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HUMAN RESOURCE MANAGEMENT

Define HRM
Human Resource Management (HRM) is a management function that helps managers recruit, select, train & develop members for an organization. Obviously, HRM is concerned with the people‟s dimension in organization ………

Functions of HRM:
• 1. 2. 3. 4. Managerial Functions Planning Organizing Directing Controlling

6. Operative functions : Job analysis Human resource planning Recruitment Selection Placement Induction & orientation . 5. 3.Contd >>>> • 1. 4. 2.

2. 5. 7.Contd>>>>>>> Human resource development: 1. 4. 6. 3. Performance appraisal Training Management development Career planning & development Internal mobility Transfer Promotion .

Compensation: 1. Social security measures . Wage & salary administration 3. Fringe benefits 6. Job evaluation 2.Contd >>>>>. Bonus 5. Incentives 4.

intra & interpersonal relations 2. Developing the leadership skills 6. Boosting employees morale 4. Understanding & applying the models of perception. leaning. Motivating the employees 3. Developing the communication skills 5.Contd>>>>>> Human relations : 1. personality. Redressing employee grievances properly & in time by means of a well formulated grievance procedure .

Collective bargaining 4. Trade unionism 3. Quality circles .Contd>>>>>>>>> Industrial Relations : 1. Indian labour market 2. Workers participation in management & 6. Industrial conflicts 5.

Total quality in human resources 3.Contd>>>>>> Recent Trends in HRM : 1. Quality of work life 2. Recent techniques of HRM . audit & research & 4. HR accounting.

recruitment & selection. employee & executive remuneration. welfare. safety & health. job analysis & design. orientation & placement. performance appraisal & job evaluation. All major activities in the working life of a worker from time of his or her entry into an organization until he or she leaves come under the preview of HRM  Specifically the activities included are HR Planning. motivation & communication. training & development. industrial relations (IR) .Scope of HRM  The scope of HRM is indeed vast.

7 sections of functions :        Introduction to HRM Employee hiring Employee & executive remuneration Employee motivation Employee maintenance IR Prospects of HRM .

Diagram Nature of HRM Prospects Of HRM EMPLOYEE HIRING Industrial Relations Hunan Resource Management EMPLOYEE & Executive Remuneration Employee Maintenance Employee Motivation .

Difference between HRM & PM Dimension Employment contract Rules Guide to management action Behavior referent Managerial task vis-a-vis labour Key relations Initiatives Personnel Management Careful delineation of written contracts Importance of devising clear rules Procedures Norms/customs & practices Monitoring Labour management Piecemeal Human Resource Management Aim to go beyond contract Can do outlook. impatience with rule Business need Values/ mission Nurturing Customer Integrated Speed of decision Slow Fast .

Objectives of HRM  Societal Objectives  Organizational Objectives  Functional Objectives  Personal Objectives .

Diagram : Personal Objectives Functional Objectives Organizational Objectives Societal Objectives Objectives of HRM .

Qualities of HR/Personnel Manager        Fairness & Firmness Tact & Resourcefulness Sympathy & Consideration Knowledge of lab our & other terms Broad social outlook Others Academic Qualifications .

Nature of HRM Human Resource Planning Job Analysis Recruitment Selection Placement Training & Development Remuneration Motivation Participative Management Communication Safety & health Welfare Promotions. etc .

Strategic Human Resource Management : Define Strategy : Is a unified course of action to achieve the goal. .

Define Strategic Management : “ Strategic management may be understood as the set of decisions and subsequent actions used to formulate and implement strategies that will optimize the fit between the organization and its environment in an effort to achieve organizational Objectives” .

Strategic Management Process Strategy formulation External Environment analysis Strategy Implementation Project Strategy Evaluation Control Strategic Alternatives and choice Company’s Mission Internal Environmental Analysis Evaluation and Control of strategy Procedural Structural Behavioral Functional .

Though planning management strives to have the right number & right kind of people at the right place at the right time.” . doing things which result in both the organization & the individual receiving maximum long-run benefit.Human Resource Planning: “ A Process by which an organization should move from its current manpower position to its desired manpower position.

skill. existing employees & future human resource requirements • To improve the standards. • To foresee the impact of technology on work. diversification etc. knowledge. ability. .Objectives of Human Resources Planning : • To recruit & retain the human resources of required quantity & quality • To foresee the employee turnover & make the arrangements for minimizing turnover & filling up of consequent vacancies • To meet the needs of the programmes of expansion . discipline etc.

Factors Affecting HRP • • • • • • • External Factors Government Policies Level of Economic Development including future supply of HRs Business Environment Information Technology Level of Technology Natural Factors International Factors • • • • • • • • Internal Factors Strategies of the company Human Resources policy of the company Formal and Informal Groups Job Analysis Time Horizons Type and quality of information Company’s production operations policy Trade Unions .

Importance of HRP : • • • • • Future personnel needs Coping with change Creating highly talented personnel Protection of weaker sections International strategies .

etc Shortage Recuritment & Selection . Lay Off .The Planning Process: Environment HR Needs Forecast Organizational Objectives & Policies HR Supply Forecast HR Programming HRP Implementation Control & Evaluation of Programme Surplus Restricted Hiring Reduced Hours VRS.

The immediate products of this analysis are job descriptions & job specifications.” .Job analysis “Job analysis is the process of studying & collecting information relating to the operations & responsibilities of a specific job.

factual statement of the duties & responsibilities of a specific job.” .Job Description : “ A Job description is an organized.

” .Job Specification : “ A Job Specification is a statement of the minimum acceptable human qualities necessary to perform a job properly.

Diagram :
Job Analysis

Job Description

Job Specification

Process of Job Analysis :
Company Strategies
Human Resource Planning Team Building Building Recruitment & Selection Training & Development Career Planning & Development
Team

Collection of Information
Process of Information Drafting Job Description Drafting Job Specification

Performance Analysis & Development Job Evaluation Wage & salary levels Internal Mobility Discipline & Grievances Work Scheduling Health & Safety

Job analysis A process of obtaining all pertinent job facts
Job Description: Job specifications A statement containing items such as : A statement of human qualifications  Job title necessary to do the job. Usually  Location, conditions of work, contains such items as : working hours, posture-standing,  Education sitting, walking, speed, accuracy,  Experience health hazards, occupational  Training diseases etc.  Judgment  Job summary  Initiative  Duties  Emotional characteristics  Machines, tools, & equipment  Unusual sensory demands such as  Materials & forms used sight, smell, hearing  Responsibilities

. • The job description should be clear regarding the work of the position. duties etc.Characteristics of Good Job Description : • The job description should indicate the scope & nature of the work including all important relationships. • More specific words should be selected to show (a) The kind of work (b) The degree of complexity (c) The degree of skill required (d) The extent to which problems are standardized.

Major steps in Job Description:
• Get the questionnaire filled by the immediate supervisor of the employee • Job analyst has to complete the job description form by observing the actual work being done by the employee & • All the information pertaining to the job should be secured from the worker. • The job analyst has to finalize the job description & write the final draft by using any one or a combination of two or more of the above methods.

Job specification form
• • • • • Job grade Job title Age Sex Educational Qualification
• • • • • Middle Management Credit Manager Between 35 & 45 years Preferably male B.E. (Industrial Engineering ) or B.SC, Ag with post graduate diploma or degree in Bank Management. Completion of CAIB is an additional qualification Should undergo training on the job/off the job for a period of one year As a credit/ field officer in a commercial bank for about five years Normal height (above 51-511) Member of social organizations Should have participated in sports/games at the district or inter-university level.

• Training Received • Experience

• •

• Physical specification • • Social Specification • • Extra- curricular activities •

Benefits/ Uses of Job Analysis :
• • • • • • • • • • Employment Training & Development Programmes Performance Appraisal Promotion & Transfer Preventing Dissatisfaction & settling complaints Discipline Wage & Salary Administration Health & Safety Induction Industrial Relations

Recruitment & Selection : .

The process begins when new recruits are sought & ends when their applications are submitted.Define Recruitment : “ Recruitment is the process of finding & attracting capable applicants for employment. The result is a pool of applicants from which new employees are selected.” .

Objectives of Recruitment : • To attract people with multi-dimensional skills & experiences that suit the present & future organizational strategies • To induct outsiders with a new perspective to lead the company. • To search or head hunt/ head pouch people whose skills fit the company’s values • To devise methodologies for assessing psychological traits • To seek out non-conventional development grounds of talent • To search the talent globally & not just within the country • To anticipate & find people for positions that do not exist yet. . • To develop an organizational culture that attracts competent people to the company. • To infuse fresh blood at all levels of the organization.

Purposes & Importance: • Determine the present & future requirements of the organization in conjunction with its personnel.planning & job-analysis activities • Increase the pool of job candidates at minimum cost • Help increase the success rate of the selection process by reducing the no of visibility under qualified or overqualified job applicants • Help reduce the probability that job applicants once recruited & selected will leave the organization only after a short period of time .

Contd >>>>>>> • Meet the organization’s legal & social obligations regarding the composition of its workforce • Begin identifying & preparing potential job applicants who will be appropriate candidates • Increase organizational & individual effectiveness in the short term & long term • Evaluate the effectiveness of various recruiting techniques & sources for all types of job applicants .

FACTORS AFFECTING RECRUITMENT .

Recruitment Process : There are 5 stages:  Planning  Strategy development  Searching  Screening  Evaluation & Control .

Recruitment Process : Personnel Planning Job Analysis Employee Requisition S C R E E N I N G To selection Job Vacancies Recruitment Planning Numbers Types Searching Activation „Selling‟ message media Applicant Pool Potentials Hires Strategy Development Where How When Applicant Population Evaluation and control .

 Number of contacts (yield ratios. Recruitment planning Translation of likely job vacancies and information about the nature of the job into set of objectives or targets. yRs)  Types of contacts (tasks and responsibility. qualification and experience expected) .Contd >>>>>>> 1.

Contd >>>>> 2. Strategy Development  „Make‟ or „Buy‟  Technological Sophistication  Where to Look  How to Look i] Internal Recruitment ii] External Recruitment  When to Look .

.Contd >>>>>>> Internal Recruitment  Present Employees.  Previous Applicants.  Former Employees.  Employee Referrals.

Write-ins and Talks.ins  Consultants  Radio and Television  Competitors  Campus Recruitment .Contd >>>>>>> External Recruitment  Advertisements  Employment Exchanges  Walk.ins.

Contd >>>>>> 3. Searching  Source activation  Selling 4. Screening 5. Evaluation and control .

ALTERNATIVES TO RECRUITMENT  Overtime  Employee Leasing  Temporary Employment .

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INTRODUCTION TO SELECTION What is Selection? “ It is the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success of a job.” .

 Cost effectiveness. .Contd……………. Role of Selection  It is related to work performance.

Organization for Selection In a simple terms it is structure or body created for selection.Contd………………. smooth process and reduce cost. Advantages:  Easy for applicants.  Helps operating managers to concentrate on own activities.  Provide better selection. .

SELECTION PROCESS External Environment Internal Environment Preliminary Interview Selection Tests Employment Interview Rejected Applicants Reference & Background Analysis Selection Decision Physical Examination Job Offer Employment Contract Concluding .

 Human Resource Planning.  Cost of hiring. .  Internal environment  Company‟s Policy.SELECTION PROCESS (Contd…) Environmental factors affecting selection.

 Labor-market Conditions. .  Unemployment Rate.  Legal and Political Considerations.SELECTION PROCESS (Contd…)  External Environment:  Supply and Demand of Specific Skills in the labor market.  Company‟s Image.

SELECTION PROCESS (Contd…) Preliminary Interview: Instrument to the HR specialists to eliminate unqualified job seekers. .

 Medical Test.  Bernsenter Personality Test.SELECTION PROCESS (Contd…) Selection tests.  Interest Test. .  Graphology Test.  Thematic Apperception Test.

SELECTION PROCESS (Contd…) Employment Interview  Employment interview. .Panel interview.Sequential interview.  Types of interviews. -Structured -Unstructured -Mixed -Behavioral -Stress . .One to one interview.  Objectives of interviews. .

known public figures. . Previous employs. 5. Selection Decision In the selection process used to narrow the number of candidates. Reference and background checks. neighbors or friends can act as reference. University professor.SELECTION PROCESS (Contd…) 4.

Physical Examination 7.SELECTION PROCESS (Contd…) 6. Concluding The Selection Process . Contracts Of Employment 9. Job Offer 8.

BARRIERS TO EFFECTIVE SELECTION     Perception Fairness Validity Reliability  Pressure .

computed as follows: Training & development = Standard performance – Actual performance .Training & Development : “It is any attempt to improve current or future employee performance by increasing an employees ability to perform through learning. The need for training & development is determined by the employee‟s performance deficiency. usually by changing the employee‟s attitude or increasing his or her skills & knowledge.

Inputs in Training : • Skills • Education .

functional loyalties to the interests of the organization as a whole? .Development : An organization expects the following from its managers when they are deputed to attend any training & development programme:  How do we make our managers self-starters? How do we imbune them with a sense of commitment & motivation so that they become self-generating?  How do we make them subordinates their parochial.

both at the workplace & outside?  How do we make them aware of themselves ---.their potential & their limitations? How do we help them see themselves as others see them & accept this self –image as a prelude to change? .Contd >>>>>>  How do we make result-oriented? How do we help them see & internalize the difference between activity & results. & between efficiency & effectiveness?  How do we make them sensitive to the environment in which they function.

a nagging dissatisfaction with the status quo? . a divine discontent. to see & feel points of view different from their own?  How do we help them understand power & thereby develop leadership styles which inspire & motivate others?  How do we instill a zest for excellence.Contd >>>>>>>  How do we teach them communicate without filters.

All of us want to be ethical in our personal lives & in business dealings  Values create creditability with the public.Contd >>>>>>. An organization perceived by the public to be ethically & socially concerned will be honored & respected even by those who have no intimate knowledge of its actual functioning . Ethical Orientation is significant for the following reasons :  Ethics correspond to the basic human needs.

They provide a common language for aligning a company‟s leadership & its people  Values help in better decision making.Contd >>>>>>>  Values lend management credibility with employees. Ethical attitudes help managements make better decisions which are in the interest of the public. the employees & in the long term the company itself .

Contd >>>>>>>>> Attitudinal changes :  Attitudes represent feelings & beliefs of individuals towards others.  Attitudes affect motivation. satisfaction & job commitments  Negative attitudes need to be converted into positive attitudes .

Reasons for difficulty in change of negative attitude :  Employees refuse to change  They have prior commitments &  Information needed to change attitudes may not be sufficient  Nevertheless. are motivated for better performance & derive satisfaction from their jobs & the work environment . attitudes must be changed so that the employees feel committed to the organization.

The Training Process : Organizational objectives & Strategies Assessment of Training Needs Establishment of Training Goals Devising Training Programme Implementation of Training Programme Evaluation of Results .

Organizational objectives :  The first step in the training process in organization is the assessment of its objectives and strategies  What business are we in? At what level of quality do we wish to provide this product or service? Where do we want to be in future? .

organizations would do well to assess the training needs of their employees • Organizations that implement training programmes without conducting needs assessment may be making errors.Needs assessment : • Need assessment diagnoses present problems and future challenges to be met through training and development • Before committing such huge resources. .

Contd >>>>>>>> • Needs assessment occurs at 2 levels i.e. when there is performance deficiency • The problem of performance deficiency caused by absence of skills or knowledge can be remedied by training . that is. : group and individual • An individual obviously needs training when his or her performance falls short of standards.

Diagram : Performance Deficiency Lack of skill or Knowledge Other causes Training Non-Training Measures .

Need Assessment Methods: Group or organizational analysis  Organizational goals and objectives  Personnel /skills inventories  Organizational climate indices      Efficiency indices Exit interviews MBO or work planning systems Quality circles Customer survey /satisfaction data  Consideration of current and projected changes Individual Analysis        Performance appraisal Work sampling Interviews Questionnaires Attitude Survey Training progress Rating scales .

verifiable. and measurable • This is easy where skills training is involved . training and development goals must be established • Goals must be tangible.Training and development objectives : • Once training needs are assessed.

Designing training and developing programme : Every training and development programme must address certain vital issues • Who participates in the programme? • Who are the trainers? • What methods and techniques are to be used for training? • What should be the level of training? • What learning principles are needed? • Where is the programme conducted? .

Diagram : Steps in Training programme Who are the Trainees ? Who are the Trainers? What methods And techniques? What should be the level of training? What principles Of learning? Where to conduct The programme? .

Methods and techniques of training : • On the job • Off-the-job .

job-instruction training. role playing. programmed instruction. lecture. case study.Contd >>>>>>> • On-the-job methods refer to methods that are applied in the workplace. laboratory training . television. films. internships and assistantship. special study. conference or discussion. job rotation. coaching • Off-the-job methods are used away from workplace such as vestibule. while the employee is actually working such as orientation training. simulation.

Conduct of training Programme : • At the job itself • On site but not the job----. in a training room in the company • Off the site such as in a university or college classroom. or a conference centre . hotel.for example. a resort.

Implementation of the training programme: • Deciding the location and organizing training and other facilities • Scheduling the training programme • Conducting the programme • Monitoring the progress of trainers .

Evaluation of programme : • The main objective of evaluating the training programmes is to determine if they are accomplished specific training objectives. that is. correcting performance deficiencies • A 2nd reason for evaluation is to ensure that any changes in trainee capabilities are due to the training programme and not due to any other conditions .

Advantages of Training : • • • • • Increased productivity Heightened Morale Reduced supervision Reduced accidents Increased organizational .

Principles of Evaluation : • Evaluation specialist must be clear about the goals and purposes of evaluation • Evaluation must be continuous • Evaluation must be specific • Evaluation must be based on objective methods and standards .

” .Performance Appraisal & Job Evaluation : “ It is the systematic evaluation of the individual with respect to his or her performance on the job & his or her potential for development.

• To effect promotions based on competence & performance • To confirm the services of probationary employees upon their completing the probationary period satisfactorily • To assess the training & development needs of employees • To decide upon a pay raise where regular pay scales have not been fixed • To let the employees know where they stand insofar as their performance is concerned & to assist them with constructive criticism & guidance for the purpose of their development Objectives of Performance Appraisal : .

Appraisal Process : Objectives of Performance Appraisal Establish Job Expectations Design an Appraisal Programme Appraise Performance Performance Interview Use Appraisal Data for Appropriate purposes .

as stated above.Objectives of Appraisal : • Objective of appraisal. including effecting promotions & transfers. assessing training needs. appraisal aims at improving the performance. awarding pay increases. . & the like • These objectives are appropriate as long as the approach in appraisal is individual • In the systems approach. instead to merely assessing it.

Future-Oriented Appraisals • • • • • • Management by Objectives Psychological Appraisals Assessment Centres 360-Degree Feedback Performance Interview Use of Appraisal .

Appraisers : 360 degree performance appraisal : • The appraiser may be any person who has thorough knowledge about the job content. • The appraiser should be capable of capable of determining what is more important & what is relatively less important. . contents to be appraised. standards of contents & who observes the employee while performing a job.

Supervisors : • Supervisors include superiors of the employee. • General practice is that immediate superiors appraise the performance which in turn is reviewed by the departmental . other superiors having knowledge about the work of the employee & department head or manager.

. little research has been conducted to determine how peers establish standards for evaluating others or the overall effect of peer appraisal on the group‟s attitude. • However.Peers : • Peer appraisal may be reliable if the work group is stable over a reasonably long period of time & performs tasks that require interaction.

especially in developed countries.Subordinates: • The concept of having superiors rated by subordinates is being used in most organizations today. .

they are to a great extent in the best position to appraise their own performance. .Self Appraisal : • If individuals understand the objectives they are expected to achieve & the standards by which they are to be evaluated.

. promptness.Users of Services/Customers: • Employee performance in service organizations relating to behaviors. speed in doing the job & accuracy can be better judged by the customers or users of services.

appraisal. consultants are trained and they observe the employee at work for a sufficiently long time for the purpose of appraisal. .Consultants : • Sometimes consultants may be engaged for appraisal when employees or employers do not trust supervisor appraisal and the management does not trust self. peer appraisal or subordinate appraisal • In this situation.

Establish Job expectations : • The 2nd step in the appraisal process is to establish job expectation • This includes informing the employee what is expected of him or her on the job • Individuals should not be expected to begin the job until they understand what is expected of them .

Design Appraisal Programme : • Formal verses Informal Appraisal • Whose performance should be rated • Who are the Raters ? .

Past-Oriented Methods : • • • • • • Rating Scales Ranking Method Paired Comparison Method Forced Choice Method Checklist Methods Critical Incidents Methods .

in the case of workers & analytical ability. • This method is also known an linear rating scale or simple rating scale. • This is the oldest and widely used technique. and traitbased qualities and characters to be rated like quality and volume of work.Graphic Rating Scales : • Graphic rating scales compare individual performance to an absolute standard. dependability. attitude etc. creative ability. • In this method judgments about performance are recorded on a scale. job knowledge. . emotional stability in the case of managerial personnel. initiative. leadership qualities. one for each employee • These forms contain a number of objectives. behavior. initiative. • The appraisers are supplied with printed forms.

the employees are ranked from best to worst on some characteristics. • The rater first finds the employee with the highest performance & the employees with the lowest performance in that particular job category & rates the former as the best & the latter as the poorest. • Then the rater selects the next highest & the next lowest & so on until he rates all the employees in that group.Ranking Method : • Under this method. .

B. • Then follow strategies develop a chart such as one below & for each plotted pair. . Instructions: • This pertains to assigning each employee‟s name a different capital letter on a separate sheet of paper. C etc. one at a time. write in the letter of the employee who. the appraiser ranks the employees by comparing one employee with all other employees in the group. has done the superior job overall given a positive comparison total & a certain % of the total positive evaluation. Under this method.Paired Comparison Method : This method is relatively simple. Example: A. in your opinion.

• Under this method.Forced Choice Method : • The rater may rate his employees at the higher or at the lower end of the scale under the earlier methods. • Forced Choice method is developed to prevent the raters from rating too high or too low. the rater after assigning the points to the performance of each employee has to distribute his ratings in a pattern to conform to normal frequency distribution. .

The rater checks to indicate if the behavior of an employee is positive or negative to each statement. The negative checks are not considered in this method. Employee performance is rated on the basis of the number of positive checks. • • • .Checklist Methods: 1. Simple checklist Method: the checklist consists of a large number of statements concerning an employee behavior.

having a series of statements about an individual. to indicate that some are more important than others. • The rater is expected to look into the questions relating to the employee‟s behavior. the attached rating scale & tick those traits that closely describe the employee behavior.Weighted checklist : • The weighted checklist method involves weighting different items in the checklists. .

• The critical incident method has the advantage of being objective because the rater considers the records of performance rather than the subjective points of opinion. emotional balance. • The performance rated may not reflect real & overall performance as the rater would be serious about appraisal just two or three weeks before the appraisal. ie: once in a year or six months under the earlier methods.Critical Incident Method : • Employees are rated discontinuously. . • Eg: mood. relationship between superior & subordinate.

• Typically. • Organizations with a prospector strategy continuously search for different product and market opportunities. . defenders have a narrow and relatively stable product-market domain. and determining employee needs for development.Organizational Strategy And Performance Appraisal : • The performance-appraisal system serves many organizational objectives and goals. rewarding performance equitably. the evaluation system is useful in identifying employees with potential. • Besides encouraging high levels of performance.

Feedback Mechanism: • Design jobs and work systems to accomplish organizational goals • Hire individuals with capabilities to discharge the jobs effectively • Train motivate. . remunerate employees for their performance & productivity.

Consistency between organizational strategy & Job Behavior : • An Organization needs a strategy consistent with the behavior of its employees if it were to realize its goals. • The performance appraisal becomes not all a means of knowing if employees behavior is consistent with the overall strategic focus.behavior fit. • A truism of organizational life is that people engage themselves in behaviors that they perceive will be rewarded. but also a way of bringing to the fore any negative consequence of the strategy-----. .

For example any organizations have adopted a more team-oriented focus. • For example. & in such a culture the stress lies on team management.Consistency between organizational values & Job Behavior link • Performance evaluation is also a mechanism to reinforce the values and culture of the organization. how an organization that articulates the value of developing its people come to know if this value is shared by its managers of the firm? • Another discussion on the strategic importance of performance evaluation is to the alignment of the appraisal with the organizational culture. team work. & more open and trusting relationship among all employees .

Wage : “ The remuneration paid by the employer for the services of hourly. daily. weekly. & fortnightly employees” .

Salary: “The term salary is defined as the remuneration paid to the clerical & managerial personnel employed on monthly or annual basis.” .

pay) dearness allowance. overtime payments etc”.Earnings : “Earnings are the total amount of remuneration received by an employer during a given period. house rent allowance. city compensatory allowance. These include salary. other allowances. .

They are defined as “variable rewards granted according to variations in the achievement of specific results.” .Incentive Payments : “Incentive are monetary benefits paid to workmen in recognition of their outstanding performance.

.Nominal wage: “ It is the wage paid or received in monetary terms” . It is also known as money wage.

It represents the purchasing power of money wage”.Real wage “ Real amount is the wage arrived after discounting nominal wage by the living cost. .

Take Home Salary: “It is the amount of salary left to the employee after making authorized deductions like contribution to the provident fund. income tax and other charges” . Life insurance premium.

Minimum wage :
“It is the amount of remuneration which could meet the “normal needs of the average employee regarded as human being lining in a civilized society”

Factors affecting wage/salary levels:
• • • • • • Remuneration in comparable industries Firm‟s Ability to pay Relating to price index Productivity Union pressure & strategies Government legislation

Importance :
• The primary advantage of incentives is the inducement and motivation of workers for higher efficiency and greater output. • It may not be difficult to get people for fixed wages and salaries. • Earnings of employees would enhanced due to incentives • There are instances where incentive earnings exceed two or three times the time-rated wages or salaries.

Disadvantages : • On the other hand. systems of payment by results may have disadvantages • Difficulties may arise over the introduction of new machines or methods • A sound incentive schemes would depend upon an understanding of the problems of human relations as well as those of engineering. .

Define Personnel Policy o o o o o A policy is pre-determined. They provide a base for management by principle as contrasted with management by expediency. personnel policies are those that individuals have developed to keep them on the track towards their personnel objectives…… management policies are developed by working organizations to keep them on course headed & directed toward their organizationa objectives. These define the intentions of the organization & serve as guidelines to give consistency & continuity to total operations…. selected course established as a guide towards accepted goals & objectives they (policies) establish the framework of guiding principles that facilitate delegation to lower levels & permit individual mangers to select appropriate tactics or programme In contrast to these.” .

indicating specifically what the organization proposes to do & thus. in turn. dictate practices & procedures . there cannot be any lasting improvement in labour management relations. without these policies. suggest the values & view points which dominate the organization‟s actions & • A positive declaration & a command to an organization. They translate the goals of an organization into selected routes & provide general guidelines that both prescribe programmes which.stone in the arch of management & the life-blood for the successful functioning of the personnel management because. • The statements of intention indicating an agreement to a general course of action.Personnel policies are : • The key.

competent & trained personnel for all levels & types of management . & motivate them  To protect the common interests of all the parties & recognize the role of trade unions in the organizations .Aims & Objectives of Personnel Policies :  To enable an organization to fulfill or carry out the main objectives which have been laid down as the desirable minima of general employment policy  To ensure that its employees are informed of these items of policy & to secure their co-operation for their attainment  To provide such conditions of employment & procedures as will enable all the employees to develop a sincere sense of unity with enterprise & to carry out their duties in the most willing & effective manner  To provide an adequate.

shall not take place in technical. which however.Contd >>>>>>> • To provide for a consultative participation by employees in the management of an organization & the framing of conditions for this participation. financial. or trading policy. .

Characteristics of good personnel policy : • The statement of any policy should be definite. assessed & revised & should. differing & temporary oral policies from multiple sources • It must be reasonably stable but not rigid. • It should indicate that the management knows that the workers prefer to deal with the management on an individual basis . positive. evaluated. to stimulate careful consideration before its formulation & to prevent the promulgation of numerous. therefore be in tune with the challenge of changes in the environment & should have a built-in resilience for adjustment from time to time. clear & easily understood by everyone in the organization so that what it proposes to achieve is evident • It should be written in order to preserve it against loss. ie it should be periodically revised.

Contd >>>>>>. • It should recognize the desire of many workers for recognition as groups in many of their relationships • It should be formulated with the due regard for the interests of all the concerned parties. employees & the public community • It should be the result of a careful analysis of the available facts. • It must be two-way communication system between the management & the employees so that the latter are kept informed of the latest developments in the organization & the employees are aware of the actions & reactions of the employees on particular issue • It should be generally known to all interested parties • It must have not only the support of the management but the co-operation of employees at the shop floor level & in the office . the employers.