed in order to identify areas of ____________ personnel or areas in which there is a __________ of personnel. 3.4 Process of Human Resource Planning The process of Human Resource Planning is one of the most crucial, complex and continuing managerial functions which, according to the Tata Electrical Locomotive Company, "embraces organization development, management development, career planning and succession planning". It may be rightly regarded as a multi-step process, including various issues, such as:

1. Deciding goals or objectives; 2. Estimating future organisational structure and manpower requirements; 3. Auditing Human resources both internally and externally 4. Planning job requirements and job descriptions/person specifications; and 5. Building a plan Human Resource Planning is not only done by organizations and corporate bodies. It is a prevalent practice at different levels: i) At the countrys national level, it is generally done by the Government and covers items like population projections, programme for economic development, basic and advanced educational infrastructure and opportunities, occupational distribution across urban and rural areas, industrial and geographical mobility of employable people. ii) At the state level, it may be done by the state government and would include manpower planning for the needs of the agricultural, industrial and service sector. iii) At the specific industry level, it would include manpower needs forecast for specific industries, such as engineering, heavy industries, consumer goods industries, public utility industries, etc. iv) At the level of the individual organization/ unit, it would relate to the planning of manpower needs for each department and for various types of personnel.

Self Assessment Questions

3.5 Human Resource Planning System The steps in the HRP process is a systematic set of activities carried out in a chronological manner. Each step needs to be evaluated and debated with all possible

information gathered from the external as well as internal environment. Table 3.1 highlights the steps in the process.

We will attempt to discuss in details the critical steps that are part of the above system. A. Purpose of Human Resource Planning: Human Resource Planning fulfils individual as well as organizational goals. What it essentially amounts to is striking a balance between the future human resources needs and the future enterprise needs. And this is done with the clear objective of maximizing the future return on investment in human resources. And this objective may be laid down for a short-term (i.e. for one year). B. Estimating/Forecasting the future Manpower Requirements: the first step in the process is to arrive at the desired organizational structure at a given point in time. Mapping this structure with the existing structure helps in identifying the gap in resources requirement. The number and type of employees needed have to be determined. In addition to the structure there are a number of external factors that affect this determination. They include business forecasts, competitor strategy, expansion plans, product/skills mix changes, profit/revenue growth projections, in addition to management philosophy and government policies. This step also includes an analysis of the external labour/talent environment, its demographics, demand/supply of the required talent, and cost considerations. Forecasting provides the basic premises on which manpower planning is done. Forecasting is necessary for various reasons, such as: a) The challenges of the general economic business cycles have an influence on the shortrange and long-run plans of all organizations. These are inflation, wages, prices, costs and raw material supplies. b) An expansion / growth initiative might need the business to use additional machinery and personnel, and a re-allocation of facilities, all of which call for adequate advance planning of human resources. c) Changes in management philosophies and top management leadership styles.

d) The use of new technology (such as the introduction of automatic controls, or the mechanization of materials handling functions) requiring a change in the skills of workers, as well as a change in the number of employees needed. e) Very often, changes in the quantity or quality of products or services require a change in the organization structure. Plans have to be made for this purpose as well. C. Auditing Human Resources: Once the future human resource needs are estimated, the next step is to determine the present supply of manpower resources. This is done through what is called "Skills Inventory". A skills inventory contains data about each employees skills, abilities, work preferences and other items of information which indicate his worth to the company. Skills inventory are also referred to as competency dictionaries. This information is usually retained as part of the performance management system with the HR department. This step in the HRP system helps identify the existing profile of the manpower and its efficiency. It helps highlight where the organization is vs. where it ought to be. The step concludes with identifying clear gaps in the skills / manpower mix required to meet the upcoming business objectives. D. Job Analysis: After having decided how many persons would be needed, it is necessary to prepare a job analysis. The recorded details of training, skills, qualification, abilities, experience and responsibilities, etc. as needed for a job are studied. Job analysis includes the preparation of job descriptions and job specifications. E. Developing a Human Resource Plan: This step refers to the development and implementation of the human resource plan, which consists in finding out the sources of labour supply with a view to making an effective use of these sources. Some important considerations at this point are: F. Specific roles/disciplines being hired for, of them which roles are pivotal for the business

Competencies and capabilities needed Manager vs. employee hiring Hire internally vs. External sourcing Planning for new skills through training existing staff vs. hiring new teams In case of surpluses, planning for redeployment / reduction in workforce as required Succession planning for key positions in the company

ACTIVITY 2
In Activity 1, List down few external factors which in your opinion might influence companies hiring strategies. What should they do at the hiring stage to prevent early attrition?

Self Assessment Questions

11. _________________ provides the basic premises on which the manpower planning is built. 12. An expansion following enlargement and growth in business involves the use of additional machinery and personnel, and a re-allocation of facilities, all of which call for ______________ of human resources. 13. A _________________ contains data about each employees skills, abilities, work preferences and other items of information which indicate his overall value to the company. 3.6 Successful Human Resource Planning The responsibilities of the HR Department with respect to manpower planning can be summarised as: i) To establish HRP as a integral part of the corporate planning activities. Therefore ensure that they are aware of the companys corporate and business objectives. ii) Ensure that the top management supports and recognizes the importance of the HRP process and drives the senior leaders to participate in it and abide by it. iii) Set aside funds to provide for technological requirements and other supporting costs such as the creation and maintenance of the skills inventory, training initiatives etc. iv) Data collection and analysis to be chosen as best suited to the industry and the economic environment as well as the organizations own plans. v) Hold the HR department responsible for coordinating the HRP process and tracking progress with continuous review. vi) Review the HRP process year on year to identify if there are any changes to be made to the HRP process itself to make it relevant and useful towards achieving the business goals. It is not uncommon for there to be resistance to the HRP function. Some common barriers are, (1) the need to frequently change staffing plans depending on the market situation,

(2) does HR have sufficient knowledge about the business and its objectives to lead the HRP initiative to successfully contribute to the achievement of business results, (3) financial forecasting tends to take precedence over HRP as it impacts the organizations profits/losses, (4) balancing long term vs. short term needs of the business often what HR might recommend might go contrary to achieving immediate business results and vice versa, (5) the role of statistical quantitative information verse qualitative intuitive information each has its role to play in the HRP process and this usually is a widely debatable aspect on the projection for human resources requirements, and (6) soliciting the support of all the business managers and leaders to contribute to the planning process by providing all the necessary information and actively participating in the HRP process this also ensures that the managers remain committed to the human resource plan through the year.

Self Assessment Questions

The responsibility for sound HRP is 14. To _________________________the operating management to plan and establish objectives; 15. To __________________________in total organizational terms and to ensure consistency with long-range objectives and other elements of the total business-plan; 16. To ___________________________against the plan and keep the top management informed about it; and 17. To ____________________________for effective manpower and organizational planning. 3.7 Summary Through planning, a management strives to have the right number and the right kinds of people at the right places, at the right time, to do things which result in both the organization and the individual receiving the maximum long-range benefit. Manpower planning consists in projecting future manpower requirements and developing manpower plans for the implementation of the projections. To carry on its work, each organization needs personnel with the necessary qualifications, skills, knowledge, work experience and aptitude for work. Human Resource Planning is essential because of frequent labour turnover. Manpower planning is also needed in order to identify areas of surplus personnel or areas in which there is a shortage of personnel.

 The process of Human Resource Planning embraces organization development, management development, career planning and succession planning". 3.8 Caselet

Workers should highlight their value to employers

By Sol E. Solomon SINGAPORE Being the quiet achiever can sometimes work against employees in the workplace, where workers are judged by their achievements and successes, according to a local-based recruitment expert. Karin Clarke, general manager of Select Business Services, noted in a recent press statement how "very innate" it is in the Singaporean culture for employees to be modest and reserved, preferring not to draw attention to their accomplishments for fear of being seen as arrogant and pretentious. According to Richard Talbot, general manager of recruitment company Sapphire Technologies Singapore, this trait cuts across all professions including the IT sector, in the island-state. "We find one of the key reasons IT candidates look to change jobs is that they know they can achieve higher remuneration elsewhere, and their employer has not been forthcoming with a suitable increment," said Talbot in an e-mail interview. However, he noted that IT professionals need to also understand how to best present their achievements to their current employer, in order to secure that promotion or pay increment they have been eyeing. Tho Lye Sam, human resource director at IBM Singapore, said in the past, technical individuals ranging from engineers to programmers, appeared to be less superior in their interpersonal or written skills compared to their business or sales peers. "But were definitely seeing less of this today," Tho said in an e-mail interview. Increasingly, she said, employers are witnessing a new breed of employees who bring a mix of business, technical and people skills. Tho added: "These knowledge workers will fuel the 21st century economy, and are definitely capable of presenting the best of their capabilities and competence with the aim of sharing best practices, as opposed to being outright showy for personal glory." Clarke said current global economic pressures make it particularly important now for workers in Singapore to make their value known in the workplace. This way, they can ensure they are recognized fairly and reap the rewards of doing their job well, she said.

"It is important that employees realize it may be time to work even harder and then communicate this success to the right people. Dont be shy to let relevant colleagues and managers know about what you have achieved," she added. Boast the right way But while employees should draw attention to their achievements, they should not do so blatantly. "Some simple, subtle steps can be taken to make sure you receive the recognition you deserve," Clarke said. "It will make for a more positive work environment and will contribute to job security, career progression and show you are willing to take responsibility and ownership for your work." "It could be as simple as copying in your manager on positive feedback from customers, or communicating the successful completion of a project or task. While it is not imperative to tell your peers unless you want to, making sure you tell the decision makers in your organization is essential," she said. Tho said IBM encourages the sharing of best practices, and this involves putting the limelight on an individual, a team, a country or even a region. "These are official broadcast platforms to share an individual or a teams winning ways to the larger IBM community," she explained. "In addition, by celebrating performance and leadership excellence, we are able to encourage more of such desired behavior." Talbot suggests employees who fear publicizing their achievements could work against them, consider taking a "reasoned approach". "Of course, an employee who constantly talks about personal achievements all the time can be an annoyance, but conversely, employees that never highlight what they have achieved are easy to forget," he noted. The individual should also recognize when to highlight an achievement to the manager, and when not to raise the issue. Talbot said: "An annual review would be a good time, for example, to highlight achievements." IBMs Tho said: "Our employees are well aware that overstatements may look good in the short term, but are not sustainable in the longer term." Clarke recommended that workers keep a record of their achievements, so they have documentation to support their case when it is time for salary negotiation or formal reviews. "It can be one of the most difficult conversations of your career, but discussing money with your employer is much easier if you can clearly demonstrate that your work has contributed to the success of your organization," she said.

Sources : ZDNet Asia, Thursday, October 02 3.9 Terminal Questions 1. Define Man Power Planning. Discuss the need for Man Power Planning 2. Describe the process of Human Resource Planning. 3. What are the various sources of recruitment? 3.10 Answers

Answers to Self Assessment Questions

1. Organization and the individual, 2. Quantitatively and qualitatively, 3. Projecting future manpower requirements. 4. Labour turnover, 5. By a growing population, 6. Surplus, shortage. 7. d, 8. b, 9. a, 10. c. 11. Forecasting, 12. Advance planning, 13. Skills inventory. 14. Assist, counsel and pressurise, 15. Collect and summarise data, 16. Monitor and measure performance,

17. Provide the research necessary Answers to Terminal Questions 1. Refer to 2.1 & 2.2 2. Refer to 2.3 3. Refer to 2.9 References: 1. Human Resources Management by Fisher, Schoenfeldt and Shaw Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-04-Recruitment and Selection

Unit-04-Recruitment and Selection Structure: 4.1 Introduction Objectives 4.2 Concept of Recruitment 4.3 Factors Affecting Recruitment 4.4 Sources of Recruitment 4.5 Recruitment & Selection Policies Selection Policy Recruitment Policy 4.6 Recruitment Practices in India 4.7 Selection Techniques 4.8 Summary 4.9 Caselet 4.10 Terminal Questions 4.11 Answers 4.1 Introduction Work culture has a large influence on our lives. Most of our daily conversations revolve around the job. People share opinion about how much they like/dislike their jobs. Our

work is at the centre of our life and it impacts our moods and our life style strongly. Viewed from the organizations point, it is equally important to ensure that the employees hired are the right people for the jobs; a happy employee gives his best to the company. In this Unit we will focus on understanding the art and the science of recruitment and selection in organizations. While Human Resources Planning focuses on the planning part of the activity the implementation of the plans happen with the effective execution of the recruitment and selection processes. This unit focuses on the need for a structured approach to recruitment and selection activities. The focus here remains, to ensure that the right number and the right kind of people at the right places, at the right time. This ensures that both the individual as well as the organizational succeed. Objectives: After studying this unit, you will be able to: Explain the critical role of recruitment Identify appropriate recruitment sources Discuss the selection tools and methods 4.2 Concepts of Recruitment The ability to identify the correct talent for not just the role/job but also from the organizational values perspective can be summarised as the key recruiting challenge. Figure 4.1 below provides the framework used in organizations to plan and staff the human resources requirements of the company.

Figure 4.1: Framework design of Procurement While an organization might have established techniques of their own to hire, there is no easy, fool-proof method for assessing a candidate even if for the simplest job. The time that todays organizations spend on this activity in not just planning for it but also its

execution. The length and complexity of the modern selection procedure are tangible evidence of this fact. Recruitment or manpower selection process is the first step in the employment of talent and the methods through which this talent is brought into a job has much to do with the ultimate success or failure of such employment. It is a strange paradox that on one hand we have a surplus of educated talent available in the market awaiting employment while on the other hand organizations struggle to find the right talent. Therefore the employability of the educated talent is fast emerging as the single largest challenge, for India at least. Therefore recruitment has been regarded as the most important function of human resources administration, because unless the right type of people are hired; even the best plans, organization charts and control systems would be rendered ineffective. Careful recruitment of employees is particularly important in India for at least two key reasons: (a) it is not easy to fire a employee. It has both societal as well as legal implications. Labour Court adjudicating such disputes would determine whether the termination of service was justified and to order reinstatement if such order was appropriate. Organizations have to maintain clear documentation of the performance of an employee which is objectively and fairly recorded to ensure that the employee was given adequate opportunity to do the job and was supported by the employer in this effort. Failure to carry out this procedure undermines the case if it goes to any judicial court. (b) the chances of mismatching the job and the person are much higher in India. With resumes that carry fictitious information this challenge is compounded. Under these conditions, the pressure to properly match a candidate to a job is only one-sided, that is, from employers side only. Self Assessment Questions 1. Recruitment or manpower selection process is the first step in the employment of ______________. 2. Since workers were drawn from the __________________, in the early days of industrial evolution in India, factories found much difficulty in recruiting the necessary talent. 3. Matching the job with the suitable applicant is naturally, a __________. 4.3 Factors Affecting Recruitment All organizations, whether large or small, do engage in recruiting activity, though not to the same intensity. Few factors that impact the nature of recruitment: i. The size of the organization- the smaller the organization the more the need to carefully scrutinize the candidate for a job and the fitment to the organizational culture. The risk in

case of job-candidate mismatch can prove equally expensive for a smaller organization as compared to the larger one. ii. The employment conditions in the country where the organization is located- critically impacts the recruiting strategy. The methods for recruiting, the selection tools that are most suited and the legal framework that bear on the employer are some aspects that need to be considered. iii. The affects of past recruiting efforts which show the organizations ability to locate and keep good performing people- constantly reviewing the effectiveness of the recruiting methods and the selection tools used, evaluating the success at-work of the new recruits are some methods used by organizations to ensure that quality hiring practices are in-place. iv. working conditions and salary and benefit packages offered by the organization this may influence turnover and necessitate future recruiting; (v) The rate of growth of organization- the phase in the life-cycle of the firm is a measure of the recruiting effort v. The level of seasonality of operations and future expansion and production programmes ensuring that the recruitment numbers come form a well-planned Human Resource Plan is critical to ensure that there is no over-hiring or under-hiring of the required talent to achieve the organizational objectives. vi. Cultural, economic and legal factors these too affect the recruiting and selection methods that are used. Self Assessment Questions

4.4 Sources of Recruitment The sources of employees can be classified into two types, internal and external. Filling a job opening from within the firm has the advantages of stimulating preparation for possible transfer / promotion, serves as a key motivator for internal employees who are aspiring for a move, increasing the general level of morale, and provides more information about job candidates through analysis of work histories within the organization. A job posting has a number of advantages. From the view point of the

employee, it provides flexibility and greater control over career progress. For the employer, it should result in better matches of employee and job. However, not all jobs are posted by an organization internally. In opening a job for internal aspirants an organization make a conscious decision and then moves forward. It is also possible that organizations might post all job opening internally as well as externally and the internal candidates compete for the job along with other external candidate. Whatever is the case, the objective remains to find the best person for the job. In most instances, the jobs are posted on the employee intranet portals/ notice boards, though some carry listings in the company newspapers. The posting period could be anywhere between 2-3 weeks, with the final decision for hiring being completed within 4-6 weeks. Internal applications are usually open to all employees with a few restrictions such as tenure within the company and poor performance issues if any. The present manager must keep in the loop and usually his or her approval might be required to proceed with the application for the job opening. Some organizations require immediate notification, while others inform only if the employee qualifies as a prime candidate for the listed opening. The human resources team acts as a hub in screening applications that are unrealistic, preventing an excessive number of bids by a single employee, and counselling employees who are constantly unsuccessful in their attempt to change jobs. External recruitment is when the organization clearly prefers to hire from outside the organization for the job. Organizations most definitely go for external hiring for lower level jobs, when they are expanding, during phases of rapid growth and for positions whose skills/ experience specifications cannot be met by existing human resources. Common outside sources available: 1. Advertising: In both the print as well as the web media. Among the best methods when the organization needs to reach a large audience and usually at least 5-6 or more job openings. First, advertisements can be placed in the appropriate media to be read by particular media groups. Secondly, more information about the company, the job, and the job specification can be included in the advertisement to permit some self-screening. Advertisement invites a fair amount of poor candidate profiles and therefore a fair amount of time and effort of the firms recruitment team is spent in screening. Often organization that can afford the cost, outsource this to a placement agency those take care of the first few steps in the screening process. 2. Professional Placement organizations or recruiting firms or executive headhunters: maintain complete information about employable candidates, who usually are already employed elsewhere. These consulting firms therefore maintain a active database of skilled and experienced resources. They work closely with organizations through contractual agreements to source appropriate candidates for the firms requirements. They recommend persons of high calibre for almost any job in information technology, managerial, marketing and production engineers posts. They have slowly and steadily emerged as extremely popular and fairly effective means for find good resources. These firms are looked upon as head hunters, raiders and pirates by organizations which

lose human resources through their efforts. However, these same organizations may employ "executive search firms" to help them find talent. 3. Job Portals and Job Sites: Job portals are hosted by a recruitment agency with a large database of skilled and experienced candidates. An organization looking for a particular skill set can register on the portal for a monthly/quarterly /annual fee and browse for the desired candidate profile and obtain a potential list of candidates who fit the profile. That these candidates would be interested in a new job and would keen to move from the existing role/ organization is another matter all together. A significant amount of time and effort of the recruitment team goes in reaching out to these candidates and validating that the information on the resume is accurate and the person matches the requirement and that the candidate is indeed looking to change the job. This is also a common sourcing method in organizations. 4. Employment Agencies: Additional screening can be affected through the utilization of employment agencies, both public and private. Today, in contrast to their former unpopular reputation, the public employment agencies in several States effective, particularly in the fields of unskilled, semi-skilled and skilled operative jobs. In the technical and professional areas, however, the private recruiters are doing most of the work. 5. Employee Referrals: Fast emerging as the latest most effective method is the referral route to staffing. Friends and relatives of present employees are also a good source from which employees may be drawn. In the current times when the talent market is most challenged, large employers frequently offer their employees bonus or prizes for any referrals that are hired. This is usually linked to the referred employees stay with the company for a specific length of time. In these time of talent crunch that the organizations are facing they are constantly coming up with innovative ways to hire good talent. Some companies maintain details of former employees whose performance record was good to woo them back when there are new job openings for which they are qualified. 6. Schools, Colleges and Professional Institutions: Popularly called Campus Recruitment, organizations engage with education institutions that educate students for ready-to-work jobs, like engineers and management graduates by offering opportunities for recruiting their students. These institutions operate (usually annual) placement services / events where complete bio-data and other particulars of the students are made available along with interviewing opportunities. The companies that hire such resources maintain contact with Placement Bureaus of these institutions and enlist with them to showcase the organization and carry out the selection process for those who fit the organizations requirement and are interested. The prospective employers can review credentials and interview candidates for management trainees or probationers. Whether the education sought involves a higher secondary certificate, specific vocational training, or a college background with a bachelors, masters or doctoral degree, educational institutions provide an excellent source of potential employees for entry-level positions in

organizations. These general and technical/ professional institutions provide blue-collar applicants, white-collar and managerial human resources. 7. Casual applicants: Unsolicited applications, both at the gate and through the Career site on the web page and even on post mail, constitute a much-used source of human resources. But are fast losing their value and are no longer counted as a valid method. Similarly unsolicited applications for positions in which large numbers of candidates are not available from other sources, the companies may gain keeping files of applications received from candidates who make direct enquiries about possible vacancies on their own, or may send unconsolidated applications. The information may be indexed and filed for future use when there are openings in these jobs. 8. Indoctrination seminars for colleges professors are arranged to discuss the problem of companies and employees. Professors are invited to take part in these seminars. Visits to plants and banquets are arranged so that the participant professors may be favourably impressed. They may later speak well of a company and help it in getting the required human resources. 9. Contractual Staffing: To adjust to short-term fluctuations in human resources needs, it is commonplace in organizations to contract employees of another employer by the hour or day. While this practice has been particularly well-established in the office administration field today almost any job can be sub contracted through a third party vendor with whom the firm enters into a contract. This way the firm not only obtains well-trained and selected human resources while its liability as a permanent employer of the resources is absolved. 10. Voluntary organizations: such as private clubs, social organizations might also provide employees handicaps, widowed or married women, old persons, retired hands, etc., in response to advertisements. Self Assessment Questions 11. In most instances, the jobs are posted on______________, though some carry listings in the company newspapers. 12. Friends and relatives of present employees are also a good source from which employees may be drawn, this is done through ______________________. 13. _______________ are firms that are looked upon as head hunters, raiders and pirates by organizations which lose human resources through their efforts. 14. ____________ is the hiring of relatives which will be an inevitable component of recruitment programmes in family-owned firms. Activity 1:

Ask some of your friends or relatives who have attended a job interview and answer the following questions: a) What was the method the firm was using to find suitable job candidates? b) How effective do you think they would be in finding the right candidate c) What suggestions would you make to the employer of the firm on choosing a better recruiting method? 4.5 Recruitment & Selection Policies 4.5.1 Selection Policy The selection procedure is essentially a series of methods of securing pertinent information about the applicant and qualifying him/her as a potential candidate with as close fit as possible to the job criteria. At each step in the selection process the objective is to learn more about the candidate and evaluate him against the job requirements. The information obtained can then be compared with the job description/specification. If the applicant qualifies, he or she advances to the next step. Sometimes organizations might evaluate information from multiple selection tools simultaneously to eliminate of qualify a candidate to the next round in the selection process. Thus, the job specification and the job applicant are interrelated at each step in the selection procedure. 4.5.2 Recruitment Policy Once the HRP process has concluded with the determination of human resources requirements for the year ahead, the recruitment and selection process can begin. Very often, recruitment is misunderstood as filling a current vacancy. Increasingly organizations are focusing on recruitment and selection process to hire a high potential candidate who the management expects to become important in the future scheme of things. Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. It is often termed "positive" in that its objective is to increase the selection ratio, that is, the number of applicants per job opening. Dale Yoder and others point out: "Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force". In terms of Stahl, recruitment is the corner stone of the whole human resources structure. Recruiting sources as discussed above should be periodically evaluated. Some common metrics used are, cost per applicant, the applicant/ hiring ratio, tenure, performance appraisals, etc. Recruiting should take into consideration ethical practices, such as use of

"truth in hiring" i.e., telling an applicant all about the firm and its position, both good and bad, to enable him to decide whether or not to join the firm, is selected. A successful and effective recruitment programme necessitates a well-defined recruitment policy, a proper organizational structure, and procedures for locating sources of manpower resources, suitable methods and techniques for utilizing these and a constant assessment and consequent improvement. Often organizations have a clearly laid down process document for recruitment to ensure that quality hiring take place. Self Assessment Questions 15. The selection procedure is essentially a series of methods of securing pertinent information about the _____________. 16. The real purpose of recruitment is not to fill up a vacancy but to add a person to the staff whom the management expects to become important in the ____________ of things. 17. Sources for recruiting should be periodically _____________. 18. Recruiting should take into consideration ethical practices, such as use of _________________ 4.6 Recruitment Practices in India The different sources for recruitment in India have been classified thus: (i) Within the organization; (ii) Badli or temporary workers; (iii) Employment agencies; (iv) Casual Callers; (v) Applicants introduced by friends and relatives in the organization; (vi) Advertisements; and (vii) Talent contractors. All public sector enterprises are required to consider candidates sponsored by the Employment Exchanges and, in most cases, confine the selection to these candidates. However, the private sector is not under any such formal obligation. Under the Apprentices Act, 1961, young craftsmen having received pre-employment training in Industrial Training Institutes have to be employed by specialized industries during training period as a percentage of the total number of regular employees. Reservation of 25% of vacancies for Scheduled Castes and Scheduled Tribes candidates and preferential treatment of displaced persons is a part of statutory requirement of Government andpublic sector employment in India. The question of preference to "Sons of the Soil" i.e., local population in the matter of employment within the local area has, of late, assumed a complex character. In this connection, the National Commission on Talent has observed: "The solution has to be sought in terms of the primary of common citizenship, geographical mobility and economic feasibility of locating industrial units, on the one hand, and local aspiration on the other."

The recruitment of managerial human resources in most organized industries is generally by promotion from within the organization. Some industries first recruit a number of young peoples as management trainees and groom the ones with high talent potential to take on senior roles and responsibilities. However it is also common in organizations to hire managerial talent from outside, if sufficient internal candidates are not available. External candidates enable an organization to bring in more industry knowledge and talent and keep the organization young and creative. The large and growing organizations enlist with and compete aggressively to woo talent from premier institutions such as the Indian Institutes of Technology, Indian Institutes of Management and from Universities offering MBA courses to obtain the best of talent. In the Indian organization where interviews are one of the most popular methods for selection, one of the key challenges is the availability of skilled interviewers. Managers are mandated to undergo training for effective interviewing skills and often need to be certified before they can interview and qualify candidates for a job/position.

Self Assessment Questions 19. All public sector enterprises are required to consider candidates sponsored by the __________________________. 20. Executives too are mostly ___________ from within. 21. _______________, in other words, local population in the matter of employment within the local area has, of late, assumed a complex character. 22. In the Indian organization where ________________are one of the most popular methods for selection 4.7 Selection Techniques There is no shortcut to fair and accurate evaluation of a candidate. As mentioned earlier, the hiring procedures are therefore, generally long and multiple. Organizations are constantly evaluating the selections tools they use to hire and keep innovating to ensure they hire quality candidates. The following are popular methods commonly used: 1 Initial or preliminary interview 2 Application blank or blanks. 3 Check of references.

4 Skill / Psychological tests. 5 Employment interview 6 Approval by the manager. 7 Medical examination. 8 Induction or orientation. 4.7.1 Preliminary Interview The more non-selective the recruitment programme, the more likely it is that a preliminary interview will be required. This initial interview is usually quite short and has as its object the elimination of the obviously unqualified. In many instances it is a overtelephone / short face-to-face interview conducted at a desk. The facts and impressions collected are of the type generally obtained in an initial interview. Many firms do not bother to initiate any paperwork at this early stage. If the applicant appears to have some chance of qualifying for existing job openings, he or she is given the application blank to complete. 4.7.2 Application Blank An application blank is a traditional, widely accepted template for getting information from a prospective applicant. This enables the recruiter to qualify the candidate to the next level in the selection process and is used extensively subsequently during the selection process. The blank aids in the interview by indicating areas of interest and discussion. It is a good means of quickly collecting verifiable basic historical data from the candidate. It also is a excellent document to share with the manager and with the interviewers and is a useful device for storing information for, later reference. These templates generally carry information on biographical data, educational attainment, work experience, salary, personal items, and other items such as names and addresses of previous employers, references etc. Manual Employees

Figure 4.2: A Specimen of a Short Application Form for Unskilled Physical disabilities: Have you ever worked for this concern before? : Yes/No Engaged/Not Engaged Department Due to Start.. . Interviewer 4.7.3 Check of References The use of references is common in most selection procedures. It involves minimum of effort and time/money. The objective is to obtain evaluation of prior employers and professional colleagues, who have known the candidate in a professional capacity. Checks on references are made by mail or telephone, and occasionally in person, and by using a reference form. 4.7.4 Skill & Psychological Tests The next step in the procedures outlined above is that of testing. The use of tests is common and most popular in the lower levels in an organization. It serves as a excellent qualifying criteria and in jobs that are dependent on a skill or a specific competency it is very useful. The objectivity of the test results make it especially popular and a fair assessment of the individual. Most organizations do not use psychological tests. However, there is a direct relationship between the size and firm and the use of such tests in hiring. Most of the larger companies that can afford to have a more detailed and accurate selection procedure do utilize some form of employment testing. It is the smaller company that frequently does not bother with tests, but places greater reliance upon the interview. 4.7.5 Interviewing

Interviewing is probably the most widely used single method of selection. A substantial amount of subjectivity, and therefore, unreliability, is to be expected from interviewing when used as a tool of evaluation. The interview consists of interaction between interviewer and applicant. If handled properly, it can be a powerful technique in achieving accurate information and getting access to material otherwise unavailable. Organizations aware of the challenges of using interviews have come up with a variety of ways to overcome the subjectivity. The use of multiple rounds of interview (even upto 8-10 rounds) and use of panel interviews are some common work-around. Four kinds of interviews for selection have been identified. These are: 1. Preliminary interview: These interviews are preliminary screening of applicants to decide whether a more detailed interview will be worthwhile. The applicant is given job details during the interview to afford him freedom to decide whether the job will suit him. This method saves the companys time and money. 2. Stress interview: Stress interviews are deliberate attempts to create pressure to observe how an applicant performs under stress. Methods used to induce stress range from frequent interruptions and criticism of an applicants opinion, to keeping silent for an extended period of time. The most important advantage of the stress interview is that helps to demonstrate important personality characteristics which would be difficult to observe in tension-free situations. However, stress-inducing must be done carefully by trained and skilled interviewers. 3. Depth interview: Depth interviews cover the complete life history of the applicant and include such areas as the candidates work experience, academic qualifications, health interest, and hobbies. It is an excellent method for executive selection, performed by qualified human resources. 4. Patterned interview: Patterned interviews are a combination of direct and indirect questioning of the applicant. The interviewer has certain clues and guidelines to areas which should be probed deeply and the interview also encourages the candidate to express the relevant information freely. After the patterned interview is complete, the interviewer should evaluate the candidate on the basis of practical experience. According to R.N. McCurry and others, certain factors lead to accurate predictions of the candidates suitability for a particular position. The factors are: (1) basic character traits, (2) motivation, and (3) emotional maturity. One advantage of a patterned interview is that systematic and chronological information is obtained, and hence this yields to statistical analysis. Interview Process

Since the interview is one of the most commonly used personal contact methods, great care has to be taken before, during and after the interview. Hiring managers/interviewers can prepare to go for a interview by (1) familiarize oneself with the profile of the candidate by reviewing the resume and to identify skills, incidents and experiences in the career of the candidate, which may answer questions raised around the critical areas; and (2) identify and prepare critical areas in which questions will be asked, depending on the ability and skills required for the job. If there is more than one interviewer, some practice and mock interviews will help calibrate variations in individual interviewers ratings. The recommended first step in a interview is establishing "rapport" whereby putting the Interviewee at ease; conveying the impression that the interview is a conversation between two friends, and not a confrontation of employer and employee. One way to achieve this is by initially asking questions not directly related to the job that is, chatting casually about the weather journey and so on. Once the Interviewee is put to ease the Interviewer starts asking questions, or seeking information related to the job. After this phase, the interviewers could move to ask detailed questions around the experiences and the skills, and make a tentative decision about the candidate. Characteristics of "good interviewers, commonly quoted 1. Knowledge of the job and its responsibility 2. Emotional maturity and a stable / unbiased personality. 3. Sensitivity to the interviewees feelings, ability to ask questions tactfully rather than directly 4. Extravert behaviour, open and considerable physical stamina. Activity 2: Continuing with the Activity 1, what was the experience your friend faced during the interview process Now try to find out the Answer for the following: d) How many rounds of interview did they face and what was being assessed? e) Do you think a stress interview serve the purpose of hiring for the job Some Issues

Despite the almost universal use of the interview for selection, very little information is available on its reliability and validity. As discussed earlier some of the key challenges are: 1. The most important issue is that of differentiating interview data from interviewers data. In most cases the validity assessed is interviewers validity rather than that of interview information. In the process one evaluates the interviewers biases and responses instead of evaluating the interviewee per se. 2. Inconsistency and lack of standardization in interviewers behaviour can make a noticeable difference in the behaviour of interviewees. Highly structured interviews reduce this variability and permit little individuality. 3. There is great subjectivity in interviews. In fact most of the objective factors are assessed by tests and application blanks. 4. The interviewer should possess a level of intelligence which is at least equal to the interviewees. Sheer glorification of the role is unethical because lack of maturity in decision-making can affect applicants. 5. The length of the interview is important. That is why; many interviews are of predetermined length due to an appointment schedule. 6. The interviewee is as much entitled to know about the job and his suitability to it as the interviewer. 4.7.6 Approval by the Manager Following the outlined procedure, we should now be of the opinion that a candidate who has successfully completed all steps so far should be hired. In executing the recruitment unit screening functions, the emphasis tends to be more on formal qualifications and general suitability. When the manager takes over, the emphasis tends to switch toward more specifically job oriented worker characteristics such as training and relevant past experience. 4.7.7 Medical Examination The medical examination is an employment step found in most businesses. It can vary from a very comprehensive examination and matching of an applicants physical capabilities to job requirements to a simple check of general physical appearance and well-being. In the selection procedure the physical examination has at least three basic objectives. First, it serves to ascertain the applicants physical capabilities. The second objective of the examination is to protect the company against unwarranted claims under workers compensation laws, or against lawsuits for damages. And the final objective is to prevent communicable diseases from entering the organization.

4.7.8 Induction Induction is concerned with introducing or orienting a new employee to the organization. Organizations could have induction programs of duration of 1-3 days and even up to 1/3/6 months. Common objectives of an Induction program can be listed as covering: 1. Overview of the organization, its history, its heros and important stories in the life of the firm so far like mergers, acquisitions, JVs, expansion in new countries etc 2. Organization Vision / Mission and Objectives statement, its structure, hierarchy of the top and the senior management, structure of the teams/divisions, focus on the division the employee/s is/are joining 3. Overview of the HR policies and processes and introduction to the Facilities team, IT team and other relevant teams per the location of joining. 4. Handover to the manager and induction at a team level on specificities related to the job and its responsibilities. Organizations also build processes by which the new employee provides feedback on the on boarding experience and use this information to improve the Induction process. In as much as various firms report that over half of their voluntary resignations occur within the first 6 months, proper orientation can do much to reduce this problem and its accompanying costs. Self Assessment Questions 23. An is a traditional, widely accepted device for getting information from a prospective applicant 24. is probably the most widely used single method of selection. 25. are deliberate attempts to create pressure to observe how an applicant performs under stress. 26. cover the complete life history of the applicant. 27. .. Is a combination of direct and indirect questioning of the applicant? 28. .. is concerned with the problem of introducing or orienting a new employee to the organization. 4.8 Summary

 Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. Recruitment or manpower selection process is the first step in the employment of talent Sources for recruiting should be periodically evaluated. A successful and effective recruitment programme necessitates a well-defined recruitment policy, a proper organizational structure, and procedures for locating sources of manpower resources, suitable methods and techniques for utilising these and a constant assessment and consequent improvement. 4.9 Caselet Recruitment sites woo first-time job seekers By Anjali Prayag Travelling across the country for campus hiring has become an expensive process and companies were looking for alternatives. Bangalore, May 11 The campus recruitment process, which had fallen into a pattern in the last few years, has taken a new turn this year. While some of last years recruits are yet to receive their joining dates, thanks to the slowdown, students passing out this year will see little activity in the campus placement process. Turning this slump into a business opportunity, online job sites are focusing their services on this new category of users. Naukri.com is beta testing Firstnaukri.com, a job site targeted at graduates ready for the job market in 2009. Mr Hitesh Oberoi, COO, Naukri.com, told Business Line that this was in response to clients requesting Naukri to help them in campus hiring. Moreover, travelling across the country for campus hiring has become an expensive process and companies were looking for alternatives, he said. About 25 companies have already registered and 20,000 CVs have been posted on FirstNaurki.com, said Mr Oberoi. Several institutes are interested in registering their students profiles on the site. This kind of campus-to-corporate online network will help companies reach out to a greater number of students, said Mr Srini Krishnamurthi, Managing Director, Expertus, a training outsourcing firm that has just launched a job portal for engineering graduates. From a career point of view, typical job sites do not work well for freshers as their needs are different.

Seniors have social networking sites that help them in connecting with people. Thats why we decided to launch c2c.com where students can participate in blogs and forums and get news about the industry, and whos hiring. To help freshers, JobStreet India is adding a bunch of skill tests in TestBench, a job seeker self-assessment product in its portfolio, said Mr Anand Iyer, CEO, Jobstreet India. This product offers aptitude and skill tests which job seekers (most of the time freshers) would find useful to assess their current competencies at their own pace, and choose to take remedial measures to become better qualified in the shrunken job market, said Mr Iyer. Friendly portal for job seekers By G. Naga Sridhar Hyderabad, March 23 If you are one of those who lost your job due to recession, here is some good news. There are friends who wish to help you find a job soon. What you need to do is post your CV on www.asksaurabh.com, a portal set up by Punebased Mr Saurabh, who recently lost his job in Yahoo, along with his friends Mr Anthony, Mr Iqbal Gandham and others. At the very outset, the portal lists three rules: no job consultants, no fake jobs/profiles and no charges for matchmaking. It also asks the users upfront to kindly respect the three rules of this free service. One can post CV and jobs in a wide range of areas such as design, engineering finance, general, HR, quality assurance, testing and software development, among others. Our philosophy is simple, if we can help one person get back into a job, our Web site would have done its job, Mr Iqbal told Business Line. Asksaurabh is not allowing recruitment agencies to post, and there is no charge for posting. Besides the concept of a friend in need is a friend indeed, what gave birth to the Web site is an inspiration from Purple People Collective (PPC), a site that helps match up IT professionals who are looking for people and those who need jobs in the US and Europe. It all started when we visited our friend Saurabh in Bangalore who had just been laid off by Yahoo!, and was looking for a new job, said Mr Anthony over phone from Pune. The Indian IT landscape and talent pool, with its different requirements, offerings and prices, requires its own dedicated site (like PCC), he added.

The response has been amazing 60 companies posted their requirements in the last 20 days while over 500 job seekers signed up for posting their CVs and finding prospective employers. The site is still in its infancy. Going forward, we believe the response would be more along with the number of people benefiting out of this, said Mr Anthony. Source : Business line May 12th / May 24th 2009 4.10 Terminal Questions 1. Discuss any 3 common sources of Recruitment 2. Why interviews are considered a common method for selection? 3. Discuss the types of interviews 4. What are some unique challenges that India faces? 5. Why is physical examination included as part of selection in some companies? 4.11Answers Answers to Self Assessment Questions 1. talent, 2. rural population, 3. two-way process 4. the size of the organization; 5. the employment conditions in the community where the organization is located; 6. the effects of past recruiting efforts which show the organizations ability to locate and keep good performing people; 7. working conditions and salary and benefit packages offered by the organization which may influence turnover and necessitate future recruiting; 8. the rate of growth of organization; 9. the level of seasonality of operations and future expansion and production programmes; and

10. cultural, economic and legal factors 11. Notice boards 12. Employee referrals 13. Executive search firms 14. Nepotism 15. Applicant, 16. future scheme, 17. evaluated, 18. "Truth in hiring". 19. Employment Exchanges, 20. promoted, 21. "Sons of the Soil" 22. Interviews 23. Application blank 24. Interviewing 25. Stress interviews 26. Depth interviews 27. Patterned interviews, 28. Induction. Answers to Terminal Questions 1. Refer to 4.4 2. Refer to 4.8 3. Refer to 4.8

4. Refer to 4.6 5. Refer to 4.8.

References: 1. Human Resources Management by Fisher, Schoenfeldt and Shaw 2. Managing Human Resources Productivity, Quality of Work Life, Profits by Wayne F. Cascio Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-05-Training and Development

Unit-05-Training and Development Structure: 5.1 Introduction Objectives 5.2 Meaning of Training 5.3 Objectives of Training 5.4 Importance of Training 5.5 Assessment of Training Needs Organization Analysis Task Analysis Man Analysis 5.6 Execution of Training programs 5.7 Types and Techniques of Training 5.8 Role of Management Development 5.9 Evaluation of Training Effectiveness 5.10 Why Training Fails? 5.11 Summary 5.12 Caselet 5.13 Terminal Questions 5.14 Answers 5.1 Introduction

How did you learn to tie a shoelace? How did you learn to cook? How did you learn about a new country you are planning to visit? Everything you know in life, almost everything, has been taught to you at some point of time. Parents, relatives, teachers in schools/colleges, friends and at work colleagues are usually the ones imparting the knowledge or skill that you need at every stage in life. In this unit we will spend time understanding the concepts that drive adult learning and skills training in organizations. Every organization needs to have well-trained and experienced personnel to perform the tasks that need to be done. Todays organizations invest a lot of time, effort and resources on training the up-skilling (improving the skills) and even multi-skilling (having employee learn multiple skills). Traditionally training focus in organizations revolved around those employees who could not do a particular job well, or those planning to change a job. Inadequate job performance or a decline in productivity or changes resulting out of job redesigning or technological changes required training to bring about the desired shift in performance/behaviour. As the jobs become more complex, the importance of employee training also increases. Today increasing organizations are investing in employee training as a method to facilitate continuous learning, innovation, creativity and particularly managerial excellence training and development. Training is as much about employee development and to retain employee motivation and growth within the firm. Objectives: After studying this unit, you will be able to: State the importance of Training. List out the types and Techniques of Training and Development. Explain the types, methods and procedures of training. 5.2 Meaning of Training The term, training indicates any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased. Usually training and development initiative in organizations have the following intentions: To improve skills, To add to the existing knowledge so that the employee is better equipped to do his present job, to innovate, To prepare him/her for a higher position, growth within the organization. Help organization cope with / adapt itself to a changing environment.

Training refers to the teaching/learning activities carried on for the primary purpose of helping employees in an organization to acquire and apply the knowledge, skills, abilities and attitudes needed by that organization. Broadly speaking, training is the act of increasing the knowledge and skill of an employee for the benefit of both the employee as well as the firm. Self Assessment Questions 1. ___________ indicates any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased 2. The concern is for the organizations variability, that it is should adapt itself to a ______________________. 3. Broadly speaking, training is the act of increasing the knowledge and skill of an employee for doing a _____________. 5.3 Objectives of Training The chief aim of learning for the manager is to increase his ability to learn from experience. The second aim is to increase his ability to help his subordinates learn from experience. According to Douglas McGregor, there are three different purposes of learning. 1. Acquiring Intellectual / job-related Knowledge: An electrical engineer may need more knowledge than he now possesses about circuit design. A new employee may require knowledge about company policies. A shop floor employee may need to be made aware of information about the new performance appraisal or compensation policy or changes to it. The acquisition of knowledge therefore is a fairly straight-forward process provided the individual wants the new knowledge. However, if he does not want the knowledge, there is little doubt that training will fail. Creating a self-driven need for knowledge is fundamental to employee learning. 2. Acquiring Manual Skills: The acquisition of a manual skill requires practice or experience along with feedback. While learning can happen in a isolated self-learning mode, it can be significantly speeded up by guidance and theoretical knowledge imparted by experts. The end objective remains that the employee be able to execute the skill effectively back on the job. Learning is enhanced when the employee receives clear feedback which tells him about the success of his efforts. The necessary effort will be expanded only if there is a felt-need on the part of the learner. 3. Acquiring Managerial Skills: Much of a managers work is managing people and solving problems. These include organizing his own and his team members work activities, and planning for a wide range of other decision-making responsibilities. These are skills include diagnosing problems, interpreting relevant data, assessing alternative

solutions and getting feedback concerning the effectiveness of the solution. These skills can be improved through classroom training. As with any skill, practice and feedback are essential for learning. The most widely used classroom method for improving the problem-solving skills is the case method. In the hands of a skilful teacher, it can be highly effective. Self Assessment Questions 4. According to Douglas McGregor, there are three different purposes of learning _______________, __________________, ______________. 5. A new employee may require knowledge about __________________. 6. Much of a managers work is____________________. 5.4 Importance of Training Training is an important investment an organization makes for making its employees more effective and productive. Training is a practical and vital necessity because; it enables employees to develop and build careers within the organization, and increase their skill levels and market worth, earning power and enhanced job security. In a way it improves retention as employees will look internally to build careers by picking up the requisite skills. On the other hand behavioural training has a significant impact on improving/changing employees attitudes and workplace co-operation including, greater loyalty to the company. Training also influences employee morale, for it found to help in reducing dissatisfaction, complaints, grievances and absenteeism, reduces the rate of turnover. Organizations are increasingly investing more and more in training and development initiatives. While the direct benefits from training are not specifically measurable there are numerous research studies that have confirmed positive correlation between organizational success and the amount of investment in training initiatives. Given this background, training in organizations is managed scientifically and practiced in the following 3 key steps: 1. Assessments of Training Requirements 2. Execution of Training Programs 3. Evaluation of Training Effectiveness The rest of this session focuses on understanding the activities that pertain to these steps. Self Assessment Questions

7. Training is a practical and vital necessity because; _______________ 8. It moulds the employees ______________ and helps them to achieve a better cooperation with the company and a greater loyalty to it. 9. Over and under-emphasis on training stems largely from ___________. 5.5 Assessment of Training Requirement Given the investment that organizations make in training it is critical for organizations to ensure that the money is rightly spent. Training needs consider both the organizations demands and that of the individuals. Diversification of product lines, new technology, and hence a new kind of job, or a shift in organizational culture or ways of conducting business are common organizational needs that cover most employees in the company. On the other hand demands that pertain to individuals growth and development, including induction training for new hires, or training necessitated by job rotation due to an organizations internal mobility policies are examples of individual need based training. The model we shall examine here is the Thayer and McGhee model. It is based on the following three factors: 1. Organization analysis 2. Task analysis 3. Individual analysis 5.5.1 Organization Analysis Total Organization Analysis is a systematic effort to understand exactly where training effort needs to be emphasized in an organization. It involves a detailed analysis of the organization structure, objectives, human resources and future business plans, and an understanding of its culture. The first step in organization analysis is establishing a clear understanding of both shortrun and long-run business and people goals. Long-term objectives are the broad directions in which the organizations would move over a long duration. These long-term objectives are then broken down into specific strategies and short-term goals for each of the units/departments. In an organization, the cumulative effect of all these would ultimately lead to the long-term goal. Short-term goals are constantly in need of adaptation to the changing environment, both external and internal. For an organization analysis, there are three essential requirements: (1) an adequate number of employees available to ensure fulfilment of the business operation; (2) that

employee performance is up to the required standard; and (3) that the working environment in their units/departments is conducive to fulfilment of tasks. In order to ensure the first two requirements a human resource inventory needs to be made. Data regarding positions, qualifications, vacancies, replacements and training time required for replacements have to be worked out. Job standards must also be worked out. Various efficiency and productivity indexes, or ratios such a productivity ratios, cost per unit etc, can be worked out to determine not only efficiency but also adequacy, in terms of under-manning or over-manning, of the workforce. An important dimension of organizational need-based analysis, is the diagnosis of the state of the organization "climate" or culture. While rules, procedures, systems and methods all contribute to the making of the environment, much of it is also determined by the attitude that the "people" have in the organization-for instance, the attitude that top management has towards its subordinate staff and the attitudes that members have towards work, Managers and company procedures. These attitudes are learnt, they result from the persons experience both within and outside the organization, and training inputs could be used to effect changes of attitude and consequently of the organizational climate. In analyzing the organization climate, both direct and indirect methods could be used. Direct methods are observation, use of questionnaires, and interviews. Reliance or indirect methods would not give a clear understanding of the attitudes and predispositions of employees. In fact, factors such as low absenteeism and low turnover are not by themselves indicators of positive or negative attitudes, and high or low morale. It would be better to make a careful analysis and study each indicator in a particular situation in conjunction with more direct methods like attitude surveys. Analysis and interpretation of the data may give clear clues not only to attitudinal training needs but possibly also to kill training needs. Activity 1: Name some companies both Indian as well as foreign those are known for ethical conduct. 5.5.2 Task Analysis This activity entails a detailed examination of each job, its components, its various operations and the conditions under which it has to be performed. The focus here is on the "task" itself and the training required to perform it, rather than on the individual. Analysis of the job and its various components will indicate the skills and training required to perform the job at the required standard.

Standard of Performance: Every job has an expected standard of performance (SOP). Unless such standards are attained, not only will inter-related jobs suffer, but organizational viability will be affected, and so will the expectations that have been set for that particular job itself. If the standards set for the performance of a job are known, then it is possible to know whether the job is being performed at the desired level of output or not. Knowledge of the "task" will help in understanding what skills, knowledge and attitudes an employee should have. Methods: If an employee is asked to perform a job, the exact components of the job and the standard of performance must be known. Task analysis entails not merely a simple listing of the various job components, but also of the various sub-tasks. Conventional methods of job analysis are usually suitable for task analysis. They are: 1. Literature review regarding the job. 2. Job performance. 3. Job observation, 4. Data Collection regarding job interviews. For blue-collar employees, more precise industrial-engineering techniques, like time and motion studies, could be used, and for white-collar employees, work sampling observation, interviews, and job performance data analysis could be employed. The focus in task analysis approach to identifying training needs is with the clear objective of enhancing the performance standard of a given task. This information is then utilised to establish the training programme for the employee. It helps identify the skill required, either in terms of education or training, to perform the job, knowledge, and finally attitudinal pre-dispositions such as the attitudes, towards safety, or interpersonal competence that will ensure that the job is performed optimally. 5.5.3 Individual Analysis Individual analysis is the third component in identifying training needs. The focus of individual analysis is on the individual employee, his abilities, and the inputs required for job performance, or individual growth and development in terms of career planning. The common source for this needs analysis usually forms parts of the performance assessment process. Clues to training needs can also come from an analysis of an individuals or a groups typical behaviour. The primary sources of such information are: (1) Observation at place or work, examination of job schedules, quantum of spoilage, wastage, and clues about interpersonal relations of the employees; (2) interviews with superiors and employees; (3) comparative studies of good vs. poor employees, to identify differences, skills and training gaps; (4) personnel records; (5) production reports; and (6)

review of literature regarding the job and machines used. Job-knowledge tests, work sampling and diagnostic psychological tests also provide information about employees. Self Assessment Questions 10. The first step in organization analysis is achieving a clear understanding of both ______________ and ________________. 11. In analyzing the organization climate, both ________________ and ______________ could be used. 12. Analysis of the job and its various components will indicate the _______________. 13. Man analysis is the third component in identifying _________________. 14. ______________ helps to identify whether the individual employee requires training and if so, what kind of was training. 5.6 Execution of Training Programs Training is the responsibility of four key stakeholders: a. The top management, which commits to the training initiative; b. The personnel department, which frames the plans, establishes and evaluates training programmes; c. Managers, who support and help implement the training plan and apply developmental procedure that will enable training e3ffectiveness at the workpalce; and d. Employees, who provide feedback, revision and suggestions for corporate educational endeavours. According to Prof John Mee, the work of training should be done at two levels. 1. The training department should assume the primary responsibility for the instruction of trainees in methods of teaching; for normal orientation; for the training of Managers in human relations; for the development of executives, for co-operative education in schools and colleges; and for the general education of employees. 2. Line Managers and employees should carry the bulk of the teaching load in the following areas; on-the-job instruction of employees; instruction in the technical and professional aspects of a business; daily development of superiors and executives through counselling; departmental communication and staff meetings as part of an overall training programme. It is needless to say that the top line executive has the responsibility for:

I. Authorising basic training policies; II. Reviewing and approving the broad outlines of training plans and programmes; and III. Approving training budgets. There are several administrative aspects that have to be taken into account before launching in-house training programme, or nominating participants to external programmes. In-company/External Programmes: The Company needs to formulate its thinking regarding participation in programmes offered by external agencies like educational management institutes, government institutions and consultant programmes, vis--vis conducting its own in-house programmes. Where employee numbers are small, it may not be worthwhile to set up a training establishment and conduct in-house programmes, but as the numbers increase, this option may offer a distinct possibility. There is the cost aspect to be considered: for the cost of sending a participant to an external programme, several employees could be trained within an organization. Yet, the advantage of an external programme would be a breath of fresh air through discussions with other participants and a fresh approach could be brought into the organization and its problems. The skills and techniques learnt may also be different from those offered by ones own in-house programmes. Training Budgets: A training budget is usually prepared for a training year. This is the responsibility of the training department. This would include cost of facilities like training room, food, transport, trainer/guest faculty, and cost of teaching materials. In fact, the cost to the organization should also include the wages and salaries of employee participants who would be temporarily pulled out of their regular jobs and sent for training. The reason for costing the trainee employees salary would be that they would not be making any contribution to the company during the training period, and that this actually adds to the training costs. However organizations are increasingly accounting for training man-days as a mandatory part of an employees work life and are treated as investment made in the individual/ organizations success. Once a set of training events are committed to and declared by the training department, the focus shifts to planning for the program. A trainer needs to plan his training activities well in advance, be it in-house company programme, in order that the lead time is adequate for preparation, both for the nominee and the organization, without disruption of normal work. In the case of internal programmes there is much more background work to be done by the trainer, in terms of course design, preparation of teaching materials, announcement of the programme, receiving and sifting of nominations, administrative arrangements such as training room, teaching aids and material, food, transportation and accommodation arrangements. With regard to external programmes, there is a need for taking into account organizational factors such as release of the nominee from the job, temporary replacement and his career plans i.e., to what extent the employee would benefit from the training programme either in terms of improved job performance, better

interpersonal competence, or preparation in terms of attitudes, concepts and skills for higher responsibilities in the organization, given the career plans based on performance appraisals that the employee and his manager have committed to. Career planning would take into account both external and internal nominations. Training methods are designed so as to ensure learning effectiveness and application back at work. In fact, the different training methods are multifaceted in scope and dimension, and each is suitable for a particular situation. The choice of a method would depend on a wide variety of factors, such as competence of instructors, relevance to the participants, the programme design, i.e., a particular method the best vehicle to put across the contents, and finally its cost implications. The best method for one situation may not be the best for different groups or tasks. Each method has structured procedures for conduct which offer certain advantages in developing certain limited facts of a trainee, and suffer from some limitations. In adapting a particular method, one should know its merits and demerits, given the situation, and analyze its relevance, its purpose, and if it is useful, how to get the most of it. The trainer should know the rationale of each of the methods before attempting to use any of them. Self Assessment Questions 15. There are several administrative aspects that have to be taken into account before launching ______________________, or nominating participants ______________________. 16. A ________________ for each internal programme has to be prepared, which would include cost of facilities like training room, food, transport, guest faculty, if any, and cost of teaching materials 17. Training methods are a means of attaining the desired objective in a ________________. 5.7 Types and Techniques of Training As discussed above, training methods have a number of overlapping objectives. They have to be chosen carefully and in relation to the programme design objectives. The main objectives of individual training methods could be: demonstration of value, developing interest and finally appeal to senses. Demonstration of Value: Complete demonstration of job requirements enables the trainee to grasp the meaning of ideas, concepts, or procedures visually. Such a method can be used effectively as an aid to overcome the "breakdown of communication". Trainees remember things that they see and hear, much longer than they do information they receive through talks or reading alone.

Engaging trainee Interest: One of the important factors to be kept in mind in choosing a method is its ability to hold and arouse the interest of the trainee in the learning situation. A trainee has to consider alternative methods of presenting training material to participants in order to stimulate their interest and facilitate retention of the matter. For instance, if traditionally the matter has been presented through lectures, perhaps audio visual methods could be used, or instead project work be assigned which would mean learning by doing or researching the subject oneself. Appeal to multiple senses: From the trainers point of view, it would be beneficial to utilize as many of the trainers senses as possible, in order to improve retention of learning. The trainer has to understand and identify the problem area i.e., he has to examine whether there is a problem with the manner in which the task is done. Secondly, selecting the appropriate method would be dependent on the level of the trainee in an organizations hierarchy. Finally, before selecting a training method, the trainer should keep in mind about cost effectiveness. Depending on the learning outcome, and the process by which it is attained, it is possible to categorize the various methods into several groups. On-the-job trainings: Since most jobs in a organization can be learned in a relatively short period of time, this method is the most widely used. It has the advantage of strongly motivating the trainee to learn since it is located in the artificial situation of a classroom. The fact that the success of the system depends almost entirely upon the immediate supervisor, the trainer, means that the personnel unit has a major responsibility for making a good, effective teacher out of every supervisor. The supervisor typically follows a set procedure (as illustrated in the table) in training an employee to perform a particular task. The suggestions accompanying each step are general guides evolved from both experience and research. Table 5.1 Table on Training Procedure Step Suggestions Instructor preparation 1. Divide task into logical parts to create lesson plans. 2. Select teaching techniques e.g., demonstration. Training preparation 1. Place trainee at ease. 2. Relate training to trainee needs e.g. promotion. 1. Present overview of task. 2. Proceed from known to unknown, easy to difficult. 3. Adjust pace to individual differences.

Presenting the task

4. Go through task and explain each step. 5. Have trainee tell instructor what to do. 1. Have trainee explain each step prior to execution. 2. Be aware of learning plateaus to sustain motivation. 3. Provide feedback on progress. 1. Positively reinforce continuously at start. 2. Move to variable positive reinforcement schedule as trainee matures. Advantages: The main advantage of on-the-job training is that the trainee learns on the actual equipment in use and in the true environment of his job. Secondly, it is highly economical since no additional personnel or facilities are required for training. Thirdly, the trainee learns the rules, regulations and procedures by observing their day-to-day applications. Fourthly, this type of training is a suitable alternative for a company in which there are almost as many jobs as there are employees. Finally, it is most appropriate for teaching the knowledge and skills which can be acquired in a relatively short period i.e., a few days or weeks. Disadvantages: The principal disadvantage of on-the-job training is that instruction is often highly disorganized and haphazard and not properly supervised. This is due to such reasons as the inability of the experienced employee to impart skills to the trainee, the breakdown of the job for the purpose of instructions, and the back of motivation on the part of the trainee to receive training. Further, the other drawback is the low productivity, especially when the employee is unable to fully develop his skills. Vestibule / Classroom Training: This method attempts to duplicate on-the-job situations in a company classroom. It is a classroom training which is often imparted with the help of the equipment and machines which are identical with those in use in the place of work. This technique enables the trainee to concentrate on learning the new skill rather than performing an actual job. In other words, it is geared to job duties. Theoretical training is given in the classroom, while the practical work is conducted on the production line. The advantages of using the vestibule-training system are the disadvantages of specialization. The instructor, a specialist, should be more skilled at teaching. The student avoids the confusion and pressure of the work situation and thus is able to concentrate on learning. One can also often attain a given level of skill more quickly in the specialized learning situation. We have more assurance that adequate time and attention will be given to training and that it will not slighted in favour of other problems. More individualized instruction can be given, and training activities do not interfere with the regular processes of production. Among the disadvantages are the splitting of responsibilities leads to

Tryout Performance

Follow-up

organizational problems. Second, an additional investment in equipment is necessary, though the cost may be reduced by getting some productive work done by trainees while in the school. Third, this method is of limited value for the jobs which utilize equipment which can be duplicated and finally the training situation is somewhat artificial. Apprenticeship programme: Apart from the requirements under Apprenticeship Act, various industries have their own apprenticeship programme where in the employees are employed on a small stipend to learn the job first and after satisfactorily completing the training they are absorbed in the industry. The advantages of this method are: 1. A skilled work force is maintained; 2. Immediate returns can be expected from training; 3. The workmanship is good; 4. The hiring cost is lower because of reduced turnover and lower production costs; and 5. The loyalty of employees is increased and opportunities for growth are frequent. Work Simulation Methods: Simulation is a technique which duplicates, as nearly as possible, the actual conditions encountered on a job. Generally, simulation techniques have been most widely used in the aeronautical industry. Knowledge-based Methods: In this method of training, an effort is made to expose participants to concepts and theories, basic principles, and pure and applied knowledge in any subject area. Basically, it is aimed at creating an awareness of the knowledge of fundamentals. The focus is essentially on transmission of knowledge which has been imbibed by the participants. This knowledge is the base, the foundation, on which further understanding can be built. The categories of this method are lectures, seminars, workshops, films and training, group discussions etc. Experiential Methods: The emphasis in this category is on achieving through group processes and dynamics, a better understanding of oneself and others. It has been asserted that attitudinal training helps and individual to improve his comprehension of self, others, group behaviour and personal interaction. Such knowledge and understanding helps an individual to understand the problems of human relationships in a work situation, including at times his managerial style. Such training is imparted on the job by the employees immediate Managers. It provides to the trainees opportunities for getting acquainted with their managers. The managers, too, have an opportunity to judge the abilities and possibilities of trainees from the point of view of their job performance.

The success of this method depends upon the fact that: 1. The experienced Managers must be good teachers; 2. They should have incentives and sufficient time for carrying out the training programmes; and 3. They should be provided with an accurate account of the training needs of the trainees they are to teach. Self Assessment Questions 18. Depending on the __________________, and the process by which it is attained, it is possible to categorize the various methods into several groups. 19. The main advantage of _____________________ is that the trainee learns on the actual equipment in use and in the true environment of his job. 20. Theoretical training is given in the ________________, while the practical work is conducted on the ____________________. 21. ______________ is a technique which duplicates, as nearly as possible, the actual conditions encountered on a job. 22. The emphasis in __________________ is on achieving through group processes and dynamics, a better understanding of oneself and others. 5.8 Role of Management Development Per Dr. B. K. Madan "Management development is the development of management over and above its science and theory, of its practice and application in organizations, corporations and institutions, alike in relation to the organization and manager, so as continuously to re-equip both to fulfil their purposes more effectively and in harmony with each other, and both with the environment in which they function and have their being and hope to thrive upon and grow." Executive/Managerial development is an attempt at improving an individuals managerial capabilities and effectiveness through a planned and deliberate process of learning. Todays organizations are making significant investment in building training infrastructure and commitment towards this activity. In the famous words of Marcus Buckingham of Gallup, people dont leave organizations they leave managers, managerial skills have come under the spotlight and attract a lot of attention in organizations. Employee retention is a key metric to track managerial effectiveness. Hence organizations are making investment in building capable managers who will build teams that will drive organizational success. For an individual this means a change through a process of planned learning.

The organizational aims of management development are to secure the following valuable end-results: 1. Improvement in technical performance; 2. Improvement in supervision and leadership at each level; 3. Improvement in inter-departmental co-operation; 4. Highlighting an individuals weaknesses; 5. Attracting good men; 6. Facilitating sound "promotion-from-within" policies and practices; 7. Ensuring that the qualifications of key personnel become better known; 8. Creating reserves in management ranks; 9. Making an organization more flexible by an increased versatility of its members; 10. Improving organizational structure; 11. Stimulating junior executives to do better work; 12. Keeping the company at least of technical and economic conditions; and 13. Broadening key men in the middle cadre. Therefore the anticipated change in the individual must take place in crucial areas which can be considered as output variables: 1. Knowledge change; 2. Attitude change; 3. Behaviour change; 4. Performance change; and 5. End-operational results (the last two changes being the result of the first three changes) While training can bring about the desired change in managerial effectiveness they are also impacted by the following factors ..

a) Formal organization how is authority and responsibility provided for within the organizations structure, how is the manager empowered, how is his/her success measured. b) Leadership climate how does the top/senior leadership of the company serve as role models, do they practice what is being preached, how is good managerial leadership communicated and reinforced c) Cultural factors how is good managerial capability recognised and rewarded, what expectations are set with the employees/teams, how is leadership success communicated and shared In a nutshell, management development aims at securing management improvement not only in the short run but as a on-going and continuous process of change. Self Assessment Questions 23. Executive development is an attempt at improving an individuals managerial effectiveness through a ___________________________. 24. The change in the individual must take place in those crucial areas which can be considered as output variables (mention any 2) ___________________. 25. The organizational aims of management development are to secure the following valuable end-results: (mention any 3) ___________________.

Activity 2: Training is considered as a tool to enhance knowledge and skill. Try to find out from a person you know and who has attended the training answers to the following questions: Did he learn from the learning? Was the training material sufficient enough? Did the training was structurally design or there were some loop holes? 5.9 Evaluation of Training Effectiveness An objective of training evaluation is to determine the payoff from the training investment. It focuses on the improvement of the participant in the training programme to perform jobs for which they were trained, what was effective and what was not, whether

the trainees required any additional on the job training, and the extent of training not needed for the participants to meet job requirements. There are various approaches to training evaluation. To get a valid measure of training effectiveness, the manager should accurately assess trainees job performance two to four months after completion of training. However this focus is not easy to establish and track in most organizations. Per Kirkpatricks study, training effectiveness of outcomes can be measured: 1. Reaction: Evaluate the trainees reaction to the programme. Did he like the programme? Did he think it worthwhile? 2. Learning: Did the trainee learn the principles, skills and fact that the supervisor or the trainer worked them to learn? 3. Behaviour: Whether the trainees behaviour on the job changed because of the training programme. 4. Results: What final results have been achieved? Did he learn how to work on machine? Did scrap page costs decrease? Was turnover reduced? Are production quotas now being met? etc., Structured interviews with the immediate supervisor of the trainees are acceptable methods for obtaining feedback in training. The supervisor is asked to rate the former trainee on job proficiency directly related to the training objectives. Another approach is to involve the use of experimental and control groups. Each group is randomly selected, one to receive training (experimental) and the other not to receive training (control). The random selection helps to assure the formation of groups quite similar to each other. Measures are taken of relevant indicators of success (e.g. words typed per minute, units of work produced per hour etc.) before and after training for both groups. If the results shown by the experimental group are significantly greater than those of the control group, the training can be considered as successful. Another common method is the longitudinal or time series analysis. A series of measurements are taken before the programme begins and continues during and post completion of the programme. The results are then plotted on a graph to ascertain changes if any, have occurred and continue to remain as a result of the training investment that was made. In addition, pre-and-post tests are administered to the training groups. Prior to the training, a test related to the training material is applied, and the results of this pre-test are compared with results on the same or similar test administered after the programme has been completed. Self Assessment Questions

26. To get a valid measure of__________________, the personnel manager should accurately assess trainees job performance two to four months after completion of training. 27. The _______________________helps to assure the formation of groups quite similar to each other. 28. Another method involved in obtaining feedback on training effectiveness is ____________________________________analysis. 5.10 Why Training Fails? The following factors have been considered as the main reasons for failure of training programmes: 1. The top management is not committed to training and the benefits of training are not clear to them. 2. The top management hardly rewards Managers for carrying out effective training. 3. The top management rarely plans and budgets systematically for training. 4. The middle management, without proper incentives from top management, does not account for training in production scheduling. 5. Without proper scheduling from above, first line Managers have difficulty production norms if employees are attending training programmes. 6. Behavioural objectives are often in precise. 7. Training external to the employing unit sometimes teaches techniques on methods contrary to practices of the participants organization. 8. Timely information about external programmes may be difficult to obtain. 9. Trainers provide limited counselling and consulting services to the rest of the organization. The training programmes can be made effective and successful if the following hints are considered; 1. Specific training objectives should be outlined on the basis of the type of performance required to achieve the specific organizational goals and objectives. 2. Attempt should be made to determine whether the trainee has the intelligence, maturity, and motivation to successfully complete the training programmes.

3. The trainee should be helped to see the need for training by making him aware of the personal benefits he can achieve through changes in behaviour. 4. The training programme should be planned so that it is related to the trainees previous experiences and background. 5. Attempts should be made to create organizational conditions that are conducive to a good learning environment. 6. If necessary; a combination of training methods should be selected so that variety is permitted and as many of the senses as possible are utilized. 7. It should be recognized that all the trainees do not progress at the same rate. Therefore, flexibility should be allowed in judging the rates of progress in the training programme. 8. If possible, the personal involvement or active participation of the trainee should be got in the training programme. He should be provided with opportunity to practice the newly needed behaviour norms. 9. As the trainee acquires new knowledge, skills or attitudes and applies them in job situations, he should be significantly rewarded for his efforts. 10. The trainee should be provided with regular, constructive feedback concerning his progress in training and implementation of the newly acquired abilities. 11. The trainee should be provided with personal assistance when he encounters learning obstacles. Self Assessment Questions 29. Specific __________________should be outlined on the basis of the type of performance required to achieve organizational goals and objectives. 30. The training programme should be planned so that it is related to the trainees _______________________and background. 31. If possible, the _______________________of the trainee should be got in the training programme. 5.11 Summary

The term, training indicates any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased. According to Douglas McGregor, there are three different purposes of learning.

-Acquiring Intellectual Knowledge

-Acquiring Manual Skills -Acquiring Problem-Solving Skills

o o o

o o o

o o

Training increases the employees "market value", earning power and job security. Training needs have to be related both in terms of the organizations demands and that of the individuals. In analyzing the organization climate, both direct and indirect methods could be used. Direct methods are observation, use of questionnaires, and interviews. Reliance or indirect methods would not give a clear understanding of the attitudes and predispositions of employees. Task Analysis entails a detailed examination of a job, its components, its various operations and the conditions under which it has to be performed. If an employee is asked to perform a job, the exact components of the job and the standard of performance must be known. Task analysis entails not merely a simple listing of the various job components, but also of the relatively critical nature of the various subtasks. Training methods are a means of attaining the desired objective in a learning situation. The choice of a method would depend on a wide variety of factors, such as competence of instructors, relevance to the participants, the programme design, i.e., a particular method the best vehicle to put across the contents, and finally its cost implications. Structured interviews with the immediate supervisor of the trainees are acceptable methods for obtaining feedback in training.

5.12 Caselet Case Studies and Success Stories Training and Development A community resource Multilink Community Services Inc was started in 1988 by a small group of migrants and refugees who saw a need for English classes and support services for non-English speaking people. Multilink became incorporated in 1989, took on its first funded program in 1991 and now it operates 32 program on a weekly basis across six local government areas. The organisation receives funding from local, state and federal government, but it also owns two businesses one that provides an interpreting and translating service; the other, a series of multicultural card games for children. Of the 330 people who work for Multilink, nearly all of its staff members are from different cultural backgrounds and none of them are under 40 years of age. Multilinks director Lynda Ford is very happy with the results that have been achieved by these mature age employees. They are honest, hardworking, loyal, insightful and always

ready to help others, Lynda said. They are happy to be working, taking the opportunities made available to them and they are great resources, providing us with cultural and religious knowledge, contacts and language skills. Training for its mature age employees remains one of Multilinks most important issues. While English literacy will always be a key concern, Lynda Ford has also identified what she calls workplace literacy as another area that requires attention. I believe that training issues were greater for this culturally diverse workgroup as often they need skills, knowledge and experience of Australian systems (education, employment, medical, drivers licences, telephone connections, etc.) and conceptual skills to establish their programs, collect data, write reports and liaise with government and other organisations. Having identified that there is a great need for it, Multilink encourages and supports continuing training for its mature age employees. The organisation informs its staff about external training opportunities, and it provides two hours per week study leave for fulltime employees. Multilink also conducts individual staff appraisals for all staff that identify training needs, and the organisation has developed a 2005-06 training plan that offers a variety of practical and technical sessions to staff. Key to success and fulfillment Career Keys is a non-profit organisation that provides community-based training and transition support to young people, parents and socially disadvantaged groups to assist them with gaining employment. It is the only organisation that is delivering this type of service in the Logan area. Career Keys is about helping others to develop their confidence, work skills and the ability to fulfil their career goals successfully, and most of its programmes are available free of charge. Deidre Foreman, the general manager of Career Keys, has a staff of 20 employees three quarters of whom are much valued mature age workers. I wanted to have a balanced workforce and I have put in place on-going training that has given an opportunity for staff to adapt to new skills as needed, Deidre said. Because mature age people do not always have the confidence to sell themselves at job interviews, Deidre believes that employers need to have skills to elicit information from potential employees so that they can see what skills mature age job seekers may bring to the workplace. She also has a policy of allowing her staff to work part-time an arrangement that requires her staff to share jobs and be multi-skilled. Deidre Foreman, Marcella Mortimer and Elena Meale at Career Keys ANZ Bank Career Extension Program

ANZ Bank has implemented a Career Extension Program which seeks to retain mature age workers who are thinking of retiring by giving them access to options other than full retirement from work. This initiative offers flexibility to mature age staff members so they can consider staying with ANZ beyond the traditional retirement age in a way that works for them as well as the business. ANZ has a number of options to help mature age employees to reassess their careers, including: part-time work job-sharing mentoring/coaching roles working from home purchased leave career breaks Lifestyle leave ANZ also offers an Alumni program which keeps the door open to retired employees and those enjoying a break from the workforce. For more information about ANZ Banks Career Extension and Alumni programs, click on the following links: Source: http://www.deewr.gov.au/Employment/Programs/Jobwise/Employers/Pages/case05.aspx 5.13 Terminal Questions 1. What is Training? What are its objectives? 2. What do you mean by Training Organisation? How organisations design a Training system? 3. Discuss various methods of Training available with their respective limitations. 4. What are the objectives of Training Methods? 5.14 Answers

Answers to Self Assessment Questions 1. Training, 2. Changing environment, 3. Particular job 4. Acquiring Intellectual Knowledge, Acquiring Manual Skills, Acquiring ProblemSolving Skills, 5. Company policy, 6. Solving problem 7. "Market value", earning power and job security, 8. Attitudes, 9. Inadequate recognition and determination of training needs and objectives. 10. Short-run and long-run goals, 11. Direct and indirect methods, 12. Skills and training required to perform the job at the required standard, 13. Training needs, 14. Man analysis 15. In-house training programme, to external programmes, 16. Training budget, 17. Learning situation, 18. Learning outcome, 19. On-the-job training, 20. Classroom, production line. 21. Simulation, 22. Experiential Methods

23. Planned and deliberate process of learning, 24. Knowledge change, Attitude change, 25. Improvement in technical performance; Improvement in supervision and leadership at each level; Facilitating sound "promotion-from-within" policies and practices 26. Training effectiveness, 27. Random selection, 28. longitudinal or time series 29. Training objectives, 30. Previous experiences, 31. Active participation Answers to Terminal Questions: 1. Refer to 5.2 & 5.3 2. Refer to 5.6 3. Refer to 5.7 4. Refer to 5.7 & 5.8 Reference: Human Resources Management by Fisher, Schoenfeldt and Shaw Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-06-Employee Growth
Unit-06-Employee Growth Structure: 6.1 Introduction Objectives 6.2 Concept of Employee growth 6.3 Career Planning 6.4 Promotions and Internal Job Posting 6.5 Succession Planning 6.6 Other Career Programs 6.7 Summary 6.8 Caselet 6.9 Terminal Questions 6.10 Answers 6.1 Introduction Business environment is turbulent and complex as never before. While you might find some speak positively or others might be sceptical and highly pessimistic about it. What therefore strikes us as corporate professionals is the impact it has on our careers and future at the workplace. This unit dwells on the provisions for employee growth and development that organizations provide for. A few decades ago, the contracting which an employee entering a firm focused on was work hard, perform well, remain loyal and committed, and thereby receive an even

greater reward and job security. This has swiftly been replaced with a new contract based on continuous learning and identity change. Now more than ever, individuals need to develop new and better personal skills of selfassessment and career planning, especially because the onus for career advancement is essentially driven by an individual, while the organization supports the process with the required provisions from a policy and investment perspective. The ideal career is one that is drive by the individual and not the organization. It can therefore be reinvented by the individual from time to time, depending on what he/she discovers as new strengths and opportunities that the market provides. Objectives: After studying this unit, you will be able to: List the components of employee growth Describe the dimensions of career planning Review promotions and internal job postings Discuss Succession planning Evaluate other programs for special employee growth. 6.2 Concept of Employee growth Increasingly organizations have become more active in implementing employee growth programs. Companies are designing employee growth programs to increase employee productivity, control attrition, prevent job burnout and obsolescence, and improve the quality of employees work lives. Human Resources department of almost all large companies and most medium sized companies have taken a greater interest in employee development programs. Human Resources professionals have never before faced so many challenges in meeting the needs of individual employees and organizations in designing career systems. To cope in todays turbulent times, it has become increasingly important, as a key talent management agenda, for both organizations and employees to better redress employee career needs. It is the employees responsibility to manage his or her own career, while it is the employers responsibility to provide employees with the tools and opportunities to enhance their skills. The end objective however remains, for the organizations to have a career-resilient workforce, one that has self reliant workers who are capable of reinventing themselves to keep up with the fast pace of organizational changes and fulfil their career aspirations, without feeling the need to moves companies in search of better career opportunities. What this essentially means can be summarised under the following key initiatives that are commonly practiced in organizations today:

Career Planning and development Promotions and Internal Job Postings Succession Planning Other talent management activities focused on employee growth

While these activities are normally part of the core HR functions often organizations (depending on the size of the organizations) might have a dedicated individual supported by a small team leading all of these activities and reporting to the Head of HR or even the CEO/MD. Self Assessment Questions 1. Companies are designing __________________________ to increase employee productivity, prevent job burnout and obsolescence, and improve the quality of employees work lives. 2. To cope in todays turbulent times, it has become increasingly important for both _____________________________ to better redress employee career needs. 3. The end result for a career-resilient workforce is one that has self reliant workers who are capable of ____________________. 6.3 Career Planning A broad view of career is defined as an individually perceived sequence of attitudes and behaviour work-related activities and experiences over the span of a persons life. In normal parlance the term career has both an internal and an external focus. An internal focus and refers to the way an individual views his/her career and the external or objective focus and refers to the actual series of job positions held by the individual. The dynamics of career development in an organizational context has two dimensions: How individuals plan and implement their own career goals (career planning), and How organizations design and implement their career development programs (career management). Career planning is a deliberate attempt by an individual to become more aware of their skills, interests, values, opportunities and constraints. It requires an individual thinking to identify career-related goals and establishing plans towards achieving those goals. Often it is a self-driven process, which every professional (irrespective of the nature of employment) spends some time to dwell on and discuss it with peers or superiors and frame it. It is also viewed from time to time that the individual looks for possible new career options. Having a career plan builds a commitment towards achieving it and is viewed as an excellent personal goal-setting exercise for self motivation.

Career management is considered to be an organizational process that involves preparing, implementing and monitoring career plans undertaken by an individual alone or within the organizations career systems. Organizations establish policies that provide for multiple career path options that an employee can choose from and pursue. This is supported with a lot of training and development activities that are agreed to with the manager and planned carefully and executed. A variety of career development activities and tools exists for use in organizations. HR managers should be familiar with these components because the managers often serve as internal consultants responsible for designing the career development systems. Some of the activities described are individual career planning tools and others are commonly used for organizational career management. In general the most effective career development programs will use both types of activities. A variety of career development activates are available for use. Some of the more popular ones include: 1. Self assessment tools:- these are usually technology enabled on-line (on the corporate intranet) tools that form part of the performance appraisal system and allow the individual to identify areas of strengths and parallelly identify career paths that would leverage these strengths the best. E.g. Career Planning Workbooks, Career Workshops hosted by the organizations from time to time. 2. Individual Counselling:- formally the process allows for individuals to discuss this as part of the performance management process with their immediate managers and share and take feedback on the appropriateness of the choices and how to go about pursuing it. Often managers recommend relevant other managers and leaders who the employee can link with to seek advice and support. Organizations also provide for formal mentoring programs to which an employee can enrol and sign up a mentor who can then provide the support and counselling on the best career option and how to go about it achieving it. 3. Information Services: organizations have established policies on what skills and experiences that each job in the organization requires. Jobs with similar skills and experiences are clubbed together to create parallel career paths. For example in a software development firm the career path options for the software engineering team can be designed as follows: Career Paths in a software company

Figure 6.1: Career Paths in a software company These are typically called career ladders or career paths and they help an employee identify what his options are for future growth and identify the appropriate one based on his personal skills and capabilities/ limitations. These career paths would be supplemented with additional information on skills and experience that one must have for each role/job in the career path. It would also specify the particular qualification or special certifications that the positions demands. An employee aspiring to pursue a career option would need to dedicate time and effort and the expenses towards acquiring the same. Large MNCs (multinational companies) also encourage the reimbursement of these expenses as a annual fixed amount on successfully clearing the exam/certification. The employee however needs to find the time and expend the effort away from work. The actual move of the employee to the new role would however depend on the existence of a job vacancy in that role. The employee can also approach career resource / talent management centres supported by the HR teams for more information on how to plan careers and apply for new roles sand jobs. Organizations usually have formal job posting systems through which the employee receives this information and applies for the job after discussing with his manager. 4. Initial employment Programs Organizations also run internship and apprenticeship programs wherein the individuals aspiring to do a particular job can spend some time as a temporary employee to explore interest and skill fitment for the job/role. (e. g. Anticipatory socialization programs, realistic recruitment, and employee orientation program); 5. Organizational Assessment programs : organizations can proactively establish formal processes wherein an employee can volunteer to participate and understand himself/herself and his/her strengths. Through the use of Assessment Centres organizations can help an employee identify areas for improvement and means of building those skills. So he can achieve his career plans. Certain organizations offer Psychological Testing instruments which profile the employees strengths and roles and responsibilities he / she will best fit into. 6. Developmental programs focus the effort of the employee towards helping the employee to achieve his career goals. The Assessment Centres, Job rotation programs, in-

house training, tuition refund plans, and mentoring, all prove effective tools to help the individual along. No matter what tools are used for career development, it is important that employees develop and individualised career plan. For example Raychem requires every person to have a learning or development plan. Self Assessment Questions 4. Career management is considered to be an organizational process that involves preparing, implementing and monitoring career plans undertaken ______________________. 5. __________________ is a deliberate attempt by an individual to become more aware of his or her own skills, interests, values opportunities, constraints and consequences. 6. Understanding __________________ in an organization requires an examination of two processes; how individuals plan and implement their own career goals (career planning), and how organizations design and implement their career development programs (career management).

6.4 Promotions and Internal Job Postings All organizations big and small have established and documented promotion policies. Even as an employee is being hired he/she is curious and does enquire repeatedly about the organizations promotion policies and what growth opportunities it affords. Within a few months of joining a new company it is natural for an employee to evaluate options for future growth in the form of promotion that the organization provides. It is therefore a critical retention tool to have transparent and fair promotion guidelines that the employee can refer to evaluate his/her suitability for promotion. In designing promotion guidelines organizations need to take note of the following considerations: Tenure in the organization Time spent in the role/job / level Performance ratings Recommendation of the immediate and skip-level (managers manager) managers HR records on disciplinary actions/ misconduct of any nature, any negative comments etc

Despite the existence of formal policies, promotions or rather the absence of it, it is often a key source of drop in motivation and results in employee exit. The communication of the criteria and retaining a transparent process can help manage perceptions gaps, but never completely eliminate dissatisfaction. Internal Job Posting is another effective method that organization uses to encourage employee growth. This usually goes together with the career planning initiatives. All or select job openings in the organization are advertised internally before external applicants are invited. Organizations might even open all positions to internal as well as external candidates and the best candidate is given the job. Todays organizations have established processes of posting jobs using technology effectively to post jobs across countries and business verticals. In large MNCs it is common for organizations to have job portals that an employee can access to view job opening globally. Based on his/her career plans an employee can choose suitable job openings and in-discussion with their managers pursues the interviewing process. In Wipro for example anyone whos been more than 18months in the same role can begin to explore jobs internally applies and interview for a new role. Such initiatives significantly impact retention levels in organizations and enhance employee enhancement. Activity 1 Speak to a friend or a relative working in a large company and find answers to the following questions: 1. How do promotions happen in the company? 2. What is the importance given to years of experience in the promotion process? Why? 3. When promotions happen are they openly communicated to all or kept confidential? Why? 4. What career planning policies does this company have, if at all? 6.5 Succession Planning Succession planning involves having senior executives periodically review their top executives and those in the next-lower level to determine several backups for each senior or key position in the firm. It takes years of grooming to develop effective senior managers and this is a talent challenge that all organizations face today. Traditionally succession planning was restricted to senior-level management positions and this was either an informal or formal process. Over the years succession planning has established itself as a key HR activity in most organizations with formal processes that ensure it is reviewed regularly and scientifically.

In smaller organizations it is yet an informal succession planning process where the individual manager identifies and grooms his or her own successor. Succession planning involves an examination of strategic (long-range) plans and HR forecasts for all identified key positions in an organizations. It includes positions that are critical for the business and for its continuity and not just the senior level positions. It includes a review of the data on all potential candidates who might be able to move to these positions either right-away or in the near future. The objective is to identify employees with potential and increase managerial depth as well as promoting from within the company. This is usually an exercise undertaken one a year and usually runs parallel to the performance appraisal process. This exercise is carried out by the senior management team of the unit/subsidiary and facilitated by the HR team. Usually, committees of top managers work together to identify high potential candidates within their team and then out-line developmental activities for them. They may also include a formal assessment of the performance and potential of candidates and written individual development plans for candidates. All members voice opinions about the potential candidates that are proposed and disagreements are openly debated, before the final document is signed off. The succession planning process includes determining and clarifying the requirements of the managerial position and development plans for how these potential candidates can be groomed to occupy these positions in the eventuality they fall vacant. These development plans then translate into the individuals development plan and HR along with the immediate manager work with the individual to execute the same. A succession planning exercise concludes with an organization chart of all key positions with listing of possible potential candidates and the readiness rating for each potential candidate. For example a position that can immediately be filled is rated higher than a position which does not have a ready-now candidate. Other components include performance appraisal of these employees, and individual development plans and management development programs. Additionally, the factors rated as most important in selecting specific internal/external potential candidates for grooming includes: past job performance, past positions or prior employment, perceived credibility, area of expertise and career paths and values and attitudes. Benefits: There are many benefits of having a formal Succession Planning System: 1. Provides a clear context to strategic business planning as the key positions for the businesss success are what are being planned for. 2. Provides a more systematic basis to judge the risk of making particular succession and developmental moves. 3. Bring focus to systematized succession a plan that scientifically identifies potential candidates to ensure business continuity.

4. Enables the identification of high potential and future leaders, whereby the thereafter the manager/HR can engage with them for leadership development initiatives. 5. Reduces randomness of managerial movements. 6. Helps anticipate problems before they get started and thereby avoid dysfunctional situations. 7. Provides scientific approach for arriving at succession decisions as part of the overall human resource planning exercise connecting formats (data, timing) with process (judgement, discussions, analyses) 8. Helps plan for internal promotion opportunity 9. Provides early warning if succession does not exist for a position allowing for lateral hiring from the market. Regardless of what type of succession planning program is used (formal or informal); most successful programs obtain the support of top management. Self Assessment Questions 7. Succession planning is usually restricted to senior-level management positions and can be ___________________. 8. Formal succession planning involves an examination of strategic (long-range) plans and HR forecasts and a review of the data on all ___________________. 9. Succession planning reduces ___________________ of managerial development movements. 6.6 Other Career Programs While the general notion is that most Career development programs are often instituted to meet the unique needs of particular employees, the benefits for the organization are immense. This is one reason why organizations continue to invest time and resources on it despite the fact that it does not offer immediate measurable benefits. Although many different groups and issues may be targeted for career development, some of the more common programs are those that focus on work-family issues, outplacement, entrenched employees, late-career employee, disadvantages employees, fast track employees and managers. Work-Family Programs focus on supporting employee manages their personal as well as work related challenges in a balanced manner. Increasing use of flexible work schedules, work from home options, opening of more on-site or company-sponsored child-care centers, and greater use of paid leave for fathers and adoptive parents are some

common practices in this area. There are also more focused programs that focus on managing gender diversity at the workplace and set goals for advancing women into senior management positions. And is truly amazing is the increasing pattern of companies holding managers accountable for meeting these goals. There are specific workshops and training programs mandated for managers to help them initiating and implementing them. Relocation Assistance and hiring practices redresses the challenges associated with employee relocation on account of a career move. The support provided by firms in assisting spouse of employees with opportunities within the company, linking them with job placement consultants as well as sponsoring the cost of re-training or picking up a new skill. The amount and nature of support could vary from company to company. Some firms have altered their policy to allow for hiring both spouses while they may not be allowed to work in the same department/team. Work Life balance Seminars and flexible HR practices wherein organizations design programs to help employees manage their work-family conflicts and coping strategies. Especially prevalent in the ITES/BPO organizations where the work-life balance is a concern. This practice is now part of most organizations where the increasing work pressure is driving companies to help employees cope with personal pressure. Various stress management workshops and stretch- exercise schedules are practiced to help employees cope with stress. Lifestyle management workshops too are becoming popular in larger organizations. Organizations are also changing their practices for recruitment, travel, transfer, promotions, scheduling hours, and benefits to meet the needs of the larger number of dual career couples. Flexible Work schedules are being increasingly instituted at the workplace. These include flextime, job sharing, part time work, working from home, compressed workweeks, temporary workweeks etc Such programs enable employees to address their work and family concerns and reduce their potential stress or conflicts between their various life roles. Telecommuting has become very popular. This provides for organizational as well as employee related advantages. Some difficulties with telecommuting are communication problems with other employees, limited access to necessary supplies and equipment and family interruption. Outplacement Program during retrenchment and downsizing is a professionally managed process in most organizations. The objective here is to assist the effected employees in making the transition to new employment. It could involve re-skilling for new, more relevant skills per market demand so finding a new job is easier. Companies might tie up with training institutes and provide the skills training. Else the company might prefer to reimburse the cost of re-skilling directly to the impacted employee for a course of his/her choice. Outplacement services would also involve working with placement agencies and recruitment firms to provide interviewing opportunities for the employees. Outplacement programs stress the importance of self confidence and individual career planning beneficial for middle or late-career employees who are being laid off.

 Special Programs for Women, Minorities and Employees with Disabilities: With organizations increasingly tapping into this critical talent pool, more employees in these special categories are entering the workforce. This calls for special focus on the importance of assisting these employees with their career needs.

Activity 2 Have you ever thought of your career plans? What exactly you want to achieve in next 5 years? How are you planning to go ahead? Consult somebody who can guide you to reach your goals. Fast Track employees are now being increasingly identified as stars with high potential for bright future in the organization. The identification and development of these employees requires organizations to exert efforts to build and monitor special programs that cater to this special audience. These employees are identified in a formal process and are placed on a fast track program. The objective here is to enable them to move to senior positions quickly. As is with all other such initiatives, this initiative helps in retaining this critical talent. Among other activities that target this group they are offered quicker job changes and more challenging job assignments. 6.7 Summary Employee growth is a evolving HR activity in todays corporate. While immediate returns are not measurable the payoffs from these investments have proven long-term benefits. To summarize Career development programs must be integrated with and supported by the existing HR programs if they are to be successful. Career development initiatives need to well communicated and supported by the business leaders and HR to ensure its benefits both for the organization as well as the employee. Career or job changes by the employee are a match between what an employee aspires for professionally and a good understanding of organizations job description, job posting systems and selection policies. It is however the responsibility of the HR staff to work with management to ensure that career programs are integrated with the other HR functions and are similarly reviewed. Career development programs must positively impact organizational and individual effectiveness over the short and long term 6.8 Caselet

CWA & AT&T Walking the Talk: (2800 Century Parkway, Atlanta, Georgia) The 2800 Century Parkway AT&T building in Atlanta is a hotbed of Alliance activity. Why? Because The Alliance, CWA Local 3250 and local AT&T Management have found value in working together. They have banded together to create opportunities in which employees can gain skills and increase their employment security while improving the efficiency of AT&T in providing service to its customers. In just the first 7 months of the 2005 Program Year, 2800 has already exceeded its annual goals. The picture was not always so rosy at this location. In late 2001 the Alliance Local Committee (ALC) and Company/Union support for it had virtually disappeared. Layoffs in both the occupational and management ranks displaced most key supporters and ALC members. A local CWA election that fall saw most of the Union Leadership at Local 3250 turn over. Without strong onsite leadership 2800 did not come close to reaching its annual goals for the first time that year. The Alliance Associate Director, Jay Ott, saw an opportunity to create a better, stronger relationship between The Alliance, CWA and AT&T Management. He began by working with the new CWA Vice President for 2800, Roy Hegenbart (who is now the Local President for 3250) to identify the right occupational employee to promote The Alliance on-site someone who understood the joint labor/management concept, who knew the people in the building, and was respected by both Management and CWA. That person was Chandra Patton, and in May of 2002, Roy convinced the company to assign Chandra as Alliance site coordinator full-time. Chandra and Jay took a different approach to creating a new Labor/Management team for 2800. They spent the rest of 2002 meeting, communicating, and building relationships with the local AT&T management and CWA leadership. Their focus was on the Administrative Supervisors, as they were the ones who could get the support needed for classroom space, particularly space for an upgraded computer lab, and for company time when the building was affected by a surplus declaration. A Leadership Team was formed to support these efforts. It consisted of Chandra Patton (Alliance Site Coordinator), James Bates, Debbie Shelton, John Bozart, and Alicia Brock (AT&T Administrative Supervisors), Roy Hegenbart (Local 3250 V.P.), and Jay Ott (Alliance Associate Director). In order for Jay to fully participate in this team, Christine Deas from The Insight Group was brought in to facilitate the meetings. The goals of the Leadership Team are: Develop a stronger, more viable relationship between AT&T Management, CWA, and The Alliance at 2800 Century Parkway. Work with the Alliance Local Committee to develop training opportunities for the surplused, represented workforce on company-time.

 Identify and offer training that will enhance employee skills and marketability within as well as outside of AT&T. Reestablish a viable after-hours training schedule that employees would support. Encourage more Business Unit Initiatives on company-time. Encourage all employees to take advantage of opportunities to grow and develop their shills, talents and interests. The everyday work of implementing the program still needed to be addresses. The Leadership Team appointed ALC members who had the skills and initiative to make the day-to-day operational decisions (e.g., what classes, when, where, marketing, registration, follow-up, etc.). By June of 2003, the work of the Leadership Team and the ALC resulted in a huge increase in Alliance activity. 2800 had surpassed its annual goals in only 9 months! Its success did not go unnoticed. Chandra Patton, Debbie Shelton and Jay Ott presented the 2800 story to The Alliance Board of Trustees at their July meeting in New Jersey. This story of cooperation and achievement was outlined in a unique way. The team developed a series of CD ROMs explain who we were and how we achieved some much success in a short period of time. It was obviously well received. However, wait! This is only half the story. What happened next is what makes 2800 stand out from most other Alliance locations in the country. The Leadership Team had always kept the people to whom they reported informed of the success of The Alliance, and the AD made special efforts to reach out to those upper level managers and union officers in order to find common interests and goals. The Board of Trustees presentation was used as a springboard to pitch the District/Division level managers and CWA leadership on even more opportunities that potentially could be in the best interest of the Company, the Union and the represented employees. Because of those presentations, Sharon Cochrane District Manager Date Group, Bernie Ragland Division Manager and Terry Parr District Manager Voice Group have supported many Business Unit Training Initiatives on company-time. Some of the more notable activities have been Customer Relations Skill Certification, Voice over Internet Protocol (VoIP), CCNA Certification, CCP@, and Net+ Certification. These programs, along with the more traditional Alliance programs, helped the 2800 location exceed their annual goals for the third time in as many years. Another indication of the strength of the Alliance commitment there is the support that AT&T provides to CWA represented employees from other Avaya and Lucent. The only Alliance lab with the equipment to provide high level IT training is at 28000. The Alliance committee works closely with management (including GRE and Security) to make his lab accessible to all Alliance participants in the area.

The opportunities available at 2800 Century Parkway are a direct result of Labor and Management seeing value in creating a more skilled workforce through The Alliance. Together, they really do walk the talk. Source : http://www.employeegrowth.com/success_stories_6-05.htm 6.9 Terminal Questions 1. What is career planning? Whose responsibility is it? 2. What is succession planning? 3. How is career planning different from succession planning? 4. What are some other career planning initiatives that are being practised in the industry these days? 6.10 Answers Answers to Self Assessment Questions 1. Employee growth programs, 2. Organizations and employees, 3. Reinventing themselves to keep up with the fast pace of organizational changes. 4. By an individual alone or within the organizations career systems, 5. Career panning, 6. Career development 7. Informal or formal, 8. Potential candidates, 9. Randomness. Answers to Terminal Questions: 1. Refer to 6.3 2. Refer to 6.4 3. Refer to 6.3 and 6.4

4. Refer to 6.6 Reference: 1. Human Resources Management and Personnel Management by K Aswathappa Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-07-Performance Appraisal
Unit-07-Performance Appraisal Structure: 7.1 Introduction Objectives 7.2 Concept and Need of Employee Review 7.3 Concept of Performance Appraisal 7.4 Types of Appraisal Method Individual evaluation Methods Multiple-person Evaluation Methods 360 Degree Appraisal 7.5 Benefits of Performance Appraisal 7.6 Summary 7.7 Caselet 7.8 Terminal Questions 7.9 Answers 7.1 Introduction What gets measured gets done, is a famous quote you might have heard before It is one of the most discussed dimensions of the various HR activities in an organization. It attracts lot of employee as well as management attention and serves as a critical linking factor for mapping individual employees performance with organizational results. In this unit we will learn about the need, design and management of performance management systems in organizations. To put it simply It is the means, by which employees work behaviour are aligned with the organizations goals. The performance evaluation system is an organized set of activities established to regularly and systematically evaluate employee performance and

ensure its alignment to business metrics. Organizations also link it to rewards and incentives. Objectives: After studying this unit, you will be able to: Interpret performance evaluation. List the techniques and methods of evaluation. Describe the significance of rewards and incentives, promotions. Evaluate the concept of 360 Appraisal. 7.2 Concept and need of Employee Review Performance evaluation is systematic activity by means of which the organization determines the extent to which the employee is delivering per agreed objectives and this is aligned to business results. Generally speaking, the HR specialists design and implement the performance management system (PMS), and then train the line managers in the use the systems, and maintain the records. Apart from focusing on performance, todays organizations are emphasising the need for employee development focus in implementing an effective PMS. The line managers use the system to review employee performance and the normal steps include: 1. Defining performance: includes setting performance targets and goals (usually for the span of a year) split into monthly or quarterly targets. These should ideally conform to the SMART principle of being Specific, Measurable, Achievable, Realistic and Timebound. These are agreed to mutually by the manager as well as the employee at the beginning of the performance period. Most PMS require the employee and manager to enter it into a prescribed performance appraisal template and signed off by both prior to the commencement of the performance period or at the start of it. 2. Measuring performance: While it largely involves the assessment of the performance against the targets at the end of the assessment period/performance period. The focus is here on on-going review of the employees performance by the manager throughout the year. This allows for the following: 1. Review progress and ascertain help/support the employee might need to complete the task per agreed standards 2. Recommend training or other on-the job / off-the job assistance that the employee might need to meet the deadlines.

3. Review the targets and commitments and make changes if required usually influenced by external factors that are impacting performance and review the targets upwards or even downwards. 3. Feedback and coaching: focuses on the developmental needs of the employee which the manager might need to take care to enable the employee to successfully complete the job in the best possible manner. A proactive approach to ensuring that the employee succeeds and the job is well done rather than waiting till the end of the assessment period. On-going feedback and coaching can also ensure that the business goals are not sacrificed. Decision for work to be reassigned to someone more capable, if the employee is unable to complete it as committed, can also be taken in-time. This step in the PMS also includes discussion between the employee and his /her manager on the medium-long term career progression plan for the employee. What does the employee aspire for professionally and how he plans to go about achieving it within the organization, what role can the manager play in this carer planning decision are few aspects that get discussed. For performance evaluation to be more than a yearly paper-work exercise, top management along with the HR team encourage its use to encompass all of the above 3 parts. An effective performance management framework must also establish clear linkage to reward decisions such as promotions, salary hike and performance-linked-incentives. Self Assessment Questions 1. _____________________ is the HR activity by means of which the organization determines the extent to which the employee is performing the job effectively. 2. The _______________ do the evaluation of the employees. 3. ______________________ must encourage its use and use it to make reward decisions such as promotions. 7.3 Concept of Performance Appraisal Research confirms that effective performance management systems impact corporate performance and the bottom line positively. To design a system for appraising performance, it is important to first define what is meant by the term work performance. Although a persons job performance depends on some combination of ability, effort and opportunity, it can be measured in terms of outcomes or results produced. Performance is defined as the record of outcomes produced on a specific job function or activity during a specific time period. For example a Sales representative would have some measure of sales as an outcome as a primary function of that job. Customer service would have very different outcome measures for defining performance. A College professor is typically evaluated on three work aspects: teaching, research and service. Performance in each of these three areas is defined with different outcome measures.

Performance on the job as a whole would be equal to the sum (or average) of the performance on each of the job functions/ activities within the job. Note that the function has to do with the work that is to be performance and not the characteristics of the person performing. Unfortunately many performance- appraisal systems confuse measures of performance with measures of the person. The definition of performance refers to a set of outcomes produced during a certain time period; it does not refer to the traits, personal characteristics or competencies of the performer. Summarised below are few aspects that need to be considered while establishing a PMS: 1. Validity of the PMS framework a. It should measure important job characteristics b. It should encompass the whole job, all parts of it c. It must measure what it claims to measure d. It does not assess other constructs besides performance e. It is based on a sound job analysis of the jobs 2. Reliability of the assessment tool a. Take care of inter-rater reliability in other words defines what outcome measure to what rating or grade b. Guard against subjective evaluation clearly identifies the aspect that need to be assessment to reduce interpretation by different people differently. 3. Freedom from Bias eliminates bias through objective assessment, by not having too many open-ended, poorly defines criterias for assessment. 4. Practicality be simple and easy to use/implement. Use technology to reduce paper work and mover to a on-line workflow based system so not too much time is wasted in managing it. Self Assessment Questions 4. To design a system for appraising performance, it is important to first define what is meant by the term _____________________. 5. Performance is defined as the record of outcomes produced on a specific job function or activity during ______________________.

6. Performance on the job as a whole would be equal to the sum (or average) of the ________________________. 7.4 Types of Appraisal Methods Ideally every individual in any organization needs to be appraised. The appraisal system should be able to take care of this, and it shall also meet the needs and the objectives of the organization meet. On broad way to categorise, the type of appraisal template used to assess performance, focuses on what the organization wishes to measure: Trait-based Appraisal: is used to assess personality or personal characteristics, loyalty, communication skills, level of initiative, decision making etc.. This is common in companies that are in the business of service, and customer satisfaction. While it is difficult to define the criteria accurately, rater/manager bias is high, and as the focus is on personal attributes providing feedback is a challenge. Behavior-based Appraisal: focuses on the appraisal of what an employee does on the job. It evaluates behavior and measures what an employee should do differently. This is common in customer facing organizations, like the hospitality / NGO companies. As the focus is on the assessment of behavior rater/manager bias remains a challenge here as well. Results-based Appraisal: measures objective results of work. The focus is on the outcome/deliverables from the job, and this alone serves as the measure for success. It may not be possible to use in jobs which depend on team work or where the job is service / support based. Most organizations use a combination of trait, behaviour and results in their appraisal systems as all three are important. It provides for a holistic and fair assessment of the individual. Activity 1 We discussed here, that every person doing any work can be evaluated. Think of the helpers in a grocery shop in your neighbourhood. How do you think the shop owner / supervisor would assess the helpers? Can you list 3-5 traits, behaviours and results that the shop owner can possibly use to assess them? If possible share it with the shop owner and observe his reaction. The next challenge in evaluation is the method to use. There are three common methods that are in-use: individual evaluation methods; multiple person evaluation methods; and other methods.

7.4.1 Individual evaluation Methods There exists five ways to evaluate an employee individually. Here the employee is evaluated one at a time without directly comparing him/her with other employees. Graphic rating scale: The most widely used performance rating technique is a graphic rating scale (eg. a 3, 4 or 5 or even 10 point rating scale). In this technique, the evaluator is presented with a list of assessment characteristics and asked to assign a number rating to the employee on each of the characteristics listed. The number of characteristics might vary from a few to several dozen. It aims to measure the quality of performance and ability to do the present job. The ratings can be in a series of boxes, or they can be on a continuous scale (0-9) or so. In the latter case, the evaluator places a check above descriptive words ranging from none to maximum. Typically, these ratings are then assigned points. For example, outstanding may be assigned a score of 4 and unsatisfactory a score of 0. Total scores are then computed. In some plans, greater weights may be assigned to more important traits. Evaluators are often asked to provide supporting comments for each rating in a sentence or two. Forced choice: The forced-choice method of evaluation was developed because other methods used at the time led to a preponderance of higher ratings, which made promotion decisions difficult. In forced choice, the evaluator must choose from a set of descriptive statements about the employee. The two-, three-, or four-statement items are grouped in a way that the evaluator cannot easily judge which statements apply to the most effective employee. Typically, HR specialists/consultants prepare the items for the form, and Managers or other HR specialists rate the items for applicability; that is, they determine which statements describe effective and ineffective behaviour. The Manager then evaluates the employee. The HR Department adds up the number of statements in each category (for example, effective behaviour), and they are summed into an effectiveness index. Forced choice can be used by superiors, peers, subordinates, or a combination of these in evaluating employees. Essay evaluation: In the essay technique of evaluation, the evaluator is asked to describe the strong and weak aspects of the employees behaviour. In very few organizations, the essay technique is the only one used; in others, the essay is combined with another form, such as a graphic rating scale. The essay summarizes and elaborates on some of the ratings, or discusses added dimensions which are not captured by the scale. Wherever it is used the essay, the can either be open ended or as in most cases there are guidelines on the topics to be covered, the purpose of the essay, and so on. The essay method can be used by evaluators who are superiors, peers, or subordinates of the employee to be evaluated. It is not a very popular method in the industry.

Management by objectives: one of the most popular individual evaluation methods in use today is Management by Objectives (MBO). In this system, the Manager and employee to be evaluated jointly set objectives/targets in advance for the employee to try to achieve during a specified period. And usually the objectives framed are of quantitative nature. MBO is a very common industry practice. At the beginning of the year clear objectives are laid down for achievement during the course of the year. These objectives are popularly called by the following names: 1. KRA-key result areas 2. KPA -key performance areas 3. Targets 4. Commitments These objectives are designed using the SMART framework as in Specific, Measurable, Achievable, Results oriented and Time bound. All objectives must conform to this framework. Thereafter the objectives are broken up into half yearly, quarterly and maybe monthly objectives, again keeping in mind the SMART framework. All along the process both the employee and the manger are in consensus of the objectives and the timelines as well as the deliverables. MBO is one of the most effective methods for performance review primarily because it is identified at the beginning of the review period and is regularly reviewed for achievements and modified on-going again in consensus between the employee and the manager. At the end of the review year, the MBOs are reviewed for completion with the SMART framework. In case of a new employee or someone moving jobs/assignments between teams; after about 6-8 weeks of being in the job this process is undertaken and the objectives are set. The evaluation too is a joint review of the degree of achievement of the objectives. This approach combines the manager and self-evaluation systems. Critical incident technique: In this technique, HR specialists and operating managers prepare lists of statements of very effective and very ineffective behaviour for an employee. These are the critical incidents. The HR specialists combine these statements into categories, which vary with the job. Once the categories are developed the statements of effective and ineffective behaviour are provided to the managers. The manager maintains a log for each employee right through the evaluation period. The manager "records examples of critical (outstandingly good or bad) behaviours in each of the categories, This log is used to evaluate the employee at the end of the period. The manager can be specific in making positive and negative comments, and it avoids

recency bias. The critical incident technique is normally to be used by superiors than in peer or subordinate evaluations. Checklists and weighted checklists: Another type of individual evaluation method is the checklist. In its simplest form, the checklist is a set of objectives or descriptive statements. If the manager believes that the employee possesses the trait listed, the manager checks the items; if not it is left blank. A rating score from the checklist equals the number of checks. A recent variation is the weighted checklist. Managers or HR specialists familiar with the jobs to be evaluated prepare a large list of descriptive statements about effective and ineffective behaviour on jobs, similar to the critical incident process. Judges who have observed behaviour on the job sort the statements into the ones describing behaviour that is scaled from excellent to poor (usually on a 7-11 scale). When there is reasonable agreement on an item (for example, when the standard deviation is small), it is included in the weighted checklist. The weight is the average score of the Raters to the checklists use. The Managers or other Raters receive the checklists without the scores, and they check the items that apply, as with an un-weighted checklist. The employees evaluation is the sum of the scores (weights) on the items checked. Checklists and weighted checklists can be used by evaluators who are superiors, peers, or subordinates, or by a combination. Behaviourally anchored rating scales: the most prevalent technique which is a variation of the critical incident approach is the behaviourally anchored rating scale (BARS). This technique is also called the behavioural expectation scale (BES). Managers give descriptions of actually good and bad performance, and HR specialists/consultants group these into categories (five to ten is typical). The items are once again evaluated by managers (often other than those who submitted the items). A procedure similar to that for weighted checklists is used to verify the evaluations (outstandingly good, for example) with the smallest standard deviation, hopefully around 1.5 on a 7-point scale. These items are then used to construct the BARS. The final output is a set of statements for each item from among which the manager chooses the most appropriate one for the employee based on his/her performance. Self Assessment Questions 7. In _______________, the evaluator must choose from a set of descriptive statements about the employee. 8. In the ________________ of evaluation, the evaluator is asked to describe the strong and weak aspects of the employees behaviour. 9. In ________________, HR specialists and operating managers prepare lists of statements of very effective and very ineffective behaviour for an employee.

7.4.2 Multiple-person Evaluation Methods While the above techniques are used to evaluate employees one at a time, there are a number of methods being used in organizations to evaluate an employee in comparison with other employees. Ranking: In ranking method, the manager/s is/are asked to rate employees doing similar jobs from highest to lowest on some overall criterion. This is very difficult to do in groups larger than 20. It is also easier to rank the best and worst employees than it is to evaluate the average ones. Simple ranking is carried out by first picking the top and bottom employees, and then selecting the next highest and next lowest, and so on, to move towards the middle. Paired comparison: This approach makes the ranking method easier and more reliable. First, the names of the persons to be evaluated are placed on separate sheets (or cards) in a predetermined order, so that each person is compared to all others to be evaluated. The evaluator then checks the person he feels is the better of the two on a criterion for each comparison. Typically the criterion is overall ability to do the present job. The number of times a person is preferred is tallied, and this develops an index of the number of preferences compared to the number being evaluated. These scores can be converted into standard scores by comparing the scores to the standard deviation and the average of all scores. This method can be used by superiors, peers, subordinates, or some combination of these groups. Forced distribution: The forced-distribution system is similar to grading on a curve. The evaluator is asked to rate employees in some fixed distribution of categories, such as 10 percent in low, 20 percent in low average, 40 percent in average, 20 percent in high average, and 10 percent in high. This should be done twice for the two key criteria of job performance and promotability. Ideally it is used for rating potential. This method is effective in avoiding rating errors where managers tend to rate employee towards the centre of the scale or at the higher end of the scale. 7.4.3 360 Degree Appraisal Typically, performance appraisal has been limited to a feedback process between employees and Managers. However, with the increased focus on teamwork, employee development, and customer service, the emphasis has shifted to employee feedback from the full circle of sources depicted in the diagram below. This multiple-input approach to performance feedback is sometimes called "360-degree assessment" to connote that full circle.

Figure 7.1: The 360 degree matrix There are no prohibitions in law or regulation against using a variety of rating sources, in addition to the employees Manager, for assessing performance. Research has shown assessment approaches with multiple rating sources provide more accurate, reliable, and credible information. For this reason, HR Management supports the use of multiple rating sources as an effective method of assessing performance for formal appraisal and other evaluative and developmental purposes. The circle, or perhaps more accurately the sphere, of feedback sources consists of Managers, peers, subordinates, customers, and ones self. It is not necessary, or always appropriate, to include all of the feedback sources in a particular appraisal program. The organizational culture and mission must be considered, and the purpose of feedback will differ with each source. For example, subordinate assessments of a Managers performance can provide valuable developmental guidance, peer feedback can be the heart of excellence in teamwork, and customer service feedback focuses on the quality of the teams or agencys results. The objectives of performance appraisal and the particular aspects of performance that are to be assessed must be established before determining which sources are appropriate. We shall discuss the contributions of each source of ratings and feedback. In addition, precautions are listed to consider when designing a performance management program that includes 360-degree assessment. Superiors: Evaluations by superiors are the most traditional source of employee feedback. This form of evaluation includes both the ratings of individuals by Managers on elements in an employees performance plan and the evaluation of programs and teams by senior managers. What does this source contribute? 1. The first-line Manager is often in the best position to effectively carry out the full cycle of performance management: Planning, Monitoring, Developing, Appraising, and

Rewarding. The Manager may also have the broadest perspective on the work requirements and be able to take into account shifts in those requirements. 2. The superiors (both the first-line Manager and the senior managers) have the authority to redesign and reassign an employees work based on their assessment of individual and team performance. 3. Most Government employees in a national survey felt that the greatest contribution to their performance feedback should come from their first- level Managers.

What cautions should be addressed?

1. Research demonstrates that appraisal programs that rely solely on the ratings of superiors are less reliable and valid than programs that use a variety of other rating sources to supplement the Managers evaluation. 2. Superiors should be able to observe and measure all facets of the work to make a fair evaluation. In some work situations, the Manager or rating official is not in the same location or is supervising very large numbers of employees and does not have detailed knowledge of each employees performance. 3. Managers need training on how to conduct performance appraisals. They should be capable of coaching and developing employees as well as planning and evaluating their performance. Self Assessment: This form of performance information is actually quite common but usually used only as an informal part of the Manager-employee appraisal feedback session. Managers frequently open the discussion with: "How do you feel you have performed?" In a somewhat more formal approach, Managers ask employees to identify the key accomplishments they feel best represent their performance in critical and noncritical performance elements. In a 360-degree approach, if self-ratings are going to be included, structured forms and formal procedures are recommended. What does this source contribute? 1. The most significant contribution of self-ratings is the improved communication between Managers and subordinates that result. 2. Self-ratings are particularly useful if the entire cycle of performance management involves the employee in a self-assessment. For example, the employee should keep notes of task accomplishments and failures throughout the performance monitoring period. 3. The developmental focus of self-assessment is a key factor. The self-assessment instrument (in a paper or computer software format) should be structured around the performance plan, but can emphasize training needs and the potential for the employee to advance in the organization.

4. The value of self-ratings is widely accepted. More than half of government employees felt that self-ratings would contribute "to a great or very great extent" to fair and wellrounded performance appraisal. 5. Self-appraisals should not simply be viewed as a comparative or validation process, but as a critical source of performance information. Self-appraisals are particularly valuable in situations where the Manager cannot readily observe the work behaviors and task outcomes.

What cautions should be addressed?

1. Research shows low correlations between self-ratings and all other sources of ratings, particularly Manager ratings. The self-ratings tend to be consistently higher. This discrepancy can lead to defensiveness and alienation if Managers do not use good feedback skills. 2. Sometimes self-ratings can be lower than others. In such situations, employees tend to be self-demeaning and may feel intimidated and "put on the spot." 3. Self-ratings should focus on the appraisal of performance elements, not on the summary level determination. A range of rating sources, including the self-assessments, help to "round out" the information for the summary rating. Peers: With downsizing and reduced hierarchies in organizations, as well as the increasing use of teams and group accountability, peers are often the most relevant evaluators of their colleagues performance. Peers have a unique perspective on a coworkers job performance and employees are generally very receptive to the concept of rating each other. Peer ratings can be used when the employees expertise is known or the performance and results can be observed. There are both significant contributions and serious pitfalls that must be carefully considered before including this type of feedback in a multifaceted appraisal program. What does this source contribute? 1. Peer influence through peer approval and peer pressure is often more effective than the traditional emphasis to please the boss. Employees report resentment when they believe that their extra efforts are required to "make the boss look good" as opposed to meeting the units goals. 2. Peer ratings have proven to be excellent predictors of future performance. Therefore, they are particularly useful as input for employee development. 3. Peer ratings are remarkably valid and reliable in rating behaviors and "manner of performance," but may be limited in rating outcomes that often require the perspective of the Manager.

4. The use of multiple Raters in the peer dimension of 360-degree assessment programs tends to average out the possible biases of any one member of the group of Raters. (Some agencies eliminate the highest and lowest ratings and average the rest.) 5. The increased use of self-directed teams makes the contribution of peer evaluations the central input to the formal appraisal because by definition the Manager is not directly involved in the day-to-day activities of the team. 6. The addition of peer feedback can help move the Manager into a coaching role rather than a purely judging role. What cautions should be addressed? 1. Peer evaluations are almost always appropriate for developmental purposes, but attempting to emphasize them for pay, promotion, or job retention purposes (i.e., the rating of record) may not be prudent. The possible exception is in an award program as opposed to performance appraisal. Peer input can be effectively used for recognition and awards. 2. There is a difference of opinion about the need for anonymity of the peer evaluators. Generally, it is advised that the identities of the Raters be kept confidential to assure honest feedback. However, in close-knit teams that have matured to a point where open communication is part of the culture, the developmental potential of the feedback is enhanced when the evaluator is identified and can perform a coaching or continuing feedback role. 3. It is essential that the peer evaluators be very familiar with the team members tasks and responsibilities. In cross-functional teams, this knowledge requirement may be a problem. In these situations, the greatest contribution the peers can make pertains to the behaviors and effort (input) the employee invests in the team process. 4. The use of peer evaluations can be very time consuming. When used in performance ratings, the data would have to be collected several times a year in order to include the results in progress reviews. 5. Depending on the culture of the organization, peer ratings have the potential for creating tension and breakdown rather than fostering cooperation and support. A very competitive program for rewarding individuals in the agency will often further compromise the value of peer rating systems. 6. Employees and their representatives need to be involved in every aspect of the design of appraisal systems that involve peer ratings. Subordinates: An upward-appraisal process or feedback survey (sometimes referred to as SAM for a "Subordinates Appraising Managers") is among the most significant and yet controversial features of a "full circle" performance evaluation program. Both

managers being appraised and their own superiors agree that subordinates have a unique, often essential, perspective. The subordinate ratings provide particularly valuable data on performance elements concerning managerial and Managerial behaviors. However, there is usually great reluctance, even fear, concerning implementation of this rating dimension. On balance, the contributions can outweigh the concerns if the precautions noted below are addressed. What does this source contribute? 1. A formalized subordinate feedback program will give Managers a more comprehensive picture of employee issues and needs. Managers and Managers who assume they will sufficiently stay in touch with their employees needs by relying solely on an "open door" policy get very inconsistent feedback at best. 2. Employees feel they have a greater voice in organizational decision making and, in fact, they do. Through managerial action plans and changes in work processes, the employees can see the direct results of the feedback they have provided. 3. The feedback from subordinates is particularly effective in evaluating the Managers interpersonal skills. However, it may not be as appropriate or valid for evaluating taskoriented skills. 4. Combining subordinate ratings, like peers rating, can provide the advantage of creating a composite appraisal from the averaged ratings of several subordinates. This averaging adds validity and reliability to the feedback because the aberrant ratings get averaged out and/or the high and low ratings are dropped from the summary calculations. What cautions should be addressed? 1. The need for anonymity is essential when using subordinate ratings as a source of performance feedback data. Subordinates simply will not participate, or they will give gratuitous, dishonest feedback, if they fear reprisal from their Managers. If there are fewer than four subordinates in the rating pool for a particular manager, the ratings (even though they are averaged) should not be given to the Manager. 2. Managers may feel threatened and perceive that their authority has been undermined when they must take into consideration that their subordinates will be formally evaluating them. However, research suggests that Managers who are more responsive to their subordinates, based on the feedback they receive, are more effective managers. 3. Subordinate feedback is most beneficial when used for developmental purposes. It also can be used in arriving at the performance rating of record, but precautions should be taken to ensure that subordinates are appraising elements of which they have knowledge. For example, if a Managers performance plan contains elements that address effective leadership behaviors, subordinate input would be appropriate. It may not be appropriate for the employee to appraise the Managers individual technical assignments.

4. Only subordinates with a sufficient length of assignment under the manager (at least 1 year is the most common standard) should be included in the pool of assessors. Subordinates currently involved in a disciplinary action or a formal performance improvement period should be excluded from the rating group. 5. Organizations currently undergoing downsizing and/or reorganization should carefully balance the benefits of subordinate appraisals against the likelihood of fueling an already tense situation with distrust and paranoia. Customers: Setting Customer Service Standards, requires agencies to survey internal and external customers, publish customer service standards, and measure agency performance against these standards. Internal customers are defined as users of products or services supplied by another employee or group within the agency or organization. External customers are outside the organization and include, but are not limited to, the general public. What does this source contribute? 1. Customer feedback should serve as an "anchor" for almost all other performance factors. Combined with peer evaluations, these data literally "round out" the performance feedback program and focus attention beyond what could be a somewhat self-serving hierarchy of feedback limited to the formal "chain of command." 2. Including a range of customers in the 360-degree performance assessment program expands the focus of performance feedback in a manner considered absolutely critical to reinventing Government Employees, typically, only concentrate on satisfying the standards and expectations of the person who has the most control over their work conditions and compensation. This person is generally their Manager. Service to the broader range of customers often suffers if it is neglected in the feedback process. What cautions should be addressed? 1. With few exceptions, customers should not be asked to assess an individual employees performance. The value of customer service feedback is most appropriate for evaluating team or organizational output and outcomes. This feedback can then be used as part of the appraisal for each member of the team. The possible exceptions are evaluations of senior officials directly accountable for customer satisfaction and evaluations of individual employees in key "front line" jobs personally serving internal or external customers. 2. Customers, by definition, are better at evaluating outputs (products and services) as opposed to processes and working relationships. They generally do not see or particularly care about the work processes, and often do not have knowledge of how the actions of employees are limited by regulations, policies, and resources.

3. Designing and validating customer surveys are an expensive and time-consuming process. The time and money are best spent developing customer feedback systems that focus on the organization or work unit as a whole. In India the use of the 360 degree as a performance assessment tool has not found many followers. Companies like Wipro and even IBM use it for middle and senior managers only and it is used purely for developmental purposes only. The concerned manager receives the feedback directly and he can then work with a mentor or his own manager to identify development areas and improve on them. Activity 2 Why is job evaluation not as pervasive as performance appraisal? Self Assessment Questions 10. In ________________, the evaluator is asked to rate employees from highest to lowest on some overall criterion. 11. In _______________________ approach first, the names of the persons to be evaluated are placed on separate sheets in a predetermined order, so that each person is compared to all others to be evaluated. 12. The __________________________ is similar to grading on a curve. 7.5 Benefits of Performance Appraisal When an employee works well, the employee naturally wants it to be praised and recognised by his/her boss and fellow-workers. "Praise seems to have its greatest value when given and received as recognition, and is not perceived by either party as an attempt to control the behaviour of the recipient." In todays highly competitive workplace individual seek status and are anxious to excel at what they do and to achieve their personal aspirations and dreams. The PMS affords a fair process that allows the employee to benchmark themselves and calibrate performance vs. Relevant others in the team / organization. Its common in all most all organizations to provide for performance linked incentive that serves to attract employee attention and stimulates him/her to work more effectively and to stretch beyond the normal expectation. In the words of Burack and Smith, "an incentive scheme is a plan or programmes to motivate individual or group performance. An incentive programme is most frequently built on monetary rewards (incentive or a monetary bonus), but may also include a variety of non-monetary rewards or prizes." The use of incentives reinforces peoples actions to use their skills and ability to achieve important longer-run goals. Rewards should be regarded as a "pay off" for performance.

An incentive plan has the following important features: 1. An incentive plan normally consists of monetary elements. The rating or score awarded to an employee per the appraisal process can translate to a 100% incentive or less or even more. 2. The timing, accuracy and frequency of incentive are the very basis of a successful incentive plans. 3. The incentive plan, in order to be effective, requires that it should be properly communicated to the employees, to encourage individual performance, provide feedback and encourage redirection. Recognition satisfies the basic human need for self-esteem and self worth. This recognition may be a simple pat on the back of the employee or a recommendation for a pay raise, promotion, or assignment of more interesting tasks. Awards may be given in the form of articles, banquets honouring certain individuals, certificates and plaques, too, may be given, or the employees name may be entered on the Honours Board. Where team work is critical collective recognition may be given by the award of a shield or a banner or a certificate, special privileges or a money bonus to the group of employees. Promotion is a term which is essential outcome of successive superior performance. It calls for greater responsibilities, and usually involves higher pay and better terms and conditions of service and, therefore, a higher status or rank. Organizations have well documented policies that articulate the promotion criteria and performance rating are a critical part of the promotability of an employee. A promotion may be defined as an upward advancement of an employee in an organization to another job, which commands better pay/wages, better status/prestige, and higher opportunities/ challenges, responsibility, and authority, better working environment, hours of work and facilities, and a higher rank. Promotions are usually given: 1. To put the worker in a position where he will be of greater value to the company and where he may derive increased personal satisfaction and income from his work; 2. To recognize an individuals performance and reward him for his work so that he may have an incentive to forge ahead. Employees will have little motivation if better jobs are reserved for lateral hires: 3. To increase an employees organisational effectiveness; 4. To build up morale, loyalty, and a sense of belonging on the part of the employees when it is brought home to them that they would be promoted if they exhibit the potential;

5. To promote job satisfaction among the employees and give them an opportunity for unbroken, continuous service; 6. To provide a process of "selective socialization". Employees whose personalities and skills enable them to fit into an organizations human relations programme tend to stay on; while those whose personalities do not fit well with those of the organization tend to leave; 7. To attract suitable and competent workers for the organization; 8. To create among employees a feeling of contentment with their present conditions and encourages them to succeed in the company. Self Assessment Questions 13. ______________ satisfies human need for esteem by others and for self-esteem. 14. Awards may be given in the form of ___________________. 15. The use of ________________ assumes that peoples actions are related to their skills and ability to achieve important longer-run goals. 7.6 Summary The HR specialists design the performance evaluation system, train the line managers in the use of the systems, and maintain the records. The three categories used here will be; individual evaluation methods; multiple person evaluation methods; and other methods. The following methods help to evaluate an employee individually: -Graphic rating scale -Forced choice -Essay evaluation -Management by objectives -Critical incident technique -Checklists and weighted checklists Three techniques that have been used to evaluate an employee in comparison with other employees being evaluated are

-Ranking -Paired comparison -Forced distribution Recognition satisfies human need for esteem by others and for self-esteem. This recognition may be shown in the form of praise, of a pat on the back of the employee or a recommendation for a pay raise, promotion, or assignment of more interesting tasks. An incentive or reward can be anything that attracts a workers attention and stimulates him to work. The use of incentives assumes that peoples actions are related to their skills and ability to achieve important longer-run goals. Performance appraisal is limited to a feedback process between employees and Managers. However, with the increased focus on teamwork, employee development, and customer service, the emphasis has shifted to employee feedback from the full circle of sources. This multiple-input approach to performance feedback is sometimes called "360-degree assessment" to connote that full circle. 7.7 Caselet Employees, key contributors to Indian growth story David Evans would like to call himself a motivational evangelist. The founderchairman of the $460-million performance improvement solution company Grass Roots, and an associate of the WPP group, Evans says the Indian growth story has been contributed not just by companies but its key stakeholders the employees. The company, which set up operations in India this month, finds that the country offers immense scope for Performance Improvement tools. In a freewheeling interview with The New Manager, Evans (60), reiterated that investments the trendiest word globally should be applied to employees and not to projects. You have always said that unappreciated workers vote with their feet and one in four quits if the trend continues? For any organisation, the biggest investment is not on projects but on its people. Disgruntled employees are like stretched out elastic bands. They lose their elasticity and hit back. The essence of investment is retaining, acquiring or improving assets items

that have a place and a value on the balance sheet. So if a company has lost an employee, effectively it has lost an investment. Indian companies are going global. What global best practices should be followed to survive the attrition crisis? Companies, like human beings, are also creatures of habit. If an organisation has built bad habits into itself and doesnt change them, these habits could accumulate to become life-threatening. Employee retention training in the workplace is the buzzword. Motivation, both of the employees and the company, is essential. Companies do very little to motivate their employees. This is where Performance Management tools come in handy. How does Performance Management differ from training? Training has completely eclipsed learning. Performance Management is all about learning newer values for achieving long-term goals. While training has always been judged quantitatively, learning without measurement is like a ship without a sail. When companies are becoming glocal, it is imperative to measure it qualitatively. The budget was spent, the courses took place, the trainers imparted their skills, the trainees returned to their offices but what was the net outcome? Performance Management, on the other hand, is like a good butler. If a company has a problem, like a good butler we listen and serve to fix it up. It is more like coaching a company for bigger responsibilities. Is there a way to measure Performance Management? Besides statistical analysis, the best way to measure performance management is through mystery shopping, a tool to measure how well new knowledge is being applied in practice. The only difference between mystery shoppers and real client customers is that the mystery shoppers record and reveal what happened to them. In all other respects they are the genuine article, meeting the demographic profile and living locally. They can find out exactly what it feels like to be a customer, and how staff reacts to a given scenario that they convincingly enact. Indian companies are going global. Does culture diversity come in the way of the employee-employer relationship? Culture diversity has to be kept in mind especially following any M&A deals. However, constant dialogue can be cathartic. It breaks barriers and helps in establishing a foothold in the global arena. How important are coaching and mentoring to the managerial cadre? Coaching can unleash the potential on a one-to-one or person-to-person basis in a nonthreatening manner. It is personal therapeutic counselling. Managers are expected to wear the coaching hat more often than their managerial hats.

Likewise, CEOs are desperately seeking a sounding board and want to partner with someone, who can help them navigate their business challenges and realise their full potential. Organisations need to be hand-held and they must provide platforms for engagements. Source: Business Line Jan 28, 2008 7.8 Terminal Questions 1. Explain the five ways of evaluating an employee individually. 2. Define performance appraisal. 3. Explain briefly, Multiple-person Evaluation Methods. 4. Write short note on: a. Rewards and incentives b. Purpose of promotions 5. Explain the concept of 3600 Appraisal. 7.9 Answers Answers to Self Assessment Questions 1. Performance evaluation 2. Line managers 3. Top management 4. Work performance 5. a specific time period 6. Performance on the job functions or activities 7. Forced choice 8. Essay technique 9. Critical incident technique 10. Ranking method

11. Paired comparison 12. forced-distribution system 13. Recognition 14. Articles, banquets honouring certain individuals, certificates and plaques etc. 15. Incentives Answers to Terminal Questions 1. Refer to 7.4.1 2. Refer to 7.3 3. Refer to 7.42 4. Refer to 7.5 5. Refer to 7.4.3 References 1. Human Resources Management by Fisher, Schoenfeldt and Shaw. 2. Managing Human Resources Productivity, Quality of Work Life, Profits by Wayne F. Cascio. Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-08-Compensation Management
Unit-08-Compensation Management Structure: 8.1 Introduction Objectives 8.2 Wage & Salary Administration 8.3 Managing Wages 8.4 Designing & Administering Compensation 8.5 Managing Benefits in Organizations 8.6 Summary 8.7 Caselet 8.8 Terminal Questions 8.9 Answers 8.1 Introduction In the end everything we do is for a reason, and whether we admit it or not money is ranked as a key motivator as well as a reason for us to seek employment. This unit is designed to provide an understanding of the key challenges that compensation/ salary management poses for the enterprise. The terms wage / salary / compensation are often used as synonyms. The term wage is usually associated with contractual employee whose pay is calculated according to the number of hours worked/ units produced. The word salary/compensation applies to the remuneration that is paid for a fixed period and does not depend upon the number of hours worked. It is associated with the white collar worker. Certain theories were propounded for determination of wages but these could not stand the test of time. A few labour and wage theories are discussed in this unit. Objectives:

After studying this unit, you will be able to explain: Discuss the concepts in organizational compensation Define managing compensation Evaluate benefits disbursement 8.2 Wage & Salary Administration The term compensation management, or alternatively, wage and salary administration revolves around designing and managing policies and methods of disbursing employee compensation. Traditionally it includes such areas as job evaluation, maintenance of wage structures, wage surveys, incentives administration, wage changes and adjustments, supplementary payouts, profit sharing, control of compensation costs, and other related pay items. Salaried often implies a status distinction, because those who are on salary are generally white-collar, administrative, professional, and executive employees, whereas wageearners are designated as hourly, non-supervisory, or blue-collar. Wage-earners in some organizations do receive full wage if they are absent for such reasons as sickness, whereas salaried employees, especially at the lower levels, often receive overtime pay when they work over the standard work week. Compensation/ salary systems are designed to ensure that employees are rewarded appropriately depending on what they do and the skills and knowledge (intellect) required for doing a specific job. It must therefore provide for the following key factors in order to be effective: The following factors may be helpful to raise the effectiveness of employees Signal to the employee the major objectives of the organizations therefore it must link to the overall goals and objectives of the company. For example if doing a quality job is critical for the company its compensation system has to ensure that this is adequately rewarded. On the other hand if a company values productivity and units produced, the compensation system would be designed such that productivity is rewarded. Attract and retain the talent an organization needs the need to benchmark salaries to the prevalent market standard for that job /skill so that the company is able to attract the right talent. If a enterprise pays a salary lower that what the market does for that job/responsibilities, the probability that suitable candidates would take the job offer and join the company. Even if they do join subsequently when they find that the market pays more for that job they would quickly find a more remunerative job and leave the company. Motivate employees to perform effectively as discussed at the outset, money is a key motivator and it often might be the only motivator for most employees, therefore

ensuring that compensation is appropriately disbursed need to be taken care of while designing the compensation system. Jobs in the brick and motor, production setups would focus on higher incentive policies that would motivate the employee to produce more while the base-salary would be low. Create the type of culture the company seeks to engender compensation systems play a critical role as sponsors for the organizations culture. A performance driven culture would build compensation policies that clearly and significantly reward performance. A company that rewards loyalty would reward employees who stay longer in the company with significantly better incentive programs. Hence we see how compensation systems are reflective of the organizations over all philosophy of what its goals and objectives are and how this can be linked to salary payout. Self Assessment Questions 1. The term ______________ is commonly used for those employees whose pay is calculated according to the number of hours worked. 2. _________________ often implies a status distinction, because those who are on salary are generally white-collar, administrative, professional, and executive employees, whereas wage-earners are designated as hourly, non-supervisory, or blue-collar. 3. A __________ is defined as a collection or aggregation of tasks, duties, and responsibilities that, as a whole, is regarded as the reasonable assignment to an individual employee. 8.3 Managing Wages The main purpose of wage and salary administration is to establish and maintain equitable wage and salary programs. The secondary objective is to design and implement an equitable labour-cost structure. Therefore payout cannot be out-of-sync with the organizations ability to pay it needs to be able to satisfy the employees as well as employers, profits maximised and conflicts minimised. Wage and salary administration is concerned with the financial aspects of needs, motivation and rewards. Managers, therefore, analyse and interpret the needs of their employees so that reward can be suitably designed to satisfy these needs. We will now review a few of the important theories that support the design of wage systems. The word salary is defined in the Oxford Dictionary as fixed periodical payment to a person doing other than manual or mechanical work. The payment towards manual or mechanical work is referred to as wages. The word pay refers to the payment for services done which would include salary as well as wages.

Wages are commonly understood as price of labour. In ordinary parlance, any remuneration paid for services is etymological wage. Benham defines wage as a sum of money paid under contract by an employer to a worker for services rendered. Labour was always looked upon as a commodity governed by the law of supply and demand. Certain theories were propounded for determination of wages but these could not stand the test of time. A few theories are discussed below: Subsistence theory: This theory, also known as Iron Law of Wages, was propounded by David Ricardo (1772-1823). According to this theory, wages tend to settle at a level just sufficient to maintain the workers and his family at minimum subsistence levels. The theory applies only to backward countries where labourers are extremely poor and are unable to get their share from the employers. Standard of living theory: This theory is a modified form of subsistence theory. According to this theory, wages are determined not by subsistence level but also by the standard of living to which a class of labourers become habituated. Residual claimant theory: Francis A. Walker (1840-1897) propounded this theory. According to him, there were four factors of production/ business activity viz., land, labour, capital and entrepreneurship. Wages represent the amount of value created in the production which remains after payment has been made for all these factors of production. In other words, labour is the residual claimant. The wage fund theory: According to this theory, after rent and raw materials are paid for, a definite amount remains for labour. The total wage fund and the number of workers determine the average workers share in the form of wages. Demand and supply theory: According to this theory, wages depend upon the demand and supply of labour. Marginal productivity theory: This is an improved form of demand and supply theory. Wages are determined by the value of the net product of the marginal unit of labour employed. Purchasing power theory: According to this theory the prosperity, productivity and progress of industry depend on there being sufficient demand to ensure the sale of its products and pocketing of reasonable profits. A large pact of the products of industry is consumed by workers and their families and if wages are high, demand will be good. However, if wages and the purchasing power of the workers are low, some of the goods will remain unsold; output will go down, which will result in unemployment. The bargaining theory of wages: John Davidson propounded this theory. According to him, wages are determined by the relative bargaining power of workers or trade unions and of employers. When a trade union is involved, basic wages, fringe benefits, job

differentials and individual differences tend to be determined by the relative strength of the organization and the trade union. The Tribunals and Wage Boards have generally followed the-principles laid down in the Fair Wages Committees Report on fixing wages. The Committee, in its report, has focused on wage differentials and has identified the following factors for consideration for fixation of wages: 1. The degree of skill. 2. The strain of work. 3. The experience involved. 4. The training involved. 5. The responsibility undertaken. 6. The mental and physical requirements. 7. The disagreeableness of the task. 8. The hazard attendant on the work, and 9. The fatigue involved. Classification of wages: The International Labour Organization (ILO) in one of its publications, classified wages as under: 1. The amount necessary for mere subsistence; 2. The amount necessary for health and decency; and 3. The amount necessary to provide a standard of comfort. In India, wages are classified as below : a. Minimum wage b. Fair wage; and c. Living wage Minimum wage: A minimum wage has been defined by the Committee as "the wage which must provide not only for the bare sustenance of life, but for the preservation of the efficiency of the worker. For this purpose, the minimum wage must provide for some

measure of education, medical requirements and amenities". In other words, a minimum wage should provide for the sustenance of the workers family, for his efficiency, for the education of his family members, for their medical care and for some amenities. It is very difficult to determine the minimum wage because conditions vary from place to place, industry to industry and from worker to worker. However, the principles for determining minimum wages were evolved by the Government and have been incorporated in the Minimum Wages Act, 1948, the important principle being that minimum wages should provide not only for the bare sustenance of life but also for the preservation of the efficiency of the workers by way of education, medical care and other amenities. Fair Wage: According to the Committee on Fair Wages, "it is the wage which is above the minimum wage but below the living wage." The lower limit of the fair wage is obviously the minimum wage; the upper limit is set by the "capacity of the industry to pay". Between these two limits, the actual wages should depend on considerations of such factors as: i) The productivity of labour; ii) The prevailing rates of wages in the same or neighbouring localities; iii) The level of the national income and its distribution; and iv) The place of industry in the economy. Living Wage: This wage was recommended by the Committee as a fair wage and as ultimate goal in a wage policy. It defined a Living Wage as "one which should enable the earner to provide for himself and his family not only the bare essentials of food, clothing and shelter but a measure of frugal comfort, including education for his children, protection against ill-health, requirements of essential social needs and a measure of insurance against the more important misfortunes including old age". In other words, a living wage was to provide for a standard of living that would ensure good health for the worker, and his family as well as a measure of decency, comfort, education for his children, and protection against misfortunes. Generally, ascertaining wages and deciding who to pay what is a activity undertaken in the beginning when a organization is set up. Thereon it is annual reviews to make corrections per the countrys economic and market/industry trends. The management considers the state of the labour market and takes into account of what he can afford to pay and the value of the worker to him. The workers willingness for employment at the rate offered implies that they agree to work at that rate, though they have had no part in fixing it. 1. Collective Bargaining: Collective bargaining is still in the initial stage in India. Although it is a desirable development in the relations between management and labour, it cannot be imposed upon either side by compulsion and should evolve naturally from within.

2. Voluntary Arbitration: In voluntary arbitration, both parties agree to refer their dispute to mutually agreed arbitrator and his award becomes binding on the parties. 3. Wage Legislation: Wages are fixed according to law in some industries. The Central Government and State Governments may fix minimum wages under the Minimum Wages Act of 1948 for industries in which workers are exploited or too unorganized to protect their own interests. In order to advise them in the matter of fixing minimum wages, the Governments appoint Minimum Wages Committees and the Advisory Boards. The Committees and the Advisory Boards consist of equal number of workers and employers representatives and also independent members whose number should not exceed one- third of the total number of members. 4. Conciliation: The Industrial Disputes Act, 1947, provides for consideration in case of disputes between employers and workers. If an agreement is reached in the course of conciliation proceedings, it becomes binding on the parties and takes effect from the date agreed upon or from the date on which it is signed by the two parties. In case no agreement is reached, the Conciliation Officer sends a full report of the proceedings. On receipt of this report, the government may decide to refer the case to Industrial Tribunal for award. 5. Adjudication: Labour courts and Industrial Tribunals are set up under the Industrial Disputes Act, 1947. On studying the awards one gets the impression that the adjudicators are attempting to justify their decision in social and ethical terms. At the same time, there is a desire to satisfy both parties to the dispute, and therefore, economic factors such as capacity to pay, unemployment, profits, condition of the economy or welfare of the industry concerned, are given due prominence. 6. Wage Boards: The boards are appointed by the Government and usually consist of seven members two representatives of management, two of labour, two independent members and a chairman. The board is expected to take into account the needs of the specific industry in a developing economy, the special features of the industry, the requirements of social justice, and the necessity for adjusting wage differential in such a manner as to provide incentives to workers for advancing their skill. Its recommendations may be accepted by the Government either completely or partly, and may be statutorily imposed on the industry in question, or may be rejected. In a nutshell, wages are influenced both by social and economic factors. In one case, economic factors may play a major role, whereas in another, social factors may be predominant. Thus, wages are product of both social and economic factors. Self Assessment Questions 4. The term is commonly used for those employees whose pay is calculated according to the number of hours worked.

5. The term . is defined in the Oxford Dictionary as fixed periodical payment to a person doing other than manual or mechanical work. 6. .. theory is also known as Iron Law of Wages, 7. .. Theory was propounded by Francis A. Walker. 8. .. Has been defined by the Committee as "the wage which must provide not only for the bare sustenance of life, but for the preservation of the efficiency of the worker. Activity 1: 9. You will benefit from understanding the common Indian statutory laws that govern compensation. Browse the internet to read up the Minimum Wages Act and make notes of the key points. Read the Provident Fund Act and the Gratuity Act as well. 8.4 Designing and Administering Compensation A lot of the design of compensation dispensation in modern times is based on the theoretical framework provided by the Equity theory. The Equity theory states that satisfaction with pay is always with reference to relevant others. The following equation provides the details of the consideration that influence the sense of satisfaction that an employee experiences w.r.t. salary:

The employee very naturally and often unconsciously identifies relevant others who are similar to himself/herself professionally / w.r.t. the job characteristics / the skill-set etc. The employee then begins to constantly compare and evaluate to retain a state of equilibrium. When the left hand side of the equation is equal to the right hand side there is no dissonance and the employee is happy and satisfied in what hes getting paid. When the employee perceives a dissonance in the way he is paid vs. what the relevant other is paid there is discomfort and dissatisfaction at work. If the left side of the equation is lower than the right hand side of the equation it is a case of the employee under-reward and he/she can opt to engage in the following course of action:

Individual could ask for a raise Individual could reduce contribution (work less hard) Individual could try to get the Other to reduce contribution Quit or Choose another relevant / comparison other

If the left hand side of the equation is higher than the right hand side it is a case of overreward and the employee normally reacts in the following ways: Individual could increase contributions (work harder or longer, cultivate additional skills) Individual could attempt to get the Other a raise Individual could attempt to get Other to increase his/her contribution Quit the job as he/she is soon singled out by the others Choose another relevant/comparison Other Therefore in designing pay systems organizations need to pay attention to all three dimensions of equity; internal Equity:- A pay differential between different jobs, within the organization either too large or too small. external Equity: comparison of similar jobs in different organizations and individual Equity: comparison among individuals in the same job with the same organization. How do organizations achieve this delicate balance among so many variables? Internal Equity is best established by ensuring that each and every job internally is appropriately compared and benchmark. Carrying out job evaluation exercises and reviewing it from time to time takes care of this challenge. Additionally providing employee transparency in the way jobs are ranked and aligned to levels within a common hierarchy is critical. We will spend time in the next chapter understanding this in a detailed manner. External Equity is established by organizations participating in salary surveys where the organizations own salary levels are benchmarked with comparative companies in the same industry to ascertain how they pay vs. the market. This is usually done by engaging with a third party consultant specializing in carrying out salary/compensation surveys. The steps in a compensation survey activity would normally be Identify and assign a consultant to carry out the salary survey Identify the jobs / roles that the company wants to benchmark a company might not want all jobs to be benchmarked as it is expensive, only those jobs that are critical to the business might be identified for benchmarking against the market. Identify the companies in the industry that it wishes to benchmark against peer / competitor companies with whom the company competes in the market and with whom the fight for talent is on are common examples, however companies that pay way above or below the normal market trends might be eliminated to ensure that more stable data is used for comparison.

 Share all information related to the identified jobs such as job description, job specification, person specification, level in the organization, salary and benefits and other perquisites provided Consultant provides the report. Review the report to ascertain where the company stand w.r.t. its competitors. Take corrective action as required/ as per compensation philosophy and ability to pay As this is a expensive and time consuming process organizations normally do a survey once in 2-3 years, however larger MNCs might want to do one every year. Companies can also purchase off-the shelf industry specific compensation survey reports that are published by these consultants and do their own benchmarking with the help of the internal HR teams. Another important pay level decision is the way the organization wishes to benchmark its pay level on a overall basis. An organization can decide to lead the market and pay its employees closer to the top end of the benchmarked salary ranges, else it can lag the market and intentionally peg itself at the lower end of the salary ranges from the survey results. An organization can decide to match the market and pay salaries at the market average. Therefore, in keeping with their pay philosophy a company can decide to pay at the 75th percentile of the market. Therefore it would benchmark itself against the 75th percentile on the survey results obtained from a custom survey or a off-the-shelf one. Individual equity is established through having clearly laid down compensation policies and guidelines. The focus here is on transparency where the employee is satisfied because he knows that he as well as comparison others are paid similarly and as per the declared compensation guidelines. Few elements that ensure a fair policy exists:

Establishing Pay Ranges commensurate with the levels in a organization Provide for Broad-banding clubbing levels into few bands that will make promotions meaningful and relevant Ensuring that there are no employees above or below a range, exceptions break the rule and results in lack of credibility Ensure that the criteria for ascertaining individual pay is clearly linked to merit, skill or seniority, avoid ambiguity for bias that might breed favoritism or nepotism Some medium as also most large family-run organizations provide for employee participation / negotiation of pay terms. Usually this provision is for key and top performing employees. It is important for a organization to be clear on whether this is allowable or not. If not clarified this can become a big de-motivator for other employees and a source of inequity. Ensure that compensation system is compliant with the countries statute, like minimum wages, provident fund, gratuity, paid leave, tax considerations and standard deductions

Compensation design of policy and guidelines is managed by a dedicated Compensation and Benefits team which is a part of the Human Resources Team. Compensation administration i.e. payroll processing is however more of a Finance department activity. Often organizations also outsource this activity. Companies like Accenture, Hewitt, ADP are common payroll processing consultants. Self Assessment Questions 10. When the employee perceives a _______________in the way he is paid vs. what the relevant other is paid there is discomfort and dissatisfaction at work. 11. In designing pay systems organizations need to pay attention to all three dimensions of equity ___________, ____________________, and _______________. 12. Compensation design of policy and guidelines is managed by a dedicated _________________________. 8.5 Managing Benefits in Organizations Managing employee Benefits is a critical part of the entire compensation policy and particularly so as the cost is completely borne by the company. There is no scientific way of ascertaining its impact on factors such as employee satisfaction and employee retention or productivity for that matter. In designing Benefits packages organizations need to pay attention to the following aspects: Legal and local laws of the land that require statutory compliance The positioning of Benefits in the total compensation strategy Are the benefits provided consistent with the long term strategic business objectives and plans Are our benefits meeting the needs and expectations of the employees and their dependents Are we competitive w.r.t. the choice of benefits, adequacy and equity and costs vs. the industry / our competitors The components of a benefits package are commonly practiced as; Security and Health Benefits - which focuses on the provisions made by the employer w.r.t. Life Insurance, Worker Compensation, Accident Insurance, Medical Insurance for self and dependents (where different companies could differently categorise dependents, some might include parents as dependents, some might limit it to spouse and children only), other medical coverage, Provident and Pension Plans, Severance Pay etc.. Organizations might even

have other health benefits programs like Health Check-up Camps, Dental Camps and other employee wellness initiatives. The modern organizations of today provide for oncampus gymnasium facilities or the reimbursement of gymnasium / health club membership. Other reimbursement plans like reimbursement of telephone bills and broadband bills where these facilities might not be entirely used for business purposes alone. Reimbursement of conveyance costs including providing for pick-up and drop facilities for their employees. Also included are catering of lunch and snacks in addition to sophisticated on-campus food-courts and even departmental stores, all with the objective of helping the employee manage better work life balance. Another popular benefit is the provision for crche facilities for the infants of employees. While the larger companies can afford a on-campus or adjacent crche which is for the children of only the employees, other companies allow for the reimbursement of the cost of crche for their employees children. Organizations like Cognizant and IBM go a step further by organizing for Childrens camp during the school vacations. Organizations also provide for employee counselling/ assistance programs and facilities. Some might tie-up with professional counsellors to provide remote/ over phone/email counselling services, while some other companies provide for on-campus employee assistance kiosks manned by professional counsellors visiting the facility 2-3 times a week. Some organizations might insist on few benefits to be contributory where the employee might need to bear part of the cost. The challenge in managing benefits is that while it costs a lot it is often taken for granted by the employees. The dilemma of finding the right balance of benefits and cash compensation is a on-going one. Like for Compensation, Benefits too are benchmarked by organizations and implemented keeping the market practices and trends in view. The key to leveraging the investment made by organizations on benefits can be got by adequate communication making employees aware of them. It includes, providing clarity on how to apply for and claim benefits, as well as hold road-shows show-casing the benefits and what the employee can avail of. It focuses on to remind the employees that they are part of the total compensation package. Most large and medium sized organizations manage compensation and benefits through state-of-the-art HRMS (Human Resource Management Systems) and the corporate intranet portals. Employee can enrol on-line for the benefits, ask queries, look up the policies and review the outstanding and balance status of the various benefits. They can view deadlines, apply for the various benefit claims and track reimbursement status online. This brings a lot of empowerment to the employee as well as awareness of the total benefits that he/she and their dependents are eligible for. Some common metrics used to assess the investments made by a company on Benefits: a) Annual cost of benefits for all employees b) Cost per employee per year c) Percentage cost of payroll

d) Percentage cost of total costs In these times of economic challenges organizations are closely tracking the investments and driving efficiency. Activity 2 Talk to a friend/relative in a corporate and ascertain the different benefits that the company provides for the employees. Differentiate between the statutory and the non-statutory ones. Also try and identify the ones that are specific to the industry and not common to all. Self Assessment Questions 12. There is no scientific way of ascertaining the impact of ___________ on factors such as employee satisfaction and employee retention or productivity 13. Some organizations might insist on few benefits to be _____________ where the employee might need to bear part of the cost. 14. The challenge in managing benefits is that while it costs a lot it is often _________________by the employees. 8.6 Summary 1. In residual theory, there were four factors of production/ business activity viz., land, labour, capital and entrepreneurship. Wages represent the amount of value created in the production which remains after payment has been made for all these factors of production. 2. Wage Boards are appointed by the Government and usually consist of seven members two representatives of management, two of labour, two independent members and a chairman. 3. Fair wage is the wage which is above the minimum wage but below the living wage. 4. Per the Equity theory satisfaction with pay is always with reference to relevant others. 5. Managing employee Benefits is a critical part of the entire compensation policy 6. The challenge in managing benefits is that while it costs a lot it is often taken for granted by the employees. 7. The challenge in managing benefits is that while it costs a lot it is often taken for granted by the employees.

8. The key to leveraging the investment made by organizations on benefits can be got by adequate communication making employees aware of them 9. In these times of economic challenges organizations are closely tracking the investments and driving efficiency. 8.7 Caselet Starlight Achieves Consistency and Transparency in Incentive Planning and Management Inconsistencies affect goal setting and payouts: As is typical in the hotel industry, Starlights sales people move around a lot. And many of them move from hotel to hotel across the Starlight portfolio of properties. To track performance, Starlight relied on a semi-automated, Excel- based process, where each hotel accessed centrally-stored data and entered those numbers into a spreadsheet. It was hard to know if everyone, at each hotel, was using the same calculations or adding their own calculations into the spreadsheets, says Rob Peters, Vice President Sales Administration for Starlight. The lack of transparency in goal setting also made it difficult to ensure that individual hotels were rolling up into divisional goals. So it became quite time intensive to implement the required checks and balances on those processes. A new approach to setting goals and modeling plans : Peters recognized the need for a new solution and chose ServeC after a competitive review. He was impressed by the technology but also by ServeCs quick grasp of Starlights business requirements. For Peters, there was a synergy between the companies and personalities, and he was impressed by ServeCs eagerness to devise a creative solution that maximized Starlights return on investment for the project. We definitely had challenges in the process, but ServeC listened and collaborated with us to find solutions, says Peters. With this type of project, it is critical to have a dedicated business and IT person on board right at the beginning. And preparation is essential know what you want compare and prepare and have a strong sense of your expectations around feel and functionality. Currently, Starlight has more than 2000 ServeC system users. At the beginning of the year, Starlight uses ServeC to set goals by division, by region, by individual hotel, by business type, by individual and by line of business/targeted measure. On a monthly basis, users input performance actuals into the system, which integrates with SAP for reference values and calculates accurate payouts.

With ServeC, Peters can ensure that sales people are using the most up-todate plans and documents. He can make plan changes instantly and have immediate insight into the sales people affected by the change. Eliminating the separate spreadsheets from each location has enabled more effective modeling as well. Peters can add, modify, pick and choose measures and understand how they will affect performance. When payouts are a significant percentage of a sellers total compensation, it is critical to maximize the dollars you put into your plans so you can focus on motivating through promotions and incentives, says Peters. Having automated modeling capabilities enables me to use the data that we have in our systems strategically to identify the best way to spend our dollars on driving performance. Accuracy and transparency support changing sales strategies: By replacing the semi-automated, spreadsheet-based process with ServeC, Peters eliminated his key challenges in incentive planning and management. We have total transparency in our goal setting, ensuring that sellers align at the hotel, regional and divisional level. Each goal and measure must be assigned to a sales manager, and the system enables simplified checks and balances. With ServeC, we also have the flexibility to change measures and weightings in our plans to adapt quickly to changing market conditions. Peters is also able to track internal turnover more efficiently because each employee has one system log on, regardless of how many different hotels they sell. In addition, Peters no longer has to direct time to checking performance numbers from each hotel, freeing him up to complete higher value activities including business modeling and improved management reporting. 8.8 Terminal Questions 1. Explain Wage Administration Policy. What are the ways by which wages and salaries are managed in India? 2. Describe the process of Wage Fixation and the machinery available for it. 3. Discuss the workplace implication of the Equity Theory. 4. What are the challenges in Benefits Management and how do organizations cope with it? 8.9 Answers Answers to Self Assessment Questions

1. Wage, 2. Salaried, 3. Job 4. Wage 5. Salary 6. Subsistence theory 7. Residual claimant theory 8. Minimum wage 9. Dissonance 10. Internal Equity, external equity, and individual equity 11. Compensation and Benefits team 12. Benefits 13. Contributory 14. Taken for granted Answers to Terminal Questions: 1. Refer to 8.2 2. Refer to 8.3 3. Refer to 8.4 4. Refer to 8.5 Reference: 1. Managing Human Resources-Productivity, Quality of Work Life, Profits by Wayne F.Cascio Copyright 2009 SMU Powered by Sikkim Manipal University

MB0043-Unit-09-Job Evaluation
Unit-09-Job Evaluation Structure: 9.1 Introduction Objectives 9.2 Concept of Job Evaluation 9.3 Objectives of Job Evaluation 9.4 Job Evaluation Methods 9.5 Advantages and Limitations of Job Evaluation 9.6 Introduction to Competency 9.7 Promotion & Transfers 9.8 Summary 9.9 Caselet 9.10 Terminal Questions 9.11 Answers 9.1 Introduction Research indicates that 50% of job performance problems are due to people being in the wrong job. And 25% of the on-the-job performance problems are associated with the inability to identify the gaps between the competencies of the person and the job requirements. Given these statistics the need to understand the requirements for performing a job well and what qualities the individual must have to do a good job is critical. This Unit focus on understanding the traditional time-tested approach of Job Evaluation which is still practised in most organizations as well as the emerging competency mapping modern approach, prevalent in the larger MNCs. Some form of job evaluation is invariably part of a formal compensation management programme. The objective of job evaluation is to rank and price the job rather than the

man. Job evaluation is concerned with assessing the value of the job in relation to another for it is only when each job has been properly evaluated that a sound compensation structure can be built. And the fundamental concept of job evaluation is to be able to objectively assess the worth of the job w.r.t. the skills and capabilities that is required to execute it. The British Institute of Management has defined job evaluation as the process of analysis and assessment of jobs to ascertain reliably their relative worth, using the assessment as a basis for a balanced wage structure. Objectives: After studying this chapter you will be able to: 1. Discuss the concept of job evaluation. 2. State the objectives of job evaluation. 3. Evaluate the job evaluation methods. 4. Summarize the need to transfer or promote the employees. 5. Evaluate the importance of job evaluation. 9.2 Concept of Job Evaluation All job evaluation systems depend heavily on job analysis and job description. Job analysis indicates the specific duties to be performed by the employee and the circumstances under which these duties are to be performed. A job description is a written record of the duties, responsibilities and conditions of the job. The job description provides the essential information on which each job is evaluated. The resulting measures of values are then translated into wage and salary rates. "Job analysis is the process of getting information about jobs; specifically, what the employee does; how he gets it done; why he does it; skill, education and training required; relationships to other jobs; physical demands and environmental conditions". Job analysis and job evaluation do not replace, judgement in the administration of the pay structure. They merely provide facts in so far as facts can be obtained through observation on which management and employees may base their decisions. Self Assessment Questions 1. A _____________ is a written record of the duties, responsibilities and conditions of the job.

2. Job analysis is the process of _________________; specifically, what the employee does; how he gets it done; why he does it; skill, education and training required; relationships to other jobs; physical demands and environmental conditions 3. Job analysis and job evaluation do not replace, judgment in the 9.3 Objectives of Job Evaluation The decision to measure or rate jobs should only be made with the intent to reach certain objectives which are important to both management and the employee. Although there are many side benefits of job evaluation, the purpose is to work towards a solution of the many wage and compensation related administrative problems which confront the industry. The below-mentioned are some of the important objectives of a job evaluation programme: 1. Establishment of sound salary differentials between jobs differentiated on the skills required. 2. Identification and elimination of salary-related inequities. 3. Establishment of sound foundation for variable pay such as incentive and bonus. 4. Maintenance of a consistent career and employee growth policy/ guidelines. 5. In organizations with active unions, creation of a method of job classification, so that management and union officials may deal with major and fundamental wage issues during negotiations and grievance meetings. 6. Collection of job facts a) Selection of employees b) Promotion and transfer of employees c) Training of new employees d) Assignment of tasks to jobs e) Improving working conditions f) Administrative organization, and g) Work simplification.

There are many established methods to carry out job evaluation in a scientific manner. A four-fold system of classifying evaluation systems is presented here. Two are described as non-quantitative and two as quantitative. 1. Non-quantitative evaluation measures, a. The ranking system. b. The job-classification system. 2. Quantitative evaluation measures. a. The point system. b. The factor-comparison system. Activity 1 Look at people around you that you come in contact with from 6am in the morning to 10am. List the jobs these individuals do. Now spend a few minutes to quickly write down 5 attributes that are required to do the job Use this information to rank order the jobs You must be having an idea of what their monthly income might be(ask them if you can) Now compare the job ranking you did with the earnings What are your observations? Self Assessment Questions 4. ______________________ is the purpose is to work towards a solution of the many wage and salary administrative problems which confront the industry. 5. _______________________ systems are the ranking system and the job-classification system. 6. Quantitative job evaluation measures are _______________________. 9.4 Job Evaluation Methods

Ranking Method: Jobs are compared one with another and arranged or valued in the order of their importance or their difficulty or their value to the firm. It is a highly subjective method and depends upon the experience of the people doing the ranking. Grade Description Method: This method depends upon recognition that there are differences in the levels of duties, responsibilities and skills required for the performance of different jobs. These differences, once recognized, can be expressed as grades or levels. These grades can then be defined and jobs classified by the selection of a particular grade or each job to correspond to its worth. Point Method: Jobs show characteristics which are common to all or most. These characteristics, called factors, generally fall under the four headings- skill, effort, responsibility and conditions. To each factor is attached a number of points, the number varying according to the degree of the factor involved. The sum of all the points for a job permits its comparison with other jobs and thus a scale of pay is arrived at. Factor-Comparison Method: This is associated with the name of E.J.Benge. Each factor (as in the point method) is ascribed a money value. Key jobs, representing the various levels or grades are ranked factor by factor and upon this ranking, a scale of pay/money value is prepared. The sum of the values for each factor is taken to be the money value of job. Time-Span Method: It was propounded by Professor Jaques that the higher in the hierarchy of organizational structure of jobs the longer the period before the results of a decision are scrutinized for adequacy. An analysis of time-spans for different jobs yields a scale of pay felt to be fair. Guide-Chart Profile Method: This is associated with the name of Dr. E.N.Hay. Three factors, know-how (education/experience), problem-solving, and accountability (responsibility) are each divided into eight degrees or levels and these, qualified by a second, or breadth dimension, each factor and breadth being concerned with some aspect of decision-making. Points are awarded for each degree as it is qualified, and the sums for different jobs are compared. Self Assessment Questions 7. The __________________________ depends upon recognition that there are differences in the levels of duties, responsibilities and skills required for the performance of different jobs. 8. In the _______________________, each factor (as in the point method) is ascribed a money value. 9. In the _____________________to each factor is attached a number of points, the number varying according to the degree of the factor involved.

9.5 Advantages and Limitations of Job Evaluation Advantages: 1. Job evaluation is a logical and an objective method of ranking jobs relatively to each other. It may thus help in removing inequities in existing wage structures and in maintaining sound and consistent wage differences in a plant or an industry. 2. The method replaces accidental factors occurring in less systematic procedures of wage bargaining by more impersonal and objective standards, thus establishing a clearer basis for negotiation. 3. The method may lead to greater uniformity in wage rates and simplify the process of wage administration. 4. Information collected in a process of job description and analysis can be used for improvement of selection, training, transfer and promotion, procedures on the basis of the comparative job requirement. Limitations: 1. Though there are many ways of applying job evaluation in a flexible manner, rapid changes in technology and in the supply of and demand for particular skills, create problems of adjustment that may need further study. 2. When job evaluation results in substantial changes in the existing wage structure, the possibility of implementing these changes in a relatively short period may be restricted by the financial limits within which the firm has to operate. 3. When there are a large proportion of incentive employees, it may be difficult to maintain a reasonable and acceptable structure of relative earnings. 4. The process of job rating is, to some extent, inexact because some of the factors and degrees can be measured with accuracy. 5. Job evaluation takes a long time to complete, requires specialized technical personnel and is quite expensive. Self Assessment Questions 10. _______________ is a logical and an objective method of ranking jobs relatively to each other. 11. Information collected in a process of _______________ can be used for improvement of selection, training, transfer and promotion, procedures.

12. When there are a large proportion of incentive employees, it may be difficult to maintain a reasonable and acceptable structure of __________________. 9.6 Introduction to Competency First popularised by Boyatiz, competency is defined as A capacity that exists in a person that leads to a behaviour that meets the job demands within parameters of organizational and that in-turn bring about the desired results; An underlying characteristic of a person results in effective and/or superior performance on the job. Competency can be thought of a as a tool that can be used to map best-in-class performance the best performer is always called the competent performer. Competencies are based on Knowledge information accumulated in a particular area of expertise, Skills the demonstration of the expertise, Motive the recurrent thought that drives behaviour, Attitude- self-concept, value and self image, Traits a general disposition to behave in a particular way. There are two sets of competencies: Threshold competencies they are the characteristics that any job holder needs to have to do that job effectively, but do not differentiate between average and superior performer; Differentiating competencies are characteristics which superior performers have but is not present in average performers. This thinking holds the key to differentiate employees based on competencies they possess and there compensation and growth within the companies in modern companies. There are therefore competency frameworks that define the competency requirements that cover all the jobs in an organization. These consist of the both work specific as well as behavioural competencies. Each job in the organization is profiled for the competencies needed and these are then placed on to a common framework. Depending on the value of that competency, the number of competencies, the proficiency level of the competency and the competencys uniqueness, the job worth can be assessed in a comparative manner. Organizations need to invest significantly and usually outsource the activity of competency mapping. But done it remains relevant and in active use for the next 4-5 years unless there is a significant change in the way the company conducts its business and its operating practices. Once established a competency framework helps: 1. One universal set of competencies for all positions and employees in these positions 2. Builds a common language and frame of reference for everyone 3. Merit of each positions / individual

4. Makes it easier to compare positions and employees across the job functions in the organization 5. It helps align everyone towards a common culture and can support any culture change process Activity 2 Use the work you did as Activity 1. For each job list the competencies that are required. Create a grid of all competencies for all of the positions, as one column each, dont repeat common competencies List the jobs along the rows Now check box the jobs with the competency and the proficiency Now place the earning for each job in the last column What does this data tell you about the jobs and the way they are paid? Linking Competency to HR Systems One of the key benefits of the competency based management approach is its usage to build all of the other HR systems such as recruitment, performance management, training and development, career development, compensation management and Succession planning. Lets study them one by one. Recruitment and selection: The Competency profile for a job serves as the reference for the candidate hunt for the position. It is used at multiple stages in the recruitment and selection process Job Description and competency profile shared with the recruitment consultant as well as hosted on the company intranet and internet site for prospective applicants to view Use the competencies to design the appropriate selection tests and other methods Assessment forms for interviewers to contain the competency list and specify the desired proficiency levels Performance Management: Increasingly the focus in most organizations using competency frameworks is to build competency based performance assessment processes. The employees performance is assessed on the core tasks and results as well as on the competencies required for the job he/she is doing. If there are gaps between the

desired proficiency and the current proficiency of the employee the employee is reviewed for development initiatives to improve the competency. If the employee has competencies above the desired proficiency he is potential talent and needs to be nurtured for other roles and higher responsibilities. Training Needs: as explained above the information on gaps in competencies are collated for employees across the organizations and suitable training interventions are designed. The methodology used for competency improvement is usually action learning based. Focus is on internalising the learning by ensuring workplace application projects and activities. Manager support in making competency training useful is important. Career Planning: Competency assessments are popularly used for helping an employee discover his strength competencies and therefore serve as effective means for the employee to identify what roles/jobs can be best for the competencies the employee possesses. Most career planning assessment and activities are built on enhancing the employees strength areas and indentifying jobs that match the strengths. Compensation philosophy: while there is significant work done in researching competency based compensation, the practical application of competency based compensation system is not as easy. The competency framework provides a common benchmarking of all jobs across the organization on the competencies required and the proficiency level for the competency. This framework is then mapped to levels or grades that create a job to level mapping. The levels have ranges of compensation that can be paid for any job at a specific level. For example if there are 25 job clusters in a company. Each job cluster can have anywhere between 5 to 17 jobs. Each job in the job cluster is mapped to a level in the company. So if a particular job cluster has 5 jobs each job has a set of competencies and proficiency and this determines the level of the job and let us assumes it maps to Level 42 in the compensation system. All Level 42 jobs are mapped to compensation range with a Minimum salary of Rs.45,000 and a maximum salary of Rs.1,20,000. This range specifies the recommended salary range for a employee in this job. Ideally a new employee being hired to this job should be paid not less than the minimum specified for this job. A employee doing a extremely good job in the role and has been in the role for close to 3 years should be getting a salary closer to the maximum in the range. Succession Planning: competency based management is most effective in succession planning initiatives. Competency assessment is a widely used to identify and nurture talent in organizations. Most succession planning decisions use the competency assessment data for the employee and this along with the career planning data are used to ascertain employee readiness and inclination for new roles and responsibilities in the critical roles identified for succession planning. Self Assessment Questions 13. Competencies are underlying characteristic of a person which results in effective and/or ____________performance on the job

14. There are two sets of competencies, ___________________________ and __________________________. 15. The _________________________for a job serves as the reference for the candidate hunt for the position. 16. The competency framework provides a common benchmarking of all jobs across the organization on the ____________________________ and __________________________________________. 9.7 Promotions and Transfers From a general point of view, selection involves the following types of problems: 1. Selection from within or outside the company 2. Hiring new employees from outside the company. 3. Promotion within the company 4. Discharge of old employees. Promotion: A few companies do have a clear cut policy while certain organisations issue circulars as and when they need. Many companies develop policies over a period of time through settlements and agreements with the employees/unions. In promoting employees consideration should be given for establishment of the horizontal or vertical promotion. The desirability of securing assistants who complement rather than supplement their superiors is the major point in a successive plan which is an integral part of manpower planning. Let us understand only two types of promotion Vertical & Horizontal promotion. In Vertical Promotion, employees are promoted from one rank to the next higher rank in the same department or division. This is based on the belief that this leads to effective utilization of experience gained in the same department. It also gives an opportunity to the employees to go up while increasing their specialization in their area of operation. However, it has got one disadvantage. The vacancies may be very few in a department. E.g. In a big University, a Lecturer working in a particular Department may not become a Professor or the Head of the Department unless his superiors die/retire/resign. This makes the person frustrated. Besides, this type of promotion limits a persons contact with other departments and does not permit him to enhance his knowledge/expertise with each years experience. Because his experience would be one or two years knowledge multiplied by 10 to 15 years rotation. If he does not get his promotion at the right time since the room at the top is limited he will also start disliking his job / organisation. As a result, he becomes counter-productive.

Horizontal promotions are considered an alternative to this by certain organisations. Under this policy, an employee may be transferred from a position in one department to a position of higher rank in another department or to the same rank in a different department if the transfer gives him an opportunity to acquire greater knowledge and wider experience. E.g. if a Senior Lecturer cannot get promotion in a particular Department for obvious reasons, he may be transferred as Registrar of the University or as Controller of Examinations or Director of Distance Education. However, there is one difficulty. Unless the person is quite dynamic and intelligent, he may find the new assignment a tough one and irksome. To some, it may be a cause for frustration. However, for many, Horizontal promotion even if it is only a paper promotion is a challenge since it allows them job rotation. The Next question to be answered is the type of man to be promoted. There is a natural tendency for an executive to select as his assistant one who has the same or similar abilities as his own. This may not result in most efficient combination. It is often observed that the assistant may imbibe the weaknesses of the Boss. Promotion is a part of the general problem of selection. Promotion is also closely linked with Training, Post-training Placement, development and incentives. Promotions and transfer make employees flexible. Definitions of promotion: 1. PIGORS & MEYERS: Define promotion as "the advancement of an employee to a better job better in terms of greater respect of pay and salary. Better houses of work or better location or better working conditions-also may characterize the better job to which an employee seeks promotions, but if the job does not involve greater skill or responsibilities and higher pay, it should not be considered a promotion." This definition takes into consideration only a Vertical promotion. 2. DALE YODER: According to Dale Yoder, it is a "movement to a position in which responsibilities and presumably the prestige are increased. Promotion involves an increase in rank ordinarily; promotion is regarded as a change that results in higher earnings, but increased earnings are essential in a promotion." This definition talks of both vertical and horizontal promotions. 3. KOONTZ ODONNEL observed that promotion is "a change within the organisation to a higher position with greater responsibilities and used for more advanced skills than in previous position. It usually involves higher status and increase in pay." Promotions can be from within or can be from outside depending upon the need of the organisation as both have certain advantages and disadvantages. So also are the arguments for and against the concept of promotion on seniority or merit. A wise policy which is followed by many organizations is a proper blending of both.

Opposite to promotion is demotion. It is more as a punishment. In certain cases it can be on cost reduction considerations. Transfers: PIGORS & MEYERS Consider transfer as "the movement of an employee from one job to another on the same occupational level and at about the same level of wages or salary" No appreciable change in task or responsibility is expected, SCOTT and others define transfer as the movement of an employee from one job to another. It may involve a promotion, demotion or no change in job status other than moving from one job to another." Types of Transfer: Transfers are of many types. It may be a reward transfer or a punishment transfer. Transfers can be classified as production transfers, Replacement transfers, Versatility transfers, shift transfers or remedial transfers. They can be temporary or permanent. However, it is better to have a clear-cut and flexible transfer policy. Otherwise, it may lead to a lot of heart- burning among the affected employees. 9.8 Summary The term wage is commonly used for those employees whose pay is calculated according to the number of hours worked. A job is defined as a collection or aggregation of tasks, duties, and responsibilities that, as a whole, is regarded as the reasonable assignment to an individual employee. Job satisfaction is determined by a set of personal and job factors. The word salary is defined in the Oxford Dictionary as fixed periodical payment to a person doing other than manual or mechanical work. According to Subsistence theory, wages tend to settle at a level just sufficient to maintain the employees and his family at minimum subsistence levels. Francis A.Walker propounded Residual claimant theory. According to him, there are four factors of production/ business activity viz., land, labour, capital and entrepreneurship. Purchasing power theory holds that the prosperity, productivity and progress of industry depend on there being sufficient demand to ensure the sale of its products and pocketing of reasonable profits. A minimum wage has been defined by the Committee as "the wage which must provide not only for the bare sustenance of life, but for the preservation of the efficiency of the employee.

 Fair Wage is the wage which is above the minimum wage but below the living wage". Living Wage is "one which should enable the earner to provide for himself and his family not only the bare essentials of food, clothing and shelter but a measure of frugal comfort, including education for his children, protection against ill-health, requirements of essential social needs and a measure of insurance against the more important misfortunes, including old age". Job evaluation is concerned with assessing the value of the job in relation to another. Job analysis is the process of getting information about jobs. 9.9 Caselet The need for competency mapping By Sheetal Srivastava The economic downturn has made companies sit up and recognise the need to have the best quality manpower working with them if they are to tide over the financial crisis looking large over the industry. This is where competency mapping has risen high up in the priority list for many organisations. Lets find out Finding the right fit for the right job is a matter of concern for most organisations especially in todays economic crisis. As meeting an individuals career aspirations are concerned, once the organisation gives an employee the perspective of what is required from him/her to reach a particular position, it drives them to develop the competencies for the same. Competencies enable individuals to identify and articulate what they offer regardless of the job. Competency mapping is a process of identifying key competencies for a particular position in an organisation, and then using it for job-evaluation, recruitment, training and development, performance management, succession planning, etc. Introduction of competency mapping has also involved introducing skill appraisals in performance appraisals. Need of the hour The slowing economy around the world has put new and increased pressure on an organisations capability to get more out of the available resource they have, and this often translates into pressure on the individual employees. That is where it is important to correlate performance result with competencies. It is therefore imperative to define a set of core competencies which corresponds the organisations key market differentiator, says Gyanendra Acharya, manager human resources, Hughes Systique Corporation. The current economic downturn has created a situation for companies to scale down various overhead costs to meet their growth requirements. Competency modeling identifies the precise set of competencies and proficiency levels needed for every role in

the organisation. This system helps identify specific areas of training and maps employee growth to strategic business needs. During a difficult economic situation, it becomes particularly important for organisations to sustain their competitive edge in the industry by investing in learning and development programs that will empower employees to build on their strategic career objectives, notes Narendra Raje, director learning and development, Unisys. Competency mapping An important HR tool Companies have long realised the importance of competency mapping as an important HR function. This is especially relevant in this recessionary environment where human capital is one of the most important assets of an organisation and needs to be nurtured. According to Ajay Trehan, founder, CEO, AuthBridge There is always a need to have the best quality manpower. More and more companies are using competency mapping tools to screen and hire people with specific competencies. There might be a need for a person with excellent writing skills or an excellent creative mind. When individuals must seek new jobs, knowing ones competencies can give one a competitive edge in the market. Professional Aptitude Council, a global talent mapping organisation, through its assessment tests for competency mapping helps companies understand their employees better. PAC has a set of modules used to help organisations assess their existing talent pool. These tests assess a person on the basis of Aptitude, Domain Skills, Communication Skills and Personality and Psychometric fit. "This involves making crucial decisions as to place which employee in which project, identify core competency area of employees etc. These tools that PAC uses help organisations plan their traning requirements in the long run," notes Naveen Manjunath, managing director (India) Professional Aptitude Council. Unisys India has a comprehensive career management framework that helps employees map their growth paths, lateral or vertical. Each role has a defined set of competencies aligned to it. Employees are expected to first acquire the competencies defined for the current role and then focus on the competencies for a growth role before they are considered eligible for movement. Unisys University facilitates the mapping of specific learning activities for each competency required for a role in the organization and has over 4000 training programs, both e-learning and instructor-led to help bridge any gaps in employee competencies, adds Raje. Adding further to this he says, Unisys India has a robust and transparent Internal Job Posting (IJP) process to enable employees to get a complete picture of the opportunities available within the company. With this information, employees are better equipped to make informed career decisions and equip themselves with the knowledge and skills they require to move up the career ladder. CBay Systems has the advantage of employees delivering and exceeding requisite performance levels since the former has mapped out competencies that are required to perform specific roles. New hires are pegged against these that are required for the role

before being hired to ensure they fit as per their deliverables. Existing employees are periodically reviewed with the help of assessment tools and based on the gap analysis we provide them necessary training and development to hone the requisite competency. The action plans for the competency development outcome based on such assessments are finalised and the entire initiative is institutionalised, confirms Sanjay Shanmugaum, vice president human resources, CBay Systems. Competency mapping not only helps know your competencies but also your weak areas which can be worked upon. Besides increasing employee morale and enhancing productivity, it induces fresh thinking, fosters innovation and thereby aims to provide an enriching job experience. Source : Times Ascent , July 27, 2009 at 12:41:33 PM 9.10 Terminal Questions 1. What is job satisfaction? What are the pre-requisites for job satisfaction? 2. Discuss two popular Job Evaluation methods. 3. Briefly discuss Promotions and how it serves as a job satisfaction method. 9.11 Answers Answers to Self Assessment Questions 1. Job description 2. Getting information about jobs 3. Administration of pay structure 4. Job evaluation 5. Non-quantitative job evaluation 6. The point system and the factor-comparison system 7. Grade Description Method 8. Factor-Comparison Method 9. Point Method 10. Job evaluation

11. Job description and analysis 12. Relative earnings 13. Superior 14. Threshold competencies 15. Differentiating competencies 16. Competency profile, competencies required, the proficiency level for the competency

Answers to Terminal Questions: 1. Refer to 9.2 & 9.3 2. Refer to 9.4 3. Refer to 9.6 & 9.7 Reference: 1. Human Resources Management by Fisher, Schoenfeldt and Shaw Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-10- Employee Satisfaction and Morale

Unit-10- Employee Satisfaction and Morale Structure: 10.1 Introduction Objectives 10.2 Meaning of Morale / employee engagement 10.3 Importance of Morale 10.4 Morale and Productivity 10.5 Measurement of Employee Satisfaction 10.6 Indices of Low Morale 10.7 Improving Morale 10.8 Summary 10.9 Caselet 10.10 Terminal Questions 10.11 Answers 10.1 Introduction We do things that will keep us happy or satisfied. As human being we are constantly seeing to satisfy out our needs and wants. We might succeed in being satisfied most of the time but not always. Any when you speak with family members you will surprisingly find that satisfaction means different things to each of them. You can therefore guess the implication for managing satisfaction in a company with so many different kinds of

people who work there for many different reasons. This unit focuses on understanding employee satisfaction and the organizational morale. The satisfaction and comfort an employee experiences at the workplace is termed morale. Morale is a widely used term in organizations. But in general, it refers to esprit de corps, a feeling of enthusiasm, zeal, confidence in individuals or groups that they will be able to cope with the tasks assigned to them. The result of high morale generally results in the high efficiency of the organization. This unit deals with the meaning, importance, measurement and improvement of morale in an organizational setting. Objectives: After studying this unit you will be able to: Recognise morale / employee engagement and its importance Judge employee satisfaction Recommend employee morale 10.2 Meaning of Morale / Employee Engagement Morale is also known as employee engagement in the modern day technology companies. Morale Defined: Morale has been variously defined by different authors. Professor Ralph C. Davis says, "Good organizational morale is a condition in which individuals and groups voluntarily make a reasonable subordination of their personal objectives for their organization". According to Dale Yoder and Paul D. Standohar, "Morale means evident commitment, that is, demonstrated spirit, enthusiasm, and confidence in the organizations policies, programmes, and accomplishments. Morale is revealed by what individuals and groups say and do to show an interest in, understanding of, and personal identification with work-team survival and success. Edwin B. Filippo has described morale as a mental condition or attitude of individuals and groups which determines their willingness to co-operate. Good morale is evidenced by employee enthusiasm, voluntary conformance with regulations and orders, and a willingness to co-operate with others in the accomplishment of an organizations objectives. Poor morale is evinced by surliness, insubordination, a feeling of discouragement and dislike of the job, company and associates." According to Haimann, "It is a state of mind and emotions affecting the attitude and willingness to work, which in turn, affect individual and organizational objectives." Joseph D. Mooney describes morale as "the sum total of several psychological qualities which include courage, fortitude, resolution, and above all, confidence." Self Assessment Questions

1. Good ___________________ is a condition in which individuals and groups voluntarily make a reasonable subordination of their personal objectives of their organization. 2. ________________ is revealed by what individuals and groups say and do to show an interest in, understanding of, and personal identification with work-team survival and success. 3. _________________ is evinced by surliness, insubordination, a feeling of discouragement and dislike of the job, company and associates. 10.3 Importance of Morale In keeping with the definitions discussed above, morale directly impacts the working of an individual in a team towards the realisation of common objectives. Morale therefore is individual specific as well as general. Unfortunately building of morale is not a mechanical problem that could be solved by either rewards or punishments. The best way to manage it is to proactively do a lot of employee related interventions that will together impact morale positively. Morale can be broadly divided into three categories: the first concerns, off-the job satisfaction that is expected from work such as income, security, and stature in the community, the second concerns on-the-job satisfaction for examplejob interest, opportunity for advancement and status within the organization, and the third group concern personal satisfaction from the job such as growth, achievement powers, job expertise etc. Each category has its impact and can damage employee morale to varying degrees. It can result in employee behaviour that ranges from engaging in simple gossip to the employee exiting the company. One other ill effect of low employee morale is the bad-mouthing that the employee might engage in outside the workplace with friends and might even engage in negative press reporting. This could be very harmful for the market perception about the company and even impact sales and revenue. Morale can also be understood as the spirit and confidence with which the employee performs his job. It is a complex psychological quality that is impossible to force on someone, difficult to measures, and easily destroyed. The level of morale is a result of the degree to which the overall needs of the individual are fulfilled. The important factors which have a bearing on employees morale can be classified as relating to: 1. The employees background-which includes his levels of intelligence and education and his type of personality largely determines the way in which he seeks to fulfil his needs for belonging, esteem, and self-realization. Morale hinges on the satisfaction of these needs. 2. An employees personal environment encompasses his relations with his family, friends, and neighbours. The employee brings his thoughts of his home and social life

with him when he goes to work and they influence his thinking and attitudes while on the job. 3. Management practices influencing morale include manager behaviour, company policies and procedures with respect to salaries, promotion methods, employee services and benefits, working conditions, handling employee issues etc At the bottom of it all, employee morale is all about the perception of the employees expectations vs. reality. The closer the individuals environment comes to providing the kinds of rewards he expects; the better will be his morale. And as this is unique to each individuals expectations, all of the 3 categories mentioned above need to be proactively redressed in order to best manage morale. Activity 1 Interview 5 of your friends or relatives and ask them what they think about the employee morale in their companies. What makes them happy at work and what makes them worried when at work. Find patterns in the response from the 5 of them. Are there common themes in what they say? How different are the issues? Can you categorise them into the 3 categories discussed above?

Self Assessment Questions

4. The content of morale could be broadly divided into ____________ groups 5. Morale depends upon the relations between _____________________. 6. The _________________________ which includes his levels of indigence and education and his type of personality-largely determines the way in which he seeks to fulfil his needs for belonging, esteem, and self-realization. 10.4 Morale and Productivity It is assumed that high morale and high productivity/ high quality and creative work all go hand in hand. Since morale manifests itself in the attitudes of employees, it is important to know about the results of high and low morale. One of the most unpredictable effects of the level of morale is its impact on employee productivity. The productivity of a group is a composite of many factors, at least one of which is the general state of mind or the commitment of the group. Formerly it was thought that high morale resulted in high productivity. Research is repeatedly proving that this correlation is not as simple. Various studies have revealed that the group having the highest morale need not always be the highest in productivity. As morale is made up of so many factors, so is productivity, the result of a series of complex factors. When a group is convinced

that high productivity will result in its getting the things it wants most, it is reasonable to believe that productivity will be high. It is likewise reasonable to believe that if the groups satisfactions in the work situation are high and high productivity will enable it to get the things it wants most, the productivity may be high. Though high morale may not be the single cause of the high productivity, a highproducing group nearly always has a reasonably high morale, in terms of the company as a whole. Morale development is almost certain to accompany successful operations where the individuals can relate their respective endeavours and objectives to the success of the enterprise as a whole. "A morale-building organization tends to utilize fully the skill, initiative, judgement, and training of its members, and through such utilization succeeds in building up these and other qualities in everyone, so that the abilities of all constantly expand, and the organization thus is able to succeed and grow." Self Assessment Questions 7. One of the most unpredictable effects of the level of morale is its impact on employee _____________________. 8. Various research studies have revealed that the group having the highest morale __________________. 9. A _______________________ tends to utilize fully the skill, initiative, judgement, and training of its members and through such utilization succeeds in building up these and other qualities in everyone. 10.5 Measurement of Employee Satisfaction Morale can be measured by assessing attitudes and job satisfaction. As it is intangible and subjective concept, it cannot be directly measured or evaluated. Employees may be unwilling to express their feelings of satisfaction or dissatisfaction with their job to the management is no longer a valid assumption. Todays employees and workplaces allow for a lot more transparency and open door philosophy seen in most organizations allow for employees to openly voice their views. Measuring morale ranges all the way from the "hunch" /general "feeling", to more scientific efforts such as employee satisfaction surveys. Also the liberated employee of today feel very comfortable looking for a new job in another company rather than be unhappy and work in a company where hes unhappy. It is important to study the commonly used methods for measuring morale, however increasingly the employee satisfaction survey is the most preferred method in most organizations. 1. The manager/executives impressions. 2. The guided interview.

3. The unguided interview. 4. A combination of the guided and unguided interview. 5. An analysis of company records. 6. The "listening-in" process. 7. The employee satisfaction survey questionnaire. 8. A combination of any of the foregoing methods. General Impression of the Manager: Some managers may not be able to tell you how they know the morale of their men, but they enjoy such an intimate relationship with them that they do know what their attitudes are. They usually know how to get things done according to the methods they have been taught, but few of them have had any special training in evaluating morale as such. Some executives are inspirational leaders and capable of developing a high morale, but few of these are trained in observing and evaluating morale standards. Executives should be encouraged to strive to sense the morale situation and should be aided by more accurate tools that are available. The Guided Interview: The guided interview is based on the hypothesis that employees answers to certain questions will reveal their attitudes. The questions selected are presumed to be the ones that will call forth a true picture of how the employees feel. This series of questions is usually rather large. The interviewer seeks to direct the interview in such a manner as to secure the answers that will reveal the desired information. The guided interview is a useful method of investigating the morale of managers or other groups that are small in comparison with the employees as a whole. The Unguided Interview: This technique for measuring morale is based upon the assumption that, if employees are allowed to talk freely, they will reveal a true situation not so much by the exact thing complained of or discussed as by the interviewers ability to relate what is said to basic causes. It is also assumed that, if the employee himself is permitted to talk through a given problem or work situation without special prompting or questioning by the interviewer, he usually will become aware of the logic or lack of logic in the situation and choose for himself the appropriate line of action. This is usually a long and time taking process as all employees need to be interviewed and the time taken in a un-guided approach is a lot more. Often the employee will need to be spoken to atlength before the true issues are unearthed. This is one reason this is not a very popular method. The method of employee-attitude analysis is designed both to correct an unfavourable situation and to secure information regarding the status of morale within the group. Though it is an expensive method of measurement than the questionnaire method, it not only provides a means of interpreting morale but at the same time is used to build morale.

A Combination of the Guided and Unguided Interview: To combines the two methods, the interviewer may start with the guided interview, which should be focused around understanding challenges in specific areas and not be general conversations. The interviewer is then invited to discuss any subject that he may like to talk about. During the guided interview some persons tend to bring in material that has no special significance in relation to the information sought. The interviewer should make note of the key issues that are emerging and then ask focused questions to better understand the issue. During the guided interviews more details need to be unearthed. The interviewer must make it a point to validate information received from one employee with all the others. This is a effective way to ensure that there is no personal misgivings that is impacting the employees morale. Company Records and Reports: These are usually prepared by the HR Department at regular intervals with the assistance of managers and Department Heads. Generally, grievances and complaints tend to reveal the state of morale of a group. Excessive absenteeism or drop in quality of work and adherence to set quality and process norms are signs of tardiness and serve as an index of general or specific morale issues. We need to be watchful when there is a sudden drop in these measures. Employee turnover is a good indicator of employee unrest or morale. This type of analysis is difficult and is not always reliable as an index of morale because it may not be possible to reveal the managerial deficiencies that are not directly interpretable in terms of morale. Listening-in by a Trained Observer: Whiting Williams of Cleveland, Ohio has developed the "listening-in" technique to the extent that it would be appropriate to call it the "Whiting Williams Method". He associated with the porkers at work and during recreational periods. He personally possessed the ability to make his observations largely objective. But it is difficult to secure individuals who possess the required scientific approach to do this work. Such observers are prone to report what they think their employers want them to find rather than the true situation. As a whole, this type of investigation of the morale status of employees is not satisfactory. The Survey Questionnaire Method: This method is generally used to collect employee opinions about the factors which affect morale and their opinion about the leadership. Morale or employee satisfaction surveys are generally conducted with a view to: 1. Finding out what employees really think; 2. Finding out what, in the company, they think is working well and what is not; 3. Solicit feedback on managerial effectiveness; 4. Determining the clarity of company vision/objectives and the top management commitment to it; and 5. Finding out what employee is most unhappy about.

This questionnaire is usually a scientifically developed instrument and well tested for validity and reliability. These include multiple choice, dichotomous (yes or no)" and open-ended questions. Conducting the Survey: Organizations often engage outside consultants to conduct the entire survey. There are a lot of reasons to do this: Make the survey credible wherein employees share correct feedback As they are experts, they help determine the type of questions to be used depending on the objectives of the survey. The survey itself is carried out anonymously, the employee is not required to divulge his/her name and personal information Analysis and generation of survey report is a specialised activity In some cases the companys representatives may give the employees the questionnaires in a stamped envelope, planning them on a table and permitting the employees to get them if they wish to, or having a fellow employee distributed them. The stamped envelopes are frequently addressed to some management consultant or college professor who tabulates the results. The consultant then analyses the data to generate a number of reports. The reports can be generate for each department, for manager with more than 20 team members, for the company, etc.. The management usually shares the findings with all the employees, highlighting the strengths and the areas for improvement. Action plans for improvement are also shared so employees are aware of the managements commitment towards improving workplace morale and employee engagement. The survey is usually conducted once a year. The important part of this initiative is the action that is taken after the survey results come on. Each department head meets with his team of managers and they together analyse the report and the data for the department and identify areas of low scores. Brainstorming exercises then help identify what actions can improve employee morale in these areas. Sometime action-planning teams are formed from among the employees and they drive the action areas. For example if the report identifies that rewards and recognition is a concern area for the team, then the taskforce focuses on establishing ways and means to improve reward systems and recognition methods. The taskforce would recommend a rhythm for quarterly or monthly rewards and identify categories for the reward (like quality, productivity, highest sales, customer appreciation). More and more reward systems encourage employee to nominate their peers rather than the managers identifying and giving awards away. All nominations are reviewed finally by a panel and the most deserving nominee is awarded. Organizations track Survey scores year on year. Most organizations tie the scores to managerial effectiveness and use it as a measure to assess managers for promotions, potential for future senior roles etc.

Activity 2 Visit this link, http://gmj.gallup.com/content/20770/gallup-study-feelinggood-matters-workplace.aspx. The article talks about current challenges in managing employee morale in todays organizations. Then visit the popular Gallup Organization survey used to measure employee satisfaction by most companies http://www.artsusa.org/pdf/events/2005/conv/gallup_q12.pdf . Review the questions used to measure employee satisfaction. What do you understand about employee engagement from the above two readings? Self Assessment Questions 10. Methods of measuring morale range all the way from _____________. 11. Some executives are ________________________ and capable of developing a high morale, but few of these are trained in observing and evaluating morale standards. 12. ________________________ is generally used to collect employee opinions about the factors which affect morale and their effect on personnel objectives. 10.6 Measurement of Employee Morale There are other signs of low morale that an organization can watch out for as indicators that employees are not happy. Over a period of time certain measures have proven to be early warning signs of drop in employee morale. Dale Yoder and others pointed out the following as signals of low morale: 1. Employee unrest increase in the grapevine gossip and group-ism. 2. High rate of absenteeism sudden increase in absence in a certain team or a department 3. Tardiness drop in sales number, productivity or quality of work 4. High employee turnover increased attrition, usually seen as a pattern in a particular team or a manager.

5. Grievances increase in employee complaints and escalation to HR or to the senior management. 6. Need for discipline increased incidents of misbehaviour or misconduct where employee is directing it towards the management or his manager 7. Fatigue and monotony complaints and general low morale directed towards daily work responsibilities. These are early signs of employee disengagement and organizations can easily track these metrics for teams and identify problem groups early in the process. It is a key responsibility of the HR team to track these metrics and work with the managers of the respective teams to ensure that corrective measures are in place. A lot of the workplace morale is the outcome of the managerial style of the manager and how he/she treats and works with his/her team. A theory X, authoritative approach usually impacts employee morale negatively. Managerial coaching is seen as a very effective method for impacting employee morale. Organizations engage mentors and coaches for managers. They work independently with the managers and use the survey report results to identify concern areas and focus on developing managers capabilities in these areas. 10.7 Improving Morale There are a number of measures which can be used to control the warning signals of low morale. The following are the positive measures to be taken to bring job satisfaction to the employees and reconcile individual interests with the interests of the organization. 1. Creation of whole jobs Under this method, complete jobs are assigned to the employees. The complexity of a job should be increased so that it may appeal to their higher needs. 2. Job enrichment Job enrichment tries to deal with dissatisfaction by increasing job depth. Under this, individual employees may be given responsibility for setting their own work pace, for concerning their own errors, and/or for deciding on the best way to perform a particular task 3. Building responsibility into a job Employees should be encouraged to participate and if possible be held responsible for taking decisions. Some delegation of responsibility from the manager tot he employee could be useful in improving employee ownership 4. Managerial effectiveness This can be achieved by: i) Developing work groups;

ii) Improving the social contacts of the employees- time away from work in team building and fun activities; iii) Managerial coaching discussed above iv) Employee stress management activities 5. Flexing working hours Flex time / work from home provisions allow employees to arrange their work hours to suit their personal needs and life-styles. This is particularly suited to situations with fluctuating workloads. Flex time employees are responsible for co-ordinating their functions with other employees and thereby have more responsibility and autonomy. 6. Rotation of jobs This reduces employees boredom which arises out of the monotonous nature of his work. 7. Incentive and Profit-sharing plans- Morale can be improved by effective incentive and profit-sharing schemes. Incentive schemes are effective in improving workplace morale. They need to carefully designed (preferably by experts) well communicated and implemented to be effective. In addition to its economic aspects, profit-sharing has also psychological aspects relating to friendly move by the management in providing the employees an opportunity to participate in the profits. Morale can also be improved by adapting several other measures such as employee contest, special recognition and awards to long service employees and training the managers in how to manage people. 10.8 Summary 1. Good organizational morale is a condition in which individuals and groups voluntarily make a reasonable subordination of their personal objectives of their organization. 2. Morale can be measured by assessing attitudes and job satisfaction 3. The guided interview is based on the hypothesis that employees answers to certain questions will reveal their attitudes 4. Questionnaire method is generally used to collect employee opinions about the factors which affect morale and their effect on personnel objectives 10.9 Caselet 11 Low Cost Ways to Increase Employee Morale By Darrell Zahorsky

A high morale work place is essential to any business. Low morale can quickly take your business off the rails and lead ultimately to business failure. The root cause of low employee morale can be numerous including job security issues, limited upward mobility, lousy management practices, excessive outsourcing, lack of fair pay and much more. To increase employee morale, you need to understand that a diversified approach to remove morale blockers and enhance staff motivators will work best to rid your business of poor morale. Impact of Low Employee Morale : What does low morale cost to your business? Like a disease, poor morale can infect every aspect of a business. It can lead to reduced productivity, reduced revenue, high staff turnover and more. According to Sirota Consulting, the share price of low morale companies saw only a 3% increase in price versus an industry average of 16%. 11 Employee Morale Boosters Morale boosters can take the form of recognition, compensation, special perks or simply terminating employees. Here are 11 low cost morale boosters: Welcome Ideas: Employee morale improves when staff feel they are valued. Share and implement their innovations and ideas. Keep Score: Mount a large score board in the office to recognize top performers and to motivate those on the bottom of the list. Inspect: The old management adage, inspect what you expect is true. Companies with a lack of focus can confuse staff and lead to less morale. Thank You Notes: Send a special thank you letter to your staffs family or spouse, praising their good work and efforts. Huddle: Have a daily morning huddle to highlight tasks for the day and to cheer yesterdays wins. Open Up: Provide an open forum or one-on-one time to allow employees to express their concerns and feelings can be an easy means to boost morale. Have Fun: Special events and outside work activities can take the pressure off the day-today grind in the office. Show Charity: Get your staff involved in a bigger cause to help them see there is more to life than work. Add Perks: Use low cost perks such as a Foosball table in the lunch room.

Fire Staff: Sometimes the root cause of low employee morale can be a staff member whose negativity brings down the group. Even a top performer can bring down staff behind your back. Measure It: Keep tabs on the levels of morale in your business by regularly measuring employee satisfaction. The backbone of business success resides in the productivity and output of your employees. Those companies who remain vigilant to the signs of low morale and who focus on improving morale can thwart off the impact of a low morale workplace. Source : About.com 10.10 Terminal Questions 1. Define Morale and discuss its importance. 2. How does morale impact productivity if at all? 3. Describe the various methods of measuring Morale. 4. How can morale be impacted positively? 10.11 Answers Answers to Self Assessment Questions 1. Organizational morale 2. Morale 3. Poor morale 4. Three 5. Expectations and reality 6. Employees background 7. Productivity 8. Need not always be the highest in productivity, 9. Morale-building organization 10. The "hunch" or general "feeling", appraisal to reasonably scientific efforts

11. Inspirational leaders, 12. The Questionnaire Method Answers to Terminal Questions 1. Refer to 10.2 & 10.3 2. Refer to 10.4 3. Refer to 10.5 4. Refer to 10.7 References: 1. Personnel Management by C. B. Mamoria. 2. Human Resource Management by Singh and Chaghre. 3.Human Resource Management by Mirza S Saiyadam. Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-11-Motivation
Unit-11-Motivation Structure: 11.1 Introduction Objectives 11.2 Concept of Motivation 11.3 Theories of Motivation 11.4 Employees and Motivation 11.5 Motivation Techniques 11.6 Summary 11.7 Caselet 11.8 Terminal Questions 11.9 Answers 11.1 Introduction Even as you have enrolled for this course and are studying this material in preparation for completing the course there is a motivation behind why you are doing this. There is nothing we do as humans that is not driven by motivation / or the gratification of a personal need. In this Unit we will be studying the concept of motivation, the theories that support it and its relevance and application at the workplace. Man is naturally needs to be constantly motivated. Basic needs of energy such as food, water etc., serve as outputs of behaviour. His behaviour is determined by what motivates him. Management largely focuses on the creation and maintenance of an environment which motivates individuals and groups towards accomplishment of common objectives. A large part of the responsibility of managers and the HR team is therefore the management of motivation of people in the organization. Objectives: After studying this unit, you will be able to:

 Define Motivation and its concept Discuss the theoretical framework for workplace motivation Analyse how it is linked to employee morale 11.2 Concept of Motivation The large part of HR functions, is to motivate employees and putting in place motivation programs and techniques to keep them motivated. It is clear that unless individuals are motivated to make sufficient potential to perform effectively, they may not achieve the level of performance that is desired from them. Managers are constantly faced with the challenges of motivating their team members to release their talent as well as potential effectively and enabling the desired goals of the organization and the needs of employees to be achieved. Knowledge of the motivational process provides the basis for understanding why people do what they do. Motivation therefore, according to Michael Jucius, has been defined as the act of stimulating someone to take a desired course of action to get a desired reaction. It includes a stimulus and desired results. Motivation concerns itself with the will to work. It seeks to know the motives for work and to find out ways and means, by which their realization can be helped and encouraged. James Driver defines it as motivation means the phenomena involved in the operation of incentives and drives. Motivation can therefore be understood best as a process

An employees performance on a assigned task is a function of his skill and motivation. Therefore, p=f(S,M), where P is for performance, S for skill and M for motivation. Skill alone does not ensure the best effort towards achieving the best performance. The other equally critical variable is motivation. Research has clearly established that difference in motivation affects performance. In laboratory experiments it was found that other things being equal, performance level is higher if the motivation level is higher. The key to understand motivation lies in the meaning and relationships between needs, drives and goals. This demonstrated through the motivation cycle given below:

Figure 11.2: Motivation Cycle 1. Needs: Needs are created whenever there is a physiological or psychological imbalance. For example, a need exists when a cell in the body is deprived of food and water or when the human personality is deprived of other persons who serve as friends or comparisons. 2. Drives: Drives are action-oriented and provide an energizing thrust toward goal accomplishment. The examples of the needs for food and water are translated into hunger and thirst drives, and need for friends becomes a drive for affiliation. 3. Goals: At the end of the motivation cycle is the goal. A goal in the motivation cycle can be defined as anything which will alleviate a need and reduce a drive. Motivation may range from a threatening gesture to a traditional inspired activity. Thus the atmosphere of working situation, the past history of human relations in a company, expectations about the future as well as an effective compensation incentive plan can be a stimuli to action. This coupled with employee skill and expertise at work can together blend to deliver high quality work output. However the challenge in managing motivation at the workplace is the fact that different things motivate different people, just as the needs and drives are different. Therefore the approach one size fits all brings a very different challenge to managing motivation for the managers. Self Assessment Questions 1. Unless individuals are motivated to make sufficient potential to perform effectively, they may not achieve the _________________. 2. When we see someone working hard at some activity, we can conclude that the individual is driven by a desire to achieve some goal which ____________________. 3. Drives are set up to alleviate___________. 4. A ____________in the motivation cycle can be defined as anything which will alleviate a need and reduce a drive.

11.3 Theories of Motivation The importance of motivation to human life and work can be judged by the number of theories that have been propounded to explain peoples behaviour. There are three categories of motivation theories and these are per their evolution. The Needs Theories are the earliest ones and attempt to identify what exactly motivates people at work. The three more prominent ones are the Maslows Need Hierarchy Theory, McGregors Theory X and Theory Y and Fredrick Herzberg Motivation-Hygiene Theory. The Process Theories are concerned with cognitive thinking that drives motivation and the effort behind it explained by the Victor Vrooms Expectancy Theory. The Contemporary theory of motivation is best discussed through the Equity theory (already covered in Unit and the Attribution theory. CONTENT THEORIES Maslows Need Hierarchy Theory Maslows theory of basic needs draws chiefly from human psychology. He arranged the human needs of an individual in a hierarchical manner. Maslow proposed an individuals motivation as a predetermined order of needs which he strives to satisfy. His model of Hierarchy of Needs indicates the following propositions about human behaviour. i) Physiological Needs: These are basic to life, viz., and hunger for food, thirst, shelter and companionship among others. They are relatively independent of each other and in some cases can be identified with a specific location in the body. These needs are cyclic. In other words, they are satisfied for only a short period; then they reappear. ii) Safety Needs: If the physiological needs are relatively satisfied, a set of needs emerge for protection against danger and threats. In an ordered society, a person usually feels safe from extremes of climate, tyranny, violence and so on. iii) Social Needs: If the physiological and safety needs are fairly satisfied, the needs for love and affection and belongingness will emerge and the cycle will repeat itself with this new centre. If he is deprived of these needs he will want to attain them more than anything else in the world. An individual desires affectionate relationships with people in general and desires to have a respected place in his group. iv) Esteem Needs: Everyone has a need for self-respect and for the esteem of others. This results in the desire for strength, confidence, prestige, recognition and appreciation. These egoistic needs are rarely completely satisfied. The typical industrial and commercial organization does not offer much opportunity for their satisfaction to employees at the lower levels. v) Self-actualization Needs: The term "self-actualization" was coined by Kurt Goldstein and means, to become actualized in what one is potentially good at. A person may

achieve self actualization in being the ideal fitter, supervisor, mother or an eminent artist. People who are satisfied with these needs are basically satisfied people and it is from these that we can expect the fullest creativeness. A sound motivational system to be successful must take care of this hierarchy of needs of the team members in order to work efficiently. It must cover basic as well as higher needs and it must be flexible to cater to changes in the environment. McGregors Theory X and Theory Y (and Theory Z) This theory depends on the popular assumptions of the management w.r.t. controlling its human resources. Professor Douglas McGregor presented two opposite sets of assumptions about employees; and about management views about the nature of people while at work. These have been represented by Theory X and Theory Y. Theory X stands for the set of traditional beliefs held, while Theory Y stands for the set of beliefs based upon researches in behavioural science which is concerned with modern social views on people at work. These two theories represent the extreme sets of assumptions; and there are a number of possible combinations on the continuum. Theory X is based on assumptions and beliefs which are based on the study of many people at work, in a variety of organizations and with different managerial styles. These assumptions imply that the manager has a low opinion of the workers and still lower expectations from them. In order to get good performance, an employee needs to be coerced, closely supervised and told what needs to be done and how to do it. Theory Y puts forward the opposite assumptions which provide a totally different picture of human nature and therefore calls for a different managerial style in dealing with employees. Theory Y implies that on-the-job need satisfaction is necessary and is driven from within. Douglas McGregor, with credentials among university scholars equalling his practical experience as a corporate executive, wrote two books which became classics and still exert a profound influence upon modern management theory and practice. These books explain his experience with two utterly different assumptions (operating consciously or subconsciously) which managers tend to use in dealing with workers. In the interests of objectivity and to avoid the "complications and prejudice of labels," he dubbed them simply "Theory X" and "Theory Y."

Theory X Managers and Theory X Workers

Examining the relationship between managers and workers and how they perceive and "view" each other, McGregor noted that managers throughout history assume, and just take it for granted, that workers are naturally lazy, hate work, try to avoid it, care not at all about an organizations goals and must simply be forced to work against their will by

threat and fear. This assumption by managers he termed "Theory X" ("X" managers) and workers with indeed such anti-work attitudes "X" workers. Leadership by "X" managers over "X" workers had to be firmly, even cruelly, autocratic with tight control and constant supervision over each worker ("supervision" literally means "watching over," overseeing). Without tight and forceful supervision "X" workers slack off or cease work at every opportunity. Given the grim and life-threatening conditions of work throughout history, the natural condition of the workplace was therefore harsh and adversarial, managers against workers and vice versa, managers forcing work and workers resisting in every way possible. This ofcourse leads to the "X" work environment where workers do the least they can get away with and managers get the least of the high human potential of people at work. Whatever the need, the power of fear, threat and sometimes money delivers performance and organizational results. Thus and then the "X" work environment was highly effective because of the unlimited power of managers over workers. However, with the passage of time, managers no longer had such unlimited power, employees in addition to being protected by a host of "workers rights laws", began to become more involved in improving the quality and productivity of work and the work systems began to empower the employee more and more. This resulted in the birth of a new order of employee behaviour and managerial style. Theory Y Managers and Theory Y Workers Because an "X" work environment had become powerless to motivate people to high productivity, McGregor speculated about other means of motivating workers, a different assumption managers might use, the assumption that under certain circumstances workers actually like and enjoy working. This assumption by managers he called "Theory Y ("Y" managers) and workers with indeed such two-work attitudes "Y workers. In theory, "Y workers love their work, look forward to it and enjoy it. Clearly, managers are spared all of the motivational problems of an "X" work environment; "Y workers are highly selfmotivated. For Ys" there is no difference between "work" and "play". In a "Y work environment, there is no need for managers to motivate people (it is already there, built in!). Managers of today build and maintain a healthy "Y" work environment by sensitive awareness of each workers individual needs (as in Maslows Needs Hierarchy above), consulting with each worker about his work ideas, preferences, methods and progress, recognizing and praising good work often, arranging work assignments to fit the individual as well as the organizations goals ("Human Brokerage" again). It is therefore possible for managers to gain their organization goals by permitting, not forcing, workers to do their best work. McGregor summarized it well: "Theory X places exclusive reliance upon external control of human behaviour, while Theory Y relies heavily on self-control and self-direction. It is worth noting that this

difference is the difference between treating people as children and treating them as mature adults." The following points are important: 1. Both theories X and Y make certain not-so-valid judgements. 2. They may not reflect mans inherent nature; rather such behaviour in people is in part the outcome of the managements philosophy and practices. 3. Theory Y particularly unduly emphasizes that all people naturally seek freedom, while there are definite indications that all people may not feel comfortable with freedom. Freedom calls for a lot of responsibility and independent decision-making which not all people may subscribe to. 4. In an organization, depending on the situation, both theory X and theory Y could be effectively applied by a manager depending on individuals preference and also the implications of each. In order to avoid workplace conflict / reduce employee dissatisfaction.

Theory Z Managers and Theory Z Workers

As McGregor was well aware, theories "X" and "Y" are polarized extremes of workplace behaviour. This is more representative of the more realistic daily condition among employees. Lets conveniently think of such degrees on a scale of "I-to-10," a "1" meaning a pure 100% "X" and "10" a 100% "Y." Any management trainer or consultant with actual experience in todays workplace knows that a pure "10" (100% "V) workplace is idyllic. Few managers, even with the most sophisticated motivational efforts, will succeed in achieving a "10" (100% "Y) workplace for every worker every day and every hour. Yet a pure "Theory Y workplace is intended as idealistic, something rarely fully reachable but rightly to be sought after by managers, still always aimed at and worked for. But realists know that true managerial success consists usually in a partial, but high and significant, achievement of a "Theory Y workplace. This is the more realistic "halfway" position about human motivation now called "Theory Z." As with the now generally accepted "Contingency Theory of Leadership," Theory Z is equivalent to a "Contingency Theory of Motivation" in which managers must match and fit the most appropriate motivation method suited to each person and situation, depending on hereand-now contingencies. As stated earlier motivation means different thing to different people and hence the need for managers to customise their style depending on the employee type or the situation. Herzberg Motivation Hygiene Theory

Fredrick Herzberg built on the works of Maslow and based his theory on the research of over 200 engineers and accountants on when they felt particularly good about the job and when they felt particularly bad about the job. Herzberg concluded those jobs satisfiers are related to job content and job dissatisfies are related to job context. In job satisfiers group of needs are such things as company policy and administration, supervision, working conditions, interpersonal relations, salary, status, job security, and personal life. These were found by Herzberg and his associates to be only dissatisfies and not motivators. In other words, if they exist in a work environment in high quantity, they yield no dissatisfaction. Their existence does not motivate satisfaction; their lack of existence would, however, result in dissatisfaction. These job satisfiers were also called Hygiene factors or maintenance and are job-context variables. In the second group, the job dissatisfies and therefore motivators all related to job content. These include the factors of achievement, recognition, challenging work, advancement, and growth in the job. Their existence will yield feelings of satisfaction or no satisfaction. The following points are worth-noting about the motivation-hygiene theory: 1. Job content and job context factors are discrete aspects of work and are neither different points on the same continuum nor different levels in the motivation hierarchy. Absence of one does not mean the presence of another. 2. A satisfactory situation can also have elements of job context just as a dissatisfactory situation can have elements of job content. However, a satisfactory situation will be context-oriented. 3. Some doubts have been raised on the methodology. Since it involves recalling events, how can we guarantee its authenticity? Despite this drawback, the theory has been supported across various Kinds of samples, organizations and cultures. 4. The theory implies that to generate satisfaction, attempts have to be made to improve the job content!

PROCESS THEORIES OF MOTIVATION Victor Vrooms Expectancy Theory of Motivation The model is built around the concept of valence, instrumentality and expectancy and is commonly called the VIE theory. The effort an individual puts into a task or a activity depends on 3 key factors: a) the effort -> performance (E->P) expectancy, b) performance -> outcome (P->O) expectancy and c) the outcome valences (V). This therefore impacts motivation. If any of the 3 is low

the motivation is low. The E->P Expectancy indicates the employees perception that his or her effort will result in a particular level of performance. Its best represented as a probability and ranges from 0.0 to 1.0. When the employee perceives that probability that he/she can do a task well the effort expended is high and conversely when he/she perceives that the probability that he/she cannot deliver the desired performance the effort expended is far lower. The P->O Expectancy is the perceived probability that a specific performance or behaviour will result in a specific outcome. When an employee perceives that the performance will benefit him with a desirable outcome he will expand the effort directed towards the performance that will get him/her the desired outcome. The Outcome Valances is the third element in the expectancy theory. It indicates the feeling of satisfaction/dissatisfaction that an employee feels towards the outcome. It is impacted by the perception about how much the outcome will interfere or fulfil the persons needs and drives. It ranges from negative to positive, 1 to +1. It also is influenced by our personal values. For example a company has newly implemented a work from home policy for a particular team. If one of the employees in the team is a extrovert and his need for affiliation is very high, hence there is positive outcome valence for group activities and other group events that fulfil this need. As a result of the change in policy the employees E->P expectancy relationship and the P->O expectancy drops and as a result the performance drops. There is no longer a positive valance towards working in this team and the employee will begin to look for a alternative opportunity wherein the outcome valence is positive and he can apply the effort and performance to meet that outcome. CONTEMPORARY THEORIES OF MOTIVATION Equity Theory: Refer to Unit 8 Attribution Theory: This theory refers to how people attribute the cause of their own or others behaviour. Herein there are two general types of attribution that people make: dispositional attribution which attributes a persons behaviour or his performance to internal factors such as personality, skills, aptitude and attitude, and situational attribution which attributes a persons behaviour or performance to external factors such as equipment, work culture, peers and colleagues. In recent years attribution theories have become significantly important in effectively explaining workplace interpersonal behaviour and perceptions. An employee can attribute his success or failure in a job to internal or external factors which can influence job performance. For example a employee can attribute his poor quality job to situational factors such as improper training, lack of supervision, technological issues which are beyond his control, and therefore he cannot do much about it; else he can attribute it to internal factors such as lacking aptitude, commitment or

understanding which are within his control and he can seek help / apply the effort to improve his performance. Employees usually attribute the success or failure of others at work to internal or external factors. For example when someone does a good job the individual can attribute it to situational factors by justifying that the good results are attributable to easy job, supportive manager or excellent training; and attribute poor job to internal factors like incompetency, lack of commitment or lack of attitude. Employees usually tend to attribute their good job performance to internal factors and poor job performance to external factors. And in judging others tend to attribute poor job performance to the individual and good job performance to external factors. When employees attribute their success to internal factors rather than external factors, they have higher motivation for putting in more efforts towards achieving greater success arising from a greater desire for achievement. Employees tend to attribute success or failure to good luck/ bad-luck. Bad-luck attribution (a external factor) helps reduce the negative effect of failure and good-luck attribution reduces the joy associated with success. Motivation is among the most researched subject in understanding human behaviour and human resources management. It continues to attract a lot of research as well as management attention in organizations, and there are a number of recent studies that continue to explore the many facets of motivation at the workplace. The range of stimuli which motivates people is many. Motivators may be either financial or non-financial. Again non-financial motivators may be individual based, group or company. As regards individual motivators, it is obvious that as human beings; people have some basic needs. Unless these are satisfied, life is not worth living. So in various ways people try to satisfy these needs. Food, shelter, clothing, money are such basic needs. These needs are served through work. In the second place, equally powerful as motivators are the stimuli which arise out of social interactions. We are powerfully affected by what others think of us and our actions. Even the basic wants are affected by group approval or disapproval. That we are part of a particular society put on particular kinds of clothing and prefer certain types of occupations are due to our preferences to certain group opinions. This could be of our family, our friends, and the school we went to, neighbours or working associates. Motivation therefore changes with time. Different things motivate us at different times in life based on our life experiences and the impact of the society we are part of. Sometimes the goals of life may come into conflict with the goals of business. This might require a adjustment, and the decision he takes will be a clear outcome of what motivates him at that point of time.

Self Assessment Questions 5. Maslow views an individuals motivation as a predetermined order of needs which ___________________. 6. ____________________presented two opposite sets of assumptions about employees; and about management views about the nature of man at work. 7. McGregor noted that managers throughout history assume, and just take it for granted, that workers are naturally lazy, hate work, try to avoid it, care not at all about an organizations goals and must be ____________________. 11.4 Employees and Motivation A common question that is raised is whether employees can at all be motivated? It is obvious that neither coercion nor pressure nor pampering can effectively motivate employees to do a job satisfactorily. There are no off-the-shelf prescriptions that can help manage motivation. However certain factors as analyzed by research scientists could be used as guidelines. Firstly, people naturally are motivated themselves and there is limited scope to impact this. Therefore, instead of the theory X approach, creation of an atmosphere that will motivate the individual to greater performance is the key. Secondly, an employee has a self image and this is the chief motivator, and their expectation of what that image should be drives motivation. A persons psychological needs affect his self-image. Thirdly, it is established that achievement and motivation are closely linked and this determines the ability to achieve. Any motivation initiative must therefore attempt to link personal desire / aspiration with performance results. Fourthly, once an organization has hired an individual, it is the responsibility of the manager to help and understand the individuals motivational pattern and leverage it for organizational success. The manager along with support of his manager and HR need to provide the environment in which this person can achieve his goal along with the organizational goal. Else an organization owes it to the employee to let him know that he does not fit into the organization and encourage him to look for alternative roles/job. Self Assessment Questions 8. There are no ready-made remedies for bringing about an effective motivation but certain factors as analyzed by research scientists, could be used as_________________. 9. A persons psychological needs affect his_________________.

10. Even if the employees have a high potential for self-motivation, it is the duty of ______________to provide the climate in which it will flourish. 11.5 Motivation Techniques Some commonly practiced motivation steps are listed below: 1. Clearly analyzing the situation requiring motivation: Every employee needs motivation. It is the primary responsibility of the manager to work closely with each of his team members and identify the motivators that drive effort and performance in them. Organizations usually have a annual process that allows for conversations around career plans and aspirations. Managers need to use this process effectively and refer to it ongoing to ensure that the employee and manager are aligned in their thinking. Managers need to be aware that personal goals and aspirations could be selfish. Given that the business cannot be sacrificed at the cost of employee motivation, a balanced view is important. It is good to involve others in analyzing so the appropriate action can be taken. 2. Have a motivation toolkit: Managers, supported by HR, must have a list of motivational initiatives from which she/he could select and apply specific tools of motivation. A manager from his personal experience should prepare a list of what devices are likely to work with what type of people and how can he/HR/the organization support it. 3. Selecting and applying the appropriate motivator: Assigning the right motivation technique is important. It is a good idea to involve the individual and have him decide on what will best satisfy his needs. Give him an understanding of the organizations total goals and the part that he is contributing. Motivation must establish attainable goals, therefore breaking up long terms goals into smaller and short-time bound goals are recommended. All along the manager needs to be prepared in-case the employees aspirations are contrary or conflicting with the team/organizations goals. 4. Follow-up and review: the process usually provides for on-going review. The primary objective is to ascertain if an employee has been motivated or not. If not, some other technique could be adopted. Use rewards promptly and apply when results are good. Rewards must be tied to the specific result and to commensurate with the contribution. A secondary purpose of follow-up is to evaluate motivation plans for future guidance. Self Assessment Questions 11. Every employee needs motivation, however, all people do not react in exactly the same way to the same _____________ 12. The last stage of motivation is to follow-up the results of the.. 13. Psychologically speaking, _______________is a part and parcel of life. To deny this is to build the theory on unrealistic foundation.

11.6 Summary Good organizational morale is a condition in which individuals and groups voluntarily make a reasonable subordination of their personal objectives of their organization. The building of morale is not a mechanical problem that could be solved by either rewards or punishments or by issuing orders regarding morale. Morale depends upon the relations between expectations and reality. The closer the individuals environment comes to providing the kinds of rewards he expects; the better will be his morale. One of the most unpredictable effects of the level of morale is its impact on worker productivity. Morale can be measured by assessing attitudes and job satisfaction. The guided interview is a useful method of investigating the morale of supervisors or other groups that are small in comparison with the employees as a whole. Signs of low morale are generally not noticed till it is obviously low or when something goes amiss. Perceptive managers are constantly on the lookout for clues to any deterioration in the morale of the employees. Morale can be improved by adapting several measures such as employee contest, special recognition and awards to long service employees, film shows to employees during their lunch hour, free coffee during rest pauses, and training the supervisors in how to handle people. The study of human motivation is of great importance in any theory of management. Unless individuals are motivated to make sufficient potential to perform effectively, they may not achieve the level of performance that is desired from them. Motivation aims at transforming the ability to do into the will to do. The key to understand motivation lies in the meaning and relationships between needs, drives and goals. Motivation may range from a threatening gesture to a tradition inspired activity. The importance of motivation to human life and work can be judged by the number of theories that have been propounded to explain peoples behaviour. They explain human motivation through human needs and human nature.

 Maslow views an individuals motivation as a pre-determined order of needs which he strives to satisfy. There are no ready-made remedies for bringing about an effective motivation but certain factors could be used as guidelines. Basically, people are motivated by themselves and are seldom motivated directly by other people. Instead of direct manipulation, creation of an atmosphere that will help individual to greater achievement is important. Motivation of people depends on their image of themselves and their expectation of what that image should be. A persons psychological needs affect his self-image. Morale and motivation, even though inter-related, are not synonymous. Motivation is individualistic while morale is a group instinct. A careful mix of morale and motivation can take an organization and its members to great heights. 11.7 Caselet Employee Motivation the Ritz-Carlton Way by Carmine Gallo When I was researching inspiring leaders, I spent time with Ritz-Carlton President Simon Cooper, who discussed how his company strives to engage its staff to increase employee satisfaction and improve customer service. I saw his strategies in practice when I attended staff meetings run by managers at the San Francisco Ritz-Carlton and described a few of them in a previous column(BusinessWeek.com, 2/13/07). Now, Ive returned to my notes to expand on ways you can incorporate techniques from the upscale hotelier in your own company. Share wow stories. Every day, employees of every department in every Ritz-Carlton hotel around the world gather for a 15-minute staff meeting where they share "wow stories." These are true stories of employee heroics that go above and beyond conventional customer service expectations. In one, a hotel chef in Bali found special eggs and milk for a guest with food allergies in a small grocery store in another country and had them flown to the hotel. In another, a hotels laundry service failed to remove a stain on a guests suit before the guest left. The hotel manager flew to the guests house and personally delivered a reimbursement check for the cost of the suit.

Telling stories in these pep talks accomplishes two goals. It reinforces a customer service skill the hotel is trying to encourage. Most important, it gives an employee "local fame." Employees want to be recognized in front of their peers. Giving them public recognition is a powerful motivator. Demonstrate passion: Moods are contagious. Managers who walk around with a smile on their face and demonstrate passion for their jobs have an uplifting effect on others. I attended a staff meeting for housekeepers at the San Francisco Ritz-Carlton one morning and discovered a group of employees whose happiness rivaled higher-paid employees in other professions. I quickly learned the enthusiasm started at the top. The supervisor was dressed impeccably in a three-button blue suit, white shirt, purple tie, and shined black shoes. His wardrobe communicated respect. "Good morning, everyone," he said enthusiastically. The housekeepers returned an energetic greeting. This manager was all smiles and showed respect for his team. He said they returned his commitment through their hard work. Sell the benefit: In every daily staff meeting, Ritz-Carlton managers reinforce one of 12 service values all employees are expected to embody on the job. On the day I attended a meeting in San Francisco, the theme was service value No.2: "I am always responsive to the expressed and unexpressed wishes and needs of our guests." The housekeepers were encouraged to discuss how this value applied to their daily tasks. "What is an expressed wish?" the supervisor asked the group. "If a guest asks for extra pillows," a woman said. "Thats exactly right," he said. "But its the unexpressed wishes that create The RitzCarlton mystique," he continued, offering the example of a housekeeper who notices a champagne bottle sitting in melted ice and replaces the ice before being asked to do so. The question was then asked: "Why do we do it? Why do we go the extra mile?" One housekeeper volunteered: "It offers a personal touch that shows we care." "Thats exactly right," another added. "It reflects our commitment to five-star service." Employees need to understand how their daily actions have an impact the customer. Use staff meetings to make the connection. Ask for feedback: Employees are encouraged to speak up during staff meetings. During a housekeeping meeting, the employees were debating the benefit of one cleaner over another. It seemed as they preferred the old product over a new one. At first glance, it was a rather mundane discussion. But I noticed something about their supervisor. He was listening intently, as if the discussion were the most important thing in his life at the moment: nodding, maintaining eye contact, and asking questions. He showed genuine interest in the topic. If it is important to his staff, it is important to him. "Why do you

think you have earned so much respect from your staff?" I later asked. "Because I listen to their concerns," the supervisor said. "And they know I will follow up." Praise effectively: Ritz-Carlton managers dont focus on what employees have done wrong but instead seek to help them improve on a given task. Supervisors use staff meetings to publicly praise employees. Criticism is done in private. One supervisor suggested sandwiching constructive criticism among the praise. "You did a great job this week cleaning the coffee pot," he would say, "but youre still struggling here. Lets work together on improving it." By offering the criticism in the middle of praise, he inspires his employees to exceed the expectations of the hotels guests. I chose to attend housekeeping meetings to make a key point: Motivation can and should take place everywhere within an organization. Simon Cooper cannot personally motivate each of his 35,000 employees worldwide, so its up to his department managers to reinforce the brand and its values through daily interactions with their teams. Are your employees engaged? Are they inspired to follow your vision? Five-star service does not begin with them. It begins with you. Source Business Week February 29, 2008 11.8 Terminal Questions 1. Define Motivation. Distinguish between Motivation & Morale. 2. Explain the views of Herzberg and Maslow on Motivation. 3. Critically examine Maslows Need Hierarchy theory with examples. 4. Critically discuss the McGregors Theory X and Y and contrast with the principles of Theory Z 5. Discuss three motivation techniques that you think are most relevant and explain why you think so.

11.9 Answers Answers to Self Assessment Questions 1. Level of performance that is desired from them 2. Perceives as having value to him 3. Needs

4. Goal 5. He strives to satisfy 6. Professor Douglas McGregor 7. Forced to work against their will by threat and fear.

8. Guidelines, 9. Self-image, 10. The management

11. Stimuli, 12. Application of the plan. 13. Selfishness Answers to Terminal Question: 1. Refer to 11.2 & 11.6 2. Refer to 11.3 3. Refer to 11.3 4. Refer to 11.3 5. Refer to 11.5 References: 1. Organizational Behavior by Fred Luthans 2. Organizational Behaviour by Steven L Shane, Mary Ann Von Glinow and Radha R Sharma Copyright 2009 SMU Powered by Sikkim Manipal University .

MH0043-Unit-12-Employee Misconduct and Disciplinary Procedure

Unit-12-Employee Misconduct and Disciplinary Procedure Structure: 12.1 Introduction Objectives 12.2 Meaning and Objectives of Discipline 12.3 Principles for Maintenance of Discipline 12.4 Basic Guidelines of a Disciplinary Policy 12.5 Disciplinary Action Penalties 12.6 Procedure for Disciplinary Action 12.7 Dismissal and Discharge of an Employee 12.8 Summary 12.9 Caselet 12.10 Terminal Questions 12.11 Answers 12.1 Introduction During the last couple of decade, the growth of industries has been hampered by many incidents of indiscipline. You would have read about it in newspaper articles and in magazines. However you will agree that employee conduct in an organization is of paramount importance for its long term success and smooth running. This Unit focuses on the understanding the challenges organizations face and how best they can be managed. During the early stages of industrialisation, manpower was largely exploited. As we studies in the earlier Unit the Theory X management style prevailed and practices like

child employment, longer working hours, inhuman and unhealthy working conditions, low wages, absence of safety and welfare measures were typical of the workplace. The labour had to seek outside help to solve their problems. The trade unions often failed to provide the needed help and sometimes tried to fulfil their own needs. Incidents of unlawful activities (strikes, gheraos) and undisciplined behaviour was commonly resorted to by the employees in industries. With the growth of union related empowerment, inter-union rivalry was prevalent in most of the public and private sector industries. Rapid industrial growth in the country resulted in many problems arising out immigrant workers from the rural to the urban cities and related social changes, displacement from familiar environments, lack of adjustment to industrial atmosphere, changes in living conditions, new stresses and strains of industrial disputes, indiscipline and violence etc. are responsible for a number of disputes and as a consequence, amount of man-days lost by such disputes were quite substantial. Todays organizations have come a long way from most of these problems. The workforce employed in todays organizations is markedly different. The traditional infrastructural as well as the more emerged information technology, information technology enabled services organizations, retail and other service based organizations have a new set of employees working in them. The workforce is characterised by:

Well educated Highly aware of their rights, privileges as well as responsibilities Mature and balanced Committed to organizational as well as personal success and wellbeing

Employee misconduct however remains a challenge that organizations continue to manage and control. Objectives: After studying this unit you will be able to: Describe the concept of Employee misconduct at the workplace State how discipline is implemented and measured. Analyze the techniques to ensure discipline 12.2 Meaning and Objective of Discipline Discipline is best defined as the observation of principles, rules or any other laid down procedures, practices, written or otherwise in the organization by the employees or group of employees, to whom these apply, for smooth and effective functioning of the organization.

Per Dr. Spriegal, "discipline is the force that prompts an individual or a group to observe the rules, regulations and procedures which are deemed to be necessary to the attainment of an objective; it is force or fear of force which restrains an individual or a group from doing things which are deemed to be destructive of group objectives. It is also the exercise of restraint or the enforcement of penalties for the violation of group regulations". Bremblett, Earl R says that, "discipline in the broad sense means orderliness-the opposite of confusion". According to Calhoon. Richard. D, "discipline may be considered as a force that prompts individuals or groups to observe the rules, regulations and procedures which are deemed to be necessary for the effective functioning of an organization. Websters Dictionary gives the meanings of the word discipline as follows: "First, it is the training that corrects moulds, strengthens or perfects. Second, it is the control gained by enforcing obedience. The third meaning is punishment or chastisement". In its most practical form employee misconduct does not mean strict and technical observance of rigid rules and regulations. It simply means working, co-operating, and behaving in a normal and orderly way, as responsible adults. The 5 key objectives of employee misconduct can be summarised as: 1. Effective attainment of organizational goals by having employees accepts rules, policies and procedures of the organization. 2. To create an atmosphere of total and absolute respects for one and all at the workplace, with customers and vendors/clients. 3. To develop among the employees a spirit of tolerance and a desire to comply with established policies established for the benefit of all 4. To increase the working efficiency and moral of the employees, so that their productivity is stepped up, the cost of production brought down and the quality of production improved. Discipline is therefore a measure to not only protect the interests of the organization but also its employees. A good example is that of the recently implemented Sexual Harassment Guideline provided for through a Supreme court ruling wherein all organizations must have a policy and a committee that will look into the gender related harassments at the workplace. Today all organizations have clearly laid down guidelines that detail un-acceptable behaviour amongst male-female employees that can merit disciplinary action. Good employee conduct is usually catalyzed by effective leadership. Leaders by being examples, prevails upon their teams to willingly follow the applicable policies, rules and

procedures. Similarly employee misconduct exists when employees fail to observe the rules of the organization or the orders of their supervisors. Conditions contributing to poor discipline can be caused by weaknesses within the organizational structure or by external factors. Self Assessment Questions 1. ________________ is the observance of principles, rules or any other laid down procedures, practices, written or otherwise in the organization by the employees or group of employees, to whom these apply, for smooth and effective functioning of the organization. 2. According to ____________________, "discipline may be considered as a force that prompts individuals or groups to observe the rules, regulations and procedures which are deemed to be necessary for the effective functioning of an organization. 3. Conditions contributing to ______________________ can are caused by weaknesses within the organizational structure or by external factors. 12.3 Principles for Maintenance of Discipline Since, disciplinary measures have serious implications for employees; they often are based on the principles of being fair, just and acceptable to employees and, where applicable, the union as well. It cannot be enforced or imposed on employees, as history has proved, it never benefits anyone. So one of the most significant transformations that has impacted the workplace in the past few years is the reinstatement of discipline in a positive and employee-supported environment. The way it is practiced in todays organizations is extremely well communicated and adopts a discretionary approach. The most important principles to be observed in the maintenance of discipline have been outlined by Yoder. Heneman, Turnball and Harold Stone are: a) As far as possible, all the rules should be framed in co-operation and collaboration with the representatives of employees. If the latter have a share in formulating them, will be much more likely to observe them. b) All the rules should be appraised at frequent and regular intervals to ensure that they are, and continue to be, appropriate sensible and useful. c) Rules should vary with changes in the working conditions of employees. Those framed for office employees, for example, may very well be different from those that are formulated for workers in an industrial concern. d) Rules should be uniformly enforced if they are to be effective. They must be applied without exception and without bending them or ignoring them in favour of any one worker.

e) Penalties for any violation of any rule should be clearly stated in advance. Employees have the right to know what to expect in the event of any infringement of a rule or regulation. For this purpose, it is better to publish them in the employees handbook. f) A disciplinary policy should have as its objective the prevention of any infringement rather than the simple administration of penalties, however just: it should be preventive rather than punitive. g) Extreme caution should be exercised to ensure that infringements are not encouraged. This should be done as a matter of policy. h) If violations of a particular rule are fairly frequent, the circumstances surrounding them should be carefully investigated and studied in order to discover the cause or causes of such violations. i) Recidivism must be expected. Some offenders would almost certainly violate rules more often than others. These cases should be carefully considered so that their causes may be discovered. j) Definite and precise provisions for appeal and review of all disciplinary actions should be expressly mentioned in the employees handbook for collective agreements.

Self Assessment Questions 4. As far as possible, all the rules should be framed in co-operation and collaboration with the___________. 5. ___________ should be uniformly enforced if they are to be effective. 6. A disciplinary policy should have as its objective the prevention of any infringement rather than the simple administration of penalties, however just. Activity 1: Review few recent articles to identify 2-3 incidents of employee indiscipline. How do think it would have been dealt and resolved by the organization? 12.4 Basic Guidelines of a Disciplinary Policy As discussed above the modern organization has evolved the way it practices the art of managing employee misconduct. However the basic principles discussed above remain as the guiding framework. The principal ingredients of a sound disciplinary system in organizations are:

1. Location of responsibility: The responsibility for generating awareness regarding discipline is entrusted with every individual in the organization. Particularly it resides with the senior leadership of the company and will all managers who serve as the ambassadors of discipline. In the traditional brick-and-motor organizations it is the Personnel Officer who is entrusted with the responsibility of offering advice and assistance. In case of employee in-discipline, the line manager issue only verbal and written warnings. In serious cases, which warrant discharge or suspension, the Industrial Relations Officer and other independent legal consultants need to be consulted. 2. Proper formulation and communication of rules: The employees are expected to conform to rules and regulations and behave in a responsible manner; it is essential that these rules and regulations are properly and carefully formulated and communicated to them. It would be preferable if a copy of these regulations is included in their handbook; at any rate, they should be put up on notice boards and bulletin boards. Every organization has a Policy and Guidelines document, either as hardcopy in the form of the Companys Policy Handbook or as soft copy on the Companys intranet site. This document elaborates the specific acceptable personal code of conduct. All new employees are required to read it and acknowledge that they have read it by signing once they have read it all. In many organizations the employees need to read it and sign it once every year. This acts as a effective preventive mechanism to ensure that employees are aware of it and have committed to abide by it. 3. Rules and regulations should be reasonable: todays organizations pay a lot of attention, and rightly so, towards formulating equitable polices that protect employee as well as the organizations values and rights. Often organizations involve employee representatives in formulating these policies and guidelines. Not only is the formulation of the policy important but also its communication. Organizations often hold road-shows and workshops that communicate policies and the reason why these policies are required. In order to make these workshops interesting and have employees attend it, the communication is often done using innovative means such as role-play, video-cases of workplace incidents and even build case studies around how to behave in particular situations. 4. Equal treatment: All defaulters of the acknowledged code of conduct should be treated equitably, depending of course on the nature of the offence. Identical punishment should be awarded for identical offences, irrespective of the position or seniority of the employee. 5. Disciplinary action should be taken in private: While the policies governing the acceptable code of conduct is communicated publicly, the reprimand for non-compliance needs to be done in private. This is to ensure that a wrong behaviour is corrected and not that the wrong-doer be punished, or ridiculed. At all times the organization needs to be watchful of remaining respectful of its employee and carry out any action in a respectful and in a confidential manner.

6. Importance of promptness in taking disciplinary action: As goes the popular saying.justice delayed is justice denied. If the action for review and reprimand is taken long after a violation of a policy/rule has happened, it loses its positive and corrective influence. The employees loose trust in the system and assume that the organization lacks commitment to it. It might even lead to resentment, which may not have developed if the corrective action had been imposed in time. Also the action taken needs to be compliant with the policy and fair. Most breach of the rules and policies might lead to employee termination, in such cases appropriate approval of the senior management should be taken and it should be implemented soon. 7. Innocence is presumed: Again as per the fundamental rights of a human being, an individual is presumed to be innocent until he is proven to be guilty. It is the organizations responsibility and therefore the HR teams responsibility to prove beyond a reasonable doubt, that a violation or an offence has been committed before any punishment is awarded. The employee or employees need to be given the first opportunity to explain himself/herself/themselves. The kind of proof that would be needed for this purpose would depend on the gravity of the offence that has been committed. 8. Get the facts: Before taking any disciplinary action, it is important to ensure that records of the offense and any previous warnings are reviewed closely. It may often be discovered that there were mitigating circumstances, or that he/she/they were not aware of the rules; or that the person had conflicting orders or even permission to break the rule for some reason. Getting facts right is the most credible part of this entire activity. 9. Action should be taken in non-threatening atmosphere: The action should be taken by multiple people to ensure that is fair and the best course of action. It then needs to be endorsed by a representative sample of the senior/top management team. Also it is important to be consistent with earlier decisions taken as therefore a rational and sensible judgement. It ought to be in-step with the conditions of natural justice. The management must act without bias and without vindictiveness. Justice and fair play must prevail. Wherever possible and within the framework of the policy, employee must be given the opportunity to reform himself/herself. And not only reprimanded. 10. After a disciplinary action has been taken by the manager, he should treat his team member in a normal manner: The employee has paid the penalty for the violation of a rule. He should, therefore, be treated as he would have been, had there been no violation and no action. Remaining respectful and fair is important, and this could be difficult. Therefore the manager might need to be reminded to be watchful of it. HR can also play a effective rule here by continuing to remain in touch with the employee and hear out his grievance if any. 11. Negative motivation should be handled in a positive manner: Often any such confrontation with a erring employees results in a immediate drop in motivation. Employee needs to be sensitised that a negative approach does not pay. Manager might often try to protect their employees. As far as possible, disciplinary action should deal

with specific rule in question, rather than with the employee in general. Managing the employee needs manager training, without doubt. The role of HR is critical. HR and the manager spend significant time role-playing the reactions of the employee and how the manager needs to respond and manage the employee back at work. The fruit of the pudding is in the preparation. Self Assessment Questions 7. The ___________________ should issue only verbal and written warnings. 8. While finalising the rules, _________________ should be given the opportunity to express freely his views thereon 9. All _______________should be treated alike, depending on the nature of their offence. Identical punishment should be awarded for identical offences, irrespective of the position or seniority of the employee. Activity 2 You need to find 2-3 samples of Code Of Conduct document that corporate use. Browse the net to find them. Some companies post their Code of Conduct document on the internet website. Study the content of these documents to better understand the theory that you have studied above.

12.5 Disciplinary Action Penalties There are varying penalties for first, second, and third offences of the same rule. Following are the commonly practiced actions in business Organization: 1. Oral reprimand 2. Written reprimand 3. Loss of privileges 4. Fines 5. Lay off 6. Demotion 7. Discharge

The penalties are listed in the general order of severity, from mild to severe. For most cases, an oral reprimand is sufficient to achieve the desired result. The supervisor must know his or her personnel in determining how to give a reprimand. For one person, a severe "session" may be necessary in order to get attention and co-operation; another person may require only a casual mention of a deficiency. If the offence is more serious, the reprimand may be put in written form. Since a written reprimand is more permanent than an oral one, it is considered a more severe offence and the penalty levied accordingly. For such offences as tardiness or leaving work without permission, fines or loss of various privileges can be used. The fines usually have some relationship to the work time actually lost. The loss of privileges includes such items as good job assignments, right to select machine or other equipment, and freedom of movement about the workplace or company. The more severe penalties of layoff, demotion, and discharge are usually outside the grant of authority to the immediate supervisor. Disciplinary layoffs can vary in severity from one to several days loss of work without pay. The use of demotions as a penalty is highly questionable. If the employee is properly qualified for the present assignment, he or she will be improperly placed on a lower job. Discharge is the most severe penalty that a business organization can give and constitutes "industrial capital punishment". Self Assessment Questions 10. The supervisor must know his or her personnel in determining how to ________________. 11. Since a written reprimand is more permanent than ________________, it is considered a more severe penalty. 12. The use of ______________as a penalty is highly questionable. 12.6 Procedure for Disciplinary Action Though there is no specific procedure to be followed. Different organizations use a variety of formal and informal methods to resolve these matters. The following steps are recommended a) An accurate statement of the disciplinary problem. b) Collection of data or facts supporting the report of the offence. c) Review policy and past similar incidents.

d) Identify corrective action to implement; take legal counsel to ensure that the local laws of the land are not in conflict e) Apply the action f) Follow-up on the disciplinary action. a. Accurate Statement of the Problem: The first step is to ascertain the problem by seeking answers to the following questions: 1. Does this case call for a disciplinary action? 2. What, exactly, is the nature of the violation or offence? 3. Under what-conditions did it occur? 4. Which individual or individuals were involved in it? 5. When, or how often, did the violation occur? In other words, an executive must first find out that a violation has occurred and that is entirely the fault, or at least partially the fault, of one or more subordinates. The next step is to determine and state the nature of the alleged violation of a rule, a regulation, a policy; to determine whether a request or order has been ignored or broken, and assess the seriousness of the specific offence which has been committed. It is also necessary to know exactly who and what was involved in the violation-whether a particular individual or group. Finally, it is desirable to know when and/or how often the violation occurred. b. Collection of data or facts support the report of the offence: Before any action is taken in a case, it is essential to gather all the facts about it. A thorough examination of the case should be made within the stipulated time limit. The facts gathered should be such as can be produced before a higher authority, if and when needed. c. Review policy and past similar incidents: The kind of penalty to be imposed for an offence should be determined beforehand. Should it be simple reprimand, a financial or non-financial penalty? Or should it be demotion, temporary lay-off or outright discharge? d. Identify corrective action to implement; take legal counsel to ensure that the local laws of the land are not in conflict: When a decision has been taken to impose a penalty, the punishment to be awarded should be such as would prevent a recurrence of the offence. If the punishment is lighter than it should be, it may encourage the violation of the same rule or another; if it is greater than it should be, it may lead to a grievance. e. Apply the action: The application of the penalty involves a positive and assured attitude on the part of the management. "If the disciplinary action is a simple reprimand,

the executive should calmly and quickly dispose of the matter. But when severe action is called for, a fortnight, serious and determined attitude is highly desirable. f. Follow-up on Disciplinary Action: The ultimate purpose of a disciplinary action is to maintain discipline, to ensure productivity, and avoid a repetition of the offence. A disciplinary action should, therefore, be evaluated in terms of its effectiveness after it has been taken. In other words, there should be a more careful supervision of the persons against whom a disciplinary action has been taken. Self Assessment Questions 13. ______________________ is the first step is to ascertain the problem. 14. Before any action is taken in a case, it is essential to _______________. 15. When a decision has been taken to impose a penalty, the punishment to be awarded should be such as will ________________________.

12.7 Dismissal and Discharge of an Employee According to Article 311 of the Indian Constitution, which states that no person shall be dismissed or removed from service until he has been given a reasonable opportunity to show cause as to why the proposed action should not be taken against him?" The Model Standing Orders, similarly states that, "before an employee is dismissed, he should be given an opportunity to explain the circumstances against him." The following steps are followed for dismissal of an employee: a) Charge Sheet is Framed and Issued: The first step in the procedure is to have in-place a written complaint against the employee in question, and which contains details of the offence with which he is charged, policy breach and the allegation of misconduct made against him, and indicating the time limit within which a reply to the charge sheet should be submitted to the due authorities. The employee is called to put forth his case why a disciplinary action should not be taken against him. The contents and implications of the complaint/charge sheet may be explained to him in his own language and in the presence of some reputable witness, before a copy of it is handed over to him. If he refuses to accept it, it should be sent to his residential address "registered post with acknowledgement due". If the employee refuses to take delivery of the registered letter, or when it has been returned undelivered, it should be published in a local paper to ensure its wide publicity.

b) Explanation Receipt: The employee provides his explanation within the scheduled time allotted. He can also ask for an extension of time for its submission, all in good faith. c) Issue of Notice of Enquiry: Upon receipt of the explanation from the employee it is reviewed. If found unsatisfactory, a notice of enquiry, mentioning the time, date and place, has to be given to him in which the name of the person or officer conducting the enquiry would also be mentioned. The employee is required to be present at the appointed time and place, together with his witness, if he has any. d) Conducting the Enquiry: On the appointed day and at the appointed place and time, the enquiry is held by the Enquiry Officer in the presence of the employee. The contents of the charge sheet and an explanation of the procedure to be followed at the enquiry are communicated to the worker. If he pleads his innocence, the enquiry proceeds; but if he pleads guilty, unconditionally and in writing, the enquiry is dropped. e) Sharing Findings: Once the enquiry is over, the Enquiry Officer has to give his findings, which should invariably contain the procedure which was followed, the employees statements, all of the documents produced and examined, the charges made and the explanations given and the evidence produced. The officer should then record his own findings on each of the charges and the grounds on which he has come to a particular conclusion. He should specifically mention which charges have been proved and which have not been proved. He then submits his findings to the authorities empowered to take the disciplinary action against the employee. He, however, is not required to make any recommendations. a) On receiving the report, the executive authorized to take a decision thereon passes an order of action b) Communication of the decision A copy of the orders is then handed over to the employee. In terminating the employment of a employee the following conditions must necessarily be complied with for misconduct. a) The misconduct of the employee is of such a nature as to indicate that his discharge or dismissal would be an appropriate punishment and that this kind of punishment has been provided in the companies policies or per statute

b) A fair and open enquiry must be held by the employer into the misconduct which an employee has been charged with. c) The enquiry should be held in such a manner as to ensure that it would be fair and proper and in conformity with the principles of natural justice. The employee must be given an adequate opportunity to defend himself and to present witness in support of his contention or case. d) The person holding the enquiry should not be someone whos known to be biased has personal/vested interest or was in anyway associated with the misconduct. e) The order must be sensitively communicated to the employee against who it has been passed. 12.8 Summary Good employee conduct might be described as orderly behaviour based on definite standards catalyzed by effective leadership. Disciplinary measures have serious repercussions on employees. Hence they should be based on certain principles so that they must be fair, just and acceptable to employees and their union. As far as possible, all the rules should be framed in co-operation and collaboration with the representatives of employees. All the rules should be appraised at frequent and regular intervals Rules should be uniformly enforced if they are to be effective. A disciplinary policy should be preventive rather than punitive. It is essential that these rules and regulations are properly and carefully formulated and communicated to employees. Identical punishment should be awarded for identical offences, irrespective of the position or seniority of the employee. If the penalty is imposed long after a violation of rules has been committed, it loses its positive and corrective influence. The ultimate purpose of a disciplinary action is to maintain discipline, to ensure productivity, and avoid a repetition of the offence. A disciplinary action should be evaluated in terms of its effectiveness after it has been taken.

12.9 Caselet HC disallows action against employee under articles of association Chennai April 13 The Madras High Court has ruled that use of articles of association of a State-owned transport corporation or clarifications by the State Government cannot be used to persist with a departmental enquiry against an employee for alleged misconduct. If an employee had committed a loss or damage to business or property of the corporation, it could always institute civil proceedings for recovery notwithstanding whether the person was in service or not, Mr Justice K. Chandru held while allowing a writ petition from R. Balraj, Managing Director, TN State Transport Corporation. The petitioner had joined the transport corporation as Works Manager and served in Cheran Transport Corporation; he was later transferred to TN State Transport Corporation and became a permanent employee from 1976 as Assistant Manager. He was subsequently promoted as Managing Director of the corporation in 1987. While serving as MD, in relation to a certain decision taken by him as part of the purchase committee, two charge memos were served on him on August 28, 2002, just two days ahead of his retirement, and he was allowed to retire without prejudice to disciplinary proceedings, and his terminal benefits like pension, gratuity and PF were withheld. The present petition was against the charge memos. The petitioner contended that in the absence of any service rule, there was no power vested on the employer to conduct an enquiry for alleged misconduct even after his superannuation. The respondents submitted that there were serious charges against the petitioner, and he was allowed to retire without prejudice to disciplinary action pending against him. They said that though there was no specific power enjoyed by the corporation, Rule 10 of articles of association of Corporation provided for the Government to issue instructions. The Judge said that articles of association of the corporation could not be raised to the level of any statutory provision to proceed against employees. Also, in the absence of any substantive power to retain an employee, the corporation could not rely upon articles of association or any clarification issued by the Government. Holding that the corporation could always institute civil proceedings for recovery of any loss allegedly caused by the employee, the Judge said there were also enough provisions in the Companies Act for making such recoveries from employees of Corporation. Allowing the petition, the Judge directed the corporation to settle the terminal benefits of the petitioner within four weeks. Source : Business Line April 14th 2007 12.10 Terminal Questions

1. Define Discipline. What are its Objectives? 2. What are the basic principles to maintain discipline? 3. Enumerate the steps for disciplinary procedure. 4. State the principal ingredients of a sound disciplinary system. 5. What conditions must necessarily be satisfied before an employee is discharged from service by way of punishment for misconduct? 12.11 Answers Answers to Self Assessment Questions 1. Discipline 2. Calhoon. Richard. D. 3. Poor discipline 4. Representatives of employees 5. Rules 6. It should be preventive rather than punitive 7. Line Executive 8. Everyone 9. Defaulters 10. Give a reprimand 11. An oral one 12. Demotions 13. Accurate Statement of the Problem. 14. Gather all the facts about it. 15. Prevent a recurrence of the offence. Answers to Terminal Questions:

1. Refer to 12.2 2. Refer to 12.3 3. Refer to 12.4 4. Refer to 12.5 &12.6 5. Refer to 12.7 Reference: 1. Human Resources Management and Personnel Management by K Aswathappa Copyright 2009 SMU Powered by Sikkim Manipal University .

MH0043-Unit-13-Grievance and Grievance Procedure

Unit-13-Grievance and Grievance Procedure Structure: 13.1 Introduction Objectives 13.2 Concept of Grievance 13.3 Why do Grievances Arise? 13.4 Importance of Grievance Handling 13.5 Grievance Handling Procedure 13.6 Concept of Arbitration 13.7 Emerging Employee Empowerment Practices 13.8 Summary 13.9 Caselet 13.10 Terminal Questions 13.11 Answers 13.1 Introduction It is human nature to express discontentment when we feel it. You too would find it easy to criticise all of what is happening around you, whether its the deplorable status of the roads in your city or the inefficiency of the garbage disposal mechanism of the city corporation. Wherever we have literate and aware people this is a natural process to findfault. This unit focuses on understanding the challenges of how organizations manage employee expectations at work. There is hardly any organization where the employees do not have some voice for grievance. Grievances therefore could range from employees complaining against their employers through to employers who have grievances against their employees. Often the actual validity of these grievances can be questioned. They may be real or imaginary,

valid or invalid, genuine or false. Whatever the nature and the cause, it produces unhappiness, frustration, discontent, indifference and poor morale amongst the employees. Ultimately it ends with an adverse effect on the efficiency and productivity of an employee at work. This unit explores the reasons as to why grievances arise. It also deals with grievance machinery and procedure. We will also understand what todays organizations are doing to manage this proactively. Objectives: After studying this unit, you will be able to: Explain the meaning of grievances. Discuss the importance of grievance handling. Describe grievance machinery and its procedure. 13.2 Concept of Grievance The definition of a grievance often varies from company to company and from author to author. The broadest interpretation of the term would include any discontent or dissatisfaction that affects organizational performance. As such, it can be stated or voiced, written or oral, legitimate or ridiculous. The word grievance is often used in a generic form to indicate various forms and stages of an employees dissatisfaction while at work. While the dissatisfaction could be defined as anything that disturbs an employee, a complaint is spoken or written dissatisfaction brought to the attention of the manager or to the HR department/team member. Often employees view the HR team as the custodian of employee content/discontent and take up their grievances with the HR team. Grievance could also be voiced by a group of employees; it need not necessarily be a single employee with a complaint. Dale Yoder defines it as "a written complaint filed by an employee and claiming unfair treatment". Prof. Jucious defines grievance as any discontent or dissatisfaction, whether expressed or not and whether valid or not, arising out of anything connected with the company that an employee thinks, believes or even feels unfair, unjust or inequitable. Prof. Pigors and Meyers define grievance as dissatisfaction. According to them, dissatisfaction of an employee is anything that disturbs the employee, whether expressed or not. The International Labour Organization (ILO) classifies a grievance as a complaint of one or more workers with respect to wages and allowances, conditions of work, interpretations of service stipulations, covering such areas as overtime, leave, transfer, promotion, seniority, job assignment and termination of service. The National Commission of Labour states that complaints affecting one or more individual workers in respect of their wage payments, overtime, leave, transfer, promotion, seniority, work assignment, and discharges would constitute grievances.

Common sources of conflicting situations where the employee feels unfairly treated, harassed, or overlooked in promotions, or are deserving of a pay hike, need to be redressed. Justice systems that allow an employee to voice perceived conflicts serve the following purposes: Increase organizational commitment and performance by treating employees fairly and by identifying problem areas Avoid expensive and long-drawn lawsuits, which also bring in negative employer branding Prevent unionism The key to employee well-being lies in communicating the process that is provided for seeking such justice and the management remaining committed to it. Self Assessment Questions 1. The broadest interpretation of the term would include any discontent or dissatisfaction that affects ______________________________. 2. In the language of the labour management relations, a grievance is a complaint formally presented by the _______________________. 3. The __________________________ states that complaints affecting one or more individual workers in respect of their wage payments, overtime, leave, transfer, promotion, seniority, work assignment, and discharges would constitute grievances. 13.3 Why do Grievances Arise? Grievances arise due to various factors. It is important from the point of view of the manager to know the possible causes of the employees dissatisfaction. A grievance is usually a symptom of some malfunctioning or misperception. Often a skilled and watchful manager can quickly find out the real or submerged reasons for a grievance. Several studies indicate that there is a pattern in the topics/categories that attract employee discontent. These can be categorised as under the following major headings. While the top concerns are mostly money related, workplace facilities and working conditions rank a good 2nd w.r.t. employee discontent. 1. Promotions, Supersession, growth and internal job opportunities 2. Compensation, increments and Bonus 3. Amenities / office facilities, Conditions of work

4. Transfer / job related relocation, 5. Disciplinary action 6. Acting Promotion 7. Fines 8. Recovery of dues 9. Safety appliance, and 10. Victimization / harassment The traditional organizations had established policy and process on how grievances need to be raised and resolved. The era of Personnel Management which focused on employee welfare adopted a more reactive approach to managing employee discontent. The closed door, highly hierarchical and autocratic management style did not provide for the employee to openly voice their opinions. The approach was reactive, time taking and involved senior management approval for any changes. Therefore, need to have a process for grievance handling aroused. The role of the unions too was partly responsible for enforcing a structure to ensure that the employees views were heard and adequately responded to. In past decade however, grievance began to be managed in a more proactive manner. Foremost the collaborative and the employee empowered work environment itself allows for employees to openly express their views and seek counsel. The managerial style adopted is more open-door, wherein the employee can approach his/her manager with an issue. The need for a formal structured approach is limited if not existent in most organizations. Many organizations form committees and involve employees in most employee-impacting decisions, be it choice of a new office location or what needs to be served for lunch in the cafeteria and other such workplace hygiene factors. In job-related issues such as promotions, compensation and merit hikes etc, todays organizations provide for a transparency in its policies and practices. The increasing focus on skills and competencies for employee reward and growth do not allow for personal biases that can lead to grievances. Self Assessment Questions 4. It is important from the point of view of the manager to know the ___________________ of the employees dissatisfaction 5. Some of the causes for grievances in organization are _____________. 6. The role of the _____________ too were partly responsible for ensuring that the employees views were heard and adequately responded to

13.4 Importance of Grievance Handling What might happen if an organization does not provide some method by which a employee can voice his complaints and obtain a explanation? The employee will be unhappy, his productivity is impacted, he openly begins to share his discontent with not just his colleagues but also outsiders, friends, relatives, maybe even customers and vendors. Just as the employee has all the right to voice a grievance, as employer (or the management) owes it to the employee to respond suitably to the grievance. It is but commonsense that the resolution of a problem rests on management. The earliest and clearest opportunity for issue resolution is found at the first stage, before the grievance has left the jurisdiction of the manager. For this reason, many firms have specifically trained their managers on how to handle a grievance or complaint properly. If the dispute or grievance constitutes a managerial problem it can often be resolved by the manager himself with the help of the HR team. The following steps discuss how a grievance can be redressed: 1. Receiving the grievance: The manner and attitude with which the manager receives the complaint of grievance is important. The basic premise is that the manager should at the outset assume that the employee is fair in presenting his/her opinion/complaint. The complaint should not be prejudged on the basis of past experience with this or other employees. When a employee approaches the manager with a issue the manager needs to make himself available to listen it all out and provide him/her the undivided attention. Research confirms that managers who were more task-oriented, as contrasted with managers who were more people-oriented, tended to experience a significantly higher number of grievances being filed in their units. 2. Reviewing the grievance: Once a complaint is received all facts supporting the issue needs to be gathered. Proper record keeping such as performance ratings, job ratings, attending records, and suggestions are reviewed. In addition, with the increasingly legal implications of modern labour-management relations, the manager should keep records on each particular grievance. All action taken, discussions with the employee, summary and what is agreed to all of it needs to be recorded. 3. Analysis and decision: With the problem defined and the facts in hand, the manager must now analyze and evaluate them, and come to some decision. It is important for the manager to involve others in the process to ensure that it is fair and is the best solution. The manager must include the views of his own manager as he might not be aware of all the implications of the problem and its resolution. Involving HR too is a recommended process in all organizations. HR can then seek finance or legal counsel if required, before any decision is taken. All involved in the decision making process need to be aware that the decision may create an undesirable precedence within the department as well as the company. 4. Response: Often it might not be possible to provide a positive resolution to the problem. If the solution decided is adverse to the employees views, attention needs to be given to the method of communication. Employees dislike managers who will take no

stand, good or bad. Clearly communicating the message and sharing as much information as possible about the decision making process helps in establishing credibility to the process used to make the decision. The manager can also invite HR or his manager to sitin on the conversation with the employee. As far as possible this should happen in a faceto-face meeting. In the event an employee wishes to take the appeal beyond to the next stage of the procedure he must be allowed to do so. The manager must have the opportunity to explain his decision to the other members so they can take a well-informed decision. 5. Follow up: The objective of the grievance procedure is to resolve a disagreement between an employee and the organization. Open communication is important for this process. The purpose of phase is to determine whether the employee feels that the problem has been sufficiently redressed. If follow up reveals that the case has been handled unsatisfactorily, then redefinition of the problem, further fact-finding, analysis, solution and follow up are required. At this stage the manager can step aside and allow someone else in a position of authority like the HR or the managers manager to lead the process and close it. Among the common errors of management encountered in the processing of grievances are: 1. Lack of in-depth review of the issue and its facts; 2. Expressing policy/management opinion prior to the time when all pertinent facts have been discovered; 3. Failing to maintain proper records; 4. Resorting to authoritative orders rather than having open conversations with the employee; and 5. Watch out if making exceptions / setting a precedence which could then become a rule. Activity 1 Visit the following website and read it. http://www.indianmba.com/Faculty_Column/FC338/fc338.html Reflect on what the author is trying to convey. How practical is it?

Self Assessment Questions

7. The clearest opportunity for settlement is found at the _____________, before the grievance has left the jurisdiction of the manager. 8. In gathering facts, one quickly becomes aware of the importance of _______________ such as performance ratings, job ratings, attending records, and suggestions. 9. In analysing and evaluating a grievance the manager must also be aware that the decision may constitute a ______________________.

13.5 The Grievance Handling Procedure Principles suggested by the Indian Institute of Personnel Management for addressing the grievance are as follows: a) A grievance should be dealt within the limits of the first line manager. b) The appellate authority should be made clear to the employee so that if he cannot get satisfaction from his immediate manager, he should know the next step. c) The grievance should be dealt with speedily. d) In establishing a grievance procedure, if the grievance is against an instruction given by a superior in the interest of order and discipline, the instructions must be carried out first and then only employee can register his protest. There should be no recourse to official machinery of conciliation unless the procedure has been carried out without reaching any solution. Grievance Machinery A grievance machinery is usually thought of in connection with a company that deals with a labour union. Though the union must be given some credit for stimulating the installation of such procedures, all companies, whether unionized or not, should have established and known methods of processing grievances. To establish new grievance machinery, workers in each department and each shift shall select, from among themselves and for a period of not less than one year at a time, departmental representatives, and forward the list of persons so selected to the management. Where the unions in the undertaking are in a position to submit an agreed list of names, recourse to election may not be necessary. Nor will this be necessary when a Works Committee is functioning satisfactorily, for the Works Committees member of a particular constituency shall act as the departmental representative. Grievance Handling

The details of the grievance procedure vary from industry to industry and from trade union to trade union because of the variations in the size of organizations, trade union strength, the management philosophy, the company traditions, industrial practices and in the cost factor. An important aspect of the grievance machinery is the reassurance given to an individual employee by the mere fact that there is a mechanism available to him which will consider his grievance in a dispassionate and detailed manner, and that his point of view will be heard and given due consideration. An employees conception of his problem(s) may be quite biased. Venting his grievance and being heard gives him a feeling of being cared for. He gets it "off his chest", so to say, and it does a lot of good for his morale as revealed by the famous Hawthorne Studies.

Fig. 13.1: Grievance Handling Procedure Initial step The greatest opportunity for the settlement of a complaint or grievance lies in the initial step of the procedure. If there is no formal procedure and the firm announces an opendoor policy, then it is possible that the manager may get bypassed by the worker who would take his grievance directly to the higher levels of management. But such bypassing not merely undermines the managers authority, who loses face, but also creates an atmosphere of win-or-loose in which both the worker and manager will try to prove the other wrong. Intermediate step As the figure indicates, the next step on the management side of the procedure is to submit the dispute to middle management. Involving the managers, middle and seniorline managers in the grievance process helps in two ways. Initially, the social barriers between the various categories are, to some extent, broken by personal contact and mutual understanding. Secondly, the problem-solving approach integrates the various levels in the organization into a team to jointly overcome the problem which concerns not only the worker but the manager as well. However, it is important to ensure that the line management assumes prime responsibility for the settlement of a grievance. In many organizations, the Personnel Department is injected into the procedure as a decision-

making power. On the union side, intermediate levels are represented by higher personnel in the union hierarchy. In most of the organizations, the business agent, a full-time negotiations specialist of the union, takes over the intermediate and sometimes the final step. The presence of a business agent may explain why management is often outmanoeuvred by the union. Business agents are specialists in union-management negotiations, and it is also their full-time job. The line manager often considers grievance processing a minor, incidental, and distasteful duty. This lack of specialization and interest on the part of line management has led to the situation in which the staff personnel department is given authority to make decisions about grievances. Final Company-union step Usually, the final step to be undertaken by the company and union is a discussion of the grievance between representatives of top management and top union officials. For management, it may be the President in important grievances, a Vice-president, or a highlevel Industrial Relations Executive but, for the union, it may be the President of the local union, the Union Executive Committee, or a representative of the International Union. It is difficult to secure an integration of interests at this high level. Self Assessment Questions 10. A ________________ is usually thought of in connection with a company that deals with a labour union. 11. The details of the grievance procedure vary from industry to industry and from trade union to trade union because of the variations in _______________. 12. An employees conception of his problem(s) may be quite ________________. 13.6 Arbitration In case, the grievance has not been settled by top management and top union leadership, three possibilities remain: 1. The union can temporarily or permanently drop the issue; 2. The union can call a strike if the contract permits; 3. The case may be submitted to an impartial arbitrator. Arbitration is usually handled by either a single individual or a panel of three, consisting of a representative of labour, one of management, and an impartial third person. An arbitrator is an outside third party who is brought in to settle a dispute, and he or she has the authority to make a decision. The arbitrator may be hired for a particular case or may be appointed as a permanent official for the industry or the company and the union. Generally, the person may be acceptable to both union and management. Salary is usually

paid by both, since it is important that no undue influence should have a bearing on his/her deliberations. Self Assessment Questions 13. A grievance should be dealt within the limits of _____________. 14. A _____________ is usually thought of in connection with a company that deals with a labour union. 15. A ___________ is an outside third party who is brought in to settle a dispute, and he or she has the authority to make a decision. 13.7 Emerging employee empowerment practices In todays organizations the focus is moving towards collaboration at the workplace. One of the most common instruments established in large organizations has be the Employee Suggestion Schemes (ESS). The ESS has proved effective in allowing employees a discrete method of voicing their opinions and suggestion for what can be better managed in the company. The management invites the employees suggestions on all/any issue that is a source of irritation for the employees including topics mentioned in 13.3 above are open for comment. What however is different is that the employee is encouraged to frame it as a suggestion and make a recommendation for a change, rather than the classic fault finding approach about what is going wrong or what is not working well. There are ESS forms/ templates that are left in common places or the employee can download from the company intranet and fill in the suggestion for change and drop it in boxes left common places like the coffee area or the lunch rooms etc.. These suggestions are then collated by the HR team and on a quarterly basis the Suggestion Committee meets to review all of the suggestions received. The Suggestion Committee includes line managers, HR representative and Finance and Facilities & Administration team members and senior management representative who can provide the necessary guidance for approval of the suggestions. The committee meets and discusses each suggestion in depth and evaluates the scope for implementation of the suggestion. The feasibility of implementing the suggestion and its other implications are evaluated closely and the suggestion accepted/set aside for future review/rejected. There are awards given away for excellent ideas that help the company optimise costs, productivity and improve quality, customer satisfaction etc.. The HR then communicates the suggestion committee report with all employees through a mail or during the employees Open-house sessions. The employees open house also called the all hands meeting is one more communication forum effectively used by the senior management of a company to connect with its employees. This usually is a quarterly or a half-yearly meeting to which all employees are invited. There is a brief sharing of the companys performance and the rest of the time devoted to answering any queries that employees might have on any issue that concerns the company and its employees. This is often followed with by a informal interactions over lunch/breakfast, where once again employees can speak to the senior executives and ask general questions. Often employees might not feel comfortable asking tough questions in

a open forum, hence there are drop-boxes provided where the employee can write and drop a question or a opinion that he wants the senior management to answer. The employee need not mention his name on the question slip. If the senior management is unable to answer a question then and there the same is reviewed subsequently by the senior management and a response shared with all employees over mail or posted on the notice board or on the intranet site for everyone to read. Some organizations also operate a email communication method where any employee who has a query or a observation can write his question to the mail alias and obtain a response. Usually the HR is the custodian of this mailid and they do the necessary review to suitably answer the questions and seek the managers inputs on a as needed basis. The concept of taskforce is also a common mechanism that organizations use to build cross-functional teams (with one representative each from each department) that will work on concerns that are commonly voiced. For example a leading medical transcription company wanted to review its incentive policy and in order to have a collaborative approach put together a team of employees one each from each of the departments including representatives from HR and Finance. The team was provided with all the historical information they would need and were given all of 6 weeks to work on the project and make a presentation to the senior management of the company. After the first presentation to them and having incorporated the feedback received the taskforce then presented the new scheme to the employees. Finally it was approved as a policy and made effective. Todays organizations therefore adopt a collaborative approach to employee issues. While the technology companies are more informal the traditional brick-and-motor companies have formal processes. Whatever the approach whether formal or informal employees are encouraged to open-up and ask questions and perform as contended employees. Activity 2 Speak to two or three friends/relatives who are working in companies. Ask them how they express dissatisfaction against an issue at work. What kind of acceptable formal/informal processes does the company have to take care of employee complaints/ grievances?

13.8 Summary The broadest interpretation of the term grievance would include any discontent or dissatisfaction that affects organizational performance. In the language of the labour management relations, a grievance is a complaint formally presented by the employee or employees to the management. The dispute or grievance constitutes a managerial problem and the scientific method is usually most productive in arriving at a satisfactory solution.

 A grievance is always a symbol of some malfunctioning or maladjustment and an able and skilful manager can always find out the real or submerged reasons for a grievance. The dispute must be handled by some member of management. In the solution of a problem, the greater burden rests on management. The clearest opportunity for settlement is found at the first stage, before the grievance has left the jurisdiction of the manager. The following directions help in handling a grievance: -Receive and define the nature of the dissatisfaction. -Get the facts. -Analyze and divide. -Apply the answer. -Follow up. A grievance should be dealt within the limits of the first line manager. The appellate authority should be made clear to the employee. The grievance should be dealt with speedily. In establishing a grievance procedure, if the grievance is against an instruction given by a superior in the interest of order and discipline, the instructions must be carried out first and then only employee can register his protest. In case, the grievance has not been settled by top management and top union leadership, the same may be submitted to an impartial arbitrator.

13.9 Caselet Kanika Datta: Handling management grievances Associations with board-level representation may sound radical but they arent such a bad idea. Workers and clerical staff have unions, the C-suite has the decision-making powers, but how should the general cadres of white-collar managerial employees express their grievances?

This issue has been starkly highlighted over the last two months when some pilots of, first, Jet Airways and, this week, of Air India struck work over pay and allowances, holding air travellers to ransom country-wide. Much opprobrium has been heaped on them, the conventional view being that pilots, who would broadly correspond to midlevel managers in airlines, are obscenely overpaid and have no right to protest besides displaying a gross sense of irresponsibility. In Jet Airways case, the point was made with all the maudlin histrionics that Chairman Naresh Goyal had perfected during an earlier strike by cabin crew last year. This time, it was cabin and ground crew who held a press conference to beseech their pilot colleagues to abandon the sick-out and return to work. Otherwise, they said, innocent employees, caught in the middle, would be in trouble if the airline lost revenue. The implication: the fat cats of the airline were ruining the livelihood of the toiling lesser mortals. State-owned Air India played out the drama differently but characteristically with Civil Aviation Minister Praful Patel, with an anxious eye to impending Assembly elections, telling the pilots to return or else even as compromises were feverishly being worked out backstage. The jury is still out on whether the pilots of Indias largest private and state-owned airlines have a legitimate case the fact that both managements backed down doesnt necessarily suggest the pilots were right. The bigger question, though, is this: if such a category of employees do think they have a valid grievance and if negotiations with senior management fail, how should they react? Is taking mass sick leave or simply not reporting to work a strike by any other name as the Mumbai high court ruled in Jets case a justified form of protest by people in positions of managerial responsibility, especially when their organisations are bleeding profusely? The short answer from senior managers is that managerial staff who dont agree with corporate policy are always free to leave or look elsewhere, a privilege blue-collar labour doesnt enjoy. This is a fair argument in the kind of open labour market that India has become. Indeed, pilots have done just this in the past, exiting with alacrity from stateowned airlines to private competitors when the industry was booming; their protests now are an indicator of the dire straits in which the airline business finds itself. It is telling that in the late eighties, union-style protests for higher pay by mid-level managers in the public sector proved signal failures precisely because of the lack of job mobility in those pre-liberalisation days. Around the same time, a strike by Indian Airlines pilots on pay and perks failed for precisely the same reason. One of the issues in the pilot-management clash in Jet Airways was over whether pilots had a right to form a union. They didnt, according to the airlines management, which provided it an excuse not to negotiate initially, that is; the stance changed later following the widespread havoc the strike created. Apparently, it was okay for the pilots

to have a welfare organisation but not a grievances forum. In an economy in which quality of talent counts for rather more than just manpower numbers, viewing the marketplace as an automatic grievance-correcting mechanism could boomerang on managements. Even if we assume that it is unseemly and undignified for managerial cadres to go on strike or haggle via employee unions, the truth is that middle managers remain uniquely disenfranchised. This is hardly a healthy situation. Forget about the dire predictions about robots replacing middle managers on the shopfloor. In most organisations, despite successive bouts of de-layering and right-sizing, middle management forms a critical element of the employee base if not always in numbers, certainly in the nature of the work it performs. In other words, it makes sense for CEOs to put in place more enlightened protest management mechanisms beyond the standard HR structures to act as (a) early warning systems and (b) create a dignified, non-combative negotiation forum for its managerial cadres. Associations with board-level representation may sound radical but they arent such a bad idea after all, labour union leaders in the West are represented on corporate board, so why not middle managers. Some Scandinavian countries have experimented with such structures. Management gurus, of course, will tell you that transparent decision-making is the ideal but experience has shown that most corporations pay lip service to the concept. IT companies, heavily dependent on talent as they move up the value chain, have cracked the system better than most. For an emerging economy like India, such mechanisms could bridge the management deficit that is inevitable in family- and government-owned corporations that currently make up the vanguard of Indias competitive advantage. Source : Business Standard, New Delhi October 1, 2009 13.10 Terminal Questions 1. What is Grievance? Why does it arise? What is its importance? 2. Bring out the importance of grievance handling. 3. Explain the grievance handling procedure. 4. Who is an arbitrator? What is his role in grievance handling? 13.11 Answers Answers to Self Assessment Questions 1. Organizational performance

2. Employee or employees to the management 3. National Commission of Labour 4. Root cause, 5. Promotions 6. Amenities 7. First stage 8. Keeping proper records, 9. Precedent within the department as well as the company. 10. Grievance machinery. 11. The size of organizations, trade union strength, the management philosophy, the company traditions, industrial practices and in the cost factor. 12. Biased. 13. The first line manager. 14. Grievance machinery. 15. Arbitrator. Answers to Terminal Questions: 1. Refer to 13.2 &13.3 2. Refer to 13.4 3. Refer to 13.5 4. Refer to 13.6 References: 1. Human Resources Management and Personnel Management by K Aswathappa 2. Managing Human Resources Productivity, Quality of Work Life, Profits by Wayne F. Cascio

Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-14-Groups and Group Dynamics

Unit-14-Groups and Group Dynamics Structure: 14.1 Introduction Objectives 14.2 Meaning and Characteristics of Group 14.3 The Types of Groups Formal Work Groups Informal Work Groups 14.4 Group Characteristics 14.5 Group Decision-making Advantages of Group Decision-making 14.6 Group Dynamics Principles of Group Dynamics 14.7 Summary 14.8. Caselet 14.9 Terminal Questions 14.10 Answers 14.1 Introduction

Man is social animal is something weve been repeating through the earlier units of this course. It will be difficult for us to imagine life as single nuclear entities. Imagine virtual classrooms and workplaces where people dont physically meet and without even know anything about each other but log-in into a video or an audio space and study / work independently. It would be boring and uninteresting, no doubt. The primitive man recognised the importance of group as a basic unit for his survival. In this unit we will learn about the groups, team and their roles in building successful organizations. The evolution of mankind is itself is an excellent example of the need for man to live in groups. The early man formed groups for hunting and protecting their species from wild beasts, and this soon proved beneficial when man turned away from his nomadic living and began to settle down and grow his own food. If we look through the history of each countrys it would be clear that, despite heavy odds, the culture of different countries is unique to the respective racial group. The characteristics and functions of group are surely worthy of study. This unit focuses on group dynamics and principles of group dynamics. Objectives: After studying this unit, you will be able to: Define Groups and their existence in an organization Identify the group characteristics and how they are different from teams Explain group dynamics 14.2 Meaning and Characteristics of Group A group refers to two or more persons, who interact for a common explicit purpose. A mere collection of people assembled at a place on the street, at a bus stand, or in railway station waiting room do not constitute a group because although people are physically gathered together, they do not jointly pursue a common objective or share a common feeling. Kimball Young defines a group as "two or more persons in a state of social interaction." T.M. Newcomb feels that a group consists of two or more persons who share norms about certain things with one another and whose social roles are closely interlocking. In the words of W.J.H. Sprott, a group is plurality of persons who interact with anyone else. Sherif and Sherif define group as a social unit which consists of a number of individuals who stand in definite status and role relationships to one another and which possesses a set of values or norms of its own regulating the behaviour of individual members, at least in matters of consequence to the group. Characteristics of a Group: The essential characteristics of a small group are:

1) Two or more people, usually formally established 2) who interact with one another, and 3) share some common goal or have a common purpose Therefore a group is usually formally established to achieve a common goal and they would meet to interact, talk, and do things together. They do not all have to meet at the same time, but in order to be a group member, a person must have occasional contact with one or more of the others. A good example of a group is a batch of students of a particular class. The groups can provide, with or without the conscious knowledge of their members, a means of fulfilling many of the needs of the individuals in them, such as: 1) belongingness needs through friendship between individuals who are part of the group; 2) need for recognition/power which may be fulfilled through the development of selfesteem and status as the result of membership in the group-through opportunity for individual contributions to group functioning; 3) Need for achievement being satisfied by motivation in the work that the group is focused on. 4) some functional needs such as aid in daily activities, help in adjustment to work routine, or even the avoidance of boredom can be met by the group; In the organizational context groups are the basic unit of an organization. Organizational members bring with them a variety of needs and because group formation can fulfil many of the needs mentioned above. Namely they provide: 1. An outlet for affiliation needs i.e. needs for friendship, support and love. 2. A means of developing, enhancing or confirming a sense of identity and maintaining self-esteem. Through group membership, a person can gain status, and thereby enhance his sense of self-esteem. 3. A means of establishing and testing reality through developing consensus among group members, uncertain parts of social environment can be made "real" and parts of social environment can be made "real" and "stable." Each person can validate his own perceptions and feelings best by checking them with others. 4. A means of increasing security and sense of power of coping with a common and powerful enemy or threat.

Groups serve a critical purpose for organizations by helping in achieving the organizations goals. This being a primary business objective for the organization the synergy in a group is important for the organization to retain. Here are few example of how organizations benefit from groups :

Enhanced performance aligning individual and group goals to achieve business results, increased efficiency, cost control measures Employee benefits fulfilling the human needs of belongingness, achievement, recognition, power, status etc. Quality decisions as many individuals are able to think differently and contribute towards making a quality decision in the best interest of work Organizational enhancements & Improved processes innovate together on improved ways to achieve the outputs in a more optimal method Global competitiveness people like to work with intelligent and challenging colleagues to build and nurtures world-class talent

Self Assessment Questions 1. ________________ feels that a group consists of two or more persons who share norms about certain things with one another and whose social roles are closely interlocking. 2. People who interact with one another and who share some common ideology are usually _____________________. 3. Through group membership, a person can gain status, and thereby enhance his sense of _____________________. 14.3 Types of Groups Groups are commonly classified on the basis of purpose or goal; extent of structuring; legal organisation or setting. Classification of group on a very broad basis is done by grouping people with similar skills or competencies together. What acts as a unifying force are a few fundamental characteristics that all groups have? 1. All groups have leaders; 2. All groups have followers; 3. They strive toward some goal or goals; 4. They have ideas about what it takes to achieve the goals; 5. They communicate amongst themselves and between group (both within and external to the organization) to ensure the that the goals are met;

6. Attempt to satisfy some form of member needs Its important to note that not all groups might be formally established in an organization. Given the social nature of the human being there is a strong tendency to form groups that fulfill the psychological need to an even greater extent. People like to belong to more than just one group since not all needs can be satisfied in a single group. Herein there are two distinct types of work groups, formal and informal. 14.3.1 Formal Work Groups In the previous chapters, we learnt that the organizing nature of organizations arranges work and people in a pattern so that they can perform the required activities. This Organizing bring together employees executing similar / interrelated tasks. The objective is the creation of operational relationship among persons that will best enable them to work together productively and with maximum professional as well as personal satisfaction. In other words, the end goal of the managers organizing responsibility is to create formal work groups that are necessary to achieve the organisations goals. Formal work groups together constitute the whole organizations. Therefore following are the characteristics of formal work groups: 1) they are sanctioned by some authority; 2) there is a prescribed division of labour 3) individuals are assigned specific responsibilities, 4) there are stable and consistent personal interactions, and 5) Provisions are made for rewarding the group membership. All formal work groups have a designated leader who supervises the work of the group members, monitors performance, provides feedback and training and is responsible for group performance to a higher authority in the organization. He holds both the responsibility as well as the authority to deliver the expectations from the group. How the leader goes about executing this depends on the leadership style of the person. It would span from a completely autocratic to a completely collaborative approach. No style can be discarded. As the nature of work, the amount of supervision and the skills required in the work assigned to the group differs the style would differ. Sometimes group members may or may not have a say in the objectives, rules of behaviour, task assignments, or performance standards of the group. Examples of formal work groups are: the professors in an academic department of a college, a surgical team in a hospital, and the two partners in a police patrol car. 14.3.2 Informal Work Groups

Informal work groups exist in formal as well as informal organizations.. Informal groups are loosely organized groups such as cricket teams and social clubs that arise apart from the formal organization to which members of the informal group may belong. They exist because the formal groups established within the organization often fail to satisfy all of the human needs to a sufficient degree. This could also be because the organizational structure rarely anticipates everything that must be done if the organization is to meet all of its objectives. From the perspective of the employee, informal work groups provide a source of satisfaction for security needs, social needs, and esteem needs. Informal Work Groups and Security Needs: Informal groups help to support their members and to protect them from outside pressure and authority. The group insulates the individual from a hostile work environment. For example there might be an informal group of south Indians in an organization. When people first enter an organization, they may feel considerable anxiety. Their surroundings are unfamiliar, the job is new, and the future is uncertain. New employees often seek out an existing group to join for help in the orientation process. Informal Work Groups and Social Needs: Many jobs restrict communication and interaction among workers. This makes it difficult for people to form work friendships and to satisfy their need for companionship. People want to feel they belong, and it is easy to feel such identification with a small social group in which relationships are based on shared interests and values. In most offices, social groups are an inevitable occurrence. Social group members enjoy each others company as the work is performed. They may also eat lunch as a group, take breaks at the same time, or share a social life outside the organization. Informal Work Groups and Esteem Needs: Beyond providing a sense of belonging, the informal group can also be a source of status or prestige for its membership. This is especially true if the group is well-known in the larger organization, if outsiders are anxious to join the group, and if acceptance into the group is difficult to achieve. To the extent that it provides an opportunity for assumption of leadership, the informal group is a source of egoistic need satisfaction. A good example is the corporate cricket team. Finally, the need for achievement can be partially satisfied by the informal group. Why Informal groups exist? As discussed in the paragraphs above the employees sense of security, belonging and esteem, make an employee happy and contended and this in turn enables the work to be done more effectively. Another advantage, not previously mentioned, is that the informal group can assist the manager in providing discipline. For instance, group members who notice that an individual is taking advantage of a situation in a way that could cause them all to lose a prized benefit may step in to correct the problem before the manager is even aware that it exists. In one office, the boss has for years successfully maintained a "no time clock" policy, in which employees are allowed to work an eight-hour day as per their convenience. If someone comes in half an hour late, takes a long lunch, or leaves early one day, it is presumed the person will make up the time as he or she sees fit. In

another office working from home is provided as a policy. This freedom actually helps the employee take care of personal alongside professional needs. Another reason it works is because there is a great deal of peer pressure (informal group norms) exerted on any individual who appears to be taking advantage of the policy. Disadvantages: The disadvantages of informal work groups can interfere with organizational effectiveness to the same degree that the advantages can contribute to it. Sometimes the goals of the group could run contrary to those of the established organization. This problem is especially evident whenever an attempt is made to implement planned change. Often the protection and social relationships provided by informal groups are threatened by new plans that disrupt order and stability. Organizations could create new procedures and standards of production, and interrupt the pattern of personal interactions on the job. The existence of informal groups can block worker co-operation with planned change by encouraging outright resistance, foot-dragging, or "malicious compliance." Since the informal group emerges whenever the formal group does not sufficiently satisfy on-the-job needs, it could be either beneficial or detrimental depending on the degree to which employees agree with the policies of management. Managers should always be alert to the formation of informal groups because they are usually an indication that employee needs are not being met through the established structure. Although the manager should not try to object to informal groups, he or she should try to ascertain impact on the organization. The best approach is to be reasonable with employees and to consider their needs. Informal groups will emerge even where human relations are sound, but their presence will not be as disruptive as when they exist primarily in response to management insensitivity. Hence the way to eliminate the negative consequences of informal groups is to make the formal group more effective in meeting both the needs of workers and the goals of the organization. The informal organization has its own goals, objectives, and authority patterns. The design and actions of the informal organization could be either supportive or detrimental to the goals of the formal organization. Since the informal organization exists to provide psychological security, rewards, protection and preservation of other values for its members, formal and informal organization perceive benefits from working in a unified way with formal structure. Self Assessment Questions 4. The end goal of the managers organizing responsibility is to create formal work groups that are necessary to achieve the ______________. 5. ________________ exist because the formal groups established within the organization frequently fail to satisfy human needs to a sufficient degree, and also because the organizational structure rarely anticipates everything that must be done if the organization is to meet all of its objectives.

6. Informal work groups increase the employees ___________________ and often enable the work to be done more effectively. 14.4 Stages of group formation Group behaviour is best understood by studying the lifecycle of a group through the various stages of its formation. These are popularly summarised as : 1. Forming this is the initial stage of group formation. It is characterised by uncertainty and confusion. There is usually a lack of clarity on the purpose, structure and task that the group needs to execute. This stage is also characterised by leadership challenges, as the leader tries to establish stability and try and bring the group together under a common goal. 2. Storming this stage as the name denotes is when the group is in a state of conflict and confrontation. The group members are getting to know each other and there are personal as well as professional assessment that happens. This usually is a emotionally charged phase as the leader establishes his/her place and the group assesses the leader as well as other members. The emotions are paramount as group members are looking to satisfy their needs are uncertain that the needs can be met. There is also conflict on the task and purpose that group members might interpret/perceive differently. 3. Norming this is the stage when the group finally settles down after the period of uncertainty. The group is in a state of cooperation and collaboration. There is clarity and focus on what the group needs to achieve and roles (both formal and informal) are clear. There is a clear we feeling as the purpose, task, leadership is a lot more clear. The leader is setting the expectation on the task and the time. Open communication is the key to this phase. 4. Performing this is the stage where the group is finally well on its way to executing the task and is fully functional. Roles and responsibilities are in-place and the focus of the group is on achievement. Relationship needs within the groups have been positively established. Both the formal and the informal leaders in the group are fully functional. 5. Adjourning this is representative of the end of the group, which the normal work groups never reach. This is common in case of project teams and task forces. Again there is a emotional atmosphere where the group members feel the stress of disbanding. The stage will start all over again when a new team is formed. Whenever a new member is introduced in the team there is brief phase when the group goes through the steps 1-4. It might not be as complex as the formation of a whole new team but the steps that the group undergoes / experiences remain the same. Activity 1: Think of a recent group you were part of. Relate the above 5 phases of group

formation with your experience. What stage you find easier to relate with? Group Norms: Each group characteristically establishes group behaviour standards or norms, beliefs, traditions and attitudes to which it expects its members to conform. They are prescriptions for acceptable behaviour determined by a group, institution, or society. In the opinion of Argyle, "Group norms are rules or guidelines of accepted behaviour which are established by a group and used to monitor the behaviour of its members." In a very structured, formalised group, these norms may become institutionalised into laws or operation laws. In other words, norm is an agreement among group membership as to how members in the group should behave. The more an individual complies with norms, the more one is accepting the group standards of behaviour. These standards are designed to achieve the goals of the group and to preserve and protect its value. i) Group Cohesiveness: Cohesiveness is the degree of attraction that the group has for each of its members. It is exemplified by such attitudes as loyalty to the group, a feeling of responsibility for group efforts, defending against outside attractions, friendliness, and congeniality. Cohesive work groups are powerful instruments that can be used for or against the formal organization. ii) Member Satisfaction: The end result of group membership is satisfaction of members. In a survey of 37 studies, Heslin and Dumply have shown specific relationship between work group member satisfaction and i) perceived freedom to participate, ii) perceived goal attainment and iii) status consensus. i) Perceived Freedom to Participate: A members perception of freedom to participate influences need satisfaction. Individuals who perceived themselves as active participators reported to be more satisfied while those who perceive their freedom to participate to be insignificant typically were least satisfied members in a work group. ii) Perceived Goal Attainment: A group members perception at progress towards the achievement of desired goals is an important factor which is related to member satisfaction. Groups which progressed towards goals attainment showed higher levels of member satisfaction while members of groups not adequately progressing towards the attainment of group goals showed a lower satisfaction level. iii) Status Consensus: It is an agreement about the relative status of all group members. When the degree of status consensus within the group is low, member satisfaction tends to be low. iii) Social Loafing: a recognised dysfunctional behaviour commonly associated with groups is social loafing. This is characterised by one or more team members reducing their efforts and performance level when in the group. The individual/s are not wanting to do more than the perception of effort being given by others. They ride on the success of

the effort of the rest of the group members. This is more common in large teams where individual contributions are more difficult to identify. Smaller size teams are the suggested way to deal with this. Self Assessment Questions 7. __________________ insulate the individual from a hostile work environment. 8. _______________ is based upon reason and seeking and processing information, and on factual discussion. 9. Persons interacting with a ______________ are protective, dogmatic, evaluative and righteous. 10. ________________ is the degree of attraction that the group has for each of its members. 14.5 Group Decision-making Most decisions in organizations are made by groups rather than individuals. While it might not be a formally declared decision making activity, group members commonly provide input to any major decision. In general, decision-making by groups has proved superior to individual decision-making. Given the nature of groups, techniques like brainstorming, critiquing, etc. prove to be an effective approach to decision making. However, many talented and imaginative individuals do not require group discussion to make an effective decision. Advantages of Group Decision-making Firstly, groups allow for a greater variety of alternatives and solutions to be discussed / considered. Assume that your employer is forced to relocate because your present building is to be demolished. You would want to examine a wide variety of possibilities. If several knowledgeable people were brought into the decision-making process, you would uncover a number of worthwhile possibilities. Secondly, group decision-making is effective in gaining acceptance and commitment. If a group in office decides to go bowling to a particular bowling lounge and this decision was made by just two people. Upon reaching the venue if it turned out to be crowded with waiting time in long queues. There would be a lot of bickering by the team members on the wrong choice of lounge. Had more of them been involved in the decision regarding the lounge to go to, there would have been far less discontent expressed for waiting in long queues. People tend to accept a decision when they have contributed to its making.

Potential Problems with Group Decisions: Group decisions take longer than individual decisions and sometimes lead to a compromise decision of little value. For example, in deciding where to relocate an office, one faction might endorse a move to an industrial park in suburbs. Another faction might urge that the company stay downtown. A compromise decision might be to stay on the edge of town which would be a poor decision in terms of attracting clerical employees. Grouping might be classified as a potential problem with group decision-making. So might individual dominance the tendency for one person in a group to dominate over the other members. In the process, the potential benefits of input from the other members are negated. The person of high organizational rank often dominates because lower ranking group members consider it politically unwise to criticize that person. If you are the head of a group, or a high-status participant, four things can be done to circumvent the problem of individual dominance. Refrain from announcing your preferred solution while the group is working through the problem. Listen carefully to suggestions from every group member. Encourage every group member to participate. Demonstrate concern for achieving a high-quality solution.

Self Assessment Questions

11. Even if a group of people do not formally sit together to thrash out a decision, 12. Group decision-making is helpful in gaining _____________ and ______________. 13. ________________ take longer than individual decisions and sometimes lead to a compromise decision of little value. 14.6 Group Dynamics Group dynamics is concerned with the interactions and forces between group members in a social situation. When the concept is applied to the study of organizational behaviour, the focus is on the dynamics of members of formal or informal groups in the organization, i.e., it is concerned with gaining knowledge of groups, how they develop, and their effect on individual members and the organisations in which they function. Thomas Harrell has defined group dynamics as an expression that describes the situation in which people acting together in a group accomplish certain thing, either positively or

negatively in a way that cannot be explained adequately in terms of the individual acting separately. Dorwin Cartwright has stressed the importance of group dynamics particularly in the context of bringing about a change. According to him, the problems of 20th century are essentially the problems of human relations. The word dynamics, is derived from a Greek word which means force. Group dynamics refers to the forces operating in groups. Investigation of group dynamics consists of a study of these forces such as what gives rise to them, what conditions modified them, what consequences they have, etc. The practical application of group dynamics consists of the utilization of knowledge about these forces for the achievement of some purpose. Group dynamics, is not particularly novel. It goes back at least to the outstanding work of men like Simmel, Freud, and Cooley. Study of team work and groups continue to be a subject on continued research. Several countries are carrying out substantial programmes of research designed to reveal the nature of groups and their functioning. The works of Kurt Lewin is significant. Lewin became convinced of societys urgent need for a scientific approach to the understanding of the dynamics of groups. In 1945, he established the Research Centre for Group Dynamics to meet this need. The Centre has been devoting its efforts to improving the scientific understanding of groups through laboratory experiments, field studies, and the use of action research. Various factors in the work environment affect group behaviour. The two broad aspects of the environment which affect group behaviour are: a) the physical environment, e.g., plant, equipment, layout, and b) the psycho-social environment, e.g., worker needs reward systems, work group structure, supervisory practices, work group norms, worker roles and attitudes. 14.6.1 Principles of Group Dynamics A group can work effectively only if its members remain committed to certain desired norms, which Cartwright has termed principles of group dynamics. These principles are: i) If a group is to be used effectively as a medium of change, those who are to be changed and those who are to wield an influence for change must have a strong sense of belonging to the same group, i.e., the barriers between the leaders and the led should be broken down. ii) The more attractive a group is to its members, the greater the influence it would exercise on its members. If attitudes, values or behaviour, are relevant as a basis of attraction to the group, the group will wield a tremendous influence over them.

iii) The higher the prestige of a group member in the eyes of other members, the greater the influence he will exercise on them. iv) Successful efforts to change individuals or sub-parts of a group would result in making them conform to the norms of the group. v) Strong pressure for changes in a group can be established by creating a shared perception by members for the need for change, thus making the source of pressure for change lie within the group itself. vi) Information relating to the need for change, plans for change, and the consequence of change must be shared by all the members of a group. vii) Changes in one part of a group produce a strain in other related parts which can be reduced only by eliminating the change or by bringing about readjustments in the related parts. Activity 2 Think of a group you belong to either at work or as a community/with a particular group of friends. Carry out the following activities: 1. List the names of all the group members 2. Briefly outline some basic information about them eg. state, age, collage passed out from, companies worked in, marital status, children information. 3. Why do you think each of them is in the group? 4. What keeps youll together? 5. Are there sub-groups within the large group? 6. Why is it so, what is the common thread within the sub-group? Reflect on what you have written. Groups represent an important dynamic in the study and application of organizational behaviour. Research indicates the following four ways to enhance team effectiveness; (1) Team building organizations need to understand that teams need time and training so they can develop into productive and cohesive units. There is a learning curve that every team must go through. A sense of ownership and partnership and empowerment is what finally makes the group effective. Quality team building programs have proved very effective method to enhance team effectiveness. Here again organizations need to be careful that the program is customised to the teams specific requirement, the corporate

culture and values and forces the group members to stretch outside their comfort zone. (2) Collaboration leveraging the capability of each individual in the group to effectively channelize it towards the groups goals, is something that organizations do to enhance group effectiveness. (3) Group Leadership the critical role of the leader in selecting the right talent and then using the right tactic to motivate them to reach the group goal is important. Team leaders need to engage in many different kinds of behaviours in order to foster team effectiveness. Positive leaders nurture positive teams has been proven by research. (4) Cultural/Global Issues the emerging workplace and its global teams pose different challenges for group effectiveness. Guidelines to such teams should include tips on adapting to each culture and respecting local laws. The study of teams and performance remains an important area of research and is still the most effective way to achieving organizational results. 14.7 Summary A group refers to two or more persons who interact for a common explicit purpose. Kimball Young defines a group as "two or more persons in a state of social interaction." The essential characteristics of a small group are: 1) two or more people, 2) who interact with one another, 3) share some common ideology, and 4) See themselves as a group. Groups may be classified in many different ways: the basis for differentiation may be purpose or goal; extent of structuring; legal organisation or setting. The end goal of the managers organizing responsibility is to create formal work groups that are necessary to achieve the organisations goals. Membership in the group is a selective process in which individuals are granted membership primarily on the basis of commonality of interests and willingness to be cooperative and to conform to the group norms. Cohesiveness is the degree of attraction that the group has for each of its members. Group dynamics is concerned with the interactions and forces between group members in a social situation.

14.8 Caselet The Geese Story: Team Building & Leadership Lessons from Nature By: Shamim Rafeek Yesterday evening I was enjoying the weather (finally it was raining for a moment in the mid of summer) from my backyard and I could hear a funny sound coming from the big pond behind my house compound wall. So like any curious person I rushed out to see what the sound was. Sure enough there was a family of Geese trying to cross the pond. It was so beautiful to see the Geese in the evening sunshine and I have never seen them so close. This group of Geese reminded me the wonderful story which I use for training to learn the basics of Team building & Leadership. Well, is there any link between the Geese & Teambuilding? We know Team building skills are critical for our effectiveness as a Manager or Entrepreneur. People in every workplace talk about building the team, working as a team, but few understand how to create the experience of team work or how to develop an effective team. Belonging to a team, in the broadest sense, is a result of feeling part of something larger than you. We do have some lessons from Geese which provide a perfect example of the importance of team work and how it can have a profound and powerful effect on any form of personal or business endeavor. Geese take full advantage of the power of their group, sharing leadership responsibilities and flying in a structure that enables the flock to leverage the strength and power of its individual members, sometimes numbering in to thousands. It is said that the Geese can make an annual round trip journey of more than 5,000 miles at a speed of50mphormore! I am sure the Team building & Leadership lessons from the geese can be helpful in our workplaces. Lessons from Geese was originally transcribed from a speech given by Angeles Arrien and was based on the work of Milton Olson. We can use the following five lessons in our personal and business life and it will help us to foster and encourage a level of passion and energy in ourselves, as well as those who are our friends, associates or team members. Lesson 1 The Importance of Achieving Goals As each goose flaps its wings it createsUPLIFT" for the birds that follow. By flying in a V formation the whole flock adds 71 percent extra to the flying range. Outcome: When we have a sense of community and focus, we create trust and can help each other to achieve our goals.

Lesson 2 The Importance of Team Work When a goose falls out of formation it suddenly feels the drag and resistance of flying alone. It quickly moves back to take advantage of the lifting power of the birds in front. Outcome : If we had as much sense as geese we would stay in formation with those headed where we want to go. We are willing to accept their help and give our help to others. Lesson 3 The Importance of Sharing When a goose tires of flying up front it drops back into formation and another goose flies to the point position. Outcome: It pays to take turns doing the hard tasks. We should respect and protect each others unique arrangement of skills, capabilities, talents and resources. Lesson 4 The Importance of Empathy and Understanding When a goose gets sick, two geese drop out of formation and follow it down to the ground to help and protect it. Outcome: If we have as much sense as geese we will stand by each other. in difficult times, as well as when wear strong Lesson 5 The Importance of Encouragement Geese flying in formation HONK to encourage those up front to keep up with their speed. Outcome : We need to make sure our honking is encouraging. In groups and teams where there is encouragement, productivity is much greater. Individual empowerment results from quality honking. Im quite sure our fine feathered friends, the geese dont spend a millisecond thinking about the Team building & Leadership lessons they provide. They teach us that we can accomplish more when we work together as a team. Individual talent, as impressive as it may be, will only be multiplied when that person joins forces with others. People who share a common vision, mission, and purpose, like the geese, attain that goal faster and more efficiently when they work together. Just as the geese generate thrust as they travel together, our teams thrust will allow us to accomplish more when we stay together. The geese also teach us that staying in formation gives a bonding and makes it better than going alone. Unity in the workplace is defined not by a pat on the back when

we succeed, but in lifting up a team members hand when he is down. A unified team wants everyone to succeed. Finally, the geese teach us that someone has to take the lead and someone has to honk from behind. Each team member brings different skills and abilities to accomplish the goals. Sometimes, we may be the person to bring the team to victory. At times, someone else may have the right talent and skills to accomplish the mission, and therefore we must fly information from the back; honking our support with enthusiasm. So, the next time you see geese flying above, take a moment to remind yourself just how smart they are, and what we can learn from them. The geese teach us to work as a team, work together in unity, share the hard jobs when it comes to leading, and honk from behind to encourage others. What does your honk say about you? Source: http://shamimrafeek.blogspot.com/2009/03/geese-story-team-buildingleadership.html

14.9 Terminal Questions 1. What is a Group? What are its basic characteristics? 2. Distinguish between formal and informal groups. 3. Enumerate the advantages and disadvantages of an informal group. 4. What are the major principles on which group dynamics function?

14.10 Answers

Answers to Self Assessment Questions

1. Newcomb, 2. Attracted to one another. 3. Self-esteem

4. Organisations goals 5. Informal Groups 6. Sense of security and belonging

7. Informal groups 8. The adult ego state 9. Parent ego, 10. Cohesiveness 11. Several people usually provide input to any major decision 12. Acceptance, commitment 13. Group decisions Answers to Terminal Questions: 1. Refer to 14.2 2. Refer to 14.4 3. Refer to 14.4.2 4. Refer to 14.7 References: 1. Organizational Behavior by Fred Luthans 2. Organizational Behavior by Steven L McShane, Mary A V Glinow and Radha R Sharma. Copyright 2009 SMU Powered by Sikkim Manipal University .

MB0043-Unit-15-Leadership
Unit-15-Leadership Structure: 15.1 Introduction Objectives 15.2 Concept of Leadership 15.3 Theories of Leadership 15.4 Classification of Leadership 15.5 Functions of a Leader 15.6 Managerial Grid 15.7 Differences between Managers and Leaders 15.8 Summary 15.9 Caselet 15.10 Terminal Questions 15.11 Answers

15.1 Introduction There is no end to the number of articles in magazines, on the web, in the newspaper, and one cant even being to count the books written on the subject of leaders and leadership. And when you look around, there are ample examples of different kinds of leaders. Some are outspoken and dynamic; some are quiet and have a charisma. In this unit the focus is on leadership, the theories that supports it, types of leaders, qualities and functions. A good leader is someone we popularly describe as possessing great ability, creativity, initiative and confidence. He naturally gets co-operation, willingness of his followers and builds employees morale and motivation effortlessly. It evident that leaders are of a different breed and class .They are ordinary people, who can rise above the rest and do extra-ordinary things. Objectives: After studying this unit, you will be able to: Define leadership Discuss the theoretical framework for leadership Distinguish between different types of leaders Evaluate how Managers are different from Leaders 15.2 Concept of Leadership A common definition of Leadership is "the relationship in which one person influences others to work together willingly on related tasks to attain that level which he desires." So, if there is no follower, there is no leader. Haiman defined Leadership as "the process by which an executive or a manager imaginatively directs, guides and influences the work of others in choosing and attaining specified goals by mediation between the individual and organisation in such a manner that both will obtain the maximum satisfaction. A good leader therefore. 1. Has foresight. 2. Has influence. 3. Communicates effectively 4. Naturally commands attention and respect.

5. Ultimate responsibility for achieving task objectives. 6. Commands trust and confidence. 7. Has concern regarding the needs of his group. 8. Is sensitive to the task, people and environment. 9. Builds and manages effective teams 10. Role models team player attributes 11. Has the ability to take decisions with vision Basically a leader should have the skills of inspiring confidence in his followers and to manage differences. Sometimes he should be a good follower of group decisions. A successful leader is one who establishes the right balance between focus on organizational goals as well as the people goals. According to Douglas McGregor, the major variables of leadership are: a) The characteristics of the leader. b) The attitudes, needs and personal characteristics of followers. c) The culture of the organisation d) The environment Socio-economic political set up both Micro and Macro. Self Assessment Questions 1. A leader is concerned both with the task / goals of the organization, as well as the _________________. 2. A leader should have the skills of _________________ in his followers and to manage differences. 3. Some managers are self-oriented, some of them are people-oriented and some of them are __________________. 15.3 Theories of Leadership Initial research in leadership theories emphasised more on the personal attributes and competencies of leaders and followers, with the popular belief that leaders are born and not made. Subsequently theories were put forth that looked at other influencers such as

situational factors and skills. While many different leadership theories have emerged, the more popular theories are the following: 1. Great Man Theories: Great Man theories assume that great leaders are born not made. These theories often showcase successful leaders as people with inherent qualities as heroic, mythical, and destined to rise to leadership. The term Great Man was used because, at the time, leader was thought of only as a male. The focus was on military leadership. 2. Trait Theories: Similar to Great Man theories, the trait theory focuses on identifying a set of characteristics and assumes that people inherit certain qualities and traits that make them better suited to be leaders. Trait theories often identify specific personality or behavioural characteristics that leaders possessed. Effective leaders normally possessed competencies such as emotional intelligence, Integrity, commitment, motivation, Selfconfidence, Intelligence and Knowledge of the business. But if particular traits are key features of leadership, how do we explain people who possess those qualities but are not leaders? 3. Behavioural Theories: Behavioural theories of leadership are based premise that great leaders can be made, not necessarily born. Rooted in concepts of behaviourism, these leadership theories focuses on the actions and behaviour of leaders, not on mental qualities or internal states. Research work done by scholars from Ohio, University of Michigan and Harvard University, distilled two categories of leadership behaviour; people-oriented behaviour focused more the people management aspect, showing trust in and respect for subordinates, genuine concern for their needs, desire for their welfare; and task-oriented leadership style-focused more on the task completion, on the structure for work, clarifying duties for the subordinates, ensuring compliance, and push them to reach their performance capacity. Leaders can therefore be of many different combinations, high or low on one or the other style of low on both or high on both. Per this theory, people can learn to become leaders and can be trained. 4. Situational Leadership Model : Developed by Paul Hersey and Ken Blanchard the Situational Leadership Model suggests that effective of leaders can assess a situation and change style with the (1) readiness of followers ability/willingness of employees to execute a specific task, (2) Ability the extent to which the employees have the necessary skill and knowledge to perform the task without the leaders guidance, and (3) Willingness refers to the followers motivation and commitment to perform the assigned task. The situational leadership model identifies 4 leadership styles of telling, selling, participating and delegating, each of which is appropriate under different circumstances of the situation. 5. Transformational Perspective of Leadership: The term transformational leadership was first coined by J.V. Downton in 1973. James MacGregor Burns (1978) first introduced the concepts of transformational and transactional leadership in his treatment of political leadership, but this term is now used in organizational psychology as well. According to Burns, the difference between transformational and transactional leadership

is what leaders and followers offer one another. This is a leadership perspective that explains how leaders change teams or organizations by creating, communicating and modelling a vision for the organization or work unit, and inspiring employees to strive for that vision. This is best understood then compared with the transactional leadership, which is defined as leadership that helps organization achieve their current objectives more efficiently such as linking job performance to valued rewards and ensuring that employees have the resources needed to get the job done. Transformational leaders are change agents who energize and direct employees to a new set of corporate values and behaviours. These leaders steer the organization onto a better course of action. It si best suited in organizations that need significant alignment with the external environment. Key elements of transformational leadership include (1) Creating a Strategic Vision reflect a future for the company or work unit that is accepted and valued by organizational members, creating a higher purpose/super-ordinate goal that energizes and unifies employees, (2) Communicating the Vision elevating the importance of visionary goals to employees, by bring it to life through symbol, metaphors, stories and other vehicles that go beyond plain language and where the leader walks the talk and model the visionary behaviour that is expected from the employees, and (3) Building Commitment to the Vision such leaders create in employees a can do attitude by including them in the vision process. Their persistence and consistency reflects an image of honesty, trust and integrity. 6. Charismatic Leadership points out that charisma is a personal trait. Often it is confused and interpreted as the highest form of transformational leadership, but increasing research supports a different thought. Charismatic or heroic leaders easily build allegiance in followers but do not necessarily change the organization. (1) Inspirational motivation: the degree to which the leader articulates a vision that is appealing and inspiring to followers. Leaders with inspirational motivation challenge followers with high standards, communicate optimism about future goals, and provide meaning for the task at hand. (2) Intellectual stimulation: The degree, to which the leader challenges assumptions, takes risks and solicits followers ideas. Leaders with this trait stimulate and encourage creativity in their followers. (3) Individualized consideration or Individualized attention: The degree to which the leader attends to each followers needs, acts as a mentor or coach to the follower, and listens to the followers concerns and needs. This also encompasses the need to respect and celebrate the individual contribution that each follower can make to the team (It is the diversity of the team that gives it its true strength). Transformational leadership and charismatic leadership theories have a lot in common and complement each other in important ways. Another research however suggests that charismatic leaders create dependent followers, whereas transformational leaders support follower empowerment, which reduces leader dependency. Self Assessment Questions 4. Early leadership theories focused on what __________ distinguished between leaders and followers

5. _______________ assume that the capacity for leadership is inherent that great leaders are born not made. 6. ____________________Model suggests that effective of leaders to vary their style with the (1) readiness of followers, (2) Ability, and (3) Willingness. 7. ________________________________are change agents who energize and direct employees to a new set of corporate values and behaviours. 8. Research suggests that charismatic leaders create ______________ followers, whereas transformational leaders support follower _____________. 15.4 Classification of Leadership According to the Personnel Research Board of Ohio University leaders were classified as follows: a) THE BUREAUCRAT who sticks to routine, pleases his superiors, avoids subordinates and he is contemptuous to them. b) THE AUTOCRAT He is directive and expects obedience from followers. (Do as I say Not, as I do) Hence, subordinates do not like him. c) THE DIPLOMAT He is an opportunist who exploits subordinates. Hence, he is not trusted by his subordinates. (He is interested Not in the Flock but in the Fleece) d) THE EXPERT He is an over-specialised man. He is self-centred and interested in his own narrow field. He treats his subordinates only as fellow- workers without any feelings. He always finds himself along. e) THE QUARTER BACK He identifies himself with his subordinates even at the risk of incurring displeasure of his superiors and subordinates at times. However, he is generally liked by his followers. Another classification given by Chris Argyris is as follows: a) The Directive type b) The Permissive type c) The participative type There are other types such as Positive and Negative. Positive is Power THROUGH the people and Negative is Power OVER the people.

In 1939, a group of researchers led by psychologist Kurt Lewin set out to identify different styles of leadership. While further research has identified more specific types of leadership, this study was useful in establishing three major leadership styles. Authoritarian Leadership (Autocratic) Authoritarian leaders are those who provide clear expectations of what needs to be done, when it should be done, and how it should be done. Authoritarian leaders usually make decisions independently with little or no input from the rest of the group. Very evidently decision-making was less creative under authoritarian leadership. Lewin also found that it is more difficult to move from an authoritarian style to a democratic style than vice versa. The leader was viewed as controlling, bossy, and dictatorial. Authoritarian leadership is best applied to situations where there is little time for group decision-making or where the leader is the most knowledgeable member of the group. Participative Leadership (Democratic) Lewins study found that participative (democratic) leadership is generally the most effective leadership style. Democratic leaders offer guidance to group members, but they also participate in the group and allow input from other group members. While it is possible that this style productivity is lower than the that in the authoritarian group, but the contributions were of a much higher quality. This could also be more time taking. Participative leaders encourage group members to participate, but retain the final say over the decision-making process. Group members feel engaged in the process and are more motivated and creative. Delegative (Laissez-Fair) Delegative leaders offer little or no guidance to group members and leave decisionmaking entirely to group members. While this style can be effective in situations where group members are highly qualified in an area of expertise, it often leads to poorly defined roles and a lack of motivation. Transformational Leader Transformational leaders offer a purpose that transcends short-term goals and focuses on higher order intrinsic needs (as discussed above). This results in followers identifying with the needs of the leader. The four dimensions of transformational leadership are: Charismatic Leader Charismatic Leader is the degree to which the leader behaves in admirable ways that cause followers to identify with the leader. Charismatic leaders display convictions, take stands and appeal to followers on an emotional level. This is about the leader having a

clear set of values and demonstrating them in every action, providing a role model for their followers. Activity 1 Reflect on your experiences so far. For the 5 types of leaders that have been discussed by Kurt Lewin, find one example of a person you can relate with the style. Briefly point out why you chose this person for this style. Discuss with a friend or a colleague and see if they agree or disagree with you. Self Assessment Questions Match the following 9. The Bureaucrat a) Who sticks to routine, pleases his superiors, avoids subordinates and he is contemptuous to them. 10. The Autocrat b) He is an opportunist who exploits subordinates. Hence, he is not trusted by his subordinates. (He is interested Not in the Flock but in the Fleece) 11. The Diplomat c) He is directive and expects obedience from followers. (Do as I say Not, as I do) Hence, subordinates do not like him 12. The Expert d) He identifies himself with his subordinates even at the risk of incurring displeasure of his superiors and subordinates at times. However, he is generally liked by his followers 13. The Quarter Back e) He is an over-specialised man. He is self-centred and interested in his own narrow field. He treats his subordinates only as fellow- workers without any feelings. He always finds himself along. 15.5 Functions of a Leader A leader has the following functions to perform: a) Maintenance of employee membership: i.e. to be close to the group. b) Organizational goals attainment: To achieve the targets set. c) Positive team interaction: To provide the climate for effective interaction i.e. Less of distrust amongst followers.

PETER DRUCKER says, "An effective leader is one who can make ordinary people do extraordinary things, make common people do uncommon things. Leadership is a lifting of a mans sights to a higher vision, the raising of a mans standard to a higher performance, the building of a mans performance beyond its normal limitations." KILLIAN stated the functions of a leader in the following way: a) To render a service (by multiplying the contribution of every individual who is its beneficiary) b) To take decision (calculated) c) To elicit response d) To achieve results e) To maintain discipline, to have a standard of performance f) To have himself a higher standard of discipline and performance also to take initiative, to bring in team (group) spirit / activity. Qualities of a Leader: VISCOUNT SLIM has enumerated the following qualities. a) Courage b) Will-power c) Judgement d) Flexibility e) Knowledge f) Integrity Ten Commandments of Leadership a) Physical and nervous energy b) Enthusiasm c) Sense of Purpose/Direction d) Technical Mastery

e) Friendliness and affection f) Decision- making g) Integrity h) Intelligence i) Faith j) Effective Communication both oral & written. Leadership also depends on the environment both Macro and Micro. All the above may be shown in the following diagram.

Figure 15.1: Framework for Situational Leadership Situational Leadership is described as having four components: a) The Task Attributes b) The Leaders personal attributes c) The Micro organizational attributes d) The Macro external cultural Attributes According to Douglas McGregor, Theory X and Theory Y are relevant. We covered this in depth in Unit 8. Leadership Styles: The opinions, attitudes and assumptions people make regarding the accomplishment of goals through others may be considered to reflect a general leadership philosophy. Leadership behaviour changes from individual to individual on the following parameters viz., philosophy, planning and goal setting, implementation, evaluation etc.

Robert Tannenbaum and Warren H.Schmidt in HBR classics discussed the issue whether a manager (leader) should be democratic or autocratic or something in between? They have exhibited it on a continuum as shown below:

Figure 15.2: The Leadership Continuum Source:http://www.thebeechconsultancy.co.uk/upload/files/18/Tannenbaum_and_Schmi dt.pdf The Leadership Continuum Model of Tannebaum and Schmidt (1973) suggest that autocratic leaders tend to make their own decisions and give instructions, as opposed to a democratic leader (laissez-faire manager) gives subordinates a greater degree of delegation in decision-making. In 1938, Lewin and Lippitt proposed classifications of leaders based on how much involvement leaders placed into task and relationship needs. This range of leadership behaviours was expressed along a continuum by Tannebaum & Schmidt in 1973, ranging from leader-centred (task) to team member-centred (relationship). To appropriate style depends on: i) Forces in the manager: Belief in team member participation and trust in capabilities of members. ii) Forces in the subordinate: Subordinates who are independent, tolerant of ambiguity, competent, identify with organizational goals. iii) Forces in the situation: Team has the knowledge, team commits to organizational values and traditions, and teams work effectively. iv) Time pressure: Need for immediate decision under time pressure eliminates participation. Advantages of the Leadership Continuum Model include: i) Gives managers a range of choices for involvement.

ii) Presents criteria for involvement and delegation. iii) Focuses decision maker on relevant criteria (e.g., forces & time). iv) Emphasizes employee development and empowerment. v) Is heuristic encourages research to see how effective delegation may be under the model. Some limitations of the Leadership Continuum theory: i) Involves only the initial step of assigning a task lacks attention to execution processes that is equally important for quality and timely completion. ii) Assumes the manager has maturity and knowledge to determine disposition of self as well as team. iii) Attention to external factors missing. iv) Simplifies the leadership challenges, more theoretical, not based on reality.

Self Assessment Questions

14. If there is no ____________ there is no leader. 15. Basically a leader should have the skills of ___________ in his followers and to manage differences. 16. _____________ assume that the capacity for leadership is inherent that great leaders are born, not made. 17. ____________ assumes that people inherit certain qualities and traits that make them better suited to leadership. 18. _____________ focus on particular variables related to the environment that might determine which particular style of leadership is best suited for the situation. 15.6 Managerial Grid Robert Blake, an eminent behavioural scientist differentiated the leaders on the basis of their concern to people and concern to task. He along with Jane Mouton conducted study on 5000 managers. He puts it on a grid called Managerial Grid as follows:

Figure 15.3: Managerial Grid: Blake and Mouton Source: Debra L Nelson and James C Quick, Organizational Behaviour Pg 397 The Managerial Grid Model (1964) is a behavioural leadership model developed by Robert Blake and Jane Mouton. This model identifies five different leadership styles based on the concern for people and the concern for production. As shown in the figure, the model is represented as a grid with concern for production as the X-axis and concern for people as the Y-axis; each axis ranges from 1 (Low) to 9 (High). The five resulting leadership styles are as follows: 1. The impoverished style (1, 1). The indifferent Leader (Evade & Elude) In this style, managers have low concern for both people and production. Managers use this style to avoid getting into trouble. The main concern for the manager is not to be held responsible for any mistakes, which results in less innovative decisions. A leader uses a "delegate and disappear" management style. Since they are not committed to either task accomplishment or maintenance; they essentially allow their team to do whatever they consider important and appropriate and prefer to detach themselves from the team process by allowing the team to suffer from a series of power struggles. Features 1. Does only enough to preserve job and job seniority. 2. Gives little and enjoys little. 3. Protects himself by not being noticed by others. Implications

1. Tries to stay in the same post for a long time. Examples of Leader speak: I distance myself from taking active responsibility for results to avoid getting entangled in problems. If forced, I take a passive or supportive position. 2. The country club style (1, 9). The accommodating Leader (Yield & Comply) This style has a high concern for people and a low concern for production. Managers using this style pay more attention to the security and comfort of the employees, in hopes that this would increase performance. The resulting atmosphere is usually friendly, but not necessarily that productive. This person uses predominantly reward power to maintain discipline and to encourage the team to accomplish its goals. Conversely, they are almost incapable of employing the more punitive coercive and legitimate powers. This inability results from fear that using such powers could jeopardize relationships with the other team members. Examples of Leader speak: I support results that establish and reinforce harmony. I generate enthusiasm by focusing on positive and pleasing aspects of work. 3. The produce or perish style (9, 1). The Controlling Leader (Direct & Dominate) With a high concern for production, and a low concern for people, managers using this style find employee needs unimportant; they provide their employees with money and expect performance back. Managers using this style also pressure their employees through rules and punishments to achieve the company goals. This dictatorial style is based on Theory X of Douglas McGregor, and is commonly applied by companies on the edge of real or perceived failure. This is used in case of crisis management. People who get this rating are very much task-oriented and are hard on their workers (autocratic). There is little or no allowance for co-operation or collaboration. Heavily task-oriented people display these characteristics: they are very strong on schedules; they expect people to do what they are told without question or debate; when something goes wrong they tend to focus on who is to blame rather than concentrate on exactly what is wrong and how to prevent it; they are intolerant of what they see as dissent (it may just be someones creativity), so it is difficult for their subordinates to contribute or develop. Examples of Leader speak:

I expect results and take control by clearly stating a course of action. I enforce rules that sustain high results and do not permit deviation. 4. The middle-of-the-road style (5, 5). The Status Quo Leader. (Balance & Compromise) Managers using this style try to balance between company goals and workers needs. By giving some concern to both people and production, managers who use this style hope to achieve acceptable performance. Examples of Leader speak: I endorse results that are popular but caution against taking unnecessary risk. I test my opinions with others involved to assure ongoing acceptability. 5. The team style (9, 9). The Sound / Team Leader (Contribute & Commit) In this style, high concern is paid both to people and production. As suggested by the propositions of Theory Y, managers choosing to use this style encourage teamwork and commitment among employees. This method relies heavily on making employees feel as a constructive part of the company. This type of person leads by positive example and endeavours to foster a team environment in which all team members can reach their highest potential, both as team members and as people. They encourage the team to reach team goals as effectively as possible, while also working tirelessly to strengthen the bonds among the various members. They normally form and lead some of the most productive teams. Examples of Leader speak: I initiate team action in a way that invites involvement and commitment. I explore all facts and alternative views to reach a shared understanding of the best solution. Grid Relationship Skills The Grid theory translates into practical use through Grid style relationship skills that people experience day in and day out when they work together. These relationship skills depict the typical and vital behaviours for each style that make relationships effective or ineffective. Some behaviour strengthens and motivates teams while others obstruct progress.

 Critique Learning from experience by anticipating and examining how behaviour and actions affect results. Initiative Taking action to exercise shared effort, drive, and support for specific activities. Inquiry Questioning, seeking information, and testing for understanding. Advocacy Expressing attitudes, opinions, ideas, and convictions. Decision-making Evaluating resources, criteria, and consequences to reach a decision. Conflict Resolution Confronting and working through disagreements with others toward resolution. Resilience Reacting to problems, setbacks, and failure, and understanding how these factors influence the ability to move forward. Grid theory makes behaviours as tangible and objective as any other corporate commodity. By studying each of the seven Leadership Grid styles and the resulting relationship skill behaviours, teams can examine, in objective terms, how behaviours help or hurt them. They can explore types of critique that work best for them and why. They can openly discuss how to improve decision-making and conflict resolution skills. These and other subjects usually considered "off limits" in terms of productivity are the very subjects that usually impede productivity. The Grid approach makes these subjects not only "discussable" but measurable in objective terms that generate empathy, motivation to improve, and creativity. The most desirable place for a leader to be along the two axes at most times would be a 9 on task and a 9 on people the Team Leader. However, do not entirely dismiss the other three. Certain situations might call for one of the other three to be used at times. For example, by playing the Impoverished Leader, you allow your team to gain self-reliance. Be an Authoritarian Leader to instil a sense of discipline in an unmotivated worker. By carefully studying the situation and the forces affecting it, you will know at what points along the axis you need to be in order to achieve the desired result. Activity 2 Leadership Exercise: How to check what type of leader you are? Do the following exercise? This is a quick self-quiz to give you some feedback on your predominant leadership style.

Instructions: Read each item carefully. Rate yourself on how frequently you engage in this behaviour. Scale: 4 = Always 3 = Often 2 = Occasionally 1 = Seldom 0 = Never 1. Finds time to listen to group members. 43210 2. Makes sure group members are working up to their fullest capacity. 43210 3. Directs the activities of group members on particular tasks. 43210 4. Looks out for group members personal welfare. 43210 5. Shows willingness to make changes in leadership approach (es). 43210 6. Emphasizes the meeting of deadlines. 43210 7. Solicits group input in important decisions. 43210 8. Emphasizes the maintenance of definite standards or performance. 43210 9. Supports group members in their actions. 43210 10. Makes personal position clear. 43210 Scoring:

 Add items 1, 4, 5, 7, 9 Total Relationship Score ___________ Add items 2, 3, 6, 8, 10 Total Task Score _____________ Plot the intersection of your total relationship and total task scores on the grid below.

Relationship Dimension is the vertical rating Task Dimension is the horizontal rating Self Assessment Questions 19. The Managerial Grid Model (1964) is a behavioural leadership model developed by ___________________________ 20. A leader uses a "________________________" management style, when they are not committed to either task accomplishment or maintenance; they essentially allow their team to do whatever it wishes and prefer to detach themselves from the team process 21. With a high concern for production, and a low concern for people, managers using this style find employee needs unimportant; they provide their employees ____________________________________. 22. The _______________________, use this style to try to balance between company goals and workers needs. 23. Grid theory makes behaviors as tangible and objective as any other _______________. 15.7 Differences between Managers and Leaders

At the work place there is a clear distinction between management and leadership. A manager and a leader are actually two very different kinds on individuals. One clear distinction could provide the following definition: Management involves power by position. Leadership involves power by influence. Abraham Zaleznik (1977), delineated differences between leadership and management. He saw leaders as inspiring visionaries, concerned about substance; while managers are viewed as planners who have concerns with process. Warren Bennis (1989) further explained a dichotomy between managers and leaders. He drew twelve distinctions between the two groups: Managers administer, leaders innovate. Managers ask how and when, leaders ask what and why. Managers focus on systems, leaders focus on people. Managers do things right, leaders do the right things. Managers maintain, leaders develop. Managers rely on control, leaders inspire trust. Managers have a short-term perspective, leaders have a longer-term perspective. Managers accept the status-quo; leaders challenge the status-quo. Managers have an eye on the bottom line, leaders have an eye on the horizon Managers imitate, leaders originate. Managers emulate the classic good soldier, leaders are their own person. Managers copy, leaders show originality. Therefore managers subscribe and conduct themselves as transactional leaders while leaders are more transformational in their style. In a normal organization we need both types of individuals as they each serve a unique purpose. Managers help take care of the day to day efficiency focused set of activities and bring in the operational excellence that helps the organization prepare itself for the leader who then builds the long term, strategic and transformational initiatives. 15.8 Summary

 Leadership behaviour changes from individual to individual on the following parameters viz., philosophy, planning and goal setting, implementation, evaluation etc. A leader is concerned both with the task (also goals of the organization) as well as the people with whom he is working. The Leadership Continuum Model of Tannebaum and Schmidt (1973) suggests that autocratic leaders are more likely to make their own decisions and not engage their subordinates, whereas a more democratic leader (laissez-faire manager) gives subordinates a greater degree of delegation in decision-making. The Managerial Grid Model (1964) is a behavioural leadership model developed by Robert Blake and Jane Mouton. This model identifies five different leadership styles based on the concern for people and the concern for production. Grid theory makes behaviours as tangible and objective as any other corporate commodity. Authoritarian leaders provide clear expectations for what needs to be done, when it should be done, and how it should be done. Democratic leaders offer guidance to group members, but they also participate in the group and allow input from other group members. Delegative leaders offer little or no guidance to group members and leave decisionmaking up to group members. The term transformational leadership was first coined by J.V. Downton in 1973. Transformational leaders offer a purpose that transcends short-term goals and focuses on higher order intrinsic needs. 15.9 CASELET Making Paper Airplanes Fly By Melanie Hoff Leadership training is an important aspect of career development for young professionals in both the private and public sectors. While this training is memorable for many, the leadership story of retired Environmental Protection Agency (EPA) executive Mike Cook offers one valuable lesson that carried over throughout his very successful career. As a fairly new and young branch chief in a federal agency tasked with developing the infrastructure for issuing municipal wastewater permits under the 1972 Clean Water Act, Mike was sent to a management training course. His experience during an exercise

framed his leadership style and provided the single most important leadership insight he gained from training during his career. During this one exercise, he and his co-students were split up into several groups and each group was given the instructions to build paper airplanes. His group worked diligently over the next hour or so to build as many paper airplanes as they could. When the time allotted was up they felt pretty good about their efforts, as the team had built 8 airplanes. Most of the other groups built a similar number of airplanes. The next part of the exercise had the instructors test each airplane against the instructions (ie. specifications). To everyones surprise, only one airplane out of the 40 met the specifications. Mike took away a single lesson from this The leaders job is to ensure the goal is achieved. And indeed, Mike followed this approach in 1974 when his branch was tasked with the goal of developing and implementing a permitting system for regulating municipal and industrial point sources of pollution as required by the 1972 Clean Water Act (CWA). With his goal clear issue permits to all (several hundred thousand) municipal and industrial dischargers Mike and his staff worked to define permitting parameters, resolve complex policy issues, develop boilerplate language for permits, make regulatory interpretations for secondary water treatment, and establish relationships with Regional and State permitting offices. By the end of 1974, the Agency and states had issued permits to 90% of all municipal dischargers. During this time, Mike developed a results-based and open leadership style. In order to achieve his permit project goal, he capitalized on the high interest of EPAs senior leaders, including EPAs Deputy Administrator (DA), who was briefed every two weeks on the progress of the project. This visibility and importance of the effort encouraged a lets get this done attitude within Mikes sphere of influence. At times, the DA also became actively involved in the project by using the positions bully pulpit to encourage regional action or to take other high level management action. The leadership approach of his office director also played a significant role in how Mike managed his own staff during the project and how he approached future leadership roles. His director encouraged open communications, provided well-deserved recognition of individual and group efforts, built strategic partnerships with stakeholders, did not second guess nor micromanage workgroup recommendations, and followed the strategic plan that was established. The office director issued regular memos that outlined both the good work and accomplishments on the project while also acknowledging the challenges that Mike and his team faced. Learning from a role model, Mike adopted many of these leadership practices and was grateful for the leadership lessons learned. Mike also noted that an organizational construct must sometimes be adjusted to support the mission. A good example of this was how his direct supervisor at the division level allowed direct access to the office director when needed for time-critical decisions and actions. This little empowerment played a key role in ensuring project success. By

streamlining the management decision chain, Mikes branch had the flexibility to take work and decisions directly the top as needed (while keeping his boss informed). While this did leave some colleagues a bit disgruntled, it helped move efforts forward in a timely manner. Recognizing the necessity to establish relationships with key stakeholders, Mike also actively sought the involvement of other EPA offices, regional offices, and state agencies. In particular, he needed to demonstrate to other stakeholders that his office and branch did, indeed, have the lead role in developing and implementing the permitting process and that we knew what we were doing and that we were going to get it done. Mike attributes some of the success to the nature and culture of the agency at that time. In 1973, the EPA was only two years old and filled with an exited staff ready to protect human health and the environment. The staff across the entire agency set about to, as Mike puts it, make things happen. He did not need to spend much effort motivating his staff it was part of the culture. Mike even incorporated his commitment to the environment into his daily commute by riding his bike to work every day, something he did during his entire EPA career. While getting wastewater permits issued by 1974 was only one of the many early successes of the agency, it was a big step forward for the EPA and the nations environment. Mikes work on this project was the beginning of a lifelong career with the EPA where he led many environmental protection efforts and influenced the leadership style of many current EPA staff and managers. He retired from EPA in 2006 with 41 years of federal service with 28 years as a senior executive at EPA. Although Mike was not successful with the paper airplanes in a leadership exercise as a young leader, he learned his lesson and eventually made those airplanes soar! Source : http://govleaders.org/midlevel-stories-cook.htm 15.10 Terminal Questions 1. What is leadership? List the characteristics of a good leader. 2. Briefly explain the different theories of Leadership. 3. Explain the functions of a leader. 4. What are the essential differences between Leaders and managers? 5. Differentiate between Transformational Leaders and Charismatic Leaders. 15.11 Answers Answers to Self Assessment Questions

1. People with whom he is working 2. Inspiring confidence 3. Task-oriented 4. Qualities 5. Great Man theories 6. Situational Leadership, 7. Transformational leaders 8. Dependent, empowerment 9. a 10. c 11. b 12. d 13. e 14. Follower 15. Inspiring confidence 16. Great Man theories 17. Trait theory, 18. Contingency theories of leadership 19. Robert Blake and Jane Mouton, 20. Delegate and disappear, 21. Money and expect performance back, 22. Status Quo Leader, 23. Corporate commodity.

Answers to Terminal Questions: 1. Refer to 15.2 2. Refer to 15.3 3. Refer to 15.5 4. Refer to 15.7 References: 1. Organizational Behavior by Fred Luthans 2. Organizational Behavior by Steven L McShane, Mary A V Glinow and Radha R Sharma. Copyright 2009 SMU Powered by Sikkim Manipal University .