Monday, August 2, 2010

Performance Management & Appraisal Terms with Glossary

It's important to understand the various terms and methods used in performance management and appraisals. Most of these aren't difficult to understand, but people often get confused about the meanings.

Documentation: The process of creating a paper trail to record data such as discussions had with employee, results of those discussions, both supervisor and employee comments, agreements between the two.

Objectives or Results: Statements of what an employee is supposed to achieve.

Ongoing Performance Communication : Communication between manager and employee all throughout the year to ensure that problems are identified early, and so there are NO SUPRPRISES during the performance appraisal.

Performance Review : Usually refers to a meeting to review and evaluate performance, involving supervisor and employee. Often done once a year, but to be effective performance reviews, or at least informal meetings to discuss performance should be undertaken at least every few months.

Performance Appraisal : The regular (usual annual) process where an employees performance for the year is assessed by manager and/or employee. It is only one part of the performance management approach. Usually means the same as "performance review".

Performance Diagnosis : Often performance problems are a result of a number of factors, not just the fault of the employee.

Performance Management : The larger process of defining what employees should be doing, ongoing communication during the year, linking of individual performance to organization needs, and the evaluating of appraising of performance.

Performance Planning : The process of communication between manager and employee that results in MUTUAL UNDERSTANDING of what the employee is to be doing during the next period of time. Often includes setting objectives and standards of performance.

Progressive Discipline : The process of addressing performance difficulties by first trying to help, then setting up increasingly strong consequences for failure to reach the desired levels of performance.

Ranking Scales : A way of evaluating staff by comparing them to each other, so there is a best, a second best, and so on. This is REAL SERIOUS TROUBLE, and almost always destructive.

Standards of Performance : Mutually agreed upon criteria used to describe how WELL an employee must perform, written to reduce subjective judgement.


INTRODUCTION

Managing employee performance is an integral part of the work that all managers and rating officials perform throughout the year. It is as important as managing financial resources and program outcomes because employee performance or the lack thereof, has a profound effect on both the financial and program components of any organization.

The Department of the Interior’s performance management policy is designed to document the expectations of individual and organizational performance, provide a meaningful process by which employees can be rewarded for noteworthy contributions to the organization, and provide a mechanism to improve individual/organizational performance as necessary.

To accomplish these objectives, managers need to identify organizational goals to be accomplished, communicate individual and organizational goals to employees that support the overall strategic mission and goals of the Department, monitor and evaluate employee performance, and use performance as a basis for appropriate personnel actions, including rewarding noteworthy performance and taking action to improve less than successful performance.

The Office of Personnel Management defines performance management as the systematic process of:

• planning work and setting expectations

• continually monitoring performance

• developing the capacity to perform

• periodically rating performance in a summary fashion; and

• rewarding good performance

PURPOSE OF PERFORMANCE APPRAISAL

Performance Appraisal is being practiced in 90% of the organisations worldwide. Self-appraisal and potential appraisal also form a part of the performance appraisal processes.

· To review the performance of the employees over a given period of time.

· To judge the gap between the actual and the desired performance.

· To help the management in exercising organizational control.

· Helps to strengthen the relationship and communication between superior – subordinates and management – employees.

· To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.

· To provide feedback to the employees regarding their past performance.

· Provide information to assist in the other personal decisions in the organization.

· Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

· To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

· To reduce the grievances of the employees.

The most significant reasons of using Performance appraisal are:

· Making payroll and compensation decisions – 80%

· Training and development needs – 71%

· Identifying the gaps in desired and actual performance and its cause – 76%

· Deciding future goals and course of action – 42%

· Promotions, demotions and transfers – 49%

· Other purposes – 6% (including job analysis and providing superior support, assistance and counseling)


BENEFITS OF PERFORMANCE APPRAISAL

Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed. Almost universally, where performance appraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive.

Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced.

For many employees, an "official" appraisal interview may be the only time they get to have exclusive, uninterrupted access to their supervisor. Said one employee of a large organization after his first formal performance appraisal, "In twenty years of work, that's the first time anyone has ever bothered to sit down and tell me how I'm doing."

The value of this intense and purposeful interaction between a supervisors and subordinate should not be underestimated.

1. MOTIVATION AND SATISFACTION

Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse.

Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings will even prefer negative recognition in preference to no recognition at all.

If nothing else, the existence of an appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development. This alone can have a positive influence on the individual's sense of worth, commitment and belonging.

The strength and prevalence of this natural human desire for individual recognition should not be overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if more attention were paid to it. Regular performance appraisal, at least, is a good start.

2. TRAINING AND DEVELOPMENT

Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs.

During the discussion of an employee's work performance, the presence or absence of work skills can become very obvious - even to those who habitually reject the idea of training for them!

Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations.

From the point of view of the organization as a whole, consolidated appraisal data can form a picture of the overall demand for training. This data may be analysed by variables such as sex, department, etc. In this respect, performance appraisal can provide a regular and efficient training needs audit for the entire organization.

3. RECRUITMENT AND INDUCTION

Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years?

Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires (and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady, or declining.

4. EMPLOYEE EVALUATION

Though often understated or even denied, evaluation is a legitimate and major objective of performance appraisal.

But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and developmental priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual.

Though organizations have a clear right - some would say a duty - to conduct such evaluations of performance, many still recoil from the idea. To them, the explicit process of judgement can be dehumanizing and demoralizing and a source of anxiety and distress to employees.

It is been said by some that appraisal cannot serve the needs of evaluation and development at the same time; it must be one or the other.

But there may be an acceptable middle ground, where the need to evaluate employees objectively, and the need to encourage and develop them, can be balanced.

CHALLENGES OF PERFORMANCE APPRAISAL

In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are:

1. DETERMINING THE EVALUATION CRITERIA

Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms

2. CREATE A RATING INSTRUMENT

The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization.

3. LACK OF COMPETENCE

Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.

4. ERRORS IN RATING AND EVALUATION

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees

5. RESISTANCE

The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.

PROCESS OF PERFORMANCE APPRAISAL


1. ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

2. COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

3. MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance.

5. DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.

6. DECISION MAKING

The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

TRADITIONAL METHODS OF PERFORMANCE APPRAISAL

1. ESSAY APPRAISAL METHOD

This traditional form of appraisal, also known as “Free Form method” involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

2. STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation.

3. PAIRED COMPARISON

A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.


4. CRITICAL INCIDENTS METHODS

In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur.

5. FIELD REVIEW

In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors’ personal bias.

6. CHECKLIST METHOD

The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.

7. GRAPHIC RATING SCALE

In this method, an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on-the-job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTION

To eliminate the element of bias from the rater’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.

MODERN METHODS OF PERFORMANCE APPRAISAL

1. ASSESSMENT CENTRES

An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees.

2. BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for eg. the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents.

In this method, an employee’s actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge.

3. HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them.

360 DEGREE PERFORMANCE APPRAISALS

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the “on-the-job” performance of the employee.

360 degree appraisal has four integral components:

1. Self appraisal

2. Superior’s appraisal

3. Subordinate’s appraisal

4. Peer appraisal

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360 degree appraisal where the employees’ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees’ abilities to work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a "360-degree review" of the employees’ performance and is considered to be one of the most credible performance appraisal methods.

360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others’ perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.

Arguments Against 360 Degree Performance Appraisal

Despite the fact that 360 degree appraisals are being widely used throughout the world for appraising the performance of the employees at all levels, many HR experts and professionals argument against using the technique of 360 degree appraisals. The main arguments are:

· 360 performance rating system is not a validated or corroborated technique for Performance appraisal.

· With the increase in the number of raters from one to five (commonly), it become difficult to separate, calculate and eliminate personal biasness and differences.

· It is often time consuming and difficult to analyze the information gathered.

· The results can be manipulated by the employees towards their desired ratings with the help of the raters.

· The 360 degree appraisal mechanism can have a adversely effect the motivation and the performance of the employees.

· 360 degree feedback – as a process- requires commitment of top management and the HR, resources(time, financial resources etc), planned implementation and follow-up.

· 360 degree feedback can be adversely affected by the customers’ perception of the organisation and their incomplete knowledge about the process and the clarity o f the process.

· Often, the process suffers because of the lack of knowledge on the part of the participants or the raters.


MANAGEMENT BY OBJECTIVES

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

THE MBO PROCESS

The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals.


Some of the important features and advantages of MBO are:

· Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are:


Specific

Measurable

Achievable
Realistic, and

Time bound.


The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.

· The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

· Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.

· Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

ASSESSMENT CENTRES

Assessment centre refers to a method to objectively observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments. Assessment centers simulate the employee’s on-the-job environment and facilitate the assessment of their on-the-job performance.

An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies and on-the-job behaviour and potential to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

An assessment centre for Performance appraisal of an employee typically includes:

Social/Informal Events – An assessment centre has a group of participants and also a few assessors which gives a chance to the employees to socialize with a variety of people and also to share information and know more about the organisation.

Information Sessions – information sessions are also a part of the assessment centres. They provide information to the employees about the organisation, their roles and responsibilities, the activities and the procedures etc.

Assignments- assignments in assessment centres include various tests and exercises which are specially designed to assess the competencies and the potential of the employees. These include various interviews, psychometric tests, management games etc. all these assignments are focused at the target job.

The following are the common features of all assessment centres:

· The final results is based on the pass/fail criteria

· All the activities are carried out to fill the targeted job.

· Each session lasts from 1 to 5 days.

· The results are based on the assessment of the assessors with less emphasis on self-assessment

· immediate review or feedback are not provided to the employees.

An organization’s human resources can be a vital competitive advantage and assessment centre helps in getting the right people in right places. The major competencies that are judged in assessment centres are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees.

CONCLUSION

People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employee’s abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance.

Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees.

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Wednesday, March 24, 2010

Differences between Human Resource Management (HRM) and Human Resource Development (HRD)

1. HRM is a subset of the entire management processes of an organization. HRD is a subset of HRM.

2. Scope of HRM is wider. Scope of HRD as compared to HRM is narrower.

3. HRM manages and develops the human elements of an organization in its entirety on longer term basis. HRD focuses on those learning experiences which are organized for a specific period to bring about the desired behavioral changes.

4. HRM emphasizes that employees, their abilities and their attitudes constitute an important organizational resource that should be used effectively and efficiently to achieve organizational as well as employees' goals. HRD emphasizes mainly on training and development of employees.

5. HRM takes decisions on HRD plans. HRD thus depends on the decisions of HRM.

6. HRM at its center has HRD. HRD's cooperation is important for overall success of HRM. HRD has to work within the realm of HRM and therefore, it's objectives should be in tandem with the broader objectives of HRM. Thus, HRM and HRD are interdependent.

7. HRM takes care of all the human needs and tries to satisfy these needs so that the employees are motivated from all the angles to contribute their best to achieve organizational goals. HRD focuses on upgrading the skills and competencies of the employees in order to improve the performance of the employees on the job.

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Differences between Personnel Management (PM) and Human Resources Management (HRM)

1. Personnel mean employed persons of an organization. Management of these people is personnel management (PM). Human resource management (HRM) is the management of employees’ knowledge, aptitudes, abilities, talents, creative abilities and skills/competencies.

2. PM is traditional, routine, maintenance-oriented, administrative function whereas HRM is continuous, on-going development function aimed at improving human processes.

3. PM is an independent function with independent sub-functions. HRM follows the systems thinking approach. It is not considered in isolation from the larger organization and must take into account the linkages and interfaces.

4. PM is treated like a less important auxiliary function whereas HRM is considered a strategic management function.

5. PM is reactive, responding to demands as and when they arise. HRM is proactive, anticipating, planning and advancing continuously.

6. PM is the exclusive responsibility of the personnel department. HRM is a concern for all managers in the organization and aims at developing the capabilities of all line managers to carry out the human resource related functions.

7. The scope of PM is relatively narrow with a focus on administering people. The scope of HRM views the organization as a whole and lays emphasis on building a dynamic culture.

8. PM is primarily concerned with recruitment, selection and administration of manpower. HRM takes efforts to satisfy the human needs of the people at work that helps to motivate people to make their best contribution.

9. Important motivators in PM are compensation, rewards, job simplification and so on. HRM considers work groups, challenges and creativity on the job as motivators.

10. In PM improved satisfaction is considered to be the cause for improved performance but in HRM it is the other way round (performance is the cause and satisfaction is the result).

11. In PM, employee is treated as an economic unit as his services are exchanged for wages/salary. Employee in HRM is treated not only as economic unit but also a social and psychological entity.

12. PM treats employee as a commodity or a tool or like equipment that can be bought and used. Employee is treated as a resource and as a human being.

13. In PM employees are considered as cost centers and therefore, management controls the cost of labor. HRM treats employees as profit centers and therefore, the management invests in this capital through their development and better future utility.

14. PM’s angle is that employees should be used mostly for organizational benefits and profits. HRM angle emphasizes on the mutual benefits, both of employees and their families and also the company.

15. PM preserves information and maintains its secrecy. In HRM communication is one of its main tasks which take into account vertical, lateral and feedback type communication.

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HRM in retail A Strategic Tool

In the new economy, human capital is the foundation of value creation. In most cases, it becomes an asset which is the most important but at the same time, the least understood and measured. In the case of the retail organization, the human capital is the asset which very often is the starting point of his interaction between the retailer and the customer.

Building a sustainable competitive advantage has become imperative for the imperative for the survival of the retailer in today’s global economy. The values of the company and the culture that it creates go forward to create the spirit of enterprise which is an integral part of the organization. Talent acquisition and talent management has thus, become a core focus of many a retail organization. Considering that retailers today operate multiple business models and there is rapid expansion across cultural boundaries, it becomes imperative for the retailer to create a superior store experience for consumers in order to increase sales and customer loyalty. They must do so, however, without increasing their overall labor costs.

In order to achieve better service while controlling cots, retailers have begun seeking ways to closely align their resource allocations with market demand. Two major retail assets, however—inventory and labor are variable, and in the case of labor, highly strategic. Labor is a retailer’s single largest controllable expenses, and the workforce is the retailer’s face to the customer. It is through the employees that customer service, revenue and brand differentiation are delivered. By aligning the deployment of this asset with actual business needs, a retailer can improve customer service during times of peak demand, thus enhancing the customer experience and control overall labor expenditure by precisely forecasting and scheduling to meet demand. It is for this reason that human resources are seen as a strategic partner.

The structure that an organization chooses to adopt is the key factor that affects the functioning of various roles in the organization. Organization structures are important as they define the hierarchy levels, the reporting relationships and the decision makers in any organization. In retail, as in any other business, defining the organization structure is the starting point for managing a business.

We start by understanding the significance of the human resources in a retail organization. After understanding the conceptual perspective of the function of human resources various human resources issues like recruitment, training and motivating employees in a retail environment are examined.

The Significance of HRM:

The early 1990’s saw the emergence of human resources as a key factor within the gamut of the company’s strategy and its implementation. The function of human resources has moved across four strategic paradigms, which are:

1) The Personnel perspective: The firm purely hires people, but the focus is not on hiring the best or on personnel development.
2) The compensation perspective: The firm uses bonuses, incentives and meaningful distinctions in pay to reward performances.
3) The alignment perspective: The firm does see its human capital as an asset, but does not invest in utilizing the capabilities of the same.
4) The high performance perspective: The firm views human resources as an integral element of the firm’s strategy implementation.

Over the years, the function of human resources has evolved to being considered from a strategic perspective. The new economic paradigm signifies an increasing focus on intangible assets and intellectual capital, especially in case of industries like retail. The significance of the right environment at the work place, the opportunities for growth and the involvement of the organization in the development of its employees has, over the years come to play a significant role n the type of talent that the company acquires and retains.

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Various aspects of the HR function in retail

In any retail organization, the people who deal with the customers at a one to one level are considered the face of the organization. Thus, people who work at the store level are important. Hiring the persons with right attitude is important as in the case of most retail stores, the employees need to work long hours, and also need to work when the rest of the people may be on a holiday e.g. on Sundays or on occasions like Diwali, Christmas etc. Secondly the retailer needs to have the persons with the right skill sets taking care of functions like buying and merchandising, as the product is the key in a retail set up.

In this section, we examine various aspects of human resources function in retail.

The Human Resources function in retail involves:

1. Identifying various roles in the organization.
2. Recruiting the persons with right attitude to fit the jobs.
3. Training
4. Motivation of employees
5. Evaluation of employee performance.

Identifying the various roles in the organization:

The first step starts with the identification of the various tasks or jobs that need to be performed in the organization. This helps in determining the number of people required from various jobs, the skill sets and educational background needed and the location, where they are doing to be based depending on the organization structure defined and the size of the retail operation.

Key tasks in a typical retail organization involve:

1) Buying and merchandising
2) Store management and operations, and
3) Technology support.

It is necessary that persons with the right attitude and skill sets are recruited for the above mentioned functions as they are the key in any retail organization. While professional qualifications for the various tasks are important, it is also necessary to hire persons who understand consumer trends and technology and what it can provide. This is extremely important, as traditionally retail has been one of the oldest users of information technology.

Recruitment and Selection:

After determining the tasks to be performed within the organization, the jobs need to be categorized on the basis of the functional or geographic needs. The aim of the recruitment process is to make available job applicants for a specified job/s. Common ways of recruitment include newspaper advertisements, visits to colleges, existing employees, references, recruitment agencies and even websites.

Many organizations create an application blank, which has to be filled in by the applicant and gives the details of education, work, hobbies and family background. It helps the organization obtain information about the applicant in standard and structured manner. Once the applications are received, they are screened on the basis of parameters that are important to the retailer. This serves as the primary basis for acceptance or rejection of the candidate.

In case of most of the organizations, the candidates who are short listed on the basis of the bio data or application blank are called for a personal interview. A personal interview enables the interviewer gauge the attitude of the person and his suitability for the desired job. Depending on the position applied for, the selection procedure may comprise of one or more interviews. When the candidate passes the interviews stage, reference checks may be done and the final decision is taken.

Training:

Training is an important aspect of human resource management in retail. Typically, in retail training needs arise at the following points:

1) Induction new persons / staff into the organization
2) Training of sales staff, as they are the persons who are in direct contact with the customers.
3) Training of staff / personnel for skill enhancements.

When new persons join any organization, an induction program is conducted. The purpose of such an induction program is to familiarize the new entrants about the organization’s policies and methods of doing business.

In retail special importance is given to the training of sales staff as they are commonly termed as the face of the organization.

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Wednesday, January 27, 2010

History of Human Resource

The term 'human resource' is traditionally called 'labor' in the political economy and economics, one of the three factors of production. It was used as labor right management in the olden day's organiztions.

In economics human resource in the beginning was known as 'human capital'. Then it was later realized that humans are capitals which can be run through a particular time in fact they are social beings and things change day to day for them. It cannot be that if one person is told to work for a particular time till a year, it is not necessary that he will make it. There are many eventualities and circumstances those may stop him to do so. Sot his term was then decided to change. But still in macro economics they use this term for employees as a factor of production.

The socialist parties from the starting of human employment have played a role of working the human rights. They explained that humans themselves are not assets for a company but the work they produce are the asset for them. And that they should be treated on the basis of their potentials and hard work. This act of their started the hiring and firing in a better manner.

This argument of 'human capital' and 'human resource' began until the United Nations recognized the same and supported the developing countries for this view.

This argument's extreme version is that of African people's slavery. They were treated as slaves and their potentials were taken as capitals by the developed nations of that time without paying them properly. This was the more extreme version of human capitalizing. This was then recognized by the United Nations.

As the above given information clearly states that in the olden days when people were not treated as humans but as an asset of the company there were many socialist parties those who wanted there to be a system by which these human beings could have their own problems and their own matters solved. This then gave rise to a concept of having a department which would only be meant for this purpose.

The idea was that the human resource department must be more than of just hiring and firing. It must be related to employee's problems like for instance their medical facilities, their salaries on time and thing like these. The employees must be free enough to consult his problems to someone who could take to the upper head.

It was considered that a separate department should be made devoted only to the human resources or the employees. This was the birth period of the human resource department.

Although it cannot be denied that this department was always there in a firm but hidden. But then it was made a separate department, there were rules made for its working and its conduct. And now human resource occupies a bigger position and is consider being an important part of a firm. If the employees are not satisfied they won't produce sufficient quality work.

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The Historical Review of Human Resource Management

INTRODUCTION.
=============

This assignment traces the history of Human Resource Management from
the Industrial Revolution in the 18th century to present times.

The assignment discusses key periods and movements in this field and
expands on their contribution to modern Human Resource Management.

In discussing the history of Human Resources Management it is
important to offer a definition of the subject. Human Resource
Management can be described as "The comprehensive set of managerial
activities and tasks concerned with developing and maintaining a
qualified workforce - human resources - in ways that contribute to
organisational effectiveness." (DeNisi and Griffin, 2004)



A HISTORICAL REVIEW.
====================

The Industrial Revolution.

The momentum for the industrial revolution grew through the 17th
century. Agricultural methods were continually improving, creating
surpluses that were used for trade. In addition, technical advances
were also occurring, for example the Spinning Jenny and the Steam
Engine. These advances created a need for improved work methods,
productivity and quality that led to the beginning of the Industrial
Revolution.


Adam Smith.
-----------

In 1776, Adam Smith wrote about the economic advantages of the
division of labour in his work The Wealth of Nations. Smith (1776)
proposed that work could be made more efficient through specialisation
and he suggested that work should be broken down into simple tasks.
From this division he saw three advantages:

- the development of skills

- time saving

- the possibility of using specialised tools.

Smith's suggestions led to many changes in manufacturing processes.

"…every individual necessarily labours to render the annual revenue of
the society as great as he can. He generally, indeed, neither intends
to promote the public interest, nor knows how much he is promoting it.
By preferring the support of domestic to that of foreign industry, he
intends only his own security; and by directing that industry in such
a manner as its produce may be of the greatest value, he intends only
his own gain, and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it."
(Smith, 1776)

Adam Smith, considered by many to be the father of Capitalism, also
discussed the Invisible Hand or Laissez Faire approach (this term is
not used in the book but argues the case). "According to the hidden
hand approach, the only responsibility of business is to maximise
profits according to the market principle and within the constraints
of the law. If government interference in business is restricted to a
minimum, society will benefit automatically from the activities of the
business sector." (Rossouw, 1994, pg18).

According to Rossouw (1994) the hidden hand approach lost value when
societies did not benefit automatically from business activity. It was
clear that business could not be relied upon to act in the best
interests of is staff, consumers and the society within which it was
operating.

In 1832, Charles Babbage examined and expanded upon the division of
labour in his work, On the Economy of Machinery and Manufacturers. In
this book Babbage offered, as an advantage to the division of labour,
that the amount of skill needed to undertake a specialised task was
only the skill the necessary to complete the task. Babbage analysed
and documented the manufacture of a pin and broke the process down
into seven elements to illustrate his point. This study became
important to employers in that they only had to pay for the amount of
skill required to complete a task (www.accel-team.com, 2004).


Trade Unions.
-------------

During the late 1700's and early 1800's governments began to feel
pressure from the working class masses who started to question and
defy the power of the aristocracy. The working class began to form
workplace combinations and trade organisationsto provide a collective
voice for their rights. Governments tried to fight this using
legislation such as the Combination Acts of 1799/1800 in the UK, which
banned everything from meetings to combinations.

"There were also attempts to form general unions of all workers
irrespective of trade. William Benbow (a Lancashire shoemaker), Robert
Owen and many others looked upon trade unionism not just as a means
for protecting and improving workers' living standards, but also as a
vehicle for changing the entire political and economic order of
society. Owen experimented with co-operative ventures and 'labour
exchanges'; both attempts to bypass the existing order of wage
slavery." (Trade Unions Congress, 2004)

Trade Unions were and are still an influential force, working for
continued economic and social development of workers and societies in
many countries around the world.


Frederick Winslow Taylor.
-------------------------

F.W. Taylor is considered to be the father of Scientific Management.
In 1911, his seminal work, The Principles of Scientific Management was
published. This book contains four overriding principles of scientific
management:

- Each part of an individuals work is analysed 'scientifically'.

- The most suitable person to undertake the job is 'scientifically
chosen' and is taught the exact way to do the job.

- Managers must co-operate with workers to ensure the job is done in a
scientific way.

- There is a clear division of work and responsibility between
management and workers. (Bloomsbury, 2002)

"Taylor's impact has been so great because he developed a concept of
work design, work measurement, production control and other functions,
that completely changed the nature of industry. Before scientific
management, such departments as work study, personnel, maintenance and
quality control did not exist." (www.accel-team.com, 2004)


The Hawthorne Studies
---------------------

The Hawthorne Studies were a groundbreaking set of experiments
conducted at the Western Electric plant in Hawthorne, Chicago by Elton
Mayo. The studies were conducted from 1927 to 1932 and measured the
relationship between productivity and working environment. The studies
were based on preliminary experiments conducted in 1924 that measured
the effect of lighting on productivity. (Bloomsbury, 2002)

The results of the experiments showed that changes in the environment
did affect productivity, but this was not the sole factor. The workers
considered management to be showing an interest in them and this
improved motivation.

Mayo's studies and the subsequent results were a significant break
from the theories of F.W. Taylor in that the workers were not solely
motivated by self interest. Mayo's research has led to the
understanding that workplaces are more than machine like environments
in that there are social environments and human emotions that require
consideration. Mayo's studies led to the rise of the Human Relations
Movement


The Human Relations Movement
----------------------------

The Human Relations movement "…argues that people are not just logical
decision makers but have needs for creativity support, recognition and
self-affirmation." (Theworkingmanager.com, 2004).

The movement presents an alternative and opposite approach to
scientific management as it focuses on the individual and not the
task.

The Human Relations movement boasts some of the world's foremost
management thinkers and theories in its ranks:

- Abraham Maslow. The Hierarchy of Needs. Presented in the US
Psychology Review in 1943

- Douglas McGregor. Theory X and Theory Y. Published in the book 'The
Human Side of Enterprise" in 1960.

- Frederick Herzberg. The Hygiene-Motivation Theory. Published in the
book "The Motivation to Work" in 1959. (www.accel-team.com, 2004)


Contemporary Human Resource Management.
---------------------------------------

In modern business the Human Resources Management function is complex
and as such has resulted in the formation of Human resource
departments/divisions in companies to handle this function. The Human
resource function has become a wholly integrated part of the total
corporate strategy.

The function is diverse and covers many facets including Manpower
planning, recruitment and selection, employee motivation, performance
monitoring and appraisal, industrial relations, provision management
of employee benefits and employee education training and development.



CONCLUSION
==========

The history of Human Resource Management has progressed through the
ages from times when people were abused in slave like working
conditions to the modern environment where people are viewed as assets
to business and are treated accordingly.

The Human Resource function will have to adapt with the times as staff
become more dynamic and less limited in their roles and bound by a job
description.

In future we may see employees being measured on the value they
contribute to a business and not their cost to the business.



REFERENCES
==========

Accel Team. (2004): "Historical Perspective - Growth of Scientific
Management" http://www.accel-team.com/scientific/scientific_01.html,
03 April 2004.

Accel Team. (2004): "Historical Perspective - Growth of Scientific
Management" http://www.accel-team.com/scientific/scientific_02.html,
03 April 2004.

Accel Team. (2004): "Considering Human Factors - The Human Relations
Approach" http://www.accel-team.com/human_relations/index.html, 04
April 2004.

Bloomsbury. (2002): Business, The Ultimate Resource, London:
Bloomsbury Publishing.

DeNisi, A.S., Griffin R.W. (2004): Human Resource Management, Boston:
Houghton Mifflin.

Rossouw, D. (1994): Business Ethics. A Southern African Perspective,
Halfway House: Southern Book Publishers.

Smith, A. (1776): An Inquiry into the Nature and Causes of the Wealth
of Nations, London; Penguin Books, 1982.

The Working Manager Ltd. (2004): "Human Relations Movement"
http://www.theworkingmanager.com/articles/detail.asp?ArticleNo=180, 04
April 2004.

Trade Unions Congress. (2004): "Timeline"
http://www.unionhistory.info/timeline/1815_1834.php, 04 April 2004.

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Sunday, August 9, 2009

HR Managers or Outsourcing Managers?

HR Managers or Outsourcing Managers? : Rise and fall of HR
Luta Gorak Manuers Limited (LGML) is a manufacturing and logistic services company with nearly 2500 employees. It has a history of successful performance in the field of manufacturing chemicals, fertilisers and also as a logistics management company for over the last two decades. With 25 HR staff it almost has a record number of HR Managers (HRMs) @ of one for every hundred employees. Most of the Senior HR Managers who built up the company in the past were considered as leaders and CEO material. They worked hard and interacted with employees and often were taken from line jobs to HR with some bridge training. Some of them have become even SBU heads, Directors, and CEOs of the company in the past.
Over a period of time as the company became a profitable company, made a mark in the corporate world and expanded its HR also gained prominence and was being cited by others as a bench-markable company for its HR. It was largely known for its recruitment, training, induction process, performance management, and succession planning and leadership development. With passage of time as HR appears to have become more and more specialised, the company started recruiting qualified HR professionals at senior levels from outside to keep their HR practices quite updated and in tune with times. Some of them were recruited from reputed Management schools specialising in HR. slowly the pressure on the HR to perform started increasing. As focus of most organizations shifted in early part of the century beginning 2001 to Talent Management, Employee Engagement and retention became primary issues. As young HR managers specialising in HR got promoted and became General Managers, Senior Vice Presidents, Vice Presidents, and Assistant Vice Presidents they started perceiving their role differently. The President HR decided to reorganize HR. He himself was a recent recruit from another company that did not have any great HR practices. In the absence of finding any internal talent to head HR, and considering the increase in specialisation of HR, the company decided to recruit the new President from outside. It took two years for him to begin to understand the organization. As he understood the organization, he decided to make his impact by reorganizing the HR function. He divided the HR into eight sections and appointed a VP or AVP to handle each of these functions. He managed to get a few of the AVPs on promotion from line jobs to HR as it has been the policy of the company to post line managers in HR. Now three of the Sections are headed by qualified HR M Managers from outside the company and five from those from line jobs. Now in the company the 25 HR Managers are divided into eight separate departments: Recruitment and sourcing, Learning and Development, Employee Engagement, Performance Management, Career Management and Development, HRIT, Employee Relations and Administration. He created a sense of competition among the managers.
Now each Section Head (VPs and AVVPs etc.) Started competing with each other in appointing consultants. Over a period of time the company became highly procedure oriented as they took some of the top level persons from Public sector. Today they have appointed seven consulting parties: Besides a number of agencies for recruitment, one consultant was appointed for PMS, one for competency mapping and HRIS, another for succession planning and career development, another for compensation and linking PMS with Pay, another for employee engagement and so on. Slowly the role of HR got redefined in the company. Now the HR Heads are busy preparing tender documents, inviting consultants, involving line managers to assess the consultants, negotiating with consultants, appointing them, clarifying their requirements, articulating their requirements on the basis of consultant views and benchmarks, coordinating their interviews with line managers, booking their travel and stay of consultants, getting the consultant who arrives to talk to the line managers on succession planning, employee engagement etc., monitoring their work, examining their reports, communicating extensions of contracts, and getting the consultants to summarise for implementing their recommendations etc. Slowly the entire HR departments and the function were relegated as out-sourcing managers.
None of the HR managers did competency mapping which is supposed to be the main job of HR department, did not design and manage appraisals which used to be an important function of the HR. Now the company is being run by consultants and HR Department acts as consultant to the consultants. Their main job is to facilitate the work of consultants. The company is run by consultants and the job of HR Managers is redefined as follows:
“Professional qualified in HR with an understanding of various systems of HR including competency mapping, competency based recruitment, competency modelling, ADCs, 360 Degree Feedback, Leadership development and succession planning, PMS and PRP, OD, knowledge of SAP, People Soft and such other IT application to people management processes, employee engagement and the like, great place to work and the like. The HR Specialist should have knowledge of consultants and consulting firms that offer world class services in the area and should have the capability to get the best consultant to help the company design and redesign the various HR systems to the changing world of Business and take the company forward. The person should have the ability to assess the appropriate ROI in appointing consultants and be able to coordinate with them, monitor their performance and make them accountable in terms of delivering what has been stated in the tender document correctly.”
One of the premier Management schools specialising in HR found this to be trend of most organizations and have decided to appoint a committee to re-examine and reformulate their curriculum. In this management school earlier the Masters in HR students used to have 50% of the courses devoted various Management functions including production, marketing, Information systems, Finance and accounting besides various HR courses. The newly appointed course after visiting some of the companies like LGML decide change their curricula according to time and has recommended reducing the 50% of the management courses to 20% and introduce 50% new courses to keep up with the changing nature of industry. Now the course mix is proposed as: General Management courses - 5, Networking and understanding of “Big Five” and other consultants - 5 courses, Tendering process and preparation of Tender documents and other competitive bidding - 5 courses, Networking and widening of Net works - 5 courses, Vigilance and management of vigilance and vigilance without pain - 5 courses, HR Interventions and Basics of HR - 5 courses, Management consulting companies and consultants to beget best results - 2 courses, Succession planning for line managers with the Consulting firms, Competency mapping and competency models of “Big Five” - 2 courses. As this reputed institute started revising the curricula, on hearing about the new innovative curricula the big five offered to this Institute Chair Professorships in different areas to promote the new curricula.
All of them seem to live happily thereafter as they all discovered a very new way of keeping people busy and occupied, each pursuing his/her own mission effectively with the help of others. LGML continues to make profits and better than even before thanks to a highly HR oriented top management who decided to let the HR do what they are good at doing.

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Friday, July 10, 2009

Operative Functions of HRM

The operative functions of personnel management are related to specific activities of personnel management viz., employment, development, compensation and relations. All these functions are interacted by managerial functions. Further these functions are to be performed in conjunction with management functions.

Employment

It is the first operative function of HRM. Employment is concerned with securing and employing the people possessing required kind and level of human resources necessary to achieve the organizational objectives. It covers the functions such as job analysis, human resources planning, recruitment, selection, placement, induction and internal mobility.

Job Analysis: It is the process of study and collection of information relating to the operations and responsibilities of a specific job. It includes:

1. Collection of data, information, facts and ideas relating to various aspects of jobs including men, machines and materials.

2. Preparation of job description, job specification, job requirements and employee specification which help in identifying the nature, levels and quantum of human resources.

3. Providing the guides, plans and basis for job design and for all operative functions of HRM.

Human Resources Planning:

It is a process for determination and assuring that the organization will have an adequate number of qualified persons, available at proper times, performing jobs which would meet the needs of the organization and which would provide satisfaction for the individuals involved. It involves

* Estimation of present and future requirement and supply of human resources basing on objectives and long range plans of the organization.

* Calculation of net human resources requirement based on present inventory of human resources.

* Taking steps to mould, change, and develop the strength of existing employees in the organization so as to meet the future human resources requirements.

* Preparation of action programs to get the rest of human resources from outside the organization and to develop the human resources of existing employees.

Recruitment:

It is the process of searching for prospective employees and stimulating them to apply for jobs in an organization. It deals with:

(a) Identification of existing sources of applicants and developing them.

(b) Creation / Identification of new sources of applicants.

(c) Stimulating the candidates to apply for jobs in the organization.

(d) Striking a balance between internal and external sources.

Selection:

It is the process of ascertaining the qualifications, experience, skill, knowledge etc., of an applicant with a view to appraising his / her suitability to a job appraising.

This function includes:

(a) Framing and developing application blanks.
(b) Creating and developing valid and reliable testing techniques.
(c) Formulating interviewing techniques.
(d) Checking of references.
(e) Setting up medical examination policy and procedure.
(f) Line manager’s decision.
(g) Sending letters of appointment and rejection.
(h) Employing the selected candidates who report for duty.

Placement: It is the process of assigning the selected candidate with the most suitable job in terms of job requirements. It is matching of employees specifications with job requirements. This function includes:

(a) Counseling the functional managers regarding placement.

(b) Conducting follow-up study, appraising employee performance in order to determine employee’s adjustment with the job.

(c) Correcting misplacements, if any.

Induction and Orientation: Induction and orientation are the techniques by which a new employee is rehabilitated in the changed surroundings and introduced to the practices, policies, purposes and people etc., of the organization.

(a) Acquaint the employee with the company philosophy, objectives, policies, career planning and development, opportunities, product, market share, social and community standing, company history, culture etc.

(b) Introduce the employee to the people with whom he has to work such as peers, supervisors and subordinates.

(c) Mould the employee attitude by orienting him to the new working and social environment.

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Overall HR Functions

Human Resources Management is one of the most complex and challenging fields of management, it deals with the people dimension in management. Over the past eighty years, various approaches to human resource management have been adopted by companies. The human resource approach which is
currently in vogue, has redefined the way people are treated and managed in organizational contexts. This approach requires that employees of the work force be treated as resources and not just as factors of production (as in scientific approach) or emotional beings with psychological needs (as in the human relations approach).

Basically, HRM includes the four functions of acquiring, developing, motivating and managing the human resources. HRM functions are broadly classified into two categories:

1. Managerial functions

2. Operative Functions

Managerial functions include planning, organizing, directing and controlling. The operative functions of human resource management are related to specific activities of HRM such as recruitment, development, compensation and employee relations.

Human resources play an important role in the development of business and countries. An attracting, retaining, motivating and developing person with varied interests and expectations is a major human resource challenge. Moreover, challenges posed by the turbulent business environment, rapid technological changes, a diverse workforce, and the changing legal and governmental regulations also affect organizations. In this situation, a new role has emerged for Human Resources function, as a value provider, as a key player in organizational working and as a contributor to organization's strategy.

The specialist role of the Human Resource professional takes a number of forms: the auditor's role, the executive's role, the facilitator's role, the consultant's role and the service provider's role. Human Resource Management objectives should be in alignment with the organizational
objectives, and should balance them with the individual and social goals. Human Resource policies, framed after determining the objectives of Human Resource Management, are described as a set of proposals and directions that guide the managers in pursuit of the objectives.

Today's Human Resource professional has a lot of challenges to face in the form of changing composition and attitudes of the work force, growing emphasis on quality of products and services and the quality of the work life, fast paced technological changes, government policies, etc... He has to gear up to meet these challenges effectively by being more innovative and proactive.

Strategic Human Resource Management helps the organization in the achievement of long-term and short-term goals through optimum utilization of human resources. It involves the development of human resources objectives and their alignment with the organizational objectives. Strategic Human Resource Management is the optimum utilization of human resources to achieve the set goals and objectives in the business environment. This has to be in alignment with organizational strategy and in tandem with the strategies of other functional areas like finance and marketing. Objectives are achieved and visions realized only when synchronization takes place. Strategic Human Resource Planning involves designing Human Resource goals in alignment with the goals of the organization, identifying the human resources required to achieve these goals and then developing these resources internally or acquiring them from outside. It also includes the conception and implementation of new Human Resource initiatives required to accomplish organizational goals.

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Monday, June 15, 2009

Concepts of HRM, Personnel Management and Industrial Relations

The world is changing dramatically and is in the process of complete transformation. The impossible things of yesterdays have become possible today and the impossible things of today will become possible tomorrow that is why it is said that change is the only permanent aspect of nature. The concept of self sufficient nations is losing importance and the concept of ‘global village’ is emerging. Management of organizations is bound to cope up with the radical transformation by developing new techniques and practices in global perspective after carefully analyzing the real challenges being faced by the professional managers.

Because of the continuous changing socio-economic, technological and political conditions the modern day managers as behavioral /operational scientists in the organization come across the following challenges:

1. Challenge of globalization.
2. Challenge of information age.
3. Challenge of quality revolution.
4. Challenge of managing workforce diversity.
5. Empowerment of workers.
6. Development of work ethics and culture.
7. Corporate reorganization.

Any organisation functions with continuous interaction of three major variables of MONEY, MACHINES AND MAN POWER, along with several other inter related and dependant factors that are influential.

The function of the manager has transformed immensely after industrial revolution and more specifically post WW II, from that of being a mere supervisor to the one who is a provider, evaluator and policy maker. Manager is the one who thinks over the effects of an action on the whole or large part of the whole system before taking the action, i.e. considers the situation behind the scene before taking any action. Effects may be positive or negative, so a cost benefit analysis is taken before an action is employed as well as an evaluation that how far a particular planning has been effective is considered. So, it evolves as a complete system of functioning.


As the management of the money with utmost flexibility and durability is important in the working and growth of any organization along with the best maintenance and operation of machines, it is even more crucial to deal with the diversity and dynamism of the man at work as they are the resources for any organization to bloom, build and boom.

And over the years ever since the identification of the vivid aspect of ‘man as a resource’ of organisation, in management there have been several practices that were employed, deployed and transformed under the terms viz personnel management, industrial relations, and the latest in use is human resource development and even more comprehensive outlook comes under the title of human resource management.

PERSONNEL MANAGEMENT (PM), is more so a traditional form of management, where manager was the person who organized, delegated and divided the work. Management applied the principles for getting things done universally regardless of the type of organization and situation involved.
PM has a limited scope and inverted orientation.
The norms, laws and strategies of functioning were designed by the management, the fountain head of the company and the task of the Personnel managers includes the activity of hiring new employees and to maintain personnel records, and to supervise the labour as an important tool whose behavior could be manipulated for the benefit of the organization and replaced when worn out.

PM practice was indeed a monotonous monitoring by the managers, of the work done by the employees in the interest of the organization with negotiation, division of labour , indirect and downward communication and functioning under clear rules norms and customs of the organization.

But later researches show that there may be few instances where certain principles are used in all circumstances otherwise different treatment is required in different cases after analyzing the various situational variables carefully as the behavioral situations are much more complicated now a days. And this was how HRM, Human

Resource Management came into existence. Intellectuals identified that man at work is the asset of any organization and is dynamic in thought process as well as functioning, thus his individual identity should be retained. And this brought an end to the PM approach that had a universal outlook in dealing with employees.

Historically it is believed, that PM preceded HRM.


INDUSTRIAL RELATIONS (IR) , is concerned with the relationship between management and workers and the role of regulatory mechanism is resolving any industrial dispute.
Likes: collective bargaining, role of management unions and government, machinery for resolution of industrial disputes, individual grievance and disciplinary policy and practice, labour legislation and industrial relations training.

On the contrary HR human relations is a more comprehensive term that includes all those aspects of HRM where employees are dealt with collectively. Human relations includes, in addition to IR, such aspects as participative management, employee welfare, employee development, employee remuneration, employee safety and health and the like.

Thus IR is one major area of concern under the role of modern day (HRM) Human Resource managers giving a long due importance to human relations in organizations.


HUMAN RESOURCE DEVELOPMENT (HRD) , on the other hand more specifically deals with the function of training and development of the employees in the organisation, career panning and development, and organisation development.

Thus it is just one of the various aspects that are covered under the functions of Human Resource Management.


HUMAN RESOURCE MANAGEMENT (HRM),
This approach of management is developmental. It is concerned with the growth and the development of the people towards higher level of competency, creativity and fulfillment as people are central themes in the organisation for the attainment of the organizational objectives.

This approach can be easily understood by comparing it with the traditional management approach where manager decided to do something and then got it done through people according to his directives and under his strict control and supervision without taking workers into confidence just to satisfy his whims.
The human resource management approach on the other hand is developmental and facilitative. It helps people grow and facilitate them in developing self control, responsibilities and other abilities in them so as to create a climate where all can contribute to the organization to the limits of their improved abilities. It will result in operative effectiveness. People will get work satisfaction by making fuller use of their capabilities and all this is certainly required for the rapid and effective achievement of organizational objective.

Thus managers role under HRM approach changes. He does not control the employees to get the work done rather support them to grow to their full abilities. Thus modern day managers are required to provide a good organizational climate wherein people can grow and be productive.

HRM regards people as an important asset to be used for the benefit of the organizations, employees and the society. It is emerging as a distinct practice of management aiming at policies that promote mutuality – mutual goals, mutual respect, mutual rewards and mutual responsibilities. It is a step beyond humanitarian type of functioning.

The belief behind the policy of mutuality is that it will remove the aspect of commitment and would promote better economic performance and greater human resource development. i.e. a satisfied and willing worker definitely gives more and better productivity compared to the dissatisfied worker under forceful functioning.

The approach suggests that there is no one best way to tackle human problem in organization because he himself being vividly dynamic.

Each situation must be analyzed carefully before taking any action and at the same time discouraging universal concept about people. Though it is teamwork that counts but every individual in his own self is distinct and needs that identification.

Thus being a diverse and distinct approach HRM cannot be utilized is isolation. It is integrated into overall systematic- strategic management of the organization’s functioning.

HRM represent the latest term in the evolution of this field.

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Interview Preparation (Job Seekers)

Scope

Scope of write-up here is to provide information on how to prepare to face the job interview. It is meant for the persons who are looking out for jobs for the first time or for those who wish to change the jobs. This write-up does not include any guidelines for the employers or their representatives who interview the candidates seeking the employment opportunities.

Introduction
  • Job interview is a process through which an employer or his representative body evaluates a potential employee for possibility of employing him in the organization.
  • The employer or employer’s representative is called interviewer and the candidate or job applicant is called interviewee.
  • The interview process is used after the initial processes of screening the candidates or applicants for the jobs have been administered on them. These may consist of resumes or bio-data or curriculum vitae, aptitude tests, IQ and EQ tests, group discussions etc.
  • Only the persons who successfully qualify the above-mentioned screening criteria are personally interviewed.
  • In such personal interviews, the interviewer and interviewee communicate with each other and exchange valuable information that is used by the interviewer to decide if the job applicant being interviewed is the most appropriate person for the organization. The interviewee, while on one hand tries to convince that he is the most appropriate person for the job, he also collects the information that helps him to decide if the organization and the job are the right ones for him or not. In case interviewer finds that candidate fills the bill, he uses interview process also to pass on such information to the interviewee that will convince him and persuade him to join the organization.
  • The personal interviews may start with telephonic interviews followed by one or more rounds of personal interviews by the employer organization. Interviews may be conducted by one person or by multiple persons in each round of interview.

Home Work Prior to Actual Interview

  • Study your resume thoroughly to remind yourself of the information that you had sent to the prospective employer at the time of application.
  • Study the job profile for which you applied. Work out as to what the job would expect from you in terms of knowledge, experience, technical skill sets, soft skill sets, past achievements, extra-curricular activities and your interests as well as the possible deliverables expected from the incumbent who would hold that job. In case the employer has not advertised or published the job description for public consumption, try to acquire a copy of the job description from the employer.
  • Now, try to match the job requirements as described above with your own profile and see for yourself as to how close you match with them. You will come to know as to where you are already in a pretty strong position and where there are gaps.
  • In the intervening period between the date of the first of the interviews and the date you come to know of the interview date, try to work towards bridging the gaps in your knowledge, technical skills and soft skills. Be a bit tough on yourself as you own self evaluator and be serious in acquiring the additional knowledge and skills required.
  • Collect information about the organization that is going to interview you. More you know about the organization, the better prepared you will be to discuss how you can meet its needs. You will also be in a better position to answer any questions the interviewers might ask you regarding their organization. You should know the profile of the organization in terms of its management/structure, its products, its financial standing, new developments in the organization etc.
  • Now comes the most important preparation i.e. formulating the questions that interviewer may ask and how you would like to answer them. Again be tough on yourself. Imagine yourself to be in interviewer’s position and think of all the possible questions you would have asked the interview candidates in order to make a good selection. For each of these questions, prepare the best possible answers that will influence the interviewers positively towards your candidature. You may take the help from others to know the types of questions the interviewers might ask. On the Internet also you may get this kind of information.
  • Make a decent looking file of all of your certificates and credential and other related papers/information that may be requited at the time of interview.
  • Keep the address and phone numbers of the venue of the interview handy with you. You should also have with you the names and designations of the persons and their telephone numbers who have been communicating with your from the interviewing organization.
  • Select the dress and other accessories that you will wear on the day of the interview and keep them ready. Always select the dress which gives you that additional confidence that you need in facing the interview situation. There are always some favorite clothes for such occasions, do use them for positive psychological support.
  • If the interview is not in your town/city and it involves travel, do the ticketing and reservations for travel and stay well in advance not to meet the last minute disappointments and rush. Try to reach the city of the interview latest by the evening of the earlier day of the interview day.
  • Keep the road map of the venue from the place of your residence. Find out how much time will it need for travel to the venue so that you can start from your residence accordingly. Always add at least 30 minutes to the travel time as an emergency allowance.

Telephonic Interview

  • Prior to your face to face interview, there may be a telephonic interview where you may be interviewed by a person or persons from the employer organization.
  • The purpose of telephone interview sometimes is to screen out the obvious mismatches to the job so that finally, only few shortlisted candidates are called for face to face interview. It saves the recruiting organization time and money.
  • They are conducted normally when the candidate is abroad or lives in a different state/city. Sometimes even in the same city too you can expect a telephone interview.
  • For this kind of interview your telephone etiquette and manners should be impressive.

Face to Face Interview: The Interview Day

  • First impressions, at times, can be the last impression. Your external personality counts in creating the first impression. Your clothes, hairstyle, gestures and anything else an interviewer sees before the interview starts make your first impression.
  • In dressing, err on a bit of conservative style. You can wear a formal dress, not an informal or casual one. As mentioned earlier, always select the dress which gives you that additional confidence that you need in facing the interview situation. It should be clean, well fit and properly pressed. Do a decent looking hair style- hair should be well in place. Shine the shoes and they should be intact. Do not wear casual types of shoes like slip-ons, loafers or sports shoes etc. Do take bath and look clean. Avoid the perfume (all you know that one of the interviewers may be allergic to perfumes). Use sophisticated and decent looking accessories. Men should not wear ear rings. Eye contact is important during an interview, so make sure your glasses are clean. Buy a new pen for the interview. Do not buy a cheap looking one.
  • Arrive early at the interview venue. You should keep some time up your sleeves to get through the official bureaucracies at the interview venue (security check, issues of admit pass etc), getting acclimatized with the environment at the venue, using the wash room etc. Do use the wash room to tidy you up.
  • As you enter the interview room, greet the interviewer(s) appropriately by saying “good morning” or “good evening”. Never say “good night” when you meet the interviewer(s) even if you meet them at night; say “good evening” even then. You should say “good night” while parting at night. During day time, say “good day” while parting. If the interviewer offers a hand shake, accept it with firm and confident handshake.
  • Keep up a happy countenance, smile as necessary. Enjoy the humorous part of conversation if any. Don’t ever look tired or keep a long face with constant frown, tension or sadness. Remain alert and look smart, interested and enthusiastic. Yet, be natural, be yourself- you don’t have to act artificially.
  • Be prepared to communicate with interviewers. When you have made a point clearly, do not overdo or stretch it by extending your talk further.
  • Do not react immediately to any question immediately. Listen the question carefully, think about it, quickly construct your reply and then, speak at a normal pace but surely. You can take your minute or two to respond but do not delay too much too. A measured response is more appreciated by the interviewer(s) than a hurried reaction.
  • Do not hesitate to get clarifications on the question being asked. But do not do it for every question. That shows that you are not attentive or your comprehension is poor.
  • Supplement your responses with examples when necessary and appropriate.
  • Be a sales person and convince through your answers and communication to make the interviewer(s) realize that you are the best person for the job.
  • If the interviewers offer you an opportunity to ask them questions, do ask them the questions you have in mind about the organization, the job requirement, place and department of posting, career growth opportunities etc. even if the interviewers do not offer such opportunity and you do have some genuine questions, take interviewer’s permission to ask the question.
  • Look out for the indications about the close of the interview and then do not hang on. Thank the interviewer(s) and greet as per the time of the day.

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