Human Resource Management

CHAPTER 1

HRM CONTEXT

Concept

 HRM is concerned with people dimension in mgmt. Since, every orgn. is made up of people acquiring their services, developing their skills, motivating them to high levels of performance and ensuring that they continue to maintain their commitment to the orgn. and it is essential to achieving organizational objectives. Getting and keeping good people is important to the success of every orgn. whether profit or non-profit , public or private.

Its main purpose is to ensure that the employees of an orgn. are used in such a way that the employer obtain the greatest possible benefit from their abilities and the employees obtain both material and psychological rewards from their work.

The mgmt. of employees is one of the key elements in the coordination and general mgmt. of a work orgn. The word HRM has been increasingly used in work orgn. The essence of the concept of HRM is that the people working in an orgn. are viewed as a valuables resources. This means that they should be well managed to increase the productivity of the global market. Employees are a valuable resources, it should be properly managed and treated, boost productivity through their full commitment and capability. HRM involves the idea that it’s important to communicate well with employees to involve them in what is going on and to foster their commitment and identification with the orgn.

The term HRM is the improved version of the older personnel mgmt. PM is concerned with personnel function such as recruitment and selection, reward, appraisal, development, industrial relation, grievances and disciple, retirement, resignation and dismissal including this HRM lays special emphasis on the important of the integration of these personnel function into the overall strategic mgmt. of the orgn.

This involves the integration of HR outcomes such as top quality recruits, appropriate compensation, effective training and development with business strategy. For e.g. If a business enterprise needs to develops products or services different from those of the other competitors, then employees must be developed, deployed, motivated and controlled to take advantage of the competition in the market.

 Definition

According to Decenzo and Robbins “ HRM is a process consisting of four function of acquisition, development, motivation and maintenance of human resources”

According to Wendell French “ HRM is the systematic planning development and control of a network of interrelated processes affecting and involving all members of an orgn.”

According to Fisher, Schoenfeldt and Shaw “ HRM involves all mgmt. decision and practices that directly affect or influence people who work for the orgn.”

Conclusion

HRM can be defined as a process concerned with the mgmt. of human effort and competences to ensure competent and committed workforce to achieve organizational goals in a changing environment.

Nature /characteristics of HRM

As an emerging discipline, HRM presents significant issues for the analysis and understanding of employment relationship within an orgn. HRM is concerned with the mgmt. of human energies and capabilities to ensure competent and committed workforce in orgn. The main Nature /characteristics of HRM are as follows:

1. Recognition of the common interest and needs:

    Both employees and mgmt. are interested in the profitability of the enterprise. There is a view that individual needs and organizational needs  will not always be the same but the orgn. tries to balance the different types of needs.

2. Response to influence of social, economic, political and cultural context:

   As one of the main characteristics of HRM every orgn. has to recognize the influences of forces in the wider social, economic, political and cultural environment. This would be reflected in increased competiveness, emphasis on political freedom, need for social security, flexible modes of operation and willingness to adapt to changes.

3. Human focus:

             HRM focus on human elements in the orgn. It helps to develop and utilization of human potential. It gets the jobs done through people to achieve result. It develops and regards people as the most important resources of an orgn.

4. Mgmt function:

        HRM involves the application of Mgmt. principle and function. It involves planning, implementing and controlling of acquisition, development, utilization and maintenance of human resources. It is an integral part of mgmt.

5.     Pervasive:

       HRM is a pervasive function of mgmt., it is concerned with all levels of human resources at work in the orgn. It is performed by all levels of mgmt. HRM responsibility cannot be delegated. It is owned by all levels of managers.

6.    Continuous:

      HRM is a continuous ongoing function. It is not a onetime activity. it is concerned with present as well as future. It ensures continuous commitment of employees rather than their forced compliance.

7.  Dynamic:

     HRM is a dynamic function. It is largely affected by changes in orgn. It is action oriented. It adapts to the changing forces in the environment consisting of political, legal, economic, socio-cultural and technological.

8.  Mutuality oriented:

    It promotes co-ordination between employers and employees. They have goal, mutual influence, mutual respects, mutual rewards and mutual responsibilities.      

Objectives of HRM

  HRM is an important function of mgmt. Its main objectives is to ensure availability, retention and utilization of a competent and willing work force in an organization. So, the main objective of HRM are as follows:

1. Achieving objectives (goals): Effective mgmt of HR is the key to organizational performance. In other word, the extent to which an orgn is able to succeed determines its capacity  to take competitive advantage and finally to increase profitability without proper integration and assignment of HR strategy and practices, it is difficult to achieve organizational performance which are as follows:

a. Personal goals: which include compensation, development, placement and advancement.

b.Functional goals: which include effective acquisition of quality employees, effectiveness in development and utilization of employees and retention of capable employees.

c. Organizational goals: which include profit, survival, growth, efficiency, service innovation and industrial peace.

d.Societal goals: which include creating employment oppurtunities; solve social problems and legal compliance.

2. Maintaining social concerns: HR strategies have implication not only within the organization but also for the long term health of an organization and finally for the community and country.

3. Seeing people as a key resources: HRM recognizes people as a key resource for success at different levels from national to the organizational level. At the organizational level, they are of strategic importance to get the competitive advantage.

4. Goal Harmony: HRM creates harmony between organizational goal and the personal goals of employees. It recognizes and satisfies individual needs. It maintains high moral of employees. It promotes job satisfaction and commitment.

5. Structure maintenance: All the tasks necessary to achieve organizational goal are assigned to people by creating a structure. The structure defines job and relationship. HRM helps to maintain adequate organizational structure. It facilitates improved working relationship among all members of orgn. It promotes mutuality.

6. Productivity Improvement: HRM continuously develops employee through training and other oppurtunities. Better quality of human resource department satisfies self development need of the employees performance based incentives lead to high productivity.

7. Efficiency Promotion: HR ensures cost effective utilization of human resources. This avoids waste and promotes efficiency. Productivity also improves firm efficiency.

8. Change mgmt: Change is making things different. HRM helps plan and manage change in the orgn. It reduces resistance to change. Effective HRM promotes readiness to change among employees.

9. Quality of work life: It refers to employee’s perception of their physical and psychological well being at work. HRM improves quality of relationship between employees and the total working environment to achieve better quality of work life. It provides various welfare facilities to employees.

                                              Functions of HRM

 

A.   Managerial Functions                                                                             B. Operative Functions

A.   Under Managerial Function

a. Planning: Manpower planning, forecasting of future manpower, planning for selection, training.

b.Organizing: grouping activities, Designing structure, establishing authority and responsibility relationship.

c. Directing: Instruction for network system, integrating workers, supervising.

d.Motivating: Financial/ Non-financial incentives, rewards, promotions.

e.Controlling: Establish standard of performance, measuring actual performance, analyze definition, taking corrective actions.

B.Operative (Routine) Functions:

a. Procurement of personnel: Human resources planning, forecasting, recruitment and selection, placement and induction of employees.

b.Development: Training, mgmt development, career development, promotion, performance appraisal, transfer.

c. Compensation: Wages, salaries, bonus, financial incentive, insuarance.

d.Integrate: Maintaining balance between individual, social and organizational goal. Democratic mgmt to reduce conflict, morale and motivation.

e.Favourable work environment: Labour welfare workers, participation in mgmt.

Personnel Mgmt Vs. HRM

Personnel mgmt: Personnel mgmt focus of personnel administration, compensation, employees welfare and labour relation. It is regarded as the staff function in orgn. Hence it is a traditional approach to administration.

HRM: HRM is a systematic approach to the mgmt of human abilities and capabilities, it is concerned with acquisition development utilization and maintenance function. It is regarded as the concern of managers. It is a part of strategic mgmt and it tries to change the mgmt with long term perspective.

Personnel Mgmt	HRM
1. People are input in the production process. 2. It is concerned with personnel department. 3. It is a routine function. 4. It is a traditional approach. 5. It is a division of labor based on job design. 6. In PM interest of orgn is upper most. 7. It places importance on rules, regulation, collective bargaining etc. 8. It is confined to discipline, control and direction to the employees. 9. It  is confined to discipline, control and direction to the employees. 10.It is a piece-meal approach labour mgmt ie. it is a reactive approach. 11.PM results in satisfied personnel and increase production. 12.PM regards people as a valuable cost. 13.PM aims to increase the skills of employees through teaching and learning.	1. People are valuable resources. 2.   It  is concerned with all levels of Managers 3.  It is a strategic function 4. It is a modern approach. 5. It is team work based on job design.        6.  In HRM there is mutuality of interest.        7.  It places emphasis on development and                                                                                                                              Utilization of human resources.                         8.   It is the mgmt of utilization of human  resources potential to achieve objective             and goal.                                         9.  It is the system oriented with supporting environment for growth performance and involvement.       10.  It is integrated approach mgmt of human      energy and capabilities ie. proactive approach. 11. The result of HRM is an committed, empowered HR with increase production. 12. HRM regards people as social capital capable     of development.        13. HRM concerns itself with developing through  training means fully and long term potential of individual employees.

Importance of HRM/Rising interest in HRM

Orgn. are human associations for achieving goals. Managers work with and through people. They must ensure that the human side of the enterprise work effectively at all levels. Since 1990s, the important and interest in HRM has been rising. The importance and factor responsible for the rising interest in HRM are as follows:

1. To take advantage in local and international market: In the 80s American has identified the mgmt. of HR as a source of competitive advantage. During this time many large American firms were suffering from external and internal market challenges combined with a slow rate of productivity growth in the US. Since then firms have realized the importance of HR activities to take competitive advantage in the local and international market.

2. To minimize the complexities of the orgn: The increasing size and complexities have resulted in multiple layer of bureaucracy. To minimize non-productive cost due to multiple layer, the role of HRM is crucial. HRM increases employee commitment as well their ability and competence to work effectively in the orgn.

3. To introduce change: the introduction of computer technology and innovation in the product and services. HRM plans education, training and development of the employees to upgrade the knowledge skills and decision making capacity to adopt to change.

4. To cope with the trend of globalization: The trends for globalization and revolutionary development in the field of communication have gone hand in hand with the emergence of multinational companies both in developed and developing countries. Only those companies that compete on the basis of quality and innovation are largely affected by the skilled, able and motivated manpower.

5. To provide opportunities for educated workforce: an educated workforce demands more challenging and meaningful work. Orgn. have to provide such oppurtunities to their workforce. A highly educated workforce challenges mgmt. to find ways of increasing employee’s involvement, responsibility and participation in the enterprise. The proper HR system and mechanism provide oppurtunities for the educated workforce to voice their demands.

6. Increasing competition: orgn’s. are facing increasing internal and external competition. Product life cycle are getting shorter. People have become policies and practices are needed to face the growing challenges of competition.

7. Work force diversity: The composition of work force is changing dramatically in orgn. It is getting diverse. It is getting bi-model ie. educated professional at one extreme and low skilled service workers at another extreme. So, mgmt. of HR is needed on a continuous basis.

8. Human asset accounting: HR are increasingly being viewed as human assets. Big orgn. compute the value of their human assets to prepare human assets balance sheet. This has given added importance to the interest of HR.

9. Mgmt. of change: the future belongs to those who best manage change, committed and competent employees are essential to manage change. HRM plays an important role in fostering employees commitment to change. The interest in HRM is increasing because it enables orgn. to better manage change.

10.            Mistake avoidance: managers like to avoid mistake related to HRM. Such as:         

    a) Wastage of time in recruitment interview.

               b) Hiring wrong person for the job.

               c) High rate of labour turnover.

    d) poorly motivated subordinates who are not doing their best.

    e) Lack of training and development for employees.

    f) Too many employees grievances and labor disputes.

                    HRM is needed to avoid or minimize above mistake.

11.            Organizational effectiveness: organizational effectiveness is needed to achieve its goals         through acquisition and efficient utilization of resource with environmental. It helps in productivity improvement.

HUMAN RESOURSE MANAGEMENT SYSTEM

              HRM can be looked upon a system composed of interrelated and interacting parts to achieve desired goals. It is an open system, which consists of input processing output as feedback components. It operates within an internal and external environment.

             HRM system provides a conceptual framework for integrating various components within the HRM system and for linking HRM with the larger organizational system. HRM system revolves around formulation and implementation of HR policies and plan. The responsibilities of HRM consist of acquisition, development, utilization and maintenance of human resource in an orgn. HRM is a vital function of mgmt. in organizational setting. Its main role is to contribute to the achievement of overall organizational goal. HRM is an integrated package of various action, plans directed at achieving organizational goal. HRM system integrate the supporting action plans develop for acquisition, development, utilization and maintenance of components of HRM to achieve the goals of the orgn. HRM system is the essence of implementation of the HRM policies and strategies for decision making to achieve objectives. HRM system is a action plans consisting of a sequence of time-bound activities. It is a policies and guidelines for decision making to achieve objectives and strategies. System is a policies and guidelines for managerial decisions in matters related to HRM. HRM system is related to acquisition development utilization and maintenance aspects of human resources.

        From a review of recent HRM literature taken from the USA and other developed countries, it is clear that the system, functions, components and objectives of modern firm differ from those of traditional ones. Therefore, emergent firm in developing countries are facing critical HR problems in their process of transition. But on the other hand, they also have the opportunity to deal with their human resources issues better from the outlet. The HRM system (selection, appraisal, rewards and development) influences organizational performance, closely linked with the organizational structure and finally, the strategic objectives of the orgn. The interactions of these features create an important organizational culture to link human resource with the organizational performance.

HRM SYSTEM AND ORGANIZATIONAL OUTCOMES

           The organizational outcomes of HRM imply that the HRM model has a bearing on the success of the orgn. Here are the effects of HRM system on the organizational outcomes. They are

1)HRM outcomes: it will increase employee commitment, enhance the quality of work and boost flexibility at the workplace.

2)Behavioral outcomes: employees will be motivated at the workplace, co-operation at work will be increased, people are motivated to involve themselves in making decisions and they will be recognized a organizational citizen.

3)Performance outcomes: productivity will be high and quality will be improved, on the other hand absenteeism, labour turnover and customer complaints will decrease.

4)Financial outcomes: finally, profit and return on investments will increase.

The changing world of work and the changing role of HR professionals

       Business environment is changing accompanied by the frequently changing the work and the role of HR professionals often the process of globalization is equated with the movement of capital but hardly a thought is given to the changing faces of labor with the coming of the knowledge orgn. and knowledge workers, having information as the basic source of power, it is very difficult to discard the differences that exist now between work, worker and HR professionals.

     In the last two decades both the concept and practice of human resource. Mgmt. have changed tremendously. Especially in Anglo-American countries, HRM is taken as more action, individual and future oriented. However, some important transformation is taking place in the sphere of labor mgmt. and work of HR professional. They are:

1)More work from few people: The arrival of flexible technology has helped to mass production. The mass production system introduced a system of division of labor whereby a task is divided into a minute work to be performed by a specialist. The flexible technology requires “multiple skilling” meaning a person capable enough to perform a variety of jobs. A good eg. of flexible technology is computer. The use of computers has made it possible to address impossible tasks. The flexible technology demands more skilled and knowledge workers to handle up-to-date technology. So, now employees has to be specialized with knowledge of different work with increased productivity the company can afford high wages and salaries to the skilled workers.

2)Demise of permanent workforce: now, there is no permanent workforce due to flexible technology which is changing the concept of permanent workforce. What we have now is contract, temporary, daily and piece wage system has comes as the basic mode of employment. The flexible technology contributes to flexible working hours what is now called “flexi-time system”. With e-mail, internets, mobile phones and wide spread use of computers, the traditional nine to five working hours is slowly coming to an end. Now people can work from their home. With flexible working hours there is also flexible payment because of this worker has to change their working habit also. The workers are paid  not just in terms of monthly wages and salaries, various options like share ownership, different types of retirement schemes are now made available.

3)Increase in the entry of working women: Female work force is tremendously increasing all over the world. A number of factors account for this. First there is an increase in service industry. The increased use of machines has drastically cut the use of muscle power. Now most of the jobs are performed on the table and with the computers. Even the manufacturing industry is taking the shape of a service industry. Secondly, the flexible working hours is very much suited to women who have to take care of the family and the job. Thirdly, the inventions birth-control technology has also freed women to join work force. Now HR professional has prepared themselves this transition.

4)Entry of old aged workers: The increase in life expectancy has put a question mark on retirement age. Now, we find retirement age increased and re-employment of retire people. More and more companies are attracting the retired workers and senior citizens because they do not need to go early to take care of children. So HR professional has to make the environment in which this workforce can work.

5)Labor mobility: The globalization phenomenon has made capital to be highly mobile. With the globalization we saw global movement of multinational companies, that is the movement skilled worker are carried on to developed countries. As more and more workforce are joining the workplace this is expected to be increasing in coming days.

6)Emergence of Trade Union and fall: During 1920’s we saw the emergence of trade union but all over the world, trade unions are undergoing an identity crisis. The fall of hand operated mass production technology and the rise of professional workers has dramatically cut down trade union membership in the west. The development of a distinct branch of mgmt called “HRM” has made the role and function of trade union less useful. The proactive mgmt has literally kicked out trade union from the companies. The useness of trade union has reduced because in professional world every individual can bargain for himself. So, he does not need to join trade union. These trade unions are also changing their strategies for their survival, like focusing to student problems, gender discrimination, unemployment, training etc.

   

ENVIRONMENT OF HRM IN NEPALESE ORGN.

        In Nepal the pace of industrialization is very slows, industrial revolution started after the establishment of Biratnagar Jute mill in the year 1936, however, HRM was confined to personal mgmt. and labor relation only.

        But after 1959 it was changed little bit with the formation of factory and factory worker act. This act a provision for appointing one welfare officer in factories was employees are more than 250 workers. It also made provision for leave, pension, provident fund, compensation for disability or death, first aid, clinic facility, provision for health and safety for workers including the working hour.

     Factory and factory workers act was substituted by labor act in 1992. Similarly trade union act was enacted in the year 1992 and child labor act was passed in the year 2000. However, these are personnel mgmt. oriented features of the acts:

1)They are personnel mgmt. oriented.

2)They focus discipline, control and direction.

3)They are rules regulation and labor relation oriented.

     HRM in Nepal is least concerned with developing human competencies and potential power for growth of employee. It focus on organizational goals but ignores employees personal goals.

     According to study made by Dev Raj 1999, barrier to human resource mgmt. are:

i)  Lack of good relation between mgmt. and line managers.

ii) Over centralization of power at the top mgmt.

iii)              Frequent change of CEO (Chief Executive Officer).

iv)              Over staffing.

v)Obsession with feeling of status.

vi)              Lack of budget for HRM.

vii)            Under utilization of HR.

viii)           Lack of performance based HRM practices.

But, in the last two decades of the HRM concept is gradually developing.

        The brief scenario of HRM in Nepal is as follows:

1)HR issues: in Nepal PM is still pre-occupied rather than HRM. Although numerous HR related problems exist, such as low production and productivity, decreasing employees motivation, satisfaction and morale, adverse union-mgmt. relation and hierarchical mgmt. practices but very little research has been undertaken to the area to explore relation between HR environment and roles.

2)Mgmt. culture: mgmt. culture of the Nepal can be defined as instability at top mgmt., lack of emphasis on planning, undue emphasis on prestige and status, highly centralized decision making and failure of formal structure to provide for the needs of the employees. There is no proper communication system between employees. Managers failed to understand the need of their employees.

3)HRM in public undertaking: HRM in these orgn. face a highly uncertain environment due to unstable political situation and short-term approach of the politician. Chairman and GM of public corporation allege that the govt. into their day-to-day decision making, such as transfer and promotion of employees in which they pressured into rewarding employees for their political belief rather than their job performance and govt. accuses the top manager of avoiding responsibility for failure of public sector unit.

4)Long time taken for transition: until 1990 the nature of personnel activities were followed by social, economic and political structure and content of the single party i.e. panchayat regime. However, even after the restoration of multiparty system in 1991 and adaptation of market economic system no change has been noticed in the traditional cultural.

5)Industrial relation: After 1990, the nature and function of the industrial relation system have changed specially in public undertaking employees became free to join unions which are organized from the national to the local level and are affiliated to one or other national political party.

INTERNATIONAL PERSPECTIVE OF HRM

      As an effect of increasing trend of globalization, competion and the global level emerged in many markets and as a result the number of firms operating worldwide increased. The effect of this trend are also noticed in many developing countries in the 1980’s where the rate of foreign direct investment(FDI) has increased, a number of multinational companies(MNC) have been established in manufacturing and services sectors and to manage these companies,, internationally oriented mgmt. practices have emerged and been adapted. Some important MNC are Coca-Cola, Pepsi-Cola, Mobil, IBM, Procter and Gamble etc. These companies have opened their manufacturing plant outside their country. These multi-national orgn. in many countries are managed by internationally operating employees. It is therefore that the subject of international HRM is growing importance for all the countries which are going along with the trend of globalization.

It is clear that international HRM(IHRM) is different from managing HRM at the national level. Factors such as increasing global and local competition, stock market responses, host country and parent company country relations and other international IHRM policies and practices. Thus, to run MNC’s and its HRM, an international IHRM perspective is required. In sum, the importance of IHRM is increasing for the following reasons:

1)To implement international business strategies by developing appropriate HR strategies for the recruitment and development of international managers,

2)To minimize financial and human costs of failure in overseas appointment.      

             

    Finding the right people to manage an orgn. can be difficult at any circumstances, but it is especially difficult to find good managers and employees of overseas operation. Such positions require more and difficult skills than do purely domestic executive jobs. The  right persons needs to be bi-cultural, with knowledge of the business practices in the home country plus understanding of business practices and customs in the host country and to truly understand a culture, it is necessary to speak the language of its people to understand humor and know what is really going on, in the host country. Although companies have taken various approach to IHRM, most agree on the importance of having qualified personnel in order to achieve foreign growth and operational objectives.

FACTOR AFFECTING THE MGMT. OF IHRM

1)Different labor markets: Each country has a different mix of available workers and a different mix of labor costs MNC’s may gain advantages by accessing these various human resources capabilities but it also possess challenges to the company.

2)International mobility problems: There are legal, economic, physical and cultural barriers to overcome when moving works to a foreign country. Yet MNC benefit from moving people, especially when labor market difference result in shortage of needed skills at an acceptable cost. In such situation, companies often must develop special recruitment, training, compensation and transfer practices.

3)National mgmt. style and practices: Attitudes of mgmt. styles, norms, mgmt practices and labor mgmt. relation vary from country to country. These differences may strain relation between headquarter and subsidiary personnel or make of manager less effective when working abroad then when working at home. At the same time, the experience of working with different national practices other some opportunities for transferring successful practices from one country to another.

4)National orientation: Although a company goals may include attaining global efficiencies and competiveness, its personnel(both labor and mgmt.) may emphasize national rather than global interest.

5)Strategy and control: specific country operations vary in terms of their importance for global corporate success, integration with operation in other countries, dependence on headquarter for resources and need for national responsiveness.

6)Communication problem: another perspective of IHRM is that international manager must communicate well to ensure that the intent of messages between headquarters and subsidiary operations is understood.

7)Expatriates: most managerial position in both headquarters and foreign subsidiaries are filled by locals rather expatriates. But now this is changing rapidly due to rapid labor mobility.

         So, HRM practices vary from country to country due to variation in culture, govt. policies, labor laws etc. Hence the study of IHRM needs an altogether different approach.  

   

  

ETHICAL ISSUES IN HRM

    Business environment is changing accompanied by the frequent change in the dynamic environmental forces. Below are issues and their implication for HRM in an orgn.:

1)Globalization: Many countries of the world has globalised their economy. It is the process by which transaction of business orgn. have been globalised across borders. The extent to which these business activities will have influence on the HRM policy and practice. To meet global requirement HRM has to think on its policies as well practice matter. Issues like selection of qualified employees with a view to work in cross-cultural situations employees have to be familiar with the culture and the ethical issues are the people work think, believe, respect each other, talk and so on.

2)Increasing interest in national security and employment: National security not only represents mobilization of armed forces and managing warfare activities. With the terrible events of September 11 in the United States where terrorists attacked world Trade Center and Pentagon, the issues of national security have emerged prominently in the business too. Terrorism is an international problem facing almost every country directly or indirectly. To cope up with this problem, every country is re-thinking its present national security process so that people of the country may feel safe to move, work, buy and sell goods and services. Any imbalances will have effects on business policies and hence on HR policies and practices. To counter the possible effects of terrorism at the organizational level, it is essential for HR managers to make the policy of providing greater economic benefit to employees and customers to protest the business in the long term.

3)Work force diversity: Today we find many work force Diversity in the organization. Workforce from different countries with different values and culture, education and training background and representing different races and religions are participating workplace. Such diversity is increasing in developing as well developed countries. With this increasing diversity, the roles and responsibility of HR managers to handle diversity related issues and problems at work. There is an increasing need for training education and other awareness programme to develop a certain level of consensus recognizing differences at work. Instead of attempting to change workforce value and culture, it is better to celebrate their differences to make the organization a success.

4)Changing skill requirement and Avoiding skill deficiencies: With the rapid change in IT, there have been substantial changes in the current skill requirement to work in modern organization. Even in less developed countries jobs are being transformed with the increasing trends of globalization. HR departments now look for a different sort of selection and rewarding policies to deploy and retain knowledge workers in the organization. The main issue for it is how to avert skill deficiencies so that an organization can minimize economic losses arising from increasing accidents, low productivity and customer complaint.

5)The contingent workforce: Specially in economically advanced countries, it is getting difficult to predict development and their subsequent effects on employment pattern of the organization. Every organization has two sets of employees i.e. core employees and contingent employees, where core employees are in permanent nature employment of labor at work, contingent employees are short term workers employees to work in peak business time when core employees are not able to cope with increased work pressure. These contingent employees are mainly part time employees, temporary employees and contract workers. With a view to manage HR in the organization, contingent employees should be treated as strategic employees.

6)Continuous improvement programme and work process engineering: Widely known as TQM, continuous improvement programme is related to TQM that includes all concerned stakeholders together with suppliers and customers. The main objectives of the programme is to built up quality commitment in quality. With the application of work process re-engineering, the organization can make gains in cost, customer service improvement and time management. Work process re-engineering is a short term work process improvement programme whereas TQM has longer-term improvement perspective.

7)Decentralized work sites: Highly skilled jobs have been replaced by knowledge workers. Due to the increasing number of knowledge worker, work sites are decentralized. Employees are no longer needed to work at office. With the increasing use of computer, fax machine, e-mail and internet network, today’s employees are not required to sit in the office and work from 9 am to 5 pm. This decentralized work sites are beneficial to balance work and family life for the workers.

8)Employees involvement: The need for employee involvement at work place is increasing in terms of delegation of authority and power, participation in making decisions, setting goal, providing training and development for the workers. When the organization is larger in size and levels, it is difficult to work without  delegating power and responsibilities to the lower level of management. Managers should be involved in the process of making decision and goal setting. This will increase feeling of ownership and commitment among the employees. Only committed employees will be creative for the success of the organization.

Human Resource Strategy

Concept and Perspective:

    Strategy  is generally developed to determine specific changes of direction than an organization should take and to decide on what new changes should be made in organization structure and process and so on to cope with environmental challenges and opportunity. So HR strategy is a course of action to achieve Human Resource objectives. Influence by larger environmental forces and business strategy, the HR strategic components are the organization’s  HR mission, objectives and policies that have to compete in the market. According to HRM model, HR strategy is integrated within the business strategy. This shows that when a firm adopts an innovation strategy, it will follow those HR strategies which support innovation.

    HR strategy is carried out by the HRM department. We can explain through this example how HR strategy has changed on company. This programmed is carried out by HR department at “Colgate-Palmolive”. Colgate-Palmolive is a global manufacturing company with sales of over $5 billion. After Assuming (taking) the presidency several years ago, the new CEO developed and communicated a new strategy emphasized concentrating on new products being the low-cost product, simplifying business and structures, pushing decision making down, promoting entrepreneurial action  and improving morale and motivation. The new strategy was aimed at making Colgate a more responsive competitor in its global markets and in focusing the company more clearly on health related products.

    With this new strategy, several major steps were made almost at once. A major re-organization took place that eliminated one level of senior management. Additional resources were diverted to new product development and research and development. And the HR programs at Colgate-Palmolive got a new mandate to help Colgate achieve its new goals.

    The program laid out for Colgate HRM provide a glimpse of how HRM today is being pressed to get involved in strategic management. At Colgate-Palmolive, HRM was directed by the president to develop and execute programs designed to create a company culture that would achieve the following:

1. Encourage a spirit of teamwork and co-operation within and among business units in working towards common objectives, with an emphasis on identifying, acknowledging and rewarding personal excellence.

2. Foster entrepreneurial attitude among the manager and innovative thinking among all employees.

3. Emphasize the commonality of interest between the employees and shareholders.

For that numerous HRM programs has to be designed. Like the company executive incentive compensation plan was re-designed to place more emphasis on individual performance and achieving operating targets. Employees benefit were re-designed to make them more flexible and responsive to employees needs. At the same time, cost controls and employee variable pay costs were instituted. The bottom line was that by implementing a number of programs (including those aimed at re-designing compensation and benefits) HRM was able to contribute to a re-focusing a Colgate employees’ efforts in a manner that contribute to the execution of Colgate’s strategic plans.

End of first chapter

  

       

CHAPTER 2

MEETING HR REQUIREMENT

                Human Resourcing and HR Planning

Concept

                Planning is the first step in any task. Planning is the process of  fixing policies and goals. It is essential element of every work.

                Human resource planning is the process of pre determining future human resource need and choosing course of actions needed to satisfy these needs. It involves estimating the size and composition of future workforce to ensure survival and growth of an organization. It determines specific number of jobs to be filled.

                HRP helps to get right people at the right place at the right time. It helps to balance the HR manpower according to organizational operation. So that they can be effectively utilized.

                This is the age of competition. So we have to make superior product (high quality at lower cost). In doing so an organization has to arrange its employees or HR in an effective way. HR planning helps to select employees according to their capacity and skill. Proper planning helps the organization to minimize problems at operation and in overall, it increases organization output. HR or manpower supply its determined by the internal and external availability of people. The internal supply consists of existing workforce and its potential to contribute and external supply resides in the population outside the organization and is influenced by the country’s over all factors.

According to Werther and Davis  “HR planning systematically forecasts and organization’s future supply of and demand for employees”.

According to Michael Armstrong “HR planning ensures that the organization knows and gets what is wants in the way of the people need to run the business now and in the future.”

                From the analysis of above definition it is clear that the basic concept of HR planning includes:

1.       Assessing the demand for HR to achieve company strategy.

2.       Utilization of HR in a cost effective and efficient manner.

3.       Utilization of internal supply and external supply HR.

Importance of HR planning

                Proper and systematic planning of HR becomes important for the success of organization as people have greater contribution for the organization. HR planning is the starting point of HRM. We can categorize importance as below:

1.       Uncertainty reduction: HR determines future human resources requirement and it provides proper job to the proper person so that uncertainty about HR and work will be minimized. It also helps to reduce shortage. Thus HRP clarify employees about their responsibility.

2.        Objective focus: HR is the most important factor to fulfill organizational task. They are meant to achieve organizational objective. HR planning arranges and utilize in proper manner so that organizational objective could be achieved.

3.       Environmental adaptation: HR planning assesses current HR competencies through HR inventory and job changing technological, political, legal, economic, social and culturalforces through HR planning.

4.       Acquisition of HR: HRP helps to acquire human resources in orgn. through recruitment, selection. It also make succession planning.

5.       Utilization of HR: Through HRP, existing human resource can be properly placed and deployed to ensure their effective and efficient utilization.

6.       Development of HR: HRP emphasizes on various skills development programmed and training to the employees such help to increase overall performance of orgn. which results in greater satisfaction of employees lower turnover and lower absenteeism.

7.       Control; of HR: HRP sets standard for control purposes. It serves as a standard for controlling the quantity and quality of employees actually deployed. This facilitates control of human resources cost as well. In fact, human resource control is possible without HRP.

8.       Improved labor relation: HRP promotes awareness about the important of human resources at all level of managers to the goals. It assists in collective bargaining with labor.

HRIS AND HR INVENTORY

                HR Inventory

                                                In an era of complex computer system, is not too difficult for most orgn. to generate a HR inventory report. The input for this report would be derived from forms completed by employees and then checked by supervisors and the personnel department. The report includes a list of names, education, training, prior (previous) employment, current position, performance rating, salary level, languages spoken, capabilities and specialized skill for every employee in the orgn. often call a skill inventory, HR inventory consists of up to date information about the qualification and experience of selected categories of employees.

                                                Form completed (fill up) by employees serve as the sources of information for developing HR inventory. The information included in the inventory are:

a)      Name of the employees/age/sex mental status.

b)      Educational qualification of the employees.

c)       Training undertaken experience of the employees.

d)       Prior employment experience of the employees.

e)      Current position held by the employees.  

f)       Performance rating by the employees.

g)      Salary level of the employees.

h)      Languages spoken by the employees.

i)        Capabilities of the employees.

j)        Specialized skills of the employees.

k)      Job and location preferences.

Importance of HR inventory

                HR inventory facilities the assessment of the current skilled workforce which is useful to determine needs of the special type of manpower in the orgn. These are the scare people resources and it the essential to maintain the record of information of these people. Such an inventory can be important:

a)      At the time of promotion.

b)       Mgmt. succession planning and reporting.

c)       Composing planning

d)      Career planning

e)      Organizational analysis.

f)       Training

g)      Development.

This report is important because it gives a good idea about the skills currently available in the orgn. This report is also important in expanding business of selecting people. It provide us guide for considering new approaches for the orgn. and can take advantage of opportunity to expand or alter the orgn. Strategies. The profile of the human resource inventory can provide critical information for identifying current or future threats to the orgn. ability to perform. For e.g. the orgn. can use this information to identify specific variables that are assumed to have a particular relationship to training needs, productivity importance and success planning.

HRIS (Human recourse information system)

One of the newer devices for providing skilled inventory is the HRIS. HRIS provides computerized information to the positions and skills available in a given orgn.

               

Acc. To William Anthony “ A HRIS facilitates in obtaining such data in a logical, valid and reliable manner in order to assist in manner in order to assist in managerial decision making”

This system is designed to quickly fulfill the personnel information needs of the orgn. with almost no additional expenditures. It highly technical features permits an orgn. to track most information about an employees and about jobs and retrieve the information when it is needed. HRIS has been implemented to assist HR inventory. This is designed to provide quick information about the positions and skill available.

Importance of HRIS

                Now a days due to the technological advancement, it requires needed and timely information of employees. HRIS provides such information which includes information about employment training, compensation etc. HRIS provides following information:

1)      Total number of employees in the orgn. by their occupation, location, department, age, service skills and grades.

2)      Total number of employees joining and leaving the orgn.

3)      Rates of employees turnover.

4)      Rates of sickness and absenteeism.

5)      The actual salary and wage bill including overtime.

Use of HR inventory and HRIS

Ø  It enables mgmt. to assess what skills are currently available in the orgn.

Ø  It is useful for planning the selection, training, promotion and transfer of employees.

Ø  It serves as a decision making tool for deploying and effectively utilizing existing HR.

Ø  It serves as a guide for considering opportunity for diversification and expansion of operation

Ø  It provides crucial information for indentifying human resource related threats to the orgn. for e.g. technical outdating of employees can be managed effectively.

SUCCESSION PLANNING

                This is the special type of planning used and to forecast potential manager for future promotion at the higher level. Since many companies fill their potential vacancies from within the orgn. some potential middle and upper level managers are selected for future promotion. Such selection is often made on the basis of the result of the performance of a particular employee. To select candidates for future promotion in managerial post, a pool of candidates may be prepared by an expert committee. These candidates are given special training and development assignment in accordance with their interest and capacity. Thus it is an executive inventory report that indicates higher position which are going to be vacant in near future due to retirement, promotion and transfer. But promotion is not granted (guaranteed) for all manager at once.

According to Werther and Davis “Succession planning is the process of human resource planner and operating manager use to convert information about current employees into decision about future internal job placement”.

          Thus, succession process of:

Ø  Anticipating managerial staffing in future.

Ø  Making plan for the development of manager to meet these needs internally.

                                Succession planning identifies high potential employees as succession to key jobs. A separate mgmt. inventory is generated from HR inventory for succession planning purpose. It includes additional information on each manager about the following:

Ø  Current performance.

Ø  Long term growth potential.

Ø  Promotion.

Ø  Development need (skill deficiencies)

    Through succession planning candidates are developed  through:

Ø  Training and mgmt. development.

Ø  Special assignment.

Ø  Job rotation.

Ø  Under study.

Ø  Other means.

Benefits of succession planning:

1)      It helps to fill vacancies of managerial posts within the orgn. This motivates employees and internal talent is assured to be utilized.

2)      Employees are facilitated carrier planning not merely jobs.

3)      Managerial shortage and skill deficiencies are pre-determined. Plans are prepared for developing managers internally to accept greater responsibility.

4)      Qualified people are placed in the right jobs. This ensures greater continuity operation.

JOB ANALYSIS

                In an organization, various employees are involved in different jobs. Job analysis involves a formal study of jobs. The final outcome of job analysis is the predetermination of job description and job satisfaction. Job analysis is a systematic explanation of the activities with an organization. It defines basic duties, responsibilities, accountability and qualification needed to accomplish the job.

                Job analysis is essential in an organization to determine duties and responsibilities of employees and to choose right employees for the right job. So, that all employees could direct their activities towards organisational activities.

                According to Decenzo and Robbins “A job analysis is a systematic exploration of the activities within a job. It involves identifying and describing what is happening on a job.”

                According to Wether  and Davis “Job analysis systematically collects, evaluates and organize information about job”.

                From the above concept and definition, we can conclude that job analysis activity includes the preparation of job description and specification. Job analysis is a process of which information about each activity involved in a job is systematically observed.

                                                Method of collecting job analysis information

                There are various methods for collecting job analysis information. Analysis generally use combination  of two or more methods. Some methods are as follows:

1.       Observation method: Using this method, a job analyst watches directly or reviews works on the job. A visual impression is obtained about the activities, equipment, materials, working conditions and job hazards. This can be supplemented by the reviews of films of workers while the observation methods provide first hand information, workers in many cases do not function most effectively when they are being watched. This distortion in job analysis may occur. This method also requires that the entire range of activities be observable which is possible for some job but impossible for many.

2.       Individual interview method: Under this method, face to face interview of individual is conducted at the work site to collect information for job analysis. Supervisor can also be interviewed. A check list of question is used for interview. This method is effective for assessing what a job entitles but it is very time consuming.

3.       Group interview method: This is like individual interview method but groups of individuals are interviewed under this method. By using this method accuracy is increased in assessing job but group dynamics decreases its effectiveness.

4.       Structured questionnaire methods: Under this method, employees are given a list of structured questionnaires about their job from a long list of possible task items. This method can give better outcome collecting job analysis information. So, it is most popular method. Disadvantage of this method is job may be overloaded and feedback is often lacking.

5.       Technical conference method: Under this method specific characteristics of a job are obtained from the “expert”. Specialists and technicians are used for gathering information about job. Although it is good but it overlooks work perception about what they can do on their job.

6.       Dairy method: For this method, employees must maintain their daily to record their  daily activities. It provides up to date information about employees. It is time consuming method. It becomes costly too because employees have to maintain daily continuously.

Purpose/Component of job analysis

 

                                                Job Analysis

Job Description                         Job Specification                                      Job Preference standard

                                                Determining relative

                                                Worth at job

               

                        Job evaluation

1.       Job Description:  A job description is a written statement of what the job holder does, how it is done and why it is done. It accurately gives the job contains environment and condition of employment. It is a profile of the job. It describes job title, duties and responsibilities, authority, accountabilities and job relationships. It is the outcome of job analysis. It provides enough information to the job incumbent. A job analysis is a foundation for many HR practices ranging from recruitment to training programmed. These will normally outline the nature of the tasks and mention the competencies and skill required for job holders. Job description include following information:

n  Title of the job, level of the job (This identifies the job)

n  Location of the job (Department, physical location)

n  Relationship (Responsible to and responsible for)

n  Job summary

n  Duties and responsibilities (what the employees do)

n  Authority (Right to make decision and give order to subordinate)

n  Accountabilities (Answerability for standard of performance )

n  Working condition involved in the job

n  Machines and materials used

2.       Job specification: (Worker’s requirement)

n  It is an overall summary (written) of worker’s requirements. It is a profile of human characteristics needed for performing the job. On the basis of information acquired through job analysis, the job specification identifies the knowledge, skills and ability needed to do the job effectively, so that capabilities and qualifications necessary for performing the job are determined. It helps in the selection of employees.

n  Job specification includes the following information:

n  Job title

n  Education and training (Year of schooling type training)

n  Experience (previous job experience in terms of years and nature of organization)

n  Appearance (neat and clean)

n  Physical health (good health)

n  Special abilities( ability to work with others)

n  Mental abilities( Judgment and initiatives)

n  Skill (communication, computer, driving, report writing etc)

n  Maturity( capacity to assumed increased responsibilities)

3.       Job performance standard: Job performance standard states an acceptable level of job achievement. They lay down standards for each job in terms of quality and quantity.

4.       Job evaluation: It is the system of determining the relative work to different jobs. Here performance of employees is evaluated on various basis. Both job description and job specification provide relevant information for evaluation with a view to fix a salary of a particular job.

Purpose of Job Analysis

1)      Writing job Description and specification

2)      Job Evaluation

3)      Recruitment and selection information: Job analysis provides useful information about job which will help for recruitment and selection of employees. Recruitment requires information like, the number of employees required methods of attracting attention of qualified candidate source of recruitment etc. By collecting such information from job analysis selection of employees may be done.

4)      Performance appraisal development: performance appraisal is a system set up by the orgn. to regularly and systematically evaluate employees performance. Information received from job analysis is useful to the HR in order to design a systematic performance evaluation program.

5)      Training and development need: Job analysis of information about employee’s skill, performance and capabilities can be taken. On the basis of such information orgn. can determine training required for the employees for better performance as well as development need for managers.

6)      Worker Orientation: Worker orientation progress is designed only for workers. These are maintained for workers. Job analysis information advice them about job related rules and regulation and about companies policies and practices.

7)      Human Resource planning: Since HPR attempts to ensure demand and supply of right number of employees of the right type and at the right time and place. Information obtained from job analysis is very useful to determine current future human resource requirement of an orgn.

ATTRACTING A HIGH PERFORMANCE WORKER

                Recruitment, selection and socialization are the prime employment processes that are followed to attract, hire and retain valued employees in the orgn. with the increasing demands for quality and innovative products and service in the market. Skill shortage began to bite orgn. that operated in the competitive world. Thus, the process of recruitment , selection and socialization has become increasingly important in HRM environment. Recognition of the fact that a good employee makes an orgn. work effective and poor one’s restrict its success, has led to emphasis on attracting and selecting people with the right personal characteristics and attitudes rather than just a requirement for particular work experience and acquired skills

                With increasing globalization of business activities and their influence on the nature of competition among requirement, selection and socialization have emerged of this issues are pertinent in the employment process decision. Firstly, orgn. are not set up just to provide employment. They operate to achieve their business goal. Therefore, there is a need to adopt recruitment and selection strategy compatible with the business strategy. Thus, recruitment and selection practices of the orgn. should be linked with business strategy to attempt a high performing work force. Secondly, the process of organizational development and design different initiatives are being followed by orgn. TQM, QWL, MBO, and other business initiatives have forced business orgn. to follow quality recruitment and selection of manpower to work on these initiatives. Thirdly, with the increasing business across the national borders, an international perspective of recruitment, selection and socialization emerged.

RECRUITMENT (PRE-SELECTION)

                A good HR planning should ensure the identification of HR needs. Once the need is identified we can do something about meeting them. After making HRP, next step is recruitment. Recruitment is concerned with identification of source from where the personnel can be employed and motivating them to offer for employment.

                Recruitment is the process of identifying potential candidate or anticipated organizational vacancies. Recruitment will attract a large number of qualified applicant for a job. It should also provide information so that unqualified applicant can self-select themselves. It means good recruitment program should attract the qualified and not attract the unqualified. This will minimize cost of processing unqualified candidates.

                According to Decenzo and Robbins “Recruiting is the discovering of potential candidates for actual or anticipated organizational vacancies”.

                According to Flipp “ Recruitment is a process of searching for perspective employees and stimulating them to apply for jobs”.

                According to Wendell French “ Recruitment is the process of finding qualified people and encouraging them to apply for work with the firm”.

                So, recruitment is the process of finding right people for right position at the right time. It is concerned with identifying and attracting a pool of qualified candidates to fulfill human resources needs of an orgn. So, recruitment is an important part of acquisition aspect of HRM.

Factor affecting recruitment

1)      Size of the orgn.

2)      Employees turnover

3)      Organizational growth

4)      Image of orgn.

5)      Nature of the job.

6)      Organizational policies

7)      Govt. and union restriction

8)      Cost

9)      Incentive of recruitment

SOURCES / METHODS OF RECRUITMENT

Normally, an orgn. can fill-up its vacancies either through probation of people available in the orgn. or through the selection of people from outside. There are mainly two sources of recruitment. They are:

1)      Internal sources

Internal sources involve recruiting within the orgn. It means perspective candidates (qualified) are found within the orgn. to fill up job vacancies. Many orgn. follow the deliberate practice of recruiting from internal sources. Prospective candidates with needs criteria are eligible’s to apply for the job within the orgn. Promotion and transfer are important means for internal recruitment.

Methods of recruitment within the orgn/ internal sources

a)      Job posting: under this method an orgn makes announcement of job opening to all the employees of the orgn. position, location, pay scale and qualification are described. Interested employees apply for the jobs. It means for job announcement may be:

Ø  Bulletin boards: Notice about job opening is placed on the bulletin boards. Public service commission and public sector enterprise use bulletin boards to announce job vacancies in Nepal.

Ø  In-house Newspaper: Job vacancies are announced in circular or memo’s sent to supervisors.

Ø  Electronic-mail: Employees receive information about job vacancies on thieer computer through e-mail. Employees can also submit their application by e-mail.

b)      Employee’s referrals: The recruitment is based on nomination by current employee or supervisor. Supervisors make recommendation of the qualified candidate for the vacant position. The recommendation also be made for the dependent of retired employee’s.

c)       Human Resource Inventory: HR inventory provide valuable information about candidate. The data available in the HR inventory help to identify qualified employees within the HR.

d)      Promotion: Recruitment may be done or job vacancies can be fulfilled up by promoting the orgn. current employees to higher position.

e)      Transfer: Without promoting, job vacancies may be filled by transferring employees from one place to another.

Advantage of Internal recruitment

1)      Better selection: By using internal recruitment, there is high possibility of better selection of employees because information on employee’s performance is readily available and predictable.

2)      Morale Building: Due to greater chance for advancement and carrier development, employees will be highly motivated. So, that their morale will be build.

3)      Mgmt. Development: promotion from within can act as a device for mgmt. development.

4)      Adaptability: Less time will be need for employees to adopt the new work orientation. Those chosen internally already know the orgn. less time on training and orientation will be required.

5)      Cost effectives: Internal recruitment is less costly as compared to external recruitment training cost will also be low.

6)      Commitment: The loyalty and commitment of employees will increase. Employees fell secure and identify themselves with the orgn.

Disadvantage of Internal recruitment

1)      Limited choice: Internal recruitment limits the choice i.e. internal source only. This excludes excellent candidates from the external sources. There may be no candidates with special skill within the orgn.

2)      In-breeding: Internal recruitment may promote excessive in-breeding. Mgnt. May becomes stagnant owing to lack of new ideas, knowledge and enthusiasm.

3)      Limited opportunities: The morale of employees can be adversely affected by limited opportunities for internal recruitment. In fighting can happen for promotion.

4)      Favoritism: Manager may overlook good candidate and recommend favored one. This may crate tensions. In Nepal “source and force based” internal recruitment is common.

5)      Seniority based: most internal recruitment are based on seniority not merit. People might be promoted to the point where they cannot successfully perform the job.

2)      External Sources

This source is widely used specially to make recruitment for entry level jobs and skilled jobs. This involves recruitment from outside the orgn. Qualified candidates from outside the orgn. are attracted to apply for job vacancies. A new hire is sought from the labor market. They are as follow:

        i.            Advertising: It is most effective and common means to search potential employees from outside the orgn. Employment advertisement in journals, newspaper, bulletins, print etc is quite common in our country. An advertisement contains brief statement about the nature of jobs, types of people needed and procedures to apply for job.

      ii.            Employment exchange:  Many orgn. get information about the perspective candidate through employment exchange. They function a list of suitable candidate of employment, they are public employment agencies and private employment agencies:

a)      Public employment agencies: Such agencies are run by govt. The employment seekers get registered with these exchange such exchange provide candidate of lower level positions. Such as skilled workers, junior clerk, supervisors etc.

b)      Private employment agencies: Private employment agencies provide employment service particularly for selecting higher level and middle level executive. This agencies take responsibilities of recruiting and selection of employees on behalf of various orgn. They charge fee for this purpose.

    iii.            Campus recruitment: Many orgn. search employees by conducting interview at the campuses of various Universities. The orgn. hold preliminary interview on the campus on the predermined date and candidate found suitable are called for the interview.

     iv.            Employees Referrals: The employees working currently in the orgn. recommend for the potential candidate who have specific knowledge and who are their relatives and friend. Such candidates tend to be better qualified for the job.

       v.            Deputation: Many organizations depute people from other organization for a certain period. Such people are given choice either to return to their original organization after a certain time or to continue at present organization. Sometime, people working in one organization are deputed in another belonging to the same industrial house.

     vi.            Labor union: In many organizations, labor unions are used as a source of manpower supply at lower levels. Organization asked labor unions to make recommendation for employment of people as a matter of goodwill and co-operation.

   vii.            Labor contractors: Labor contractors serve as the source of recruitment for requisite number of workers. They charge commission for their services. Factories generally use this method for recruitment.

 viii.            Gate hiring: The concept of gate hiring is to select people who approach for employment in the organization. It is useful and convenient method at the initial stage of organization. When a large number of such people may be required by the organization.

                It is not necessary that a particular orgn. should utilize all sources to employ people of all types. Some of the sources are more useful for a particular category of employees. Eg. Advertisement and deputation re more useful for employing managerial position.

Advantages of external recruitment

1)      Qualitative HR: External sources provide a sufficiently larger pool of qualified candidate. So, mgmt. has greater choice for selection and quality.

2)      Organizational rejuvenation (transformation): External recruitment facilitates inflow of new ideas, knowledge, skills and enthusiasm in the orgn. This keeps the rejuvenated. Enterprise and experience of other orgn. can also be brought.

3)      Environmental adaptation: The inflows of new knowledge, skill and experience help orgn. adapt to changing forces in the environment.

4)      Balanced HR Mix: External sources facilitates of specific group like women, disables, minorities etc. This not only helps to achieve legal compliance but also result in balance HR mix.

5)      Fairness in Recruitment: there is no pre-conceived nation, reservation, favoritism in external recruitment. The recruitment is fair and ill-fighting for promotion among employees are low.

Disadvantages of external recruitment

1)      High cost: external recruitment is costly than internal recruitment. The cost of training new entrant is also high. Attracting potential candidate is difficult.

2)      Poor employment morale: recruitment from outside can adversely affect the morale of existing employees. Their chances of advancement will be reduces motivation can be low.

3)      Adaptability problems: More time will be needed to new employees to adapt to the work environment of the orgn. The orientation will also be high.

4)      Wrong selection: external recruitment can result in wrong selection of employees. This can adversely affect the quality of HR and effective of orgn.

TESTING/SELECTING EMPLOYEES

                                With a pool of applicant next steps is to select the best candidates for the job. This usually means whittling (selecting / reducing) down the applicant pool by using the screening tools. Selecting the right employees is important for three main reasons. Firstly, your own experiences always depends in past on your subordinates. Secondly, it is important because it is costly to recruit and hire employees. Thirdly, it is important because of the legal implication of incomplete hiring. So, test tries to choose the right candidates at the place.

                                Testing and selection is a deliberate effort to select a fixed number of personnel from a larger number of applicants. When orgn. gets more candidates than the actual recruitment, the orgn. must have the device and methods of testing and selecting to divide application into categories like, those who will be offered employment and those who will not be offered employment.

                                The process of testing and selection is also known as the process of reject.

                According to Decenzo and Robbin “ The primary purpose of selection activities is to predict which job applicant will be successful if hires”

According to Werther and Davis “ The selection process is a series of steps use to decide which recruit should be hired”

                According to Wendell French “Selection is the process of choosing among people apply for work with an orgn.”

                                Thus, testing and selecting and selection is the process of selecting right candidates among the perspective candidates for a particular position in an orgn. It consists of series of steps through which applicant pass. Each step serves as a hurdle, which the successful candidates pass.

PROCESS / STEPS IN SELECTION

                A selection process involves a numbers of steps. The basic idea is to get maximum possible information about the candidates to ensure their suitability for employment. The type of information needed for various positions may vary and it is also possible that selection process may have different steps for various positions. Similarly, various steps of selection process may be different from orgn. to orgn. However, a standard selection process has the following process:

1)      Receiving of the Application: first of all selection process start with the receiving of the application form filled-up by the probable candidates. In which candidate will provide the full information about himself/herself and also regarding his Academic qualification with experience and training.

2)      Screening of application: Perspective employees have to fill up some sort application forms. These forms have variety of information about the applicant like their personal bio-data, achievement, experience etc. such information is used to screen the applicants who are found to be qualified for the consideration of employment. Based on the screening of application only those candidates are found to be meeting the job standards exceeds the actual requirement, the orgn. decides a suitable number of candidates who will called for further selection process.

3)      Preliminary Interview (screening interview): Preliminary interview is held for initial screening out of candidates. It is very short. It centers on job requirements. Unqualified, unsuitable and misfit candidates are screened out. The candidates also get a chance to find out more about the orgn. and the job.

4)      Selection test: Many orgn. hold different kinds of selection test to know about the candidates who cannot be called for interview. Selection test may give information about the attitude, interest, personality etc which can’t be known by application form.

5)      Interview: Selection test are normally followed by personal interview of the candidates. The basic idea here is to find out overall suitability of candidates for jobs. It also provide opportunity to give relevant information about orgn. to the candidates.

6)      Checking of reference: Many orgn. ask the candidates to provide the names of reference from whom more information about the candidates can be obtained such information may be related to character, working style etc. With the education, institution from whom the candidates have received education or other persons of importance who may be aware of the candidates behavior and ability.

7)      Physical Examination: It is carried out to ascertain the physical fitness of perspective candidate. Many orgn. don’t carry physical exam but some orgn. carry on a comprehensive basis. Some orgn. only have general check-up to find out the major physical problems. As regard to timing some orgn. conduct physical exam near the end of selection process while some orgn. place it relatively early in the process.

8)      Approval by Appropriate Authority: On the basis of the above steps suitable candidates are recommended for selection by the select committee or HRM or PM. Orgn. may designate various opportunity for approvals of final selection of candidate for different categories. For top level manager, BOD may be approving authority and for lower level manager top level manager may be approving authority.

9)      Placement: After all formalities are completed, the candidates are placed on their jobs, initially on probation period. The probation period may range from 3 month to 2 years. During this period, they are observed clearly and when they complete this period successfully they become the permanent employees of the orgn.

SELECTION TEST

                Selection test is a systematic procedure for sampling human behavior. It can collect unbiased information about an applicant aptitude, experience and motivation. This information provides a basis for predicting performance and behavior.

                The various type of test that has to be passed by candidate are as follows:

1)      Aptitude test: Aptitude test are normally used to measure the potential of individual to perform. It is done to measure aptitude for job. From this test candidates learning capacity be known. They are:

i)        IQ: On this testing , they measure intelligence quotient in term of comprehensive reasoning, number reasoning etc.

ii)      Mechanical aptitude test: This is used to measure capacities related to mechanical matters.

iii)    Psychomotor test: They measures abilities related to psychomotor matter such as manual, morality etc.

2)      Achievement test: They measures theoretical, practical knowledge and skills which candidates clarify to know. They can be:

i)        Job knowledge test: it is done to measure about knowledge of particular job.

ii)      Work sample test: In this test, candidate is asked to do part o factual work.

3)      Situational test: They abstract real life situation and candidates are asked to cope with the situation problems. Through situational test, candidates are evaluated in a situation that is similar to some aspects of the job to be done in the future, if the candidates are selected.

4)      Interest test: interest test provide information about candidates likes and dislikes in relation to work, hobbies, recreational activities etc. It is assumed that there is relation between interest and job satisfaction.

5)      Personality test: Personality test measure personality angle of the candidates such as friendliness, dependability, temperament and emotions.

6)      Honesty test: This measures honesty and loyalty of candidates.

Precaution of using selection test

1)      Supplementary use.

2)      Legal implication

3)      Reliability (consistency)

4)      Validity (accuracy)

5)      Objectivity

6)      Standardization

Tools for Testing and Selection

1)      Written test: Written test are historically a significant input to the selection decision. Recently, however there has been a marked decline in their use. Written test provide employees full knowledge about job that he has to work if is chosen.

There are hundreds of selection tools and written test including:

i)        Intellectual ability

ii)      Mechanical ability

iii)    Perceptual accuracy

iv)    Motar ability

v)      Personality traits

2)      Performance stimulation test (Artificial): There has been increasing interest in the past decade in developing performance simulation test. The singular identifying characteristics of this test is that they require the applicant to engage in specification, it is based on job analysis data.

3)      Working sampling (actual): work sampling is the process to create a replica of job. Applicants demonstrate the work where they possess the necessary talents by actually doing the tasks.

4)      Assessment centers: A more elaborate set of performance situation tests, specially designed to evaluate a candidates managerial potential is administered at the assessment centre. Assessment centers involve procedures that incorporate group and individual exercise. Applied by line executive practicing supervisors or by trained psychologists as to how well they perform.

5)      Graphology: It has been said that an individual’s handwriting can suggest the degree of energy, inhabitation and spontaneous to be found in the writer, disclosing and elements of balance and control from which many personality characteristics can be taken out.

6)      Polygraph test: The use of lie dictators for verifying information on the application form can also be considered as a form of employment test. Some orgn. require all applicants to submits a polygraph test as a security measure and they follow-up with occasional test to randomly check on employees honesty.

CLASSIFICATION AND DIFFERNTIAL PLACEMENT

                Classification

                                The classification of employees depends on the selection process performance and information received from the application form, test result, medical report, verification of application form with the references and related documents. After all this test candidates is considered to be eligible to receive an offer of employment. The orgn. selection process has to be effective in differentiating between those who will not. After that decision in the hand of applicant to accept it or not. Classification helps candidate to know what they will be getting for work. Those who are not classified has to be given the reason why they have not been selected (classified).

                                While classification following decision has to be taken:

i)        First they will be classified as rejected candidate: Informing them about the rejection for employment in orgn.

ii)      Hold the candidates (classified as waiting list ): keep his or her names as alternative candidates for some time.

iii)    Hire and Place: notifying the candidates of his or her selection and him/her in vacant position.

Placement

                Placement is allocation of new employees to job. Proper placement builds a competent and satisfied work force. Not only the candidates are suitable to the job but also the job should be suitable to the person. When selected candidates report for duty they should be placed in the right job. A misplaced employee is a frustrated employees.

                According to Micheal Jucious “ Placement is the determination of the job to which an accepted candidates is to be assigned his assignment to that job”

               

                Points to be noted while placement  

1)      First, placement is for a probation period. Usually extending from 6 to 12 month. Orientation and pre-service training are given to the employees during the probation period. If the performance is satisfactory during the probation period the employees is given tenure (permanent posting). If the performance is unsatisfactory, the probation period may b extended or the employees is asked to quit the job.

2)      Some employees may themselves like to quit job during probation period, if they are not satisfied with the job or placement.

3)      Placement involves assigning a specific rank and responsibility to the selected candidates. It implies matching of job requirement with the qualification of the candidates.

4)      Promotion, transfer and demotion also require placement action.

5)      Misplaced employees perform below expectation corrective action should be taken to place them properly so that they become fit for the job.

6)      Placement should relate with legal provisions.

Benefits of proper placement

1)      Reduced employee’s turnover, absenteeism and accident.

2)      Improve employee’s morale and satisfaction.

3)      Better adjustment to job and work environment by candidates i.e. performance on job matches the expectation.

3^rd chapter

DEVELOPING HUMAN RESOURES

           

            Concept of developing human resources                             

                            Human resources represent the most important resource of orgn. developing human resource is concerned with increasing the competencies through knowledge, skills, attitudes and experience of people in orgn. The achievement of organizational goal depends largely on the efforts and performance of people working in orgn. Better people achieve better result. HRD excellence is the essence of organizational excellence. HRD is an integral part of every manager’s job in orgn.

                            People possessing energy and physical strength alone are not human resource. People becomes HR when they also acquire competencies, such as knowledge, skills, attitudes, experience and growth potential. HRD is concerned with developing competencies of people in organizational setting. It ensures that orgn. have adequate HR with competencies needed to achieve goals effectively.

                            Now day’s orgn. have to work in competitive and dynamic environment to cope with changing environment forces the orgn. should be pro-active such pro-activeness depend on how far the orgn. is able to develop and utilize its HR and thus to make them ready to understand and cope with this changing environment when environmental forces are relatively fixed and static, they are easy to predict and adapt. On the contrary, if this forces comprises various elements and are changing more frequently, it becomes difficult to predict them. This uncertainty presents challenges to managers. However, orgn. have to understand and attempt to cope with this situations by developing HR. HRD is an essential element of the orgn. for the development and utilization of HR.

                            According to Decenzo and Robbins “ HRD is concerned with preparing employees to work effectively and efficiently in the orgn. “

                            According to Leonard Nadler “ HRD is organized learning in a definite time period to increase the possibility of improving job performance and growth “

CONCLUSION:

            “HRD is a process for developing human competencies through time bound organized learning experiences to improve productive contribution of people for achieving organizational goals efficiently and effectively”. Today, the mgmt. of quality and productivity is a real challenge for all orgn. These challenges can development of HR as the competitive requirement of the orgn. HRD is an important programme to ensure that the orgn. has an institutionalized way of developing utilizing and committing HR  in order to meet organizational challenges in the present and in the future.

Importance of HRD

            HR staff manage orgn. Managers get the jobs done by working with and through people. HR to be developed continuously to  achieve organizational goals effectively and efficiently. HRD is concerned with developing competencies of people in organizational changes. Hence, there are numbers of important of HRD which are as follows:

1)      It helps to improve competencies: HRD improves knowledge, skills and abilities of employees. It develops capabilities of each employees as an individual. It also increases the capabilities of each employees In relation to the current job through enhanced technical skills. HRD also provides career development opportunities to employees. Availabilities of competent employees in the orrgn.

2)      It enhance effectiveness: HRD improve productive performance of employees for achieving goals effectively. It helps to improve productivity and quality. It also helps to keeps cost down and properly utilize materials and equipment, reduce waste and scrap and improve safely.

3)      Foster team work: HRD fosters team work through group focus on work activities. It improves communication through free expression of feeling. The organizational climate of trust, faith in employees capabilities and autonomy in job is promoted finally employees commitment increases.

4)       Facilitates career development: Career development comprises personal improvements undertaken by an employees to achieve career plan. HRD facilitates career development of employees. It matches training and development opportunities with employees needs.

5)      Increases job satisfaction: HRD aids job satisfaction of employees. It facilitates positive emotional responses of employees towards job. Employees gets a feeling of belongingness to the orgn. Specially it increases employees morale, reduce absenteeism and labor turnover, increase job satisfaction and retain employees.

6)      Improve decision making: HRD improves decision making capabilities and creative thinking of managers. Competent managers make effective decision. They also encourage participative decision making to ensure employees commitment.

7)      Manage change and conflict; HRD facilitates planning and mgmt. of change in orgn. It also helps overcomes resistance to change in improving the organizational climate, OD interventions and change mgmt.

HRD also helps to manage conflict through improve labor mgmt. relations.

8)      Succession planning: Succession planning is anticipating managerial staffing needs in future and making plans to develop manager to meets those needs from internal source. HRD is an essential factor in planning managerial succession in the orgn. It also facilitates potential appraisal of employees.

9)      Environmental adaptation: Orgn. can be dynamic through the effort and competencies of their human resources. HRD equips managers to respond as well as to pro act changing environmental forces. It facilitates environmental adaptation, especially technological adaptation in an environment of fast changing technology.

ORIENTATION / INDUCTION

CONCEPT

            It is the matter of introducing a new employees into the orgn. with a view to increase his confidence  and developing a sense of co-operation. This will promote good morale of the employees in the orgn. It is the final steps in selection test. Orientation helps new employees to adopt to the new environment. Actually speaking orientation is the problem of introducer or orientating a new employees to his work group, supervisor and orgn.

            As a small part of socialization, the orientation program may be organized for a few hours to make new employees familiar with the new work situation. It helps to avoid “reality shock” the state which result from the disparity between what the new employees expected from his or her new job and the realities of it. It helps to reduce the initial anxiety which we feel when we first begin a new job.

            Orientation program are frequently used to familiarize newly appointed employees with the current rules and regulation, the benefit and incentives offered by the orgn. and to provide a small orientation, handbook comprising information on the policies and practice of the orgn.

            So, in brief orientation is a tool of socialization process. It introduces the new employees to the orgn. and its work environment.

Purpose / objectives of orientation

i)                    To familiarize the objectives of orgn. such as rules, policies, histories, physical facilities etc.

ii)                   To communicate human resources policies such as benefit pay scale, hour of work, holidays etc.

iii)                 To review job duties and responsibilities of the employees.

iv)                 To introduce the employees to supervisors and co-workers.

v)                  To see whether the right men have been placed on the right job or there has been a mistake

SOCIALIZATION OF EMPLOYEES

Concept

            Socialization is a process by which the adjustments are made to make the candidate from being an outsider to being an insider. It is a process by which candidates are socialized to job and also to orgn. culture to make them feel, they are also the member of orgn. family.

                            By this process, employees are fitted to the orgn. culture and what is wanted from him. To provide him value and norms held by the orgn. Socialization is a meeting point of orgn. culture and individual personality.

                            Every orgn. has a culture consisting of shared norms and values that define appropriate behavior for its members. New employees needs to be socialized not only to job environments but also to orgn. culture encompasses shared norms and values that guide employees behavior. They need to make adjustments while making the move from being an outsider to being an insider.

According to Decenzo and Robbins “Socialization refers to the adaptation that take place when an individual passes from outside the orgn. to the role of an inside member”

            According to Werther and Davis “Socialization is the ongoing process through which an employee’s begins to understand and accept the values, norms and beliefs held by others in the orgn.”

According to R. W. Griffin “Socialization is generalized norms and conformity that occur when a person makes the transition from being an outsider to being in the orgn.”

            So, we can conclude that socialization is a process of adaptation to make a fit between the employees and the job in the orgn. cultural context. It ensures that the performances of roles by employees confirm to the values and norms held by others in the orgn.

            To understand the concept of socialization it is necessary to examine organization’s roles, values and norms:

1)      Orgn.-culture: The culture of an orgn. should be shard with new employees such as values, objective, belief and organizational structure.

2)      Roles: A role is a set of expected behavior pattern attributed to someone occupying a given position in an orgn. In the socialization process new employees has to behave in a pattern according to how he or she is expected to have in the new orgn.

3)      Values: Understanding the values of an orgn. significantly assists the new employee in the process of socialization.

4)      Norms: Norms guide individual members behavior for what they ought to do or what they ought not to do in various circumstances.

Purposes of Socialization

Socialization is a process of adaptation by new employees to job environment and orgn. culture. It’s purposes are as follows:

1)      To ensure predictability of employee behavior: During the socialization process a manager can learn about the acceptable and unacceptable behavior of his ao her newly selected employees in the department.

2)       To substitute for rules guiding employee’s behavior: Once the socialization process is completed the new employees will be mixed-up with the orgn. culture. Thus, socialization can largely substitute for rules and regulation guiding employees behavior.

3)      To increase employees performance and satisfaction: The increasing acceptance of socialization activities by the new employees can result in satisfaction in job roles, which leads to better performance.

4)      To reduce anxiety: Joining a new orgn. creates serious anxiety in some employees. It happens due to the fear of clashes of interests with other employees of the new orgn. Socialization activity can greatly assist in the reduction of a new employee’s anxiety by providing more information about the new job situation and supervisors.

5)      Increase organizational stability: Effective socialization provides favorable impression about the job and the orgn. The results will be low rates of employee’s turnover. Orgn. face minimum disruption. This helps increase organizational stability.

           

PROCESS OF SOCIALIZATION

                            Socialization provides a settling in period to new employees to adjust to orgn. culture and job environments. It helps to reduce employees. It also strongly influences employees performances and organizational stability. However, socialization does not occur in a vacuum. Mgmt. should engineer socialization.

                            The socialization process comprises of three stage i.e. entry or pre-arrival stage, encounter stage and metamorphosis stages and outcomes of these stages better performances, career and lower turnover.

                                                                                                                                   

 

  Pre arrival stage or        Encounter stage        Metamorphosis stage                Career commitment  

      pre-entry                                                                                                              performance/productivity                                                                                                                  

                                                                                                                                         Reduced turnover

1)      Pre-arrival stage (Pre-entry stage): Pre-arrival stage reefers to socialization of new employees prior to join orgn. It is clear that individual decision to join an orgn. are often based on incomplete, in-accurate and sometimes distorted information. As a result wrong expectation and desire emerged. It is therefore important that socialization process occur before a new employees join the orgn. During this time there is a need for the preparation of individual, prior to entry, for an occupational or organizational position. In some jobs, particularly of people such as doctors, engineers and accountants they will have undergo a considerable degree of prior socialization in training and in educational institution.

            The sources are:

a)      Education and Training: Schools and colleges are ground for socialization. They install in student of right kinds, values, norms and attitudes needed for successful careers. However, they may not be job specific.

b)      Recruitment process: It informs prospective candidate about the orgn. and the job.

c)       Selection process: It ensures that the ‘right types’ of candidates are selected for those who will fit-in.

At the pre-arrival stage, new employees posses pre-conceived perceptions of organizational values, norms attitudes expectation and job environment.

2)      Encounter stage (Entry stage): This stage refers to the entry of new employees in the orgn. They compare their prior perceptions about the orgn. culture and the job environment with reality (reality shock). Following things will happen in encounter stage:

a)      If the expectations match the reality, socialization may not be needed.

b)      If the expectations do not match the reality, socialization will be needed. Employees will be needed to detach (leave) themselves from prior perception. New learning will be needed in the values norms and attitudes of the orgn.

c)       If the employees become unsatisfied with the reality, they will resign from the job.

3)      Metamorphosis stage (Change stage) : In this stage when the new recruits work out ways of dealing with the problems discovered during the encounter phase. Once this process is complete the real career of recruits will starts in the orgn. New employees competencies and skill will be recognized by other orgn. members.

This stage refers to employees going through change. The drop old and learn new values, norms attitudes. Orgn. should design appropriate socialization program for metamorphosis stage. Employees also learn from interactions with co-workers. The socialization process is complete when members:

a)      Become comfortable with the orgn. and the job.

b)      Understand and accept the norms of the orgn.

c)       Feel accepted by peers as trusted and valued individuals

d)      Feel self-confident and competent to complete their jobs successfully.

e)      Knows how they will be evaluated including the criteria of measuring and evaluating their work.

Outcomes of socialization

                            Successful socialization leads to following outcomes:

i)        Positive influence on productivity of employees. Their work performance improves.

ii)       Greater commitment to orgn. goals by employees. This increases employees loyalty.

iii)     Less chances to leave the orgn. Employees turnover is reduced because they stay with the orgn.

DETERMINING TRAINING NEEDS

            The difference between employees desired performances and actual performance may indicate a training need. With a view to organizing training program it is necessary to identify needs from time to time. Information about training need can be collected from various sources such as supervisors, employees themselves, HR directors, result of the performance evaluation.

            Training should be given there is a training need. A training need exists when a performance problem can be traced to a knowledge or skill deficiency. This represents a gap between the existing capabilities of an employees and the requirement of the job. This can be explained by following formula:

 

          JOB                       MINUS               EMPLOYEES                 =                 TRAINING  

  REQUIREMENT              ( - )               CAPABILITIES         EQUAL TO              NEED   

            Training needs assessment is the foundation of all training program. It is a systematic analysisof specific training activities required to achieve organizational and HRD goals.

Training are needed to cope with following situation:

1)      Decrease in employees performance.

2)       Change in the prevailing technology and work procedure.

3)      For employees promotion and succession in a higher level position.

4)      For increasing productivity and effectiveness of certain units of operation.

          Training is needed to improve skills and enhancing employees capacity to cope with the ever-changing demands of the work situation.

LEVEL OF ASSESSING TRAINING NEEDS

 Training need is a specific skill that an employee’s needs to acquire to get the jobs done efficiently and effectively. Prosper identification of training needs, implies that performance gap can be overcome through appropriate training experience.

Training need exists at three levels, they are:

1)      Organizational level: This refers to short-coming within the orgn. as a hole. The assessment need at this level is done to determine the problem areas where training is needed. Actually, training and development program are ultimately designed and implemented to achieve organizational objectives. Organizational analysis makes it easy to assess the interest of orgn. in employee training program.

2)      Task level /job needs analysis: The requirements of the job, together with the knowledge skills and attitude needed to perform them are the focus of need analysis at the task level.

3)      Individual level analysis: this refers to assessing deficiencies in specific skills, knowledge and attitudes on the part of individual employees. It identities who needs training in what and how long. This level is very important for assessing needs because individual employees are targetsfor training.

Importance of determining training needs

1)      To develop training objectives.

2)      Identify training and responding problems.

3)      Develop training program

4)      Evaluate training.

TRAINING

                  Concept of training                                                                                  

            Training is a learning experience in that it seeks a relatively permanent change in an individual that will improve his or abilities performance on the job.

            Learning is the vital route to effective work and organizational performance. Training and development is the usual way of learning process in the orgn. Training is the way of showing how job is done in a correct, effective and efficient manner. It is process of passing know to competent and well prepared people in a suitable learning climate to shorten learning time or experience.

            Orgn. are learning systems. Training is a necessary component in orgn. learning process. Competitive advantage is dependent on competencies possessed by the employees. Training is an important part of HRD efforts in modern orgn. It enhances capabilities required to improve performance in the present job. It involves positive changes in knowledge, skills and attitudes of employees to increase their efficiency and effectiveness on the job. It is the most frequently used HRD mechanism.

            According to Decenzo and Robbins “Training is a learning experience in that  it seeks a relatively permanent change in an individual that will improve his or her ability to perform on the job”.

            According to Edwin B. Flippo “Training is the act of increasing the knowledge and skills in an employee for doing a particular job”

            According to Micheal Jucious “Training is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased”

  Conclusion

                            Training serves as a balancing factor between employees capabilities and job requirement. It transforms the behavior of the individual and improves performances by improving knowledge skill and attitudes. It sustains competitive advantage.

                            “Training is telling, plus showing plus supervising until the desired change is achieved in a skill, attitude and behavior”.

Principle of training

1)      Principle of commitment

2)      Principle of responsibility

3)      Principle of planning

4)      Principle of implementation

5)      Principle of evaluation

Consideration in design of the training program

            Training is concerned with enhancing the knowledge and skills of employees in the present job. It should be properly designed. The training policy should guide the training design. Training is a useful HR tools for improving the skills of employees and enhancing their capacity to cope with the ever-changing demands of the work situation. This is the best way to empower employees with enough skill and knowledge to perform jobs.

            Following key issues has to be considered for training program:

1)      Goals and scope: The goals and scope of the training present a key design issues. What goals should the training program want to achieve?

2)      The need for understanding corporate policies: Training is an essential contributor to organizational objectives. If HR experts do not understand the organizational mission properly, it is difficult to get benefits from the training program. Any mismatch between corporate objective and training design may cause a waste of time and other resources of the orgn.

3)      Structure: The structure of training has to be considered while designing training i.e. what should be the mix of theory and practice?

4)      Support of the top mgmt.: In fact, training program must be the priority of the top mgmt., some regards training as a cost matter. To adapt to changing competition and technical circumstances, the top mgmt. has to be convinced of the importance of providing training.

5)      Duration: Duration of training must be considered before designing training program. The specific issues are should be a one-shot affair or a continuous process? Can training be staggered so that employees can take it is various modules at various times?

6)      Curriculum /training (methods) material: The curriculum aspect of training also possesses key issues for training design. The specific issues are how should curriculum be designed for the training and how to keep it up-to date? Should be curriculum be divided in module? etc.

7)      Finance: training involve cost financial aspects are an important issue in training design, which are what should be the basis for allocating budget for training should trainee get extra allowances and incentives for attending training program?

8)      Addressing training need properly: with view to address the training need properly attention should be given to selection of participant, selection of qualified resource persons, where as trainee’s may not be able to follow the instruction provided by them or vice-versa.

9)      Making Training method very effective: Training is given either in on-the job situation which method of training is appropriate depends on the types of skills and knowledge to be provided in order to increase performance at work.

METHODS OF TRAINING

Training is given to operative employees. Training methods for delivery of training to the are:

1)      On-the –job training method

2)      Off-the-job training method

1)      On-the-job training (OJT)

The most widely used methods of training is on the job training. This method involves “learning while working”. Training takes place on the job. It places the employees in the context of real work situation. It is learning by doing under the supervision of experience employees. This training is well suited to train many employees in clerical position, production shop floor and workers in manual and repetitive jobs. On the job training are as follows:

i)        Apprenticeship training:

            People seeking to enter skilled trade such as plumbers, electricians or iron-worker are often required to undergo apprenticeship training before they are accepted as worker. In this method, employees learn by working with those already skilled in their jobs. The duration for apprenticeship training varies from job to job, generally from two to five years. Trainees are allowed to perform sophisticated tasks as their skills and experience increase. A master workers guides the trainees. The main objectives of apprenticeship program is that the required job knowledge and skills are so complex as to rule out anything less than a long time period where trainee understand a skilled method of working. During the apprenticeship period the trainee is paid less than fully qualified worker.

ii)       Internship training :

It is provided to skilled and technical personnel. The goal is to combine practical experience with class-room oriented theoretical knowledge. The trainee is interned in orgn. for a specified period and works as an employees. Students of technical subjects generally undergo internship training.

iii)     Job instruction training (JIT):

This is a most popular way of on-the-job training method. This type of training is given by the regular staff or by training staff or technician. It is given to teach new tasks. It is designed for supervisors to train operative. It is related to specific work situation. It is received directly on the job.

   

   The job instruction technique (training) passes from four steps:

a)      Preparation: The trainee are told about the job. They are put at ease. Their desire to learn is aroused.

b)      Presentation: The trainee’s are given instruction by telling, showing, illustrating, and explaining about new knowledge and skills.

c)       Practice: The trainee actually performs the job to demonstrate their understanding. Error is corrected. Practice is continued.

d)      Follow-up: The trainee is placed in the job on his own. A resource person is designated for providing needed assistance.

JIT is for trainer.

            Merit of OJT

i)        This is a very simple method of training. Employees are trained in the real job situation.

ii)       Employees can begin to contribute in the production process also while in the training.

iii)     Employees receive experience on the job that can be smoothly transferred to fit in on the orgn. flow of activities.

iv)     It is less costly.

v)      Multi-skilling is possible.

vi)     OJT is useful for learning job that can be learned by watching and doing.

Demerit of OJT

i)        Equipment can be damaged during training.

ii)       The productivity of trainee will be low while they develop skills.

iii)     The trainee makes errors while they learn.

iv)     Scrap and reject rates can be high. Quality can be low.

2)      Off the job training:

This type of training takes place outside the real work situation such training programs

are either organized in the firm’s own training institute outside the workplace or in any other technical school. In some plant operations correspondence course are used. They are:

i)                    Class-room lecture or conference method:

            It is based on talking and showing. It is oral communication of specific information by instructor to trainee’s. it is teacher centered i.e. “training by telling”. The trainer discusses theoretical aspects of information related to the job. The effectiveness of this program will be to maximize the chances of exchanging ideas and views between the trainer and trainee’s.

            Conference is a group meeting based on trainee participation guided by a leader. Conference can be held outside the orgn. at relaxed environments. Subjects of common interest are discussed in the conference.

ii)                   Programmed instruction:

This is a method of self instruction in which training material such as text or          manual is presented to trainee with small bits of information. Trainee’s have to learn step-by-step following the instruction given to him, which are:

a)      Presenting questions, facts or problems to the learner.

b)      Allowing the person to respond.

c)       Providing feedback on the accuracy of answer.

Trainees are required to provide feedback on their learning progress. It is very useful for specific skills, such as making financial statement, sales report etc.     

iii)                 Videotapes and films (audio-visual tool):

These are very useful techniques of teaching skills to the trainee videotapes and films can be used and reused during training program repeatedly. Films and tapes provide a live work situation, which is not possible through other media.

iv)                 Computer assisted instruction:

A number of software program are available for learning and teaching the trainee’s different job skills and also providing some of the realities of the job. With the use of such program the trainees are informed by the computer of the accuracy of their work, told where and how to proceed next and informed of how well they are doing on the job. All instruction are provided by the computer.

v)                  Vestibule training:

In vestibule training, employees learn their jobs on the equipment that they will be using but the training is conducted away from the work place. In this training program the trainee is provided future work station including the machine that will be used in the future is duplicated. This training method is especially given to those trainee’s who have little or no knowledge of the job situation.

vi)                 Simulation exercises:

Simulation is abstraction of real working condition in the lab or classroom. The trainee is placed in an artificial environment that closely resembles actual working condition. Simulation activities are case exercise, experiential exercise, complex computer modeling and vestibule training

vii)                Experiential exercises:

It is usually short structured learning experiences where individual learn by doing. After completing the exercise, the facilitator or training typically discusses what happened and introduces theoretical concepts to help explain the member behavior during the exercise.

Merit of off the job training

1)       The opportunity to use the ability of the best instructor and the best planned materials.

2)      Less costly by training a large number of trainee in a classroom.

3)      Training time is reduced compared to on-the-job training.

4)      Large amount of information can be covered.

5)      Large amount of information can be covered.

6)      Trainee’s develop useful contacts.

          Demerit of off the job training

1)      It involves training a larger number of tainee’s. it is difficult to meet specific job of the trainee.

2)      Trainee may not utilize or transfer all knowledge and skills acquired from the training.

3)      It is not useful to develop interpersonal skills.

DEVELOPING MANAGER/ MGMT. DEVELOPING/ LEADERSHIP DEVELOPMENT

                            Mgmt/ leadership development is more future oriented and more  concerned with education, than in employees training or assisting a person to become a better performer. Mgmt. development focuses on the employee’s personal growth. Successful manager must have analytical, human, conceptual and specialized skills. Training cannot overcome a manager’s or potential manager’s inability to understand cause and effect relationship from experience to visualize relationship or to think logically. So, mgmt. development is predominantly an education process rafter than a training process.

            Mgmt. development is a systematic process of improving managerial effectiveness by imparting knowledge, increasing skills, changing attitudes and developing experiences. It prepares the managers to handle future responsibilities. It develops managerial potential.

            According to Decenzo and Robbins “ Mgmt. development is future oriented training focusing on personal growth of the employees”

            According to Garry Dessler “ Mgmt. development is any attempt to improve the managerial performance of imparting knowledge, changing attitudes or increasing skills”

            So, mgmt. development activities are directly related to the development or preparation of managers for future responsibility. It is the total process of planning and program for the growth and improvement managers within an orgn. in order to enhance productivity and profitability.

Method of mgmt./ Leadership development

            Mgmt. leadership development is also divided into two method, they are:

1)      On the job mgmt. development

2)      Off the job mgmt. development

1)      On the job mgmt. development method

Mgmt. development takes place on the job. It is learning by doing in the context of real work environment. To develop managers, several programs can be conducted on the job. Some of this program are developed and conducted more formally with the assistance of training experts. On the other, informal development program are provided by the managers and supervisors to their subordinates. Some of the training methods are describe below:

i)        Coaching:

 when a managers takes a active role in guiding another managers. We refer to this activity as coaching. Just as track and field coaches observe analyze and attempt to improve the performance of their athletes “coaches”  on the job can do the same. The effective coaches whether on the track or in the corporate industry, gives guidance through direction, advice, criticism, and suggestion in an attempt to aid the growth of the employees with the help of coaching, the supervisor can make succession planning of a particular employees for the forthcoming mgmt. responsibility.

ii)        Job rotation:

            This involves moving manager from one job to another on a systematic manner in order to the other or systematically changing job responsibilities can increase their knowledge and skills.

iii)     Under study assignment (Training position):

Instead of transferring or promoting a subordinate, a manager is given some responsibly to work under the supervision of his or her immediate boss or outstanding manager as a “Assistant”. This method of development is useful to learn the total jobs of his or her boss within a short period of time especially in vacation period.

iv)     Multi-mgmt. program:

In this program lower and middle level managers, who have potential for future are invited to participate at the time of formulating corporate plans and policies. Top mgmt. also provides opportunities to the lower level managers to provide their ideas and suggestions for the future corporate plan and policy.

v)      Committee Assignment:

Assignment to a committee can provide an opportunity for the employee to share in managerial decision making, to learn by watching others, and to investigate specific organizational problems. Committee may be of temporary or permanent.

vi)     Internship :

It combines classroom-oriented theoretical knowledge with practical experience students are interned in orgn. for a specific period to work as employees.

                                                                                  

Merit of on the job mgmt. development

a)      It increases career opportunity inside the orgn.

b)       Gives the employees exposure on the real job.

c)       Facilitates transfer of knowledge in the job situation from one to the other manager to take future responsibility.

d)      There is rapid feedback of performance.

e)      Managers gain insights into the working of orgn.

De-Merit of on the job mgmt. development

a)      It may interfere in the regular performance by damaging goodwill of the firm.

b)      Does not involve full responsibility

c)       Cost of this type of method is very high.

d)      The chances for errors are high.

e)      Student may lack serious.

2)      Off the job mgmt. development method

Most of mgmt. development takes place off the job. Managers are removed from the stresses and demands of the work place. They can focus on learning experience. They are as follows:

i)                    The formal course methods:

These course are run by different professional training institute with the aid of program instruction, computer assisted instruction, and correspondence courses. This is a popular method of brining all participants up to a common level of knowledge. Many colleges and universities also organize such training program to suit a particular orgn. needs.

ii)                   Transactional analysis:

Transactional analysis is a method in which manager try to understand and analyze his or her ego status. In the practical application of this technique, managers analyze their daily transactions with employees and indentify the ego state. This will help managers to correct their behavior while transacting with their counterpart.

iii)                Lecture / seminar:

Lectures are oral communication of information to managers by instructors Participants get opportunity to acquire knowledge and develop their conceptual, analytical and technical abilities. Lectures can be tailored to meet the unique mgmt. development needs of the orgn.

Seminars are formal presentation of papers by experts to small groups. They are followed by discussion which is facilitated by the leaders.

iv)                Behavior modeling (interaction mgmt.):

This methods combines role play with modeling. It is getting popular. In this method problems faced by managers are indentified practiced and transferred to job.

v)                  Sensitivity training:

In this method members are brought together in a free and open environment in which participant discuss themselves in a unstructured way and their interactive process are observed by a professional behavioral scientist. This professional then creates the opportunity for the participants to express their idea’s beliefs and attitudes. The main objectives of sensitivity training are to provide manager with increase awareness of their own behavior.

vi)                Simulation exercises:

Using this exercise, trainee’s are given opportunity to learn in an off-the-job situation that are similar to actual job condition. The participants are placed in artificial environment that closely resembles to actual work environment. They practice decision making. They also receive feedback regarding risks to equipments and people. The simulations tools popularly used are:

a)      Case study:

Case study analysis popularized by the Harvard Graduate School of Business. Taken from the actual experiences of orgn., these cases represents attempt to describe as accurately as possible, real problems that mangers have faced. Trainee’s study the cases to determine problems, analyze causes, develop alternative solutions, selects what they believe to be the best solution and implement it.

b)      Decision games:

Decision games exercises  put individuals in the role of act out managerial problems. Games which are frequently played on the particular game, provide opportunities for individuals to make decisions and to consider the implications of a decision on their segments of the orgn.

c)       Role play:

This allows the participants to act out problems to aid and deal with real people and problems. Participants are assigned roles and are asked to react to one another as they would have to do in their managerial job.

d)      Computer modeling:

The real business situations are situated through computer modeling. Participants analyze the situation and make decisions. The computer programs calculate outcomes and provide feedback.

Merits of off the job development method

a)      Useful to develop self-insight in manager to take more responsibility in the future.

b)      Opportunity to interact with different managers in course of development.

c)       Easy transfer of knowledge and skills.

d)      Large amount of information can be covered in short-time.

e)      It improves decision making abilities of managers through group process.

De-Merits of off the job development method

a)      Many parts of learning might not be useful in the real job situation.

b)      Chances of coping the behavior of a bad trainer or a misleading case.

c)       It is difficult to duplicate pressures and realities of actual decision making situation on the job through simulation

Other leadership development method:

1)      Mentoring:

Mentoring is a process of giving advice and assistance to leaders. Mentoring is done by mentor who works as a counselor, coach, or advisor. The of the mentor programs is to help support leader or manager of a orgn. in their job, socialize them in the cultural values of the orgn. which in turn help their chances for development and advancement.

2)      Empowerment:

Effective leaders share power and responsibility with their employees. The role of empowering is to show trust provide vision, offer encouragement motive and coach employees.

Many world famous corporations have introduced empowerment to implement TQM. But the problem with empowerment is that it ignores the extent to which leadership can be shared.

EVALUATING TRAINING EFFECTIVENESS

                            Evaluating is an integral part of the training process. It provides feedback on the effectiveness of training activities. The measure of training effectiveness is the extent to which training objectives have been achieved. Evaluation helps to control and improve the quality of training programs and to judge their value. It verifies the program success in terms of learner outcomes and cost effectiveness.

                            Evaluating training effectiveness arises when we discussing training or development activities. It is not enough to merely assume that any training an orgn. offers is effective. We need to develop substantive data to determine whether our training program is achieving its goal or not. If not correcting the deficiencies in skills, knowledge or attitudes that were assessed as needing attention. Evaluation is a systematic and objectives to improve current activities and future planning. Effectiveness is doing the right things to move closer to the objectives.

            Criteria for evaluating training effectiveness

                            Evaluation of training effectiveness is one of the fundamental principles of training and development. Without evaluation one cannot determine effectiveness. It is important to determine how well training and development programs will achieve their goals that have been determined. In addition, this also aids in evaluating other HR program and their effectiveness relating to increasing productivity and quality of work life. The criteria used for evaluating training effectiveness are as follows:

i)                    Reaction of the participants:

This relates to the feeling of participants about the training, the instructor and instructional methods utilized, the material and the usefulness in the job to be performed. Reactions can be based on impression, opinions and attitudes.

ii)                   Changes in participants knowledge and skills:

The changes observed in participants knowledge and skills on the job after a training program are important. Many training program have been organized to impart specific knowledge and skills to the participants.

iii)                 Changes in participants attitudes(behavior):

The influence of training programs in changing the attitudes of participant is another important criteria. Employee’s performance depends on the attitudes of an employees on his or her job. Managers are always concerned to changes in employees attitudes by providing some behavioral training.

iv)                 Changes in job performance:

The effect of training on the participant and on their skills and behavior to perform differently after attending a training program is a useful criterion for evaluating training effectiveness. One of the difficulties normally faced by the participants is how to transfer the knowledge and skills learned during training period to the real work place. For the participants, training in the job situation is relatively easy to transfer than training outside the job situation.

v)                  Organizational performance:

This criterion relates to the effet of employees training on achieving certain organizational goals such as reduced turnover, improved productivity. Since training activities are a means of attaining organizational goals, it is necessary to evaluate training effectiveness against the background of this goal.

Process of training effectiveness

Process of evaluating training effectiveness passes from four stages, they are:

1)      Setting intended standard

2)      Measuring actual outcomes

3)      Finding deviation

4)      Corrective actions

Methods for evaluating training effectiveness

1)      Observation method:

In this methods trainee is observed regularly during training period by trained staff. Trained staff observed the changes of trainee in knowledge, skills and attitudes towards the job.

2)       Test-re-test method:

In this method participants have to give a test before they begin the program. After the program is completed participants again have to give the test. The change in test scores indicates the changes in the level of knowledge resulting from training.

3)      Pre-post performance method:

In this method each participant is evaluated before the training start. After the training is completed they are again evaluated in the real performance. This method is very useful to examine the effect of training on changing participant’s knowledge skills and their attitudes in the real job situation.

4)      Experimental-control group method:

This method is primarily used to evaluate the differences in the knowledge, skill, learning abilities and intelligence of the control and experimental groups. Control group are the group which have no clear instructions and guidelines to perform on the job i.e. they are without training. On the other hand, for the Experimental group there are clear instruction and guidelines at work i.e. they undergo training. Using this method if the performance of the experimental group improved on the job, the training would be successful. On the other hand, if performance of control and experimental groups remains unchanged the training will be unsuccessful.

5)      Trainee survey:

This refers to direct questioning to trainee to gather reactions about training programs. In this method questionnaire is provided to trainee after training period and asked the various direct question regarding training program.

6)      Cost-effectiveness analysis: I

It asses total value of training benefits against total costs of training. It measures value of money in training. The training is effectiveness if benefit exceeds costs.

4^TH CHAPTER

PERFORMANCE AND EFFECTIVENESS

                Role of HR in a firm competiveness

HR has huge role in increasing the firm competiveness. If the employees are not suited to the job in which he/she is working orgn. cannot achieved the goal. In a high competitive business environment the survival of an orgn. is becoming tougher. The competitive advantage can be best achieved by seeking improvement in the mgmt. of people. In other words, competitive strength of an orgn. can be raised through better utilization of HR. so, role of HR in a firm competitiveness are as follows:

i)                    Staffing is a basic function. Human resources are critical for the orgn. Hence this resources needs to be properly managed. Staffing function ensures its proper mgmt. It ensures the right time and place to enhance their performance.

ii)                   HR ensures the recruitment and selection of the right type of people. It seeks and attracts qualified applicants to fill vacancies.

iii)                 HR provides planning for the effective utilization of efforts and potentialities of individuals and groups.

iv)                 HR provides services to the entire orgn. The expertise available with the HR specialist helps the total orgn. in the proper mgmt. of HR.

v)                  HR maintains cordial job relationship by providing opportunities for self development through training and promotion program.

vi)                 HR ensures social justice by uniform application of the rules and regulations with special consideration for unique individual differences of employees.

HR functions are thus important for orgn. to succeed in a fast changing environment, orgn. can become dynamic and grow only through efforts and competencies of their HR. HR is the only function which makes an orgn. different from others.   

EVALUATING EMPLOYEES PERFORMANCES

CONCEPT

                Performance evaluation is systematic formal appraisal (evaluation) of an employees performance on the job and his potential for assuming future responsibilities. It evaluates the contribution of each employees to the accomplishment of orgn. goal. It provides feedback so that employees know where they stand, where they ought to be going and how they are going to get there. It assesses the quality of each employees.

                Employees performance evaluation is an important dimension of HR mgmt. For orgn. performance is directly linked with its productivity efficiency and ultimately with the achievement of organizational objectives. At the same time, employee’s career development, reward and motivation are directly linked with their effective performance.

According to Wyne F. Cascio “ Performance evaluation is a review of the jb relevant strengths and weakness of an individual or a team in an orgn.”

According to Dale s. Beach “ Performance evaluation is the systematic evaluation of individual with respect to their performance on the job and their potential for development”

Purpose of performance evaluation

1)      To reward employees:

The results of performance appraisal is useful to make decision on rewards, awards and benefits to the employees. Rewards does not only include salary and compensation but also other benefits to the employees, such as power, status, self fulfillment and freedom at work.

2)      To develop and motivate employees:

The result of performance appraisal can be used to develop and motivate employees by recognizing their performances strength and weakness. If employee’s have weakness they should be develop to remove those weakness.

3)      To review potentiality of employees:

Evaluated information is used to find the future capability of an individual to hold a higher managerial position. On the basis of current job performance, employees are developed to succeed their superior in the future.

4)      Evaluate effectiveness of selection test:

Performance evaluation results can be compared with the scores of selection tests to find out the validation of selection tests. After evaluation such test can be made more effective for selection purpose in future.

5)      For performance feedback:

Another purpose of performance evaluation is job related strengths and weakness of employees are identified. Feedback can be given to employees about their performance rating.

6)      Training and development decisions:

Performance evaluations results indicate knowledge, skills and attitudinal deficiencies in employees. They serve as a guide for identifying training and development needs.

7)      For promotion and transfer:

Performance evaluation results serve as a basis for various HR decisions, like promoting outstanding and promising performance and employees to achieve a better fit between people and job.

8)      Supervisory understanding:

Periodic performance evaluation encourages supervisors to observe the job performance of their subordinate and take an interest in helping them. This facilitates communication, mutual understanding between the supervisor and subordinates.

Performance evaluation process/ step

Performance evaluation reviews job-relevant strengths and weakness of an individual in orgn. It identifies performance and HRD actions to rectify such deficiencies. The performance evaluation process consists of the following steps:

1)      Setting appraisal objectives:

For the appraiser(assessor) it is necessary to define appraisal objectives clearly.

2)      Setting the performance standard:

The starting point of performance appraisal is the establishment of performance standard. Performance standard contains this information, what is to be done nad how wwell it is to be done. Once the objective of appraisal is set, the next step is to develop performance standard based on the information from job analysis and job descriptions.

3)      Communicate the expectation:

Once performance standard are set, they should be clearly communication should be two-way so that there will not be any barrier to implementing the managerial performance expectation.

4)       Making the appraisal (collection of actual performance):

In this step, information on actual performance is collected using various means, such as direct observation, statistical reports and other written documents.

5)      Discussion of appraisal with the employees:

Whatever may be the outcome of the evaluation, it should be presented before the concerned employee. And the pros and cons of the result should be discussed with him or he.

6)      Taking corrective actions:

If the performance is below the standard, the manager should develop action to correct the behavior of the employees to improve his/her performance in the future.

Essential of effective performance appraisal system

1)      Relevance:

The performance appraisal system is said to have relevance, when there is a clear link between orgn. Objective and performance standard.

2)      Sensitivity:

The performance evaluation system should be capable of distinguishing and effective performer from an effective performer.

3)      Reliability:

Reliability depends on the chances of close observation for the appraiser to evaluate job behavior and performance of the employees.

4)      Acceptability:

To make an appraisal system acceptable, all parties-manager, subordinate, appraiser must be involved and they should support it.

5)      Practicability:

The appraisal techniques and instruments should be easy to understand and use.

Methods of performance evaluation

A wide variety of performance evaluation methods exist. They are:

1)      Graphic-Rating scales:

This is the most commonly used method of performance appraisal. Using these methods, a set of performance factors is identified, including such characteristics as quality of work, technical knowledge, co-operative spirit, punctuality and initiative. The appraiser go through the of set of factor rating them, for e.g. on a scale 1 to 5 where the highest number would denote the best rating whereas the lowest number would denote the poor rating.

2)      Alternative Ranking methods:

In this method, the appraiser ranks all employees from the best to the poorest on the merits of performance on particular traits, such as quality of work and knowledge of work. Using this technique the evaluator has to indicate carefully about who is the highest performer on the particular job factor and also the lowest performer.

3)      Paired comparison:

The evaluator compared each employees on a one-on-one basis in terms of overall performance. Pairs of each employees are formed. Better performer in each pair is identified. The overall rank of the employees is determined by the number of times chosen as better performer in total pairs.

4)      Forced choice method:

It consists of a special type of checklist items are arranged in groups. Using this methods the appraisal is forced to choose between two or more statements that are most or least descriptive of the employees being appraised. Mostly two job characteristics i.e. job performance and potential for promotion are used to evaluate employees in different categories.

5)      Critical incident method:

In this methods, the appraiser is required to record incidents of the employees positive and negative actions and thus forms the basis of the appraisal reports. This method focuses on job performance. This consists of written descriptions of effective or ineffective worker behavior related to performance in critical situations. Such situations are termed as incidents. The critical incidents are analyzed to evaluate employees performances.

6)      Narrative forms:

Using this method the appraiser writes a narrative about strength, weakness, previous performance and potential of employees. In addition the appraiser also suggest improvements in the current weakness.

7)      Behaviorally Anchored Rating Scales(BARS):

This method of appraising performance is relatively new forms of methods. This methods is a combination of critical incident method and rating scale methods. The rating scale is “anchored” with critical incidents to make the evaluation job specific. The critical incidents serve as example of effective or ineffective performance. The rating scale represents a range of descriptive statements of job behavior varying from least to the most effective. The formats of BARS consists of a set of statements which describe key aspects of performance in a particular job and have been scaled on a single dimension ranging from every poor behavior to outstanding behavior.

8)      Management by Objective(MBO):

Performance appraisal is based on how well the time-bound objectives have been accomplished. The objectives are jointly set by the manager and the subordinate. The emphasis is not on activities but on result achieved. This approach is known as MBO.

                The step involve in MBO are:

a)      Set the organizational goals and plans.

b)      Discuss departmental goals.

c)       Define expected results.

d)      Performance review.

e)      Provide feedback.

Emerging concepts and issues in performance appraisal

1)      Current performance-oriented:

Performance evaluation has not received adequate attention in HRM. It is largely confined to appraising current performance on the job. It is not much concerned about the employee’s potential for assuming future responsibilities.

2)      Informal and subjective:

Most of the private sector enterprises lack systematic performance appraisal system personal judgment and subjective assessment of owner-manager serve as the key criteria for performance appraisal.

3)      Promotion-oriented purpose:

The main purpose of performance evaluation in most orgn. is the promotion of employees. It does not provide performance feedback to employees. Nor is it used as a basis for reward mgmt. or identification of training and development needs. Most orgn. carry out ‘wholesale’ performance evaluation when an employees is up for promotions.

4)      Lack of transparency:

Performance evaluation lacks transparency. The performance standards are not properly communicated to employees. Performance appraisal is not discussed with the employee. Performance appraisal does not initiate corrective actions.

5)      Trained appraiser:

Another issue in performance evaluation is that there is shortage of trained appraiser. Because evidence indicates that the training of appraisers can make them more accurate rater. If trainer is not properly trained then he cannot properly rate employees.

6)      Feedback:

Employees like to know how they are doing. The “annual review” where the managers share the subordinates evaluation with them, can becomes a issues in many orgn. because if the performance is negative he may not communicate with employees.

7)      Shortage of multiple raters:

As the number of rater increase, the probability of attaining more accurate information increase. But in most orgn. only one rater appraise the employees. If a person has had ten supervisors where, nine have rated him excellent and one poor, how we can overlook the one poor evaluation.

8)      Shortage of selective rating:

It has been suggested that appraiser should rate in those areas in which they have significant job knowledge. If rater make evaluations on only those dimensions on which they are in a good position to rate, we can increase the appraise agreement and make the evaluation a more valid process. But in most orgn. we follow the fixed rating areas.

CAREER DEVELOPMENT

Concept

                Career means advancement of a profession for a lifelong sequence of jobs so, career development as the long-term career effectiveness and success of organizational personnel. Career development is a milestone to ensure long run interest of employees working in an orgn. So, employees training and mgmt. development effort should be compatible with an individual’s career development in the orgn. But a successful career program should look toward developing people for the long term needs of the orgn. and be capable of dealing with the dynamic changes that will take place, overtime in attempting to match individual abilities and aspirations with the needs of the orgn. The orgn. can use its employees to the full extent and at the same time it has to provide them chances to build their careers.

                Moreover, to understand career in the orgn. it is necessary to know about internal and external career:-

i)                    Internal career: It refers to the individual subjective thinking and evaluation of his or her career. This concept of career is very subjective because it has a number of intangible indicators which are difficult to evaluate and study, for e.g. a ambition to go ahead, to achieve very specific plans such as a specific rank, position, income, or skill by age 40.

ii)                   External career: It refers to the more or less objective or realistic description of official progression steps through a given occupation. This has clear and tangible indicators that are evaluated and judged. For e.g. occupation, job level, mobility, opportunity, task characteristics etc.

Definition  

According to Werther and Davis “Career planning is the process by which one selects career goals and the path to those goals”

According to Manner and Schien “A career generally consists of a series of separate but related experience and adventures through which a passes during a lifetime”

According to Byars and Rue “Career development is on-going formalized efforts that focus on developing and enriching HR in the light of both the employees and the employees and the orgn’s needs”

So, career development is required to implement career plans. It comprises personal improvements undertaken by an employee to achieve career plan as well as HRM assisted efforts designed o assist employees in developing their careers.

Individual career stage

1)      Growth stage (Birth to 14yrs): (Influence by teacher, parents and friends “behave and react to different situation”)

2)      Exploration stage(15 to 24yrs): (Developing image, an individual goals, motives and ambitions will be developed)

3)      Establishment stage(25to 44yrs):  (In this stage individual passes through recruitment, selection, orientation, socialization and job placement, leveling-off)

4)      Maintenance stage(45 to 65 yrs): (Mid career, he work hard to achieve maximum productivity. “He tries to become teacher”)

5)      Decline stage(66 and above): (Near to the retirement ages, in this individuals feels decline in power and authority)

Need for career development

1)      To increase managerial competence

2)      To increase technical competence

3)      Job security

4)      Creativity

5)      To reduce employees turnover

6)      To identify training and development needs

7)      Autonomy and independence

Objective of career development       

1)      To integrate environmental demand and personal concern.

2)      To reduce employees turnover

3)      Motivate employees

4)      To increase organizational performance

5)      To enhance institutional social well being

Suggestion for more effective career development(methods)

The methods or tools that manager can utilize to better match the career needs of their subordinates, they are as follows:

1)      Challenging initial jobs: There is an increasing body of evidence indicating that employees who receive especially challenging job assignments early in their careers do better on later jobs. Apparently initial challenges particularly if they are successfully met, stimulate a person to perform well in subsequent years.

2)      Dissemination of career option information: Surprisingly many employees lack any substantive information about career paths that successful employees follow within the orgn., they should make this information available. Dissemination of career option information helps ambitious employees to develop his desires skills that he or she lacks.

3)      Job posting: To provide information to all employees about job opening. The posting lists include the abilities experience and seniority requirements to quality for vacancies.

4)      Assessment centers: Assessment center also has relevance as a career development tool. By putting people through assessment centers we obtain observable evidence of their to do certain job.

5)      Career counseling: One of the most logical parts of a career development program is career counseling. This can appropriately be made part of an individual’s annual performance reviews. If the employees expresses unrealistic aspirations, the manager should be prepare to give a frank appraisal of where and how the individual fall-short an activity that is rarely enjoyable.

6)      Career development workshops: Mgmt. should consider the value of group workshop to facilitate career development. By bringing together groups of employees with their supervisors and managers, problems and misperceptions can be identified and it is hoped resolved.

7)      Continuing education and training: The training and educational development activities help to reduce the possibilities that employees will find themselves with obsolete skills. When this development activities are carefully aligned with an individual’s aspirations and anticipated future organizational needs, they become an essential elements in an employees career growth.

The education and training an  effective career development program could include on-the-job training, educational or skill courses offered by personnel within the orgn. or outside courses provided by colleges, universities or specialized consultant.

8)      Periodic job changes: To encourage employees to continue their education and training so as to prevent obsolescence and stimulate career growth, managers should be aware that periodic changes can achieve similar result. Job changes can take the form of vertical promotion, lateral transfers or assignments organized around new tasks.

9)      Special assignment and job rotation: Special assignment and job rotation make it easier for the orgn. to explore talents, motives and values of its employees. This helps the individual employees to know about his or her career.

10)   Flexible working hours and other of work activities: With a view to think about career plan and perspectives many orgn. are providing time to their employees to pursue personal goals. During the time-off period and employee get opportunities to interact with family, friend and other professional, which could be beneficial to employees career development.

End of 4^th chapter      

5^TH CHAPTER

COMPENSATION

Concept

                It is an exchange of employee’s effort or work, based on volume of time or value of production. Compensation is a process by which employees will attract, motivate and retain competent labor in the orgn. Compensation includes all forms of employees pay or rewards arising from the employment. Total compensation includes both intrinsic and extrinsic rewards. Extrinsic rewards are pay, promotion, commission, benefits and working condition. These rewards are necessary to fulfill lower order needs. In the absence of fulfillment of such need an employee may be dissatisfied at the present job.

                On the other hand, intrinsic rewards come from self fulfillment, responsibility, achievement and recognition. There are higher order needs which is necessary to motivate employees of work to increase their commitment majority of labor mgmt. dispute are due to compensation.

According to Milkavish “Compensation refers to all form of financial returns, tangible services and benefits employees receives as part of an employment relationship”.

According to Byars and Rue  “Compensation refers to all the extrinsic rewards that employees receive in exchange for their work. It is composed of the base wge or salary, any incentives or bonuses and any benefits”

According to Schuler  “Compensation is the activity by which orgn. evaluate the contribution of employees in order to distribute fairly direct and indirect monetary and non-monetary rewards provided by the orgn.”

Employees look for rewards before they do anything. They need to be compensated for their efforts based on time or production. Compensation refers to all forms of financial rewards received by employees. It arises from employment. It occupies an important place in the life of the employees. It is a cost to the employees.

Compensation program (pay plan)         

                It is very tough job for the orgn. to develop a perfect compensation program. Each plan has certain strong points and some weak points. However, an orgn. attempt to establish a compensation program suitable to its business strategy and to motivate people to achieve its strategy. For this purpose the orgn. needs work on the pay plan process and pay system mechanism.

1)      Pay plan process: It include some important issues regarding secrecy and participation of employees in the pay decision. For this two process followed:

a)      Communication and pay

b)      Participation and system effectiveness.

Comm.                                        Feeling of control

And                                              and commitment

pay                                                                                                                                         favorable

                                                     Information about                        trust of                    perception             

                                                    System                                   system                      of

Participation                                                                                                             pay plan

 And pay                                   Higher quality

System                                        decision

Effective

2)      Pay system mechanism: Pay system mechanism denotes steps that have to be followed to determine pay in the orgn. The following five steps are taken:

a)      Planning for job evaluation

b)      Updated job description

c)       Conduct pay or salary survey

d)      Job evaluation

e)      Determine relative worth of each job

f)       A pay structure

Determinants of compensation program

                Determinants or factors that influence pay structure and level are:

a)      Legal framework

b)      Orgn. compensation policies

c)       Union pressures

d)      Equity consideration

e)      Job evaluation

f)       Competitors

g)      Productivity

Job evaluation system

                Compensation is one of the main part of the HRM activity. Thus, the compensation decision are influenced by business plan, orgn. recruitment and selection policy, union mgmt. relation, HR planning, job Analysis and performance appraisal. In other words, these are the input factor to evaluate a job in the orgn. Once information is collected from the above source, the next important step is to evaluate jobs. This will be followed by pay system mechanism. In sum, the job evaluation system comprises of:

a)      Collection of related information.

b)      Evaluation of job

c)       Determining pay structure and pay level of each job.

This can be explained by following diagram:

 

Business strategy

Job analysis

Recruitment and

    Selection                                                       job                                                       Pay

HR planning                                                  evaluation                                         Structure

Performance

Evaluation

                So, job evaluation is the process of determining the relative, worth of the job. It is very useful in the establishment of wage rate structure and in the elimination of wage inequalities. The information provided by the job analysis is used to rank all jobs in job hierarchy.

Process of job evaluation

Job evaluation is only the starting points for establishing the relative differentiation of base pay rates. In the process of job evaluation, the evaluator rates the job, not the man in the job. There are four steps in job evaluation:  

1)      Job analysis: Job analysis provides information through job description and specification. Using this source of information, the evaluator can assess job duties and responsibilities and corresponding skills or knowledge required.

2)      Determination of compensable job factors: Once the process of job analysis is completed the next step is to identify the main compensable factor. This factors are accountability, know how problem solving ability and other physical demand as the job. This factors differ as per the job position.

3)      Determining the relative importance of compensable factors: A determining compensable factors, the next step is to assign the relative weight according to their importance. For a manager judgment and decision making abilities are important and therefore more weights will be given to this factors where as for a physical worker, the ability to handle weight is an important compensable factor and based on its importance.

4)      Deciding about the job evaluator: The final step is to decide on who evaluate the jobs in the orgn. Only then the question of choice of job evaluation method arises. A number of experts are available to evaluate jobs the policy of job is made by the HR department whereas the method is selected by the team of job analysis comprising supervisor, HR manager, industrial engineers and other job experts.   

Methods of job evaluation

1)      Ranking method: This is very simple and it ranks jobs in order of their difficulty from simplest to most complex. Specialists review the job analysis information. They appraise each job and rank it in order of importance of relative worth to the orgn. Each job is compared with others to determine the overall rank. A committee can also be entrusted to do the job of ranking.

2)      Classification (grading) method: This method is widely used in determining salaried jobs including those of govt. and services occupation. Using this method, job Analyst categories jobs into various job groups known as grade or classes. The highest grade may covers jobs requiring the manger to make the judgment and work in a challenging job environment whereas the jobs which merely require workers to follow simple instruction under close supervision are categories in the lowest grade.

Grade is a group of different jobs requiring similar skills, effort and responsibility. Each job is assigned a grade common factor used for assigning the grade are responsibility, skills, and difficulty.

3)      Point rating methods: This is also widely used job evaluation method where jobs are ranked on quantitative basis or by assigning points, such points are assigned to compensable factors according to their importance.

A quantitative point scale is used to evaluate jobs on a factor by factor basis. It evaluates the compensable factors of each jobs. It uses point instead of pay rates. Separates factors are scored to produce on overall point score for the job.

4)      Factor comparison method: This method involves the ranking of different jobs in respect of certain compensable factor and usually also involve the assigning of money wages to the jobs. This methods directly leads to wage determination. To determine pay using this method, compensable factors such as skills, mental and educational requirement, responsibility and working condition are selected. Each of this factors is broken down into various sub factors such as working condition, under different heading like temperature, dust and other inconvenience. The ranking of jobs in respect of each of the factors and the subsequent fixing of wages which

5)      serve as a point of reference for the later evaluation and ranking of the other jobs. Compared with other methods of job evaluation, this method is more systematic.

Compensation structure

                The compensation structures consists of sequence of pay ranges, each of which has a defined maximum and minimum. Once the job evaluation is complete, its data become the centre for the development of the orgn.’s compensation structure. This means establishing pay rates or ranges that are compatible with the ranks, classification or points arrived at through job evaluation. The compensation structure for a job’s determined by:

a)      Ranking through the evaluation process.

b)      Market rates for similar job found by wage and salary survey.

c)       Creation of job grades. A pay grade comprises of jobs of approximately.

Any of the four job evaluation methods can provide the necessary input for developing the orgn. overall pay structure. Each has its strength and weakness but because of its wide use. We will use the point method to show how point totals are combined with wage survey to form wage curve.

1)      Wage survey: Most orgn. use surveys together factual information on pay practices within specific communities and among firms in their industries. This information is used for comparison purposes. It can tell mgmt. if the orgn. wage are in line with these of other orgn. and incase where there is short supply of individual to fill certain position, the higher wage can be fixed.

Many industry and employees association also conduct surveys and make their result available, but  orgn. can conduct their own survey and most large ones do. They collect information about average wage level for a specific job entry level and maximum wage rates, overtime pay practices, vacation and holiday allowances the number of pay periods and the length of the normal work day and work week.

2)       Wage curve: When mgmt. arrives at point totals from job evaluation and obtains survey data on what comparable orgn. are paying for similar jobs, the wage curve can be fitted to the data for e.g.:

                       

          Y

 8.75

                         8.50

                         8.25

8.00

7.75

7.50

7.25

7.00

6.75

6.50

6.25

6.00

5.75

5.50

5.25

                                               

                                 0       100   200   300   400    500   600    700                                                       X                   

                               

This e.g. assumes usages of the point method and plots point totals and wages data. A separate wage curve can be constructed based on survey data. A complete wage curve tells mgmt. the average relationship between points of established pay grades and wages based rates.

3)      Wage structures: It is only a short step from plotting a wage curve to develop the orgn. wage structure. Jobs that are similar in terms of classes, grades or points are group together. It can be explained by following figures:

                     Y

7000

Point	Grade
0-100	1
100-200	2
200-300	3
300-400	4
400-500	5
500-600	6

6000

Grade 6

Grade 5

Grade 3

Grade 4

5000                                                                                                                                                 

4000

3000

Grade 2

2000

Grade 1

1000

      

500

          0                   100               200              300             400                 500               600               700       X

                                                                                    point

          

       

The more important job is paid more and as individuals assume jobs of greater importance, they rise within the wage hierarchy (i.e. each pay has a range). All the jobs in the same grade receive the same pay rates. In practice, orgn. tend to design (compensation) pay structure with ranges in each grade to reflect senior in job and levels of performance. The pay rates are fine tuned by developing pay ranges. Compensation structure should be reviewed from time to time to adopt it to change in the environment and cost of living.

Incentive system

        Primary system of compensation is a non-incentive, on the basis of time spend. Incentive compensation also called payment by result is essentially a managerial device of increasing the worker’s productivity. F.W.Taylor  introduced the system of incentive for those whose production exceeds some pre-determined standard. Incentives would increase earning of employees if they actually performed more than the given standard. This is the method of rewarding employees on the basis of their output. The basic principle of the incentive compensation is that an offer of additional money will motivate worker to work harder and skillfully which will result in an increase rate of output.

        According to Milton L. Rock “Incentive are variable rewards granted according to variation in the achievement of specific result”

        According to Wendell French “incentive plans provide financial or non-financial rewards to employees who make substantial contribution to organizational effectiveness”

        So, incentive is direct compensation for performance. They link rewards to performance to enhance productivity. They are generally monetary benefit paid to employees for outstanding performance. They are given in addition to wage salary.

Type of incentive compensation (incentive plan)

                There are number of method of incentive compensation. But for the purpose of application. They are divided into three main heading:

1)      Individual incentive compensation: This incentive is paid according to individual performance and efforts. Some of individual incentives compensation are as follows:

a)      Piece-rate system: This is incentive compensation introduced by F.W.Taylor and widely popular these days too. Under this system, the employees will receive a wage for each unit produced. The piece rate has the advantage of establishing a direct relationship between what an employee’s produces and what is earned.

b)      The standard hour system: This is also a frequently used incentive system. this system is also like piece-rate system except that a employees is paid a basic salary in a hourly rate but employees will get an extra percentage above the standard payment or wage for exceeding the standard hour.

c)       Sales incentive system: This incentive plan is offered for sales employees in the form of commissions. In this scheme, beside a salary, manager or sales supervisors are given a certain percentage of commission as an incentive for selling products.

d)      Managerial incentive system: Manager are also provided some incentive in form of stock option and performance and share if their performance increase the profitability and market share of the company.

2)      Group incentive system: Under this system, a production target is set or standard of performance for a group of employees. If the employees in the group perform better or more than the standards all members of the group receive incentives. Some important types of group incentives are presented below:

a)      Production incentive program: Under this system members of these group receive regular pay and bonus is paid if the performance and profit of orgn. exceed the standard set.

b)      Departmental head incentive system: Based on the division or department incentives aare given to the departmental heads for exceeding the tandard. This incentives later shared among the employees of the same department.

c)       Professional incentives system: This system is offered specially to the professional staff, such as accountant and engineers. The bonus incentives for this group is based on either the department return on assets or the company return on assets.

3)      Organizational level incentives system: Incentives at this level are useful to motivate all employees who work for organizational effective. This incentive plan are offered to encourage high level of co-operation among the employees. Some method of orgn. level incentives system are as follows:

a)      The Scalan plan: This plan was developed by Joseph Scalan in 1937. This incentive plan is offered to enhance mgmt. employees relation company wide. According to this system, financial incentive or bonus is paid to both workers to employer in the orgn. The amount of bonus is determined on the basis of saving in labor cost. Saving is shared by employees (75) and the employer (25).

b)      Profit-sharing plan: This is a form of orgn. incentive provided to all employees working in the orgn. allocated on the basis of profit.

Gain Sharing

                                Gain sharing are incentives plan that engage employees in a common effort to achieve productivity objectivity objectives and share the gains. The incentive is linked to the overall performance of the orgn. This is a form of group incentive plan in which employees divide productivity generated saving among worker and employees. The concept of gain sharing is completely different from the concept of profit sharing. Gain sharing is the outcome of productivity when profit sharing is based on the amount of profit figures. It requires:

a)      A mgmt. philosophy emphasizing the role of employees.

b)      Highly structured committee where employees are involved and can provide valuable suggestion.

c)       A formula that computes and divides the productivity related saving.

Normally, a high level of co-operation between mgmt. and employees in any orgn. indicates the free flow of communication, active participation and interaction of views and ideas. This will finally improve the productivity and the gain for all employees as well as for employee. To implement a gain sharing plan in many orgn., it requires the following steps:

a)      Determine corporate objective to increase productivity.

b)      Define specific productivity measures.

c)       Determine the percentage of gain to be shared out of incremental gains.

d)      Find a suitable formula to share productivity gain sharing among the employees.

e)      Determine a motivating size of payment.

f)       Pay in cash or stock.

g)      Determine how frequently bonuses are to be paid.

h)      Continue participating system in the orgn.

Types of gain sharing plan

1)      Production gain sharing plan: In this system of gain sharing if a group exceeds the pre-determined objective of goals in the production they will receive bonus.

2)      Profit sharing: Under this plan, orgn. share profit with the workers. It boosts morale and co-operation of employees. Labor relation improve labor turnover is reduced.

3)      Cost-reduction plan: In this system, employees committees will provide new ideas for cost reduction. Employees are rewarded by bonus payment for cost sharing.

4)      Employee’s ownership: In this system, employees have an ownership stake in the orgn. If the employees exceeds, the predetermined objective, the orgn. will allow the employees to buy share.

Employees benefit

                Individual except more than wage or salary from their employers. The amount of paid vacation, the number of sick leave days and insurance and pension programs are factors that will influence whether applicant accept employment with a given orgn. or once employed whether they continue working for that orgn. There is evidence that the absence of adequate benefit and service can contribute to employee’s dissatisfaction and increased absenteeism and turnover. A good benefit package, is in some certain orgn. Thus, the subject of important to the field of HRM.

                Generally, offering good benefits serve as a tool to attract and retain good employees. While simply offering benefit is no guarantee that employees will stay with the orgn., the lack of benefit will surely cause some people to leave. If an orgn. excepts to get the “best” than it must pay for the best.

                Certain benefit must be supplied by the orgn. for its employees with a few expectation the hiring of any employees will require the orgn. to pay security premium, employment compensation, worker compensation and state disability premium. Hence, the payment of these costs by the orgn. provides the employees with financial protection at retirement, termination or as a result of injury and it also provides benefit to the workers dependents in case of his or her death.

                Types of benefit

1)      Legally required benefit: Certain benefit must be supplied by the orgn. for its employees regardless of whether it want to or not, with few exception, the hiring of any employees will require the orgn. to pay. Legally required benefit are as follows:

i)        Social security: The major source of income for American retires has been the benefit provided by social security insurance. Social security insurance is financed by contribution and matched by the employer, computed as a percentage of the employees earning.

ii)       Unemployment compensation: Unemployment compensation laws provide benefit to employees who are without a job and submit an application for unemployment agency, who register for available work and who are willing to accept any suitable employment offered them through their state unemployment compensation commission. The point behind unemployment compensation is to provide an income to individual who have lost a job though no fault of their own.

iii)     Worker’s compensation: Every state currently has some types of worker’s compensation to compensate employees or their families for death or permanent or total disability resulting from job related endeavors. Federal employees and others not working within the states are covered by separate legislation.

iv)     State disability laws: For some individual state disability law provide income supplement for short term illness. This payment are designed to continue to provide a portion of income should an employees have an illness or injury that prevent him or her from working beyond the period that would be covered under a sick-leave plan. State disability plans are totally funded by employer contribution.

2)      Voluntary benefit:

i)        Rest periods: Particularly popular among office jobs and those jobs requiring heavy exertion, high repetition or diligent concentration requiring break during the day to allow the workers to rest.

ii)       Holidays: Certain numbers of days of the year are stipulated as paid holidays. Most orgn. define this days to include the fourth July, labor day, Christmas say and new year. The number of paid holidays varies, but within a relatively narrow range. Virtually all employees receive this benefit, usually 9 to 11 days holidays are provided each year regardless of the employees length of service.

iii)     Vacation: After employees have been with an orgn. for a specified period of time, they usually become eligible for a paid vacations. Common practice is to relate the length of vacation to the length of tenure and job classification in the orgn.

iv)     Sick leave: Most orgn. provide their employees with pay for days worked because of illness. Sick leave is allocated on the basis of number of days in a year, accured a cumulative basis or expanded relative to year of service with the orgn.

v)       Leave of absence: A miscellaneous category includes leave of absence for which pay is provided like, educational leaves, jury duty, military service etc.

vi)     Pension program: The pension programs represents a fixed payment other than wages, made regularly to former employees for their surviving dependents. To quality employees are required to fulfill certain conditions of employment for a specific length of time. It is calculated on the basis of base salary.

vii)   Insurance: One of the most popular benefit offered to employees today is the provision of insurance like life, health and accident. While life insurance is probably one of the oldest benefit offered, other method are life insurance, accident insurance etc.

viii)  Group life insurance: Group life insurance plans offer a distinct advantage to employees, low cost coverage without a physical examination, whether the employees absorbs the full cost of the life insurance for employees or whether it is shared between the employer and the employees the fact is that the plan cover a large number of employees allow the insurer to provide coverage at low cost.

 

Employees services

                In addition to benefits, orgn. can offer a wealth of services that employees find desirable. These services can be provided by the orgn. at no cost to employees or at significant reduction from what might have to be paid without the orgn. support.

                The company picnic, the Christmas dance, reward banquets and the company golf are all example of services that most large orgn’s and many small orgn. provide for employees, their spouse or their entire families, they are:

i)        Company sponsored events: The motivation behind mgmt’s offering social and recreational program is to develop cohesiveness among employees as well as commitment and loyalty to the orgn. For e.g. the orgn. sponsorship of a team to compete in the community bowling league provide employees recreation, offers a diversionary outlet and build espirt de-corps.

ii)       Counseling services: Many firms provide a wide range of counseling services. This include financial counseling ( for e.g. how to overcome existing indebtness ). Family counseling, career counseling, outplacement counseling (for helping terminated disenchanted employees find new jobs) pre-retirement counseling and legal counseling through legal insurance plans.

iii)     Cultural activities: In an effort to broader the interest and assist in the overall growth of employees orgn. may provide cultural benefit and such as free tickets to play or operate participation in a company create book club or creation and use of a company library. The cost of such benefit are usually minimal, yet they provide an opportunity for the employees to grow and develop.

iv)     Credit unions: Many orgn. have established credit unions to serve both the saving and lending needs of their employees. Credit union usually lend money at rate that are competitive with or lower than these otherwise available outside. They also assume marginally higher risks than will offer the benefit of payroll deduction. Deposits is put into saving in credit union ( called share account ) usually offer a higher rate of interest than that paid by commercial bank on a passbook.

v)        Housing: Orgn. also provide housing facilities where housing is scarce and costs are unusually higher where there is a high risks in ownership may provide employees with the option of supported and supplemented housing.

vi)     Subsidized child care: Today most of the orgn. provide subsidized child care services for working women.

vii)   Elder care: With an aging population, elder care has become more of an issue for many employees. Elder care benefits are important for much the same reasons as are child care benefits. The responsibility for caring for an aging relative can affect the employees performance at work aging relative can affect the employees performance at work.

viii)  Other services: The list of services that an orgn. can provide its employees is only limited by the imagination of mgmt. For e.g. retail store, free coffee, tuition refunds etc.

Retirement program

                                In the past social security was the single largest source of income for retired worker. Most of the public sectors today however rely on some form of pension program to cover their financial needs in retirement. Many workers in the private sector also have their social security benefits supplemented through private pension program which are operated through their employers.

                                A retirement programs represents a fixed payment other than wage and made regularly to farmer or their surviving dependents. To qualify employees are required to fulfill certain conditions of employment for a specific length of time. The most popular method for determining the amount of an employees pension is base payment on a percentage of the employee’s earning usually computed on an average over several years multiplied by the number of years employees has been employed by the orgn. The next popular method is one in which payment is based on same percentage of the employees is income usually for a particular period of time.

                                Pension is expensive benefits for orgn. to provide but are necessary if orgn. are to attract and keep valuable employers. The inflation of the early 1980’s made it more important than ever for older workers to have some assurance that their financial needs in their retirement year would be taken care of. However, there is little evidence that employees are motivated by pension program. The reasons that pension plans are only remotely tied to an individual performance specially for the worker under forty five year of age, pension must viewed as membership based reward that are provided to develop loyalty.

Retirement benefit

                                Major retirement benefit of employees are as follows:

1)      Social security: Most people assume that social security provides income only when they are over 62, but it actually provides three types of benefits. The familiar retirement benefit provide if they retire at age of 62 or thereafter and are insured under the social “security”, second are death benefit. This provide monthly payment to dependents regardless of age at death, again assuming employees are insured under the social security act. Finally, there are disability payment, this provide monthly payment to employees who becomes totally disabled (and their dependents) if they work and meet certain requirement. The social security system also administers the Medicare programs, which provide a wide range of health services to people 65 or above.

2)      Pension plan: Pension plan provide income to individual in their retirement and just over half of full time workers participate in some type of pension plan at work. However, the actual rate of participation depends on several things. For e.g. older workers tend to have a higher participation rate as much as three times as high as those in small firms. Similarly, worker earning lower incomes are more at receiving little or no pension.

Pension plan can be divided into three basic ways:

a)      Contributory versus non-contributory plans: The employees contribute to the contributory plan while the employers make all contribution to the non-contributory pension plan.

b)      Qualified versus non-qualified plans: There are certain tax benefits employer receives from contributing to qualified pension plans. Such as tax deduction for contribution. Non-qualified pension plan gets less favorable tax treatment for employees and employers.

c)       Defined contribution plan versus defined benefit plans: Defined contribution plan specify what contribution the employee and employer will make to the employee’s retirement or saving fund with defined contribution plan, the person’s pension will depend on the amount contributed to the fund and on the retirement fund’s investment earning.

Whereas defined benefit plans the employees knows ahead of time the pension benefits they will receive. The defined pension benefits itself is usually set by a formula that ties the person’s retirement pension to an amount equal to a percentage of the pension pre-retirement multiplied by the number of years she/he worked for the company.

3)      Pension planning: It is complicated partly because of the many federal laws governing pension. For e.g. companies (8 employees) usually want to ensure their pension contribution are “qualified” or tax deductable, so, they must follows the pertinent income tax codes. The employee’s retirement income security act of 1974 restricts what companies can, cannot and must do in regard to pension plan. In unionized companies the employer must let the union participate in pension plan administration.

4)      Early retirement windows: Some plans take the form of early retirement window arrangement in which specific employee’s are eligible to participate. The “window” means that for a limited time the company opens the opportunity for employees to retire earlier than usual. The financial incentive is generally a combination of improved or liberalized pension benefit plus a cash payment.

Executive compensation

        The pay of executives is merely a special case within the topic of compensation but it does have several twists that deserve attention. Firstly, the base salary of executive is higher than those of low level manager or operative personnel. Secondly, executives frequently operate under bonus and stock option that can dramatically increase their total compensation. Finally executive receive perquisites or special benefit that other do not.

        Executive compensation is divided into three sections:

1)      Executive salaries: In the early 1980’s executive in the public service generally earned yearly salaries in the  $40000-$50000 range. Orgn. even provide more salary than this also why the ogrn. Provide such a huge salary for executives? The answer is quite simple i.e. motivation and economics. In the economic terms, we know that top manager is expected to demonstrate good decision making abilities. As a result, the supply of qualified senior executives is scare and orgn. have bid up the price for this talent. They too much keep their salaries in line with the competition or potentially lose an executive to another orgn. High salaries also act to motivate both top executive and lower level managers. High pay encourages top-level manager to perform well in order to keep their jobs. But high pay also acts to stimulate lower level managers to work hard so that they can someday move up the ladder to “the big money”.  

2)      Financial  compensation: Financial incentives like bonuses or stock option plans are the main supplemental financial compensation:

a)      Differed bonus: Much of this additional compensation is differed bonus i.e. the executive bonus is computed on the basis of some formula usually taking into account increase in sales and profit. This bonus although earned in the current period is distributed over several future periods.

b)      Stock option: Stock option have been a common incentives offered to executives. They generally allow executive to purchase at some time in the future, a specific amount of the employees company’s stock at a fixed price. Under the assumption that good mgmt. will increase the company’s profitability and therefore the price of the stock. Stock options are viewed as performance based incentives.

3)      Supplemental non-financial compensation:

a)      Perquisites: Executives are frequently offered a perquisites not offered to other employees. The logic of offering these ‘perks’ from the orgn. perspectives, is to attract and keep good managers and to motivate them to work hard in the orgn. interest.

In addition, to the standard benefit offered to all employees. Some benefits are reserved for privatized executives. They range from an annual physical examination worth several hundred dollars, to interest free loans of millions of dollars which can be worth $100000  a year or more popular perks include the payment of life insurance premiums, club membership, company automobiles, liberal expenses accounts, supplemental disability insurance, supplemental retirement account, post retirement consulting contracts and personal financial tax and legal counseling.

b)      Golden parachute: Finally, a popular benefit that occurred to top executives in the early 1980’s was designed by top executives as a means of protecting themselves if a merger took place. This parachute provides either a severance (compensating) salary to the departing executives or a guaranteed position in the newly created orgn.

Compensation in Nepal  

Compensation mgmt. in Nepal is largely concerned with pay benefit and services. The role of direct compensation is important compared to indirect compensation mgmt. is mainly legal fulfillment. Civil servants are paid according to the provisions of the civil service act and regulation. Minimum wages and bonus is paid to the worker and employees according to labor act.

In the private sector, the goal of compensation mgmt. is not only legal but to acquire and retain competent employees. It also aims to motivate employees for higher performance. Till the advent of democracy in 1951, employer unilaterally decides the wage rate. There is no uniformity in wage structure. Since 1966 wages committee formed by the govt. has been fixing minimum wages for various categories of workers.

The pay level in Nepal is largely determined by marketing rates or legal provisions. Ranking through job evaluation process is generally not done. Job grades are legally prescribed for civil service and public sector enterprises. Job grades in public sector differ from orgn. to orgn., but govt. job grades and pay rates are taken as points of reference for determining private sector grades and rates. The uncontrolled influence of Indian workers also affects pay rates in Nepal. Legally gender discrimination is not allowed but employers avoid hiring female workers. They generally pay them low rates of pay compared to male workers. This is prevalent in private sector establishment. Following are the factor of compensation in Nepal:

1)      Govt. Regulation: Govt. regulation largely affect human resources activities at orgn. level including the compensation policy. Govt. regulation guide orgn. policy in regulating compensation in almost all countries. The tools for compensation regulation largely affect human resource activities at orgn. level including the compensation policy . govt. regulation guide orgn. policy in regulating compensation in almost all countries. The tools for compensation regulation are:

i)        Legal framework: this consists following laws:

a)      Labor laws: It regulate the wages of workers. They deal with unions and labor relations. They are about:

Ø  Minimum wages: Minimum monthly, daily or hourly wages that must be paid regardless of the worth of job. Minimum wages in Nepal are fixed by the govt.

Ø  Overtime payment: The rates of hours worked above the specified weekly hours are laid down. In USA, it is one and half times the regulate pay roles.

Ø  Equal pay: Legal provisions ensure fair and equal treatment on the job or compensation. Gender based discrimination in compensation is made illegal.

Ø  Provident fund, Gratuity , pension: Employees and employer contribution to employees provident fund are also specified by law. In Nepal, it is 10% of gross salary for both the parties. The laws also make provisions for the payment of gratuities and pension to employees on retirement or termination.

Ø  Bonus: The payment of bonus from the profit also specified by law. In Nepal, the bonus act has prescribed by 10% of net profit as the limit for bonus payment.

Ø  Deduction: The deduction that can be made from the wages and salaries also regulated by law. Income tax must be deducted at source by the employees.

b)      Company Act : this regulates the salary of executives. In India the company act limits the amount for payment of salary and allowances perquisites and commission to managerial personnel. The company Act 1996 of Nepal limit rewards to 5% of profit to company director.

ii)       Institutional framework: the govt. regulations of compensation is also done by various regulatory institutions. They can be:

a)      Wage boards: They fix minimum wages, in Nepal minimum wages of labor and tea plantation of worker are fixed by the wages committee formed by the govt.

b)      Tribunal: They provide decision of a divaction incase of wages disputes. The tribunal are formed by the govt.

c)       Department of labor ( Bureau of labor ): this is the govt. agency responsible  for implementation of legal framework related to compensation.

2)      Minimum wages: Employees get at least minimum wages. The “committee on fair wages” observed that minimum wage must provide not merely for the bare subsistence but also for the preservation of the efficiency of the worker. So, minimum  wage must also provide some sort of education, medical, retirement and had recommended that a fair and minimum wage must be paid to the workers. But inspite of discussion, wage or minimum wage. The committee on fair wage or minimum wage after examining the various definition of a fair wage concluded that ‘one of the various definition of a fair wage wage could be applied to Nepalese condition’. The committee therefore evoled it’s own concept of fair wage on the basis of minimum wage and living standard.

If collective bargaining is the heart of industrial relation then minimum wage is the starting point from where other aspects of collective bargaining process are initiated. At present the debate on minimum wage in Nepal is uncomfortably poised on employer’s claim to be “too high” and employees claiming it to be “too high” nor to be “too low”. It is a statutory floor price of labor. They agreed that the the orgn. fair wage should not be lower than the minimum wage and expressed the view that while the lower limit of a fair wage should not be, the upper limit was set by the capacity of an industry to pay. This means that minimum wage depend not only on the present position of Nepalese industry, bargaining power, union policy, govt. regulation and also its future prospects.

Till the advent of democracy, employees and unilaterally decided wage rates. There are no uniformity in wage structure. Since 1966 wages committee found by them has been fixing minimum wages for various categories of workers.

Following table provide information about minimum w ages:

Minimum wages in Nepal(as per month)

Year	Unskilled	Semi-skilled	Skilled	High skilled	Daily wages
1965	110	137.50	206.25	309.38	-
1974	150	173	228	320	-
1980	250	280	340	440	8
1987	582	632	740	923	22
1992	1152	1200	1310	1500	40
1997	1800	1800	1960	2160	63
2000	2116	2166	2276	2466	74

3)      Social welfare factor : Before we deal on the structure of benefits that one is entitled under the presents social security arrangement in the formal sector of employment, it will be here to spare few words on how formal sector of employment is organized in Nepal with 80% of  the total labour force engaged in agriculture carried n mostly in informal, unorganized and self employment in Nepal. A part from few programs t address the problems of agricultural labour’s have been left from the amount ambiguity of social security.

Recently the employment outside agriculture sector is increasing. The share of agriculture labour force has declined by 10% point from 91% in census 1981 to 81% in census 1991. This is also marked by the huge increase in the proportion of wage earning worker from about 9% in 1981 to over 21% in 1991.

Public sector is still the largest sector for formal employment opportunity in public sector/service constitute civil service, police and army service, public schools and universities of state owned enterprises has total organized has total figures of about 37,6,000 which is 44%of total organized sector employment.

One estimates shows that around 4,71,000 working in private sector enterprises. This gives us the total of 8,4,8,000 as organized sector employment.

Two legislation namely civil service Act and labour Act provide a basic farmewrk for social security provisions in the public service and in private sector.

a)      Civil service act  has provided the following compensation system for civil for civil servant.

v  Pay and allowances as prescribed from time to time.

v  Medical expenses equivalent to

Ø  12 month salary for gazette officers over the service tenure

Ø  18 month salary for non-gazette officers over the service tenure

v       Pension and gratuity family in case of employees death

v  Disability allowance as prescribed

v  One month’s extra salary for dashain festival

v  Life insurance coverage Rs 20,000 for gazette and Rs 12,000 for non-gazette              employees

v   Pension gratuity on retirement  of the employees

v   Payment in lieu of accumulated sick leave

v   10% of salary as provident fund etc

v    

b)      The labour Act 1992 has prescribed the following compensation system for workers and employees:-

v  Pay and allowance, minimum wages have been prescribed

v  Welfare fund as prescribed

v  Gratuity, provident fund, medical expenses as prescribed

v  Leave and payment for specified accumulated leave

v  Housing facilities by allocating 5% of gross profit

v  Day care centers for the children of women workers prescribed.

The structure of social security benefits provided by the employers is as follows:-

i)        Old age Benefits:-  Pension and provident fund are the two most prominent forms of old age benefits. Pension is applicable only in govt. service and in some public bodies and institution. There is no provision for pensions under the labour Act. One significant aspect of social security benefits is provident fund, is only contribution benefit (50% shared by the employees and 50% by employers) prevailing in Nepal.

In fact to the money despite, it carry 11% interest and partial with draw facility where and when necessary.

ii)       Sickness allowances:-  Paid sick leaves and medicare facilities are two other benefits that come under employees sickness contingency. Civil servants enjoy better facility than the private sector. Employees in both in term of paid sick leaves and medicare facilities. The employees were entitled to have maximum of 30 to the minimum of 12 day sick leaves while the laborer range is between 15 days to 75 days.

iii)     Work Injury:- Here again benefits provided for the civil servants for out weight 6 the provision made in the labour act. Overseas treatment provision is being made for the civil servants. Under the labour act the maximum the employees can claim for is the 100% compensation of the medical expenses plus paid sick leaves. The regulation is silent overseas medical treatment.

iv)     Work Accidents :- Work accidents, claims involves medicare plus paid leaves. However in the civil services where there is the termination of the job due to accidents, there is the provision for pension plus an lump sum payment of $10,000. As per the labour act the maximum employees can claim for 5 years salary. In case of death due to work accident there is the provision for pension plus some other lump sum payments. However under labour regulation of the dead workers may be given a priority of employment in the company concerned.

v)      Maternity allowances:- Paid maternity leave of two month in civil service and 52 days under labour regulation can be claimed only for two surviving children. This is applicable to female worker only.

vi)     Voluntary retirement :- Where a permanent employees decided to separate earlier from the work, he/she is entitled to have lump sum gratuity calculated on the basis o f no. of years of service. Here private sector employees have some preferential treatment. In the civil service, on an employee completing five years of service is entitled to have gratuity while it si three years as per the labour regulation.

vii)   Survivor Benefits:- A provision has made in the civil service to allow survivor benefit of Rs 40,000 to peons, Rs 50,000 to non gazatted officers and Rs 75,000 to gazatted officers in case on employees dies during hi/her tenure.

viii)  Incentive Compensation:- Incentive compensation in Nepal tend to be:-

Ø  Piece rate bonus and commission is used for individual incentives based on performance.

Ø  Bonus is used for group and organizational incentives. The labour act has limited the payment of bonus at 10% of net profit.

Emerging Concepts and issues in Compensation

Several issues related to compensation and security has emerged over the year. The more important one’s how orgn can provide compensation security and benefit to employees so as to retain and attract the probable employees as the reduce employees turn over. There are following issues in compensation:-

i)        Labour mgmt relation – Labour mgmt relation is the most important factor which affect in deciding the good compensation package to employees. Recently the relation between labour and mgmt is not too cordial as in past. In this competitive world, where you need good relation between mgmt and labour decreasing day by day. Due to this relation, mgmt does not want to increase salary and other compensation in r eply laour does not want to be practicable and increase his productivity.

ii)       Globalization and information technology :- Due to the globalization every company want to open the industries every where the world only opening industries will not produce the products for that employees is needed not only employees you need to give them good compensation package because due to information technology. even the subordinate know prevailing working and compensating package provided by the other companies an orgn of employees through regional ILO organization. Due to ILO the child labour exploitation have been reduced to some extent.

iii)     Union :- Russian revolution may have failed but its effect ie. Union of labour is still exists. Union is the most important factor that has strongly emerged over the year. Only the strong union can see and bargain for the good compensation.

iv)     Govt Regulation:- One of the most important issues while fixing and providing compensation and security to employees is government regulation. Govt fixes the minimum wages and other benefit to employees. Govt does not have any thought of gain from is so, it is not influenced by any other thing.

Chapter 6 : OCCUPATINAL HEALTH AND SAFETY

Concept

            Mgmt has a responsibility to ensure that the workplace is free from unnecessary hazard and that conditions surrounding the work place are not hazardous to employee’s physical or medical health. Of course, accident can and do occur on many jobs and the severity of these many surprise us. There are approximately 20 million work related injuries each years 39,000 work related illness and 1,00,000 work related death. So while it may sound heartless, all employers are concerned about employee’s health and safety, if for no other reason than accident cost money. However from an morale stand point, employees have an obligation to maintain a workplace that will facilitate the operation of the work-tasics employees are assigned and will minimize and negative aspects of situations affecting the employees health and safety.

From late 1960’s remarkable progress was made in reducing the rate and severity of job related accident and diseases yet the most significant piece of federal legislation in the areas of employees health and safety was no entacted until 1970.

Importance

            Safety and accident prevention concerns managers for several reasons, one of which. For eg, 6026 us workers recently died in workplace accident an there were over 62 million non-fatal injuries and illness resulting from accident. At work many safety experts believe such figures actually under estimation the true numbers. One study published in the “journal of the American medical association” said workers actually suffers an estimated 13.2 million non-fatal injuries and 8,62,200 illness annually for a total cost of $171 billion each year. Many injuries and accident, the theory goes just unreported.

An injuries are not just a problem in traditionally “unsafe” industries like mining and construction  For eg, every year over 15,000 reported injuries of or illness occur among semi-conductor worker, another15,000 among circuit boards assemblers and another 15,000 among manufacturer of computers. In fact an increasing technology based economy is triggering new health concerns, as more employees spend more time is sealed building and mechanically controlled office equipment. Even new computer contribute to “sick building syndrome” symptoms like headache and sniffies which some expert blame an poor ventilation and dust and fumes from con site irritants. Two engineers recently found that new computers emit chemical fumes (which however diminish after running computer constantly for a week) and “safe” office work is actually susceptive to many other health and safety problems including repetitive trauma injuries related to computer use, respiratory illness steming from in-door air quality and high levels of stress which are associated with a variety of factors including task design.

But an even fact like this does not tells the whole story. They do not reflect he human suffering incurred by the injured workers and their families or the economic costs incurred by employers, cost that averaged over $23,000 per serious accident. Nor do they reflect the legal implication. When a boiler explosion at ford’s rouge power plant killed 6 workers and injured 14. Ford was slapped with $1.5 million fine, and also agreed to spend almost $6 million in various safety measures. The state of Michigan concluded that Ford hadn’t followed safety procedures and tht gas leaked into the furnance  because employee’s hadnot closed valued property.

Legal Provision and Practices

The occupational safety and health Act (OSHM)of employees health and safety is clearly different today from what it would have been thirty years ago. The passage of OSHA in 1970, dramatically changed the role that mgmt must play in ensuring that the physical working condition meet adequate standard what the civil Right Act did to alter the orgn commitment to affirmative action OSHA has done to alter the orgn health and safety programs.

The OSHA legislation established comprehensive and specific health standard, authorized inspection to ensure the standard are met empowered the occupational safety and health administration to  police, the orgn. compliance and required employees to keep records of illness and injuries and to calculate accident ratio. The act implies to almost every business engaged in interstate commerce, which means that five million work place employing approximately 64 million workers are concerned. Those orgn not meeting the interest at commerce criteria are covered by state occupational safety and health laws.

The safety and health standards OSHA established are incredibly extensive complex and in some cases contradictory standards exist for such diverse conditions and noise level, air impurities, physical protection equipments, the heights of toilet partitions and the correct size of ladders. The initial standards consumed 350 pages in the Federal Register and some of the annual revisions and interpretation have exceeded 500 pages. Yet, in spite of such volume employrs are responsible for knowing these standards and ensuring that those that to apply to them are followed.

Practices of OSHA

OSHA standard vary depending on the nature of event and the orgn. typically, OSHA enforces the standard based on a five- item priority listing. These are:-

1)      Imminent Danger:- It refers to a condition where an accident is about to occur. Although this is given top priority and acts as preventive measures, imminent danger situations are hard to define. In fact, in some cases the definition of imminent danger appears to be an accident in progress. Interpretation leaves much to the imagination. For eg, a leading OSHA union mgmt described the following situation of imminent danger. Suppose you were leaving school and on the way to your dormitory, someone stopped you, put a gun to you head and demanded money. Are you in imminent danger? No, according to one interpretation of imminent danger, not until the trigger is pulled and the bullet is rifting through the barrel, you are in imminent danger. By that time it is obviously too late and as some individuals claim this gives rise top priority too accidents that have led to seniors injuries or death.

2)      Catastrophes :-under the law an orgn must report the serious accident to the original, safety and health administration  field office within 48 hours of their occurrence. This permits the investigators to review the scene and try to determine the cause the accidents. Unfortunately many disasters have occurred and in each case, OSHA official responded. Some of the more notable cases have been coal mine disaster and constructions accidents.

3)      Employees Complaints :- one that many manager are concerned about is employees see’s a violation have it respond. During this time, worker can refuse to work on the item in question, until OSHA has investigated the complaint. This is especially true where there is a union,. In some union contracts, workers may legally refuse to work if condition are below standard and they may stay off the job with pay until OSHA arrives and either finds the complaint invalid or mandate the complaints.

4)      Targeted Inspections:- the next priority for enforcement is the inspection of targeted industries. Earlier we stated that more than 5 million work places are covered under OSHA. To investigate each would require several hundred thousands full time inspectors. However, OSHA only employees about 11(eleven) hundred inspectors. So in order o have the largest impact, OSHA begin to direct to those industries with the highest injury rates, rooftin and sheet metal, meal processing, plumber and wood products, mobile homes and cameras etc.

5)      Random Inspection:- The final item is random inspection originally. OSHA inspectors were authorized to enter any work areas/premises without notice, to ensure that the workplace was in compliance. In 1978, however the Supreme Court ruled in Marshall V. Barlows incorporation the employers do not have to let OSHA inspectors have search warrants. This decision while not  destroying OSHA’s ability to conduct inspections, force inspections to justify their choice of inspection sites more rigorously that is neither than trying to oversee health and safety standard in all of their jurisdiction. OSHA inspectors find it easier to justify their actions and obtain search warrants, if they appear to be pursuing specific problems areas.

6)      Fines :- An OSHA inspectors has the right to leavy a fine against an orgn. for non-complaince. While leaving the fine is more complicated than described here if an orgn. does not bring into compliance a “red flagged” item. It can be assessed upto a maximum if $10,000 per day per violation.

The impact of OSHA standard has made orgn more aware of health and safety. The standard may have been initially extreme in their specificity, but that has been changing. Modification in recent years made them more realistic.

The information suggest that OSHA has been effective at cutting on-the-job injuries and illness but not without high cost for both business firms (in their efforts to confirm to OSHA standard)and govt. (in its efforts to enforce the standards).

Trends/Emerging issues in OHS

While OSHA has been effective in reducing health and safety problems in orgn. There have been complaints from orgn. that OSHA was not needed. Instead each orgn should police itself in providing an environment that is conducive to productive work. This can be described as follows:-

Ø  Self service method came to affect in 1981. Although there are opponents to this new approach this concept has generally been accepted placing health and safety responsibilities.

Ø  On joint labour-mgmt team would serve as a means of increasing worker participation while attracting those areas that appear hazardous.

This new decentralized approach is a means of expanding health and safety consciousness but OSHA would still be investigating problem areas. However with more in-house programs, this will give OSHA inspectors more opportunity to address more opportunity to address more problematic health issues such as the long term health effects of chemicals in the work place. Following are the issues of OHS:-

1)      Alcoholism and substance abuse:- Alcholism and substance abuse are serious and wide spread problems at work. Some expert estimate that as many as 50% of all problem employees in industry are actually alcoholics. The effect of alcoholism on the worker and work are severe.

2)      Job stress and Burnout:- Problems such as alcoholism and drug abuse sometimes result from stress especially job stress. Here, job related factors such as over work, re-location and problems with customers eventually put the person under such stress that a pathological reaction such as drug abuse occur.

job stress has serious consequences for both employers and employees. The human consequences such as cardio-vascular diseases, headaches, and accident. For the orgn. consequences include reductions in the quantity and quality of job performance, increased absenteeism and turnover and increased grievances and health care cost.

Burnout is a phenomenon closely associated with job stress. Expert define burnout as the total depletion of physical and mental caused by excessive striving to reach an unrealistic work-related goals.

3)      Asbestos exposure at work:- There are different sources of occupational respiratory diseases like asbestos, silica, coz, lead etc. if these asbestos has become a major concern in arts because of publicity surrounding asbestos in building such as school constructed before and mid’s 70. Major efforts are now under way to rid this building of the substance.

OSHA  standard require several action with respect to asbestos. Companies must monitor the air whenever an employees expects the level of asbestos ot rise to one-half the allowable limit.

4)      Computer related health problems:- The fact that many worker today must spend hours each day working with computers is creating health problems a work. Short- term eye problems like burning, itching and tearing as well as eyestrain and eye soreness are common complaints among video displaying users. Backaches and neck aches are wide spread among display users.

5)      Aids and the workplace:- For some of the employers Aids related question concern their legal responsibilities in dealing with AIDS sufferers. Mandatory leave can’t be required for a person with AIDS, unless work performance has deteriorated.

6)      Work place smoking:- Another issue of OHS is smoking which is serious problem for both employers and employees. As early as the 1980’s the congressional office of technology estimates that each employer spend between 82,000 and 50,000 yearly. This cost drive higher health and fire insurance as well as increased absenteeism and reduced productivity.

7)      Violence at work:- Violence against employees has become an enormous problem at work.

CHAPTER 7

MANAGING EMPLOYEES RELATION, CHANGE AND COMMUNICATION

HRM Communication

          There are different activities of HRM, the activity which keep all activities in common thread is effective communication. The need for communication arises because of worker diversity of employees, specially those who do not speak the native language. Communication in workforce diversity also means letting these individual know that the company will make every attempt to provide them equal opportunity in the orgn.

          We also addressed the need to communicate with respect to the recruiting and selection process (in terms of understanding what the job entails and realistic job previews) in orientation (accumulating employees to HRM activities and policies0 and training (understanding how to do the job). Yet probably the most critical HRM activities emphasizing evaluations, benefits and safety and health. The need to be able to communicate the relationship that exists between one’s efforts and individual goal attainment for that the need for performance goals to be communicate achieving orgn. wide objectives. In performance evaluation and the interaction between an employees and manager can affect performance outcomes when these outcomes are positive, individual should be rewarded. When they are not positive, effort must be expanded to correct the problem, for that, we introduced employees. Counseling which relies heavily on effective communication.

          For benefit and safety and health, it should be discussed and informed employees about the benefit offered to them and wellness program and legal issues of providing certain information with respect to benefit, HRM is responsible for providing each employees with a summary plan description which describes understandable terms employees right, their pension plan requirement and updated benefits accumulations likewise OSHA under its hazard communication standard require employers to notify employees of potential dangers and protective measures when exposed to workplace hazardous chemical or “toxins”.

          As we move into the 21^st century, we recognize that our companies will be different. Factor like global competition and technology enhancement are making company official rethink how they are organized. We have witnessed extensive delaying, mergers and acquisition in the past. When such events occurs employees stress level increased, one way of reducing such stress is to reduce the uncertainty that surrounds the situation in our terms effective communication.

          We know the years ahead will continue to witness change in our companies. Our movement towards learner structure, continues improvement, employees involvement and work teams will work best if effective communication exists and where good communication programs are operating benefits occurs to the company. For e.g. one study credits communication with better work relation, greater trust between employees and managers, greater employees satisfaction and leading to lower turnover rates and without diverse workforce, proper communication is needed to ensure that thae message is understand by all employees.

HRM Communication Program  

          Achieving the goals, effective communication can offer is not easy. It does not happen by itself. Rather, it evolves after careful thought implementation and evaluation for that we rely on HRM. Although we have highlighted many of this item throughout the text, following are the point of effective HRM communication program:

The purpose of communication: HRM communication programs are decision to keep employees informed about what is happening in the orgn. and knowledgeable of the policies and procedures affecting them, whereas public relations departments are created to keep the public informed of what an orgn. does. HRM communication focus on the internal constituents i.e. the employees. The role of employees relations departments in maintenance function communication program serves as a basis for increasing employee loyalty and commitment. By building into the corporate culture, a systematic means through which information is free flowing timely and accurate, employees how perceive that the orgn. value them. Such a system build trust and openness among organizational members, even assisting the share of “bad news”

HRM communication has the ability to bring about many positive changes in an orgn. This process by whatever means should stay focused on keeping employees informed there by setting the stage for enhancing employees satisfaction.

1)    Guidelines for supporting communication programs: Building effective HRM communication programs involve a few fundamental elements. This include:

i)       Top mgmt. commitment: Before any orgn. can develop and implement an internal orgn.  program it must have the backing support and blessing of the CEO. By activity designed to facilitate way environment must be seen by employees as being endorsed by the company’s top mgmt. In doing, the programs are given priority and are viewed as significant component of the corporate culture.

ii)    Effective upward communication: The upward flow of communication is particularly not worthy because it is the employees, the one closest to the work, who may have vital information that top mgmt. should know. Unless top mgmt. is made aware of the implication of different requirement like knowing how to ensure that profit by orgn. sustain for long period.

iii)   Determining what to communicate: At the extreme, if every piece of information that exists in our orgn. were communicated, no work would ever get done, people would be spending their entire days on information overload. Employees while wanting to be informed are not concerned with every piece of information like who just retired was promoted or what community group was given a donation.

One means of determining what to communicate is through a “what if, so what” test. When deciding the priority og the information to be shared HR manager ask themselves what will happen if this information is not shared.

iv)  Allow for feedback: We cannot assume that our communication effort are achieving their goals. Consequently we must develop into the system a means of assessing the flow of information and for fostering employee feedback. Irrespective of how that information is gathered, employees must be involved. Otherwise not only will measurement of the effective of the communication program be difficult but we may also give the perception that employees commitment is unnecessary.

v)    Information sources: HRM communication should serve as a promoting effective communication throughout the orgn. Although HRM play an important role in bringing, they are not the only or main source of information.

Employees Handbook    

During the orientation of new employees, we inform them of a numbers of important facts, regarding employment in the orgn. But we must recognize that starting this information once is not enough. There is often too much for employees to absorb, especially during the excitement of the first day on the job. Consequently a permanent reference guide is needed. The reference guide for employees is called the employees handbooks.

The employee’s handbook is a tool that when developed properly serves both designed and the employers. For e.g. a well designed handbook provides a central information sources that convey such useful information as “what the company is about, its history and employees benefits”. The handbook then gives employees an opportunity to learn about the company and what the company provides for them in a way that permits each employees an opportunity to understand the information at his/her own pace. By having this resource available question that may arise over such benefits as accurate, matching contribution etc can be more easily answered. Serving as an easy reference guide. The employee’s handbook can be used by employees whenever it is warranted. Beyond just being a source of information employees handbook also generate some other benefits where they exist. It has been found that they assist in creating an atmosphere in which employees become more productive members of the orgn. and increase their commitment and loyalty to the orgn. By being through in it coverage, an employee handbook will address various HRM policies and work rules which set the parameters within which employees are expected to perform. For e.g. the handbook may express information on discipline and discharge procedures and a means of re-dressing disciplinary action should the employees feel that it was administered unfairly. The handbook then serves to ensure that any HRM policy will be fair, equitable and consistently applied.

Employer too can benefit from using an employee handbook like cautions, how employees will be terminated etc.

Content/Component of an employee’s Handbook   

          Although there is no right or wrong ways of putting together the content of an employees handbook, there is a recommended format. As a means of facilitating, we will present an outline from an actual employees handbook, they are:

1)    Introductory comments: In this section, the company conveys various introductory information to the employee’s. The purpose of this comment is to describe to employees what the company is about, its mission and goals. Furthermore the company conveys to its employees the corporate values of customer satisfaction and by achieving that goal the firm can provide those things that employees may desire.

These introductory remarks also tell new employees that they are valuable assets to the orgn. and this introductory section also provide brief history of the orgn.

2)    What you should know: This section is designed to inform all employees of the rules and policies regarding employment in the company. Those items of importance to employees such as attendance, work hours and so on, are presented so that there is no misunderstanding by employees.

3)    Yours benefit: No matter, how much value we place on the introductory remarks of employee handbook, the section on employees benefit is probably the most widely read and perceived most important by employees. This section should thoroughly explain and benefit employees receive. When they are eligible and what if any costs the employees might incurs.

4)    Yours responsibility and safety procedures: Just as employers are responsible for creating a safe and healthy work, hence workers provides information regarding company policies on reporting accident, alcohol and personal conduct among others explained is such terms that employees know what complains require.

Other forms of employee’s communication   

           (other than handbook)

1)    Bulletin board

2)    Companywide meeting

3)    Company news letter

4)    The electronic media.   

Mechanism for effective communication

          Any communication system operating in an orgn. will only be effective if it permit information to flow upward. For HRM, enabling this process revolves around two themes, they are:

1)    The complaint procedure: An orgn. complaint procedure is designed to permit employees the question actions that have occurred in the company and seek the company assistance in correcting the problem. Complaint procedures implemented in non-organized orgn. Irrespective of their names, must follow a set pattern i.e. given the structure of HRM paid out, non-organized complaints procedures may consist of the following:

Ø Step 1 (Employees – Supervisor): This is generally regarded as the initial step to resolve an employee’s problem. Here the employees tries to address the issues with his/her supervisor, seeking some resolution. If the issues is resolved here, nothing further need to be done.

Ø Step 2 (Employees – Employer Relation): Not getting satisfaction desired in step 1, the employee then proceeds to file complaints with the employees relation representation. As part of his/her job, Employees Relation representative investigate the matter including gathering information from both parties and make recommendation for resolution. Although this is the first formal step, the employees may continue upward should the recommend solution be unsatisfactory to the employees.

Ø Step 3 (Employees – Department Head): If Employees Relation fails to correct the problems or if the employees wishes to further exercise there rights, the next step in the complaint procedure is to meet with the manager of the area. Once again an investigation will take place and a decision rendered.

Ø Step 4 (Employees – President): The final step in the process involves taking issue to the president. Generally although employees right may be protected under various state laws, the president’s decision is final.

2)    The suggestion program: Similar to the complaint procedures, a suggestion program is designed to allow employees oppurtunities to tell mgmt. what it is doing efficiently and what the company should do from an employee’s point of view. That is suggestion program give employees the chance to tell mgmt. “what they are doing right and what they are doing wrong”. In many companies in conjunction with continuous improvement processes and employee involvement, mgmt. welcomes such suggestions.

Although employees value the “reward” the most important aspect of a suggestion program is for individuals to useful or not, employers must recognize employees submitting suggestions and inform them of their outcomes. Even if the idea was not appropriate for the company employees should be told what mgmt. decision was  failure to do so will more than likely decrease employees willingness to make suggestion. And if the suggestion is good in the spirit of employees communication not only reward them but recognize their input in the company’s next newsletter.

Organization Culture     

          Orgn. culture is also called environment, climate milieu(social surrounding) in which employees work. It is the interpretation of common culture. It is the set up of an orgn. It is the man made system.         A culture is a set of values that helps its members to understand what the orgn. stand for, how does it think and what is important. Orgn. culture is also called orgn. climate. Culture is an important for defining individual objectives. It is the foundation of an organizational internal environment. So it play a major role in shaping managerial behavior. People are affected by the culture in which they live. For e.g. a person growing up in a middle class family will be taught the values, belief and expected behavior of organizational employees. An individual working in Pepsi- cola, Coca-cola or any other orgn. with a firmly establish culture will be taught the values, belief and expected behavior of that orgn. society has a social culture, a workplace has a orgn. culture.

          According to Jonne Martin “An individual come in contact with orgn. they come into contract with dress, norm, stories, people tell about what goes on the orgn. formal rules and procedures, its formal code of behavior, rituals tasks, pay system, Jargons and Jokes only understand by insider and so on, these elements are some of the manifestations of orgn. culture”

          According to Geert Hoz Stede “culture is the collective programming of the mind that distinguish the member of one category of people from those of other”

          Conclusion: The culture of an orgn. is the set of value that helps its members to understand the orgn. stand for how it does thing and what is consider important.

Characteristics of culture     

1)    It is uniform perception by orgn.

2)    It has common characteristics

3)    It is descriptive

4)    It can distinguish an orgn. from other

5)    It can integrate individual groups and orgn. system

Factor that affect orgn. culture

1)    Organizational context

2)    Structure of the orgn.

3)    Process of the orgn.

4)    Physical environment

5)    System, value and norms

Creating and sustaining culture

          Some organizational culture may be direct or at least indirect, result of action taken by the founder. However, this is not always the case. Sometime founders creates weak culture and if the orgn. is to survive, a top manger must be installed who will sow the seeds for the necessary strong culture.

          An orgn. culture does not pop out of thin air. One established it rarely fades way. What forces influences the creation of a culture? What re-inforces and sustains these forces one they are in place.

Ø Creating (who create the culture): People who establish the orgn. founder are the sources of the culture while organizational culture can be created in a number of different ways.

Ø Sustaining culture: Once an organizational culture is started and begins to develop, there are a number of practices that can help solidify the acceptance of core values and ensures that the culture maintain itself. These forces play a particularly important part in sustaining a culture. They are:

1)    Selection practices: It’s main purpose is to select and identify the right person for the job have the knowledge, skills and abilities to perform the orgn. successfully. The selection process, sustain an orgn. culture by selecting out those individual who are rightly suited for the job.

2)    The action of mgmt: The actions of top mgmt. also have a major impact on sustaining orgn. culture. Through what they say, think and how they behave, senior executive establish norms the filter down through the orgn. as to whether risk taking is desirable, how much freedom managers should give their subordinate, what is appropriate dress, what actions will pay off in terms of pay raises, promotion and other rewards.

3)    Socialization process: No matter how good a job, the orgn. does in recruiting and selecting of new employees but they will not be fully familiarized in the orgn. culture because if they are unfamiliarized with the orgn. culture new employees are potentially likely to disturb the beliefs and customs that are in place. Through socialization process orgn. try to help new employees to adopt its new culture. This process is called socialization.

Orgn. change and human resources    

          We live in age of transition. One of the few things of real permanent in our world is change. Change is inevitable in a progressive culture. Change in fact is accelerating in our society.       Organizational change refers to a relatively enduring alteration of the present state of an orgn. or its components or interrelationship among the component and their differential and integrated functions in totality or partially in order to attain greater viability in the context of the present and anticipated future environment.

          In industry, change is related to automation, competition, new technology, computerization, information technology and liberalization of a economy. It also include change in process, customs, norms and culture of the orgn.

          Change is virtually the number one problem of modern manager. So, good manager must communicate with their employees, the need for necessary change. Today manager must recognize and attempt to manage the change ass effective and quickly as possible. They need to manage change not only to compete but even to survive.

          Groups are often resistant to change, members become set in their ways and attitudes, they have to believe the groups is right, no matter what the circumstances and of course any deviation from the norms would have to be explained and justified by the individual to other members. So HRM must explain why change is necessary, if change is not done what will be the consequence.

Job Stress Factors

Concept

          Stress is a dynamic condition in which an individual is confronted with an opportunity or demand related to what he/she desires and for which the outcomes is perceived to be both uncertain and important.

          Work stress is a pressure, strain, tension which arise due to work. Stress is a pain which we cannot change. Due to job stress employees performance involvement in the orgn may decrease but job stress always not lower performance. The evidence indicates that stress can be either a positive or negative influence an employee’s performance. For many people, low to moderate amount of stress enable them to perform their job better by increasing their work intensity, alertness and ability to react. However a high level of stress or even a moderate amount sustained over a long period of time, eventually takes its tolls (effect) and performance declines. The impact of stress on satisfaction is for more straight forward job related tension.

          According to Beehr and Newman “a condition arising from the interaction of people and their jobs and characterized by change with people with people that force them to deviate from their normal functioning”

          This can be explained by following figure:

          y

	Performance

 

         

                            moderate level \ optimum level  

 

                                                                                                           x                       

                                                    Stress

Causes of stress/Factor of job stress

Factors of stress can be divided into three groups. They are as follows:-

1)    Environmental factor:- Just as environmental uncertainty influences the design of the orgn structure, it is also influence stress levels among employees in that orgn differential type of environmental factor are:-

i)                   Economic uncertainties: - It creates stress when the economy is contracted or when country development is decrease, people feel anxious about their security.

ii)                Technology uncertainties:- It is a third type of environmental factor that can cause stress, because new innovation can make an employees skills and experience absolute (absolute) in a very short period of time.

iii)              Political uncertainty:- It also create stress because employees or people always like to have stable political system because it will have stability of program that have to be implemented.

2)    Organizational factor:- The stress caused by working in a orgn. There is no shortage of factors within the orgn that can cause stress, they are pressure to avoid overload, a demanding and insensitive boss and un-pleasant co-worker are few example. Different type of orgn factor are:-

a)     Task design:- Task design are factors related to a person’s job’s. They include the design of the individual job(autonomy, task variety, degree of automation ) working condition and the physical work layout.

b)    Role demand:- Role demand is a pressure placed as a person as a function of the particular he/she plays in the orgn.

c)     Interpersonal demand:- Interpersonal demand pressure created by other employees. Lack of social support from colleagues (friend) and poor interpersonal relationship

d)    Organizational structure:- It defines the level of differentiation in the orgn. the degree of rules and regulation and where decisions are made.

e)     Organizational leadership:-The stress caused by managerial style of the orgn senior executives.

f)      Organizational lifestyle:- Four stage life cycle of orgn creates different problem and pressure for employees. Especially decline stages are stressful because employees are lay-off and different incentives are reduces.

3)    Personal/ Individual:- Individual only work about 40 to 50 hrs a week. But experience and problems that people encounter during 120 plus non-working hours has huge impact on job. Different personal factor which affect in stress are as follow:

a)     Family issues: Survey shows that people dear family and personal relationship. For e.g. the breaking-off relationship and problem with children creates stress for employees.

b)    Economic problems: It is problem created due to financial resources is another set of personal troubles that can stress for employees and distract their attention from their work.

c)     Inherent personality: Survey shows that some people have an inherent tendency to concentrate negative aspect of the world in general that creates stress. 

Managing stress /stress mgmt. techniques

          Mgmt. may not be concerned when employees experience low to moderate levels of stress. The reason, as we know that such levels of stress may be functional and leads to higher employees performance. But high level of stress or even low levels sustained over long period of time, can lead to reduce employee performance and thus require action of mgmt. There are two ways of managing stress. They are:

1)    Individual approach: Employees can take personal responsibility for reducing his or her stress level. Individual strategies that have proven effective include:

a)     Time mgmt.: Many people manage their time poorly. The thing they have to accomplish in any given time or days or week are not necessarily beyond completion thereby reduced stress if they manage time properly. The well-organized employees can often accomplish twice as much as the person who is poorly organized.

b)    Physical exercise: Non-competitive physical exercise such as aerobics, working, jogging, swimming, and riding a bicycle have been recommended by physician as a way to deal with excessive stress level. Physical exercise provide a mental diversion from work pressure.

c)     Relaxation techniques: Individual can teach themselves to reduce tension and stress through relation techniques such as meditation, hypo sis and bio-feedback.

d)      Social support system: family, friend and work colleagues can provide an outlet when levels before become excessive. Increasing social support network, therefore, can be means for reducing tension and stress.

2)    Organizational approaches: Several of the factors that causes stress, particularly task and role demands and organizational structure are controlled by mgmt. strategies that mgmt. might use as organizational approaches to manage stress are as follows:

a)     Selection and placement: While certain jobs are more stressful than others, that individual differs in their response to stress situation. Selection and placement decision should take these facts into consideration.

b)    Goal setting: One survey concluded that individual perform better when they have specific and challenging goals and receive feedback on how well they progressing towards these goals. The use of goals can reduce stress as well provide motivation.

c)     Re-designing jobs: Redesigning jobs to give employees more responsibility, more meaningful work, more autonomy and increased feedback can reduce stress because this factors give the employee’s greater control over work activities can reduce dependence on others.

d)    Increasing employee’s involvement: Employee’s feel stressful when they feel uncertain about goals expectation how they will be evaluated. By giving this employees avoid in these decision that directly affect their job performance. Mgmt. can increase employees control and reduce stress by increasing employee’s involvement in decision making.

e)     Organizational communication: Increasing formal organizational communication with employees reduces uncertainty and stress by reducing ambiguity and conflict.

f)      Wellness programs: Our final suggestion in managing stress for orgn. is wellness program. This program focus on the employees total physical and mental condition.

Spirituality in the work place

          Spirituality in the work place means when employees enter the company for work, he should feel that they are in scared place. Employees should be made feel that they are in temple and they are in temple and they are working for some return. By working in the orgn. they are getting something which are asked by them. When one enter temple he feel stress free same way one employees enter the orgn. employees also has to feel stress free. If he is not stress free then he will not work for the orgn. his spirituality will not be there. If spirituality is not there then employees will work without involvement.

          If involvement is not there, it will not be easy for orgn. to achieve goals. For developing spirituality provide different benefit and training. Spirituality must come from inner heart of the employees.

Participation

          The basic issues which give rise to the concept of participative mgmt. were the problem of:

1)    Growing workers alienation.

2)    Their lack of commitment t industrial work.

3)    The widening social distance between them and managers.

The growth of industrial system created two distinct groups in an undertaking. This group were assigned two sets of function to be performed i.e. managerial and operative. The factory system thus divorced managerial and operative function, authorizing persons who occupied managerial position to exercise “managerial position” to exercise managerial function while “workers” performed operative function. Those who advocate worker participation in mgmt. seek to bridge this gap or even to remove it, by authorizing workers to take part in managerial function.

Participative mgmt. has conceived as “any or all process by which employees other than managers contribute positively towards the reaching of managerial decision which affect their work”, the totality of such forms of upward exertions of power by subordinate in orgn. are perceived to be legitimate by themselves and their superiors, a process in which two or more parties influence each other in making plans, policies and decisions. All these different definition incorporate the element of control in decision making, participative mgmt. is thus a program of sharing power between managers and effectiveness. Therefore the amount of participation depends upon its scope (range of managerial functions in which workers take part), degree (power enjoyed by workers to influence managerial decision) and extent (proportion of workers taking part in managerial affairs).

Participation in mgmt. should not be handled by a few persons. The general mass of workers must in some way be participating in its work. For this purpose the interest of workers is to be maintained by publishing and explaining to them the results of the scheme. Inviting suggestions and awarding prizes for accepted suggestions is one of the effective ways of creating a sense of participation and a sense of belonging among all the workers.

Modern orgn. are confronting with the challenging of enhancing the level of performance. In recent years there is growing concern to the problem of employee morale, productivity and sustainability of the orgn. effectiveness. Various measures are being introduced to resolve these problems. Participative mgmt. is recognized as one of the effective measure that addresses the problem of poor morale and low productivity.

Participative mgmt. is considered as a process by which the worker’s share in decision making extends beyond the decisions that are implicit in the specific contents of the jobs they do. In simple terms, participative mgmt. implies participation of workers in the process of mgmt. of organizational activities and their jobs. Participative mgmt. is style of mgmt., that lays emphasis on the importance of good human-relation and worker’s participation in mgmt. decision making. It is also a style characterized by the extensive use of the group decision making method in which each person is given autonomy to exercise discretion in completing the task assigned to him/her.

Ways of employee’s participation in mgmt.

1)    Participation of the board level: This is a form of representative participation. Employees sit in a company’s Board of directors and represents the interest of the firm’s employee’s.

2)    Participation through ownership: Workers may become more involved in industries by making them shareholders of the company. This may be done by inducing them to buy equity share. The mgmt. may promote the scheme by allowing the workers to make payments in installments. It may also advance loans or even gives financial assistance to such workers to enable them to buy equity share.

3)    Participation through complete control: Workers acquire complete control of the mgmt. through elected boards.

4)    Participation through staff or work council: Staff council or work’s council are bodies on which the representation is entirely of the employees.

5)    Participation through joint councils and committee’s: Joint council are bodies comprising representations of employer’s and employees. The function of this bodies may range from decision-making on some issues to merely advising the mgmt. as consultative bodies.

6)    Participation through collective bargaining: The principle of collective bargaining mgmt. as worker a collective agreement to lay down certain rules for the formulation and termination of the conditions of service in an establishment.

7)    Participation through suggestion schemes: Employees views on such matter as machine utilization, waste, energy conservation and safety are invited and reward is given for the best suggestions.

8)     Participation through quality circles: A quality circles consists of seven to ten people from the same work are who meet regularly to define, analysis and solve quality and related problem in their areas. Membership is strictly voluntary and meeting is usually held once a week.

9)    TQM: It is classified as a participative method every employees in the orrgn. is involved and is expected to take responsibility for improving quality every day.

Partnership

         

Partnership is a collaborative goal setting by manager and subordinate the extent to which goals are accomplished is a major factor in evaluating and rewarding the subordinate performance. Partnership is a system of mgmt. involving effective participation and involvement of each member of the orgn. Partnership makes each individual output centered, result oriented, optimum committed and achievement motivated. Partnership will give full scope to individual strength and responsibility and at the same time give common direction of vision and effort, establish team works and harmonize the goal of the individual.

          Partnership focuses on goal and achievement of orgn. They are not merely organizational goals but also the personal goals of the managers and the employees. This is a big step towards effective mgmt. Partnership aims at a radical realignment of relations between superior and subordinate. It helps the subordinate to self control.

Employees Involvement 

          Employees involvement can be best defined as giving each worker more control over his or her job. To do this requires delegation, participative mgmt., work team, goal setting, employees training and development opportunities for the workers. It handled properly, involving employees should assist in developing more productive employees who are more legal and committed to the orgn.

          When the orgn. is lager in size and levels it is difficult to work without delegating power and responsibility to the lower level of mgmt. The most effective way of delegation is to assign power and resource at a lower level of mgmt. to work smoothly managers/employees should be involved in the process of making decision and goal setting. This will increase feeling of ownership and commitment among the employees whenever significant change occur in the orgn., subsequent change in the way work gets done must also occur with respect to downsizing, many company today are requiring their employees to do more, faster and better with less. Involving employees means different things to different orgn. and people.

How orgn. involve employees

          To be successful when facing multiple tasks, often on multiple project, more employees at all level will need to delegate some of their activities and responsibilities to other organizational members. This means that employees are going to have certain amount of authority to make decision that directly affect their work. Delegation will be required at all levels of the orgn.

          In addition to being required to take an more responsibilities employees will be expected to make decision without the benefit of the “tried and true” decision of the past and because of all this employees are part of the process today, there is more of a need for them to contribute to the decision making process. In most orgn. the days of autocratic mgmt. are over. To facilitate customer demand and fulfill corporate expectation, today’s employees need to be more involved. Group decision making enables to have more input into the process and greater access to needed information.

          Another phenomenon of involving employees will be an emphasis on work teams. The bureaucratic structure of yesterday is not appropriate for many today’s company’s worker from different specialization in an orgn. are increasingly required to work together to successfully complete complex project. As such, traditional work areas have given way to more of a team effort, building and capitalizing on the various skills and background that  each member bring t the team. The basis of work teams then is driven by the task at hand. Involving employees allow them an opportunity to focus on the job goals. By giving them more freedom, employees are in a better position to develop the means to achieve the desired goals.

Implication for HRM         

          For an orgn. addressing some components of employees involvement is not enough. What is needed is demonstrated leadership as well as supportive mgmt. Additionally employees need to be trained and this where HRM can make a valuable contribution. Employees expected to delegate, to have decision participatively handled, to work in team or to set goals cannot do so unless they know and understand what it is they are to do. Empowering employees require extensive training in all aspect of the job. Workers may need to understand how new job design process. They may need training in interpersonal skills to make participative mgmt. and work teams functions properly. All in all, we can anticipate much more involvement from HRM in all parts of the orgn.

          But make no mistake about it. Employee’s involvement comes at a price. First of all, better control over one’s work activities, coupled with better “tools” has shown to improve productivity. We are doing more with less, but are doing it smarter and more productivity. Additionally as employees see the commitment the orgn. and HRM have made to them, there is evidence that commitment and loyalty to an orgn. will increase.

End of the chapter  

  

                 



   Chapter  8

             Industrial Relation

Concept

                The term labor system is popularly used in firm or industry where union has been established. Labor relation is the product of industrialization. Traditionally, they were concerned with the relations that existed between employer and labor. Labor relation is very important to reduce conflict. It is concerned with managing interrelationship between the three factors:

a)      Workers, represented by union.

b)      Employees represented by employer association.

c)       Society represented by the govt. and various pressure groups.

These three factors and their interplay constitute the study of industrial relations. Industrial relation denote the relationship between “workers and employees, between worker, orgn and employers and between the respective orgn. and public authorities.

Managing or harmonizing the sectoral, divergent or even conflicting interest of these three factors with the goals of development is essence of industrial relation. Failure to harmonize such divergent interests and would have adverse effects on developments efforts and it would result in work stoppage, disruption of essential services, social tension even investments climate, low productivity and loss of faith in the democratic system. it is therefore of almost relevance to development evoke or build a system of industrial relation which would harmonize and at the same time, enhance the interest of the govt., employees and the workers. Thus, the basic mission of the industrial relation system are:

Ø  To promote and develop healthy labor mgmt. and govt. relations.

Ø  To minimize industrial conflict and tensions.

Ø  To establish effective and meaningful communication system and participative culture at the national, industrial and shop floor levels so as to provide a favorable work climate.

According to John T. Dunlop “Labor Relation are the complex of interaction relation among workers, managers and govt.”

                According to Kochan “Industrial relation practices and outcomes are shaped by the interaction of environment, forces along with the strategic choices and values of managers, union leader, workers and public policy decision maker”

                In conclusion, Industrial relation is multidimensional affected by economic, social cultural, political, legal, technological and occupational forces.

Purposes of labor relation 

1)      Determine power of labor and mgmt.

2)      Collective bargaining.

3)      Stability and regularity in industry.

4)      Institutionalization of relationship according to rules and regulation.

5)      Developing meaningful relation.

6)      Increasing communication and participation at work.

7)      Initiate change in the orgn.

Union     

A union is an orgn. of workers activity, collectivity seeking to promote and protect its mutual interests through collective bargaining. Union are an integral and important part of the internal environment of orgn. They gratly affect the important sector of the orgn. Union’s objectives are as follow:

i)        Improve working condition and work for social economic program of workers.

ii)       Try to maintain good labor relationship.

iii)     Increase production and assist in orgn development.

It is useful for making the workers lawful and disciplined. An union in orgn. has the legal authority to bargain and negotiate with the employees on the various issues such as wages, working hours and other condition of employment. Union have a major impact on wage structure, wage level and individual wage determination, regardless of whether specific orgn. are organized or not. Thus union comprises of:

a)      Collective employees efforts to join together with a view to bargain with mgmt.

b)      The changed to ends in terms of membership influence and recognition.

According to Decenzo and Robbins “Union is an orgn. of workers acting collectively seeking to promote and protect its mutual interest through collective bargaining”

Why do employees join union?

                 Union are goal-directed. The goals serve as the reason’s for employees to join unions. The reason individual join union are as diverse as the people themselves. Just what are they seeking to gain when they join a union? The answer of these questions varies with the individual and the union contract but the following captures the most common reasons. They are as follows:

1)      Higher wages and benefits: There are power and strength in numbers. As a result, union sometimes are able to obtain higher wages and benefit package for their members than employee would be able to negotiate individually, one or two employees walking off the job over a wage dispute is unlikely to significantly affect most business but hundred of workers going out on strike can temporarily disrupt or even close down the company. Additionally professional bargainer employed by the union may be able to negotiate more skillfully than any individual could on his or her own behalf.

2)      Greater job security: Union provide its member with a sense of independence from mgmt. power to arbitrarily hire, promote or fire. The collective bargaining contract will stipulate rules that apply to all members, thus providing fairer and more uniform treatment.

3)      Influence work rules: Where a union exists, workers are provided with an opportunity to participate in determining the conditions under which they work and an effective channel through which they can protect condition they believe are unfair. Therefore, a union is not only a representative of the worker but also provides rules that define channels in which complaints and concerns of workers can be registered. Grievance procedures and rights to third party arbitration of dispute’s are examples of practice that are typically defined and regulated as a result of union efforts.

4)      Obtain political power: Union is lobbying groups. In practice, they tend to be aligned with a given political party. This helps them exert political muscles.

Employer Association

                When we think of union, one usually think of a manual workers. This was fairly accurate in the early years of the union movement, more recently the concept of union has spread to include employer as a association. This association performs same function as trade union. Employer association is rarely found in the business circle but this trend is increasingly day to day due to benefit that derives from the power of coalition and the gain that can be achieved. Employer association helps the different employer to reduce competition of their product and service by cartel and combination. Employer association and union often perform similar function but association prefers to avoid the union title. This association imposes formal penalties and informal pressure on member of association who do not follow the association code of conduct. In the political front, employer association is one of the most active powerful and effective lobby group in the country and it organize impressive lobby efforts anywhere that legislative bodies seek to make changes affecting the economic need of the orgn. Every year before the budget finalization, the finance minister look on the thought and their expectation from the budget.

                   In Nepal, enterprise and business houses are organized into their respective district-wise chamber of commerce and industry which in turn are affiliated to the federation of Nepalese chamber of commerce and industry (FNCCI) at the national level. Through this organization the employers are consulted in the formulation of economic and social policies of the govt. They are given due participation in various bodies of the national levels. Their pre-occupation have thus been to watch over their members commercial and financial interests.

                The employer’s organization in Nepal has not yet paid attention to assuming their industrial relation functions. Hence, they are not acting as employer’s association for purposes of industry-wise bargaining with labor and for making uniform policies of personal administration.

Labor legislation in Nepal along with important provision

Concept

                Laws constitute an important force in the external environment of HRM. They greatly affect HRM policies practices and goal achievement. HR must comply with the legal provision in force.

                Labor legislation refers to laws, rules regulation and judicial decision related to labor relations. It plays an important part in the development of labor relation. Historically labor legislation appeared to rectify the evils of the factory system brought by industrial revolution. “it created legal right and obligation between labor and mgmt. Its aim was to provide social justice”. The establishment of international labor orgn (ILO) in facilitated the enactment of labor law.

Reference page no 237 D.R.Adhikari HRM in Nepal.  

Labor legislation in Nepal

                Nepal had no effective labor legislation till 1959. The important legal landmark are:

1)      Nepal factory and factory worker Act 1959.

2)      Bonus Act 1994.

3)      Labor act 1992 (as Amended in 1998)

4)      Trade Union Act 1993.

5)      Foreign Employment Act 1992

6)      Children Labor Act 2000.

1.       Nepal Factory and Factory Worker Act 1959

It was the first labor law enacted in the country. it was amended three times. It covered factories employing 10 or more workers. The important provision of this Act are:

a)      Payment of wages, overtime and minimum wages to worker.

b)      Provident fund provision for permanent workers.

c)       Welfare provisions consisting of:

Ø  Leave, working hour

Ø  Pension, provident fund, marketing benefit

Ø  Compensation for injury/disability/death

Ø  Medical facilities

Ø  Rest room for taking rest for workers.

Ø  Children arrangement.

Ø  Worker right to form union.

Ø  Tribunal to settle dispute.

Ø  Worker committee to harmonize about relation.

Ø  Employment of foreign citizen.

Ø  Right to strike and lockout etc.

This act has been replaced by labor act 1992. At present the   legal environment of consist of:

2.       Bonus Act 1994

Bonus Act regulates the payment of Bonus to employees and workers. It specifies:

a)      The Bonus shall not exceed 10% of the net profit.

b)      The amounts of Bonus to an individual depend on the amount of monthly salaries and wages paid, but shall not exceed six month wages and salaries.

3.       Labor Act 1992 (as amended in 1998)

This Act replaced the Nepal factory and factory workers Act 1959. The main provision of this act relate to:

a)      Employment and job security, firing of workers.

b)      Working hours.

c)       Remuneration and yearly pay increment.

d)      Health and security.

e)      Special provision for orgn. like tea garden, construction work, transport, hotel, travel and trekking etc.

f)       Welfare provision.

g)      Conduct and punishment.

h)      Settlement of labor disputes.

The amendment of labor Act in 1998, brought companies within the scope of the act. It also specifies the provision for employing non-citizen. It lays down condition under which workers can go on strike.

v  In 1998 the govt. established a labor court to deal with labor disputes under the labor court regulation act, 1995.

4.       Trade Union Act 1993 (amended in 1999)

The provision of this are:

a)      It provides legal basis for organizing the trade union. A minimum of 10 workers should get together for unionization. They should constitute at least 25% of total worker in the orgn.

b)      The specific objectives of trade union are:

Ø  Improve working condition and work for socio-economic progress of workers.

Ø  Try to maintain good labor mgmt. relation.

Ø  Increase productivity and assist in orgn. development.

Ø  Work for making the workers dutiful and disciplined.

c)       It makes provision for recognition of authorized trade union for presenting demands to mgmt.

d)      The provision has made for registration of trade union.

e)      Orgn. level trade union confirm trade union, Association, trade union Federation.

       The framework for labor legislation in Nepal is still in early stage, policies, laws and institutions are still evolving.

5.       Foreign Employment Act 1992

This Act regulates foreign employment. Their major provisions are:

a)      Licensing is required to operate foreign employment office. Deposit is needed to operate foreign employment office.

b)      Procedure is prescribed for selection of workers for foreign employment.

c)       Contracting arrangement have been prescribed.

d)      Mechanism for investigation and inspection of document related to foreign employment has been provided.

6.       Children labor Act 2000

The child labor Act 2000, makes the following provision:

i)        Children below 10 years have been defined as child.

ii)       Children below 14 years must not be employed as labor.

iii)     Children must not be employed in specified hazardous jobs like tourism-oriented jobs, tobacco-based work, insecticides etc.

iv)     Permission should be taken from the authorized govt. agency for employment of child.

v)      Child labor must not be based from 6pm in the evening to 6am in the morning.

vi)     Child labor must not be employed for more than 6hrs per day or 36hrs per weeks.

vii)   There should be no discrimination in wage payment for child labor.

viii)  Punishments ranging from 3 month imprisonment or Rs 10000/ fine or both are provided for violation of the law.

Collective Bargaining

                The term collective bargaining typically refers to the negotiation, administration and interpretation of a written agreement between two parties that covers a specific period of time. One of the motivations of employees to join union is to strengthen group effort to bargain with the mgmt. in order to increase the pay and benefit to improve the working condition and to handle other employment relations problems. Collective bargaining is the main element of industrial relation/employment relation. Outcomes of collective bargaining are not only effective for a unionized firm but they equally have implication for the non-unionized firm society and economy as a whole. For e.g. when a new wage rate is determined through the collective agreement of the union representative and mgmt. such agreement also affects non-union and social orgn.

                Definition

                According to Decenzo and Robbins “The term collective Bargaining refers to the negotiation, administration and interpretation of a written agreement between two parties that covers a specific period of time”

                According to Fossam “A process by which the representative of the orgn. (the employer) meet one attempt to work out a contract  with representative of the workers (the employer)”

                According to Marlow “The process of joint regulation of job control undertaken by mgmt. the trade unions who negotiate to establish the terms and conditions which govern the employment relationship”

Collective Bargaining process

The process of collective bargaining is complex. Normally steps in the process depends on the country specific legal provision and the types of issues. Some of the important steps in the process are as follows:

1)      Preparing for negotiate: This is the homework phase for the union and mgmt. Once a union has been certified as the bargaining unit, both union and mgmt. begin the ongoing activity of preparing for negotiations, we refers to this as ongoing activity because ideally it should begin as soon as the previous contract is agreed upon or union certification is achieved. Realistically, it probably begins anywhere from one to six months before the current contract expire. We can consider the preparation for negotiation as composed of three activities, fact gathering, goal setting and strategy development.

Information is gathered from the following sources:

a)       Internal sources: Grievances and accident record, job performance reports, overtime figures, transfer, turnover, absenteeism, financial performance etc serve as internal sources of information.

b)      External sources: Economic forecast, cost of living standard of recently negotiated contract in similar orgn., industry labor statistics etc serve as external sources.

Both parties formulate a strategy for negotiation by assessing other side’s        power statistics. Negotiations are designated from both parties. Bargaining issues are identifies.

2)      Contract negotiation (Negotiating at the bargaining table): Both parties meet at the bargaining table union delivers a list of demand to mgmt. The negotiation continues for many. But the real negotiation takes place behind the closed doors. If settlement is reached by both the parties based on compromise it is an oral agreement.

3)      Agreement: The oral agreement is converted into a written agreement. The legal dimension is carefully taken care-off.

4)      Union Ratification: The union negotiation submit the agreement for approval from rank and file member of voted for acceptance, the agreement is converted into a contract.

5)      Contract Administration: Once the contract is agreed upon and ratified, it must be administered. This step involves administering the contract by:

a)      Informing union members and mgmt. about the contract.

b)      Interpreting the contract and resolving grievances.

c)       Implementing the contract.

d)      Monitoring activities during the contract to provide feedback for next negotiation.

Mgmt. is primarily responsible for contract administration. The HR manager plays a crucial role in day to day administration of the contract.

Probably the most important elements of contract administration relates to spelling a lot out a procedure for handling contractual disputes. Almost all collective bargaining agreement contains formal procedures to be used in resolving grievances of the interpretation and application of the contract. These contracts have provision for resolving specific for many initiated grievances by employees concerning dissatisfaction with job-related issues.

Disciplinary Action

                Concept of Discipline

                Employee discipline is essential for effective HRM in orgn. No orgn. can be effective without promotion and maintenance of discipline at all levels of employees. Discipline regulates the behavior of employees. Discipline regulates the behavior of employees. It is a necessary condition of orderly behavior.

                The term discipline refers to a condition in the orgn. where employees conduct themselves in accordance with the orgn’s rules and standard of acceptable behavior. For the most part employees discipline themselves by confirming to what is considered proper behavior because they believe it is the reasonable things to do. Once they are made aware of what is expected of them, and assuming thay find these standards or roles to be reasonable they seek to meet those expectations.

                According to Decenzo and Robbins “ Discipline refers to a condition in the orgn. when employees conduct themselves in accordance with the orgn. rule and standard of acceptable behavior”

                According to Gary Dessler “Discipline is a procedure that correct or punishes a sobordinates because a rule or procedure has been violated”

                In conclusion, Discipline orderliness, it means adherence to rules regulations, procedures and standards of acceptable behavior to achieve goals.

Disciplinary Actions

                Disciplinary Action should aim to correct undesirable behavior. It should not be punitive (designed to punish). It should be progressive. It should be based on severity and frequency of the offence. It should be applied consistently in an impersonal manner.

                Disciplinary Action generally follow progressive sequence of six steps (given by Decenzo and Robbins), same sequence is followed to control discipline in Nepal with some alteration according to the size of orgn. They are as follows:

1.       Oral Warning

2.       Written Warning

3.       Suspension

4.       Payout

5.       Demotion

6.       Dismissal

Oral Warning

Written Warning

Suspension

Pay-out

Demotion

Dismissal

1)      Oral Warning: This is the mildest forms of disciplinary action for minor offences. The employees is reprimanded orally in a private and informal environment. The oral warning are:

a)      The employees should be informed of the role that has been violated and the problems caused by it.

b)      The employees should be given chance to provide explanation including the plan for correction.

c)       Both the manager and employees should agree about solution to the offence to prevent it from recurring including potential consequence of future violations.

d)      A record is made of the oral warning and place in the employees file.

2)      Written Warning: The second step in the progressive discipline process is the written warning. In fact, it is the first formal stage of the disciplinary procedure. This is because the written warning becomes part of the employees official personal life. The written warning includes:

a)      The employees is advised in writing of the violation its effect, and potential consequence of future violations.

b)      The employees is given a chance to give explanation, including the plans for correction.

c)       The copy of written warning becomes a part of the employee’s life.

d)      The HRD is provided a copy of the written warning.

3)      Suspension: It is a short lay-off from work without pay. The employee is prohibited from performing the tasks assigned to him. It generally follows written warning. The duration of suspension can be one day to several weeks. It can also be the first disciplinary action for serious violations. 

Suspension provides a rude awakening to problem maker employees. They may start adherence follow to rules and standards of acceptable behavior.

4)      Pay-Out: The offender (problem maker) employees is either denied annual increment or his pay is out. It has demoralizing affect on the employees. If the employee alters his behavior, the pay cut is withdrawn. This disciplinary action rarely applied in practice. It is temporary in nature.

5)      Demotion: A demotion is reduction in job grade accompanied in pay. This action is used where mgmt. want to avoid dismissal of the problem employees.

Demotion action demoralize not only to the problem creator but also the co-workers. It is of permanent nature. It gives a loud message to the concerned employees to shape up for discipline.

6)      Dismissal: It is the ultimate disciplinary action for the most serious offences. The employees is dismissed from the job, when all other action fail, dismissal is the answer.

Ø  It provides emotional trauma to the offending employees. Employees tends to resort to legal action to fight dismissal.

Ø  Generally theft, misconduct, drug abuse, for significant of information and employment application, lack required qualification and job elimination result in dismissal.

Ø  Dismissal is costly. It can have adverse effect on other employees.

Grievance Handling

Concept

                Every orgn. faces problem related to employees grievances not matter how they are planned or organized. This grievances represent the classification or feeling of injustice in connection with the employment of people in the orgn. Grievances are employee’s perception for unfair treatment as the job manifested in feeling of discontent or dissatisfaction. They mainly result from differences in employees expectation and managerial practices relating to condition of employment, when employee’s complaint and brought to the notice of mgmt. it become grievances.

                According to the Keith Davis “Grievances is any real or implies feeling of personal injustice that an employee has about the employment relationship”

                According to the Wendell French “Grievances is a formal complaints field by an employee following an established grievances procedures”

                Employee grievances are a matter of important concern for HRM. Grievances are employees perception for unfair treatment on the job manifested in feeling of discontent or dissatisfaction.

Causes of Grievances

1)      Interpretation Differences

2)      Mgmt. practices

3)      Labor union practices

4)      Personality traits

5)      Orgn. culture

Steps in Grievances procedure

                Grievances procedures follow five successive steps. They are:

Step One

Satisfied

Grievant-Supervisor

                                                                                                               

Grievant-Departmental Head           (Verbal complaint)

          

Satisfied

Step Two

                                                                               

                                                                    

Grievant-Grievance Committee        (Appeal for Revision)

Satisfied

Step Three

                                                                                                                                                            

                                               

Step Four

Satisfied

Grievant-Top Mgmt (Appeal for Revision)

                                                                                                 

                                                                  

Step Five

Voluntary Arbitration   (Referred for Arbitration)

No need

                                                 

Decision binding for all

                

                                               

The various steps are as follow:

1)      

Step one           (Grievant – Supervisor): The grievant employees orally conveys his grievances to the immediate supervisor. The supervisor decides about the grievances within a fixed time period. This step is most suitable for “give and take” approach. 

2)      

Step two           (Grievant – Department Head): If the grievant is not satisfied with decision of the supervisor, he appeals o the higher level of mgmt. For e.g. department head in writing. The department head gives a decision within a fixed time period.

3)      

Step three        (Grievant – Grievance committee): if the grievant is not satisfied with decision of the department head, he appeals to a grievance committee. This committee comprises of the representative of employer and employees. The committee gives a decision within a employees. The committee gives a decision within a fixed time period.

4)      

Step one           (Grievant – Chief Executives): If the grievant is not satisfied with the decision of the grievance committee he appeals to the top mgmt. of the orgn. for revision. The top mgmt. gives a decision with a fixed time period. Union officials can accompany the grievant for discussion with mgmt.

5)      

Step one           (Grievant – voluntary Arbitration): if the grievant is not satisfied with the decision of the chief executive, the grievance is referred for voluntary arbitration. The arbitrator is an independent third party.

                The arbitrator follows a quasi-judicial process. Both parties present evidence and are cross examined. The decision of the arbitrator is binding on both parties. This is the last step in grievance procedure.

Conflict Management

Concept of conflict

                In an orgn. where more than two persons work together to achieve organizational goal and when a person interact with each other as a result of interaction sometime conflict may come out. Conflict is the outcome of behavioral interactions. So, it is natural phenomenon when two or more persons work together.

                Conflict is some degree is a part of human life. Orgn. are no exception to this. If the orgn. is designed on functional basis without taking care of co-ordination problems, there may be interdepartmental conflict which may means different ting to different people because it take place or happens in different setting and may take several forms.

                Generally, conflict means disagreements or hostility between individual and groups in the orgn. it may evens rivalry or competition in the individual.

Definition

According to S. P. Robbins “Conflict consists of all kinds of opposition or antagonist interaction”

According to Richard Steers “Conflict is the process by which a person or group feels frustrated in the pursuit of certain goals, plans or objectives”

According to James Stooner “Conflict involves disagreement about the allocation of scarce resource or a clash of goal status, values, perception or personalities”

                In recent it has been recognized that although conflict can be major problem, certain kinds of conflict may be beneficial. It is because a certain degree of conflict leads to higher performance and good decision in the orgn. If conflict is handled constructively it serves as a useful purpose in the orgn. If conflict is too little, performance tends to be too low. If it is too high, it can be a disruptive force. Optimum level of conflict can be good for the health of the orgn. this can be explained by following diagram:

                                             P                                optimum level of conflict

                                             E

                                                 R

                                                 F

                                                 O

                                                 M

                                                A

                                                N

                                                C

                                                E

                                                        Low                                      Conflict                                          High

                Above graph interprets that performance is low, when there is no conflict or excessive conflict. Absence of conflict also block innovation and competitive, enthusiasm where as excessive conflict prevent innovation and even normal function. 

Causes of Conflict

1)      Poor communication skill

2)      Value clashes

3)      Culture clashes

4)      Weak work policy and practice

5)      Unfavorable working environment

6)      Unclear relationship

7)      Personality clashes

Conflict Management

                Conflict may be harmful to an orgn. but there are times when it is useful. It is for this reason that manager must learn to recognize the different between constructive and destructive results, it must be analyzed and managed carefully. The manager should seek a level of conflict that is good for the orgn.

                Conflict can sometimes be resolved or prevented by designing an appropriate orgn. structure. Following are some of the frequently implied technique to resolved conflicts. They are as follows:

1)      Unilateral (one party):

a)      Domination: The simplest conflict resolution method is removal of the other party i.e. to force opponents to free and give up the best fight. In this method, one party which seems stronger than another tries to dominate. Often managers use their authority to fire a lower level ranking staff which they consider trouble maker. Sometimes manager try to eliminate conflict through physical separation. Groups are not allowed to interact with each other. Since this is a violent and short term method it does a little to resolve conflict.

2)      Joint (Two party) (Two part solve the problem):

a)      Collective Bargaining: It refers to negotiation, settlement and administration of a time bound agreement between labor and mgmt. They sit together and negotiate to settle the disputes.

b)      Grievance Procedure: Grievance Procedure is a formal organizational mechanism for dealing with employees grievances. It consists of several steps through which a worker can take his steps grievances to successively higher level of mgmt. for re-dressal. Most collective bargaining contract consists of a grievance procedure.

c)       Negotiation: During negotiation concerned parties sit together and negotiate or exchange dialogues in order to reach to an agreement or to settle the conflict.

d)      Compromise: In this method, both parties get something and lose something. This method is not long term solution because the party having the shock of loosing something intended will  try to achieve that when he feels he has regained something.

3)      Third party decision (Mediator)

a)      Conciliation: It is the process whereby a third party provides assistance in settling disputes. The settlement of the disputes depends on the agreement of the parties involved. The third party does not impose its decision but brings them together. It is settlement by persuasion. It generally deals with interest disputes.

b)      Mediation: It is a process whereby the third aprty is more active and submit proposal for dispute settlement. The parties involved in disputes are free to accept or reject such proposals. The mediator cannot force agreement but facilitates it. Mediators should be impartial and be trusted by both parties.

c)       Arbitration: It is a process whereby a third party takes a final decision on a dispute. If the conciliation fails, either one of the party or both can seek arbitration. Similarly, any one of the two parties involved who is not willing to settle the dispute through conciliation can apply to arbitration. The appeal to arbitration can be voluntary or compulsory. Compulsory arbitration of interest disputes is used in exceptional situation. Such as dispute in essential service when arbitration concerns a right dispute it is similar to adjudications.

Dismissal

                It is the ultimate disciplinary action for the most serious offences. The employees is dismissed from the job, when all other action fail, dismissal is the answer. Dismissal should be used only for the most serious offences.

                Dismissal is the most drastic disciplinary step that orgn. can take against an employees and orgn. should take action with deliberate care. There should be sufficient cause for dismissal and the rehabilitate or salvage the employee have failed. However, there are undoubtedly times when speedy dismissal is required, in this instances orgn should carry it out at once.

Ground for Dismissal

                Companies dismiss employees for four reasons:

1)      Unsatisfactory performance: It is a persistent failure to perform assigned duties to meet prescribed standard on the job. Specific reason include excessive absenteeism, tiredness, a persistent failure to meet normal’s job requirement or an adverse attitude towards the company supervisor or fellow employees.

2)      Misconduct: It is a deliberate and willful violation of rules and regulation by employees it may include stealing, rowdy behavior etc.

3)       Lack of qualification: It is an employee’s inability to do the assigned work, although he/she is diligent. The employee may be trying to do the job. So, it is especially important to make an effort to salvage him/her perhaps by re-assigning or training the employees.

4)      Changed job requirement: It refers to an employee’s inability to do work after the nature of the job has changed and of course firms often dismiss employees when they eliminate their jobs. Again the employees may be laborious. So firms often make an effort to restrain or transfer such employees.

Precaution

                Dismissals are never pleasant, but there are several things that we can do to ensure the dismissal is viewed as fair. For that individual who has been reported that was given full explanation of why and how termination decision were made. Finally terminated employees have to feel:

a)      Perceive their lay-off as fair.

b)      Endorse the terminating orgn.

c)       Indicate that they did not wish to take the past employer to court.

Avoiding wrongful discharge suits

                Wrongful discharge occur when an employee dismissal violates the law or the contractual arrangement stated or implied by the firm via its employment application forces, employee manuals or other promises. The time to protect against such suits is before you make mistakes and suit are filed.

                Avoiding wrongful discharge suits requires two prone approach. First, set up employment policies and dispute resolution procedure to make employees feel that the firm treated them fairly. People who are fixed and who walk away feeling they have been embarrassed, striped of their dignity or treated unfairly and financially are more likely to seek retribution in the courts. There is no way to make termination pleasant but it helps to at least make sure its view as fair.

                Secondly, do the preparatory work, starting with the employment application that will help to avoid such suits. Pay particular attention to the employees hand book. It should include an acknowledgement form like that which makes clear that the materials in the hand book do not constitute a contract.

                Before we finally dismiss the person, we have to do final review:

1)      Is an employee covered by any type of written agreement including a collective bargaining agreement?

2)      Have written or oral representation been made a form of contract?

3)      Is a deformation claim a likely?

4)      Is there a possible discrimination allegation?

5)      Is there any worker’s compensation involvement?

6)      Have reasonable rules and regulation been communicated and enforced?

7)      Have the employees been given an opportunity to explain any rule violation or to correct poor performance?

8)      Have all due been paid within 24hrs of separation?

9)      Has employee been advised?

10)   Has employee been advised of what the employer will tell to prospective employee in response to a reference inquiry?

11)   Have you reviewed the person’s personnel file?

12)   Have you considered “buying-out” a wrongful discharge claim with settlement pay?

Finally, telling the employees why you are dismissing him/her is important. While some manager try to avoid hurting the person’s feeling or triggering an argument , not being frank and honest can back fire.

Method of dismissal

                There are two method of dismissal. They are:

1)      Outplacement: Dismissing an employee is one of the most difficult task we can face at work. The dismissed employee, even if warned many times may react with disbelief or even violence. Outplacement is a information by the employer to employee what is available to them, for that we do:

Outplacement counseling: It is a systematic process by which someone you have terminated is trained and counseled in the technique in the technique of conducting a self-appraisal and securing a new job that is appropriate to his/her need and talents. As the term generally used, outplacement does not imply that the employer takes responsibility for placing the person in a new job. Instead, it is a counseling service whose purpose is to provide the person with advice, instruction and a sounding board to help formulate career goals and successfully executive a job search. Outplacement counseling is part of the terminated employee’s support or severance package and is often done by specialized outside firm.

Outplacement firm do more than counsel displaced employee’s they also help the employer device it’s dismissal plan. For e.g. Virginia based Getronics worked with an outplacement firm to develop a plan regarding how to break a news, deal with dismissed employee’s emotional reactions and institute the appropriate severance pay and employment plans.

2)      Redundancy: It is a compulsory termination due to different reason like downsizing, mergers, retirement etc. Redundancy is non-disciplinary separation. For the employer, reduced sales or profit may require lay-off or downsizing. Employee’s has to terminate their employment through volunteers who are interested in reduced hours or part time work, opting for voluntary early-retirement package and networking with local employee concerning temporary or permanent redeployment.

A lay-off is a situation in there is a temporary shortage of work and employees are told there is no work for them but that management intends to recall them work is available, until than worker are sent home for a time, is a situation in which three conditions are present:

i)        There is no work available for the employees.

ii)       Mgmt. expects the no-work situation to be temporary and probably short-term.

iii)     Mgmt. intends to recall the employees when the work is again available.

  A lay-off or redundancy is therefore not a termination which is a permanent serving of the employment relationship. Downsizing (reducing) means usually dramatically reducing the number of people in the orgn. Yet many firm discover operating earning don’t rise after major cuts. Low morale among those remaining may contribute to the problem. Regardless of why you are downsizing, think through the process both to avoid unnecessary consequences and to ensure the process is fair.

There is another form of redundancy which is known as retirement. It is a point at which a person gives up one’s work usually between the age of 60 to 65 but increasingly earlier today due to firm early retirement incentive plans.

Current issues in labor relation in Nepal  

                The history of labor relation in Nepal is about half a century old only. The following are the key issues in Nepal’s labor relation:

1)      Suspicious mgmt.: The Nepalese mgmt. has remained suspicious of trade union and their activities. It has taken a confrontation oriented reactive approach to labor relations, whenever there is industrial unrest or strike, mgmt react. They lack a strategic vision to labor mgmt.

The important issue in labor relations therefore is now to persuade Nepalese mgmt. to adopt a proactive strategy, toward labor relations. This strategy requires careful anticipation and prediction of the moves of labor unions to respond effectively.

2)      Union rivalry: Nepalese trade unions are highly politicized through their affiliation to political parties. This has divided trade unions on ideological lines. Multiplicity of trade unions is a common feature of large Nepalese orgn. Inter-union rivalries have adversely affected the effectiveness of labor unions.

The issues therefore is now to get rid of the unions of political influences, so that labor can take a united stand to promote and protect its interest and welfare.

3)      Collective bargaining: Collective bargaining in Nepal lacks good faith. Mgmt. regard it as an encroachment in its method to manage. Both labor and mgmt. don’t make every reasonable effort to arrive at settlement. Labor union as well as mgmt. lack professional bargainers. The agreement also remains poorly implement.

The issues therefore is how to make collective bargaining the hallmark of labor relation in Nepal.

4)      Legal framework: Nepal lacks a comprehensive legal frame work for labor relations. It is still in starting stage. The individual unrest and disputes are growing. Govt. mediation has become place in setting labor disputes though a “fire bridge approach”.

The issue therefore is how to effectively implement the existing law and how to develop a comprehensive legal framework.

5)      Labor policy: Nepal lacks a comprehensive labor policy. The five year development plans provide piecemeal approach to labor relations.

The issue therefore is urgent formulation of a comprehensive labor policy to manage labor-relations. It should be in conformity with the development needs and socio-cultural realities of a country. it should also cover migration of labor.

6)      Quality of work life: Nepalese trade union are obsessed with wage increase demands. Economic consideration dominate their actions. Quality of work life is the least considered matter in labor relations . unacceptable labor practices such as child and bonded labor are present.

The issue therefore is now is to give proper importance to quality of life issue in labor relations.

7)      Grievance handling: Nepalese labor relations lack effective and comprehensive grievance handling procedure labor tends to resort to strikes, mgmt. tends to resort to lock-out. Indicipline is widespread.

The issues therefore are urgent development of grievance handling procedure in Nepalese labor relations.

8)      Education and training: Both labor and mgmt. in Nepal lack education and training, about managing labor relations. This led to the lack of professional approach to labor issues.

The issues therefore is to provide education and training to both labor union and employers association in mgmt. of labor relations. This is essential to foster a culture of harmonious labor relations.

Emerging concepts in Industrial Relations   

1)      Mutual hostility and suspicious: Mutual suspicion, hostility and hostilities reside between three actors of industrial relation. The psychological distance between mgmt., employee and the govt. it is very much in a confused state and cannot persuade its role between facilitators, regulator, promoter, arbitrator or that of a controller.

2)      Strikes and lockout as ultimate resolution of disputes: There is a general feeling that the right and interest of the worker can and should be secured from mgmt. through strikes and confrontation. Strikes and lockout are thought to be one and the ultimate weapon in the hand of trade union and mgmt. respectively.

3)      Politicization of labor issues and multiplicity of union: There is heavy politicization of labor issues because of politicization of labor issues, there is vertical division and fragmentation of the trade union. Both govt. and mgmt. have used “divide and rule” policy there by weakening the position of labor unions.

4)       Legalistic orientation of industrial relation: the industrial relation is too much pre-occupied with legalistic orientation. Simply having rules of the game need not guarantee a fair game. The players, their attitudes and behavior they do.

5)      Unacceptable labor practices: The labor policy has different acts which is unacceptable. The Nepal there is a practice like bonded labor, child labor and labor discrimination.

End of the chapter