Human Resource Management Essentials

Cheatsheet Content

Course Overview Human Resource Management (HRM) focuses on people as the core asset of organizations. It covers various aspects from planning and development to managing emerging issues like diversity and workplace health. Course Objectives Gain insight into operative functions of personnel management. Understand the importance of human resources as an asset. Acquire a broader perspective on managing human resources effectively. Understand major principles and techniques of HRM systems. Understand the dynamic nature and applications of HRM. Be aware of environmental influences on HR and how to manage them. Introduction to HRM HRM is a body of knowledge and practices defining the nature of work and regulating employment relationships. It covers five functional areas: Staffing: Obtaining people with appropriate skills, abilities, knowledge. Practices include HR planning, job analysis, recruitment, selection. Rewards: Design and administration of reward systems. Practices include job evaluation, performance appraisal, benefits. Employee Development: Analyzing training needs to ensure employees have knowledge and skills to perform jobs or advance. Performance appraisal identifies key skills and competencies. Employee Maintenance: Administration and monitoring of workplace safety, health, and welfare policies to retain a competent workforce and comply with regulations. Employee Relations: Employee involvement/participation schemes, negotiations between management and union representatives over employment contract decisions. Meaning and Definition HRM is about attracting, developing, and maintaining quality personnel, integral to a manager's organizing responsibilities. It matches an organization's needs to employees' skills and abilities. Key terms: Human: Homo-sapiens – Social Animal Resources: Human, Physical, Financial, Technical, Informational etc. Management: Function of Planning, Organizing, Leading & Controlling of organizational resources to accomplish goals efficiently and effectively. Definitions by Scholars Strategic, integrated, coherent approach: Employment, development, and well-being of people in organizations. Management decisions and action: Affecting the relationship between organization and its employees (Beer et al., 1984). Policies to maximize organizational integration: Employee commitment, flexibility, and quality of work (Guest, 1987). Management function: Helps managers recruit, select, train, and develop members for an organization. HRM focuses on: People aspect of Management. Practices that help the organization deal effectively with its people. Enhancing employee contribution to organizational effectiveness, emphasizing strategic thinking about people as key resources. Proactive rather than reactive approach. Importance of Human Resource Management HRM's significance lies in four dimensions: company, professional, social, and national. Significance for an Organization HRM helps achieve organizational goals more efficiently and effectively by: Attracting and retaining talent through effective HRP, recruitment, selection, placement, orientation, compensation, and promotion policies. Developing necessary skills and attitudes through training, development, performance appraisal. Securing willing cooperation through motivation, participation, grievance handling. Effectively utilizing available human resources. Ensuring a future team of competent and dedicated employees. Professional Significance Effective HR management improves quality of work life and fosters teamwork by: Providing maximum opportunities for personal development. Maintaining healthy relationships between individuals and work groups. Allocating work properly. Social Significance Proper HRM enhances the dignity and self-respect of labor by: Providing suitable employment with social and psychological satisfaction. Maintaining balance between jobs and jobseekers (numbers, qualifications, needs, aptitudes). Eliminating wastage of human resources through physical and mental health conservation. National Significance HR and its management play a vital role in national development. Efficient and committed manpower is required for effective exploitation of natural, physical, and financial resources. Development depends on the skills, attitudes, and values of human resources. Effective HRM speeds up economic growth, leading to higher living standards and fuller employment. Evolution and Development of HRM Modern HRM has developed through several stages: Commodity Concept: Before the industrial revolution, labor was treated as a commodity to be bought and sold. Factor of Production Concept: Employees were considered a factor of production (like land, materials, machinery). Taylor's scientific management stressed selection and training for maximum productivity. Paternalistic Concept: Employers began providing schemes to workers, adopting a fatherly and protective attitude. Humanitarian Concept: Based on the belief that employees have inalienable rights, and employers should protect their social and psychological satisfaction. Behavioral Human Resource Concept: Analyzed human behavior in organizations, focusing on motivation, group dynamics, organizational climate, and conflict. Employees were seen as valuable assets. Emerging Concept: Employees are now considered partners in industry, often sharing stock membership. HRM is emerging as a distinct discipline. Human Resource Management Objectives The primary objective is to ensure the availability of the right people for the right jobs to effectively achieve organizational goals. This includes: Employee's Objective: Assisting employees in achieving personal goals like training, adequate income, placement, compensation, pleasant working conditions, security, growth, and better quality of work life. Owners' Objectives: Ensuring organizational objectives are met through HR contributions, leading to profitability for businesses or client satisfaction for non-businesses. Social Objectives: HRM contributes to product quality, fair promotion, and a healthy environment. Legal Objectives (Legal Requirement): Complying with government laws and regulations, such as avoiding discrimination, ensuring equal employment opportunities, fair treatment, minimum pay, affirmative action, fair working conditions, avoiding negligent hiring, and preventing sexual harassment. UNIT TWO: Human Resource Environment 1.1 Learning Objectives Explain the Human Resource environment. Understand the HRM model and its elements. Introduction The environment includes all forces influencing the HR department, positively or negatively. HR managers must analyze this environment to be proactive. Proactive steps are crucial for organizational survival in a changing, competitive business landscape. External Environment Factors Technological factors Economic challenges Political/Government rules and regulations Social factors Unions and employees' demands Workforce diversity Internal Environment Factors Mission/Strategy Policies Organizational culture Organizational structure HR systems Leaders' style and experience Human Resource Management Model This model visualizes the link between business strategy and HR strategy. Different models describe this relationship: Separation Model: No relationship between organizational and HR strategy. Fit Model: HR strategy is designed to fit organizational strategy, recognizing people's importance in achieving goals. Dialogue Model: Recognizes the need for two-way communication and debate between HR and organizational strategy. Holistic Model: People are recognized as key to competitive advantage, making HR strategy an end in itself, integrated with organizational strategy. HR-Driven Model: HR strategy is in prime position, driving organizational strategy based on employee strengths. UNIT THREE: Job Analysis & HR Planning 3.1. Learning Objectives Define job analysis and human resource planning. Identify methods of acquiring job analysis information. Understand the importance and potential harms of job analysis information. List the importance of human resource planning. Explain factors affecting human resource planning. 3.2. Introduction Organizations exist through people. Jobs are the cornerstone, requiring formal study through job analysis to answer questions like: How much time for tasks? What behaviors are needed? What kind of person is best suited? How can this information be used for personnel management? 3.3. Job Analysis Job analysis is the process of collecting information about a job, its "anatomy." It is performed on ongoing jobs. Edwin B. Flippo: "The process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of the analysis are job descriptions and specifications." Systematic analysis: Collects information on what the jobholder does, under what circumstances, and what qualifications are required. Job analysis determines tasks, skills, knowledge, abilities, and responsibilities for successful job performance. Job Description: Requirements relating to the job. Job Specification: Qualities demanded from a jobholder. 3.3.2 Steps in Job Analysis Decide the use of job analysis information: Focus on key areas where the information will be used, considering needs, priorities, and constraints. Review relevant background information: Organization charts, existing job descriptions, and process flow charts provide context. Select representative positions: Analyze a sample of similar jobs rather than all of them. Actually analyze the job: Collect data on activities, required behaviors, working conditions, and human traits/abilities using various methods. Verify information: Confirm data with the worker and supervisor to ensure accuracy and gain acceptance. Develop job description and job specification: These are the tangible outputs, outlining job activities, responsibilities, and required personal qualities. 3.3.3 Methods of Collecting Job Analysis Information Various methods exist for gathering job data: Observation: Data collected by observing an employee at work. Reliable for observable physical activities but less suitable for mental tasks. Interview: Job analysts interview jobholders to obtain information. Considered satisfactory when coupled with observation. Merit: Simple, quick, unearths information not on written forms, skilled interviewers can find hidden activities. Demerit: Time-consuming, potential for distortion (intentional or unintentional), employees may exaggerate responsibilities. Job Questionnaires: Circulated among workers to report job facts. Merit: Quick and efficient for large numbers of employees. Demerit: Time-consuming and expensive to develop, potential for misinterpretation. Written Narratives or Maintenance of Record: Employees and supervisors keep records of daily operations. Time-consuming. Job Performance: Analyst performs the job to gain firsthand experience. Suitable for jobs with low skill requirements. Multiple Sources: Using various sources (individuals, groups, supervisors, observations, questionnaires) helps avoid inaccuracies. 3.3.4 Importance of Job Analysis Information Job analysis is crucial for overall personnel management and provides data for: HRP: Human Resource Planning. Recruitment and Selection: Guides in finding suitable candidates. Training and Development: Determines content and subject matter. Job Evaluation: Helps estimate job value and compensation. Remuneration: Sets wage differentials. Performance Appraisal: Establishes performance standards. EEO Compliance: Ensures selection criteria are job-related. Job Definition: Describes duties and responsibilities. Promotion and Transfer: Evaluates employees for career moves. Employee Safety and Health: Uncovers unsafe practices. Placement and Orientation: Provides clear job requirements. 3.3.5 Job Description A factual, organized statement describing a job's title, location, duties, responsibilities, working conditions, hazards, and relationships. It differentiates jobs and sets their outer limits. Contents: Job identification: Title, code, department. Job summary: Activities and tasks performed. Job duties and responsibilities: Core of the description, including frequency. Working condition: Physical environment (heat, light, noise, dust, risks). Social environment: Work group size, interpersonal interactions. Machines, tools and equipment: Major items used. Supervision: Extent of supervision given/received, superior/subordinate designations. Relation with other jobs: Jobs above and below, vertical workflow, promotion channel. 3.3.6 Job Specification Focuses on the person, outlining minimum acceptable human qualities (physical, mental, social, psychological, behavioral) needed for effective job performance. Guides recruitment and selection. Example: Job Specification of Compensation Manager Position title: Manager, wage and salary administration. Code number: HR/1028 Department: Human resource division Job summary: Responsible for company wage and salary programs, job analysis, job evaluation, wage and salary surveys and benefit administration. Job duties: Supervises job analysis studies, approves descriptions, chairs job evaluation committee, conducts wage/salary surveys, administers fringe benefits. Working conditions: Normal 8-hour days. Supervision: Reports to director, human resources; supervises wage/salary department officers. Relationships: With equivalent levels in other departments, local officials. Education and training: Bachelor's (min 3.0 CGPA), Law degree/diploma desirable, MBA (Marketing specialization). Experience: At least 5 years in similar position in large organization. Age: Preferable 35-42. Other requirements: Fluency in speaking/writing, good health, ability to work long hours, good computer knowledge. 3.3.7 Potential Problems with Job Analysis Top management support missing: Lack of clear communication about the importance of employee participation. Single means and source for data: Relying on one method when a combination would provide better data. No participation from supervisor/job holder in design: Analyses planned by one person without involving key stakeholders. No training or motivation for job holders: Employees are often unprepared or unmotivated to provide quality data. Insufficient time: Job analysis is often rushed, leading to incomplete data. Activity may be distorted: Employees may intentionally or unintentionally provide inaccurate data, especially if they feel scrutinized. Failure to analyze the job: Focus only on what the job holder does, not on whether it's done correctly or can be improved. 3.3.8 Meaning and Definition of Human Resource Planning (HRP) HRP is the systematic process of reviewing human resource requirements to ensure the right number of employees with the necessary skills are available when needed. Bulla and Scott (1994): "The process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements." Reilly (2003): "A process in which an organization attempts to estimate the demand for labour and evaluate the size, nature and sources of supply which will be required to meet the demand." HRP involves forecasting future demand and supply of employees, and designing programs to correct discrepancies. It ensures the organization has the right people, in the right place, at the right time to achieve objectives efficiently. 3.3.9. Importance of Human Resource Planning HRP benefits organizations and nations by optimizing human resource use: Recruitment of qualified human Resources: Essential for long-term survival, especially for scarce skilled labor. Control over recruitment and training Cost: Reduces costs associated with hiring, training, and maintaining employees. Adjusting with rapid technological change: Helps forecast and meet changing manpower needs due to evolving technology. Reducing labour turnover: Minimizes loss of experienced and skilled labor due to dissatisfaction, retirement, etc. Improvement of labour productivity: Satisfied workers are more productive; HRP improves morale and productivity. Mobility of labour: Helps retain qualified personnel in a competitive job market. Treating Manpower as Real Corporate Assets: Recognizes the human factor as crucial for productivity. Facilitating expansion programmes: Ensures continued supply of manpower for growing organizational activities. 3.3.10 Steps [Procedures] in Human Resource Planning The main procedures in HRP are: Conducting external and internal environmental scanning: Analyzing economic conditions, labor market, laws, regulations, social factors, unions, workforce diversity, and internal factors like performance, absenteeism, turnover. Determining future HR requirements: Based on business plans, sales, production, financial goals, and technological changes. Determining future HR availabilities: Estimating employee numbers and types available, starting with an inventory and subtracting anticipated losses. Determining net manpower requirement (NMPR): Comparing overall personnel requirement with personnel inventory. Developing action plan: Adjusting for surplus or shortage. Shortage Solutions: Hire new full-time employees, offer incentives for postponing retirement, re-hire retired employees, reduce turnover, use overtime, subcontract, hire temporary employees, re-engineer. Surplus Solutions: Hire freezing, early retirement incentives, transfer/re-assign, utilize slack time for training, lay off, pay reduction, demotion, termination. 3.3.11. Factors Affecting Human Resource Planning Type and strategy of the organization: Influences production processes, staff types, and managerial personnel needs. Organization growth cycle: HRP needs vary with organizational stages (embryonic, growth, mature, decline). Environmental uncertainties: Political, social, and economic changes require careful recruitment, selection, and training policies. Type and quality of information used to forecast HR needs: Information from job analysis, management inventories, recruitment sources, skill inventories, labor market analysis, compensation programs, turnover data, retirement plans. Nature of the job being filled: Vacancies arise from separations, promotions, and expansion. Off-loading the work/Outsourcing: Using external parties for work can affect internal HR planning. UNIT FOUR: Recruitment & Selection Objective Understand various concepts of recruitment. Understand various concepts of selection. Understand various concepts of induction. Introduction Personnel are the most important resource. Ensuring the right number of people with the right skills is fundamental for organizational success. Effective personnel planning, recruitment, selection, and socialization are crucial for staffing jobs with qualified individuals. 4.1. Meaning and Definition of Recruitment Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs. Sources can be internal or external. Recruitment is the process of attracting potential new employees to the organization, closely related to selection. It supplies a pool of qualified applicants. Recruitment needs: Planned: Arise from changes in organizational retirement policy. Anticipated: Movements in personnel that can be predicted. Unexpected: Due to resignation, death, accidents, illness. 4.1.1 Features of Recruitment A process or series of activities. Linking activity: Connects employers and job seekers. Positive function: Develops a pool of eligible candidates. Basic purpose: Locate and attract people to meet job requirements. Important function: Acquires necessary personnel for continued organizational function. Pervasive function: All organizations engage in it, but volume varies with size, nature, and environment. Complex job: Affected by organization's image, job nature, policies, working conditions, compensation, growth rate. 4.1.2 Purpose and Importance The general purpose is to provide a pool of potentially qualified job candidates: Increase job candidates at minimum cost. Improve selection success by reducing unqualified applicants. Reduce turnover by attracting candidates less likely to leave quickly. Meet social and legal obligations regarding workforce compensation. Identify and prepare potential job applicants. Increase organizational and individual effectiveness. Evaluate recruiting techniques and sources. Poor recruitment can be costly: Complicates selection, leading to lower standards. Increases training and supervision costs, decreases productivity. May distort wage structures if entry-level pay is raised to attract talent. 4.1.3. Factors Governing Recruitment Recruitment is influenced by external and internal factors. External Factors: Supply and demand of specific skill: High demand for a skill relative to supply requires extra recruiting effort. Unemployment rate: High unemployment simplifies recruitment; low unemployment requires more effort. Political and legal consideration: Laws regarding job reservations for minorities, physically handicapped, etc. Sons of soil: Preference for local residents. Company's image: Job seekers' perception of the company. Location of the organization: Influences recruitment nature and workforce composition. Internal Factors: Recruiting policy of the organization: Internal vs. external recruitment preference, use of temporary/part-time employees. Quality of HRP: Effective HRP facilitates recruitment by identifying sources and methods. Size of the organization: Larger organizations may find recruitment less problematic. Cost of recruiting: HRP and proactive HR practices can minimize costs. Growth and Expansion: Growing organizations have higher recruitment needs. 4.1.4. Sources and Methods of Recruitment Internal Sources: Employees already on the payroll. Present employees: Promotion, transfers, upgrading, demotion. Retired and retrenched employees: Re-hiring. Methods of internal recruitment: Closed internal recruitment system: Informal, based on managerial nominations, can lead to favoritism. Open internal recruitment system (Job posting and bidding): Notices of available jobs posted, allowing employees to apply. Advantages of internal sources: Improved employee morale and motivation. Better assessment of existing employees. Promotes loyalty and commitment. Familiarity with organization and policies reduces orientation/training costs. Good union relations. Reduces labor turnover. Improves return on investment of human resources. Demerits of internal sources: Inbreeding. Capable persons may be overlooked if promotion is seniority-based. Restricted choice, limited talent. Favouritism. Not available for newly established enterprises. External Sources: Outside the organization. High school and vocational schools Colleges and Universities Competitors and other firms The unemployed Methods of external recruitment: Newspaper advertisements: Quick, flexible, targets specific areas, but can attract many unqualified applicants. Television and Radio advertisements: Reaches passive job seekers, targets specific audiences, but can be expensive. Campus recruiting: Effective for entry-level positions, lower salary expectations, but applicants lack experience. Walk ins/unsolicited applications: Low cost for companies, but may not attract minorities or currently satisfied workers. Employee referrals: Current employees refer applicants, providing accurate information, but can lead to cliques or discrimination. Advantages of external sources: Access to requisite skills, education, training. Wider market for selection, irrespective of background. Access to expertise and experience from other organizations. Always available, even for new enterprises. Brings in new blood and ideas. Disadvantages of external sources: More expensive and time-consuming. Requires detailed screening. Less familiarity with the organization, requiring more orientation. May affect motivation and loyalty of existing staff if higher levels are filled externally. 4.1.4. Organizational Inducement in Recruitment Organizational inducements are positive features and benefits offered to attract applicants: Organizational compensation system (starting salaries, pay raises, incentives, benefits). Career opportunities (growth, development, promotion). Organizational reputation (general treatment of employees, quality of products/services, social endeavors). 4.2 The Meaning of Selection Selection is the process of choosing the best person(s) from a list of applicants who meet the selection criteria, considering environmental conditions. It matches applicant qualifications with job requirements, essentially a process of rejection. Selection differs from recruitment: recruitment identifies sources and stimulates applications; selection chooses from those applicants. Recruitment is positive; selection is negative (rejecting many to find a few suitable ones). 4.2.1 The Significance of Employee Selection Effective selection is crucial for organizational success: Improves productivity: Selecting qualified employees enhances organizational benefits. Long-lasting decision: Difficult to reverse. Poor hires negatively impact success. Affects other HR functions: Impacts training needs if less qualified people are hired. 4.2.2 Environmental Factors Affecting the Selection Process Legal considerations: Legislation, executive orders, court decisions influence selection tools. Speed of Decision Making: Time constraints can significantly impact the selection process. Organizational hierarchy: Different methods used for varying levels (e.g., extensive checks for managers, simple tests for clerical). Applicant pool (labour market): Number of qualified applicants affects selectivity. Probationary period: Used to evaluate performance or check validity of selection. 4.2.3 Selection Criteria Based on job analysis, these characteristics are essential for high performance: Categories of criteria: Education, experience, physical characteristics, other personal characteristics. Formal education: Used as a surrogate for abilities, screening based on specified educational levels, institutions, GPA. Experience and past performance: Indicators of future job performance, work-related attitudes. Physical characteristics: Only legally used if directly related to job effectiveness (e.g., eyesight for pilots). Personality characteristics and personality type: Marital status, sex, age, etc. Age restrictions are illegal unless job-related. 4.2.4 Selection Process A series of steps, or hurdles, designed to eliminate unqualified candidates. Not all organizations use all hurdles, and their order may vary. Complexity increases with job level. Basic steps in selection: Completing and screening of the application form Preliminary interview Employment test Second or follow up or diagnostic interview Reference check Physical (medical examination) Final decision or final approval Application blank: Widely used for collecting candidate information. Preliminary interviews: Screens out unqualified/uninterested applicants, explains jobs, answers questions. Employment test: Measures characteristics like aptitude, psychomotor skills, job knowledge, proficiency, interest, personality. Polygraph tests measure physiological changes. Secondary or follow-up interview: Supplements information, determines suitability for specific openings. Structured interview: Predetermined approach, job-related questions, standardized evaluation. Semi-structured interview: Major questions pre-planned, flexibility for in-depth probing. Unstructured interview: Active listening, broad questions, high spontaneity, but prone to bias. Stress interview: Deliberately creates tension to assess coping mechanisms. Depth Interview/ Extensive Interview: Covers life history, in-depth personality profile. Interview problems: Contrast effects or Halo effect: Influence of preceding candidates or overall impression. Similarity to interviewer: Bias due to shared characteristics. Non-verbal signals: Interviewers swayed by appearance, posture, etc. Interviewer lack of knowledge: Inability to identify job-relevant characteristics. Over-emphasis on negative characteristics: Focusing on minor flaws. Snap judgment: Forming an opinion too early. Legal Considerations in interview: Do not ask about children, age, physical/mental disability (unless job-related), height/weight for identification, maiden name, citizenship, arrest records (only convictions), smoking habits (unless related to regulations). Reference checks: Contacting previous employers, educational institutions, or public figures. Selection decision: HR department makes recommendations, concerned department gives final approval. Physical examination or medical evaluation: Determines physical fitness, reveals disabilities, prevents contagious diseases. Final approval or hiring decision: Offer of employment. 3.2.5 Reviewing the Hiring Process Evaluation after hiring considers: Number and quality of initial applicants. Effectiveness of advertising. Unasked questions. Interviewer performance. Contribution of employment tests. 4.3.1 Definition and Meaning of Orientation Orientation introduces new employees to the organization, its mission, activities, programs, and job. It socializes employees to norms, values, and behaviors. Handbooks are often used. 4.3.2 The Purpose of Orientation Make new employees feel welcome. Reduce anxiety and hazing. Socialize to organizational values and behaviors. Help employees succeed in their jobs. Enable quick productivity. Reduce start-up costs. Develop realistic job expectations and satisfaction. Build relationship with supervisor. 4.3.3 Guidelines for Orientation Start with relevant information, then broader policies. Pace the orientation comfortably. Focus on the "human side" (supervisors, co-workers). "Sponsor" new employees with experienced workers. Gradually introduce to colleagues. Allow sufficient time to adjust before increasing job demands. UNIT FIVE: Training and Development 5.1 Learning Objectives Explain the objectives of training and development. Describe the process of training and development. Understand the concept of career development. 5.2 Introduction Training and development are essential for adapting to fast-changing technologies and environments. They improve employee skills and knowledge, contributing to organizational effectiveness. 5.3 Meaning and Definition Training and development are designed efforts to increase employees' knowledge, skills, and abilities. Training: Process of teaching basic skills for present jobs. Development: Systematic education, training, and growth for individual growth beyond specific jobs (often for managers/professionals). 5.4 Needs and Benefits of Training Training is essential due to continuous technological advancements and evolving practices. 5.4.1 Training Needs Factors creating training needs: Increasing use of fast-changing techniques. Employment of inexperienced new labor. Need for effective performance with minimum supervision and waste. Refresher training for old employees. Movement from one job to another (transfer, promotion, demotion). Proper monitoring of development ensures purposeful growth congruent with career plans. 5.4.2 Importance of Training Well-planned training results in: Reduction in learning time. Reduction in supervisory burden and accident rate. Improvement in methods of work. Reduction in machine breakage and maintenance cost. Prevention of employee obsolescence. Improvement in product quality and production rate. Improvement of morale and reduction in grievances. Improvement of efficiency and productivity. 5.5 Process of Training and Development Steps in employee training and development: Identify training and development needs (Need Assessment): Organizational level: Determine where and how training should be conducted based on structure, objectives. Occupational level (Job analysis): Determine skills and knowledge required for jobs. Individual level (Person analysis): Identify who needs training and what kind, based on job performance, evaluations. Establishing training and development objectives: Define specific outcomes (SMART: Specific, Measurable, Achievable, Realistic, Time-targeted). Selecting training and development methods (Instructional method): Match content and method to job requirements and learning styles. Implementation of training and development programs: Decide who, who instructs, where, when, and material requirements. Evaluating the training and development programs: Verify success against objectives, assess cost/benefit, improve program effectiveness. Evaluation purposes: Increase program effectiveness, provide feedback to participants, assess objective achievement, reduce professional liability, justify expenses, aid individual trainee decisions. Measurement criteria: Reaction, learning, job behavior, organizational impact, ultimate value. 5.6. Training Methods Methods are classified into on-the-job and off-the-job training. On-the-job training: Individual learns on a regular job under supervision. Job rotation Coaching Job instruction/training through step by step Committee assignment Field trips Internship Apprenticeship Off-the-job training: Trainee separated from job, attention focused on learning material. Vestibule training (simulation) Role playing Lecture methods Conference/ group Discussion Demonstration Case studies Self study and E-learning UNIT SIX: Performance Appraisal Learning Objective Understand the purpose of performance appraisal. List out performance appraisal steps. Understand the methods of Performance Appraisal. Explain problems related to performance appraisal. Learn how to minimize performance appraisal problems. Introduction What is Performance? Productivity (effectiveness and efficiency) and personnel data (accidents, turnover, absences, tardiness). What is Appraisal? Systematic evaluation of employees by supervisors to assess worth, identify strengths/weaknesses, and aid administrative decisions (selection, training, promotion, wages). 6.1 Purposes of Performance Appraisal Providing basis for promotion/transfer/termination: Aids career planning. Enhancing employees' effectiveness: Helps employees understand roles and improves performance. Identifying employees' training and development needs: Audits skills, prepares for future challenges. Removing discontent: Motivates workers by addressing factors causing dissatisfaction. Developing interpersonal relationship: Improves communication and trust between superiors and subordinates. Aiding wage administration: Provides scientific basis for reward allocation, wage fixation, incentives. Exercising control: Managers think about factors influencing performance. Improving communication: Provides feedback to employees. 6.2. The Performance Appraisal Process/steps Establishment of performance standards: Clear, objective standards derived from job analysis and job description. Communication of expectations: Ensure employees understand standards. Measurement of performance: Gather information through observation, reports. Comparison of actual performance with standards: Note deviations and provide constructive feedback. Initiation of corrective action: Address performance gaps (immediate or basic). 6.3. Performance Appraisal Methods Critical Incident Method: Focuses on critical behaviors, documenting effective/ineffective actions. Checklist: Evaluator checks behaviors that apply to the employee; scored by HR. Graphic Rating Scale: Assesses factors like quality of work, job knowledge, loyalty. Paired Comparison: Compares each employee against every other to create a ranking. Management by Objectives (MBO): Converts organizational objectives into individual goals; involves goal setting, action planning, self-control, periodic reviews. 360-degree appraisal: Feedback from boss, peers, subordinates, customers; provides well-rounded view, aids development. 6.4. Problems in Performance Appraisal Leniency Error: Raters are overly generous (positive leniency) or harsh (negative leniency). Halo Effect: Overall impression influences rating on all factors. Similarity Error: Raters evaluate others based on perceived similarity to themselves. Low Appraiser Motivation: Evaluators may be reluctant to give realistic appraisals if it negatively impacts employees. Central Tendency: Raters avoid extreme ratings, clustering around the middle. Recency vs. Primacy Effect: Recent performance or initial impressions disproportionately influence ratings. Horn Effect: Highly critical managers compare subordinates to their own past performance. Contrast Effects: Ratings influenced by performance of other employees. Stereotyping (Rater's Bias): Assessments based on preconceived notions or personal preferences. 6.5. How to minimize Appraisal Problems Improving validity and reliability of performance criteria: Use objective, standardized criteria. Adopting multiple appraisal and different timing: Use multiple sources and conduct appraisals several times a year. Providing better feedback: Communicate results promptly with suggestions for improvement. Training raters: Train managers on performance management, goal setting, and constructive feedback. UNIT SEVEN: Compensation 7.1. Learning Objectives Understand the purpose and meaning of compensation. List out the Factors affecting compensation. Explain various employee benefits and services. 7.2. Introduction Determining monetary compensation is a complex but significant HR function, crucial for organizational success due to its impact on costs and employee attitudes. 7.3 Meaning and Definition of Compensation Compensation includes all rewards employees receive for performing organizational tasks. Direct financial payments: Wages, salaries, incentives, commissions, bonuses. Indirect payments: Financial benefits like insurance, vacation. Employees need to be rewarded fairly. Organizational rewards are both intrinsic and extrinsic. Compensation should be equitable, adequate, and meet government, union, and management requirements. It is influenced by internal and external factors. 7.4 IMPORTANCE OF EQUITABLE / IDEAL COMPENSATION SYSTEM An effective remuneration system is highly significant: Attracts, retains, and motivates competent people. Influences employee loyalty and satisfaction. Impacts performance levels and willingness to excel. Affects job evaluation, recruitment, and selection. Influences union-management relations. Contributes to economic development. 7.5. FACTORS INFLUENCING EMPLOYEE COMPENSATION Factors influencing remuneration can be external or internal. External Factors: Labour market: Supply and demand for specific skills. Cost of living: Consumer price index, cost-of-living adjustments (COLA). Labour unions: Influence pay rates and other benefits through collective bargaining. Government rules and regulations: Minimum wage, equal pay provisions. Comparable wage rate: Wage patterns in the industry and community. Internal Factors: Top level management: Views and strategies affect pay decisions. Labour budget: Resource allocation for compensation. Size and age of the organization: Larger/newer organizations may pay higher wages. Job evaluation and performance appraisal: Helps establish wage differentials and award pay increases. The employee: Performance, seniority, experience, potential. 7.6. INCENTIVE PAYMENTS Monetary benefits for outstanding performance, varying with individual output. Importance: Induces and motivates for higher efficiency and output. Enhances employee earnings. Reduces total and unit cost of production. Reduces supervision, improves equipment utilization, reduces scrap, lost time, absenteeism, turnover, and increases output. 7.7. EMPLOYEE BENEFITS AND SERVICES Fringe benefits and services are indirect compensation, not directly related to performance. Benefits: Direct monetary value (pension, insurance, holiday pay). Services: Indirect value (company newspaper, purchasing service). Characteristics of fringe benefits: Additional to regular wages. Not a substitute for wages/salaries. Primarily advantageous to employees. Can be expressed in cash terms. Provided by employers (unlike welfare services by other agencies). Types of employee benefits and services: Legally required payments: Old age, disability, health insurance, workers' compensation, unemployment compensation. Contingent and deferred benefits: Group life insurance, pension plans, health insurance, disability income, maternity leave, childcare leave, sick leave, dental benefits, tuition aid. Payment for time not worked: Vacations, holidays, voting pay allowance. Other benefits: Travel allowance, company car, moving expense, uniform, tools, employee meals, discounts. 7.8. COMPENSATION ADMINISTRATION IN ETHIOPIAN CIVIL SERVICE SYSTEM Government employees are entitled to benefits like annual leave, maternity leave, sick leave, marriage leave, mourning leaves, special leaves, medical benefits, disability pension, compensation injury leave, and other benefits. 7.8. E-compensation Management Organizations use computers for salary fixation, payment, calculations of allowances, employee benefits, welfare measures, and fringe benefits. UNIT EIGHT: Integration and Maintenance Learning Objective Explain the concept of employee discipline. Understand the concept of Collective bargaining and Grievance handling. Introduction Employee relations reflect perceptions of management, employees, and unions. A good climate fosters trust, fairness, open communication, harmonious relationships, and effective conflict resolution without industrial action. 8.1 Employee Discipline Discipline regulates human activities to ensure controlled performance, encouraging adherence to job standards and sensible behavior. It involves rewards or penalties. Punishment: Deters individuals from offenses and sets examples. Negative Discipline: Involves force or outward influence to ensure rule adherence, using punishment for disobedience. Positive Discipline: Subordinates comply from a desire to cooperate, promoting collaborative efforts and reducing need for formal authority. Indiscipline Nonconformity to rules, leading to chaos, confusion, reduced efficiency, strikes, and production losses. Factors Leading to Indiscipline: Socio-economic and cultural factors. Poor management, insensitive actions, defective communication. Forms of Indiscipline: Absenteeism, insubordination, rule violation, gambling, incompetence, damage to property, strikes, dishonesty, disloyalty. Misconduct: Actions inconsistent with duty, unsafe for employer, immoral, insulting to superiors, disturbing peace, negligence. Purpose and Objectives of Disciplinary Action: Encourage sensible behavior, enforce rules. Serve as an example, punish offenders. Ensure smooth running, maintain industrial peace, improve working relations. Kinds of punishment: Minor Punishments: Warning, censure, fine, withholding increment. Major Punishments: Demotion, discharge, dismissal. 8.2. Employee Relation Elements of employee relations: Formal and informal employment policies. Development, negotiation, and application of formal systems for collective bargaining, dispute handling, and employment regulation. Policies and practices for employee voice and communications. Informal and formal interactions between managers, team leaders, and employees. Philosophies and policies of major players (government, management, unions). Legal framework. Institutions like ACAS and employment tribunals. Bargaining structures and agreements. 8.3. Collective Bargaining A social process that turns disagreements into agreements, establishing rules and decisions on matters of mutual concern. It provides a framework for resolving disputes and regulating employment conditions. Bargaining power: The ability to induce another party to make a decision they would otherwise not. It is not static and is influenced by subjective assessments and the number of elements creating power. Forms of collective bargaining: Conjunctive bargaining: Agreement reached out of absolute requirement for continued operations. Cooperative bargaining: Parties recognize mutual dependence for achieving objectives. 8.4. Grievance Handling Dissatisfaction: Any unrest, expressed or not. Complaint: Spoken or written dissatisfaction brought to attention. Grievance: Formal dispute about employment conditions, registered through procedure. Features of grievance: Discontent with any aspect of the organization. Arises from employment, not personal issues. Can be based on real or imaginary reasons. Forms of grievance: Factual: Legitimate needs unfulfilled (e.g., unpaid wage hike). Imaginary: Dissatisfaction due to wrong perception, not valid reason. Disguised: Dissatisfaction for unknown reasons (e.g., family pressure). Causes of Grievances: Economic: Wage fixation, overtime, bonus, feeling underpaid. Work Environment: Poor physical conditions, tight production norms, defective tools, unfair rules. Supervision: Bias, favoritism, nepotism from supervisors. Work group: Inability to adjust with colleagues, feeling neglected. Miscellaneous: Violations in promotions, safety, transfer, disciplinary rules, fines. UNIT NINE: Promotions, Transfers and Separations Learning Objective This chapter discusses concepts of promotions, transfers, and separations, including their types and reasons. Introduction Promotion: Upward movement to a job with greater responsibilities, higher status, and better salary. Transfer: Horizontal movement to another job, section, department, or plant with same salary, status, and responsibility. Separation: Cessation of service (mandatory retirement, dismissal, resignation, accidents, death). Socialization: Process of acquiring knowledge, skills, and dispositions to become able members of society. Stages of organizational socialization: Pre-arrival stage: Individuals enter with values, attitudes, and expectations. Encounter stage: Individuals confront reality, which may differ from expectations. Metamorphosis/change/transformation stage: New members adapt to the organization's culture and tasks. 9.1 Purpose of Transfer A transfer is a lateral movement with no major change in status or responsibilities. It can be initiated by the company or employee, temporary or permanent. Purposes of transfer: Increase organizational effectiveness. Increase versatility and competency of key positions. Deal with fluctuations in work requirements. Correct incompatibilities in employee relations or erroneous placement. Relieve monotony. Adjust workforce. Punish employees. 9.2 Concept of Mobility Organizational activity to cope with changing requirements, mainly through promotion and transfer. Main purposes: Improve organizational effectiveness. Maximize employee efficiency. Cope with changes in operation. Ensure discipline. 9.2.1 Promotion Upward movement to a job with greater responsibilities, higher status, and better salary. Purposes and advantages: Recognize performance, motivate, develop competitive spirit. Retain skilled employees, reduce discontent. Utilize knowledge/skills, attract competent employees. Promotion Procedure: Formulation of Promotion Policy: Balance internal and external sources. Promotion Channels: Identified through job analysis and career planning. Promotion Appraisals: Dependent on performance appraisal outcomes. Centralized Records: Maintain employee education, experience, skills, abilities. Bases of Promotion: Seniority: Easy to measure, reduces turnover, provides satisfaction. Merit: Motivates competent employees, maintains efficiency. Seniority-cum-Merit: Combines both for a balanced approach. 9.2.2 Demotion Lowering of status, salary, responsibilities; used as a disciplinary measure. Causes of Demotion: Adverse business conditions (recession). Incompetence of the employee. Technological changes (inability to adapt). Disciplinary measure. 9.2.3 Transfer Horizontal movement to another job/location with same salary, status, responsibility. Reasons for transfers: Shortage of employees in one department. Punish employees/deal with work fluctuations. Correction of faulty initial placement. Break monotony, improve employee health. Family-related issues. 9.2.4 Separations Cessation of service due to various reasons. Resignation: Voluntary separation initiated by employee (health, better opportunities). Termination: Employer-initiated end of contract (non-performance, indiscipline). Absconding: Employee leaves without notice (theft, stress, better opportunity). Retirement: Mandatory, premature, or voluntary. Dismissal: Termination as punishment for misconduct/unsatisfactory performance. Suspension: Temporary removal pending inquiry. Retrenchment: Permanent termination for economic reasons. Layoff: Temporary removal from payroll due to external circumstances. 9.3 Types of Promotion Horizontal Promotion: Increase in responsibilities/pay, change in designation within job classification. Vertical Promotion: Greater responsibility, prestige, pay, and change in job nature, transgressing job classification. Dry Promotions: Change in designation without increased responsibilities or pay, often with annual increments. UNIT TEN: Sexual Harassment in Workplace, HRM Empowerment Unit Objectives Acquaint students with basic concepts of sexual harassment in the workplace and HRM empowerment. Introduction Sexual harassment is a long-standing concern in HR. It has gained prominence due to human rights focus and efforts to improve productivity. National laws and organizational policies address prevention, behavior rules, training, and counseling. 10.1 Meaning and Definition Harassment: Making others uncomfortable through actions or words, or putting them at risk. Can be based on gender, race, disability, age, etc. Workplace Harassment: Harassment while doing job or on the way to/from work, by anyone encountered in the workplace. Can be verbal or non-verbal, even if not sexual. Sexual Harassment: A form of unlawful sex discrimination. Unwanted verbal or physical sexual behavior that creates a hostile environment, interferes with work, or is a condition of employment. 10.1.1 Equal Employment Opportunity Federal law (Title VII of Civil Rights Act of 1964) prohibiting discrimination in employment practices (hiring, promotion, discipline). Ensures all employees work in a discrimination-free environment. 10.1.2 Types of Sexual Harassment in the Workplace Quid-Pro-Quo Harassment: "This for that" – sexual favor demanded as a condition for job benefits or to avoid negative consequences. Hostile Work Environment: Employer, supervisor, or co-worker creates an uncomfortable environment due to sex-based conduct. 10.1.3 Prevalence of Sexual Harassment Studies show 40-70% of women and 10-20% of men experience sexual harassment. Cases are increasing, with men filing more complaints. Victims often take no action. 10.1.4 Effects of Sexual Harassment Reduced work performance, productivity, increased turnover, sick leave. Psychological and physical harm to victims (anger, anxiety, depression). Indirect societal effects (e.g., limiting women's achievement). 10.1.5 Remedies Employers can minimize liability and prevent claims by: Issuing a strong policy condemning harassment. Informing employees about the policy and their rights. Developing a complaint procedure. Establishing a management response system (investigation). Providing training for supervisors and managers. Keeping thorough records. Conducting exit interviews. Revising the policy periodically. Encouraging upward communication (surveys, hotlines). 10.1.6 Tips on E-HRM (HR Business Partnering) To implement HR business partnering: Know business drivers for change. Structure HR to support the line. Involve business and HR in implementation. Ensure senior management drives changes. Recognize impact on line managers. Be clear on HR roles. Know how all roles work together. Continually review effectiveness. Ensure the right people are in the right roles. Use virtual teams and align to business parts for seamless service. 10.1.7 Workforce Diversity Management Diversity refers to human characteristics that make people different (age, specialty, orientation, background). If not managed well, it can negatively impact teamwork. Sources of workforce Diversity: Racial & Ethical Groups: Stereotypes, cultural differences. Older Workers: Growing older population, trend towards later retirement. Gender (Women in Business): Increasing representation, but still challenges. Education: Bipolar distribution of educational levels. Dual-Career Families: Challenges and opportunities for organizations (e.g., relocation assistance). Religion and Culture: Increasing diversity due to globalization. Persons with disabilities: Limited work ability, protected by laws like ADA. Immigrants: Highly skilled or minimally educated, eager to work, bring diverse cultures. Young persons with limited education or skills: Often hired for de-skilled jobs. Competitive advantage through Work Force Diversity: Marketing: Diverse workforce brings knowledge of diverse consumer habits. Creativity, innovation, and problem solving: Diverse backgrounds lead to more options and solutions. Flexibility: Diverse workforce fosters adaptable corporate culture, less restrictive policies. 10.1.8 HIV and Workplace HIV impacts productivity and costs due to staff absences, turnover, loss of skilled labor, and stigmatization. Managing HIV in the workplace minimizes costs and protects productivity. ILO Code of Practice on HIV/AIDS and the world of work identifies ten key principles: Recognition of HIV/AIDS as a workplace issue. Non-discrimination on basis of real or perceived HIV status. Gender equality integral to workplace response. Healthy work environment. Social dialogue in strategy development. No screening for exclusion from employment. Confidentiality of HIV-related personal information. Continuation of employment relationship. Prevention strategies. Care and support for infected and affected workers. The ILO Recommendation concerning HIV and AIDS and the World of Work, 2010 (No. 200) strengthens these principles. Scope of Recommendation No. 200: All workers (all forms, arrangements, workplaces). Persons in any employment or occupation. Those in training (interns, apprentices). Volunteers.