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Human Resource Management

Rama Shankar Yadav


Human Resource Management
• Definition:
– It is a scientific process of
– Continuously enabling
• The employees to improve their competency and
capability to
• Play their present as well as future expected roles so
that the goals of the organization are achieved
effectively and
• At the same time the needs of the employees are also
met
Introduction
• Human resource management (HRM)
– An approach to the management and development of people
– Based on four fundamental principles.
1. Human resources are the most important assets
2. The organizational success is most likely to be achieved if
the personnel policies and procedures of the organizations
are closely linked with each other.
3. Organisational values may need to be changed or
reinforced starting from the top.
4. Finally integration - getting all the members of the
organization involved and working together with a sense of
common purpose.
Introduction
• HRM
– Is a strategic approach to the
• Acquisition,
• Motivation,
• Development and
• Management of the organization's human resources
Introduction
• HRM is
– Proactive rather than reactive
• Includes many familiar functions
– Manpower planning,
– Selection,
– Performance appraisal,
– Salary administration,
– Training and development
Employee Selection
• Human Resource Planning
– Process of determining its human resource needs
• Right People
• Right Place
• Right time
• Right Number
– To efficiently and effectively complete the task
– The tasks should be strategically linked to the
organization’s overall strategic goal
Organizational Strategy

Mission
( To be world’s No-1 Car Manufacturer)
* It is foundation for every decision in
the organization

Objectives
Broad statements that establishes the
target of the organization

Organizing
Who will do what, when and how
The Strategic HR Linkage
What is job analysis?
• Job Analysis
– A systematic approach to collect information
about a job such as
• Nature of tasks,
• Responsibilities and the
• Skills required to perform those tasks
– An important part of Human Resources (HR)
planning
Methods of Job Analysis
• Observation
• Interview
– Individual
– Group
• Questionnaires
• Diary
• Technical Conference
• Critical Incident Technique
Methods of Job Analysis
• Technical Conference Method
– Uses experts to gather information about job
characteristics
Method of Job Analysis
• Critical Incident Technique (CIT)
– Takes past incidents of good and bad behavior
– Organizes incidents into categories that match the job
they are related to
– 4 Steps
• Brainstorm and create lists of dimensions of job behaviors
• List examples of effective and ineffective behavior for each
dimension
• Form a group consensus on whether each incident is
appropriately categorized
• Rate each incident according to its value to the company
HRM Case study: role and job analysis
• Job Description at Red Lobster (Phillip – Gully 2009)
• Red Lobster operates over 670 casual-dining seafood restaurants in the US
and Canada, employing more than 63,000 people. When Red Lobster
developed a new business strategy to focus on value and improve its
image, it established a new vision, mission, and goals for the company.
The restaurant chain simplified its menu with the highest-quality seafood
it could offer at mid-range prices, traded its restaurants’ tropical themes
for a crisp, clean look with white-shirt-and-black-pants uniforms for its
employees, and added Northeastern coastal imagery to its menu and
Web-site. Executing the new mission and differentiation strategy required
hiring fun, hospitality-minded people who shared its values.
• Although Red Lobster had not had any problem with hiring restaurant
managers, the company felt that the managers it hired did not always
reflect Red Lobster’s strategy, vision and values. The company also realized
that their old job descriptions did not reflect the passion its new strategy
needed from its employees.
• Red Lobster ask your opinion of what it should do in writing its job
descriptions to improve the fit between its new management hires and
its new business strategy.
Why to Recruit?
Employee Selection
• Recruitment
– According to Barber “Recruitment includes all
those practices and activities carried on by the
organization with the primary purpose of
identifying and attracting potential employees”.
– Three phases
• (a) Generating applicants
• (b) Maintaining applicant data pool or status and
• (c) Influencing the applicant’s job choice decisions
Selection Process
• Eight Steps
– Initial Screening Interview/Test
– Completing the application form
– Employment Tests
– Comprehensive Interview
– Background Investigation
– Conditional Job offer
– Medical or Physical Examination
– Permanent Job Offer
Employee Selection
• Selection
– Aims to select the right person for right job at
right time is the prime objective of the selection
process.
– Method
• How to select?
Employee Selection
• Choose
– The Employment Interview
• Structured Interview
– Nature, sequence and order of the question is fixed
– The applicants exhibiting the same response were selected for
the job
» More reliable
» More Valid
• Unstructured Interview
– Nature, sequence and order of question is not fixed
Employee Selection
• Biases of Interviews
– Leniency Effect
– Central Tendency Effect
– Halo Effect
Employee Selection
Choose test !!
– A battery of test is selected to assess the desired
competencies in a person.
• For example clerical test may include a battery of test on
numerical ability, verbal ability etc.

• Personality test:
– Assessing personality traits which may increase the
performance and keep motivating the employees.
– Use of Big five Test
Employee Selection
• Interest test:
– Assess the interest level of a candidate in a particular
activity.
• Achievement test:
– To assess the subjective knowledge and job
knowledge in areas like
• Marketing, economics, HR etc.
• Test of motor and physical ability:
I. These test are used to assess finger movement and
II. Speed and accuracy of other locomotors.
Finger dexterity test is one such example.
Employee Selection
• And/or
– Medical Test/Physical Examination
• To assess the physical fitness
• Color blindness other hereditary diseases
• Locomotors Ability etc
• Salary Negotiation and terms of employment
– After the selection process is done
• Selected candidate is contacted through the hiring managers for
salary negotiation process and terms of employments.
• If the candidate agrees to the terms of condition and the salary
negotiation then finally the
• HR manager rolls down the permanent offer letter specifying the
CTC, date, venue, timing and the reporting manager for the joining
formalities.
CV/Resume/ Biographical Information
• Objective of Resume
– To circulate current information about self to the
prospective employer
– Communicating the areas of strength and positivity
– Contains
• Name and Age
• Place of domicile
• Objective
• Work experience
• Technical (JAVA specialist) and Behavioral skills (leadership, team
player)(KSA)
• Interest areas/ Hobby/ Passion
• Other responsibilities
– Coordinator of Student Council
– Event Management etc.
• References
Resume/ Biographical Information
Background Investigation
• Aim
– To verify the information provided by the candidate
• Includes
– Former employer
• About his/her work performance
• Behavior
– Police stations
• Inquiring about his legal status, criminal records etc.
– Personal References
• School Teachers
– Verifying about education and his character
• Friends/Relatives
Background Investigation
• Who does this?
– Internal Investigation
• HR Manager cross verifies
– External Investigation
• Professional investigation third party

• Why to do?
– Study shows that past behavior is a good predictor of
future behavior/performance
– Nearly half of the candidates provide fake information
(as cited in Robbins & Decenzo)
– To avoid negligent hiring
Training & Development
• Training
– A process of enhancing the desired competence
(KSA) level of the employee
• Enhancing what they know, how they work, how they
behave
– Seeks a relatively permanent change in employees
that improves their job performance
Training & Development
• Employee Training
– Present day oriented
– Focuses on current jobs
– Enhancing skills needed to perform current job
• Employee Development
– Future oriented
– Future job roles and progression
– Adding new skills for the future role
Training & Development
• Determining Training Needs
– Organizational Goals give indication of kind of
Knowledge, skills and attitude is needed
– HR Manager in the beginning of the Performance
cycle generates/provides the list of training to be
provided to the employees
– Each Department Head communicates the kind of
training is required for their employees
– HR Manager collates and prepares a training
calender
Training & Development
• Mid term Training need identification
– If the employee is not able to perform well
– If the performance is declining
– If quality is declining
– If accidents are increasing
Employee Development Methods
• Job Rotation
– Moving employees from one position to other
positions
– To meet his future assignments
– Can be vertical or horizontal
– Turning a specialist to generalist
Employee Development Methods
• Assistant to Positions
– Employees with desired potential work under
successful manager
– In variety of fields
• Committee Assignments
– Gives an opportunity to the employees to identify
specific issues of the organization
– Gives opportunities to share his decision makings
and ideas to complete the assigned task
Employee Development Methods
• Lectures Courses and Seminars
– Traditional forms
• Inviting internal subject expert
• Inviting external subject expert
– Help in enhancing conceptual knowledge about a
particular field
– Through distance mode as well
• Telecast from some specific location not
Employee Development Methods

• Simulations
– Training employees on actual work experiences
– Includes case studies, role play etc
• Identify the problems
• Find alternate ways to solve that problem
• Identify the best solution
• Implement it
Employee Development Methods

• Outdoor Training
– Use of outdoor location such as
• Mountain climbing, rafting
– Fills a sense of team spirit in the members
– Work more cohesively
• Vestibule Training
– Giving real instruments to perform a task but in
simulated situation
• Example given computer to train on typing speed etc.
• Given welding instrument
Performance Management
• Performance Management
– Includes set of activities which ensure that
• Goals are consistently met in an effective and efficient way
– It focuses on the performance of
• Organization
• Department
• Employee or
• Even processes
And/Or
• Performance Management
– Is a process by which organizations
• Strategically align their
– Resources
– Systems
– And employees
• To achieve their objectives and priorities
Performance Management
• Performance Management is not only
reviewing or evaluating employees
But also
• Getting feedback from the employees about
the evaluation and other processes
– To make it more efficient and effective
• Getting aware about the constraints of the
system and processes
Purposes of Performance
Management

• Three purpose
• Performance evaluation
–Evaluating an employee and giving
feedback to her/him
• Development of the employee
• Documentation of the processes
Performance Management
• Performance Evaluation/Appraisal
– Must communicate about the performance of
employee
• I.e. how well they have performed on the set
parameters
– Improper feedback induces the chance of decreasing the
motivation of the employee
• Development of the employees
– Pointing out the weak areas or improvement areas
• Which could have increased the performance
Performance Management
• Documentation
– Performance management should be in concern with the
legal aspects of employee performance
• E.g. PM should not be used to discriminate against employees on
the basis or race, religion, age and gender
– Labor welfare Officer often asks about the documents
related to the performance appraisal of the employees
– Termination of an employee must be performance
document supported
• His/her performance should decrease sufficiently and
continuously
• Then only terminate
• He/she must be given clear cut warning in advance of 6-7 months
– Document also provide the list of top performers
• Used for identifying future leaders
Performance Appraisal Steps
Appraisal Methods
• HR Managers
– Establish the performance standards
– Measure them with the actual performance
• Three approaches to do appraisal
– Appraising on absolute standards
– Appraising on relative standards
– Appraising on outcomes
Appraisal Methods
• Absolute standards
– Employees are compared to a
standard/benchmark
– It is independent of other employees in the group
– Employee is assessed on job traits and behavior
– Includes following methods
• The Critical Incident Appraisal
• The Checklist
• The adjective rating scale
• Forced Choice
• Behaviorally anchored rating scale
Absolute Standards Appraisal Types
1. The Critical Incident Appraisal
i. Appraiser focuses on critical/important behaviors that
differentiate between doing a job effectively and doing it
ineffectively
ii. The appraiser writes the anecdotes describing employee
actions that were especially effective or ineffective
i. E.g. Police man bringing order in an hostile
environment
iii. In this method specific behaviors are cited and not traits
iv. It is more valid method of appraisal as the behavior is
clearly job related
v. This method judges behavior related to performance and
not personalities
vi. Employees have clear cut reference for desired behavior
Absolute Standards Appraisal Types
• The Critical Incident Appraisal
– Demerits
» Time consuming process since writing down incidents on daily
basis is burdensome.
» Quantification and comparison of behavior becomes difficult
2. Checklist Appraisal
i. Evaluator uses behavioral descriptions and checks off behavior that
apply to the employee
ii. Merely checks and ticks “yes” or “no”
Absolute Standards Appraisal Types
Absolute Standards Appraisal Types

• Once the checklist is rated by the


evaluator/supervisor
• It is handed over to the HRM staff for evaluation
• The final appraisal is returned back to the rater
for discussion
• Demerit
– It is inefficient if there are numerous job categories,
you need to prepare individualized checklist
Absolute Standards Appraisal Types
• Adjective Rating Scale Appraisal
– In this method
• Rating scale is used for assessing factors such as
– Quantity and quality of work
– Job knowledge
– Cooperation
– Punctuality
– Honesty
– Loyalty
• This method is more valid and accurate when words
like loyalty and integrity are defined precisely
• Otherwise leads to subjectivity in the evaluation
• Provides quantification of data
• Provides scope for comparison between employees
across job domain
Absolute Standards Appraisal Types
Absolute Standards Appraisal Types
• Forced Choice Appraisal
– A special type of checklist
– The rater must choose between two or more
statements
– Each statement can be favorable or unfavorable
– The rater’s job is to identify the best descriptive
statement
– E.g.
– Evaluating a teacher on lecture delivery
a. Lectures with confidence
b. Maintains the interest of the class
c. Allows students to learn the concepts on their own
Absolute Standards Appraisal Types
• Behaviorally Anchored Rating Scales (BARS)
– Is a combination of Critical Incident and adjective
rating scale approaches
– The appraiser rates the employee along a
continuum, but the points are example of actual
behavior on the job rather than general
descriptions or trait
Relative Standards Appraisal Types
• These methods are relative rather than
absolute
– Group order ranking
– Individual ranking
– Paired comparison
Relative Standards Appraisal Types
• Group Order Ranking
– Evaluator places the employee in a particular class
• E.g. Top 20%
– Advantage
• Clearly classifying top or bottom
– Disadvantage
• If the employee number is small say 20
– 20% of 20 = 4
» This means only 4 are at top, but it may be so that others
are also very close to the top 4.
» The evaluator is forced to rate them not in top 4 or not to
promote
Relative Standards Appraisal Types
• Individual Ranking
– Rank all employees from highest to lowest
– Only one employee can be best
– The difference between each employee is
considered equal
• Diff Rank 1 and 2 = Diff Rank 15 and 16
– It is easy to rank when the employee size is small
Relative Standards Appraisal Types
• Paired Comparison Method
– Calculated based on total [N(N-1)]/2 comparisons
– A score is obtained for each employee by counting
the number of pairs in which the individual is
preferred member
– Difficult to use when N is large
Using Achieved Outcomes to evaluate employees
• Employees are evaluated on
– How well employees achieved the specific set of
objectives which are critical in the successful
completion of their job
– Also known as Goal setting approach or MBO
(Management by objectives)
• E.g. There is organization’s overall objectives
– The overall objective is translated into specific objectives for
different departments
– The department level objective is divided into specific objective
for each employee of the department.
– If all the employees of a department achieve their goals, the
overall department will achieve their goal.
– If all the department achieve their goal, the organization will
achieve its goal
– It is top down as well as bottom up approach
Using Achieved Outcomes to evaluate employees

• Four Common Elements in an MBO program


1. Goal Specificity
2. Participative Decision Making
3. An explicit time period
4. Performance feedback
• Goal Specificity
– Specific Goals are set in such a way that they are
operational (measurable)
• Eg. Reducing the cost of production of the product by
Rs.08/unit
Using Achieved Outcomes to evaluate employees
• Participative Decision Making
• The objectives (What to achieve and how to achieve) are
not set only by the supervisor
• Rather by mutual agreement
• An explicit time period
• Each objective has a concise time too
• Generally six month or one year
• Performance feedback
– Continuous feedback on performance and goals
– Helps in monitoring and corrective their own actions
– Generally a formal appraisal meet also takes for detailed review and
feedback
Categorization of Performance Appraisal Method

1. Past oriented Method


2. Future oriented Method
Past Oriented Appraisal

1.Assessing the 1. Assesses/aims at


employees on their future potential/

Future Oriented Appraisal


past performance targets
2. Evaluating what 2. Establishing goals
was achieved in the which was not
last year achieved in the last
year
Categorization of Performance Appraisal Method
Past Oriented Appraisal Method
1. The Critical Incident Appraisal
2. Checklist Appraisal
3. Adjective Rating Scale Appraisal
4. Forced Choice Appraisal
5. Behaviorally Anchored Rating Scales (BARS)
6. Ranking Method
7. Paired Comparison Method
8. Essay Method
9. Observation Method
10. Costing method
1. Evaluated on the ROI base
Categorization of Performance Appraisal Method
• Future Oriented Appraisal Method
1. Management By Objectives (MBO)
2. Psychological Appraisal
1. Assesses employees potential for future performance
1. Done in form of interviews
2. Psychological Tests
3. Discussion with supervisor
4. More focused on employees personal attributes such as
1. Intellect, motivation and emotional abilities
3. Assessment center
1. Managerial employees come together to participate in job
related exercises
2. Evaluated by trained observers
3. Characteristics assessed are
1. Planning, Communication, Self confidence, Decision making
Categorization of Performance Appraisal Method
• Future Oriented Appraisal Method
4. 360 – Degree Feedback
– Involves systematic collection of data from all the
relevant interacting stakeholders of the employees
– Gives a much broader horizon of the feedback
– Generates scope for greater self development
– Useful in measuring
• Inter personal skills
• Customer satisfaction etc
– Negative side
• Time consuming
• All the raters may not be adept at providing balanced
and objective feedback
Distortions in Performance Appraisal
Distortions in Performance Appraisal
• Leniency Error
– Evaluator is lenient in rating all the subordinate
– Performance is overstated
– If all the employees are rated by same evaluator the
error is ruled out
• Central Tendency Error
– Rating everyone close to the average
– Difficult to identify poor and good performer
• Halo Error
– The tendency to let our assessment of one trait of an
individual influence our evaluation of that individual
on many other traits
Distortions in Performance Appraisal
• Similarity Error
– Evaluator rate better people who display
attributes similar to the rater
• Low Appraiser motivation
– If the appraiser is not motivated in rating
– Not believes in the process
– Then may wrongly rate the employees
• Inflationary Pressure
– Due to inflation the target is increased
– Inflation adjusted
Effective PMS Process
Post Appraisal Interview
• It provides the employees the feedback
information
• Opportunity to the appraiser to explain the
employee his rating
• Opportunity to the employees to explain his
views about the rating and promotion
– Internal & External factors responsible for bad
performance
• It helps both the parties to review
– Standards
– Establish new standards based on the reality
Post Appraisal Interview
• Guidelines for the managers in conducting the
interview
– Encourage for self assessment
• This enables employees to have input before the
interview
– Invite Participation
• Problems are known to both the parties
– Express Appreciation
• Give positive feedback by praising the good work
– Minimize criticism
• Don’t exaggerate the weak points of the employee
• Convey as areas of improvement
Post Appraisal Interview
• Guidelines for the managers in conducting the
interview
– Change the behavior not the person
– Focus on problem solving rather than criticizing
– Be supportive
• Use a supportive language and body language