HARM takes place within a complex and ever changing environment and is increasingly being recognized for its strategic importance. The Strategic Importance of HARM HARM or personnel as it is sometimes called was once relegated to second- class status in many organizations, but its importance has grown dramatically in the last two decades. This new importance stems from increased legal complexities, the recognition that human resources are a valuable means for improving productivity, and the awareness today of the costs associated with poor human resource management.
Poor human resource planning can exult in spurts of hiring followed by layoffs – costly in terms of unemployment compensation payments, training expenses and the morale. Haphazard compensation systems do not attract, keep and motivate good employees and outmoded recruitment practices can expose the firm to expensive and embarrassing legal action. As a result the chief human resource manager is a vice president directly accountable to the CEO of the firm. Human Resource Planning The starting point in attracting human resources is planning.
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HER planning involves job analysis and forecasting the demand for and supply of labor. Job Analysis Job analysis is a systematic analysis of jobs within an organization. It is made up of two parts; 1 . Job description: It is systematic evaluation of the duties, working conditions, tools, materials and equipment related to the performance of a job. It is the list of duties of a job, its working conditions and the tools materials and equipment used to perform it. 2. Job specification: It is the description of the skills abilities and other credentials required by a job.
It lists the skills, abilities and other credentials needed to do the job. Forecasting HER Demand and Supply After managers fully understand the job to be performed within an organization, they can start planning for the organization’s future HER needs. The manager starts by assessing trends in past HER usage, future organizational plans and general economic trends. Forecasting Internal Supply – the number and type of employees who will be in the firm at some future date. Forecasting External Supply – the number and type of people who will be available for hiring from the labor market at large.
Replacement Charts – At higher levels of the organization, managers plan for specific people and positions. The technique most commonly used is the replacement chart which lists each important managerial position, who occupies it, how long that person will probably stay In it before moving on, and who is now qualified or soon will be qualified to move into it. On calculating the future demand firstly the internal supply is checked if it is not in a position to supply personnel for the job then external supply is looked for.
STAFFING THE ORGANIZATION When managers have determined that new employees are needed, they must then turn their attention to recurring and hiring the right mix of people. Staffing the organization is one of the most complex and important tasks of good HER management Recruiting Human Resources Recruiting is the process of attracting qualified persons to apply for the jobs that are open. Recruits may be found internally or from the outside world. Internal Recruiting – It means considering present employees as candidates for openings. Promotions from within can help build morale and keep high quality employees from leaving.
External Recruiting – It involves attracting people outside the organization to apply for jobs. This method includes; *advertising*campus interviews*employment agencies referrals by present employees *Walk ins. The manager must select the most appropriate method for each job. News paper ads are often used because they reach a Wide audience and thus allow minorities equal opportunities to find out about and apply for the job openings. Selecting Human Resources Once the recruiting process has attracted a pool of applicants, the next step is to select someone to hire.
The intent of the selection process is to gather from applicants information that will predict their job success and then to hire the candidates likely to be most successful. Application Forms The first step in selection is usually asking the candidates to fill out an application form. It is an efficient method of gathering information about the applicant’s previous work history, educational background and other job- related demographic data. Application form data helps the managers to decide the candidate’s eligibility for an interview call and also help the interviewers to get familiarize themselves with the candidate before interview.
Tests Test of ability, skill, aptitude or knowledge that is relevant to the job is particularly taken. Usually tests of general intelligence or personality are occasionally useful as well. Interviews Interview is a popular selection devise, but sometimes the interview is a poor predictor of job success, e. G. Biases inherent in the way people perceived and judge others on first meeting affect subsequent evaluations. Other Techniques Some organizations also go for drug tests especially in situations where drug related performance could create serious safety hazards.
Applicants at nuclear power plant, for example will probably be tested for drugs. Some organizations also run credit checks on prospective employees. Developing Human Resources Regardless of how effective a selection system is most employees need additional training if they are to grow and develop in their jobs. This includes employee orientation and training and development technique uses, 1. New Employee Orientation Orientation is the process of introducing new employees to the organization so that they can more quickly become effective contributors.
Poor orientation can result in; * Disenchantment ( having lost one’s good opinion of sub/SST) * Dissatisfaction * Anxiety * Turnover * And other employee problems. Effective orientation can result in; * Job satisfaction * Performance Retention * And similar areas An effective orientation program will help new comers feel like part of a team, introduce them quickly to the coworkers, supervisors and other new employees and ease the transition from an outsider to an insider. 2. Training and Development Techniques and Methods Work-Based Program Work -??based program tie training and development activities directly to task performance.
The most common method of work-based training is on-the-job training. In it the employee works in the actual work situation and is shown how to perform a task more effectively by a supervisor or experienced employee. Vestibule training involves a work simulation situation in which the job is performed under conditions closely simulating the real work environment. (off the job training) Systematic Job Rotations and Transfers, in this the employees are systematically moved from one job to another so that they can learn a wider array of tasks and skills.
This method is most likely used for lower level managers or for operating employees being groomed for promotions to supervisory management positions. Instructional-Based Program Training designed to impart new knowledge and information. Lectures or Discussion Approach, in this a trainer presents the material in a descriptive fashion to those attending a trainee program. Just like a college lecturer the trainer lectures to the trainees. Depending upon the situation the trainer may opt for a pure lecture method or discussion method. The lectures may be video or audio-taped for other people at different locations.
Computer-Assisted Instructions in this a trainee sits at a personal computer and operates software that has been specifically developed to impart certain material. This method allows self-paced learning and immediate feedback. Training Technology Earlier all training involved paper, pencil etc but more recently new technology is being used e. G. * Video Teleconferencing * Interactive video Team Building and Group-Based Training Nowadays more and more companies are using team basis for doing their jobs. Some companies plan training programs specifically designed to facilitate intra;group cooperation among members of team.
Evaluating Employee Performance Performance Appraisal Performance appraisal is the specific and formal evaluation of an employee in order to determine the degree to which the employee is performing effectively. Appraisals are important because they provide a benchmark to better assess the extent to which recruiting and selection processes are adequate. Performance appraisals help managers assess the extent to which they are recruiting and selecting the best employees. They also contribute to effective training and development and compensation.
Performance Appraisal Process Several questions must be answered as part of the performance appraisal process. These questions generally relate to who conducts the performance appraisal and provides feedback to the individual whose performance was valuated. Individual’s supervisors is the most likely person to conduct a performance appraisal. He has the most knowledge and opportunity to observe the employees performing their jobs. After appraisal the next job is to provide the feedback, coaching and counseling. Many managers do a poor job in giving feedback, perhaps they do not know how to do it properly.
An employee would feel angry, hurt, discouraged or argumentative on getting a negative feedback but for them to improve they need to be told about their shortcomings and guidance as to how to improve it. Methods of Appraising Performance Depending upon the nature of the job mostly performance is appraised using judgment and rating methods. Ranking Method it requires the manager to rank in order from top to bottom or best to worst each member of a particular work group or department. The individual ranked first is presumed to be the top performer, and second is presumed to be the second best performer and so on.
The basis of ranking is global or overall performance. Forced Distribution Method classifies employees into different performance categories based on a predetermined distribution. Those frequencies are determined in advance and are imposed upon the rater. E. G. 10% of the employees in a work group will be grouped as “outstanding” 20% very good etc. This method is based on the so-called bell or normal curve. Rating Method Graphic Rating Scale is a performance rating method using a numerical scale to rate performance along a set of dimensions.
It consists of a statement or questions about some aspects of an individual’s job performance followed by the scale of response e. G. Strongly agree, agree etc. These responses or descriptors are usually arrayed along a bar line or similar visual presentation marked with numbers or letters corresponding to each descriptor. Graphic rating scale is relatively easy to develop and covers a wide array of dimensions in it. Critical Incident Method is a performance rating method based on stated examples that reflect especially good or poor performance. It is simply an example of good or poor performance on the part of the employee.
Organizations that rely on this method often requires raters to recall such instances and then describe what the employee did (or did not do) that led to success or failure. This method defines performance in airily clear and behavioral terms. Providing Compensation and Benefits Employees do not work for free- they expect to be compensated for talent, time and effort they devote to their jobs to help the organization achieve its goals. Compensation is set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization.
Compensation involves a number of different elements; * Base salary * Incentives * Bonuses * Benefits * Other rewards. Compensation should never be a random decision, but rather the result of a careful and systematic strategic process. Determining Basic Compensation Basic Compensation means the base level of wages or salary paid to an employee. Wages generally refers to hourly compensation paid to operating employees. Most of the jobs that are paid on an hourly wages basis are lower- level or operating-level jobs. Organization can also describe compensation on monthly or hourly basis.
Salary is compensation in the form of money paid for discharging the responsibilities of a job. 1. Pay Surveys in Compensation Common source that many organizations use in determining base compensation is pays surveys. It IS a survey of compensation paid to employees by other employers in a particular geographic area, an industry, or an occupational group. Pay surveys provide the information that an organization needs to avoid problems of an imbalance between its own pay scale and those of its competitors. 2. Job Evaluation Another means of determining basic compensation is job evaluation.
Job evaluation is a method for determining the relative value or worth of a job to the organization so individuals who perform the job can be appropriately compensated. 3. Est. bliss ins a Pay Structure Compensation for different jobs is based on the organization’s assessment of he relative value to the organization of each job class. There should be logical rank ordering of compensation levels from the most to the least valuable jobs throughout the organization. Two or more jobs that are valued relatively equal will be compensated at approximately the same level.
Organization also decides on minimum and maximum pay ranges for job or job classes. Managers might use performance, seniority or the combination of the two to determine how much a person can be paid for doing a particular job. Performance based Compensation Besides basic compensation many organizations also offer some form of reference-based rewards as well. When rewards are associated with higher levels of performance employees will presumably be motivated to work harder in order to reap those rewards. Merit pay Plan refers to pay awarded to employees according to the relative value of their contributions.
Employees who make greater contributions get higher pay than those who make lesser contributions. Merit pay plans are compensation plan that formally base at least some meaningful portion of compensation on merit. The most general form of merit pay plan is raise. Raise is an annual salary increase granted to employees because of their relative merit (individual performance and contribution to the organization). In such plans, merit is usually determined or defined according to individual performance and overall contribution to the organization. Skill-Based Pay System or Knowledge-Based pay System both are not strictly viewed as merit systems.
Instead of rewarding on increased performance these systems focus on rewarding employees for acquiring new skills and knowledge related to their jobs. Presumably as the employees acquire more and more skills or knowledge they become more valuable for the organization. Incentive Compensation Systems These are the oldest form of performance based rewards. Piece-Rate Incentive Plan has been in use for hundreds of years. Under this system the organization pays an employee a certain amount of money for every unit produced or for every dozen units produced.
This system does not give a minimum wage to an employee. Under this system the performance is totally under an individual’s control and that the employee does a single task continuously during the course of the employee’s work time. Individual Incentive Pay Plans reward individual performance on a real-time basis. That is rather than increasing a person’s base salary at the end of the year, an employer gives an individual a salary increase or some other financial reward for outstanding performance immediately or shortly after the performance occurred.
This system is used where performance can be objectively assessed in terms of number of units of output or similar measures, rather than on a subjective assessment by a superior. The most common form of individual incentive is the sales commission paid to people engaged in sales work. Sales commission is the individual incentive plan rewarding employees with a argental of sales volume that they generate. Other Forms of Incentives Occasionally organizations use other forms of incentives e. G. A non-monetary incentive, such as additional time off or a special perk, a paid vacation etc. Or perfect attendance or so on. Team and Group Incentives Systems Merit compensation and incentive compensation systems describe earlier deal with reward system for individuals. Organizations also offer performance-based rewards programs for teams and groups. As team and group work trends are increasing in the world so is the importance of these incentives plan. Shanghaiing Programs are among the most popular group incentive-reward systems. Shanghaiing is the group-based incentive plan that gives rewards for productivity improvements in the organization. (profit sharing).
These systems are designed to share with employees the cost savings from productivity improvements. Organizations measure group or team productivity through allowing the group or team to lower the costs and increase productivity and eventually translating the gains into dollar values and also share it with the members of the team or group. Performance Increases Some organizations uses true incentives. They tie the group or team incentives directly to performance increases. Sometimes these incentives are paid as they are earned rather than added to base salaries. They are distributed at team level rather than at an individual level.
Profit Sharing is a group-based incentive plan in which employees are paid a share of company profits. Some organizations give certain incentives beyond a certain team or a group. These are generally organization-wide incentives. One long-standing type of plan is called profit sharing. At the end of the year some portion of the company’s profits is paid into a profit-sharing pool that is hen distributed to all employees. Indirect Compensation and Benefits In addition to financial compensation, most organizations provide employees with an array of other indirect compensation and benefits.
Benefits generally refers to various rewards, incentives and other things of value that an organization gives to its employees in addition to wages, salaries and other forms of direct financial compensation. As these benefits have tangible value they represent a meaningful form of compensation in addition to the usual formal financial compensation, for instance cars, cell phones etc. Mandated Protection Plans protect employees when their income is threatened or reduced by *Illness * disability * Unemployment * retirement Another mandated plan is social security (officially old age survivors and disability insurance program).
The original purpose of this program is to provide some limited income to retired individuals to supplement personal savings, private pensions and part-time work. Workers’ compensation is mandated insurance that covers individuals who suffer a job-related illness or accident. Employer bears the cost of workers’ compensation insurance. The exact premium is related to each employer’s past experience with job-related accident and illness. Optional Protection plans these plans provide protection in almost same areas as discussed before but except that if organization chose to provide to its employees or not.
This includes insurance coverage, health insurance, etc. Some big companies have also started including such things as special programs for drugs, vision care, mental health services and dental care. Many companies also establish private pension plans for employees. These are prearranged plans administered by the organization to roved income to employees upon their retirement. Paid Time Off Many organizations provide employees with a certain amount of time off with pay.